/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130604.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, June 4, 2013, Vol. 17, No. 153 Headlines 5TH AVENUE: Opposes UST Motion for Dismissal of Case ACDM REPLACEMENT: Voluntary Chapter 11 Case Summary ADEPT TECHNOLOGIES: Gets Interim Access to Cash Collateral ALLIANCE LAUNDRY: S&P Lowers Corporate Credit Rating to 'B' ALLIED SYSTEMS: Bankruptcy Judge Blasts Proposed $33MM Loan ALPHA OMEGA: GOB Sales Agent Compelled to Comply With Contract AMERICAN AIRLINES: Blasts UST's Plan Disclosures Objections AMERICAN AIRLINES: Judge Greenlights Union Integration, FAA Deals ATARI INC: Wants to Sell Substantially All Assets ATARI INC: Committee Wants Deal on Plan Before Bonuses ATP OIL: Bankruptcy Judge Says Asset Sale Not "Preordained" ATP OIL: Anadarko Objects to Sale of Assets AXIS CONTRUCTION: Case Summary & 20 Largest Unsecured Creditors BIOSCRIP INC: S&P Rates Senior Secured Credit Facilities 'B' BLOCKBUSTER INC: Chapter 7 Conversion Sought BOLIN & CO: Circuit Court Liberalizes Rules on Mutual Setoff BOWLES SUB: Amended Plans of Reorganization Declared Effective CANCANA RESOURCES: Seeks Approval for Management Cease Trade Order CAREY LIMOUSINE: Chapter 11 Plan Is Confirmed CASH STORE: Obtains Full Revocation of Cease Trade Orders CCS MEDICAL: S&P Revises Outlook to Negative & Affirms 'B-' CCR CENTRAL EUROPEAN: Chapter 11 Plan to Be Consummated June 5 CHINA BAK: Incurs $22.6-Mil. Net Loss in March 31 Quarter CHINA GINSENG: Incurs $1.4-Mil. Net Loss in March 31 Quarter CHINA PEDIATRIC: Incurs $4.7-Mil. Net Loss in First Quarter CHRISTIAN BROTHERS: Settles Abuse Claims for $16.5 Million CIT GROUP: Shares Jump as Lender Exits Regulatory Curbs CLEARWATER SEAFOODS: S&P Revises Outlook to Pos. & Affirms 'B' CCR CODA HOLDINGS: Bonuses Pulled, More Bankruptcy Issues Remain COLLEGIATE ACADEMY: S&P Lowers Issuer Credit Rating to 'BB' COOPER-BOOTH: Section 341(a) Meeting Set on June 25 CPI CORP: Trustee Gets Green Light for Chapter 7 Auction CPG INTERNATIONAL: S&P Revises Outlook to Stable & Affirms 'B' CCR CROSS BORDER RESOURCES: Reports $1.8-Mil. Net Income in 1st Qtr. CUSTOM CABLE: Choate Hall Moves to Toss Investor Suit DAMES POINT: Parties Select GrayRobinson as Mediator DANCE NEW AMSTERDAM: Voluntary Chapter 11 Case Summary DETROIT, MI: State Treasurer on Possible Bankruptcy DEWEY & LEBOEUF: Settlement With XL, Davis Approved by Court DIGERATI TECH: Files Petition in Houston Amid Fight for Control DIMARIA PROPERTIES: Voluntary Chapter 11 Case Summary DIRECT ACCESS: Hit With Involuntary Petition; Executives Arrested DOBSON LAND: Case Summary & Unsecured Creditor DUCOMMUN INC: S&P Raises Rating on $60MM Revolver Debt to 'BB' EDISON MISSION: Refinancing Wind-Power Unit Viento ELCOM HOTEL: Hiring of Manager, Professionals Approved ENERGYSOLUTIONS INC: Terminates Offerings Under Plans ENDEAVOUR INTERNATIONAL: Eliminates Classified Board Structure ENVIRONMETAL SOLUTIONS: Incurs $631K Net Loss in First Quarter EVERGREEN OIL: Wants to Hire Buxbaum HCS as Financial Advisor EXCEL MARITIME: Non-Filing of Form 20-F Prompts NYSE Notice FAIRWEST ENERGY: Alberta Court Extends CCAA Stay Until July 3 FIDELITY NATIONAL: Fitch Affirms 'BB+' Sr. Unsecured Debt Rating FORESIGHT ENERGY: S&P Revises Outlook to Pos. & Affirms 'B' CCR FREESEAS INC: Issues 200,000 Add'l Settlement Shares to Hanover FREESEAS INC: Issues 594 Final Settlement Shares to Hanover FRIENDSHIP DAIRIES: Raymond Hunter Okayed as Dairy Consultant GELT PROPERTIES: Wins OK to Tap Nochumson for Craig Atkins Suit GENERAL MOTORS: Defends $367MM Hedge Fund Deal in Bankruptcy Fight GFL ENVIRONMENTAL: S&P Assigns 'B+' CCR; Outlook Stable GMX RESOURCES: Unsecured Creditors Committee Taps Attorneys GMX RESOURCES: Hearing Today on Bid for $3.32MM Bonuses GMX RESOURCES: Has Cash Use; Sale Plans Objected GREAT BASIN: Completes Sale of Nevada Hollister Gold Mine GROVES IN LINCOLN: Proofs of Claim Due June 27 GUIDED THERAPEUTICS: To Raise $2.6 Million From Private Placement HALSEY MINOR: CNET Founder Files for Ch. 7 Liquidation HAMPTON ROADS: John Maloney Joins as Bank VP and CRM HASSEN REAL: Third Amended Joint Plan of Reorganization Confirmed HAWAII OUTDOOR: Wagner Choi Withdraws Over Differences HEARTHSTONE HOMES: Bankruptcy Case Converted to Chapter 7 HERCULES OFFSHORE: Fleet Status Report as of May 23 HERITAGE CONSOLIDATED: Chamberlain Okayed as Committee Counsel HIGHWAY TECHNOLOGIES: Sheds Workers Without Notice, Suit Says HOT TOPIC: S&P Assigns 'B' CCR & Rates $350MM Sr. Sec. Notes 'B' HOWREY LLP: Adversary Suits Target Verizon, Dozens of Others IBIO INC: Incurs $1.8-Mil. Net Loss in March 31 Quarter IDERA PHARMACEUTICALS: Raised $16.5 Million From Stock Offering INDIANA BANK: Sold to First Farmers Bank & Trust INFINITY ENERGY: Amends First Quarter Form 10-Q INTERSIL CORP: S&P Withdraws 'BB-' Corporate Credit Rating IN PLAY: Weinman & Associates Approved as Bankruptcy Counsel INSPIREMD INC: To Issue 6.4 Million Shares Under Plans INSPIREMD INC: Results From MASTER Trial of MGuardTM EPS INTELLICELL BIOSCIENCES: Issues 8.5 Million Shares to Hanover INTELLICELL BIOSCIENCES: Hanover Held 9.9% Stake at May 21 INTERFAITH MEDICAL: Cash Collateral Use Extended Until June 10 INTERLEUKIN GENETICS: Growth Equity Owned 25.9% Stake at May 17 INTERLEUKIN GENETICS: Bay City Held 26.2% Equity Stake at May 17 IRWIN MORTGAGE: Taps Aon Insurance to Assist in Stock Sale ISAACSON STEEL: Hearing on Case Conversion Continued Until Aug. 6 ISTAR FINANCIAL: Shareholders Elect Six Directors J.C. PENNEY: Consummates $2.25 Billion Term Loan JAMES RIVER: Silverback Asset Held 8.8% Equity Stake at May 17 JEH COMPANY: Section 341(a) Meeting Scheduled for July 12 JMW AUTO: Lowell Cage Remains as Chapter 7 Trustee K-V PHARMACEUTICAL: Battle Amps Up as Silver Point Boosts Offer K-V PHARMACEUTICAL: Seeks Approval of Deal with State of Texas KINDER MORGAN: S&P Affirms 'BB' Corporate Credit Rating KRONOS WORLDWIDE: S&P Lowers CCR to 'B+'; Outlook Stable LEHMAN BROTHERS: Selling $1.06-Billion of LBI Claims at 45% LEHMAN BROTHERS: Battle over 2008 Sale Goes Before Appeals Panel LEHMAN BROTHERS: Investors Get $640MM Fraud Suit Sent to State Ct. LEHMAN BROTHERS: Trustee Pushes 2nd Circ. to Reverse Barclays Win LEHMAN BROTHERS: Can Sell More Claims Against Brokerage Unit LEVEL 3: Stockholders Elect 14 Directors LIFECARE HOLDINGS: Settlement Approval Paves Way for Carlyle Sale LIGHTSQUARED INC: Lands Exit Financing Deal With Jefferies LIVINGVENTURES INC: Incurs $465K Net Loss in First Quarter LMR LLC: Austin Hotel Owner Has Confirmed Plan LUXEYARD INC: Chief Operating Officer Resigns MANASOTA GROUP: Late Filed 2011 Financials Show $544K Loss MARKWEST ENERGY: Fitch Affirms 'BB' Issuer Default Rating MAUI LAND: Now in Compliance with NYSE's Listing Standards MCCLATCHY COMPANY: Stockholders Elect 11 Directors MDU COMMUNICATIONS: Seeking Extension of $30MM Credit Facility MERIDIAN SUNRISE: Evidentiary Hearing on Plan Will Start June 17 MF GLOBAL: Court Approves Agreement to Resolve Deutsche Bank Claim MF GLOBAL: Claimant Ordered to Pay $250 Fine for Misconduct MF GLOBAL: Wins Court Approval to Settle Claim of NYSDTF MFM INDUSTRIES: Case Summary & Largest Unsecured Creditors MOMENTIVE PERFORMANCE: Moody's Changes Outlook to Negative NATIVE WHOLESALE: GableGotwals Okayed to Handle Oklahoma Action NEWLAND INTERNATIONAL: Wins Confirmation of Prepackaged Plan NORTH AMERICAN ENERGY: S&P Alters Outlook to Stable & Keeps B- CCR ORLEANS HOMEBUILDERS: PD Claims v. Unit Discharged in Bankruptcy READER'S DIGEST: Settles With FTC to Permit Plan Approval SABINE PASS: S&P Assigns 'BB+' Rating to $420MM Sr. Secured Notes SAN BERNARDINO: NPGFC Explains Why It Can Keep Its Lawyers SOUND SHORE: June 25 Hearing on Montefiore-Led Auction SOUND SHORE: Proposes to Hire Counsel and Advisors SOUND SHORE: Proposes $33-Million of DIP Loans From MidCap SPANISH PEAKS: Can Assume Ground Lease With Boyne USA, Ct. Says STANFORD GROUP: Receiver to Make $55-Million First Distribution THOR INDUSTRIES: U.S. Trustee Seeks to Dismiss Case THQ INC: Court Sets July 16 Plan Confirmation Hearing TRINITY COAL: Committee Can Hire Sturgill Turner as Local Counsel TRINITY COAL: Committee Taps John T. Boyd as Mining Consultants TRINITY COAL: Taps Cardno & Newbridge Firms as Mining Consultants TRINITY COAL: Wants to Employ Dixon Hughes as Tax Accountants TWIN DEVELOPMENT: Can Hire Hinds & Shankman as Bankruptcy Counsel VEBLEN WEST: Has No More Assets, Chapter 11 Case Dismissed VIRGIN ISLANDS WAPA: Fitch Affirms 'BB' Rating on $156.55MM Bonds VORNADO REALTY: Fitch Affirms 'BB+' Preferred Stock Rating WATERFRONT OFFICE: DG-Hyp Says Chapter 11 Plan is Unconfirmable WYLDFIRE ENERGY: Trustee Hires Lain Faulkner as Accountants * Three Circuits Retain Absolute Priority Rule for Individuals * Strict Compliance Required in Recording Mortgages * Norton Rose Combines with US Legal Practice Fulbright & Jaworksi * Companies With Insolvent Balance Sheet ********* 5TH AVENUE: Opposes UST Motion for Dismissal of Case ---------------------------------------------------- Debtor 5th Avenue Partners opposes a motion by Peter C. Anderson, U.S. Trustee for Region 16, for the dismissal of its Chapter 11 case. The Debtor filed a document joining in an objection by Portigon AG, New York Branch, formerly known as WestLB AG, New York Branch, to the dismissal of the case. A hearing on the motion was previously set for May 28 but has been adjourned to Aug. 1, 2013, at 10:30 a.m. As reported in the Troubled Company Reporter, the U.S. Trustee asserted that there is "no purpose" for the case to remain in Chapter 11. The U.S. Trustee pointed out that when the Debtor filed for Chapter 11 relief in June 2010, it owned a hotel in San Diego and an adjacent entertainment venue. In May 2011, these assets were sold pursuant to an order of the Court. The sale order provided that a portion of the sale proceeds in the amount of $21 million would be held by the Debtor in an escrow fund pending resolution of lien disputes between WestLB and various parties. Recently, the Court entered an order for the release of $10.5 million to WestLB from this escrow fund. Three adversary proceedings were commenced. Two of those have been closed and the remaining adversary proceeding has been dismissed with prejudice. According to the U.S. Trustee, neither the Debtor nor any other party has filed a plan with the Court. The U.S. Trustee is asking the Court to issue an order regarding the disposition of the remaining escrow funds currently being held by the Debtor. About 5th Avenue Partners Newport Beach, California-based 5th Avenue Partners owns and operates the Se San Diego hotel located in San Diego, California's financial district. The hotel has 184 guestrooms, a 5,500-square- foot spa, a restaurant, rooftop bar and lounge, 20,000 square feet of banquet space and meeting rooms, an outdoor rooftop pool, fitness center and 23 unsold condominium units. 5th Avenue also owns next to the Se San Diego hotel building a 31,000-square-foot building, which it leases to the House of Blues music club. 5th Avenue Partners, LLC, filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-18667) on June 25, 2010. Marc J. Winthrop, Esq., at Winthrop Couchot PC, in Newport Beach, California, serves as counsel to the Debtor. Blitz Lee & Company serves as its accountant. Richard M. Kipperman was appointed as chief restructuring officer. The Company estimated assets at $10 million to $50 million and debts at $50 million to $100 million. The Official Committee of Unsecured Creditors tapped Baker & McKenzie LLP as counsel. ACDM REPLACEMENT: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: ACDM Replacement Property Shea, LLC 3499 North Campbell Avenue, Suite 907 Tucson, AZ 85719 Bankruptcy Case No.: 13-09024 Chapter 11 Petition Date: May 28, 2013 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Sally M. Darcy, Esq. MCEVOY, DANIELS & DARCY P.C. Camp Lowell, Corporate Center 4560 East Camp Lowell Drive Tucson, AZ 85712 Tel: (520) 326-0133 Fax: (520) 326-5938 E-mail: ccarter@mddlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Bruce Ash, authorized representative. ADEPT TECHNOLOGIES: Gets Interim Access to Cash Collateral ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Alabama authorized Adept Technologies, LLC's continued use of cash collateral. The Court has already entered four interim agreed orders allowing the Debtor to use cash collateral which PNC Bank, National Association asserts an interest. The Debtor is authorized to use cash collateral in the ordinary course of business for a period of 60 days from the May 22, 2013, entry of the order. As adequate protection to PNC for the use of the cash collateral, the Debtor will grant PNC a first priority replacement lien in all assets of the Debtor that comprise the PNC collateral, subject to carve out on certain expenses. Additionally, the Debtor will deliver to PNC monthly adequate protection payments of $77,000, commencing on May 15, 2013, and continuing on the 15th of each month through the termination date. PNC will apply the adequate protection payments first to the $500,000 term loan and then to the $1.2 line of credit. As reported in the Troubled Company Reporter on March 20, 2013, PNC asserts that the PNC debt totaled approximately $6,402,852 as of the Petition Date, and is secured by, among other things, certain real property in four locations in Madison County, Alabama, and PNC's security interest in the Debtor's inventory, chattel paper, accounts, equipment and general intangibles, together with all other accessories, accessions, attachments, tools, parts, supplies, replacements of and additions thereto, all products and produce thereof and all proceeds of the foregoing, including insurance proceeds. About ADEPT Technologies ADEPT Technologies, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-83490) on Oct. 31, 2012, in Decatur, Alabama. The Debtor, which has principal assets located in Huntsville, Alabama, estimated assets of $10 million to $50 million and liabilities of up to $10 million. Judge Jack Caddell presides over the case. Kevin D. Heard, Esq., at Heard Ary, LLC, represents the Debtor as counsel. The petition was signed by Brad Fielder, managing member. ADEPT Technologies, LLC, delivered to the U.S. Bankruptcy Court for the Northern District of Alabama, Northern Division, a plan of reorganization and accompanying disclosure statement proposing a 10% recovery for allowed general unsecured claims. ALLIANCE LAUNDRY: S&P Lowers Corporate Credit Rating to 'B' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Ripon, Wis.-based Alliance Laundry Systems LLC to 'B' from 'B+'. S&P removed the ratings from CreditWatch, where they were placed with negative implications on Nov. 27, 2012, following the company's announcement of its proposed shareholder distribution. The outlook is stable. The 'B' issue-level and '3' recovery rating on the company's first-lien facilities, and the 'CCC+' issue-level and '6' recovery rating on the second-lien facilities, remain unchanged. As of March 31, 2013, the company had about $480 million of debt outstanding. "The lower corporate credit rating on Alliance Laundry reflects our expectation that credit measures will remain below our prior expectations as a result of significantly higher debt levels following the company's recapitalization transaction," said Standard & Poor's credit analyst Rick Joy. For the 12 months ended March 31, 2013, Standard & Poor's estimates Alliance Laundry's adjusted debt leverage increased to 5.2x from 3.7x in the prior-year period. The company used proceeds from this transaction along with cash from the balance sheet to repay existing debt and fund a $232 million shareholder distribution. "Our ratings on Alliance Laundry reflect our view that the company has a "highly leveraged" financial risk profile and "weak" business risk profile. Key credit factors in our business risk assessment are the company's narrow product focus, small scale, and customer concentration, yet strong market position in the U.S. commercial laundry equipment segment. The financial risk assessment reflects our expectation that credit measures will remain consistent with indicative ratios for a highly leveraged financial risk profile over the next year, and our opinion of the company's aggressive financial policies, demonstrated by its two debt-financed shareholder distributions, totaling $279 million, over the past year," S&P noted. Alliance Laundry manufactures a full line of self-contained commercial laundry equipment, primarily serving laundromats, multiunit housing laundries, and on-premise laundries. The outlook is stable, reflecting S&P's expectation that Alliance Laundry will maintain adequate liquidity and continue to improve operating performance. S&P expects credit metrics to improve slightly over the near term, including leverage of about 5x by year-end 2013, and for the company to maintain free cash flow close to historical levels. ALLIED SYSTEMS: Bankruptcy Judge Blasts Proposed $33MM Loan ----------------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that a Delaware bankruptcy judge refused to consider Allied Systems Holdings Inc.'s request for $33.5 million in replacement post-petition financing from two private equity lenders, calling the proposal "dead on arrival," and chastising the parties for bringing him a motion that fell so short. According to the report, U.S. Bankruptcy Judge Christopher S. Sontchi said he agreed with many objections lodged by the official committee of unsecured creditors that argued the refinancing terms were much too expensive. Peg Brickley writing for Dow Jones' DBR Small Cap reports that the bankruptcy judge slapped down a bankruptcy financing offer and auction plan advanced by Black Diamond Capital Management LLC for Allied Systems and threatened to put the company in the hands of a trustee. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. Yucaipa Cos. has 55 percent of the senior debt and took the position it had the right to control actions the indenture trustee would take on behalf of debt holders. The state court ruled in March 2013 that the loan documents didn't allow Yucaipa to vote. In March, the bankruptcy court also gave the official creditors' committee authority to sue Yucaipa. The suit includes claims that the debt held by Yucaipa should be treated as equity or subordinated so everyone else is paid before the Los Angelesbased owner. The judge is allowing Black Diamond to participate in the lawsuit against Yucaipa and Allied directors. ALPHA OMEGA: GOB Sales Agent Compelled to Comply With Contract -------------------------------------------------------------- A Massachusetts bankruptcy judge compelled an agent who assisted in the going-out-of-business sale of Lexington Jewelers Exchange, Inc., dba Alpha Omega Jewelers, to comply with the terms of an agency agreement between the parties in a May 29, 2013 Memorandum of Decision available at http://is.gd/GIt4EYfrom Leagle.com. The Motion to Compel was brought by Harold B. Murphy, as Chapter 7 Trustee of the Debtor, against the joint venture comprised of Capital Group, LLC, SB Capital Group, LLC and The Gordon Company, Inc. The JV conducted the GOB Sale on the Debtor's behalf as its agent pursuant to a court-approved agency agreement. The dispute arose when Bellweather Properties of Massachusetts, an affiliate of Simon Property Group and the Debtor's landlord for its Burlington Mall retail store, asserted an administrative expense claim for unpaid percentage rent for $200,522, for the period January 2008 to April 2008. To this, the Trustee demanded from the Agent evidence of payment of the Simon Claim or, in the absence of that evidence, that the Agent tender the amount of the Simon Claim to the Trustee. In a May 29 decision, Bankruptcy Judge William C. Hillman granted the Motion to Compel, saying that it "does no more than ask the Joint Venture to do that which it is contractually obliged." The Chapter 7 Trustee is represented by: Kathleen R. Cruickshank, Esq. MURPHY & KING, P.C. Boston, MA Tel: (617) 226-3404 Fax: (617) 305-0604 Email: krc@murphyking.com The Joint Venture is represented by: James P. Ponsetto, Esq. GREENBERG TRAURIG, LLP One International Place Boston, MA 02110 Tel: (617) 310-6000 Fax: (617) 310-6001 Email: ponsettoj@gtlaw.com -- and -- Robert Boghosian, Esq. Andrew L. Buck, Esq. COHEN TAUBER SPIEVACK & WAGNER P.C. New York, NY Tel: (212) 381-8726 Email: rboghosian@ctswlaw.com abuck@ctswlaw.com About Alpha Omega Cambridge, Massachusetts-based Alpha Omega Jewelers aka Lexington Jewelers Exchange Inc. -- http://www.alphaomegajewelers.com/-- owns and manages watch retail shops. The Debtor filed for chapter 11 petition on Jan. 2, 2008 (Bankr. E.D. Ma. Case No. 08-10042). Adrienne Kotowski Walker, Esq., and Kevin J. Walsh, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC represent the Debtor in its restructuring efforts. The Debtor had $1 million to $100 million in assets and debts when it filed for bankruptcy. The case was converted into a Chapter 7 proceeding on May 12, 2008, in anticipation of the completion of the Debtor's going-out- of-business sale. Harold B. Murphy was appointed as Chapter 7 trustee. AMERICAN AIRLINES: Blasts UST's Plan Disclosures Objections ----------------------------------------------------------- Gavin Broady of BankruptcyLaw360 reported that AMR Corp. responded to criticism of its disclosure statement and proposed reorganization plan in New York bankruptcy court, slamming the U.S. trustee for attempting to scuttle the plan over objections to a proposed $20 million severance deal for its outgoing CEO. According to the report, the American Airlines Inc. parent, which seeks to finalize an $11 billion merger with US Airways Group Inc. to create the world's largest airline, says the objections are premature and should be overruled. 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. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. 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. 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 AIRLINES: Judge Greenlights Union Integration, FAA Deals ----------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that AMR Corp. scored a New York bankruptcy judge's approval to enter a deal that significantly reduces the Federal Aviation Administration's claims against the airline, as well as an agreement outlining the integration of AMR's workers with those at US Airways Group Inc. According to the report, the FAA settlement provides the agency with $24.9 million in allowed general unsecured claims and resolves allegations that AMR's American Airlines Inc. violated federal regulations before it entered bankruptcy. The deal resolves the $162 million in claims asserted by the FAA against the airlines, the report said. 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. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. 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. 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). ATARI INC: Wants to Sell Substantially All Assets ------------------------------------------------- Atari, Inc., et al., ask the U.S. Bankruptcy Court for the Southern District of New York to approve the bid procedures to govern the sale(s) of substantially all of their assets. The Debtors, with the assistance of their investment banker, Perella Weinberg Partners, commenced a comprehensive sale process for the Debtors' assets, including the Debtors' iconic brands and unique intellectual property portfolio. As part of the sale process, PWP contacted over 180 parties comprising of financial and strategic buyers, the latter category including both gaming and non-gaming companies. To date, more than 90 parties have signed confidentiality agreements and have been provided access to an electronic data room. The proposed bid procedures include: Bid Procedures Objection Deadline: June 4, at 4 p.m. Bid Procedures Hearing Date: June 11, at 10 a.m. Proposed Bid Deadline: July 10, at 5 p.m. Proposed Auction Dates: July 16, 17, 18 and 19 at 10 a.m. Proposed Sale Hearing Date: July 24, at 10 a.m. Proposed Sale Hearing Obj. Deadline: July 17, at 4 p.m. Proposed Obj. Deadline for Auctions & Selection of Successful/Back-Up Bidder(s): July 24, at 9 a.m. Additionally, the Debtors may afford each potential bidder the time and opportunity to conduct reasonable due diligence. Alden Global Value Recovery Master Fund, L.P., or permitted assignee, as the DIP Lender under the credit agreement, will have all rights available under Bankruptcy Code Section 363(k) to submit a credit bid on the collateral. A copy of the bid procedures is available for free at http://bankrupt.com/misc/ATARIINC_sale.pdf Ira S. Dizengoff, and Kristine G. Manoukian at Akin Gump Strauss Hauer & Feld LLP represent the Debtor. About Atari Atari -- http://www.atari.com-- is a multi-platform, global interactive entertainment and licensing company. Atari owns and/or manages a portfolio of more than 200 games and franchises, including world renowned brands like Asteroids(R), Centipede(R), Missile Command(R), Pong(R), Test Drive(R), Backyard Sports(R), and Rollercoaster Tycoon(R). Atari Inc. and its U.S. affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) on Jan. 21, 2013, to break away from their unprofitable French parent company and secure independent capital. A day after its American unit filed for Chapter 11 bankruptcy protection, Paris-based Atari S.A. took a similar measure under Book 6 of that country's commercial code. Atari S.A. said it was filing for legal protection because its longtime backer BlueBay has sought to sell its 29% stake and demanded repayment by March 31 on a credit line of $28 million that it cut off in December. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP are proposed to serve as lead counsel for the U.S. companies in their Chapter 11 cases. BMC Group is the claims and notice agent. Protiviti Inc. is the financial advisor. The Official Committee of Unsecured Creditors is seeking Court permission to retain Duff & Phelps Securities LLC as its financial advisor. The Committee sought and obtained authority to retain Cooley LLP as its counsel. ATARI INC: Committee Wants Deal on Plan Before Bonuses ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the official creditors' committee for Atari Inc. said that the video-game maker put the proposed executive bonus program under seal so the public won't know the "magnitude" of the payments for the company's top eight officers. The committee's statement, the report relates, was made in papers filed this week in opposition to court approval of the program. A hearing to consider bonus approval is currently on the June 6 calendar for the U.S. Bankruptcy Court in New York. The report notes that the creditors said they weren't inclined to approve bonuses until secured lender Alden Global Capital Ltd. agrees on a settlement where the assets can be sold, leaving behind enough cash for a "meaningful distribution" to unsecured creditors. Although a secrecy requirement precluded the committee from laying out details, the creditors' filing said that the top three officers could receive bonuses exceeding their annual salaries. The committee is also against smaller bonuses for simply paying off financing for the bankruptcy. Higher bonuses, the committee says, aren't "difficult to attain" and therefore are retention bonuses banned by Congress for top managers of bankrupt companies. The report relates that the U.S. Trustee said that the top three executives would be collectively paid $72,000 upon repayment of the $5.25 million loan from Alden financing the bankruptcy. The U.S. Trustee also said that targets to qualify for higher bonuses aren't sufficiently "challenging." Not having found a buyer offering an adequate price for the business, Atari filed papers proposing to hold auction on July 16 through July 19. The report says that the bankruptcy judge already gave the committee authority to investigate the bankrupt French parent, Alden and others. The U.S. Atari company said at the outset of bankruptcy that debt owing to the parent should be treated as equity. The U.S. company also challenged the secured status of debt to the parent and to Blue Bay Value Recovery (Master) Fund Ltd. Alden is now Atari's post-bankruptcy lender, the primary shareholder of the bankrupt French parent, and a major secured lender to the parent. Given the secured status against the parent, Alden controls the $275 million claim the parent has against the U.S. company, according to a court filing by the committee. About Atari Inc. Atari -- http://www.atari.com-- is a multi-platform, global interactive entertainment and licensing company. Atari owns and/or manages a portfolio of more than 200 games and franchises, including world renowned brands like Asteroids(R), Centipede(R), Missile Command(R), Pong(R), Test Drive(R), Backyard Sports(R), and Rollercoaster Tycoon(R). Atari Inc. and its U.S. affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) on Jan. 21, 2013, to break away from their unprofitable French parent company and secure independent capital. A day after its American unit filed for Chapter 11 bankruptcy protection, Paris-based Atari S.A. took a similar measure under Book 6 of that country's commercial code. Atari S.A. said it was filing for legal protection because its longtime backer BlueBay has sought to sell its 29% stake and demanded repayment by March 31 on a credit line of $28 million that it cut off in December. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP are proposed to serve as lead counsel for the U.S. companies in their Chapter 11 cases. BMC Group is the claims and notice agent. Protiviti Inc. is the financial advisor. The Official Committee of Unsecured Creditors is seeking Court permission to retain Duff & Phelps Securities LLC as its financial advisor. The Committee sought and obtained authority to retain Cooley LLP as its counsel. ATP OIL: Bankruptcy Judge Says Asset Sale Not "Preordained" ----------------------------------------------------------- Jacqueline Palank, writing for Dow Jones Newswires' Daily Bankruptcy Review, reported that a bankruptcy judge warned ATP Oil & Gas Corp. that it's not "preordained" that he'll approve the asset sale the company has long been pinning its hopes on but which has run into complications. According to the report, the remarks, from Judge Marvin Isgur of the U.S. Bankruptcy Court in Houston, came at a status conference on ATP's progress in resolving concerns about its planned sale to its lenders. The lenders, led by Credit Suisse, have offered about $690 million for ATP's deepwater drilling assets, but much of the offer is in the form of debt forgiveness instead of cash. As a result, ATP attorney Charles Kelly, of Mayer Brown LLP, said the company is concerned it won't have enough cash on hand to cover the costs of bankruptcy -- what is known as being administratively insolvent -- let alone pay creditors, the report related. The attorney asked Judge Isgur for suggestions as how to resolve the dilemma but got an answer he probably hadn't bargained on. "If the estate is going to wind up administratively insolvent as a result of the 363 sale, then maybe the debtor should consider other options," Judge Isgur responded, according to the report. "It's not preordained to me that it's going to get approved." The judge's comments come less than a week before ATP is scheduled to ask him to approve the sale, a deal that's been delayed as the deal has run into creditor criticism and concerns, the report pointed out. 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 OIL: Anadarko Objects to Sale of Assets ------------------------------------------- Anadarko E&P Onshore filed with the U.S. Bankruptcy Court an objection to ATP Oil & Gas' motion for the sale of substantially all assets, joining similar objections previously filed by the United States and BP. Jeremy Heallen of BankruptcyLaw360 reported that Anadarko E&P Onshore, a unit of Anadarko Petroleum Corp., asked the bankruptcy judge to block a proposed $691 million sale of ATP Oil & Gas Corp.'s offshore assets, because the deal will allegedly allow the foundering company to escape $153 million in environmental liabilities. According to BankruptcyData, Anadarko E&P Onshore asserts, "Anadarko finds the United States' arguments persuasive because it is now apparent that the Debtor seeks to use the Sec. 363(b) sale process to shirk its environmental liabilities. Approval of the sale would leave the Debtor with massive P&A liabilities -- liabilities which this Court has characterized as administrative expense claims -- for which there will be no funding," the BData report said, citing court documents. The objection continues, 'the BP Objection to be well-founded in its argument that the proposed sale and attendant benefits may only be obtained by the DIP Lenders pursuant to the chapter 11 plan process," the BData added. According to the Law360 report, Anadarko E&P Onshore claims the sale of all of the income-producing assets to ATP's lenders does not include plugging and abandonment obligations tied to unproductive wells within the company's portfolio in which Anadarko holds partial interests. 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. 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. AXIS CONTRUCTION: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Axis Contruction, Inc. 4510 NE 68th Drive, Suite 102 Vancouver, WA 98661 Bankruptcy Case No.: 13-43532 Chapter 11 Petition Date: May 28, 2013 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: Timothy J. Dack, Esq. 1014 Franklin Street, Suite 102 P.O. Box 61645 Vancouver, WA 98666 Tel: (360) 694-4227 E-mail: bkfile@dackoffice.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/wawb13-43532.pdf The petition was signed by James Niemitalo, president. BIOSCRIP INC: S&P Rates Senior Secured Credit Facilities 'B' ------------------------------------------------------------ Standard & Poor's Rating Services said it affirmed its 'B' corporate credit rating on Elmsford, N.Y.-based BioScrip Inc. and assigned a 'B' issue-level rating on the company's senior secured credit facilities with a recovery rating of '3', indicating expectations for meaningful recovery in the event of a payment default. The outlook is stable. "The ratings on BioScrip Inc. reflect its "highly leveraged" financial risk profile, characterized by its highly leveraged capital structure and acquisitive past," said credit analyst John Babcock. "The ratings also incorporate our assessment of its business risk profile as "weak", which we revised from "vulnerable" based on its improved scale and competitive position. Other key credit factors considered in our business risk assessment include its narrow business focus and limited barriers to entry." S&P based its stable rating outlook on its expectation that BioScrip's debt-to-EBITDA ratio will remain near 5x for the next two years. Additionally, while S&P believes the company will generate more than $45 million in free cash flow in 2013, S&P do not expect the cash to be used for debt reduction. S&P would consider an upgrade if the company achieves an improved financial risk profile, including a debt-to-EBITDA ratio maintained below 5x. S&P estimates this could occur if it grows revenues in the double digits and its EBITDA margin expands 100 bps from its current projections. This could reflect operating leverage and a sustained decline in borrowing. S&P believes a lowering of the company's speculative-grade rating is unlikely in the year ahead, given BioScrip's plan to invest in higher-margin businesses than those divested. However, S&P would consider a downgrade if its covenant cushion falls below 10%. S&P estimates this could occur if its EBITDA margin contracts more than 100 bps from its projections. BLOCKBUSTER INC: Chapter 7 Conversion Sought -------------------------------------------- BankruptcyData reported that Blockbuster filed with U.S. Bankruptcy Court a motion for an order to convert its Chapter 11 reorganization cases to liquidation under Chapter 7 of the Bankruptcy Code, directing the U.S. Trustee assigned to the case to appoint a chapter 7 trustee and relieving Kurtzman Carson Consultants of its responsibilities as noticing and claims agent. The motion explains, "Conversion of the chapter 11 cases to cases under chapter 7 will provide a mechanism to reconcile any remaining claims, make final distributions, and close the administration of these cases....Upon conversion, the chapter 7 trustee can determine how he wishes to allocate estate assets to respond to requests from taxing authorities and other entities," the BData report said, citing court documents. The Court scheduled a June 19, 2013 hearing to consider the motion. About Blockbuster Inc. Blockbuster Inc., the movie rental chain with a library of more than 125,000 titles, along with 12 U.S. affiliates, initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan (Bankr. S.D.N.Y. Case No. 10-14997) on Sept. 23, 2010. It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A. Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the U.S. Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. The Official Committee of Unsecured Creditors retained Cooley LLP as its counsel. In April 2011, Blockbuster conducted a bankruptcy court-sanctioned auction for all the assets. Dish Network Corp. won with an offer having a gross value of $320 million. The Debtor changed its name from Blockbuster Inc. to BB Liquidating Inc. after Dish purchased all assets, including the trade name. BOLIN & CO: Circuit Court Liberalizes Rules on Mutual Setoff ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Manhattan clarified rules governing situations when a contract claim may be offset against a tort claim. The report recounts that a creditor had a $270,000 secured claim against a corporation in Chapter 7. The trustee won a judgment against the creditor for $226,000. The bankruptcy judge refused to allow setoff, requiring the creditor to pay the $226,000 judgment. In an unsigned and unpublished opinion on May 28, the Second Circuit in Manhattan reversed. The report notes that the case turned on whether the debts and credits both arose pre-bankruptcy. The appeals court reiterated law saying that a claim arises when all of the transactions necessary for liability have occurred, even if the claim remained contingent at bankruptcy. The two debts therefore were both pre- bankruptcy. The Bloomberg report discloses that the bankruptcy court also denied setoff, saying there was a lack of mutuality because one debt was secured and the other unsecured and didn't arise from the same transaction. The appeals court reversed again, holding that secured and unsecured claims may be offset. Likewise, contract claims may be set off against tort claims. The case is Ogden v. Chorches (In re Bolin & Co. LLC), 12-1310, U.S. Court of Appeals for Second Circuit (Manhattan). Bolin & Company, LLC, a jewelry retailer in Greenwich, Connecticut, filed a Chapter 7 bankruptcy petition on Aug. 20, 2004. Michael Daly was appointed the bankruptcy trustee. BOWLES SUB: Amended Plans of Reorganization Declared Effective -------------------------------------------------------------- Bowles Sub Parcel A, LLC and Fenton Sub Parcel A, LLC notified the Bankruptcy Court that the Effective Date of their plans of reorganization occurred on May 6, 2013. The Plans were confirmed on April 19. According to the Debtors' Second Modified Plan of Reorganization dated April 12, 2013, the Plan provides that the cash flow generated from the Reorganized Debtors' ongoing operations will be used for general working capital purposes and to make distributions under the Plan. A copy of the Plan is available for free at http://bankrupt.com/misc/BOWLES_SUB_2plan.pdf The cases had been reassigned to Judge R. Tunheim from Chief Judge Michael J. Davis, Judge Ann D. Montgomery, Judge Susan R. Nelson and Judge David S. Doty. About Fenton Sub Parcel D and Bowles Sub Parcel D Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own industrial multi-tenant properties located in the Twin Cities. They are controlled by StoneArch II/WCSE Minneapolis Industrial LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100% member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is the 100% member of Fenton Sub Parcel D, LLC. In 2007, StoneArch acquired various LLCs, which in turn owned 27 industrial multi- tenant properties located in the Twin Cities. The properties were divided into four separate pools: A, B, C, and D. Fenton Sub Parcel D and Bowles Sub Parcel D jointly own the properties in pool D. As tenants in common, Fenton Sub Parcel D has an undivided 74.5394% interest and Bowles Sub Parcel D has an undivided 25.4606% interest. The Pool D Properties consist of six parcels of real property located in Anoka, Dakota, and Hennepin Counties, Minnesota. The Debtors expect the Pool D Properties to be worth $13,135,656 as of the Petition Date. Although they are two separate legal entities, Fenton Sub Parcel D and Bowles Sub Parcel D have consistently been treated as one enterprise. Hoyt Properties, Inc., acts as agent in managing the Pool D Properties. Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11 bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on June 29, 2011. The Debtors' petitions were signed by Steven Bruce Hoyt, chief manager, who is also a debtor (Bankr. D. Minn. Case No. 11-43816). He is separately represented by Michael C. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman, P.A. The cases were originally assigned to Judge Dennis D. O'Brien and reassigned to Judge Robert J. Kressel as the cases are related to the Hoyt case, which was filed earlier before Judge Kressel. Cynthia A. Moyer, Esq., James L. Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson & Byron, PA, represent the Debtors. CANCANA RESOURCES: Seeks Approval for Management Cease Trade Order ----------------------------------------------------------------- Cancana Resources Corp. on May 31 disclosed that has applied to the Alberta Securities Commission to approve a management cease trade order. If approved, it is anticipated that the MCTO will be issued effective June 3, 2013. The Company anticipates it may be unable to file its annual financial statements, management discussion and analysis and related Chief Executive Officer and Chief Financial Officer certificates for its fiscal year-ended January 31, 2013 before the May 31, 2013 filing deadline. Through the process of completing the Cancana's financial statements, the Company's auditors have raised an issue with respect to the consolidation of an investment currently held by the Company and the applicable accounting treatment in respect of this holding. The Company has been working diligently with its auditors to remedy the situation in advance of the deadline, however Cancana has concluded that its auditor will not be able to complete the audit within the allotted timeframe and as such the Required Filings cannot be made by the Filing Deadline. The Company anticipates that it will be in a position to remedy the default within the two-month time allotted that the Company has applied for under the MCTO and file the Required Filings on or before July 30, 2013. The MCTO restricts all trading in securities of the Company, whether direct or indirect, by management of the Company. The MCTO will be in effect until the Required Filings are filed. The Company intends to satisfy the provisions of the alternative information guidelines set out in sections 4.3 and 4.5 of National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults so long as the Required Filings are outstanding. The Company has not taken any steps towards any insolvency proceeding and the Company has no material information to release to the public. About Cancana Resources Corp. Cancana Resources Corp. -- http://www.cancanacorp.com-- is an exploration stage company with assets in Brazil and Canada. The Company has been seeking projects that expand its resource base and provide for near term production and revenue. CAREY LIMOUSINE: Chapter 11 Plan Is Confirmed --------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the reorganization plan for Carey Limousine L.A. Inc. was approved on May 30 when the U.S. bankruptcy judge in Delaware signed a confirmation order. According to the report the plan, a product of mediation with the official creditors' committee, has $1.1 million cash for unsecured creditors with $4.5 million in claims, for a projected 24.3 percent recovery. In exchange for the $1.1 million destined for unsecured creditors, an affiliate named Carey International Inc. will become the new owner. The Bloomberg report discloses that secured claims aren't affected. The principal liability is $146.6 million owing on a secured term loan. About Carey Limousine Carey Limousine L.A., Inc., a subsidiary of Carey International, is one of the largest chauffeured transportation services companies in Southern California. Carey Limousine filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-12664) on Sept. 25, 2012. The Debtor operates from a centralized location with convenient proximity to Los Angeles International Airport, Beverly Hills, Downtown Los Angeles, and other centers of business and tourism in Southern California. The Debtor has 17 employees and utilized 30 independent owner-operators. Seventeen farm-out companies, providing chauffeurs, fulfill overflow customer requests. The Debtor estimated just under $500,000 in assets and at least $100 million in liabilities. The Debtor said it owes $146.6 million in term loans provided by lenders led by Highland Financial Corp., as arranger and NexBank, SSB, as administrative agent. The Debtor has tapped Young, Conaway, Stargatt & Taylor, as counsel; Willkie Farr & Gallagher LLP, as bankruptcy co-counsel; and Kurtzman Carson Consultants LLC as the claims and notice agent. CASH STORE: Obtains Full Revocation of Cease Trade Orders --------------------------------------------------------- The Cash Store Financial Services Inc. on May 31 disclosed that it has obtained a full revocation of the cease trade orders that were recently issued by the Alberta Securities Commission, the British Columbia Securities Commission and the Ontario Securities Commission. As announced in a press release dated May 14, 2013, the Alberta Securities Commission issued a cease trade order in connection with the Company's decision to restate and re-file financial statements and related MD&A for (i) the years ended September 30, 2012, September 30, 2011 and the fifteen month period ended September 30, 2010, and (ii) the interim periods ending December 31, 2011, March 31, 2012, June 30, 2012 and December 31, 2012. On May 16, 2013 and May 21, 2013, the British Columbia Securities Commission and Ontario Securities Commission also issued similar cease trade orders. The Company has now completed the Restatement and the Cease Trade Orders have been revoked. About Cash Store Financial Cash Store Financial is the only lender and broker of short-term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store Financial operates 512 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 25 branches in the United Kingdom. Cash Store Financial is a Canadian corporation that is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States. The Company's balance sheet at Dec. 31, 2012, showed C$207.69 million in total assets, C$169.93 million in total liabilities and C$37.76 million in shareholders' equity. * * * As reported in the Feb. 8, 2013 edition of the TCR, Standard & Poor's Ratings Services lowered its issuer credit rating on Cash Store Financial (CSF) to 'CCC+' from 'B-'. The outlook is negative. "The downgrades follow a proposal by the payday loan registrar in Ontario to revoke CSF's payday lending licenses and CSF's announcement that it has discontinued its payday loan product in the region," said Standard & Poor's credit analyst Igor Koyfman. The company's businesses in Ontario, which account for approximately one-third of its store count, will begin offering a new line of credit product to its customers. S&P believes this is to offset the loss of its payday lending product; however, this is a relatively new product, and S&P believes that it will be challenging for the company to replace its lost earnings from the payday loan product. S&P also believe that the registrar's proposal could lead to similar actions in other territories. As reported by the TCR on May 22, 2013, Moody's Investors Service downgraded the Corporate Family Rating and senior unsecured debt rating of Cash Store Financial Services to Caa1 from B3 and assigned a negative outlook. According to Moody's, CSFS remains unprofitable on both the pretax and net income lines and prospects for return to profitability are unclear. CCS MEDICAL: S&P Revises Outlook to Negative & Affirms 'B-' CCR --------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook to negative from stable and affirmed its 'B-' corporate credit rating on CCS Medical Inc. The 'B-' issue-level and '3' recovery rating on the company's first-lien term loan, and the 'CCC' rating and the '6' recovery rating on the company's second-lien term loan remain unchanged. The '3' recovery rating on the 1st-lien term loan reflects S&P's expectation for meaningful (50%-70%) recovery in the event of payment default. The '6' recovery rating on the 2nd-lien term loan reflects S&P's expectation for negligible (0%-10%) recovery in the event of payment default. "While we are maintaining our "vulnerable" business risk and "highly leveraged" financial risk profiles, we note that free cash flow is very thin heading into a challenging phase in the company's operations," said credit analyst David Kaplan. "We based our vulnerable business risk profile on a highly fragmented business and what we view as low barriers to entry in the non- Medicare business as well as intense pricing pressure in its highly concentrated diabetes products business. CCS' highly leveraged financial risk profile reflects our belief that, over the near-term, free cash flow will struggle to grow and leverage will rise because of a combination of sharp price declines and low initial volumes following implementation of competitive bidding." The negative outlook reflects S&P's expectation for reduced EBITDA generation and thin-to-negative free cash flow over the next few quarters, the uncertainty surrounding potential reimbursement cuts from commercial payers, and the need to increase volumes substantially while tightly managing working capital, to generate positive free cash flow. S&P could lower the rating if CMS-related payment delays continue to increase working capital levels or if expected volumes do not materialize in the second half of 2013. Such a development would likely result in negative free cash flows that could exhaust the company's liquidity and jeopardize the company's ability to refinance its debt. S&P could revise the outlook to stable if the company is able to generate sustained levels of free cash flow. This would imply that the company is able manage the price reduction and higher volumes expected from new contracts under Competitive Bidding while also containing working capital outflows. CENTRAL EUROPEAN: Chapter 11 Plan to Be Consummated June 5 ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that ownership of Central European Distribution Corp. will be taken over officially by Roustam Tariko's Roust Trading Ltd. by June 5, the U.S.-based parent of the world's largest vodka producers said in a statement on May 31. According to the report the U.S. Bankruptcy Court in Delaware approved the prepackaged Chapter 11 reorganization plan on May 13. The report notes that the plan received an approving vote of creditors before court proceedings commenced April 7. About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. On April 7, 2013, CEDC and two subsidiaries sought bankruptcy protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan that reduces debt by US$665.2 million. Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as legal counsel to the Debtor. Houlihan Lokey is the investment banker. Alvarez & Marsal will provide the chief restructuring officer. GCG Inc. is the claims and notice agent. The Bankruptcy Court approved the Disclosure Statement and confirmed the Second Amended and Restated Joint Prepackaged Plan of Reorganization. CHINA BAK: Incurs $22.6-Mil. Net Loss in March 31 Quarter --------------------------------------------------------- China BAK Battery, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $22.6 million on $44.1 million of revenues for the three months ended March 31, 2013, compared with a net loss of $15.6 million on $32.8 million of revenues for the same period last year. The Company reported a net loss of $47.9 million on $107.8 million of revenues for the six months ended March 31, 2013, compared with a net loss of $17.4 million on $104.5 million of revenues for the six months ended March 31, 2012. The Company's balance sheet at March 31, 2013, showed $418.2 million in total assets, $392.7 million in total liabilities, and stockholders' equity of $25.5 million. According to the regulatory filing, the Company has a working capital deficiency, accumulated deficit from recurring net losses incurred for the current period and prior years and significant short-term debt obligations maturing in less than one year as of Sept. 30, 2012, and March 31, 2013. "These factors raise substantial doubts about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/g1wKfX Shenzhen, PRC-based China BAK Battery, Inc., is a leading global manufacturer of lithium-based battery cells. CHINA GINSENG: Incurs $1.4-Mil. Net Loss in March 31 Quarter ------------------------------------------------------------ China Ginseng Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.4 million on $497,943 of revenues for the three months ended March 31, 2013, compared with a net loss of $281,962 on $902,807 of revenues for the three months ended March 31, 2012. "The increase of the net loss in this quarter is primarily due to the inventory impairment." The Company reported a net loss of $3.1 million on $2.7 million of revenues for the nine months ended March 31, 2013, compared with a net loss of $1.1 million on $3.1 million of sales for the nine months ended March 31, 2012. "The net loss was primarily due to the decreased whole sales and increased cost of sales as a percentage of revenue and the inventory impairment. The Company's balance sheet at March 31, 2013, showed $6.3 million in total assets, $6.8 million in total liabilities, and a stockholders' deficit of $462,148. According to the regulatory filing, the Company had an accumulated deficit of $8.8 million as of March 31, 2013, and there are existing uncertain conditions the Company foresees relating to its ability to obtain working capital and operate successfully. "Management's plans include the raising of capital through the equity markets to fund future operations and the generating of revenue through its businesses. Failure to raise adequate capital and generate adequate sales revenues could result in the Company having to curtail or cease operations. "Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/FBgvW2 Changchun City, China-based China Ginseng Holdings, Inc., conducts business through its four wholly-owned subsidiaries located in China. The Company has been granted 20-year land use rights to 3,705 acres of lands by the Chinese government for ginseng planting and it controls, through lease, approximately 750 acres of grape vineyards. However, recent harvests of grapes showed poor quality for wine production which indicates that the vineyards are no longer suitable for planting grapes for wine production. Therefore, the Company has decided not to renew its lease for the vineyards with the Chinese government upon expiration in 2013 and, going forward, it intends to purchase grapes from the open market in order to produce grape juice and wine. CHINA PEDIATRIC: Incurs $4.7-Mil. Net Loss in First Quarter ----------------------------------------------------------- China Pediatric Pharmaceuticals, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $4.7 million on $882,483 of net sales for the three months ended March 31, 2013, compared with a net loss of $1.8 million on $4.8 million of net sales for the same period last year. The Company's balance sheet at March 31, 2013, showed $7.5 million in total assets, $608,483 in total current liabilities, and stockholders' equity of $6.9 million. The Company had accumulated deficit of $11.3 million and $6.5 million as at March 31, 2013, and Dec. 31, 2012. "These create an uncertainty about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/YlW0Nb Located in Xi'an, Shaanxi Province, PRC, China Pediatric Pharmaceuticals, Inc., is engaged in the business of manufacturing and marketing of over-the-counter and prescription pharmaceutical products for the Chinese marketplace as treatment for a variety of disease and conditions. CHRISTIAN BROTHERS: Settles Abuse Claims for $16.5 Million ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Christian Brothers' Institute came to an agreement with lawyers for sexual-abuse claimants on a Chapter 11 plan based on a $16.5 million contribution from the religious order and from an insurance company. The report notes that according to a statement by Jeff Anderson & Associates PA, the plan will be filed in the next two weeks with the U.S. Bankruptcy court in White Plains, New York. According to the report, the forthcoming plan will provide payments for 400 victims, according to Anderson. It won't stop the victims from suing third parties, like schools and dioceses, he said. The report says that Anderson also said the settlement will provide "concrete measures" for "safeguarding children from future abuse." About Christian Brothers' Institute The Christian Brothers' Institute in New Rochelle, New York, is a domestic not-for-profit 501(c)(3) corporation organized under Sec. 102(a)(5) of the New York Not-for-Profit Corporation Law. CBI was formed to establish, conduct and support Catholic elementary and secondary schools principally throughout New York State. The Christian Brothers of Ireland, Inc., in Chicago, Illinois, is a domestic not-for-profit 501(c)(3) corporation organized under the Not-for-Profit Corporation Law of the State of Illinois. CBOI was formed to establish, conduct and support Catholic elementary and secondary schools principally throughout the State of Illinois, as well as other spiritual and temporal affairs of the former Brother Rice Province of the Congregation of Christian Brothers. CBI and CBOI depend upon grants and donations to fund a portion of their operating expenses. The Christian Brothers' Institute and The Christian Brothers of Ireland filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 11-22820 and 11-22821) on April 28, 2011. Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, serves as the Debtors' bankruptcy counsel. The Christian Brothers' Institute disclosed assets of $63,418,267 and $8,484,853 in liabilities. CIT GROUP: Shares Jump as Lender Exits Regulatory Curbs ------------------------------------------------------- Rick Green, writing for Bloomberg News, reported that CIT Group Inc. (CIT), the business lender run by John Thain, jumped 5.4 percent after reporting that regulatory curbs imposed in 2009 while the firm struggled to survive have been lifted. CIT received notice from the Federal Reserve Bank of New York that a written agreement dated Aug. 12, 2009 was terminated, according to a statement from the company, the report related. CIT advanced $2.41 to $46.90 as of 4:15 p.m. on May 31 in New York and traded for as much as $47.77, its best level since February 2011. The stock has gained 21 percent this year. The report related that bad loans including subprime mortgages led New York-based CIT to take $2.33 billion from the Treasury's bank rescue fund and then file for bankruptcy. Thain, who joined the company after its troubles began, led CIT with a plan that reduced the lender's bad credits and high cost of funds. The bailout wasn't repaid. CIT's 2009 agreement with the Fed required the company to seek the regulator's approval for issuing dividends or new debt, the report said. CIT also pledged to provide periodic updates focusing on cash and funding. CLEARWATER SEAFOODS: S&P Revises Outlook to Pos. & Affirms 'B' CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services said it revised its outlook on Halifax, N.S.-based Clearwater Seafoods L.P. to positive from stable. At the same time, Standard & Poor's affirmed its 'B' long-term corporate credit rating on the company. "The revised outlook reflects what we view as Clearwater's strengthened operating performance and credit protection measures, which we expect will continue this year," said Standard & Poor's credit analyst Lori Harris. "The improvement in Clearwater's credit metrics in the past couple of years is attributed to increased EBITDA, which was driven by higher sales and better cost efficiencies," Ms. Harris added. Standard & Poor's also assigned its 'BB-' issue-level rating and '1' recovery rating to Clearwater's proposed new term facilities, which are expected to consist of C$30 million senior secured term loan A due 2018, C$45 million senior secured delayed-draw term loan A due 2018, and US$200 million senior secured term loan B due 2019. The '1' recovery rating indicates S&P's expectation of very high (90%-100%) recovery in the event of default. S&P understands that proceeds of the new term loans, along with drawings under a proposed C$60 million senior secured revolving credit facility (which S&P don't rate), will be used to refinance existing debt and fund a new clam harvesting vessel. The ratings on Clearwater reflect Standard & Poor's view of the company's "weak" business risk profile and "aggressive" financial risk profile (as defined by S&P's criteria). S&P base its business risk assessment on Clearwater's narrow product focus, historically volatile operating performance, and participation in the commodity-oriented commercial fishing industry. These factors are partially offset, S&P believes, by the company's position as the largest holder of shellfish quota in Canada, improved operating performance, and a proven record of operating under the seafood industry's highly regulated environment. S&P's financial risk assessment is based on what it considers the company's "aggressive" financial policy, weak credit protection measures, and nominal free cash flow expected this year because of elevated capital expenditures. The positive outlook on Clearwater is based on Standard & Poor's belief that the company will maintain its solid market position in premium shellfish and seafood products, while strengthening its operating performance and credit measures in the medium term. S&P could consider raising the ratings if Clearwater is able to improve its performance and credit metrics on a sustainable basis, including funds from operations to debt above 15%, debt leverage below 4x, and an EBITDA cushion above 15% within its leverage covenant. Alternatively, S&P could revise the outlook back to stable in the event the company's operating performance flattens, if Clearwater's adjusted credit ratios do not meet S&P's guidance, or if the company is not on track to generate meaningfully improved free cash flow in 2015. CODA HOLDINGS: Bonuses Pulled, More Bankruptcy Issues Remain ------------------------------------------------------------ Randall Chase, writing for The Associated Press, reported that the Chapter 11 case of failed electric car maker CODA Holdings continued on the fast track after attorneys resolved several objections to the company's bankruptcy financing and sale plans. According to the report, after meeting behind closed doors for several hours, attorneys for the company and its official creditors committee told a Delaware bankruptcy judge they had reached agreements on several disputed issues. The agreements will not be formally submitted to the court for approval until June 3, but Judge Christopher Sontchi nevertheless granted a request by the parties to sign final orders approving CODA's debtor financing and sale plans. The report related that Sontchi, who had expressed concerns about the company's bankruptcy plans at hearing earlier this month, said the changes made make them more reasonable. Attorneys for the U.S. trustee and the official creditors committee argued in court papers last week that CODA's financing and sale plans would unfairly benefit a group of lenders and noteholders, led by an affiliate of Fortress Investment Group, who are seeking to acquire the company with a lead, or "stalking horse" bid of $25 million, the report recalled. Under a sale order approved Wednesday, competing bids are due Friday, followed by an auction, if necessary, on June 3, the report noted. About CODA Holdings Los Angeles, California-based CODA Energy -- http://www.codaenergy.com-- made an electric auto that was a commercial failure. The company marketed the Coda Sedan, which sold only 100 copies. It was an electrically powered version of the Hafei Saibao, made in China. After bankruptcy, Los Angeles- based Coda intends to concentrate on making stationery electric- storage systems. 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. COLLEGIATE ACADEMY: S&P Lowers Issuer Credit Rating to 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its issuer credit rating (ICR) to 'BB' from 'BBB-' on Colorado Educational and Cultural Facilities Authority's series 2004 charter school revenue refunding bonds, supported by Collegiate Academy Charter School Building Corp. and issued for Collegiate Academy Charter School. The outlook is negative. "The lowered rating reflects our view of the significant deterioration in the school's operations, as demonstrated by the negative fund balance in fiscal 2012," said Standard & Poor's credit analyst Carlotta Mills. "The negative outlook indicates that while management appears to have stabilized and the school has a plan in place for fiscal improvement, finances would have to improve before we could consider revising the outlook to stable," continued Ms. Mills. The ICR reflects S&P's opinion of: -- The school's very low days' cash on hand (four days), with a similar level of cash expected by management in fiscal 2013; -- The potential that the school may lose its charter (as with all charter schools) prior to the bonds' maturity; -- Inadequate coverage in fiscal 2012, according to its calculations, with a similar or lower level of coverage expected by management in fiscal 2013; and -- Management challenges, which appear to have stabilized, during the last half of fiscal 2013. Debt as of the end of fiscal 2012 was $6.9 million. COOPER-BOOTH: Section 341(a) Meeting Set on June 25 --------------------------------------------------- A meeting of creditors in the bankruptcy case of Cooper-Booth Wholesale Company, L.P., will be held on June 25, 2013, at 2:00 p.m. at 833 Chestnut Street, Suite 501, Philadelphia, PA. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Cooper-Booth Wholesale Company, L.P. and two affiliates sought Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 13-14519) in Philadelphia on May 21, 2013, after the U.S. government seized its bank accounts to recover payments made by a large customer caught smuggling Virginia-stamped cigarettes into New York. The petitions were signed by Barry Margolis, president of Cooper- Booth Mgmt Co., Inc., general partner. Judge Magdeline D. Coleman presides over the case. Maschmeyer Karalis, P.C., serves as the Debtors' counsel. Executive Sounding Board Associates, Inc., acts as the Debtors' financial advisor. Blank Rome LLP serves as the Debtors' special counsel. CPI CORP: Trustee Gets Green Light for Chapter 7 Auction -------------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that a Delaware bankruptcy judge gave the green light for photography portrait studio operator CPI Corp.'s Chapter 7 trustee to hire a logistics firm to gather its equipment from more than 2,000 locations and sell it in a liquidation auction with a $3.3 million stalking horse. According to the report, the sale plan includes the stalking horse bid from Lifetouch Portrait Studios Inc., and CPI also obtained a post-petition loan from Bank of America to pay Logistics International LLC $1.5 million to go to Sears, Toys R Us, Walmart, among others. About CPI Corp. CPI Corp., an operator of 2,700 photo studios, filed a petition on May 1, 2013, to liquidate in Chapter 7 (Bankr. D. Del. Case No. 13-11158) where a trustee was appointed immediately to liquidate the assets. The last balance sheet for November 2012 had assets of $56.2 million and liabilities of $174.8 million. The bankruptcy petition listed liabilities for the parent company of $135 million, including secured claims totaling $99.4 million. On April 15, 2013, three of the Company's Canadian subsidiaries, CPI Corp., an unlimited liability company organized under the laws of Nova Scotia, CPI Portrait Studios of Canada Corp., an unlimited liability company organized under the laws of Nova Scotia, and CPI Canadian Images, an Ontario partnership, were subject to an order by the Superior Court of Justice in the Province of Ontario pursuant to Section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, cB-3, as amended and Section 101 of the Courts of Justice Act, R.S.O. 1990, C.C.43, as amended, in which Duff & Phelps Canada Restructuring Inc. was appointed as receiver and receiver and manager without security of all of the assets, undertakings and properties of such Canadian subsidiaries, acquired for, or used in relation to a business carried on by those Canadian subsidiaries, including all proceeds thereof. The Court File No. is 13-10069-00CL. CPG INTERNATIONAL: S&P Revises Outlook to Stable & Affirms 'B' CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services said revised its outlook on Scranton, Pa.-based building products producer CPG International Inc. (CPG) to stable from negative. At the same time, S&P affirmed the ratings on CPG, including the 'B' corporate credit rating. "We revised our outlook on CPG following the company's successful integration of competing decking manufacture TimberTech, resulting in realized cost savings and improved EBITDA," said Standard & Poor's credit analyst James Fielding. "Our rating on CPG reflects our view of the company's "weak" business risk profile. A large concentration of the company's products are tied to highly-cyclical construction and remodeling activity, and exposure to raw material costs including composite resins, which can exhibit volatility. Still, we acknowledge that the company weathered the sharp U.S. downturn in construction relatively well and we expect it to generate free cash flow as these markets recover. In addition, the company strengthened its market share in the composite decking and railing markets with its acquisition of TimberTech last year," S&P noted. The stable outlook reflects S&P's assessment of the company's successful integration of competitor TimberTech, which should contribute to higher EBITDA in 2013 and 2014, such that leverage will be in the 5x to 6x range. The outlook also reflects S&P's expectation that the company will maintain its adequate liquidity position. An upgrade during the next 12 months would most likely be contingent on a successful public offering that dropped leverage below 5x and sharply reduced CPG's private equity ownership and control. The likelihood of such an event is indeterminate at this time. S&P would lower its rating on CPG if the company were to use a substantial amount of its committed revolving borrowing capacity to fund large acquisitions, such that S&P no longer viewed liquidity to be adequate. CPG manufactures various composite building products for residential and commercial applications. Its largest segments include composite exterior decking, railing, and trim, as well as lockers and bathroom partitions. CROSS BORDER RESOURCES: Reports $1.8-Mil. Net Income in 1st Qtr. ---------------------------------------------------------------- Cross Border Resources, Inc., filed its quarterly report on Form 10-Q, reporting net income of $1.8 million on $3.3 million of revenues for the three months ended March 31, 2013, compared with net income of $727,649 on $3.6 million of revenues for the same period last year. Other income was $543,091 for the quarter ended March 31, 2013, as compared to expenses of $761,746 for the quarter ended March 31, 2012. "The increase in income is due to non-cash gains on settlement of debt and a decrease in loss on derivatives contracts." The Company's balance sheet at March 31, 2013, showed $39.1 million in total assets, $20.9 million in total liabilities, and stockholders' equity of $18.2 million. "At March 31, 2013, the Company had a working capital deficit of $1,777,987 and outstanding debt of $10,900,000. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/9j4h8Z Dallas-based Cross Border Resources, Inc., is an independent natural gas and oil company engaged in the exploration, development, exploitation, and acquisition of natural gas and oil reserves in North America. The Company's primary area of focus is the State of New Mexico, particularly southeastern New Mexico. The Company has two wholly-owned subsidiaries, which are inactive: Doral West Corporation and Pure Energy Operating, Inc. * * * Darilek Butler & Associates, PLLC, in San Antonio, Texas, expressed substantial doubt about Cross Border's ability to continue as a going concern, following their audit of the Company's financial statements for the year ended Dec. 31, 2012, citing the Company's significant operating losses and negative working capital. CUSTOM CABLE: Choate Hall Moves to Toss Investor Suit ----------------------------------------------------- Jake Simpson of BankruptcyLaw360 reported that Choate Hall & Stewart LLP urged a Delaware federal judge to dismiss a malpractice suit by private investor HWI Partners LLC that alleges the law firm botched HWI's acquisition of now-bankrupt Custom Cable Industries Inc. in 2008, arguing that HWI lacks standing and the suit is time-barred. According to the report, the law firm said that the purported financial injury -- a failure to properly execute a loan agreement by Choate Hall that left Custom Cable saddled with debt -- occurred to Custom Cable and not HWI. The case is HWI Partners LLC et al v. Choate, Hall & Stewart LLP et al, Case No. 1:13-cv-00918 (Del.). About Custom Cable Custom Cable filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10-18478) on July 30, 2010. Michael P. Horan, Esq., and Stephanie C. Lieb, Esq., at Trenam Kemker Scharf Barkin Frye, serve as the Debtor's bankruptcy counsel. The Debtor estimated $1 million to $10 million in assets and $10 million to $50 million in debts in the Chapter 11 petition. DAMES POINT: Parties Select GrayRobinson as Mediator ---------------------------------------------------- P & B Marina Development, LLC, filed an agreed motion asking the U.S. Bankruptcy Court for permission to employ Jason Burnett of GrayRobinson as mediator in the Chapter 11 case of Dames Point Holdings, LLC. The Court directed the Debtor and P & B Marina to select a mediator on or before May 28. The parties conferred and selected a mutually acceptable mediator. The mediator can be reached at: Jason Burnett GRAYROBINSON, P.A. 50 North Laura Street, Suite 1100 Jacksonville, Florida 32202 P & B Marina's counsel can be reached at: Scott A. Underwood, Esq. Frank S. Harrison, Esq. FOWLER WHITE BOGGS P.A. P.O. Box 1438 Tampa, FL 33601 Tel: (813) 228-7411 Fax: (813) 229-8313 E-mail: scott.underwood@fowlerwhite.com frank.harrison@fowlerwhite.com About Dames Point Holdings P & B Marina Development, LLC filed an involuntary chapter 11 case against Jacksonville, Florida-based Dames Point Holdings, LLC (Bankr. M.D. Fla. Case No. 13-00501) on Jan. 29, 2013. Scott A. Underwood, Esq., at Fowler White Boggs, P.A. represented the petitioners. On March 12, 2013, the Court entered an order vacating the Feb. 28, 2013, order for relief in involuntary Chapter 11 case. The Court has consolidated the involuntary Chapter 11 case for all purposes with the voluntary case of William F. Snafnacker. The U.S. Trustee for Region 21 has informed the Bankruptcy Court that until further notice, it will not appoint a committee of creditors in the Chapter 11 case of Dames Point Holdings because of an insufficient number of unsecured creditors willing or able to serve on an unsecured creditors committee. DANCE NEW AMSTERDAM: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Dance New Amsterdam, Inc. fka Dance Space Center, Inc. 280 Broadway 1st Floor New York, NY 10007 Bankruptcy Case No.: 13-11734 Chapter 11 Petition Date: May 27, 2013 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Irina Kushel, Esq. LAW OFFICES OF IRINA KUSHEL 299 Broadway, Suite 1405 New York, NY 10007 Tel: (347) 825-2369 Fax: (212) 994-9470 E-mail: irina@kushellaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Catherine A. Peila, executive director. DETROIT, MI: State Treasurer on Possible Bankruptcy --------------------------------------------------- Matt Helms and Kathleen Gray, writing for The Detroit Free Press, reported that State Treasurer Andy Dillon said he believes Detroit's turnaround is building momentum and the city will be in better shape once emergency manager Kevyn Orr completes his tenure. But it's clear that a municipal bankruptcy is possible, and Dillon said that if it happens, it must be well-planned to avoid pitfalls that have left cities such as Stockton and Vallejo, Calif., struggling to provide services despite Chapter 9 filings, according to the report. Acknowledging the public uproar over the vulnerability of the Detroit Institute of Arts' assets in a possible Detroit bankruptcy, the aim, he said, would be ensuring that a Detroit bankruptcy "is not a failed transaction," Dillon said. "I think we're ready to go either way," Dillon said during a panel discussion on Detroit's future at the Mackinac Policy Conference, the report related. Still, Dillon said the larger issues crippling Detroit -- a bureaucratic, inflexible city government, bleeding cash and enormous debts -- can be resolved outside of municipal bankruptcy, the report said. Orr's focus as emergency manager is on "going right at the heart of the problem of restructuring" a city that did not adjust as its population shrank and its tax revenues declined to disastrous levels, Dillon said, the report further related. "There's no nibbling on the edges here," he said. DEWEY & LEBOEUF: Settlement With XL, Davis Approved by Court ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Dewey & LeBoeuf LLP, the defunct law firm, received court approval last week for a settlement where XL Specialty Insurance Co. will pay $19 million and the firm's former Chairman Steven Davis chips in a note for $511,000. In return, XL and Davis receive waivers of claims that could have been brought by the law firm. The report recounts that the firm's liquidating Chapter 11 plan was approved in February. Stephen DiCarmine, the former executive director, and Joel Sanders, Dewey's former chief financial officer, were left out of the settlement and unsuccessfully objected to approval. In his approval order, U.S. Bankruptcy Judge Martin Glenn found that the settlement was negotiated in good faith, at arm's length, with aid of a mediator. Judge Glenn is allowing XL to deduct the payment from the insurance company's liability under the policy. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey filed a Chapter 11 Plan of Liquidation and an accompanying Disclosure Statement on Nov. 21, 2012. It filed amended plan documents on Dec. 31, in an attempt to address objections lodged by various parties. A second iteration was filed Jan. 7, 2013. The plan is based on a proposed settlement between secured lenders and Dewey's official unsecured creditors' committee, as well as a settlement with former partners. On Feb. 27, 2013, the Bankruptcy Court confirmed Dewey & Leboeuf's Second Amended Chapter 11 Plan of Liquidation dated Jan. 7, 2013, As of the Effective Date of the Plan, the Debtor will be dissolved. Alan Jacobs of AMJ Advisors LLC, has been named Dewey's liquidation trustee. DIGERATI TECH: Files Petition in Houston Amid Fight for Control --------------------------------------------------------------- Digerati Technologies, Inc., filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 13-33264) in Houston, on May 30, 2013. The Stafford, Texas-based company said its principal assets are subsidiaries with operations in Fairview, Montana; Williams County, North Dakota; and San Antonio, Texas. The Debtor disclosed $60 million in assets and $62.5 million in liabilities as of May 29, 2013. Arthur L. Smith, the CEO and sole director, said he sent the company to bankruptcy after reviewing the company's financial condition over the last couple of months. Mr. Smith signed the petition. Digerati is represented by Edward L Rothberg, Esq., at Hoover Slovacek, LLP, in Houston. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Digerati Technologies Inc. filed a Chapter 11 petition on the heels of a fight for control in state court. Digerati Technologies, Inc. -- http://www.digerati-inc.com-- is a provider of cloud communication services. According to the Bloomberg report, in a statement on March, the company said a state court in Houston barred an opposing faction from representing that anyone other than Smith is the company's CEO. The state court entered a temporary injunction barring other group from making regulatory filings, public statement for the company, or representing themselves to be the company's officers and directors, according to the same statement. DIMARIA PROPERTIES: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: DiMaria Properties, LLC 3400-3428 E. Atlantic Blvd Pompano Beach,, FL 33062 Bankruptcy Case No.: 13-22403 Chapter 11 Petition Date: May 28, 2013 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: Bart A Houston, Esq. THE HOUSTON LAW GROUP, P.A. 1401 East Broward Blvd., Suite 206 Fort Lauderdale, FL 33301 Tel: (954) 315-4877 Fax: (954) 762-2554 E-mail: bhouston@thlglaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Frank DiMaria, managing member. DIRECT ACCESS: Hit With Involuntary Petition; Executives Arrested ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Direct Access Group LLC, whose executives were arrested this month on charges of money laundering and violation of the Foreign Corrupt Practices Act, was hit May 30 with an involuntary Chapter 7 bankruptcy petition (Bankr. S.D.N.Y. Case No. 13-11780). According to the report the involuntary petition filed by Lake Avenue Capital LLC describes how Direct Access owned a broker- dealer. After the arrests, the Securities and Exchange Commission filed a civil suit alleging the broker was involved in a kickback scheme "involving more than $66 million in illegal profits and bribes." The Bloomberg report discloses that the broker ceased operations, according to Lake Avenue. Lake Avenue wants the bankruptcy court in Manhattan to appoint a trustee at a hearing on June 3, even before Direct Access is officially in bankruptcy. A call to Direct Access for comment on the filing wasn't returned. DOBSON LAND: Case Summary & Unsecured Creditor ---------------------------------------------- Debtor: Dobson Land Company LLC 1030 Main Street Kimball, TN 37380 Bankruptcy Case No.: 13-12571 Chapter 11 Petition Date: May 28, 2013 Court: United States Bankruptcy Court Eastern District of Tennessee (Chattanooga) Judge: John C. Cook Debtor's Counsel: David J. Fulton, Esq. SCARBOROUGH, FULTON & GLASS 701 Market Street, Suite 1000 Chattanooga, TN 37402 Tel: (423) 648-1880 Fax: (423) 648-1881 E-mail: djf@sfglegal.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The list of 20 largest unsecured creditors only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Louise B. Dobson Unknown 1020 Waterfront Place Kimball, TN 37347 The petition was signed by Louise Dobson, member/manager. DUCOMMUN INC: S&P Raises Rating on $60MM Revolver Debt to 'BB' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B+' corporate credit rating on Ducommun Inc. The outlook is stable. At the same time, S&P raised the rating on the company's secured credit facility, which consists of a $60 million revolver and an originally $190 million term loan ($155 million as of March 30, 2013), to 'BB' from 'BB-'. S&P revised the recovery rating on this debt to '1' from '2', reflecting expectations of very high (90%-100%) recovery in the event of a payment default. S&P also affirmed the 'B-' issue rating on the company's $200 million unsecured notes. The '6' recovery is unchanged and reflects expectations of negligible (0%-10%) recovery. "Standard & Poor's ratings on Carson, Calif.-based Ducommun reflect our expectations that growing earnings and cash flow will enable the company to reduce debt used for the LaBarge acquisition, resulting in gradually improving credit measures," said Standard & Poor's credit analyst Christopher DeNicolo. "We assess Ducommun's business risk profile as "weak," given its modest size compared with some competitors and our expectation of flat to declining defense spending over the next few years. Good program and customer diversity partly offset these factors. We view the company's financial risk as "aggressive," reflecting weak, albeit improving, credit protection measures after the largely debt-financed LaBarge acquisition and "adequate" liquidity, under our criteria," S&P noted. S&P expects debt to EBITDA to fall below 4.5x and funds from operations (FFO) to debt to improve to more than 15% in the next 12 months as the strong commercial aircraft market, improving margins, and debt reduction offset lower projected U.S. defense spending and weakness in the industrial and natural resource segments. Ducommun acquired LaBarge in June 2011 for about $340 million, which it funded from internally generated cash, senior notes, and a new credit facility. The acquisition weakened credit metrics, but they have since improved because of the earnings contributions from LaBarge and about $35 million of debt reduction. S&P do not expect the company to make further material debt-financed acquisitions until it reduces its leverage. S&P expects revenues to grow only modestly for the next few years as Boeing Co. and Airbus SAS increase production on most models to bring down huge order backlogs, offsetting weaker military demand because of pressures on the U.S. defense budget and weakness in its industrial and natural resource segment. S&P expects defense spending (about 51% of sales) to stay under pressure and demand from the regional and general aviation markets to remain weak, but prospects for commercial aerospace (27%) will likely continue to be strong as Boeing and Airbus increase production rates on most models. The other end markets (22%) have good long-term growth prospects but are more cyclical than defense, and Ducommun doesn't have experience operating in these markets. S&P expects the company's EBITDA margins to be about 12%--in line with most aerospace and defense suppliers, with some modest improvement possible because of higher volumes and efforts to reduce costs and improve operating efficiency. The top commercial aerospace programs are the Boeing 737 and 777, both popular jetliners that are increasing production. The top defense programs include a mix of military helicopter, missile, and radar programs with good near-term prospects, as well as some programs that will likely be ending in the next few years, such as the C-17 cargo plane. The outlook is stable. S&P expects the company's revenue and earnings to benefit from strong demand in the commercial aerospace segment, offset by U.S. defense spending cuts and weaker non- aerospace and defense revenues. Further, S&P believes Ducommun's use of free cash flow to reduce debt should enable it to maintain credit protection measures that are appropriate for the rating, with gradual improvement likely over the next 12-24 months. S&P do not expect to raise its ratings on Ducommun over the next year, but it could do so if earnings and cash flows increase more than it expects, resulting in debt to EBITDA below 3.5x and FFO to debt above 20%. A downgrade is unlikely in the next 12 months, but S&P could lower the ratings if the company makes additional debt-financed acquisition and if weakness continues in key markets, or if any significant, adverse changes in U.S. defense spending priorities lead to FFO to total debt consistently less than 10% and debt to EBITDA increasing more than 5x. EDISON MISSION: Refinancing Wind-Power Unit Viento -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that independent power producer Edison Mission Energy is refinancing non-bankrupt subsidiary Viento Funding II Inc. The new loan will provide a larger credit, allow Viento to provide money to EME, and remove EME's bankruptcy as a default on Viento's loan. According to the report, Viento owns all or part of three wind- power project. The existing loan, from Portigon AG, New York Branch, includes a $227 million term loan and a $5.2 million working capital facility. Currently, $191.4 million is outstanding on the term loan. At a June 19 hearing in U.S. Bankruptcy Court in Chicago, EME will ask the court's permission to take down replacement financing with new lenders as yet not identified. The report notes that the new loan would include a $211 million term loan and an $8.5 million working capital facility. When the new loan is drawn, Viento will funnel $20 million to EME. Viento will be able to service the loan from its own income, court papers say. Unlike the existing loan, the new facility will allow Viento to provide further monies to EME in the future, and EME's bankruptcy will no longer be an event of default on Viento's loan. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. In its schedules, Edison Mission Energy disclosed total assets of assets of $5,721,559,170 and total liabilities of $6,202,215,094 as of the Petition Date. Kirkland & Ellis LLP is serving as legal counsel to EME, Perella Weinberg Partners, LP is acting as financial advisor and McKinsey Recovery & Transformation Services U.S., LLC is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case and is represented by the law firms Akin Gump and Perkins Coie. The Committee also has tapped Blackstone Advisory Partners as investment banker and FTI Consulting as financial advisor. EME said it doesn't plan to emerge from Chapter 11 until December 2014 to receive benefits from a tax-sharing agreement with parent Edison International Inc. ELCOM HOTEL: Hiring of Manager, Professionals Approved ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Florida authorized Elcom Hotel & Spa LLC, et al., to employ Brad Hayden of The Benchmark Management Company as management company of Elcom Hotel's spa, restaurant, hotel units, and common areas located at what is known as One Bal Harbour, which is operated as a five-star resort. Benchmark will, among other things,: a. supervise and direct the management and operations of the Hotel and the Shared Facilities; b. employ all employees working in or about the Hotel and the Shared Facilities; and c. hire, train, promote, discharge and supervise the work of the management staff (i.e., general manager, assistant managers and department heads) of the Hotel and supervise through said management staff the recruiting, hiring, promoting, discharging and work of all other operating and service employees performing services in or about the Hotel and the Shared Facilities. Benchmark has agreed to perform the services at the ordinary and usual monthly rate of 3 percent of hotel revenues for services rendered with respect to management and operation of the Hotel and $15,000 per calendar month for services rendered with respect to management and operation of the Shared Facilities. The Bankruptcy Court also authorized the Debtors to employ Barry E. Mukamal and Marcum, LLP as accountants and financial Advisors. The hourly rates for Marcum professionals range from $145 to $475 and the rates for para-professionals range from $75 to $135. Moreover, the bankruptcy judge authorized the Debtors to employ Paul D. Breitner as special litigation counsel. The Debtors also obtained approval to enter into an agreement with Pistorino & Alam, Consulting Engineers, Inc. P&A is authorized to perform the engineering services for Elcom Hotel. According to the Debtors, the exterior of the property is in need of painting and waterproofing. 10295 Collins Avenue, Residential Condominium Association, Inc. and 10295 Collins Avenue, Hotel Condominium Association, Inc., have requested that the project be given priority by Elcom Hotel. The hourly rates of P&A personnel are: Principal Engineer $225 Assoc. Engineer/Architect $175 Licensed Engineer/Architect $150 Staff Arch./Engineers $125 Field Inspector, contractor $95 CAD Drafts Person $65 Technician $50 Project Support $40 About Elcom Hotel Elcom Hotel & Spa LLC and Elcom Condominium LLC sought Chapter 11 protection (Bankr. S.D. Fla. Case Nos. 13-10029 and 13-10031) on Jan. 2, 2013, with plans to sell their hotel and condominium property. Elcom Condominium owns nine of the hotel condominium units at the One Bal Harbor Resort & Spa. The resort is located on five acres of land in Bal Harbor, Florida. The building and improvements consist of 185 luxury residential condominium units and 124 hotel condominium units. Elcom Hotel owns the hotel lot. Elcom Hotel estimated assets and liabilities of less than $50 million. The Debtor owes OBH Funding, LLC, $1.8 million on a mortgage and F9 Properties, LLC, formerly known as ANO, LLC, $9 million on a mezzanine loan secured by a lien on the ownership interests in the project's owner. OBH Funding and ANO are owned by Thomas D. Sullivan, the manager of the Debtors. Attorneys at Kozyak Tropin & Throckmorton, P.A., serve as bankruptcy counsel to the Debtor. Duane Morris LLP is the special litigation, real estate, and hospitality counsel. Algon Capital, LLC, d/b/a Algon Group's Troy Taylor is the Debtors' Chief Restructuring Officer. The United States Trustee has said it will not appoint an official committee of unsecured creditors for Elcom Hotel pursuant to 11 U.S.C. Section 1102 until further notice. ENERGYSOLUTIONS INC: Terminates Offerings Under Plans ----------------------------------------------------- EnergySolutions, Inc., filed with the Securities and Exchange Commission: (1) Registration Statement No. 333-147404 filed on Nov. 15, 2007, pertaining to the offering by the Company of up to 10,440,000 shares of the Company's common stock, par value $0.01 per share, under the EnergySolutions, Inc., 2007 Equity Incentive Plan; and (2) Registration Statement No. 333-182773 filed on July 20, 2012, pertaining to the offering by the Company of up to 2,000,000 shares of Common Stock under the EnergySolutions, LLC 401(k) Profit Sharing Plan. On May 24, 2013, pursuant to the Agreement and Plan of Merger, dated as of Jan. 7, 2013, as amended on April 5, 2013, by and among Rockwell Holdco, Inc., Rockwell Acquisition Corp., and the Company, Merger Sub merged with and into the Company with the Company surviving as a wholly owned subsidiary of Parent. In connection with the transactions contemplated by the Merger Agreement, the offering of the Company's securities pursuant to the Registration Statements has been terminated as of May 24, 2013. About EnergySolutions Salt Lake City, Utah-based EnergySolutions offers customers a full range of integrated services and solutions, including nuclear operations, characterization, decommissioning, decontamination, site closure, transportation, nuclear materials management, the safe, secure disposition of nuclear waste, and research and engineering services across the fuel cycle. EnergySolutions reported net income of $3.92 million in 2012, as compared with a net loss of $193.64 million in 2011. The Company's balance sheet at March 31, 2013, showed $2.61 billion in total assets, $2.33 billion in total liabilities, and $282.78 million in total stockholders' equity. Bankruptcy Warning "Our senior secured credit facility contains financial covenants requiring us to maintain specified maximum leverage and minimum cash interest coverage ratios. The results of our future operations may not allow us to meet these covenants, or may require that we take action to reduce our debt or to act in a manner contrary to our business objectives. "Our failure to comply with obligations under our senior secured credit facility, including satisfaction of the financial ratios, would result in an event of default under the facilities. A default, if not cured or waived, would prohibit us from obtaining further loans under our senior secured credit facility and permit the lenders thereunder to accelerate payment of their loans and not renew the letters of credit which support our bonding obligations. If we are not current in our bonding obligations, we may be in breach of our contracts with our customers, which generally require bonding. In addition, we would be unable to bid or be awarded new contracts that required bonding. If our debt is accelerated, we currently would not have funds available to pay the accelerated debt and may not have the ability to refinance the accelerated debt on terms favorable to us or at all particularly in light of the tightening of lending standards as a result of the ongoing financial crisis. If we could not repay or refinance the accelerated debt, we would be insolvent and could seek to file for bankruptcy protection. Any such default, acceleration or insolvency would likely have a material adverse effect on the market value of our common stock," the Company said in its annual report for the year ended Dec. 31, 2012. * * * As reported in the Jan. 9, 2013 edition of the TCR, Standard & Poor's Ratings Services placed its ratings, including its 'B' corporate credit rating, on EnergySolutions on CreditWatch with developing implications. "The CreditWatch placement follows EnergySolutions' announcement that it has entered into a definitive agreement to be acquired by a subsidiary of Energy Capital Partners II," said Standard & Poor's credit analyst Jim Siahaan. EnergySolutions is permitted to engage in discussions with other suitors, which may include other financial sponsors or strategic buyers. ENDEAVOUR INTERNATIONAL: Eliminates Classified Board Structure -------------------------------------------------------------- The board of directors of Endeavour International Corporation approved an amendment to the Amended and Restated Bylaws of the Company. The Amendment eliminates the classified structure of the Board over a period of three years. Specifically, the Amendment provides that effective at the Company's annual meeting of stockholders in 2014, 2015 and 2016, the Class I, Class II and Class III classifications, respectively, of the Board will terminate. Upon termination of each of the three Classes, each of the directors whose Class has terminated may be elected to serve as a director on an annual basis. Upon termination of all three classes of directors, the entire Board will be elected annually. Each current director will continue as a director of the Class of which he or she is a member until the expiration of his or her current term or until his or her earlier death, resignation, retirement, disqualification or removal in accordance with the provisions of the Bylaws. A copy of the Amended ByLaws is available for free at: http://is.gd/rfQXcE About Endeavour International Houston-based Endeavour International Corporation (NYSE: END) (LSE: ENDV) is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the United States. For the year ended Dec. 31, 2012, the Company incurred a net loss of $126.22 million on $219.05 million of revenue, as compared with a net loss of $130.99 million on $60.09 million of revenue during the prior year. The Company's balance sheet at March 31, 2013, showed $1.50 billion in total assets, $1.36 billion in total liabilities, $43.70 million in series C preferred stock, and $90.30 million in total stockholders' equity. * * * As reported by the TCR on March 5, 2013, Moody's Investors Service downgraded Endeavour International Corporation's Corporate Family Rating to Caa3 from Caa1. Endeavour's Caa3 CFR reflects its weak liquidity, small production and proved reserve scale, geographic concentration and the uncertainties regarding its future performance given the inherent execution risks related to its offshore North Sea operations for a company of its size. In the Feb. 22, 2013, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Houston, Texas-based Endeavour International Corp. (Endeavour) to 'CCC+' from 'B-'. The rating action reflects S&P's expectation that Endeavour could have insufficient liquidity to meet its needs due to the delay in production from its Rochelle development. ENVIRONMETAL SOLUTIONS: Incurs $631K Net Loss in First Quarter -------------------------------------------------------------- Environmental Solutions Worldwide, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $630,685 on $1.5 million of revenue for the three months ended March 31, 2013, compared with a net loss of $426,071 on $2.5 million of revenue for the same period last year. The Company's balance sheet at March 31, 2013, showed $6.2 million in total assets, $3.7 million in total liabilities, and stockholders' equity of $2.5 million. According to the regulatory filing, the Company has sustained recurring operating losses. "As of March 31, 2013, the Company had an accumulated deficit of $55,141,063 and cash and cash equivalents of $1,572,441. During the last two fiscal years there were significant changes made to ESW's business. These changes in operations, the relocation of the Company's operations, and the current prevailing economic conditions all create uncertainty in the operating results and, accordingly, there is no assurance that the Company will be successful in generating sufficient cash flow from operations or achieving profitability in the near future. As a result, there is substantial doubt regarding the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/ivEBbj Montgomerville, Pa.-based Environmental Solutions Worldwide, Inc., through its wholly-owned subsidiaries is engaged in the design, development, manufacturing and sales of emissions control technologies. ESW also provides emissions testing and environmental certification services with its primary focus on the North American on-road and off-road diesel engine, chassis and after-treatment market. ESW currently manufactures and markets a line of catalytic emission control and enabling technologies for a number of applications focused on the retrofit market. EVERGREEN OIL: Wants to Hire Buxbaum HCS as Financial Advisor ------------------------------------------------------------- Evergreen Oil, Inc., asked the U.S. Bankruptcy Court for the Central District of California for permission to employ Buxbaum HCS, LLC as financial advisor. The Debtors, with the assistance of their proposed exclusive investment banker, Cappello Capital Corp., intend to market and sell EEHI's stock in EOI, or, subject to certain conditions, all or substantially all of EOI's operating assets to a qualified buyer. The proceeds of the sale of EEHI's stock in EOI will then be used to repay EOI's creditors. Buxbaum will, among other things: a. assist the Debtors with the preparation of their schedules of assets and liabilities and statements of financial affairs; b. prepare financial reports and other documents required by the Office of the U.S. Trustee, including, without limitation, monthly operating reports and disbursement reports; and c. assist the Debtors and their staff in compiling due diligence materials in connection with the marketing and sale of the assets; James L. Buxbaum, a chief executive officer of Buxbaum, tells the Court that the Debtors proposes to pay Buxbaum a postpetition "evergreen" retainer of $25,000, which will be maintained during the period that Buxbaum is providing services to the Debtors and their estates. The Debtors will also make weekly payments to Buxbaum for services rendered during the preceeding week(s), in accordance with the budget approved by the DIP Lender and the Court. Buxbaum will be permitted to draw down from the retainer to pay for services rendered to the Debtors. Anthony Fidaleo and Clegg Porter will be the professionals primarily responsible for providing financial advisory services to the Debtors. The hourly rates for both Mr. Fidaleo and Mr. Porter is $175. Mr. Buxbaum assures the Court that Buxbaum is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Evergreen Oil Headquartered in Irvine, California, with facilities located in Newark and Carson, California, Evergreen Oil Inc. is one of the largest waste oil collectors in California, and the only oil re-refining operation in California. Founded in 1984, EOI is also a major provider of hazardous waste services, offering customers across California a full range of environmental services to handle all of their waste management needs. Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Case Nos. 13-13163 and 13-13168) on April 9, 2013, in Santa Ana California. The Debtors on the petition date filed applications to employ Levene, Neale, Bender, Yoo & Brill L.L.P. as bankruptcy counsel; Jeffer, Mangels Butler & Mitchell L.L.P. as special corporate counsel effective; and Cappello Capital Corp. as exclusive investment banker. The Debtors each estimated assets and debts of $50 million to $100 million. According to the docket, the formal schedules of assets and liabilities are due April 23, 2013. EXCEL MARITIME: Non-Filing of Form 20-F Prompts NYSE Notice ----------------------------------------------------------- Excel Maritime Carriers Ltd. received a letter from NYSE on May 16, 2013, notifying the Company that it is currently not in compliance with Rule 802.01E of the NYSE Listed Company Manual because it had not filed its annual report on Form 20-F for the period ended Dec. 31, 2012, in a timely manner. Under the NYSE rules, the Company has until Nov. 15, 2013, to file its annual report on Form 20-F, subject to continuing oversight and monitoring by the NYSE. As previously announced, the Company has not filed its Form 20-F due to ongoing restructuring discussions with its lenders as well as investors and strategic parties. About Excel Maritime Based in Athens, Greece, Excel Maritime Carriers Ltd. -- http://www.excelmaritime.com/-- is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products. Excel owns a fleet of 40 vessels and, together with 7 Panamax vessels under bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of approximately 3.9 million DWT. Excel Class A common shares have been listed since Sept. 15, 2005, on the New York Stock Exchange (NYSE) under the symbol EXM and, prior to that date, were listed on the American Stock Exchange (AMEX) since 1998. FAIRWEST ENERGY: Alberta Court Extends CCAA Stay Until July 3 ------------------------------------------------------------- FairWest Energy Corporation on May 31 disclosed that an Order was obtained on May 28, 2013 from the Court of Queen's Bench of Alberta extending the stay of proceedings granted to FairWest under the Companies' Creditors Arrangement Act to July 3, 2013. The May 28 Order also provides for an increase in maximum amount available under the debtor-in-possession financing facility with Supreme Group Inc. to $1,765,000. FairWest also disclosed on May 31 that its board of directors have resigned. As a result of the resignation of the directors, the May 28 Order grants PricewaterhouseCoopers Inc., the court- appointed monitor of FairWest with additional powers to, among other things, select the successful bid from amongst the bids submitted pursuant to the Sale and Investment Solicitation Process set out by Order of the Court dated March 19, 2013 and oversee and direct the completion of the transaction contemplated by the successful bid. FairWest also disclosed that Doug McNichol has resigned as President and Chief Operating Officer of FairWest. FairWest thanks Mr. McNichol for his service and contribution to FairWest, particularly during the CCAA proceedings and wishes him all the best in his future endeavours. In addition, Marion Mackie has resigned as Chief Financial Officer of FairWest, however, pursuant to the May 28 Order, Mrs. Mackie has been appointed as the Chief Restructuring Officer for FairWest. The CRO is authorized to operate and carry on the business of FairWest during the CCAA proceedings. 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. FIDELITY NATIONAL: Fitch Affirms 'BB+' Sr. Unsecured Debt Rating ---------------------------------------------------------------- Fitch Ratings has affirmed Fidelity National Financial, Inc.'s Issuer Default Rating (IDR) at 'BBB-' and senior unsecured debt at 'BB+.' Fitch has also affirmed the Insurer Financial Strength (IFS) of FNF's title insurance companies at 'BBB+.' The Rating Outlook for all ratings is Stable. Key Rating Drivers The affirmation follows both FNF's recent announcement that it plans to acquire Lender Processing Services, Inc. (LPS) for $2.9 billion, as well as Fitch's periodic annual review of FNF's ratings. FNF plans on financing the acquisition, which is expected to close in fourth quarter 2013, with approximately 50% common equity and 50% debt. The affirmation reflects expected increased financial leverage, reduced financial flexibility, and reduced quality of holding company capital at FNF on a proforma basis post acquisition, offset by recent improvements in the statutory capitalization of FNF's title insurance subsidiaries. As of March 31, 2013 FNF reported financial leverage of 22% and tangible financial leverage, which excludes goodwill from equity, of 33%. On a proforma basis, financial and tangible financial leverage increase to 33% and 67%, respectively. Although Fitch believes that FNF will actively seek to reduce financial leverage closer to FNF's stated long term target of 25% the additional goodwill the LPS transaction generates significantly alters the quality of capital. Fitch maintains its concern about FNF's aggressive capital management strategy based on its willingness to periodically lever up the balance sheet to fund acquisitions, which Fitch views as a limiting factor to the company's rating. While FNF has been successful to date in most of its acquisitions, past success does not guarantee future success. Offsetting some of the integration risk tied to the LPS acquisition is the fact LPS was formerly owned and spun off by FNF. If properly executed this transaction will diversify earnings and be an additional source of cash flow. FNF's title insurance subsidiaries have sustained profitability during the current difficult economic conditions, and have materially improved their capital positions. Fitch estimates that FNF's Risk Adjusted Capital (RAC) score for year end 2012 to be 161% a significant improvement from prior year's score of 111%. The improvement is attributable mainly to a 52% increase in statutory surplus. Most of Fidelity's improved surplus in 2012 was derived from earnings. However, accounting changes and deferred tax assets accounted for approximately 20 percentage points of the RAC score improvement. Additionally, Fitch adjusted Fidelity's stated surplus by $65 million after tax to reflect its view of the company's statutory reserve redundancy, which accounted for 10 percentage points of its RAC score. No such benefit was recognized in the prior year. FNF has a dominant position in title insurance accounting for approximately 33% of the U.S. title insurance market. This scale coupled with an aggressive cost management focus has allowed FNF to be one of the most profitable title insurance companies. For full year 2012, FNF reported a GAAP combined ratio of 89.2% and a consolidated GAAP pretax margin of 9.4%. For first quarter 2013 FNF reported a consolidated GAAP pretax operating margin of 6.9% down from first quarter of 2012 which reported an 8.5%. However, from a title insurance perspective FNF reported a pretax operating profit of $171 million or a 12.3% margin, the strongest first quarter since 2004. The Stable Outlook reflects Fitch's view that FNF will continue to operate profitably despite the challenges faced by the title insurance industry. Specifically, mortgage originations are forecast to fall during 2013, placing added pressure on title insurance margins. Rating Sensitivities The following is a list of key rating drivers that could lead to an upgrade: -- Sustained performance of operating company capital in line with Fitch's guidelines for 'A' IFS category title insurers, which includes a RAC score of approximately 140% and net leverage below 6.0x. -- Sustained calendar and accident year profitability. -- Sustained improvement in EBIT based interest coverage of 7.0x or higher. The following is a list of key rating drivers that could lead to a downgrade: -- An absolute RAC score below 105% or deterioration in capitalization such as net leverage above 7.5x. -- Inability to move financial leverage below 30% on a post LPS acquisition basis, by yearend 2015. -- A significant write down in goodwill or signs that indicate a potential write down of goodwill is possible. -- Deterioration in earnings, primarily measured by consolidated pretax GAAP margins, at a pace greater than peer averages. -- Sustained material adverse reserve development. -- Any additional acquisition that makes a meaningful change to the company's profile, particularly one that increases financial leverage. Fitch has affirmed the following ratings with a Stable Outlook: Fidelity National Financial, Inc. -- IDR at 'BBB-'; -- $300 million 4.25% convertible senior note maturing Aug. 15, 2018 at 'BB+'; -- $300 million 6.6% senior note maturing May 15, 2017 at 'BB+'; -- $400 million 5.5% senior note maturing September 1, 2022 at 'BB+' -- Four year $800 million unsecured revolving bank line of credit due April 16, 2016 at 'BB+'. Fidelity National Title Ins. Co. Alamo Title Insurance Co. of TX Chicago Title Ins. Co. Commonwealth Land Title Insurance Co. -- IFS ratings at 'BBB+'. FORESIGHT ENERGY: S&P Revises Outlook to Pos. & Affirms 'B' CCR --------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on St. Louis-based Foresight Energy LLC to positive from stable. At the same time, S&P affirmed all existing ratings, including its 'B' corporate credit rating, on the company. "The positive outlook reflects our view that Foresight's credit measures in the coming year, despite difficult industry conditions, are likely to improve," said Standard & Poor's credit analyst Marie Shmaruk. The positive outlook reflects S&P's view that Foresight should be able to sustain its improved operating performance and maintain its financial performance based on S&P's assumption that it will sell about 20 million tons of coal in 2013 and about 25 million tons in 2014 at between $40 and $45 per ton, net of transportation, while maintaining costs of $20 to $25 per ton. This reflects S&P's view that domestic coal markets are gradually improving, allowing the company to sell at the anticipated prices. S&P could raise the ratings if coal markets improve and the company is able to meet the expected levels of sales and production and maintains its trend of improving credit metrics, specifically debt to EBITDA, as adjusted, below 4x and FFO to total debt greater than 20%. S&P could lower the ratings if coal markets deteriorate further, causing the company to have difficulty in finding customers for its coal and average prices to drop below $40 per ton, which could inhibit cash flow and lead to tighter liquidity. S&P ascribes a lower probability to this scenario. FREESEAS INC: Issues 200,000 Add'l Settlement Shares to Hanover --------------------------------------------------------------- The Supreme Court of the State of New York, County of New York, entered an order approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with a stipulation of settlement between FreeSeas Inc., and Hanover Holdings I, LLC, in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 153183/2013. Hanover commenced the Action against the Company on April 8, 2013, to recover an aggregate of $1,792,416 of past-due accounts payable of the Company, plus fees and costs. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on April 17, 2013. Pursuant to the terms of the Settlement Agreement approved by the Order, on April 17, 2013, the Company issued and delivered to Hanover 560,000 shares of the Company's common stock, $0.001 par value, and, as previously reported, between April 22, 2013, and May 16, 2013, the Company issued and delivered to Hanover an aggregate of 2,060,000 Additional Settlement Shares. The Settlement Agreement provides that the Initial Settlement Shares will be subject to adjustment on the trading day immediately following the Calculation Period to reflect the intention of the parties that the total number of shares of Common Stock to be issued to Hanover pursuant to the Settlement Agreement be based upon a specified discount to the trading volume weighted average price of the Common Stock for a specified period of time subsequent to the Court's entry of the Order. The Settlement Agreement provides that in no event will the number of shares of Common Stock issued to Hanover or its designee in connection with the Settlement Agreement, when aggregated with all other shares of Common Stock then beneficially owned by Hanover and its affiliates, result in the beneficial ownership by Hanover and its affiliates at any time of more than 9.99 percent of the Common Stock. Since the issuance of the Initial Settlement Shares and Additional Settlement Shares, on May 22, 2013, Hanover demonstrated to the Company's satisfaction that it was entitled to receive 200,000 Additional Settlement Shares based on the adjustment formula described above, and that the issuance of such Additional Settlement Shares to Hanover would not result in Hanover exceeding the beneficial ownership limitation. Accordingly, on May 22, 2013, the Company issued and delivered to Hanover 200,000 Additional Settlement Shares pursuant to the terms of the Settlement Agreement approved by the Order. About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. Freeseas disclosed a net loss of US$30.88 million in 2012, a net loss of US$88.19 million in 2011, and a net loss of US$21.82 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed US$114.35 million in total assets, $106.55 million in total liabilities and US$7.80 million in total shareholders' equity. RBSM 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 recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. It has also failed to make required payments to Deutsche Bank Nederland as agreed to in its Sept. 7, 2012, amended and restated facility agreement and received notices of default from First Business Bank. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions among others raise substantial doubt about the Company's ability to continue as a going concern. FREESEAS INC: Issues 594 Final Settlement Shares to Hanover ----------------------------------------------------------- The Supreme Court of the State of New York, County of New York, entered an order on April 17, 2013, approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with a stipulation of settlement between FreeSeas Inc., and Hanover Holdings I, LLC, in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 153183/2013. Hanover commenced the Action against the Company on April 8, 2013, to recover an aggregate of $1,792,416 of past-due accounts payable of the Company, plus fees and costs. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on April 17, 2013. Pursuant to the terms of the Settlement Agreement approved by the Order, on April 17, 2013, the Company issued and delivered to Hanover 560,000 shares of the Company's common stock, $0.001 par value, and, as previously reported, between April 22, 2013, and May 22, 2013, the Company issued and delivered to Hanover an aggregate of 2,260,000 Additional Settlement Shares. The Settlement Agreement provides that the Initial Settlement Shares will be subject to adjustment on the trading day immediately following the Calculation Period to reflect the intention of the parties that the total number of shares of Common Stock to be issued to Hanover pursuant to the Settlement Agreement be based upon a specified discount to the trading volume weighted average price of the Common Stock for a specified period of time subsequent to the Court's entry of the Order. The Calculation Period expired on May 23, 2013. Based on the adjustment formula, Hanover was entitled to receive an aggregate of 2,820,594 VWAP Shares. Accordingly, since Hanover had received an aggregate of only 2,820,000 Initial Settlement Shares and Additional Settlement Shares, on May 24, 2013, the Company issued and delivered to Hanover 594 additional shares of Common Stock pursuant to the terms of the Settlement Agreement approved by the Order. No additional shares of Common Stock are issuable to Hanover pursuant to the Settlement Agreement. About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. Freeseas disclosed a net loss of US$30.88 million in 2012, a net loss of US$88.19 million in 2011, and a net loss of US$21.82 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed US$114.35 million in total assets, $106.55 million in total liabilities and US$7.80 million in total shareholders' equity. RBSM 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 recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. It has also failed to make required payments to Deutsche Bank Nederland as agreed to in its Sept. 7, 2012, amended and restated facility agreement and received notices of default from First Business Bank. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions among others raise substantial doubt about the Company's ability to continue as a going concern. FRIENDSHIP DAIRIES: Raymond Hunter Okayed as Dairy Consultant ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Friendship Dairies to modify employment of Raymond Hunter, Ph.D. and Emerald Agriculture as agricultural business consultant. By previous order, the Court had approved the employment of Emerald Agriculture and, more particularly, Mr. Hunter as a consultant jointly for the Debtor and the Official Committee of Unsecured Creditors. With Dr. Hunter having completed his assignment jointly for the Debtor and the Committee, the Debtor sought to modify Dr. Hunter's employment to serve as a dairy consultant for the Debtor and to assist in the preparation and confirmation of its plan of reorganization. The Debtor is authorized to tender Emerald Agriculture a deposit to be held as security toward future compensation in the amount of a $10,000. The deposit is to be held and not applied until allowed fees are approved by the Court. AgStar Financial Services, FLCA had filed an objection to the Debtor's motion. About Friendship Dairies Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The Debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C., serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. GELT PROPERTIES: Wins OK to Tap Nochumson for Craig Atkins Suit --------------------------------------------------------------- Gelt Properties, LLC, et al., sought and obtained approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Nochumson P.C. as its special counsel to represent its interests in the pending Craig Atkins and Penco Appraisals, Inc. et al., legal matters. Prepetition, Nochumson has represented the Debtors in various legal matters, and as of the Petition Date, no outstanding fees were owed by the Debtors for the services. To the best of the Debtors' knowledge, Nochumson has no connection with the Debtors and is not an insider or affiliate of the Debtors. About Gelt Properties Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC, and affiliate Gelt Financial Corporation borrow money from traditional lenders and make loans to commercial borrowers. They also acquire and manage real estate. Gelt Properties and Gelt Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and 11- 15826) on July 25, 2011. Judge Magdeline D. Coleman presides over the cases. Albert A. Ciardi, III, Esq., Jennifer E. Cranston, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., in Philadelphia, Pa., serve as the Debtors' bankruptcy counsel. The petitions were signed by Uri Shoham, the Debtors' chief financial officer. The Debtors' other professionals include: Eisenberg, Gold & Cettei P.C. as its special counsel to provide proper legal counsel to the Debtors with regard to defending against certain actions, Cohen and Forman as their special counsel to advise them upon all matters which may arise or which may be incident to the bankruptcy proceedings. Gelt Properties disclosed $4.73 million in assets and $4.84 million in liabilities as of the Chapter 11 filing. Its affiliate, Gelt Financial has scheduled $20.3 million in assets and $17.05 million in liabilities as of the Chapter 11 filing. On Sept. 15, 2011, a committee of unsecured creditors was appointed. Schoff McCabe, P.C. represents the Committee. Craig Howe, CPA, and Howe, Keller & Hunter, P.C., serve as the Committee's accountants. The Debtors's amended Plan of Reorganization dated March 16, 2012, provides that all assets of the Debtors will be sold and liquidated, rented or leased, developed and maintained, in the ordinary course of the Debtors' business. The Debtors note that the proposed Plan envisions the utilization of management talents, commitment and an existing infrastructure to restructure existing debt, liquidate unprofitable properties and meaningfully shift focus to its growing REO portfolio. GENERAL MOTORS: Defends $367MM Hedge Fund Deal in Bankruptcy Fight ------------------------------------------------------------------ Lance Duroni of BankruptcyLaw360 reported that General Motors LLC urged a judge to uphold a pivotal $367 million settlement its predecessor inked with hedge fund bondholders as it slipped into bankruptcy, stressing that it has intervened to protect its Canadian subsidiary and not on behalf of the hedge funds. According to the report, a trust created for unsecured creditors of the former General Motors Corp., or Old GM, sued in bankruptcy court last year to void the 2009 settlement that paid the hedge funds $367 million in cash. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. GM employs 208,000 people in every major region of the world and does business in more than 120 countries. GM and its strategic partners produce cars and trucks in 30 countries, and sell and service these vehicles through the following brands: Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. GM's largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government once owned as much as 60.8% stake in New GM on account of the financing it provided to the bankrupt entity. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. General Motors Corp. and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31, 2011. GFL ENVIRONMENTAL: S&P Assigns 'B+' CCR; Outlook Stable ------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B+' long- term corporate credit rating to Toronto-based GFL Environmental Corp. The outlook is stable. At the same time, Standard & Poor's assigned its 'B+' issue-level rating (the same as the corporate credit rating on GFL) and '4' recovery rating to the company's proposed C$200 senior unsecured notes. A '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery in a default scenario. "The rating on GFL reflects our view of the company's narrow scope of activities and limited geographic diversity, profitability that is weaker than that of its rated peers, and an aggressive growth strategy we expect to include acquisitions," said Standard & Poor's credit analyst Jamie Koutsoukis. "Providing some offset to these factors is the essential nature of the services provided, relatively strong and reliable cash flows, and considerable resilience to economic swings in the residential and commercial segments," Ms. Koutsoukis added. GFL is an environmental services company providing solid and liquid waste collection, treatment, and disposal solutions, as well as soil treatment services to the municipal, industrial, and commercial sectors. The stable outlook on GFL reflects S&P's expectation that the company will generate stable cash flow from its businesses, of which a large portion is contracted, and will not experience any operating challenges that result in reduced margins. Furthermore, the outlook incorporates S&P's expectation that management is committed to maintaining its financial risk profile and will keep adjusted debt to EBITDA below 4.5x and funds from operations (FFO) to adjusted debt above 15%. S&P could lower the rating on GFL if its financial measures deteriorate from its current expectations with adjusted debt to EBITDA moving above 4.5x or if FFO to debt falls below 12% on a sustained basis. This could occur if the company increases leverage either through debt-financed acquisitions or aggressive debt-funded internal growth. An upgrade is constrained by GFL's financial sponsor ownership as per S&P's criteria. GMX RESOURCES: Unsecured Creditors Committee Taps Attorneys ----------------------------------------------------------- The Official Unsecured Creditors' Committee in the Chapter 11 cases of GMX Resources Inc., et al., asks the U.S. Bankruptcy Court for the Western District of Oklahoma for permission to retain Winston & Strawn LLP as its counsel; and Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., as its special and local counsel. Winston Strawn Winston & Strawn has indicated a willingness to act on behalf of, and render services to, the Committee. The hourly rates of Winston & Strawn are: Partners $625 - $1,120 Associates $370 - $695 Paralegals $160 - $335 Practice Support $130 - $510 James Donnell, Justin Rawlins, Greg Martin, and Courtney Schoch will be the attorneys primarily responsible for the engagement and their hourly rates are: (i) Mr. Donnell's hourly rate of $895 will be capped at $716 during Winston & Strawn's representation of the Committee; (ii) Mr. Rawlins', Mr. Martin's, and Ms Schoch's hourly rates are $630, $525, and $390, respectively. In addition, Winston & Strawn attorneys will not charge for legal fees incurred in travelling to or from the Bankruptcy Court. To the best of the Committee's knowledge, Winston & Strawn is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Hall Estill Hall Estill will, among other things: a. advise the Committee on its rights, obligations, and powers in the case; b. appear before the Court and others on the Committee's behalf on all matters involving the Debtors or the cases; and c. assist the Committee and lead counsel in investigating and analyzing the acts, liabilities, and financial condition of the Debtors, the Debtors' assets and business operations, including disposition of those assets, and any other matters relevant to the case and the interests of unsecured creditors. The hourly rates of Hall Estill's personnel are: Shareholders $230 - $375 Associates $170 - $230 Paralegals $105 - $150 Hall Estill's primary team on this particular engagement and their hourly rates are: Steven W. Soule $350 Bonnie N. Hackler $275 Larry Ball $325 Jennifer Castillo $230 Conor P. Cleary $185 To the best of the Committee's knowledge, Hall Estill does not represent any interest adverse to the Committee, the estate, the U.S. Trustee, or any person employed by the Office of the U.S. Trustee. Creditors Committee Members According to an April 16 filing by the U.S. Trustee, the members of the Creditors Committee are: 1. Bank of New York Mellon Attn: Dennis Roemlein 601 Travis Street, 16th Floor Houston, TX 77002 Tel: (713) 483-6531 2. Penn Virginia Corporation Attn: John Brooks 840 Gessner, Suite 800 Houston, TX 77024 Tel: (713) 722-6545 3. MBI Energy Logistics LLC Attn: Tony Hauck 12980 35th Street SW Belfield, ND 58622 Tel: (701) 575-8242 4. Pyramid Tubular Products, L.P. Attn: Kenneth Richmond 2 Northpoint Drive, Suite 610 Houston, TX 77060 Tel: (281) 405-8090 5. C&J Energy Services, Inc. Attn: Mark Cashiola 10375 Richmond Ave, Suite 1910 Houston, TX 77042 Tel: (713) 260-9910 6. Dual Trucking and Transport, LLC Attn: Walter Berry P.O. Box 590 Houma, LA 70361 Tel: (985) 223-8878 7. American Stock Transfer & Trust Company, LLC Attn: Karishma Kadian 6201 15th Avenue Brooklyn, NY 11219 Tel: (718) 921-8180 8. Cudd Pumping Services Attn: Allyson Lyons 8032 Main Street Houma, LA 70360 Tel: (985) 853-5825 9. Regency Intrastate Gas, LP Attn: Stephen Reilly 2001 Bryan Street, Suite 3700 Dallas, TX 75201 Tel: (214) 840-5605 About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. 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 strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. The Company's balances sheet at Sept. 30, 2012, showed $343.14 million in total assets, $467.64 million in total liabilities and a $124.49 million total deficit. 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. GMX missed a payment due in March 2013 on $51.5 million in second- lien notes. Other principal liabilities include $48.3 million in unsecured convertible senior notes. The DIP financing provided by senior noteholders requires court approval of a sale within 75 days following approval of sale procedures. The lenders and principal senior noteholders include Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors Inc. and Whitebox Advisors LLC. The Official Committee of Unsecured Creditors tapped Winston & Strawn LLP as its counsel. GMX RESOURCES: Hearing Today on Bid for $3.32MM Bonuses ------------------------------------------------------- GMX Resources Inc., and its debtor affiliates seek authority from the U.S. Bankruptcy Court for the Western District of Oklahoma to pay severance to terminated employees and implement a key employee retention plan. As of the Petition Date, the Debtors' aggregate workforce consisted of 65 employees, 55 of which are employed on a salaried basis and 10 are employed on an hourly basis. Since agreeing to sell their assets, the Debtors have reduced their drilling and operational activities to a level sufficient to maintain value as the Debtors navigate through the sale process and Chapter 11. As a result of the operational reductions, the Debtors are no longer in need of as many employees and will likely terminate employees as operations continue to be adjusted. Additionally, consummation of a sale process could result in further workforce reductions. Severance Program While the Debtors did not have a standardized severance program prior to the Petition Date, the Debtors did pay severance to terminated employees on a regular basis. The Debtors seek approval of a severance program for employees according to the following terms: * Upon the termination of employment of any eligible employee by the Debtors during the period beginning on April 1, 2013 and ending on the date that is 90 days after the closing date of the sale of substantially all of the Debtor's assets pursuant to Section 363 of the Bankruptcy Code, the Debtors will pay the eligible employee a severance payment equal to the following: (i) for senior managers and department heads with at least three completed years of service, the sum of (a) six months' base salary, and (b) accrued but unused paid time off through the date of termination; (ii) for senior managers and department heads with less than three completed years of service, the sum of (a) three months' base salary, and (b) accrued but unused PTO through the date of termination; and (iii) for all other non-insider employees, the sum of (a) three months' base salary, and (b) accrued but unused PTO through the date of termination. * The severance payment will be subject to the employee's execution and delivery of an effective and irrevocable release of claims against the Debtors, their affiliates and other releasees within 55 days following the employee's termination of employment. * The severance payment will be payable in a cash lump sum within 10 days following the employee's satisfaction of the release requirement. The proposed Severance Program does not cover any of the Debtors' officers or directors. Further, eligible employees will not include any employee whose employment is terminated by the Debtors due to any act or omission constituting cause or any employee who resigns from employment with the Debtors for any reason. The Debtors estimate that the maximum amount of payments that would be made under the Severance Program will be approximately $1.825 million. KERP for Non-Insiders The Debtors also seek approval of a KERP for non-insider employees. The Debtors believe it is important to incentivize key employees to stay with them during the bankruptcy and sale process. The KERP will be offered only to a select group of employees who are important either for work during the term of the bankruptcy case or to operations that may continue after bankruptcy if, after the sale process, those employees are needed to continue to operate the assets. These key employees will provide critical services in connection with the sale process as well as the chapter 11 cases in areas such as finance, asset disposition, claims reconciliation and contract management. Under the KERP, an eligible employee will receive a retention payment equal to one month of base salary for every completed full month of service during the period beginning on April 1, 2013, and ending on the Section 363 Sale Closing Date, with a minimum payment equal to four months of base salary, provided that the employee remains continuously employed by the Debtors through the Section 363 Sale Closing Date. The retention payment will be subject to the employee's execution and delivery of an effective and irrevocable release of claims against the Debtors, their affiliates and other releasees within 55 days following the Section 363 Sale Closing Date. The retention payment will be payable in a cash lump sum within 10 days following the employee's satisfaction of the release requirement. The total amount that could be paid pursuant to the KERP would be approximately $1.497 million, with no payments being made to any insiders. According to the Debtors, the Severance Program includes Tyler Rohleder, the son of Michael Rohleder, president of the GMX Resources Inc. Technically, Tyler Rohleder is an "insider" as defined by Section 101(31)(B)(vi) of the Bankruptcy Code as he is a relative of an officer. The Debtors, however, assert that Tyler Rohleder should not treated as an insider for purposes of the Motion. The payments to Tyler Rohleder satisfy Section 503(c)(2) as the payment is part of a program that will be generally applicable to all full-time employees and the amount is not greater than 10 times the amount of the mean severance pay given to non-management employees during the calendar year in which the payment is made. Committee, Bondholders' Trustee Object Maria Chutchian of BankruptcyLaw360 reported that GMX Resources' proposed key employee retention plan drew a challenge from unsecured creditors and the trustee for $51 million in bonds, who said the plan rewards employees for doing nothing more than sticking around for the sale process. According to the report, American Stock Transfer & Trust Co. LLC, the indenture trustee and collateral agent for $51 million in senior secured notes, and GMX's official committee of unsecured creditors said in court filings that the two plans are unreasonable. A hearing on the motion will be held on June 4, 2013, at 1:30 p.m. The Debtors are represented by William H. Hoch, Esq., Regan S. Beatty, Esq., and Christopher M. Staine, Esq., at Crowe & Dunlevy, P.C., in Oklahoma City, Oklahoma; David A. Zdunkewicz, Esq., Timothy A. Davidson II, Esq., and Joseph Rovira, Esq., at Andrews Kurth LLP, in Houston, Texas. 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. 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. The bankruptcy court in May 2013 gave final approval for $50 million in secured financing. The lenders and principal senior noteholders include Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors Inc. and Whitebox Advisors LLC. GMX RESOURCES: Has Cash Use; Sale Plans Objected ------------------------------------------------ Judge Sarah A. Hall of the U.S. Bankruptcy Court for the Western District of Oklahoma entered a final order authorizing GMX Resources Inc. and its debtor affiliates to use cash collateral securing their prepetition indebtedness. The Debtors are also authorized to access up to $50 million of debtor-in-possession loans. Meanwhile, Rachel Feintzeig writing for Daily Bankruptcy Review reports, that an energy company that entered into a joint venture with GMX Resources, is objecting to GMX's bid to put its assets on the auction block, saying the sale process is actually just a "short cut" foreclosure. 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. 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. The bankruptcy court in May 2013 gave final approval for $50 million in secured financing. The lenders and principal senior noteholders include Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors Inc. and Whitebox Advisors LLC. GREAT BASIN: Completes Sale of Nevada Hollister Gold Mine --------------------------------------------------------- Great Basin Gold Limited announced that further to its news release of April 29, 2013, the sale of its Nevada assets and operations including the Hollister trial mine and Esmeralda mill has completed substantially on the terms disclosed in that news release except that the term of the net profits royalty may be terminated after five years in certain events. The Company previously disclosed that the proceeds of Hollister sale were US$15 million plus a 15% net profits royalty payable to the bankrupt US subsidiaries' estate to a maximum of $90 million over an up to nine year period. Great Basin Gold Ltd. is incorporated under the laws of the Province of British Columbia and its registered address is 1108- 1030 West Georgia Street, Vancouver BC, Canada. Great Basin Gold Ltd., including its subsidiaries, is a mineral exploration and development company with two operating assets, both in the production build-up phase, the Hollister Project on the Carlin Trend in Nevada, USA and the Burnstone Project in the Witwatersrand Goldfields in South Africa. Over and above the exploration being conducted at the above mentioned properties, greenfields exploration is being undertaken in Tanzania and Mozambique. GROVES IN LINCOLN: Proofs of Claim Due June 27 ---------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, established June 27, 2013, at 4:00 p.m., as the deadline for creditors to file proofs of claim against The Groves in Lincoln, Inc. About Groves in Lincoln The Groves in Lincoln Inc., along with affiliate The Apartments of the Grove Inc., sought Chapter 11 protection (Bankr. D. Mass. Case No. 13-11329) in Boston on March 11, 2013. David C. Turner signed the petition as president and CEO. Groves is a Massachusetts not-for-profit corporation organized in 2006 for the purpose of developing and operating a senior independent living facility in Lincoln, Massachusetts to be known as The Groves in Lincoln. This facility now consists of 168 independent living units on a 34-acre campus with a mix of apartments, cottages, and related common areas including community center, dining rooms, lounges, barbershop/beauty salon, library, fitness center and pool. Groves has 26 full-time employees and 22 part-time employees as of the bankruptcy filing. The Debtors tapped Murtha Cullina LLP as counsel, Verdolino & Lowey, P.C. as accountants and financial advisors, and RBC Capital Markets LLC as investment banker. GUIDED THERAPEUTICS: To Raise $2.6 Million From Private Placement ----------------------------------------------------------------- Guided Therapeutics, Inc., has entered into definitive agreements with certain accredited investors for the private placement of its convertible preferred stock and warrants to purchase shares of its common stock. Gross proceeds to Guided Therapeutics are expected to be approximately $2.6 million, prior to the payment of placement agent fees and expenses. Pursuant to the terms of the definitive agreements, Guided Therapeutics has agreed to issue an aggregate of up to approximately 2,600 shares of preferred stock, which are convertible by the holders at any time into an aggregate of up to approximately 3,823,529 shares of common stock at an initial conversion price of $0.68 per share, subject to customary adjustments. The preferred stock is mandatorily convertible upon the achievement of certain conditions, including the receipt of certain approvals from the U.S. Food and Drug Administration and the achievement by Guided Therapeutics of specified average trading prices and volumes for its common stock. Holders of the preferred stock will be entitled to quarterly dividends at an annual rate of 5.0 percent for the quarter ended Dec. 31, 2013, and at an annual rate of 10 percent thereafter, in each case, payable in cash or, subject to certain conditions, common stock. Guided Therapeutics may redeem the preferred stock after the second anniversary of issuance, subject to certain conditions. Each share of preferred stock is entitled to a number of votes equal to the number of shares of common stock into which the preferred stock is convertible. For each share of preferred stock purchased, Guided Therapeutics has agreed to issue warrants exercisable for an aggregate of 1,471 shares of common stock, which will be split evenly into two tranches, at an exercise price of $1.08 per share, subject to customary adjustments. One tranche of warrants will be subject to a mandatory exercise provision that allows Guided Therapeutics to require exercise upon the achievement of certain conditions, including the receipt of certain approvals from the U.S. Food and Drug Administration and the achievement by Guided Therapeutics of specified average trading prices and volumes for its common stock. The warrants have a five year term. Net proceeds from the private placement are intended to be used to support manufacturing and marketing of the Guided Therapeutics LuViva(R) Advanced Cervical Scan. The private placement remains subject to customary closing conditions and is expected to close on or about May 24, 2013. SunTrust Robinson Humphrey, Inc., acted as sole placement agent for the private placement. Additional information can be obtained for free at: http://is.gd/qh7DZx About Guided Therapeutics Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) -- http://www.guidedinc.com/-- is developing a rapid and painless test for the early detection of disease that leads to cervical cancer. The technology is designed to provide an objective result at the point of care, thereby improving the management of cervical disease. Unlike Pap and HPV tests, the device does not require a painful tissue sample and results are known immediately. GT has also entered into a partnership with Konica Minolta Opto to develop a non-invasive test for Barrett's Esophagus using the LightTouch technology platform. Guided Therapeutics disclosed a net loss of $4.35 million on $3.33 million of contract and grant revenue for the year ended Dec. 31, 2012, as compared with a net loss of $6.64 million on $3.59 million of contract and grant revenue in 2011. The Company's balance sheet at March 31, 2013, showed $3.58 million in total assets, $1.72 million in total liabilities, and $1.86 million in total stockholders' equity. UHY LLP, in Sterling Heights, Michigan, issued a "going concern" qualification on the Company's consolidated financial statements for the year ended Dec. 31, 2012, citing recurring losses from operations and accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "The Company's capital-raising efforts are ongoing. If sufficient capital cannot be raised during the second quarter of 2013, the Company has plans to curtail operations by reducing discretionary spending and staffing levels, and attempting to operate by only pursuing activities for which it has external financial support, such as under the Konica Minolta license agreement and additional NCI, NHI or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In such a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate and/or file for bankruptcy protection." HALSEY MINOR: CNET Founder Files for Ch. 7 Liquidation ------------------------------------------------------ Halsey McLean Minor, who sold CNET Networks Inc. to CBS Corp. in 2008 for $1.8 billion, filed a liquidating Chapter 7 bankruptcy petition (Bankr. C.D. Cal. Case No. 13-bk-23787) on May 24, 2013 in Los Angeles. Dawn McCarty and Ari Levy, writing for Bloomberg News, reported that Mr. Minor made sure that he won't be the only one who's uncomfortable. There's no money for his unsecured creditors, he said in his bankruptcy petition, which seeks to hand over all his eligible assets to a court official who will sell them to the highest bidder and wipe Minor's finances clean for whatever he decides to do next. "Choosing Chapter 7 is clearing the slate," Bob Rattet, a bankruptcy lawyer in White Plains, New York, told the news agency. "He isn't required like Middle America to pay his debts, because they're mostly business-related." The Bloomberg report discloses that Mr. Minor is yet to file lists of his assets and liabilities. He also hasn't made the required disclosure about his income and transactions before bankruptcy. The petition claims that assets total less than $50 million while debt is more than $50 million. HAMPTON ROADS: John Maloney Joins as Bank VP and CRM ---------------------------------------------------- Hampton Roads Bankshares, Inc., the holding company for The Bank of Hampton Roads and Shore Bank, said that John Maloney has joined BHR as a Vice President and Customer Relationship Manager, based in the Hilltop Financial Center in Virginia Beach. Mr. Maloney has 13 years of experience in commercial banking and branch management in Norfolk and surrounding markets. Thomas Mears, president Commercial Banking for BHR, said, "John is a talented, experienced banker with deep roots and relationships in our local markets and we welcome him to our team. We continue to execute our One Bank strategy, which is more about bankers than buildings and which is grounded in a commitment to outstanding service to our customers." Prior to joining BHR, Mr. Maloney served in commercial lending positions with City National Bank, Virginia Business Bank, Bank of the Commonwealth and Heritage Bank. Previously, he served as a branch manager with PNC Bank (formerly RBC) in Hampton, VA. Mr. Maloney earned a B.B.A. from James Madison University and is a graduate of the University of Virginia School of Bank Management and the RMA Lending School. He is active in a number of civic and community organizations, including serving as former President of Sertoma of Norfolk and former Chair of the Norfolk Division of the Hampton Roads Chamber of Commerce. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and 15 ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company reported a net loss of $98 million in 2011, compared with a net loss of $210.35 million in 2010. The Company's balance sheet at March 31, 2013, showed $2.03 billion in total assets, $1.84 billion in total liabilities and $185.36 million in total shareholders' equity. HASSEN REAL: Third Amended Joint Plan of Reorganization Confirmed ----------------------------------------------------------------- Eastland Tower Partnership and Hassen Real Estate Partnership's Third Amended Joint Plan of Reorganization dated Jan. 17, 2013, which allows for the estates to compromise and settle claims against and claims held by the estates, has been confirmed by the bankruptcy court. The terms of certain compromises and settlements are included in the Plan, the Plan Documents, and any separate stand-alone motions filed with the Bankruptcy Court and heard prior to the entry of the Confirmation Order. Because the settlements are integral to the implementation of the Plan, they are approved as part of the Plan. The settlements are the product of good-faith, arm's-length negotiations. The Debtor is represented by: Theodore B. Stolman Marina Fineman Michael S. Neumeister STUTMAN, TREISTER & GLATT PROFESSIONAL CORPORATION 1901 Avenue of the Stars, 12th Floor Los Angeles, CA 90067 Tel: (310) 228-5600 Fax: (310) 228-5788 E-mails: tstolman@stutman.com mfineman@stutman.com mneumeister@stutman.com About Hassen Real Estate and Eastland Tower Hassen Real Estate Partnership and affiliate Eastland Tower Partnership are each engaged in the business of commercial real estate development and operation in West Covina, California. HREP owns and operates a retail/office center known as the West Covina Village Shopping Center, while ETP owns and operates an office tower known as the Wells Fargo Bank Tower. HREP filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-25499) on April 10, 2011. Christine M. Pajak, Esq., and Marina Fineman, Esq., and Theodore B. Stolman, Esq., at Stutman, Treister & Glatt Professional Corporation, in Los Angeles, serve as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. ETP (Bankr. C.D. Calif. Case No. 11-25500) simultaneously filed a separate Chapter 11 petition. HAWAII OUTDOOR: Wagner Choi Withdraws Over Differences ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Hawaii authorized Wagner Choi & Verbrugge to withdraw as counsel for Hawaii Outdoor Tours, Inc. According to WCV, the Debtor and WCV have fundamental and irreconcilable differences regarding: (i) the future course of the bankruptcy case and the objectives to be attained; (ii) counsel's relationship with the Debtor's management. Wcv related that both of the differences render WCV's continued representation of the Debtor no longer feasible. About Hawaii Outdoor Tours Hawaii Outdoor Tours, Inc., operator of the Niloa Volcanoes Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D. Haw. Case No. 12-02279) in Honolulu on Nov. 20, 2012. Niloa Volcanoes is a 382-room hotel with a nine-hole golf course. The 64-acre property is subject to a 65-year lease, commencing Feb. 1, 2006, and provides for a total ground rent for the first 10 years of $500,000 annually. The Debtor used a $10 million loan from First Regional Bank and $10 million of its own cash to invest in the property. First-Citizens Bank & Trust Company, which acquired the First Regional note from the Federal Deposit Insurance Corp., commenced foreclosure proceedings in August. First-Citizens Bank asserts a claim of $9.95 million. The Debtor believes that the value of the hotel property exceeds the amount of the First-Citizens Bank note. Just the bricks and mortal alone was valued in excess of $35 million by First Regional's appraiser and the insurance company. Bankruptcy Judge Robert J. Faris oversees the case. Wagner Choi & Verbrugge acts as bankruptcy counsel. In its schedules, the Debtor disclosed $52,492,891 in assets and $11,756,697 in liabilities. The petition was signed by CEO Kenneth Fujiyama. Ted N. Petitt, Esq., represents Secured Creditor First-Citizens Bank as counsel. Cynthia M. Johiro, Esq., represents the State of Hawaii Department of Taxation as counsel. HEARTHSTONE HOMES: Bankruptcy Case Converted to Chapter 7 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nebraska converted the Chapter 11 case of Hearthstone Homes, Inc., to one under Chapter 7 of the Bankruptcy Code. The Chapter 11 Trustee filed for case conversion, saying that since the filing of this case, the Debtor in this case has ceased operations. The Chapter 11 Trustee has successfully liquidated the majority of the bankruptcy estate's real estate and personal property assets through court-approved sales. The net proceeds of those sales have been distributed to the secured creditors or are being held pending resolution of an adversary proceeding mainly between Wells Fargo Bank, N.A., and Hiller Electric with the Chapter 11 Trustee named solely as the stakeholder holding the funds. The Chapter 11 Trustee said, "The remaining assets of the bankruptcy estate are certain causes of action including avoidance actions which the Trustee is currently investigating and pursuing." The Chapter 11 Trustee stated that conversion to Chapter 7 will allow the orderly prosecution and administration the Avoidance Actions under the U.S. Bankruptcy Code, and the administration of the segregated funds pending further order directing their distribution, without some of the administrative costs and burden imposed in a Chapter 11 case. The U.S. Trustee's office has indicated it has no objection to the conversion motion. About Hearthstone Homes Hearthstone Homes, Inc., filed a Chapter 11 petition in Omaha, Nebraska (Bankr. D. Neb. Case No. 12-80348) on Feb. 24, 2012. ketv.com reported that Hearthstone Homes sought bankruptcy protection after a deal to sell the company fell through. Hearthstone Homes' principal business activities have been the purchase, development and sale of residential real property for 40 years. Chief Judge Thomas L. Saladino presides over the case. The Debtor is represented by Robert F. Craig, P.C. Hearthstone estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. Wells Fargo N.A., the primary lender, is represented by lawyers at Croker Huck Kasher DeWitt Anderson & Gonderinger LLC. The Official Committee of Unsecured Creditors was appointed on March 2, 2012. Gross & Welch, P.C., L.L.O., represents the Committee. On March 9, 2012, Wells Fargo Bank filed a motion to appoint a Chapter 11 trustee, saying the Debtor had no unencumbered assets, no cash, and no present source of income. On March 13, an order was entered granting the motion to appoint a Chapter 11 trustee. The U.S. Trustee, through consultation with creditors, selected C. Randel Lewis to be the Chapter 11 trustee, which was approved by the Court on March 21, 2012. HERCULES OFFSHORE: Fleet Status Report as of May 23 --------------------------------------------------- Hercules Offshore, Inc., posted on its Web site at www.herculesoffshore.com a report entitled "Hercules Offshore Fleet Status Report". The Fleet Status Report includes the Hercules Offshore Rig Fleet Status (as of May 23, 2013), which contains information for each of the Company's drilling rigs, including contract dayrate and duration. The Fleet Status Report also includes the Hercules Offshore Liftboat Fleet Status Report, which contains information by liftboat class for April 2013, including revenue per day and operating days. The Fleet Status Report is available for free at http://is.gd/LtLquz About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. Hercules incurred a net loss of $127 million in 2012, a net loss of $76.12 million in 2011, and a net loss of $134.59 million in 2010. The Company's balance sheet at March 31, 2013, showed $2 billion in total assets, $1.08 billion in total liabilities and $919.58 million in stockholders' equity. * * * The Troubled Company Reporter said on April 11, 2013, that Moody's Investors Service upgraded Hercules Offshore, Inc.'s Corporate Family Rating to B2 from B3. Hercules' B2 CFR is supported by its improved cash flow and lower leverage on the back of increased drilling activity and higher day-rates in the Gulf of Mexico (GOM) As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based Hercules Offshore Inc. to 'B' from 'B-'. "The upgrade reflects the improving market conditions in the Gulf of Mexico and our expectations that Hercules' fleet will continue to benefit," said Standard & Poor's credit analyst Stephen Scovotti. HERITAGE CONSOLIDATED: Chamberlain Okayed as Committee Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Heritage Consolidated LLC to retain Chamberlain, Hrdlicka, White, Williams & Aughtry as its counsel. Brian A. Kilmer joined on Feb. 1, 2013, Chamberlain's Houston office as a shareholder in the firm's bankruptcy, restructuring, reorganization and creditors' right practice group. Prior to joining Chamberlain, Mr. Kilmer was a partner at Okin Adams & Kilmer LLP, where he served as counsel to the Committee since Nov. 3, 2010. The firm's hourly rates are: Professional Rates ------------ ----- Brian Kilmer, Shareholder $375 Brian Roman, Associate $305 Renee Bayer, Associate $215 Dana Drake, Legal Assistant $315 About Heritage Consolidated Heritage Consolidated LLC is a privately held company whose core operations consist of exploration for, and acquisition, production, and sale of, crude oil and natural gas. Heritage Consolidated filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 10-36484) on Sept. 14, 2010, in Dallas, Texas. Its affiliate, Heritage Standard Corporation, also filed for Chapter 11 protection (Bankr. N.D. Tex. Case No. 10-36485). The Debtors each estimated assets and debts of $10 million to $50 million. The Debtors tapped Malouf & Nockels LLP's as special counsel; Munsch Hardt Kopf & Harr, P.C.; Rochelle McCullough, LLP; HSC, RM LLP as special bankruptcy counsel to HSC; and Bridge Associates, LLC, as financial advisor and designate Scott Pinsonnault as interim chief restructuring officer. The U.S. Trustee for Region 6 formed an Official Committee of Unsecured Creditors in the Chapter 11 cases. HIGHWAY TECHNOLOGIES: Sheds Workers Without Notice, Suit Says ------------------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that two laid-off employees of bankrupt Highway Technologies Inc. launched a putative class action against the company, alleging they weren't given proper notice when the Houston-based traffic safety firm terminated about 90 percent of its workforce before filing for Chapter 11 protection. According to the report, Jason McClain and Thomas Wachsman filed the lawsuit as an adversary case in Highway Technologies' Chapter 11 proceedings in Delaware Bankruptcy Court, arguing that they and the rest of the 740 terminated employees didn't get the 60-day warning mandated by the U.S. Worker Adjustment and Retraining Notification Act. About Highway Technologies Highway Technologies Inc. and affiliate HTS Acquisition Inc. sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11325 to 13-11326) on May 22, 2013, to conduct an orderly liquidation. Founded 30 years ago, Highway Technologies at its peak was one of the largest traffic safety companies in the U.S. It operated from 32 locations in 13 states. However, just before the bankruptcy filing, the Debtors ceased operations, terminated 750 employees and began the process of securing their assets for sale. HOT TOPIC: S&P Assigns 'B' CCR & Rates $350MM Sr. Sec. Notes 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a 'B' corporate credit rating to Hot Topic Inc. At the same time, S&P assigned a 'B' issue-level rating, with a '4' recovery rating to the company's proposed $350 million senior secured notes due 2021. The '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery of principal in the event of a payment default. S&P do not rate the proposed $75 million asset-based revolver (ABL) and it will remain undrawn at closing of the transaction. The outlook is stable. The company has stated that it will use the proceeds, along with $250 million common equity contribution, to fund the acquisition of Hot Topic by Sycamore Partners. "The ratings on City of Industry, Calif.-based Hot Topic Inc. reflects our assessment of a "vulnerable" business risk profile and "highly leveraged" financial risk profile," said credit analyst Mariola Borysiak. The vulnerable business risk profile incorporates the company's participation in the highly competitive and widely fragmented specialty apparel retail. Although the company has national presence, it is much smaller than many of its specialty apparel peers. In S&P's view, the company established a niche position in the industry. Its lower fashion risk Hot Topic segment offers music and pop-culture inspired merchandise to the 18-24 year old customers. The company's Torrid concept is solely dedicated to plus-size young women. While S&P believes that the Hot Topic merchandise concept is mature, with limited growth potential, it views the plus-size segment of the retail space as underpenetrated and a growth opportunity for the Torrid segment. The stable outlook reflects S&P's view that operational enhancements that new management introduced will continue to strengthen performance over the next year leading to modest improvement of credit protection measures and that new store growth will be successfully executed. While not likely in the next year, S&P could raise the rating if the company successfully executes its aggressive expansion plans while further improving its profitability such that EBITDA growth results in total debt to EBITDA declining toward mid-4x. Based on S&P's analysis, about 22% EBITDA growth and constant debt at pro forma fiscal 2012 levels would likely result in total debt to EBITDA declining to about 4.6x. S&P could lower the rating if performance suffers from competitive pressures, merchandise missteps, or if rapid expansion leads to operational challenges that cause EBITDA declines such that debt leverage increases toward mid-6x. Under this scenario, about 13% EBITDA erosion and constant debt at pro forma 2012 levels would trigger such action. HOWREY LLP: Adversary Suits Target Verizon, Dozens of Others ------------------------------------------------------------ David McAfee of BankruptcyLaw360 reported that the Chapter 11 trustee in Howrey LLP's bankruptcy filed 34 adversary suits in California bankruptcy court, asking the judge to avoid transfer payments and disallow and expunge proofs of claims for companies including Verizon, Wyndham Group Inc., John Hopkins Medicine, Salter and Co. PLLC and others. According to the report, the adversary suit comes less than two weeks after Howrey's liquidation trustee, Allan B. Diamond of Diamond McCarthy LLP, filed a motion seeking permission to pursue claims against Dewey & LeBoeuf LLP, Cooley LLP, Morrison & Foerster LLP, among other law firms. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Calif. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March 2011. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June 2011 at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. IBIO INC: Incurs $1.8-Mil. Net Loss in March 31 Quarter ------------------------------------------------------- iBio, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.8 million on $0 revenue for the three months ended March 31, 2013, compared with a net loss of $3.1 million on $371,755 of revenues for the three months ended March 31, 2012. The Company reported a net loss of $4.9 million on $390,186 of revenues for the nine months ended March 31, 2013, compared with a net loss of $4.3 million on $925,935 of revenues for the nine months ended March 31, 2012. The Company's balance sheet at March 31, 2013, showed $5.0 million in total assets, $2.7 million in total liabilities, and stockholders' equity of $2.3 million. The Company said: "The history of significant losses, the negative cash flow from operations, the limited cash resources currently on hand and the dependence by the Company on its ability -- about which there can be no certainty -- to obtain additional financing to fund its operations after the current cash resources are exhausted raises substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/xEJQTm Newark, Del.-based iBio, Inc., is a biotechnology company focused on commercializing its proprietary platform technologies, the iBioLaunch(TM) platform for vaccines and therapeutic proteins and the iBioModulator(TM) platform for vaccine enhancement and on developing and commercializing select product candidates derived from the iBioLaunch platform. IDERA PHARMACEUTICALS: Raised $16.5 Million From Stock Offering --------------------------------------------------------------- Idera Pharmaceuticals, Inc., completed an underwritten public offering of its common stock and warrants to purchase shares of its common stock in which it raised $16.5 million in gross proceeds. As a result of the offering, the Company believes it now has stockholders' equity in excess of both the $2.5 million stockholders' equity requirement for continued listing, as well as the $5 million stockholders' equity requirement for initial listing, on The NASDAQ Capital Market. As previously disclosed on Nov. 26, 2012, while the Company was listed on The NASDAQ Global Market, the Company received notice from NASDAQ that the bid price of its common stock had not met the applicable minimum bid price requirement of $1.00 per share and, pursuant to NASDAQ Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days within which to evidence compliance with the bid price requirement. The Company's listing was subsequently transferred to The NASDAQ Capital Market effective Feb. 7, 2013. The rules applicable to companies listed on The NASDAQ Capital Market provide for a second 180-day period to evidence compliance with the $1.00 bid price requirement so long as the company satisfies all requirements for initial listing on The NASDAQ Capital Market, including the $5 million stockholders' equity requirement, and the continued listing requirement for market value of publicly held shares upon the expiration of the first compliance period, which in the Company's case is May 28, 2013. The Company expects to meet those criteria as of May 28, 2013. 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 March 31, 2013, showed $6.81 million in total assets, $4.10 million in total liabilities, $5.92 million in series D redeemable convertible preferred stock, and a $3.21 million total stockholders' deficit. INDIANA BANK: Sold to First Farmers Bank & Trust ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Indiana Bank Corp., won approval May 30 from the U.S. Bankruptcy Court in Terra Haute, Indiana, to sell the four-branch Bank of Indiana NA to First Farmers Bank & Trust. The bank owner said it wasn't feasible to hold an auction in the highly regulated banking industry. About Indiana Bank Corp. Indiana Bank Corp., a bank holding company, filed for Chapter 11 protection (Bankr. S.D. Ind. Case No. 13-bk-80388) on April 9, 2013, in Terra Haute, Indiana. On April 9, the holding company announced that its four-branch bank subsidiary Bank of Indiana NA will be sold to First Farmers Bank & Trust. First Farmers has 24 branches in Illinois and Indiana. It will acquire "significant assets" and assume liability to depositors on their accounts. The acquisition should be completed in the third quarter. Dana, Indiana-based Indiana Bank Corp. estimated assets and debt both less than $10 million. INFINITY ENERGY: Amends First Quarter Form 10-Q ----------------------------------------------- Infinity Energy Resources, Inc., has filed an amendment to its quarterly report on Form 10-Q for the quarter ended March 31, 2013, originally filed with the Securities and Exchange Commission on May 20, 2013, for the sole purpose of furnishing the Interactive Data File with detailed note tagging as Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 provides the financial statements and related notes in the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language). No other changes have been made to the Company's Form 10-Q. A copy of the Amended Form 10-Q is available at: http://is.gd/RM07A8 About Infinity Energy Overland Park, Kansas-based Infinity Energy Resources, Inc., and its subsidiaries, are engaged in the acquisition and exploration of oil and gas properties offshore Nicaragua in the Caribbean Sea. Infinity Energy disclosed net income of $2.90 million for the year ended Dec. 31, 2012, as compared with a net loss of $3.52 million during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $4.46 million in total assets, $6.95 million in total liabilities, $12.86 million in Redeemable, convertible preferred stock and a $15.35 million total stockholders' deficit. EKS&H LLLP, in Denver, Colorado, 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, has no on-going operations, and has a significant working capital deficit, which raises substantial doubt about its ability to continue as a going concern. INTERSIL CORP: S&P Withdraws 'BB-' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings, including the 'BB-' corporate credit rating, on Milpitas, Calif.-based Intersil Corp. at the company's request. IN PLAY: Weinman & Associates Approved as Bankruptcy Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Colorado authorized In Play Membership Golf, Inc., to employ Weinman & Associates, P.C. as bankruptcy counsel to assist in, among others, the preparation of statements and schedules, the plan of reorganization and disclosure statement, and related matters. The firm has received a $10,000 from Stacey Hart, the Debtor's principal. The firm will bill at its customary rates: Hourly Rate ----------- Jeffrey A. Weinman, Esq. $450 William A. Richey (Paralegal) $200 Lisa Barenberg (Paralegal) $150 About In Play Membership Golf In Play Membership Golf, Inc., doing business as Deer Creek Golf Club and Plum Creek Golf and Country Club, filed a Chapter 11 petition (Bankr. D. Col. Case No. 13-14422) in Denver on March 22, 2013. The Debtor estimated assets and liabilities of at least $10 million. According to the docket, the Chapter 11 plan and disclosure statement are due July 22, 2013 INSPIREMD INC: To Issue 6.4 Million Shares Under Plans ------------------------------------------------------ InspireMD, Inc., registered with the U.S. Securities and Exchange Commission: * 3,364,882 shares of the Company's common stock, par value $0.0001 per share, underlying options previously granted under the Company's 2011 UMBRELLA Option Plan; * 570,360 shares of restricted stock granted under the 2011 Plan; * 509,791 shares of common stock issued upon the exercise of options granted pursuant to the 2011 Plan; * 151,343 shares of common stock issuable pursuant to the 2011 Plan; * 250,000 shares of common stock issued upon the exercise of options granted pursuant to the Nonqualified Stock Option Agreement, dated as of July 11, 2011, by and between InspireMD, Inc. and Sol J. Barer, Ph.D.; * 725,000 shares of common stock issuable pursuant to the Nonqualified Stock Option Agreement, dated as of Nov. 16, 2011, by and between InspireMD, Inc. and Sol J. Barer, Ph.D.; * 725,000 shares of common stock issued pursuant to the Stock Award Agreement, dated as of Nov. 16, 2011, by and between InspireMD, Inc. and Sol J. Barer, Ph.D.; * 23,081 shares of common stock issuable pursuant to the Stock Option Agreement, dated as of Aug. 28, 2011, by and between InspireMD, Inc. and Ivry Cor Ltd; * 17,500 shares of common stock issued pursuant to the Stock Option Agreement, dated as of Aug. 28, 2011, by and between InspireMD, Inc. and Ivry Cor Ltd; * 40,581 shares of common stock issuable pursuant to the Stock Option Agreement, dated as of Aug. 28, 2011, by and between InspireMD, Inc. and Fellice Pelled; and * 6,087 shares of common stock issuable pursuant to the Agreement, dated as of Jan. 15, 2008, by and between D.I.R. Omri Yitzum and Hashka'ot Ltd and Others and InspireMD, Register No. 513679431. A copy of the Form S-8 prospectus is available for free at: http://is.gd/EEFn8B About InspireMD InspireMD, Inc., was organized in the State of Delaware on Feb. 29, 2008, as Saguaro Resources, Inc., to engage in the acquisition, exploration and development of natural resource properties. On March 28, 2011, the Company changed its name from "Saguaro Resources, Inc." to "InspireMD, Inc." Headquartered in Tel Aviv, Israel, InspireMD, Inc., is a medical device company focusing on the development and commercialization of its proprietary stent platform technology, Mguard. MGuard provides embolic protection in stenting procedures by placing a micron mesh sleeve over a stent. The Company's initial products are marketed for use mainly in patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions (bypass surgery). InspireMD reported a net loss of US$17.59 million for the year ended June 30, 2012, compared with a net loss of US$6.17 million during the prior year. For the nine months ended March 31, 2013, the Company incurred a net loss of $14.31 million. The Company's balance sheet at March 31, 2013, showed $9.79 million in total assets, $13.20 million in total liabilities, and a $3.40 million total capital deficiency. Kesselman & Kesselman, in Tel Aviv, Israel, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company has had recurring losses, negative cash flows from operating activities and has significant future commitments that raise substantial doubt about its ability to continue as a going concern. The Company said the following statement in its quarterly report for the period ended Dec. 31, 2012: "The Company has had recurring losses and negative cash flows from operating activities and has significant future commitments. For the six months ended December 31, 2012, the Company had losses of approximately $9.4 million and negative cash flows from operating activities of approximately $5.8 million. The Company's management believes that its financial resources as of December 31, 2012 should enable it to continue funding the negative cash flows from operating activities through the three months ended September 30, 2013. Furthermore, commencing October 2013, the Company's senior secured convertible debentures (the "2012 Convertible Debentures") are subject to a non-contingent redemption option that could require the Company to make a payment of $13.3 million, including accrued interest. Since the Company expects to continue incurring negative cash flows from operations and in light of the cash requirement in connection with the 2012 Convertible Debentures, there is substantial doubt about the Company's ability to continue operating as a going concern. These financial statements include no adjustments of the values of assets and liabilities and the classification thereof, if any, that will apply if the Company is unable to continue operating as a going concern." INSPIREMD INC: Results From MASTER Trial of MGuardTM EPS -------------------------------------------------------- InspireMD, Inc., announced new 6-month results from the MASTER (MGuard for Acute ST Elevation Reperfusion) trial demonstrating that the MGuard Embolic Protection Stent (EPS) outperformed bare metal and drug eluting stents in all-cause mortality in ST segment elevation myocardial infarction (STEMI) patients. Results from the trial were presented at the InspireMD STEMI Symposium at EuroPCR, the official annual meeting of the European Association for Percutaneous Cardiovascular Interventions (EAPCI) taking place in Paris from May 21-24, 2013. In addition to the symposium, the Company reported that another fourteen presentations and three abstracts highlighting the MGuard EPS technology were presented over the 4-day conference. With its proprietary micro-net mesh sleeve, MGuard EPS addresses an unmet need by preventing unstable arterial plaque and thrombus (clots) that cause heart attack blockage from breaking off and exacerbating damage. The MASTER trial achieved its primary endpoint (p value = 0.008), in complete ST-segment resolution at 60-90 min post-procedure (a strong predictor of mortality). Secondary endpoint clinical outcomes continue to show a lower mortality rate with MGuard EPS compared to control (0.5 percent vs. 2.8 percent, P=0.06) at 6 months. These findings corroborate the previously announced 30- day results showing that all-cause mortality with MGuard EPS was lower than bare metal and drug eluting stents used as a control (0 percent vs. 1.9%, P=0.06). Additional 6-month results are available at www.inspiremd.com. "The initial MASTER trial results published in the Journal of the American College of Cardiology[1]in October 2012 demonstrated the acute benefits of the embolic protection stent, as MGuard EPS outperformed drug-eluting and bare metal stents in complete ST- segment resolution," said Professor Dr. Sigmund Silber, Director of the Heart Center at the Isar Academic Teaching Site of the University of Munich. "The six-month MASTER results highlight the enduring benefits of the MGuard EPS, with a consistent trend in lower mortality." In the MASTER trial, a total of 433 patients with STEMI presenting within 12 hours of symptom onset undergoing percutaneous coronary intervention were randomized at 50 sites in 9 countries to the MGuard EPS (n = 217) or commercially available bare metal or drug- eluting stents (n = 216). "The body of positive clinical evidence supporting the use of the MGuardEPS continues to grow," said Alan Milinazzo, president and chief executive officer of InspireMD. "Both the 6-month data and the subgroup analysis presented this week at EuroPCR in Paris, suggest that our technology offers improved embolic protection over the current generation of bare metal and drug eluting stents for the STEMI patient. Advancing embolic protection without requiring physicians to increase procedure time or dramatically change their technique is a major benefit of the MGuard EPS." A PowerPoint presentation that InspireMD, Inc., presented on May 23, 2013, at EuroPCR, the official annual meeting of the European Association for Percutaneous Cardiovascular Interventions, at the Palais Des CongrŠs in Paris, is available for free at http://is.gd/pFZhtR About InspireMD InspireMD, Inc., was organized in the State of Delaware on Feb. 29, 2008, as Saguaro Resources, Inc., to engage in the acquisition, exploration and development of natural resource properties. On March 28, 2011, the Company changed its name from "Saguaro Resources, Inc." to "InspireMD, Inc." Headquartered in Tel Aviv, Israel, InspireMD, Inc., is a medical device company focusing on the development and commercialization of its proprietary stent platform technology, Mguard. MGuard provides embolic protection in stenting procedures by placing a micron mesh sleeve over a stent. The Company's initial products are marketed for use mainly in patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions (bypass surgery). InspireMD reported a net loss of US$17.59 million on US$5.35 million of revenue for the year ended June 30, 2012, compared with a net loss of US$6.17 million on US$4.67 million of revenue during the prior year. For the nine months ended March 31, 2013, the Company incurred a net loss of $14.31 million on $3.37 million of revenues. The Company's balance sheet at March 31, 2013, showed $9.79 million in total assets, $13.20 million in total liabilities, and a $3.40 million total capital deficiency. Kesselman & Kesselman, in Tel Aviv, Israel, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company has had recurring losses, negative cash flows from operating activities and has significant future commitments that raise substantial doubt about its ability to continue as a going concern. The Company said the following statement in its quarterly report for the period ended Dec. 31, 2012: "The Company has had recurring losses and negative cash flows from operating activities and has significant future commitments. For the six months ended December 31, 2012, the Company had losses of approximately $9.4 million and negative cash flows from operating activities of approximately $5.8 million. The Company's management believes that its financial resources as of December 31, 2012 should enable it to continue funding the negative cash flows from operating activities through the three months ended September 30, 2013. Furthermore, commencing October 2013, the Company's senior secured convertible debentures (the "2012 Convertible Debentures") are subject to a non-contingent redemption option that could require the Company to make a payment of $13.3 million, including accrued interest. Since the Company expects to continue incurring negative cash flows from operations and in light of the cash requirement in connection with the 2012 Convertible Debentures, there is substantial doubt about the Company's ability to continue operating as a going concern. These financial statements include no adjustments of the values of assets and liabilities and the classification thereof, if any, that will apply if the Company is unable to continue operating as a going concern." INTELLICELL BIOSCIENCES: Issues 8.5 Million Shares to Hanover ------------------------------------------------------------- The Supreme Court of the State of New York, County of New York, entered an order approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with a stipulation of settlement between Intellicell Biosciences, Inc., and Hanover Holdings I, LLC, in the matter entitled Hanover Holdings I, LLC v. Intellicell Biosciences, Inc., Case No. 651709/2013. Hanover commenced the Action against the Company on May 10, 2013, to recover an aggregate of $706,765 of past-due accounts payable of the Company, which Hanover had purchased from certain vendors of the Company pursuant to the terms of separate receivable purchase agreements between Hanover and each of such vendors, plus fees and costs. The Assigned Accounts relate to certain construction, architectural, accounting, legal and financial services. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on May 21, 2013. Pursuant to the terms of the Settlement Agreement approved by the Order, on May 23, 2013, the Company issued and delivered to Hanover 8,500,000 shares of the Company's common stock, $0.001 par value. Giving effect to that issuance, the Settlement Shares represent approximately 9.93 percent of the total number of shares of Common Stock presently outstanding. A copy of the Order is available for free at: http://is.gd/XGaPyh About Intellicell Biosciences Intellicell BioSciences, Inc., headquartered in New York, N.Y., was formed on Aug. 13, 2010, under the name "Regen Biosciences, Inc." as a pioneering regenerative medicine company to develop and commercialize regenerative medical technologies in large markets with unmet clinical needs. On Feb. 17, 2011, the company changed its name from "Regen Biosciences, Inc." to "IntelliCell BioSciences Inc". To date, IntelliCell has developed proprietary technologies that allow for the efficient and reproducible separation of stromal vascular fraction (branded "IntelliCell(TM)") containing adipose stem cells that can be performed in tissue processing centers and in doctors' offices. The Company has incurred losses since inception resulting in an accumulated deficit of $43,079,590 and a working capital deficit of $3,811,024 as of March 31, 2012, respectively. However, if the non-cash expense related to the Company's change in fair value of derivative liability and stock based compensation is excluded then the accumulated deficit amounted to $4,121,538. Further losses are anticipated in the continued development of its business, raising substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $4.15 million in total assets, $7.31 million in total liabilities and a $3.16 million total stockholders' deficit. INTELLICELL BIOSCIENCES: Hanover Held 9.9% Stake at May 21 ---------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Hanover Holdings I, LLC, and Joshua Sason disclosed that, as of May 21, 2013, they beneficially owned 8,500,000 shares of common stock of Intellicell Biosciences, Inc., representing 9.93 percent of the shares outstanding. A copy of the regulatory filing is available at http://is.gd/L3jmPP About Intellicell Biosciences Intellicell BioSciences, Inc., headquartered in New York, N.Y., was formed on Aug. 13, 2010, under the name "Regen Biosciences, Inc." as a pioneering regenerative medicine company to develop and commercialize regenerative medical technologies in large markets with unmet clinical needs. On Feb. 17, 2011, the company changed its name from "Regen Biosciences, Inc." to "IntelliCell BioSciences Inc". To date, IntelliCell has developed proprietary technologies that allow for the efficient and reproducible separation of stromal vascular fraction (branded "IntelliCell(TM)") containing adipose stem cells that can be performed in tissue processing centers and in doctors' offices. The Company has incurred losses since inception resulting in an accumulated deficit of $43,079,590 and a working capital deficit of $3,811,024 as of March 31, 2012, respectively. However, if the non-cash expense related to the Company's change in fair value of derivative liability and stock based compensation is excluded then the accumulated deficit amounted to $4,121,538. Further losses are anticipated in the continued development of its business, raising substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $4.15 million in total assets, $7.31 million in total liabilities and a $3.16 million total stockholders' deficit. INTERFAITH MEDICAL: Cash Collateral Use Extended Until June 10 -------------------------------------------------------------- Judge Carla E. Craig of the U.S. Bankruptcy Court for the Southern District of New York entered a sixth interim order further extending Interfaith Medical Center, Inc., et al.'s use of the cash collateral securing their prepetition indebtedness. A final hearing on the motion will be held on June 10, 2013, at 2:00 p.m. (prevailing Eastern Time), with an objection deadline of June 3. About Interfaith Medical Center Headquartered in Brooklyn, New York, Interfaith Medical Center, Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford- Stuyvesant and an ambulatory care network of eight clinics in central Brooklyn, in Crown Heights and Bedford-Stuyvesant. The Company filed for Chapter 11 protection (Bankruptcy E.D. N.Y. Case No. 12-48226) on Dec. 2, 2012. The Debtor disclosed $111,872,972 in assets and $193,540,998 in liabilities as of the Chapter 11 filing. Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP, serves as bankruptcy counsel to the Debtor. Nixon Peabody LLP is the special corporate and healthcare counsel. CohnReznick LLP serves as financial advisor. Donlin, Recano & Company, Inc. serves as administrative agent. The Official Committee of Unsecured Creditors tapped Alston & Bird LLP as its counsel, and CBIZ Accounting, Tax & Advisory of New York, LLC as its financial advisor. Eric M. Huebscher, the patient care ombudsman tapped the law firm of DiConza Traurig LLP, as his counsel. INTERLEUKIN GENETICS: Growth Equity Owned 25.9% Stake at May 17 --------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Growth Equity Opportunities Fund III, LLC, and its affiliates disclosed that, as of May 17, 2013, they beneficially owned 22,719,382 shares of common stock of Interleukin Genetics, Inc., representing 25.9 percent of the shares outstanding. A copy of the regulatory filing is available at http://is.gd/ilbgNV About Interleukin Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized health company that develops unique genetic tests to provide information to better manage health and specific health risks. Interleukin Genetics disclosed a net loss of $5.12 million in 2012, as compared with a net loss of $5.02 million in 2011. The Company's balance sheet at March 31, 2013, showed $2.17 million in total assets, $16.95 million in total liabilities and a $14.78 million total stockholders' deficit. Grant Thornton LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company incurred a net loss of $5,120,084 during the year ended December 31, 2012, and as of that date, the Company's total liabilities exceeded its total assets by $13,623,800. These conditions, among other factors, raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "We have retained a financial advisor and are actively seeking additional funding, however, based on current economic conditions, additional financing may not be available, or, if available, it may not be available on favorable terms. In addition, the terms of any financing may adversely affect the holdings or the rights of our existing shareholders. For example, if we raise additional funds by issuing equity securities, further dilution to our then- existing shareholders will result. Debt financing, if available, may involve restrictive covenants that could limit our flexibility in conducting future business activities. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our technologies, tests or products in development. Our common stock was delisted from the NYSE Amex in 2010 and is currently trading on the OTCQBTM. As a result, our access to capital through the public markets may be more limited. If we cannot obtain additional funding on acceptable terms, we may have to discontinue operations and seek protection under U.S. bankruptcy laws." INTERLEUKIN GENETICS: Bay City Held 26.2% Equity Stake at May 17 ---------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Bay City Capital LLC and its affiliates disclosed that, as of May 17, 2013, they beneficially owned 36,001,285 shares of common stock of Interleukin Genetics, Inc., representing 26.2% of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/zT4g2c About Interleukin Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized health company that develops unique genetic tests to provide information to better manage health and specific health risks. Interleukin Genetics disclosed a net loss of $5.12 million in 2012, as compared with a net loss of $5.02 million in 2011. Grant Thornton LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company incurred a net loss of $5,120,084 during the year ended December 31, 2012, and as of that date, the Company?s total liabilities exceeded its total assets by $13,623,800. These conditions, among other factors, raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at March 31, 2013, showed $2.17 million in total assets, $16.95 million in total liabilities and a $14.78 million total stockholders' deficit. Bankruptcy Warning "We have retained a financial advisor and are actively seeking additional funding, however, based on current economic conditions, additional financing may not be available, or, if available, it may not be available on favorable terms. In addition, the terms of any financing may adversely affect the holdings or the rights of our existing shareholders. For example, if we raise additional funds by issuing equity securities, further dilution to our then- existing shareholders will result. Debt financing, if available, may involve restrictive covenants that could limit our flexibility in conducting future business activities. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our technologies, tests or products in development. Our common stock was delisted from the NYSE Amex in 2010 and is currently trading on the OTCQBTM. As a result, our access to capital through the public markets may be more limited. If we cannot obtain additional funding on acceptable terms, we may have to discontinue operations and seek protection under U.S. bankruptcy laws." IRWIN MORTGAGE: Taps Aon Insurance to Assist in Stock Sale ---------------------------------------------------------- Irwin Mortgage Corporation asks the U.S. Bankruptcy Court for the Southern District of Ohio for permission to employ Aon Insurance Managers (Cayman) Ltd., to assist with the sale of the Debtor's stock in Irwin Reinsurance Corporation in accordance with the Debtor's separate motion for an order authorizing the sale of the IRC Stock to zInsureRe, Inc. The Debtor and Aon agreed that, subject to the Court's approval, the Debtor would engage Aon and be responsible for payment of Aon's fees from the $800,000 purchase price. Accordingly, the Aon Agreement replaces and supersedes the prior agreement; the prior agreement is terminated; and IRC will have no obligation to pay any fees or other compensation to Aon. The Debtor proposes to pay Aon a fee of 1.5% of the cash actually received from the transaction, excluding the pre-closing transfers from IRC to IMC. As the transaction is structured in the 363 motion, AON's fee would be $12,000. The Debtor has not paid Aon any compensation. To the best of Debtor's knowledge, Aon is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. The Court confirmed the Plan of Liquidation proposed by Irwin Mortgage Corporation and the subsequent modification as set forth in the First Amended Plan of Liquidation, filed Jan. 30, 2013. ISAACSON STEEL: Hearing on Case Conversion Continued Until Aug. 6 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Hampshire continued until Aug. 6, 2013, at 1:30 a.m., the hearing to consider motion to convert the Chapter 11 case of Isaacson Structural Steel, Inc., to one under Chapter 7. As reported in the Troubled Company Reporter on April 5, 2013, the U.S. Trustee sought for the conversion of the cases so that a disinterested trustee may promptly investigate claims against third parties, including insiders or affiliates of the Debtors, or parties related to insiders or affiliates of the Debtors. According to the U.S. Trustee, a disinterested trustee is needed to review the Debtors' conduct as recent pleadings filed with the Court disclose the existence of a federal Grand Jury and other fraud investigation underway by the U.S. Attorney for the District of Vermont. The U.S. Trustee said that after negotiating the terms of the sale of substantially all of the tangible assets of the companies, the Debtors' officers and directors have essentially abandoned their responsibilities as fiduciaries and a void exists in the management of the Debtors' estates. "Although these cases have been pending for almost two years, the Debtors have failed to file a plan or disclosure statement, and have failed to demonstrate any meaningful progress towards the successful completion of this case. Since the sale approximately a year ago, the Debtors' operating reports have been filed and executed by an estate professional, not by an officer of the Debtor as required, and furthermore, the reports that have been filed lack sufficient information to permit the Court or the United States Trustee to determine whether the Debtors' estates are administratively insolvent," the Trustee stated. About Isaacson Structural Steel Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc., filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416) on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over the case. Isaacson Structural Steel estimated both assets and debts of $10 million to $50 million. The petition was signed by Arnold P. Hanson, Jr., president. An official committee of unsecured creditors has been appointed in Isaacson Structural Steel's case. Nixon Peabody LLP, and Mesirow Financial Consultants represents the Committee. A bankruptcy petition was also filed for Isaacson Steel, Inc. (Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating assets and debts of $1 million to $10 million. The petition was signed by Arnold P. Hanson, Jr., president. William S. Gannon, Esq., also represents Isaacson Steel. The cases are now being jointly administered. No trustee or examiner has been appointed in this case. ISTAR FINANCIAL: Shareholders Elect Six Directors ------------------------------------------------- iStar Financial Inc. held its 2013 Annual Meeting of Shareholders in New York, New York, on May 21, at which the shareholders: (i) elected Jay Sugarman, Robert W. Holman, Jr., Robin Josephs, John G. McDonald, Dale Ann Reiss and Barry W. Ridings to the Company's board of directors; (ii) ratified the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2013; and (iii) approved, on an advisory basis, the compensation of the Company's named executive officers and other named officers. On May 21, 2013, the board of directors of iStar Financial authorized and approved amended bylaws permitting informal actions to be taken via electronic transmission. About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. iStar Financial incurred a net loss of $241.43 million in 2012, following a net loss of $25.69 million in 2011. The company reported a net loss of $41.3 million on $94.5 million of revenue in the first quarter of 2013. * * * In March 2013, Fitch Ratings affirmed iStar's 'B-' issuer default rating and revised the outlook to "positive" from "stable." The revision of the outlook to positive is based on the company's demonstrated access to the unsecured debt market, which, combined with certain secured debt refinancings, have significantly improved SFI's near-term debt maturity profile. As reported by the TCR on Oct. 5, 2012, Standard & Poor's Ratings Services affirmed its 'B+' long-term issuer credit rating on iStar Financial. In October 2012, Moody's Investors Service upgraded the corporate family rating to B2 from B3. The current rating reflects the REIT's success in extending near term debt maturities and improving fundamentals in commercial real estate. The ratings on the October 2012 senior secured credit facility takes into account the asset coverage, the size and quality of the collateral pool, and the term of facility. J.C. PENNEY: Consummates $2.25 Billion Term Loan ------------------------------------------------ J. C. Penney Company, Inc.'s wholly owned subsidiary, J. C. Penney Corporation, Inc., has entered into a new five-year $2.25 billion senior secured term loan credit facility. The size of the facility was increased from the $1.75 billion anticipated in the commitment letter the Company announced on April 29, 2013. Proceeds of the term loan credit facility will be used to finance the cash tender offer for the Notes and to fund ongoing working capital requirements and other general corporate purposes. The term loan credit facility is guaranteed by the Company and certain subsidiaries of JCP, and is secured by mortgages on certain real estate of JCP and the guarantors, in addition to substantially all other assets of JCP and the guarantors. Chief Financial Officer Ken Hannah said, "We are extremely pleased with the consummation of our term loan and the success of our tender offer. We appreciate the strong demand from investors and their confidence in jcpenney's future. This new funding gives us the financial flexibility to pursue our plans to put the Company back on a path to profitable growth." Goldman Sachs Bank USA was the lead arranger of the term loan credit facility, with Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch and UBS Securities LLC serving as the other joint arrangers. The Company also announced that JCP amended its revolving credit facility to increase the amount of additional first and second lien indebtedness that it can incur to $2.25 billion, which permits the borrowing of the loans under the new term loan credit facility. Pricing and maturity terms under the revolving credit facility remain unchanged. Initial Settlement of Tender Offer and Consent Solicitation The Company, as co-obligor on the Notes, and JCP, as issuer of the Notes, announced the acceptance for purchase and payment of all of the $242,782,000 in aggregate principal amount of JCP's 7 1/8 percent Debentures Due 2023 validly tendered (and not validly withdrawn) prior to 5:00 p.m., New York City time, on May 20, 2013, pursuant to JCP's previously announced cash tender offer for the Notes and related solicitation of consents to certain proposed amendments to the indenture, as amended and supplemented, governing the Notes to eliminate most of the restrictive covenants and certain events of default and other provisions in the Indenture. Payment of the tendered Notes pursuant to the Initial Settlement was made today and holders who validly tendered (and did not validly withdraw) their Notes prior to the Consent Expiration received a total consideration equal to $1,450 per $1,000 principal amount of the Notes, which included a consent payment of $50 for each $1,000 principal amount of the Notes, plus accrued and unpaid interest to, but not including, the applicable payment date for the Notes. As previously announced, upon receipt of the requisite consents from holders of the Notes, JCP, the Company and Wilmington Trust, National Association, the successor trustee under the Indenture, executed a supplemental indenture to the Indenture to effect the Indenture Amendments. Pursuant to the terms of the Supplemental Indenture, the Supplemental Indenture became effective upon execution, and the Indenture Amendments became operative upon the Initial Settlement. Notes outstanding following the Initial Settlement are subject to the terms of the Supplemental Indenture even if the holders of such Notes did not consent to the Indenture Amendments. The tender offer will expire at 11:59 p.m., New York City time, on June 4, 2013, unless extended or terminated. Holders who tender their Notes after the Consent Expiration, but before the Expiration Time, will be eligible to receive $1,400 per $1,000 principal amount of the Notes, plus accrued and unpaid interest to, but not including, the applicable payment date for the Notes. Goldman, Sachs & Co. is acting as dealer manager and solicitation agent for the tender offer and consent solicitation. Questions regarding the tender offer and consent solicitation may be directed to Goldman, Sachs & Co. at (800) 828-3182 (toll-free) or (212) 902-5183 (collect). D.F. King & Co., Inc. is acting as tender and information agent for the tender offer and consent solicitation. Requests for copies of the tender offer documents may be directed to D.F. King & Co., Inc. at (212) 269-5550 (banks and brokers) or (800) 290- 6427 (toll-free). Additional information can be obtained at http://is.gd/SiiQJ9 About J.C. Penney Plano, Texas-based J.C. Penney Company, Inc. is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. J.C. Penney disclosed a net loss of $985 million in 2012, as compared with a net loss of $152 million in 2011. The Company's balance sheet at Feb. 2, 2013, showed $9.78 billion in total assets, $6.61 billion in total liabilities and $3.17 billion in total stockholders' equity. * * * The Company carries Moody's Investors Service's B3 Corporate Family Rating with negative outlook. Early in March 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Penney to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P lowered the issue- level rating on the company's unsecured debt to 'CCC+' from 'B-' and maintained its '3' recovery rating on this debt, indicating S&P's expectation of meaningful (50% to 70%) recovery for debtholders in the event of a payment default. "The downgrade reflects the performance erosion that has accelerated throughout the previous year and seems likely to persist over the next 12 months," explained Standard & Poor's credit analyst David Kuntz. At the same time, Fitch Ratings downgraded the Company's Issuer Default Ratings to 'B-' from 'B'. The Rating Outlook is Negative. The rating downgrades reflect Fitch's concerns that there is a lack of visibility in terms of the Company's ability to stabilize its business in 2013 and beyond after a precipitous decline in revenues leading to negative EBITDA of $270 million in 2012. Penney, Fitch said, will need to tap into additional funding to cover a projected FCF shortfall of $1.3 billion to $1.5 billion in 2013, which could begin to strain its existing sources of liquidity. In February 2013, Penney received a notice of default from a law firm representing more than 50% of its 7.4% Debentures due 2037. The Company has filed a lawsuit in Delaware Chancery Court seeking to block efforts by the bondholder group to declare a default on the 2037 bonds. Penney also asked lawyers at Brown Rudnick LLP to identify the investors they represent. In March 2013, Penney received a letter from bondholders withdrawing and rescinding the Notice of Default. On April 12, 2013, Penney borrowed $850 million out of its $1.85 billion committed revolving credit facility with JPMorgan Chase Bank, N.A., as Administrative Agent, and Wells Fargo Bank, National Association, as LC Agent. Penney said the move was to enhance the Company's financial flexibility and position. JAMES RIVER: Silverback Asset Held 8.8% Equity Stake at May 17 -------------------------------------------------------------- Silverback Asset Management, LLC, and its affiliates disclosed that, as of May 17, 2013, they beneficially owned 3,455,400 shares of common stock of James River Coal Company representing 8.8 percent of the shares outstanding. A copy of the Schedule 13G is available for free at http://is.gd/5LIVoQ 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. 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. * * * 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. JEH COMPANY: Section 341(a) Meeting Scheduled for July 12 --------------------------------------------------------- A meeting of creditors in the bankruptcy case of JEH Company will be held on July 12, 2013, at 10:30 a.m. at FTW 341 Rm 7A24. Creditors have until Oct. 10, 2013, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013. James E. Helzer signed the petitions as president. The Lead Debtor estimated assets and debts of at least $10 million. Judge Russell F. Nelms presides over the case. JMW AUTO: Lowell Cage Remains as Chapter 7 Trustee -------------------------------------------------- In a May 29, 2013 Memorandum Opinion available at http://is.gd/ylteEOfrom Leagle.com, Bankruptcy Judge Marvin Isgur ruled that Lowell Cage has faithfully honored his duties as trustee in the Chapter 7 proceeding of JMW Auto Sales and thus, will not be removed from that position. Among those that gave rise to concerns on Mr. Cage's capacity as trustee are (1) the transfer of a 2001 Lexus car to Sonny Adams, a JMW employee, from large creditor Automotive Finance Corporation without him providing consideration for the vehicle; and (2) certain creditors' complaint over Mr. Cage alleged high legal costs. JMW was in the retail used car business and provided in-house financing on its vehicles. An involuntary chapter 7 petition was filed on behalf of JMW Auto Sales, L.L.C., Case No. 07-37364 (Bankr. S.D.Tex.). The principals of JMW, Marvin and Joan Moye filed a voluntary chapter 7 petition on November 6, 2007, Case No. 07-37770. Mr. Cage was appointed Chapter 7 trustee and the bankruptcy court allowed the trustee to retain his own law firm, Cage, Hill & Niehaus L.L.P. K-V PHARMACEUTICAL: Battle Amps Up as Silver Point Boosts Offer --------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that a group of senior bondholders led by Silver Point Finance LLC upped their offer to take control of the bankrupt K-V Pharmaceutical Co. in response to a group of investors that raised the stakes by increasing their own proposal just days ago. An earlier report by BankruptcyLaw360 said that an investor group that has proposed a Chapter 11 plan that would allow it to take over K-V Pharmaceutical Co. upped its proposal to $275 million in New York bankruptcy court. According to the report, the group, which includes Greywolf Capital Partners II LP, Capital Ventures International, Deutsche Bank Securities Inc. and Kingdon Capital Management LLC, recently wooed K-V with an alternative plan that offered more than five times its previous offer. The competition for the women's health care company and its subsidiaries, known for preterm birth prevention drug Makena, makes clear that investors expect great results once they exit bankruptcy. 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. K-V PHARMACEUTICAL: Seeks Approval of Deal with State of Texas -------------------------------------------------------------- BankruptcyData reported that K-V Pharmaceutical filed with the U.S. Bankruptcy Court a settlement agreement with the State of Texas and Ven-a-Care of the Florida Keys, Inc. Under this agreement, Claim No. 300 shall be deemed allowed as a general unsecured claim against K-V Pharmaceutical in the fixed, liquidated amount of $3,000,000 and the State of Texas shall be paid a pro rata distribution on account of the allowed Texas claim in accordance with any confirmed Chapter 11 plan, the BData report said, citing court documents. Simultaneously, the Texas action and the Company stay enforcement motion will be withdrawn, the BData report added. The Texas action is a whistleblower suit alleging the company made false claims to the state's Medicaid program, Lance Duroni of BankruptcyLaw360 reported, citing court documents. In a motion to approve the settlement, K-V said it still disputes the state's allegations, but that the deal was in the best interests of its creditors, considering Texas was asserting claims worth potentially tens of millions of dollars, the BLaw360 report said. The Court scheduled a June 20, 2013 hearing to consider the motion. 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. KINDER MORGAN: S&P Affirms 'BB' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed several ratings within the corporate family of U.S. midstream energy company Kinder Morgan Inc. (KMI): -- S&P affirmed KMI's and El Paso Corp.'s 'BB' corporate credit ratings. -- S&P affirmed El Paso Pipeline Partners L.P.'s (EPB) and its Colorado Interstate Gas Co. and Southern Natural Gas Co. subsidiaries 'BBB-' corporate credit ratings. -- S&P affirmed its ratings, including the 'BBB' corporate rating, on Kinder Morgan Energy Partners L.P. (KMP). The outlook is stable. -- The rating outlooks on KMI, El Paso, and EPB and its subsidiaries were revised to positive from stable. "Our ratings on Houston, Texas-based midstream energy company KMI reflect the company's "strong" business risk profile and "aggressive" financial risk profile as our criteria define the terms. We revised the business risk profile to "strong" from "satisfactory" based largely on the company's improved scale and the high percentage of fee-based cash flows. KMI's credit quality centers on its ownership of Kinder Morgan G.P. Inc., the general partner of the master limited partnership (MLP) of KMP, El Paso Corp., including El Paso's general and limited partnership interests in EPB, and a minority equity interest in NGPL PipeCo. LLC. As of March 31, 2013, KMI and its subsidiaries had about $34 billion of total reported debt, while KMI and El Paso had about $9.5 billion of debt collectively on a stand-alone basis," S&P said. "Our outlook on KMI's ratings is positive. KMI's ability to complete its deleveraging plan and associated asset dropdowns to KMP and EPB while maintaining consolidated debt/EBITDA in the low 5x area and stand-alone debt/EBITDA of roughly 3x could ultimately lead to a higher rating. The outlook could be stabilized if KMI's consolidated and stand-alone debt/EBITDA are sustained above 5.5x and 4x, respectively. A stable outlook could also occur if additional debt-financed acquisitions or a decline in cash flows from its subsidiaries weakens its financial risk profile," S&P added. "Our rating outlook on El Paso is positive and reflects our rating outlook on KMI. El Paso's corporate credit rating is also in line with our rating on KMI. KMI's management exerts significant control over El Paso, especially regarding its financial policies. KMI's ability to complete its deleveraging plan and associated asset dropdowns to KMP and EPB while maintaining consolidated debt/EBITDA in the low 5x area and stand-alone debt/EBITDA of roughly 3x could ultimately lead to a higher rating," S&P noted. KRONOS WORLDWIDE: S&P Lowers CCR to 'B+'; Outlook Stable -------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Kronos Worldwide Inc. to 'B+' from 'BB-'. The outlook is stable. At the same time, S&P raised its issue-level rating on the company's $400 million term loan to 'BB' from 'BB-' and revised its recovery rating to '1' from '3', indicating its expectation of very high recovery (90% to 100%) in the event of a payment default. "The downgrade reflects weaker-than-expected operating performance at Kronos because of significant deterioration in TiO2 market conditions, which should remain weak through much of 2013 before gradually recovering," said Standard & Poor's credit analyst Seamus Ryan. "We expect the company's EBITDA to be negative in the first half of 2013 and that its funds from operations to total adjusted debt will approach 10% in 2013," he added. "The ratings on Kronos reflect the company's limited focus on the highly cyclical, commodity-based TiO2 market and our expectation that credit metrics will be at trough levels in 2013. Because we view the company's concentrated ownership and complex corporate structure as risk factors, we focus our analysis of the company's credit metrics at Valhi, Kronos's parent company. The ratings also reflect our expectation that, although weaker industry conditions could persist for at least several more quarters, a gradual industry recovery should support an improvement to credit metrics in 2014 to the 20% funds from operations (FFO) to total debt we expect at the rating. In addition, we believe that the company's growth and shareholder rewards plans will not increase its debt leverage beyond our expectations for the ratings. We characterize the company's business risk profile as "weak" and its financial risk profile as "aggressive", S&P noted The stable outlook reflects S&P's expectation that, despite weakened industry conditions, Kronos's operating results will improve over the next few quarters to support adequate liquidity and financial metrics appropriate for the ratings. S&P also expects that management will maintain a prudent approach to funding growth and shareholder rewards. S&P could lower the ratings if it expects continued weakness in end-market demand and declining selling prices to lead to EBITDA margins well below 10% through 2014. In this scenario, S&P would expect FFO to total debt to remain in the 10% to 12% range over that period. S&P could also lower the ratings if the company uses additional debt to fund growth plans or shareholder rewards without an offsetting improvement to its business risk profile, or if environmental liabilities increase meaningfully as a result of additional accounting disclosure on remediation obligations. S&P could raise ratings if TiO2 industry conditions recover more quickly than expected over the next year, leading to greater than 10% revenue growth in 2014 and EBITDA margins of about 15%. In this scenario S&P would expect FFO to total debt to surpass 30%. However, because of the highly cyclical, commodity-based nature of the company's operations, S&P would look for additional evidence that improved credit metrics are sustainable in order to consider a higher rating. LEHMAN BROTHERS: Selling $1.06-Billion of LBI Claims at 45% ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Reorganized Lehman Brothers Holdings Inc. is selling a $1.06 billion chunk of its unsecured claim against brokerage subsidiary Lehman Brothers Inc. for 44.75 percent of face value, yielding $474.35 million cash for distribution to creditors of the Lehman holding company. According to the report, the Lehman parent said in mid-May that it was looking to sell its $14 billion unsecured claim against the brokerage, which is in a separate liquidation. The new sale, announced May 31, is the second sale of part of the $14 million approved claim. The report notes that on May 22 Lehman disclosed agreement to sell $4.22 billion of the claim for 44.5 percent, to generate $1.88 billion. The credit trading desk of JPMorgan Chase & Co. arranged the trade for the Lehman holding company, according to Elizabeth Seymour, a bank spokeswoman. Selling the claim became possible as the result of a settlement between the Lehman parent and the trustee for the Lehman broker that was approved as part of a larger settlement authorized by the bankruptcy court in April. The report relates that in addition to the $14 billion unsecured claim, the settlement gave the Lehman holding company $2 billion cash and a $240 million priority claim. Selling the claim against the broker for cash will enable the holding company to accelerate distribution to its creditors because the trustee for the Lehman broker isn't in a position yet to make distributions on general claims. The report says that the sale of the claim won't occur until the settlement between the Lehman parent and brokerage becomes effective. 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. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers. 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: Battle over 2008 Sale Goes Before Appeals Panel ---------------------------------------------------------------- Nick Brown, writing for Reuters, reported that Lehman Brothers' defunct brokerage told an appeals court it was entitled to billions of dollars in cash it says was wrongly included in its 2008 sale to Barclays Plc. According to the report, the arguments in federal appeals court in New York renewed a murky, years-old court battle with huge implications for the brokerage's creditors, including Lehman affiliates and hedge funds. "It was made very clear" in the asset purchase agreement "what was going to Barclays and what was staying behind," said the brokerage's lawyer, William Maguire, the report related. "The deal didn't exclude just some cash, it excluded all cash." The dispute has its roots in the hectic sale of the brokerage's assets to Barclays in the days following the $639 billion bankruptcy of parent company Lehman Brothers Holdings Inc in September of 2008, the report recalled. The brokerage contends the $250 million deal did not include the brokerage's cash assets. But Barclays says otherwise, relying on a so-called clarification letter signed after the deal was approved. The case is No. 12-2322, U.S. Court of Appeals for the Second Circuit. 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. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. 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: Investors Get $640MM Fraud Suit Sent to State Ct. ------------------------------------------------------------------ Stewart Bishop of BankruptcyLaw360 reported that a New York federal judge found that a $640 million securities fraud case against a Lehman Brothers Holdings Inc. unit can be timely adjudicated in state court and won't significantly impact the liquidation of Lehman's estate. According to the report, U.S. District Judge Lorna G. Schofield ruled that although another judge had previously rejected an earlier request for mandatory abstention based on the factor of whether the case would suffer greater delay in state court, that ruling is not binding. 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. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. 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: Trustee Pushes 2nd Circ. to Reverse Barclays Win ----------------------------------------------------------------- Richard Vanderford of BankruptcyLaw360 reported that the trustee in charge of liquidating Lehman Brothers Inc. urged the Second Circuit to undo a court decision that awarded $4 billion of its collateral to Barclays PLC, a long-contested aspect of Barclays' financial crisis-era purchase of the brokerage. According to the report, Barclays' deal to buy most of Lehman's assets, approved by a bankruptcy court judge in September 2008, did not give Barclays a legitimate claim to Lehman's collateral, a lawyer for trustee James W. Giddens told a panel of judges at oral arguments in 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. HoulihanLokey 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. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. 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: Can Sell More Claims Against Brokerage Unit ------------------------------------------------------------ Saabira Chaudhuri and Joseph Checkler writing for Daily Bankruptcy Review reports that Lehman Brothers Holdings Inc. is selling more of the claims against its defunct brokerage, as part of a continuing strategy to quickly recover money that will go to its creditors. Lehman said May 30 it will sell an additional $1.06 billion of its general unsecured claims against the brokerage unit, Lehman Brothers Inc., which is being unwound by trustee James W. Giddens. 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. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. 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. LEVEL 3: Stockholders Elect 14 Directors ---------------------------------------- At Level 3 Communications, Inc.'s annual meeting of stockholders hedl on May 23, 2013, the stockholders elected 14 directors to hold office until the annual meeting of stockholders in 2014 or until his successor is elected and qualified, namely: (1) Walter Scott, Jr.; (2) Jeff K. Storey; (3) General Kevin P. Chilton; (4) Admiral Archie R. Clemins; (5) Steven T. Clontz; (6) Admiral James O. Ellis, Jr.; (7) Michael Glenn; (8) Richard R. Jaros; (9) Michael J. Mahoney; (10) Charles C. Miller, III; (11) John T. Reed; (12) Peter Seah Lim Huat; (13) Peter van Oppen; and (14) Dr. Albert Yates. The stockholders also approved the compensation of the Comapany's named executive officers. Effective May 23, 2013, the Board of Director of Level 3 confirmed the following committee assignments for the Board's standing committees. Audit Committee --------------- John T. Reed (Chairman) Kevin P. Chilton Archie R. Clemins T. Michael Glenn Classified Business and Security Committee ------------------------------------------ James O. Ellis, Jr. (Chairman) Kevin P. Chilton Charles C. Miller, III Jeff K. Storey John T. Reed Compensation Committee ---------------------- Michael J. Mahoney (Chairman) Richard R. Jaros Peter Seah Lim Huat Peter van Oppen Nominating and Governance Committee ----------------------------------- Albert C. Yates (Chairman) James O. Ellis, Jr. Steven T. Clontz Strategic Planning Committee ---------------------------- Steven T. Clontz (Chairman) Archie R. Clemins Richard R. Jaros Charles C. Miller, III About Mr. van Oppen Mr. van Oppen has been a partner at Trilogy Partnership, a private investment firm focused on technology and telecommunications, since 2006. Prior to joining Trilogy, Mr. van Oppen served as Chief Executive Officer and Chairman of the Board for Advanced Digital Information Corporation, a data storage company, for 12 years, from 1994 through its acquisition by Quantum Corp. in 2006. Prior to ADIC, Mr. van Oppen served as President and Chief Executive Officer of Interpoint, a predecessor company to ADIC, from 1989 until its acquisition by Crane Co. in October 1996, and had also been a consultant at PricewaterhouseCoopers and Bain & Company. Mr. van Oppen currently serves as the Chairman of the Board of Trustees and is the former Chair of the Investment Committee at Whitman College and serves on the boards of directors of several private companies. Mr. van Oppen was formerly a director of Isilon Systems, Inc. The Board has determined that Mr. van Oppen is independent within the meaning of the listing standards of The New York Stock Exchange. Mr. van Oppen will earn fees for Board service consisting of a $75,000 annual cash retainer. As a member of the Compensation Committee, in addition to his other compensation as a Board member, Mr. van Oppen will receive a cash retainer of $15,000. Level 3 will also compensate Mr. van Oppen with a grant of restricted stock units as of July 1 of each year, with the number of units determined by dividing $150,000 by the volume-weighted average price of Level 3's common stock over the period from January 1 to June 30, subject to a cap of 6,666 units. These restricted stock units vest and settle in shares of Level 3's common stock, par value $.01 per share, on the first anniversary of grant. Mr. van Oppen was also awarded an initial grant of restricted stock units with a value of $150,000 on the date of grant, which was March 1, 2013. The restrictions on transfer for this initial grant lapse 100 percent on the third anniversary of the date of grant. About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. Level 3 incurred a net loss of $422 million in 2012, a net loss of $756 million in 2011, and a $622 net loss in 2010. The Company's balance sheet at March 31, 2013, showed $12.88 billion in total assets, $11.77 billion in total liabilities and $1.10 billion in total stockholders' equity. * * * In October 2012, Fitch Ratings affirmed the 'B' Issuer Default Ratings (IDRs) assigned to Level 3. LVLT's ratings recognize, in part, the de-leveraging of the company's balance sheet resulting from its acquisition of Global Crossing Limited (GLBC). Level 3 carries a 'B-' corporate credit rating, with positive outlook, from Standard & Poor's Ratings Services. LIFECARE HOLDINGS: Settlement Approval Paves Way for Carlyle Sale ----------------------------------------------------------------- Jamie Santo of BankruptcyLaw360 reported that a Delaware bankruptcy judge signed off on a proposed settlement between LifeCare Holdings Inc.'s creditors committee and its private equity purchaser, removing the final obstacle to hospital group's $320 million sale to The Carlyle Group LP. According to the report, the federal government and the U.S. trustee argued the agreement should be rejected because it would pay junior creditors while more senior claims went wanting, but U.S. Bankruptcy Judge Kevin Gross overruled their objections, finding that the absolute priority rule did not come into play. 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, to sell the 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. LIGHTSQUARED INC: Lands Exit Financing Deal With Jefferies ---------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that LightSquared Inc. said it reached a deal with Jefferies LLC to finance its exit from bankruptcy but is asking a court to keep the terms of the agreement under wraps in an effort to keep the information out of the hands of competing financial institutions. According to the report, in a court filing, LightSquared sought approval for the financing, which it says should fulfill the company's prepetition debt and serve as a critical step toward repaying its creditors and exiting bankruptcy. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LIVINGVENTURES INC: Incurs $465K Net Loss in First Quarter ---------------------------------------------------------- LivingVentures, Inc., formerly known as Green Global Investments, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $465,225 on $194,869 of revenue for the three months ended March 31, 2013, compared with a net loss of $187,345 on $0 revenue for the same period last year. The Company's balance sheet at March 31, 2013, showed $2.8 million in total assets, $2.6 million in total liabilities, and stockholders' equity of $150,282. "The Company sustained an accumulated net loss of $2,603,346 for the period from Dec. 17, 1999 (inception) to March 31, 2013. This raises substantial doubt about its ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/SHMYEh Maitland, Fla.-based LivingVentures, Inc., is engaged in the acquisition, development and operation of senior housing communities. LMR LLC: Austin Hotel Owner Has Confirmed Plan ---------------------------------------------- LMR, LLC d/b/a Baymont Inn & Suites Austin South, won confirmation of its chapter 11 exit plan. Bankruptcy Judge Christopher Mott overruled an objection by Asset Ventures Fund I, Ltd., the Debtor's lender and secured creditor. AVF holds a claim against the Debtor for roughly $3.8 million, secured by the Baymont Hotel owned by the Debtor. "This case involves a Chapter 11 debtor hotel owner that experienced financial difficulties as the result of the unexpected loss of its prior franchise and the nationwide recession. In a remarkable turnaround, this debtor has been able to recover during its bankruptcy case due to a rising Austin hotel market that is increasing its revenue and value. As more people travel to Austin to engage in leisure pursuits -- whether it be to see live music, watch independent films, attend college football games, or experience a new racetrack that is close by -- a segment of these out-of-towners are taking 'refuge from home life' at the debtor's limited service hotel. As a result, in a difficult (but not unprecedented) legal setting, this particular Chapter 11 debtor can successfully cramdown its plan of reorganization on an objecting secured creditor that recently acquired the debtor's loan." Judge Mott said. The Court directed the Debtor's counsel to submit a proposed form of order confirming the Debtor's Modified Second Amended Plan of Reorganization within 14 days after entry of the Court's Opinion. The Court on April 25, 2013, conducted the confirmation hearing regarding the First Amended Plan of Reorganization, as amended by the Second Amended Plan of Reorganization, and as modified by the Modified Second Amended Plan of Reorganization. AVF filed the lone objection. A copy of the Court's May 24, 2013 Opinion is available at http://is.gd/xSOOXUfrom Leagle.com. LMR, LLC, dba Baymont Inn & Suites Austin, and as Baymont Inn & Suites Austin South, filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 12-12267) on Oct. 2, 2012, in its hometown in Austin. Judge H. Christopher Mott oversees the case. Frank B. Lyon, Esq. -- franklyon@me.com -- serves as LMR's bankruptcy lawyer. LMR estimated $1 million to $10 million in both assets and debts. A list of LMR's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/txwb12-12267.pdf The petition was signed by Lisa Rhee, manager. LUXEYARD INC: Chief Operating Officer Resigns --------------------------------------------- LuxeYard, Inc., said that Jerome Wilkerson, the Company's chief operating officer, chief technology officer and chief financial officer signatory resigned from his positions at the Company and its subsidiaries. The Company said suitable replacements will be determined by the Board of Directors. About Luxeyard, Inc. Los Angeles, California-based Luxeyard, Inc., a Delaware Corporation, is an internet company selling luxury goods on a flash Web site. Luxeyard, Inc., is the parent company of the wholly owned subsidiaries, LY Retail, LLC, incorporated under the laws of the State of Texas on April 20, 2011, and LY Retail, LLC, incorporated in the State of California on Nov. 8, 2011. The Company's balance sheet at Sept. 30, 2012, showed $1.5 million in total assets, $5.8 million in total liabilities, and a stockholders' deficit of $4.3 million. "As of Sept. 30, 2012, we have generated minimal revenues since inception. We expect to finance our operations primarily through our existing cash, our operations and any future financing. However, there exists substantial doubt about our ability to continue as a going concern because we will be required to obtain additional capital in the future to continue our operations and there is no assurance that we will be able to obtain such capital, through equity or debt financing, or any combination thereof, or on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet our capital needs. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, our operations would be materially negatively impacted. Therefore, there is substantial doubt as to our ability to continue as a going concern." An Involuntary Petition for bankruptcy, entitled In re Luxeyard, Inc. (Case No. 12-bk-51986-BR), was filed against LuxeYard, Inc., by three creditors of the Company. The petition was filed in the United States Bankruptcy Court, Central District of California. The date that jurisdiction was assumed was Dec. 27, 2012. The Petitioners have claimed that they have debts totaling $66,220. MANASOTA GROUP: Late Filed 2011 Financials Show $544K Loss ---------------------------------------------------------- Manasota Group, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $544,686 on $273,266 of total operating income for the year ended Dec. 31, 2011, as compared with a net loss of $5.76 million on $58,184 of total operating income for the year ended Dec. 31, 2010. The Company's balance sheet as of Dec. 31, 2011, showed $1.23 million in total assets, $1.58 million in total liabilities and a $353,848 total shareholders' deficit. None of the Company's officers have been receiving any compensation since Sept. 10, 2010. Moreover, beginning after filing the quarterly report on Form 10-Q for the third quarter of 2011, particularly with the advent of the requirement that the Company's periodic reports be accompanied by Interactive Data Files pursuant to Rule 405 of Regulation S-T, the total fees payable to the accountants, legal counsel and contractors engaged to convert the reports into formats suitable for filing on EDGAR have increased to a level which exceeded the Company's net margin. Furthermore, the Common Stock continued to trade very thinly and on a sporadic basis. Consequently, on or about Dec. 31, 2011, the Board of Directors made the decision to temporarily suspend the Company's filing of periodic reports under the Exchange Act beginning with its Annual Report on Form 10-K for the fiscal year ending Dec. 31, 2011. On April 26, 2013, the Company received a letter from the Office of Enforcement Liaison in the SEC's Division of Corporation Finance. The letter informs the Company that if it does not take the necessary steps to return the Company into compliance with its reporting requirements under the Exchange Act within the next fifteen days, the SEC may commence administrative proceedings to revoke the Company's registration under the Exchange Act and impose a trading suspension with respect to the Common Stock. On May 6, 2013, the Company filed a letter with the SEC setting forth a plan for returning into that compliance by filing this Report on or before May 31, 2013, and all other delinquent periodic reports on or before July 31, 2013, and requesting that no such administrative proceedings or trading suspension be commenced at this time. A copy of the Form 10-K is available for free at: http://is.gd/n6wDCE About Manasota Group Manasota Group, Inc., f/k/a Horizon Bancorporation, Inc., was incorporated in the State of Florida on May 27, 1998, for the purpose of becoming a bank holding company owning all of the outstanding capital stock of Horizon Bank, a commercial bank chartered under the laws of Florida and a member of the Federal Reserve System. MARKWEST ENERGY: Fitch Affirms 'BB' Issuer Default Rating --------------------------------------------------------- Fitch Ratings affirms MarkWest Energy Partners, L.P.'s Issuer Default Rating (IDR) and senior unsecured rating at 'BB', and the senior secured rating at 'BB+'. The Rating Outlook has been revised to Negative from Stable. Today's rating action affects approximately $3 billion of debt outstanding. The Negative Outlook reflects Fitch's concern about limited liquidity and covenant headroom over the next few quarters as MarkWest continues with its expansion plans. The company's significant investments in infrastructure projects in the Marcellus and Utica shale plays should ultimately benefit the credit profile. However, capex needs have hurt current credit metrics. Leverage as of 1Q'13 was high enough to reduce availability to draw on the revolver to $145 million due to a financial covenant. Over the next couple of quarters, Fitch expects that MarkWest's leverage may remain close to the bank agreement's maximum leverage of 5.5x (but not exceed it) which would result in ongoing reduced liquidity. Historically, the company has been active in raising capital with equity offerings. Fitch expects that MarkWest will continue to use this as a source of funding for growth, and that the company will be able to raise equity as needed to maintain liquidity and comply with covenants. Over the next few quarters, Fitch will monitor MarkWest's equity issuances as well as EBITDA growth, which would reduce leverage. Key Rating Drivers Key rating factors which support the rating include: -- A reasonably diverse footprint with leading positions in the liquids-rich areas in the Mid-continent and Appalachia; -- Strategically well-positioned assets with exposure to the rapidly growing Marcellus and Utica shale plays; -- An increasing amount of fee-based revenue sources and a layered hedging strategy; -- A strategy to fund growth with a balanced combination of debt and equity. The ratings also factor in the following concerns: -- Increased leverage which has significantly reduced liquidity but should improve later in 2013 and into 2014; -- Some exposure to non-fee-based cash flows from keep-whole and percent-of-proceeds arrangements; -- Reliance on drilling and production activities in the E&P sector for gathering and processing volumes, which in turn are ultimately driven by volatile hydrocarbon prices; -- A significant long-term capital expenditure program; -- Use of proxy hedging that can be periodically affected by breakdowns in the correlation between crude oil and natural gas liquids (NGL) prices. Leverage: At the end of 1Q'13, debt to adjusted leverage (defined by Fitch as debt to adjusted EBITDA) was 5.6x, up from 4.8x at the end of 2012. The increase is attributed to the $1 billion bond offering in January 2013 which was used for the early retirement of high-coupon debt and to prefund a portion of 2013's capex budget. On a sequential basis, leverage increased 0.3x when adjusting for cash on the balance sheet. Fitch expects that leverage will be elevated over the next few quarters to fund growth projects in two important shale plays, the Marcellus and Utica, and prior to significant new-project EBITDA being realized. Fitch anticipates that leverage will remain in the range of 5-5x.5x at the end of 2013 but then fall to a range of 4.25x-4.75x in 2014 as new gathering and processing volumes drive EBITDA growth. Restrained Liquidity: At the end of 1Q'13, MarkWest's availability to draw on its $1.2 billion secured revolver was reduced to $145 million due to financial covenants which do not allow leverage (as defined in the bank agreement) to exceed 5.5x. Borrowing capacity was significantly reduced from $680 million of availability at the end of 2012. The revolver expires in 2017. Cash on the balance sheet was $654 million and of that total, $148 million was held at the Utica joint venture (JV) leaving MarkWest with $506 million on a standalone basis. MarkWest does not have any near-term debt. The next debt maturity is scheduled for 2020. Amendment: In December 2012, MarkWest's secured revolving credit agreement was amended to increase the financial covenant for the total leverage ratio (as defined by the bank agreement) to 5.5x from 5.25x through 4Q'13. After that, the total leverage ratio cannot exceed 5.25x. The bank definition of total leverage differs from the Fitch calculation and the largest difference is that the bank definition gives pro forma EBITDA credit for material projects. Spending: The company expects 2013 capex to be in the range of $1.5 billion-$1.8 billion (and is net of The Energy Minerals Group's (EMG) contribution to a JV in the Utica). In 2012, capex was approximately $2 billion. In addition, MarkWest made an acquisition for approximately $510 million. While MarkWest's spending has been significant, the company has used a combination of debt and equity to fund growth. In 2012, net equity proceeds were $1.6 billion while new debt issued was just $750 million. Distributable Cash Flow and Coverage: Distributable cash flow (DCF) for the latest 12 months (LTM) ending 1Q'13 was $418 million and the company expects it to be in the range of $500 million-$540 million for the year. The distribution coverage for the LTM ending 1Q13 was 1.1x, which is slightly below where it has averaged (approximately 1.2x). As of July 1, 2013, 20% of the 19.95 million Class B units held by EMG will begin to vest (the vesting schedule is 20% per year beginning in 2013), so the coverage ratio may decline slightly in the latter half of the year. Hedging: The company uses some direct product hedges as well as a proxy hedging strategy which is vulnerable to a periodic breakdown in the correlation between crude oil and NGLs. At the end of 1Q'13, 72% of its expected commodity exposed volumes were hedged for 2013 and of that total, 65% were covered by direct hedges and the remainder were dirty hedges. The company has hedged 30% for 2014 and 75% of those hedges are direct product hedges. Fee-Based Contracts: In 1Q'13, 58% of net operating margin was from fee-based contracts versus 39% in the year earlier period. MarkWest projects that net operating margin from fee-based arrangements will increase to 63% for 2013 and rise to 70% for 2014. Fitch considers the increase of fee-based contracts favorable from a credit perspective. Ratings Sensitivities Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Increased size, scale, and earnings diversification matched with a sustained decrease in leverage (defined by Fitch as debt to adjusted EBITDA) to approximately 4.5x for a sustained period of time; -- Material improvements in liquidity. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Leverage (defined by Fitch as debt to adjusted EBITDA) in excess of 5.0x on a sustained basis; -- Failure to meaningfully improve liquidity through an equity raise over the next few quarters; -- Higher leverage either for high multiple acquisitions or to fund growth projects above and beyond planned debt increases. MAUI LAND: Now in Compliance with NYSE's Listing Standards ---------------------------------------------------------- Maui Land & Pineapple Company, Inc., has been informed by the New York Stock Exchange that it is now considered a "company back in compliance" with the NYSE's continued listing standards. The NYSE decision was based on MLP's consistent positive performance with respect to its business plan and the NYSE's market capitalization standards over the past two quarters. The NYSE notified the Company in October 2012 that it was not in compliance with the NYSE's continued listing standards because its average market capitalization was less than $50 million over a 30 trading-day period and its most recently reported shareholders' equity was less than $50 million. In December 2012, the Company submitted a business plan outlining its actions to achieve compliance within 18 months. On May 20, 2013, MLP's average market capitalization over a 30 trading-day period was approximately $81 million. 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. 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. 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. MCCLATCHY COMPANY: Stockholders Elect 11 Directors -------------------------------------------------- The McClatchy Company held its annual meeting of shareholders on May 14, 2013, at which the shareholders elected the following as directors: Class A Common Stock -------------------- Elizabeth Ballantine Kathleen Foley Feldstein Clyde Ostler Class B Common Stock -------------------- Leroy Barnes, Jr. Molly Maloney Evangelisti Brown McClatchy Maloney William B. McClatchy Kevin S. McClatchy Theodore R. Mitchell Frederick R. Ruiz Patrick J. Talamantes The shareholders also ratified the selection of Deloitte & Touche LLP as the Company's independent auditors for 2013. About The McClatchy Company Sacramento, Cal.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local Web sites in each of its markets which extend its audience reach. The Web sites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The McClatchy incurred a net loss of $144,000 in 2012, as compared with net income of $54.38 million in 2011. The Company's balance sheet at March 31, 2013, showed $2.84 billion in total assets, $2.81 billion in total liabilities, and $32.83 million in stockholders' equity. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. McClatchy Co. carries a 'B-' Corporate Credit Rating from Standard & Poor's Ratings Services. MDU COMMUNICATIONS: Seeking Extension of $30MM Credit Facility -------------------------------------------------------------- MDU Communications International, Inc., received notice from Multiband Corporation that in connection with Multiband entering into a merger agreement with Goodman Networks Inc., Multiband was terminating the Acquisition Agreement with the Company. Meanwhile, the Company is currently in discussions with its lenders for the extension of its $30 million credit facility, which matures on June 30, 2013, while the Company evaluates strategic options, including merger, sale of the Company or sale of Company assets. About MDU Communications Totowa, New Jersey-based MDU Communications International, Inc., is a national provider of digital satellite television, high-speed Internet, digital phone and other information and communication services to residents living in the United States multi-dwelling unit market -- estimated to include 32 million residences. The Company reported a net loss of $6.4 million on $27.3 million of revenue for 2012, compared with a net loss of $7.4 million on $27.9 million of revenue for 2011. The Company's balance sheet at March 31, 2013, showed $18.04 million in total assets, $32.14 million in total liabilities and a $14.09 million total stockholders' deficiency. CohnReznick LLP, in Roseland, New Jersey, expressed substantial doubt about MDU's ability to continue as a going concern following the financial results for the year ended Sept. 30, 2012. The independent auditors noted that the Company has incurred significant recurring losses, has a working capital deficit, and an accumulated deficit of $75 million at Sept. 30, 2012. They also noted that the Company's $30 million Credit Facility matures on June 30, 2013. MERIDIAN SUNRISE: Evidentiary Hearing on Plan Will Start June 17 ---------------------------------------------------------------- The Hon. Brian D. Lynch of the U.S. Bankruptcy Court for the Western District of Washington will convene an evidentiary hearing commencing on June 17, 2013, at 9:30 a.m., to determine whether or not to confirm the First Amended Plan of Reorganization of Meridian Sunrise Village, LLC. The First Amended Disclosure Statement is approved permitting the Debtor to solicit acceptances or rejections of the Amended Plan. An objection to approval of the Disclosure Statement was filed by U.S. Bank National Association. Ballots accepting or rejecting the Plan were due May 22. Any objections to confirmation of the Plan were also due May 22. An initial hearing was schedule for May 29, to consider the confirmation of the Debtor's Plan and any objections thereto. According to the First Amended Disclosure Statement, the Plan provides that the Debtor will continue to own, manage and operate its shopping center property and continue the lease-up process after the Effective Date in the ordinary course of business. All claims that are allowed by the Court will be paid in full. Holders of Claims secured by the real property and improvements owned by the Debtor will retain their liens on and security interests in such property until their claims are fully paid. Unsecured creditors will also be paid in full over time, with interest on their claims. The Debtor's members will retain their equity interests in the Debtor going forward. The distributions under the Plan will be made from amounts generated from operations of the Reorganized Debtor. A copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/MERIDIAN_SUNRISE_1amendedds.pdf About Meridian Sunrise Village LLC Meridian Sunrise Village LLC filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 13-40342) in Tacoma, Washington, on Jan. 18, 2013. The Debtor, a single asset real estate under 11 U.S.C. Sec. 101(51B), disclosed $70.6 million in total assets and $65.9 million in total liabilities in its schedules. The Debtor owns the property known as the New Meridian Sunrise Village in 10507 156th St. E. Puyallup, Washington. The Debtor has valued the property at $70 million, which property secures debt of $64.4 million to U.S. Bank, National Association. A copy of the schedules attached to the petition is available at http://bankrupt.com/misc/wawb13-40342.pdf MF GLOBAL: Court Approves Agreement to Resolve Deutsche Bank Claim ------------------------------------------------------------------ U.S. Bankruptcy Judge Martin Glenn approved the agreement signed by MF Global Holdings Ltd.'s trustee and Deutsche Bank to resolve the validity and amount of claim asserted by the bank. Under the agreement, the claim will be allowed as a Class 6D general unsecured claim against MF Global FX in the amount of $8.325 million. Deutsche Bank purchased the claim from Banco Monex S.A. in July 2012. Banco Monex filed the claim after MF Global FX allegedly failed to make necessary payments under a 2009 agreement About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MF GLOBAL: Claimant Ordered to Pay $250 Fine for Misconduct ----------------------------------------------------------- U.S. Bankruptcy Judge Martin Glenn imposed a monetary sanction against Michelle Coe who was found guilty of misconduct for filing a $35 million claim against MF Global Holdings Ltd. In a May 29 ruling, Judge Glenn ordered Ms. Coe to pay a fine of $250 and warned her that she could face larger fines for "any future frivolous conduct." Ms. Coe brought what she deemed an administrative expense claim tied to Man Financial's 2005 acquisition of Refco Inc.'s assets despite warnings that she could face penalties if she continued to file frivolous pleadings. On April 18, Judge Glenn threw out Ms. Coe's $35 million claim, and ordered her to pay a fine. Barely two weeks after he issued the ruling, the bankruptcy judge vacated the sanction and gave Ms. Coe a chance to defend herself at the May 24 hearing. Ms. Coe, however, failed to appear in person or by telephone at the hearing. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MF GLOBAL: Wins Court Approval to Settle Claim of NYSDTF -------------------------------------------------------- U.S. Bankruptcy Judge Martin Glenn approved an agreement, which calls for the settlement of claims of the New York State Department of Taxation and Finance. Under the deal, NYSDTF agreed to reduce its claim against MF Global Holdings USA Inc. to $73,664 from $4,475,289. The agreement is available for free at http://is.gd/tnznpL About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MFM INDUSTRIES: Case Summary & Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: MFM Delaware, Inc. aka MFM Industries (Delaware), Inc. P.O. Box 86 Lowell, FL 32663 Bankruptcy Case No.: 13-11359 Chapter 11 Petition Date: May 28, 2013 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Peter J. Walsh Debtors' Counsel: Scott J. Leonhardt, Esq. THE ROSNER LAW GROUP, LLC 824 Market Street, Suite 810 Wilmington, DE 19801 Tel: (302) 777-1111 E-mail: leonhardt@teamrosner.com - and ? Frederick Brian Rosner, Esq. THE ROSNER LAW GROUP LLC 824 Market Street, Suite 810 Wilmington, DE 19801 Tel: (302) 777-1111 E-mail: rosner@teamrosner.com Debtor's Co-Counsel: KING & SPALDING, LLP Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that simultaneously filed for Chapter 11 protection: Debtor Case No. ------ -------- MFM Industries, Inc. 13-11360 Assets: $10,000,001 to $50,000,000 Debts: $10,000,001 to $50,000,000 The petitions were signed by Matthew A. Crane, president and CEO. A. MFM Delaware's List of Its Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ben Chereskin Note $362,949 c/o Profile Capital Management, LLC 400 N. Michigan Avenue, Suite 620 Chicago, IL 60611-4138 Spitfire Global, Inc. Note $91,619 800 Sailboat Key Boulevard St. Petersburg Beach, FL 33707 B. MFM Industries, Inc.'s List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Terex Financial Services, Inc. Trade Debt $809,540 200 Nyala Farm Road Westport, CT 06880 Delta Express Systems, Inc. Trade Debt $412,836 4254 N. Clark Road Gainesville, GA 30506 CKS/Regal Plastics Trade Debt $275,208 2818 Merrell Road Dallas, TX 75229-4701 ProEnergy Partners, LP Trade Debt $243,955 Total Quality Logistics Trade Debt $229,000 Anduro Manufacturing, LLC Trade Debt $186,773 Krebs Land Development, LLC Trade Debt $186,408 Hood Packaging Corporation Trade Debt $130,496 Maxpak Total Packaging Trade Debt $106,923 Daymon Worldwide Trade Debt $82,788 Motion Industries Trade Debt $55,060 ESM Metro Trade Debt $48,039 Cady Bag Company, LLC Trade Debt $46,633 ADP Commercial Trade Debt $43,528 CSX Transportation Trade Debt $42,580 Letica Corporation Trade Debt $41,935 Bentonite Performance Minerals, Trade Debt $41,025 LLC Teco Peoples Gas Trade Debt $38,124 Chuck Latham Associates, Inc. Trade Debt $37,168 Progress Energy Florida, Inc. Trade Debt $36,756 MOMENTIVE PERFORMANCE: Moody's Changes Outlook to Negative ---------------------------------------------------------- Moody's Investors Service changed the outlook on Momentive Performance Materials Inc.'s (Momentive or MPM) to negative from stable and affirmed the company's other ratings (Caa1 Corporate Family Rating) given the company's ongoing weak financial performance and the expectation that its available liquidity will decline from current levels back toward $300 million by the end of 2013 without a more meaningful recovery in demand. Moody's affirmed the company SGL-3 rating due to its improved balance sheet cash and new credit facilities. Moody's also modified the loss given default assessments on the company's debt. "While financial performance has improved over the past two quarters and its balance sheet cash has increased, Momentive's financial performance remains well below levels that would cover its cash expenses," stated John Rogers, Senior Vice President at Moody's. "Given the slow pace of earnings improvement, free cash flow is likely to remain negative for longer than previously expected." Ratings Rationale The negative outlook reflects the continuing cash burn at MPM. Although the company has no maturities before 2016 and it has improved liquidity with the recent receipt of $102 million from GE, Moody's anticipates that cash and available liquidity will decline back toward $300 million by year end 2013. This assumes a slow recovery in financial performance in 2013 and into 2014. The affirmation of the Caa1 rating reflects the company's $392 million of cash and available liquidity at March 31, 2013, which provides additional time for the company's end markets to improve and profitability to increase. MPM has extremely weak credit metrics with Net Debt/EBITDA of over 15x and negative Retained Cash Flow. The rating could be lowered if EBITDA does not rise above $70 million per quarter for the remainder of 2013 or if cash and available liquidity falls below $250 million. MPM's financial performance deteriorated in the fourth quarter of 2011, as new capacity in China was brought on-stream by several competitors. Slow demand growth in China for silicones, combined with declines in Europe, have caused margins to remain well below historic averages and slowed the recovery in capacity utilization rates in the industry. MPM's siloxane joint venture in Asia has not resulted in a meaningful improvement in financial performance due to this continuing over capacity. The principal methodologies used in rating Momentive Performance Material Inc were the Global Chemical Industry rating methodology published in December 2009, and the Loss Given Default methodology for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website. Momentive Performance Materials Inc., headquartered in Albany, New York, is the second largest producer of silicones and silicone derivatives worldwide. The company has two divisions: silicones (which accounted for roughly 90% of revenues) and quartz. Revenues were roughly $2.3 billion for the LTM ending March 31, 2013. NATIVE WHOLESALE: GableGotwals Okayed to Handle Oklahoma Action --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of New York authorized Native Wholesale Supply Company to employ GableGotwals as special counsel relating to an action pending in the District Court of Oklahoma, where the Debtor is a defendant. GableGotwals was paid a total of $125,000 for its services in connection with the rendered legal services to the Debtor since Oct. 16, 2012. To the best of the debtor's knowledge, GableGotwals does not have any connection with the Debtor, its creditors, or any party-in- interest, or its respective attorneys. About Native Wholesale Supply Company Native Wholesale Supply Company is engaged in the business of importing cigarettes and other tobacco products from Canada and selling them to third parties within the United States. It purchases the products from Grand River Enterprises Six Nations, Ltd., a Canadian corporation and the Debtor's only secured creditor. Native is an entity organized under the Sac and Fox Nation and has its principal place of business at 10955 Logan Road in Perrysburg, New York. Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No. 11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered to resolve an ongoing dispute with the United States government regarding up to $43 million in assessments made by the government against the Debtor pursuant to the Fair and Equitable Tobacco Reform Act of 2004 and the Tobacco Transition Payment Program and to restructure the terms of payment of any obligation determined to be owing by the Debtor to the U.S. under the Disputed Assessment. The issues pertaining to the Disputed Assessment resulted in two lawsuits, subsequently consolidated, now pending in the Federal District Court. Robert J. Feldman, Esq., and Janet G. Burhyte, Esq., at Gross, Shuman, Brizdle & Gilfillan, P.C., in Buffalo, N.Y., represent the Debtor as counsel. The Company disclosed $30,022,315 in assets and $70,590,564 in liabilities as of the Chapter 11 filing. The States of California, New Mexico, Oklahoma and Idaho have appeared in the case and are represented by Garry M. Graber, Esq., at Hodgson Russ LLP. No trustee, examiner or creditors' committee has been appointed in the case. NEWLAND INTERNATIONAL: Wins Confirmation of Prepackaged Plan ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Newland International Properties Corp., the owner of the Trump Ocean Club International Hotel & Tower in Panama City, Panama, on May 30 won the signature of the bankruptcy judge on a confirmation order approving the prepackaged Chapter 11 reorganization begun exactly one month earlier. The pre-negotiated, pre-accepted reorganization is designed to restructure $220 million in first-lien secured notes. It was accepted unanimously by noteholders. The report notes that the Chapter 11 plan doesn't affect unsecured creditors and allows owners to retain their stock. The existing $220 million in 9.5 percent senior secured notes will be paid in full by issuance of new notes for the entire principal amount plus accrued interest. The new notes, to mature in May 2017, will pay interest at 9.5 percent, although the collateral, amortization schedule and covenants are revised. The noteholders will have 30 percent of the owners' voting rights. An executive vice president with Trump Organization Inc., Eric Trump said the company has nothing to do with the project's ownership or financing. Trump Panama Hotel Management LLC is the "property manager and nothing more," he said, the report adds. 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. NORTH AMERICAN ENERGY: S&P Alters Outlook to Stable & Keeps B- CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services said it revised its outlook on Edmonton, Alta.-based North American Energy Partners Inc. (NAEP) to stable from developing. At the same time, Standard & Poor's affirmed its 'B-' long-term corporate credit rating and senior unsecured debt rating on the company. The '4' recovery rating on the senior unsecured debt is unchanged. "Although NAEP's revenues have decreased due to increasing in- sourcing among its principal customers in the Western Canadian Sedimentary Basin, heightened competition from other service providers, and reduced development activity at the large oil sands projects, the company has been able to improve its operating margins and overall profitability," said Standard & Poor's credit analyst Michelle Dathorne. "We expect it should be able to generate some positive free cash flow during our forecast period, so we expect NAEP's cash flow protection metrics, which have improved in fiscal 2013, should continue to strengthen in fiscal years 2014 and 2015," Ms. Dathorne added. The ratings on NAEP reflect Standard & Poor's view of the company's limited operational diversification, and diminishing visibility to future revenue growth, due to increasing competition from other service providers and in-sourcing among its principal customers. S&P believes NAEP's improving operating margins in its principal business segment, the heavy construction and mining (HCM) division, its spending flexibility, which allows the company to reduce capital spending to maintenance levels without compromising its operating efficiency, and adequate liquidity offset these weaknesses. The stable outlook reflects Standard & Poor's expectation that NAEP's forecast EBITDA should be sufficient to fund its financing obligations and maintenance capital spending throughout S&P's 2013-2015 forecast period. Standard & Poor's believes the company's competitive position has weakened due to both reduced business activity in its principal operating segment (HCM), as well as the recent disposition and exit from some of its secondary businesses, specifically its pipeline business unit and construction operations in western Canada. Despite its narrowed business diversification, NAEP has been able to improve its operating margins by renegotiating several key service contracts. Despite the diminished visibility to revenue growth, due to capital spending restraint among large oil sands producers, S&P believes the company should maintain stable revenues and operating cash flow from its remaining operations. Nevertheless, if NAEP's liquidity becomes less than adequate, or EBITDA falls and its cash flow protection metrics weaken, such that fully adjusted debt-to- EBITDA increases above 6.5x, S&P would lower the rating. S&P do not believe the current business environment in the Western Canadian Sedimentary Basin will provide an opportunity for material organic growth in revenues and EBITDA; therefore, a positive rating action during S&P's forecast period is unlikely to occur. If, however, the company is able to broaden its business diversification (either organically or through a transformative acquisition), and improve and sustain its operating margins and return on capital employed while maintaining fully adjusted debt- to-EBITDA at or below 4.0x, S&P would raise the corporate credit rating to 'B'. ORLEANS HOMEBUILDERS: PD Claims v. Unit Discharged in Bankruptcy ---------------------------------------------------------------- District Judge Joel H. Slomsky opined that claims asserted against Stock Grange L.P. in the case Davis vs. Grubb were discharged in the bankruptcy proceeding filed by Stock Grange. Accordingly, the Pennsylvannia district court ruled that Stock Grange is dismissed as a party in the case. Stock Range filed for bankruptcy on March 1, 2010, and obtained confirmation of its Chapter 11 plan on Dec. 1, 2010. The case arose out of a dispute over property damage. The Complaint alleges that work on the Grubbs' property by homebuilder Stock Grange was performed negligently, which allowed two separate floods to damage the property. Moreover, upon agreement of the parties' counsel, the Complaint is remanded back to the Court of Common Pleas of Chester County. The cases are captioned TROY and JENNIFER DAVIS, and JILL U. TILLMAN, Plaintiffs v. BRIAN and ERIN GRUBB and ORLEANS HOMEBUILDERS, INC., Defendants; and ALLSTATE INSURANCE COMPANY a/s/o TROY and JENNIFER DAVIS, Plaintiffs v. BRIAN and ERIN GRUBB and ORLEANS HOMEBUILDERS, INC., Defendants, Civil Action Nos. 12- 4628, 12-6747 (E.D. Pa). The parties agree that Stock Range is incorrectly named in these cases as Orleans Homebuilders, Inc. Stock Rage is a subsidiary of Orleans Homebuilders. A copy of the District Court's May 23, 2013 Opinion is available at http://is.gd/mtEcZKfrom Leagle.com. About Orleans Homebuilders Orleans Homebuilders, Inc. -- aka FPA Corporation, OHB, Parker & Lancaster, Masterpiece Homes, Realen Homes and Orleans -- develops, builds and markets high-quality single-family homes, townhouses and condominiums. From its headquarters in suburban Philadelphia, the Company serves a broad customer base including first-time, move-up, luxury, empty-nester and active adult homebuyers. The Company currently operates in these 11 distinct markets: Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. Orleans Homebuilders employs approximately 300 people. The Company filed for Chapter 11 bankruptcy protection on March 1, 2010 (Bankr. D. Del. Case No. 10-10684). Cahill Gordon & Reindell LLP is the Debtor's bankruptcy and restructuring counsel. Curtis S. Miller, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, are the Debtor's Delaware and restructuring counsel. Blank Rome LLP is the Debtor's special corporate counsel. Garden City Group Inc. is the Debtor's claims and notice agent. Gerard S. Catalanello, Esq., and James J. Vincequerra, Esq., at Duane Morris LLP, in New York; Lawrence J. Kotler, at Duane Morris LLP, in Philadelphia, Pennsylvania; and Richard W. Riley, Esq., and Sommer L. Ross, Esq., at Duane Morris LLP, in Wilmington, Delaware, serve as counsel to the Official Committee of Unsecured Creditors. The Company estimated assets and debts at $100 million to $500 million as of the Petition Date. Orleans Homebuilders, Inc., in February 2011 completed its financial reorganization and emerged from Chapter 11 protection as a newly reorganized company. Orleans emerged with $160 million in new financing, including a $30 million revolving credit facility. READER'S DIGEST: Settles With FTC to Permit Plan Approval --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Reader's Digest Association reached a settlement with the U.S. Federal Trade Commission, resolving a dispute that would have blocked approval of the publisher's reorganization plan at the June 28 confirmation hearing. During and after Reader's Digest's prior bankruptcy reorganization, the company marketed a device called the Ab Circle Pro. The FTC initiated an investigation in April 2010 and alleged Reader's Digest was employing false advertising. The report notes that the result was a settlement in August 2012 where Reader's Digest agreed to pay $31.2 million. Giving credit for what was paid before bankruptcy, the FTC filed a claim for about $26.7 million. Significantly, the FTC contended that the claim would survive bankruptcy. A ruling that the claim would be discharged was an express condition that had to be met for the plan to be confirmed. In settlement, Reader's Digest agreed the claim would be valid for the full amount, $26.7 million, although as a general unsecured claim to be treated under the plan. In addition, the FTC will receive $500,000 cash to defray its expenses. The report relates that approval of the FTC settlement comes to court for approval at the June 28 confirmation hearing. The report says that the plan will complete an agreement negotiated before the February Chapter 11 filing where holders of what amounts to $475 million in second-lien floating-rate notes will become the owners in exchange for debt. The Chapter 11 plan was modified to win support from the official creditors' committee. Their $500,000 pot was increased by $3.875 million, raising the unsecured creditors' recovery from 0.1 percent to 3 percent. About Reader's Digest Reader's Digest is a global media and direct marketing company that educates, entertains and connects consumers around the world with products and services from trusted brands. For more than 90 years, the flagship brand and the world's most read magazine, Reader's Digest, has simplified and enriched consumers' lives by discovering and expertly selecting the most interesting ideas, stories, experiences and products in health, home, family, food, finance and humor. RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No. 13-22233) filed for Chapter 11 protection on Feb. 17, 2013, with an agreement with major stakeholders for a pre-negotiated chapter 11 restructuring. Under the plan, the Debtor will issue the new stock to holders of senior secured notes. RDA Holding Co. listed total assets of $1,118,400,000 and total liabilities of $1,184,500,000 as of the Petition Date. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Evercore Group LLC is the investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Reader's Digest, together with its 47 affiliates, first sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24, 2009 and exited bankruptcy Feb. 19, 2010. Under the Plan, holders of allowed general unsecured claims in such sub-class will receive their pro rata share of the GUC distribution; holders of allowed general unsecured claims of Reader's Digest will also receive their pro rata share of the RDA GUC distribution and the senior noteholder deficiency claims in such sub-class will be deemed waived solely for purposes of participating in the GUC distribution and the RDA GUC distribution. The Official Committee of Unsecured Creditors is represented by Otterbourg, Steindler, Houston & Rosen, P.C. The Committee tapped Alvarez & Marsal North America, LLC, as financial advisors. SABINE PASS: S&P Assigns 'BB+' Rating to $420MM Sr. Secured Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB+' project rating to Sabine Pass LNG L.P.'s (SPLNG) $420 million in senior secured notes due 2020, and assigned a '2' recovery rating, indicating expectations of substantial (70% to 90%) recovery in a default. At the same time, S&P affirmed its 'BB+' issue rating and '2' recovery rating on SPLNG's $1.67 billion 7.5% senior notes due Nov. 30, 2016, and it withdrew its ratings on the 2013 notes. The outlook is stable. SPLNG's October 2012 refinancing amortized $130 million of long- term debt and addressed its near-term maturities, both of which S&P views as positive for credit. Partially mitigating these positives, the new notes are interest-only, which means further amortization may not occur until the 2016 notes come due, shortening the remaining repayment period covered by the terminal use agreements. In addition, the 2016 note indenture does not allow for a new debt service reserve account to support the 2020 notes, a structural feature that S&P typically expects in project financings. The sponsors mitigated this by adding a cash-trap feature in the distribution account that acts as a "synthetic" debt service reserve account, sufficient to cover six months of debt service on the 2020 notes, effectively providing the same liquidity and protection to lenders as a traditional debt service reserve. "Furthermore, the new indenture provides for reinstating a traditional debt service reserve for the 2020 notes once the 2016 indenture matures," said Standard & Poor's credit analyst Mark Habib. The rating and outlook is also tied to S&P's outlook on CQP and SPL. CQP's outlook reflects significant progress on its SPL project and, based on this, CQP's improved ability to access capital markets as demonstrated by ultimate parent CEI's repayment of all outstanding long-term debt. SAN BERNARDINO: NPGFC Explains Why It Can Keep Its Lawyers ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that National Public Finance Guarantee Corp. filed a 32-page brief last week explaining why the law firm Winston & Strawn LLP is entitled to continue serving as its lawyers in the Chapter 9 municipal bankruptcy of San Bernardino, California. The report recounts that California Public Employees' Retirement System filed papers in May telling the bankruptcy judge that Winston & Strawn must be disqualified from continuing to represent NPFGC. Calpers, California's public employees' retirement fund, described how Winston hired away a partner and two associates from the Charlotte, North Carolina office of K&L Gates LLP. Those lawyers billed 500 hours working for Calpers in the San Bernardino bankruptcy. According to Calpers, it's mandatory for the court to bar Winston from further representing National. Naturally, NPFGC argued in papers last week that it's not. The report notes that for starters, NPFGC said the firm created a "strong conflict screen" where the former Calpers lawyers won't have anything to do with the San Bernardino case. NPFGC laid out case law saying there is no mandatory disqualification of an entire firm when the two parties are not adversaries in the same lawsuit. NPFGC said that it has no claims against Calpers. Even though their interests are "not wholly aligned," they aren't in the "most extreme" form of a "direct conflict." Consequently, NPFGC told the judge that Winston & Strawn can continue as its lawyers given the screening wall. The issue comes to court for argument at a June 13 hearing. About San Bernardino, Calif. San Bernardino, California, filed an emergency petition for municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 12-28006) on Aug. 1, 2012. San Bernardino, a city of about 210,000 residents roughly 65 miles (104 km) east of Los Angeles, estimated assets and debts of more than $1 billion in the bare-bones bankruptcy petition. The city council voted on July 10, 2012, to file for bankruptcy. The move lets San Bernardino bypass state-required mediation with creditors and proceed directly to U.S. Bankruptcy Court. The city is represented that Paul R. Glassman, Esq., at Stradling Yocca Carlson & Rauth. San Bernardino joined two other California cities in bankruptcy: Stockton, an agricultural center of 292,000 east of San Francisco, and Mammoth Lakes, a mountain resort town of 8,200 south of Yosemite National Park. San Bernardino announced in April 2013 that it will resume making payments in July to California Public Employees' Retirement System. The city stopped making contributions after filing for municipal bankruptcy. The city told Calpers it will begin making payments at the start of the fiscal year beginning in July. The annual payment is $25.5 million, or 21 percent of the city's revenue. SOUND SHORE: June 25 Hearing on Montefiore-Led Auction ------------------------------------------------------ Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home filed petitions for Chapter 11 protection on May 29 and will seek approval later this month to conduct an auction led by Montefiore Medical Center. Judge Robert D. Drain will convene a hearing June 25, 2013, at 10:00 a.m. to conduct approval of the bidding and auction procedures proposed by the Debtors. Objections are due June 18. The Debtors have signed a contract to sell their not-for-profit facilities for $54 million to Montefiore Medical Center, absent higher and better offers in an auction in June. Montefiore has agreed to become the stalking-horse bidder for the assets under these terms: * The $54 million purchase price includes assumption of $9 million in employee liabilities, and the satisfaction of cure amounts for rejected contracts of up to a maximum of $3 million. The buyer will pay additional cash for furniture, equipment, and inventory. * The buyer has agreed to provide a guaranty in the amount of $7 million to $10 million to collateralize certain of the Debtors' postpetition loan obligations and has agreed to grant a continuing lien in post-closing accounts receivable to guaranty any shortfall in the collection of certain of the Debtors' postpetition revolving loan obligations in an amount not to exceed $5 million. * Montefiore is offering employment on a probationary basis to substantially all employees of the Debtors but won't assume any collective bargaining agreements with the employees. * In an event Montefiore is outbid in the auction, it will receive a break-up fee of 3% of the purchase price and an expense reimbursement not to exceed $750,000. * Montefiore may terminate the asset purchase agreement if the bidding procedures order is not entered within 35 days after the Petition Date, of the bankruptcy court has not entered a sale order within 100 days after the Petition Date. Sound Shore says that the continuing losses experienced by the Debtors over the course of the past several years, changing demographics and declining reimbursement rates, all coupled with the Debtors' inability to implement required system updates and capital improvements necessary to streamline their ongoing operations necessitate a prompt consummation of the asset sale. The Debtors project a "cash burn" rate of $1.5 million to $2 million per month. The sale process to MMC will require regulatory approvals, which could take up to six or more months after entry of a sale order. The parties expect the sale to be consummated not later than Oct. 31, 2013. First Day Motions Aside from the proposed bidding procedures, the Debtors filed a variety of motions on the Petition Date. The Debtors filed motions to, among other things, prohibit utilities from discontinuing services, continue their existing insurance programs, obtain DIP financing, and extend the deadline to file their schedules of assets and liabilities. Judge Drain granted a June 28 extension of the deadline to file the schedules and granted interim approval to certain first-day motions on May 31. The Debtors expect weekly payroll to all of their employees to total $7.2 million for the 30-day period following the Petition Date. The Debtors will not make any payroll payments to directors and officers during the same period. The Debtors expect cash receivables of $20.8 million and cash disbursements of $21.8 million during the next 30 days. About Sound Shore Medical Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home and related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on May 29, 2013, in White Plains, New York. The Debtors are the largest "safety net" providers for Southern Westchester County in New York. Affiliated with New York Medical College, Sound Shore is a not-for-profit 242-bed, community based- teaching hospital located in New Rochelle, New York. Mountain Vernon Hospital is a voluntary, not-for-profit 176-bed hospital located in Mount Vernon, New York. Howe Avenue Nursing Home is a 150-bed, comprehensive facility. The Debtors tapped Garfunkel Wild, P.C., as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors; and GCG Inc., as claims agent. Montefiore, the proposed purchaser of the assets, is represented by Togut, Segal & Segal LLP. Sound Shore disclosed assets of $159.6 million and liabilities totaling $200 million. Liabilities include a $16.2 million revolving credit and a $5.8 million term loan with Midcap Financial LLC. There is $9 million in mortgages with Sun Life Assurance Co. of Canada (US) and $11.5 million owing to the New York State Dormitory Authority. Revenue of $241.8 million in 2012 resulted in an operating loss of $16.4 million. SOUND SHORE: Proposes to Hire Counsel and Advisors -------------------------------------------------- Sound Shore Medical Center of Westchester and its debtor- affiliates filed with the bankruptcy court applications to employ Garfunkel Wild, P.C., as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors; and GCG Inc., as claims agent. Financial Advisors A&M has been engaged by the Debtors since 2007. The Debtors say the services of experienced financial advisors will enhance their attempts to maximize the value of their estates. Postpetition, A&M will provide assistance to the Debtors with respect to the management of the overall restructuring process, the development of ongoing business and financial plans and supporting restructuring negotiations among the Debtors, their advisors and their creditors. Stuart McLean, the managing director of A&M, will lead the assignment. A&M will be paid for the services of its professionals at the customary hourly billing rates: Hourly Rate ----------- Managing Director $675 to $875 Director $475 to $675 Associate $375 to $475 Analyst $275 to $375 A&M can be reached at: ALVAREZ & MARSAL HEALTHCARE INDUSTRY GROUP, LLC 600 Lexington Avenue, 6th Floor New York, NY 10022 Tel: + 1 212 759 4433 Fax: + 1 212 759 6302 Claims Agent The Debtors have not yet filed their schedules of assets and liabilities but they anticipate that there will be in excess of 3,000 entities to be noticed. In view of the number of anticipated claimants, the Debtors submit that appointment of a claims and noticing agent is both necessary and the best interest of both the Debtors' estates and their creditors. GCG received a retainer of $30,000. GCG has agreed to provide discounted hourly rates and agreed to cap the highest hourly rate at $295: Position Discounted Rate -------- --------------- Administrative and Claims Control $45 to $55 Project Administrators $70 to $85 Quality Assurance Staff Consultant $80 to $125 Project Supervisors $95 to $110 Systems, Graphic Support & Tech Staff $100 to $200 Project Managers and Sr. Project Managers $125 to $175 Directors and Asst. Vice Presidents $200 to $295 Vice Presidents and above $295 For its noticing services, GCG will charge $50 per 1,000 e-mails, and $0.10 per page for facsimile noticing. For its claims administration services, GCG will charge $0.15 per claim for association of claimants' names and addresses to the database, and will bill at its discounted hourly rates for processing of claims. For solicitation and processing of ballots, GCG will also charge at its discounted hourly rates. Counsel GW has represented the Debtors on numerous legal maters in the past, and brings to this case a unique perspective and knowledge base. GW has indicated its willingness to act as general bankruptcy counsel on behalf of the Debtors. The rates to be charged by professionals from GW who will work on the case range from $419 to $530 per hour, the rates of paraprofessionals range from $145 to $225 per hour. The attorneys who will be primarily responsible for providing services to the Debtors and their billing rates are: Hourly Rate ----------- Burton Weston, Partner $530 Afsheen Shah, Partner $420 Karen L. Rodgers, Partner $385 Andrew J. Schulson, Partner $440 About Sound Shore Medical Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home and related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on May 29, 2013, in White Plains, New York. The Debtors are the largest "safety net" providers for Southern Westchester County in New York. Affiliated with New York Medical College, Sound Shore is a not-for-profit 242-bed, community based- teaching hospital located in New Rochelle, New York. Mountain Vernon Hospital is a voluntary, not-for-profit 176-bed hospital located in Mount Vernon, New York. Howe Avenue Nursing Home is a 150-bed, comprehensive facility. Montefiore, the proposed purchaser of the assets, is represented by Togut, Segal & Segal LLP. Sound Shore disclosed assets of $159.6 million and liabilities totaling $200 million. Liabilities include a $16.2 million revolving credit and a $5.8 million term loan with Midcap Financial LLC. There is $9 million in mortgages with Sun Life Assurance Co. of Canada (US) and $11.5 million owing to the New York State Dormitory Authority. Revenue of $241.8 million in 2012 resulted in an operating loss of $16.4 million. SOUND SHORE: Proposes $33-Million of DIP Loans From MidCap ---------------------------------------------------------- Sound Shore Medical Center of Westchester and its debtor- affiliates seek approval from the bankruptcy court to obtain postpetition financing from MidCap Financial, LLC, and to access cash collateral. The Debtors say that access to DIP financing and the use of cash collateral are essential to ensure that the Debtors can fund their postpetition operating requirements, and preserve and maintain their properties and the infrastructure of their businesses pending a sale of the assets. Under the DIP credit agreement, MidCap will make cash advances and other extensions of credit in an amount not to exceed $33 million on a revolving credit ($23 million) and term basis ($10 million). The proceeds of the DIP facility will be used to repay the prepetition revolving obligations owing to MidCap ($16.2 million), pay prepetition term loan obligations as they become due (total $5.8 million), and to fund the costs and expenses associated with the Chapter 11 cases. Upon interim approval of the DIP financing, the initial loans and advances will be used for the Debtors' working capital needs and operating requirements. Upon final approval of the DIP facility, the Debtors will use proceeds of the DIP revolving facility to refinance the prepetition revolving loan obligations. The DIP financing will mature in 12 months from the date of closing. A copy of the DIP financing motion is available for free at: http://bankrupt.com/misc/Sound_Shore_DIP_Financing.pdf About Sound Shore Medical Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home and related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on May 29, 2013, in White Plains, New York. The Debtors are the largest "safety net" providers for Southern Westchester County in New York. Affiliated with New York Medical College, Sound Shore is a not-for-profit 242-bed, community based- teaching hospital located in New Rochelle, New York. Mountain Vernon Hospital is a voluntary, not-for-profit 176-bed hospital located in Mount Vernon, New York. Howe Avenue Nursing Home is a 150-bed, comprehensive facility. The Debtors tapped Garfunkel Wild, P.C. as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors; and GCG Inc., as claims agent. Montefiore, the proposed purchaser of the assets, is represented by Togut, Segal & Segal LLP. Sound Shore disclosed assets of $159.6 million and liabilities totaling $200 million. Liabilities include a $16.2 million revolving credit and a $5.8 million term loan with Midcap Financial LLC. There is $9 million in mortgages with Sun Life Assurance Co. of Canada (US) and $11.5 million owing to the New York State Dormitory Authority. Revenue of $241.8 million in 2012 resulted in an operating loss of $16.4 million. SPANISH PEAKS: Can Assume Ground Lease With Boyne USA, Ct. Says --------------------------------------------------------------- Bankruptcy Judge Ralph B. Kirscher gave Ross Richardson, as Chapter 7 Trustee for Spanish Peaks Holdings II LLC, Spanish Peaks Lodge LLC and The Club at Spanish Peaks LLC, permission to assume a "ground lease" involving Big Sky Resort premises in a May 29, Memorandum of Decision available at http://is.gd/n4gh7Hfrom Leagle.com. The matter refers back to a certain "Southfork Agreement," where Boyne USA, Inc. agreed to transfer about 25 acres to Spanish Peaks Holdings, LLC's predecessor and grant Spanish Peaks Holdings, LLC's predecessor ski in/ski out access to Big Sky Resort. In exchange, Spanish Peaks Holdings, LLC's predecessor agreed to pay Boyne certain overrides. A 2002 Purchase and Sale Agreement among the parties ratified the Southfork Agreement and modified and clarified the override payments due under the Southfork Agreement. Because Boyne had transferred some of its ski terrain to Spanish Peaks Holdings, LLC under the PSA, Boyne and Spanish Peaks Holdings, LLC also entered into the Ground Lease, which granted to Boyne the use of all ski terrain and access points necessary to maintain ski operations operated on the property that was the subject of the PSA. In return, Section 8 of the Ground Lease grants the Lessors, their agents, employees, members, guests, invitees and assigns the right to use and enjoy the "Premises" with and without restrictions, depending on whether the use is directly or not directly related to "the Activities." Among other things, Judge Kirscher said that contrary to Boyne's contentions to the contrary, the Trustee has not previously rejected the Ground Lease and the Ground Lease is not deemed rejected under the Bankruptcy Code. The Debtors filed voluntary Chapter 7 bankruptcy petitions in the District of Delaware on October 14, 2011. Bankruptcy Judge Brendon Linehan Shannon transferred the Debtors' bankruptcy cases to Montana on January 10, 2012, Case Nos. 12-60041-7, 12-60042-7, 12-60043-7, and Ross Richardson was appointed trustee thereafter. The Trustee was represented at the hearing of the motion by John L. Amsden of Beck & Amsden LLC, in Bozeman, Montana. Boyne USA, Inc. and Big Sky Resort, LLC were represented at the hearing by Benjamin P. Hursh, Esq., and David M. Wagner, Esq., of Missoula, Montana; Michael R. Lastowski, Esq. -- MLastowski@duanemorris.com -- of Duane Morris of Wilmington, Delaware; and Paul D. Moore, Esq. -- PDMoore@duanemorris.com -- of Duane Morris, of Boston, Massachusetts. STANFORD GROUP: Receiver to Make $55-Million First Distribution --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Ralph Janvey, the U.S. receiver for the R. Allen Stanford Ponzi scheme, received permission May 30 from the U.S. District Court in Dallas to make a first distribution of 1 percent to holders of $4.238 billion in approved claims. According to the report, the distribution from $55 million in available cash will be made in the next 90 days, according to court papers. The distribution was made possible by a settlement approved in April with the receiver's counterparts in London and on the island of Antigua. The report recounts that Stanford's fraud was structured with investors purchasing certificates of deposit issued by a bank he controlled in Antigua. Money that should eventually go to victims was located in at least 14 countries, the receiver said in a court filing. Like the trustee for Bernard L. Madoff Investment Securities LLC, Mr. Janvey calculated claims based on how much an investor deposited and how much was taken out. He isn't allowing claims for so-called fictitious interest. From the $7.2 billion in obligations to investors shown on the books, Mr. Janvey said fictitious interest amounted to $1.3 billion. The Bloomberg report discloses that there are $893.5 million in claims that as yet haven't been resolved. Although those investors won't receive distributions yet, Mr. Janvey is holding back cash to cover their claims once they are resolved. Mr. Janvey said there may be later distributions, depending on how much more he recovers. He already has filed hundreds of lawsuits, many of them, like the Madoff trustee's, against investors who took out more than they invested. Stanford was sentenced to a 110-year prison sentence and his chief financial officer James M. Davis, was given a five-year prison sentence. About Stanford Group The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States (U.S.) authorities in early 2009. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management served more than 70,000 clients in 140 countries. On Feb. 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The case in district court was Securities and Exchange Commission v. Securities Investor Protection Corp., 11-mc-00678, U.S. District Court, District of Columbia (Washington). The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money- laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. THOR INDUSTRIES: U.S. Trustee Seeks to Dismiss Case --------------------------------------------------- The United States Trustee of Region 8, Samuel K. Crocker, filed a motion with the U.S. Bankruptcy Court seeking the dismissal of the Chapter 11 case of Thor Industries, LLC. Patricia C. Foster, counsel for the U.S. Trustee, says that the principal assets in the case are lakeside lots and a marina. No Plan of Reorganization has been proposed. The Debtor has made several attempts to obtain Court approval of the sale of the lots but the motions have consistently been opposed successfully by the Debtor's primary lender, Tennessee State Bank. TSB obtained relief from the automatic stay by orders entered on February 27, 2013. TSB has taken possession of the real property of the debtor. Ms. Foster also complains that the Debtor is delinquent in the payment of U.S. Trustee fees in the amount of $1,301.92. The U.S. Trustee contends that cause exists to dismiss the case. A hearing on the motion will be held on June 25, 2013 at 9:00 a.m. in the Bankruptcy Courtroom, James H. Quillen United States Courthouse, 220 West Depot Street, Greeneville, TN 37743. About Thor Industries Lake City, Tennessee-based Thor Industries, LLC, filed a Chapter 11 petition (Bankr. E.D. Tenn. Case No. 12-50625) in Greenville on March 30, 2012. The Debtor disclosed $11.97 million in assets and $10.0 million in liabilities as of the Chapter 11 filing. The Debtor owns the property in Mountain Lake Marina & RV Resort in Campground Road, Lake City, Tennessee, worth $11 million and securing an $8.52 million debt. The Debtor also owns a property Hickory Bluff Marina, in Camden County, Georgia, worth $875,000 and securing a $375,000 loan. Judge Marcia Phillips Parsons oversees the case. Dean B. Farmer, Esq., at Hodges, Doughty & Carson PLLC represents the Debtor in its restructuring efforts. The petition was signed by R. Steven Williams, Sr., chief manager. Samuel K. Crocker, U.S. Trustee for Region 8, was unable to form a committee of unsecured creditors because there were an insufficient number of unsecured creditors interested in forming a committee. THQ INC: Court Sets July 16 Plan Confirmation Hearing ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that video-game developer THQ Inc., which has sold most of the business to five buyers to generate $72 million, will hold a July 16 confirmation hearing for approval of the plan. According to the report, the bankruptcy court in Delaware approved the disclosure statement on May 30, providing creditors with information so they can decide whether to vote yes or no. The liquidating plan will give unsecured creditors as little as 19.9 percent or as much as 51.9 percent for claims ranging between $143 million and $291.6 million. The report notes that the primary factor affecting the recovery by unsecured creditors is the $107 million claim by European subsidiaries. THQ believes the European affiliates are solvent and will end up with no claim in the U.S. If they aren't, the company contends the claims should be subordinated. If the European claims are paid in the U.S. bankruptcy, the unsecured creditors' recovery will be 19.9 percent to 29.6 percent, according to the disclosure statement. If the European claims are knocked out, the distribution rises to 31.5 percent to 51.9 percent. The report relates that THQ estimates bringing in $94.9 million to $105.2 million and having $58 million to $74 million available for distribution to unsecured creditors. About THQ Inc. THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- is a worldwide developer and publisher of interactive entertainment software. The Company develops its products for all popular game systems, personal computers, wireless devices and the Internet. Headquartered in Los Angeles County, California, THQ sells product through its network of offices located throughout North America and Europe. THQ Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13398) on Dec. 19, 2012. Attorneys at Young Conaway Stargatt & Taylor, LLP and Gibson, Dunn & Crutcher LLP serve as counsel to the Debtors. FTI Consulting and Centerview Partners LLC are the financial advisors. Kurtzman Carson Consultants is the claims and notice agent. Before bankruptcy, Clearlake signed a contract to buy Agoura THQ for a price said to be worth $60 million. After a 22-hour auction with 10 bidders, the top offers brought a combined $72 million from several buyers who will split up the company. Judge Walrath approved the sales in January. Some of the assets didn't sell, including properties the company said could be worth about $29 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five persons to serve in the Official Committee of Unsecured Creditors. The Committee tapped Houlihan Lokey Capital as its financial advisor and investment banker, Landis Rath & Cobb as co-counsel and Andrews Kurth as counsel. TRINITY COAL: Committee Can Hire Sturgill Turner as Local Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Kentucky authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of Trinity Coal Corporation, et al., to retain the Lexington, Kentucky law firm of Sturgill, Turner, Barker & Moloney, PLLC as local counsel. To the best of the Committee's knowledge, Sturgill Turner is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Trinity Coal Trinity Coal Corp. is a coal mining company that owns coal deposits located in the Appalachian region of the eastern United States, specifically, in Breathitt, Floyd, Knott Magoffin, and Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo, McDowell and Wyoming Counties in West Virginia. Trinity's coal mining operations are organized into six distinct coal mining complexes. Three complexes are located in Kentucky and are referred to as Prater Branch Resources, Little Elk Mining and Levisa Fork. The Kentucky Operations produced compliance and low sulfur steam coal. Three complexes are located in West Virginia and are referred to as Deep Water Resources, North Springs Resources and Falcon Resources. Trinity is a wholly owned subsidiary of privately held multinational conglomerate Essar Global Limited. Credit Agricole Corporate & Investment Bank, ING Capital LLC and Natixis, New York Branch filed an involuntary petition for relief under Chapter 11 against Trinity Coal Corporation and 15 affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three entities say they are owed a total of $104 million on account loans provided to Trinity. On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and Cecil I. Walker Machinery Co. filed an involuntary petition for relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335) against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit Agricole, ING Capital and Natixis joined as petitioning creditors. On March 4, 2013, the Debtors filed their consolidated answer to involuntary petitions and consent to an order for relief and reservation of rights, thereby consenting to the entry of an order for relief in each of their respective Chapter 11 cases. An order for relief in each of the Debtors was entered by the Court on March 4, 2013, which converted the involuntary cases to voluntary Chapter 11 cases. Sturgill, Turner, Barker & Moloney, PLLC serves as the Committee's local counsel. TRINITY COAL: Committee Taps John T. Boyd as Mining Consultants --------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Trinity Coal Corporation, et al., asks the Bankruptcy Court for permission to retain John T. Boyd Company, as mining and geological consultants. Boyd will render these services, among other things: a. prepare reports on the Debtors' mining operations; b. provide advice concerning a mine operations evaluation; c. provide advice and assistance with the valuation of reserves, property, plants and equipment; and d. provide advice and assistance with mine cost and cash flow analysis. The hourly rates of Boyd's personnel are: Expert Witness $350 Principal/Managing Director $320 Vice President $280 Executive Consultant $250 Project Manager $250 Senior Engineer/Director/Consultant $210 Senior Transportation Analyst $210 Senior Market Analyst $210 Senior Geologist/Consultant $165 Engineer/Geologist/Consultant $145 Technical Specialist $100 Engineering Assistant/Sr. CAD $90 Draftsman/CAD $65 Clerical $50 To the best of the Committee's knowledge, Boyd is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Trinity Coal Trinity Coal Corp. is a coal mining company that owns coal deposits located in the Appalachian region of the eastern United States, specifically, in Breathitt, Floyd, Knott Magoffin, and Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo, McDowell and Wyoming Counties in West Virginia. Trinity's coal mining operations are organized into six distinct coal mining complexes. Three complexes are located in Kentucky and are referred to as Prater Branch Resources, Little Elk Mining and Levisa Fork. The Kentucky Operations produced compliance and low sulfur steam coal. Three complexes are located in West Virginia and are referred to as Deep Water Resources, North Springs Resources and Falcon Resources. Trinity is a wholly owned subsidiary of privately held multinational conglomerate Essar Global Limited. Credit Agricole Corporate & Investment Bank, ING Capital LLC and Natixis, New York Branch filed an involuntary petition for relief under Chapter 11 against Trinity Coal Corporation and 15 affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three entities say they are owed a total of $104 million on account loans provided to Trinity. On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and Cecil I. Walker Machinery Co. filed an involuntary petition for relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335) against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit Agricole, ING Capital and Natixis joined as petitioning creditors. On March 4, 2013, the Debtors filed their consolidated answer to involuntary petitions and consent to an order for relief and reservation of rights, thereby consenting to the entry of an order for relief in each of their respective Chapter 11 cases. An order for relief in each of the Debtors was entered by the Court on March 4, 2013, which converted the involuntary cases to voluntary Chapter 11 cases. Sturgill, Turner, Barker & Moloney, PLLC serves as the Committee's local counsel. TRINITY COAL: Taps Cardno & Newbridge Firms as Mining Consultants ----------------------------------------------------------------- Trinity Coal Corporation, et al., had asked the Bankruptcy Court for permission to employ Cardno MM&A, and Newbridge Services, Inc., as mining consultants. Cardno will, among other things, provide mining engineering and geological services, valuations of machinery, plants, equipment and mineral resources, technical support and other services in connection with the potential sale of assets in the Debtors' Chapter 11 cases. Newbridge Services will, among other things, evaluate costs of reclamation in connection with the potential sale of assets in the Debtors' cases. John E. Feddock, P.E., senior vice president of Cardno, will be principally responsible for the consulting services performed by Cardno, while William Larry Adams, president of Newbridge, will be principally responsible for the consulting services performed by Newbridge. To the best of the Debtors' knowledge, the firms are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. About Trinity Coal Trinity Coal Corp. is a coal mining company that owns coal deposits located in the Appalachian region of the eastern United States, specifically, in Breathitt, Floyd, Knott Magoffin, and Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo, McDowell and Wyoming Counties in West Virginia. Trinity's coal mining operations are organized into six distinct coal mining complexes. Three complexes are located in Kentucky and are referred to as Prater Branch Resources, Little Elk Mining and Levisa Fork. The Kentucky Operations produced compliance and low sulfur steam coal. Three complexes are located in West Virginia and are referred to as Deep Water Resources, North Springs Resources and Falcon Resources. Trinity is a wholly owned subsidiary of privately held multinational conglomerate Essar Global Limited. Credit Agricole Corporate & Investment Bank, ING Capital LLC and Natixis, New York Branch filed an involuntary petition for relief under Chapter 11 against Trinity Coal Corporation and 15 affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three entities say they are owed a total of $104 million on account loans provided to Trinity. On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and Cecil I. Walker Machinery Co. filed an involuntary petition for relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335) against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit Agricole, ING Capital and Natixis joined as petitioning creditors. On March 4, 2013, the Debtors filed their consolidated answer to involuntary petitions and consent to an order for relief and reservation of rights, thereby consenting to the entry of an order for relief in each of their respective Chapter 11 cases. An order for relief in each of the Debtors was entered by the Court on March 4, 2013, which converted the involuntary cases to voluntary Chapter 11 cases. Sturgill, Turner, Barker & Moloney, PLLC serves as the Committee's local counsel. TRINITY COAL: Wants to Employ Dixon Hughes as Tax Accountants ------------------------------------------------------------- Trinity Coal Corporation, et al., ask the U.S. Bankruptcy Court for the Eastern District of Kentucky for permission to employ Dixon Hughes Goodman as tax accountants. Sandra D. Thomas, a partner with DHG, will be responsible for directing the services performed by DHG. DHG will, among other things, prepare the Debtors tax returns; advise the Debtor on tax issues in their Chapter 11 cases; and work with taxing authorities to resolve issues and disputes in the Debtors cases. The hourly rates of DHG's personnel are: Partners $395 Senior Manager $305 Manager $235 Senior Associate $150 Tax Associate $135 To the best of the Debtors' knowledge, DHG does not hold nor represent an interest adverse to the Debtors. About Trinity Coal Trinity Coal Corp. is a coal mining company that owns coal deposits located in the Appalachian region of the eastern United States, specifically, in Breathitt, Floyd, Knott Magoffin, and Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo, McDowell and Wyoming Counties in West Virginia. Trinity's coal mining operations are organized into six distinct coal mining complexes. Three complexes are located in Kentucky and are referred to as Prater Branch Resources, Little Elk Mining and Levisa Fork. The Kentucky Operations produced compliance and low sulfur steam coal. Three complexes are located in West Virginia and are referred to as Deep Water Resources, North Springs Resources and Falcon Resources. Trinity is a wholly owned subsidiary of privately held multinational conglomerate Essar Global Limited. Credit Agricole Corporate & Investment Bank, ING Capital LLC and Natixis, New York Branch filed an involuntary petition for relief under Chapter 11 against Trinity Coal Corporation and 15 affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three entities say they are owed a total of $104 million on account loans provided to Trinity. On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and Cecil I. Walker Machinery Co. filed an involuntary petition for relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335) against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit Agricole, ING Capital and Natixis joined as petitioning creditors. On March 4, 2013, the Debtors filed their consolidated answer to involuntary petitions and consent to an order for relief and reservation of rights, thereby consenting to the entry of an order for relief in each of their respective Chapter 11 cases. An order for relief in each of the Debtors was entered by the Court on March 4, 2013, which converted the involuntary cases to voluntary Chapter 11 cases. Sturgill, Turner, Barker & Moloney, PLLC serves as the Committee's local counsel. TWIN DEVELOPMENT: Can Hire Hinds & Shankman as Bankruptcy Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California authorized Twin Development LLC to employ Hinds & Shankman LLP as bankruptcy counsel. As reported in the Troubled Company Reporter on May 20, 2013, James Andrew Hinds, Jr., Paul R. Shankman and other members, associates and attorneys will be responsible in the representation of the Debtor. To the best of the Debtor's knowledge, the law firm has no interest materially adverse to the interest of the estate or of any class of creditors or equity holders. The Debtor said in court papers the firm has requested that the Debtor find an alternate counsel and complete, sign and file a substitution of counsel because the Debtor was unable to pay the firm's retainer, or any portion of the retainer pre- or post- petition. The Debtor did not sign the substitution of counsel and returned it to the firm. Concurrently, the firm has requested to be relieved. The hearing set for April 29, 2013, was continued until June 24. In the interim, the Debtor has utilized the services of and incurred costs to the law firm. If the Debtor is successful in obtaining postpetition funds for the law firm's employment on or before the hearing on the withdrawal, the funds will be impounded into an appropriate debtor-in-possession account and the law firm will inform the Court by filing and serving notice regarding the same. About Twin Development Twin Development, LLC, filed a Chapter 11 petition (Bankr. S.D. Cal. Case No. 13-02719) on March 19, 2013. The petition was signed by Wallace Benwart as manager. The Debtor scheduled assets of $55,800,000 and scheduled liabilities $38,027,600. VEBLEN WEST: Has No More Assets, Chapter 11 Case Dismissed ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Dakota dismissed the Chapter 11 case of Veblen West Dairy LLP. Forrest C. Allred, the duly appointed, qualified and acting Chapter 11 trustee for the Debtor, had requested for the dismissal of the Debtor's case because: 1. all assets of the Debtor have been liquidated; 2. any plan of reorganization which has been filed has been withdrawn; and 3. the trustee has completed all of his obligations pertaining to the case, except filing a final report, which will be filed after entry of an order dismissing the matter. About Veblen West Veblen West Dairy LLP, based in Veblen, S.D., operates a 4,000-cow milking facility. Veblen West sought Chapter 11 protection (Bankr. D. S.D. Case No. 10-10071) on April 7, 2010. Alan E. Brown, Esq., Chris M. Heffelbower, Esq., Jon S. Swierzewski, Esq., Kathleen Harrell-Latham, Esq., Kenneth Corey-Edstrom, Esq., and Thomas J. Flynn, Esq., at Larkin Hoffman Daly & Lindgren, Ltd., in Minneapolis, Minn.; and Thomas M. Tobin, Esq., at Tonner Tobin and King, in Aberdeen, S.D., represent the Debtor as counsel. The Debtor disclosed $15.5 million in assets and $23.7 million in liabilities as of the Chapter 11 filing. Forrest C. Allred was appointed Chapter 11 trustee. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw Fowler Proctor & Fairgrave PC, in Des Moines, Iowa; and Forrest C. Allred, Esq., of Aberdeen, S.D., represent the Chapter 11 trustee as counsel. The Dairy Dozen-Milnor, LLP, a related milking facility, also sought Chapter 11 protection (Bankr. D. N.D. Case No. 10-30377) on April 7, 2010. The Dairy Dozen-Thief River Falls, LLP, another related entity, sought Chapter 11 protection (Bankr. D. Minn. Case No. 10-60438) on April 7, 2010, and that case has been converted to a Chapter 7 liquidation proceeding. Two additional related entities filed Chapter 11 petitions on July 2, 2010 -- Veblen East Dairy Limited Partnership (Bankr. D. S.D. Case No. 10-10146) and The Dairy Dozen-Veblen, LLP (Bankr. D. S.D. Case No. 10-10147). About Veblen East Veblen, South Dakota-based Veblen East Dairy Limited Partnership operates a operates a "large calf-raising dairy business" in South Dakota. The Company filed for Chapter 11 bankruptcy protection on July 2, 2010 (Bankr. D. S.D. Case No. 10-10146). The Debtor estimated its assets and debts at $50 million to $100 million. Lee Ann Pierce was appointed Chapter 11 trustee. The Company's affiliate, Veblen West Dairy, LLP, filed a separate Chapter 11 petition on April 7, 2010 (Bankr. D. S.D. Case No. 10-10071). Veblen West operates a 4,000-cow milking facility. Veblen West and Veblen East' cases are not being jointly administered. VIRGIN ISLANDS WAPA: Fitch Affirms 'BB' Rating on $156.55MM Bonds ----------------------------------------------------------------- Fitch Ratings has affirmed the following ratings for the Virgin Islands Water and Power Authority (WAPA): -- $156,550,000 electric system revenue bonds, series 2003, 2010A, 2010B, 2010C, 2012A at 'BB'; -- $109,340,000 electric system subordinated revenue bonds, series 2007A, 2012B, 2012C at 'BB-'. The Rating Outlook on all bonds is Negative. SECURITY The electric system revenue bonds are secured by a pledge of net electric revenues and certain other funds established under the bond resolution. The electric system subordinated revenue bonds are secured by a pledge of net revenues that are subordinate to the pledge securing the electric system revenue bonds. KEY RATING DRIVERS WEAKENED FINANCIAL METRICS: WAPA's financial metrics have deteriorated in recent years to speculative-grade levels reflecting escalating fuel prices, delays in cost recovery, higher receivables and increased reliance on short-term debt financing. Fitch-calculated debt service coverage has remained below 1.0x since fiscal 2010 and the ability to meet financial targets remains uncertain. INADEQUATE AND REGULATED COST RECOVERY MECHANISMS: The authority's electric rates are regulated by the Virgin Islands Public Service Commission (PSC), which has authorized cost recovery through both base rates and a levelized energy adjustment clause (LEAC) for fuel and other related costs. Although the PSC been reasonably responsive to requests for cost recovery in recent years, delays inherent in both the regulatory process and the recovery mechanism impair liquidity and limit financial flexibility. EXPOSURE TO FLUCTUATING OIL PRICES: All of WAPA's generating capacity is currently oil-fired, exposing the authority to fuel price volatility and procurement risk. Steadily rising fuel costs in recent years have exacerbated the challenges related to cost recovery and created significant deferrals. Positively, other fuel and transmission options are actively being pursued and could, over time, provide a more diversified fuel mix. RELIANCE ON SHORT-TERM BORROWINGS: The authority has relied on short-term bank lines of credit from Banco Popular of Puerto Rico (rated 'BB-' by Fitch) and FirstBank of Puerto Rico to fund working capital needs and fuel purchases as a result of reduced cash flow from operations. The weak financial profile of the liquidity providers, the short tenor of recent arrangements and historically low cash balances all contribute to Fitch's concern about the authority's liquidity. WEAK LOCAL GOVERNMENT CREDIT QUALITY: Fitch's 'BB' rating on the U.S. Virgin Islands' implied general obligations reflects significantly strained fiscal operations, despite recent initiatives to structurally balance the operating budget, and the intractability of longer-term fiscal challenges that are now compounded by severe economic difficulties from the closure of the Hovensa LLC refinery on St. Croix. The government is WAPA's largest customer and accounts for a lower, but still sizable portion of the authority's delinquent accounts. RATING SENSITIVITIES IMPROVE CASH FLOW AND LIQUIDITY: Additional rate increases, the more timely recovery of fuel costs, and long-term access to bank credit could all improve enterprise liquidity and stabilize the Outlook. FAILURE TO IMPROVE UTILITY AND FINANCIAL FUNDAMENTALS: A further weakening of the fundamental business and financial operations of WAPA that further impairs liquidity and cost recovery could result in a rating downgrade. CREDIT PROFILE WAPA is the primary provider of electric and water service to the U.S. Virgin Islands (St. Thomas, St. Croix and St. John). The electric system generates, transmits and sells electric power and energy to more than 55,000 residential, commercial and large power customers, including the government. Despite steady customer growth, system energy requirements declined 11% for the period 2008 through 2012, largely due to retail conservation efforts driven by the increasingly high cost of electricity, and a meaningful reduction in line losses and unaccounted for energy. WAPA also owns and operates a water utility system. The authority maintains separate financial statements for the two systems, and the debt of each system is separately secured. The two systems, however, share common administrative and operating personnel, and certain operating expenses. ADEQUATE, BUT ISOLATED OPERATIONS The utility owns and operates two principal generating facilities, one located on St. Thomas, and the other on St. Croix. In addition, it has a smaller generating facility on St. John. Because of the topography of the ocean floor, the islands of St. Thomas and St. Croix are not interconnected electrically. Collectively, the authority's generators have an installed capacity of 307.7 megawatts (MW) that is well above peak demand requirements (130 MW). All of the authority's current generating units are fueled by oil. WAPA has been exploring a number of alternative energy sources including wind, solar and waste to energy for many years to reduce its dependence on fossil fuels both for generating electricity and for production of potable water. The authority has broadly set a goal of reducing its use of oil by 60% by 2025. Energy production from these alternative energy initiatives is very limited to date. However, the authority appears to be making considerable progress on several initiatives, including three executed solar power purchase agreements expected to come on line in early 2014 and a proposal to enable the use of liquefied petroleum gas for electric production, which could reasonably be expected to provide long-term benefits. EXTREMELY HIGH COSTS AND RATES The authority's cost structure has historically been dominated by fuel costs, particularly since 2007 as WAPA's average fuel costs have risen 72% from $67.21/barrel to $116.21/barrel, and now account for approximately 75% of total operating expenses. Since 2009, the authority has filed two base-rate cases, both of which were approved by the PSC, providing roughly $15.6 million in additional revenue annually. More recently, in November 2012, WAPA filed for an additional base rate increase of approximately $18 million effective July 1, 2013. A decision is currently pending. Despite the constructive increases in base rates, rising fuel costs and deferred recovery of these costs continue to more than offset the improved base rate cash flow. Approved increases in the LEAC are notable - from $0.21/kwh in January 2009 to $0.41/kWh - but have continued to lag rising costs, pushing deferred fuel balances to $55 million at March 31, 2013 and straining liquidity. Base rates, by comparison, are currently $0.093/kWh, bringing total rates to approximately $0.50/kWh. FINANCIAL PERFORMANCE WAPA's overall financial profile has weakened in recent years, reflecting much higher fuel costs, a lackluster economy and the continued financial strain of weak results of the water system and overdue receivables from the government. Consequently, Fitch- calculated debt service coverage has fallen below 1.0x each year since 2010. Although there was a slight improvement in fiscal 2012, Fitch-calculated debt service coverage amounted to only 0.89x. The authority's internally calculated debt service coverage ratio, which excludes expenses related to bad debt, post- employment benefits and payments in lieu of taxes, was slightly higher at 1.02x. The impact of declining energy sales has been partially offset by increases in base rates and the LEAC; however, increases in fuel and other operating expenses have continued to outpace revenue growth, resulting in operating losses in both fiscal 2011 and 2012. Net losses after interest expense, non-operating income and capital grants were $11 million and $15 million in 2011 and 2012, respectively. Leverage metrics have also deteriorated steadily since 2008, when the authority reported total debt/FADS of 7.9x and equity/capitalization of 32.4%. At year-end 2012, total debt/FADS had increased to 11.9x and equity/capitalization had weakened to 17.9%, reflecting both an erosion in net assets from $107 million to $66 million, and an increase in total debt from $223 million to $305 million. WAPA has relied on short-term borrowings in recent years to fund the shortfall in operating cash flow, deferred fuel costs and overdue receivables, and Fitch expects this trend to continue, absent higher rate collections and improved cost recovery. Proceeds from the authority's 2012 debt issuance were used, in part, to repay outstanding balances, which restored borrowing capacity. VORNADO REALTY: Fitch Affirms 'BB+' Preferred Stock Rating ---------------------------------------------------------- Fitch Ratings has affirmed the credit ratings of Vornado Realty Trust and Vornado Realty, L.P. (NYSE: VNO) as follows: Vornado Realty Trust: -- Issuer Default Rating (IDR) at 'BBB'; -- Preferred stock at 'BB+'; Vornado Realty, L.P.: -- IDR at 'BBB'; -- Unsecured revolving credit facility at 'BBB'; -- Senior unsecured notes at 'BBB'. The Rating Outlook is Stable. Key Rating Drivers The ratings reflect Vornado's credit strengths, including its strong access to capital, exceptional unencumbered assets to unsecured debt ratio, maintenance of leverage appropriate for the rating category, a high-quality portfolio of properties, manageable lease maturities and granular tenant base. These positive rating elements are offset by a weak fixed charge coverage ratio and the continued negative impact of the Base Realignment and Closure statute (BRAC) on recurring operating EBITDA and recurring capital expenditures on Vornado's Washington, D.C. office portfolio. LEVERAGE APPROPRIATE FOR RATING Vornado's leverage ratio remains consistent with a 'BBB' rating and was 7.3x as of March 31, 2013, compared with 6.7x and 6.8x as of Dec. 31, 2011 and Dec. 31, 2010, respectively. Leverage was negatively affected by the timing of the 4Q'2012 666 Fifth Avenue retail acquisition ($707 million). When adjusting for the acquisition along with the post-March 31, 2013 sales of LNR Property LLC (LNR), Harlem Park and Downtown Crossing leverage was 6.9x at Mar. 31, 2013. Fitch forecasts leverage including recurring distributions from partially owned entities will remain between 6.5x - 7.0x through 2014. Fitch defines leverage as net debt divided by recurring operating EBITDA. SIMPLIFICATION OF INVESTMENT STRATEGY In 2012, VNO embarked on a plan to divest many of its non-core assets including non-cash flowing or non-recurring operating EBITDA contributing assets such as LNR. The company's progress to- date has been in excess of Fitch's expectations through most notably the sale of LNR and the sale of shares in J.C. Penney (JCP) earlier in 2013. VNO's willingness to recognize a sizable loss on JCP reflects a true commitment to the strategy of simplification and a return to investing in core markets and assets. Credit metrics will improve to the extent that net proceeds are redeployed into consolidated cash flowing assets. STRONG UNENCUMBERED ASSET COVERAGE The ratings are further supported by VNO's unencumbered property coverage of unsecured debt, which gives the company significant financial flexibility as a source of contingent liquidity. Consolidated unencumbered asset coverage of net unsecured debt (calculated as annualized first-quarter 2013 unencumbered property EBITDA divided by a blended stressed capitalization rate of 7.6%) results in coverage of 5.7x. The ratio is strong for the rating, particularly given the unencumbered Manhattan office and retail properties are highly sought after by secured lenders and foreign investors, resulting in stronger contingent liquidity relative to many asset classes. GOOD LIQUIDITY VNO's liquidity is appropriate for the rating with a liquidity ratio of 2.7x for the period April 1, 2013 - Dec. 31, 2014. Assuming VNO refinances 80% of its secured obligations, the ratio improves further to 5.6x (2.6x when including Fitch's estimated development expenditures). VNO benefits from limited near-term debt maturities with only 8.9% of total debt maturing through 2014 and a manageable AFFO payout ratio (71% in 2012). Fitch calculates liquidity as sources (unrestricted cash, availability under the line of credit facilities, and retained cash flow from operations) over uses (debt maturities and recurring capital expenditures). FAIR OPERATING PERFORMANCE As anticipated, Vornado's operating performance was negatively affected by BRAC with Washington, D.C.'s SSNOI declining 9.8% in 2012. However, VNO has materially outperformed its underlying markets as measured by both occupancy and same-store EBITDA over the longer term. From 2005 to 2012, the New York office portfolio's same-store EBITDA growth was 300 bps above that of the market, and occupancies were 410 bps higher. The Washington, D.C. office portfolio exhibited similar performance through 2011, with same-store EBITDA growth and occupancy 310 bps and 410 bps higher than those of the market, respectively. Such performance reflects the quality of the portfolio's assets, as well as management's capabilities. Fitch forecasts VNO's portfolio will experience low single digit growth in SSNOI through 2015. Further, both VNO's tenant granularity and lease maturities are appropriate for the rating and enhance cash flow predictability. COVERAGE LOW FOR RATING The company's fixed-charge coverage ratio was 1.7x for the TTM ended Mar. 31, 2013, below the 2.1x level of 2011 largely from the loss of BRAC related income. Fitch expects coverage will improve above 2.0x in 2014 and improve further in 2015 as the company continues to repay higher coupon secured and unsecured debt obligations. Fixed-charge coverage sustaining, or Fitch's expectation that it will sustain, below 1.8x may result in negative ratings momentum. Fitch defines fixed-charge coverage as recurring operating EBITDA less recurring capital expenditures and straight-line rents, divided by interest incurred and preferred stock and OP unit distributions. PREFERRED STOCK NOTCHING The two-notch differential between VNO's IDR and preferred stock rating is consistent with Fitch's criteria for corporate entities with an IDR of 'BBB'. Based on Fitch's research on 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis', available on Fitch's Web site at www.fitchratings.com, these preferred securities are deeply subordinated and have loss absorption elements that would likely result in poor recoveries in the event of a corporate default. STABLE OUTLOOK The Stable Rating Outlook is driven in part by Fitch's expectation that VNO will maintain appropriate credit metrics in light of the BRAC related earnings erosion and the impact of potential increased development activity. RATING SENSITIVITIES The following factors may result in positive momentum on VNO's ratings and/or Outlook: -- Fitch's expectation of net debt to recurring operating EBITDA sustaining below 6.0x (leverage was 7.3x as of Mar. 31, 2013); -- Fitch's expectation of fixed-charge coverage sustaining above 2.5x (coverage was 1.7x for the TTM ended Mar. 31, 2013). The following factors may result in negative momentum on VNO's ratings and/or Outlook: -- Fitch's expectation of leverage sustaining above 7.5x; -- Fitch's expectation of fixed-charge coverage sustaining below 1.8x; -- Fitch's expectation of a sustained liquidity coverage ratio below 1.0x. WATERFRONT OFFICE: DG-Hyp Says Chapter 11 Plan is Unconfirmable --------------------------------------------------------------- Deutsche Genossenschafts-Hypothekenbank AG asks the Bankruptcy Court to deny approval of the Disclosure Statement dated March 27 for Waterfront Office Building, LP, et al.'s Plan of Reorganization. DG-Hyp is the holder of a senior mortgage loan on the properties and is owed at least $55,000,000. DG-Hyp notes that the equity holders of the Debtors propose to hold onto their equity in exchange for a $5,000,000 cash infusion in apparent reliance on the new value exception to the absolute priority rule. According to DG-Hyp, the Debtor's Plan is unconfirmable. DG-Hyp also said that Disclosure Statement failed to provide basic information about the properties and the Debtors, including an appraisal, projections of future income, a showing of ability to meet plan commitments, a financial disclosure from the Debtors' principals, or the source and application of the Debtor's $5,000,000 cash infusion. According to the Disclosure Statement, the Plan dated March 27, 2013, provides that the Holders of Allowed Secured Tax Claims (Class 1) will receive (a) deferred cash payments over a period not to exceed five years from the Petition Date. The Allowed DG-Hyp Secured Claims (Class 2 -- $55,672,222) will receive, with respect to the DG-Hyp Secured Claims: (i) title to the real property owned by Summer and any security deposits paid by Summer's tenants not previously returned to any such tenants; (ii) approximately $3,500,000 representing the Debtors' reserves held under the Prepetition Date loan documents between DG-Hyp and the Debtors and cash collateral order. The Allowed DG-Hyp General Unsecured Claim (Class 3 -- $16,500,000) will receive payments equal to 3 percent of any such Claim from the Reorganized Debtor in four equal quarterly cash payments. Each Holder of an Allowed General Unsecured Claim (Class 4 -- $350,000) will receive payments equal to 80 percent of its Allowed Claim, in equal quarterly payments of five percent of its claim. Each Holder of a Tenant Claim (Class 5 -- $600,000) will be paid in full, plus interest at the case interest rate, the amount of a tenant claim within twelve months that it would otherwise be due under the tenant's lease with Waterfront. The Holders of Interests (Class 6) will be permitted to retain their interests; provided, however, that they contribute five million dollars ($5,000,000) in total to the Reorganized Debtor on the Effective Date. Plan payments will be made from: (a) the cash of the Reorganized Debtor on hand as of the Effective Date; (b) cash arising from the operation, ownership, maintenance, or sale of the assets owned and managed by the Debtors; and (c) any cash generated or received by the Reorganized Debtor after the Effective Date from any other source, including the $5,000,000 to be contributed by the holders of the interest to be issued on the Effective Date under the Plan. A copy of the Disclosure Statement, is available for free at http://bankrupt.com/misc/WATERFRONT_OFFICE_ds.pdf The Debtors are represented by: James Berman, Esq. ZEISLER & ZEISLER, P.C. 558 Clinton Avenue Bridgeport, CT 06605 Tel: (203) 368-4234 Fax: (203) 367-9678 About Waterfront Office Building LP Waterfront Office Building LP and Summer Office Building LP filed for Chapter 11 protection (Bankr. D. Conn. Case Nos. 12-52121 and 12-52122) on Nov. 27, 2012. Waterfront estimated at least $50 million in assets and at least $50 million in liabilities. Summer estimated at least $10 million in assets and at least $50 million in liabilities. James Berman, Esq., at Zeisler And Zeisler, P.C., in Bridgeport, Connecticut, serve as counsel to the Debtors. WYLDFIRE ENERGY: Trustee Hires Lain Faulkner as Accountants ----------------------------------------------------------- Michael A. McConnell, Chapter 11 trustee for Wyldfire Energy, Inc., asks the bankruptcy court for approval to employ Lain, Faulkner & Co., P.C. as his accountants. The firm will, among other things, provide these services: (i) assisting the Trustee in gathering the Debtor's financial information and analyzing the Debtor's financial position, assets and liabilities; (ii) advising and assisting the Trustee in connection with any potential sales of assets; and (iii) assisting the Trustee in examining the Debtor's schedules and proofs of claim to determine whether any claims are objectionable or otherwise improper. As part of its retention, Lain Faulkner will complete its analysis of accounts between the Debtor and Carlton Scott Riggs commenced during its prior retention by the Debtor and prepetition at the request of Tim and Tamara Ford. The Trustee believes that completion of the analysis is necessary for the Trustee's evaluation of claims against the estate. Significant progress has already been made as a result of Lain Faulkner's prior retentions, including (1) reconciliation of cash transactions of the Debtor and Mr. Riggs to the general ledgers and bank statements from September 2009 through June 2011, (2) an analysis of all lease purchases and sales by the Debtor and Mr. Riggs reconciled to actual cash receipts and disbursements, (3) document review, (4) interviews of Tamara Ford and independent contractors with knowledge of the business activities of the Debtor, and (5) review of the Hanke report. Compensation to the accountants will be based on these steps: Step 1: Testing of lease transactions (estimated fees $15,000- $20,000); Step 2: Testing of overhead costs and expenses and lease allocations (estimated fees $5,000-$10,000); and, Step 3: Prepare written report including reconciliation with Hanke report (estimated fees $15,000-$20,000). The firm's hourly rates are: Professional Rates ------------ ----- Stephen H. Thomas, Shareholder $390.00 Brian Crisp, Certified Public Accountant $340.00 The Trustee attests that the firm a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Wyldfire Energy Palo Pinto, Texas-based Wyldfire Energy, Inc., filed a bare-bones Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-70239) in Wichita Falls, Texas, on June 20, 2012. Tamara Ford, a 100% stockholder, signed the Chapter 11 petition. Judge Harlin DeWayne Hale oversees the case. The Law Offices of Ronald L. Yandell, Esq., serves as the Debtor's counsel. At the behest of Carlton Scott Riggs and Riggs Energy, Inc., the Court ordered the appointment of a Chapter 11 trustee for the Debtor on April 11, 2013. Michael A. McConnell, the Chapter 11 trustee, has managed the Debtor's affairs since April 18, 2013. Proposed counsel for the Chapter 11 trustee can be reached at: Nancy Ribaudo C. Josh Osborne Katherine L. Thomas KELLY HART & HALLMAN LLP 201 Main Street, Suite 2500 Fort Worth, Texas 76102 Tel: 817/332-2500 Fax: 817/878-9280 * Three Circuits Retain Absolute Priority Rule for Individuals -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that three federal circuit courts of appeal have now ruled that Congress didn't repeal the absolute priority rule for individuals in Chapter 11 when amending the Bankruptcy Code in 2005. According to the report, the latest member of the club is the U.S. Court of Appeals in New Orleans, thanks to an opinion on May 29 by Circuit Judge Edith H. Jones. Previous circuit court decisions reaching the same result came in January from the Tenth Circuit in Denver and in June 2012 from the Fourth Circuit in Richmond, Virginia. The report notes that all three cases involved individuals in Chapter 11 who owned small businesses. They proposed plans where at least one class of creditors voted "no." The plans would have allowed the individuals to retain property and use income to pay creditors over time. In the new case from the Fifth Circuit in New Orleans, the bankruptcy court refused to confirm the plan using the cram down process and sent the appeal directly to the circuit court. The report says that Judge Jones found Section 1129(b)(2)(B) of the Bankruptcy Code not to be ambiguous. She said that the amendment in 2005 only allows an individual in Chapter 11 to retain income earned after filing, and thus not paying post- bankruptcy wages toward claims of pre-bankruptcy creditors. Even if the amendment were ambiguous, Judge Jones reached the same result saying a ruling otherwise would be an impermissible "repeal by implication." The report relates that the absolute priority rule derives from in Section 1129(b) (2) (B)(ii). It provides that owners or shareholders may not retain any property if a class of creditors isn't paid in full and votes against the plan. According to the Tenth Circuit opinion in January, one bankruptcy appellate panel and five bankruptcy courts ruled that absolute priority for individuals was repealed when Congress amended Section 1129 in 2005. The Bloomberg report discloses that as amended, the subsection provides that an individual nonetheless may "retain property included in the estate under section 1115." According to the Tenth Circuit 17 bankruptcy courts concluded that the revision didn't repeal the absolute priority rule. The Tenth Circuit, like the Fifth, declined to adopt an interpretation based on "implied repeal." The case is In Re Lively, 12-20277, U.S. Court of Appeals for the Fifth Circuit (New Orleans). * Strict Compliance Required in Recording Mortgages --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that two appeals courts handed down decisions last week voiding mortgages where the lenders didn't comply with the details of state recording laws. The report relates that the case in the U.S. Court of Appeals in Atlanta involved a mortgage lacking the signature of an additional witness on the attestation page. The two lower courts voided the mortgage at the behest of the Chapter 7 trustee. According to the report, the 11th Circuit in Atlanta certified the question to the Georgia Supreme Court and then upheld the lower courts in an unsigned opinion. The Georgia court ruled that the lack of a witness signature was fatal to enforceability of the mortgage. The U.S. Court of Appeals in Cincinnati upheld lower courts and held that a lien on a mobile home was defective and unenforceable. In Kentucky, where the case arose, liens on mobile homes are perfected by noting the lien on a title certificate and by filing in the county of the owner's residence. The Bloomberg report discloses that the lender noted its security interest on the title, although filing was in the lender's county, not the owner's county of residence. Circuit Judge Bernice B. Donald on the Sixth Circuit upheld the lower courts and ruled that the mortgage was invalid. The Georgia case is National City Mortgage v. Gordon (In re Bennett), 12-13239, 11th U.S. Circuit Court of Appeals (Atlanta). The Kentucky case is Vanderbilt Mortgage & Finance Inc. v. Westenhoeffer (In re Epling), 11-6216, 6th U.S. Circuit Court of Appeals (Cincinnati). * Norton Rose Combines with US Legal Practice Fulbright & Jaworksi ------------------------------------------------------------------ John Coleman, Managing Partner, Canada, at Norton Rose Fulbright, disclosed that effective, June 3, 2013, Norton Rose has formally combined with leading US legal practice Fulbright & Jaworski LLP to create Norton Rose Fulbright. "This is an exciting step for us and one which we believe will greatly benefit our clients," Mr. Coleman said. "Norton Rose Fulbright has close to 3,800 lawyers and offers worldwide coverage from more than 50 cities across Canada, the United States, Europe, Latin America, Asia, Australia, Africa, the Middle East and Central Asia. In the United States, we have one of the country's largest legal practices, with 750 lawyers coast to coast, including New York, Houston, Dallas, Los Angeles and Washington, DC." "As Norton Rose Fulbright, we will be able to provide clients with a full service US law capability with Canada's largest trading partner. We can now help with inbound and outbound cross-border deals seamlessly, with lawyers based in our country's key markets. We will also have new north-to-south access to the Americas, with close to 1,500 lawyers in Canada, the US and Latin America. "Norton Rose Fulbright aims to provide you with world-class legal skills in corporate, M&A and securities; banking and finance; dispute resolution and litigation; intellectual property; antitrust and competition; employment and labour; real estate; and tax. We have one of the leading global regulation and investigations practices, with highly experienced regulatory lawyers in all of our principal locations. We have also significantly enhanced the depth and breadth of our resources in financial institutions; energy; infrastructure, mining and commodities; technology and innovation; transport; and life sciences and healthcare, which comprise our key industry sector strengths. "I will continue to be a member of our global management team and am joined on the executive by Fulbright & Jaworski's US Managing Partner, Kenneth Stewart. Canadian Senior Partners Michael Lang and Bill Tuer, and Partner Jane Caskey, are also members of our global management team. Our Global Chairman is Adrian Ahern, based in Sydney and Norman Steinberg, our Canadian Chairman is now also Global Co-Chair. "The creation of Norton Rose Fulbright has been a long-term ambition for us and represents a landmark achievement for both practices. It puts us on a new level of legal service to clients in Canada, the US and around the world," Mr. Coleman said. Norton Rose Fulbright is a global legal practice. The firm provides the world's pre-eminent corporations and financial institutions with a full business law service. * Companies With Insolvent Balance Sheet ---------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ABT CN 120.5 (14.1) (11.1) ADA-ES INC ADES US 92.5 (39.8) (11.0) AK STEEL HLDG AKS US 3,906.1 (109.7) 604.0 ALLIANCE HEALTHC AIQ US 535.0 (119.7) 45.0 AMC NETWORKS-A AMCX US 2,568.3 (825.3) 620.4 AMER AXLE & MFG AXL US 3,029.6 (107.9) 354.0 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMERISTAR CASINO ASCA US 2,125.6 (2.6) (60.2) AMR CORP AAMRQ US 23,852.0 (8,376.0) (2,465.0) AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0 ANACOR PHARMACEU ANAC US 37.4 (8.0) 9.5 ANGIE'S LIST INC ANGI US 108.3 (0.1) 3.3 ARRAY BIOPHARMA ARRY US 107.4 (52.4) 40.0 AUTOZONE INC AZO US 6,662.2 (1,550.1) (1,108.4) BERRY PLASTICS G BERY US 5,082.0 (315.0) 517.0 CABLEVISION SY-A CVC US 7,143.2 (5,676.0) (266.5) CAESARS ENTERTAI CZR US 27,475.0 (560.0) 1,227.1 CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CC MEDIA-A CCMO US 15,519.2 (8,209.7) 1,053.5 CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CHIMERIX INC CMRX US 26.3 (2.1) 15.9 CHINA XUEFENG EN CXEE US 0.0 (0.0) (0.0) CHOICE HOTELS CHH US 546.0 (539.3) 56.8 CIENA CORP CIEN US 1,885.2 (78.6) 741.2 CINCINNATI BELL CBB US 2,151.5 (727.8) (93.4) COMVERSE INC CNSI US 857.8 (18.8) 4.7 DELTA AIR LI DAL US 45,068.0 (1,943.0) (5,427.0) DENDREON CORP DNDN US 639.0 (35.9) 339.3 DEX MEDIA INC DXM US 2,658.8 (17.7) (13.5) DIRECTV DTV US 20,650.0 (5,748.0) 69.0 DOMINO'S PIZZA DPZ US 476.6 (1,323.4) 85.0 DUN & BRADSTREET DNB US 1,902.0 (1,097.0) (194.9) DYAX CORP DYAX US 47.4 (59.8) 18.9 FAIRPOINT COMMUN FRP US 1,656.5 (360.7) 5.5 FERRELLGAS-LP FGP US 1,503.0 (42.3) (22.2) FIFTH & PACIFIC FNP US 826.3 (170.2) (17.7) FOREST OIL CORP FST US 1,895.0 (104.8) (127.8) FREESCALE SEMICO FSL US 3,139.0 (4,540.0) 1,209.0 GENCORP INC GY US 1,385.2 (379.1) 32.0 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GLOBAL BRASS & C BRSS US 576.5 (37.0) 286.9 GOLD RESERVE INC GRZ CN 78.3 (25.8) 56.9 GOLD RESERVE INC GDRZF US 78.3 (25.8) 56.9 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 HALOGEN SOFTWARE HGN CN 22.8 (46.2) (9.4) HCA HOLDINGS INC HCA US 27,882.0 (8,012.0) 1,796.0 HOVNANIAN ENT-A HOV US 1,580.3 (481.2) 935.2 HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) INCYTE CORP INCY US 330.3 (163.5) 178.7 INFOR US INC LWSN US 5,846.1 (480.0) (306.6) INSYS THERAPEUTI NEOL US 14.5 (30.8) (41.8) INSYS THERAPEUTI INSY US 14.5 (30.8) (41.8) INVIVO THERAPEUT NVIV US 13.8 (14.3) (15.3) IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE CN 1,528.9 (164.9) (62.3) JUST ENERGY GROU JE US 1,528.9 (164.9) (62.3) L BRANDS INC LTD US 6,019.0 (1,014.0) 667.0 LIN TV CORP-CL A TVL US 1,201.4 (86.6) (101.7) LORILLARD INC LO US 3,749.0 (1,796.0) 1,158.0 MANNKIND CORP MNKD US 215.2 (146.8) (231.9) MARRIOTT INTL-A MAR US 6,523.0 (1,377.0) (732.0) MDC PARTNERS-A MDZ/A CN 1,418.5 (12.4) (165.9) MDC PARTNERS-A MDCA US 1,418.5 (12.4) (165.9) MEDIA GENERAL-A MEG US 734.7 (191.7) 38.1 MERITOR INC MTOR US 2,337.0 (1,014.0) 208.0 MERRIMACK PHARMA MACK US 127.3 (32.1) 58.4 MONEYGRAM INTERN MGI US 4,892.0 (171.7) 14.1 MORGANS HOTEL GR MHGC US 583.6 (148.2) 110.7 MPG OFFICE TRUST MPG US 1,450.5 (530.6) - NATIONAL CINEMED NCMI US 831.0 (308.8) 122.2 NAVISTAR INTL NAV US 8,531.0 (3,309.0) 1,517.0 NEKTAR THERAPEUT NKTR US 447.9 (2.6) 183.8 NPS PHARM INC NPSP US 188.5 (4.2) 133.4 NYMOX PHARMACEUT NYMX US 1.8 (7.4) (1.9) ODYSSEY MARINE OMEX US 28.0 (7.1) (15.5) OMEROS CORP OMER US 17.7 (15.9) 5.2 OMTHERA PHARMACE OMTH US 18.3 (8.5) (12.0) ORGANOVO HOLDING ONVO US 16.7 (5.3) (6.2) PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 312.8 (93.7) 189.9 PHILIP MORRIS IN PM US 37,418.0 (2,732.0) 2,152.0 PHILIP MRS-BDR PHMO11B BZ 37,418.0 (2,732.0) 2,152.0 PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PLY GEM HOLDINGS PGEM US 881.8 (314.9) 101.4 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 510.5 (11.1) 88.5 RALLY SOFTWARE D RALY US 35.8 (1.1) 1.3 REGAL ENTERTAI-A RGC US 2,451.8 (706.2) 117.1 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) RENTPATH INC PRM US 208.0 (91.7) 3.6 RESVERLOGIX CORP RVX CN 14.0 (20.2) (4.7) REVLON INC-A REV US 1,241.9 (655.1) 152.9 ROCKWELL MEDICAL RMTI US 18.0 (10.5) (14.3) RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,892.1 (280.5) 523.4 SILVER SPRING NE SSNI US 494.3 (104.0) 60.1 SINCLAIR BROAD-A SBGI US 2,734.5 (97.3) (18.2) SUPERVALU INC SVU US 11,034.0 (1,415.0) (1,380.0) TAUBMAN CENTERS TCO US 3,302.5 (184.4) - THRESHOLD PHARMA THLD US 113.9 (21.8) 88.3 TOWN SPORTS INTE CLUB US 406.2 (50.7) (13.2) ULTRA PETROLEUM UPL US 2,035.4 (562.2) (293.0) UNISYS CORP UIS US 2,323.2 (1,545.4) 453.1 VECTOR GROUP LTD VGR US 1,066.8 (108.3) 422.2 VENOCO INC VQ US 704.3 (299.9) (40.5) VERISIGN INC VRSN US 2,071.1 (39.1) (91.2) VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VISKASE COS I VKSC US 334.7 (3.4) 113.5 WEIGHT WATCHERS WTW US 1,314.7 (1,620.7) (312.5) WEST CORP WSTC US 3,940.9 (850.2) 297.8 WESTMORELAND COA WLB US 943.0 (286.5) (3.0) XERIUM TECHNOLOG XRM US 616.9 (26.0) 123.4 XOMA CORP XOMA US 88.9 (0.9) 60.6 YRC WORLDWIDE IN YRCW US 2,200.9 (642.6) 111.1 ********* 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, 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 ***