/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130614.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 14, 2013, Vol. 17, No. 163 Headlines ADVANCED INTERACTIVE: Sold to Cubic for $3.2 Million AES EASTERN: Liquidating Trustee Launches $20MM In Avoidance Suits AIRTRONIC USA: Files Bankruptcy Reorganization Plan ALMANARA AT BLANCO: Voluntary Chapter 11 Case Summary AMERICAN LAND: Court Won't Stay Trustee's Asset Sale AMERICAN ORIENTAL: Weinberg & Company Raises Going Concern Doubt AMERICAN SUZUKI: Dealership's $1.6MM Claim for Legal Fees Tossed AMF BOWLING: Has Exclusive Right to File Plan Until Aug. 9 ANTIOCH COMPANY: Retains GA Keen to Market Former Headquarters ANTIOCH COMPANY: Faegre Baker Approved as Committee's Counsel APPVION INC: New $375MM First Lien Loan Gets Moody's Ba3 Rating AQGEN LIBERTY: S&P Assigns 'B' ICR; Outlook Stable ARROW ALUMINUM: Files Plan to Pay First Citizens Bank ATP OIL: Obtains Authority to Use Cash Collateral Until June 21 ATP OIL: Gomez Rejection Bid Okayed; June 20 & 21 Sale Hearing Set ATP OIL: Gets Court Okay of Blackhill Employment Amendment B-SWDE4 LLC: Case Summary & 20 Largest Unsecured Creditors BELVEDERE LLC: Case Summary & 4 Unsecured Creditors BENESTANTE ENTERPRISES: Voluntary Chapter 11 Case Summary BIRKY FARMS: Case Summary & 13 Unsecured Creditors BUILDERS GROUP: Cupey Professional Mall Files in Puerto Rico CASH STORE: Ontario Agency Starts Proceedings Over Payday Loans CASPIAN ENERGY: To Appeal Toronto Stock Exchange Share Delisting CASTLE MAPLEWOOD: Case Summary & 4 Unsecured Creditors CITICARE INC: Case Summary & 20 Largest Unsecured Creditors CODA HOLDINGS: Unsecured Creditors Settle; Non-Auto Sale Approved COMMODORE INT'L: 2nd Circ. Walls Off Favored Path to Coverage CONQUEST SANTA FE: Plan Outline Hearing Continued to July 6 COUNTRYWIDE FIN'L: BofA Could Still Put Countrywide into Ch. 11 CROSSROAD STATION: Voluntary Chapter 11 Case Summary DETROIT, MI: Has 50/50 Bankruptcy Chance, Emergency Manager Says DEWEY STRIP: Files Bare-Bones Chapter 11 Petition in Delaware DEWEY STRIP: Case Summary & Largest Unsecured Creditors DOCTORS HOSPITAL: LaSalle Claim Should Be Offset v Nomura Proceeds DOLE FOOD: Moody's Alters Outlook to Negative After Buyout Bid EASTMAN KODAK: UST, Tech Companies Have Plan Outline Objections EASTMAN KODAK: Spectra Files Objection to KPP Settlement EXIDE TECHNOLOGIES: Meeting to Form Creditors' Panel on June 18 FANNIE MAE: Shareholders Challenge U.S. Takeover in Suit FLEX FINANCIAL: Case Summary & 20 Largest Unsecured Creditors FOUR SEASONS: Voluntary Chapter 11 Case Summary FREDDIE MAC: Shareholders Challenge U.S. Takeover in Suit GAME TRADING: Stipulation With Baltimore County Revised GENERAL STEEL: Incurs $42K Net Loss in March 31 Quarter GENWORTH WEALTH: Moody's Assigns B2 Ratings to New $255MM Debt GIBSON ENERGY: S&P Raises CCR to 'BB'; Outlook Stable GMX RESOURCES: Oil and Gas Auction Set for Aug. 28 GOLD ORGANIZATION: Case Summary & 19 Largest Unsecured Creditors GREEN ISLE: Case Summary & 20 Largest Unsecured Creditors H&M OIL: Chapter 11 Cases Converted to Chapter 7 HASH LANE: Case Summary & 20 Largest Unsecured Creditors HIGHWAY TECHNOLOGIES: Cleared to Auction Two Branches HJ HEINZ: Fitch Withdraws Ratings on Acquisition Deal Completion HOME LOAN: S&P Assigns 'B+' ICR & Rates $350MM Sr. Sec. Loan 'BB-' HOWREY LLP: Creditors May Subpoena Arent Fox, Arnold & Porter HOWREY LLP: Creditors Target Arent Fox, Others Over Unfinished Biz ISTBET INVESTMENTS: Voluntary Chapter 11 Case Summary JEFFERSON COUNTY, AL: Bank Appeals Request Threatens Deal JEFFERSON COUNTY, AL: Seeks to Halt Dispute on Sewer System KIVA CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors LAKE PLEASANT: Stops Plan Sale by Filing New Case LAKE PLEASANT: Sec. 341 Meeting of Creditors on July 9 LAKE PLEASANT: Wins Approval for Polsinelli as Counsel LIFE UNIFORM: Final Hearing on $15-Mil. DIP Financing June 19 LIFE UNIFORM: Proposes Scrubs-Led Auction in July LIFE UNIFORM: Rejecting Burdensome Leases for 20 Locations LIFECARE HOLDINGS: US Can't Halt $320MM Sale Payouts, Judge Says LOUISIANA FILM: Ex-Saints Players, Coach Settle Fraud Claims LOWER BUCKS: JP Morgan, BNY Mellon Want Class Bid Denied MARIETTA MATERIALS: Moody's Changes Ratings Outlook to Stable MARINAS INTERNATIONAL: Voluntary Chapter 11 Case Summary MERUELO MADDUX: 9th Cir. BAP Rules on Richard Meruelo Claims METROGAS SA: Justices May Shift US' Role in Global Arbitration MF GLOBAL: Judge Glenn Fines Coe for Frivolous Filings MIPL HOLDINGS: S&P Revises Outlook to Positive & Affirms 'BB' ICR MONITOR COMPANY: Seeks Authority to Continue Cash Collateral Use MOTORCAR PARTS: Sends Subsidiaries Into Chapter 7 MSI CORPORATION: Files for Chapter 11 in Pittsburgh MSI CORPORATION: Case Summary & 10 Unsecured Creditors NATIONAL ENVELOPE: Meeting to Form Creditors' Panel on June 21 NEENAH PAPER: Loan Amendments No Impact on Moody's Ratings NORTH AMERICAN ENERGY: Moody's Retains CFR After Piling Biz Sale NPHP INVESTMENTS: Voluntary Chapter 11 Case Summary OMNI FOODS: Voluntary Chapter 11 Case Summary PENSON WORLDWIDE: July 24 Deadline to Vote on Liquidation Plan Set PENSON WORLDWIDE: Seeks Approval of SunGard Claim Settlement PENSON WORLDWIDE: Grace Fin'l. Wants Stay Lifted to Pursue Claims PENSON WORLDWIDE: Adamba Seeks Court Okay to File Late Claim PERLL DIAGNOSTICS: Case Summary 14 Unsecured Creditors PIK HOLDINGS: Leveraged Buyout Prompts Moody's to Assign B3 CFR PRM FAMILY: Admin. Agent Objects to Cash Collateral Use Request PRORHYTHM INC: ReCor Owns Disputed Patents QUEBECOR WORLD: 'Conduit' Banks Can Trigger Ch. 11 Safe Harbor QUIKSILVER INC: Moody's Lowers CFR to B3; Outlook Remains Stable RCN TELECOM: Proposed $200MM Bonds Issue Gets Moody's Caa1 Rating RESIDENTIAL CAPITAL: Gets More Time to Control Its Chapter 11 Case RESIDENTIAL CAPITAL: Reaches Deal Slashing FGIC's $5.5B Claim RESIDENTIAL CAPITAL: Again Urges Approval of $1-Bil. Ally Payout REVSTONE INDUSTRIES: Subsidiary Gets $54-Mil. Offer From Shiloh ROTECH HEALTHCARE: Second Amended Plan Filed ROTHSTEIN ROSENFELDT: Beats Government in Forfeiture Proceedings SEAN DUNNE: Ulster Bank May Proceed With Irish Bankruptcy SELECTOS WHOLE: Case Summary & 20 Largest Unsecured Creditors SEMCRUDE LP: Plan Trustee Loses Suit Against Ritchie, Cottonwood SEMGROUP LP: Creditors Lose $200 Million in Two Lawsuits SOUTHWIND HOSPICE: Bankruptcy Court to Hear UMB Bank Suit STRATA TITLE: No Longer Holds Interest in Tempe Tower SUNTECH POWER: Noteholders File Suit in New York Court SUPERIOR HOMES: 11th Cir. Affirms Order Barring Lawsuits SUPERMEDIA INC: Idearc Execs Strike $34MM Deal to End Fraud Claims THORNBURG MORTGAGE: Deadline for Proposed Mediators List Moved TOUSA INC: Insurance Pays $67 Million for Settlement TUCKER CAPITAL: Files for Chapter 11 Protection TUCKER CAPITAL: Case Summary & 20 Largest Unsecured Creditors UNIVERSAL FINANCE: Can't Use Cash to Pay BB&T, SunTrust VAIL LAKE: Puts Itself Into Chapter 11 Amid Ownership Dispute VAIL LAKE: 341 Meeting of Creditors on July 9 VALLEJO, CA: Lets Residents Set Part of Budget WARNER SPRINGS: Disclosure Statement Hearing Set for July 25 WATER PIK: S&P Assigns 'B' Rating to $240MM 1st-Lien Facilities WENTWOOD BAYTOWN: Can Access Cash Collateral Until June 30 WENTWOOD BAYTOWN: Matthew Hoffman Approved as Bankruptcy Counsel WORLDWIDE EDUCATION: Chapter 15 Case Summary YANKEE CANDLE: Moody's Rates Proposed $450MM Senior Notes 'Caa1' * Royal Bank of Canada Sued by Rakuten Bank Over CDOs * Moody's Outlook on Public Power Utilities Remains Stable * Moody's Notes Weakening Covenants for Low-Rated Bonds in May * Large Bankrupt Companies' Fulcrum Securities Fall in Price * U.S. Foreclosure Activity Increases 2% in May, RealtyTrac Says * Oklahoma Foreclosure Auctions Drop 47% in May, RealtyTrac Says * RealtyTrac Says May N.Y. Scheduled Foreclosure Auctions Up 95% * U.S. Says States, Banks Aren't Harmed By Dodd-Frank * Banks Get Reprieve on New Swaps Rule * Regulators Turn Up Heat Over Bank Fees * Bill to Limit CFTC Cross-Border Authority Faces U.S. House Vote * SEC Fines Options Exchange for Lax Oversight * Insurers Inflating Books, New York Regulator Says * Obama Picks Furman to Head Economic Council * BOOK REVIEW: Jacob Fugger the Rich: Merchant and Banker of Augsburg, 1459-1525 ********* ADVANCED INTERACTIVE: Sold to Cubic for $3.2 Million ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Advanced Interactive Systems Inc. was sold for $3.2 million in cash to San Diego-based Cubic Corp., a provider of combat training systems for the military. No buyer was under contract before the auction. The bankruptcy court in Delaware approved the sale June 11. About Advanced Interactive Systems Seattle-based Advanced Interactive Systems Inc. designed and built simulators for the military and police. The simulators provide training in the use of weapons combating terrorism or crime. AIS had revenue of $14.7 million in 2011, declining to $7.2 million in 2012. Advanced Interactive halted operations and filed a Chapter 7 petition (Bankr. D. Del. Case No. 13-10517) on March 14, 2013. The Debtor is represented by Jason M. Madron, Esq., at Richards, Layton & Finger, P.A. Advanced Interactive disclosed assets of $24.2 million and liabilities totaling $72.7 million, including $21.6 million in secured debt. From the secured debt, $21 million is owing to Kayne Anderson Mezzanine Advisors LP. The bankruptcy trustee has a court-approved settlement with Kayne Anderson where some sale proceeds will go to unsecured creditors. AES EASTERN: Liquidating Trustee Launches $20MM In Avoidance Suits ------------------------------------------------------------------ Brian Mahoney of BankruptcyLaw360 reported that the liquidating trustee of AES Eastern Energy Inc. filed almost 60 adversary complaints in Delaware federal bankruptcy court seeking the avoidance or return of more than $20 million in transfers made to other companies, including CSX Transportation Inc. and Greenberg Traurig LLP, while the company was insolvent. According to the report, the complaints, filed by liquidating trustee Eugene I. Davis, include a $9.7 million suit against CSX Transportation Inc. and a $5.5 million complaint against Lafayette Coal Co. for payments made by AES in the 90 days before its bankruptcy filing. About AES Eastern Ithaca, New York-based AES Eastern Energy, L.P., either directly or indirectly, control six coal-fired electric generating plants located in New York State. Currently, the Debtors actively operate two of the six power plants and sell the electricity generated by those plants into the New York wholesale power market to utilities and other intermediaries under short-term agreements or directly in the spot market. AES Eastern Energy and 13 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and Richards, Layton & Finger, P.A., are legal counsel to AES Eastern Energy and affiliates. Barclays Capital is serving as investment banker and financial advisor. Kurtzman Carson Consultants is the claims and noticing agent. AES Eastern Energy estimated $100 million to $500 million in assets and $500 million to $1 billion in debts. The petition was signed by Peter Norgeot, general manager. Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer, Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq., Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby & Geddes, P.A., serve as counsel to the Creditors Committee. FTI Consulting Inc. is the financial advisor. AES Eastern was authorized in April to sell the two operating facilities to secured creditors in exchange for debt. AIRTRONIC USA: Files Bankruptcy Reorganization Plan --------------------------------------------------- Global Digital Solutions, Inc. on June 13 disclosed that its planned merger partner, Airtronic USA, Inc., filed its chapter 11 bankruptcy reorganization plan on June 10, 2013, with the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division. "The filing of this consensual Plan signals that the end is in sight," said David Loppert, who will become GDSI's Chief Financial Officer after the acquisition with Airtronic is completed. "Upon confirmation, GDSI is expected to complete its acquisition of Airtronic and Airtronic will emerge from chapter 11 as a debt-free company with adequate working capital provided by GDSI. This will enable Airtronic to once again compete at the highest levels in its areas of expertise in small arms innovations." On August 20, 2012, GDSI and Airtronic disclosed that they had signed a letter of intent to enter into good faith discussions involving a potential strategic combination in which Airtronic would be acquired by GDSI. Having completed those good faith discussions, the companies signed a merger agreement on or about October 16, 2012. Dr. Merriellyn Kett, Airtronic's President and CEO, will continue serving as CEO of Airtronic once the merger between GDSI and Airtronic is finalized. "This filing is a very important step for both companies," said GDSI founder and largest shareholder Richard J. Sullivan, who will become Chairman and CEO after the acquisition with Airtronic is completed. "We hope this reorganization Plan will be confirmed by the court in due course and we look forward to moving forward with the completion of the merger process as quickly as possible." Founded in 1990, Airtronic is a well-respected, award-winning manufacturer of critical battlefield weapons. The company provides small arms and small arms spare parts to the U.S. Department of Defense, foreign militaries, and the law enforcement market. The company's products include grenade launchers, rocket propelled grenade launchers, grenade launcher guns, flex machine guns, grenade machine guns, rifles, and magazines. Airtronic is a member of the National Small Arms Technology Consortium (NSATC) and the largest woman-owned small arms manufacturing company in the United States. The company has received commendations from the US Army Tank, Armaments, and Automotive Command and the Defense Logistics Agency for the quality and on-time delivery of its products. More About Richard J. Sullivan Dick Sullivan is an entrepreneurial pioneer. In 2001, Sullivan received the prestigious World Economic Forum's "Award for Advanced Chip Technology" presented in Davos, Switzerland. He served as Chairman and CEO of Applied Digital Solutions, where he executed a technology rollup involving 42 acquisitions that succeeded in increasing the company's share price from $2.50 to a peak of $18 per share. During Mr. Sullivan's decade-long tenure as Chairman and CEO, Applied Digital was one of the highest volume traded stocks on NASDAQ. Mr. Sullivan also served as Chairman and CEO of Digital Angel Corporation and led the effort to spin off VeriChip Corporation. In 1970, he was a founding member of the management team of Manufacturing Data Systems, Inc., which listed at $7.50 per share and was sold to Schlumberger N.V. in 1980 at $65 per share. More About Merriellyn Kett, PhD Airtronic's CEO and President joined the company in 2003 as a partner and helped to refocus the business on several essential battlefield weapons, including the M203 40mm Grenade Launcher -- one of the most widely used grenade launchers in the world -- the .50 cal. Machine Gun, the MK 19 Grenade Machine Gun, and most recently the MK 777, a shoulder-fired recoilless rifle that is light, lethal, and affordable. Dr. Kett received her doctorate in analytic philosophy from DePaul University in Chicago, IL, and spent a year studying at the Sorbonne in Paris, France. Before joining Airtronic in 2003, she worked in infrastructure development in China, building a metallurgical coking plant in Shanxi Province. About Global Digital Solutions, Inc. Global Digital Solutions -- http://www.gdsi.co-- is refocusing its business strategy on providing knowledge-based and culturally attuned societal consulting and security-related solutions in unsettled areas. About Airtronic USA, Inc. Airtronic -- http://www.Airtronic.net-- is an electro-mechanical engineering design and manufacturing company. It provides small arms and small arms spare parts to the U.S. Department of Defense, foreign militaries, and the law enforcement market. The company also manufactures medical, avionics, and telecommunications original equipment. The company's products include grenade launchers, rocket propelled grenade launchers, grenade launcher guns, flex machine guns, grenade machine guns, rifles, and magazines. Founded in 1990, the company is based in Elk Grove Village, Illinois. On May 16, 2012, the voluntary petition of Airtronic, Inc. for liquidation under Chapter 7 was converted to chapter 11 reorganization. The company had filed for chapter 7 bankruptcy on March 13, 2012. ALMANARA AT BLANCO: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Almanara at Blanco Pointe, Inc. 4804 Mission Street, Suite 222 San Francisco, CA 94112 Bankruptcy Case No.: 13-51539 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court Western District of Texas Debtor's Counsel: Edward L. Rothberg, Esq. HOOVER SLOVACEK, LLP 5847 San Felipe, Suite 2200 Houston, TX 77057 Tel: (713) 977-8686 Fax: (713) 977-5395 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Najeeb Shihadeh, director and president. AMERICAN LAND: Court Won't Stay Trustee's Asset Sale ---------------------------------------------------- Bankruptcy Judge Alan S. Trust denied the request of American Land Acquisition Corporation for a stay pending appeal of the Court's May 22, 2013 Order authorizing the Chapter 7 Trustee to sell the Debtor's commercial real property. Marc A. Pergament, the Chapter 7 Trustee of the Debtor's estate, objected to the Debtor's Motion. According to Judge Trust, the Debtor has failed to show that: -- it will suffer actual and imminent irreparable injury if the sale of the bankruptcy estate's commercial real property is not stayed; -- the bankruptcy estate will not suffer substantial injury if a stay is granted; -- its appeal has a substantial possibility of success on the merits; and -- the public interest supports granting a stay. On March 20, the Chapter 7 Trustee filed a motion to sell the Property to Gemini Property Acquisitions, LLC, for $600,000, subject to higher and better offers and subject to certain environmental reviews of the Property. The Trustee retained Reliant Realty Group, LLC, as his commercial real estate broker. Reliant marketed the Property and negotiated with several potential purchasers. The Sale Motion was scheduled for hearing on May 21, 2013. The next day the Court entered an Order granting the Sale Motion. A copy of the Court's June 10, 2013 Decision and Order is available at http://is.gd/nfQtCSfrom Leagle.com. About American Land Acquisition Corp. American Land Acquisition Corporation filed a Chapter 7 petition (Bankr. E.D.N.Y. Case No. 12-76440) on Oct. 26, 2012. The Petition was signed by Dale R. Javino, acting as President of the Debtor. The Debtor later disclosed that the Petition was filed three days before a scheduled foreclosure sale of the Debtor's commercial real property located at 1000 Tenth Street, Ronkonkoma, New York. The foreclosure sale was scheduled by Wayne Miller, who claims to hold a second mortgage on the Property, and who sought to foreclose pursuant to a prepetition judgment of foreclosure entered by a state court of competent jurisdiction on Sept. 19, 2012. Mr. Miller is the only creditor listed on Debtor's bankruptcy Petition. Thereafter, the Debtor disclosed that the Estate of Joseph Gazza holds a first mortgage on the Property. Marc A. Pergament was appointed interim Chapter 7 Trustee, and has since qualified as the permanent trustee and is currently acting in that capacity. On Dec. 19, 2012, the Debtor filed a pro se motion to dismiss the case, alleging that "it was filed by mistake". On Feb. 20, the Court entered an Order denying the Motion to Dismiss. On May 17, 2013, the Debtor filed a pro se motion to convert this case to Chapter 11, which the Court denied by Order entered on June 4 as another improper pro se filing. AMERICAN ORIENTAL: Weinberg & Company Raises Going Concern Doubt ---------------------------------------------------------------- American Oriental Bioengineering, Inc., filed on June 11, 2013, its annual report on Form 10-K for the year ended Dec. 31, 2012. Weinberg & Company, P.A., in Los Angeles, California, expressed substantial doubt about American Oriental's ability to continue as a going concern in their audit report on the Company's financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses and utilized significant cash in operations. "In addition, at Dec. 31, 2012, the Company had a working capital deficiency and its convertible notes were in default." The Company reported a net loss of $59.7 million on $145.1 million of revenues in 2012, compared with a net loss of $68.5 million on $212.7 million of revenues in 2011. The Company's balance sheet at Dec. 31, 2012, showed $446.3 million in total assets, $118.7 million in total liabilities, and shareholders' equity of $327.6 million. Default Notice On Feb. 19, 2013, the Company received a notice of acceleration under the terms of the Company's 5.00% Convertible Senior Notes due 2015 issued pursuant to an Indenture, dated as of July 15, 2008, between the Company and Wells Fargo Bank, National Association, as Indenture Trustee. The notice was sent by certain holders of the Senior Notes that together hold more than 25% of the aggregate principal amount of the Senior Notes. The notice states that the default is the result of the Company's failure to (A) pay to the holders under the terms of the Indenture accrued interest due and payable on each of July 16, 2012, and Jan. 15, 2013, which failure to pay continued for a period of 30 days after July 16, 2012, and Jan. 15, 2013, respectively, and (B) provide, pursuant to the terms of the Indenture, a notice of the termination of trading and delisting of the Company's common stock by the New York Stock Exchange. As of March 4, 2013, the aggregate principal amount of the Senior Notes, and unpaid, but accrued interest was $53,010,424. A copy of the Form 10-K is available at http://is.gd/2gBdEk American Oriental Bioengineering, Inc., is a China-based, vertically integrated pharmaceutical company dedicated to improving health through the development, manufacture and commercialization of a broad range of pharmaceutical and healthcare products. AMERICAN SUZUKI: Dealership's $1.6MM Claim for Legal Fees Tossed ---------------------------------------------------------------- Bankruptcy Judge Scot C. Clarkson in Santa Ana, Calif., sustained American Suzuki Motor Corporation's to South Motors Suzuki Inc.'s Claim Number 520-1, in the amount of $1,595,601 plus attorney fees and costs. The judge, however, allowed South Motors' unsecured claim for $21,461, based on the lost profits as of the date of the tender of inventory, parts and accessories. South Motors Suzuki asserted claims arising from damages resulting from the Debtor's rejection of an executory automobile dealership sales and service agreement. The Court said South Motors Suzuki is entitled to compensation for rejection of the Agreement consisting of the lost profits from the sale of the automobile inventory, parts and accessories in stock at the time of South Motor's tender of the automobile inventory, parts and accessories. Judge Clarkson said prevailing party attorney fees and costs are awarded to the Debtor and against South Motors in the amount to be determined following an evidentiary hearing to be conducted on July 25, 2013 at 1:30 p.m. in Courtroom 5C of the Ronald Reagan Federal Building and Court House, 411 West Fourth Street, Santa Ana, California. Application for fees and costs, together with supportive declaratory evidence (with respect to the amount of fees and costs, and not on the ultimate legal issue of prevailing party or award entitlement, which has already been determined by this decision) shall be filed and served by the Debtor on all interested parties by no later than 21 days prior to the hearing. Objections are due by no later than 14 days prior to the hearing. A copy of the Court's June 3, 2013 Order and Opinion is available at http://is.gd/DvxJ0Ofrom Leagle.com. About American Suzuki Established in 1986, American Suzuki Motor Corporation is the sole distributor of Suzuki automobiles and vehicles in the United States. American Suzuki wholesales its inventory through a network of independently owned and unaffiliated dealerships located throughout the continental United States. The dealers then market and sell the Suzuki Products to retail customers. Suzuki Motor Corp., the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki products. American Suzuki has 295 employees. There are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. American Suzuki filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC, absent higher and better offers. SMC is not included in the Chapter 11 filing. The Debtor disclosed assets of $233 million and liabilities totaling $346 million. Debt includes $32 million owing to the parent on a revolving credit and $120 million for inventory financing. There is about $4 million owing to trade suppliers. The Court approved the amended Chapter 11 Plan. Under the Company's amended Plan, its Motorcycles/ATV and Marine divisions, along with its continued Automotive parts and service operation, will be sold to a newly organized, wholly-owned subsidiary of Suzuki Motor Corporation, enabling those operations to continue uninterrupted. The new entity will use the ASMC brand name and operate in the continental U.S. ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Freddie Reiss, Senior Managing Director at FTI Consulting, served as chief restructuring officer. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., is the claims and notice agent. The Debtor retained Imperial Capital LLC as investment banker. SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern LLP. The Official Committee of Unsecured Creditors is represented by Irell & Manella LLP. AlixPartners, LLC serves as its financial advisor. ASMC's Chapter 11 Plan was confirmed by the Bankruptcy Court on Feb. 28, 2013. The Chapter 11 Plan became effective on March 31, 2013, when ASMC closed its assets sale and commenced paying the claims in full of all consensually settling Automotive Dealers and trade creditors through the PE Creditor Trust established by the Plan. ASMC closed the sale of its operating assets to Suzuki Motor of America, Inc., a newly organized, wholly-owned subsidiary of Suzuki Motor Corporation, which will operate as the sole distributor of Suzuki products in the continental U.S. ASMC has wound down all operations. AMF BOWLING: Has Exclusive Right to File Plan Until Aug. 9 ---------------------------------------------------------- Judge Kevin R. Huennekens of the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, further extended until Aug. 9, 2013, the time within which AMF Bowling Worldwide, Inc., et al., have exclusive right to file a plan of reorganization, and until Oct. 8, 2013, the time within which the Debtors have exclusive right to solicit acceptances of that plan. Patrick J. Nash, Jr., Esq., and Jeffrey D. Pawlitz, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois; Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in New York; and Dion W. Hayes, Esq., and John H. Maddock III, Esq., Sarah B. Boehm, Esq., at McGuirewoods LLP, in Chicago, Illinois, represent the Debtors. About AMF Bowling Worldwide AMF Bowling Worldwide Inc. is the largest operator of bowling centers in the world. The Company and several affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case Nos. 12-36493 to 12-36508) on Nov. 12 and 13, 2012, after reaching an agreement with a majority of its secured first lien lenders and the landlord of a majority of its bowling centers to restructure through a first lien lender-led debt-for-equity conversion, subject to higher and better offers through a marketing process. At the time of the bankruptcy filing, AMF operated 262 bowling centers across the United States and, through its non-Debtor facilities, and 8 bowling centers in Mexico -- more than three times the number of bowling centers of its closest competitor. Debt for borrowed money totals $296 million, including $216 million on a first-lien term loan and revolving credit, and $80 million on a second-lien term loan. Mechanicsville, Virginia-based AMF first filed for bankruptcy reorganization in July 2001 and emerged with a confirmed Chapter 11 plan in February 2002 by giving unsecured creditors 7.5% of the new stock. The bank lenders, owed $625 million, received a combination of cash, 92.5% of the stock, and $150 million in new debt. At the time, AMF had over 500 bowling centers. Judge Kevin R. Huennekens oversees the 2012 case, taking over from Judge Douglas O. Tice, Jr. Patrick J. Nash, Jr., Esq., Jeffrey D. Pawlitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP; and Dion W. Hayes, Esq., John H. Maddock III, Esq., and Sarah B. Boehm, Esq., at McGuirewoods LLP, serve as the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker and financial advisor. McKinsey Recovery & Transformation Services U.S., LLC, serves as the Debtors' restructuring advisor. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. Kristopher M. Hansen, Esq., Sayan Bhattacharyya, Esq., and Marianne S. Mortimer, Esq., at Stroock & Stroock & Lavan LLP; and Peter J. Barrett, Esq., and Michael A. Condyles, Esq., at Kutak Rock LLP, represent the first lien lenders. An ad hoc group of second lien lenders is represented by Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran, PLC; and Ben H. Logan, Esq., Suzzanne S. Uhland, Esq., and Jennifer M. Taylor, Esq., at O'Melveny & Myers LLP. The Official Committee of Unsecured Creditors retained Pachulski Stang Ziehl & Jones LLP as its lead counsel; Christian & Barton, LLP as its local counsel; and Mesirow Financial Consulting, LLC as its financial advisors. ANTIOCH COMPANY: Retains GA Keen to Market Former Headquarters -------------------------------------------------------------- GA Keen Realty Advisors, the real estate division of Great American Group, Inc., has been exclusively retained by The Antioch Company, LLC d/b/a Creative Memories to market and sell the company's former headquarters in Yellow Springs, Ohio through a bankruptcy sale process. The 95,062 square-foot building features 66,574 square-feet of warehouse and 26,823 square-feet of office space. There are currently two tenants leasing a combined total of 20,555 square- feet producing annual rental income of approximately $250,000. "This property represents an excellent opportunity for both users and investors," said Matthew Bordwin, Co-President of GA Keen Realty Advisors. "From a user's perspective they can offset the cost of operating the facility with the existing rental income and investors will be looking to not only benefit from the current rental stream but from the upside to be realized in connection with leasing the remainder of the facility." Located at 888 Dayton St., the property is less than 20 miles northeast of Dayton and just minutes from Interstate 70 and Interstate 675. The property features six dock-height loading doors, one drive-in door and numerous climate-controlled meeting and conference rooms. Built in 1975 and renovated in 2000, the building has clear ceiling heights of 12 to 28 feet. The facility is located on a 12.47-acre site in an area zoned for light industrial use with 191 parking spaces. The property is being marketed as part of a bankruptcy sale and stalking horse proposals are currently being accepted. As such, interested parties are encouraged to act immediately. For more information about the property, contact Matthew Bordwin at 646-381-9222 or at mbordwin@greatamerican.com. About The Antioch Company St. Cloud, Minn.-based scrapbook company The Antioch Company and six affiliates filed for Chapter 11 bankruptcy (Bankr. D. Minn. Case No. 13-41898) in Minneapolis on April 16, 2013. Antioch disclosed $10 million to $50 million in both assets and debts. The affiliates that separate filed for Chapter 11 are Antioch International-Canada LLC, Antioch International LLC, zeBlooms LLC, Antioch Framers Supply LLC, Antioch International-New Zealand LLC, and Creative Memories Puerto Rico, LLC. Founded in 1926, Antioch and its affiliates make up one of the world's preeminent suppliers of scrapbooks, related accessories, and photo solutions for memory preservation through the direct sales channel. The Debtors also go by business names Creative Memories, Antioch, Agenda, Antioch Publishing, Cottage Arts, Frame of Mind and Webway. Antioch has 200 employees and currently has operations through the Debtor companies and foreign subsidiaries in the United States, Canada, Japan, Australia, and New Zealand. In 2012, the Company's net revenue was approximately $93.8 million and it had a net loss of $3.7 million. Antioch previously sought bankruptcy protection in 2008 (Bankr. S.D. Ohio Case No. 08-35741). In the 2013 case, the U.S. Trustee appointed a seven-member creditors committee. ANTIOCH COMPANY: Faegre Baker Approved as Committee's Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of The Antioch Company, LLC, et al., to retain Faegre Baker Daniels LLP as counsel. Faegre is expected to, among other things: a. render advice to the Committee with respect to its powers and duties in the cases; b. assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' businesses and any other matter relevant to the cases; and c. participate in negotiations with the Debtors and other parties-in-interest with respect to the administration of the Debtors' estates, plan of reorganization and disclosure statement, and otherwise protect and promote the interests of the general unsecured creditors of the Debtors. The hourly rates of attorneys who will primarily represent the Committee in the cases are: Michael B. Fisco, partner $635 Abby E. Wilkinson, partner $460 Eric J. Howe, associate $370 Nicole M. Murphy, associate $295 Susan Carlson, paralegal $235 Other attorneys and support staff may provide services to the Committee in connection with the cases. The firm's current hourly rates are: Partners $395 - $900 Associates $240 - $435 Paralegals $135 - $265 To the best of the Committee's knowledge, Faegre does not hold or represent any interest adverse to the Committee, the Debtors or their estates. In a separate filing, the Court authorized the Committee to retain Crowe Horwath LLP as its financial advisor, Fredrikson & Byron PA, and McDonald Hopkins LLC. About The Antioch Company St. Cloud, Minn.-based scrapbook company The Antioch Company and six affiliates filed for Chapter 11 bankruptcy (Bankr. D. Minn. Case No. 13-41898) in Minneapolis on April 16, 2013. Antioch disclosed $10 million to $50 million in both assets and debts. The affiliates that separately filed for Chapter 11 are Antioch International-Canada LLC, Antioch International LLC, zeBlooms LLC, Antioch Framers Supply LLC, Antioch International-New Zealand LLC, and Creative Memories Puerto Rico, LLC. Founded in 1926, Antioch and its affiliates make up one of the world's preeminent suppliers of scrapbooks, related accessories, and photo solutions for memory preservation through the direct sales channel. The Debtors also go by business names Creative Memories, Antioch, Agenda, Antioch Publishing, Cottage Arts, Frame of Mind and Webway. Antioch has 200 employees and has operations through the Debtor companies and foreign subsidiaries in the United States, Canada, Japan, Australia, and New Zealand. In 2012, the Company's net revenue was approximately $93.8 million and it had a net loss of $3.7 million. Antioch previously sought bankruptcy protection in 2008 (Bankr. S.D. Ohio Case No. 08-35741). Judge Dennis D. O'Brien oversees the 2013 case. Sean Malloy, Esq., Michael Kaczka, Esq., and Manju Gupta, Esq., at McDonald Hopkins LLC; and Clinton E. Cutler, Esq., and Douglas W. Kassebaum, Esq., at Fredrikson & Byron, P.A., serve as counsel to the Debtors. The U.S. Trustee appointed a seven-member creditors committee in the 2013 case. The Committee tapped Faegre Baker Daniels LLP as its counsel, Crowe Horwath LLP as its financial advisor, and Stoneleigh Group Holdings LLC's Kevin Willis as Chief Restructuring Officer. APPVION INC: New $375MM First Lien Loan Gets Moody's Ba3 Rating --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Appvion Inc.'s (formerly Appleton Papers Inc.) proposed $375 million first lien term loan maturing 2019 and a B3 rating to the company's proposed $200 million second lien term loan maturing 2020. The company's speculative-grade liquidity rating was upgraded to SGL-2 from SGL-3 and the company's rating outlook was changed to positive from stable. The company's B2 corporate family rating and B2-PD probability of default rating were affirmed. Issuer: Appvion, Inc. Upgrades: Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Assignments: $200M Senior Secured Bank Credit Facility, Assigned B3 $375M Senior Secured Bank Credit Facility, Assigned Ba3 $375M Senior Secured Bank Credit Facility, Assigned a range of LGD2, 28 % $200M Senior Secured Bank Credit Facility, Assigned a range of LGD5, 72 % Outlook Actions: Outlook, Changed To Positive from Stable Affirmations: Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 The proceeds from the term loans will be used to repay the company's $503 million existing indebtedness, including prepayment penalties and financing fees. The company's proforma adjusted leverage will increase slightly following the refinancing; however, this is expected to be offset by the company's improved interest coverage. The Ba3 rating on the first lien term loan are notched two rating levels above the corporate family rating due to their senior ranking to the company's second lien term loan (rated B3), which provides loss absorption for the first lien debt. The ratings are subject to the conclusion of the proposed transaction and Moody's review of final documentation. Ratings Rationale: The positive outlook reflects Moody's expectations of improved financial performance, supported by higher earnings due to implementation of the company's new paper supply contract, lower interest costs and growth from the company's thermal paper and encapsys business. Appvion's B2 CFR reflects the company's leading global market position in several specialty paper niches, its improving product diversity and the company's strong and stable margins. The rating is tempered by the secular contraction in the demand for the company's carbonless paper business, the company's limited financial flexibility due to its employee stock ownership plan and the company's exposure to potential contingencies associated with environmental issues. Over the mid-term, the growth of the company's thermal paper and microencapsulating businesses are expected to offset the decline in the company's carbonless paper business. Moody's expects the company's financial leverage (adjusted debt / EBITDA) to approach 5 times over the next 12 to 18 months. Appvion's speculative grade liquidity rating of SGL-2 reflects the company's good liquidity position. As of the quarter ended March 31, 2013, Appvion had approximately $2 million of cash and roughly $66 million of borrowing capacity under its $100 million ABL revolving credit facility (after $6.5 million of drawings and $16 million of letters of credit usage). In conjunction with the proposed refinancing, the ABL revolving credit facility will be replaced with a 5-year senior secured first lien revolving credit facility. Moody's estimates free cashflow of approximately $35 million over the next year. Covenant issues are not expected over the near term. Most of the company's assets are encumbered and the company does not have any scheduled debt maturities over the next 12 months. An upgrade may be warranted if the company is able to sustain adjusted debt to EBITDA below 5 times. A deterioration in operating performance (such that normalized RCF/TD and (RCF- CapEx)/TD would drop below 5% and 2%, respectively), due in part to an inability to replace declining carbonless paper volumes with either new or existing products, a significant escalation in anticipated environmental costs or a deterioration in liquidity, could negatively impact the ratings and/or outlook. The principal methodology used in this rating was the Global Paper and Forest Products Industry Methodology published in September 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Appvion headquartered in Appleton, Wisconsin, develops and manufactures specialty coated paper products, including thermal papers (49% of revenues), carbonless papers (45%), as well as a microencapsulating business (6%). Appvion has four manufacturing sites, two of which are located in Wisconsin, one in Pennsylvania and one in Ohio. In 2001, the company was acquired by its employees through an employee stock ownership plan (ESOP). LTM sales ending March 31, 2013 were $841 million. AQGEN LIBERTY: S&P Assigns 'B' ICR; Outlook Stable -------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' issuer credit rating on AqGen Liberty Management I Inc. and AqGen Liberty Management II Inc (together, AqGen). The rating outlook is stable. At the same time, S&P assigned its 'B' issue-level rating on AqGen's proposed $255 million senior secured credit facility, which will consist of a $230 million term loan (due in 2020) and a $25 million revolver (due in 2018, which will be undrawn at close). "Our ratings on AqGen reflect the pro forma consolidated entity's weak financial profile, including high debt leverage and negative tangible equity following the leveraged buyout. In addition, the lack of a track record as a stand-alone entity weighs on AqGen's credit quality, in our view," said Standard & Poor's credit analyst Trevor Martin. S&P believes the transition to a stand- alone firm poses some challenges, with nonrecurring transition costs and recent fee cuts likely to depress cash flow and debt service capacity, at least in the near term. The rating also reflects AqGen's relatively limited scale and position in the highly competitive wealth management business. AqGen plans to issue a $230 million, seven-year first-lien senior secured term loan to finance the buyout by two private equity firms. The private equity firms are contributing $199 million of equity toward the $413 million purchase price. In addition, AqGen is seeking a $25 million, five-year first-lien senior secured revolving credit facility, which will be undrawn as close. The transaction will create a new organizational structure. AqGen Liberty Holdings LLC, the ultimate holding company, will reside at the top of the structure, with two intermediate holding companies one level below. These holding companies, AqGen Liberty Management I and AqGen Liberty Management II, will be the co- borrowers of the debt and will hold the operating entities of two distinct businesses. AqGen Liberty Management I will contain Altegris Holdings Inc., which is the company's alternative asset management platform. AqGen Liberty Management II will contain the turnkey asset management platform (TAMP). The stable outlook incorporates S&P's view that the firm's financial profile will remain fairly aggressive in the near term. Although fee cuts will affect EBITDA, S&P expects EBITDA will rebound over time through growth in assets under management (AUM). S&P would consider an upgrade if the debt-to-EBITDA multiple improves to closer to 3.0x on a sustained basis. However, an upgrade would also be contingent on the company establishing a track record as a stand-alone entity. Conversely, S&P would consider downgrading the company if AUM falls below $20 billion or debt leverage rises above 5.0x. ARROW ALUMINUM: Files Plan to Pay First Citizens Bank ----------------------------------------------------- Arrow Aluminum Industries, Inc., Edna Elaine Blackwell, and Ricka Blackwell filed with the U.S. Bankruptcy Court for the Western District of Tennessee, Western Division, which provides for the Arrow's primary creditor, First Citizens National Bank, receiving a secured claim for the equipment and the insider principals obtaining reverse mortgages on their homes and properties to pay Citizens Bank. Debtors Ricka Blackwell and Edna Elaine Blackwell join the Disclosure Statement explaining the Plan but their Chapter 11 cases are not substantively consolidated. The Individual Debtors intend to seek dismissal of their cases in order to effectuate the reverse mortgage. They have no other assets for distribution to creditors. The Claims against the Debtor consist of: * Administrative Expense Claims, to be paid in full as soon as practicable after the Effective Date. * The secured claim of the First Citizens National Bank (Class 1) in the amount of $2,000,000, which will be paid 180 equal monthly installments from the Effective Date. * The Internal Revenue Service and State of Tennessee unsecured priority claims (Class 2), which total $315,498, to be paid in 60 months, with interest. * IRS Secured Claim (Class 3), which total $285,378, will be treated as fully undersecured in Class 2 and 5. * The Allowed FCNB Undersecured Claim (Class 4) will be determined after receipt of funds from the reverse mortgages obtained by the Debtor's principals and paid to FCNB. * General Unsecured Claims (Class 5) -- all unsecured claims FCNB and including potential Claims from the Rejected Contracts. Allowed Claims will receive general limited liability company membership interests in the Reorganized Debtor consistent with the proportion of their interests in the Property prior to the Effective Date. It is divided into Class 3A and 3B. * Ownership Claims (Class 6) -- the allowed Claims and Interests of the owners of the Debtor. The monthly payments due on account of the allowed Claims will be made from the net operational profits (positive cash flow) of the operations, after allowance for operational expenses (vendor costs, taxes) and reserves (to cover extraordinary repairs). The Reorganized Debtor will remain in the current premises for 180 days after the Effective Date. Steven N. Douglass, Esq., and Chandra Madison, Esq., at Harris Shelton Hanover Walsh, PLLC, in Memphis, Tennessee, represent the Debtors. A full-text copy of the Disclosure Statement dated June 11, 2013, is available for free at: http://bankrupt.com/misc/ARROWALUMINUMds0611.pdf About Arrow Aluminum Arrow Aluminum Industries, Inc., filed a Chapter 11 petition (Bankr. W.D. Tenn. Case No. 13-21470) in Memphis on Feb. 11, 2013. The petition was signed by William Ted Blackwell as president. The Debtor has scheduled assets of $126,246,137 and scheduled liabilities of $3,130,103. The Debtor is represented by Harris Shelton Hanover Walsh, PLLC. Arrow Aluminum previously sought Chapter 11 protection (Case No. 12-1348) in December but the case was promptly dismissed. In that case, the U.S. Trustee sought dismissal or conversion to Chapter 7, while Citizens National Bank sought appointment of a Chapter 11 trustee to take over management of the Debtor's properties. ATP OIL: Obtains Authority to Use Cash Collateral Until June 21 --------------------------------------------------------------- ATP Oil & Gas Corporation obtained court approval of its emergency motion asking the Court for authority use Cash Collateral until June 21, 2013. Throughout the course of its Chapter 11 case, the Debtor has funded its operations pursuant to a DIP Credit Agreement approved by the Court. However, on June 7, 2013, the DIP Lenders served the Debtor with a DIP Termination Declaration Carve Out Trigger Notice that terminated the Debtor's ability to use Cash Collateral. Pursuant to Section 363(c)(2) of the Bankruptcy Code, the Debtor may not use the Cash Collateral without the consent of the DIP Lenders or authority granted by the Court. Counsel for the Debtor, Charles S. Kelley, Esq., of Mayer Brown LLP, said the DIP Lenders have consented to the Debtor's use of Cash Collateral for two weeks for certain expenses. These expenses represent the minimum expenses identified by the Debtor that are necessary to continue operations and comply with environmental and safety regulations through June 21, 2013, he says. Accordingly, Judge Marvin Isgur authorized the Debtor's interim use of Cash Collateral for the approved expenditures for the period from June 10, 2013, through and including June 21, 2013, consistent with the terms and protections set forth in the Final DIP Order. A full-text copy of the Cash Collateral Order and Budget may be accessed for free at http://is.gd/sQvjtV DIP Lenders' Termination Notice Credit Suisse AG, Cayman Islands Branch as administrative agent and collateral agent under the Debtor's Senior Secured Superpriority Debtor-in-Possession Credit Agreement dated as of August 29, 2012, together with certain of the DIP Lenders, informed the Court and interested parties that it served the Termination Notice to preserve the DIP Lenders' rights given existing Events of Default by the Debtor under the DIP Credit Agreement and the inability of the Debtor and the DIP Lenders to reach agreement on a budget for the use of Cash Collateral going forward. Specifically, the DIP Agent said, service of the Termination Notice was precipitated by the inability (or unwillingness) of the Debtor to propose a reliable and appropriate budget for the use of Cash Collateral going forward. The DIP Lenders have been willing to allow the use of Cash Collateral pursuant to a budget that provides for necessary expenses to take the case through the pending sale of the Debtor's assets pursuant to the DIP Lenders' credit bid and a reasonable wind-down budget thereafter. However, the course of the DIP Lenders' ongoing budget discussions with the Debtor have raised significant questions for the DIP Lenders as to the motivation of the Debtor's decision makers and their ability to propose a reliable budget. These ongoing issues left the DIP Lenders with no choice but to serve the Termination Notice, relates the DIP Agent. As the result of the Termination Notice, the Debtor is no longer authorized to use Cash Collateral beyond June 12, 2013, the end of the five day period after the Termination Declaration Date absent consent of the Required DIP Lenders. Additionally, the Termination Notice also serves as the Carve Out Trigger Notice pursuant to Paragraph 31 of the of the DIP Order, thereby triggering the $3,000,000 Carve Out Amount for the case professionals of the Debtor and the Statutory Committee. The DIP Agent said the Debtor's actions to date, particularly with respect to the budget discussions, evidence an apparent lack of commitment to the Sale process and give the DIP Lenders concern that the Debtor will be unable to propose a workable, reliable budget. Nonetheless, the DIP Lenders continue to believe that the Sale is the best outcome for the Debtor's estate and remain willing to agree to a Cash Collateral Budget that will pay the expenses necessary to take the estate through the sale process (including a post-Sale wind-down), notes the DIP Agent. The DIP Agent said the DIP Lenders are willing to agree to a two week budget for the use of cash collateral in order to permit a final opportunity to come to an agreed budget that can take the case through the Sale and a wind-down. The DIP Lenders emphasize that they remain supportive of paying critical vendor and other expenses as part of such a budget. Paul H. Zumbro, Esq., and Stephanie R. Tumbiolo, Esq., of Cravath, Swaine & Moore LLP, and Charles A. Beckham, Jr., Esq., Henry Flores, Esq., and Kelli M. Stephenson, Esq., of Haynes and Boone, LLP, represent the DIP Agent. Counsel for certain of the DIP Lenders are Ronald J. Silverman, Esq., Scott K. Seamon, Esq., Amy Kyle, Esq., and Andrew Gallo, Esq. of Bingham Mccutchen LLP, and R. Michael Farquhar, Esq., Phillip L. Lamberson, Esq., Matthew T. Ferris, Esq., Sean B. Davis, Esq., of Winstead PC. ATP Talks Back "The issuance of the Termination Notice and the filing of the DIP Statement instead are a resort to heavy-handed tactics in the middle of difficult negotiations over a prospective wind-down budget," the Debtor's counsel, Charles S. Kelley, Esq., of Mayer Brown LLP, tells the Court. Mr. Kelley says the Debtor has worked diligently and in good faith to negotiate and procure a budget that will allow the Debtor to close the sale and fund the payment of necessary administrative expenses during the pre-closing period, and provide some possibility of confirming a Chapter 11 plan. However, those efforts (including efforts to even define such expenses) have been undermined by the DIP Agent's and DIP Lenders' desire to postpone closing -- although not the approval of the sale itself -- for a period of up to two months, he adds. "In fact, the DIP Agent and the DIP Lenders only advised the Debtor . . . on Monday, June 10, of their intent to delay the closing. These, and other last minute considerations, including the inability of the DIP Agent and the DIP Lenders to finalize the terms of the APA, place the Debtor in a difficult position to forecast future expenses and ensure, among other things, compliance with this Court's orders with respect to the Debtor's other estate constituents," Mr. Kelley says. "The Debtor chooses not to respond to the many accusations and personal attacks, but do not misconstrue its silence as agreement. Rather, the Debtor already has scheduled a thirty-minute status conference for the Court and, if asked about any of the unfounded accusations leveled at the Debtor in the DIP Statement, the Debtor is prepared to expend as much time as necessary to respond and explain its position in respect thereof. The Debtor is confident that the Court will find its conduct during these difficult negotiations to be above board and in proper exercise of its duties to the estate as a whole," he added. Further Use of Cash at Risk Jeremy Heallen of BankruptcyLaw360 reported that beleaguered ATP Oil & Gas Corp. told a Texas bankruptcy court that it had been unable to agree on a proposed operating budget with bankruptcy lenders and that its access to cash could be cut off in a matter of days. According to the report, joined by its consortium of debtor-in- possession lenders headed by Credit Suisse Group AG, ATP notified the bankruptcy court that it had reached an impasse attempting to hammer out a revised debtor-in-possession budget, missing a June 5 deadline and triggering a cash flow shutdown. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. ATP OIL: Gomez Rejection Bid Okayed; June 20 & 21 Sale Hearing Set ------------------------------------------------------------------ Judge Marvin Isgur of the United States Bankruptcy Court for the Southern District of Texas gave ATP Oil & Gas Corporation permission to walk away from certain unexpired leases and executory contracts related to its Gomez Properties and to abandon any interests relating to the contracts and leases. The rejection of any Gomez Agreements are effective as of June 13, 2013. Judge Isgur said all objections to the Debtor's motion that have not been withdrawn, waived, or settled, are overruled. In the alternative, Judge Isgur continued, if the oil and gas lease and rights of way granted by the United States through the BOEM, made the Gomez Agreements not unexpired leases or executory contracts, then the interests in the oil and rights of way are relinquished. The Court said nothing in the Order will affect or impair in any way NGP Capital Resources Company's term overriding royalty interest, transaction documents, rights or claims relating to properties that do not constitute the Gomez Leases. Moreover, the Debtor's abandonments of the Gomez Leases is approved and will be effective as of June 13, 2013. Nothing will alter the Debtor' obligations incurred in connection with its Gomez operations, to comply with laws reasonably designed to protect the public health or safety from identified hazards. At the request of the United States, through its regulatory divisions BOEM and BSEE, the Debtor will provide a third party with access to documents related to decommissioning of the Gomez Properties. Claims arising from the rejection or abandonment must be filed on or before the date that is 30 days from June 13, 2013, Judge Isgur concluded. June 20 and 21 Sale Hearing Judge Isgur also entered an order on June 5, 2013, establishing June 20 and June 21, 2013 at 9:30 a.m. (Central Prevailing Time) as the hearing dates on ATP Oil & Gas Corporation's Deepwater Sale. Charles S. Kelley, Esq., of Mayer Brown LLP, represents ATP as counsel. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. ATP OIL: Gets Court Okay of Blackhill Employment Amendment ---------------------------------------------------------- ATP Oil & Gas Corporation obtained Court approval to amend and supplement the employment of Blackhill Partners, LLC, to include, among other things, the retention of John H. Homier as its general manager, and an increase in the monthly cap that is payable to Blackhill to $250,000, effective as of the date on and after the general manager began rendering services to the Debtor. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. B-SWDE4 LLC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: B-SWDE4, LLC 3455 Cliff Shadows Parkway, Suite 210 Las Vegas, NV 89129 Bankruptcy Case No.: 13-15085 Chapter 11 Petition Date: June 10, 2013 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Adam P. Bowler, Esq. BOGATZ & ASSOCIATES 3455 Cliff Shadows Pkwy, Ste 110 Las Vegas, NV 89129 Tel: (702) 776-7000 Fax: (702) 776-7900 E-mail: abowler@isbnv.com Scheduled Assets: $150,000 Scheduled Liabilities: $1,455,000 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/nvb13-15085.pdf The petition was signed by Thomas J. DeVore, COO of LEHM, LLC, manager. Affiliates that previously sought Chapter 11 protection: Petition Debtor Case No. Date ------ -------- ---- B-PWR, LLC 12-13827 03/03/12 C-SWDE393, LLC 11-21059 07/03/11 N-NWI4, LLC 13-13954 05/06/13 BELVEDERE LLC: Case Summary & 4 Unsecured Creditors --------------------------------------------------- Debtor: Belvedere, LLC P.O. Box 8147 Charlottesville, VA 22906 Bankruptcy Case No.: 13-61207 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court Western District of Virginia Debtor's Counsel: Douglas E. Little, Esq. 710 East High Street P.O. Box 254 Charlottesville, VA 22902 Tel: (434) 977-4500 Tel: (434) 293-5727 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/vawb13-61207.pdf The petition was signed by Charles W. Hurt, manager. BENESTANTE ENTERPRISES: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Benestante Enterprises, Inc. 59 Britania Drive East Amherst, NY 14051 Bankruptcy Case No.: 13-11562 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court Western District of New York Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Robert Macaluso, president. BIRKY FARMS: Case Summary & 13 Unsecured Creditors -------------------------------------------------- Debtor: Birky Farms, Inc. P.O. Box 2465 Champaign, IL 61825 Bankruptcy Case No.: 13-90766 Chapter 11 Petition Date: June 10, 2013 Court: United States Bankruptcy Court Central District of Illinois (Danville) Judge: Gerald D. Fines Debtor's Counsel: Nicolas Jon Boileau, Esq. ACTON & SNYDER, LLP 11 East North Street Danville, IL 61832 E-mail: nick.boileau@acton-snyder.com Scheduled Assets: $1,672,532 Scheduled Liabilities: $2,043,187 A copy of the Company's list of its 13 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ilcb13-90766.pdf The petition was signed by Ronald Watkins, sole shareholder/sole director. BUILDERS GROUP: Cupey Professional Mall Files in Puerto Rico ------------------------------------------------------------ Builders Group & Development Corp., doing business as Cupey Professional Mall, sought Chapter 11 protection (Bankr. D.P.R. Case No. 13-04867) on June 12 in San Juan, Puerto Rico, its home- town. The company sought bankruptcy on the eve of a foreclosure sale of its property. The Debtor estimated at least $10 million in assets and liabilities in its petition. The Debtor has tapped G A Carlo-Altieri & Associates as counsel and Jose M. Monge Robertin, CPA, as accountants. CASH STORE: Ontario Agency Starts Proceedings Over Payday Loans --------------------------------------------------------------- The Cash Store Financial Services Inc. on June 12 disclosed that the Ontario Ministry of Consumer Services has filed an application to start legal proceedings against the Company in relation to the Company's Basic line of credit product offering that was introduced on Feb. 1, 2013. In February 2013, the Company ceased offering payday loans in Ontario and began brokering the Basic line of credit as part of a wider initiative to offer a risk-based suite of Line of Credit products allowing customers to build credit and gain access to less costly funding. The Company has pending an application for judicial review, seeking a declaration that certain provisions of the regulations made under the Ontario Payday Loans Act are void and unenforceable, which application is scheduled to be heard on October 2, 2013. The new application by Ontario seeks a declaration that the Basic line of credit is subject to the Payday Loans Act and that the Company must obtain a broker license to offer this product, irrespective of the validity of the regulations. The Company remains committed to maintaining ongoing dialogue with the Ontario Ministry of Consumer Services with respect to its concerns and to making changes that further benefit consumers by helping them to build a better credit score, by providing them opportunities to reduce their short-term borrowing costs, and by allowing them greater flexibility than payday loans. Furthermore, the Company believes that its practice to offer the funding of advances by electronic methods provides a safer and friendlier environment for its customers and staff. However, the Company maintains that its operations in Ontario are in compliance with all applicable laws and intends to oppose the application by the Ontario Ministry of Consumer Services. The Company will continue to provide further updates on material developments to regulatory matters as they occur. About Cash Store Financial Headquartered in Edmonton, Alberta, 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. Cash Store Financial employs approximately 1,900 associates. * * * 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 believes 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. CASPIAN ENERGY: To Appeal Toronto Stock Exchange Share Delisting ---------------------------------------------------------------- The Toronto Stock Exchange on June 11 disclosed that it will delist Caspian Energy Inc.'s common shares effective at the close of market on July 11, 2013 due to the TSX Continued Listing Committee's view that Caspian was not meeting the continued listing requirements of the TSX. Caspian has provided notice to the TSX that it is appealing this decision and will submit written arguments to the TSX. The TSX has encouraged on-going dialogue as Caspian moves forward with its plans and Caspian intends to pursue this. Caspian also plans to make an application for listing on NEX, subject to the outcome of its appeal to the TSX. Caspian Energy Inc. is an oil and gas exploration company, operating in Kazakhstan where it has a number of targets in the highly prospective Aktobe Oblast of Western Kazakhstan. CASTLE MAPLEWOOD: Case Summary & 4 Unsecured Creditors ------------------------------------------------------ Debtor: Castle Maplewood, LLC, a Wisconsin Corporation 1400 E. Fox Lane Milwaukee, WI 53217 Bankruptcy Case No.: 13-27864 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court Eastern District of Wisconsin Debtor's Counsel: Jeffery D. Nordholm, Esq. STORM, BALGEMAN, MILLER & KLIPPEL, S.C. 1011 N. Mayfair Road, #200 Wauwatosa, WI 53226 Tel: (414) 453-8500 Scheduled Assets: $1,717,824 Scheduled Liabilities: $4,074,881 A copy of the Company's list of its largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wieb13-27864.pdf The petition was signed by William E. Eiseman, member. Related entities that previously sought Chapter 11 protection: Entity Case No. Petition Date ------ -------- ------------- William E. Eiseman & Nancy E. Eiseman 12-31537 08/01/12 CITICARE INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Citicare, Inc. 154 West 127th Street New York, NY 10027 Bankruptcy Case No.: 13-11902 Chapter 11 Petition Date: June 9, 2013 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Gabriel Del Virginia, Esq. LAW OFFICES OF GABRIEL DEL VIRGINIA 880 Third Avenue, 13th Floor New York, NY 10022 Tel: (212) 371-5478 Fax: (212) 371-0460 E-mail: gabriel.delvirginia@verizon.net Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/nysb13-11902.pdf The petition was signed by Silva Umukoro, president. CODA HOLDINGS: Unsecured Creditors Settle; Non-Auto Sale Approved ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Coda Holdings Inc. was authorized by the bankruptcy court on June 11 to sell the non-auto business to an insider group including an affiliate of Fortress Investment Group LLC under a contract with a $25 million sticker price. According to the report, the buyer will pay $1.7 million in cash, with the remainder paid with the loan financing the Chapter 11 case and pre-bankruptcy secured debt. The creditors' committee became supporters of the sale after negotiating concessions with the buyers designed to allow eventual implementation of a liquidating Chapter 11 plan. The report notes that the settlement provides for expenses of the Chapter 11 case and priority claims to be paid with the unused portion of the DIP loan the noteholders provided to finance the bankruptcy. From cash that remains, the first $500,000 goes to unsecured creditors. Additional cash will be split, with unsecured creditors receiving one-third and the purchasers two- thirds. The noteholders' deficiency claims won't share in the portion for unsecured creditors. The report relates that there is a companion sharing arrangement for proceeds from lawsuits. A Fortress affiliate holds $15.8 million of the notes to be exchanged for ownership and is one of the providers of bankruptcy financing. 2 More Bankrupt Affiliates As reported in yesterday's edition of the TCR, Miles Electric Vehicles Limited and Lio Energy Systems Holdings LLC sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11511 and 13- 1152) on June 11, 2013. Paul Lienert and Sakthi Prasad, writing for Reuters, reports that the bankruptcy flings is another sign of the challenges facing the "green" car industry. Consumers have been slow to gravitate to electric vehicles due to their high cost, lack of convenience and concerns about their driving range. Among the prominent "green" car makers that face an uncertain future is southern California-based Fisker Automotive Inc, which is seeking a buyer after hiring bankruptcy advisers. General Motors Co, Ford Motor Co, Nissan Motor Co, and Honda Motor Co, are among the global automakers that have invested heavily in electric vehicles, but sales have been slow, the report said. Miles Electric Vehicles LLC, a California-based company that is separate from, but related to, Coda, was founded in 2004 by entrepreneur Miles Rubin and was one of the first U.S. companies to import small, battery-powered electric cars from China, the report related. It has focused mainly on low-speed vehicles -- electric cars limited to speeds of 25 miles per hour and intended mainly for off-road use by universities and park services. 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. COMMODORE INT'L: 2nd Circ. Walls Off Favored Path to Coverage ------------------------------------------------------------- Bibeka Shrestha of BankruptcyLaw360 reported that the Second Circuit last week gutted a key precedent that policyholders have long used to argue that excess liability insurers should drop down and pay for losses not covered by lower-level carriers, drawing narrow boundaries around an influential 1928 decision in ruling against the officers of bankrupt technology company Commodore International Ltd. According to the report, ruling on a directors and officers coverage dispute, the federal appeals court threw into question the value of its long-standing precedent in Zeig v. Massachusetts Bonding & Insurance Co. About Commodore Commodore International Corporation (OTC:CDRL) -- http://www.commodorecorp.com/-- creates, develops and offers innovative digital media services, software and hardware. Innovations such as the CommodoreWorld(TM) multi media platform, the Gravel(TM) premium product line and the In Public MediaTower, open up new opportunities for the customization and sharing of media entertainment, such as music, movies and games. CIC's European operational office headquarters is in Baarn, The Netherlands and its U.S. headquarters is in Century City, California. CONQUEST SANTA FE: Plan Outline Hearing Continued to July 6 ----------------------------------------------------------- The adequacy hearing on the Disclosure Statement explaining Conquest Santa Fe, L.L.C.'s proposed Chapter 11 Plan has been continued to July 6, 2013, at 2:30 p.m., in Tucson, Arizona. The hearing was previously scheduled for May 2, 2013, and was then continued to June 4, 2013. The Debtor's First Amended Chapter 11 Plan and Disclosure Statement is dated May 20, 2013. Among other things, the Amended Disclosure Statement relates in depth description of the Debtor's assets and indebtedness. The Amended Disclosure Statement emphasizes the proposed treatment afforded to Class 6 Allowed General Unsecured Claims. Conquest's allowed general unsecured creditors will be paid their pro rata share of the initial distribution, in the total amount of $25,000 on the Effective Date. Beginning on the Effective Date, all unpaid amounts of Allowed Unsecured Claims will accrue interest at a rate equal to 2% per annum, or such rate as otherwise set by the Court. Starting from the second anniversary of the Effective Date, and each year thereafter until the Fifth Anniversary of the Effective Date, each claimant will receive an annual distribution, equal to their pro rata share of the greater of $25,000 or 25% of the Net Income of Conquest's Hotel property, after payment of all other Plan Payments. Conquest notes that if LPP Mortgage, Ltd., does not hold a general unsecured claim, it is estimated that all creditors will be paid within 4 years after the Effective Date. LPP is the successor lender to Conquest. If LPP is awarded a general unsecured claim, creditors will likely not be repaid in full. The amount of repayment will depend on the allowed amount of LPP's claim. Proposed treatment under the Plan for the other claim classes are essential the same as disclosed in the Original Chapter 11 Plan. As reported by The Troubled Company Reporter on April 8, 2013, the Plan provides that (1) the secured claim of LPP Mortgage, which the Debtor disputes, will be allowed on the amount determined by the Court, reduced by an offset of any damages awarded the Debtor by the Court, against LPP, and (2) prepetition equity holders will continue their ownership of the company post-confirmation. A copy of First Amended Disclosure Statement dated May 20 is available at http://bankrupt.com/misc/CONQUESTSTAFEds0520.PDF About Conquest Santa Fe Conquest Santa Fe, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-24937) in Tucson, Arizona, Nov. 16, 2012, estimating at least $10 million in assets and liabilities. Judge Eileen W. Hollowell presides over the case. Lowell E. Rothschild, Esq., Scott H. Gan, Esq., and Frederick J. Petersen, Esq., at Mesch, Clark & Rothschild, P.C., in Tucson, Arizona, serve as counsel to the Debtor. The Debtor owns and operates the 92-room Hyatt Place Hotel on Cerillos Road in Santa Fe, New Mexico, which opened for business on May 25, 2010. COUNTRYWIDE FIN'L: BofA Could Still Put Countrywide into Ch. 11 --------------------------------------------------------------- Karen Freifeld, writing for Reuters, reported that Bank of America Corp could put its Countrywide Financial unit into bankruptcy if it fails to win court approval for an $8.5 billion settlement with mortgage investors, a bank executive said on Monday. According to the report, Chief Risk Officer Terrence Laughlin was testifying at a hearing in New York state court on whether to approve the deal, which would settle claims by investors who said Countrywide misrepresented the mortgages underlying bonds they bought. During negotiations leading up to the June 2011 settlement, Bank of America threatened to put Countrywide, which it had rescued at the height of the financial crisis in 2008, into bankruptcy, the report said. That possibility was still on the table, Laughlin said on Monday. "One of the options that was available to us and continues to be available to us was to put Countrywide into bankruptcy," Laughlin said, the report related. Laughlin represented Bank of America at negotiations with institutional investors, including BlackRock Inc, MetLife Inc, and Allianz SE's Pacific Investment Management Co. American International Group Inc and a handful of other investors are challenging the deal, saying it offers only pennies on the dollar. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- originated, purchased, securitized, sold, and serviced residential and commercial loans. In mid-2008, Bank of America completed its purchase of Countrywide for $2.5 billion. The mortgage lender was originally priced at $4 billion, but the purchase price eventually was whittled down to $2.5 billion based on BofA's stock prices that fell over 40% since the time it agreed to buy the ailing lender. CROSSROAD STATION: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Crossroad Station, LLC 61295 Mountain Breezes Court Bend, OR 97707 Bankruptcy Case No.: 13-33636 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court District of Oregon Debtor's Counsel: Rex K. Daines, Esq. OLSEN DAINES P.O. Box 12829 3995 Hagers Grove Road Salem, OR 97309 Tel: (503) 362-9393 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by David Lester Howland, member. DETROIT, MI: Has 50/50 Bankruptcy Chance, Emergency Manager Says ---------------------------------------------------------------- Reuters reported that in his first public meeting, Detroit Emergency Manager Kevyn Orr said on Monday the city has a 50/50 chance of filing for bankruptcy. According to the report, speaking to an audience at Wayne State University, Orr delivered a message of fiscal discipline but offered few details of his plan for negotiating with Detroit's creditors, public employees or retirees. Detroit is believed to owe about $17 billion in debt and other liabilities, the report said. When he released his first official report on Detroit's finances last month, Orr said the city will have enough cash on hand to meet its existing obligations through at least the fourth quarter. Asked about the possibility of a bankruptcy filing, Orr said: "I'll take a dive and say 50/50," the report related. "And I will learn more in the coming weeks once we have discussions with stakeholders and creditors," the report further related. Orr, a bankruptcy lawyer who was appointed as Detroit's emergency financial manager in March, is scheduled to meet with the city's creditors on Friday, the report said. DEWEY STRIP: Files Bare-Bones Chapter 11 Petition in Delaware ------------------------------------------------------------- Las Vegas, Nevada-based Dewey Strip Holdings LLC and Las Vegas North Strip Holdings Syndications Group LLC sought Chapter 11 protection (Bankr. D. Del. Case Nos. 13-11479 and 13-11480) on June 7 in Delaware, without stating a reason. Each debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated at least $10 million in assets and at least $100 million in liabilities. The Debtors have tapped Neal Wolf & Associates, LLC and Womble Carlyle Sandridge & Rise, LLP as bankruptcy counsel. Martin H. Walrath, IV, vice-president of International Property Syndications, Ltd., as manager and sole member, signed the petitions. DEWEY STRIP: Case Summary & Largest Unsecured Creditors ------------------------------------------------------- Debtor: Dewey Strip Holdings, LLC 9440 W. Sahara Avenue, Suite 240 Las Vegas, NV 89117 Bankruptcy Case No.: 13-11479 Chapter 11 Petition Date: June 7, 2013 Court: U.S. Bankruptcy Court District of Delaware Debtors? Counsel: Steven K. Kortanek, Esq. WOMBLE CARLYLE SANDRIDGE & RICE, LLP 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801 Tel: (302) 252-4363 Fax: (302) 661-7728 E-mail: skortanek@wcsr.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $100,000,001 to $500,000,000 Affiliate that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Las Vegas North Strip Holdings Syndications Group, LLC 13-11480 fka Las Vegas North Strip Holdings, LLC Assets: $10,000,001 to $50,000,000 Debts: $100,000,001 to $500,000,000 The petitions were signed by Martin H. Walrath, IV, vice president of International Property Syndications, Ltd., sole member. A. Dewey Strip Holdings' List of Its Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Bank, National Loan $215,250,000 Association as Administrative Agent 299 South Main Street, 6th Floor Salt Lake City, UT 84111 Manufacturers and Traders Trust Loan $28,320,000 Company, as Collateral Trustee 1 M&T Plaza, 7th Floor Buffalo, NY 14203 Clark County Treasurer Special Assessments $3,461 Las Vegas Boulevard Fees Maintenance, File 57254 Los Angeles, CA 90074 Bank of the West Relationship Loan Unknown Manager City National Bank Loan Unknown KeyBank National Association Loan Unknown Pacific Capital Bank, N.A. Loan Unknown B. Las Vegas North Strip Holdings' List of Its Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Bank, National Loan $215,250,000 Association as Administrative Agent 299 South Main Street, 6th Floor Salt Lake City, UT 84111 Manufacturers and Traders Trust Loan $28,320,000 Company, as Collateral Trustee 1 M&T Plaza, 7th Floor Buffalo, NY 14203 Clark County Treasurer Special Assessments $2,200 Las Vegas Boulevard Fees Maintenance, File 57254 Los Angeles, CA 90074 Bank of the West Relationship Loan Unknown Manager City National Bank Loan Unknown KeyBank National Association Loan Unknown Pacific Capital Bank, N.A. Loan Unknown DOCTORS HOSPITAL: LaSalle Claim Should Be Offset v Nomura Proceeds ------------------------------------------------------------------ In the lawsuit, Gus A. Paloian, Chapter 11 Trustee of Doctors Hospital of Hyde Park, Inc., Counter-Claimant, v. LaSalle Bank National Association, f/k/a LaSalle National Bank, as Trustee for Certificate Holders of Asset Securitization Corporation Commercial Pass-Through Certificates, Series 1997, D5, by and through its servicer, Orix Capital Markets, LLC Counter-Claim Defendant, Adv. Proc. No. 11 A 01983 (Bankr. N.D. Ill.), the Chapter 11 Trustee summary judgment declaring and adjudging that the claim filed in the Doctors Hospital bankruptcy case by LaSalle Bank National Association -- f/k/a LaSalle National Bank as Trustee for Certificate Holders of Asset Securitization Corporation Commercial Mortgage Pass-Through Certificates, Series 1997, D5, by and through its Servicer, Orix Capital Markets, LLC -- is offset to the extent of recovery by it from a third party in assertedly related litigation. In 2000, LaSalle filed a $60 million claim against the Debtor's Estate for the principal balance and other amounts allegedly due on a loan guaranteed by the Debtor. At the same time LaSalle filed suit in a New York District Court to recover damages from Nomura Asset Capital Corporation, the party who had assigned the loan to LaSalle. That suit was based on provisions in the assignment contract. In July 2006, LaSalle received $67.5 million from Nomura in settlement of the New York Litigation. The debts claimed due in LaSalle's Proof of Claim are asserted in Count I of the Chapter 11 Trustee's Counterclaim to be the same as LaSalle has already recovered in its settlement with Nomura. The Chapter 11 Trustee argues that LaSalle's only damage sought in the New York case was thereby recovered in the litigation settlement, namely the principal balance, interest, and other amounts due on the mortgage loan. The Chapter 11 Trustee argues that LaSalle seeks to recover those very claims a second time by its pending claim against the bankruptcy estate. Bankruptcy Judge Jack B. Schmetterer agrees with the Chapter 11 Trustee. In a June 10, 2013 Opinion available at http://is.gd/bpBP1hfrom Leagle.com, Judge Schmetterer said, "a Summary Judgment Order will enter on Count I adjudging and declaring that proceeds of the Nomura Settlement are to be credited as an offset against the LaSalle Proof of Claim filed against the bankruptcy estate. Other Counts of the Counterclaim contesting certain elements of the Proof of Claim will be set for trial along with the Claim itself and further evidence will be taken to establish the net balance due on the Claim, if any, after crediting the offset." Doctors Hospital of Hyde Park, Inc., filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 00-11520) on April 17, 2000. On April 22, 2004, Gus A. Paloian, Esq., at Seyfarth Shaw LLP in Chicago, was appointed the Chapter 11 trustee for Doctors Hospital. DOLE FOOD: Moody's Alters Outlook to Negative After Buyout Bid -------------------------------------------------------------- Moody's affirmed the ratings Dole Food Company, Inc. -- including its B1 Corporate Family Rating -- and changed the outlook to negative from stable. The negative outlook reflects the uncertainty and event risk associated with Dole Chairman and CEO David Murdock's bid to take the company private for approximately $1.5 billion. The offer is subject to review and approval by both an independent committee of the board as well as shareholders. The following ratings are affirmed: Dole Food Company, Inc.: Corporate Family Rating of B1 Probability of Default Rating B1-PD $180 million 5-year senior secured revolving credit facility at Ba3 (LGD 3, 32%) $500 million 7-year term loan B at Ba3 (LGD 3, 31%) $125 million 7-year senior secured delayed draw term loan at Ba3 (LGD 3, 32%) Speculative Grade Liquidity Rating is SGL-2. The rating outlook is revised to negative from stable. Ratings Rationale: Dole's B1 CFR reflects the earnings and cash flow volatility inherent in its commodity-oriented business, its relatively high leverage, as well as the impact of uncontrollable factors such as weather and regulations on key products. Dole benefits from sizeable scale, with over $4.2 billion in proforma 2012 revenues, leading market positions in a number of categories, and good geographic diversity. Dole has some geographic diversity with 61% of its revenues from North America and 32% from Europe on a pro forma 2012 basis. The company's April 2013 sale of its worldwide packaged foods and Asia fresh produce businesses left the remaining company largely concentrated in fresh fruits and vegetables. The negative outlook reflects the uncertainty and event risk associated with Dole Chairman and CEO's David Murdock's offer to purchase the company for approximately $1.5 billion. Mr. Murdock and his affiliates currently own around 40% of Dole's common stock. The offer is subject to approval by an independent committee of the board and shareholders. If successful, this would represent the second time Murdock has taken Dole private, having previously taken the company private in 2003. A downgrade could be considered if the company is taken private in a leveraged transaction, or if for any other reason debt/EBITDA is sustained above 5.5 times. Ratings could also be downgraded if operating profits deteriorate or if the company engages in large debt funded acquisitions or shareholder returns. It is highly unlikely that Moody's would consider an upgrade of Dole's ratings until such time as questions concerning its ownership and the profile of its capital structure are resolved. Over time, ratings could be upgraded if Dole achieves material and sustained improvement in operating margins and is able to reduce leverage such that debt to EBITDA is sustained below 4 times, incorporating Moody's adjustments. Management's willingness to commit to such lower leverage levels would be an important consideration. Upward rating momentum would also require maintenance of a strong liquidity profile The principal methodology used in this rating was the Global Food - Protein and Agriculture Industry Methodology published in September 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Westlake Village, California, Dole Food Company, Inc. is a leading producer of fresh fruit and fresh vegetables. 2012 sales, proforma for the sale of its worldwide packaged foods and Asia fresh produce businesses were approximately $4.2 billion. Dole's chairman, David Murdock, and his affiliates beneficially own approximately 40% of the company's common stock. EASTMAN KODAK: UST, Tech Companies Have Plan Outline Objections --------------------------------------------------------------- Various companies filed objections to the disclosure statement explaining Eastman Kodak's Chapter 11 reorganization plan. Approval of the disclosure statement -- which outlines the terms of the Plan -- is a prerequisite for commencing the solicitation of votes and scheduling a confirmation hearing. The U.S. Trustee's Office, as well as various tech companies, including Oracle America Inc., LG Electronics Inc., Century Indemnity Co., IBM Corp., Fujifilm Corp., Intel Corp., Nikon Corp. and Hewlett-Packard Co. filed objections to the adequacy of the information in the disclosure statement. U.S. Trustee Tracy Hope Davis, the official charged with regulating bankruptcy cases in the New York region, questioned a provision of the restructuring plan, which releases third parties from various claims and bars creditors from suing them. Ms. Davis also questioned the basis for the so-called substantive consolidation, where creditors of the parent company and subsidiaries are treated the same. The U.S. trustee further said the plan outline should disclose whether insiders who provided services prior to approval of the restructuring plan would receive payment, and that Kodak should explain why such payment does not violate the federal U.S. bankruptcy law. Ms. Davis was referring to Section 503(c) that was added to the Bankruptcy Code in 2005 to limit executive compensation. "To the extent any such allowance or payment is contemplated under the plan, the disclosure statement should disclose the recipient or recipients and the amount due," the U.S. trustee said. Kodak retirees and creditors also criticized the company for giving insufficient information about many facets of its plan, including the termination of so-called nonqualified retirement plans, estimated recovery for some classes of creditors and the potential impact of the restructuring plan on their license agreements with Kodak. The tech companies, as well as an insurer, say that the Disclosure Statement does not include adequate information about Kodak's treatment of patent and other agreements under the plan, according to BankruptcyLaw360. BankruptcyData reports that, another objector, Dai Nippon Printing Co., asserts, "The Disclosure Statement inadequately discloses the treatment of DNP's Reserved Rights and Defenses in connection with the Sale and Plan, and, in particular, fails to disclose whether the DNP Contracts constitute 'Shared Contracts' under the KPP Purchase Agreement. Additionally, the proposed assumption and assignment provisions and sale free and clear provisions contained in the Approval Motion would unfairly limit DNP's ability to oppose an improper assignment of the agreements through an unnecessarily expedited process and other limitations in contravention of applicable law, including sections 361, 363(e), and 365(c) of the Bankruptcy Code and other defenses. The Approval Motion proposes inadequate procedures and timeframes for presenting oppositions and would prevent DNP from mounting a proper defense in an evidentiary hearing after necessary disclosures and discovery from the Debtors and the Purchaser." The hearing to consider approval of the disclosure statement was moved to June 25. Creditors and other parties have until June 21 to file objections. Kodak filed its restructuring plan on April 30, under which it offers full payment to priority claim holders, secured claim holders and second-lien creditors while it offers stock to general unsecured creditors. The company had said its shareholders will get nothing and their stock will be canceled when it emerges from bankruptcy protection. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a proposed reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. EASTMAN KODAK: Spectra Files Objection to KPP Settlement -------------------------------------------------------- Spectra Logic Corp. filed an objection to the proposed settlement between Eastman Kodak Co. and its U.K. pension fund that calls for the sale of its personalized imaging and document imaging businesses to the pension fund. Spectra filed the objection to clarify and ensure that Kodak may transfer no more than the rights it has under its service agreement with the company, and is not seeking authority to sell the equipment it does not own. "Kodak has possession of the equipment as a mere bailee under the service agreement, without power or right to sell, lease or encumber the equipment, which is not part of Kodak's bankruptcy estate," Spectra said. The companies are parties to a service agreement dated Nov. 29, 2011, under which Kodak provides maintenance services to purchasers of Spectra's products, using the latter's equipment and replacement parts to provide the necessary repair. Eric Johnson, Esq., at Bryan Cave HRO, in Denver, Colorado, and Michelle McMahon, Esq., at Bryan Cave LLP, in New York, represent Spectra Logic Corp. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a proposed reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. EXIDE TECHNOLOGIES: Meeting to Form Creditors' Panel on June 18 --------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on June 18, 2013, at 10:00 a.m.in the bankruptcy case of Exide Technologies. The meeting will be held at: DoubleTree Hotel Wilmington 700 King Street, Salon C Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002 and exited bankruptcy two years alter. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide Technologies returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick And Company Inc. as public relations consultant and GCG as claims agent. The Debtor disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. The Company has also established two separate toll-free information lines: one for U.S. suppliers, 888- 985-9831 and another for other interested parties, 855-291-0287. FANNIE MAE: Shareholders Challenge U.S. Takeover in Suit -------------------------------------------------------- Andrew Zajac & Clea Benson, writing for Bloomberg News, reported that Fannie Mae and Freddie Mac shareholders sued the U.S., alleging that the 2008 takeover of the housing lending giants was illegal and cost investors billions of dollars. According to the report, the takeover of the mortgage companies by the Federal Housing Finance Agency, "while beneficial to the economic welfare of the nation, destroyed the value of Fannie Mae's and Freddie Mac's common and preferred stock and trampled the private ownership rights" of shareholders, according to the complaint filed yesterday in the U.S. Court of Federal Claims in Washington. The shareholders' complaint seeking $41 billion in damages was filed by the Seattle-based law firm Hagens Berman Sobol Shapiro LLP, a lead counsel in class-action lawsuits including those against Toyota Motor Corp. over the unexpected sudden acceleration of vehicles, the report said. Investors in Fannie Mae and Freddie Mac have taken a renewed interest in the companies' future now that they have started posting record profits as the housing market rebounds. Fannie Mae had its best year ever in 2012, reporting net income of $17.2 billion for 2012, outpacing S&P 500 companies such as Wal-Mart Stores Inc., General Electric Co., and Berkshire Hathaway Inc., according to data compiled by Bloomberg. Freddie Mac, the smaller of the two, reported earning $11 billion last year. Both have said they expect to remain profitable. The case is is Washington Federal v. U.S., 13-cv-00385, U.S. Court of Federal Claims (Washington). FLEX FINANCIAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Flex Financial Holding Company 6501 S. Frontage Road Merriam, KS 66202 Bankruptcy Case No.: 13-21483 Chapter 11 Petition Date: June 10, 2013 Court: United States Bankruptcy Court District of Kansas (Kansas City) Judge: Dale L. Somers Debtor's Counsel: Jonathan A. Margolies, Esq. MCDOWELL RICE SMITH & BUCHANAN 605 W 47th Street Kansas City, MO 64112 Tel: (816) 753-5400 Fax: (816) 753-9996 E-mail: jmargolies@mcdowellrice.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ksb13-21483.pdf The petition was signed by Wade C. Ferguson, CEO. FOUR SEASONS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Four Seasons 66B Investment, Corp. 1600 Ponce De Leon Boulevard, Suite 1204 Coral Gables, FL 33134 Bankruptcy Case No.: 13-23481 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court Southern District of Florida Debtor's Counsel: Cesar J. Dominguez, Esq. LAW OFFICES OF DOMINGUEZ & ASSOCIATES, P.A. 201 S. Biscayne Boulevard, 28th Floor Miami, FL 33131 Tel: (305) 446-7255 Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by David Gonzalez-Escudero, president. FREDDIE MAC: Shareholders Challenge U.S. Takeover in Suit --------------------------------------------------------- Andrew Zajac & Clea Benson, writing for Bloomberg News, reported that Fannie Mae and Freddie Mac shareholders sued the U.S., alleging that the 2008 takeover of the housing lending giants was illegal and cost investors billions of dollars. According to the report, the takeover of the mortgage companies by the Federal Housing Finance Agency, "while beneficial to the economic welfare of the nation, destroyed the value of Fannie Mae's and Freddie Mac's common and preferred stock and trampled the private ownership rights" of shareholders, according to the complaint filed yesterday in the U.S. Court of Federal Claims in Washington. The shareholders' complaint seeking $41 billion in damages was filed by the Seattle-based law firm Hagens Berman Sobol Shapiro LLP, a lead counsel in class-action lawsuits including those against Toyota Motor Corp. over the unexpected sudden acceleration of vehicles, the report said. Investors in Fannie Mae and Freddie Mac have taken a renewed interest in the companies' future now that they have started posting record profits as the housing market rebounds. Fannie Mae had its best year ever in 2012, reporting net income of $17.2 billion for 2012, outpacing S&P 500 companies such as Wal-Mart Stores Inc., General Electric Co., and Berkshire Hathaway Inc., according to data compiled by Bloomberg. Freddie Mac, the smaller of the two, reported earning $11 billion last year. Both have said they expect to remain profitable. The case is is Washington Federal v. U.S., 13-cv-00385, U.S. Court of Federal Claims (Washington). GAME TRADING: Stipulation With Baltimore County Revised ------------------------------------------------------- Bankruptcy Judge Nancy V. Alquist signed off on a Stipulation and Consent Order between Peter Chadwick, in his capacity as Responsible Officer for the estates of Game Trading Technologies, Inc. and Gamers Factory, Inc.; and Baltimore County, Maryland, pursuant to which the parties agree to modify a prior settlement of the County's claims against the Debtors' estate. The parties agree that Baltimore County will have no further claims in the bankruptcy cases with respect to the tax periods asserted in the First Amended Claim (July 1, 2011 through June 30, 2012) and the Motion to Amend (July 1, 2012 through June 30, 2013). A copy of the June 11, 2013 Stipulation and Consent Order is available at http://is.gd/ppbWxGfrom Leagle.com. Baltimore County is represented by Bambi Glenn, Esq. -- bglenn@baltimorecountymd.gov About Game Trading Technologies Game Trading Technologies Inc., fka City Language Exchange, Inc., (OTC BB: GMTD) filed for Chapter 11 protection (Bankr. D. Md. Lead Case No. 12-11519) on Jan. 30, 2012. James Edward Van Horn, Jr., Esq., at McGuirewoods LLP, represents the Debtor. WeinsweigAdvisors LLC's Marc Weinsweig serves as chief restructuring officer. When it filed for bankruptcy, Game Trading estimated $0 to $50,000 in assets and $1 million to $10 million in debts. Affiliate Gamers Factory, Inc., filed a separate petition for Chapter 11 relief (Bankr. D. Md. Case No. 12-11522) on the same day, listing $1 million to $10 million in both assets and debts. An Official Committee of Unsecured Creditors has been appointed in the case. The panel is represented by Gary H. Leibowitz, Esq., and G. David Dean, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A. On Feb. 8, 2012, the Debtors filed their proposed plan of reorganization and motion to establish bidding procedures for and sale of substantially all of the companies' assets. Pursuant to the sale and bid procedures motion, the companies seek to sell, subject to higher and better offers and bankruptcy Court approval, substantially all of their assets to two stalking horse bidders, DK Trading Partners, LLC, and Mantomi Sales, LLC, respectively. Mantomi Sales, LLC, is 100% owned by Todd Hayes, the Debtors' president and CEO. Pursuant to the Mantomi Sales LLC asset purchase agreement, (i) Mr. Hays was required to resign as President and CEO of the companies on or before the execution of the Mantomi APA; (ii) the companies' Chief Restructuring Officer may employ Mr. Hays as an independent consultant to the companies in matters unrelated to the sale; and (iii) nothing in the Mantomi APA constitutes or will be deemed a breach of the employment agreement between Mr. Hays and the companies. Counsel for the Official Committee of Unsecured Creditors are Gary H. Leibowitz, Esq., G. David Dean, Esq., and Saul A. Ehrenpreis, Esq. -- sehrenpreis@coleschotz.com -- at Cole, Schotz, Meisel, Forman & Leonard, P.A. GENERAL STEEL: Incurs $42K Net Loss in March 31 Quarter -------------------------------------------------------- General Steel Holdings, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $42,129 on $780,683 of total sales for the three months ended June 30, 2012, compared with a net loss of $35,593 on $1.1 million of total sales for the three months ended June 30, 2011. The Company reported a net loss of $97,877 on $1.4 million of total sales for the six months ended June 30, 2012, compared with a net loss of $49,164 on $1.8 million of total sales for the six months ended June 30, 2011. The Company's balance sheet at June 30, 2012, showed $2.8 million in total assets, $3.1 million in total liabilities, and a stockholders' deficit of $302,050. The Company had an accumulated deficit of $290,244 and a shareholders' deficit of $302,050 as of June 30, 2012. A copy of the Form 10-Q is available at http://is.gd/ABQK77 General Steel Holdings, Inc., was incorporated on Aug. 5, 2002, in the State of Nevada. The Company is headquartered in Beijing, China and operates a portfolio of steel companies serving various industries in the People's Republic of China. GENWORTH WEALTH: Moody's Assigns B2 Ratings to New $255MM Debt -------------------------------------------------------------- Moody's Investors Service has assigned a B2 corporate family rating to Genworth Wealth Management. Moody's has also assigned B2 ratings to a $25 million senior secured revolving credit facility and a $230 million senior secured first lien term loan. The borrowers of the debt are AqGen Liberty Management I and AqGen Liberty Management II. The credit facilities will be used to partially finance the previously announced $413 million leveraged buyout of Genworth Wealth Management by two private sponsors -- Genstar Capital and Acquiline Capital Partners from Genworth Financial. The outlook on all ratings is stable. Genworth Wealth Management is a vertically integrated product provider and platform in the wealth management industry consisting of two operating businesses, Genworth Financial Wealth Management ("GFWM") and Altegris. GFWM generates fee revenue by providing investment management and back-office solutions to financial advisors. Altegris generates fee revenue by providing packaged access to leading alternative investment managers to financial advisors, high-net worth and institutional investors. Ratings Rationale The B2 corporate family rating reflects GFWM's and Altegris' established positions as providers of investment product and services to the wealth management industry. The rating is also supported by the strong cash flow generation and stability of GFWM's turnkey asset management platform (TAMP) driven by consistently high advisor retention rates. While industry fundamentals point to favorable growth dynamics from increased outsourcing of key investment management functions by financial advisors and increasing allocation to alternatives, Moody's believes GFWM's and Altegris' growth trajectories will continue to be challenged by net outflows and increasing competitive dynamics in the TAMP and liquid alternative markets. Persistent net outflows, while showing some near-term improvement, from GFWM's GFAM franchise have stalled growth at GFWM and Moody's expects the headwind from GFAM will remain over the near to medium term. Growth expectations for Altegris incorporate Moody's less sanguine growth outlook for the retail alternatives market based on these products limited track records, potential for suitability risk and the flood of new products entering the market. Moody's believes success for Altegris in the retail alternative mutual fund market will be much more dependent on relative investment performance and investor preferences and less dependent on providing access to managers. Pro forma leverage at 3.8x is modest for a leveraged buyout transaction but still introduces high leverage into the capital structure of Genworth Wealth Management and reduces the firm's financial flexibility. Pro-forma interest coverage is healthy at roughly 6x. Moody's expects the company will use free cash flow for reinvestment in the business for growth resulting in modest deleveraging. Required debt amortization is minimal but the senior secured credit facility contains covenants to capture excess cash flow and proceeds from asset sales. The implementation of a new compensation structure at Altegris that incorporates higher proportions of variable compensation and incremental benefits from near term cost savings may help offset near-term profit pressures driven by elevated outflows from higher margin, higher fee proprietary products and pricing changes at GFWM. Steady improvement in debt service ratios and debt reduction will be a principal driving factor behind the potential for future upgrades. The stable outlook reflects the strong cash flow generation of GFWM's TAMP and a leverage ratio that compares favorably to other B2 rated companies and an expectation for gradual improvement in the company's debt metrics from the recapture of excess cash flows. The company's ratings and/or outlook could see upward pressure based on evidence of franchise growth supported by sustained progress towards: growing the base of platform-focused advisors versus product-focused advisors, increasing penetration of higher growth RIA channel, stabilizing outflows from GFWM's GFAM business, Altegris' converting its placement on major wirehouse platforms into consistent sales and deleveraging below 3.3x. The ratings could face downward pressure if Moody's sees a sharp decline in advisor retention rates, sustained underperformance of key proprietary investment products and reduction in retail investor appetite for alternative investment products. The following ratings were assigned: Genworth Wealth Management: Corporate Family Rating -- B2 AqGen Liberty Management I/AcGen Liberty Management II, as co- borrowers: $25 million Senior Secured First Lien revolving credit facility due 2018 -- B2 $230 million Senior Secured First Lien Term Loan due 2020 -- B2 The principal methodology used in rating Genworth Wealth Management was Moody's Global Rating Methodology for Asset Management Firms published on 1 October 2007. Genworth Wealth Management is a provider of investment products and support services to the wealth management industry with approximately $23.5 billion in assets under management. GIBSON ENERGY: S&P Raises CCR to 'BB'; Outlook Stable ----------------------------------------------------- Standard & Poor's Ratings Services said it raised its long-term corporate credit and senior secured debt ratings on Gibson Energy ULC to 'BB' from 'BB-'. The outlook is stable. The recovery rating on Gibson's revolving credit facility and term loan B is unchanged at '3'. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery in a default scenario. "The upgrade reflects our expectation of stable credit metrics over the next two years, an increasing proportion of lower risk cash flows associated with terminal and pipeline growth, and increasing confidence of successful integration of OMNI Energy Services Corp.," said Standard & Poor's credit analyst Gerry Hannochko. The ratings on Gibson reflect Standard & Poor's view of the company's "fair" business risk profile and "significant" financial risk profile, as S&P's criteria define these terms. The ratings incorporates S&P's assessment of the weaknesses associated with the company's moderate exposure to commodity prices, high fixed charges, and remaining integration risk associated with the OMNI acquisition. S&P believes the company's diversified energy infrastructure assets, which provides operational efficiency and cross-selling opportunities, and the rising contribution of low volatility contracted cash flows associated with the terminals and pipelines segment somewhat offset the weaknesses. Gibson is a midstream energy company operating in North America, mostly in western Canada and U.S. oil plays. It provides transport, storage, and distribution of crude and associated products, and provides crude transportation through trucking in the U.S. The company operates in five segments: terminals and pipelines, truck transportation, propane and natural gas liquids (NGL) marketing and distribution, processing and well-site fluid, and marketing of crude and refined products. It recently acquired OMNI, a U.S. environmental and production service provider, which will create a new business segment called Environmental Services. As of March 31, 2013, Gibson had adjusted total debt of about C$850 million, with most of the adjustments (about C$230 million) due to operating leases and asset retirement obligations. Gibson's fair business risk profile reflects S&P's view of its integrated business segments and our expectation of improved cash flow from growing NAM crude production. Offsetting these strengths are weaknesses associated with the company's moderate commodity exposure and associated cash flow volatility, and integration risk associated with OMNI. S&P believes Gibson's strategic focus is on strengthening its position along the energy value chain by offering incremental services in the midstream segments and developing more integrated solutions. Gibson has a history of integrating its operations successfully, but S&P believes that there is some level of integration risk remaining with the C$440 million OMNI acquisition. OMNI presents service offerings that provide Gibson with cross-selling opportunities, but that are different from Gibson's existing major operations. The company will use OMNI's operations to strengthen its foothold in the U.S. Therefore, S&P believes there is some execution risk of Gibson integrating OMNI and establishing the cross-selling opportunities successfully. The stable outlook reflects Standard & Poor's view that Gibson will maintain a stable debt-to-EBITDA profile in the 2.5x-3.0x range over S&P's 18-month rating horizon. S&P expects that the company will continue to expand its more stable terminals and pipeline business faster than the other segments through its high proportion of capital allocation to that segment. S&P assumes that Gibson will maintain strong liquidity through this period. An upgrade could occur if the business risk profile improves to "satisfactory" from "fair", which could be indicative of a larger proportion (greater than 35% of consolidated) of long term contracted, fee for service cash flows coming from the terminal and pipeline business. Additionally, an upgrade could occur if the financial risk profile was changed to intermediate from significant, which could occur if forecasted debt to EBITDA is maintained at around 2.5x. A downgrade could occur if debt to EBITDA deteriorates above the 4x area, or if the company embarks on more aggressive financing of growth and acquisition initiatives. GMX RESOURCES: Oil and Gas Auction Set for Aug. 28 -------------------------------------------------- GMX Resources Inc. won approval to put its oil-and-gas business on the auction block in August, with a group of noteholders opening the bidding with a $338 million offer. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that GMX Resources will sell the assets at auction on Aug. 28, under procedures approved this week by the U.S. Bankruptcy Court in Oklahoma City. According to the report, the auction will determine if there is a cash buyer with an offer high enough to discourage secured lenders from buying the property using their $338 million in first-lien notes rather than cash. Bids are due Aug. 21. A hearing to approve the sale is set for Sept. 10. The report notes that the assets will be offered for sale in bulk and piecemeal. Therefore, bidders can make offers for individual assets or groups of assets. 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. 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. GOLD ORGANIZATION: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: The Gold Organization, LLC 1150 West St. Georges Avenue Linden, NJ 07036 Bankruptcy Case No.: 13-22625 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court District of New Jersey Debtor's Counsel: Gary S. Jacobson, Esq. HEROLD LAW, P.A. 25 Independence Boulevard Warren, NJ 07059-6747 Tel: (908) 647-1022 Fax: (908) 647-7721 E-mail: gjacobson@heroldlaw.com Scheduled Assets: $7,252,000 Scheduled Liabilities: $5,136,374 A copy of the Company's list of its 19 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb13-22625.pdf The petition was signed by Eytan Gold, managing member. GREEN ISLE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Green Isle Inn, Inc. dba Casa Mathiesen Se Coqui Inn Mango's Inn Calle I Num 36 Villamar Isla Verde Carolina, PR 00979 Bankruptcy Case No.: 13-04653 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Judge: Enrique S. Lamoutte Inclan Debtor's Counsel: Carlos J. Nazario Diaz, Esq. NAZARIO DIAZ & ASSOC. 97 Esteban Padilla Bayamon, PR 00959 Tel: (787) 787-5780 Fax: (787) 786-3468 E-mail: starpropertiescorp@gmail.com Scheduled Assets: $1,778,500 Scheduled Liabilities: $8,128,660 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/prb13-04653.pdf The petition was signed by Henry Rick Orasi, president. H&M OIL: Chapter 11 Cases Converted to Chapter 7 ------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, signed off an order converting H&M Oil & Gas, LLC, et al.'s Chapter 11 cases to cases under Chapter 7 of the Bankruptcy Code. The United States Trustee is directed to immediately appoint a Chapter 7 trustee. About H&M Oil H&M Oil & Gas, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-32785) in its hometown Dallas on April 30, 2012. Another entity, Anglo-American Petroleum Corp. (Case No. 12-32786) simultaneously filed for Chapter 11. H&M Oil disclosed $297,119,773 in assets and $77,463,479 in liabilities as of the Chapter 11 filing. H&M Oil & Gas is an oil and gas production and development company. H&M, through its operating company, H&M Resources LLC, is focused on developing its leases in the Permian basin and Texas panhandle. Dallas, Texas-based Anglo-American Petroleum -- http://www.angloamericanpetroleum.com/-- is the holding corporation for H&M Oil. Judge Barbara J. Houser presides over the case. The Debtors are represented by Keith William Harvey, Esq., at Anderson Tobin PLLC, in Dallas. Lain Faulkner & Co., PC, serves as financial adviser. The Debtor filed a Plan in October 2012, designed to pay lender Prospect Capital Corp. by delivery of crude oil rather than cash. In November 2012, the bankruptcy judge approved the appointment of a trustee to replace management. The advent of a trustee automatically allows creditors to file reorganization plans. In addition to seeking appointment of a trustee, Prospect had been seeking permission to file a plan competing with H&M's. Douglas J. Brinkley, of The Claro Group, LLC, has been appointed as the Chapter 11 trustee. The U.S. Trustee selected Mr. Brinkley following after consultation with Keith Harvey, counsel for the Debtors, and Jason Brookner, counsel for the creditor. HASH LANE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Hash Lane Holdings, LLC dba Lakeridge Golf Course fka Lakeridge Golf Course Group, LLC P.O. Box 10578 Reno, NV 89519 Bankruptcy Case No.: 13-51138 Affiliate that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Club Lakeridge, Inc. 13-51140 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court District of Nevada Debtors' Counsel: Alan R. Smith, Esq. THE LAW OFFICES OF ALAN R. SMITH 505 Ridge Street Reno, NV 89501-1719 Tel: (775) 786-4579 Fax: (775) 786-3066 E-mail: mail@asmithlaw.com Hash Lane' Assets: $5,206,026 Hash Lane's Liabilities: $6,299,064 Club Lakeridge's Assets: $1,000,250 Club Lakeridge's Liabilities: $2,143,778 The petitions were signed by Byron Topol and Nathan L. Topol, managing member and president. A. A copy of Hash Lane Holdings' list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb13-51138.pdf B. A copy of Club Lakeridge's list of six unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb13-51140.pdf Affiliates that previously sought Chapter 11 protection: Entity Case No. Petition Date ------ -------- ------------- Harborside Investments South, Ltd. 12-50817 04/11/12 Lakeridge Centre Office Comple, L.P. 10-53612 09/08/10 Nathan L. Topol 12-51014 05/01/12 Tee Investment Company, LP 11-50615 03/01/11 West Shore Resort Properties, LLC 10-50506 02/22/10 HIGHWAY TECHNOLOGIES: Cleared to Auction Two Branches ----------------------------------------------------- Marie Beaudette writing for Dow Jones' DBR Small Cap reports that a bankruptcy judge cleared Highway Technologies Inc., which abruptly shut down on May 17, to auction its branches in Minnesota and Montana later this month. Highway Technologies has agreements to sell two of its branches for about $5.25 million. The Debtor is seeking to sell its Minnesota and Montana branches, for $2.5 million to SSJS Inc. and $2.7 million to Mountain West Holding Co. LLC, respectively. The Debtor is winding down its business after a botched sale brought its operations to a halt. 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. Attorneys at Pachulski Stang Ziehl & Jones LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hilllman, Esq., at Schulte Roth & Zabel, in New York. The company's balance sheet as of March 31, 2013, showed $55 million in total assets and $102 million in liabilities. HJ HEINZ: Fitch Withdraws Ratings on Acquisition Deal Completion ---------------------------------------------------------------- Fitch Ratings has withdrawn the following ratings upon the close of Berkshire Hathaway (Berkshire) and 3G Capital's (3G) acquisition of the H.J. Heinz Company (Heinz) on June 7, 2013. H.J. Heinz Co. -- Senior unsecured bank facilities 'BB+'; -- Short-term IDR 'B'. -- Commercial paper 'B'. H.J. Heinz Finance Co. -- Senior Unsecured bank 'BB+' (as co-borrower); -- Short-term IDR 'B'; -- Commercial paper 'B'. Concurrently, Fitch has upgraded the ratings of H.J. Heinz UK Finance Plc's 6.25% notes due 2030 to 'BB' from 'BB-'. These notes became equally and ratably secured with the 2nd lien notes at the closing of the transaction. Fitch has also downgraded H.J. Heinz Finance Co.'s Series B preferred stock to 'B' from 'BB-', due to its subordination in the capital structure. These securities are expected to be redeemed on July 15, 2013. Hawk Acquisition Sub., Inc. was merged into H.J. Heinz Co. at closing. The current ratings of Heinz, Hawk Acquisition Holding Corp. and its subsidiaries are as follows (taking into account the actions above): Hawk Acquisition Holding Corp. (Parent) -- Long-term Issuer Default Rating (IDR) 'BB-'. H.J. Heinz Co. -- Long-term IDR 'BB-'; -- Secured credit facility 'BB+'; -- 2nd lien notes 'BB'; -- Senior unsecured notes 'BB-'. H.J. Heinz Finance Co. -- Long-term IDR 'BB-'; -- Senior unsecured notes BB-; -- Series B preferred stock 'B'. H.J. Heinz Finance UK Plc. -- Long-term IDR 'BB-'; -- 2nd lien notes 'BB'. The Rating Outlook is Stable. The transaction was valued at $28 billion, including the assumption of $5.3 billion of debt with hedge accounting adjustments at Jan. 27, 2013, and represents roughly 13.0x Heinz's latest 12 months (LTM) EBITDA of $2.2 billion. The debt financing for the buyout included $9.5 billion of first-priority U.S. term loans due 2019 and 2020, a $2 billion first-priority revolver (undrawn at closing), and $3.1 billion of second-lien notes due 2020. Berkshire invested $12.25 billion of equity, inclusive of $8 billion of preferred equity with warrants, and 3G invested $4.25 billion of common equity. Existing debt that was not refinanced as part of this transaction (rollover notes) includes: $231 million of 6.375% notes due 2028, $202 million of 6.25% notes due 2030, $435 million of 6.75% notes due 2032, and $931 million of 7.125% notes due 2039. A portion of the Change of Control Notes remain outstanding. As noted above, the $350 million series B preferred stock will be redeemed in July 2013. Heinz's $500 million senior unsecured notes due in July 2013 will also be repaid by maturity. Key Rating Drivers: The ratings reflect Heinz's highly leveraged capital structure post buyout balanced with its low business risk, above-average revenue growth, potentially higher operating income as a private firm, and consistent cash flow generation. 3G has proven its ability to increase operating profitability and de-lever acquired firms. Anheuser Busch InBev NV/SA and Burger King Worldwide, Inc. both experienced significant margin expansion and steady deleveraging after being acquired by 3G. Fitch expects Heinz's operating EBITDA growth to exceed the firm's 4%-6% historical average under its new ownership structure due to the combination of mid-single-digit organic revenue growth and cost reductions. Fitch also believes Heinz is capable of generating average annual free cash flow (FCF) of more than $200 million over the two years following the buyout, despite a substantial increase in interest expense and $720 million of annual preferred dividends. Annual operating cash flow and FCF averaged $1.2 billion and over $425 million, respectively over the past 10 years. Heinz's low business risk and the stability of its operations have been demonstrated over time as the firm's revenue and operating earnings held up well during the recent global economic slowdown. Even with an approximate 30% exposure to pressured European consumers, the firm has continued to take pricing and grow volumes. Fitch expects that growth in emerging markets will continue to outpace that of developed markets with opportunities to further expand Heinz's core portfolio of meals/snacks, ketchup/sauces, and infant nutrition around the globe in both retail and foodservice. Integrated into the ratings is Fitch's treatment of the $8 billion 9% cumulative perpetual preferred stock (preferred) held by Berkshire. Fitch has classified 50% of the principal as equity and 50% as debt. The terms of the preferred allow for dividend deferral and provide incentives to issue common equity, which reduces the company's overall financial risk. Pro forma total debt adjusted for the equity treatment of these hybrid securities is approximately $18 billion. Total debt with equity credit-to-operating EBITDA exceeds 7.5x, up from roughly $5 billion debt and 2.4x for the LTM period ended Jan. 27, 2013. Fitch anticipates that total debt with equity credit-to-operating EBITDA can decline to below 6.0x within two to three years of the buyout based on significant anticipated operating earnings growth and modest debt reduction. The ratings also incorporate Heinz's product and geographic diversification and leading market share positions in major product categories. Ketchup and sauces represented 45% of fiscal 2012 sales while meals and snacks represented 38%, infant nutrition 11%, and other products the remaining 6%. Heinz generates about two-thirds of its sales outside the U.S., with emerging markets representing nearly 25% of the firm's $11.6 billion of revenue. For the nine months ended Jan. 27, 2013, organic revenue growth was 3.7% as a result of 2.1% pricing and 1.6% volume growth. Volume gains in emerging markets were partially offset by declines in Continental Europe, Australia, and Italy, while pricing increased across developing markets as well as in Continental Europe and U.S. food service. Reported operating income increased 9.4% to $1.28 billion for the nine-month period due to benefits of higher pricing, volume, and productivity initiatives. Liquidity, Maturities, Covenants, and Collateral: Heinz has historically maintained high levels of liquidity with year-end cash averaging over $1 billion since 2011. Liquidity and on-going financial flexibility are expected to remain adequate despite considerable debt levels following the buyout. Heinz will maintain a $2 billion revolver and is expected to continue to hold high cash balances as cash flow generation remains robust. Fitch views the ability to defer $720 million in preferred dividends as being a potential lever equity partners could pull should there be an unanticipated deterioration in cash flow and/or liquidity constraints. Berkshire's 50% common equity stake supports this view. Solid FCF generation will be enabled by EBITDA growth and the potential for additional working capital improvement. The $720 preferred dividend is a moderately incremental replacement to the $650 million of common dividends distributed by Heinz prior to the buyout. Capital expenditures should decline modestly as spending behind Heinz's Project Keystone, a multi-year program to drive productivity and standardize systems, comes to an end. Maturities will be modest in the intermediate term, eliminating refinancing risk should market conditions worsen. Rollover notes are long dated and debt incurred for the buyout has maturities six to seven years out. Term loan amortization is manageable at 1% annually. In terms of collateral, the first-priority debt is secured by a perfected first-priority security interest in substantially all tangible and intangible property with carve-outs that include Principal Property as defined by indentures governing rollover notes. Based on Fitch's interpretation this includes the gross book value of certain manufacturing, processing plants or warehouses located in the U.S. Fitch views the value of the collateral as meaningful as it is substantially based on the value of Heinz's trademarks, which include namesake Heinz, Ore-Ida, and Smart Ones. Collateral for junior-lien debt will include a second- priority security interest in assets securing the first-priority debt. Rating Sensitivities: An upgrade of Heinz's ratings is not anticipated in the near term. However, faster than expected deleveraging, accelerated top-line growth, and greater than projected cost reductions would be viewed positively making upward migration in ratings possible. A commitment to operating with total debt with equity credit-to- operating EBITDA below 5.0x and continued generation of meaningful FCF would also be a prerequisite for any upgrades. Further downgrades could occur if deleveraging is slower than Fitch expected or total debt with equity credit-to-operating EBITDA is maintained in the 7.0x range. Failure to achieve cost reduction targets, weakening organic growth or margin contraction, or increased debt levels could trigger adverse rating actions. The inability to generate FCF, or a sustained loss of market share in core product categories would also be viewed negatively. HOME LOAN: S&P Assigns 'B+' ICR & Rates $350MM Sr. Sec. Loan 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B+' issuer credit rating to Home Loan Servicing Solutions Ltd. (HLSS). The outlook is stable. S&P also assigned a 'BB-' rating on HLSS's proposed issuance of a $350 million senior secured term loan. Cayman Islands-headquartered HLSS is a publicly traded company that invests in mortgage servicing rights (MSRs) or rights to MSRs. As of March 31, 2013, the company held the rights to MSRs for $92.5 billion of unpaid principal balance (UPB). It does not, however, service any loans, originate loans, or invest in underlying mortgages. The company purchases the rights to service residential mortgages from Ocwen Financial Corporation (Ocwen), a large player in the mortgage-servicing industry that spearheaded the founding of HLSS. S&P largely views HLSS as a funding vehicle for Ocwen. "The firm's close relationship with Ocwen will be a negative ratings factor unless the firm diversifies its relationships to include other servicing platforms," said Standard & Poor's credit analyst Stephen Lynch. Although the relationship with Ocwen provides HLSS with a steady stream of assets to purchase, HLSS relies on Ocwen's operational effectiveness and financial health as a going concern. If Ocwen were to come under financial duress, HLSS could be forced to find a new subservicer for its assets, or sell its servicing assets and dissolve the company. S&P's rating on HLSS balances its limited business model against its conservative financial position. S&P believes HLSS is likely to generate strong profits over the next few years on the back of robust demand for high-touch servicing. Over time, however, cash flows could subside as the foreclosure wave abates. "The stable outlook reflects S&P's expectation that HLSS will expand substantially but continue to operate with low leverage and little debt that will mature subsequent to a decline in high-touch servicing opportunities," said Mr. Lynch. "We also expect the company to generate strong profits." S&P could downgrade HLSS if its leverage (which we measure as debt/equity outside of securitizations) rose above 2.0x. S&P could also downgrade the company if operational problems at Ocwen or a reduction in its servicing portfolio lead to losses over multiple quarters. Although S&P's forecast measure of leverage remains good for the rating--currently below 1x--an upgrade is unlikely over the next 18 months or until management establishes a longer track record and slows its rate of growth. S&P is unlikely to upgrade HLSS while the company grows at this rapid pace, given S&P's concern about its monoline business and dependence on Ocwen. HOWREY LLP: Creditors May Subpoena Arent Fox, Arnold & Porter ------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that a California bankruptcy judge gave Howrey LLP creditors the go-ahead to subpoena documents from Arent Fox LLP, Arnold & Porter LLP and Snell & Wilmer LLP surrounding the transfer of Howrey's former client matters to the firms. According to the report, U.S. Bankruptcy Judge Dennis Montali gave the three firms 21 days apiece to produce the documents and testimony sought by Howrey's official committee of unsecured creditors related to the fallen firm's former client matters and compensation the firms received as a result of inheriting the work when Howrey filed for bankruptcy. 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. HOWREY LLP: Creditors Target Arent Fox, Others Over Unfinished Biz ------------------------------------------------------------------ Law360 reports that unsecured creditors of folded law firm Howrey LLP on Friday moved to investigate potential claims against Arent Fox LLP and two other firms over profits earned from "unfinished business" inherited when they hired defecting Howrey partners. Howrey's official committee of unsecured creditors wants Arent Fox, Arnold & Porter LLP and Snell & Wilmer LLP to turn over documents and provide each firm's "custodian of records" for a deposition, according to motions filed in California bankruptcy court. 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. ISTBET INVESTMENTS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: ISTBET Investments, LLC 60 Stanford Avenue West Orange, NJ 07052 Bankruptcy Case No.: 13-23721 Chapter 11 Petition Date: June 10, 2013 Court: United States Bankruptcy Court Southern District of Florida (Miami) Debtor's Counsel: Jeffrey H. Tromberg, Esq. FLORIDA DEBT RELIEF CENTER, LLC P.O. Box 970124 Boca Raton, FL 33497-0124 Tel: (954) 535-9905 Fax: (954) 337-8500 E-mail: ecf@itsjustdebt.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Betty Hyman, manager. JEFFERSON COUNTY, AL: Bank Appeals Request Threatens Deal --------------------------------------------------------- Katy Stech writing for Dow Jones' DBR Small Cap reports that three banks that were forced to buy some of Jefferson County, Alabama's sewer bonds during the financial crisis want to push forward on an appeals-court dispute -- a development that threatens the $1.9 billion sewer-debt deal that county officials are relying on to get the struggling municipality out of bankruptcy. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff& Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. JEFFERSON COUNTY, AL: Seeks to Halt Dispute on Sewer System ----------------------------------------------------------- Katy Stech, writing for Dow Jones Newswires' Daily Bankruptcy Review, reported that Jefferson County, Ala., officials and municipal bondholders want to halt their dispute over how the county's sewer system should be managed during the county's bankruptcy case -- a dispute that was scheduled to unfold before a panel of appeals judges but will die under a recent debt-cutting deal. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff& Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. KIVA CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Kiva Construction & Engineering, Inc. 186 Zimmer Road Gibson, LA 70356 Bankruptcy Case No.: 13-11576 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court Eastern District of Louisiana Debtor's Counsel: Paul C. Miniclier, Esq. LAW OFFICE OF PAUL C. MINICLIER 1305 Dublin Street New Orleans, LA 70118 Tel: (504) 864-1276 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/laeb13-11576.pdf The petition was signed by Joseph McDermott, president. LAKE PLEASANT: Stops Plan Sale by Filing New Case ------------------------------------------------- Johnson Bank, a secured creditor, is challenging the request of Lake Pleasant Group, LLP, and affiliate DLGC II, LLC, for joint administration of the Debtors' recently filed cases and for assignment of the cases to Judge Eileen W. Hollowell. Johnson Bank points out that LPG "intentionally fails to disclose" to the Court that there exists a pending jointly administered Chapter 11 case (Case No. 11-10170) for these same debtors before Judge Eddward P. Ballinger Jr., and that the Court in the prior cases has confirmed a plan of reorganization. Several hours prior to the filing of LPG's motion, Johnson Bank filed its own motion in the pending case seeking the administrative consolidation of the new cases with the lower- numbered pending case to be heard in front of Judge Ballinger. Johnson Bank explains that the sole intention of the Debtors in filing the new cases is to strategically prevent Johnson Bank's trustee's sale of the Debtors combined real property scheduled for June 5, 2013, the date of filing the New Cases. Johnson Bank's trustee's sale is authorized by the terms of the confirmed plan. Johnson Bank is represented by: Tamalyn E. Lewis, Esq. Vishnu R. Jonnalagadda, Esq. RIDENOUR, HIENTON & LEWIS, P.L.L.C. 201 North Central Avenue, Ste. 3300 Phoenix, AZ 85004 Tel: (602) 254-9900 Fax: (602) 254-8670 E-mail: tlewis@rhlfirm.com vjonna@rhlfirm.com About Lake Pleasant and DLGC II Lake Pleasant Group, LLP, and affiliate DLGC II, LLC, sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-09574 and 13-09576) in Phoenix on June 5, 2013. The Debtors have tapped Wesley Denton Ray, Esq., and Philip R. Rudd, Esq., at Polsinelli, P.C., as counsel. LPG estimated at least $10 million in assets and liabilities. DLGC II estimated at least $10 million in assets and liabilities of less than $10 million. LPG and DLGC II, LLC, first filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 11-10170) on April 13, 2011, with Polsinelli Shughart PC on board as counsel. Phoenix, Arizona-based LPG was formed for the purpose of purchasing and developing 244 acres of real property located near State Route 74 and Old Lake Pleasant Road in Peoria, Arizona. In the schedules filed in the original case, LPG disclosed assets of $15,780,263 and liabilities of $10,301,552. LAKE PLEASANT: Sec. 341 Meeting of Creditors on July 9 ------------------------------------------------------ There's a meeting of creditors of Lake Pleasant Group, LLP, and affiliate DLGC II, LLC, on July 9, 2013, at 9:00 a.m. at the U.S. Trustee Meeting Room, 230 N. First Avenue, Suite 102, in Phoenix. 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. About Lake Pleasant and DLGC II Lake Pleasant Group, LLP, and affiliate DLGC II, LLC, sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-09574 and 13-09576) in Phoenix on June 5, 2013. The Debtors have tapped Wesley Denton Ray, Esq., and Philip R. Rudd, Esq., at Polsinelli, P.C., as counsel. LPG estimated at least $10 million in assets and liabilities. DLGC II estimated at least $10 million in assets and liabilities of less than $10 million. LPG and DLGC II, LLC, first filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 11-10170) on April 13, 2011, with Polsinelli PC on board as counsel. Phoenix, Arizona-based LPG was formed for the purpose of purchasing and developing 244 acres of real property located near State Route 74 and Old Lake Pleasant Road in Peoria, Arizona. In the schedules filed in the original case, LPG disclosed assets of $15,780,263 and liabilities of $10,301,552. LAKE PLEASANT: Wins Approval for Polsinelli as Counsel ------------------------------------------------------ Lake Pleasant Group, LLP, has sought and obtained approval from Judge Eileen W. Hollowell to employ Polsinelli PC as attorneys in its new Chapter 11 case. The professional legal services Polsinelli will render include, without limitation, preparation of pleadings and applications; conducting examinations incidental to the administration of this bankruptcy case and estate; advising the Debtor of its rights, duties, and obligations under Chapter 11 of the Bankruptcy Code; taking any and all other necessary action incident to the proper preservation and administration of the Chapter 11 estate; and advising the Debtor in the formulation and presentation of a plan of reorganization pursuant to Chapter 11 of the Bankruptcy Code, and the accompanying disclosure statement. The hourly rates charged by Polsinelli are: Partners: $275 to $650 per hour Associates: $220 to $280 per hour Paralegals: $165 to $175 per hour Polsinelli is still owed $4,575 by the Debtor in connection with the Debtors' previous Chapter 11 case. The firm says it's a disinterested party as defined by 11 U.S.C. Sec. 101. It has agreed not to seek payment for any outstanding fees or costs relating to the prior proceeding. About Lake Pleasant and DLGC II Lake Pleasant Group, LLP, and affiliate DLGC II, LLC, sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-09574 and 13-09576) in Phoenix on June 5, 2013. The Debtors have tapped Wesley Denton Ray, Esq., and Philip R. Rudd, Esq., at Polsinelli, P.C., as counsel. LPG estimated at least $10 million in assets and liabilities. DLGC II estimated at least $10 million in assets and liabilities of less than $10 million. LPG and DLGC II, LLC, first filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 11-10170) on April 13, 2011, with Polsinelli PC on board as counsel. Phoenix, Arizona-based LPG was formed for the purpose of purchasing and developing 244 acres of real property located near State Route 74 and Old Lake Pleasant Road in Peoria, Arizona. In the schedules filed in the original case, LPG disclosed assets of $15,780,263 and liabilities of $10,301,552. LIFE UNIFORM: Final Hearing on $15-Mil. DIP Financing June 19 ------------------------------------------------------------- Life Uniform Holding Corp. and its affiliates will seek final approval of their request to obtain $15 million of DIP financing at a hearing on June 19 at 11:00 a.m. The Debtors say that the $15 million senior-secured credit facility being provided by prepetition senior secured lender CapitalSource Finance LLC is the best and only financing available under the circumstances. The $11.5 million of the financing will be used to pay off the $11 million outstanding prepetition revolving facility provided by Capitalsource. The DIP facility will provide $2.5 million of incremental liquidity on an interim basis and $4 million in incremental liquidity in total that the Debtors believe is necessary to operations and to conclude a sale process on an expedited basis. Advances under the DIP facility will bear interest at a rate equal to the Prime Rate plus 5.25% per annum. The Prime Rate will have a floor of 2.75%. The default rate will be 2.0% in excess of the rate then in effect. The Debtors will pay the DIP lender a fee of $100,000. The DIP facility will mature Sept. 1, 2013. The Debtors have agreed to these milestones: * File on the Petition Date a motion to set bidding procedures to sell assets for a purchase price of at least $22.625 million. * Obtain final approval of the DIP financing by June 24, 2013. * Obtain approval of the bidding procedures on or before June 24, 2013. * Conduct an auction on or before 53 days following the Petition Date. * Obtain approval of the sale to the winning bidder on or before 55 days following the Petition Date. * Close the sale 60 days following the Petition Date. Judge Kevin J. Carey at the end of May entered an order authorizing the Debtors to access $12.625 million of the DIP financing and use cash collateral on an interim basis. An addendum to the interim order provides that with respect to the Debtors' non-residential real property leases, no liens or encumbrances will be granted on or extend to the Debtors' non residential real property leases themselves, but rather, any liens granted will extend only to the proceeds of the non-residential real property leases. The addendum was added in light of an objection filed by Brixmor Property Group, Inc. and Aronov Realty Management -- the owners or agents for the owners of certain shopping centers in which Debtors operate restaurant and/or food court locations pursuant to leases -- with respect to granting a lien on the leases rather than the proceeds of the disposition thereof. The landlords are represented by: Matthew G. Summers, Esq. BALLARD SPAHR LLP 919 N. Market Street, 11th Floor Wilmington, DE 19801 Telephone: (302) 252-4428 Facsimile: (410) 361-8930 E-mail: summersm@ballardspahr.com - and - David L. Pollack, Esq. BALLARD SPAHR LLP 51ST Fl - Mellon Bank Center 1735 Market Street Philadelphia, PA 19103 Telephone: (215) 864-8325 Facsimile: (215) 864-9473 E-mail: pollack@ballardspahr.com About Life Uniform Life Uniform was founded in 1965 when Angelica Corporation decided to enter the retail uniform industry. The first Life Uniform store opened in 1965 in Clayton, Missouri. At present, Life Uniform is the nation's largest independently owned medical professional supplier. Life Uniform Holding Corp., Healthcare Uniform Company, Inc., and Uniform City National Inc. filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-11391 to 13-11393) on May 29, 2013. The petitions were signed by Bryan Graiff, COO, CFO, VP, secretary, and treasurer. The lead debtor estimated assets and debts of at least $10 million. First lien lender Capitalsource is owed on a $11.5 million revolver and $26 million term loan. Sun Uniforms Finance LLC is owed $6.1 million in principal on a second lien note and holds two additional notes, each in the original principal of $1.08 million. Angelica Corp. holds an unsecured junior subordinate not in the principal amount of $5.48 million. Klehr Harrison Harvey Branzburg, LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions acts as the Debtors' claims and noticing agent. The Debtors' financial advisor is Capstone Advisory Group, LLC. Sun Uniform LLC acquired Life Uniform in July 2004. Since the acquisition by Sun the company addressed sagging profitability and overhead issues and quickly drove increases in profitability through a combination of store rationalization and sensible corporate overhead initiatives. However, recent performance has been declining in terms of revenue. This is due to the company's liquidity issues, which prevented the company from completing its e-commerce system upgrade, encourage better pricing from vendors, and maintain sufficient capital. The company has signed a deal to sell all assets to Scrubs and Beyond, LLC for $22.625 million, absent higher and better offers at a court-sanctioned auction. LIFE UNIFORM: Proposes Scrubs-Led Auction in July ------------------------------------------------- Life Uniform Holding Corp. and its affiliates filed at the end of May proposed procedures where Scrubs and Beyond, LLC will buy the assets for $22.625 million, absent higher and better offers. The Debtors say that notwithstanding the marketing efforts by investment banker Morgan Joseph TriArtisan LLC prepetition, the Debtors will seek to expose the assets for competitive bidding through a court-sanctioned auction. The proposed buyer and DIP lender CapitalSource Finance LLC are, however, requiring a quick sale of the assets. The parties attest that the best way to maximize the value for the benefit of their estates and creditors is to attempt an expeditious sale. The timeline contemplates closing of the transaction by Aug. 30, 2013. The proposed rules provide that: * The assets may be sold in a single sale to a single bidder or in parts to different bidders. * Initial bids for the assets must be submitted on July [__] and should provide a minimum overbid amount of $1 million and should include a 20 percent deposit. * If qualified bids are received by the deadline, an auction will be conducted on July [__]. * Neither CapitalSource Finance LLC nor Sun Uniforms Finance, LLC will submit a credit bid for the assets. * The sale hearing will take place on July [__]. * Scrubs and Beyond will receive customary bidding protections: a break-up fee in the amount of $678,750 (3 percent of the purchase price), an initial overbid for all or a portion of the assets. The Debtors filed a separate motion for approval of the purchase agreement with Scrubs and Beyond. A copy of the motion is available for free at: http://bankrupt.com/misc/Life_Uniform_APA_Motion.pdf The Debtors' investment banker can be reached at: MORGAN JOSEPH TRIARTISAN LLC 600 Fifth Avenue, 19th Floor New York, NY 10020 Attn: Alex C. Fisch About Life Uniform Life Uniform was founded in 1965 when Angelica Corporation decided to enter the retail uniform industry. The first Life Uniform store opened in 1965 in Clayton, Missouri. At present, Life Uniform is the nation's largest independently owned medical professional supplier. Life Uniform Holding Corp., Healthcare Uniform Company, Inc., and Uniform City National Inc. filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-11391 to 13-11393) on May 29, 2013. The petitions were signed by Bryan Graiff, COO, CFO, VP, secretary, and treasurer. The lead debtor estimated assets and debts of at least $10 million. First lien lender Capitalsource is owed on a $11.5 million revolver and $26 million term loan. Sun Uniforms Finance LLC is owed $6.1 million in principal on a second lien note and holds two additional notes, each in the original principal of $1.08 million. Angelica Corp. holds an unsecured junior subordinate not in the principal amount of $5.48 million. Klehr Harrison Harvey Branzburg, LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions acts as the Debtors' claims and noticing agent. The Debtors' financial advisor is Capstone Advisory Group, LLC. Sun Uniform LLC acquired Life Uniform in July 2004. Since the acquisition by Sun the company addressed sagging profitability and overhead issues and quickly drove increases in profitability through a combination of store rationalization and sensible corporate overhead initiatives. However, recent performance has been declining in terms of revenue. This is due to the company's liquidity issues, which prevented the company from completing its e-commerce system upgrade, encourage better pricing from vendors, and maintain sufficient capital. The company has signed a deal to sell all assets to Scrubs and Beyond, LLC for $22.625 million, absent higher and better offers at a court-sanctioned auction. LIFE UNIFORM: Rejecting Burdensome Leases for 20 Locations ---------------------------------------------------------- Life Uniform Holding Corp., which has a deal to sell the business for $22.6 million to Scrubs & Beyond LLC, has filed a motion to reject certain unexpired leases of nonresidential real property, effective May 31, 2013. In contemplation of the sale of the assets, the Debtors have analyzed various store locations to determine which locations do not add any value to their enterprise and of the remaining leases, which if any have potential value to another enterprise if the lease was marketed. The Debtors are rejecting the leases with respect to these locations that were burdensome to the estates and that had no resale or designation value: Store No. Location Management Company --------- -------- ------------------ 60 The Orchard at Saddleback Westrust Ventures LLC Lake Forest, CA 125 Beaver Valley Mall Preit-Rubin Inc. Monaca, PA 174 South County Center CBL & Associates Mgt, Inc. St. Louis, MO 210 Southridge Plaza Bonnie Management Corp Grendale, WI 228 Chesapeake Square Simon Property Group Chesapeake, VA 251 White Marsh Mall General Growth Properties Baltimore, MD 274 Algodon Retail Center Eisenberg Company Phoenix, Arizona 281 South Shore Mall Westfield Bay Shore, NY 315 Pinole Vista Crossing The Kivel Stadt Group Pinole, CA 327 Hawthorn Mall Westfield Vernon Hills, IL 389 Argen and Watt Shopping Center SEL Investments Sacramento, CA 397 Lincoln Center Sims-Grupe Mgt. Corp. Inc. Stockton, CA 404 Mercer Mall Federal Realty Inv. Trust Lawrenceville, NJ 407 Whitehall Mall Kravko/Simon Whitehall, PA 410 Granite Run Mall Madison Marquette Media, PA 412 Plaza at King of Prussia Kravco King of Prussia, PA 464 Town Center at Cobb Simon Property Group Kennesaw, GA 505 Kings Court Lat Purser & Assoc., Inc. Charlotte, NC 524 Shops of Stone Oak Shops of Stone Oak - NE Uniforms San Antonio, TX 528 Scrub Shop The Milled Family LP Edison, NJ About Life Uniform Life Uniform was founded in 1965 when Angelica Corporation decided to enter the retail uniform industry. The first Life Uniform store opened in 1965 in Clayton, Missouri. At present, Life Uniform is the nation's largest independently owned medical professional supplier. Life Uniform Holding Corp., Healthcare Uniform Company, Inc., and Uniform City National Inc. filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-11391 to 13-11393) on May 29, 2013. The petitions were signed by Bryan Graiff, COO, CFO, VP, secretary, and treasurer. The lead debtor estimated assets and debts of at least $10 million. First lien lender Capitalsource is owed on a $11.5 million revolver and $26 million term loan. Sun Uniforms Finance LLC is owed $6.1 million in principal on a second lien note and holds two additional notes, each in the original principal of $1.08 million. Angelica Corp. holds an unsecured junior subordinate not in the principal amount of $5.48 million. Klehr Harrison Harvey Branzburg, LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions acts as the Debtors' claims and noticing agent. The Debtors' financial advisor is Capstone Advisory Group, LLC. Sun Uniform LLC acquired Life Uniform in July 2004. Since the acquisition by Sun the company addressed sagging profitability and overhead issues and quickly drove increases in profitability through a combination of store rationalization and sensible corporate overhead initiatives. However, recent performance has been declining in terms of revenue. This is due to the company's liquidity issues, which prevented the company from completing its e-commerce system upgrade, encourage better pricing from vendors, and maintain sufficient capital. The company has signed a deal to sell all assets to Scrubs and Beyond, LLC for $22.625 million, absent higher and better offers at a court-sanctioned auction. LIFECARE HOLDINGS: US Can't Halt $320MM Sale Payouts, Judge Says ---------------------------------------------------------------- Jamie Santo of BankruptcyLaw360 reported that a Delaware bankruptcy judge refused to freeze payments from the proceeds of LifeCare Holdings Inc.'s $320 million acquisition by Carlyle Group LP, rejecting the federal government's bid to keep the funds on ice while it appeals the deal. According to the report, contending that the LifeCare sale leaves nothing for its administrative tax claim, the government challenged the hospital group's sale in district court, but U.S. Bankruptcy Judge Kevin Gross denied the request for a stay. About LifeCare LCI Holding Company, Inc., and its affiliates, doing business as LifeCare Hospitals, operate eight "hospital within hospital" facilities and 19 freestanding facilities in 10 states. The hospitals have about 1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle Group, which holds 93.4% of the stock following a $570 million acquisition in August 2005. LCI Holding Company, Inc., and its affiliates, including LifeCare Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to secured lenders. Ken Ziman, Esq., and Felicia Perlman, Esq., at Skadden, Arps, Slate Meagher & Flom LLP, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Huron Management Services LLC will provide the Debtors an interim chief financial officer and certain additional personnel; and (ii) designate Stuart Walker as interim chief financial officer. The steering committee of lenders is represented by attorneys at Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent under the prepetition and postpetition secured credit facility is represented by Simpson Thacher & Barlett LLP. The Debtors disclosed assets of $422 million and liabilities totaling $575.9 million as of Sept. 30, 2012. As of the bankruptcy filing, total long-term obligations were $482.2 million consisting of, among other things, institutional loans and unsecured subordinated loans. A total of $353.4 million is owing under the prepetition secured credit facility. A total of $128.4 million is owing on senior subordinated notes. LifeCare Hospitals of Pittsburgh, LLC, a debtor-affiliate disclosed $24,028,730 in assets and $484,372,539 in liabilities as of the Chapter 11 filing. The lenders provided $25 million in secured financing for the Chapter 11 case. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP. FTI Consulting, Inc., serves as its financial advisor. LOUISIANA FILM: Ex-Saints Players, Coach Settle Fraud Claims ------------------------------------------------------------ Stewart Bishop of BankruptcyLaw360 reported that former New Orleans Saints tight end Jeremy Shockey and the team's ex- defensive coach Gary Gibbs settled their claims accusing a former Saints long snapper of drawing them into an investment scheme surrounding a now-collapsed film company and concealing his financial stake in the business. According to the report, in a joint motion to dismiss, defendants Kevin Houser, Securities America Inc. and American International Specialties Lines Insurance Co. along with Gibbs and Shockey said they have entered into a binding settlement agreement, with each party paying their own fees. A group of the credit buyers that include 47 Construction, LLC, et al., filed a petition to put the Company into Chapter 11 protection on July 23, 2009 (Bankr. E.D. La. Case No. 09-12232). LOWER BUCKS: JP Morgan, BNY Mellon Want Class Bid Denied -------------------------------------------------------- Daniel Wilson at Law360 reports that JP Morgan Trust Co. NA and Bank of New York Mellon Trust Co. NA on Friday hit back at a class certification bid in a suit accusing them of improperly handling $36 million in bonds for a now-bankrupt hospital, telling a Pennsylvania federal judge that the plaintiff's claims were relevant only to him. About Lower Bucks Hospital Lower Bucks Hospital is a non-profit hospital based in Bristol, Pennsylvania. The Hospital is licensed to operate 183 beds. Together with affiliates Advanced Primary Care Physicians and Lower Bucks Health Enterprises, Inc., Lower Bucks owns a 36-acre campus with several medical facilities. The Hospital's emergency room serves 30,000 patients annually. For the fiscal year ending June 30, 2009, Lower Bucks had $114 million in consolidated revenues. The Hospital filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-10239) on Jan. 13, 2010. The Hospital's affiliates -- Lower Bucks Health Enterprises, Inc, and Advanced Primary Care Physicians -- also filed Chapter 11 petitions. Jeffrey C. Hampton, Esq., and Adam H. Isenberg, at Saul Ewing LLP, in Philadelphia, assist the Hospital in its restructuring effort. Donlin, Recano & Company, Inc., is the Hospital's claims and notice agent. The Debtors tapped Zelenkofske Axelrod LLC for tax preparation services. The Hospital estimated assets and liabilities at $50 million to $100 million. Regina Stango Kelbon, Esq., at Blank Rome LLP, in Philadelphia, represents the Official Committee of Unsecured Creditors as counsel. The Bankruptcy Court confirmed the hospital operator's Chapter 11 plan on Dec. 7, 2011. It emerged from bankruptcy in January 2012. MARIETTA MATERIALS: Moody's Changes Ratings Outlook to Stable ------------------------------------------------------------- Moody's Investors Service revised the rating outlook for Marietta Materials, Inc.'s to stable from negative and affirmed its existing ratings, including its Ba1 corporate family rating and Ba1-PD probability of default rating. The following ratings actions were taken: Ba1 Corporate Family Rating, affirmed Ba1-PD Probability of Default, affirmed Ba1 on senior unsecured notes affirmed, LGD4- 58% revised to LGD4- 57% Speculative grade liquidity rating of SGL-3, affirmed Ratings Rationale: The change in outlook to stable from negative reflects Moody's expectation that Martin Marietta will remain focused on debt reduction and deleveraging, and operating performance will improve over the next year as end markets begin to slowly improve, albeit from a weak base. The stable outlook also incorporates Moody's expectation that a large levering acquisition, similar to the Vulcan bid in 2012, is unlikely in the intermediate future. Martin Marietta's Ba1 ratings benefit from the company's position as one of the North America's leading aggregates producers; typically stable operating performance in most, but not in all economic scenarios; and diverse end-markets including public, private residential and non-residential construction. However, Moody's notes its diversity did not fully mitigate against the nation-wide declines in private residential and non-residential construction experienced during the most recent recession. Elevated financial leverage and cyclical weakness constrain the rating. The company lacks multinational diversity, as it effectively derives all of its income from operations in North America. The company is smaller in scale than more highly rated multinational building materials companies. While private construction, primarily residential, has experienced an uptick in demand, weak public sector construction activity still presents credit risk. SGL-3 speculative grade liquidity rating reflects Martin Marietta's adequate liquidity profile, supported by the availability of $237 million under its unsecured revolving credit facility due 2015, absence of near-term debt maturities, and Moody's expectation that the company will remain operating cash flow positive over the next twelve months. Liquidity, however, is constrained by a rather low cash balance of $37 million at March 31, 2013, moderate covenant clearance levels, and pending covenant test level tightening over the next several quarters. The stable outlook presumes that the company will carefully balance its financial policy including maintaining acceptable liquidity and debt leverage and other credit metrics against its growth strategies, which may include various "tuck-in" acquisitions. Furthermore it reflects Moody's expectations that Martin Marietta's operating performance will improve, as private sector construction continues to recover, and declines in public construction slow and eventually reverse. Material debt reduction and improved and sustained operating margins and cash flow, would lead to upward rating consideration. Adjusted debt-to-EBITDA sustained comfortably below 2.5x and adjusted EBIT-to-interest expense consistently above 4.0x, and rebuilding abundant liquidity would support positive rating pressure. Martin Marietta's ratings could be pressured in the event that the company's liquidity deteriorated or if stressed conditions in the end markets cause a negative impact on credit metrics, including adjusted debt-to-EBITDA exceeding 4.0x and adjusted EBIT-to- interest expense declining below 2.5x. The rating would likely be downgraded in the event that Martin Marietta completed an acquisition of Vulcan Materials company along the lines previously considered, or any other materially levering transaction. The principal methodology used in this rating was the Global Building Materials Industry Methodology published in July 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Raleigh, North Carolina, Martin Marietta Materials, Inc. is one of the leading United States producers of aggregates for infrastructure, commercial, agricultural and residential construction. Aggregates account for nearly 90% of the company's revenues. The company also manufactures magnesia-based chemical products, and dolomitic lime in its Specialty Products segment. In the LTM period ending March 31, 2013 Martin Marietta generated approximately $2 billion in revenues. MARINAS INTERNATIONAL: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Marinas International Consolidated, LP 11226 Indian Trail Dallas, TX 75229 Bankruptcy Case No.: 13-11489 Chapter 11 Petition Date: June 10, 2013 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Kevin Gross About the Company: The company operates 11 marinas across the United States. Debtor's Counsel: Christopher A. Ward, Esq. POLSINELLI PC 222 Delaware Avenue, Suite 1101 Wilmington, DE 19801 Tel: (302) 252-0920 Fax: (302) 252-0921 E-mail: cward@polsinelli.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Jo Wilsmann, chief financial officer. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Marinas International Consolidated II, LP 13-bk-11490 Marinas International Consolidated II - Ouachita, LP 13-bk-11491 MERUELO MADDUX: 9th Cir. BAP Rules on Richard Meruelo Claims ------------------------------------------------------------ Meruelo Maddux Properties, Inc., and related reorganized debtors objected to proofs of claim filed by Richard Meruelo, who previously served as MMPI's Chairman, CEO, and major shareholder. The reorganized Debtors moved for disallowance of the claims. In the Claims, Richard sought indemnification for liabilities that he incurred in defending actions and proceedings based on guaranties that he executed for the benefit of the Debtors, for fees he incurred in connection with the Debtors' bankruptcies, and for payment on a judgment. Richard retained Neufeld Marks & Gralnek to represent him in his defense of these claims. During the course of the cases, Richard also retained Levene, Neale, Bender, Rankin & Brill as personal bankruptcy counsel. Neufeld submitted its declaration of disinterestedness and therein disclosed its concurrent representation of one or more of the Debtors. Neufeld, however, failed to disclose that it represented Richard in connection with the Guaranties. The bankruptcy court confirmed a third party's plan in the Debtors' cases on June 24, 2011. The Debtors subsequently objected to proofs of claim for pre-petition legal services filed by Neufeld to the Debtors and moved for disallowance. The Debtors also objected to Neufeld's request for payment of an administrative claim for post-petition fees. The bankruptcy court heard all Neufeld fee related matters on March 1, 2012. The bankruptcy court determined, among other things, that Neufeld improperly failed to disclose its simultaneous representation of Richard (and other insiders) in non-bankruptcy proceedings and that, as a result of the concurrent representations, Neufeld was not disinterested for purposes of 11 U.S.C. section 327(a). The bankruptcy court, thus, ordered Neufeld to disgorge fees previously received and denied its various requests for further payment. The Debtors also moved to disallow Richard's Claims. They argued that neither of the Agreements formed a basis for Richard's reimbursement claims and that disallowance under section 502(e)(1)(B) was warranted because the Claims were contingent. In response to the Motion to Disallow, Richard submitted an amended proof of claim in the MMPI case and filed opposition. Richard reiterated that he was entitled to reimbursement and indemnification based on the Agreements and listed total claims in the amount of $316,294.39, consisting of three different categories of liabilities: (1) $151,453.53 in attorneys' fees paid to Neufeld on account of its representation of Richard in proceedings related to the Guaranties and in the Cases ("Neufeld Claim"); (2) $142,224.48 in attorneys' fees paid to Levene on account of its representation of Richard in the Cases ("Levene Claim"); and (3) $22,526.38 on account of Richard's payment of a state court judgment against Richard and a related entity pursuant to a guarantied lease ("Nemiroff Claim"). The bankruptcy court heard the Motion to Disallow on May 11, 2012 and, after argument, granted it in its entirety. It disallowed the Levene Claim because the fees were not related to an indemnification purpose. It disallowed the Neufeld claim based on the law firm's prior disqualification in the Cases. Finally, it disallowed the Nemiroff Claim because the underlying Claim was unenforceable in the bankruptcy case. Richard appealed. "We vacate the Disallowance Order with respect to the Levene and Neufeld Claims and remand to the bankruptcy court so that it may make the required findings regarding those claims. We affirm the Disallowance Order as to the Nemiroff Claim," the U.S. Bankruptcy Appellate Panel for the Ninth Circuit held in a May 6, 2013 Memorandum available at http://is.gd/7DQcTgfrom Leagle.com. "We address only the issues related to the guaranty liabilities and bankruptcy legal fees. We decline to address the issue related to the payment on the judgment as it was not addressed by Richard in his statement of issues on appeal, in his opening or reply brief, or in a substantive fashion at oral argument. Thus, we vacate and remand in part and affirm in part." the Ninth Circuit BAP said. The case is RICHARD MERUELO, individually and as Trustee of the Richard Meruelo Living Trustee U/D/T dated September 15, 1989, Appellant, v. MERUELO MADDUX PROPERTIES, INC., Appellee (9th Cir. BAP). Gregory M. Salvato, Esq., of Salvato Law Offices, argues for Richard Meruelo. Christopher E. Prince, Esq. -- cprince@lesnickprince.com -- at Lesnick Prince & Pappas LLP, represents the reorganized Debtors. About Meruelo Maddux Meruelo Maddux Properties, Inc., and its affiliates filed for Chapter 11 protection (Bankr. C.D. Cal. Lead Case No. 09-13356) on March 26, 2009. John N. Tedford, IV, Esq., and Enid M. Colson, Esq., at Danning Gill, Diamond & Kollitz, LLP, in Los Angeles, represent the Debtors in their restructuring effort. The Debtors' financial condition as of Dec. 31, 2008, showed $681,769,000 in assets and $342,022,000 of debts. FTI Consulting, Inc., serves as the Debtors' financial advisors, Ernst & Young as independent auditors and tax advisors, DLA Piper LLP (US) as special securities and litigation counsel, and Waldron & Associates, Inc. as real estate appraiser. The U.S. Trustee appointed an official committee of unsecured creditors and a separate official shareholders' committee in the case. SulmeyerKupetz, APC, serves as the Creditors Committee's counsel and Kibel Green, Inc., as its financial advisor. The equity committee has sought to retain Ron Orr & Professionals, Inc., Rodiger Law Office, and Jenner & Block as counsel, and Kibel Green, Inc. as its financial advisor. The Debtors have hired Kurtzman Carson Consultants as solicitation and balloting agent. The Debtors; Legendary Investors Group No. 1, LLC, and East West Bank; and Charlestown Capital Advisors, LLC and Hartland Asset Management Corporation have proposed rival reorganization plans in the case. In mid-January 2011, the Debtors struck a deal with the Legendary Group to drop the group's competing plan. Legendary Investors Group No. 1, LLC, is represented in the case by Jeremy V. Richards, Esq., and Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP; and Surjit P. Soni, Esq., at The Soni Law Firm. East West Bank is represented by Curtis C. Jung, Esq., and Monica H. Lin, Esq., at Jung & Yuen, LLP, and Elmer Dean Martin III, Esq. Charlestown Capital Advisors, LLC and Hartland Asset Management Corporation are represented in the case by Christopher E. Prince, Esq., Matthew A. Lesnick, Esq., and Andrew R. Cahill, Esq., at Lesnick Prince LLP. On June 24, 2011, after trial on competing proposed plans, the bankruptcy court entered an order confirming the plan of reorganization proposed by two of MMPI's minority shareholders. That plan -- by Charlestown Capital Advisors, LLC's and Hartland Asset Management Corporation -- became effective July 26, 2011. Under the Plan, Charlestown Capital obtained control of the reorganized company. The Charlestown Plan provided for payment in full to holders of undisputed unsecured claims on the Effective Date and for payment to holders of secured claims either by surrender of collateral or through payment over a four-year period. METROGAS SA: Justices May Shift US' Role in Global Arbitration -------------------------------------------------------------- Keith Goldberg of BankruptcyLaw360 reported that by agreeing to take on BG Group PLC and Argentina's dispute over a $181 billion arbitration award, experts say, the U.S. Supreme Court is poised to determine how much power U.S. courts can wield over international arbitration proceedings linked to bilateral investment treaties and could give firms second thoughts about having those disputes handled by U.S.-based arbitration panels. The U.S. Supreme Court agreed to consider BG Group PLC's bid to reinstate aN arbitration award over an investment in now-bankrupt Argentine gas distributor MetroGas SA, an award the D.C. Circuit said was given in violation of an international investment treaty, the report said. According to the report, the high court granted BG Group's petition for writ of certiorari 18 months after the D.C. Circuit overturned the British natural gas exploration company's arbitration award, ruling that the arbitration panel had overstepped its authority. About MetroGas SA Headquartered in Buenos Aires, Argentina, MetroGAS S.A. is the largest gas distribution company in Argentina in terms of number of customers and of delivered gas volumes. MetroGAS distributes approximately 20.4% of the total natural gas supplied by the nine distribution companies licensed after the privatization of Gas del Estado in late 1992, and currently has approximately 2.2 million customers in its service area (Buenos Aires City and eleven municipalities in the south of Greater Buenos Aires), a densely populated area including major power plants and other industrial and commercial users. As a consequence of different scenarios that significantly affected the Company's ability to generate enough fund flows to satisfy payments to its suppliers and financial creditors, on June 17, 2010, MetroGAS' Board of Directors requested a Reorganization proceeding which was filed before the National Court for Commercial Matters No. 26, Secretariat No.51, case record No. 056,999. The Shareholders' Assembly carried out on Aug. 2, 2010, ratified the decision taken by the Board. In Feb. 2, 2012, the Company presented a total and final reformulation of the preventive agreement proposal for unsecured creditors who are verified and declared acceptable consisting in the payment of verified or declared unsecured credits by means of releasement, swap or "dacion en pago" of such credits, of two kinds of negotiable bonds (the "New Negotiable Bonds") to be due on Dec. 31, 2018. During the Bondholders' Meeting of MetroGAS S.A, on June 18, 2012, the proposal for the reorganization proceedings of MetroGAS S.A. was unanimously accepted by the Company's creditors. MF GLOBAL: Judge Glenn Fines Coe for Frivolous Filings ------------------------------------------------------ Bankruptcy Judge Martin Glenn imposed a monetary sanction requiring that Michelle Y. Coe pay the sum of $250 to the Clerk of the U.S. Bankruptcy Court for the Southern District of New York, for frivolous filings in the Chapter 11 case of MF Global Holdings Ltd. Ms. Coe is also warned that any future frivolous conduct will result in substantially larger sanctions awards. "The Court has set the amount of the sanctions $250 payable to the Clerk of the U.S. Bankruptcy Court at a modest amount intended to deter further misconduct. Hopefully, Coe will get the message this time," Judge Glenn said. On July 5, 2010, Ms. Coe filed a purported $25 million claim against Holdings USA purportedly based on "Intellectual Property Trade Secret." The Claim does not arise from any direct relationship between Ms. Coe and any of the Debtors, but instead from Man Financial's purchase of certain assets from Refco Inc., et al in 2005 during Refco's bankruptcy case. MFGI is a successor to Man Financial and Holdings USA is MFGI's parent company. The Court previously concluded that having litigated her claims and lost with respect to the claims in the Refco case, Ms. Coe was collaterally estopped from proceeding with her claims in MF Global's case. A copy of the Court's May 29, 2013 Memorandum Opinion and Order is available at http://is.gd/RvTvP0from Leagle.com. 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. MIPL HOLDINGS: S&P Revises Outlook to Positive & Affirms 'BB' ICR ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised the outlook on U.K.-based asset manager MIPL Holdings Ltd. (Mondrian) to positive from stable. At the same time, Standard & Poor's affirmed its 'BB' long-term issuer credit and senior secured debt ratings on Mondrian. "The outlook revision is based on the company's improved debt leverage metrics and a history of disciplined voluntary debt repayments," said Standard & Poor's credit analyst Daniel Koelsch. "The positive outlook reflects our opinion that Mondrian's debt leverage metrics such as its EBITDA-to-interest or debt-to-EBITDA multiples have teadily improved since the company incurred its initial debt in third-quarter 2011. Since we first assigned our ratings to the company, Mondrian has shown its ability and willingness to pursue a path of disciplined mandatory and voluntary debt repayments. Although Mondrian took advantage of favorable markets during February of this year and issued new debt (proceeds were in part used to repay the existing debt; net increase of debt was approximately $80 million in addition to a two-year extension of maturity and a reduced coupon rate), the $306 million total debt outstanding at March 31, 2013, was still below the $440 million issued during third-quarter 2011. Of more importance and excess earnings provided, we believe that Mondrian will continue to reduce its debt at a rather fast pace through mandatory and voluntary repayments. By the company's own estimations, debt should be fully redeemed by year-end 2017. At the same time, we expect that the company's cash levels could fluctuate to account for the extra payments that are necessary for the voluntary debt repayments. Finally, we also anticipate that Mondrian might continue to make distributions to retired partners or pensioners, but only after accounting for the above-noted additional debt repayment activities. In other words, we don't expect that Mondrian would slow down its expected debt repayment schedule through significant equity distributions," S&P noted. S&P's issuer credit rating on Mondrian reflects its opinion that the company's relatively high leverage and negative tangible equity more than offset its favorable business profile as an institutional asset manager. Mondrian's leverage is the result of a share buyback from Hellman & Friedman LLC in third-quarter 2011. The buyback restored management's ownership of the company to 100%. Mondrian is an independent, institutional asset manager with investment and operations functions in London, and an office in Philadelphia. Its business model is clearly defined, narrow in scope, and consistently executed. Over more than 20 years, the company has developed a strong reputation as a value-oriented defensive money manager with a focus on institutional clients, particularly in the U.S. where the majority of its customers are located. At March 31, 2013, the company had approximately $72.5 billion in AUM and ranked among the 10 largest managers of active international securities for U.S. institutional tax-exempt assets. The positive outlook reflects S&P's expectation that Mondrian will operate with incrementally decreasing leverage levels through scheduled and voluntary debt repayments. S&P could raise the ratings if Mondrian successfully continues to maintain or improve current leverage levels such as its EBITDA to interest coverage (first-quarter 2013: 14.1x) or debt-to-EBITDA ratio (first-quarter 2013: 1.8x). The positive outlook also reflects S&P's expectation that Mondrian will be able to maintain or increase current fee-paying AUM. This will rest on its ability to continue its successful track record of risk-adjusted performance and its ability to retain existing or attract new investors. The maintenance or growth of AUM is particularly important, as it allows Mondrian to generate the cash flows necessary to service its debt and rebuild its equity levels. The ratings could come under pressure if the company's variable expense flexibility were insufficient to buffer revenue declines and, as a result, interest coverage ratios decreased. In addition, S&P would also consider lowering the ratings if substantial equity distributions were to be put ahead of debt servicing activities or if such distributions were funded through additional leverage. MONITOR COMPANY: Seeks Authority to Continue Cash Collateral Use ---------------------------------------------------------------- MCG Limited Partnership, f/k/a Monitor Company Group Limited Partnership, et al., filed a second motion seeking authority from the U.S. Bankruptcy Court for the District of Delaware to use cash collateral to enable the Debtors (a) to fulfill their post-closing obligations under the asset purchase agreement with Deloitte Consulting LLP and DCSH Limited, (b) to perform under a transition services agreement entered into between the Debtors and Deloitte in connection with the closing of the sale under the APA, and (c) to continue the orderly wind down of the Chapter 11 Cases. The Debtors also require access to sufficient Cash Collateral to pay attorneys' fees and costs anticipated to be incurred in June, July, and August to administer the Chapter 11 Cases and to complete performance of their obligations under the APA and the TSA. The work includes, among other things, the transfer of the minority investments and resolution of any objections or legal disputes in connection therewith. The Debtors also require access to Cash Collateral to pay McGladrey LLP for assistance with tax- related work and to the Debtors' financial advisor for assistance with the general administration of their Chapter 11 Cases. Because the Debtors have not yet received the consent of its remaining secured lender, Caltius Partners IV, LP, to use Cash Collateral, the Debtors are also asking that the Court approve the granting of liens and superpriority claims to Caltius as adequate protection. The Debtors tell the Court that, prior to the hearing, they will continue to work in good faith with Caltius and its advisors towards a consensual resolution of issues concerning their use of Cash Collateral. The Debtors hold unencumbered assets which, although illiquid, have substantial value. Among these is an adversary proceeding already filed by the Committee, as estate representative, against the Debtors' landlord in Cambridge, Massachusetts, seeking to recover preferences totaling $2,127,948, including a wire transfer of $992,175, made in respect of long past due obligations under threat of lease termination one week before the Petition Date. In addition, the Debtors believe that the estates could pursue avoidance and recovery of another approximately $10 million in preferential payments from the respective transferees of those payments. The Committee, as estate representative, has sent demand letters related to potential avoidance actions against approximately 179 prospective defendants. Already, the estates have received approximately $69,000 pursuant to the terms of settlements between the estates and just a few of these prospective defendants. A hearing on the Debtors' motion will be held on June 24, 2013, at 11:00 a.m. (ET). Objections are due June 17. John H. Schanne II, Esq., David B. Stratton, Esq., David M. Fournier, Esq., and James C. Carignan, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, and D. Ross Martin, Esq., James M. Wilton, Esq., and Jonathan P. Reisman, Esq., at Ropes & Gray LLP, in Boston, Massachusetts; and Adam J. Goldstein, Esq., at Rope & Gray LLP, in New York, represent the Debtors. About Monitor Company Monitor Company Group LP -- http://www.monitor.com/-- is a global consulting firm with 1,200 personnel in offices across 17 countries worldwide. Founded in 1983 by six entrepreneurs, and headquartered in Cambridge, Massachusetts, Monitor advises for- profit, sovereign, and non-profit clients on growing their businesses and economies and furthering their charitable purposes. Monitor and several affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 12-13042 to 12-13062) on Nov. 7, 2012. Judge Hon. Christopher S. Sontchi presides over the case. Pepper Hamilton LLP and Ropes & Gray LLP serve as the Debtors' counsel. The financial advisor is Carl Marks Advisory Group LLC. Epiq Bankruptcy Solutions, LLC is the claims and noticing agent. The petitions were signed by Bansi Nagji, president. Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the Committee of Unsecured Creditors as counsel. Bank of America is represented in the case by Jinsoo Kim, Esq., and Timothy Graulich, Esq., at Davis Polk & Wardwell LLP; and Mark D. Collins, Esq., at Richards Layton & Finger PA. J. Gregory Milmoe, Esq., and Shana A. Elberg, Esq., at Skadden Arps Slate Meagher & Flom LLP in New York; and Mark Chehi, Esq., and Christopher DiVirgilio, Esq., at Skadden Arps in Delaware, represent Deloitte Consulting LLP. Caltius Partners IV LP; Caltius Partners Executive IV, LP; and CP IV Pass-Through (Monitor) LP are represented by John Sieger, Esq., at Katten Muchin Rosenman LLP. Monitor's consolidated unaudited financial statements as of June 30, 2012, which include the assets and liabilities of non- Debtor foreign subsidiaries, reflected total assets of roughly $202 million (including $93 million in current assets) and total liabilities of roughly $200 million. Monitor filed for bankruptcy to sell substantially all of their businesses and assets to Deloitte Consulting LLP, a Delaware registered limited liability partnership and DCSH Limited, a UK company limited by shares, subject to higher or otherwise better offers. The base purchase price set forth in the Stalking Horse Agreement is $116.2 million, plus (i) assumption of certain liabilities and (ii) certain cure costs for assumed contracts. The Stalking Horse Agreement provides for the Stalking Horse Bidder to receive a combined breakup fee and expense reimbursement of $4 million. The Debtors held an auction on Nov. 28, 2012, at the offices of the Sellers' counsel, Ropes & Gray LLP in New York. In mid- January 2013, Judge Sontchi allowed the Debtors to sell its assets to Deloitte Consulting for $116.2 million. MOTORCAR PARTS: Sends Subsidiaries Into Chapter 7 ------------------------------------------------- Brian Mahoney of BankruptcyLaw360 reported that two separately capitalized subsidiaries of NASDAQ-listed replacement car parts manufacturer Motorcar Parts of America filed for Chapter 7 liquidation in Delaware bankruptcy court. Fenwick Automotive Products Ltd. and Introcan Inc. listed total liabilities between $100 million and $500 million, according to their individual filings. Fenwick listed assets of more than $10 million and Introcan listed assets of less than $10 million, court records show. Three other affiliates also sought bankruptcy. MPA purchased Fenwick, also known as Fenco, in 2011, the report related. Torrance, California-based Motorcar Parts of America, Inc., and its subsidiaries is a leading manufacturer, remanufacturer, and distributor of aftermarket automobile parts. These replacement parts are sold for use on vehicles after initial vehicle purchase. These automotive parts are sold to automotive retail chain stores and warehouse distributors throughout North America and to major automobile manufacturers. MSI CORPORATION: Files for Chapter 11 in Pittsburgh ---------------------------------------------------- MSI Corporation filed a bare-bones Chapter 11 petition (Bankr. W.D. Pa. Case No. 13-22457) in Pittsburgh on June 7, 2013. The Vandergrift, Pennsylvania-based company estimated at least $10 million in assets and less than $10 million in liabilities. According to the docket, governmental entities are required to submit proofs of claim by Dec. 4, 2013. The bar date for the filing of claims for other creditors has not yet been set. MSI CORPORATION: Case Summary & 10 Unsecured Creditors ------------------------------------------------------ Debtor: MSI Corporation 210 First Street Vandergrift, PA 15690 Bankruptcy Case No.: 13-22457 Chapter 11 Petition Date: June 7, 2013 Court: U.S. Bankruptcy Court Western District of Pennsylvania Debtor's Counsel: Michael J. Roeschenthaler, Esq. MCGUIREWOODS, LLP 625 Liberty Avenue, 23rd Floor Pittsburgh, PA 15222 Tel: (412) 667-6000 Fax: (412) 667-6050 Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Henry W. McLaughlin, III, president. Debtor's List of Its Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Euler Hermes Collections Huston Debt $270,230 Attn: Dennis Brown 600 South 7th Street Louisville, KY 40203 Dynamark Security Centers Trade Debt $32,618 6622 Jefferson Road Corpus Christi, TX 78413 D&S Industrial Contracting Trade Debt $27,040 4200 Casteel Drive Coraopolis, PA 15108 H&K Equipment Company Fork Lifts $22,038 Production Abrasives, Inc. Trade Debt $19,740 Ellison Industrial Controls Trade Debt $10,800 Smith Tool & Supply Production Supplies $4,068 Erie Bearings Company Machinery Repairs $2,183 R.L. Holliday Company, Inc. Production Supplies $1,782 MSC Industrial Supply Co. Inc. Production and Safety $1,671 Supplies NATIONAL ENVELOPE: Meeting to Form Creditors' Panel on June 21 -------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on June 21, 2013, at 10:00 a.m.in the bankruptcy case of NE Opco, Inc., et al. The meeting will be held at: J. Caleb Boggs Federal Building 844 King Street, Room 5209 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About National Envelope National Envelope is the largest privately-help manufacturer of envelopes in North America. Headquartered in Frisco, Texas, National Envelope has eight plants and 15 percent of the envelope market. Revenue of $427 million in 2012 resulted in a $60.1 million net loss, continuing an unbroken string of losses since 2007. NE OPCO, Inc., doing business as National Envelope, along with affiliate NEV Credit Holdings, Inc., filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-11483) on June 10, 2013. The company disclosed liabilities including $148.4 million in secured debt, with $37.5 million owing on a revolving credit and $15.6 million on a secured term loan. There is a $55.7 million second-lien debt 82 percent held by a Gores Group LLC affiliate. National Envelope, then known as NEC Holdings Corp., first sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. The business was bought by Gores Group LLC for $208 million in a bankruptcy sale. National Envelope, through NE OPCO, has returned to bankruptcy to pursue a plan of reorganization or sell the assets as a going concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a sale of the business with publicly traded competitor Cenveo Inc. In the new Chapter 11 case, the company has tapped the law firm Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP as financial adviser, and Epiq Bankruptcy Solutions as claims and notice agent. The Gores Group is represented by Weil, Gotshal and Manges LLP and Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht & Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition senior agent, is represented by Goldberg Kohn Ltd and DLA Piper. NEENAH PAPER: Loan Amendments No Impact on Moody's Ratings ---------------------------------------------------------- Moody's Investors Service said that Neenah Paper Inc.'s recent increase to its dividend and related credit agreement amendment is credit neutral and does not affect the company's ratings at present. Neenah Paper, Inc. produces premium papers and specialty products. The fine paper business accounts for about half of consolidated sales and produces premium writing, text, cover, and specialty papers used for corporate annual reports, corporate identity packages, invitations, personal stationery, and high-end packaging. The technical products business manufactures automotive filters, saturated and coated base papers, and a variety of non- woven wall coverings. Based in Alpharetta, Ga., and with operations in the U.S. and Germany, the company reported revenues of over $800 million for the twelve months ended March 31, 2013. On May 13, 2013, Moody's Investors Service upgraded Neenah Paper Inc.'s Corporate Family Rating to Ba2 from Ba3, and assigned a Ba3 rating to the company's proposed $175 million of Senior Unsecured Notes due 2021. Proceeds will be used to refinance the remaining $90 million 7.375% Senior Unsecured Notes due 2014, repay borrowings under the asset-based revolving credit facility, pay transaction-related fees and expenses, and add cash to the company's balance sheet. The rating outlook is stable. NORTH AMERICAN ENERGY: Moody's Retains CFR After Piling Biz Sale ---------------------------------------------------------------- North American Energy Partners, Inc. (NAEP, B3 negative) has entered into an agreement to sell its piling division to Keller Group plc (unrated) for $227.5 million in cash at closing and additional cash proceeds of up to $92.5 million over the next three years. Moody's says the move is credit positive because NAEP will use the initial $210 million in net proceeds to reduce debt. Upon closing of the sale, NAEP's outlook may be changed to stable from negative. However, due to the reduced size and scale of the company an upgrade from the B3 Corporate Family Rating is unlikely. North American Energy Partners Inc. (NAEP), headquartered in Calgary, Alberta, primarily serves the Canadian oil sands sector through its Heavy Construction and Mining segment. NPHP INVESTMENTS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: NPHP Investments LP 5525 E. Lincoln Drive, #100 Paradise Valley, AZ 85253 Bankruptcy Case No.: 13-09682 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Daniel P. Collins Debtor's Counsel: Dale C. Schian, Esq. SCHIAN WALKER, P.L.C. 1850 North Central Avenue, #900 Phoenix, AZ 85004-4531 Tel: (602) 277-1501 Fax: (602) 297-9633 E-mail: ecfdocket@swazlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Peter G. Bernal, president. OMNI FOODS: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Omni Foods, Inc. 4130 Mount Vernon Drive Los Angeles, CA 90008 Bankruptcy Case No.: 13-24871 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court Central District of California Debtor's Counsel: Joyce H. Vega, Esq. JOYCE H. VEGA & ASSOCIATES 6185 Magnolia Avenue, Suite 318 Riverside, CA 92505 Tel: (888) 616-5762 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its largest unsecured creditors does not contain any entry. The petition was signed by Ronson Smothers, president. PENSON WORLDWIDE: July 24 Deadline to Vote on Liquidation Plan Set ------------------------------------------------------------------ Creditors entitled to vote on the Fourth Amended Joint Liquidation Plan of Penson Worldwide, Inc., and its affiliated debtors have until July 24, 2013 at 5:00 p.m. (prevailing Eastern Time) to submit their ballots accepting or rejecting the Plan. To be counted, an original Ballot must actually be received on or before the Voting Deadline by Kurtzman Carson Consultants LLC. The Voting Parties consist of holders of Claims in Class 3A (General Unsecured Claims against PWI), Class 4A (Second Lien Note Claims against PWI), Class 5A (Convertible Note Claims against PWI), Class 3B (General Unsecured Claims against PFSI), Class 4B (Subordinated Loan Claims against PFSI), Class 3C (General Unsecured Claims against SAI and PHI), Class 4C (Second Lien Note Guarantee Claims against SAI and PHI), Class 3D (General Unsecured Claims against Nexa), and Class 3E (General Unsecured Claims against remaining Filed Subsidiary Debtors). For parties holding claims in Classes 4A, 5A and 4C, Ballots may be mailed or delivered by hand to Penson Worldwide Ballot Processing, Kurtzman Carson Consultants, 599 Lexington Avenue, 39th Floor, New York, New York 10022, during normal business hours. For parties holding claims in Classes 3A, 3B, 4B, 3C, 3D, and 3E, Ballots may be mailed or delivered by hand to Penson Worldwide Ballot Processing, Kurtzman Carson Consultants, 2335 Alaska Avenue, El Segundo, California 90245, during normal business hours. 4th Amended Plan The United States Bankruptcy Court for the District of Delaware approved on June 7, 2013, the Third Amended Disclosure Statement explaining Penson's Fourth Amended Plan as containing adequate information within the meaning of Section 1125 of title 11 of the United States Code. Penson's Fourth Amended Plan incorporates the settlement of SunGard Financial Systems LLC's general unsecured claim. After months of good faith and arm's-length negotiations, the Debtors have agreed to settle the SunGard Claim, which is classified and treated in Class 3B of the Plan, pursuant to a settlement agreement, subject to Court approval. Under the Settlement, the SunGard Claim will be allowed as a general unsecured claim against Penson Financial Services, Inc. in the aggregate amount of $16.0 million, and will be classified and treated with other General Unsecured Claims against PFSI. The parties exchange mutual releases. The Fourth Amended Plan further provides revised recovery for these classes of claims: Class Recovery ----- -------- Class 3B General Unsecured Claims 50-100% Class 6B Equity Interests $35.7 million Class 3C General Unsecured Claims 0-12% Class 4C Second Lien Note Guarantee Claims 0-29% Class 5D Equity Interests $7.9-$8.5 million Class 3E General Unsecured Claims $0-1,000 Class 5E Equity Interests $0-1,000 Of the Debtors' estimated Administrative Expense Claims ranging from $3.5 to $4.0 million, approximately $650,000 is estimated to be for the aggregate fees and expenses of counsel to the Second Lien Noteholders Committee and counsel to the Convertible Noteholders Committee. From a previous estimate of $285-291 million, the Debtors estimate the General Unsecured Claims at PWI to be in the range of $282-284 million. The Debtors revised their estimate of Nexa's General Unsecured Claims range from $2-3 million to $400,000-$900,000. Holders of the Promissory Note Claim will be entitled to receive 40% of the proceeds of the Illiquid Instruments up to a maximum of $3.5 million. The Promissory Note Claim will be placed in Class 2C against the SAI and PHI Estates. The value of Illiquid Instruments is speculative but the Debtors estimate it to be in the range of approximately $5-$10 million. The Fourth Amended Plan further notes that the Official Committee of Unsecured Creditors has independently concluded that the Plan is in the best interests of all unsecured creditors and has recommended that unsecured creditors vote in favor of the Plan. A full-text copy of Penson's Third Amended Disclosure Statement may be accessed for free at http://is.gd/sXAwy5 A full-text copy of Penson's Fourth Amended Joint Liquidation Plan may be accessed for free at http://is.gd/mo3v0R A full-text copy of Penson's Notice of Filing Blacklined Versions of the Fourth Amended Plan and Third Amended Disclosure Statement may be accessed for free at http://is.gd/6hmx9B July 31 Confirmation Hearing A hearing will be held on July 31, 2013 at 10:00 a.m. (prevailing Eastern Time), before the Honorable Peter J. Walsh of the United States Bankruptcy Court for the District of Delaware to consider confirmation of Penson's Fourth Amended Plan. Any objection, comment, or response to confirmation of the Plan, including any supporting memoranda, must be filed with the Clerk of the Bankruptcy Court, at 824 North Market Street, 3rd Floor, Wilmington, Delaware 19801, together with proof of service, on or before July 24, 2013 at 5:00 p.m. (prevailing Eastern Time) and must (i) be in writing, (ii) state the name and address of the objecting party, (iii) state the amount and nature of the Claim or Equity Interest of such party, (iv) state with particularity the basis and nature of any objection to the Plan and, if practicable, proposed modification to the Plan that would resolve such objection, and (v) be served on these parties on or before the Confirmation Objection Deadline: (a) counsel for the Debtors: Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019 Attn: Andrew N. Rosenberg, Esq. Oksana Lashko, Esq. - and - Young Conaway Stargatt & Taylor, LLP 1000 North King St., Rodney Square Wilmington, Delaware 19801 Attn: Pauline K. Morgan, Esq. Kenneth J. Enos, Esq. (b) the U.S. Trustee 844 King Street Suite 2207 Wilmington, Delaware 19801 Attn: Mark Kenney (c) counsel to the Official Committee of Unsecured Creditors: Hahn & Hessen LLP 488 Madison Avenue New York, New York 10022 Attn: Mark T. Power, Esq. - and - Cousins Chipman & Brown, LLP 1007 North Orange Street Suite 1110 Wilmington, Delaware 19801 Attn: William E. Chipman, Jr., Esq. (d) counsel to the Senior Noteholders Committee: Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, New York 10004 Attn: Gary Kaplan, Esq. Richard Tisdale, Esq. (e) counsel to the Convertible Noteholders Committee: Sidley Austin LLP One South Dearborn Chicago, Illinois 60603 Attn: Larry J. Nyhan, Esq. Bojan Guzina, Esq. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PENSON WORLDWIDE: Seeks Approval of SunGard Claim Settlement ------------------------------------------------------------ Penson Worldwide, Inc., and its affiliated debtors seek the Court's approval of a settlement agreement dated as of June 7, 2013, with SunGard Financial Systems LLC. SunGard filed a proof of claim against Penson Financial Services, Inc. asserting that it is owed at least $17,593,407.00 (Claim No. 69) as of the Petition Date. SunGard Availability Services LP filed a proof of claim against Penson Worldwide Inc. asserting that it is owed $72,250.00 (Claim No. 65) as of the Petition Date. On March 11, 2013, SunGard Securities Finance LLC filed a proof of claim against PWI, asserting it was owed $65,250.00 (Claim No. 226) as of the Petition Date. The Debtors and SunGard have engaged in good faith negotiations to settle, resolve and release all claims, dispute and issues between them. Under the proposed settlement, the SunGard Claim will be fully and finally allowed as a general unsecured claim against PFSI in the aggregate amount of $16.0 million, which will be classified and treated with other General Unsecured Claims under Penson's Fourth Amended Joint Liquidation Plan. A hearing on the motion is set for July 10, 2013. Parties have until June 21 to file objections. The Debtors' counsel are Kenneth J. Enos, Esq., Pauline K. Morgan, Esq., Ryan M. Bartley, Esq., of Young Conaway Stargatt & Taylor, LLP, and Andrew N. Rosenberg, Esq., and Oksana Lashko, Esq., of Paul, Weiss, Rifkind, Wharton & Garrison LLP. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PENSON WORLDWIDE: Grace Fin'l. Wants Stay Lifted to Pursue Claims ----------------------------------------------------------------- Grace Financial Group, LLC seeks relief from the automatic stay for the purpose of permitting liquidation of the its claims against debtor Penson Financial Services, Inc., which are pending in a FINRA Dispute Resolution proceeding. The FINRA case is styled as Grace Financial Group LLC v. Penson Financial Services, Inc. and Apex Clearing Corporation, FINRA No. 12-02002. A hearing on the motion will be held on July 10, 2013 at 9:30 a.m. Michael Busenkell, Esq. -- mbusenkell@gsbblaw.com -- and Brya M. Keilson, Esq. -- bkeilson@gsbblaw.com -- of Gellert Scali Busenkell & Brown, LLC represent Grace Financial. Penson's counsel are Kenneth J. Enos, Esq., Pauline K. Morgan, Esq., Ryan M. Bartley, Esq., of Young Conaway Stargatt & Taylor, LLP, and Andrew N. Rosenberg, Esq., and Oksana Lashko, Esq., of Paul, Weiss, Rifkind, Wharton & Garrison LLP. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PENSON WORLDWIDE: Adamba Seeks Court Okay to File Late Claim ------------------------------------------------------------ Adamba Imports International, Inc., tells the Court that it was was not served with notice of the Bar Date for Filing Prepetition Proofs of Claim in Penson Worldwide, Inc. and its debtor affiliate's Chapter 11 cases. Adamba is based in Brooklyn, New York and is engaged in the business of providing produce, deli and liquor products to supermarkets. According to Scott J. Leonhardt, Esq. -- leonhardt@teamrosner.com -- of The Rosner Law Group LLC, the Debtors served Adamba with the Suggestion of Bankruptcy before the Bar Date expired, and easily could have served it with the Bar Date Notice. Four attorneys from Young Conaway Stargatt & Taylor, LLP, and two attorneys from Paul, Weiss, Rifkin, Wharton & Garrison LLP signed the Suggestion of Bankruptcy; four attorneys from Young Conaway Stargatt & Taylor, LLP signed the Certificate of Service certifying under penalty of perjury that the Suggestion of Bankruptcy was served on Adamba. None of these attorneys had the Bar Date Notice served on Adamba. Alternatively, the failure to file the Proof of Claim was due to excusable neglect, he said. Accordingly, Adamba requests that the Court allow its claim because notwithstanding it was a known creditor, the Debtors failed to provide it with actual notice of the Bar Date. In the alternative, Adamba asks the Court to allow it a late filed proof of claim. Adamba also seeks Court approval to file its motion under seal saying its motion contains information concerning a pending FINRA Arbitration. Under FINRA guidelines, pending arbitrations are confidential. Penson is represented by Kenneth J. Enos, Esq., Pauline K. Morgan, Esq., Ryan M. Bartley, Esq., of Young Conaway Stargatt & Taylor, LLP, and Andrew N. Rosenberg, Esq., and Oksana Lashko, Esq., of Paul, Weiss, Rifkind, Wharton & Garrison LLP. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PERLL DIAGNOSTICS: Case Summary 14 Unsecured Creditors ------------------------------------------------------ Debtor: Perll Diagnostics, Inc. pka Penn Diagnostics, Inc. 5010 Ritter Road, Suite 104 Mechanicsburg, PA 17055 Bankruptcy Case No.: 13-02985 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court Middle District of Pennsylvania (Harrisburg) Judge: Mary D. France Debtor's Counsel: Lawrence V. Young, Esq. CGA LAW FIRM 135 North George Street York, PA 17401 Tel: (717) 848-4900 Fax: (717) 843-9039 E-mail: lyoung@cgalaw.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 14 unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/pamb13-02985.pdf The petition was signed by Nava K. Nawaz, M.D., president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Malik M. Nawaz & Nava K. Nawaz 13-02367 05/03/13 PIK HOLDINGS: Leveraged Buyout Prompts Moody's to Assign B3 CFR --------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family and B3-PD Probability of Default Ratings to Pik Holdings, Inc., the parent of Water Pik, Inc. following the announcement of Water Pik's leveraged buyout. Moody's also assigned a B2 rating to the company's proposed $240 million first lien credit facilities consisting of a $215 million term loan and a $25 million revolver as well as a Caa2 rating to the company's proposed $95 million second lien term loan. Upon the close of the transaction, Water Pik will become the obligor and Moody's will move the ratings to Water Pik. The ratings outlook is stable. Proceeds from the proposed $215 million first term loan and $95 million second lien term loan along with a common equity contribution (from MidOcean Partners and its affiliates and rollover equity from management) will be used to fund the acquisition of Water Pik from EG Capital Group and Carlyle Group. Moody's does not expect any drawings under the proposed $25 million revolving credit facility at closing. Concurrent with the transaction, substantially all of the company's existing debt (including the preferred stock which Moody's treated as 50% debt) will be paid off. The B3 Corporate Family Rating reflects Water Pik's highly leveraged capital structure following the LBO. "The proposed LBO will increase Water Pik's debt leverage considerably," stated Moody's analyst Tiina Siilaberg. "The contemplated transaction more than doubles the company's funded debt balance to $310 million from about $141 million reported on March 31, 2013, and as a result, pro forma debt/EBITDA will be initially high at about 6.1 times," added Siilaberg. Additionally, the B3 rating considers the company's small scale with revenues under $200 million, limited product focus, and customer concentration with the top three customers accounting for a material portion of net sales. The following ratings were assigned to Pik Holdings, Inc. (The ratings are contingent upon the receipt and review of final documentation.): - Corporate Family Rating, assigned B3; - Probability of Default Rating, assigned B3-PD; - $25 million first lien revolving credit facility, due 2018, assigned B2 (LGD3, 34%); - $215 million first lien term loan, due 2020, assigned B2 (LGD3, 34%); - $95 million second lien term loan, due 2021, assigned Caa2 (LGD5, 86%). The following ratings of Water Pik, Inc. will be withdrawn upon consummation of the LBO: - Corporate Family Rating of B2; - Probability of Default Rating of B3-PD; - $140 million first lien term loan due 2017 at B2 (LGD3, 34%); - $20 million first lien revolving credit facility due 2016 at B2 (LGD3, 34%). Ratings Rationale: The B3 Corporate Family Rating reflects Water Pik's high debt leverage, small revenue base as compared to many of its competitors, customer concentration, and limited product diversification. Moreover, Water Pik has a limited presence at key mass merchandiser customers relative to larger consumer durables companies and is exposed to consumer discretionary spending trends. At the same time, the rating is supported by the company's good liquidity and its well established niche market position, good pro forma interest coverage metrics and strong EBITDA margins due to a low cost sourcing model. The rating also considers the company's history of de-leveraging through earnings growth and debt reduction. The stable outlook reflects Moody's expectation that Water Pik will maintain good liquidity over the near term while modestly growing revenue and earnings. Water Pik is solidly positioned in the B3 rating category. Positive rating pressure could build if debt reduction combined with sustained earnings growth and a conservative financial policy lead to a material improvement in credit metrics, such that debt to EBITDA is maintained below 4.5 times and EBITA to interest expense is sustained above 2.5 times. Ratings could be downgraded if financial policies become more aggressive, operating performance weakens, or if liquidity were to deteriorate for any reason. In particular, if debt to EBITDA increases to above 6.5 times, EBITA to interest expense declines below 1.5 times or free cash flow generation turns negative, the ratings could be downgraded. Furthermore, the loss of a key customer, or a material debt-financed acquisition/dividend could also pressure the ratings. The principal methodology used in rating Water Pik Inc. was the Global Consumer Durables Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Fort Collins, Colorado, Water Pik, Inc. sells oral health and showerhead products. Oral health is divided into consumer oral health (COH) and professional oral health (POH). The showerhead division sells replacement showerheads under the Water Pik brand name to mass merchandisers and home improvement centers. The company generated $177 million of revenues for the trailing twelve month period ended March 31, 2013. PRM FAMILY: Admin. Agent Objects to Cash Collateral Use Request --------------------------------------------------------------- Bank of America, N.A., as administrative agent and a lender under an amended and restated credit agreement dated July 1, 2011, objects to PRM Family Holding Company, L.L.C., et al.'s request for continued use of cash collateral, asserting that it is gravely concerned about the financial condition of the Debtors. The Agent complains that the Debtors provided bare-bones projections with no supporting assumptions claiming they will have approximately $4.0 million in the bank over the next couple of months. Since then, the Debtors have provided a 13-week operating budget claiming they will have twice that amount -- approximately $8.0 million -- on hand during the difficult summer months, the Agent notes. Robert J. Miller, Esq. -- rjmiller@bryancave.com -- Bryce A. Suzuki, Esq. -- bryce.suzuki@bryancave.com -- and Justin A. Sabin, Esq. -- justin.sabin@bryancave.com -- at Bryan Cave LLP, in Phoenix, Arizona, serve as counsel for BofA. About PRM Family PRM Family Holding Company, L.L.C., operator of 11 Pro's Ranch Markets grocery stores in Arizona and Texas and New Mexico, sought Chapter 11 protection (Bankr. D. Ariz. Case No. 13-09026) on May 28, 2013. As of the bankruptcy filing, PRM Family Holding operates seven grocery stores in Phoenix, two in El Paso, Texas, and two in New Mexico. Its corporate office is in California and it has warehouses and distribution facilities in California and Phoenix. Its Pro's Ranch Markets feature produce, baked goods and other general grocery items with a Hispanic flair and theme. The company has more than 2,200 employees. PRM Family blamed its woes on, among other things, the adverse effect of the perception in Arizona towards immigrants including the passage of SB 1070 and an immigration audit to which no other competitor was subjected. It also blamed a decline in the U.S. economy and an increase competition from other grocery store chains. Bank of America, the secured lender, declared a default in February 2013. Scott H. Gan, Esq., at Mesch, Clark & Rothschild, P.C., in Tucson, Arizona, serves as counsel to the Debtor. PRM Family estimated liabilities in excess of $10 million. PRORHYTHM INC: ReCor Owns Disputed Patents ------------------------------------------ The Court of Chancery of Delaware declared ReCor Medical Inc. as the rightful owner of the '757 PCT patent application and the patent applications from which the '757 PCT patent application claims priority (i.e., the '429 and '618 patent applications). The two patents document the use of ultrasound in renal denervation -- the process of damaging the sympathetic nerves surrounding the renal arteries -- to treat hypertension. ReCor acquired the patents from ProRhythm Inc., an insolvent medical device company. The case, RECOR MEDICAL, INC., a Delaware corporation, Plaintiff, v. REINHARD WARNKING and SOUND INTERVENTIONS, INC., a Delaware corporation, Defendants, C.A. No. 7387-VCN (Del. Ch.), was a dispute over the ownership of the two patents. In a May 31 decision, the Chancery Court ruled that the Defendants, former employees of ProRhythm, are enjoined from making further use of the technology disclosed in the applicable patents and are ordered to take all necessary steps to transfer to ReCor the applicable patents, all books and records pertaining thereto, and all the attendant rights to the applicable patents and the technology disclosed or claimed therein. A copy of the Court's May 31, 2013 Memorandum Opinion is available at http://is.gd/7XlV4qfrom Leagle.com. Daniel B. Rath, Esq., Rebecca L. Butcher, Esq., and K. Tyler O'Connell, Esq. -- rath@lrclaw.com butcher@lrclaw.com and oconnell@lrclaw.com -- at Landis Rath & Cobb LLP, Wilmington, Delaware; and John W. Holcomb, Esq. -- john.holcomb@knobbe.com -- at Knobbe Martens Olson & Bear LLP, Riverside, California, attorneys for ReCor. Thomas M. Horan, Esq. -- thoran@wcsr.com -- at Womble Carlyle Sandridge & Rice, LLP, Wilmington, Delaware; and Joseph N. Campolo Esq., and Eryn Y. Deblois, Esq. -- jcampolo@cmmllp.com and edeblois@cmmllp.com -- at Campolo, Middleton & McCormick, LLP, Bohemia, New York, attorneys for Defendants. Headquartered in Ronkonkoma, New York, ProRhythm Inc. -- http://www.prorhythm.com/-- developed medical H.I.F.U. products, including a device for the treatment of atrial fibrillation. The company filed for Chapter 11 protection on Dec. 11, 2007 (Bankr. D. Del. Case No. 07-11861). Chun I. Jang, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., represented the Debtor. When the Debtor filed for protection form its creditors, it disclosed estimated assets between $10 million and $50 million and estimated debts between $1 million and $10 million. QUEBECOR WORLD: 'Conduit' Banks Can Trigger Ch. 11 Safe Harbor -------------------------------------------------------------- Brian Mahoney of BankruptcyLaw360 reported that the Second Circuit ruled that securities transfers may qualify for safe harbor from avoidance actions under the Bankruptcy Code even if the financial institution involved in the transfer is "merely a conduit," affirming the dismissal of $376 million suit brought by Quebecor World Inc. creditors against a group of insurer-investors. According to the report, a three-judge panel ruled that Quebecor's official committee of unsecured creditors can't recover $376 million in securities repurchase transactions that were made to a group of institutional insurance company investors within the 90 days before the Petition Date. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. On June 30, 2009, Judge Peck and the Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice, in a joint hearing, approved the plan of compromise filed by Quebecor World Inc. and its affiliates in their cases before the Canadian Companies' Creditors Arrangement Act and the Chapter 11 plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates in the U.S. Bankruptcy Court. On July 21, 2009, Quebecor World Inc. and its affiliated debtors and debtors-in-possession emerged from protection under the Companies' Creditors Arrangement Act in Canada and Chapter 11 of the U.S. Bankruptcy Code. Quebecor World emerged from bankruptcy as World Color Press Inc." QUIKSILVER INC: Moody's Lowers CFR to B3; Outlook Remains Stable ---------------------------------------------------------------- Moody's Investors Service lowered Quiksilver Inc.'s Corporate Family Rating to B3 from B2 and also lowered the Probability of Default Rating to B3-PD from B2-PD. Moody's also lowered the rating on the company's $400 million senior unsecured note to Caa2 from Caa1 and also lowered the rating on Boardriders, S.A. EUR 200 million senior unsecured note to B2 from B1. The company's SGL-2 Speculative Grade Liquidity rating was affirmed. The rating outlook remains stable. The following ratings were downgraded: Quiksilver, Inc. Corporate Family Rating to B3 from B2 Probability of Default Rating to B3-PD from B2-PD $400 million senior unsecured notes due 2015 to Caa2 (LGD 5, 83%) from Caa1 (LGD 5, 81%) Boardriders S.A. EUR 200 million notes due 2017 to B2 (LGD 3, 42%) from B1 (LGD 3, 34%) The following rating was affirmed: Quiksilver, Inc. Speculative Grade Liquidity Rating at SGL-2 Ratings Rationale: The downgrade of Quiksilver's Corporate Family Rating considers the company's continued weak performance in its current fiscal year, with adjusted EBITDA (as defined by the company) declining near 45% to $32 million for the six month period ending April 30, 2013 compared to the year prior period. Debt/EBITDA, incorporating Moody's standard analytical adjustments, is now in the high six times range and interest coverage (EBITA/interest expense) is less than one times. The downgrade considers that the performance of the DC Shoe brand, which has been a fast-growing brand for the company, has seen weaker performance, relating to the lack of innovation in some key product categories in this brand. Moody's believes Quiksilver's new management team's initiatives to reduce operating costs are credible and will be positive over time. However Moody's expects these initiatives will take some time to be realized, and given their wide-ranging impact on the organization there are execution risks. While Moody's believes results will begin to stabilize in the next couple of quarters, credit metrics are expected to remain weak for an extended period of time. The stable outlook considers Moody's expectations that while the company's current metrics will remain weak, over time Moody's expects benefits from improved inventory management and cost saving initiatives to enable the company to make progress improving operating margins over the next 12 to 18 months. The stable outlook also considers the company's good overall liquidity at the current time, tempered by its need to refinance its $400 million senior unsecured notes which currently come due in April 2015. Quiksilver's B3 Corporate Family Rating reflects the company's high debt burden with debt/EBITDA in the high six times range and interest coverage below one time. The ratings also reflect the company's low absolute profit margins -- operating margins, excluding restructuring costs, are below 3%. The ratings consider the company's ownership of three highly recognized brands in the action lifestyle sector, the company's significant diversification by geography with more than 60% of its revenues generated outside the US. The company's overall liquidity profile is good, with access to a new $230 million asset-based revolver though is tempered by the company's need to address its April, 2015 maturity of its senior unsecured notes. Ratings could be upgraded if the company were to be successful over time executing its profit improvement plan, which would be evidenced by operating margins showing meaningful improvement from current levels. Quantitatively, ratings could be upgraded if debt/EBITDA was sustained below 5 times and interest coverage was sustained above 1.75 times. Ratings could be lowered if the company was unable to make meaningful progress improving operating margins over the next year, indicating that cost savings initiatives are not being achieved or that its brands faced greater challenges in the market. There is limited capacity for the company to experience any meaningful erosion to the company's current good liquidity profile. Ratings could be lowered if the company is unable to make tangible progress refinancing its April 2015 debt maturity. Quantitatively ratings could be downgraded if interest coverage remained below one times or if debt/EBITDA were expected to remain above 6 times by the end of the company's 2014 fiscal year. The principal methodology used in this rating was the Global Apparel Companies Industry Methodology published in May 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Huntington Beach, California, Quiksilver Inc. distributes apparel, footwear, and accessories in more than 90 countries under brands that include Quiksilver, Roxy and DC. LTM revenues are near $2.0 billion. RCN TELECOM: Proposed $200MM Bonds Issue Gets Moody's Caa1 Rating ----------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to the proposed $200 million senior unsecured bonds of RCN Telecom Services, LLC. The company expects to use proceeds to fund another dividend distribution to its private equity owners, ABRY Partners, LLC and Spectrum Equity. Moody's also affirmed RCN's B2 corporate family rating and the B1 rating on its senior secured first lien credit facility. On May 28, Moody's downgraded the corporate family rating to B2 from B1 based on expectations for the issuance of senior unsecured bonds to fund the dividend. A summary of these actions follow. RCN Telecom Services, LLC Senior Unsecured Bonds, Assigned Caa1, LGD6, 91% Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Secured First Lien Credit Facility, Affirmed B1 Ratings Rationale: Despite RCN's high leverage (about 6.2 times debt-to-EBITDA pro forma for the proposed transaction), expectations for the company to continue to generate positive free cash flow from its attractively bundled video, high speed data and voice services in densely populated markets support its B2 corporate family rating. The financial sponsor ownership constrains the rating; notwithstanding expectations for leverage to decline from both EBITDA growth and debt reduction over at least the next year or two, beyond that time the equity owners will likely seek incremental returns of capital, which could lead to an increase in leverage or limit the application of free cash flow to debt reduction. Debt funded distributions have exceeded debt reduction with free cash flow, and cash distributed to the sponsors to date exceeds their original cash investment. As an overbuilder in most markets, RCN faces intense competition from larger and better capitalized cable, direct broadcast satellite (DBS) and telecom operators. The company's upgraded network allows it to offer an attractive package to both residential and commercial customers, and the company added video and high speed data subscribers on both a year over year and sequential basis in the March quarter despite rate increases, evidence of its ability to win and retain customers while maintaining price discipline. Nevertheless, price pressure remains a risk, and the battle for subscribers could limit growth (albeit less so in the Lehigh Valley market, which represents about 40% of EBITDA and in which RCN acts as an incumbent). The lack of scale together with weak EBITDA margins relative to cable peers also constrains the rating. Given the competition and RCN's size, Moody's expects margins to remain below peers, particularly as programming costs, especially the sports content prevalent in RCN's urban markets, escalate. The stable outlook incorporates expectations for leverage to fall below 6 times debt-to-EBITDA over the next year and for RCN to continue to generate positive free cash flow. The current leverage profile, lack of scale, overbuilder model, and the financial sponsor ownership limit upward ratings momentum. However, Moody's could consider a positive action with a commitment to a more conservative financial profile characterized by leverage trending toward and remaining below 4 times debt-to- EBITDA on a sustained basis. An upgrade would also require good liquidity and expectations for stable to improving subscriber trends. Deteriorating operating performance, an inability to achieve leverage below 6 times over the next 18 months, or expectations for sustained negative free cash flow would likely pressure the rating down. Over the longer term another debt-financed dividend or an acquisition resulting in leverage sustained above 6.5 times debt-to-EBITDA could warrant a downgrade. An erosion of the liquidity profile could also have negative ratings implications. The principal methodology used in this rating was Global Pay Television-Cable and Direct-to-Home Satellite Operators Methodology published in April 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Princeton, New Jersey, RCN Telecom Services, LLC (RCN) provides bundled cable, high-speed Internet and voice services to residential and small-medium business customers primarily located in high-density Northeast (Washington, D.C.; Philadelphia and Lehigh Valley, PA; New York City; Boston) and Chicago markets. The company serves approximately 339 thousand video, 349 thousand high speed data, and 187 thousand voice customers, and its annual revenue is approximately $570 million. ABRY Partners, LLC owns approximately two-thirds of the company, Spectrum Equity owns approximately 20%, and management and other equity investors own the remainder. RESIDENTIAL CAPITAL: Gets More Time to Control Its Chapter 11 Case ------------------------------------------------------------------ Joseph Checkler writing for Dow Jones' DBR Small Cap reports that Residential Capital LLC on Wednesday got more time to file a reorganization plan clear from the threat of rival proposals, two weeks before a hearing on a key settlement with parent Ally Financial Inc. Residential Capital asked Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to further (i) extend the exclusive period during which only they may file a Chapter 11 plan through and including August 21, 2013, and (ii) extend the period during which they have the exclusive right to solicit acceptances of that plan through and including October 21, 2013. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Reaches Deal Slashing FGIC's $5.5B Claim ------------------------------------------------------------- Ciaran McEvoy of BankruptcyLaw360 reported that in a deal that will bring Residential Capital LLC closer to the end of its bankruptcy case in New York, the mortgage servicer announced a settlement with Financial Guaranty Insurance Co. to reduce the bond insurer's claim from $5.5 billion to $596.5 million. According to a court filing in U.S. Bankruptcy Court for the Southern District of New York, ResCap, which once was the fifth- largest mortgage-servicer in the United States, said the settlement was "subject to FGIC's reservation of its rights to assert certain additional claims," the report related. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Again Urges Approval of $1-Bil. Ally Payout ---------------------------------------------------------------- Brian Mahoney of BankruptcyLaw360 reported that Residential Capital LLC asked a New York federal bankruptcy court to approve a $1.1 billion claims payout to Ally Financial Inc., dismissing as unfounded an objection to the deal from one of the debtor's largest bondholders, Warren Buffett's Berkshire Hathaway Inc. According to the report, ResCap debtors asked the court to authorize them to pay out $1.1 billion arising from asserted secured claims under two so-called insider loans provided by Ally in 2009. ResCap, a former Ally subsidiary, has outlined the proposed payment in the case's plan support agreement. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). REVSTONE INDUSTRIES: Subsidiary Gets $54-Mil. Offer From Shiloh --------------------------------------------------------------- Stephanie Gleason writing for Dow Jones' DBR Small Cap reports that Revstone Industries LLC has received a $54.4 million offer from a Shiloh Industries Inc. subsidiary for its auto parts manufacturing business and is seeking court permission to sell those assets. About Revstone Industries Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. A motion for joint administration of the cases has been filed. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. ROTECH HEALTHCARE: Second Amended Plan Filed -------------------------------------------- BankruptcyData reported that Rotech Healthcare filed with the U.S. Bankruptcy Court Second Amended Chapter 11 Plan of Reorganization and related Disclosure Statement. The Plan actually consists of 115 separate Chapter 11 Plans -- one Plan for each of the Debtors that will emerge as a reorganized entity. The Plan does not substantively consolidate any estates. According to the Disclosure Statement, "(i) each holder of an Allowed First Lien Claim shall receive Cash in an amount equal to the Allowed amount of its First Lien Claim; (ii) each holder of an Allowed Second Lien Notes Claim shall receive (x) its pro rata share of 100% of the common equity of the reorganized Company, subject to dilution by the equity interests issued under the Management Equity Incentive Program (thereby eliminating in excess of $300 million of secured debt), and (y) the right to participate in the New Second Lien Term Loan; (iii) all the Company's outstanding shares will be cancelled and extinguished, and no holder of an Equity Interest in Rotech shall receive a distribution on account thereof; and (iv) trade creditors and vendors who agree to maintain or reinstate payment terms as existing prior to the Commencement Date shall be paid in full upon the effective date of the Plan. Other unsecured claims will be paid their Pro Rata Share of $1,500,000 and except as otherwise set forth in the Plan." About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP is the special healthcare regulatory counsel; Barclays Capital Inc. is the financial advisor; Alix Partners, LLP is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders are represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The plan is supported by holders of a majority of the first- and second-lien secured notes. The $290 million in 10.5 percent second-lien notes are to be exchanged for the new equity. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTHSTEIN ROSENFELDT: Beats Government in Forfeiture Proceedings ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for the law firm run by admitted Ponzi schemer Scott Rothstein won a victory June 12 over federal prosecutors attempting to seize the firm's bank accounts as part of a criminal forfeiture proceeding. The report recounts that creditors started an involuntary bankruptcy against the firm Rothstein Rosenfeldt Adler PA just before prosecutors indicted Mr. Rothstein, who later pleaded guilty and is serving a 50-year prison sentence. As part of criminal forfeiture proceedings, federal prosecutors laid claim to law firm bank accounts, contending they contained proceeds from the Ponzi scheme. The federal district court largely sided with the government, forcing the firm's Chapter 11 trustee Herbert Stettin to appeal to the U.S. Eleventh Circuit Court of Appeals in Atlanta. The report notes that Mr. Stettin won in a 22-page opinion by Circuit Judge Gerald B. Tjoflat. The government made a concession in the lower court that proved fatal on appeal. Prosecutors admitted that the accounts contained funds of the firm not tainted with fraud. The clean money was comingled with fruits of the Ponzi scheme. Agreeing with a decision from the U.S. Court of Appeals in Philadelphia, Judge Tjoflat in substance ruled that comingled funds cannot be forfeit because money is fungible. He said that proceeds of fraud used to acquire other property are forfeited only when they can be traced. The report relates that Judge Tjoflat carried the theory a step further in favor of Mr. Stettin as trustee. To the extent money from the firm's accounts was used to acquire other property, that other property is not forfeited either. Although the bank accounts themselves belong to the trustee as a consequence of June 12 opinion, Judge Tjoflat pointed out that Rothstein's interest in the firm remains forfeit "subject, of course, to any claims third parties may have against such interest." The report notes that while the meaning of the quoted language is unclear, it could be a signal that Mr. Stettin's status as a hypothetical judicial lien creditor will cut off any forfeiture claim the government might make against Rothstein's interest in the firm. While the June 12 case is an example of judicial scholarship, it may make little difference to creditors because the government had said forfeited funds would be turned over to swindled investors, after deduction of costs. The Bloomberg News reports that exactly which creditors make a recovery and how much could be different with distribution made in bankruptcy rather than by the government. Distributions from the bankruptcy may come sooner rather than later because there is a July 11 confirmation hearing for court approval of the Chapter 11 plan proposed by Mr. Stettin. The plan is based in large part on a $72.4 million settlement payment to be made by TD Bank NA in exchange for a waiver of lawsuits. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- was suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on Jan. 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case is represented by Michael Goldberg, Esq., at Akerman Senterfitt. SEAN DUNNE: Ulster Bank May Proceed With Irish Bankruptcy --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the attempt by Sean Dunne, an Irish real estate developer, to avoid bankruptcy in his home country may have been undone by Ulster Bank Ireland Ltd. Mr. Dunne filed for Chapter 7 bankruptcy in March in Connecticut, saying he is now resident in the U.S. According to the report, after Mr. Dunne filed lists of his assets and creditors, Ulster Bank filed papers asking the U.S. court to allow involuntary bankruptcy in Ireland to proceed. Mr. Dunne's Chapter 7 trustee, Richard M. Coan, agreed with the idea of having a parallel bankruptcy in Ireland. He said Mr. Dunne's "Irish connections are paramount." The report notes that the bankruptcy judge in Connecticut agreed with the bank and the trustee by signing an order on June 12 permitting the bank to serve Mr. Dunne with papers initiating an Irish bankruptcy. Mr. Dunne wants bankruptcy principally in the U.S. where he can formally shed debt more quickly than in Ireland. The bankruptcy court authorized trustee Mr. Coan to "minimize costs" on matters "more properly resolved" in the Irish bankruptcy. Mr. Rochelle notes that even if Mr. Dunne is ruled bankrupt in Ireland, the so-called automatic stay from the U.S. bankruptcy will remain. Because U.S. law means that the Connecticut court has power over Mr. Dunne's assets in Ireland, the courts in both countries will need to work out a cooperation agreement. The report recounts that Ulster Bank initiated involuntary bankruptcy proceedings in Ireland six week before Mr. Dunne filed for Chapter 7 bankruptcy in the U.S. The U.S. proceedings automatically stopped the bank from serving papers on Dunne commencing the Irish bankruptcy in earnest. Using Mr. Dunne's own lists of assets and liabilities as evidence, the bank said that all of his real estate and bank accounts are in Ireland while all creditors are outside the U.S., mostly in Ireland. The Bloomberg News report discloses that the formal lists of property and debt Mr. Dunne filed last month in the U.S. court show assets with a total claimed value of $55.2 million and liabilities totaling $942.2 million. The assets include $40.8 million of real estate, all in Ireland. Among the $280.2 million in secured creditors and $612.2 million in unsecured creditors, almost all are in Ireland. Mr. Dunne's property lists show $10,000 of household furnishings he claims are exempt from creditors' claims. The household goods are located at a home in Dublin. About Sean Dunne Irish real estate developer Sean Dunne filed a liquidating Chapter 7 bankruptcy petition (Bankr. D. Conn. Case No. 13-50484) on March 30, 2013, in Bridgeport, Connecticut. Mr. Dunne says he now lives and works in Connecticut. Mr. Dunne said he filed for bankruptcy in the U.S. because Ulster Bank was applying to an Irish court for permission to commence bankruptcy proceedings there. The formal lists of property and debt Dunne filed in May in the U.S. court shows assets with a total claimed value of $55.2 million and liabilities totaling $942.2 million. The assets include $40.8 million of real estate, all in Ireland. Among the $280.2 million in secured creditors and $612.2 million in unsecured creditors, almost all are in Ireland. SELECTOS WHOLE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Selectos Whole Foods, Inc. P.O. Box 9023115 San Juan, PR 00902 Bankruptcy Case No.: 13-04680 Chapter 11 Petition Date: June 6, 2013 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Judge: Brian K. Tester Debtor's Counsel: Carlos Rodriguez Quesada, Esq. LAW OFFICE OF CARLOS RODRIGUEZ QUESADA P.O. Box 9023115 San Juan, PR 00902-3115 Tel: (787) 724-2867 E-mail: cerqlaw@coqui.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/prb13-04680.pdf The petition was signed by Thomas Ward, president. SEMCRUDE LP: Plan Trustee Loses Suit Against Ritchie, Cottonwood ---------------------------------------------------------------- Bettina M. Whyte, as trustee of the SemGroup Litigation Trust, commenced these lawsuits: -- Bettina M. Whyte, as the Trustee, on behalf of the SemGroup Litigation Trust, Plaintiff, v. C/R Energy Coinvestment II, L.P., C/R SemGroup Investment Partnership, L.P., Ritchie SG Holdings LLC, SGLP Holding, Ltd., SGLP US Holding, LLC and Doe Defendants, 1-100, Defendants, Adv. Proc. No. 10-50840 (Bankr. D. Del.); and -- Bettina M. Whyte, as the Trustee, on behalf of the SemGroup Litigation Trust, Plaintiff, v. Cottonwood Partnership, LLP, Rosene Family, L.L.C., Satco Investments, L.L.C., and Doe Defendants, 1-100, Defendants, Adv. Proc. No. 10-51808 (Bankr. D. Del.), seeking to avoid and recover certain SemGroup partnership distributions that occurred on or around Aug. 2, 2007 and Feb. 20, 2008. The Defendants owned equity interests in SemGroup and its general partner, SemGroup G.P., LLC. When SemGroup made equity distributions, the Defendants received a portion of the proceeds due to their ownership interest. The 2007 Distributions totaled $26,192,686. The 2008 Distributions totaled $29,102,985. The eight-count Complaint asserts constructive fraudulent transfer claims pursuant 11 U.S.C. Sections 548 and 544, Oklahoma's Uniform Fraudulent Transfer Act, and recovery of the alleged fraudulent transfers under 11 U.S.C. Sec. 550. The Trustee alleges the Debtors received no value in exchange for the 2008 Distributions to the Defendants and that the Debtors were insolvent at the time of the 2008 Distributions. In response, the Defendants argue that the Debtors were solvent at the time of the 2008 Distributions and thus, the transfers cannot be avoided. In a June 10, 2013 Opinion available at http://is.gd/B61fIpfrom Leagle.com, Bankruptcy Judge Brendan Linehan Shannon finds that the Trustee has failed to carry her burden to prove that the Debtors were insolvent at the time of the 2008 Distributions. Judgment is entered in favor of the Defendants on all counts, Judge Shannon said. Bettina M. Whyte, Trustee of the SemGroup Litigation Trust, is represented by: BLANK ROME LLP Bonnie Glantz Fatell, Esq. David A. Dorey, Esq. E-mail: Fatell@BlankRome.com Dorey@BlankRome.com - and - QUINN EMANUEL, URQUHART & SULLIVAN LLP R. Brian Timmons, Esq. Eric D. Winston, Esq. Matthew Scheck, Esq. Brian Collins, Esq. Rachel Appleton, Esq. E-mail: briantimmons@quinnemanuel.com ericwinston@quinnemanuel.com matthewscheck@quinnemanuel.com briancollins@quinnemanuel.com rachelappleton@quinnemanuel.com Counsel to Ritchie SGLP Holding, Ltd., and SGLP US Holding, L.L.C., are: COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A. Patrick J. Reilley, Esq. Sanjay Bhatnagar, Esq. E-mail: preilley@coleschotz.com sbhatnagar@coleschotz.com - and - SIDLEY AUSTIN LLP Thomas K. Cauley, Jr., Esq. Brian A. McAleenan, Esq. E-mail: tcauley@sidley.com bmcaleenan@sidley.com Loizides, P.A.'s Laurie S. Polleck, Esq., and Albright, Rusher & Hardcastle, PC's James W. Rusher, Esq., argue for Cottonwood Partnership, LLP. About SemGroup, L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-11525) on July 22, 2008. John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represented the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. served as the Debtors' claims agent. The Blackstone Group L.P. and A.P. Services LLC acted as the Debtors' financial advisors. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represented the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. SemGroup LP won confirmation from the Bankruptcy Court of its Fourth Amended Plan of Reorganization on Oct. 28, 2008. The Plan, which distributed more than $2.5 billion in value to stakeholders, was declared effective on Nov. 30, 2008. As part of the Plan, the Reorganized Debtors entered into two new credit facilities aggregating $625 million in financing; entered into a $300 million Second Lien Term Facility; created a new corporate structure, including issuing shares of common stock and warrants; and distributed approximately $500 million of cash and approximately $1 billion in value of new common stock and warrants to thousands of creditors in accordance with the Plan. SEMGROUP LP: Creditors Lose $200 Million in Two Lawsuits ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors of SemGroup LP lost two lawsuits with more than $200 million at issue in the space of 24 hours. One loss was in federal district court in New York and the other defeat was at the hands of a bankruptcy judge in Delaware. According to the report, both suits were brought by Bettina Whyte, in her capacity as trustee for the creditors' trust created under the SemGroup Chapter 11 plan implemented in December 2009. In the New York suit, Ms. Whyte was suing Barclays Plc, contending that the $143 million pre-bankruptcy sale of SemGroup's portfolio of derivatives was a fraudulent transfer under Oklahoma state law. U.S. District Judge Jed Rakoff dismissed the suit in a 10-page opinion filed June 11. The report notes that Ms. Whyte crafted her Barclays suit intending to avoid the safe harbor in Section 546(g) of the Bankruptcy Code prohibiting a bankruptcy trustee from suing to unravel swap transactions. Ms. Whyte relied on a provision in the SemGroup plan where individual creditors transferred their claims to the trust, allowing her to argue the suit was by creditors not a trustee. As further hoped-for protection, she sued only under state fraudulent transfer law. Judge Rakoff saw right through the subterfuge. He said her "clever argument" would create an "absurd result" and render the safe harbor a "nullity." As a legal principle, Judge Rakoff said that the safe harbor "impliedly preempts" Ms. White's theory that creditors were suing, not a trustee. Judge Rakoff said that "Congress intended to place swap transactions totally beyond the inherently destabilizing effects of a bankruptcy and its attendant litigation." According to the report, Ms. Whyte's second defeat was a 21-page opinion on June 10 by U.S. Bankruptcy Judge Brendan Linehan Shannon in Delaware. Defendants were shareholders Ritchie SG Partnership LP and Cottonwood Partnership LLP. In the Delaware suit, Ms. Whyte was again suing as the creditors' trustee, claiming that $56 million in distributions to shareholders within a year of bankruptcy were fraudulent transfers because SemGroup was insolvent. In an oral ruling in April, Judge Shannon preliminarily rejected Ms. Whyte's $26.2 million claim for a transfer about a year before bankruptcy. The judge didn't buy the theory that SemGroup had unreasonably small capital a year before bankruptcy. On the $29.1 million stockholder distribution five months before bankruptcy, the pivotal issue was solvency. Bloomberg News reports that Judge Shannon took sides with the shareholders' expert from Spectrum Capital Group and concluded that SemGroup was solvent, thus killing the fraudulent transfer theory. Judge Shannon dismissed the suit entirely. The New York suit is Whyte v. Barclays Bank PLC, 12-5318, U.S. District Court, Southern District of New York (Manhattan). The Delaware suit is Whyte v. C/R Energy Coinvestment II LP (In re SemCrude LP), 10-50840, U.S. Bankruptcy Court, District of Delaware (Wilmington). About SemGroup, L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-11525) on July 22, 2008. John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represented the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. served as the Debtors' claims agent. The Blackstone Group L.P. and A.P. Services LLC acted as the Debtors' financial advisors. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represented the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. SemGroup LP won confirmation from the Bankruptcy Court of its Fourth Amended Plan of Reorganization on Oct. 28, 2008. The Plan, which distributed more than $2.5 billion in value to stakeholders, was declared effective on Nov. 30, 2008. As part of the Plan, the Reorganized Debtors entered into two new credit facilities aggregating $625 million in financing; entered into a $300 million Second Lien Term Facility; created a new corporate structure, including issuing shares of common stock and warrants; and distributed approximately $500 million of cash and approximately $1 billion in value of new common stock and warrants to thousands of creditors in accordance with the Plan. SOUTHWIND HOSPICE: Bankruptcy Court to Hear UMB Bank Suit --------------------------------------------------------- Kansas Magistrate Judge David J. Waxse referred UMB Bank, N.A.'s lawsuit against KANZA Bank to the U.S. Bankruptcy Court for the District of Kansas, saying the case is related to the Southwind Hospice, Inc. bankruptcy case, Case No. 12-23053. UMB Bank, N.A., as Trustee under the Indenture dated January 1, 2005, filed its Complaint against KANZA Bank for resolution of an existing dispute concerning the alleged demand by the Defendant that UMB Bank pay it, to the detriment of other bond owners, the outstanding principal amount of certain Healthcare Facility Revenue Bonds owned by the Defendant after the occurrence of an event of default by the obligor under the Indenture under which the bonds were issued. UMB Bank seeks a declaratory judgment to determine whether payment by UMB Bank to the Defendant is required by the Indenture and seeks reimbursement of fees and expenses as required by the Indenture. The Defendant filed an Answer and Counterclaims, including counts for breach of contract, declaratory judgment, breach of fiduciary duty and breach of trust pursuant to the Kansas Uniform Trust Code. The case is, UMB BANK, N.A., Plaintiff, v. KANZA BANK, Defendant, Case No. 11-1215-DJW (D. Kan.). A copy of Judge Waxse's June 7 Memorandum and Order is available at http://is.gd/1yUh1Efrom Leagle.com. UMB Bank, N.A., is represented by Gardiner B. Davis, Esq., and Patrick J. Whalen, Esq. -- gdavis@spencerfane.com and pwhalen@spencerfane.com -- at Spencer Fane Britt & Browne LLP. KANZA Bank is represented by Will B. Wohlford, Esq., Kristen D. Wheeler, Esq., and Julia M. Gaughan, Esq. -- WWOHLFORD@morrislaing.com kwheeler@morrislaing.com and jgaughan@morrislaing.com -- at Morris, Laing, Evans, Brock & Kennedy, Chtd. Southwind Hospice, Inc., in Pratt, Kansas, filed a Chapter 11 petition (Bankr. D. Kan. Case No. 12-23053) on Nov. 9, 2012. Bankruptcy Judge Dale L. Somers oversees the case. Edward J. Nazar, Esq. -- ebn1@redmondnazar.com -- at Redmond & Nazar, LLP, serves as the Debtor's counsel. In its petition, the Debtor scheduled assets of $1,447,993 and liabilities of $2,727,546. A list of the Company's 19 largest unsecured creditors is available for free at http://bankrupt.com/misc/ksb12-23053.pdf The petition was signed by Ginger Goering, executive director. STRATA TITLE: No Longer Holds Interest in Tempe Tower ----------------------------------------------------- Bankruptcy Judge Daniel P. Collins ruled that Schedule 1 of the Tempe Tower LLC Operating Agreement can be enforced under Arizona and Bankruptcy laws. According to Schedule 1, on February 24, 2013, Strata Title LLC's membership interests in Tempe Tower changed from 50% to zero and Pure Country Tower LLC's membership interests changed from 50% to 100%. Tempe Tower is a sole purpose LLC created to own and operate real property at 230 W. Fifth Street, Tempe, Arizona. When formed, the Debtor and Pure Country each held a 50% membership interest in Tempe Tower. At formation, John Lupypciw, the Debtor's sole member, was the manager of Tempe Tower. Tempe Tower is a manager managed LLC according to the terms of the operating agreement entered into by the parties on February 24, 2012. "Though the Debtor's membership interests in Tempe Towers were property of the estate at the time of filing, those membership interests were subject to Arizona law. Under Arizona law, parties to an operating agreement can contract, as the parties here did in Schedule 1, for changes in membership interests between the parties. Stay relief to effectuate Schedule 1 was unnecessary as it required no affirmative acts necessary to effectuate Schedule 1, cause exists to do so and the stay is hereby lifted immediately," Judge Collins said in a June 6, 2013 decision available at http://is.gd/jLASwDfrom Leagle.com. Strata Title LLC filed its chapter 11 petition (Bankr. D. Ariz. Case No. 12-24242) on Nov. 6, 2012. The Debtor is a single member limited liability company with John Lupyciw as its sole member. The Debtor did not list an interest in Tempe Tower, LLC (Tempe Tower) on its original schedules (November 20, 2012, Dkt #17), but later amended Schedule B, claiming a 70% interest in Tempe Tower. Tempe, Arizona-based Strata Title is represented by Ronald J. Ellett, Esq. -- rjellett@ellettlaw.phxcoxmail.com -- at Ellett Law Offices, P.C., as counsel. In its petition, the Debtor estimated $1 million to $10 million in both assets and debts. A list of the two largest unsecured creditors is available for free at http://bankrupt.com/misc/azb12-24242.pdf The petition was signed by Mr. Lupypciw as managing member. SUNTECH POWER: Noteholders File Suit in New York Court ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that when large foreign companies like Suntech Power Holdings Co. are in bankruptcy abroad, they often initiate Chapter 15 bankruptcy proceedings in the U.S. if they had operations in the U.S. or issued securities in the U.S. markets giving investors the right to sue in U.S. courts. According to the report, Suntech so far hasn't filed for Chapter 15 protection, thus allowing holders of $550,000 in defaulted notes to file a lawsuit this week in New York state court. The noteholders are Trondheim Capital Partners LP and Michael Meixler. Suntech defaulted on $575 million in notes in March and later that month was put into bankruptcy in China by eight bank lenders. The Bloomberg News report discloses that creditors of the holding company, including holders of bonds sold in the U.S. market, may have difficulty achieving a major recovery because they are structurally subordinated to creditors of the operating company where the assets are located. A Chapter 15 petition, if approved by a U.S. bankruptcy judge, would halt lawsuits and creditor actions in the U.S. Chapter 15 is designed to assist a foreign court in a bankruptcy principally pending outside the U.S. About Suntech Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP) produces solar products for residential, commercial, industrial, and utility applications. With regional headquarters in China, Switzerland, and the United States, and gigawatt-scale manufacturing worldwide, Suntech has delivered more than 25,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. As reported by the TCR on March 20, 2013, Suntech Power Holdings Co., Ltd., has received from the trustee of its 3% Convertible Notes a notice of default and acceleration relating to Suntech's non-payment of the principal amount of US$541 million that was due to holders of the Notes on March 15, 2013. That event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corporation and Chinese domestic lenders. SUPERIOR HOMES: 11th Cir. Affirms Order Barring Lawsuits -------------------------------------------------------- The U.S. Court of Appeals for the Eleventh Circuit ruled that a Florida bankruptcy court did not abuse its discretion in approving a settlement agreement in the involuntary bankruptcy case against Superior Homes & Investments LLC, which compromise contained a Bar Order that prevented three cases from proceeding in Florida's state courts. On Feb. 20, 2009, numerous creditors filed a Chapter 11 involuntary bankruptcy petition (Bankr. M.D. Fla. Case No. 09-01955) against Superior Homes & Investments, LLC. The petitioning creditors were represented by Wendy Anderson, Esq. -- wra@andersonbadgley.com -- at Anderson & Badgley, in Winter Park, Florida. There were over 650 claims asserted against the Debtor, 400 of which concerned unreturned deposits paid to the Debtor totaling $33,000,000. Robert Morrison was appointed as Chapter 11 Trustee of the estate. In November 2009, the bankruptcy court converted the case to Chapter 7. During his investigation of the Debtor's books and records, Mr. Morrison discovered that the Debtor had made a number of transfers to its principals and affiliated entities -- "Non-Debtor Defendants" -- which were potentially subject to avoidance under the Bankruptcy Code and Florida law. The Trustee also determined that these transfers rendered indistinguishable the assets of the Debtor and Non-Debtor Defendants. On Feb. 18, 2011, the Trustee filed a complaint against the Debtor and the Non-Debtor Defendants to recover the allegedly fraudulent transfers made between the Debtor and the Non-Debtor Defendants during the time leading up to the bankruptcy case. Based on the Non-Debtor Defendants' cooperation during the Adversary Proceeding, the Trustee determined that they had approximately $1,000,000 in cash and assets available to satisfy a judgment entered against them. However, the Trustee was concerned that the $1,000,000 in assets would be exhausted by the Non-Debtor Defendants' defense of state-court cases filed by 560 creditors of the Estate. These creditors sought to recover from the Non-Debtor Defendants the allegedly fraudulent transfers made between the Debtor and the Non-Debtor Defendants. To safeguard the $1,000,000 for the benefit of the Estate and all of its creditors, the Trustee constructed a compromise that would result in the Non-Debtor Defendants paying $800,000 to the Estate in exchange for the entry of an order barring further litigation against the Debtor and the Non-Debtor Defendants. The Bar Order would enjoin the creditors' state-court litigation against the Non-Debtor Defendants. Of those creditors, 116 (the Appellants) objected to the Bar Order, requesting that the bankruptcy court allow a judgment to issue against the Non-Debtor Defendants in the state-court proceedings so that the Appellants could use the judgment to collect from other sources of recovery, such as insurance. Such an agreement is typically called a Coblentz agreement. On September 1, 2011, the bankruptcy court denied the Appellants' request and entered the Bar Order. On September 20, 2012, the district court affirmed the bankruptcy court's approval of the Compromise and entry of the Bar Order. A three-judge panel of the Eleventh Circuit held that the state- court litigation would directly impact the Estate because the Trustee would not have received the $800,000 settlement in the absence of the Bar Order. The Appellants argue that the bankruptcy court abused its discretion in applying this factor because the Compromise will provide the Appellants with a 2-cent return for each dollar of their deposit; and also because the Compromise does not contain Coblentz agreements, which would allow the Appellants to pursue the Non-Debtor Defendants' insurers. A Coblentz agreement -- from In re Coblentz v. Am. Sur. Co. of N.Y., 416 F.2d 1059, 1063 (5th Cir. 1969) -- generally speaking, is a settlement agreement where "an insurer who ha[s] refused to handle its insured's defense, thus leaving its insured to his own resources, was bound by the terms of a negotiated final consent judgment entered against the insured." Wrangen v. Penn. Lumbermans Mut. Ins. Co., 593 F.Supp.2d 1273, 1278 (S.D. Fla. 2008). The Eleventh Circuit disagrees. It held that, "Although Appellants might receive only 2 [cents] on the dollar, this out- of-context observation ignores the fact that the Debtor is practically insolvent and the Non-Debtor Defendants pursuant to the Compromise are parting ways with approximately 80% of their remaining assets. Certainly, a Coblentz agreement would have been more beneficial to Appellants than the Compromise as it stands now, but we hardly think that the bankruptcy court abused its discretion in approving the Compromise and the Bar Order. Allowing the state-court litigation to continue would have drained the Non- Debtor Defendants' resources and allowed Appellants to make an end-run around the normal bankruptcy procedure for distribution of the Estate. Therefore, the Trustee did what was, in his business judgment, in the best interest of the Estate by structuring the Compromise and its Bar Order, and the bankruptcy court did not abuse its discretion in approving them." The appellate case is, CHRISTOPHER APPS, et al., Plaintiffs, RUSSEL KING, LORI LYNNE KING, KEITH MEALAND, VALERIE MEALAND, DAVID SHEPPARD, GILLIAN SHEPPARD, Plaintiffs-Appellants, v. ROBERT M. MORRISON, THE SUPERIOR GROUP, LLC, a.k.a. Superior Group, LLC, SUPERIOR REAL ESTATE, LLC, SUPERIOR FINANCIAL GROUP, LLC, SUPERIOR GROUP MANAGEMENT, LLC, d.b.a. The Superior Group of Companies, et al., Defendants-Appellees (11th Cir.). A copy of the Eleventh Circuit's June 10, 2013 per curiam decision is available at http://is.gd/JEXtzUfrom Leagle.com. SUPERMEDIA INC: Idearc Execs Strike $34MM Deal to End Fraud Claims ------------------------------------------------------------------ Kathryn Brenzel of BankruptcyLaw360 reported that executives of the former Idearc Inc. reached a $33.8 million settlement in a securities fraud class action accusing the company of releasing rosy financial statements as it spiraled toward bankruptcy, after years of failed attempts to resolve the case in Texas federal court. According to the report, the settlement comes on the eve of trial and after three failed attempts at mediation since the complaint was filed in 2009, according to court documents. The case is Buettgen v. Harless et al, Case No. 3:09-cv-00791 (N.D. Tex.). About SuperMedia Headquartered in D/FW Airport, Texas, SuperMedia Inc., formerly known as Idearc, Inc., is a yellow pages directory publisher in the United States. Its portfolio includes the Superpages directories, Superpages.com, digital local search resource on both desktop and mobile devices, the Superpages.com network, which is a digital syndication network, and its Superpages direct mailers. SuperMedia is the official publisher of Verizon, FairPoint and Frontier print directories in the markets in which these companies are the incumbent local telephone exchange carriers. Idearc was spun off from Verizon Communications, Inc., in 2006. At Dec. 31, 2012, SuperMedia had approximately 3,200 employees, of which approximately 950 or 30% were represented by unions. SuperMedia and three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10545) on March 18, 2013, to effectuate a merger of equals with Dex One Corp. SuperMedia disclosed total assets of $1.4 billion and total debt of $1.9 billion. Morgan Stanley & Co. LLC is acting as financial advisors to SuperMedia, and Cleary Gottlieb Steen & Hamilton LLP and Young Conaway Stargatt & Taylor, LLP are acting as its legal counsel. Fulbright & Jaworski L.L.P is special counsel. Chilmark Partners Is acting as financial advisor to SuperMedia's board of directors. Epiq Systems serves as claims agent. This is also SuperMedia's second stint in Chapter 11. Idearc and its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 09-31828) in March 2009 and emerged from bankruptcy in December 2009, reducing debt from more than $9 billion to $2.75 billion. THORNBURG MORTGAGE: Deadline for Proposed Mediators List Moved -------------------------------------------------------------- Bankruptcy Judge Duncan W. Keir signed off on a "Stipulation and Consent Order Revising Schedule for Submission of Lists of Proposed Mediators" in the case, JOEL I. SHER in his capacity as Chapter 11 Trustee for TMST, INC., TMST HEDGING STRATEGIES, INC., and TMST HOME LOANS, INC., Plaintiff, v. JPMORGAN CHASE FUNDING INC., et al., Defendants, Adv. Proc. No. 11-00340 (Bankr. D. Md.). On May 23, 2013, the Court entered an Order Assigning Matter to Bankruptcy Dispute Resolution Program and an Order as to Selection of Mediator. The Mediation Orders require that the parties confer in good faith in an effort to select and submit to the Court for approval a list of mutually-agreeable proposed mediators, or if such agreement is not reached, the parties are to submit separate lists of proposed mediators. The Mediation Orders require that the Submissions be completed on or before June 22, which is a Saturday, making the Submissions due on June 24. The parties have been in consultation in the effort to select mutually-agreeable mediators, but require a short period of additional time to file the Submissions. The parties have agreed to an extension of the deadline for the filing of the Submissions to July 1. A copy of the Stipulation dated June 11, 2013, is available at http://is.gd/JUlbgsfrom Leagle.com. Cadwalader, Wickersham & Taft LLP's Israel Dahan, Esq. -- deryck.palmer@cwt.com and israel.dahan@cwt.com -- and John H. Thompson, Washington, D.C., argue for Citigroup Global Markets, Ltd. and Citigroup Global Markets, Inc. Paul, Weiss, Rifkind, Wharton & Garrison LLP's Alan W. Kornberg, Esq., Roberta A. Kaplan, Esq., and Brian S. Hermann, Esq. -- akornberg@paulweiss.com rkaplan@paulweiss.com and bhermann@paulweiss.com -- and Lori Simpson, Esq. -- lsimpson@bdslegal.com -- argue for JPMorgan Chase Funding Inc. (as successor to Bear Stearns Investment Products Inc.). Katten Muchin Rosenman LLP's David Bohan, Esq., and John Sieger, Esq., in Chicago -- david.bohan@kattenlaw.com and john.sieger@kattenlaw.com -- and Eric Kuwana, Esq. -- eric.kuwana@kattenlaw.com -- represent UBS AG (as successor to UBS Securities, LLC). Jones Day's Bennett L. Spiegel, Esq., and Erin N. Brady, Esq. -- blspiegel@jonesday.com and enbrady@jonesday.com -- and Jane Rue Wittstein, Esq. -- jruewittstein@jonesday.com -- and Miguel Eaton, Esq. -- meaton@jonesday.com -- represent RBS Securities Inc. f/k/a Greenwich Capital Markets, Inc. and Greenwich Capital Derivatives, Inc. and Royal Bank of Scotland plc. Whiteford Taylor Preston LLP's John F. Carlton, Esq., and Todd M. Brooks, Esq. -- jcarlton@wtplaw.com and tbrooks@wtplaw.com -- Douglas K. Mayer, Esq., Esq., and A.J. Martinez, Esq., at Wachtell, Lipton, Rosen & Katz -- dkmayer@wlrk.com and ajmartinez@wlrk.com -- represent Credit Suisse Securities (USA) LLC and Credit Suisse International. Shapiro Sher Guinot & Sandler's Richard M. Goldberg, Esq. and Daniel J. Zeller, Esq. -- jis@shapirosher.com rmg@shapirosher.com and djz@shapirosher.com -- represent the Chapter 11 Trustee. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009. Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, served as counsel to Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as special counsel. Jim Murray and David Hilty of Houlihan Lokey Howard & Zukin Capital, Inc., served as investment banker and financial advisor. Protiviti Inc. served as financial advisory services. KPMG LLP served as the tax consultant. Epiq Systems, Inc., serves claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. He is represented by his firm, Shapiro Sher Guinot & Sandler. TOUSA INC: Insurance Pays $67 Million for Settlement ---------------------------------------------------- Tousa Inc. is asking a Florida bankruptcy judge to approve a settlement whereby its insurers will pay $67 million to end a lawsuit that alleged Tousa's top brass disregarded their duty to the company and its creditors. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the $67 million settlement with several insurance companies represents the last missing piece before the liquidating homebuilder can move ahead with bankruptcy court approval of a Chapter 11 plan filed in mid-May. The deal is part of a broader "grand bargain" at the heart of the company's Chapter 11 liquidation plan, according to a motion filed with the bankruptcy court, BankruptcyLaw360 reported. Bloomberg News relates that the new settlement opens the door to conclusion of a bankruptcy more than five years old. Like everything else in the Tousa case, the dispute with the insurance companies revolved around a fraudulent transfer before bankruptcy where Tousa operating subsidiaries were made liable on debt which previously hadn't been their responsibilities. The judgment finding fraudulent transfers was upheld in the U.S. Court of Appeals in Atlanta. Alongside the main suit, Tousa's creditors sued the company's directors and officers for authorizing the fraudulent transfers. There were also lawsuits with insurance companies that provided directors' and officers' liability insurance over the question of whether there was liability on the policies. The Bloomberg report notes that the insurance companies included Federal Insurance Co., XL Specialty Insurance Co. and Zurich American Insurance Co. Tousa's secured lenders also sued the directors and officers, who turned the claims over to the insurance companies. In settlement, the insurance companies will pay $67 million, with $47.9 million going to creditors of the Tousa companies that were forced to shoulder debt improperly. The first-lien lenders receive $7.66 million, while second-lien lenders take home $11.5 million. The report relates that some of the insurance companies also pay $8.27 million of the directors' and officers' defense costs. The new settlement was crafted by mediator Peter L. Borowitz, who was also responsible for the larger settlement underlying the Chapter 11 plan. The lawsuits were hard-fought. The report recounts that the directors and officers made six motions to dismiss. All were denied. The settlement took two years to work out in mediation. There will be a hearing for approval of the settlement on July 11 in U.S. Bankruptcy Court in Fort Lauderdale, Florida. The appeal in the Circuit Court of Appeals was Citicorp North America Inc. v. Official Committee of Unsecured Creditors (In re Tousa Inc.), 11-11071, U.S. Court of Appeals for the Eleventh Circuit (Atlanta). About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case No. 08-10928). Richard M. Cieri, Esq., M. Natasha Labovitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in New York, N.Y.; and Paul S. Singerman, Esq., at Berger Singerman, in Miami, Fla., represent the Debtors in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. The official committee of unsecured creditors has filed a proposed chapter 11 liquidating plan for Tousa. However, the committee said it would no longer pursue approval of its liquidation plan because of the pending appeal of its fraudulent transfer case in the U.S. Court of Appeals for the Eleventh Circuit. A district court in February 2011 held that the bankruptcy judge was wrong in ruling that lenders who were paid off received fraudulent transfers when Tousa gave liens on subsidiaries' properties to bail out and refinance a joint venture. Daniel H. Golden, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, N.Y., represent the creditors committee. Tousa and the official committee of unsecured creditors has filed a proposed chapter 11 liquidating plan following a settlement between the Debtor and creditors and other settlements crafted by mediator Peter L. Borowitz. The settlement was made after a May 2012 U.S. Court of Appeals in Atlanta decision that found that banks received fraudulent transfers exceeding $400 million. There will be a hearing on June 20 for approval of disclosure materials explaining the plan. Tousa intends to hold a confirmation hearing in August for approval of the plan. TUCKER CAPITAL: Files for Chapter 11 Protection ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Tucker Capital Inc., a provider of truck leasing and financing, filed a petition for Chapter 11 protection (Bankr. D. Ore. Case No. 13-33699) on June 10 in its hometown in Portland, Oregon. According to the report, operating in seven states, the company specializes in serving over-the-road drivers with bad credit. The petition estimated assets of less than $10 million and debt exceeding $10 million. The creditor list shows about $12 million owing to Bank of America NA and Zion's First National Bank, secured by truck leases. TUCKER CAPITAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Tucker Capital, Inc. P.O. Box 10446 Portland, OR 97296 Bankruptcy Case No.: 13-33699 Chapter 11 Petition Date: June 10, 2013 Court: United States Bankruptcy Court District of Oregon Judge: Randall L. Dunn About the Company: The Debtor is a provider of truck leasing and financing in seven states. Debtor's Counsel: Tara J. Schleicher, Esq. FARLEIGH WADA WITT 121 SW Morrison St #600 Portland, OR 97204 Tel: (503) 228-6044 E-mail: tschleicher@fwwlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 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/orb13-33699.pdf The petition was signed by William E. Laverde, president. UNIVERSAL FINANCE: Can't Use Cash to Pay BB&T, SunTrust ------------------------------------------------------- Bankruptcy Judge William L. Stocks denied the request of Universal Finance Inc. to use cash collateral to the extent it seeks authorization to make payments to Branch Banking and Trust Company and SunTrust Bank. The Court said the proposed payments to BB&T and SunTrust are not permissible. On May 1, 2013, the Debtor filed its Motion for Use of Cash Collateral, and submitted a budget setting forth the items which it proposes to pay if permitted to use cash collateral. The budget includes proposed monthly payments of $11,540 to BB&T and $21,884.56 to SunTrust from the cash collateral. Wells Fargo Bank and the Bankruptcy Administrator object to the proposed payments to BB&T and SunTrust. A copy of Judge Stocks' June 7, 2013 Opinion and Order is available at http://is.gd/fuyMTDfrom Leagle.com. This case came before the court on May 28, 2013 for hearing on the Cash Collateral Motion. Katherine J. Clayton, Esq., and Clint S. Morse, Esq. -- cmorse@brookspierce.com -- appeared on behalf of the Debtor, June L. Basden and J. Patrick Haywood appeared on behalf of Wells Fargo, and Robert E. Price appeared on behalf of the Bankruptcy Administrator. Universal Finance Inc. is a licensed consumer finance company in the business of making small, secured consumer loans. Universal Finance filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 13-50538) on April 30, 2013. To finance its operations, in 2007 the Debtor took out a $30,000,000 line of credit from Wells Fargo. When this loan was made, Wells Fargo obtained a security interest in the accounts receivable of the Debtor. The cash collateral which the Debtor seeks to use consists of the collections from the accounts receivable that are subject to the security interest held by Wells Fargo. Beginning in May 2008, the Debtor's principals, Richard and Robert Greer, concluded that loans or equity infusions to the Debtor were needed. Thereafter, R&R Enterprises, LLC, another company owned by the Greers, pledged, among other things, its interest in two office buildings to secure a loan from BB&T in the amount of $1,500,000. The proceeds of this loan provided over $1,000,000 in working capital to the Debtor. In June and September of 2010, the Greers pledged the majority of their liquid assets to SunTrust to secure two loans totaling $4,500,000. Approximately $3,500,000 of the loan proceeds from SunTrust also went to the Debtor. These loans to the Debtor were made subject to subordination agreements under which repayment of BB&T and SunTrust was subordinated to Wells Fargo, the Debtor's largest creditor. Judge William L. Stocks oversees Universal Finance's bankruptcy case. Katherine J. Clayton, Esq. -- kclayton@brookspierce.com -- at Brooks, Pierce, McLendon, Humphrey & Leonard LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets, and $10 million to $50 million in debts. A list of the largest unsecured creditors is available for free at http://bankrupt.com/misc/ncmb13-50538.pdf The petition was signed by Robert V. Green, director, shareholder. VAIL LAKE: Puts Itself Into Chapter 11 Amid Ownership Dispute ------------------------------------------------------------- Vail Lake Rancho California, LLC, this month said that it would no longer contest a bankruptcy petition signed by creditors. In addition, Vail Lake sent five affiliates into bankruptcy in order to address its woes. "Most immediately, the present filings and uncontested involuntary petition are precipitated by insufficient liquidity and as such, serve to allow the Debtors to preserve their operations as a going concern for the benefit of their economic stakeholders," explains Thomas C. Hebrank, who was named Vail Lake's CRO in May. As soon as the Court shortly enters an order for relief commencing VLRC's Chapter 11 case, the Debtors expect to file "first day" motions. The Debtors will ask the Court to extend the deadline to file their schedules of assets and liabilities, pay prepetition wages, and pay claims of critical vendors. The Debtors intend to file applications to hire Cooley LLP as counsel; and Thomas C. Hebrank and E3 Advisors to serve as chief restructuring officer. Road to Bankruptcy According to Mr. Hebrank, the current financial issues faced by the Debtor are attributable largely to the wrongful acts of Angela Sabella and Sabella's lending entity, Dynamic Finance Corporation, which, were undertaken in a concerted effort to obtain ownership of the Debtors' and their respective assets. According to the Debtors, Sabella and Dynamic are classic "hard money" lenders and are the predecessors in interest to the senior secured lender to Vail Lake, Cambridge Financial of California, LLC. William Johnson bought the Vail Lake properties from Kemper Insurance Company in 1995 to 1996. "From approximately 1996 onward, then, various of the Debtors entered in to numerous financial transactions with Sabella and her affiliate Dynamic, including purported loans secured by the Debtors' respective properties that were both fraudulent and usurious, among other things. At the same time, Dynamic and Sabella made continual associated demands regarding Sabella's and/or Dynamic's desire for additional equity ownership in the Companies," Mr. Hebrank explains. "After obtaining effective financial control of Johnson and his entities, Sabella sought to ensure her ultimate ownership of the Vail Lake properties by withholding funds needed for development and instead rolling over advances made by herself and Dynamic into short term loans at usurious interest rates and uniformly cross- collaterized, as a means of attempting to ensure the properties could not be successfully entitled or operated." In 2005, the Companies were successful in negotiating the terms of a sale to KB Home Coastal, Inc. ("KB"), pursuant to which the real properties held by VLRC, VLVR and VLU, excluding any lake membership rights and any water rights to the lake itself, would be sold for a sale price of $200,000,000. However, Sabella withhold consent of the sale. Fraudulent Transfers The CRO points out, among other things, that the purported financing by Sabella/Cambridge, in excess of $30,000,000 in principal amount on its face, is belied by the documentary evidence. He adds that the stated "principal" is the result of numerous short term notes rolling over prior loans at usurious interest rates and with improper charges and fees. He also points out that promissory notes given to Dynamic and Sabella were executed without property corporate authority so they are likely void or voidable. In the Chapter 11 cases, the Debtors intend to promptly move to seek avoidance of the Sabella/Dynamic liens, now purportedly assigned to Cambridge, on grounds including, without limitation, avoidance as fraudulent transfers as well as avoidance for lack of perfection. In addition, the Debtors further intend to seek equitable subordination or recharacterization of any claims asserted by Cambridge or Sabella/Dynamic, as the case may be. North Plaza Bankruptcy Vail Lake's CRO tells the Court that results of an investigation by the bankruptcy trustee of a related entity reveal "inappropriate actions" by Sabella and Dynamic. An entity controlled by Johnson, North Plaza LLC, was the subject of an involuntary bankruptcy filing in 2004 (Bankr. S.D. Cal. Case No. 04-00769). North Plaza owned as its primary asset certain real property consisting of approximately 40 acres of land located in Temecula, California. In the North Plaza bankruptcy, the trustee thoroughly investigated a substantial amount of such transactions, which were inextricably linked to the Companies' dealings with Dyanmic and Sabella. the Trustee ultimately objected to and otherwise challenged the claims asserted by Sabella and Dynamic against the North Plaza estate, on grounds of, e.g., lender liability, fraudulent conveyance, recharacterization, fraud, and usury. The North Plaza trustee settled his claims with Sabella and Dynamic in October 2010. The trustee also reached a settlement with VLRC, VLVR and VLU, with approval of the bankruptcy court by order entered May 7, 2013. Pending Lawsuits The Debtors are party to number of pending lawsuits: (a) Chen v. Shining City et al.: Sabella, now going by the name Angela Chen, has sued VLRC, Shining City and Johnson in Riverside Superior Court (Case No. RIC1210424) alleging various acts of fraud and other misconduct and has obtained a preliminary injunction prohibiting certain conduct by VLRC and its principals, including filing for bankruptcy relief and transferring any of its property. No trial date has been set. (b) Cambridge v. Johnson: Cambridge Financial of California, LLC, has sued Johnson, together with his spouse Patricia Johnson, in Riverside Superior Court (Case No. RIC1115973) for sums owed on personal guarantees in principal amounts totaling approximately $32,000,000. The Johnsons, VLU and VLRC have filed a cross- complaint alleging various wrongful acts on the part of Cambridge's assignors, Sabella and Dynamic. No trial date has been set. (c) Elysian v. VLU et al.: Elysian Events, LLC ("Elysian") has sued VLU, VLRC and ORM in Riverside Superior Court (Case No. 1209275) alleging damages on various theories as a result of cancellation of an events contract. No trial date has been set. Elysian was granted relief from stay in the bankruptcy proceeding of VLRC to continue this suit to judgment, but was not denied relief from stay to enforce any resulting judgment. (d) VLRC v. Clawson et al.: VLRC has brought an action against Kid Gloves, Inc. ("Kid Gloves"), Kelly Abreu, Vail Custodial Services and others in San Diego Superior Court (Case No. 37-2009- 00094633-CU-FR-CTL) seeking to cancel two notes and trust deeds, for wrongful foreclosure and for marshalling of assets. Judgment was entered denying the request to cancel the note and trust deeds, setting the amount due on the notes and ordering marshalling of assets. VLRC appealed the judgment, and the defendants have filed a cross-appeal. The parties are currently briefing the issues on those appeals. Kid Gloves, and an entity named 1690463 Alberta Ltd., have moved the Court for relief from stay as against VLRC connection with the state court suit. (e) Bree v. Johnson et al., Riverside Superior Court Case No. RIC400076, filed 09/19/2003. This Complaint, for breach of contract, brought by James and Dorene Mae Bree (the "Brees"), alleges breaches in connection with a buyout of the Brees 30 percent VLU membership interest, as well as alleged continuing breaches against them by Johnson, and others, relating to alleged actions taken to preclude the Brees from receiving the consideration for the transfer. The complaint also alleges that fraudulent misrepresentations were made by Johnson and others in connection with the sale of the membership interest. The case remains pending. (f) Bree v. Johnson, Riverside Superior Court Case No. RIC399683, filed 09/10/2003. This complaint, brought by the Brees, for foreclosure, relates to the several deeds of trust recorded against various real properties, including those owned by the Debtors, in or about late 2002. The Complaint sought reformation, imposition of equitable lien, judicial foreclosure, and damages. On March 13, 2013, the Riverside Superior Court held a Hearing on OSC re: Dismissal after Settlement Pursuant to Rule 3.1385(B). The case currently reflects a status "Closed and Marked as Disposed." About Vail Lake Vail Lake Rancho California, LLC and its affiliates own the California campground Vail Lake Resort. Vail Lake is a large reservoir in western Riverside County, California, located on Temecula Creek in the Santa Margarita River watershed, approximately 15 miles east of Temecula, California. Properties cover approximately 9,000 acres and have an estimated water storage capacity of approximately 51,000 acre-feet. On Dec. 26, 2012, creditors of Vail Lake filed an involuntary Chapter 11 petition (Bankr. S.D. Cal. Case No. 12-16684) for Vail Lake. In a filing on June 6, 2013, the Debtor said it consents to the entry of an order for relief and does not contest the involuntary Chapter 11 petition. On June 5, 2013, the company sent 5 related entities -- Vail Lake USA, LLC ("VLU"), Vail Lake Village & Resort, LLC ("VLRC"), Vail Lake Groves, LLC, Agua Tibia Ranch, LLC, and Outdoor Recreational Management, LLC -- to Chapter 11 bankruptcy. The new debtors have sought and obtained an order for joint administration of their Chapter 11 cases with Vail Lake Rancho (Case No. 12-16684). The Debtors are represented by attorneys at Cooley LLP and Phillips, Haskett & Ingwalson, A.P.C. The Debtors' consolidated assets, as of May 31, 2013, total approximately $291,016,000 and liabilities total $52,796,846. VAIL LAKE: 341 Meeting of Creditors on July 9 --------------------------------------------- There's a meeting of creditors of Vail Lake USA LLC and its affiliates on July 9, 2013, at 1:00 p.m. at 402 W. Broadway, Emerald Plaza Building, Suite 660 (B), Hearing Room B, San Diego, CA. 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. Objections to discharge are due Sept. 9, 2013, according to the docket. About Vail Lake Vail Lake Rancho California, LLC ("VLRC") and its affiliates own the California campground Vail Lake Resort. Vail Lake is a large reservoir in western Riverside County, California, located on Temecula Creek in the Santa Margarita River watershed, approximately 15 miles east of Temecula, California. Properties cover approximately 9,000 acres and have an estimated water storage capacity of approximately 51,000 acre-feet. On Dec. 26, 2012, creditors of Vail Lake filed an involuntary Chapter 11 petition (Bankr. S.D. Cal. Case No. 12-16684) for Vail Lake. In a filing on June 6, 2013, the Debtor said it consents to the entry of an order for relief and does not contest the involuntary Chapter 11 petition. On June 5, 2013, the company sent 5 related entities -- Vail Lake USA, LLC ("VLU"), Vail Lake Village & Resort, LLC ("VLRC"), Vail Lake Groves, LLC, Agua Tibia Ranch, LLC, and Outdoor Recreational Management, LLC -- to Chapter 11 bankruptcy. The new debtors have sought and obtained an order for joint administration of their Chapter 11 cases with Vail Lake Rancho (Case No. 12-16684). The Debtors are represented by attorneys at Cooley LLP and Phillips, Haskett & Ingwalson, A.P.C. The Debtors' consolidated assets, as of May 31, 2013, total approximately $291,016,000 and liabilities total $52,796,846. VALLEJO, CA: Lets Residents Set Part of Budget ---------------------------------------------- The Associated Press reported that a Northern California city that emerged from bankruptcy two years ago is trying a novel approach to setting part of its budget: having the public decide. The San Francisco Chronicle reported on Tuesday that Vallejo let residents over the age of 16 vote in May on how to spend about $3.2 million. Taxpayers were allowed to pick from 33 projects, with the top 12 sharing the money, the AP report said. The winners included pothole and street repair, community gardens and streetlights, according to AP. Among the losers were public art and small-business training. City Manager Daniel Keen said the effort was a good way to give people confidence in a city government they considered broken, the report related. The City Council certified the vote results last week and sent them to city staff to incorporate in the budget, the report further related. About Vallejo, California Vallejo -- http://www.ci.vallejo.ca.us/-- is a city in Solano County, California in the United States. As of the 2000 census, the city had a total population of 116,760. It is located in the San Francisco Bay Area on the northern shore of San Pablo Bay. It was named for General Mariano Guadalupe Vallejo. Vallejo filed for protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. E.D. Calif. Case No. 08-26813) on May 23, 2008, after it was unable to persuade labor unions to accept salary concessions as the recession began cutting into local government tax collections nationwide. Marc A. Levinson, Esq., and Norman C. Hile, Esq., at Orrick, Herrington & Sutcliffe LLP in Sacramento, California, represented the City. The city estimated $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. According to Vallejo's comprehensive annual report for the year ended June 30, 2007, the city has $983 million in assets and $358 million in debts. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. A federal judge released the city of Vallejo from bankruptcy on Nov. 1, 2011. WARNER SPRINGS: Disclosure Statement Hearing Set for July 25 ------------------------------------------------------------ The hearing on the disclosure statement explaining the Chapter 11 Plan proposed by Jeffrey D. Cawdrey on behalf of Warner Springs Ranchowners Association will be held on July 25, 2013, at 11:00 a.m. The Debtor's request to further extend its exclusivity periods will also be heard on the same date. The Debtor has formulated a plan that contemplates the creation of a liquidating trust, through which a liquidating trustee will liquidate all of the assets that are not sold and distribute the proceeds from the sale of the ranch and these remaining assets to creditors and UDI owners. About Warner Springs Ranchowners Warner Springs Ranchowners Association, a California non-profit mutual benefit corporation, filed for Chapter 11 protection (Bankr. S.D. Cal. Case No. 12-03031) on March 1, 2012. Judge Louise DeCarl Adler presides over the case. Megan Ayedemo, Esq., and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the Debtor. The Debtor has hired Andersen Hilbert & Parker LLP as special counsel. Timothy P. Landis, P.H., serves as the Debtor's environmental consultant. The Debtor's schedules disclosed $14,079,894 in assets and $1,466,076 in liabilities as of the Chapter 11 filing. Warner Springs Ranchowners Association manages and co-owns 2,300 acres of unencumbered rural land known as the Warner Springs Ranch in San Diego County, California. The improvements on the Property include 250 cottage style hotel rooms, an 18 hole golf course, service/gasoline station, tennis courts, an aquatics center, an equestrian center, an airport, a spa, and two restaurants. WATER PIK: S&P Assigns 'B' Rating to $240MM 1st-Lien Facilities --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Water Pik Inc. The outlook is stable. "At the same time, we assigned a 'B' issue-level rating to Water Pik's proposed $240 million first-lien senior secured credit facilities, composed of a $25 million revolving credit facility expiring 2018 and a $215 million first-lien term loan due 2020. The recovery rating is '3', indicating our expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default. We also assigned a 'CCC+' issue-level rating to the company's proposed $95 million 7.5 year second-lien term loan, with a recovery rating of '6', indicating our expectation for negligible (0% to 10%) recovery in the event of a payment default. Proceeds from the new term loans along with equity from entities affiliated with MidOcean Partners will primarily be used to finance the acquisition of Water Pik Inc. from existing financial sponsor EG Capital, including the repayment of all existing debt," S&P said. The ratings are based on proposed terms and are subject to review upon receipt of final documentation. S&P will withdraw its ratings on the company's existing senior secured credit facilities following the close of the transaction and repayment of this debt. At the close of the transaction, S&P estimates Water Pik will have about $310 million in total debt outstanding. The ratings on Water Pik reflect S&P's view that the company has a "vulnerable" business risk profile and a "highly leveraged" financial risk profile. Key credit factors in S&P's business risk assessment include its view of the company's participation in the highly competitive oral health care market, narrow product focus, small size, and customer and supplier concentration, yet strong market shares in its niche product categories. S&P's view of Water Pik's financial risk profile reflects leverage of more than 5x and a ratio of funds from operations (FFO) to total debt of less than 12%. "We expect Water Pik's operating performance will remain relatively stable over the near-to-intermediate term, that the company will maintain adequate liquidity, and that the company will use free cash flow for debt reduction, resulting in leverage improving to the mid-5x area over the next year," said Standard & Poor's credit analyst Rick Joy. S&P could consider a lower rating if liquidity becomes constrained or operating performance and credit measures deteriorate, such that leverage is above 7.5x. Although unlikely given the company's "vulnerable" business risk profile, S&P could consider raising the rating if the company can expand its market presence and business-line diversity, and significantly improve credit measures. WENTWOOD BAYTOWN: Can Access Cash Collateral Until June 30 ---------------------------------------------------------- The Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas signed off on a stipulation authorizing Wentwood Baytown, L.P.'s continued interim access to cash collateral until June 30, 2013. A stipulation with CW Capital Asset Management LLC provides that all funds collected by the Debtor will immediately be deposited and held in a debtor-in-possession account until disbursed under the terms of the order. As adequate protection from any diminution in value of the lender's collateral, the Debtor will grant the lender replacement liens in all tangible and intangible real and personal property acquired, and a superpriority administrative expense claim status. A June 26 hearing at 3 p.m. has been set. CW Capital serves as special servicer for U.S. Bank N.A., as trustee for the registered holders of ML-CFC Commercial Mortgage Trust 2006-2, Commercial Mortgage Pass-Through Certificates, Series 2006-2. The Trust is represented by: Frederick W. H. Carter, Esq. VENABLE LLP 750 East Pratt Street, Suite 900 Baltimore, MD 21202 Tel: 410-244-7400 Fax: 410-244-7742 - and - Karl D. Burrer, Esq. Arsalan Muhammad, Esq. HAYNES AND BOONE LLP Houston, TX 77010 Tel: 713-547-2000 Fax: 713-547-2600 E-mail: karl.burrer@haynesboone.com arsalan.muhammad@haynesboone.com A copy of the stipulation is available for free at http://bankrupt.com/misc/WENTWOOD_cashcoll_stipulation.pdf In a separate document, the Court will convene a hearing on July 24 at 3 p.m., to set the disclosure statement filing. About Wentwood Baytown, L.P. Wentwood Baytown, L.P., filed a Chapter 11 petition in Houston, Texas (Bankr. S.D. Tex. Case No. 13-32151) on April 9. The petition was signed by Gary M. Gray as president of general partner. The Debtor estimated assets and debts of at least $10 million. Judge Letitia Z. Paul presides over the case. The Debtor is represented by Matthew Hoffman, Esq., at Law Offices of Matthew Hoffman, P.C. The Debtor, which also uses the names Marina Club Apartments, Briarwood Apartments, and The Dickinson Arms, owns properties in Bayton and Dickinson, Texas. The Debtor disclosed $14,599,753 in assets and $14,813,172 in liabilities as of the Chapter 11 filing. Judy A. Robbins, U.S. Trustee for Region 7, has notified the Bankruptcy Court that she was unable to obtain a sufficient number of eligible creditors interested in serving on the official committee of unsecured creditors and has therefore been unable to appoint a proper committee in the case. WENTWOOD BAYTOWN: Matthew Hoffman Approved as Bankruptcy Counsel ---------------------------------------------------------------- The Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas authorized Wentwood Baytown, L.P. to employ the Law Offices of Matthew Hoffman as bankruptcy counsel. Wentwood Baytown, L.P., filed a Chapter 11 petition in Houston, Texas (Bankr. S.D. Tex. Case No. 13-32151) on April 9. The petition was signed by Gary M. Gray as president of general partner. Judge Letitia Z. Paul presides over the case. The Debtor is represented by Matthew Hoffman, Esq., at Law Offices of Matthew Hoffman, P.C. The Debtor, which also uses the names Marina Club Apartments, Briarwood Apartments, and The Dickinson Arms, owns properties in Bayton and Dickinson, Texas. The Debtor disclosed $14,599,753 in assets and $14,813,172 in liabilities as of the Chapter 11 filing. Judy A. Robbins, U.S. Trustee for Region 7, has notified the Bankruptcy Court that she was unable to obtain a sufficient number of eligible creditors interested in serving on the official committee of unsecured creditors and has therefore been unable to appoint a proper committee in the case. WORLDWIDE EDUCATION: Chapter 15 Case Summary -------------------------------------------- Chapter 15 Petitioner: Kevin Wessell Chapter 15 Debtor: Worldwide Education Services, Inc. aka IncWay Corporation Companies Incorporated c/o Patton, Moreno & Asvat (BVI) Limited Capitol Chambers P.O. Box 3174 Road Town, Tortola British Virgin Islands Chapter 15 Case No.: 13-25233 Chapter 15 Petition Date: June 10, 2013 Court: U.S. Bankruptcy Court Central District of California Debtor?s Counsel: Scott H. Yun, Esq. STUTMAN, TREISTER & GLATT PROFESSIONAL CORPORATION 1901 Avenue of the Stars, 12th Floor Los Angeles, CA 90067 Tel: (310) 228-5600 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. YANKEE CANDLE: Moody's Rates Proposed $450MM Senior Notes 'Caa1' ---------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to The Yankee Candle Company, Inc.'s proposed $450 million senior unsecured notes due 2018. Proceeds from the notes along with Yankee Candle's proposed $950 million secured term loan due 2020 rated B1 will be used to refinance all of the company's existing debt ($842 million), repay a $315 million payment-In-kind note at YCC Holdings, LLC., and pay a $187 million dividend to Madison Dearborn Partners, LLC. Madison Dearborn owns YCC which in turn owns Yankee Candle. The Caa1 rating on Yankee Candle's proposed senior unsecured notes considers its pro forma junior position to the company's $175 million asset-based loan revolver (not-rated) and proposed $950 million secured term loan. New rating assigned: Yankee Candle $450 million senior unsecured notes due 2018 at Caa1 (LGD 5, 87%) Ratings affirmed: YCC Corporate Family Rating at B2 YCC Probability of Default Rating at B2-PD Yankee Candle $950 million senior secured term loan due 2020 at B1 (LGD 3, 39%) Ratings affirmed and to be withdrawn upon transaction completion: YCC $315 million senior unsecured notes due 2016 at Caa1 (LGD 6, 90%) Yankee Candle $654 million senior secured term loan due 2019 at B1 (LGD 3, 35%) Yankee Candle $188 million subordinated notes due 2017 at B3 (LGD 5, 75%). Once the proposed refinancing is complete, YCC's B2 Corporate Family Rating, B2-PD Probability of Default Rating and SGL-3 Speculative Grade Liquidity rating will be transferred to Yankee Candle as there will no longer be any rated debt at YCC. Ratings Rationale: YCC's B2 Corporate Family Rating considers the company's high pro forma debt/EBITDA, at about 7 times, historically aggressive financial policy in terms of cash dividends, limited overall scale in terms of revenues, and narrow product focus. The rating is supported by YCC's high operating margins which compare favorably to best-in-class consumer product companies, and demonstrated resilience during weak economic conditions. The stable rating outlook reflects Moody's expectation that YCC will be able to maintain revenue and operating margin stability and reduce leverage. Ratings could be lowered if it appears that the company will not be able to reduce debt/EBITDA towards 6.5 times by December 31, 2013 and/or liquidity deteriorates for any reason. A higher rating would require evidence that the company can achieve and sustain debt/EBITDA below 5.5 times and EBITA/interest above 1.75 times. The principal methodology used in rating YCC was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. YCC Holdings LLC is headquartered in South Deerfield, Massachusetts. Operating through its indirect operating subsidiary, The Yankee Candle Company, Inc., YCC designs, manufactures, and distributes premium scented candles in the U.S. Revenues for the twelve months ended March 30, 2013 was $852 million. The company is owned by affiliates of Madison Dearborn Partners, LLC ("MDP") and members of management. * Royal Bank of Canada Sued by Rakuten Bank Over CDOs ----------------------------------------------------- Sophia Pearson & Chris Dolmetsch, writing for Bloomberg News, reported that Royal Bank of Canada, the country's largest lender, and several units were sued by Rakuten Bank Ltd. over claims it marketed and sold unsuitable securities backed by deteriorating mortgage loans that wiped out a $10 million investment. According to the report, RBC induced Rakuten to invest 1 billion Japanese yen ($10.3 million) in a tranche of notes in a collateralized debt obligation called Logan CDO III Ltd. in June 2007. The notes ultimately became worthless when Rakuten sold them in December 2008 "for a nominal sum equivalent to approximately one cent," according to a summons filed yesterday in state court in Manhattan. The lawsuit, which accuses RBC of fraudulent misrepresentation, is seeking to recover the U.S. dollar equivalent of the investment plus interest. "RBC engaged in wrongful and unjust acts, including without limitation fraudulent misrepresentations and omissions of material facts relating to Logan III and its collateral," lawyers for Rakuten said in the filing, the report cited. "But for this and other misrepresentations and nondisclosures by RBC, plaintiff would never have invested in the notes." Logan III consisted of a diversified portfolio of CDOs and residential mortgage-backed securities, according to the filing, the report said. Pools of home loans securitized into bonds were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s. The housing market collapsed, and the crisis swept up lenders and investment banks as the market for the securities evaporated. The case is Rakuten Bank Ltd. v. Royal Bank of Canada (RY),652057/2013, New York state Supreme Court, New York County (Manhattan). * Moody's Outlook on Public Power Utilities Remains Stable ---------------------------------------------------------- The outlook on the US public power utilities continues to be stable as public utility boards generally remain supportive of raising rates or cutting costs as necessary to maintain current financial performance, says Moody's Investors Service in a new report. "The unregulated cost recovery process will remain intact over the next 12 to 18 months, which should allow for supportive and timely rate-setting and stable financial metrics," says Dan Aschenbach, the Moody's Senior Vice President who wrote "US Public Power Electric Utilities: Limited Threats From Local Governance Underscore Credit Stability." Moody's expects the multi-year improvement in the financial metrics of the public electric utilities to continue after their notable decline in 2009, with low fuel and energy prices contributing to their stable performance. Some of the smaller and medium-sized utilities will see some strain in their financial measures, however, as they phase in the fixed costs of new power projects that are coming on line. Moody's says despite fiscal pressures on some local governments the public power electric utility business model remains unchanged and these fiscal pressures should not affect most utilities. "We see no legislative or regulatory change to how public power utilities operate," says Aschenbach. "There has only been some limited privatization proposals and increased intervention unique to several utilities." Federal environmental regulations are the chief source of possible negative pressure, says Moody's. Other potential risks include threats to power source diversity as more capacity adjusts to natural gas and the challenges that renewable energy sources generally present, says Moody's. "Most regions in the US do not have the transmission grid resiliency nor operating procedures in place to mitigate the issues of intermittent generation when wind or solar generation becomes a larger portion of a region's power mix," says Aschenbach. * Moody's Notes Weakening Covenants for Low-Rated Bonds in May -------------------------------------------------------------- Moody's North American High-Yield Covenant Quality Index remained near its record low in May, the rating agency says in a new report, "Bond Covenant Quality Remains Weak in May." Although the three-month rolling average ticked up slightly last month, to 3.90 from 3.94 in April, it has declined in seven of the 10 months since peaking at 3.41 last July. Moody's measures covenant quality on a five-point scale, with 1.0 denoting the strongest investor protections and 5.0, the weakest. "Both the three-month rolling average and single-month scores improved slightly last month, but May was still the fifth-worth month in terms of covenant quality of the past year," says Moody's Head of Covenant Research, Alexander Dill. "Two contrary forces were at play in May. Though the percentage of Ba rated bonds, which generally have worse quality, fell to 21% from a record high of 41% in April, the covenant quality of bonds rated lower materially worsened." Bonds further down the rating scale usually have stronger covenant packages because investors expect weaker credits to provide more protection. Bonds rated Caa/Ca and single B at issuance had the same average 3.92 score in May compared with 3.69 for Caa rated bonds and 3.66 for single B bonds, respectively, in April, while Ba rated bonds boosted the overall covenant quality average, scoring 4.27 in May compared with 4.48 in April. Neither the slight improvement in covenant quality nor the preponderance of low-rated bonds with weaker covenant quality narrowed the average spread to benchmark in May. "Spreads remain stable," Dill says, "even while investors assume more risk to own higher-yielding instruments." Among bonds offering the strongest investor protections in May were those from Magnetation LLC, which scored 2.07 and Ahern Rentals Inc., which scored 2.09. Bonds from CommScope Holding Company Inc., at 4.79; US Airways Group, Inc., 4.74; and United Continental Holdings Inc., 4.73, offered the weakest protections among bonds with full high-yield packages. High-yield lite issuance was relatively low last month, helping prop up the overall covenant quality score. High-yield lite bonds accounted for 20.5% of issuance in May, compared with 22.2% in April and came from several sectors, including paper, packaging and forest products; healthcare; wholesale power; and retail and business products. * Large Bankrupt Companies' Fulcrum Securities Fall in Price ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that in four of the largest bankruptcies in the U.S., the so-called fulcrum securities fell in price a third or more in recent weeks. Do the declines mean the market is shying away from investments in bankruptcies, or do the circumstances of each company explain the drops? Analysts blame falling prices on the conditions of the businesses themselves. The report notes that the stock of AMR Corp., the parent of American Airlines Inc., afforded the largest potential profits for those smart enough to analyze the debt structure accurately and realize the parent holding company was solvent even though the airline subsidiary might be insolvent. As a result, stock that could have been purchased for 40 cents in October rose to a high of $6.85 on May 16. Since then, AMR stock declined 33.5 percent, closing June 12 at $4.62 in over-the-counter trading. The report relates that the largest fall in the shortest time was unsecured bonds of MF Global Holdings Ltd., the bankrupt parent of a liquidating broker. Since the Chapter 11 filing in October 2011, the $325 million in 6.25 percent senior unsecured notes due 2016 reached a peak of 78.25 cents on the dollar on Feb. 20, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The same bonds could have been purchased June 12 for 47.125 cents, representing a 40 percent pullback. Since June 5, the bonds are down 27.5 percent. The report says that the bloom is off the rose on the $400 million in Eastman Kodak Co. 7 percent convertible notes due in 2017. In the last trade before Kodak filed a proposed reorganization plan, the bonds went for 12.853 cents on the dollar on April 24. They more than doubled in price, rising to 26.125 by May 15, declining since then to trade mostly in the neighborhood of 16 to 17 cents in the last week. The report shares that at Patriot Coal Corp., the debt is down in price even though the company won a lawsuit victory over the United Mine Workers union. Since bankruptcy in July, the $200 million in 3.25 percent senior convertible notes due 2013 traded as high as 16 cents on the dollar on Sept. 26. On June 11, the bonds went for 11.75 cents, representing a 26.5 percent loss for anyone who bought at the top. David Tawil, co-founder of Maglan Capital LP, said that profit taking could explain at least some of the declines. "The smartest guys want to be the first to take profits off the table," he said in an interview. David Tawil doesn't have investments in any of the four companies. Patriot Coal is "just a bad situation," according to Amer Tiwana, a managing director with CRT Capital Group LLC in Stamford, Connecticut. In an interview, he said the case is "contentious" with "no clear path to emergence in sight." Mr. Tawil explained the decline in AMR stock by saying those who bought the equity after bankruptcy "didn't have a strong conviction on a long-term basis." For Kodak, there is a "fear factor that something bad will happen with a new plan," Mr. Tiwana said. As an analyst, Kodak and Patriot Coal are two of the bankrupt companies Mr. Tiwana covers. The report notes that it wouldn't be accurate to say that investors are pulling back from investments in the debt of bankrupt companies. Lead acid battery maker Exide Technologies filed for reorganization on June 10. For the $674 million of 8.625 percent first-lien notes due 2018, the last trade before bankruptcy was 56.033 cents. Although the first trade after bankruptcy was 49.938, the price quickly recovered, selling as high as 59.062 on June 10. The bonds were above 59 cents again for part of the day June 12. Fulcrum security is the name given to the debt or equity of a bankrupt company that stands to gain by a successful outcome in Chapter 11 reorganization. A fulcrum security thus won't be debt to be paid in full, nor will it be debt or stock destined to be rendered worthless. The AMR case is In re AMR Corp., 11-bk-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The MF Global holding company's Chapter 11 case is In re MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The Kodak case is In re Eastman Kodak Co., 12- bk-10202, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The Patriot case is In re Patriot Coal Corp., 12-bk- 51502, U.S. Bankruptcy Court, Eastern District of Missouri (St. Louis). The Exide case is In re Exide Technologies, 13-bk-11482, U.S. Bankruptcy Court, District of Delaware (Wilmington). About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. In April 2013, AMR filed a Chapter 11 plan of reorganization that will carry out the merger. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. The hearing before the Court to consider confirmation of the Plan is scheduled for Aug. 15, 2013. 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). 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. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a proposed reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. * U.S. Foreclosure Activity Increases 2% in May, RealtyTrac Says ---------------------------------------------------------------- RealtyTrac(R), an online marketplace for real estate data, on June 13 released its U.S. Foreclosure Market Report(TM) for May 2013, which shows foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 148,054 U.S. properties in May, an increase of 2 percent from the 75-month low in April but still down 28 percent from May 2012. The report also shows one in every 885 U.S. housing units with a foreclosure filing during the month. High-level findings from the report: -- The monthly increase in overall foreclosure activity was caused largely by an 11 percent month-over-month increase in bank repossessions (REOs), although REO activity was still down 29 percent from a year ago. -- REO activity increased from the previous month in 33 states -- including North Carolina (up 60 percent), Oregon (up 57 percent), Wisconsin (up 44 percent), Illinois (up 44 percent), Colorado (up 23 percent), and Michigan (up 19 percent). REO activity increased 9 percent from the previous month in non- judicial states and was up 13 percent from the previous month in judicial states. -- Among the five lenders involved in last year's national mortgage settlement, all but one (Citi) posted monthly increases in REO activity, indicating that temporary stoppages of foreclosure sales announced during the month by some of the lenders involved in the settlement had little lasting impact on the number of completed foreclosures for the month. -- U.S. foreclosure starts increased 4 percent from the previous month but were still down 33 percent from a year ago. Foreclosure starts increased from the previous month in 26 states and were up from a year ago in 14 states, including Maryland (up 229 percent), Connecticut (up 122 percent), Hawaii (up 108 percent), Arkansas (up 84 percent), New Jersey (up 82 percent), Nevada (up 81 percent), Washington (up 53 percent), Pennsylvania (up 26 percent) and New York (up 13 percent). -- The foreclosure problem continued to shift away from non-judicial states and toward judicial states. Judicial states accounted for five of the top six foreclosure rates nationwide: Florida, Ohio, Maryland, South Carolina and Illinois. At No. 2, Nevada's foreclosure rate was the highest ranked among non- judicial states. -- Among the nation's 20 largest metros, those with the biggest increases in median home prices tended to be in states where a non-judicial foreclosure process has allowed foreclosures to be absorbed by the market more quickly. Seven of the 10 metros with the biggest jumps in median home prices from a year ago were in non-judicial states, while all five metros with flat or declining median prices were in states with a judicial foreclosure process. "Foreclosure activity continued to bounce back in some markets where it may have appeared the foreclosure problem had been knocked out by an aggressive combination of foreclosure prevention efforts over the past two years," said Daren Blomquist, vice president at RealtyTrac. "Places like Nevada, where foreclosure starts increased to a 20-month high, and Maryland, where overall foreclosure activity increased to a 33-month high. Still, the emerging housing recovery has strengthened most local markets enough to quickly shake off a few more blows from these nagging foreclosures." Local broker quotes from the RealtyTrac Network -- "While foreclosure activity is less than one-third the level it was at the height of the foreclosure crisis in Reno, the 20-month high in foreclosure starts in May could provide some limited relief to the shortage of inventory as those foreclosure starts translate into short sales, sales at the public foreclosure auction or possibly bank-owned sales over the next year," said Craig King, COO at Chase International brokerage, which covers the Reno and Lake Tahoe markets. "Given the shortage of inventory and rising home prices, banks have little motivation to hold back on any foreclosures, so homeowners who have not been making payments for several months or even years without a foreclosure notice should expect to see that notice coming and would be well-advised to list their home as a short sale if they have no other alternative to avoid foreclosure." -- "Southern California is seeing the lowest levels of distress since 2005," said Rich Cosner, CEO of Prudential California Realty, covering Orange, Riverside and San Bernardino counties. "Given that 2005 was one of the best real estate markets in history, what we may be seeing is that the foreclosure levels and NOD levels are bottoming out at their historical lows. Those few foreclosures selling at the courthouse steps are being bought at almost market-level prices and are being paid for in cash by investors." Florida, Nevada, Ohio post top state foreclosure rates A 20 percent monthly increase in foreclosure activity pushed Florida's foreclosure rate to highest among the states in May, up from the No. 2 ranking in April. One in every 302 Florida housing units had a foreclosure filing during the month, nearly three times the national average. Florida foreclosure starts jumped 39 percent from a two-year low in April, but were still down 17 percent from a year ago. Scheduled foreclosure auctions in Florida increased 6 percent from the previous month and were up 79 percent from a year ago, while Florida bank repossessions increased 14 percent from the previous month and were up 20 percent from a year ago. Nevada foreclosure activity increased annually in May after 27 consecutive months of annual decreases, but the state's foreclosure rate still slipped to second highest among the states after ranking No. 1 in April. One in every 305 Nevada housing units had a foreclosure filing during the month. The increase in overall foreclosure activity in Nevada was driven primarily by an 81 percent year-over-year increase in foreclosure starts, which reached a 20-month high in May. Meanwhile scheduled foreclosure auctions in Nevada increased 21 percent from the previous month but were still down 14 percent from a year ago, and bank repossessions increased 4 percent from the previous month but were still down 64 percent from a year ago. Ohio posted the nation's third highest state foreclosure rate for the second month in a row in May, with one in every 584 housing units with a foreclosure filing during the month. A total of 8,770 Ohio properties had a foreclosure filing during the month, down 27 percent from a 31-month high in April and down 15 percent from May 2012. Ohio foreclosure starts and scheduled foreclosure auctions both decreased in May, but bank repossessions were still up 7 percent from a year ago -- the ninth consecutive month with an annual increase in bank repossessions. Maryland foreclosure activity increased 11 percent from the previous month and was up 134 percent from a year ago, and the state posted the nation's fourth highest foreclosure rate in May: one in every 587 housing units with a foreclosure filing. South Carolina foreclosure activity decreased 2 percent from the previous month and was down 11 percent from a year ago, but the state still posted the nation's fifth highest state foreclosure rate in May: one in every 600 housing units with a foreclosure filing. Other states with foreclosure rates ranking among the 10 highest nationwide were Illinois (one in every 606 housing units with a foreclosure filing), Georgia (one in 693 housing units), Washington (one in 736 housing units), Arizona (one in 742 housing units), and Wisconsin (one in 774 housing units). Top metro foreclosure rates in Florida, Nevada, Pennsylvania and Illinois cities With one in every 209 housing units with a foreclosure filing, Miami posted the nation's highest foreclosure rate in May among metropolitan statistical areas with a population of 200,000 or more. Foreclosure activity in the Miami metro area increased 29 percent from the previous month and was up 59 percent from a year ago. Five other Florida metro areas posted foreclosure rates that ranked among the top 10 in May: Jacksonville at No. 2 (one in every 225 housing units with a foreclosure filing); Tampa at No. 3 (one in every 290 housing units); Orlando at No. 7 (one in every 336 housing units); Ocala at No. 9 (one in every 352 housing units); and Sarasota at No. 10 (one in every 360 housing units). Other metro areas with foreclosure rates ranking in the top 10 were Las Vegas at No. 4 (one in every 296 housing units); Reno, Nev., at No. 5 (one in every 301 housing units); Reading, Pa., at No. 6 (one in every 306 housing units); and Rockford, Ill., at No. 8 (one in every 347 housing units). 20 major metro foreclosure and home price trends Among 20 of the nation's largest metros, those with the biggest increases in median home prices tended to be in states where a non-judicial foreclosure process has allowed foreclosures to be absorbed by the market more quickly. Seven of the 10 metros with the biggest jumps in median home prices from a year ago were in non-judicial states, and foreclosure activity in all seven of these metros was down by 25 percent (Denver) to 64 percent (Phoenix) from a year ago. Meanwhile all five metros with flat or declining median prices were in states with a judicial foreclosure process, and in all but one of these metros (Boston) foreclosure activity increased in May from a year ago. * Oklahoma Foreclosure Auctions Drop 47% in May, RealtyTrac Says ---------------------------------------------------------------- RealtyTrac(R), an online marketplace for comprehensive housing and real estate data, on June 13 released its Oklahoma Foreclosure Market Report(TM) for May 2013, which shows foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 1,123 Oklahoma properties in May, a decrease of 11 percent from the previous month and down 13 percent from May 2012. One in every 1,475 Oklahoma housing units had a foreclosure filing in May, below the national average of one in 885 housing units and ranked No. 28 highest among all states. The decrease in overall Oklahoma foreclosure activity was driven by a sharp drop in scheduled foreclosure auctions, down 47 percent from the previous month and down 26 percent from a year ago in May, following three straight months of annual increases. Foreclosure starts in Oklahoma were down 30 percent year-over-year in May, but bank repossessions (REO) were up 52 percent, the third straight month with an annual increase in REOs. "The sharp drop in scheduled foreclosure auctions in May is likely the result of a foreclosure moratoria imposed after the devastating tornadoes tore across the region during the month," said Daren Blomquist, vice president of RealtyTrac. "This comes on the heels of an upward trend that resulted in an 18-month high in scheduled foreclosure auctions statewide in April." The tornadoes are also having a much bigger impact on the area's overall real estate market, according to Sheldon Detrick, CEO of Prudential Detrick/Alliance Realty in Oklahoma City and Tulsa. "We have 4,000 homes totally destroyed, and another 10,000 homes damaged -- a large part of which are uninhabitable," said Mr. Detrick. "We lived -- in May 1999 -- through the previous tornado that struck the area. We know what that was like. And that of course was followed by a construction boom. We had construction crews in here building as fast as they could and we anticipate that trend this time." "But right now, people can't find a place to live. You can't find a place to rent. Churches are taking in people. People are taking in people. Adversity brings us together, and this is a king-sized adversity. And we are united. We are rebuilding and coming back." Mr. Detrick said the decrease in May foreclosure activity was largely due to the tornado's after affects, which is creating an inventory imbalance that's being exasperated by the destruction of over 14,000 homes. That inventory imbalance, combined with rising costs on building supplies, will likely lead to an unprecedented period of home price appreciation in the Oklahoma City market over the next five years. "I see probably the most prosperous time and the greatest appreciation in real estate may be on record over the next 18 months," Mr. Detrick added, noting he's been involved in the real estate industry for 53 years. "We have pent-up buyer demand. Our listings are down 22 percent from a year ago. We have a significant imbalance of buyers in versus moving out, and that again affects the inventory." Oklahoma City foreclosure auctions down 45 percent from previous month In Oklahoma City, scheduled foreclosure auctions dropped 45 percent month-over-month and were down 13 percent from a year ago. Foreclosure starts decreased 40 percent from a year ago, while bank repossessions jumped 150 percent annually -- corresponding to a recent increase in scheduled foreclosure auctions in the metro area. One in every 1,360 Oklahoma City housing units had a foreclosure filing in May, well below the national average and ranked 128th nationwide out of the 209 metro areas nationwide that RealtyTrac ranks each month. Tulsa foreclosure auctions down 52 percent from previous month In Tulsa, scheduled foreclosure auctions dropped 52 percent from the previous month and were down 42 percent annually. Foreclosure starts decreased 34 percent annually while REOs increased 16 percent during the same time period -- corresponding to a recent jump in scheduled foreclosure auctions. One in every 743 Tulsa housing units had a foreclosure filing in May -- above the national average and ranked 68th out of metros nationwide. High-level national findings from the report: -- Foreclosure filings were reported on 148,054 U.S. properties in May, an increase of 2 percent from the 74-month low in April but still down 28 percent from May 2012. One in every 885 U.S. housing units had a foreclosure filing during the month. -- The monthly increase in overall foreclosure activity was caused largely by an 11 percent month-over-month increase in bank repossessions (REOs), although REO activity was still down 29 percent from a year ago. -- U.S. foreclosure starts increased 4 percent from the previous month but were still down 33 percent from a year ago. Foreclosure starts increased from the previous month in 25 states and were up from a year ago in 14 states. -- The foreclosure problem continues to shift away from non-judicial states and toward judicial states. Five of the top six state foreclosure rates in May were in judicial states. -- Among the nation's 20 largest metros, those with the biggest increases in median home prices tended to be in states where a non-judicial foreclosure process has allowed foreclosures to be absorbed by the market more quickly. Seven of the 10 metros with the biggest jumps in median home prices from a year ago were in non-judicial states, while all five metros with flat or declining median prices were in states with a judicial foreclosure process. * RealtyTrac Says May N.Y. Scheduled Foreclosure Auctions Up 95% ---------------------------------------------------------------- RealtyTrac(R), an online marketplace for real estate data, on June 13 released its New York Foreclosure Market Report(TM) for May 2013, which shows foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 4,027 New York state properties in May, up 2 percent from the previous month and up 14 percent from a year ago. The report also shows one in every 2,007 New York housing units with a foreclosure filing during the month, less than half the national average and ranked No. 36, highest among the states. The monthly increase in overall foreclosure activity was caused primarily by a 95 percent spike in scheduled foreclosure auctions. A total of 508 properties statewide were scheduled for foreclosure auction during the month, up 21 percent from a year ago and the highest numbers since October 2010 -- a 31-month high. "The pig is starting to move through the python in terms of rebounding foreclosure activity in New York," said Daren Blomquist, vice president at RealtyTrac. "After 14 straight months of annual increases in foreclosure starts statewide, May provided early evidence that these foreclosure starts are now moving through the process and being scheduled for a public foreclosure auction. The 21 percent annual increase in scheduled foreclosure auctions statewide was the first annual increase in scheduled foreclosure auctions in eight months." Foreclosure rates statewide remain relatively low despite the recent increases in activity, but the additional foreclosure inventory could help satiate strong demand in Long Island and New York City, according to Emmett Laffey, CEO of Laffey Fine Homes, which covers those markets. "We are experiencing a lack of inventory which is being met with strong demand, particularly from the investor market. Investor interest in real estate has never been hotter," Mr. Laffey said. "Secondly, consumer confidence is playing a major factor. With Wall Street up, unemployment down, and interest rates remaining near all-time lows, buyers are hoping to jump into the real estate game as quickly as possible." Although still at a relatively low level compared to foreclosure starts, scheduled foreclosure auctions jumped from the previous month and a year ago in the Long Island counties of Suffolk and Nassau. A total of 116 Suffolk County properties were scheduled for foreclosure auction in May, up 137 percent from the previous month and up 132 percent from a year ago, and a total of 45 Nassau County properties were scheduled for foreclosure auction during the month, up 165 percent from the previous month and up 36 percent from a year ago. Scheduled foreclosure auctions also spiked 53 percent in Kings County (Brooklyn) from the previous month in May, and were up 174 percent from a year ago. Richmond County (Staten Island) reported a significant increase in scheduled foreclosure auctions on both a monthly and annual basis, spiking 50 percent from the previous month and a year ago. Meanwhile scheduled foreclosure auctions were still down from a year ago in Bronx County (down 7 percent), Manhattan (down 67 percent), and Queens (down 17 percent). High-level national findings from the report: -- Foreclosure filings were reported on 148,054 U.S. properties in May, an increase of 2 percent from the 74-month low in April but still down 28 percent from May 2012. One in every 885 U.S. housing units had a foreclosure filing during the month. -- The monthly increase in overall foreclosure activity was caused largely by an 11 percent month-over-month increase in bank repossessions (REOs), although REO activity was still down 29 percent from a year ago. -- U.S. foreclosure starts increased 4 percent from the previous month but were still down 33 percent from a year ago. Foreclosure starts increased from the previous month in 25 states and were up from a year ago in 14 states. -- The foreclosure problem continues to shift away from non-judicial states and toward judicial states. Judicial states accounted for five of the top six state foreclosure rates in May. -- Among the nation's 20 largest metros, those with the biggest increases in median home prices tended to be in states where a non-judicial foreclosure process has allowed foreclosures to be absorbed by the market more quickly. Seven of the 10 metros with the biggest jumps in median home prices from a year ago were in non-judicial states, while all five metros with flat or declining median prices were in states with a judicial foreclosure process. * U.S. Says States, Banks Aren't Harmed By Dodd-Frank ----------------------------------------------------- Erica Teichert of BankruptcyLaw360 reported that the U.S. government urged a Washington federal judge to nix 11 states' and a bank's attempts to knock down several Dodd-Frank Act mortgage and bank liquidation provisions on constitutional grounds, maintaining they couldn't show they have been injured by the financial reforms. According to the report, the plaintiffs -- which include 11 states, one community bank and two advocacy groups -- claim the Dodd-Frank provisions at issue have given the federal government inappropriate power to deem large banks too big to fail and have driven community banks out. The case is STATE NATIONAL BANK OF BIG SPRING et al v. GEITHNER et al, Case No. 1:12-cv-01032 (D.D.C.). * Banks Get Reprieve on New Swaps Rule -------------------------------------- Michael R. Crittenden, writing for The Wall Street Journal, reported that some of biggest banks on Wall Street will get an additional two years to comply with a post-financial crisis rule requiring they move risky swap activities into separate affiliates. According to the report, the Office of the Comptroller of the Currency said it granted extensions to seven banks, giving them until July 2015 to comply with so-called "swaps push-out" rules required by the 2010 Dodd-Frank law. While the move was largely expected, the OCC's action could further inflame criticism that much of Dodd-Frank remains undone nearly three years after its passage, the WSJ report said. As of June 3, just 38% of rules required by Dodd-Frank had been finalized, while 63% of rule-writing deadlines have been missed, according to law firm Davis Polk. The OCC notified Bank of America Corp., J.P. Morgan Chase & Co., Citigroup Inc., Wells Fargo & Co., HSBC Holdings PLC, Morgan Stanley and U.S. Bancorp that they were granted a 24-month extension in response to their requests for a longer transition period. The banks declined to comment, the report said. The move comes less than a week after the Federal Reserve said foreign banks also will be eligible for the two-year delay in complying with the rule, which is slated to take effect July 16, the WSJ noted. * Regulators Turn Up Heat Over Bank Fees ---------------------------------------- Shayndi Raice and Alan Zibel, writing for The Wall Street Journal, reported that U.S. regulators are stepping up scrutiny of overdraft fees charged by banks, a big revenue stream that is helping the industry lessen the hit caused by low interest rates and the sluggish economy. According to the report, the Consumer Financial Protection Bureau, in a report set for release Tuesday, plans to criticize the U.S. banking industry for practices that it says range from confusing rules on overdraft fees to increasing the likelihood of multiple fees being charged to the same customer. The agency, created by the Dodd-Frank financial-overhaul law in 2010 to be a powerful voice for consumers, said it has no immediate plans to issue or recommend new overdraft-fee rules, the report said. But the report is the strongest signal yet that the CFPB is burrowing into the controversial fees, which generated about $32 billion in revenue in the U.S. last year, according to research firm Moebs Services Inc. Since its creation, the CFPB has examined areas from mortgages to student loans to credit reports, the report said. The agency's efforts come as banks and other financial institutions are struggling to regain profit momentum five years after the financial crisis erupted. Fees are a huge revenue source for banks but have exposed them to ire from regulators and consumers. * Bill to Limit CFTC Cross-Border Authority Faces U.S. House Vote ----------------------------------------------------------------- Dave Michaels, writing for Bloomberg News, reported that House lawmakers vote on June 12 on legislation that would curb the U.S. Commodity Futures Trading Commission's authority to oversee the $633 trillion global swaps market. According to the report, the vote takes place as a majority of CFTC commissioners have signaled they want to delay final action on how new derivatives rules apply to foreign banks and the overseas affiliates of U.S. banks and hedge funds. Chairman Gary Gensler insists the agency should take its final vote on the guidance by July 12, when the current deadline expires. The CFTC will decide how to press forward after the Securities and Exchange Commission last month outlined a different approach to regulating swaps that it oversees, which hews closer to industry viewpoints, the report said. The House bill would exempt foreign banks from CFTC rules if their home countries have broadly similar regulations and would force the CFTC and SEC to reconcile their approaches. The House bill isn't expected to be considered by the Senate, Representative Jim Himes, a Connecticut Democrat on the House Financial Services Committee, said April 25, the report related. He voted for the bill when it was approved by the committee last month. The legislation "is intended to send a message that Congress would like them to delay in order to achieve greater harmonization in the approach to cross-border regulation with the SEC," said Annette L. Nazareth, a former SEC commissioner and Washington- based partner at Davis Polk & Wardwell, the report cited. * SEC Fines Options Exchange for Lax Oversight ---------------------------------------------- The New York Times' DealBook reported that the Securities and Exchange Commission fined the Chicago Board Options Exchange and an affiliate $6 million for what it called breakdowns in regulatory oversight, including a failure to enforce rules to prevent abusive short-selling. According to the report, the agency said the financial penalty against the exchange and its affiliate, C2 Options Exchange, was the first action related to an exchange's responsibility to self- police its market. The case stemmed in part from oversight of OptionsXpress, a firm now owned by Charles Schwab, which was accused by the S.E.C. of engaging in an abusive naked short-selling scheme, or selling shares before borrowing them first, the report said. An S.E.C. judge on June 7 ordered OptionsXpress, its former chief financial officer and a customer to pay $4.8 million in fines and to return $4.2 million. In a statement, the S.E.C. said: "Self-regulatory organizations must enforce the federal securities laws as well as their own rules to regulate trading on their exchanges by their member firms, the report quoted. In doing so, they must sufficiently manage an inherent conflict that exists between self-regulatory obligations and the business interests of an S.R.O. and its members. An S.E.C. investigation found that C.B.O.E. failed to adequately police and control this conflict for a member firm that later became the subject of an S.E.C. enforcement action. C.B.O.E. put the interests of the firm ahead of its regulatory obligations by failing to properly investigate the firm's compliance" with the regulation against abusive short-selling and then interfered with the S.E.C. investigation into the firm. The S.E.C. added that the exchange had an ineffective surveillance program that failed to detect wrongdoing despite numerous red flags that its members were engaged in abusive short-selling and also did not live up to its regulatory and compliance responsibilities in several other areas over four years, the report said. * Insurers Inflating Books, New York Regulator Says --------------------------------------------------- Mary Williams Walsh, writing for The New York Times' DealBook, reported that New York State regulators are calling for a nationwide moratorium on transactions that life insurers are using to alter their books by billions of dollars, saying that the deals put policyholders at risk and could lead to another taxpayer bailout. According to the report, insurers' use of the secretive transactions has become widespread, nearly doubling over the last five years. The deals now affect life insurance policies worth trillions of dollars, according to an analysis done for The New York Times by SNL Financial, a research and data firm. These complex private deals allow the companies to describe themselves as richer and stronger than they otherwise could in their communications with regulators, stockholders, the ratings agencies and customers, who often rely on ratings to buy insurance, the report said. Benjamin M. Lawsky, New York's superintendent of financial services, said that life insurers based in New York had alone burnished their books by $48 billion, using what he called "shadow insurance," according to an investigation conducted by his department, the report related. He issued a report about the investigation late Tuesday. The transactions are so opaque that Mr. Lawsky said it took his team of investigators nearly a year to follow the paper trail, even though they had the power to subpoena documents, the report noted. * Obama Picks Furman to Head Economic Council --------------------------------------------- Aamer Madhani, writing for USA Today, reported that President Obama tapped longtime economic adviser Jason Furman on Monday to be the next chairman of the White House Council of Economic Advisers, calling him "one of the most brilliant economic minds of his generation." According to the report, during a White House ceremony, Obama said Furman -- who had previously been identified as the leading candidate for the job -- has dedicated his public service career to helping people climb the economic ladder. "Jason never forgets who it is that we're fighting for," Obama said, the report cited. "Middle class families, folks who are working hard to climb their way into the middle class, the next generation." If confirmed by the Senate, Furman would succeed Alan Krueger, who announced his plans last month to return to his position at Princeton University in the fall, the report related. Furman is currently the principal deputy on the National Economic Council, which coordinates economic advice for the president, the report added. The Council of Economic Advisers makes recommendations to the president on economic matters and briefs him on data. * BOOK REVIEW: Jacob Fugger the Rich: Merchant and Banker of Augsburg, 1459-1525 -------------------------------------------------------------- Author: Jacob Streider Publisher: Beard Books Hardcover: 227 pages List Price: $34.95 Review by Gail Owens Hoelscher Buy a copy for yourself and one for a colleague on-line at http://is.gd/UAP0Zb Quick, can you work out how much $75 million in sixteenth century dollars would be worth today? Well, move over Croesus, Gates, Rockefeller, and Getty, because that's what Jacob Fugger was worth. Jacob Fugger was the chief embodiment of early German capitalistic enterprise and rose to a great position of power in European economic life. Jacob Fugger the Rich is more than just a fascinating biography of a powerful and successful businessman, however. It is an economic history of a golden age in German commercial history that began in the fifteenth century. When the book was first published, in 1931, The Boston Transcript said that the author "has not tried to make an exhaustive biography of his subject but rather has aimed to let the story of Jacob Fugger the Rich illustrate the early sixteenth century development of economic history in which he was a leader." Jacob Fugger's family was one of the foremost family in Augsburg when he was born in 1459. They got their start by importing raw cotton, by mule, from Mediterranean ports. They later moved into silk and herbs and, for a long while, controlled much of Europe's pepper market. Jacob Fugger diversified into copper mining in Hungary and transported the product to English Channel and North Sea ports in his own ships. A stroke of luck led to increased mining opportunities. Fugger lent money to the Holy Roman Emperor Maximilian I to help fund a war with France and Italy. Mining concessions were put up as collateral. The war dragged on, the Emperor defaulted, and Fugger found himself with a European monopoly on copper. Fugger used his extensive business network in service of the Pope. His branches all over Europe collected payments due the Vatican and issued letters of credit that were taken to Rome by papal agents. Fugger is credited with creating the first business newsletter. He collected news of evolving business climate as well as current events from his agents all across Europe and distributed them to all his branches. Fugger's endeavors wee not universally applauded. The sin of usury was still hotly debated, and Fugger committed it wholesale. He was sued over his monopoly on copper. He was involved in some messy bribes in bringing Charles V to the throne. And, his lucrative role as banker in the sale of indulgences, those chits that absolve the buyer of sin, raised the ire of Martin Luther himself. Luther referred to Fugger specifically in his Open Letter to the Christian Nobility of the German nation Concerning the Reform of the Christian Estate just before being excommunicated in 1521. Fugger went on, however, to fund Charles V's war on Protestanism and became even richer. Fugger built many churches and buildings in Augsburg. He was generous to the poor and designed the world's first housing project. These buildings and lovely gardens, called the Fuggerei, are still in use today. A New York Times reviewer said that Jacob Fugger the Rich, a book "concerned with the most famous, most capable, and most interesting of all [the members of the Fugger family] will be as interesting for the general reader as for the special student of business history." This observation is just as true today as in 1931, when first made. Jacob Streider was a professor of economic history at the University of Munich. ********* 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 ***