/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130731.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, July 31, 2013, Vol. 17, No. 210 Headlines ABERDEEN LAND II: Sec. 341(a) Meeting of Creditors on Aug. 7 AGE REFINING: 5th Cir. Reinstates Committee's Plan Appeal ALASKA AIR: S&P Raises CCR to 'BB' and Revises Outlook to Stable ALLIED SYSTEMS: Can Employ PwC as Supplemental Financial Advisor ALLIED SYSTEMS: Axis Group Can Ink License Agreement with NYC APERION COMMUNITIES: Sec. 341 Meeting of Creditors on Aug. 20 BANKRATE INC: Moody's Rates $70MM Revolver Ba1 & $300MM Notes B2 BANKRATE INC: S&P Rates $70MM Revolver BB+ & New $300MM Notes BB- BATE LAND & TIMBER: Sec. 341(a) Meeting of Creditors on Sept. 4 BEST UNION: Court Confirms Chapter 11 Plan of Reorganization BIO-KEY INTERNATIONAL: Sells 3.5 Million Units for $1 Million BMC SOFTWARE: S&P Lowers CCR to 'B+'; Outlook Stable BOWIE RESOURCE: Moody's Assigns B1, Caa1 Ratings to Term Loans BROADVIEW NETWORKS: Incurs $516,000 Net Loss in Second Quarter BUILDERS GROUP: Aug. 26 Hearing on Request to Use Cash Collateral BUILDERS GROUP: G.A. Carlo-Altieri Approved as Counsel CARDERO RESOURCE: Secured Creditors Demand Debt Repayment CASPIAN ENERGY: Debenture Holders Agree to Extend Default Cure CENGAGE LEARNING: Unsecured Creditors Oppose Loans, Plan Deal CHA CHA ENTERPRISES: Section 341(a) Meeting Set on Aug. 28 CHINA GREEN: Merges with China Shianyun COMMUNITY LEADERSHIP: S&P Assigns 'BB' Rating to $15.9MM Bonds COMPETITIVE TECHNOLOGIES: Tonaquint to Buy $112,500 Conv. Note COMMUNITY MEMORIAL: Committee Files Corrected Plan of Liquidation CONSOLIDATED DISTRIBUTORS: MEC May Pursue Infringement Suit CONTINENTAL BUILDING: Moody's Assigns 'B2' CFR; Outlook Stable CONTINENTAL BUILDING: S&P Assigns Prelim. 'B' CCR; Outlook Stable CORNERSTONE HOMES: New York Homebuilder Sets Sept. 6 Confirmation CPI CORP: Asset Sale to Lifetouch Portrait to Be Approved DAMES POINT: Can Employ Gust Sarris as Counsel DBSI INC: Wavetronix May Amend Respond to Plan Trustee's Complaint DETROIT, MI: 15 Months to Reorganize $18 Billion in Debt DETROIT, MI: 86-Cent Water Debt Seen Delivering Profit DETROIT, MI: Gov. to Rebuild City But Says No to State Bailout DEWEY & LEBOEUF: Trust's Status Report for April to June 2013 DUNE ENERGY: Board OKs $1.1 Million 2013 Bonuses to Executives DYNAVOX INC: Taps Bulger to Advise on Strategic Alternatives EARL GAUDIO: Section 341(a) Meeting Set on Aug. 15 EASTMAN KODAK: Seeks to Reject Contracts With Acro, et al. EASTMAN KODAK: U.S. Trustee Opposes Formation of Equity Committee EASTMAN KODAK: Names Management for Post-Emergence Company ELAN CORP: Perrigo Purchase Offer Prompts Moody's Upgrade Review ELAN CORP: S&P Puts 'B+' CCR on CreditWatch Positive EXIDE TECHNOLOGIES: Seeks Bonuses for Employees After CEO Departs FREESEAS INC: Issues 700,000 Add'l Settlement Shares to Hanover GABRIEL TECHNOLOGIES: U.S. Trustee Balks at Plan Disclosures GASCO ENERGY: Posts $3-Mil. Net Loss in Second Quarter 2013 GETTY PETROLEUM: Settlement With Lukoil Approved GORDON PROPERTIES: Examiner Can Employ Leach Travell as Counsel HAMPTON ROADS: Moody's Affirms Ratings on Series 2007-A Bonds HAWKER BEECHCRAFT: New York Judge Dismisses Qui Tam Claim HDC FINANCIAL: Ariz. Court Won't Reinstate Claims Against Seibels HEALTHWAREHOUSE.COM INC: W. Corona Had 10% Stake at March 15 HEARUSA INC: Shareholders Agree to $1 Million Settlement HYMAN COMPANIES: Court Rules on Objection to Ansel Claim INTELLIPHARMACEUTICS INT'L: Offering 1.5 Million Units INTERLEUKIN GENETICS: Amends 120.4MM Shares Resale Prospectus IRON MOUNTAIN: S&P Retains 'BB-' CCR Following Upsize of Facility J & J DEVELOPMENTS: Liquidating Trustee Wants Case Opened J & J DEVELOPMENTS: Trustee Can Hire Speth & King as Counsel J.C. PENNEY: Adds Article XVII to Bylaws JAMES RIVER: Kentucky Plant Operation Resumes JUMP OIL: Court Approves Sale of Gas Stations and Related Property JUNIPER GENERATION: Fitch Affirms BB+ Rating on $206MM Sec. Notes KEMET CORP: Stockholders Elect Two Directors LEE BRICK: Chapter 11 Plan Declared Effective LIBERACE FOUNDATION: Hires Marquis Aurbach as Special Counsel LIBERTY HARBOR: Plan Filing Exclusivity Extended Until Oct. 17 LIFE UNIFORM: Sold to Scrubs & Beyond for $22.6 Million LIFEPOINT HOSPITALS: Moody's Affirms 'Ba2' Corp. Family Rating LORD & TAYLOR: Moody's Reviews 'B1' CFR for Possible Downgrade MAUI LAND: Posts $831,000 Net Income in June 30 Quarter MAXCOM TELECOMUNICACIONES: Plan Confirmation Hearing on Sept. 10 MCCLATCHY CO: Former Yahoo! Executive Named to Board MF GLOBAL: Reaches Settlement With JPMorgan Unit on Recovery MFM DELAWARE: Benesch Friedlander Approved as Committee's Counsel MFM DELAWARE: Panel Can Hire Gavin/Solmonese as Financial Advisor MFM DELAWARE: Gregg Stewart Approved as Chief Financial Officer MGM DELAWARE: Pharus Securities Approved as Investment Banker MI PUEBLO SAN JOSE: Sec. 341 Meeting of Creditors on Aug. 28 MPG OFFICE: Amends 2012 Annual Report to Re-File Exhibit MULTI PACKAGING: Moody's Assigns 'B2' CFR, Outlook Stable MULTI PACKAGING: S&P Affirms 'B' CCR & Rates $50MM Facility 'B+' NATIONAL ENVELOPE: Can Employ Epiq Systems as Admin. Advisor NATIONAL ENVELOPE: Committee Retains Pachulski Stang as Counsel NATIONAL ENVELOPE: RR Donnelley Wants Stay Relief to Permit Setoff NATIONAL ENVELOPE: Panel Seeks Clarification on Info Protocol NESBITT PORTLAND: Fine-Tunes Joint Consensual Plan NNN 3500: Motion to Reconsider Order Granting Stay Relief Denied NORTHERN BEEF: Section 341(a) Meeting Scheduled for Sept. 4 NUANCE COMMUNICATIONS: S&P Retains 'BB+' Rating to Sr. Facility OLDE PRAIRIE: 7th Circuit Dismisses CenterPoint Appeal ONCURE MEDICAL: Auction Scheduled for Aug. 19 PACIFIC GOLD: Amends 2012 Annual Report PARTY CITY: Moody's Reviews B2 Ratings for Possible Downgrade PARTY CITY: S&P Revises Outlook to Neg. & Rates $300MM Notes CCC+ PATRIOT COAL: Mine Workers' Appeal Nears Conclusion PATRIOT COAL: Knighthead, Aurelius to Backstop for Rights Offering PENSON WORLDWIDE: 4th Amended Plan to Come Before Court Today PENSON WORLDWIDE: Parties File Motions to Lift Automatic Stay PEREGRINE FINANCIAL: 7th Cir. Affirms Ruling in Prestwick Suit PERRIGO CO: S&P Puts 'B+' CCR on CreditWatch Positive PMI GROUP: Plan Approved Over Justice Department Objection POINT BLANK: SS Body Armor Can Employ McKenna as Special Counsel R. BROWN & SONS: Vermont Court Appoints Sheriffs as Custodians RCN TELECOM: Moody's B2 CFR Unchanged Following Bond Announcement RG STEEL: Seeks Court Approval of Longer Plan-Filing Exclusivity ROTECH HEALTHCARE: Wins Approval of $200 Million Exit Financing SAKS INCORPORATED: Fitch Puts 'BB' IDR on Rating Watch Negative SAKS INC: On Moody's Downgrade Watch After Hudson Bay Purchase SHUANEY IRREVOCABLE: Can Employ Wilson Harrell as Attorney SIRIUS XM: Moody's Rates New $600-Mil. Senior Notes 'B1' SIRIUS XM: S&P Assigns 'BB' Rating to $600MM Senior Notes Due 2021 SOUND SHORE MEDICAL: Can Employ Garfunkel Wild as Counsel SOUTH FLORIDA SOD: Sec. 341 Meeting of Creditors on Aug. 5 SPRINGFIELD HOMES: Sec. 341(a) Meeting of Creditors on Aug. 20 STACY'S INC: Bank of the West Opposes Sale of Greenhouse Owner STEARNS HOLDINGS: Moody's Assigns B2 CFR & Rates $200MM Notes B2 STELERA WIRELESS: Section 341(a) Meeting Set on Aug. 26 SUNSET MARINE: Tracker Marine Suit Remanded to Missouri Court SURGICAL SPECIALTIES: Moody's Assigns 'B3' CFR; Outlook Negative SURGICAL SPECIALTIES: S&P Assigns 'B' CCR; Outlook Stable SWJ MANAGEMENT: Sec. 341 Creditors' Meeting Set for Aug. 27 TELECOMMUNICATIONS MANAGEMENT: S&P Affirms 'B+' Corp Credit Rating TESORO LOGISTICS: Moody's Rates New $300MM Sr. Unsec. Notes 'B1' TESORO LOGISTICS: S&P Rates $300MM Unsecured Notes 'BB-' THQ INC: Graphics Co. Wants IP Claim Set at $62MM VALENCE TECHNOLOGY: Lincoln Center Lease Extended Until Dec. 31 VERISIGN INC: Share Repurchase Program Hike No Impact on Ba2 CFR VERTIS HOLDINGS: Has Until Oct. 7 to Remove Civil Actions WINDMILL DURANGO: Sec. 341 Meeting of Creditors on Aug. 29 * Fitch Releases Global Short-Term 2012 Transition, Default Update * Fitch: U.S. Money Fund Exposure to Eurozone Banks Stabilizes * Fitch: Cumulative US CMBS Defaults Diminishing in Size & Speed * Bankruptcy Filings Fall 17 Percent in First Half of 2013 * Time Limits on Dischargeability Aren't Flexible * Upcoming Meetings, Conferences and Seminars ********* ABERDEEN LAND II: Sec. 341(a) Meeting of Creditors on Aug. 7 ------------------------------------------------------------ There's a meeting of creditors of Aberdeen Land II, LLC, on Aug. 7, 2013 at 1:00 p.m. at Jacksonville, FL (3-40) - Suite 1-200, 300 North Hogan St. 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. Proofs of claim are due by Nov. 5, 2013. About Aberdeen Land II Aberdeen Land II, LLC, doing business as Aberdeen, owns a 1,316-acre master- planned community near Jacksonville, Florida. The project is designed for 1,623 single-family homes and 395 multi-family units. More than 1,000 units have been sold, leaving Aberdeen with 856 undeveloped lots and 28.1 acres zoned for commercial or residential use. Aberdeen filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-04103) on July 1, 2013, in Jacksonville, Florida. The Debtor has tapped Genovese Joblove & Battista, P.A., as counsel, Kapila & Company as accountant, Kellerhals Ferguson Fletcher Kroblin, PLLC, as special counsel, and Fishkind & Associates as expert consultants. The Debtor disclosed $41,165,861 in assets and $30,605,713 in liabilities in its schedules. Aberdeen owes $24 million in bonds that financed the project and more than $20 million to secured lenders with mortgages on the property. AGE REFINING: 5th Cir. Reinstates Committee's Plan Appeal --------------------------------------------------------- The United States Court of Appeals, Fifth Circuit, vacated the district court's orders that dismissed appeals by the Official Committee of Unsecured Creditors in the Chapter 11 case of AGE Refining, Inc. The Committee appeals from an order approving a settlement reached between JPMorgan Chase Bank, N.A. and Chase Capital, and the AGE bankruptcy estate, and from the order confirming AGE's restructuring plan. The District Court held that both of the Committee's appeals were equitably moot. The District Court did not reach the merits of the appeals. "As the district court did not reach the merits, we will not reach them here, leaving them for the district court on remand," the Fifth Circuit said. AGE owned a refinery in San Antonio, Texas, and was owned and operated by Glen Gonzalez and persons affiliated with him. Chase was AGE's primary secured creditor before bankruptcy and also provided AGE with postpetition financing, permitted AGE to use Chase's cash collateral, and was granted postpetition liens on AGE's assets. The bankruptcy court appointed Eric Moeller as the Chapter 11 trustee. Refinery equipment and real property and other AGE tangible assets -- including property adjacent to the refinery and the Elmendorf Tank Farm -- were eventually sold to NuStar for $41 million. The legal documents effectuating the sale did not allocate the sale proceeds between Chase's encumbered collateral and unencumbered assets. No valuation testimony on the Refinery was presented to the bankruptcy court. Chase, arguing it was oversecured, made claims against the estate that included $40.2 million in prepetition claims and postpetition interest exceeding $6 million. At that time, other administrative priority claims against the Debtor's estate exceeded $5.5 million and unsecured claims totaled nearly $9 million. The Chapter 11 Trustee and the Committee contested Chase's claims, arguing that Chase's collateral did not have a value in excess of its claims. The Trustee negotiated with Chase, however, out of concern that litigation of the claims would leave the estate in a worse position than in a compromise. The Trustee and Chase reached the Chase Settlement regarding Chase's claims. The bankruptcy court approved the settlement over the Committee's objections that it overpaid Chase. The Committee appealed the order approving the Chase Settlement but did not seek a stay pending appeal. Chase was paid the full $40.2 million of its asserted prepetition claim and agreed to "cap" its claim for post-petition interest at $5 million. In a separate proceeding, the Chapter 11 Trustee settled and released the estate's claims against the Gonzalez Defendants, who agreed to pay $3.6 million to the estate in return for dismissal with prejudice of the Trustee's claims against them. The settlement stipulated that the transfer must be made by the time the Confirmation Plan was final, even if appealed, so long as a stay was not issued. The Gonzalez Defendants paid the agreed amount, and the bankruptcy court entered the agreed order. The Chapter 11 Trustee submitted a final reorganization plan that incorporated the Chase Settlement. The Plan designated Chase as an "impaired" creditor pursuant to 11 U.S.C. Sec. 1124; thus, Chase became entitled to vote to approve the Plan, to the extent of its post-petition "unsecured" claim, in the same class as the unsecured creditors of AGE. The bankruptcy court approved the Plan over the Committee's objections that it overpaid Chase and misclassified Chase's "unsecured" claim. The Committee appealed the order approving the Plan and sought a stay. The bankruptcy court orally denied the motion for a stay of the Plan and laid out its reasoning in extensive detail. The bankruptcy court held that the Committee was likely to succeed on the merits because Chase's claim was not a prepetition claim and, as a postpetition entitlement, it was not a claim entitled to vote. Hence, the requirements of 11 U.S.C. Sec. 1129(a) for confirmation were not satisfied because confirmation was carried based on Chase's vote. The bankruptcy court added, while noting its irrelevance given the preceding conclusion, that Chase's claim was "impaired" because the Plan altered Chase's rights under the Chase Settlement by delaying until post-confirmation a $200,000 payment it was otherwise immediately entitled to receive in the Chase Settlement. In general, however, the bankruptcy court held the Chase Settlement was not intertwined with or contingent on the Plan. Turning to the requirement of irreparable harm, the bankruptcy court reasoned that "[i]f the amount that's actually paid is determined to be too much, an appellate court could easily fashion an order directing return of monies to the estate for redistribution without adversely affecting the balance of the plan." The bankruptcy court added that "language in [In re Pac. Lumber Co., 584 F.3d 229, 240 (5th Cir. 2009)] . . . strongly suggests . . . that the appellate courts might believe themselves capable of addressing the merits of an appeal even in the absence of a stay" and that Pacific Lumber suggests that a stay was not necessary because the Committee's claims against Chase would not be equitably moot even without a stay. The bankruptcy court refused to enter a stay, in part, to ensure money from the Gonzalez Defendants was transferred according to the Plan and the Gonzalez settlement. The Chapter 11 Trustee distributed the proceeds from the settlement with the Gonzalez Defendants, made distributions to AGE's remaining administrative claimants, and paid the Committee's counsel. A liquidating trust was created and Randolph Osherow was appointed Liquidating Trustee. Mr. Osherow has filed claim objections, all but one of which have been resolved. On appeal, the district court dismissed the Committee's appeals of both the Chase Settlement and the Plan as equitably moot. The court reasoned that it could not "simply strike the alleged wrongful part of the settlement." The district court further reasoned that "overturning the order approving the Plan and [Chase] Settlement would affect the rights of parties who are not before the Court; namely, the administrative claimants, the priority unsecured creditors, the Gonzalez Defendants, and the trustee of the liquidating trust." The appellate cases are: OFFICIAL COMMITTEE OF UNSECURED CREDITORS, Appellant, v. ERIC J. MOELLER, Chapter 11 Trustee for Age Refining, Incorporated, Appellee; and OFFICIAL COMMITTEE OF UNSECURED CREDITORS, Appellant, v. CHASE CAPITAL CORPORATION; ERIC MOELLER, Chapter 11 Trustee; LIQUIDATING TRUSTEE RANDOLPH N. OSHEROW, Appellees, Nos. 12-50718, cons. w/12-50805 (5th Cir.). A copy of the Fifth Circuit's July 24, 2013 decision is available at http://is.gd/LiHXYIfrom Leagle.com. About Age Refining Age Refining, Inc. owned a refinery in San Antonio, Texas. It manufactured, refined and marketed jet fuels, diesel products, solvents and other highly specialized fuels. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 10-50501) on Feb. 8, 2010. The Company estimated $10 million to $50 million in assets and $100 million to $500 million in liabilities in its bankruptcy petition. David S. Gragg, Esq., and Steven R. Brook, Esq., at Langley & Banack, Incorporated, in San Antonio, Texas, represent Eric J. Moeller, Chapter 11 Trustee, as general counsel. Eric Moeller has been named chapter 11 trustee to take management of the Debtor from CEO Glen Gonzalez. In November 2010, the trustee filed suit against Mr. Gonzalez, alleging he breached his fiduciary duty by dipping into Company coffers for his personal use while paying himself an excessive salary and stock distributions. David S. Gragg, Esq., Steven R. Brook, Esq., Natalie F. Wilson, Esq., and Allen M. DeBard, Esq., at Langley & Banack, Inc., in San Antonio, Tex., serve as general counsel to the Chapter 11 Trustee. The effective date for Age Refining's Chapter 11 plan occurred or on Jan. 20, 2012. The Plan received confirmation from the Bankruptcy Court on Dec. 9, 2011. ALASKA AIR: S&P Raises CCR to 'BB' and Revises Outlook to Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit ratings on Seattle, Wash.-based Alaska Air Group Inc. (Alaska Air) and its major operating subsidiary Alaska Airlines Inc. to 'BB' from 'BB-'. At the same time, S&P revised its outlooks on both companies to stable from positive. "We based our upgrades on Alaska Air's improved credit metrics due to its strong operating performance and debt reduction, trends we expect to continue," said credit analyst Betsy Snyder. "For the 12 months ended March 31, 2013, Alaska Air's EBITDA interest coverage was 7.8x compared with 5.4x a year earlier, funds from operations (FFO) to debt was 41% compared with 30%, debt/capital was 57% compared with 66%, and debt/EBITDA was 2.2x compared with 3.1x. With our expectations of continued strong operating performance due to relatively stable fuel prices and continued debt reduction, we anticipate EBITDA interest coverage will increase to more than 8x, FFO to debt will increase to the mid-40% area, debt/capital will decline to below 50%, and debt/EBITDA will decline to below 2x by the end of 2014. The company also benefits from strong liquidity, with liquidity (cash and full availability of a $200 million of revolver capacity) as a percentage of trailing-12-month revenues of around 33%--among the highest of the U.S. rated airlines, which tend to average 15%-25%. With moderate capital spending needs, we expect Alaska Air to continue to generate free cash flow. As a result, we have raised our assessment of Alaska Air's financial risk profile to intermediate" from "significant." The ratings reflect the company's position as a relatively small participant in the cyclical and price-competitive U.S. airline industry; improved financial profile; and liquidity S&P believes should remain comfortably sufficient for operating needs and debt service. S&P views the company's business risk profile as "weak," its financial risk profile as "intermediate," and its liquidity as "strong" under its criteria. Alaska Air is the holding company for Alaska Airlines Inc. and Horizon Air Industries Inc., a regional airline. Alaska Airlines, which accounts for about 80% of consolidated passenger revenues, operates hubs at Anchorage, Alaska; Los Angeles; Seattle (its main hub); and Portland, Ore. It primarily serves destinations along the West Coast of the U.S., Canada, Mexico, and routes to Alaska from the lower 48 states. The airline also provides east/west service to Hawaii and several other destinations, primarily from Seattle. The company flies around 33% of its capacity in West Coast markets, 15% in Alaska and between Alaska and the mainland U.S., 22% mid-continent and transcontinental, 20% to and from Hawaii, and 10% to Mexico and Canada. Horizon primarily flies domestically, mostly along the West Coast out of hubs at Seattle and Portland. Although the company faces significant competition in its West Coast markets, principally from Southwest Airlines Co. and United Air Lines Inc., but also from JetBlue Airways Corp., Virgin America, and Allegiant Travel Co., Alaska Airlines has a substantial market share on many of the routes it serves along the West Coast, and dominates traffic between the West Coast and Alaska. The company also benefits from alliance relationships with many airlines, including American Airlines Inc., Delta Air Lines Inc., and various non-U.S. airlines. The company has benefited from an increase in connecting passengers as Delta has grown its international network at Seattle. Alaska Air has benefited from an increase in demand for air travel and good cost controls. In the second quarter of 2013, the company's operating margin (after depreciation) rose to 13.9% from 9.6% in the prior year period. Barring a significant decline in demand due to weaker-than-expected economic growth and/or a spike in fuel prices, S&P expects the company's operating performance to improve modestly through 2014. Higher fuel prices represent a risk to all airlines. Although the company has recently announced a change in its hedging strategy, which will reduce the tenor of its hedges to 18 months from 36 months (in line with industry standards), it still has had one of the best fuel-hedging programs among U.S. airlines, using mostly call options that cap the cost of its fuel purchases. The company has about 50% of its fuel needs hedged at just more than $100 a barrel through the second quarter of 2014. The rating outlook is stable. S&P expects the company's credit metrics to continue to improve based on increased demand and ongoing debt reduction and related interest expense, with FFO to debt increasing to the mid-40% area. S&P could raise the ratings if the company's margins improve, leading to a reassessment of its business risk profile as "fair," and it continues to strengthen its financial risk profile such that FFO to debt is consistently at least 50%. S&P could lower the ratings if economic weakness resulted in weaker demand and/or fuel prices increased sharply, decreasing FFO/debt to below 30% over a sustained period. ALLIED SYSTEMS: Can Employ PwC as Supplemental Financial Advisor ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Allies Systems Holdings, Inc., et al., to employ PricewaterhouseCoopers LLP as supplemental financial advisor, nunc pro tunc to the Petition Date. PwC will assist the Debtors (a) in the preparation of a liquidation analysis and (b) in discussions with their various creditors, creditor groups, official constituencies and other interested parties. As reported in the TCR on July 16, 2013, PwC will be paid at these hourly rates: Professional Level Range ------------------ ----- Partner/Principal $700 to $800 Director/Senior Manager $500 to $600 Manager $400 to $500 Senior Associate $300 to $400 Associate $200 to $300 Para-professional $100 to $150 PwC will receive reimbursement of reasonable out-of-pocket expenses. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. Yucaipa Cos. has 55 percent of the senior debt and took the position it had the right to control actions the indenture trustee would take on behalf of debt holders. The state court ruled in March 2013 that the loan documents didn't allow Yucaipa to vote. In March 2013, the bankruptcy court also gave the official creditors' committee authority to sue Yucaipa. The suit includes claims that the debt held by Yucaipa should be treated as equity or subordinated so everyone else is paid before the Los Angeles- based owner. The judge allowed Black Diamond to participate in the lawsuit against Yucaipa and Allied directors. ALLIED SYSTEMS: Axis Group Can Ink License Agreement with NYC ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved the motion of Allied Systems Holdings Systems, Inc., et al., for an order authorizing Axis Group, Inc., to enter into a license agreement with the City of New York Department of Citywide Administrative Services. Pursuant to the Agreement, Licensor Axis Group agrees to permit the City of New York to use approximately 65,000 square feet of area located at the South Brooklyn Marine terminal in the Borough of Brooklyn for the purpose of: (i) constructing 500 linear feet of wire mesh fencing, (ii) locating and storing up to three (3) locker and office trailers in the area, (iii) locating and storing constructing equipment and motor vehicles owned by Licensee in the area, (iv) locating and storing aggregate materials in the area, and (v) the operation by the Licensee of the New York Department of Transportation's Citywide Concrete Unit, utilizing the structures, materials and equipment reference in (i)-(iv) above, and for no other purposes. Licensor Axis Group, as tenant, leases the land and the improvements at the premises from the City of New York, as landlord, pursuant to that certain lease agreement, dated Nov. 1, 2006. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. Yucaipa Cos. has 55 percent of the senior debt and took the position it had the right to control actions the indenture trustee would take on behalf of debt holders. The state court ruled in March 2013 that the loan documents didn't allow Yucaipa to vote. In March 2013, the bankruptcy court also gave the official creditors' committee authority to sue Yucaipa. The suit includes claims that the debt held by Yucaipa should be treated as equity or subordinated so everyone else is paid before the Los Angeles- based owner. The judge allowed Black Diamond to participate in the lawsuit against Yucaipa and Allied directors. APERION COMMUNITIES: Sec. 341 Meeting of Creditors on Aug. 20 ------------------------------------------------------------- There's a meeting of creditors of Aperion Communities LLLP on Aug. 20, 2013 at 9:00 a.m. at US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, Arizona (341-PHX). 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. Proofs of claim are due by Nov 4, 2013. About Aperion Communities Aperion Communities LLLP filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 13-12040) on July 15, 2013. Adam E. Hauf, Esq., at The Forakis Law Firm PLC, serves as counsel. The Debtor estimated at least $10 million in assets and $1 million to $10 million in liabilities in its schedules. BANKRATE INC: Moody's Rates $70MM Revolver Ba1 & $300MM Notes B2 ---------------------------------------------------------------- Moody's Investors Service has assigned a B2 rating to Bankrate, Inc.'s, an Internet-based consumer personal finance provider, proposed $300 million senior unsecured notes due 2018 and Ba1 rating to the company's proposed $70 million revolver maturing 2018. In connection with the rating action, Moody's affirmed Bankrate's B1 Corporate Family Rating (CFR), B1-PD Probability of Default Rating (PDR) and SGL-1 Speculative Grade Liquidity Rating. The stable rating outlook is maintained. Net proceeds from the new senior notes will be used to repay the $195 million outstanding 11.75% senior secured notes due 2015 plus call premium. The company will use residual proceeds of approximately $88 million to increase cash balances and for general corporate purposes. In conjunction with this transaction, Bankrate intends to replace the existing two-tranche revolver (comprised of a Ba1-rated $30 million super-priority Tranche A and B1-rated $70 million Tranche B), with a single $70 million revolver. Upon repayment of the secured notes and extinguishment of the two-tranche revolver, the new revolver will be secured by the entire asset pool on a first-lien basis, resulting in a three notch lift relative to the CFR. The new unsecured notes are rated one notch lower than the CFR, reflecting the higher loss absorption sustained relative to senior secured revolver borrowings in a distressed scenario under Moody's Loss Given Default (LGD) Methodology. Moody's anticipated a refinancing transaction given that the secured notes were callable after 7/15/2013 and the company's cash balance ($112 million as of 6/30/2013) was not sufficient to cover the entire outstanding amount plus the premium. Although the refinancing will increase absolute debt levels and elevate Moody's adjusted pro forma debt-to-EBITDA leverage to 3x from 2x as of 3/31/2013, Bankrate has enough capacity at the B1 rating level to absorb this incremental debt. Further, Moody's views the refinancing transaction favorably due to the extension of the debt maturity structure and expectations for modest annual interest expense savings. Rating Assigned: Issuer: Bankrate, Inc. $70 Million Senior Secured Revolver due 2018 -- Ba1 (LGD-1, 3%) $300 Million Senior Unsecured Notes due 2018 -- B2 (LGD-4, 58%) Ratings Affirmed: Issuer: Bankrate, Inc. Corporate Family Rating -- B1 Probability of Default Rating -- B1-PD Speculative Grade Liquidity Rating -- SGL-1 The assigned rating is subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. Moody's will withdraw the B1 rating on the 11.75% senior secured notes, Ba1 rating on the Tranche A super-priority revolver and B1 rating on the Tranche B revolver upon their full repayment. Ratings Rationale: The B1 CFR reflects Bankrate's strong credit metrics, which provide the company with flexibility for continued acquisitions and potential shareholder distributions as well as adequate cushion to absorb increased earnings volatility associated with changes in consumer spending and rising interest rates. The rating also incorporates the prospect for future acquisitions, event risks associated with continued majority ownership by private equity sponsor Apax, its modest overall revenue base, and exposure to volatile consumer finance online advertising spending. These risks are mitigated by the company's strong brand, high quality aggregated content and leading position in online consumer personal finance. Further, Moody's expects Bankrate to benefit from the secular shift of advertising spend and personal finance purchase activity from traditional channels to online and mobile platforms. Although Moody's estimates the proposed refinancing transaction will increase pro forma leverage to around 3x debt-to- EBITDA (Moody's adjusted incorporating operating leases) from 2x as of 3/31/2013, the company will continue to be positioned comfortably within the B1 rating category. Bankrate has considerable dry powder for acquisitions and shareholder distributions including $70 million of unused revolver capacity, projected free cash flow generation, and balance sheet cash. Moody's expects Bankrate to maintain leverage below 3.5x as it executes its organic and acquisition growth strategies. Rating Outlook The stable rating outlook incorporates expectations that Bankrate will continue to pursue acquisitions and shareholder distributions funded from free cash flow and periodic debt issuance or revolver borrowing, and will maintain a solid liquidity position and debt- to-EBITDA below 3.5x. Moody's also assumes the US economy will continue to grow modestly and expect the company to maintain solid performance even if consumer finance interest rates increase over the next 12-18 months. What Could Change the Rating -- Up The small scale, potential for leveraging transactions, and volatility of online consumer finance advertising limit upward rating potential. However, Moody's would consider a higher rating if the company profitably grows the revenue base, maintains a strong liquidity position, commits to a strong credit profile and sustains debt-to-EBITDA comfortably below 2x and free cash flow to debt of about 15%. What Could Change the Rating -- Down A decline in earnings or acquisitions or cash distributions resulting in sustained debt-to-EBITDA above 3.5x could lead to a downgrade. Deterioration of the liquidity profile due to weak cash generation, or a material decline in cushion within the credit agreement's financial maintenance covenant could also have negative ratings implications. The principal methodology used in this rating was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in North Palm Beach, FL, Bankrate operates consumer banking and personal finance websites, which provide information on finance related matters including mortgages, credit cards, auto loans, insurance, money market accounts, certificates of deposit, and home equity loans. Bankrate's revenue for the twelve months ended June 30, 2013 was approximately $424 million. In June 2011, the company executed an initial public offering (IPO) for proceeds of approximately $300 million but is still primarily owned and controlled by Apax VII Funds (Apax). BANKRATE INC: S&P Rates $70MM Revolver BB+ & New $300MM Notes BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on North Palm Beach, Fla.-based Bankrate Inc. The outlook is negative. At the same time, S&P assigned the company's proposed $70 million senior secured revolving credit facility its 'BB+' issue-level rating, with a recovery rating of '1', indicating S&P's expectation for very high (90% to 100%) recovery for lenders in the event of a payment default. In addition, S&P assigned the company's proposed $300 million senior unsecured notes its 'BB-' issue-level rating, with a recovery rating of '3' (50% to 70% recovery expectation). The transaction lowers the company's interest expense and also gives the company additional funds to pursue its acquisition- oriented growth strategy. Any acquisitions would come at a time when management is focused on turning around results in the insurance segment. Pro forma adjusted leverage is 3.2x, and interest coverage is over 5x. The rating on Bankrate reflects our expectation that leverage will remain moderate, subject to its business turnaround and pace of acquisitions, and the potential for the company to benefit from favorable trends in online advertising. S&P believes Bankrate's business risk profile is "weak" (based on S&P's criteria), reflecting its concentrated exposure to volatility in the financial services industry and the highly competitive online advertising market. S&P views Bankrate's financial risk profile as "significant," with the potential for debt-financed acquisitions and shareholder-favoring transactions tempering the benefit of moderate debt leverage. S&P regards Bankrate's management and governance as "fair." Volatility in financial services advertising, together with low barriers to entry and tough competition in online advertising, is an overarching business risk. The company has expanded its financial services offerings by adding services to its credit card and insurance platforms in recent years. S&P believes insurance- related products provide a growth opportunity for the company and are generally less cyclical than businesses that focus on other financial products. However, the company has made efforts to reduce its volume of low-quality leads in insurance, as it gathered improved feedback data on lead performance. The volume of low-quality leads has been greater than expected, contributing to a revenue decline in the fourth quarter of 2012 and the first half of 2013. It is unclear when or to what degree improved pricing from higher-quality leads will offset the reduction in total lead volume. In addition, low credit card approval rates have reduced revenues from the credit card end market because of reduced customer acquisition efforts by credit card issuers. The credit card segment is the only one in which Bankrate receives compensation based on its clients' conversion of leads to an approved application, and is therefore vulnerable to lower credit card approval levels. Like most Internet companies, Bankrate depends on search engines for a substantial portion of its Internet traffic, leaving it vulnerable to changes in search algorithms. BATE LAND & TIMBER: Sec. 341(a) Meeting of Creditors on Sept. 4 --------------------------------------------------------------- There's a meeting of creditors of Bate Land & Timber, LLC, on Sept. 4, 2013 at 10:00 a.m. at Wilson 341 Meeting Room. 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. The last day to file a complaint is on Nov. 4, 2013. Proofs of claim are due by Dec. 3, 2013. Governmental proofs of claim are due by Jan. 22, 2014. Bate Land & Timber, LLC, filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-04665) in Wilson, North Carolina on July 26, 2013. The Debtor estimated at least $10 million in assets and less than $500,000 in liabilities. George Mason Oliver, Esq., at Oliver Friesen Cheek, PLLC, has been tapped as bankruptcy counsel. BEST UNION: Court Confirms Chapter 11 Plan of Reorganization ------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California has confirmed the Chapter 11 Plan of Reorganization dated May 20, 2013, of The Best Union, LLC. The Court approved the explanatory disclosure statement as containing "adequate information" in May 2013. A full-text copy of the Amended Disclosure Statement dated May 15, 2013, is available for free at: http://bankrupt.com/misc/BESTUNION_AmdDSMay15.pdf The Plan provides that the secured claims of Bank of China, SPCP Group V, LLC, will be paid in full and the lenders will retain their liens securing the debts until the debts are paid or the West Covina Property is sold. Holders of general unsecured claims will recover 100%. The Court entered the plan confirmation order on July 8, 2013. About The Best Union West Covina, California-based, The Best Union, LLC, owns properties in West Covina and Fresno, California. Bank of China and SPCP Group V, LLC, have secured claims of $5.888 million and $2.255 million, respectively. The West Covina property generated income of $752,000 last year. The Fresno property generated income of $251,000 in 2011. The Company filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-32503) on June 28, 2012. Bankruptcy Judge Peter Carroll presides over the case. Mufthiha Sabaratnam, Esq., at Sabaratnam and Associates, represents the Debtor in its restructuring effort. The Debtor disclosed assets of $11,431,364, and liabilities of $9,195,179 in its schedules. The petition was signed by James Lee, manager. BIO-KEY INTERNATIONAL: Sells 3.5 Million Units for $1 Million ------------------------------------------------------------- BIO-Key International, Inc., issued to certain private investors 3,500,006 units consisting of 3,500,006 shares of the Company's common stock and warrants to purchase an additional 3,500,006 shares of the Company's common stock for an aggregate purchase price of $1,050,000. Each unit had a purchase price of $0.30 and consisted of one share of common stock and one warrant. The warrants are immediately exercisable at an exercise price of $0.40 per share at any time prior to July 22, 2018. The exercise price and the number of shares issuable upon exercise of the warrants are subject to adjustment upon the occurrence of certain events, including stock dividends, stock splits, combinations, and reclassifications of the Company's capital stock, and the warrants immediately terminate upon the sale of all or substantially all of our assets or the acquisition of more than 50 percent of the Company's voting securities by any person in one or a series of related transactions. The warrants do not confer upon the holders thereof any voting, dividend or other rights as stockholders of the company. 16 Million Shares for Resale Biokey International registered with the U.S. Securities and Exchange Commission 16,026,947 shares of the Company's common stock, $.0001 par value per share, to be offered by DRNC Holdings, Inc., REF Securities & Co., L.P., RIT 22 Trust, et al. The shares of common stock offered by the selling security holders includes 12,526,941 shares of common stock and 3,500,006 shares of common stock underlying warrants with an exercise price of $0.40 per share which expire five years after the date of grant. The Company will not receive any part of the proceeds from sales of these shares by the selling security holders, however, the Company will receive proceeds upon any exercise of the warrants by the selling security holders. The Company's common stock trades on the OTC Bulletin Board under the symbol "BKYI." The closing price of the Company's common stock on the OTC Bulletin Board on July 23, 2013, was $0.33 per share. A copy of the Form S-1 prospectus is available for free at: http://is.gd/9ylsu1 About BIO-Key Wall, N.J.-based BIO-key International, Inc., develops and markets advanced fingerprint biometric identification and identity verification technologies, cryptographic authentication- transaction security technologies, as well as related Identity Management and Credentialing software solutions. In its report on the consolidated financial statements for the year ended Dec. 31, 2012, Rotenberg Meril Solomon Bertiger & Guttilla, P.C., in Saddle Brook, New Jersey, expressed substantial doubt about BIO-key's ability to continue as a going concern, citing the Company's substantial net losses in recent years, and accumulated deficit at Dec. 31, 2012. The Company reported net income of $3,267 on $3.8 million of revenues in 2012, compared with a net loss of $1.9 million on $3.5 million of revenues in 2011. BMC SOFTWARE: S&P Lowers CCR to 'B+'; Outlook Stable ---------------------------------------------------- Standard & Poor's Ratings Services lowered its 'BBB+' corporate credit rating on Houston-based BMC Software Inc. to 'B+' from 'BBB+'. S&P removed the rating from CreditWatch, where it placed it with negative implications on May 6, 2013. The outlook is stable. "At the same time, we assigned our 'BB-' issue rating to BMC's $1 billion euro term loan due 2020 with a recovery rating of '2', indicating our expectation for substantial (70% to 90%) recovery of principal in the event of a payment default. We assigned our 'B+' issue rating to the company's $3.2 billion term loan due 2020 and $350 million revolver due 2018. The '3' recovery rating indicates expectations for meaningful (50% to 70%) recovery of principal in the event of a payment default. We also assigned our 'B-' issue rating to its $1.38 billion senior notes due 2021 and its $300 million rollover senior notes due 2020. The '6' recovery rating indicates expectations for negligible (0% to 10%) recovery of principal in the event of a payment default," S&P said. "The downgrade reflects our assessment that the going-private transaction will result in a deterioration in BMC's financial risk profile," said Standard & Poor's credit analyst Philip Schrank. BMC is a leading provider of systems management software solutions on mainframe and distributed platforms. BMC's "satisfactory" business risk profile under S&P's criteria reflects predictable recurring revenues from contractual maintenance agreements, a highly defensible market position, and entrenched customer relationships that largely supports the company's stable revenue base. However, BMC's marketplace is very competitive, with the presence of larger and more diversified participants (such as IBM (AA-/Stable/--) and CA Technologies (BBB+/Stable/--). S&P's stable outlook reflects BMC's strong market position in diversified market segments and consistent operating performance. S&P's view that the company's private-equity ownership structure is likely to prevent sustained debt reduction currently limits any potential for an upgrade. The company's defensible market positions and high recurring revenue base lessen the potential for credit deterioration. However, S&P could lower the ratings if the company sustained leverage in excess of 7x because of acquisitions or shareholder-friendly initiatives. BOWIE RESOURCE: Moody's Assigns B1, Caa1 Ratings to Term Loans -------------------------------------------------------------- Moody's assigned first-time ratings to Bowie Resource Partners LLC, including a B2 corporate family rating (CFR), B2-PD probability of default rating, B1 rating on the first lien term loan and Caa1 rating on the second lien term loan. The outlook is stable. The proceeds of the term loans will be predominantly used to finance Bowie's $435 million acquisition of Canyon Fuel Company, LLC from Arch Coal. Subsequent to the transaction, Bowie will have four mines in the Western Bituminous region of the US, including Bowie #2 longwall mine in Colorado and the three Utah mines formerly owned by Arch -- Sufco longwall mine, Skyline longwall mine, and Dugout Canyon room-and-pillar mine. In 2012, the four mines produced 12.8 million tons of high BTU, low sulfur coal and generated roughly $460 million in revenues pro-forma for the transaction. The transaction also contemplates about $100 million investment from Galena Private Equity, with approximately $90 million of proceeds directed towards prepayment of Bowie's existing debt and repurchase of existing minority interests. Subsequent to the transaction, Bowie's debt will consist entirely of the current issuance, and 45% of the company will be owned by Galena, owned in turn by Trafigura Beheer B.V. , a multi-national commodity trading company. Ratings Rationale: The B2 CFR reflects the company's limited scale and business diversity and long-term challenges facing the US coal industry. The ratings acknowledge the low-cost position of the company's mines and geographic advantage relative to key customers, as well as long-term contracts with several large baseload coal-fired plants. The ratings also incorporate Moody's expectation of conservative leverage and substantial free cash flows over the ratings horizon. With approximately 13 million tons of annual production and less than $500 million in annual revenues, Bowie is one of the smallest rated coal companies. Concentrated in a single region of the US with four underground mines, the company is exposed to the risk of significant adverse effects from geologic conditions, operational disruptions, regulatory developments or economic conditions affecting the region. Although the company's asset base is relatively small and highly concentrated, the ratings acknowledge the high productivity of the company's mines and the competitiveness of the product. As three of the four mines utilize long-walls, the company is highly efficient, with cash costs expected to average in the $20-$25 range over the next two to three years. These costs are substantially lower than those of many other producers of high-BTU coal, particularly in Appalachia. Although the cost structure is comparable to Illinois Basin producers, Western Bituminous coal has much lower sulfur content, which is an advantage in light of regulatory pressures aimed at limiting emissions and necessitating installation of scrubbers at coal plants that burn higher-sulfur coal. The ratings further acknowledge the proximity of the company's coal mines to its regional customer base of large baseload plants. While the ratings also incorporate risks stemming from high customer concentration, the company's credit profile benefits from the fact that a large proportion of revenue stems from major utilities that rely heavily on coal -- including PacificCorp, Intermountain Power Agency and Sierra Pacific Power Company. Moreover, a large proportion of company's expected production through 2015 is secured under long-term, attractively structured contracts, which will help ensure stability of margins and cash flows over the ratings horizon. The ratings reflect Moody's expectation that the company's credit metrics will remain relatively conservative over the next two to three years. Moody's expects EBITDA (as adjusted) of approximately $110 - $120 million in 2013, with steady performance going forward. Moody's expects the company's capital needs to be manageable over the next three to five years -- approximately $90 million in 2013 (pro-forma full year), which includes one-time infrastructure investment of $30 million, and ranging from $40 to $60 million per year thereafter. The ratings also incorporate the risk that capital investment needs could escalate beyond that horizon as mines get closer to the end of mine life (average of 15 years at December 31, 2012). That said, over the next three years, Moody's expects the company to generate positive free cash flow of roughly $20 million in 2013 and ranging from $40 to $80 million in each of 2014 and 2015. Ratings incorporate Moody's expectation that the company will direct much of the free cash flow towards repaying debt with Debt/ EBITDA, as adjusted, expected to decline from approximately 4.0x in 2013 to 2.8x -- 3.2x in 2014. While Moody's acknowledges the productivity of the company's mines and its strong and stable customer base, Bowie is not entirely insulated from the challenges facing the US coal industry as a whole. Booming shale production has led to a natural gas glut that poses formidable competition for the US coal industry, causing a significant switch from coal to natural gas among power producers. Stricter environmental regulations are further discouraging coal consumption at home. US power producers once derived about half of their electricity from coal, but coal's share slipped to about 42% of the total in 2011 and 37% in 2012, as natural gas prices declined to historic lows of $2/MMBtu in April 2012. Although natural gas prices have since recovered to the $3.50 - $4/MMBtu range, prompting some recovery in coal consumption, Moody's believes coal's share of power production will stay below 40% over the next three to five years. The first lien term loan is rated B1 and the second lien Caa1 due to their relative positions in the company's capital structure and claim on collateral. The loans rank behind the ABL facility and are guaranteed by the company's wholly-owned domestic subsidiaries. The terms loans are primarily secured by the first- priority and second-priority interest on the company's fixed assets. The ratings outlook is stable, based on the company's significant contracted position and the low-cost structure of its mines. The ratings could be upgraded if the industry fundamentals improve in domestic and/or export markets, the company's Debt/ EBITDA is maintained below 4x and EBIT/ Interest increases above 2.5x. The ratings could be downgraded if the company undertakes any significant shareholder-friendly activities or debt-financed acquisitions, if liquidity deteriorates, if there is a loss of a material customer relationship, if free cash flows turn negative, Debt/ EBITDA raises above 5x, or EBIT/ Interest falls below 1.5x The principal methodology used in this rating was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. BROADVIEW NETWORKS: Incurs $516,000 Net Loss in Second Quarter -------------------------------------------------------------- Broadview Networks Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $516,000 on $80.45 million of revenues for the three months ended June 30, 2013, as compared with a net loss of $8.07 million on $86.87 million of revenues for the same period during the prior year. For the six months ended June 30, 2013, the Company incurred a net loss of $2.88 million on $161.25 million of revenues, as compared with a net loss of $13.04 million on $175.40 million of revenues for the same period a year ago. As of June 30, 2013, the Company had $217.09 million in total assets, $203.28 million in total liabilities and $13.80 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/7eGmdK About Broadview Networks Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a communications and IT solutions provider to small and medium sized business ("SMB") and large business, or enterprise, customers nationwide, with a historical focus on markets across 10 states throughout the Northeast and Mid-Atlantic United States, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. Ernst & Young LLP, in New York, N.Y., issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011. The independent auditors noted that the Company has in excess of $300 million of debt due on or before September 2012. "In addition, the Company has incurred net losses and has a net stockholders' deficiency." The Company reported a net loss of $11.9 million for 2011, compared with a net loss of $18.8 million for 2010. * * * In the July 23, 2012, edition of the Troubled Company Reporter, Moody's Investors Service downgraded Broadview Networks Holdings, Inc. Corporate Family Rating (CFR) to Caa3 from Caa2 and the Probability of Default Rating (PDR) to Ca from Caa3 in response to the company's announcement that it has entered into a restructuring support agreement with holders of roughly 70% of its preferred stock and roughly 66-2/3% of its Senior Secured Notes. The company is expected to file a pre-packaged Chapter 11 Plan of Reorganization or complete an out of court exchange offer. As reported by the TCR on July 25, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Broadview to 'D' from 'CC'. "This action follows the company's announced extension on its revolving credit facility. We expect to lower the issue- level rating on the notes to 'D' once the company files for bankruptcy, or if it misses the Sept. 1, 2012 maturity payment on the notes," S&P said. BUILDERS GROUP: Aug. 26 Hearing on Request to Use Cash Collateral ----------------------------------------------------------------- The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for the District of Puerto Rico will convene a hearing on Aug. 26, 2013, at 2 p.m., to consider: -- Builders Group & Development Corp.'s motion to use cash collateral, and -- secured and judgment creditor CPG/GS PR NPL LLC's motion to alter or amend the Court's interim order entered on July 19, 2013; and the Debtor's opposition to that motion. CPG/GS, in its objection to the interim order authorizing the Debtor's use of cash collateral, stated that CPG has no confidence in the honesty or the capacity of the Debtor's current management and will not consent to the Debtor's current management's use of its cash collateral. CPG also explained that, the Debtor has (a) no right to use any cash collateral of CPG/GS, as the same was properly foreclosed and transferred prepetition to CPG/GS, thus does not constitute an asset of the bankruptcy estate; (b) Debtor is not able of providing any reasonable adequate protection to CPG/GS as there exists no equity in its assets, and there exists no reorganization or refinancing alternatives that could even remotely provide a viable exit strategy pursuant to which creditors, such as CPG/GS, will be paid the amount and value of their security interest. The Debtor says CPG/GS is in violation of the automatic stay. The Debtor also says neither the counsel for, nor a representative of, CPG/GS has ever visited the Cupey Professional Mall, yet they are sure that they own it and that every problem in the mall is caused by Builders' management. CPG/GS also has filed a motion for entry of an order determining the foreclosure of rents or prohibiting the use of CPG/GS' cash collateral. CPG/GS said it must not be forced, through the non- consented use of its cash, or in the alternative, its cash collateral, to place its property and collateral at substantial risk by essentially "financing" a bankruptcy proceeding that appears to have minimum, if any, probability of reorganization and where the likelihood of CPG/GS recovering on the used cash collateral is remote. In response, the Debtor said CPG's statement related to "settlement attempts, bad faith, mismanagement and alienation of patrons" is "self-serving and fictional," with the only purpose being to influence the Court to take a stance against Builders. Contrary to CPG's representations, Builders and CPG reached a prepetition agreement through a mediated effort which only required minimal changes prior to execution, and CPG kept delaying the signing, then it about-faced and filed a complaint for foreclosure. Builders, through its president's personal resources and those of related companies, has paid the expenses of maintaining the Cupey Professional Mall out of pocket since September 2010. The Debtor said the collateral has been protected and the value has been increased due to the efforts of Builders. On July 19, the Court entered an interim order allowing the Debtor to use cash collateral, and grant replacement liens and other adequate protection. Prior to the Petition Date, CPG/GS made certain loans and extended certain financial accommodations to Debtor. As of the Petition Date, the aggregate principal amount of approximately $9,400,000 was outstanding under the Prepetition Debt, in addition to accrued interest thereon and fees and expenses incurred by or on behalf of lender in connection therewith. To secure the Prepetition Debt, the Debtor granted to the lender liens on and security interests in substantially all of the Debtor's property, and the proceeds, products, rents and profits of all of the foregoing. The estimated value of the Prepetition Collateral is $11,900,000. The Debtor intends to use the cash collateral for the continued operation of its business. The Debtor said CPG is adequately protected through (a) an equity cushion in the property, which is estimated to be $2,500,000 and (b) through Builders' offer of adequate protection payments of $23,961 per month. About Builders Group Builders Group & Development Corp. owns and manages the Cupey Professional Mall, a shopping center located in Cupey, Puerto Rico. The Company sought Chapter 11 protection (Bankr. D.P.R. Case No. 13-04867) on June 12, 2013, 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 is represented by Kendra Loomis, Esq. at G A Carlo-Altieri & Associates. Jose M. Monge Robertin, CPA, serves as accountant. BUILDERS GROUP: G.A. Carlo-Altieri Approved as Counsel ------------------------------------------------------ The Hon. Enrique S. Lamoutte Inclan of the Bankruptcy Court for the District of Puerto Rico authorized Builders Group & Development Corp. to employ Gerardo A. Carlo-Altieri, Esq., and G.A. Carlo-Altieri & Associates as counsel. As reported in the Troubled Company Reporter on June 21, 2013, the Debtor has agreed to pay a $20,000 retainer. The firm will bill on the basis of $280 per hour, plus expenses, for work performed by Gerardo A. Carlo, Esq.; $260 per hour, plus expenses, for work performed by Kendra K. Loomis, Esq.; $200 per hour, plus expenses for work performed by other associates; and $100 per hour for paralegal time. The firm attests it is a "disinterested person" as defined in 11 U.S.C. Sec. 101(14). About Builders Group Builders Group & Development Corp. owns and manages the Cupey Professional Mall, a shopping center located in Cupey, Puerto Rico. The Company sought Chapter 11 protection (Bankr. D.P.R. Case No. 13-04867) on June 12, 2013, 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 is represented by Kendra Loomis, Esq. at G A Carlo-Altieri & Associates. Jose M. Monge Robertin, CPA, serves as accountant. CARDERO RESOURCE: Secured Creditors Demand Debt Repayment --------------------------------------------------------- Cardero Resource Corp. on July 29 disclosed that it has received a demand for payment of certain outstanding indebtedness to certain affiliates of Luxor Capital Group, LP, secured creditors of the Company. Luxor are the holders of senior secured notes of the Company, the issuance of which was announced by the Company on April 23, 2013. Cardero Coal Ltd., the Company's wholly-owned subsidiary, was also served with a demand for payment for the Indebtedness in its capacity as guarantor in connection with Notes. The demand is in the amount of $5,668,514, and payment is to be on or before August 5, 2013. The default upon which the demand is based is the alleged failure by Cardero to pay legal costs in the amount of US$48,137 incurred by Luxor in connection with the Notes. Cardero disputes that it was provided with proper notice to pay the legal fees, and takes the position that there has therefore been no default and that the demand for payment of the Notes is invalid. Payment of the outstanding legal fees has been made. Cardero will resist any attempts by Luxor to enforce payment based on the alleged default, including by appropriate legal action. Notwithstanding that Cardero does not accept that it is in default under the Notes, the Company is presently engaged in advanced negotiations to secure the appropriate financing to pay out the Indebtedness to Luxor, and anticipates receiving a term sheet in respect of such financing shortly, with a view to completing such financing prior to August 5, 2013. About Cardero Resource Corp. Headquartered in Vancouver, Canada, Cardero Resource Corp. -- http://www.cardero.com-- is an exploration-stage company. The Company holds, or has rights to acquire, interests in mineral properties in Argentina, Mexico, Peru, the United States, Ghana and Canada. The Company is in the process of evaluating, such properties through exploration programs or, in some cases, mineralogical and metallurgical studies and materials processing tests. In June 2011, the Company completed the acquisition of Coalhunter Mining Corporation (Coalhunter). In September 2011, Coalhunter changed its name to Cardero Coal Ltd. Coalhunter has entered into various agreements to explore and, if warranted, develop, certain coal deposits in the Peace River Coal Field located in the northeast region of British Columbia. CASPIAN ENERGY: Debenture Holders Agree to Extend Default Cure -------------------------------------------------------------- Caspian Energy Inc. previously announced that it had received notices of failures to make a payment from Meridian Capital International Fund, Firebird Global Master Fund, Ltd. and Firebird Avrora Fund, Ltd. under Caspian's Amended and Restated Convertible Debentures dated July 8, 2011 for failure to pay the principal amount on the maturity date of June 2, 2013. The terms of the Convertible Debentures provide that a default occurs if there is a failure to pay principal on maturity and such failure to pay is not remedied within 30 days after receipt of written notice from the holder. Caspian announces that each of the Convertible Debenture Holders has agreed to extend the period to remedy such failure to pay until August 26, 2013. The aggregate principal amount of the Convertible Debentures is US$12,460,957. 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. CENGAGE LEARNING: Unsecured Creditors Oppose Loans, Plan Deal ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Cengage Learning Inc. creditors' committee will put up a fight at a hearing this week when the company seeks final court approval to use secured lenders' cash and lock in what the creditors call "an artificially compressed timeframe" for emerging from Chapter 11. According to the report, Cengage has secured interim bankruptcy court approval for an agreement with first-lien lenders allowing use of cash representing collateral for their loans. The use of cash is up for final approval at an Aug. 1 hearing. The report notes that before bankruptcy, Cengage negotiated an agreement under which holders of $2 billion in first-lien debt support a reorganization plan. The plan would eliminate more than $4 billion of $5.8 billion in debt. The report relates that second-lien creditors and holders of unsecured notes aren't part of the agreement. The committee argued in papers filed July 28 that Cengage and first-lien lenders are attempting to "hand over the company" to first-lien lenders "at the expense of the debtors' unsecured creditors." The committee said it didn't believe its constituency is "out of the money." To the contrary, unsecured creditors argue that Cengage has "significant positive cash flow" along with cash balances that will grow "over the next several months." The report discloses that the committee said none of the holders of second-lien and lower-ranking debt are on board with the so- called plan support agreement. About Cengage Learning Stamford, Connecticut-based Cengage Learning -- http://www.cengage.com/-- provides innovative teaching, learning and research solutions for the academic, professional and library markets worldwide. Cengage Learning's brands include Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South Western and Wadsworth, among others. Apax Partners LLP bought Cengage in 2007 from Thomson Reuters Corp. in a $7.75 billion transaction. The acquisition was funded in part with $5.6 billion in new debt financing. Cengage Learning Inc. filed a petition for Chapter 11 reorganization (Bankr. E.D.N.Y. Case No. 13-bk-44106) on July 2, 2013, in Brooklyn, New York, after signing an agreement where holders of $2 billion in first-lien debt agree to support a reorganization plan. The plan will eliminate more than $4 billion of $5.8 billion in debt. First-lien lenders who signed the so-called plan-support agreement include funds affiliated with BlackRock Inc., Franklin Mutual Adviser LLC, KKR & Co. and Oaktree Capital Management LP. Second- lien creditors and holders of unsecured notes aren't part of the agreement. The Debtors have tapped Kirkland & Ellis LLP as counsel, Lazard Freres & CO. LLC as financial advisor, Alvarez & Marsal North America, LLC, as restructuring advisor, and Donlin, Recano & Company, Inc., as claims and notice agent. A nine-member official committee of unsecured creditors has been appointed in the Debtors' Chapter 11 cases. CHA CHA ENTERPRISES: Section 341(a) Meeting Set on Aug. 28 ---------------------------------------------------------- A meeting of creditors in the bankruptcy case of Cha Cha Enterprises, LLC, will be held on Aug. 28, 2013, at 1:30 p.m. at U.S. Federal Bldg., 280 S 1st St. #130, San Jose, CA. Creditors have until Nov. 26, 2013, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. The meeting was originally slated for Aug. 14. Proofs of claim are due by Nov. 12, 2013. Cha Cha Enterprises, LLC, filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-53894) on July 22, 2013. The Debtor estimated at least $10 million in assets and liabilities. Paul J. Pascuzzi, Esq., at Felderstein, Fitzgerald et al, serves as counsel to the Debtor. CHINA GREEN: Merges with China Shianyun --------------------------------------- China Green Creative, Inc., purchased 100 shares of common stock of China Shianyun Group Corp., Ltd, for $1,354, causing China Shianyun Group Corp., Ltd., to become a wholly owned subsidiary of the Company. Immediately following the acquisition, China Shianyun was merged with and into the Company, effective as of July 26, 2013. As a result of the merger, the Company's corporate name was changed to "China Shianyun Group Corp., Ltd." Prior to the merger, China Shianyun had no liabilities and nominal assets and, as a result of the merger, the separate existence of China Shianyun ceased. The Company is the surviving corporation in the merger and, except for the name change provided for in the Agreement and Plan of Merger, there was no change in the Company's directors, officers, capital structure or business. Pursuant to the name change, the Company will obtain a new OTCBB symbol. A copy of the Agreement and Plan of Merger is available for free at http://is.gd/D6s0ed About China Green China Green Creative, Inc., located in Shenzhen, Guangdong Province, People's Republic of China, is principally engaged in the distribution of consumer goods and electronic products in the PRC. China Green disclosed net income of $635,873 on $6.87 million of revenues for the year ended Dec. 31, 2012, as compared with a net loss of $344,901 on $1.92 million of revenue during the prior year. The Company's balance sheet at March 31, 2013, showed $6.63 million in total assets, $7.26 million in total liabilities and a $629,368 total stockholders' deficiency. Madsen & Associates CPA's, Inc., in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company does not have the necessary working capital to service its debt and for its planned activity, which raises substantial doubt about its ability to continue as a going concern. COMMUNITY LEADERSHIP: S&P Assigns 'BB' Rating to $15.9MM Bonds -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' long-term rating to the Colorado Educational and Cultural Facilities Authority's (CECFA) $15.9 million series 2013 charter school revenue bonds supported by Community Leadership Academy Building Corporation II and issued for Community Leadership Academy (CLA). At the same time, Standard & Poor's assigned its 'BB' rating to CECFA's $8.2 million series 2008 charter school revenue bonds outstanding, which are supported by Community Leadership Academy Building Corporation I, also issued for CLA. The outlook on both ratings is stable. "The ratings reflect our opinion of CLA's good enterprise profile, as demonstrated by healthy demand characteristics and academic performance that is better than the local district's in most aspects based on the latest available performance assessment data," said Standard & Poor's credit analyst Kenneth Gacka. "In our view, the good demand profile positions the school well to meet its enrollment targets as it expands to also offer high school grades," continued Mr. Gacka. Nevertheless, there are ample risks and uncertainties associated with expansion projects, which S&P thinks limit the overall credit profile to the current rating. Specifically, CLA must increase enrollment during the coming years in order to absorb the heightened debt load, lower the debt burden, and consistently produce maximum annual debt service coverage above 1x. Management anticipates using the proceeds of the series 2013 bonds to fund the construction of CLA's new Quebec Street facility and to refund the interim financing incurred by the school to acquire the land and set up modular buildings on this site. The new site (including the modular building, which will remain) will ultimately house students in grades 6 through 12 upon completion of the project. CLA used the proceeds from the series 2008 financing to construct its Holly Street facility, which currently provides space for students in grades pre-K through 8th grade and will ultimately be the site for pre-K through 5th grade students. COMPETITIVE TECHNOLOGIES: Tonaquint to Buy $112,500 Conv. Note -------------------------------------------------------------- Competitive Technologies, Inc., entered into a securities purchase agreement with Tonaquint, Inc., on July 16, 2013, pursuant to which Tonaquint will acquire a $112,500 convertible promissory note in consideration for $100,000. The note is convertible at a conversion price of $0.30 per share. A copy of the Securities Pact is available for free at http://is.gd/k52dbD About Competitive Technologies Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX: CTTC) -- http://www.competitivetech.net/-- was established in 1968. The Company provides distribution, patent and technology transfer, sales and licensing services focused on the needs of its customers and matching those requirements with commercially viable product or technology solutions. Sales of the Company's Calmare(R) pain therapy medical device continue to be the major source of revenue for the Company. Competitive Technologies incurred a net loss of $3 million on $546,139 of gross profit from product sales in 2012, as compared with a net loss of $3.59 million on $1.86 million of gross profit from product sales in 2011. As of March 31, 2013, the Company had $4.60 million in total assets, $9.25 million in total liabilities and a $4.64 million total shareholders' deficit. Mayer Hoffman McCann CPAs (The New York Practice of Mayer Hoffman McCann P.C.), in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that at Dec. 31, 2012, the Company has incurred operating losses since fiscal year 2006. These conditions raise substantial doubt about the Company's ability to continue as a going concern. COMMUNITY MEMORIAL: Committee Files Corrected Plan of Liquidation ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Community Memorial Hospital filed with the U.S. Bankruptcy Court for the District of Michigan on July 26, 2013, a corrected First Amended Plan of Liquidation for the Debtor. This First Amended Chapter 11 Plan is being filed as a complete amendment and restatement of the Chapter 11 Plan of Liquidation filed by the Committee on April 5, 2013. Pursuant to the First Amended Plan, on or prior to the Effective Date, a liquidating trust will be established for the purpose of liquidating the Debtor's remaining assets and distributing the proceeds thereof to creditors. Citizens Bank (Class 3) will be deemed to have that portion of its claim that is a secured claim deemed satisfied and paid in full in exchange for (i) the Debtor's Lincoln Bridge property and Bay Street property, (ii) cash payment on the effective date of the Plan, and (iii) a note secured by accounts receivable. The USDA (Class 4) will have that portion of its claim that is a secured claim deemed satisfied and paid in full in exchange for cash payment on the Effective Date. Upon payment of higher ranked claims, each holder of general unsecured claims (Class 5) will receive its pro-rata share of the liquidating trust assets. A copy of the Corrected First Amended Plan of Liquidation is available at: http://bankrupt.com/misc/communitymemorial.doc777.pdf About Community Memorial Hospital Community Memorial Hospital, operator of the Cheboygan Memorial Hospital, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 12-20666) on March 1, 2012. Judge Daniel S. Opperman oversees the case. Paul W. Linehan, Esq., and Shawn M. Riley, Esq., at McDonald Hopkins LLC, in Cleveland, Ohio; and Jayson Ruff, Esq., at McDonald Hopkins LLC, in Bloomfield Hills, Michigan, represent the Debtor as counsel. The Debtor's financial advisor is Conway Mackenzie Inc. The Debtor disclosed $23,085,273 in assets and $26,329,103 in liabilities. Opened in 1942, the Debtor is an independent, not-for-profit entity, organized exclusively for charitable, scientific and educational purposes, and holds tax exempt status in accordance with Section 501(c)(3) of the Internal Revenue Code. The Cheboygan Memorial Hospital is a 25-bed critical access hospital located in Cheboygan, Cheboygan County, a community on the Lake Huron coast. The Debtor has 395 employees. McLaren Health Care Corporation proposed to acquire substantially all of the Debtor's operating assets at its primary hospital campus, for $5,000,000, plus (2) all amounts required for the Debtor to cure and assume the assigned Assumed Contracts and Leases. Daniel M. McDermott, the U.S. Trustee for Region 9, appointed a five-member official committee of unsecured creditors in the Chapter 11 case of Community Memorial Hospital. Michael S. McElwee, Esq., at Varnum LP, in Grand Rapids, Michigan, represents the Unsecured Creditors' Committee as counsel. CONSOLIDATED DISTRIBUTORS: MEC May Pursue Infringement Suit ----------------------------------------------------------- In the Chapter 11 case of Consolidated Distributors, Inc., E.D. New York Bankruptcy Judge Nancy Hershey Lord granted Monster Energy Company's Emergency Motion for an Order Clarifying That the Automatic Stay Does Not Apply and for Relief From the Automatic Stay Under 11 U.S.C. Sec. 362(d)(1)). Judge Lord, however, dismissed, with prejudice, MEC's Motion For an Order Dismissing the Debtor's Chapter 11 Case and Alternatively to Either Convert the Debtor's Chapter 11 Case to a Case Under Chapter 7 or to Appoint a Chapter 11 Trustee. Consolidated Distributors contested the MEC Motions. MEC seeks relief from the automatic stay so it may pursue a district court action to final judgment. On March 3, 2011, MEC commenced a lawsuit in the United States District Court for the Middle District of Florida against multiple defendants including the Debtor; David Baksht, the Debtor's principal; and Joe Cool, Inc. MEC alleged that the Debtor and Baksht infringed MEC's "M-Claw" trademark by marketing and assisting others in marketing clothing bearing the so-called "3DL" trademark. The District Court Action proceeded as to Joe Cool, an alleged joint venturer of the Debtor and resulted in a settlement. The Debtor and Baksht, however, did not appear in the District Court Action until a year after the complaint was filed. After the District Court entered a default, the Debtor sought relief from the default and filed an answer and counterclaims against MEC. The Debtor alleged that its use of the "3DL" trademark pre-dated MEC's use of the "M-Claw" trademark and, thus, MEC was infringing on Debtor's trademark rights. Furthermore, the Debtor counterclaimed that the seizure by MEC of goods bearing the so- called "3DL" trademark at Joe Cool's Florida place of business constituted a "wrongful seizure" within the meaning of federal trademark law, entitling the Debtor to damages. Joe Cool had released all such claims as part of its settlement with MEC. In light of the bankruptcy filing, the District Court stayed MEC's claims against the Debtor, but concluded that the automatic stay did not apply to the District Court Action with respect to MEC's claims against Baksht and the Debtor's counterclaims against MEC. The District Court set a February 21, 2013 trial date for MEC's claims against Baksht. However, on February 15, 2013, the District Court, sua sponte, stayed the entire District Court Action pending the resolution of the Debtor's bankruptcy case, because the District Court believed that a jury could not possibly resolve the issues surrounding Baksht's liability without addressing the Debtor's liability. On July 18, 2013, the Bankruptcy Court held a hearing on the U.S. Trustee's Motion to Dismiss or in the Alternative, Motion to Convert to Chapter 7, filed on May 31, 2013. The Court granted the U.S. Trustee's Motion to Convert to Chapter 7. Judge Lord said the order with respect to MEC's Lift Stay Motion will become effective 30 days after its entry. The judge said the 30-day stay will allow the newly appointed Chapter 7 Trustee time to evaluate the estate's interest in the trademark litigation. David M. Hillman, Esq., at Schulte Roth & Zabel LLP, argues for Monster Energy Company. A copy of Judge Lord's July 23, 2013 Memorandum Decision is available at http://is.gd/MKUWbifrom Leagle.com. Consolidated Distributors, Inc., filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case No. 13-40350) on Jan. 22, 2013, estimating under $1 million in both assets and debts. A copy of the petition is available at http://bankrupt.com/misc/nyeb13-40350.pdf The Debtor tapped Noson A. Kopel, Esq., as counsel. He was later replaced by The Law Offices of David Carlebach, Esq. CONTINENTAL BUILDING: Moody's Assigns 'B2' CFR; Outlook Stable -------------------------------------------------------------- Moody's Investors Service assigned a first-time B2 Corporate Family Rating and a B2-PD Probability of Default Rating to Continental Building Products LLC, a newly created entity for the purpose of acquiring the gypsum assets owned by LaFarge North America, Inc. In a related rating action Moody's assigned a B1 rating to the company's proposed first lien secured bank facility and a Caa1 rating to the proposed second lien bank credit facility. Proceeds from the first and second lien credit facilities, together with a $304 million equity contribution by the affiliates of Lone Star Funds, will be used for the acquisition. The rating outlook is stable. The following ratings/assessments were affected by this action: Corporate Family Rating assigned B2; Probability Default Rating assigned B2-PD; First Lien Sr. Sec. RCF due 2018 assigned B1 (LGD3, 38%); First Lien Sr. Sec. Term Loan due 2020 assigned B1 (LGD3, 38%); and, Second Lien Sr. Sec. Term Loan due 2021 assigned Caa1 (LGD5, 88%). Ratings Rationale: Continental's B2 Corporate Family Rating reflects its highly leveraged capital structure. According to Moody's calculations, Continental's adjusted debt-to-EBITDA is near 5.75 times at closing. The rating also incorporates Continental's small size based on revenues and absolute EBITA levels relative to other rated manufacturing and wallboard companies, leaving little cushion for earnings variability. This is particularly of concern given the volatility in the US construction markets. Providing some offset to Continental's leveraged capital structure and the other ratings constraints is Moody's expectation that the company will continue to benefit from the sustained rebound in the repair and remodeling and new home construction sectors, key end markets driving Continental's revenues and earnings. Moody's anticipates Continental's operating margins will improve from a combination of higher volumes, increased pricing, the success of its LiftLite wallboard and other new products, and ongoing cost reduction initiatives. Moody's also expects free cash flow to be used for debt reduction. As a result of margin expansion and lower levels of balance sheet debt, Moody's projects interest coverage - - defined as adjusted EBITA-to-interest expense -- could approach 2.5 times over the next 12 to 18 months (all ratios incorporate Moody's standard adjustments). Availability under the revolving credit facility should be sufficient to cover potential shortfalls in operating cash flows and to allow the company to contend with both seasonality in its business and growing demand for its products. With the exception of term loan amortization, Continental will face no near-term debt maturities. The stable rating outlook incorporates Moody's view that Continental's operating performance will continue to improve and that free cash flow will be used for debt reduction. This should result in better debt leverage metrics and improve the company's capacity to contend with any potential slow-down in demand. The B1 rating assigned to the first lien senior secured bank credit facility, one notch above the corporate family rating, reflects its position as the most senior committed debt in Continental's capital structure. The bank credit facility is comprised of a $50 million revolving credit facility expiring in 2018, and a $300 million term loan maturing in 2020. Each facility is secured by a first priority security interest in substantially all of Continental's assets, and both would be pari passu in a recovery scenario. The term loan amortizes 1% per year with a bullet payment at maturity. Continental's subsidiaries provide upstream guarantees for the first lien bank credit facility, which also benefits from $100 million in more junior capital. The Caa1 rating assigned to the $100 million second lien senior secured term loan due 2021, two notches below the corporate family rating, reflects its position as the junior-most debt in the company's capital structure and would absorb the first losses in a recovery scenario. This term loan is structurally subordinated to the company's first lien credit facilities with a second lien on the company's assets. It has no amortization with a bullet payment at maturity. Continental's subsidiaries provide upstream guarantees for the second lien bank credit facility as well. Positive rating actions over the intermediate term are unlikely given the company's small size. However, if Continental improves its operating margins over the long term such that EBITA-to- interest expense exceeds 3.0 times and debt-to-EBITDA is sustained below 4.25 times (all ratios include Moody's standard adjustments), then positive rating actions could be considered. Also, a significant amount of permanent debt reductions and an improved liquidity profile would also support upward rating pressures. Negative rating actions could occur if Continental's operating performance falls below Moody's expectations or if the company experiences a weakening in financial performance due to a decline in demand for its products. EBITA-to-interest expense remaining below 2.0 times or debt-to-EBITDA sustained above 5.5 times (all ratios incorporate Moody's standard adjustments) could pressure the ratings. A deteriorating liquidity profile, debt-financed acquisitions or large dividends could stress the ratings as well. The principal methodology used in this rating was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Continental Building Products LLC, headquartered in Reston, VA, manufactures gypsum wallboard and related products for use in residential and commercial construction, as well as for repair and remodeling applications. It operates in the Eastern United States and Eastern Canada. Lone Star Funds, through its affiliates, is the primary owner of Continental. Revenues for the twelve months through June 30, 2013 totaled approximately $352 million. CONTINENTAL BUILDING: S&P Assigns Prelim. 'B' CCR; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its preliminary 'B' corporate credit rating to Reston, Va.-based Continental Building Products LLC. The outlook is stable. At the same time, S&P assigned its preliminary 'B+' (one notch higher than the corporate credit rating) issue-level rating to Continental's proposed $350 million first-lien credit facilities. The preliminary recovery rating is '2', indicating S&P's expectation of substantial (70% to 90%) recovery for lenders under S&P's default scenario. S&P also assigned its preliminary 'CCC+' (two notches lower than the corporate credit rating) issue-level rating to Continental's proposed $100 million second-lien term loan due 2021. The preliminary recovery rating is '6', indicating S&P's expectation of negligible (0% to 10%) recovery for lenders under its default scenario. "The stable rating outlook reflects our expectation of improved operating performance driven by recovering residential construction and repair and remodeling spending. As a result, we expect Continental to generate positive free cash flow that will go toward repayment of debt. Consequently, we expect debt to EBITDA will be about 4.5x within the next 12 months," said Standard & Poor's credit analyst Maurice Austin. "We could raise our ratings if industry fundamentals continue to improve, resulting in better operating performance such that the company can use excess cash flow for debt repayment. In our view, this would provide cushion against some future volatility in sales and margins, providing more confidence that leverage could be sustained well below 5x through a business cycle. In this scenario, we would also need to gain confidence that the company's owners were committed to financial policies supportive of an "aggressive" financial risk profile, as consistent with our criteria for companies owned by financial sponsors," S&P noted. A downgrade is less likely in the near term, given S&P's favorable outlook for home construction and remodeling spending. However, S&P could take a negative rating action if the increase in remodeling spending fails to materialize as S&P expects, resulting in Continental's debt leverage measures being sustained at more than 5.5x. CORNERSTONE HOMES: New York Homebuilder Sets Sept. 6 Confirmation ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Cornerstone Homes Inc. scheduled a Sept. 6 hearing for the bankruptcy judge in Rochester, New York, to approve the reorganization plan. According to the report, the plan was accepted before bankruptcy by holders of 96 percent of unsecured creditors' claims. The company owns 728 properties and has 398 under contract. Four secured lenders with $21.8 million in claims are to be paid in full and didn't vote on the plan. Unsecured creditors are chiefly noteholders with $14.5 million in claims. For a 7 percent recovery, they will get a note for $1 million, bearing 2 percent interest and maturing in 10 years. The note will be paid from sale proceeds. The report notes that to quicken the pace of plan approval, the bankruptcy judge didn't yet approve disclosure materials explaining the reorganization. Before approving the plan at the Sept. 6 confirmation hearing, he will first determine whether disclosure materials were adequate. About Cornerstone Homes Cornerstone Homes Inc., a homebuilder from Corning, New York, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-21103) on July 15, 2013, in Rochester alongside a reorganization plan already accepted by 96 percent of unsecured creditors' claims. The Debtor disclosed assets of $18,561,028 and liabilities of $36,248,526. Judge Paul R. Warren presides over the case. David L. Rasmussen, Esq., at Davidson Fink, LLP, serves as the Debtor's counsel. CPI CORP: Asset Sale to Lifetouch Portrait to Be Approved --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee liquidating CPI Corp. will soon get bankruptcy court approval to sell assets for $3.3 million to Lifetouch Portrait Studios Inc. According to the report, CPI, based in St. Louis, ran 2,700 photo studios until it shut down and filed a liquidating Chapter 7 petition on May 1 in Delaware. A trustee was appointed automatically, and in late May the bankruptcy judge approved auction and sale procedures. In addition to saying he will sign an order formally approving the sale to Lifetouch, U.S. Bankruptcy Judge Brendan Shannon announced in a court filing that he's "reluctantly" denying a request by landlords for immediate payment of rent accruing during bankruptcy. The report notes that Judge Shannon said CPI appears to be "administratively insolvent," meaning there won't be enough cash to pay debt arising after bankruptcy. If landlords were paid now, Judge Shannon said, they would be given a "super-priority" that "is not the stated purpose" of bankruptcy law. About CPI Corp. Headquartered in St. Louis, Missouri, CPI Corp. provides portrait photography services at more than 2,500 locations in the United States, Canada, Mexico and Puerto Rico and provides on location wedding photography and videography services through an extensive network of contract photographers and videographers. The Company reported a net loss of $39.9 million on $123.2 million of net sales for the 24 weeks ended July 21, 2012, compared with a net loss of $5.6 million on $159.5 million of net sales for the 24 weeks ended July 23, 2011. The Company's balance sheet at July 21, 2012, showed $61 million in total assets, $159.6 million in total liabilities, and a stockholders' deficit of $98.6 million. DAMES POINT: Can Employ Gust Sarris as Counsel ---------------------------------------------- Dames Point Holdings, LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Gust G. Sarris, Esq., as attorney. P & B Marina Development, LLC filed an involuntary chapter 11 case against Jacksonville, Florida-based Dames Point Holdings, LLC (Bankr. M.D. Fla. Case No. 13-00501) on Jan. 29, 2013. Scott A. Underwood, Esq., at Fowler White Boggs, P.A. represented the petitioners. On March 12, 2013, the Court entered an order vacating the Feb. 28, 2013, order for relief in involuntary Chapter 11 case. The Court has consolidated the involuntary Chapter 11 case for all purposes with the voluntary case of William F. Snafnacker. The U.S. Trustee for Region 21 has informed the Bankruptcy Court that until further notice, it will not appoint a committee of creditors in the Chapter 11 case of Dames Point Holdings because of an insufficient number of unsecured creditors willing or able to serve on an unsecured creditors committee. DBSI INC: Wavetronix May Amend Respond to Plan Trustee's Complaint ------------------------------------------------------------------ Judge Peter J. Walsh granted Wavetronix' motion for leave to amend its answer to the first amended complaint in the adversary proceeding captioned as, JAMES R. ZAZZALI, as Trustee of the DBSI Estate Litigation Trust created by operation of the Second Amended Joint Chapter 11 Plan of Liquidation; and CONRAD MYERS, as Trustee of the DBSI Liquidating Trust created by operation of the Second Amended Joint Chapter 11 Plan of Liquidation, v. WAVETRONIX LLC, DAVID V. ARNOLD, LINDA S. ARNOLD, MICHAEL JENSEN, JOHN DOES 1-50, and ABC Entities 1-50, Adv. Proc. No. 10-55963 (D. Del.). A copy of the Court's July 26, 2013 order is available at http://is.gd/aqe4yAfrom Leagle.com. Papers filed in the DBSI case indicate that Wavetronix was one of several technology development companies that benefited from funds bilked from DBSI's investors. From 2001 through 2006, Wavetronix borrowed more than $21 million dollars from Stellar Technologies, LLC, a DBSI affiliate and Idaho-based company that invested in technology-oriented startup companies. The loans, which were accomplished through transfers to Wavetronix from various DBSI companies, were memorialized through promissory notes, security agreements, and personal guarantees made out to Stellar. David Arnold, Wavetronix's CEO, signed the notes. In November 2012, Judge Walsh directed Wavetronix to cease interfering with the administration of the liquidating trust established under the confirmed Second Amended Joint Chapter 11 Plan of Liquidation Filed by the Chapter 11 Trustee and the Official Committee of Unsecured Creditors for DBSI Inc. Judge Walsh also directed Wavetronix to provide required financial information, includilng Wavetronix's 2011 federal and state tax returns and any supporting schedules, attachments and exhibits. Conrad Myers, the trustee for the DBSI Liquidating Trust and the Trust Oversight Committee made the request. According to Judge Walsh, Wavetronix is withholding information that is necessary to the conduct of the Trustee's fiduciary duties. The judge also held that if the Trustee requires information related to the current financial condition of Wavetronix in addition to that produced as required in the Court's order, then Wavetronix is ordered to appear for an examination pursuant to Bankruptcy Rule 2004 and Local Rule 2004-1, to the extent necessary. About DBSI Inc. Headquartered in Meridian, Idaho, DBSI Inc. and its affiliates were engaged in numerous commercial real estate and non-real estate projects and businesses. On Nov. 10, 2008, and other subsequent dates, DBSI and 180 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-12687). DBSI estimated assets and debts between $100 million and $500 million as of the Chapter 11 filing. Lawyers at Young Conaway Stargatt & Taylor LLP represent the Debtors as counsel. The Official Committee of Unsecured Creditors tapped Greenberg Traurig, LLP, as its bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' notice claims and balloting agent. Joshua Hochberg, a former head of the Justice Department fraud unit, served as an Examiner and called the seller and servicer of fractional interests in commercial real estate an "elaborate shell game" that "consistently operated at a loss" in his report released in October 2009. McKenna Long & Aldridge LLP was counsel to the Examiner. On Sept. 11, 2009, the Honorable Peter J. Walsh entered an Order appointing James R. Zazzali as Chapter 11 trustee for the Debtors' estates. On Oct. 26, 2010, the trustee won confirmation of the Second Amended Joint Chapter 11 Plan of Liquidation for DBSI, paving the way for it to pay creditors and avoid years of expensive litigation over its complex web of affiliates. The plan, which was declared effective Oct. 29, 2010, was co-proposed by DBSI's unsecured creditors committee. Pursuant to the confirmed Chapter 11 plan, the DBSI Real Estate Liquidating Trust was established as of the effective date and certain of the Debtors' assets, including the Debtors' ownership interest in Florissant Market Place was transferred to the RE Trust. Mr. Zazzali and Conrad Myers were appointed as the post- confirmation trustees. Messrs. Zazzali and Myers are represented by lawyers at Blank Rime LLP and Gibbons P.C. DETROIT, MI: 15 Months to Reorganize $18 Billion in Debt -------------------------------------------------------- Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that Michigan Governor Rick Snyder said that Detroit's 15-month deadline to reorganize $18 billion in debt in a record federal bankruptcy is an "aggressive" goal needed to restore essential city services after 60 years of decline. "This probably is the largest challenge in the United States," Gov. Snyder, a 54-year-old Republican, said July 26. Bankruptcy court gives the city "one forum to resolve all the issues." The report notes that the emergency manager Gov. Snyder appointed, Kevyn Orr, can be removed from his post by the city council in September 2014, returning local control to elected officials. Mr. Orr and Gov. Snyder, in separate interviews at Bloomberg headquarters in New York, argued that the July 18 bankruptcy filing is the best way to adjust the city's debts by that deadline. "I don't have time to run in place or to play games as usual or to engage in the usual banter that's happened all too often in Detroit," Mr. Orr, 55, said July 25. He endorsed a plan by the bankruptcy judge to name a mediator to help the city negotiate with its unions, pension funds and bondholders. The report relates that "I'm hoping the mediator provides a process by which we can stop talking past each other," said Orr, who worked on the Chrysler LLC bankruptcy while an attorney at Jones Day. Detroit filed the biggest U.S. municipal bankruptcy after decades of decline left the city unable to pay its debts and provide needed services. Mr. Orr said creditors refused to give an "honest response" to his June debt-reduction proposal and instead sued him and Snyder to block the bankruptcy filing. The report says that the proposal by U.S. Bankruptcy Judge Steven Rhodes to name U.S. District Judge Gerald Rosen as mediator is on the agenda for a hearing on Aug. 2 in Detroit. Mr. Orr, who was appointed in March, agreed that the September 2014 deadline to reach a solution in bankruptcy court is ambitious. He also said that should mediation fail, Detroit has already met most of the conditions required to ask Rhodes to impose cuts on creditors, a procedure available to the court under the U.S. Bankruptcy Code. The report recounts that before the bankruptcy, Mr. Orr proposed eliminating about US$2 billion in unsecured bond debt and reducing US$3.5 billion in future pension liabilities. Under that proposal, those debts, and money owed for other retiree benefits, such as health care, would be replaced with about US$2 billion in new debt. No U.S. city or county in bankruptcy has successfully invoked the Bankruptcy Code's so-called cram-down procedure to force creditors to take losses on their principal. "Records are made to be broken," Orr said. About Detroit, Michigan The city of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The city's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Debtor is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. DETROIT, MI: 86-Cent Water Debt Seen Delivering Profit ------------------------------------------------------ Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that Detroit's bankruptcy is providing a buying opportunity in the city's $5.4 billion of water and sewer debt as investors bet that bonds trading at the deepest discount since 2011 will get paid in full. The biggest Chapter 9 filing in U.S. history is scaring individuals away from the obligations, creating a chance to profit, said Tom Metzold at Eaton Vance Management and Paul Mansour at Conning. Detroit securities guaranteed by water and sewer fees would be refinanced and fully repaid under Emergency Financial Manager Kevyn Orr's pre-bankruptcy proposal, unlike some general obligations he deemed unsecured. The report notes that investors still accept less than 100 cents on the dollar to part with the debt. Two series of water bonds backed by units of Assured Guaranty Ltd. and MBIA Inc. traded on July 19 -- the day after Mr. Orr filed -- at 86 cents, the lowest since 2011, data compiled by Bloomberg show. Both companies said they would make full and timely payments to bondholders if Detroit doesn't. "The chances of not getting paid 100 cents on the dollar, even for uninsured people, is as close to zero as possible," said Mr. Metzold, who helps oversee about $28 billion of debt as codirector of municipal debt at Eaton Vance in Boston. The report discloses that the debt is "one of the single-best values in the entire bond market right now," Mr. Metzold said in a telephone interview with Bloomberg News' Brian Chappatta. The company owns about US$100 million of Detroit water and sewer obligations and is buying more, he said. About Detroit, Michigan The city of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The city's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Debtor is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. DETROIT, MI: Gov. to Rebuild City But Says No to State Bailout -------------------------------------------------------------- Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that the comeback of Detroit, a Democrat- dominated city with an 83-percent black population, may define the political career of Michigan Governor Rick Snyder, the white first-term Republican who has avoided partisan warfare like that waged by party colleagues Scott Walker of Wisconsin and Sam Brownback of Kansas. According to the report, Gov. Snyder's ability to remake the biggest city in a state that led the U.S. in unemployment during the recession could provide a blueprint for cooperation on intractable issues. "I do what I believe is the right thing, and I don't get caught up in all the politics," Gov. Snyder said in an interview at Bloomberg's New York headquarters. The report notes that Gov. Snyder said he wants to rebuild the city, which has lost about 60 percent of its population since its peak of 1.8 million in the 1950s, starting from its denser downtown and Midtown and moving on to its far-flung and lightly peopled neighborhoods. He would foster economic development and begin spending $100 million within the next 30 days to bolster safety and remove blight. "If people have better services, they'll be in Detroit," he said. "I am committing state money, but I'm not doing it in terms of just paying a bailout to pay off debt -- it's on focused projects," Snyder said. "I view it as how we can put state resources toward better services to citizens, not simply debt service." The report discloses as Gov. Rick Snyder says. About Detroit, Michigan The city of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The city's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Debtor is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. DEWEY & LEBOEUF: Trust's Status Report for April to June 2013 ------------------------------------------------------------- The Dewey & LeBoeuf Secured Lender Trust made disbursements in the aggregate amount of $4,882,038 and had aggregate receipts totaling $9,112,609, according to a status report submitted by the Trust for the period April 1, 2013 through June 30, 2013. FTI Consulting, Inc. is the secured lender trustee for the Secured Lender Trust. Alan M. Jacobs is the liquidating trustee for the Liquidation Trust. The Liquidation Trust remains responsible for much of the post- Effective Date administration of this Bankruptcy Case. The Secured Lender Trust is responsible for, among other things, the collection and liquidation of the Secured Lender Trust Assets. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey filed a Chapter 11 Plan of Liquidation and an accompanying Disclosure Statement on Nov. 21, 2012. It filed amended plan documents on Dec. 31, in an attempt to address objections lodged by various parties. A second iteration was filed Jan. 7, 2013. The plan is based on a proposed settlement between secured lenders and Dewey's official unsecured creditors' committee, as well as a settlement with former partners. On Feb. 27, 2013, the Bankruptcy Court confirmed Dewey & Leboeuf's Second Amended Chapter 11 Plan of Liquidation dated Jan. 7, 2013, The effective date of the Plan occurred March 22, 2013. FTI Consulting, Inc. was appointed secured lender trustee for the Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A. Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at Togut, Segal & Segal LLP, serve as counsel to the Liquidation Trustee. DUNE ENERGY: Board OKs $1.1 Million 2013 Bonuses to Executives -------------------------------------------------------------- Dune Energy, Inc.'s named executive officers will receive these minimum bonuses under the 2013 Bonus Program, pursuant to the Board's determination on July 23, 2013: Officer and Title Minimum Bonus ----------------- ------------- James A. Watt President and Chief Executive Officer $550,000 Frank T. Smith, Jr. Senior Vice President and Chief Financial Officer $222,000 Hal L. Bettis Executive Vice President, Business Development and Environmental Affairs $190,000 Richard H. Mourglia Senior Vice President, Land and General Counsel $167,000 The Board of Directors of Dune Energy approved a new cash bonus plan for the Company's employees, including the Company's senior executives, for 2013. Each participant in the 2013 Bonus Program was assigned a target bonus for 2013. A participant's bonus was to be determined by multiplying the participant's target bonus by a performance factor determined based upon the Company's performance and the participant's individual performance. Actual bonuses could range from zero percent to 200 percent of the participant's target bonus. The metrics used to determine each participant's bonus under the 2013 Bonus Program are (i) reserve growth, (ii) production growth, (iii) lease operating expense reduction and (iv) individual goals. No minimum bonus was required under the 2013 Bonus Program. On July 23, 2013, in order to improve employee retention efforts, the Board approved paying bonuses to the participants in the 2013 Bonus Program at a minimum of 100 percent of the target bonus for each participant. The Board also approved accelerating the time frame for paying bonuses to the participants in the 2013 Bonus Program. James A. Watt, the Company's president and chief executive officer, was granted the authority to distribute the 2013 Bonuses in up to four tranches. The Company anticipates making bonus payments in three equal installments at the end of September 2013, December 2013 and March 2014. A participant must be employed by the Company on the date of any payment in order to receive that payment. If the metrics used to determine the bonus for a particular participant dictate a bonus higher than 100 percent of the target bonus, that participant will receive such excess as a part of the March 2014 bonus payment. Registers 6.2MM Shares Dune Energy registered with the U.S. Securities and Exchange Commission 6,249,996 shares of common stock for resale by Simplon International Limited, Highbridge International, LLC, West Face Long Term Opportunities Global Master L.P., et al. The common stock to be offered and sold pursuant to this prospectus will be offered and sold by the selling stockholders. The Company will not receive any proceeds from the sale of the common stock. The Company's common stock is traded on the OTC Bulletin Board under the symbol "DUNR." On July 25, 2013, the closing price of the Company's common stock on the bulletin board was $1.60. A copy of the Form S-1 prospectus is available for free at: http://is.gd/390PUO About Dune Energy Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/ -- is an independent energy company based in Houston, Texas. Since May 2004, the Company has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. The Company's properties cover over 90,000 gross acres across 27 producing oil and natural gas fields. Dune Energy disclosed a net loss of $7.85 million in 2012, as compared with a net loss of $60.41 million in 2011. The Company's balance sheet at March 31, 2013, showed $270.01 million in total assets, $124.76 million in total liabilities and $145.25 million in total stockholders' equity. DYNAVOX INC: Taps Bulger to Advise on Strategic Alternatives ------------------------------------------------------------ DynaVox Inc. on July 29 disclosed that it has engaged Bulger Partners, an international firm providing financial advisory and strategy consulting services to technology-driven organizations, to advise the company on strategic alternatives, including identifying and evaluating potential business combination transactions and refinancing structures. DynaVox and its lenders have entered into a forbearance agreement and amendment to its $15 million senior secured credit agreement to address the company's present default, which will allow the company to explore and develop strategic alternatives. DynaVox intends to continue with its operations in the ordinary course and expects no impact on its customers, vendors, or employees as it works with Bulger to identify and pursue potential business combination transactions, refinancing structures and other strategic alternatives. About DynaVox Inc. DynaVox Inc. (OTC: DVOX) is a holding Company with its headquarters in Pittsburgh, Pennsylvania, whose primary operating entities are DynaVox Systems LLC and Mayer-Johnson LLC. DynaVox provides speech generating devices and symbol-adapted special education software to assist individuals in overcoming their speech, language and learning challenges. The Company reported a net loss of $6.7 million on $51.1 million of net sales for the thirty-nine weeks ended March 29, 2013, compared with a net loss of $13.3 million on $73.4 million of net sales for the thirty-nine weeks ended March 30, 2012. The Company's balance sheet at March 29, 2013, showed $52.3 million in total assets, $37.2 million in total liabilities, and stockholders' equity of $15.1 million. The Company said in its quarterly report for the period ended March 29, 2013, "We are in default under our credit agreement and our lenders have the right to accelerate our obligations at any time, which raises substantial doubt about our ability to continue as a going concern." Bankruptcy Warning "In the event of an acceleration of our obligations and our failure to pay the amount that would then become due, the holders of the 2008 Credit Facility could seek to foreclose on our assets, as a result of which we would likely need to seek protection under the provisions of the U.S. Bankruptcy Code," the Company said in its quarterly report for the period ended March 29, 2013. EARL GAUDIO: Section 341(a) Meeting Set on Aug. 15 -------------------------------------------------- A meeting of creditors in the bankruptcy case of Earl Gaudio & Son, Inc., will be held on Aug. 15, 2013, at 10:00 a.m. at 208 Federal Bldg-Danville, IL. Creditors have until Nov. 13, 2013, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Earl Gaudio & Son Inc. filed a Chapter 11 petition (Bankr. C.D. ILL. Case No. 13-90942) on July 19, 2013. The petition was signed by Angela E. Major Hart, as authorized signer of First Midwest Bank, custodian. Judge Gerald D. Fines presides over the case. The Debtor estimated assets of at least $10 million and debts of at least $1 million. John David Burke, Esq., at Ice Miller, LLP, serves as the Debtor's counsel. EASTMAN KODAK: Seeks to Reject Contracts With Acro, et al. ---------------------------------------------------------- Eastman Kodak Co. seeks court approval to end its contracts with Acro Industries Inc., Winfield Industries and The University of Mississippi Medical Center, citing significant savings from the rejection. "Rejection will avoid the accrual of any ongoing monthly and other obligations for rights provided under the contracts that are not valuable to the estates," said Kodak's lawyer, Sean Greecher, Esq., at Young Conaway Stargatt & Taylor LLP, in New York. A list of the contracts is available without charge at http://is.gd/Wq71r9 U.S. Bankruptcy Judge Allan Gropper will hold a hearing on August 16. Objections are due by August 9. 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: U.S. Trustee Opposes Formation of Equity Committee ----------------------------------------------------------------- The U.S. trustee overseeing the bankruptcy of Eastman Kodak Co. is blocking efforts by its shareholders to win court approval to form an equity committee. Early this month, Ahsan Zia, a Kodak shareholder, asked Judge Allan Gropper to reconsider his previous denial of an equity committee, saying Kodak is an "asset rich company" worth billions of dollars based on the value of its patents, real estate and its going concern value. Tracy Hope Davis, the official charged with regulating bankruptcy cases in the New York region, said an equity committee is not necessary because there is "no substantial likelihood" of a distribution to shareholders since the company is insolvent. "The U.S. trustee declined to appoint an equity committee as there appears to be no equity interests to be protected," Ms. Davis said in a July 29 court filing. The U.S. trustee cited Kodak's own public filings, including its recent monthly operating report in which the company reported a net loss of $47.8 million in May. In the same report, Kodak also disclosed an unaudited combined balance sheet showing total assets of $3.41 billion and total liabilities of $4.85 billion. The U.S. trustee also pointed out the company's inability to pay in full the unsecured claims of three classes of creditors which, together, assert $2.24 billion to $2.84 billion. "Because the debtors cannot pay these claims in full, the debtors correctly do not propose to provide distributions to equity interests," Ms. Davis said. "To do otherwise would be a violation of the strictures of the absolute priority rule." The absolute priority rule is a rule which insists that a creditor's claim have an absolute priority over a shareholder's claim. The investors are paid only after the claims of the creditors are settled to the satisfaction of the bankruptcy court. The U.S. trustee also contended that the official committee of unsecured creditors "adequately represents" the shareholders' interests in maximizing value to Kodak's estate. Judge Gropper will hold a hearing on August 5 to consider the appointment of an equity committee. Objections are due by July 31. 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: Names Management for Post-Emergence Company ---------------------------------------------------------- In consultation with the backstop providers of Kodak's emergence equity plan, Kodak on July 30 outlined its post-emergence executive leadership in supplemental filings to its Plan of Reorganization. This team will ensure continuity in Kodak's leadership and has the expertise to continue the implementation of the company's business transformation, which focuses on imaging innovation for business. The new equity investors have confirmed their acceptance of this management team, which is a condition to Kodak's emergence equity plan. In its filings, the company named the following senior corporate and business unit executives: -- Antonio M. Perez, who will continue as Chief Executive Officer and will serve as a member of the Board. Mr. Perez will commit to serve the reorganized company for up to three years following the company's emergence from Chapter 11. Mr. Perez will agree to be CEO for one year from emergence, or until the post-emergence Board of Directors elects his successor, whichever is sooner. During his tenure as CEO, in addition to fulfilling his responsibilities as CEO, Mr. Perez will be actively involved with the Board in identifying the right successor with whom he will work closely to effect a seamless transition. Upon the appointment of his successor, Mr. Perez would resign from his position as CEO, and would then continue working closely with his successor and the Board as a full-time special advisor to the Board to effect a seamless transition and facilitate the continued realization of the company's transformation for a period up to the first anniversary of the company's emergence. In addition, he has agreed to serve the company in a consulting capacity for up to another two years following the initial one-year term. -- Douglas J. Edwards, who will remain in his role as President of Digital Printing and Enterprise. He was named to the post in September 2012, and elected a Senior Vice President in October 2012. Kodak's highly differentiated Stream and SQUAREspot technologies underpin this portfolio and products include KODAK PROSPER Solutions and KODAK FLEXCEL Systems. -- Brad W. Kruchten, who will continue to serve as President, Graphics, Entertainment & Commercial Films, which includes Prepress, Entertainment Imaging, Commercial Film and Global Consumables Manufacturing, a position he has held since 2011. The Graphics business includes renowned products such as KODAK PRINERGY Workflow and KODAK SONORA Process Free Plates. -- Terry R. Taber, who will continue in his current post as Chief Technical Officer, a position he has held since 2009. As CTO, he is responsible for the development of key technologies including those in functional printing. -- Eric H. Samuels, who will serve as Controller, having been appointed Corporate Controller and Chief Accounting Officer in July 2009. -- Patrick M. Sheller, who will serve as the General Counsel, Secretary and Chief Administrative Officer, positions he has held since 2012. Additionally, Jim Mesterharm will continue as Chief Restructuring Officer and Becky Roof will continue as Interim Chief Financial Officer, under the company's agreement with AlixPartners. The duration of the company's agreement with AlixPartners will be determined by the post-emergence board. Also continuing in their roles as General Managers of Kodak's regional operations are Philip Cullimore, Europe, Middle East and Africa; Lois Lebegue, Asia Pacific; John O'Grady, U.S. and Canada; and Gustavo Oviedo, Latin America and Emerging Geographies. "On behalf of the entire continuing management team, we appreciate the support of our new owners and look forward to the completion of Kodak's successful restructuring, the confirmation of our Plan of Reorganization and our emergence from Chapter 11 later in the third quarter," said Mr. Perez. These management arrangements are subject to certain conditions, including approval as part of confirmation of Kodak's of Plan of Reorganization and Kodak's emergence from Chapter 11. The confirmation hearing on the Plan of Reorganization is currently scheduled for August 20, 2013, with emergence expected during the third quarter. 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. ELAN CORP: Perrigo Purchase Offer Prompts Moody's Upgrade Review ---------------------------------------------------------------- Moody's Investors Service placed the ratings of Elan Corporation, plc. under review for upgrade, including the Ba3 Corporate Family Rating and the Ba2-PD Probability of Default Rating. At the same time, Moody's affirmed Elan's SGL-1 Speculative Grade Liquidity rating. This rating action follows the news that Perrigo Company will acquire Elan for approximately $8.6 billion. The transaction is expected to close by year-end 2013 and is subject to Perrigo and Elan shareholder approvals, as well as review by the Irish High Court. Perrigo is rated Baa3 with a stable rating outlook. Ratings placed under review for upgrade: Ba3 Corporate Family Rating Ba2-PD Probability of Default Rating Rating affirmed: SGL-1 Speculative Grade Liquidity Rating The rating review will focus on the benefits of being part of a larger, higher-rated entity. Elan currently does not have any rated debt, and Moody's anticipates withdrawing Elan's ratings upon close of the transaction. Ratings Rationale: Elan's Ba3 Corporate Family Rating reflects its limited scale, its high product concentration in Tysabri royalties, and the risks associated with an evolving business strategy. The Ba3 rating is supported by Elan's high cash balance (reported at $1.9 billion as of June 30, 2013). In addition, the rating reflects positive trends in Tysabri and the long-dated nature of this royalty stream, given an extremely small risk of generic competition. If the transaction with Perrigo does not close, Moody's anticipates that Elan will pursue business development. Headquartered in Dublin, Ireland, Elan Corporation, plc. ("Elan") is a specialty biopharmaceutical company with areas of expertise in neurological and autoimmune disease. The principal methodology used in this rating was Global Pharmaceutical Industry published in December 2012. ELAN CORP: S&P Puts 'B+' CCR on CreditWatch Positive ---------------------------------------------------- Standard & Poor's Ratings Services said it placed its 'B+' corporate credit rating on Elan Corp. PLC on CreditWatch with positive implications. This reflects the likelihood that its rating will be equalized with Perrigo when the transaction closes. Elan does not have any debt outstanding and we will likely withdraw the corporate credit rating at close. S&P affirmed its corporate credit rating on Perrigo Co. at 'BBB' and revised the outlook to negative from stable. This reflects the chance that its credit metrics will remain below levels that are typical for the intermediate financial risk category. "We placed our corporate credit rating on Elan Corp. PLC on CreditWatch with positive implications following the announcement that it has agreed to be acquired by Perrigo Co. for $6.7 billion, net of cash acquired," said credit analyst John Babcock. "Assuming the acquisition is completed, we will raise our rating on Elan to that of the acquirer." "We will monitor the progress of the acquisition and resolve the CreditWatch placement accordingly. If the transaction is completed, we will raise Elan Corp. PLC's corporate credit rating to 'BBB', the same as Perrigo Co. If Elan's shareholders reject the sale, we will likely affirm its corporate credit rating at 'B+' with a stable outlook. Due to Codere's significant upcoming debt maturities and ongoing negotiations with various stakeholders for a balance sheet restructuring, we believe that management could implement credit-dilutive restructuring measures, which we would view as tantamount to a default under our criteria," S&P added. "Given our view of the continuous pressure on Codere's revenues and profits, and the status of current discussions with the various stakeholders, we believe that a positive rating action is unlikely over the next few months," S&P noted. EXIDE TECHNOLOGIES: Seeks Bonuses for Employees After CEO Departs ----------------------------------------------------------------- Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that Exide Technologies, the 125-year-old battery maker, proposed bonus plans to pay employees $16.1 million if target levels are reached for earnings before interest taxes depreciation and amortization and free cash flow. "At this incipient stage of the restructuring process, it is critical to ensure that those employees who drive the economic success of the debtor's enterprise are appropriately compensated and incentivized to deliver superlative results," the company said in court papers filed July 25. According to the report The report notes that the proposed annual incentive plan covers 725 employees throughout the Exide corporate enterprise, according to court documents. A key employee incentive plan would cover 55 employees. A key employee retention plan would cover another 51 and would cost about $2 million. 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 after. 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. FREESEAS INC: Issues 700,000 Add'l Settlement Shares to Hanover --------------------------------------------------------------- FreeSeas Inc. issued 700,000 additional settlement shares to Hanover Holdings I, LLC, on July 26, 2013. The Supreme Court of the State of New York, County of New York, entered an order on June 25, 2013, approving, among other things, the settlement between FreeSeas and Hanover, in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 651950/2013. Hanover commenced the Action against the Company on May 31, 2013, to recover an aggregate of $5,331,011 of past-due accounts payable of the Company, plus fees and costs. Pursuant to the terms of the Settlement Agreement, the Company issued and delivered to Hanover 890,000 shares of the Company's common stock, $0.001 par value, and between July 2, 2013, and July 24, 2013, the Company issued and delivered to Hanover an aggregate of 5,583,000 additional settlement shares. A copy of the Form 6-K is available for free at: http://is.gd/dnh2hl About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. Freeseas disclosed a net loss of US$30.88 million in 2012, a net loss of US$88.19 million in 2011, and a net loss of US$21.82 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed US$114.35 million in total assets, $106.55 million in total liabilities and US$7.80 million in total shareholders' equity. RBSM LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. It has also failed to make required payments to Deutsche Bank Nederland as agreed to in its Sept. 7, 2012, amended and restated facility agreement and received notices of default from First Business Bank. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. GABRIEL TECHNOLOGIES: U.S. Trustee Balks at Plan Disclosures ------------------------------------------------------------ August B. Landis, Acting United States Trustee for the Northern District of California - Region 17, objects to the approval of the proposed Disclosure Statement for Gabriel Technologies Corp., et al.'s First Amended Joint Plan of Reorganization dated June 7, 2013. The Acting U.S. Trustee says the Disclosure Statement should not be approved because it does not contain adequate information about: * Information about Debtors' history; * Information about pre-filing and post-filing tax returns and reports; * Information about factual basis for substantive consolidation; * Liquidation analyses; and * Intention to operate in the future. A copy of the Acting U.S. Trustee's objection is available at: http://bankrupt.com/misc/gabriel.doc182.pdf As reported in the TCR on June 19, 2013, the Plan, as amended, proposes the substantial consolidation of the Debtors' assets and estates and the transfer of those assets and estates to the Reorganized Debtor. Payments to creditors under the Plan will be financed by the reorganization loan consisting of advances of funds in two tranches, Tranche A and Tranche B. Tranche A, up to the aggregate principal amount of $500,000, will be advanced to the Reorganized Debtor to satisfy the obligations of the Reorganized Debtor under the following Sections of the Plan, as well as to fund the Reorganized Debtor's reasonable estimate of ongoing Implementation Expenses: Administrative Expense Claims, cure of executory contracts, compensation to the litigation trustee, tax reporting compliance, and quarterly fees. Tranche B, up to the aggregate principal amount of $1,000,000, will be advanced to the Reorganized Debtor from time to time as required. Secured claims will be paid by proceeds recovered from Qualcomm Incorporated in a lawsuit involving royalties, and from another lawsuit involving royalties captioned Gabriel Technologies Corporation, etc. v. Keith Feilmeier, et al. A full-text copy of the First Amended Plan dated June 7, 2013, is available for free at: http://bankrupt.com/misc/GABRIELTECHplan0607.pdf About Gabriel Technologies Gabriel Technologies Corporation and one subsidiary filed separate Chapter 11 petitions (Bankr. N.D. Cal. Case No. 13-30340 and 13- 30341) on Feb. 14, 2013, in San Francisco, after losing in a patent dispute with smartphone chips maker Qualcomm Inc. Gabriel Technologies, through its debtor-subsidiary Trace Technologies, LLC, holds significant intellectual property assets directed toward location-based products and services through global positioning systems. Gabriel Technologies disclosed $15 million in assets and $15 million in liabilities as of Jan. 31, 2013. The Debtors tapped the law firm of Meyers Law Group, P.C. as general bankruptcy counsel. A three-member official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP represents the Committee. The Debtor filed a Plan of Reorganization that proposes to substantively consolidate the Debtors' estates into the Chapter 11 estate of Gabriel, and upon the Effective Date, all those assets will become the property of the Reorganized Debtor. Secured claims filed against the Debtors will be paid by proceeds recovered from Qualcomm Incorporated in a lawsuit involving royalties, and from another lawsuit involving royalties captioned Gabriel Technologies Corporation, etc. v. Keith Feilmeier, et al. Unsecured Claims will also be paid from the proceeds of the two lawsuits, after all secured claims have been paid. Allowed General unsecured claims will accrue an interest of 10% per annum. GASCO ENERGY: Posts $3-Mil. Net Loss in Second Quarter 2013 ----------------------------------------------------------- Gasco Energy, Inc. on July 30 reported financial and operating results for the second quarter ended June 30, 2013. Oil and gas sales for the second quarter ended June 30, 2013 were $2.9 million, as compared to $1.6 million for the same period in 2012. Natural gas sales comprised 83% of total oil and gas sales for Q2-13. The year-over-year increase in oil and gas sales is primarily attributed to a 99% increase in the average price received for the Company's natural gas volumes, a 6% increase in the average price received for oil volumes, offset in part by a 4% decrease in equivalent production volumes. Gasco's average realized gas price was $4.50 per thousand cubic feet of natural gas (Mcf) for Q2-13, compared to $2.26 per Mcf in the prior-year period, excluding the effect of hedges. During June 2012, the Company settled its remaining commodity hedge contract, and the Company currently does not have any commodity hedges in place. The average realized oil price for Q2-13 was $82.92 per barrel, as compared to $78.57 per barrel for the prior-year period. Gasco does not hedge its crude oil volumes. For Q2-13, Gasco reported a net loss of $3.0 million, or $0.02 per basic and diluted share, as compared to a net loss of $5.1 million, or $0.03 per basic and diluted share in Q2-12. As of June 30, 2013, Gasco's total assets were $53.2 million, its stockholders' equity was $13.1 million, and cash and cash equivalents were $2.0 million. Net cash provided by operating activities during Q2-13 was $0.5 million, as compared to net cash used in operating activities of $3.0 million in the comparable 2012 reporting period. Net cash used in investing activities during Q2-13 was $0.25 million, as compared to net cash provided by investing activities in the prior-year period of $0.1 million. First Half 2013 Period Note Regarding Uinta Basin Joint Venture During Q1-12, Gasco conveyed a 50% interest in certain of its Uinta Basin properties to its joint venture partner concurrent with the March 22, 2012 closing of the transaction. Due to the 50% interest conveyance, operational and financial results for the six-month period ended June 30, 2013 are not similarly comparable to the same period ended June 30, 2012. Oil and gas sales for the first half of 2013 were $4.7 million, as compared to $4.8 million for the same period in 2012. The decrease in oil and gas sales during the first half 2013, as compared to the prior-year period, is primarily attributed to the Uinta Basin transaction and normal production decline and to a 5% decrease in the average price received for oil volumes, offset in part by a 56% increase in prices received for natural gas volumes. The average prices received for the first half of 2013 were $4.00 per Mcf and $81.11 per barrel of oil, as compared to $2.57 per Mcf and $85.36 per barrel in the 2012 first-half reporting period. For the first half of 2013, Gasco reported a net loss of $4.7 million, or $0.03 per share, as compared to a net loss of $10.2 million, or $0.06 per share in the prior year period. Included in the first half 2013 results are a non-cash gain of $0.7 million attributed to derivatives and $0.2 million related to an impairment of the carrying value of the Company's inventory. Excluding the effect of the above-stated non-cash items, Gasco would have posted a net loss of $3.8 million, or $0.02 per share for the six-month period ended June 30, 2013. Net loss excluding the effect of non-cash items is a non-GAAP financial measure. Net cash provided by operating activities for the first half of 2013 was $0.3 million as compared to net cash used in operating activities of $3.5 million for the same period in 2012. The Company invested approximately $1.1 million during the first half of 2013 in oil and gas activities. Net cash provided by investing activities during the first half of 2012 included $19.2 million in cash proceeds from the sale of certain of the Company's Uinta Basin assets as part of the previously announced Uinta Basin joint venture. Net cash used in financing activities was $8.5 million in the first half of 2012. Outlook Due to the significant extended decline in the natural gas market and low natural gas prices in recent years caused primarily by excess production, Gasco has not been able to recover its exploration and development costs as anticipated. As such, there is substantial doubt regarding the Company's ability to generate sufficient cash flows from operations to fund its ongoing operations, and the Company currently anticipates that cash on hand and forecasted cash flows from operations will only be sufficient to fund cash requirements for working capital through September of 2013. This expectation has been revised from the Company's previous estimate as reported in its Form 10-Q for the quarter ended March 31, 2013, due to the implementation of cost savings measures and cash management strategies. In addition, the Company did not pay the April 5, 2013 semi-annual interest payment on its 2015 Notes, and as a result, an event of default occurred under the indenture, which could result in legal action for collection of the 2015 Notes or the filing of an involuntary petition for bankruptcy against the Company. As a result of the event of default, the trustee of the 2015 Notes or the holders of at least 25% in aggregate principal amount of the 2015 Notes have the right to accelerate payment obligations under the 2015 Notes. As of July 30, 2013, total accumulated principal and interest on the 2015 Notes (including default interest) equaled $47,233,455. The Company has not received any notice of acceleration of the 2015 Notes as of July 30, 2013 and it is engaged in discussions with the holders of the 2015 Notes regarding responding to the default. Gasco has not allocated any amounts to its 2013 capital budget. The Company's prior revolving credit facility matured in June 2012, at which time Gasco repaid all of the outstanding borrowings thereunder. While the Company has attempted to secure a replacement facility, it has been unable to do so on acceptable terms and the Company is no longer actively in discussions to obtain a replacement facility. There can be no assurance that Gasco will be able to adequately finance its operations or execute its existing short-term and long-term business plans, and the Company's liquidity and results of operations are likely to be materially adversely affected if it is unable to generate sufficient operating cash flows, secure additional capital or otherwise pursue a strategic restructuring, refinancing or other transaction to provide the Company with additional liquidity. As previously announced, Gasco has engaged Stephens, Inc., a financial advisor, to assist the Company in evaluating such potential strategic alternatives, including a sale of the Company or all of its assets. It is possible these strategic alternatives will require the Company to make a pre-packaged, pre-arranged or other type of filing for protection under Chapter 11 of the U.S. Bankruptcy Code (or an involuntary petition for bankruptcy may be filed against the Company). These factors raise substantial doubt about Gasco's ability to continue as a going concern. Teleconference Call Gasco has elected to postpone its second quarter conference call with investors, analysts and other interested parties until such a time that that the Company can convey further substantial and material information regarding its current liquidity situation. About Gasco Energy Denver-based Gasco Energy, Inc. -- http://www.gascoenergy.com-- is a natural gas and petroleum exploitation, development and production company engaged in locating and developing hydrocarbon resources, primarily in the Rocky Mountain region and in California's San Joaquin Basin. Gasco's principal business is the acquisition of leasehold interests in petroleum and natural gas rights, either directly or indirectly, and the exploitation and development of properties subject to these leases. Gasco focuses its drilling efforts in the Riverbend Project located in the Uinta Basin of northeastern Utah, targeting the oil-bearing Green River Formation and the natural gas-prone Wasatch, Mesaverde, Blackhawk, Mancos, Dakota and Morrison formations. In its auditors' report on the consolidated financial statements for the year ended Dec. 31, 2012, KPMG LLP, in Denver, Colorado, expressed substantial doubt about Gasco Energy's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations. The Company reported a net loss of $22.2 million on $8.9 million of revenues in 2012, compared with a net loss of $7.3 million on $18.3 million of revenues in 2011. The Company's balance sheet at March 31, 2013, showed $52.78 million in total assets, $36.75 million in total liabilities and $16.03 million in total stockholders' equity. Bankruptcy Warning "The Company has engaged Stephens, Inc., a financial advisor, to assist it in evaluating potential strategic alternatives, including a sale of the Company or all of its assets. It is possible these strategic alternatives will require the Company to make a pre-packaged, pre-arranged or other type of filing for protection under Chapter 11 of the U.S. Bankruptcy Code. If the Company is unable to generate sufficient operating cash flows, secure additional capital or otherwise restructure or refinance the business before the end of the second quarter of 2013, it will not have adequate liquidity to fund its operations and meet its obligations (including its debt payment obligations), the Company will not be able to continue as a going concern, and could potentially be forced to seek relief through a filing under Chapter 11 of the U.S. Bankruptcy Code. In addition, because the Company has not paid the April 5, 2013 interest payment on its outstanding 2015 Notes within the 30-day cure period, an event of default has occurred under the Indenture, which could result in the filing of an involuntary petition for bankruptcy against the Company," according to the Company's quarterly report for the period ended March 31, 2013. GETTY PETROLEUM: Settlement With Lukoil Approved ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Getty Petroleum Marketing Inc. got court approval July 29 for a settlement with former owner Lukoil Americas Corp. that brings in $93 million for creditors. The report recounts that Getty Petroleum's liquidating Chapter 11 plan was approved in August 2012 using the cramdown process because the class of $240 million in unsecured creditors voted against the proposal. The plan created a creditors' trust to prosecute a lawsuit against Lukoil. According to the report, Getty Petroleum claimed to have discovered environmental contamination at leased gas stations after it acquired the business in February 2011 from Lukoil. The trial with Lukoil began in May in U.S. Bankruptcy Court in New York. To avoid having the court rule, the parties settled, with Lukoil to pay $93 million now that the settlement has been approved by the bankruptcy court. The report relates that the disclosure statement informed unsecured creditors they could expect nothing to a maximum of 28.5 percent, depending on the outcome of lawsuits. In a class by itself, Getty Properties had the largest claim of $242 million, including a $10.5 million priority claim to be paid in full. Unsecured claims could total as much as $650 million, according to the disclosure statement. The settled lawsuit is Getty Petroleum Marketing Inc. v. Lukoil Americas Corp. (In re Getty Petroleum Corp.), 11-02941 and 11- 02942, U.S. Bankruptcy Court, Southern District New York (Manhattan). About Getty Petroleum A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing markets gasoline, hydraulic fluids, and lubricating oils through a network of gas stations owned and operated by franchise holders. A former subsidiary of Russian oil giant LUKOIL, the company operates in the Mid-Atlantic and Northeastern US states. Getty Petroleum Marketing's primary asset is the more than 800 gas stations in the Mid-Atlantic states which are located on properties owned by Getty Realty. After scaling back the company's operations to cut debt, in 2011 LUKOIL sold Getty Petroleum Marketing to investment firm Cambridge Petroleum Holding for an undisclosed price. Getty Petroleum and three affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on Dec. 5, 2011. Judge Shelley C. Chapman presides over the case. Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq., and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New York, N.Y., serve as the Debtors' counsel. Ross, Rosenthal & Company, LLP, serves as accountants for the Debtors. Getty Petroleum Marketing, Inc., disclosed $46.6 million in assets and $316.8 million in liabilities as of the Petition Date. The petition was signed by Bjorn Q. Aaserod, chief executive officer and chairman of the board. The Official Committee of Unsecured Creditors is represented by Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North America, LLC, serves as the Committee's financial advisors. GORDON PROPERTIES: Examiner Can Employ Leach Travell as Counsel --------------------------------------------------------------- Stephen E. Leach -- the court-appointed examiner in the Chapter 11 cases of Gordon Properties, LLC and Condominium Services, Inc. -- sought and obtained approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Leach Travell Britt, PC, as his counsel. LTB will, among other things, assist the examiner in the conduct of his duties as examiner. To the best of the examiner's knowledge, LTB is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. LTB and the examiner have agreed that LTB will be compensated at a reduced rate from its customary hourly rates for bankruptcy work. The reduced hourly rates for persons likely to perform work in these cases are: Stephen E. Leach -- sleach@ltblaw.com $400 All other bankruptcy partners $350 Senior Associates $300 Associates $250 Paralegals $100 About Gordon Properties Alexandria, Va.-based Gordon Properties, LLC, owns 40 condominium units in a high-rise apartment building with both residential and commercial units and two commercial units adjacent to the high- rise building. Gordon Properties' ownership of these condos represents about a 20% interest in the Forty Six Hundred Condominium project -- http://foa4600.org/-- in Alexandria. Gordon Properties also owns one of the adjacent commercial units, a restaurant. Gordon Properties sought Chapter 11 protection (Bankr. E.D. Va. Case No. 09-18086) on Oct. 2, 2009, and is represented by Donald F. King, Esq., at Odin, Feldman & Pittleman PC in Fairfax, Va. Gordon Properties disclosed $11,149,458 in assets and $1,546,344 in liabilities. Condominium Services filed its chapter 11 petition (Bankr. E.D. Va. 10-10581) on Jan. 26, 2010. It scheduled one creditor, the condominium association, with a disputed claim of $436,802.00. The association filed a proof of claim asserting a claim of $453,533.12. A second proof of claim was filed by the Internal Revenue Service for $1,955.45. According to its schedules, if both claims are allowed, it has a net deficit of about $426,900. CSI is wholly owned by Gordon Properties. In February 2012, Judge Mayer denied the motion of the association to substantively consolidate the chapter 11 bankruptcy cases of Gordon Properties and Condominium Services, Inc., the condominium management company. Gordon Properties and CSI opposed the motion. The two cases were previously administratively consolidated. Stephen E. Leach has been appointed as examiner in the Debtor's case. HAMPTON ROADS: Moody's Affirms Ratings on Series 2007-A Bonds ------------------------------------------------------------- Moody's Investors Service has affirmed all ratings assigned to Hampton Roads PPV, LLC Military Housing Taxable Revenue Bonds, 2007 Series A. The rating action affects the Ba1 on $210 million of class I bonds, the B1 rating on $58 million of class II bonds and the B1 rating on $9 million of class III bonds. The outlook on the ratings is stable. Summary Rating Rationale The ratings affirmation reflects continued pressure on financial position, volatile occupancy rate, and lack of satisfactory debt service reserve fund (DSRF) to mitigate changes in net operating income. The project's operating performance is sensitive to ships deployment, unit turnover rate expense, and changes in basic allowance for housing (BAH). Credit Strengths - Satisfactory debt service coverage ratio on Class I bonds and tight coverage on Class II and Class III bonds - Experienced property management - Strong base essentiality and strong Navy's interest in the success of the project Credit Challenges - Volatile occupancy rate puts a stress on the project's revenue stream - Expenses exceed initial projections, largely due to high unit- turnover rate - Flow of funds allows for monthly release of excess funds with no cash trap provisions and no minimum account balance provisions - Weak DSRF Outlook The stable outlook reflects Moody's expectation that the project will produce satisfactory results over the next twelve to eighteen months helped by the increase in BAH rate and management active role in offsetting potential declines in revenue and unit turnover related expenses. What Could Change the Rating Up? A rating upgrade would require a sustained improvement in operating performance and/or cash funding of debt service reserve fund or replacement of current surety provider with another of higher credit quality. What Could Change the Rating Down? The rating could be downgraded if the project experiences a significant decline in BAH or an occupancy levels that result in below 1x DSCR. A downgrade of AIG (rated Baa1), the Excess Collateral Funding Agreement provider could also put a downward pressure on the rating. The principal methodology used in this rating was Global Housing Projects published in July 2010. HAWKER BEECHCRAFT: New York Judge Dismisses Qui Tam Claim --------------------------------------------------------- Section 1141(d)(6)(A), added to the Bankruptcy Code in 2005, provides that the confirmation of a plan does not discharge a corporate debtor from any debt "of a kind specified in paragraph (2)(A) or (2)(B) of section 523(a) that is owed to a domestic governmental unit, or owed to a person as the result of an action filed under subchapter III of chapter 37 of title 31 or any similar State statute." UNITED STATES OF AMERICA EX REL. DONALD MINGE and DAVID KIEHL and DONALD MINGE and DAVID KIEHL, INDIVIDUALLY, Plaintiffs, v. HAWKER BEECHCRAFT CORPORATION, Defendant, Adv. Proc. No. 12-01890 (Bankr. S.D.N.Y.), was commenced to obtain a determination that the plaintiffs' claims against Hawker under the False Claims Act, 31 U.S.C. Sections 3729 et seq., pending in Kansas, are not dischargeable under both clauses of the statute. The defendant moved to dismiss the complaint on several grounds. In a July 24, 2013 Memorandum Decision available at http://is.gd/IaY70Xfrom Leagle.com, Bankruptcy Judge Stuart M. Bernstein ruled that the Plaintiffs' qui tam claim is dischargeable, and the complaint is dismissed as to that claim. Plaintiffs Donald Minge and David Kiehl are former employees of TECT Aerospace, Inc. or TECT Aerospace Wellington, Inc., subcontractors of the defendant Hawker Beechcraft Corporation. In 2007, the Plaintiffs filed a qui tam lawsuit under the FCA against, inter alia, Hawker and TECT in the United States District Court for the District of Kansas. The Plaintiffs alleged that Hawker made misrepresentations to the U.S. Government regarding certain components manufactured by TECT and incorporated into military aircraft sold to the Government. The alleged misrepresentations were contained in certifications relating to 347 planes. The Plaintiffs sought three times the amount of damages the Government sustained (aggregating nearly $2.3 billion), in addition to a civil penalty of $11,000 for each violation (aggregating $3.8 million) plus costs and attorneys' fees in the Kansas Action. The Kansas Action was stayed as to Hawker when Hawker filed for chapter 11. F. James Robinson, Jr., Esq., and Gaye B. Tibbets, Esq. -- robinson@hitefanning.com and tibbets@hitefanning.com -- at Hite, Fanning & Honeyman L.L.P.; and Tammy P. Bieber, Esq., and Wayne H. Davis, Esq. -- bieber@thsh.com and davis@thsh.com -- at Tannenbaum Helpern Syracuse & Hirschtritt LLP, argue for the Plaintiffs. Douglas W. Baruch, Esq., and Jennifer M. Wollenberg, Esq. -- douglas.baruch@friedfrank.com and jennifer.wollenberg@friedfrank.com -- at Fried, Frank, Harris, Shriver & Jacobson LLP; and James H. M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Patrick J. Nash, Jr., Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis LLP, represent Hawker. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee's financial advisor is FTI Consulting, Inc. On June 30, 2012, Hawker filed its Plan, which proposed to eliminate $2.5 billion in debt and $125 million of annual cash interest expense. The plan would give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. In July 2012, Hawker disclosed it was in exclusive talks with China's Superior Aviation Beijing Co. for the purchase of Hawker's corporate jet and propeller plane operations out of bankruptcy for $1.79 billion. In October 2012, Hawker unveiled that those talks have collapsed amid concerns a deal with Superior wouldn't pass muster with a U.S. government panel and other cross-cultural complications. Sources told The Wall Street Journal that Superior encountered difficulties separating Hawker's defense business from those units in a way that would make both sides comfortable the deal would get U.S. government clearance. The sources told WSJ the defense operations were integrated in various ways with Hawker's civilian businesses, especially the propeller plane unit, in ways that proved difficult to untangle. Thereafter, Hawker said it intends to emerge from bankruptcy as an independent company. On Oct. 29, 2012, Hawker filed a modified reorganization plan and disclosure materials. Hawker said the plan was supported by the official creditors' committee and by a "substantial majority" of holders of the senior credit and a majority of holders of senior notes. Hawker said it will either sell or close the jet-manufacturing business. The revised plan still offers 81.9% of the new stock in return for $921 million of the $1.83 billion owing on the senior credit. Unsecured creditors are to receive the remaining 18.9% of the new stock. Holders of the senior credit will receive 86% of the new stock. The senior credit holders are projected to have a 43.1% recovery from the plan. General unsecured creditors' recovery is a projected 5.7% to 6.3%. The recovery by holders of $510 million in senior notes is predicted to be 9.2% to 10%. Beechcraft Corp., formerly Hawker Beechcraft, on Feb. 19, 2013, disclosed that it has formally emerged from the Chapter 11 process as a new company well-positioned to compete vigorously in the worldwide business aviation, special mission, trainer and light attack markets. The company's Joint Plan of Reorganization was approved by the Bankruptcy Court on Feb. 1, and became effective on Feb. 15. HDC FINANCIAL: Ariz. Court Won't Reinstate Claims Against Seibels ----------------------------------------------------------------- Infinet Holdings, Inc. and HDC Financial Services Corporation appeal from the summary judgment dismissing their breach of contract and related claims against The Seibels Bruce Group, Inc., Consolidated American Insurance Company, and South Carolina Insurance Company. The judgment was based on the superior court's determination that the facts upon which Infinet and HDCFS's case depended had already been resolved in a bankruptcy proceeding. Because Infinet and HDCFS do not argue that the superior court erred by applying the doctrine of issue preclusion, the Court of Appeals of Arizona, Division One, Department C, affirmed. Under a December 2001 Memorandum of Understanding, SBG agreed to front a captive worker's-compensation program for HDC -- a professional employee organization that was, along with HDCFS, a subsidiary of Infinet -- through SBG's subsidiary SCIC and SCIC's subsidiary CAIC. In March 2002, Infinet, HDC, HDCFS, and Du Pre Insurance Services, Inc. filed a complaint in the superior court against SBG, SCIC, and CAIC, alleging that insurance policies issued to HDC had been improperly cancelled. The plaintiffs sought declaratory relief and monetary damages based on claims for breach of contract, bad faith, punitive damages, tortious interference with contract and business relations, slander, and negligent misrepresentation. In February 2003, the plaintiffs prevailed on their declaratory judgment claim. Thereafter, protracted litigation ensued, including the filing of cross-claims and counterclaims and the entry of summary judgment in favor of SBG on the punitive damages claim. In June 2005, HDC filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. In July 2007, the bankruptcy court confirmed a plan of reorganization pursuant to which HDC was reorganized into a new entity, Reorganized HDC. RHDC then pursued further litigation in the bankruptcy court to recover funds that HDC's principal, Anderton, allegedly stole from HDC. As his defense, Anderton contended that the funds at issue were Infinet's, not HDC's, and he claimed that HDCFS, not HDC, was the subsidiary that generated the vast majority of Infinet's revenue. In July 2011, the bankruptcy court found Anderton liable to RHDC for over $4.2 million. The district court affirmed in September 2012. In re Human Dynamics Corp., 2012 WL 3848446, at *11 (D.Ariz. Sept. 5, 2012) (unpublished decision). RHDC also successfully moved to dismiss all of HDC's claims in the superior court action. With Infinet and HDCFS as the sole remaining plaintiffs after Du Pre settled its claims, SBG (joined by SCIC and CAIC) moved for summary judgment on the remaining counts. SBG argued that Infinet and HDCFS could not prove damages because they did not earn revenue from any operations that the defendants' conduct could have harmed: rather, HDC was the operational subsidiary, and it was no longer a plaintiff. SBG attached to its motion consolidated tax returns showing that Infinet's gross receipts consisted solely of revenue earned by HDC and the management fees that Infinet charged HDC. In response, Infinet and HDCSF argued that an issue of fact existed as to whether they were damaged by the defendants' conduct, because "HDCFS produced the greatest portion of Plaintiffs' revenue." In support of this argument, Infinet and HDCSF relied on testimony presented by Infinet executives during the bankruptcy proceedings, and stated that the testimony would be repeated at trial. In October 2011, the superior court granted SBG's motion for summary judgment. The court entered an appealable judgment in August 2012. Infinet and HDCFS timely appeal. Infinet and HDCFS contend that the superior court erred by granting summary judgment on their claims for damages because factual issues remain as to whether the defendants' conduct harmed them. They contend that the court improperly "ignore[d] the conflicting issues of fact posed by the parties with respect to the nature and structure of [Infinet and HDCFS's] business operations." Although Infinet and HDCFS's opening brief mentions the superior court's reliance on the bankruptcy proceedings, Infinet and HDCFS do not argue the court erred by determining that the bankruptcy court's findings precluded them from relitigating the issue of whether they suffered damages. The appellate case is, INFINET HOLDINGS, INC., an Arizona corporation; and HDC FINANCIAL SERVICES CORPORATION, an Arizona corporation, Plaintiffs/Appellants, v. THE SEIBELS BRUCE GROUP, INC., a South Carolina corporation; CONSOLIDATED AMERICAN INSURANCE COMPANY, a South Carolina corporation; and SOUTH CAROLINA INSURANCE COMPANY, a South Carolina corporation, Defendants/Appellees, No. 1 CA-CV 12-0628 (Ariz. App.). A copy of the Appeals Court's July 25, 2013 Memorandum Decision is available at http://is.gd/ZJ18jBfrom Leagle.com. HEALTHWAREHOUSE.COM INC: W. Corona Had 10% Stake at March 15 ------------------------------------------------------------ In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Wayne Corona disclosed that as of March 15, 2013, he beneficially owned 2,723,128 shares of common stock of HealthWarehouse.com, Inc., representing 10.4 percent of the shares outstanding. A copy of the regulatory filing is availabel for free at http://is.gd/KQjjCw About HealthWarehouse.com HealthWarehouse.com, Inc., headquartered in Florence, Kentucky, is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare e-commerce company that sells brand name and generic prescription drugs as well as over-the-counter ("OTC") medical products. In the auditors' report accompanying the consolidated financial statement for the year ended Dec. 31, 2011, Marcum LLP, in New York, expressed substantial doubt about HealthWarehouse.com's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. The Company reported a net loss of $5.71 million in 2011, compared with a net loss of $3.69 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.69 million in total assets, $8.52 million in total liabilities and a $6.83 million total stockholders' deficiency. HEARUSA INC: Shareholders Agree to $1 Million Settlement -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee of the liquidating trust for former hearing-aid retailer HearUSA Inc. is looking for creditors he mistakenly didn't pay in addition to the eight shareholders who will get about $1 million under a settlement. According to the report, HearUSA's Chapter 11 plan was approved last year by the U.S. Bankruptcy Court in West Palm Beach, Florida. The plan called for distributing leftover money to shareholders. Several shareholders sued Joseph Luzinski, the liquidating trustee, contending he used the wrong record date when making a $37 million distribution last year to stockholders. The report notes that as required by the bankruptcy judge, Luzinski filed a status report at the end of last week saying that about 4 million shares, or some 11 percent of the outstanding stock, were traded between the correct record date and the later date the trustee used for making distributions to shareholders. The report relates that the lawsuit plaintiffs said they sold stock after the proper record date. In a settlement agreement filed last week, Luzinski agreed to pay the eight shareholders about $1 million using money from the trust. So far, Luzinski has been unable identify from brokers and clearinghouses any other shareholders who failed to get distributions. To determine who else is entitled to payment, the trustee arranged a hearing on Aug. 8 to ask the judge to fix a date by which shareholders must file a claim for distributions. Luzinski is a senior vice president with Development Specialists Inc. The settled lawsuit is Jacks v. Luzinski (In re HearUSA Inc.), 13-01370, U.S. Bankruptcy Court, Southern District of Florida (West Palm Beach). About HearUSA Inc. HearUSA, Inc., which sells hearing aids in 10 states, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 11-23341) on May 16, 2011, to sell the business for $80 million to William Demant Holdings A/S, absent higher and better offers. HearUSA's business was later sold to Siemens Hearing Instruments Inc., the principal supplier and primary secured lender, for a price calculated at the time to produce $39.7 million for common shareholders. HearUSA said the Siemens acquisition was worth $129 million, plus the waiver of a distribution on the 6.4 million shares of HearUSA stock that Siemens owned. The liquidating Chapter 11 plan was confirmed in May 2012 and implemented in June. Following the sale, the Debtor changed its name to "HUSA Liquidating Corporation". The Debtor said that assets are $65.6 million against debt of $64.7 million as of March 31, 2010. HearUSA owed $31.3 million to Siemens. Judge Erik P. Kimball presides over the case. Brian K. Gart, Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at Berger Singerman, P.A., represent the Debtor. The Debtor has tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC, investment banker; Development Specialist Inc., restructuring advisor and Joseph J. Luzinski as chief restructuring officer; and AlixPartners LLC, as communications consultant. Trustee Services, Inc., serves as claims and notice agent. The Official Committee of Unsecured Creditors has been appointed in the case. Robert Paul Charbonneau, Esq., and Daniel L. Gold, Esq., at Ehrenstein Charbonneau Calderin, represent the Creditors Committee. An Official Committee of Equity Security Holders has also been appointed. Mark D. Bloom, Esq., at Greenberg Traurig P.A., in Miami, Fla., represents the Equity committee as counsel. HYMAN COMPANIES: Court Rules on Objection to Ansel Claim -------------------------------------------------------- E.D. Pennsylvania Bankruptcy Judge Richard E. Fehling sustained, in part, and overruled, in part, The Hyman Companies' Supplemental Objection to Claim No. 41 filed by Roberta Ansel. The Debtor's Supplemental Objection to Ansel's claim on the basis of Section 502(b)(7), 11 U.S.C. Sec. 502(b)(7), is time-barred as having been filed after the expiration of the Plan deadline in Section 14.1 for filing objections to proofs of claim; and the Supplemental Objection on the basis of Section 502(b)(7) is also rejected on equitable and substantive grounds. Ansel's claim is subject to the limitations contained in Section 15.1 of the Debtor's confirmed Plan and, as a result, Ansel may not recover post- petition interest, post-petition attorneys' fees, or post-petition court costs on account of or as part of her claim. The claim is reduced to conform to the decision and award of the Massachusetts court in Ansel v Hyman Companies, Inc., Docket No. MICV2005-01534 (the "Massachusetts Claim", which is a final decision and has a lower award than Ansel demanded in her claim. Ansel's Motion for Determination of Any Remaining Issues on Debtor's Objection to Claim of Ansel is denied and dismissed as moot. The Court directs the parties to file a stipulation by August 16, 2013, setting forth the amount of pre-petition interest, pre- petition attorneys' fees, and pre-petition court costs that were awarded to Ansel by the Massachusetts court, which amounts will be allowed as part of the Debtor's claim in the bankruptcy proceeding. If the parties fail to file the Stipulation by August 16, the Court will conduct a hearing to determine the amount of pre- petition interest, attorneys' fees, and court costs that were awarded to Ansel in the Massachusetts state court litigation. A copy of the Court's July 24, 2013 Order is available at http://is.gd/bR02Hcfrom Leagle.com. About Hyman Cos. Allentown, Pennsylvania-based The Hyman Companies, Inc. -- aka Landau, The Landau Collection, Boccelli, Landau Costume Jewelry, and Bijou Bijou -- sells high-end costume jewelry and other merchandise from shopping center, mall, and hotel stores and kiosks throughout the country. Hyman Companies filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 09-20523) on March 3, 2009. Edmond M. George, Esq., at Obermayer Rebmann Maxwell & Hippel, LLP, assists the Company in its restructuring efforts. The Company estimated $1 million to $10 million in both assets and debts. INTELLIPHARMACEUTICS INT'L: Offering 1.5 Million Units ------------------------------------------------------ Intellipharmaceutics International Inc. has priced an underwritten public offering of 1,500,000 units of common shares and warrants at US$2.05 per unit. The offering is being anchored by a healthcare dedicated institutional investor. In connection with the offering, the Company will be issuing an aggregate of 1,500,000 common shares and warrants to purchase an additional 375,000 common shares. The warrants will be exercisable immediately, have a term of five years and an exercise price of US$2.55 per common share. After underwriting discounts and commissions and estimated offering expenses, the Company expects to receive net proceeds of approximately US$2,500,000. Maxim Group LLC is acting as sole book-running manager for the offering. Brean Capital, LLC, is acting as co-manager for the offering. The Company expects to close the transaction, subject to customary conditions, on or about July 31, 2013. About Intellipharmaceutics Toronto, Canada-based Intellipharmaceutics International Inc. is incorporated under the laws of Canada. Intellipharmaceutics is a pharmaceutical company specializing in the research, development and manufacture of novel and generic controlled-release and targeted-release oral solid dosage drugs. Its patented Hypermatrix(TM) technology is a multidimensional controlled- release drug delivery platform that can be applied to the efficient development of a wide range of existing and new pharmaceuticals. Based on this technology, Intellipharmaceutics has a pipeline of product candidates in various stages of development, including filings with the FDA in therapeutic areas that include neurology, cardiovascular, gastrointestinal tract, diabetes and pain. The Company's balance sheet at May 31, 2013, showed $3.6 million in total assets, $5.4 million in total liabilities, and a stockholders' deficiency of $1.8 million. Going Concern Uncertainty "In order for the Company to continue operations at existing levels, the Company expects that for at least the next twelve months the Company will require significant additional capital. While the Company expects to satisfy its operating cash requirements over the next twelve months from cash on hand, collection of anticipated revenues resulting from future commercialization activities, development agreements or marketing license agreements, through managing operating expense levels, funds from senior management through the convertible debenture described elsewhere herein, equity and/or debt financings, and/or new strategic partnership agreements funding some or all costs of development, there can be no assurance that the Company will be able to obtain any such capital on terms or in amounts sufficient to meet its needs or at all," the Company said in its quarterly report for the period ended May 31, 2013. INTERLEUKIN GENETICS: Amends 120.4MM Shares Resale Prospectus ------------------------------------------------------------- Interleukin Genetics, Inc., has amended its Form S-1 registration statement relating to the resale by Bay City Capital Fund V, L.P., Growth Equity Opportunities Fund III, LLC, Merlin Nexus IV, LP, et al., of up to 120,408,197 shares of the Company's common stock. These shares consist of 85,326,230 issued and outstanding shares and 35,081,967 shares underlying warrants. The Company's common stock is traded on the OTCQB under the symbol "ILIU". On July 25, 2013, the closing sale price of the Company's common stock on the OTCQB was $0.375 per share. The Company will not receive any proceeds from the sale of any shares by the selling stockholders. The Company may, however, receive the proceeds of any cash exercises of warrants. A copy of the Form S-1/A is available for free at: http://is.gd/LgSvNz About Interleukin Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized health company that develops unique genetic tests to provide information to better manage health and specific health risks. Interleukin Genetics disclosed a net loss of $5.12 million in 2012, as compared with a net loss of $5.02 million in 2011. The Company's balance sheet at March 31, 2013, showed $2.17 million in total assets, $16.95 million in total liabilities and a $14.78 million total stockholders' deficit. Grant Thornton LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company incurred a net loss of $5,120,084 during the year ended December 31, 2012, and as of that date, the Company's total liabilities exceeded its total assets by $13,623,800. These conditions, among other factors, raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "We have retained a financial advisor and are actively seeking additional funding, however, based on current economic conditions, additional financing may not be available, or, if available, it may not be available on favorable terms. In addition, the terms of any financing may adversely affect the holdings or the rights of our existing shareholders. For example, if we raise additional funds by issuing equity securities, further dilution to our then- existing shareholders will result. Debt financing, if available, may involve restrictive covenants that could limit our flexibility in conducting future business activities. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our technologies, tests or products in development. Our common stock was delisted from the NYSE Amex in 2010 and is currently trading on the OTCQBTM. As a result, our access to capital through the public markets may be more limited. If we cannot obtain additional funding on acceptable terms, we may have to discontinue operations and seek protection under U.S. bankruptcy laws." IRON MOUNTAIN: S&P Retains 'BB-' CCR Following Upsize of Facility ----------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Boston- based information storage company Iron Mountain Inc. are unchanged following the company's proposed amendment to upsize its senior secured revolving credit facility to $1.5 billion from $725 million. The unchanged ratings include the 'BB-' corporate credit rating, the 'BB+' issue-level rating on the existing senior secured credit facilities, and the 'B+' issue-level rating on all unsecured debt. The recovery rating on the revolver is '1', indicating S&P's expectation of very high (90% to 100%) recovery for secured lenders in the event of a payment default. The recovery rating on the existing unsecured debt remains '5' (10% to 30% recovery expectation). The company will use a portion of the upsized revolver to pre- repay the senior secured term loan. The proposed transaction will be leverage-neutral. However, S&P expects borrowings under the revolver to remain outstanding. S&P's negative rating outlook reflects the uncertainty surrounding the company's planned conversion to a REIT. RATINGS LIST Iron Mountain Inc. Corporate Credit Rating BB-/Negative/-- Ratings Unchanged Iron Mountain Inc. Senior Secured $1.5B* Revolving Credit Facility BB+ Recovery Rating 1 * Upsized from $725M. J & J DEVELOPMENTS: Liquidating Trustee Wants Case Opened --------------------------------------------------------- Steven L. Speth, the Liquidating Trustee in the bankruptcy proceeding of J& J Developments, Inc., asks the U.S. Bankruptcy Court for the District of Kansas to leave the case open for the purpose of administering potential assets. The Liquidating Trustee relates that he is in the process of pursuing recoveries of preferences or fraudulent conveyances as set forth in the Debtors statements and schedules. Until the Liquidating Trustee completes his investigation of the potential recoveries the case is not ready for a final decree. About J & J Developments J & J Developments Inc. is a real estate holding company holding title to real estate in more than 20 locations in Kansas. Many of those locations contain convenience stores. J & J Developments filed a Chapter 11 petition (Bankr. D. Kan. Case No. 12-11881) in Wichita, Kansas, on July 12, 2012. John E. Brown signed the petition as president and chief executive officer. The Debtor is represented by Edward J. Nazar, Esq., at Redmond & Nazar, LLP, in Wichita, Kansas. Judge Robert E. Nugent presides over the case. According to the petition, the Debtor has scheduled assets of $18.7 million and scheduled liabilities of $34,933. J & J Developments, Inc. won confirmation of its Chapter 11 Liquidation Plan dated Nov. 30, 2012. J & J DEVELOPMENTS: Trustee Can Hire Speth & King as Counsel ------------------------------------------------------------- The Hon. Robert E. Nugent of the Bankruptcy Court for the District of Kansas authorized Steven L. Speth, the Liquidating Trustee in the J & J Developments, Inc.'s Chapter 11 case, to employ Speth & King as counsel. Speth and King will represent the Liquidating Trustee in all proceedings before the Court including hearings on any motions for relief from stay, contested matters, adversary proceedings, motions and notices pertaining to sales, avoidance of liens, objections to exemptions, negotiations with creditors and parties- in-interest, or any other matter typically requiring the involvement of any attorney. The hourly rates of Speth & King personnel are: Steven L. Speth, Esq. $250 sls@spethking.kscoxmail.com Timothy J. King, Esq. $250 tjk@spethking.kscoxmail.com Paralegal $60 Mr. King tells the Court that no retainer of other prepaid compensation has been paid. Mr. King assures the Court that Speth & King is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About J & J Developments J & J Developments Inc. is a real estate holding company holding title to real estate in more than 20 locations in Kansas. Many of those locations contain convenience stores. J & J Developments filed a Chapter 11 petition (Bankr. D. Kan. Case No. 12-11881) in Wichita, Kansas, on July 12, 2012. John E. Brown signed the petition as president and chief executive officer. The Debtor is represented by Edward J. Nazar, Esq., at Redmond & Nazar, LLP, in Wichita, Kansas. Judge Robert E. Nugent presides over the case. According to the petition, the Debtor has scheduled assets of $18.7 million and scheduled liabilities of $34,933. J & J Developments, Inc. won confirmation of its Chapter 11 Liquidation Plan dated Nov. 30, 2012. J.C. PENNEY: Adds Article XVII to Bylaws ---------------------------------------- The Board of Directors of J. C. Penney Company, Inc., approved an amendment to the Company's Bylaws, effective July 23, 2013, to add a new Article XVII that provides that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company's stockholders; (iii) any action asserting a claim arising pursuant to the Delaware General Corporation Law or the Company's certificate of incorporation or Bylaws; or (iv) any action asserting a claim governed by the internal affairs doctrine of the State of Delaware. In the event that the Court of Chancery lacks jurisdiction over any such action or proceeding, new Article XVII provides that the sole and exclusive forum for that action or proceeding will be another state or federal court located within the State of Delaware. Article XVII further provides that any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company is deemed to have notice of and consented to the foregoing provision. A copy of the Company's Bylaws, as amended, is available at: http://is.gd/7t725I About J.C. Penney Plano, Texas-based J.C. Penney Company, Inc. is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. J.C. Penney disclosed a net loss of $985 million in 2012, as compared with a net loss of $152 million in 2011. As of May 4, 2013, the Company had $10.37 billion in total assets, $7.50 billion in total liabilities and $2.86 billion in total stockholders' equity. * * * The Company carries Moody's Investors Service's B3 Corporate Family Rating with negative outlook. Early in March 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Penney to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P lowered the issue- level rating on the company's unsecured debt to 'CCC+' from 'B-' and maintained its '3' recovery rating on this debt, indicating S&P's expectation of meaningful (50% to 70%) recovery for debtholders in the event of a payment default. "The downgrade reflects the performance erosion that has accelerated throughout the previous year and seems likely to persist over the next 12 months," explained Standard & Poor's credit analyst David Kuntz. At the same time, Fitch Ratings downgraded the Company's Issuer Default Ratings to 'B-' from 'B'. The Rating Outlook is Negative. The rating downgrades reflect Fitch's concerns that there is a lack of visibility in terms of the Company's ability to stabilize its business in 2013 and beyond after a precipitous decline in revenues leading to negative EBITDA of $270 million in 2012. Penney, Fitch said, will need to tap into additional funding to cover a projected FCF shortfall of $1.3 billion to $1.5 billion in 2013, which could begin to strain its existing sources of liquidity. In February 2013, Penney received a notice of default from a law firm representing more than 50% of its 7.4% Debentures due 2037. The Company has filed a lawsuit in Delaware Chancery Court seeking to block efforts by the bondholder group to declare a default on the 2037 bonds. Penney also asked lawyers at Brown Rudnick LLP to identify the investors they represent. In March 2013, Penney received a letter from bondholders withdrawing and rescinding the Notice of Default. On April 12, 2013, Penney borrowed $850 million out of its $1.85 billion committed revolving credit facility with JPMorgan Chase Bank, N.A., as Administrative Agent, and Wells Fargo Bank, National Association, as LC Agent. Penney said the move was to enhance the Company's financial flexibility and position. JAMES RIVER: Kentucky Plant Operation Resumes --------------------------------------------- Leslie County, Kentucky-based Shamrock Coal Company, Inc., a subsidiary of James River Coal Company, received an imminent danger order under section 107(a) of the Mine Act, alleging that an accumulation of rock and coal on the preparation plant's belt transfer hopper caused rock and coal to spill off the incline belt and tower and on to the ground below, where miners and mobile equipment travel. Upon issuance of the imminent danger order, the preparation plant's belt was stopped, the transfer hopper was cleaned, and the area underneath the transfer hopper was roped off and guarded to prevent miners or mobile equipment from traveling in the area. After the above steps were taken, the Company's preparation plant resumed operations. No injuries occurred as a result of this situation. About James River Headquartered in Richmond, Virginia, James River Coal Company (NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines, processes and sells bituminous steam and industrial-grade coal primarily to electric utility companies and industrial customers. The company's mining operations are managed through six operating subsidiaries located throughout eastern Kentucky and in southern Indiana. James River reported a net loss of $138.90 million in 2012, as compared with a net loss of $39.08 million in 2011. The Company's balance sheet at March 31, 2013, showed $1.16 billion in total assets, $944.75 million in total liabilities and $215.26 million in total shareholders' equity. * * * In the May 24, 2013, edition of the TCR, Moody's Investors Service downgraded James River Coal Company's Corporate Family Rating to Caa2 from Caa1. "While the company continues to take actions to reposition operations and shore up its balance sheet, we expect external factors will preclude James River from maintaining credit measures and liquidity consistent with the Caa1 rating level," said Ben Nelson, Moody's lead analyst for James River Coal Company. As reported by the TCR on Nov. 19, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Richmond, Va.-based James River Coal Co. to 'CCC' from 'SD' (selective default). "We raised our rating on James River Coal because we understand that the company has stopped repurchasing its debt at deep discounts, for the time being," said credit analyst Megan Johnston. JUMP OIL: Court Approves Sale of Gas Stations and Related Property ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Missouri entered on July 9, 2013, an order granting the motion of Jump Oil Company, Inc., to approve the sale of substantially all of the Debtor's assets, consisting of the Gas Stations and related property. Colonial Pacific Leasing and CRE Venture 2011-1, LLC, the holders of first priority liens and security interests in the assets proposed to be sold consented to the sale upon the terms and conditions contained in this Order. To the extent any leases with respect to the Property under which the Debtor is the lessor are not other assumed and assigned by the purchaser(s) of the Property, the tenants under such leases will vacate the applicable Property within fifteen (15) days of entry of the Order. The list of the approved purchasers of the Property is available at http://bankrupt.com/misc/jumpoil.doc182.pdf About Jump Oil Company Jump Oil Company owns 42 parcels of real property throughout the state of Missouri, on which gas and service stations are operated by various third-party lessees pursuant to lease agreements with Debtor. The gas stations are Phillips 66 branded stations, pursuant to a branding and licensing agreement. Jump Oil Company filed a Chapter 11 petition (Bankr. E.D.Mo.) on Feb. 14, 2013, in St. Louis, Missouri to sell its gas stations pursuant to 11 U.S.C. Sec. 363. The Debtor disclosed $17,603,456 in assets and $26,276,060 in liabilities as of the Chapter 11 filing. The Debtor has tapped Goldstein & Pressman, P.C. as counsel; HNWC as financial consultants; Matrix Private Equities, Inc. as financial advisor; Mariea Sigmund & Browning, LLC as special counsel; and Wolff & Taylor, PC as accountants. The Debtor's combined indebtedness as of the Petition Date, both secured and unsecured, is $22.5 million. Colonial Pacific Leasing Station is owed $17.9 million secured by a perfected security interest and liens 37 of the gas stations. CRE Venture 2011-1, LLC is owed $716,000 allegedly secured by three of the Debtor's sites. Lindell Bank is owed $347,000 allegedly secured by interest in two of the Debtor's sites. JUNIPER GENERATION: Fitch Affirms BB+ Rating on $206MM Sec. Notes ----------------------------------------------------------------- Fitch Ratings has affirmed Juniper Generation, LLC's $206 million ($12.48 outstanding) senior secured notes due 2014 at 'BB+'. The Rating Outlook is revised to Stable from Positive. The return to a Stable Outlook is based upon Fitch's view that Juniper will meet its last 18 months of debt service payments despite an environment of low-power prices and a recent history of extended forced outages. Key Rating Drivers -- Revenue Risk: Revenues are fully contracted with capacity and energy payments from an investment grade utility offtaker. Exposure to fluctuations in power pricing is mitigated by established heat rates that factor in market prices under the short run avoided cost (SRAC) formula through the project's debt maturity in 2014. The project, however, remains exposed to fluctuations in gas prices, which also factor in market power prices. Amid an environment of continuing low gas prices, dispatch can be reduced to minimize negative margins. Revenue Risk: Weaker -- Operating Risk: Operating performance has historically been stable, though some of the plants experienced intermittent extended forced outages from 2011 through April 2013. Decline in portfolio diversification exacerbates the project's exposure to event risks such as forced outages. The declining debt profile, however, accommodates fewer assets remaining in the portfolio. Operating: Risk Midrange -- Supply Risk: Expiration of the Bear Mountain gas supply agreement in October 2012 is not a rating constraint as the plant is able to secure adequate fuel supply at market price. Supply Risk: Midrange -- Financial Results and Debt Structure: The 2012 senior debt service coverage ratio (DSCR) improved to 1.58x from 1.48x in 2011, though it is lower than the historical average of 1.71x since 2007. A slow rebound in gas prices suggests continuation of low power prices in the near term. As a result, Fitch projects base case DSCRs of 1.49x and 1.26x in 2013 and 2014, respectively. Under Fitch's rating case financial scenario of increased costs and reduced power prices, DSCRS are projected to be 1.44x in 2013 and 1.23x in 2014. Though the 2014 DSCR is low for the current rating level, debt repayment is bolstered by the project's liquidity and debt is scheduled to be paid in full by December 2014. Debt Structure: Midrange Rating Sensitivities -- Weakened Operations: An extended forced outage for the Bear Mountain plant that reduces capacity payments and materially erodes the project's cash flow could trigger a downgrade. Security The senior notes are secured by a first-priority security interest in Juniper's equity interests. The collateral comprises all of Juniper's accounts and assets, including the assets of the wholly owned projects, until the scheduled expiration of their respective power purchase agreements (PPAs). Upon the expiry of each facility's PPA, the facility and the relevant equity interest are removed from the collateral package, and the cash flows associated with that facility will no longer be available to pay debt service. Credit Update Of the nine assets that originally formed the Juniper Generation portfolio, only Bear Mountain and Corona remain. As expected, individual plants have been removed from the note's collateral as their respective PPAs expired. These projects no longer contribute equity distributions to service Juniper's debt obligations. Favorably, the declining debt service accommodates the decline in the number of assets in the portfolio to adequately meet debt obligations. Support for Juniper's debt is also derived from equity distributions from the WCAC operating company, which provides operations and maintenance services to Juniper's assets. Juniper Generation has a history of stable operating performance, though output declined in recent years due to reduced dispatch amid low power prices and forced outages at some of the facilities in Juniper's portfolio. Total 2012 generation declined approximately 26% compared to 2011 and declined 33% in comparison to 2010. Bear Mountain, the largest of the two assets remaining in the portfolio, experienced declining performance as reflected in a 2012 capacity factor of 53% from 76% in 2011 and 99% in 2010. Plant availability in 2012 was low at approximately 53% as well. Despite the outage, management reports that Juniper earned its full capacity payment in 2012, as its units were available during periods required by the offtaker. The installation of a new turbine in April 2013, scheduled replacement of the gas generator in late 2013 and access to spare engines are expected to stabilize Bear Mountain's operations. However, the 18-year old Bear Mountain plant remains exposed to the potential for future forced outages, which could erode cash flow. Fitch's rating case financial analysis is based upon a forecast of continued low gas prices, which currently average less than $4/mmbtu through 2014. Fitch's analysis also includes low power prices, increased operating expenses, and heat rates under Option A as defined by the SRAC settlement. For the Bear Mountain facility 2013 generation output is forecast to be lower than historical levels to minimize the potential for negative margins from low power prices. Bear Mountain is still expected to earn full capacity payments, which substantially mitigate the impact of potentially reduced energy revenues. The Corona facility is not expected to provide distributions material to the project's overall financial performance. Bolstering the project's prospects for senior debt repayment, the project has reserves backed by letters of credit of approximately $9 million in the form of a debt service reserve and working capital funds. Juniper is a special purpose company created solely to issue the secured notes and hold a portfolio of equity interests in nine gas-fired cogeneration plants and two service companies. The facilities, located in southern California, sell energy and capacity to Pacific Gas and Electric (PG&E; Issuer Default Rating [IDR] 'BBB+' with a Stable Outlook) and Southern California Edison (SCE; IDR 'A-' with a Stable Outlook) under PPAs expiring through 2018. There is no debt at the individual project level. KEMET CORP: Stockholders Elect Two Directors -------------------------------------------- KEMET Corporation held its annual meeting of stockholders on July 25, 2013, at which the stockholders: (1) elected Jacob Kotzubei and Robert G. Paul as directors to serve three-year terms to expire in 2016; (2) ratified the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending March 31, 2014; and (3) approved, on an advisory basis, the compensation paid to the Company's named executive officers. About KEMET KEMET, based in Greenville, South Carolina, is a manufacturer and supplier of passive electronic components, specializing in tantalum, multilayer ceramic, film, solid aluminum, electrolytic, and paper capacitors. KEMET's common stock is listed on the NYSE under the symbol "KEM." The Company's balance sheet at March 31, 2013, showed $911.59 million in total assets, $634.67 million in total liabilities and $276.91 million in total stockholders' equity. * * * As reported by the TCR on March 26, 2013, Moody's Investors Service downgraded KEMET Corp.'s Corporate Family Rating to Caa1 from B2 and the Probability of Default Rating to Caa1-PD from B2- PD based on Moody's expectation that KEMET's liquidity will be pressured by maturing liabilities and negative free cash flow due to the interest burden and continued operating losses at the Film and Electrolytic segment. KEMET carries a 'B+' corporate credit rating from Standard & Poor's Ratings Services. LEE BRICK: Chapter 11 Plan Declared Effective --------------------------------------------- Gregory B. Crampton, Esq., at Nicholls & Crampton, P.A., for Lee Brick & Tile Company, filed a First Chapter 11 Post Confirmation Report for the Second Quarter of 2013 pursuant to the order confirming the Debtor's plan. He disclosed that the Effective Date of the Amended and Restated Plan of Reorganization occurred on July 16, 2013. The Court on July 1 entered an amended order confirming the Amended Plan dated April 16, 2013. According to the report, the estimated date on which the final report and motion for final decree can be filed is Dec. 31, 2013. On June 12, the Court entered an order confirming the Amended and Restated Plan of Reorganization dated April 10. At the Confirmation hearing held on May 28, the Debtor announced in open court certain Plan modifications, which modifications, according to Court's findings, do not adversely change the treatment of the claim of any creditor or the interest of any equity security holder who has previously accepted the Plan before the Modifications. A copy of the order confirming the Plan is available at: http://bankrupt.com/misc/leebrick.doc310.pdf The Bankruptcy Court conditionally approved the Amended Disclosure Statement on April 24, 2013. The Debtor's Plan groups claims into 11 classes of creditors. The first three classes relate to costs of administration and priority claims under the Bankruptcy Code, and the treatment of each is governed by specific provisions of the Bankruptcy Code. Classes 4 through 8 relate to classes that are treated as secured creditor classes. Class 9 relates to the Unsecured Deficiency Claim of Capital Bank. Class 10 relates to allowed unsecured creditor claims while Class 11 relates to Shareholder Interests. Payments provided under the terms of the Plan will be made from those monies remaining after satisfaction of Class 1, Class 2, and Class 3, and after debt service payments as otherwise provided in the Plan, and after payment of normal operating expenses and retention of sufficient operating reserve of the Reorganized Debtor, derived from these sources: (i) the Debtor's Cash on Hand at Effective Date; (ii) net sale proceeds from any other Retained Assets designated for sale as provided in the terms of the Plan; (iii) revenues from the business operations of the Reorganized Debtor; (iv) net proceeds from the Debtor's collection of accounts receivable and tax refunds, if any; (v) net proceeds from recoveries of Designated Litigation, if any, and (vi) voluntary capital contributions from shareholders or loans from a shareholder(s) made on a basis subordinate to the interests of Class 4, 5, 6, 7, 8, 9, and 10 allowed claims. About Lee Brick Sanford, North Carolina-based Lee Brick & Tile Company filed a bare-bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04463) on June 15, 2012, in Wilson on June 15, 2012. Lee Brick -- http://www.leebrick.com/-- began its operations in 1951 after Hugh Perry and 10 local businessmen from Lee County decided three years prior to invest in the business of brickmaking. In the late 1950's Hugh Perry bought out the investing partners, making Lee Brick a solely owned and operated family company. Hugh Perry named his son Frank president in 1970, which he served until 1999 and currently serves as CEO. Since 1999 Don Perry succeeded his father and serves as the company's president. Frank Perry, along with his sons Don and Gil, and brother-in-law JR (rad) Holton have helped guide the family business through revolutionary changes in brick manufacturing that few people in the ceramic industry could have ever anticipated. Judge Randy D. Doub presides over the case. Kevin L. Sink, Esq., at Nicholls & Crampton, P.A., serves as the Debtor's counsel. The petition was signed by Don W. Perry, president. The Debtor, in its amended schedules, disclosed $27,851,968 in assets and $14,136,003 in liabilities as of the Chapter 11 filing. In the original schedules, the Debtor scheduled $27,851,968 in assets and $14,135,140 in liabilities. Lender Capital Bank is owed $13.0 million, of which $6.5 million is secured. LIBERACE FOUNDATION: Hires Marquis Aurbach as Special Counsel ------------------------------------------------------------- Liberace Foundation for the Creative and Performing Arts asks the U.S. Bankruptcy Court for permission to employ Marquis Aurbach and Coffing, LLP as special counsel related to Liberace's intellectual property, including defending matters related to the intellectual property. The Debtor has agreed to pay the firm's Jamie Frost,, Esq., at $210 per hour for post-petition services rendered beginning June 19, 2013, plus costs advance by the firm. The Debtor has agreed to pay Nick Crosby, Esq., $325 per hour for post-petition services rendered beginning June 19 plus costs advanced by the firm. Marquis Aurbach attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Hearing on the Debtor's request is set for Aug. 14, 2013 at 9:30 a.m. at MKN-Courtroom 2, Foley Federal Bldg. Attorney for the Debtor can be reached at: Nedda Ghandi, Esq. Ghandi Law Offices 601 S 6th Street Las Vegas, NV 89101 Telephone: (702) 878-1115 Fax: (702) 447-9995 E-mail: nedda@ghandilaw.com About Liberace Foundation Founded in 1976, the Liberace Foundation for the Creative and Performing Arts -- http://www.liberace.org/-- helps students in Southern Nevada pursue careers in the performing and creative arts through scholarship assistance and artistic exposure. The foundation has awarded more than 2,700 students with scholarships. It owns the Liberace Museum Collection at 1775 E. Tropicana, in Las Vegas. The Liberace Museum, which has exhibited the jewelry, pianos, garish gowns and other artifacts owned by the great pianist and showman, was opened in 1979. The property is valued at $13 million. The secured creditor, U.S. Bank N.A., is owed $1.269 million. Liberace Foundation filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-22004) in Las Vegas on Oct. 24, 2012, estimating $10 million to $50 million in both assets and liabilities. Bankruptcy Judge Mike K. Nakagawa presides over the case. The Ghandi Law Offices serves as the Debtor's counsel. Brownstein Hyatt Farber Schreck, LLP serves as special counsel. The petition was signed by Anna Nateece, business manager. No committee has been appointed or designated by the U.S. Trustee. LIBERTY HARBOR: Plan Filing Exclusivity Extended Until Oct. 17 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey extended Liberty Harbor Holding, LLC, et al.'s exclusive periods to file and seek a confirmation of a Plan of Reorganization until Oct. 17, 2013, and Dec. 16, 2013. About Liberty Harbor Jersey City, New Jersey-based Liberty Harbor Holding, LLC, along with two affiliates, sought Chapter 11 protection (Bankr. D.N.J. Lead Case No. 12-19958) in Newark on April 17, 2012. Each of the Debtors is solely owned by Peter Mocco. Liberty, as of April 16, 2012, had total assets of $350.08 million, comprising of $350 million of land, $75,000 in accounts receivable and $458 cash. The Debtor says that it has $3.62 million of debt, consisting of accounts payable of $73,500 and unsecured non-priority claims of $3,540,000. The Debtor's real property consists of Block 60, Jersey City, NJ 100% ownership Lots 60, 70, 69.26, 61, 62, 63, 64, 65, 25H, 26A, 26B, 27B, 27D. Affiliates that filed separate petitions are: Liberty Harbor II Urban Renewal Co., LLC (Case No. 12-19961) and Liberty Harbor North, Inc. (Case No. 12-19964). The three cases are administratively consolidated. Judge Novalyn L. Winfield presides over the case. Wasserman, Jurista & Stolz, P.C. serves as insolvency counsel and Scarpone & Vargo serves as special litigation counsel. The petition was signed by Peter Mocco, managing member. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed three creditors to the Official Committee of Unsecured Creditors in the Chapter 11 cases of the Debtor. LIFE UNIFORM: Sold to Scrubs & Beyond for $22.6 Million ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Life Uniform and Uniform City received court authority on July 26 to sell the business for $22.6 million to Scrubs & Beyond LLC. There were no competing bids, so an auction wasn't held. 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. 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. 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. 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 in July. First lien lender CapitalSource Finance LLC is owed on a $11.5 million revolver and $26 million term loan. CapitalSource is represented by Brian T. Rice, Esq., at Brown Rudnick LLP; and Jeffrey C. Wisler, Esq., at Connolly Gallagher LLP. 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. LIFEPOINT HOSPITALS: Moody's Affirms 'Ba2' Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service downgraded the Speculative Grade Liquidity Rating of LifePoint Hospitals, Inc. to SGL-3 from SGL-1. Moody's also affirmed LifePoint's existing ratings, including the Ba2 Corporate Family Rating and Ba2-PD Probability of Default Rating. The outlook for the ratings remains stable. The downgrade of the Speculative Grade Liquidity Rating to SGL-3 reflects Moody's expectation that the company's liquidity will remain adequate but will be stressed by the upcoming maturity of $575 million of convertible senior subordinated notes in May 2014 if the notes are not be refinanced before that time. Moody's SGL ratings do not presume capital market access to refinance debt maturities. Should LifePoint refinance the notes prior to their maturity, Moody's will likely upgrade the SGL rating to reflect the elimination of the upcoming cash requirement. However, a change in the capital structure resulting from a repayment of the subordinated debt with either additional senior secured or unsecured debt could result in a downgrade of the current instrument ratings on those classes of rated debt. Following is a summary of Moody's rating actions. Rating downgraded: Speculative Grade Liquidity Rating, to SGL-3 from SGL-1 Ratings affirmed / LGD assessments revised: Senior secured revolving credit facility expiring 2017, at Ba1 (LGD 3, 35%) from Ba1 (LGD 3, 36%) Senior secured term loan A due 2017, at Ba1 (LGD 3, 35%) from Ba1 (LGD 3, 36%) Senior secured term loan B due 2017, at Ba1 (LGD 3, 35%) from Ba1 (LGD 3, 36%) 6.625% senior unsecured notes due 2020, at Ba1 (LGD 3, 35%) from Ba1 (LGD 3, 36%) Corporate Family Rating, Ba2 Probability of Default Rating, Ba2-PD Ratings Rationale: LifePoint's Ba2 Corporate Family Rating reflects Moody's expectation that the company's operating performance will result in strong interest coverage and cash flow coverage of debt. Leverage is expected to remain moderate and could increase modestly as the company pursues acquisitions and share repurchase activity. The rating also incorporates Moody's expectation of a difficult operating environment in the near term, characterized by reimbursement pressures and weak volume trends, but improving in 2014 as provisions of the Affordable Care Act are implemented. Given the expectation that leverage will not likely decline meaningfully beyond current levels and could increase modestly, Moody's does not expect an upgrade in the near term. However, Moody's could upgrade the rating if the company grows earnings through acquisitions that do not significantly disrupt operations or require a material use of incremental debt, such that debt to EBITDA is sustained at or below 3.0 times. Moody's could downgrade the rating if it believes LifePoint's financial policy is becoming more aggressive and it pursues debt financed acquisitions or share repurchases or if the company experiences operating challenges such that debt to EBITDA is expected to approach and be sustained around 4.0 times. The principal methodology used in this rating was the Global Healthcare Service Providers published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Brentwood, Tennessee, LifePoint is a leading operator of general acute care hospitals with operations predominantly in non-urban communities. The company generated revenue of approximately $3.5 billion net of the provision for doubtful accounts in the twelve months ended June 30, 2013. LORD & TAYLOR: Moody's Reviews 'B1' CFR for Possible Downgrade -------------------------------------------------------------- Moody's Investors Service placed Lord & Taylor Holdings, LLC ratings, including its B1 Corporate Family Rating, on review for downgrade. The review for downgrade follows the announcement that Lord & Taylor's parent company, Hudson's Bay Company, has agreed to purchase Saks for $16 per share or a total transaction price of approximately $2.9 billion in a transaction that will be largely funded with debt. The following ratings are placed on review for downgrade Corporate Family Rating at B1 Probability of Default Rating at B1-PD Senior secured bank facility at Ba3 (LGD 3, 37%) Ratings Rationale: The review for downgrade acknowledges Moody's concern that Hudson's Bay's acquisition of Saks may result in an incremental releveraging of Lord & Taylor should Hudson's Bay choose to use Lord & Taylor as a vehicle to support the financing of the transaction. This may prove to be detrimental for Lord & Taylor's credit profile. The review for downgrade also reflects Hudson's Bay's evaluation of the strategic alternatives to fully realize the value of the combined companies real estate portfolio including the potential to create a real estate investment trust. A key underpinning of Lord & Taylor's existing B1 CFR has been the sizable value of its real estate portfolio which is well above its current level of debt. The review for downgrade will focus on the capital structure being put in place to finance the acquisition of Saks by Hudson's Bay including at which legal entity the debt will be raised and the potential support being provided from both the parent and Lord & Taylor. The review for downgrade will also focus on the final terms of the closing of the transaction. Should Lord & Taylor's capital structure remain unchanged or should Lord & Taylor not provide any support to the transaction, its ratings would likely be affirmed. The principal methodology used in this rating 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. Lord & Taylor Holdings LLC, headquartered in New York, NY, operates 48 full line department stores, 3 outlet stores, 2 Lord & Taylor Home specialty stores, and lord&taylor.com. The company is predominantly located in the North Eastern United States. Lord & Taylor's revenues are about $1.5 billion. Lord & Taylor is wholly owned by Hudson's Bay Company. Currently, about 18% of HBC's common shares are publically traded with the remaining 82% owned by the Hudson's Bay Trading Company, L.P., a private equity investment partnership. Hudson's Bay Company operates 90 Hudson's Bay department stores and 69 Home Outfitters stores in Canada. Revenues are about C$2.3 billion. MAUI LAND: Posts $831,000 Net Income in June 30 Quarter ------------------------------------------------------- Maui Land & Pineapple Company, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $831,000 on $3.10 million of total operating revenues for the three months ended June 30, 2013, as compared with a net loss of $1.03 million on $3.45 million of total operating revenues for the same period a year ago. For the six months ended June 30, 2013, the Company incurred a net loss of $984,000 on $6.46 million of total operating revenues, as compared with a net loss of $1.27 million on $8.76 million of total operating revenues for the same period during the prior year. As of June 30, 2013, the Company had $57.48 million in total assets, $92.18 million in total liabilities and a $34.70 million stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/fIjoh4 About Maui Land & Pineapple Co. Maui Land & Pineapple Company, Inc. (NYSE: MLP) -- http://mauiland.com/-- develops, sells, and manages residential, resort, commercial, and industrial real estate. The Company owns approximately 23,000 acres of land on Maui and operates retail, utility operations, and a nature preserve at the Kapalua Resort. The Company's principal subsidiary is Kapalua Land Company, Ltd., the operator and developer of Kapalua Resort, a master-planned community in West Maui. Maui Land incurred a net loss of $4.60 million in 2012, as compared with net income of $5.07 million in 2011. Deloitte & Touche LLP, in Honolulu, Hawaii, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring negative cash flows from operations and deficiency in stockholders' equity which raise substantial doubt about the Company's ability to continue as a going concern. MAXCOM TELECOMUNICACIONES: Plan Confirmation Hearing on Sept. 10 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved several first day motions filed by Maxcom Telecomunicaciones, S.A.B. de C.V.m, allowing it to, among other things, pay employees and vendors. The U.S. Bankruptcy Court's approval allows the Company to maintain its day-to-day operations without disruption while effectuating its previously announced comprehensive recapitalization and debt restructuring. Under the Chapter 11 plan of reorganization, Maxcom will complete a recapitalization and debt restructuring that is expected to significantly reduce Maxcom's debt service expense and position Maxcom for growth with a US$45 million capital infusion. A hearing to consider confirmation of the Plan is scheduled for Sept. 10, 2013, at 2:00 p.m. (prevailing Eastern Time) in the U.S. Bankruptcy Court. Objections to the plan must be filed by Sept. 3. As previously noted, the restructuring is not expected to adversely affect Maxcom's customers, employees, or vendors. Throughout the restructuring, Maxcom intends to continue business as usual. All telecommunications services will continue without change or interruption, and employees and vendors will be paid in the normal course of business. The Company expects to complete its restructuring, which is subject to U.S. Bankruptcy Court approval and the conditions set forth in the recapitalization agreement and the restructuring and support agreement, within approximately 60 days and anticipates emerging from Chapter 11 by early fall. As of the voting deadline on July 23, 2013, over 98 percent in amount and over 94 percent in number of the holders of Senior Notes that cast ballots voted to accept the Plan. These results exceed the amount required for the court to approve the Plan, and have been certified and filed with the U.S. Bankruptcy Court by GCG, Inc., Maxcom's proposed notice, claims, and balloting agent. About Maxcom Maxcom Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico City, Mexico, is a facilities-based telecommunications provider using a "smart-build" approach to deliver last-mile connectivity to micro, small and medium-sized businesses and residential customers in the Mexican territory. Maxcom launched commercial operations in May 1999 and is currently offering local, long distance, data, value-added, paid TV and IP-based services on a full basis in greater metropolitan Mexico City, Puebla, Tehuacan, San Luis, and Queretaro, and on a selected basis in several cities in Mexico. In June 2013, Maxcom didn't make an $11 million interest payment on the notes. Maxcom sought bankruptcy protection (Bankr. D. Del. Case No. 13- bk-11839) in Wilmington, Delaware, on July 23, 2013. Maxcom listed $11.1 billion in assets and $402.3 million in debt. The company had assets valued at 4.98 billion pesos ($394 million) in the quarter ended March 31, according to an April 26 regulatory filing. The company reached a restructuring agreement with Ventura Capital, a group holding about $86 million, or 48.7 percent, of the senior notes and about 44 percent of its equity holders, court papers show. The Company has engaged Lazard Freres & Co. LLC and its alliance partner Alfaro, Davila y R�os, S.C., as its financial advisor and Kirkland & Ellis LLP and Santamarina y Steta, S.C. as its U.S. and Mexican legal advisors in connection with its restructuring proceedings and potential Chapter 11 case. The Ad Hoc Group has retained Cleary Gottlieb Steen & Hamilton LLP and Cervantes Sainz, S.C., as its U.S. and Mexican legal advisors. Ventura has retained VACE Partners as its financial advisor, and Paul Hastings LLP and Jones Day as its U.S. and Mexican legal advisors, respectively. MCCLATCHY CO: Former Yahoo! Executive Named to Board ---------------------------------------------------- The McClatchy Company has appointed Craig I. Forman to its board of directors effective July 25, 2013. In connection with his service as a director, Mr. Forman will receive the Company's standard fees paid to outside directors. Accordingly, Mr. Forman will receive a pro rata portion of the $45,000 annual cash retainer for his service through the remaining portion of the year ending at the Company's 2014 annual meeting of stockholders. In addition, on July 23, 2013, Mr. Forman received a grant of 15,000 shares of Class A common stock under The McClatchy Company 2012 Omnibus Incentive Plan. Mr. Forman, 51, is a private investor and entrepreneur, a former media, technology and telecommunications executive and former Wall Street Journal bureau chief and foreign correspondent. He has held executive roles with Earthlink, Yahoo!, Time Warner, Infoseek, and Dow Jones. "I'm thrilled to welcome Craig to McClatchy's board of directors," said McClatchy Chairman Kevin S. McClatchy. "As a top business and technology executive for some prominent brands, Craig has much to offer McClatchy's own digital evolution. And as a former journalist himself, he is keenly interested in helping to perpetuate McClatchy's news mission." Mr. Forman's last executive management role was with the Atlanta- based internet services provider Earthlink in 2009, where he was president of the company's $1 billion consumer access and audience business. He previously served as the vice president and general manager for Yahoo's media and information divisions, overseeing Yahoo! News, Yahoo! Sports and Yahoo! Finance. Mr. Forman has led internet and new media divisions at Time Warner, was the vice president for product development and editor at the search engine Infoseek, and was the director and editor of international business information services for Dow Jones. Since 2009, Mr. Forman has served as a director on a variety of public and private company boards. He is the executive chairman of the board of Appia, Inc., a Durham, N.C., based mobile- applications marketer and distributor. Mr. Forman also serves on the boards of Coincident TV, LLC, a video technology company; MotiveCast, Inc., a social media and mobile gaming producer; Success Media, LLC, an online video training company; and Yellow Media, Inc., a Canadian publisher of print and digital business directories. Previously he served as executive chairman of WHERE, Inc., a leading mobile-advertising technology network acquired by eBay Inc. in 2011. Mr. Forman began his career as foreign correspondent and editor for The Wall Street Journal. He worked as a deputy bureau chief in The Wall Street Journal's London bureau and later served as bureau chief in the newspaper's Tokyo bureau. In London, he was part of a Persian Gulf War team that finished as a finalist for the 1991 Pulitzer Prize in International Reporting. "I am delighted to join McClatchy's board of directors at this time of challenge and opportunity in the media industry," Mr. Forman said. "This company has a profound tradition of journalistic excellence and is pursuing its digital media transition energetically. I look forward to contributing to the company's 156-year record of successfully serving its customers and communities." McClatchy President and CEO Pat Talamantes said, "Craig offers a rich and varied blend of digital, business and media experience. His recent board and professional work has focused on helping companies successfully navigate and thrive in the digital landscape. We're looking forward to his contributions to McClatchy." Mr. Forman holds an undergraduate degree in public and international affairs from Princeton University and earned a master's degree in law from Yale University. With the appointment of Forman, McClatchy's board of directors now consists of 12 members, including three Class A directors and nine Class B directors. About The McClatchy Company Sacramento, Cal.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local Web sites in each of its markets which extend its audience reach. The Web sites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The McClatchy incurred a net loss of $144,000 in 2012, as compared with net income of $54.38 million in 2011. The Company's balance sheet at March 31, 2013, showed $2.84 billion in total assets, $2.81 billion in total liabilities, and $32.83 million in stockholders' equity. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. McClatchy Co. carries a 'B-' Corporate Credit Rating from Standard & Poor's Ratings Services. MF GLOBAL: Reaches Settlement With JPMorgan Unit on Recovery ------------------------------------------------------------ Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that MF Global Holdings Ltd. reached a settlement giving it a share of JPMorgan Chase & Co.'s recovery on a $60 million claim against the holding company's brokerage. According to the report, under a prior settlement with the brokerage, MF Global Inc., JPMorgan agreed to hand over $100 million in customer property and in return received the $60 million unsecured claim. As part of a new settlement, JPMorgan will give a percentage of its recovery on the claim to the holding company, according to court papers filed July 24. The report notes that the settlement avoids the delay and expense of lawsuits, and resolves disputes over transfers of customer property made during the final week before MF Global sought bankruptcy. If JPMorgan recovers less than $10 million on its claim, the holding company will get 10 percent, according to court papers. The percentage rises with the recovery amount, with each dollar over $50 million going to MF Global Holdings. JPMorgan's settlements with the brokerage have so far resulted in a total of $1 billion being made available to distribute to former customers, according to the filing. The report discloses that a hearing to seek approval of the holding company settlement is set for Aug. 22. JPMorgan's prior settlement with the brokerage already has court approval. MF Global Holdings, once run by former New Jersey Governor and ex- Goldman Sachs Group Inc. Co-Chairman Jon Corzine, filed for bankruptcy in 2011 after a $6.3 billion trade on its own behalf on bonds of some of Europe's most indebted nations. Most MF Global client funds were held in JPMorgan accounts, and the New York- based bank was a key lender to the parent before it collapsed in the eighth-largest U.S bankruptcy. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MFM DELAWARE: Benesch Friedlander Approved as Committee's Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of MFM Industries, Inc., et al., to retain Benesch, Friedlander, Coplan & Aronoff LLP as its counsel. As reported in the Troubled Company Reporter on July 4, 2013, Benesch Friedlander will render, among others, these professional services: a. To assist and advise the Committee in its consultation with the Debtors relative to the administration of the cases; b. To assist and advise the Committee in its examination and analysis of the Debtors' affairs; c. To attend meetings and negotiate with the representatives of the Debtors and other parties in interest; and d. To assist the Committee in the review, analysis and negotiation of any sale of assets and/or plan and disclosure statement filed in the cases. Michael J. Barrie, Esq., a member of Benesch Friedlander, tells the Court that his firm has no interest adverse to the Committee. The partners and associates of Benesch Friedlander also do not have any connection with the Debtors, their creditors or any other party in interest, or their respective attorneys. Benesch Friedlander's current standard hourly rates are: Michael J. Barrie, Esq., Partner $465 Jennifer R. Hoover, Esq., Partner $395 Stephen M. Ferguson, Esq., Associate $285 Jennifer E. Smith, Esq., Associate $295 Elizabeth Hein, Paralegal $240 About MFM Industries Cat litter maker MFM Delaware, Inc., and affiliate MFM Industries, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11359 and 13-11360) on May 28, 2013. Founded in 1964 as a clay-based absorbents supplier, MFM is supplier of cat litter in the U.S. The Company produces 100,000 tons of cat litter a year, representing 1 percent of the total market. Its private label market share is 20 percent. The company's cat litter products are comprised of a blend of fuller's earth clay, sodium bentonite and scenting properties. Clay is supplied from a leased clay mine in Ocala, Florida, and is transported five miles away to the company's manufacturing plant in Reddick, Florida. Direct Capital Partners, LLC, acquired a majority stake in the Company in 1997. Frederick B. Rosner, Esq. at Rossner Law Group LLC serves as the Debtors' bankruptcy counsel, and Pharus Securities, LLC, serves as investment banker. The Official Committee of Unsecured Creditors is represented by Michael J. Barrie, Esq., at Benesch, Friedlander, Coiplan & Aronoff LLP as its counsel; and Gavin/Solmonese LLC as its financial advisor. MFM DELAWARE: Panel Can Hire Gavin/Solmonese as Financial Advisor ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of MFM Industries, Inc., et al., to retain Gavin/Salmonese LLC as its financial advisor. As reported in the Troubled Company Reporter on July 5, 2013, the Gavin/Solmonese will provide, among others, these financial advisory services: A) Reviewing and analyzing the businesses, management, operations, properties, financial condition and prospects of the Debtors; B) Reviewing and analyzing historical financial performance, and transactions between and among the Debtors, their creditors, affiliates and other entities; C) Reviewing the assumptions underlying the business plans and cash flow projections for the assets involved in any potential asset sale or plan of reorganization; and D) Determining the reasonableness of the projected performance of the Debtors, both historically and future. Gavin/Solmonese attests it has no connection with, holds no interest adverse to, the Debtors, their estates, their creditors, or any party in interest in the cases, nor does the firm hold any interest adverse to the interests of the Committee or Debtors' creditors. Gavin/Solmonese's professionals will charge at these hourly rates: Edward T. Gavin, CTP $600 Wayne P. Weitz $475 Jeremy P. Valentin $275 From time to time other Gavin/Solmonese professionals may be involved in the cases as needed. Their hourly rates range from $250 to $650 per hour. About MFM Industries Cat litter maker MFM Delaware, Inc., and affiliate MFM Industries, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11359 and 13-11360) on May 28, 2013. Founded in 1964 as a clay-based absorbents supplier, MFM is supplier of cat litter in the U.S. The Company produces 100,000 tons of cat litter a year, representing 1 percent of the total market. Its private label market share is 20 percent. The company's cat litter products are comprised of a blend of fuller's earth clay, sodium bentonite and scenting properties. Clay is supplied from a leased clay mine in Ocala, Florida, and is transported five miles away to the company's manufacturing plant in Reddick, Florida. Direct Capital Partners, LLC, acquired a majority stake in the Company in 1997. Frederick B. Rosner, Esq. at Rossner Law Group LLC serves as the Debtors' bankruptcy counsel, and Pharus Securities, LLC, serves as investment banker. The Official Committee of Unsecured Creditors is represented by Michael J. Barrie, Esq. at Benesch, Friedlander, Coiplan & Aronoff LLP as its counsel; and Gavin/Solmonese LLC as its financial advisor. MFM DELAWARE: Gregg Stewart Approved as Chief Financial Officer --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved an agreement entered into between MFM Industries, Inc., et al., and Rinnovo Management LLC authorizing the employment of Gregg Stewart as interim chief financial Officer. As reported in the Troubled Company Reporter on July 5, 2013, Mr. Stewart is the sole employee of Rinnovo. Mr. Stewart will perform the ordinary course duties as the Debtors' interim CFO, until a successor is appointed. Pursuant to the Rinnovo Agreement, Mr. Stewart will provide the following services, among others, to the Debtors: A. assist the Debtors in identifying, analyzing, and evaluating near term options for the Debtors, including performing a brief assessment of the Debtors to evaluate: (i) the viability of the Debtors' current business model, from both an operational and financial point of view; and (ii) the Debtors' current financial condition and determine what steps should be taken (operationally and financially) to improve business performance; B. assist management in the creation of a business plan; C. assist and/or negotiate directly with trade customers or creditors in an effort to identify solutions and maintain continued support throughout the bankruptcy process; D. assist management in identifying profit and cash improvement projects; E. assist in managing cash flow; F. assist the Debtors and their investment banker in a Section 363 asset sale transaction; and G. provide financial support in the preparation of Schedules, Statement of Financial Affairs, and in responding to requests for information by the Committee and the United States Trustee. Mr. Stewart attests that he and his firm are each a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtors have agreed to compensate Rinnovo for Mr. Stewart's professional services at the rate of $2,200 per day, billed in quarter-day increments, plus reimbursement of normal, reasonable out-of-pocket operating and travel expenses, which should approximate $1,000 per week. Rinnovo will also be eligible for a management value enhancement bonus based on a successful outcome of the assignment to be negotiated at a future date. Under the Rinnovo Agreement, the Debtors are required to pay Mr. Stewart an advance deposit of $12,000, which is approximately one week's wages and expenses. Rinnovo may be reached at: Gregg F. Stewart President RINNOVO MANAGEMENT LLC 3940 NE Sugarhill Ave Jensen Beach, FL 34957-3729 USA Tel: (772) 334-7346 E-mail: gstewart@rinnovomanagement.com About MFM Industries Cat litter maker MFM Delaware, Inc., and affiliate MFM Industries, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11359 and 13-11360) on May 28, 2013. Founded in 1964 as a clay-based absorbents supplier, MFM is supplier of cat litter in the U.S. The Company produces 100,000 tons of cat litter a year, representing 1 percent of the total market. Its private label market share is 20 percent. The company's cat litter products are comprised of a blend of fuller's earth clay, sodium bentonite and scenting properties. Clay is supplied from a leased clay mine in Ocala, Florida, and is transported five miles away to the company's manufacturing plant in Reddick, Florida. Direct Capital Partners, LLC, acquired a majority stake in the Company in 1997. Frederick B. Rosner, Esq. at Rossner Law Group LLC serves as the Debtors' bankruptcy counsel, and Pharus Securities, LLC, serves as investment banker. The Official Committee of Unsecured Creditors is represented by Michael J. Barrie, Esq. at Benesch, Friedlander, Coiplan & Aronoff LLP as its counsel; and Gavin/Solmonese LLC as its financial advisor. MGM DELAWARE: Pharus Securities Approved as Investment Banker ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized MFM Industries, Inc., et al., to employ Pharus Securities, LLC as investment banker. As reported in the Troubled Company Reporter on July 8, 2013, Pharus will perform these services for or on behalf of the Debtors: a. Analyzing and recommending a basic transaction strategy; b. Identifying potential buyers and developing a strategy for approaching such prospects; initiating and maintaining contact with prospective buyers; c. Assisting management in the preparation of materials and supporting analyses to present to potential buyers; d. Contacting or following-up with potential buyers to determine preliminary interest; e. Analyzing and advising on the offers received for the Debtors; f. Facilitating potential buyer due diligence, including conducting site visits, assisting in management presentations, organizing and maintaining a due diligence document room, and attending and supervising due diligence sessions; g. Assisting the Debtors in the selection of a "stalking horse" bidder, including negotiation of the key financial and other terms of such an offer; h. Assisting the Debtors in conducting an auction once the stalking horse bid is in place; i. If requested, providing testimony and/or other written support to the Bankruptcy Court in connection with the bankruptcy proceedings; j. Assisting in negotiations to reach an agreement in principle and/or definitive agreement; and k. Performing other financial advisory services customary for transactions of this nature. Under the Engagement Letter, the Debtors have agreed to pay Pharus the following fees: * Success Fee: Upon closing of a Transaction, the Debtors will pay Pharus a fee equal to a percentage of the Gross Sale Proceeds implied by the purchase price of the Debtors or other part or parts of the Debtors as follows: 1.75% of Gross Sale Proceeds up to $20.0 million; plus 2.75% of the incremental Gross Sale Proceeds in excess of $20.0 million. Pharus will be entitled to the Success Fee upon consummation of a Transaction, during the term of the Engagement Letter or, subject to certain conditions, within 6 months after the effective date of termination of the Engagement Letter. * Payment if No Success Fee is Due: In the event that no Success Fee is due and payable to Pharus under the Engagement Letter, Pharus will be entitled to a retainer fee in the amount of $12,500 for each full month that Pharus is engaged by the Debtors. The aggregate Retainer Fee payments received by Pharus will in no event exceed $62,500. The Retainer Fees will be due and payable upon the earlier of: (i) the closing of any sale of substantially all of the Debtors' assets that does not trigger payment of a Success Fee; (ii) five business days after the effective date of the Debtors' plan of reorganization (which plan does not trigger payment of a Success Fee); or (iii) conversion of the Debtors' cases to one under Chapter 7 of the Bankruptcy Code (provided that no Success Fee is due at the time of, or has been paid prior to, conversion). To the best of the Debtors' knowledge, the managing directors, senior directors, directors, vice presidents, senior associates, associates, analysts, and administration of Pharus: (a) do not have any connection with the Debtors or their affiliates, their creditors, the U.S. Trustee, or any person employed in the office of the U.S. Trustee, or any other party in interest, or their respective attorneys and accountants, (b) are "disinterested persons," as that term is defined in Section 101(14) of the Bankruptcy Code, and (c) do not hold or represent any interest adverse to the Debtors' estates. About MFM Industries Cat litter maker MFM Delaware, Inc., and affiliate MFM Industries, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11359 and 13-11360) on May 28, 2013. Founded in 1964 as a clay-based absorbents supplier, MFM is supplier of cat litter in the U.S. The Company produces 100,000 tons of cat litter a year, representing 1 percent of the total market. Its private label market share is 20 percent. The company's cat litter products are comprised of a blend of fuller's earth clay, sodium bentonite and scenting properties. Clay is supplied from a leased clay mine in Ocala, Florida, and is transported five miles away to the company's manufacturing plant in Reddick, Florida. Direct Capital Partners, LLC, acquired a majority stake in the Company in 1997. Frederick B. Rosner, Esq. at Rossner Law Group LLC serves as the Debtors' bankruptcy counsel, and Pharus Securities, LLC, serves as investment banker. The Official Committee of Unsecured Creditors is represented by Michael J. Barrie, Esq. at Benesch, Friedlander, Coiplan & Aronoff LLP as its counsel; and Gavin/Solmonese LLC as its financial advisor. MI PUEBLO SAN JOSE: Sec. 341 Meeting of Creditors on Aug. 28 ------------------------------------------------------------ There's a meeting of creditors of Mi Pueblo San Jose, Inc., on Aug. 28, 2013, at 9:30 a.m. at San Jose Room 268. 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. Proofs of claim are due by Nov. 26, 2013. Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-53893) in San Jose, California on July 22, 2013. Heinz Binder, Esq., and Robert G. Harris, Esq., at Law Offices of Binder and Malter, in Santa Clara, California, serve as counsel. MPG OFFICE: Amends 2012 Annual Report to Re-File Exhibit -------------------------------------------------------- MPG Office Trust, Inc., has amended its annual report on Form 10-K for the year ended Dec. 31, 2012, originally filed with the U.S. Securities and Exchange Commission on March 18, 2013, in order to re-file Exhibit 10.48 to include documents related to this exhibit that were not previously filed. A copy of the Amended Form 10-K is available for free at http://is.gd/Z7eOS6 About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- owns and operates Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high-quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. For the year ended Dec. 31, 2012, the Company reported net income of $396.11 million, as compared with net income of $98.22 million on $234.96 million of total revenue during the prior year. The Company's balance sheet at March 31, 2013, showed $1.45 billion in total assets, $1.98 billion in total liabilities, and a $530.56 million total deficit. In its Form 10-K filing with the SEC for the fiscal year ended Dec. 31, 2012, the Company said it is working to address challenges to its liquidity position, particularly debt maturities, leasing costs and capital expenditures. The Company said, "We do not currently have committed sources of cash adequate to fund all of our potential needs, including our 2013 debt maturities. If we are unable to raise additional capital or sell assets, we may face challenges in repaying, extending or refinancing our existing debt on favorable terms or at all, and we may be forced to give back assets to the relevant mortgage lenders. While we believe that access to future sources of significant cash will be challenging, we believe that we will have access to some of the liquidity sources identified above and that those sources will be sufficient to meet our near-term liquidity needs." On March 11, 2013, the Company entered into an agreement to sell US Bank Tower and the Westlawn off-site parking garage. The transaction is expected to close June 28, 2013, subject to customary closing conditions. The net proceeds from the transaction are expected to be roughly $103 million, a portion of which may potentially be used to make loan re-balancing payments on the Company's upcoming 2013 debt maturities at KPMG Tower and 777 Tower. Roughly $898 million of the company's debt matures in 2013. "Our ability to access the capital markets to raise capital is highly uncertain. Our substantial indebtedness may prevent us from being able to raise debt financing on acceptable terms or at all. We believe we are unlikely to be able to raise equity capital in the capital markets," the Company said. "Future sources of significant cash are essential to our liquidity and financial position, and if we are unable to generate adequate cash from these sources we will have liquidity-related problems and will be exposed to material risks. In addition, our inability to secure adequate sources of liquidity could lead to our eventual insolvency." MULTI PACKAGING: Moody's Assigns 'B2' CFR, Outlook Stable --------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating and a B2-PD Probability of Default Rating to Multi Packaging Solutions, Inc. (New) ("MPS", initially "Mustang Merger Corp") on its proposed $640 million leveraged buyout. Moody's also assigned Ba3 ratings to the $278 million proposed senior secured term loan and $50 million revolver, as well as a Caa1 rating to the $200 million proposed senior unsecured notes. The rating outlook is stable. Proceeds from the new debt, $22 million of rolled foreign debt and $160 million equity contribution will fund MPS' buyout by Madison Dearborn Partners from current owner Irving Place Capital, and refinance existing debt. The transaction will raise leverage to the upper-5 times range (as of LTM ended March 2013), which is high for the B2 ratings category. However, Moody's expects that low-single-digit organic earnings growth and mandatory principal repayments will reduce debt/EBITDA to the mid-5 times range for the fiscal year ending June 2014. Importantly, the B2 rating also considers the company's stable end markets and successful track record of organic and acquisition-driven growth in the intensely competitive paper packaging industry. Assignments: Issuer: Multi Packaging Solutions, Inc. (New) Corporate Family Rating of B2 Probability of Default Rating of B2-PD Proposed $50 million senior secured revolving credit facility due 2018 at Ba3 (LGD3, 31%) Proposed $278 million senior secured term loan due 2020 at Ba3 (LGD3, 31%) Proposed $200 million senior unsecured notes at Caa1 (LGD5, 84%) Stable rating outlook The ratings are contingent upon the receipt and review of final documentation. All ratings of predecessor John Henry Holdings, Inc., including its B2 CFR and ratings on existing bank debt, will be withdrawn upon completion of the proposed transaction and repayment of existing debt. Ratings Rationale: The B2 Corporate Family Rating reflects MPS' operations in the intensely competitive paper packaging industry, relatively high leverage in the upper-5 times range (Moody's-adjusted debt/EBITDA pro-forma for the 2013 LBO), acquisitive growth strategy, and relatively small scale. At the same time, the rating considers favorably the company's relatively recession-resistant end markets, track record of organic growth and successful integration of acquired businesses, long-term customer relationships, and good liquidity. The Ba3 ratings on the proposed senior secured term loan and revolver reflect their first priority lien on substantially all US assets, a pledge of 65% of the voting stock of all material foreign subsidiaries, and upstream guarantees by all existing and future domestic wholly owned subsidiaries. The ratings also benefit from the loss absorption provided by the $200 million senior unsecured notes. However, the Ba3 instrument ratings could be downgraded if the company incurs material additional senior secured debt, as allowed under the proposed credit agreement, thereby reducing the support provided by the unsecured debt. The Caa1 ratings on the senior unsecured notes reflect their subordinated position in the capital structure and the same guarantees as the senior secured facilities. The stable rating outlook incorporates Moody's expectations that MPS will generate low-single digit earnings growth and solid free cash flow in the near term and that Moody's adjusted leverage will decline to 5.5 times debt/EBITDA by the end of the fiscal year ending June 30, 2014. The ratings could be downgraded if liquidity deteriorates, profitability declines or management increases debt levels such that leverage is sustained above 5.5 times debt/EBITDA or interest coverage falls below 1.5 times (EBITDA-CapEx)/interest expense. The ratings could be upgraded if Moody's comes to expect the company to maintain leverage below 4 times, interest coverage above 2 times, a more conservative financial philosophy, and good liquidity. The principal methodology used in this rating was the Global Paper and Forest Products Industry 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. Multi Packaging Solutions, Inc. (New) ("MPS", initially "Mustang Merger Corp") is a print and packaging company serving the consumer, healthcare and multimedia end markets. The company manufactures products such as folding cartons, blister cards, labels, inserts/outserts and pixie tags. Headquartered in New York, NY, the company will be controlled by Madison Dearborn Partners, Inc. following its planned buyout from Irving Place Capital. MPS reported revenues of approximately $579 million for the fiscal year ended June 30, 2013. MULTI PACKAGING: S&P Affirms 'B' CCR & Rates $50MM Facility 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' corporate credit rating on Multi Packaging Solutions Inc. (MPS) and its wholly owned subsidiary John Henry Holdings Inc. The outlook is stable. S&P removed all ratings from CreditWatch, where it had placed them on July 9, 2013 with negative implications following the announcement that private equity firm Madison Dearborn Partners had agreed to acquire MPS from equity sponsor Irving Place Capital. Terms of the transaction were not disclosed at that time. S&P assigned a 'B+' issue-level rating to the company's proposed $50 million revolving credit facility and $280 million senior secured term loan. The recovery rating is '2', indicating S&P's expectation for substantial (70% to 90%) recovery in the event of a payment default. S&P also assigned a 'CCC+' issue-level rating to the proposed $200 million senior unsecured notes, with a recovery rating of '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. The term loan, senior unsecured notes, and about $160 million in equity from Madison Dearborn Partners and existing management will fund the purchase of outstanding equity, pay off existing debt of about $370 million, and fund transaction fees and expenses. "Upon close of the transaction, we expect adjusted debt to EBITDA to approach 6x, and the key ratio of funds from operations to total adjusted debt of about 10%," said Standard & Poor's credit analyst Daniel Krauss. "Based on our scenario forecasts for gradual earnings growth and modest debt reduction over the next year," he added, "we expect that credit metrics will gradually strengthen, with FFO to debt of above 10% and debt to EBITDA of about 5.5x, in line with our expectations at the current rating." S&P expects the company to continue to generate moderate free cash flow and maintain adequate liquidity while balancing its growth objectives. Given the high level of leverage at close of the transaction, private equity ownership and track record of growth through acquisitions, S&P characterizes the company's financial policies as "very aggressive." The ratings on New York-based MPS reflects the company's relatively narrow scope of operations, limited customer and geographic diversity, and competition from larger and financially stronger companies. The relatively stable healthcare and consumer end markets, benefits from the company's cost reduction initiatives, and steady operating performance represent some key credit strengths. S&P characterizes MPS's business risk profile as "weak" and its financial risk profile as "highly leveraged." The outlook is stable. S&P expects that continued growth in the healthcare and consumer end markets will more than offset secular declines in the media segment. Based on Standard & Poor's outlook for modest U.S. economic growth for the remainder of 2013 and 2014, S&P expects that EBITDA and free cash flow will continue to gradually improve, enabling the company to maintain adequate liquidity and credit metrics appropriate for the current rating. S&P assumes that management and the new owners will be supportive of credit quality and, therefore, have not factored into its analysis any distributions to shareholders or meaningful debt- funded acquisitions. "Based on our downside scenario, we could lower the ratings if free cash flow turns negative for an extended period of time, causing liquidity to decline meaningfully. This could occur if an increasingly competitive environment caused EBITDA margins to drop more than 200 basis points (bps) from our baseline expectations, along with some moderate weakness in volumes. At that point, we would expect FFO to total debt to drop to about 8%. We could also lower the ratings if financial policy decisions or growth spending result in debt leverage increasing to above 7x," S&P said. "Based on our scenario forecasts, we could raise the ratings if organic revenues grow by about 10%, combined with a 150 bps improvement in EBITDA margins. In this scenario, we would expect that the ratio of FFO to total debt would increase to above 15%. To consider a higher rating, we would also need further insight into the company's very aggressive financial policies, including the potential for large debt-funded acquisitions or dividends," S&P noted. NATIONAL ENVELOPE: Can Employ Epiq Systems as Admin. Advisor ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized NE OPCO, Inc., et al., to employ Epiq Systems, Inc., as administrative advisor for the Debtors, nunc pro tunc to the Petition Date. As reported in the TCR on June 21, 2013, as administrative advisor, Epiq Systems will, among other things, gather data in conjunction with the preparation of the schedules of assets and liabilities, assist the Debtors in managing the claims reconciliation and objection process, and provide balloting and solicitation services. The Debtors paid Epiq Systems a retainer of $15,000. The Debtors earlier sought approval to employ Epiq Systems as claims agent. For its role as claims agent and administrative advisor, Epiq Systems will charge the Debtors at these rates: Position Hourly Rate -------- ----------- Clerical $35 to $50 Case Manager $60 to $95 IT/ Programming $80 to $150 Senior Case Manager $100 to $140 Consultant $120 to $170 Senior Consultant $175 to $225 Senior Managing Consultant $230 to $270 Communication Counselor $250 to $295 For its noticing services, Epiq Systems will charge $50 per 1,000 e-mails, and $0.10 per page for facsimile noticing. For database maintenance, the firm will charge $0.10 per record per month, with fees for the first three months waived. For-online claim filing services, Epiq Systems will charge $600 per 100 claims filed. For its solicitation and balloting services, Epiq Systems will charge $325 per hour for work provided by the executive vice president and the standard hourly rates for other associates. 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. NATIONAL ENVELOPE: Committee Retains Pachulski Stang as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of NE OPCO, Inc., et al., asks the U.S. Bankruptcy Court for the District of Delaware for authorization to retain Pachulski Stang Ziehl & Jones LLP as counsel to the Committee, nunc pro tunc to June 21, 2013. PSZJ will provide these services: a. Assisting, advising and representing the Committee in its consultations with the Debtors regarding the administration of these cases; b. Assisting, advising and representing the Committee with respect to the Debtors' retention of professionals and advisors with respect to the Debtors' business and these cases; c. Assisting, advising and representing the Committee in analyzing the Debtors' assets and liabilities, investigating the extent and validity of liens and participating in and reviewing any proposed asset sales, any asset dispositions, financing arrangements and cash collateral stipulations or proceedings; d. Assisting, advising and representing the Committee in any manner relevant to reviewing and determining the Debtors' rights and obligations under leases and other executory contracts; e. Assisting, advising and representing the Committee in investigating the acts, conduct, assets, liabilities and financial condition of the Debtors, the Debtors' operations and the desirability of the continuance of any portion of those operations, and any other matters relevant to the cases or to the formulation of a plan; f. Assisting, advising and representing the Committee in connection with any sale of the Debtors' assets; g. Assisting, advising and representing the Committee in its participation in the negotiation, formulation, or objection to any plan of liquidation or reorganization; h. Assisting, advising and representing the Committee in understanding its powers and its duties under the Bankruptcy Code and the Bankruptcy Rules and in performing other services as are in the interests of those represented by the Committee; i. Assisting, advising and representing the Committee in the evaluation of claims and on any litigation matters, including avoidance actions; and j. Providing such other services to the Committee as may be necessary in these cases. The professionals and paralegals presently designated to represent the Committee and their current standard hourly rates are: Laura Davis Jones $975 Robert J. Feinstein $975 Bradford J. Sandier $750 Shirley S. Cho $695 Peter J. Keane $425 Lynzy McGee $295 Proposed counsel for the Committee can be reached at: Laura Davis Jones, Esq. Bradford J. Sandier, Esq. Robert J. Feinstein, Esq. Peter J. Keane, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17 Ih Floor Wilmington, DE 19801 Tel: (302) 652-4100 Fax: (302) 652-4400 E-mail: ljones@pszjlaw.com bsandier@pszjiaw.com rfeinstein@pszjlaw.com pkeane@pszjiaw.com 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. NATIONAL ENVELOPE: RR Donnelley Wants Stay Relief to Permit Setoff ------------------------------------------------------------------ R.R. Donnelley & Sons Company asks the U.S. Bankruptcy Court for the District of Delaware for entry of an order granting RRD relief from the automatic stay in order to permit it to setoff certain prepetition debts that RRD owes to Debtor NE OPCO, Inc., against certain prepetition claims that RRD has against the Debtor. According to papers filed with the Court, as of July 12, 2013, RRD held a prepetition claim against the Debtor in the amount of $2,251,099 for products and services sold to the Debtor under the Master Purchase Agreement RRD and Debtor entered into as of Oct. 17, 2012. The Master Agreement specifically permits RRD to setoff any claims that it may have under the Master Agreement against any amounts that it may owe to the Debtor, according to RRD. RRD has also bought envelopes from the Debtor through a series of purchase orders accepted by the Debtor on a prepetition basis. RRD says that as of the Petition Date, it owed the Debtor $1,981,441 for the purchase of envelopes from the Debtor. Counsel for RRD may be reached at: Kathleen M. Miller, Esq. SMITH, KATZENSTEIN & JENKINS LLP The Corporate Plaza 800 Delaware Avenue, Suite 1000 P.O. Box 410 Wilmington, DE 19899 Tel: (302) 652-8400 Fax: (302) 652-8405 E-mail: kmiller@skjlaw.com - and - Peter J. Roberts, Esq. SHAW FISHMAN GLANTZ & TOWBIN LLC 321 North Clark St., Suite 800 Chicago, IL 60654 Tel: (312) 276-1322 Fax: (312) 980-3888 E-mail: proberts@shawfishman.com 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. NATIONAL ENVELOPE: Panel Seeks Clarification on Info Protocol ------------------------------------------------------------- The Official Committee of Unsecured Creditors of NE OPCO, Inc., et al., asks the U.S. Bankruptcy Court for the District of Delaware to enter an order pursuant to Sections 105(a), 107(b), and 1102(b)(3)(A) of Title 11 of the United States Code and Rule 9018 of the Federal Rules of Bankruptcy Procedure, clarifying the requirement of the Committee to provide access to the Debtors' confidential or privileged information to any creditor the Committee represents. The Committee proposes the following procedure to help ensure that confidential, privileged, proprietary and/or material non-public information will not be disseminated to the detriment of the Debtors' estate and to aid the Committee in performing its statutory function: The Committee proposes to keep creditors informed as required by the statute by directing them to the Committee's own web page at www.pszjlaw.com/neopco.html to make non-confidential and non- privileged information available to unsecured creditors, which contains links to the Court's PACER website, posts relevant pleadings, and provides creditors with the information necessary to email or contact Committee counsel. The Committee proposes that the Committee will not be required to disseminate to any Entity (as defined in Section 101(15) of the Bankruptcy Code): (i) without further order of the Court, Confidential Information or (ii) Privileged Information. In addition, the Committee proposes that it not be required to provide access to information or solicit comments from any Entity that has not demonstrated to the satisfaction of the Committee, in its sole discretion, or to the Court, that it holds claims of the kind described in Section 1102(b)(3) of the Bankruptcy Code. The Committee also proposes that any information received (formally or informally) by the Committee from any Entity in connection with an examination pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure or in connection with any formal or informal discovery in any contested matter, adversary proceeding or other litigation will not be governed by any order entered with respect to this Motion but, rather, by any order governing such discovery. 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. NESBITT PORTLAND: Fine-Tunes Joint Consensual Plan -------------------------------------------------- Nesbitt Portland Property, LLC, et al., and secured lender U.S. Bank National Association filed with the U.S. Bankruptcy Court for the U.S. Bankruptcy Court for the Central District of California a First Amended Disclosure Statement for the Consensual Plan of Reorganization proposed by Nesbitt, et al., and secured lender U.S. Bank, N.A. The hearing to consider the confirmation of the Consensual Joint Plan will be held on Sept. 27, 2013, at 9:00 a.m. Ballots and objections must be received by Sept. 6, 2013. The Plan calls for selling off seven Embassy Suites-branded hotels and an eighth Texas hotel to new franchisors. The hotels will be put up for auction in an attempt to cover at least $193 million in outstanding lender claims -- including a defaulted $187.5 million loan plus interest. After extensive negotiations, the Debtors, secured lender U.S. Bank N.A., Windsor Capital Management, Inc., guarantor Nesbitt Family Trust 3, LLC and Patrick Nesbitt, Sr., executed a Plan Support Agreement in May 2013. The Plan Support Agreement provides for a comprehensive settlement of the disputes between the parties and for a consensual Plan of which the Debtors and the Secured Lender will be co-proponents. With the exception of the secured lender claim, allowed insider claims, and allowed intercompany claims, the Plan provides for the payment in full of all allowed claims against the Debtors. Holders of allowed insider claims, allowed intercompany claims, and allowed interests will receive nothing under Plan. U.S. Bank on account of its secured claim will receive, among other things, cash from the proceeds of a hotel sale. Holders of general unsecured claims will receive cash in an amount equal to the amount of their allowed claims without interest on the Effective Date. A copy of the First Amended Disclosure Statement is available at: http://bankrupt.com/misc/nesbitt.doc398.pdf The Joint Plan is an aggregation of eight separate plans for each of the Debtors. About Nesbitt Portland Property et al. Windsor Capital Group Inc. CEO Patrick M. Nesbitt sent hotel- companies to Chapter 11 bankruptcy to stop a receiver named by U.S. Bank National Association from taking over eight hotels, seven of which are operated as Embassy Suites brand hotels. The eighth hotel, located in El Paso, Texas, was previously operated as an Embassy Suites hotel, but lost its franchise agreement. The eight hotels were pledged by the Debtors as collateral for the loans with U.S. Bank. According to http://www.wcghotels.com/Santa Monica-based Windsor Capital owns and/or operates 23 branded hotels in 11 states across the U.S. Windsor Capital is the largest private owner and operator of Embassy Suites hotels. In the case U.S. Bank vs. Nesbitt Bellevue Property LLC, et al. (S.D.N.Y. 12 Civ. 423), U.S. Bank obtained approval from the district judge in June to name Alan Tantleff of FTI Consulting, Inc., as receiver for: * Embassy Suites Colorado Springs in Colorado; * Embassy Suites Denver Southeast in Colorado; * Embassy Suites Cincinnati - Northeast in Blue Ash, Ohio; * Embassy Suites Portland - Washington Square in Tigard, Oregon; * Embassy Suites Detroit - Livornia/Novi in Michigan; * Embassy Suites El Paso in Texas; * Embassy Suites Seattle - North/Lynwood in Washington; and * Embassy Suites Seattle - Bellevue in Washington The receiver obtained district court permission to engage Crescent Hotels and Resorts LLC to manage the eight hotels. But before Mr. Adam could take physical possession of the properties and take control of the Hotels, the eight borrowers filed Chapter 11 petitions (Bankr. C.D. Cal. Lead Case No. 12-12883) on July 31, 2012, in Santa Barbara, California. The debtor-entities are Nesbitt Portland Property LLC; Nesbitt Bellevue Property LLC; Nesbitt El Paso Property, L.P.; Nesbitt Denver Property LLC; Nesbitt Lynnwood Property LLC; Nesbitt Colorado Springs Property LLC; Nesbitt Livonia Property LLC; and Nesbitt Blue Ash Property LLC. Bankruptcy Judge Robin Riblet presides over the cases. The Jonathan Gura, Esq., and Peter Susi, Esq., at Susi & Gura, PC; and Joseph M. Sholder, Esq., at Griffith & Thornburgh LLP, represent the Debtor as counsel. Alvarez & Marsal North American, LLC, serves as financial advisors. Attorneys at Kilpatrick Townsend & Stockton LLP represented the Debtors in the receivership case. U.S. Bank National Association, as Trustee and Successor in Interest to Bank of America, N.A., as Trustee for Registered Holders of GS Mortgage Securities Corporation II, Commercial Mortgage Passthrough Certificates, Series 2006-GG6, acting by and through Torchlight Loan Services, LLC, as special servicer, are represented in the case by David Weinstein, Esq., and Lawrence P. Gottesman, Esq., at Bryan Cave LLP. On Sept. 5, 2012, the Debtors filed with the Court their schedules of assets and liabilities. Nesbitt Portland scheduled $29.4 million in assets and $192.3 million in liabilities. Nesbitt Portland's hotel property is valued at $27.19 million, and secures a $191.9 million debt to U.S. Bank. NNN 3500: Motion to Reconsider Order Granting Stay Relief Denied ---------------------------------------------------------------- On July 18, 2013, the U.S. Bankruptcy Court for the Northern District of Texas denied the motion of NNN 3500 Maple 26, LLC, to alter or amend, or alternatively, for relief from the Court's May 20, 2013 order. The Court's May 20 order denied CWCapital Asset Management's motion to dismiss case but granted CWCapital Asset Management's motion for relief from the automatic stay. In the July 18 order, the Court said that the Debtor's First Amended Plan of Reorganization filed on June 3, 2013, does not resolve the issues discussed in the Court's order entered on May 20, 2013. First, there is no equity in the property. Second, there is no realistic chance the Amended Plan will be confirmed. Therefore, the Motion for Reconsideration is denied. About NNN 3500 NNN 3500 Maple 26, LLC, based in Costa Mesa, Calif., filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case No. 12-23718) on Nov. 30, 2012. Judge Scott C. Clarkson presided over the case. In its schedules, the Debtor disclosed $45,563,241 in total assets and $46,658,593 in total liabilities. On Jan. 23, 2013, the Bankruptcy Court entered an order transferring venue of the bankruptcy case to the U.S. Bankruptcy Court for the Northern District Of Texas (Case No. 13-30402). Judge Harlin DeWayne Hale presides over the case. Darvy M. Cohan, Esq., with offices at La Jolla, Calif., and Michelle V. Larson, Esq., at Andrews Kurth LLP, in Dallas, represent the Debtor as counsel. NORTHERN BEEF: Section 341(a) Meeting Scheduled for Sept. 4 ----------------------------------------------------------- A meeting of creditors in the bankruptcy case of Northern Beef Packers Limited Partnership will be held on Sept. 4, 2013, at 1:30 p.m. at Rm 206-7, 115 SE 4th Ave, Aberdeen. Creditors have until Nov. 4, 2013, to submit their proof of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Northern Beef Packers Limited Partnership filed a Chapter 11 petition (Bankr. D.S.D. Case No. 13-10118) on July 19, 2013. The Karl Wagner signed the petition as chief financial officer. Judge Charles L. Nail, Jr., presides over the case. The Debtor estimated assets of at least $50 million and debts of at least $10 million. James M. Cremer, Esq., at Bantz, Gosch, & Cremer, L.L.C., serves at the Debtor's counsel. NUANCE COMMUNICATIONS: S&P Retains 'BB+' Rating to Sr. Facility --------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB+' issue-level rating and '1' recovery rating on Nuance Communications Inc.'s first-lien senior secured credit facility remain unchanged following the company's plan to extend the maturity of the existing revolver and term loan. S&P's 'BB-' corporate credit rating on Nuance Communications is also unchanged. The outlook is stable. The company seeks to extend the revolver maturity by about three years to August 2018 from March 2015 and the term loan maturity by about three years to August 2019 from March 2016. "Our ratings on Nuance Communications reflect its "significant" financial risk profile and "fair" business risk profile. The niche nature of the voice and language solutions market that the company serves underpins our business risk assessment. Our financial risk assessment incorporates the company's acquisition growth strategy and operating lease-adjusted total debt to EBITDA, at 4.7x, which is high for a significant financial risk profile, and is primarily a result of deferred revenue recognition from recent acquisitions not allowed according to GAAP. The company's leading presence in the voice and language market, a significant level of recurring revenues, and a diverse customer base serving the financial services, telecommunications, health care, and automotive end markets partially offset these factors," S&P said. RATINGS LIST Nuance Communications Inc. Corporate Credit Rating BB-/Stable/-- Ratings Unchanged Nuance Communications Inc. Senior Secured $488M term loan due 2019 BB+ Recovery Rating 1 $75M revolver due 2018 BB+ Recovery Rating 1 OLDE PRAIRIE: 7th Circuit Dismisses CenterPoint Appeal ------------------------------------------------------ The United States Court of Appeals, Seventh Circuit, dismissed as moot an appeal by CenterPoint Properties Trust from a February 2011 bankruptcy court order in Olde Prairie Block Owner, LLC's Chapter 11 case that denied CenterPoint's request to: (1) amend the bankruptcy court's findings of fact in a September 2010 written ruling that enforced the automatic stay in the Debtor's case, and (2) have the bankruptcy court enforce the Sept. 17, 2010 oral "stay" ruling. According to CenterPoint, in the oral ruling, the court found that Olde Prairie did not have a significant equity cushion in its property. CenterPoint argues that the bankruptcy court's oral statement made during the Sept. 17 hearing (and later appended to the nunc pro tunc Order) was a final and binding Order. CenterPoint argued that the subsequent Written Ruling, which found that Olde Prairie did have an equity cushion, violated Fed.R.Civ.P. Rule 52. Olde Prairie Block owns what appears to be a valuable piece of real estate located at 230 and 330 E. Cermak Road in Chicago, near McCormick Place. Olde Prairie had planned to develop condominiums on the site, but after the real estate bubble burst, the company decided to develop a hotel complex on the property. CenterPoint Properties Trust is a real estate investment company owned by the California Public Employees Retirement System. In February 2008, Olde Prairie signed a one-year promissory note for a $37,127,667.03 loan with CenterPoint and secured the loan with a mortgage on the property. Olde Prairie was unable to meet its payment obligations and in February 2009, CenterPoint initiated a foreclosure action in state court after Olde Prairie defaulted. On May 18, 2010, shortly before the foreclosure sale was to begin, Olde Prairie filed for Chapter 11 bankruptcy, automatically staying the state court foreclosure action. In the Written Ruling, the bankruptcy court concluded that Olde Prairie had at least $33.15 million in equity in the property. The bankruptcy court calculated this amount by determining that the property was worth $81,150,000. At the time that determination was made, Olde Prairie owed approximately $48,000,000 on the note, leaving it with an equity cushion of $33,150,000 in the property. During the bankruptcy case, Olde Prairie moved the bankruptcy court to allow it to enter into a Debtor-In-Possession credit agreement with an investment company. Olde Prairie sought up to an additional $4 million to pay real estate taxes and various other expenses. In exchange for the loan, Old Prairie offered a "superpriority priming lien" on the property to secure the line of credit. CenterPoint contested Olde Prairie's motion, but the bankruptcy court approved the DIP loans and issued an Expense Order allowing Olde Prairie to borrow a little over $2 million from the company in exchange for a superpriority priming lien on the property. In early 2012, while CenterPoint's appeal was pending, CenterPoint moved the bankruptcy court to dismiss the Chapter 11 case and lift the stay on the state foreclosure action. The bankruptcy court did so on April 17, 2012, and CenterPoint subsequently received a judgment of foreclosure and sale of the property in state court on August 13, 2012. Just days before a scheduled foreclosure sale, Olde Prairie filed a second Chapter 11 case, which again stayed the sale. This second Chapter 11 case was dismissed with prejudice on Jan. 18, 2013. According to the Seventh Circuit, in light of the fact that the bankruptcy case underlying the appeal has been dismissed with prejudice, CenterPoint's appeal is moot and is therefore dismissed. A copy of the Seventh Circuit's June 13, 2013 Order is available at http://is.gd/gHV7IJfrom Leagle.com. The Seventh Circuit panel consists of Circuit Judges Daniel A. Manion, Michael S. Kanne, and John Daniel Tinder. About Olde Prairie Block Owner Olde Prairie Block Owner, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-37599) in Chicago in September 2012, disclosing assets of $97 million in assets and $80.6 million in liabilities in its schedules. The Debtor owns two properties: (i) the Old Prairie Property, a 53,575 square foot parcel that has a building and a gravel paved lot at E. Cermak Road in Chicago, and (ii) the Lakeside Property, a 159,960 square- feet property that contains buildings in Chicago. The Debtor said CenterPoint Properties Trust has a disputed claim of $70.8 million, of which $63.3 million is secured. JMB Capital Partners is owed $3.4 million on account of DIP financing in a previous Chapter 11 case. Olde Prairie Block first sought chapter 11 protection (Bankr. N.D. Ill. Case No. 10-22668) on May 18, 2010. Two years later, the bankruptcy judge in Chicago dismissed the case and granted Centerpoint's motion to lift automatic stay to permit its state- court foreclosure action to proceed. In the prior case, the Debtor was represented by John Ruskusky, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago. Robert R. Benjamin, Esq., at Golan & Christie, LLP, serves as counsel to the Debtor in the 2012 Chapter 11 case. CenterPoint is represented in the 2012 case by David F. Heroy, Esq., and Erin E. Broderick, Esq., at Baker & McKenzie LLP. No creditor's committee has been appointed in the case. No trustee has been appointed. ONCURE MEDICAL: Auction Scheduled for Aug. 19 --------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that OnCure Medical Corp. will sell the business to Radiation Therapy Services Inc. unless a better bid turns up at an auction on Aug. 19. Competing bids are due Aug. 14. According to the report, RTS is offering to buy the operation in a transaction valued at $126.5 million. The price includes $42.5 million in cash and the assumption of $82.5 million in debt. The sale will be completed through confirmation of a Chapter 11 plan. The report notes that although RTS would take ownership when Englewood, Colorado based OnCure emerges from Chapter 11 under a court-approved plan, bidders can make offers with ownership being conveyed from a sale rather than through plan confirmation. The bankruptcy court in Delaware approved auction procedures last week. The sale process is supported by all of the lenders and holders of 73 percent of the notes, according to a court filing. About OnCure Holdings Headquartered in Englewood, Colorado, OnCure Holdings, Inc. -- http://www.oncure.com/-- provides management services and facilities to oncology physician groups throughout the country. OnCure Holdings and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 13-11540 to 13-11562) in Wilmington on June 14, 2013. Bradford C. Burkett signed the petition as CEO. On the Petition Date, the Debtors disclosed total assets of $179,327,000 and total debts of $250,379,000. There's at least $15 million owing on a first-lien term loan facility, as well as $210 million on prepetition secured notes. Paul E. Harner, Esq., and Keith A. Simon, Esq., at Latham & Watkins LLP, in New York, serve as the Debtors' lead bankruptcy counsel. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware, serves as the Debtors' local Delaware counsel. Kurtzman Carson Consultants is the claims and notice agent. Match Point Partners LLC provides management services to OnCure. The Debtors have signed a deal to sell the business to Radiation Therapy Services Holdings Inc. for $125 million, absent higher and better offers. RTS's offer comprises $42.5 million in cash (plus covering certain expenses and subject to certain working capital adjustments) and up to $82.5 million in assumed debt. Secured noteholders are supporting the RTS deal. Millstein & Co., Kirkland & Ellis LLP, Alvarez & Marsal and Deloitte advised Radiation Therapy in connection with the transaction. Promptly before the bankruptcy filing, the Debtors entered into a restructuring support agreement with the members of an ad hoc committee of its secured notes, constituting 100% of the lenders under the first lien term loan credit agreement and approximately 73% of the secured notes, pursuant to which they have agreed to support a stand-alone restructuring of the Debtors, subject to an auction process for a sale of substantially all of the Debtors' assets or the equity of the reorganized Debtors pursuant to a chapter 11 plan. PACIFIC GOLD: Amends 2012 Annual Report --------------------------------------- Pacific Gold Corp. has amended its annual report for the fiscal year ended Dec. 31, 2012, to revise Items 11 and 12 Part III of the original Annual Report and add certain exhibits to Item 15 of Part IV of the Original Annual Report. A copy of the Form 10-K/A is available for free at http://is.gd/H627bi About Pacific Gold Las Vegas, Nev.-based Pacific Gold Corp. is engaged in the identification, acquisition, and development of prospects believed to have gold mineralization. Pacific Gold through its subsidiaries currently owns claims, property and leases in Nevada and Colorado. Pacific Gold diclosed a net loss of $16.62 million in 2012, as compared with a net loss of $1.38 million in 2011. The Company's balance sheet at March 31, 2013, showed $1.42 million in total assets, $4.63 million in total liabilities and a $3.20 million total stockholders' deficit. Silberstein Ungar, PLLC, in Bingham Farms, Michigan, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred losses from operations, has negative working capital and is in need of additional capital to grow its operations so that it can become profitable. These factors raise substantial doubt about the Company's ability to continue as a going concern. PARTY CITY: Moody's Reviews B2 Ratings for Possible Downgrade ------------------------------------------------------------- Moody's Investors Service placed Party City Holdings Inc.'s B2 Corporate Family rating, B2-PD Probability of Default Rating and B1 secured term loan rating on review for downgrade. At the same time, Moody's assigned a Caa2 rating to the proposed $300 million Senior PIK Toggle Notes due 2019 to be co-issued by PC NextCo Holdings, LLC, Party City's newly formed parent company, and PC Nextco Finance, Inc. The company intends to use net proceeds of approximately $291 million to fund a dividend to shareholders. The assigned rating is subject to review of final documentation. Upon completion of the transaction and review for downgrade, Party City's Corporate Family and Probability of Default Ratings will be moved to Holdings. The Proposed Notes will be senior, unsecured obligations of Holdings, and will not be guaranteed by any of Holdings' subsidiaries. Holdings is required to pay interest entirely in cash so long as there is restricted payment capacity for upstream dividends at the Party City level under the agreements governing Party City's existing senior secured credit facilities and existing senior unsecured notes. Ratings assigned: PC NextCo Holdings, LLC and PC Nextco Finance, Inc. as co- borrowers: $300 million senior unsecured PIK toggle notes due 2019 at Caa2 (LGD 6, 94%) Ratings placed on review for downgrade and LGD assessment subject to change: Party City Holdings Inc.: Corporate Family Rating at B2 Probability of Default Rating at B2-PD $1.12 billion senior secured term loan due 2019 at B1 (LGD 3, 38%) Ratings affirmed and LGD assessment subject to change: Party City Holdings Inc.: $700 million senior unsecured notes due 2020 at Caa1 (LGD 5, 84%) Ratings Rationale: The review for downgrade was triggered by Party City's announcement that it plans to increase consolidated debt to pay a dividend to its shareholders. Should this transaction close, consolidated leverage (Party City and Holdings combined) will significantly increase from a level that is already very high for the B2 rating. Moody's anticipates that pro forma lease adjusted debt to EBITDA will increase to around 8.0 times for the twelve month period ended March 31, 2013 before considering pro forma synergies from recent acquisitions and other cost savings initiatives. Despite having a track record of integrating acquisitions and achieving cost savings, consolidated pro forma debt to EBITDA will likely remain well above the previously-stated 6.5 times metric to remain B2. Assuming the transaction closes on terms substantially as indicated, Moody's expects to complete the review and to downgrade Party City's Corporate Family Rating to B3 from B2, Probability of Default Rating to B3-PD from B2-PD, and $1.12 billion senior secured term loan to B2 from B1. The assignment of a Caa2 rating to Holdings' proposed $300 million Notes due 2019 assumes the completion of the transaction and is based upon a one-notch downgrade of Party City's Corporate Family and Probability of Default Ratings to B3 and B3-PD, respectively. The Caa2 rating assigned to the proposed Notes reflects their structural subordination to all existing liabilities at Party City as they are located at a holding company and are not guaranteed by the operating company. The principal methodology used in this rating 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. Party City Holdings, Inc. is a designer, manufacturer, distributor and retailer of party goods and related accessories. The company's retail brands principally include Party City and Halloween City. Total revenue exceeded $1.9 billion for the twelve month period ended March 31, 2013. The company is majority owned by Thomas H. Lee Partners, L.P. PARTY CITY: S&P Revises Outlook to Neg. & Rates $300MM Notes CCC+ ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on U.S.- based Party City Holdings Inc. to negative from stable. S& also affirmed all existing ratings, including its 'B' corporate credit rating. At the same time, S&P assigned a 'CCC+' issue-level rating to Party City's proposed $300 million senior unsecured PIK toggle holdco notes due 2019, issued under Rule 144A without registration rights. The recovery rating for the notes is '6', indicating S&P's expectations for negligible (0% to 10%) recovery in the event of a payment default. The notes will be co-issued by Party City NextCo Holdings LLC and PC Nextco Finance Inc., parent companies of Party City Holdings Inc. "The outlook revision to negative reflects our belief that Party City's credit metrics will weaken from the proposed $300 million senior PIK toggle notes," said Standard & Poor's credit analyst Stephanie Harter. The 'B' corporate credit rating on Party City reflects Standard & Poor's view of Party City's financial risk profile as "highly leveraged" and its business risk profile as "weak." Key credit factors in S&P's assessment of Party City's business risk profile include its narrow business focus, participation in the highly competitive and fragmented party goods industry, and exposure to higher or volatile raw material costs. However, the company benefits from a strong presence in the niche party goods industry and the somewhat recession-resistant characteristics of its products. "Our assessment of Party City's financial risk profile is based on its significant debt burden, very aggressive financial policy (including debt-financed acquisitions and the proposed dividend), and weak operating performance. The company's credit protection measures were already weak following the weaker-than-expected Halloween season in 2012, which occurred during Superstorm Sandy. The company's LBO in July 2012 coupled with this weak operating performance left leverage at 8x for the 12 months ended March 30, 2013. For the same period, we estimate the ratio of pro forma total debt to adjusted EBITDA will be even weaker at 8.2x, while the ratio of pro forma funds from operations (FFO) to total debt will decline to about 5%, from 6% excluding the new notes," S&P said. S&P could consider revising the outlook to stable if the company's operating performance improves above its expectations such that leverage is below 8x for fiscal year-end 2013, while liquidity remains adequate. PATRIOT COAL: Mine Workers' Appeal Nears Conclusion --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Patriot Coal Corp. could know by the end of August whether a district judge in St. Louis will uphold the late May ruling by the bankruptcy judge allowing the coal producer to modify union contracts and the guarantee of lifetime medical care for retirees. According to the report, U.S. Bankruptcy Judge Kathy A. Surratt- States held a trial in late April and May, concluding with a 102- page opinion that Patriot met each of the five requirements for modifying labor contracts and retiree health benefits. The United Mine Workers union appealed. The union filed its brief on July 2, giving reasons why the bankruptcy judge was in error. Patriot's brief followed on July 26. After the union files a reply brief on Aug. 7, a decision could come down from U.S. District Judge Carol E. Jackson. The report notes that Patriot said the union's appeal is futile because Jackson can't overturn findings of fact by Surratt-States unless they were "clearly erroneous." The company also said the law doesn't require turning over "every shred of information" that "does not now and did not ever exist." The appeal is United Mine Workers of America v. Patriot Coal Corp. (In re Patriot Coal Corp.), 13-01086, U.S. District Court, Eastern District Missouri (St. Louis). 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. HoulihanLokey 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. PATRIOT COAL: Knighthead, Aurelius to Backstop for Rights Offering ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Patriot Coal Corp. received formal court approval on July 26 to pay as much as $2 million to Knighthead Capital Management LLC and Aurelius Capital Management LP in fees and expenses for negotiating a rights offering to buy hundreds of millions of dollars of securities not purchased by other creditors. According to the report, objections from the U.S. Trustee were resolved, and there were no other objections lodged with the U.S. Bankruptcy Court in St. Louis. Proceeds from a rights offering would constitute some of the funds for emerging from bankruptcy. The report notes that the two investors together have 54 percent of Patriot's senior notes and about 10 percent of the convertible notes, according to a court filing. Papers filed by Patriot in bankruptcy court in June didn't give details on the rights offering or the reorganization plan. 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. HoulihanLokey 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. PENSON WORLDWIDE: 4th Amended Plan to Come Before Court Today ------------------------------------------------------------- A Fourth Amended Joint Liquidation Plan filed by Penson Worldwide Inc. and its affiliates on July 29, 2013, will come before Judge Peter J. Walsh of the U. S. Bankruptcy Court for the District of Delaware today, July 31, 2013, at 10:00 a.m. (prevailing Eastern Time), for confirmation. The central goal of the Plan is to promptly make distributions from the liquidation of the Debtors' assets to the Debtors' creditors in accordance with the order of priority set forth in the Bankruptcy Code. The Plan contemplates, among other things, payment in full in cash to holders of Allowed Administrative Expense Claims, Professional Fee Claims, Priority Tax Claims, and Non-Tax Priority Claims. Holders of Allowed Other Secured Claims will receive either payment in full in cash or receipt of their collateral. To implement the Plan, the existing Board of Directors for each corporate Debtor will be replaced with the Board of Managers of PTL, a newly formed limited liability company to which all assets of the Debtors will be conveyed and transferred. The Board of Managers of PTL will be comprised of two members appointed by the Second Lien Noteholders Committee, one member appointed by the Convertible Noteholders Committee and one member appointed by the Committee. Mr. Bryce B. Engel will be installed as the Chief Officer of PTL and will be responsible for winding-up the affairs of each Debtor. The Plan effectuates mutual releases by and between the Debtors and certain Released Parties, as well as by and among the non- Debtor Released Parties, and provides for exculpation of certain parties serving the Debtors' estates in fiduciary capacities during the Chapter 11 Cases. Since the Plan was solicited, the Debtors have modified certain provisions of the Plan -- either through the revised Plan or the proposed Confirmation Order -- to make technical, non-material changes and to address concerns filed or asserted by various parties. These modifications include: * The Debtors have revised Section 2.04 (Priority Tax Claims) of the Plan to (i) specify the frequency of payments of Allowed Priority Tax Claims, (ii) provide for accrual of post-petition interest on the Allowed Administrative Expense Claims and Allowed Priority Tax Claims of certain taxing authorities, and (iii) delete the provision about automatic disallowance of any Claims or demands for fines or penalties related to a Priority Tax Claim. * The Debtors have revised Section 11.13 (Estimation of Claims; Certain Reserves) of the Plan to provide for establishment of reserves at the time of any Distribution based on the maximum amount asserted by any creditor, unless the Bankruptcy Court orders otherwise or the parties agree to a lesser amount. * The Debtors have modified Section 14.03 (Term of Pre- Confirmation Injunctions or Stays) to provide that any stay or injunction with respect to Arbitration No. 12-02714 before the Financial Industry Regulatory Authority will be terminated as of the Effective Date. * The Debtors have modified Section 14.05 (Injunction) of the Plan to provide that nothing contained therein will enjoin any suit, action or other proceeding against any customer of the Debtors, who is not a Released Party, regarding such customer's property. * The Debtors have modified Section 17.07 (Books and Records) to indicate that the five-year period for the Debtors' retention of books and records may be extended upon reasonable request of a party in interest and add the Lead Plaintiff in the Putative Class Action as an additional notice party to be noticed before such books and records may be destroyed. * The Debtors have added a reservation of rights for any Person covered by the D&O Insurance Policies in Section 17.13 (D&O Insurance Policies) of the Plan. * The Debtors have clarified the treatment of and obligations to the IRS and other state taxing authorities under the Plan. * The Debtors have clarified in their proposed Confirmation Order that nothing in the Plan or the Confirmation Order will be deemed to constitute a discharge of the Debtors in violation of Section 1141(d)(3) of the Bankruptcy Code. The Debtors submit that the Plan Modifications do not affect the recoveries of creditors who voted on the Plan and, as such, the Plan can be confirmed without re-solicitation for Plan acceptances. The Impaired Classes of Claims in Classes 3A, 4A, 5A, 3B, 4B, 3C, 4C, 3D, and 3E that are entitled to vote to accept or reject the Plan have voted overwhelmingly to accept the Plan pursuant to Section 1126(c) of the Bankruptcy Code. Classes 6A, 7A, 8A, 5B, 6B, 6C, 4D, 5D, and 5E are conclusively deemed to have rejected the Plan pursuant to section 1126(f) of the Bankruptcy Code. Full-text copies of Penson's 4th Amended Plan and a Notice of Filing a Blacklined Copy of the 4th Amended Plan may be accessed for free at http://is.gd/sEkNeOand http://is.gd/VJozl1 The Debtors also filed a notice of filing a first amended supplement to the 4th Amended Joint Liquidation Plan, a clean copy of which may be accessed for free at http://is.gd/vU4Dz3and a blacklined copy at http://is.gd/K05ElS The Debtors tell the Court that they have worked diligently to resolve all formal and informal objections to the Plan and have reached agreement in principle and/or resolved all Objections other than the Limited Objection filed by Andrzej Abraszewski. The Debtors submit that Mr. Abraszewski's issues with respect to his motion to file a late claim, and related discovery dispute, do not involve confirmation issues and should be reserved for resolution at the appropriate time. The Debtors previously objected to the discovery requests issued/served on July 2, 2013 in connection with the Late Claim Motion arguing that the discovery requests were premature and otherwise impermissible and void. Penson is represented by Pauline K. Morgan, Esq., Curtis J. Crowther, Esq., Kenneth J. Enos, Esq., Ashley E. Markow, 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: Parties File Motions to Lift Automatic Stay ------------------------------------------------------------- The George E. Morris Revocable Trust asks the Court to lift the automatic stay imposed by Section 362(a) of the Bankruptcy Code for the purpose of permitting the liquidation of the Trust's claims against debtor Penson Financial Services, Inc. as asserted in the Statement of Claim filed in the FINRA Dispute Resolution proceeding, such case being styled as George E. Morris Revocable Trust v. Penson Financial Services, Inc., et al., FINRA No. 12- 00989. The Trust has asserted claims in excess of $1,000,000 against, among other parties, the Debtor based on (i) breach of fiduciary duty, (ii) fraudulent misrepresentation (iii) omission to state a material fact; (iv) breach of contract; and (v) negligence. The FINRA Arbitration Proceeding had been scheduled for June 11-14, 2013, but was postponed in light of the Debtor's Chapter 11 filing. The Trust's attorney, Michael Busenkell, Esq. -- mbusenkell@gsbblaw.com -- at Gellert Scali Busenkell & Brown, LLC, asserts that the Trust's claims against the non-debtor entities are not subject to the automatic stay. "Given that Movant's claims are currently in an arbitration forum that is specially qualified to hear securities related matters, stay relief should be granted to allow Movant's claim to be liquidated in the FINRA Arbitration Proceeding," he added. Similarly, TradeKing, LLC (as successor to Zecco Trading, Inc.) also seeks relief from the automatic stay so that it may proceed with the liquidation of its claim against Penson Financial Services, Inc. in an arbitration, commenced nearly 8 months prior to the Debtors' bankruptcy filings, before the Financial Industry Regulatory Authority styled Zecco Trading, Inc. vs. Penson Financial Services, Inc. TradeKing timely filed a proof of claim against PFSI on March 4, 2013 in an amount not less than $1,239,115.21. Tradeking is represented by James S. Carr, Esq., Gilbert R. Saydah, Esq., Casey B. Boyle, Esq., at Kelley Drye & Warren LLP. Meanwhile, Slawomir Wisniewski, who holds a claim against PFSI for breach of obligations in the amount of not less than $3,992,410, asks the Court to deem his proof of claim as timely filed. Mr. Wisniewski said he did not learn about PFSI's bankruptcy until on or about May 23, 2013. Mr. Wisniewski is represented by Scott J. Leonhardt, Esq. --leonhardt@teamrosner.com -- at The Rosner Law Group LLC and Jonathan L. Flaxer, Esq., Michael Devorkin, Esq., Dallas L. Albaugh, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP. In a separate matter, Judge Peter Walsh granted a stipulation to lift the automatic stay filed by Barbara Hallum with respect to a National Futures Association Arbitration. The Court also terminated the automatic stay upon the motion filed by Regions Equipment Finance Ltd. and Regions Equipment Finance Corporation for relief from the automatic stay and for adequate protection. The Court determined that the Debtor has no equity in the Equipment which is the subject of Regions' motion, and it is not necessary for the Debtor's reorganization. The Stay is terminated so as to permit Regions to exercise all available rights and remedies with respect to the Equipment. 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. PEREGRINE FINANCIAL: 7th Cir. Affirms Ruling in Prestwick Suit -------------------------------------------------------------- In 2009, Prestwick Capital Management Ltd., Prestwick Capital Management 2 Ltd., and Prestwick Capital Management 3 Ltd. sued Peregrine Financial Group, Inc., Acuvest Inc., Acuvest Brokers, LLC, and two of Acuvest's principals (John Caiazzo and Philip Grey), alleging violations of the Commodity Exchange Act, 7 U.S.C. Sec. 1 et seq. Prestwick asserted a commodities fraud claim against all defendants, a breach of fiduciary duty claim against the Acuvest defendants, and a guarantor liability claim against PFG. After the district court awarded summary judgment to PFG in August 2011, Prestwick moved to dismiss the remaining defendants with prejudice to pursue its appeal of right against PFG. The district court subsequently dismissed the Acuvest defendants from the lawsuit, rendering its grant of summary judgment a final order which Prestwick now appeals. In a July 19, 2013 decision available at http://is.gd/RbmjKKfrom Leagle.com, the United States Court of Appeals, Seventh Circuit, affirmed the district court. The case is PRESTWICK CAPITAL MANAGEMENT, LTD., PRESTWICK CAPITAL MANAGEMENT 2, LTD., PRESTWICK CAPITAL MANAGEMENT 3, LTD., Plaintiffs-Appellants, v. PEREGRINE FINANCIAL GROUP, INC., Defendant-Appellee, No. 12-1232 (7th Cir.). About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. PERRIGO CO: S&P Puts 'B+' CCR on CreditWatch Positive ----------------------------------------------------- Standard & Poor's Ratings Services affirmed all of its ratings on Allegan, Mich.-based Perrigo Co., including the 'BBB' corporate credit rating, and revised its outlook to negative from stable. At the same time, S&P placed all of its ratings on Dublin, Ireland-based Elan Corp. PLC, including the 'B+' corporate credit rating, on CreditWatch with positive implications. "The outlook revision reflects the meaningfully higher pro forma debt levels and credit ratio deterioration that will result from the proposed Elan acquisition, and the risk of making a large acquisition outside its core businesses," said Standard & Poor's credit analyst Jerry Phelan. Standard & Poor's forecast Perrigo's pro forma leverage (as measured by the ratio of debt to EBITDA) will increase to about 3.5x from around 2x currently, which would make it more difficult to navigate potential unexpected setbacks over the next two years. If projected performance falls short of S&P's expectations, it could take longer for the company to restore credit metrics to levels consistent with an "intermediate" financial risk profile, which includes 2x-3x leverage. Risks include an unexpected decline in Tysabri in-market sales, which could occur if recently introduced or future competing multiple sclerosis (MS) treatments are deemed to have better risk/return tradeoffs than Tysabri, or if there is a meaningful increase in progressive multifocal leukoencephalopathy occurrences linked to Tysabri. It would also be more difficult to restore credit ratios to prior levels if competition increases from national branded competitors in the over-the-counter pharmaceuticals, nutritionals, or generic prescription drug businesses. S&P could lower the ratings if it forecasts that Perrigo will not be able to restore credit measures over the next 18-24 months closer to levels indicative of an intermediate financial risk profile, including leverage below 3x and FFO to total debt in the low-30% area. Alternatively, S&P could revise the outlook to stable if Perrigo is able to improve profitability and restore credit ratios closer to preacquisition levels. PMI GROUP: Plan Approved Over Justice Department Objection ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Tax Division of the U.S. Justice Department lost again when trying to block court approval of a Chapter 11 plan on the ground that the principal purpose was avoidance of taxes. According to the report, PMI Group Inc. won the signature of a Delaware bankruptcy judge on a July 25 confirmation order approving a reorganization plan. Both the Justice Department and the U.S. Trustee opposed confirmation. The Justice Department argued that the entire purpose of PMI's Chapter 11 plan was to preserve the use of "substantial tax attributes" by attracting capital "to shield $2.4 billion of taxable income that would otherwise be subject to a 35 percent corporate tax rate." The report notes that U.S. Bankruptcy Judge Brendan Shannon delivered his opinion in court last week and followed up by saying in the confirmation order that the "principal purpose of the plan is not tax avoidance." He said PMI conducted "more than an insignificant amount of active trade or business" after filing for Chapter 11 protection. The U.S. Trustee contended that the plan was a liquidation where PMI wasn't entitled to wipe out debt under Section 1141(d)(3) of the Bankruptcy Code. That section is designed, according to the government, "to prevent trafficking in corporate shells." The report relates that rejecting the objection, Shannon said the plan "does not provide for the liquidation of all or substantially all of" the company's property. He added that PMI "will continue to engage in business after consummation of the plan." PMI began bankruptcy with $165 million in cash that grew to $200 million. The report says that almost all will be distributed to creditors, resulting in a 29 percent recovery for holders of $691 million in senior unsecured notes. For general unsecured creditors with $6.3 million to $10.3 million in claims, recovery projected at 26 percent to 27 percent. The report discloses that the government appealed from approval of the Chapter 11 plan for former solar-panel maker Solyndra LLC, having likewise contended unsuccessfully that the primary purpose was tax avoidance by preserving tax losses when there was no ongoing business. The government dropped the appeal in December when the bankruptcy and district courts both denied stays pending appeal. About The PMI Group The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor disclosed $167,963,354 in assets and $770,362,195 in liabilities. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. The Official Committee of Unsecured Creditors appointed in the case retained Morrison & Foerster LLP and Womble Carlyle Sandridge & Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company serves as the Committee's financial advisor. POINT BLANK: SS Body Armor Can Employ McKenna as Special Counsel ---------------------------------------------------------------- Point Blank entities, now known as SS Body Armor I, Inc., et al., sought and obtained permission from the U.S. Bankruptcy Court to employ McKenna Long & Aldridge LLP as special litigation and government investigation counsel. MLA will represent the Debtors: (a) in the forfeiture and restitution proceedings in the Eastern District of New York in the matters titled US. v. David H Brooks, et al., Cr. No. 06-550 and U.S. v. All Assets Listed On Schedule I Attached Hereto and All Proceeds Traceable Thereto, 1 0-cv-4750; (b) before the U.S. Attorney's Office for the Eastern District of New York and the Department of Justice in seeking approval for a global settlement of the underlying restitution and forfeiture claims and in remission and restoration procedures; (c) before the SEC in seeking approval of the global settlement; and (d) in any other matters related to the above-noted activities for which the Debtors seek MLA's services. Nancy R. Grunberg, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. MLA may be reached at: Nancy R. Grunberg, Esq. George Kostolampros, Esq. McKENNA LONG & ALDRIDGE LLP 1900 K Street NW Washington, DC 20006 Tel: 202-496-7524 Fax: 202-496-7756 E-mail: ngrunberg@mckennalong.com gkostolampros@mckennalong.com MLA's hourly rates are: $800 per hour for Nancy R. Grunberg, $600 for Mr. Kostolampros, and $300 per hour for Mazen Saah (specialist/paralegal). About Point Blank Headquartered in Pompano Beach, Florida, Point Blank Solutions, Inc. -- http://www.pointblanksolutionsinc.com/-- designs and produces body armor systems for the U.S. Military, Government and law enforcement agencies, as well as select international markets. The Company maintains facilities in Pompano Beach, Florida, and Jacksboro, Tennessee. The Company's former chief executive officer and chief operating officer were convicted in September 2010 of orchestrating a $185 million fraud. Point Blank Solutions, formerly DHB Industries, filed for Chapter 11 protection (Bankr. D. Del. Case No. 10-11255) on April 14, 2010. Laura Davis Jones, Esq., Alan J. Kornfeld, Esq., David M. Bertenthal, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves as corporate counsel. Epiq Bankruptcy Solutions serves as claims and notice agent. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Equity Security Holders in the case. Ian Connor Bifferato, Esq., and Thomas F. Driscoll III, Esq., at Bifferato LLC; and Carmen H. Lonstein, Esq., Andrew P.R. McDermott, Esq., and Lawrence P. Vonckx, Esq., at Baker & McKenzie LLP, serve as counsel for the Official Committee of Equity Security Holders. Robert M. Hirsh, Esq., and George P. Angelich, Esq., at Arent Fox LLP, serve as counsel to the Creditors Committee, and Frederick B. Rosner, Esq., and Brian L. Arban, Esq., at the Rosner Law Group LLC, serve as co-counsel. In October 2011, the Debtors sold substantially all assets to Point Blank Enterprises, Inc. The lead debtor changed its name to SS Body Armor I, Inc. following the sale. R. BROWN & SONS: Vermont Court Appoints Sheriffs as Custodians -------------------------------------------------------------- Debtor R. Brown & Sons, Inc., seeks a determination on the allowance and amount of pre-petition and post-petition storage claims of LaRoche Towing & Recovery, Inc., and New England Quality Service, Inc., d/b/a Earth Waste & Metal, and alleges the fees these entities seek for storage charges are unreasonable. According to Vermont Bankruptcy Judge Colleen A. Brown, prior to a determination of the reasonableness and allowance of the storage fees, the Court must adjudicate the status of the parties now seeking payment of fees and costs associated with the writ of execution and levy on the Debtor's equipment, and the nature of the parties' claims. Judge Brown held that (1) the Sheriff of Rutland County and the Sheriff of Washington County are custodians within the meaning of Sections 101(11) and 543 of the Bankruptcy Code, (2) LaRoche Towing & Recovery, Inc., and New England Quality Service, Inc., d/b/a Earth Waste & Metal are agents of the two custodians, (3) these entities must each file an accounting in satisfaction of the requirements of Sec. 543 and Bankruptcy Rule 6002, and (4) all four of these entities are entitled to reimbursement and compensation pursuant to Sec. 543(c)(2), to the extent they apply for it and demonstrate the sums they seek are reasonable. The Court directs the Sheriffs, Earth Waste Systems, and LaRoche Towing & Recovery to each file an accounting pursuant to Sec. 543(b)(2). R. Brown & Sons, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D. Vermont Case No. 13-10449) on June 18, 2013. When the Debtor commenced the voluntary Chapter 11 case, much of its equipment was under the control of the Washington County and Rutland County Sheriffs, who had levied on it pursuant to a State court writ of execution. Rathe Salvage, Inc., creditor who had obtained a $440,095 judgment against the Debtor, and the writ of execution, in State Court, is the largest creditor in this case. On June 21, 2013, the Debtor filed an emergency motion for turnover of its equipment. An exhibit to the Turnover Motion listed 10 pieces of equipment upon which the Sheriff had levied, specified whether each piece was being held by New England Quality Service, Inc. d/b/a Earth Waste & Metal Systems in Castleton, Vermont, or La Roche Towing and Recovery, Inc. in Barre, Vermont, and indicated that the value of the equipment totaled $432,500. Rathe Salvage opposed. Prior to the July 9, 2013 hearing on the Turnover Motion, the parties stipulated on the release of nine of the equipment -- a 2008 Lincoln Towncar titled in the name of Robert Brown personally was excluded -- and the payment for adequate protection to Rathe. A copy of Judge Brown's July 26, 2013 Memorandum of Decision is available at http://is.gd/IF3P7Pfrom Leagle.com. Ray Obuchowski, Esq., and Jennifer Emens-Butler, Esq. -- ray@oeblaw.com and jennifer@oeblaw.com -- at Obuchowski & Emens- Butler, PC, represent the Debtor. Andre Bouffard, Esq., at Downs Rachlin Martin, PLLC, For Rathe Salvage, Inc. RCN TELECOM: Moody's B2 CFR Unchanged Following Bond Announcement ----------------------------------------------------------------- Moody's Investors Service said that there will be no impact to the B2 corporate family rating or the Caa1 rating assigned to the proposed bonds of RCN Telecom Services, LLC despite the potential for a higher coupon than Moody's originally anticipated. RCN's B2 corporate family rating has flexibility to withstand this potential. Its good free cash flow affords it with cushion to absorb slightly higher interest expense. The company expects to use proceeds to fund another dividend distribution to its private equity owners, ABRY Partners, LLC and Spectrum Equity. 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, and on June 12, Moody's rated the proposed bonds. 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. 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. RG STEEL: Seeks Court Approval of Longer Plan-Filing Exclusivity ---------------------------------------------------------------- Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that RG Steel LLC has asked a bankruptcy judge for an extension of the right to be the only party to submit a recovery plan for the company. According to the report, the company is seeking to expand the period, which would have expired on July 25, by 130 days to Dec. 2, court documents filed July 24 show. While the steelmaker's request is pending, it keeps exclusivity, preventing others from filing competing plans. This is the company's fourth and final request to extend exclusivity. "Recently, the debtors have devoted much of their attention to pursuing significant" litigation, the company said in its extension request. "It is appropriate for the debtors to maintain their exclusivity rights so that the culmination of the debtors' reorganization efforts can be pursued in a coordinated, cost- effective and efficient manner." The report notes that RG Steel, which has filed hundreds of lawsuits seeking to recover payments made within 90 days of its filing, said that the extension will allow it to "better understand the potential recoveries" available from litigation. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owned Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012. Bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion. As of the bankruptcy filing, the Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. Kramer Levin Naftalis & Frankel LLP represents the Official Committee of Unsecured Creditors. Huron Consulting Services LLC serves as the Committee's financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. CJ Betters Enterprises Inc. paid $16 million for the Ohio plant. ROTECH HEALTHCARE: Wins Approval of $200 Million Exit Financing --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Rotech Healthcare Inc. got court approval July 29 to sign lenders to a commitment providing $200 million in first-lien loans constituting part of the financing necessary for emergence from Chapter 11 reorganization. According to the report, the company has a confirmation hearing on Aug. 20 for the reorganization plan, which was mostly worked out before the Chapter 11 filing in April. Assuming the plan is approved next month, the senior financing will consist of a $25 million first-lien revolving credit and $175 million in two tranches of first-lien term loans. Rotech was also authorized to sign a backstop agreement under which some existing second-lien lenders agree to provide the new financing if no one else steps forward. An official shareholders' committee was appointed, based on the notion that an offer in the original plan of 10 cents a share indicated there could be value for equity. The report notes that the official equity panel attempted unsuccessfully to block $30 million in financing and argued the company is worth substantially more. After the equity committee's objection, the plan was modified to omit the provision giving stockholders 10 cents a share. For a recovery estimated at 28 percent to 47 percent, the plan will give ownership to holders of $290 million in 10.5 percent second-lien notes. The report relates that 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. Unsecured creditors, whose official committee supports the plan, are estimated to recover 12 percent to 25 percent. 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. SAKS INCORPORATED: Fitch Puts 'BB' IDR on Rating Watch Negative --------------------------------------------------------------- Fitch Ratings has placed Saks Incorporated on Rating Watch Negative. This action follows the company's announcement July 29, 2013 that they have entered into a definitive merger agreement with Hudson's Bay Company (HBC). HBC will acquire Saks for US$16.00 per share in an all-cash transaction valued at approximately US$2.9 billion, including debt. This equates to approximately 11x of Saks' LTM EBITDA. The transaction is expected to close before the end of the calendar year, subject to approval by Saks shareholders, regulatory approvals and other customary closing conditions. HBC will operate three brands under Hudson's Bay, Lord & Taylor and Saks Fifth Avenue and post-transaction will have 320 stores in North America with pro forma sales of C$7.2 billion, normalized EBITDA of C$587 (or approximately US$570 million), and debt/EBITDA of 5.7x before realizing C$100 million in expected synergies. This contrasts to Neiman Marcus, Inc.'s revenue of $4.5 billion and EBITDA of $630 million. Key Rating Drivers Fitch expects to withdraw Saks' ratings contingent upon the successful closing of the HBC transaction. Saks currently has a modest amount of on-balance sheet debt totaling $319 million, including $175 million drawn under its $600 million revolver, $91.2 million of 7.5% convertible notes due Dec. 1, 2013, and $51 million of capital leases. Fitch expects the 7.5% notes to be converted given that they are deep-in-the-money with a conversion price of $5.54 relative to the current stock price. The 7.5% notes include a change of control provision whereby there is a make whole premium although the adjustment results in relatively minor additional shares. Fitch's placement of Saks on Rating Watch Negative reflects the potential for an alternative bid given a 40-day go-shop period, including interest from private equity, which could lead to a leveraged transaction and have negative rating implications. Rating Sensitivities In the event of an opposing bid that leads to a leveraged transaction, Fitch expects negative pressure on ratings and the IDR will be based on the post transaction capital structure. Fitch has placed the following ratings for Saks on Rating Watch Negative: -- Long-term Issuer Default Rating 'BB'; -- $600 million secured credit facility 'BBB-'; -- Senior unsecured notes 'BB'. SAKS INC: On Moody's Downgrade Watch After Hudson Bay Purchase -------------------------------------------------------------- Moody's Investors Service placed Saks Incorporated Ba2 Corporate Family Rating and Ba2-PD Probability of Default Rating on review for downgrade. The review for downgrade follows the announcement that Hudson's Bay Company has agreed to purchase Saks for $16 per share or a total transaction price of approximately $2.9 billion. At the same time, Moody's affirmed Saks' Ba3 senior unsecured notes rating. The following ratings are placed on review for downgrade: Corporate Family Rating of Ba2 Probability of Default Rating of Ba2-PD The following rating is affirmed Senior unsecured notes at Ba3 (LGD 5, 84%) Ratings Rationale: Moody's views the acquisition favorably as it will combine three well regarded retail nameplates in North America, result in a sizable owned real estate portfolio, and create the opportunity for potential synergies. In addition, the acquisition will provide Saks with a growth platform in Canada. However, the transaction will be largely financed with debt, weakening both Saks' and Hudson's Bay's credit profiles. The review for downgrade of Saks' Corporate Family Rating and Probability of Default Rating acknowledges the likely weakening in Saks' credit metrics as a result of the transaction. The affirmation of the $2 million senior unsecured notes due 2013 acknowledges that these notes will be repaid in full. The review for downgrade will focus on the capital structure being put in place to finance the acquisition including at which legal entity the debt will be raised and potential support from the parent. The review for downgrade will also focus on the closing of the transaction and should the acquisition not close, Saks going forward financial policies. The principal methodology used in this rating 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. Saks Incorporated, headquartered in New York, NY, operates about 43 Saks Fifth Avenue Stores in 22 states, 64 OFF 5th off-price stores across the United States, and an e-commerce operation. Revenues are about $3.1 billion. Hudson's Bay Company operates 90 Hudson's Bay department stores and 69 Home Outfitters stores in Canada. It also operating 48 full line Lord 7 Taylor department stores in the northeastern United States and two major cities in the Midwest. Revenues are about C$3.8 billion. SHUANEY IRREVOCABLE: Can Employ Wilson Harrell as Attorney ---------------------------------------------------------- Shuaney Irrevocable Trust sought and obtained approval from the U.S. Bankruptcy Court to employ J. Steven Ford, Esq., of the law firm Wilson, Harrell, Farrington, Ford, Wildon, Spain, & Parson, PA as attorney under a general retainer. According to papers filed by the Debtor in court, J. Steven Ford disclosed that he or other members of his firm have previously represented two of the Debtor's creditors in unrelated matters which the Debtors believes will not adversely affect Mr. Ford's representation of the Debtor. Mr. Ford has also represented Paradise Liquors of the Emerald Coast, LLC, in a Chapter 11 case filed Feb. 17, 2012 and dismissed March 6, 2012. The Shuaney Irrevocable Trust owns a 15% interest in Paradise Liquors of the Emerald Coast, LLC. About Shuaney Irrevocable Trust Shuaney Irrevocable Trust, in Fort Walton Beach, Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-31887) on Dec. 1, 2011. The Debtor scheduled $20,996,723 in assets and $19,625,890 in debts. The Law Office of Mark Freund serves as counsel to the Debtor. Judge William S. Shulman presides over the case. The U.S. Trustee for Region 21 was unable to appoint an Official Committee of Unsecured Creditors of Shuaney Irrevocable Trust. SIRIUS XM: Moody's Rates New $600-Mil. Senior Notes 'B1' -------------------------------------------------------- Moody's Investors Service assigned B1 to Sirius XM Radio Inc.'s proposed $600 million senior notes. Net proceeds from the new notes plus available cash are expected to refinance the existing 8.75% senior notes due 2015. All other ratings are unchanged including the company's Ba3 Corporate Family Rating (CFR), Ba3-PD Probability of Default Rating as well as B1 instrument ratings on the existing senior notes. The B1 ratings on the proposed and existing senior notes reflects their effective subordination to the unrated secured revolver. The stable rating outlook is unchanged. Assigned: Issuer: Sirius XM Radio Inc. New $600 million sr notes: Assigned B1, LGD4 -- 60% Unchanged: Issuer: Sirius XM Radio Inc. Corporate Family Rating: Unchanged Ba3 Probability of Default Rating: Unchanged Ba3-PD 7.625% sr notes due 2018 ($540 million outstanding): Unchanged B1, LGD4 -- 60% 5.25% sr notes due 2022 ($400 million outstanding): Unchanged B1, LGD4 -- 60% 4.25% sr notes due 2020 ($500 million outstanding): Unchanged B1, LGD4 -- 60% 4.625% sr notes due 2023 ($500 million outstanding): Unchanged B1, LGD4 -- 60% Speculative Grade Liquidity Rating: Unchanged SGL -- 1 Outlook: Issuer: Sirius XM Radio Inc. Outlook is Stable Unchanged but to be withdrawn upon full redemption or completion of the tender Issuer: Sirius XM Radio Inc. 8.75% sr notes due 2015 ($753 million outstanding): Unchanged B1, LGD4 -- 60% Ratings Rationale: Sirius' Ba3 corporate family rating reflects moderate pro forma leverage (estimated 3.3x debt-to-EBITDA as of June 30, 2013, including Moody's standard adjustments) and expectations for free cash flow before dividends of more than $800 million or 23% of debt balances over the next 12 months. Despite the increase in debt-to-EBITDA from 2.8x as of March 31, 2013 (including Moody's standard adjustments), leverage ratios along with other credit metrics remain within the Ba3 category. Since the beginning of 2013, the company increased funded debt balances by $0.8 billion and repurchased roughly $1.3 billion of common stock on the open market under its $2 billion common share repurchase program. Moody's expects the company to fund additional share repurchases with revolver advances and operating cash flow while maintaining leverage and coverage ratios within the Ba3 category given management's 3.5x target for reported leverage. The Ba3 CFR reflects Moody's expectations that, despite the potential for higher debt balances to partially fund distributions, the self-pay subscriber base and operating performance of Sirius will be supported by continued growth in the delivery of light vehicles in the U.S. over the next 12 months and management will keep leverage within its target range. Sirius continues to position itself for enhanced financial flexibility. As proposed, the new notes are covenant-lite with no limitations on restricted payments nor debt issuances which mirrors the covenant-lite structure for the $1.0 billion of notes issued earlier this year. In contrast, the existing 5.25% notes due 2022 provide a 3.50x leverage ratio incurrence test for restricted payments and a 6.0x leverage ratio test for additional indebtedness. Furthermore, management has stated that it is looking at forming a new holding company in the near term. Looking forward, Moody's expects U.S. deliveries of light vehicles in 2013 to climb to 15.25 million units. Growth in new vehicle deliveries and modest economic recovery should support net self- pay subscriber additions from the current 20.3 million over the next 12 months. Moody's expects EBITDA in 2013 to increase to $1.1 billion (including Moody' standard adjustments) accompanied by reduced capital spending in the years leading up to the next satellite launch cycle. Continued growth in the subscriber base will drive EBITDA increases and could better position the company to fund the next cycle of significant expenditures related to construction and launching of replacement satellites beginning as early as 2016 so long as share repurchases and dividends are maintained within prudent levels. Longer term, ratings remain constrained as Sirius will increasingly share the dashboard of new vehicles with OEM installed devices providing competitive advertising-supported media, including internet radio services. Moody's expects greater competition will also lead to higher programming costs adding to scheduled increases in royalty payments paid by Sirius on behalf of performing artist and recorded music companies. These higher costs may not be entirely offset by increases in consumer subscription rates. The stable outlook reflects Moody's view that Sirius will increase its self-pay subscriber base reflecting good demand for new vehicles in the U.S. and resulting in higher revenue and EBITDA. The outlook incorporates Sirius maintaining good liquidity, even during periods of satellite construction, and the likelihood of share repurchases or additional dividends being funded from revolver advances, new debt issuances, or free cash flow. The outlook does not incorporate highly leveraging transactions or a level of shareholder distributions that would negatively impact liquidity or sustain debt-to-EBITDA ratios above 3.75x (including Moody's standard adjustments). The stable outlook assumes that changes in the corporate structure, including a potential tax free spin-off, will not adversely impact the company's operating strategy, credit metrics, or financial policies. Ratings could be downgraded if debt-to-EBITDA ratios are sustained above 3.75x (including Moody's standard adjustments) or if free cash flow generation falls below targeted levels as a result of subscriber losses due to a potentially weak economy or migration to competing media services or due to functional problems with satellite operations. A weakening of Sirius' liquidity position below expected levels as a result of dividends, share repurchases, capital spending, or a significant acquisition could also lead to a downgrade. Ratings could be upgraded if management demonstrates a commitment to balance debt holder returns with those of its shareholders. Moody's would also need assurances that the company will operate in a financially prudent manner consistent with a higher rating including sustaining debt-to-EBITDA ratios below 2.75x (including Moody's standard adjustments) and free cash flow- to-debt ratios above 20% even during periods of satellite construction. The principal methodology used in this rating was the Global Broadcast and Advertising Related Industries Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sirius XM Radio Inc., headquartered in New York, NY, provides satellite radio services in the United States and Canada. The company creates and broadcasts commercial-free music; premier sports talk and live events; comedy; news; exclusive talk and entertainment; and comprehensive Latin music, sports and talk programming. Sirius XM services are available in vehicles from major car companies in the U.S., and programming is also available online as well as through applications for smartphones and other connected devices. The company holds a 37.7% interest in Sirius XM Canada which has more than 2 million subscribers. Sirius is publicly traded and a controlled company of Liberty Media Corporation which owns over 50% of common shares and controls a majority of the board of directors. Sirius reported 25.1 million subscribers, including 20.3 million self-pay subscribers, at the end of June 2013 and generated revenue of $3.6 billion for the trailing 12 months ended June 30, 2013. SIRIUS XM: S&P Assigns 'BB' Rating to $600MM Senior Notes Due 2021 ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned New York City-based satellite radio company Sirius XM Radio Inc.'s proposed issuance of $600 million senior notes due 2021 an issue-level rating of 'BB', with a recovery rating of '3'. The '3' recovery rating indicates our expectation of meaningful (50% to 70%) recovery in the event of a payment default. Sirius plans to use the net proceeds, together with some of its existing cash, to redeem $753 million 8.75% senior notes due 2015. "The rating on Sirius XM Radio incorporates our expectation that leverage will not increase above our 4.5x threshold for the company at this rating, despite moves to boost shareholder returns, because of its good operating outlook and growing discretionary cash flow. We assess Sirius' business risk profile as "fair," reflecting its stable churn, despite modest price increases, steady growth of new subscribers, dependence on U.S. new auto sales and consumer discretionary spending for growth, and its intermediate-term vulnerability to competition from alternative media. We view Sirius XM's financial risk profile as "significant" because of rising debt leverage and more aggressive financial policies following Liberty Media Corp.'s January 2013 majority ownership stake," S&P said. In December 2012, the company paid a $327 million special dividend and authorized a $2 billion share repurchase program. The company had purchased nearly $1.3 billion under this program through July 24, 2013. Pro forma for the transaction, lease-adjusted gross debt to EBITDA, excluding cash balances of $139 million, was 3.1x at June 30, 2013, a decline from 3.9x a year ago. The rating outlook is stable, as S&P do not expect the debt-to-EBITDA ratio to increase above our 4.5x target in the intermediate term. RATINGS LIST Sirius XM Radio Inc. Corporate Credit Rating BB/Stable/-- New Rating Sirius XM Radio Inc. $600M senior notes due 2021 BB Recovery Rating 3 SOUND SHORE MEDICAL: Can Employ Garfunkel Wild as Counsel --------------------------------------------------------- Sound Shore Medical Center of Westchester et al., sought and obtained approval from the U.S. Bankruptcy Court to employ Garfunkel Wild, P.C. as counsel. Burton S. Weston, Esq., a shareholder of Garfunkel Wild, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home and related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on May 29, 2013, in White Plains, New York. The Debtors are the largest "safety net" providers for Southern Westchester County in New York. Affiliated with New York Medical College, Sound Shore is a not-for-profit 242-bed, community based- teaching hospital located in New Rochelle, New York. Mountain Vernon Hospital is a voluntary, not-for-profit 176-bed hospital located in Mount Vernon, New York. Howe Avenue Nursing Home is a 150-bed, comprehensive facility. The Debtors tapped Burton S. Weston, Esq., at Garfunkel Wild, P.C. as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors; and GCG Inc., as claims agent. The Debtors are seeking to sell their assets to the Montefiore health system. In June 2013, Montefiore added $4.75 million to its purchase offer for Sound Shore Medical Center and Mount Vernon Hospital to speed up the sale. Montefiore raised its bid to $58.75 million plus furniture and equipment as part of a request for a private sale of the bankrupt New Rochelle and Mount Vernon hospitals, which the Bronx-based health system would like to buy by August 2. Montefiore is represented by Togut, Segal & Segal LLP. Alston & Bird LLP represents the Official Committee of Unsecured Creditors. Sound Shore disclosed assets of $159.6 million and liabilities totaling $200 million. Liabilities include a $16.2 million revolving credit and a $5.8 million term loan with Midcap Financial LLC. There is $9 million in mortgages with Sun Life Assurance Co. of Canada (US) and $11.5 million owing to the New York State Dormitory Authority. SOUTH FLORIDA SOD: Sec. 341 Meeting of Creditors on Aug. 5 ---------------------------------------------------------- There's a meeting of creditors in the Chapter 11 case of South Florida Sod, Inc., on Aug. 5, 2013, at 2:00 p.m. at Orlando, Florida (687), Suite 1203B, George C. Young Courthouse, 400 West Washington Street. 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. Proofs of claim are due by Nov 4, 2013. About South Florida Sod South Florida Sod Inc., a sod farmer, filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 13-bk-08466) on July 9, 2013, in Orlando, Florida. The Debtor estimated at least $10 million in assets and liabilities. The company owns 13 properties in Florida and three other states. The company intends on selling a 5,777-acre property in Sarasota County, Florida, with a claimed value of $20 million or more. Secured debt totals $23.5 million, not including a $1.6 million judgment. Attorneys at Latham Shuker Eden & Beaudine, LLP, serve as counsel to the Debtor. SPRINGFIELD HOMES: Sec. 341(a) Meeting of Creditors on Aug. 20 -------------------------------------------------------------- There's a meeting of creditors of Springfield Homes, LLC, on Aug. 20, 2013 at 10:00 a.m. at Raleigh 341 Meeting Room. The last day to file a complaint is Oct. 21, 2013. Proofs of claim are due by Nov. 18, 2013. Governmental entities are required to send in their Proofs of claim by Jan. 18, 2014. Springfield Homes, LLC, filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-04550) in Wilson, North Carolina, on July 22, 2013. The Debtor estimated at least $10 million in assets and at least $1 million in liabilities. D. Kyle Deak, Esq., at Troutman Sanders, LLP, serves as counsel. STACY'S INC: Bank of the West Opposes Sale of Greenhouse Owner -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Stacy's Inc., a commercial greenhouse in York, South Carolina, must overcome opposition from secured lender Bank of the West before the bankruptcy court approves auction and sale procedures at an Aug. 1 hearing. After signing a contract to sell the operation for $17 million to Metrolina Greenhouses, Stacy's filed a Chapter 11 petition in June. Later, the price was reduced to $15.2 million. Owed more than $22 million, Bank of the West opposed the sale procedures, saying the "purchase price is not fair and reasonable." The bank complains that it's not being offered the right to bid for the assets using secured debt rather than cash. The bank said its lack of consent alone is enough to bar a sale. Stacy's wants the bankruptcy judge to schedule an auction on Aug. 31 to see whether anyone can top the offer from Huntersville, North Carolina-based Metrolina. About Stacy's Inc. Stacy's Inc., a commercial greenhouse in York, South Carolina, filed a Chapter 11 petition on June 21 (Bankr. D. S.C. Case No. 13-03600) in Spartanburg, South Carolina, with a deal to sell the business for $17 million to Metrolina Greenhouses, absent higher and better offers. Stacy's -- http://www.stacysgreenhouses.com/-- has 16 acres of greenhouses on three farms aggregating 260 acres in York, South Carolina. The business employs 1,000 people during its peak season. The biggest customers include Home Depot, Lowe's, Wal- Mart, Tractor Supply Company, Costco, and Harris Teeter. The secured lender is Bank of the West, owed $22.1 million secured by liens on the assets. The Debtor disclosed $26.4 million in total assets and $31.4 million in liabilities in its schedules. The secured lender is Bank of the West, owed $22.1 million secured by liens on the assets. The Debtor has tapped Barton Law Firm, P.A, as bankruptcy counsel; Ouzts, Ouzts & Varn, P.A. as its financial advisor; SSG Advisors, LLC, as its investment banker; and Faulkner and Thompson, P.A., to provide limited accounting services. STEARNS HOLDINGS: Moody's Assigns B2 CFR & Rates $200MM Notes B2 ---------------------------------------------------------------- Moody's Investors Service assigned a first-time B2 corporate family rating to Stearns Holdings, Inc. and a B2 rating to the company's planned $200 million senior secured notes. The outlook is stable. Ratings Rationale: Stearns is a privately-held mortgage banking company headquartered in Santa Ana, California. On July 24, 2013 the company announced its intention to issue $200 of senior secured notes. The proceeds will be used to fund mortgage servicing rights, retire existing short-term debt, and other general corporate purposes. Stearns's ratings incorporate the company's good recent financial performance and solid capital adequacy. In 2012, the company benefited from strong industry origination volumes and historically high industry loan gain-on-sale margins. The ratings are constrained by Stearns's transitioning strategic direction (retaining MSRs, growth aspirations, new management team), limited franchise positioning in the highly competitive residential mortgage market and its constrained financial flexibility due to reliance on short-term secured bank warehouse facilities-a funding model that is susceptible to periods of illiquidity- and a high level of encumbered assets. The stable outlook reflects Moody's expectation that Stearns will be able to profitably grow while employing modest leverage. Given the company's transitioning strategic direction and growth aspirations, an upgrade is unlikely at this time. Negative ratings pressure could develop in the event of a material increase in leverage, material decrease in liquidity or available warehouse funding facilities, or material deterioration in financial performance such as losses resulting from a decline in revenues without a commensurate decrease in expenses. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. STELERA WIRELESS: Section 341(a) Meeting Set on Aug. 26 ------------------------------------------------------- A meeting of creditors in the bankruptcy case of Stelera Wireless, LLC, will be held on Aug. 26, 2013, at 2:00 p.m. at 1st Floor, room 113, 215 Dean A. McGee Avenue, Oklahoma City. 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. Stelera Wireless, LLC, filed a Chapter 11 petition (Bankr. W.D. Okla. Case No. 13-13267) on July 18, 2013. Tim Duffy signed the petition as chief technology officer/manager. Judge Niles L. Jackson presides over the case. The Debtor estimated assets and debts of at least $10 million. Mulinix Ogden Hall & Ludlam, PLLC, serves as the Debtor's counsel. SUNSET MARINE: Tracker Marine Suit Remanded to Missouri Court ------------------------------------------------------------- Puerto Rico Bankruptcy Judge Mildred Caban Flores remanded to the United States District Court for the Western District of Missouri a dispute among debtor Sunset Marine of Puerto Rico, Inc., and counterparties Tracker Marine, LLC & Mako Marine International, LLC, f/k/a Mako Marine International, Inc., Bass Pro Group, citing improper cross-district removal, pursuant to 28 U.S.C. Sec. 1452(a) and Fed. R. Bankr. P. 9027(a)(1). The Puerto Rico court denied a motion to strike and modifies the automatic stay to allow the action, styled Tracker Marine, LLC & Mako Marine International, LLC, f/k/a Mako Marine International, Inc. vs. Sunset Marine of Puerto Rico, Inc., San Juan Carlos Nieto Rodriguez and Maria Teresa Perea Fernandez, designated Case No. 11-3238 before the United States District Court for the Western District of Missouri, to proceed to final, firm and unappealable judgment. Tracker Marine, LLC & Mako Marine International, LLC, f/k/a Mako Marine International, Inc. are barred by the automatic stay to execute any judgment that they may obtain in their favor against Sunset Marine of Puerto Rico, Inc.; however, they may pursue their award in the United States Bankruptcy Court for the District of Puerto Rico. Prior to the removal, Tracker filed a three-count complaint against the Debtor and its principals, Juan Carlos Nieto Rodriguez and Maria Teresa Perea Fernandez, regarding a distribution agreement between the parties in the Missouri case. The Debtor answered the complaint raising various affirmative defenses including a defense under Puerto Rico's Law 75, 10 L.P.R.A. Sec. 278-278(e). The Debtor and Principal filed a counterclaim seeking a refund on warranty claims, damages for breach of contract, damages for implied warranty and unjust enrichment as well as an award of attorney's fees and costs. The Debtor also moved to have the Missouri case transferred to Puerto Rico but that request was denied. A month later, Principal filed a complaint against Tracker Marine Group in the Commonwealth of Puerto Rico, Court of First Instance, San Juan Part. The Debtor was not a party to the local court action. The local court granted a motion to stay the proceedings after determining that the claims were substantially similar to those at issue in the Missouri case. In the Missouri case, the trial was initially set for October 20, 2012; however, counsel for the Debtor withdrew legal representation. The court then granted Debtor until November 11, 2012, to obtain new counsel and until November 18, 2012, to respond to a motion for contempt and sanctions and other pending motions. The trial was rescheduled for December 3, 2012. The Missouri case was stayed when the Debtor filed for bankruptcy. On November 27, 2012, the Debtor commenced an adversary action (Adv. No. 12-411) against Tracker, seeking damages for breach of contract under a distribution or representation agreement under Puerto Rico's Law 75 or Law 21, respectively. On December 18, 2012, the Debtor removed the Missouri case to the Puerto Rico court (Adv. No. 12-427), pursuant to 28 U.S.C. Sec. 1452(a) and Fed. R. Bankr. P. 9027. Tracker moved to dismiss the case or in the alternative to remand or abstain from the case. The Debtor replied and moved to strike Tracker's memorandum of law in support of the motion to dismiss. In the bankruptcy case, Tracker had moved for relief from the automatic stay to proceed with the Missouri case but their request was denied as premature until the court resolved the pending motion to dismiss or abstain in the adversary case. On June 18, 2013, the court conducted a hearing regarding the pending motion to dismiss and the matter was taken under advisement. A copy of the Puerto Rico court's July 24, 2013 Opinion and Order is available at http://is.gd/WGXO94from Leagle.com. Guaynabo, Puerto Rico-based Sunset Marine of Puerto Rico, Inc., dba Sunset Marine Charters, filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 12-09083) on Nov. 14, 2012. Juan Manuel Suarez Cobo, Esq. -- suarezcobo@gmail.com -- at Legal Partners PSC, serves as the Debtor's counsel. The Debtor estimated $1 million to $10 million in both assets and debts. A list of the eight unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/prb12-09083.pdf The petition was signed by Juan Carlos Nieto Rodriguez, president. SURGICAL SPECIALTIES: Moody's Assigns 'B3' CFR; Outlook Negative ---------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and a Caa1-PD Probability of Default Rating to Surgical Specialties Corporation (US), Inc. At the same time, Moody's assigned a B3 to SSC's new First Lien Senior Secured Term Loan B and First Lien Senior Secured Revolver. SSC is the borrowing entity for Angiotech Pharmaceuticals, Inc., which emerged from bankruptcy in 2011. The rating outlook is negative. Proceeds from this transaction will be largely distributed to shareholders. Following the restructuring of Angiotech's legacy debt in 2011, 80% of Angiotech is now owned by Courage Capital Management, Blue Mountain Capital and Beach Point Capital Management. Ratings assigned: Surgical Specialties Corporation (US), Inc. Corporate Family Rating at B3 PDR at Caa1-PD First lien senior secured Term Loan B at B3, (LGD3, 35%) First lien senior secured Revolver at B3, (LGD3, 35%) Ratings Rationale: The B3 ratings reflect the company's very small revenue base and presence in a few low-technology oriented products aimed at niche customer bases amid much larger competitors. These concerns are partly offset by moderately high leverage, which is lower than what is typically associated with B3 rated issuers. Pro-forma for this transaction, debt/EBITDA is expected to be about 3.3 times while cash flow from operations will be close to breakeven based on carve-out audited financials for 2012. The negative outlook reflects uncertainty associated with the company's sale of its innovative Quill knotless suture technology to Johnson & Johnson (JNJ). Although JNJ has a manufacturing contract with SSC through May 2014 with a one year renewal option -- which will temporarily aid top line growth -- there is risk that SSC's own Quill sales will erode if the company is not able to offset losses of larger hospital customers with smaller, non- JNJ customers. Moreover, amid this transition, and in advance of seeing the success of its strategy, a distribution is being made to shareholders. In addition, Moody's believes there is less clarity regarding future performance and cash flows given SSC's limited financial reporting as a standalone entity. If the company sees significant impairment in liquidity or is unable to replace lost revenues because of a downturn in Quill sales, the ratings could be downgraded. Over the near term, given the very small size of the company, lack of diversity, and the presence of much larger competitors within its product lines, a rating upgrade is not anticipated. However, if the company is able to demonstrate its ability to continue to grow its sales of Quill and other products alongside JNJ as a competitor, and Moody's believes that positive free cash flow generation is sustainable, the outlook could be stabilized. Over time, if the company can substantially grow its revenue base, and reduce leverage such that debt/EBITDA is sustained below 3.0 times and FCF/debt is above 10%, the ratings could be upgraded. The principal methodology used in this rating was the Global Medical Product and Device Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Surgical Specialties Corporation (US), Inc. is the borrowing entity for Angiotech Pharmaceuticals, Inc., headquartered in Vancouver, Canada. SSC and its operating subsidiaries manufacture single-use surgical products within the areas of surgical wound closure, oral surgery and ophthalmology. Product sales for SSC were approximately $123 million during fiscal 2012. SURGICAL SPECIALTIES: S&P Assigns 'B' CCR; Outlook Stable --------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to U.S.-based medical device manufacturer, Surgical Specialties Corp. (U.S.) Inc. The outlook is stable. At the same time, S&P assigned the company's proposed $110 million senior secured credit facilities its 'B' issue-level rating (the same as the corporate credit rating), with a recovery rating of '3', indicating S&P's expectation for meaningful (50%-70%) recovery for secured lenders in the event of a payment default. The facility consists of a $10 million revolving credit facility due 2017 (undrawn at closing) and a $100 million term loan due 2018. The company will use the proceeds to pay a dividend to its shareholders. "The 'B' corporate credit rating reflects Surgical Specialties' "aggressive" financial risk profile, despite leverage that is low for the category. S&P believes the company's owners have a short- term investment horizon and S&P sees the potential for leverage to increase over the intermediate term," said credit analyst Tulip Lim. "Our business risk assessment on the company is "vulnerable", reflecting the company's limited history as a stand- alone entity, its small size relative to its competitors, product concentration, customer concentration, and the relatively low technology nature of the majority of its product portfolio." The stable outlook reflects S&P's expectation of strong revenue growth and EBITDA margin expansion over the near term given the company's short-term agreement with Ethicon. S&P believes this agreement temporarily gives the company flexibility to repay debt or make acquisitions with internally generated cash flow. S&P believes that by 2015, the company will have adequate capacity to service obligations with organic revenues and earnings. S&P could lower the rating after guarantees related to the Ethicon agreement end in 2014 if revenue, EBITDA, and cash flow decline more than S&P expects. This could be a result of underperformance of the base business. S&P could also lower the rating if the company's margin of compliance falls below 15%. This could occur if revenue only grows at a low-single-digit percent rate (including the Ethicon arrangement) and the company's EBITDA margin does not improve. Although unlikely over the near term, S&P could raise the rating if the company increases its scale or builds a more defensible product portfolio. This would likely involve a transformative event. S&P could also raise the rating if the company convincingly establishes a more conservative financial policy. SWJ MANAGEMENT: Sec. 341 Creditors' Meeting Set for Aug. 27 ----------------------------------------------------------- The U.S. Trustee will convene a meeting of creditors pursuant to 11 U.S.C. 341(a) in the Chapter 11 case of SWJ Management LLC on Aug. 27, 2013, at 2:30 p.m. The meeting will be held at J80 Broad St., 4th Floor, USTM. New York-based SWJ Management LLC filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 13-12123) on June 28, 2013. Judge Allan L. Gropper oversees the case. The Law Offices of David Carlebach, Esq., serves as the Debtor's counsel. In its petition, the Debtor estimated $50 million to $100 million in both assets and debts. The petition was signed by Richard Annunziata, managing member. An affiliate, Ridgewood Realty of LL, SK Mulberry Contract, filed a separate Chapter 11 petition (Case No. 12-14085) on Sept. 28, 2012. TELECOMMUNICATIONS MANAGEMENT: S&P Affirms 'B+' Corp Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that Telecommunications Management LLC's (d/b/a NewWave Communications) proposed $15 million add-on to its first-lien term loan and $5 million add- on to its second-lien term loan does not affect the 'BB-' issue level and '2' recovery rating on the company's first-lien credit facilities, which includes a term loan and revolving credit, and the 'B-' issue level and '6' recovery rating on its second-lien term loan. The 'B+' corporate credit rating, stable outlook, and all other ratings also remain unchanged. The company will use proceeds from the credit facilities to fund future acquisitions, S&P do not expect leverage to improve to more than the high 5x area in 2014, from the 6.0x S&P anticipates by the end of 2013, pro forma for acquisitions. S&P's 'B+' corporate credit rating already incorporated potential acquisitions, in keeping with the stated objective of the equity sponsor GTCR to expand NewWave's operations to at least three times its current subscriber size. However, S&P's rating does not assume any meaningful increase in leverage as a result of any such acquisitions. Moreover, S&P's base-case scenario assumes that the company's free operating cash flow will be break even to modestly positive over the next few years. S&P's ratings reflect its assessment of the company's business risk profile as "fair," based on its limited scale and geographic diversity compared with other cable operators S&P rates, as well as profitability that lags most of its peers. S&P's expectation is that the company's financial risk profile will remain "highly leveraged," based on S&P's belief that leverage will remain above 5x through at least the next few years. RATINGS LIST Telecommunications Management LLC d/b/a New Wave Communications Corporate Credit Rating B+/Stable/-- Ratings Unchanged Telecommunications Management LLC d/b/a New Wave Communications First-Lien Term Loan BB- Recovery Rating 2 Second-Lien Term Loan B- Recovery Rating 6 TESORO LOGISTICS: Moody's Rates New $300MM Sr. Unsec. Notes 'B1' ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Tesoro Logistics LP's proposed $300 million senior unsecured notes due 2021. The notes are being co-issued by Tesoro Logistics Finance Crop. The Corporate Family Rating of Ba3 and other ratings of TLLP are unaffected, and the rating outlook is positive. The proceeds from the proposed notes offering will be used to repay borrowings under TLLP's secured revolving credit facility. On June 3, 2013, TLLP financed the $544 million cash portion of the $640 million Carson logistics assets drop down through drawings under its revolving credit facility. "Tesoro Logistics proposed bond offering is a debt neutral transaction and will improve the company's liquidity profile," commented Gretchen French, Moody's Vice President. "Our underlying views on TLLP reflected in our June 5 rating action remain unchanged." Rating assignments: $300 Million Senior Unsecured Notes due in 2021, Rated B1 (LGD 5, 73%) Moody's current ratings for Tesoro Logistics LP are: Corporate Family Rating of Ba3 Probability of Default Rating of Ba3-PD $350 Million Senior Unsecured Notes due 2020, Rated B1 (LGD 5, 73%) Speculative Grade Liquidity rating of SGL-3 Ratings Rationale: TLLP's B1 rated senior unsecured notes reflect both the overall probability of default of the company, to which Moody's assigns a Probability of Default Rating of Ba3-PD, and a loss given default of (LGD 5, 73%). The notes are rated one notch below the Ba3 Corporate Family Rating, reflecting the contractual subordination of the notes to TLLP's $575 million credit facility. The unsecured notes have upstream guarantees from substantially all of TLLP's subsidiaries. On a standalone basis, Moody's views TLLP's credit profile as more consistent with a B1 rating, reflecting its stable cash flows from long-term, fee-based contracts with minimum volume commitments and visible growth trajectory, but restrained by its small size, limited track record as both a master limited partnership (MLP) and with its pro-forma portfolio of assets, and aggressive growth strategy and high distributions associated with its MLP structure. However, the Ba3 Corporate Family Rating reflects one notch of uplift from its strategic importance to its parent company and general partner, Tesoro Corporation (TSO, Ba1 stable). TLLP provides TSO with critical infrastructure, a coordinated growth strategy, and supportive contracts. Additionally, TSO's support is reflected in its 36% common unit ownership stake, plus a 2% general partner stake, in Tesoro Logistics. TLLP's SGL-3 rating reflects the expectation for adequate liquidity through early 2014. Pro forma for the proposed bond issuance, the company will have $244 million drawn under its $575 million bank credit facility and cash balances of roughly $93 million. The credit facility is secured by substantially all of TLLP's assets, matures in December 2017 and includes covenants of net debt/EBITDA of no greater than 5x, secured debt/EBITDA of no greater than 3.5x, and EBITDA/interest of no less and 2.5x. Pro forma for the first Carson drop down and the recent closed acquisition of the Northwest Products System from Chevron, Moody's estimates that covenant headroom will tighten somewhat, with covenant net debt/EBITDA increasing to about 3.9x. In addition, given limited revolver capacity, funding of the second Carson drop down, estimated at $450 million to $550 million, will be contingent on capital markets access. In order to maintain sufficient covenant compliance after these acquisitions, Moody's believes the company will need to finance its future dropdowns with a significant portion of equity. TLLLP's positive outlook reflects the company's materially increasing scale and asset diversity, with a continued high percentage of contracted, fee-based revenues from its parent company and general partner, TSO. TLLP's ratings could be upgraded if the company is able to increase in size and scale while maintaining reasonable leverage (EBITDA approaching $200 million and debt/EBITDA below 4.5x) and adequate distribution coverage. However, future rating action would consider TLLP's success in integrating and financing the Carson drop downs, including the degree of equity financing of the dropdowns. TLLP's ratings could be downgraded if debt/EBITDA were to be sustained above 5x, which would most likely occur because of a leveraging acquisition, or if the company acquired a significant amount of new assets with a weak business risk profile. If TSO's credit quality were to materially decline, this would also pressure TLLP's ratings. The principal methodology used in this rating was the Global Midstream Energy Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Tesoro Logistics LP is a master limited partnership headquartered in San Antonio, Texas. TESORO LOGISTICS: S&P Rates $300MM Unsecured Notes 'BB-' -------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB-' issue-level rating and '4' recovery rating to Tesoro Logistics L.P.'s and Tesoro Logistics Finance Corp.'s proposed $300 million senior unsecured notes due 2021. The recovery rating of '4' indicates S&P's expectation of average (30% to 50%) recovery if a payment default occurs. The partnership intends to use net proceeds to reduce borrowings under its secured revolving credit facility, which it used to partially fund the cash portion of the $640 million Carson refinery acquisition from Tesoro Refining & Marketing Co. LLC, a subsidiary of parent Tesoro Corp., on June 1, 2013. San Antonio-based Tesoro Logistics is a midstream energy partnership that gathers, transports, and stores crude oil and distributes, transports, and stores refined products. S&P's corporate credit rating on Tesoro Logistics is 'BB-', and the outlook is stable. Ratings List Tesoro Logistics L.P. Corporate credit rating BB-/Stable/-- New Rating Tesoro Logistics L.P. Tesoro Logistics Finance Corp. $300 million senior unsecured notes due 2021 BB- Recovery rating 4 THQ INC: Graphics Co. Wants IP Claim Set at $62MM ------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that computer graphics designer McRo Inc. said that it has a $62 million bankruptcy claim against defunct video game maker THQ Inc. from a patent dispute and cited a recent Federal Circuit decision that laid out pleading standards in intellectual property suits to back up its case. According to the report, THQ had argued in U.S. Bankruptcy Court in the District of Delaware that the graphics designer's claim was insufficient because it didn't list which video games purportedly violated its patents or what damages it supposedly suffered as a result. About THQ Inc. THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- was a worldwide developer and publisher of interactive entertainment software. The Company developed its products for all popular game systems, personal computers, wireless devices and the Internet. Headquartered in Los Angeles, California, THQ sold product through its network of offices located throughout North America and Europe. THQ Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13398) on Dec. 19, 2012. Michael R. Nestor, M. Blake Cleary and Jaime Luton Chapman at Young Conaway Stargatt & Taylor, LLP; and Oscar Garza at Gibson, Dunn & Crutcher LLP represent the Debtors. FTI Consulting and Centerview Partners LLC are the financial advisors. Kurtzman Carson Consultants is the claims and notice agent. Before the bankruptcy, Clearlake signed a contract to buy Agoura THQ for a price said to be worth $60 million. After a 22-hour auction with 10 bidders, the top offers brought a combined $72 million from several buyers who will split up the company. Judge Walrath approved the sales in January. Some of the assets didn't sell, including properties the company said could be worth about $29 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five persons to serve in the Official Committee of Unsecured Creditors. The Committee tapped Houlihan Lokey Capital as its financial advisor and investment banker, Landis Rath & Cobb as co-counsel and Andrews Kurth as counsel. VALENCE TECHNOLOGY: Lincoln Center Lease Extended Until Dec. 31 --------------------------------------------------------------- The Hon. Craig A. Gargotta of the U.S. Bankruptcy Court for the Western District of Texas authorized Valence Technology, Inc., to execute a lease amendment extending the term of the lease agreement with Lincoln Center Properties, LLC, from Oct. 1, 2013, and ending Dec. 31. All objections to the motion have been resolved by the order or are overruled in their entirety. About Valence Technology Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-11580) on July 12, 2012, in its home-town in Austin. Founded in 1989, Valence develops lithium iron magnesium phosphate rechargeable batteries. Its products are used in hybrid and electric vehicles, as well as hybrid boats and Segway personal transporters. The Debtor disclosed debt of $82.6 million and assets of $31.5 million as of March 31, 2012. The Debtor disclosed $24,858,325 in assets and $78,520,831 in liabilities as of the Chapter 11 filing. Chairman Carl E. Berg and related entities own 44.4% of the shares. ClearBridge Advisors LLC owns 5.5%. Judge Craig A. Gargotta presides over the case. The Company is being advised by Sabrina L. Streusand at Streusand, Landon & Ozburn, LLP with respect to bankruptcy matters. The petition was signed by Robert Kanode, CEO. On Aug. 8, 2012, the U.S. Trustee for Region 7 appointed five creditors to serve on the Official Committee of Unsecured Creditors of the Debtor. Brinkman Portillo Ronk, PC, serves as its counsel. VERISIGN INC: Share Repurchase Program Hike No Impact on Ba2 CFR ---------------------------------------------------------------- Moody's Investors Service said that VeriSign, Inc.'s announcement that it increased its share repurchase program to $1 billion does not affect its Ba2 corporate family rating or stable ratings outlook. The increased share buyback program does not have an expiration date. Verisign's Ba2 rating reflects Moody's expectation that the company will return excess cash to shareholders and that share repurchases will be executed within the context of the company's free cash flow and liquidity. Furthermore, Moody's expects the company to generate strong free cash flow relative to debt and total debt to EBITDA leverage should decline from EBITDA growth. Headquartered in Reston, VA, Verisign provides Internet infrastructure services. Verisign reported approximately $930 million in revenue in the twelve months ended June 30, 2013. VERTIS HOLDINGS: Has Until Oct. 7 to Remove Civil Actions --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until Oct. 7, 2013, Vertis Holdings, Inc., et al.'s deadline to file notices of removal of civil actions related proceedings to which the Debtor are or may become parties. Vertis Holdings Inc. -- http://www.thefuturevertis.com/-- provides advertising services in a variety of print media, including newspaper inserts such as magazines and supplements. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanley Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. On Jan. 16, 2013, Quad/Graphics completed the acquisition of Vertis Holdings for a net purchase price of $170 million. This assumes the purchase price of $267 million less the payment of $97 million for current assets that are in excess of normalized working capital requirements. WINDMILL DURANGO: Sec. 341 Meeting of Creditors on Aug. 29 ---------------------------------------------------------- There's a meeting of creditors of Windmill Durango Office II, LLC, on Aug. 29, 2013 at 1 p.m. at 341s - Foley Bldg, Rm 1500, in Las Vegas, Nevada. 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. Last day to file proofs of claim is on Nov. 27, 2013. Windmill Durango Office II, LLC, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 13-16523) in Las Vegas, Nevada, on July 26, 2013. Matthew C. Zirzow, Esq., at Larson & Zirzow, in Las Vegas, serves as counsel. The Debtor estimated at least $10 million in assets and liabilities. * Fitch Releases Global Short-Term 2012 Transition, Default Update ------------------------------------------------------------------ Fitch Ratings published on July 29, 2013 a new study on the rating migration and default experience of Fitch-rated global corporate and structured finance short-term ratings in 2012, including the historical 23-year period. Fitch recorded five short-term corporate finance defaults in 2012, up from three in 2011. The five defaults were all rated non- investment grade 12 months prior to default. The resulting 2012 average 12-month default rate was 0.33%, in line with the historical 1990 to 2012 12-month average of 0.30%. The share of corporate finance short-term ratings downgraded in 2012, 7.5%, slipped from the prior year's 9.2%. However, downgrades once again topped upgrades of 3.1% in 2012 (versus 2.5% in 2011). By broad sector, downgrades of industrial issuers increased year-over-year to 7.4% from 5% in 2011, while the financial institution downgrade rate fell to 7.6% from 11.5%. For the fourth consecutive year, there were no short-term structured finance defaults in 2012. In addition, rating stability remained high, with 96% of ratings either remaining unchanged or paying in full for the year. The study is titled 'Fitch Ratings Global Short-Term 2012 Transition and Default Update' and is available on Fitch's web site under Credit Market Research. * Fitch: U.S. Money Fund Exposure to Eurozone Banks Stabilizes -------------------------------------------------------------- U.S. prime money market fund (MMF) exposure to Eurozone banks has remained relatively steady through the first-half (1H) of 2013 except for a temporary drop in March, according to a Fitch Ratings report. Exposure to Eurozone banks represents 14.5% of total MMF assets within Fitch's sample as of end-June 2013. Fitch believes this stability in part reflects improved investor sentiment towards the Eurozone following last summer's European Central Bank (ECB) actions. Between end-June 2012 through end-June 2013, MMF allocations to Eurozone banks increased 89% on a dollar basis. Although the intensity of the Eurozone crisis continued to subside through 1H 2013, Fitch notes that MMF exposure to banks in that region remain approximately 60% below their May-2011 levels. Fitch believes that there are several indications that MMF Eurozone allocations of 15% - the average through 1H 2013 - could be a new steady state rather than a move towards the full resumption of mid-2011 levels. The proportion of eurozone and European exposure in the form of repos has remained below 20% of these banks' collective exposure in each of the past three months, well below the levels of roughly 40% of exposure during the height of the crisis last summer. The full report 'U.S. Money Fund Exposure to European Banks: Stabilization' is available at 'www.fitchratings.com.' Fitch's sample is based on the top-10 U.S. prime money market funds, which represents approximately $652 billion - or 46% - of the estimated $1.43 trillion in total U.S. MMF assets under management. * Fitch: Cumulative US CMBS Defaults Diminishing in Size & Speed ---------------------------------------------------------------- The rate of cumulative defaults slowed again last quarter for U.S. CMBS while the size of the newly defaulted loans continues to decrease, according to Fitch Ratings. Fitch's U.S. CMBS cumulative default rate for fixed-rate CMBS increased only ten basis points (bps) in second-quarter 2013 (2Q'12) to 13.7% . The rate of increase was smaller than the 18 bp rise at the end 1Q'13 from year-end 2012. In 2Q'13, 97 loans, totaling $1.4 billion newly defaulted down from 101 loans, $2 billion newly defaulting in 1Q'13. Another encouraging sign is that most newly defaulted CMBS loans are much smaller in size. In fact, 72 of the 97 newly defaulted CMBS loans were under $15 million. By property type, office continued to make up the greatest component of new defaults with 47 loans, totaling $647 million. The majority of the office defaults were in secondary markets, which continue to be under pressure. * Bankruptcy Filings Fall 17 Percent in First Half of 2013 ---------------------------------------------------------- Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that the number of U.S. businesses filing Chapter 11 petitions with $1 million or more in debt fell 17 percent in the first half of 2013 compared with the same period of 2012, according to data compiled by Bloomberg. According to the report, California's central district bankruptcy court was the most active venue and many of the largest cases were taken on by Delaware's bankruptcy court. 945 companies have filed Chapter 11's on a consolidated basis in the 2013 period, down from 1,143. Second-quarter Chapter 11's totaled 474, up from 471 in the first quarter. The report notes that while Detroit's July 18 Chapter 9 petition is at the forefront of the public's attention, only one U.S. municipality sought court protection from January to June, down from five a year ago. Fewer foreign companies looked to protect their assets in the U.S. from creditors with a Chapter 15 petition and most of those were from Canada. Nine companies filed Chapter 15 petitions in the second quarter of 2013, bringing this year's total to 17. The Southern District of New York bankruptcy court was the busiest venue for Chapter 15's. The report discloses that a year ago 22 businesses filed Chapter 15 petitions and 46 percent of these petitions were Canadian companies. During that period, six of the 22 petitions were handled by New York's Southern District and five were overseen by the Delaware bankruptcy court. The first six months of 2013 have seen three Chapter 15 bankruptcies involving debt of $1 billion or more: Sino-Forest Corp., STX Pan Ocean and PT Berlian Laju Tanker. * Time Limits on Dischargeability Aren't Flexible ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to the U.S. Court of Appeals in San Francisco, the bankruptcy court erred in treating a motion for an extension of time to object to discharge as a motion for an extension of time for objecting to dischargeability. According to the report, a creditor in an individual's Chapter 7 case filed a timely motion for more time to file a complaint under Section 707 of the Bankruptcy Code objecting to dischargeability of the debt owing to the creditor. The creditor didn't also request more time for objecting to discharge of all debts under Section 523. The report notes that at the hearing on the motion for more time, the bankruptcy judge reviewed the facts and concluded it was a straightforward dischargeability issue and on the court's own motion extended the time for a complaint under Section 523. The bankrupts appealed and lost in district court. U.S. Court of Appeals for the Ninth Circuit vacated that decision in a July 25 opinion by Circuit Judge Jacqueline Nguyen. The report relates that Judge Nguyen said there's no basis for extending time for a dischargeability complaint once the time has expired. She ruled that motions under Bankruptcy Rules 4004 and 4007 aren't interchangeable. She also pronounced that that All Writs Act in Section 105(a) of the Bankruptcy Code isn't a "roving commission to do equity." The case is Willms v. Sanderson, 12-35135, U.S. Ninth Circuit Court of Appeals (San Francisco). * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Aug. 8-10, 2013 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 22-24, 2013 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 2, 2013 BEARD GROUP, INC. 20th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, 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 ***