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/raid1/www/Hosts/bankrupt/TCR_Public/130805.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, August 5, 2013, Vol. 17, No. 215 Headlines 307 HAMILTON: Case Summary & 2 Unsecured Creditors ALKERMES INC: Moody's Hikes Ratings to Ba3 on Good Performance AMERICAN AIRLINES: Merger Plan Accepted by AMR Creditors AMERICAN AIRLINES: Draws Few Objections to Plan Confirmation AMERICAN AIRLINES: Fitch Affirms 'BB-' Term Loan Rating AMERICAN AIRLINES: U.S. Trustee Again Objects to Horton Severance AMERICAN CAPITAL: S&P Puts 'B+' Rating on CreditWatch Positive ARCHDIOCESE OF MILWAUKEE: Abuse Claimants Can't Get Cemetery Funds ASHLAND GROUP: Case Summary & 2 Unsecured Creditors CAESARS ENTERTAINMENT: Bank Debt Trades at 11% Off CASA CASUARINA: Hires SCA Group's Michael Mazzarino as CRO CASA CASUARINA: Won't Have Chapter 11 Trustee for Now CASA CASUARINA: Can Employ Marshall Socarras as Counsel CASA CASUARINA: Has Green Light to Hire Auctioneers and Brokers CATAMARAN CORP: Moody's Retains Ba2 CFR After Restat Acquisition CLOVER INVESTMENT: Case Summary & 3 Unsecured Creditors DETROIT, MI: Women Lawyers Take Center Stage DETROIT, MI: Judge Proposes Fast Track for Bankruptcy DRYSHIPS INC: Q2 Results Conference Call Scheduled for August 8 DYNEGY INC: Posts $145-Mil. Net Loss in Second Quarter EASTMAN KODAK: Completes Syndication of $695MM Exit Term Loans EASTMAN KODAK: Perez to Be Replaced as CEO After Bankruptcy EMIGRANT BANCORP: Fitch Raises Issuer Default Rating to 'B+' ENDEAVOR ENERGY: New $300MM Sr. Notes Issue Get Moody's B3 Rating FIRST COMMUNITY SW FL: FDIC Named as Receiver; C1 Assumes Deposits GENTILE FAMILY: Case Summary & 20 Largest Unsecured Creditors GLS CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors GRYPHON GOLD: Case Summary & 16 Unsecured Creditors GREATER RISING: Case Summary & 2 Unsecured Creditors GREEN SPRING: Case Summary & 5 Unsecured Creditors HAPCO PETROLEUM: Updated Case Summary & Creditors' Lists HARBINGER GROUP: Fitch Affirms 'B' Issuer Default Rating HEALTH MANAGEMENT: S&P Puts 'BB-' Rating on CreditWatch Developing HOLT DEVELOPMENT: Discloses Payments Made to Bankruptcy Counsel HOLT DEVELOPMENT: Wants Schedules Deadline Extended to Aug. 15 HORIZON HEALTH CENTER: Meeting to Form Creditors' Panel on Aug. 8 HOVNANIAN ENTERPRISES: Moody's Hikes CFR to Caa1; Outlook Stable IGPS CO: Pallet Business Sold After Settlement Reached IMS HEALTH: Policy Change Prompts Moody's to Cut CFR to 'B2' IMS HEALTH: S&P Affirms 'B+' CCR & Rates New $750MM Notes 'B-' ISAACSON STRUCTURAL: Case Conversion Hearing Continued to Sept. 24 JEFFERSON COUNTY: Water Works Opposes High Sewer Taxes JIN CORPORATION: Case Summary & 10 Unsecured Creditors K-V PHARMACEUTICAL: Creditors Balk at Ex-CEO's $83MM Claim LAXMI INC: Case Summary & 17 Unsecured Creditors LAZARUS HOLDINGS: Case Summary & 19 Largest Unsecured Creditors LAZY DAYS: Judges May Issue Rulings for Use in Other Courts LEHMAN'S EGG: Updated Case Summary & Creditors' Lists LIFE UNIFORM: Ombudsman Taps Womble Carlyle as Delaware Counsel LIFE UNIFORM: Taps Littler Mendelson as Special ERISA Counsel LIN MEDIA: LIN TV Merger No Impact on Moody's 'B1' CFR LOUIS PEARLMAN: Trustee's Bid for Jury Trial in BofA Suit Denied METROPLEX LUCKY: Voluntary Chapter 11 Case Summary MF GLOBAL: Files Class Antitrust Suit Against Swap Banks MJK PROPERTIES: Case Summary & 18 Unsecured Creditors MOHEGAN TRIBAL: Moody's Rates New $425MM Sr. Notes Issue 'Caa1' NGPL PIPECO: Bank Debt Trades at 4% Off OCI BEAUMONT: S&P Assigns Preliminary 'B-' CCR; Outlook Stable OIL STATES: Spin-Off Plan Triggers Moody's Review for Downgrade ORECK CORP: Panel May Hire Lowenstein Sandler as Counsel ORECK CORP: Pillsbury Winthrop to Handle FTC Matters PATRIOT COAL: Seeks to Avoid Violation of Loan Covenant PENN NATIONAL: S&P Revises Outlook to Negative & Affirms 'BB' CCR PMI GROUP: Reorganization Plan Confirmed July 25 PORCHLIGHT ENTERTAINMENT: Case Summary & 20 Unsecured Creditors PORTER BANCORP: Reports $1.7 Million Net Loss in Second Quarter PPL MONTANA: S&P Lowers Rating on $338MM Certs Due 2020 to 'BB+' PREMIER BEVERAGE: Restructures Defaulted Senior Secured Note PREMIER PAVING: Plan Confirmation Hearing Slated for Aug. 27 PREMIER PAVING: Wants Continued Access to Cash Until Sept. 1 PRORHYTHM INC: Del. Court Issues Revised Opinion on ReCor Lawsuit QUANTUM FUEL: Stockholders Elect Two Directors QUEBECOR MEDIA: DBRS Confirms 'BB' Issuer Rating RADIOSHACK CORP: S&P Lowers Corporate Credit Rating to 'CCC' READER'S DIGEST: Once Again Emerges From Bankruptcy REALAUCTION.COM LLC: Declared Bankruptcy After Patent Ruling RENAISSANCE PROPERTIES: Case Summary & Unsecured Creditor RESIDENTIAL CAPITAL: Judge Rejects Intercompany Conflict Argument RESIDENTIAL CAPITAL: Creditors Slam Bondholders' 'Disruption' RESPONSE BIOMEDICAL: VP Human Resources' Employment Terminated REVSTONE INDUSTRIES: Creditors Buck Hiring of Jacobs, Much Shelist REVSTONE INDUSTRIES: Unit Unveils Pact With Chrysler, GM RG STEEL: Seeks Review of Ruling Allowing Caruso as Substitute ROCKWOOD SPECIALTY: Moody's Keep Ba1 Rating over Subsidiary Sale ROTECH HEALTHCARE: Exit Financing Letters, Seal Approved SANUWAVE HEALTH: Obtains $1.6 Million from Units Offering SARKIS INVESTMENTS: Voluntary Chapter 11 Case Summary SCOOTER STORE: Pays Off Loan, Seeks More Exclusivity SMALL TOWN: Case Summary & 20 Largest Unsecured Creditors SMILE BRANDS: Moody's Rates New Senior Debt Facility 'B1' SPRINGLEAF FINANCE: Prepays $235MM Under 2011 Credit Agreement SUN BANCORP: Keith Stock Appointed as Director STANDARD PACIFIC: Moody's Ups CFR to B2 & Rates $250MM Notes B2 STANDARD PACIFIC: S&P Assigns 'B+' Rating to $250MM Senior Notes TANDY BRANDS: Provides Update on Restructuring Plan TERESA GIUDICE: Reality Show Stars Hit With Fraud Claims TITAN ENERGY: Extends Repayment of $2.4MM of Notes in Default TITAN PHARMACEUTICALS: Amends 2012 Form 10-K to Add Disclosure TONGJI HEALTHCARE: Taps Anton & Chia as New Accountants TOUSA INC: Plan, Exhibits Filed, Supporting Memorandum Filed TRENDSET INC: Trustee and Timberland Inks Settlement on Deposits TRENDSET INC: Court Approves Rejection of Contracts and Leases TRINET HR: Moody's Assigns B1 Rating to $705MM Debt Facilities TRINET HR: S&P Assigns 'B+' Rating to $705MM Sr. Secured Facility TRIUS THERAPEUTICS: Inks Manufacturing Agreement with Patheon TRIUS THERAPEUTICS: To be Acquired by Cubist for $818 Million TRX SOFTWARE: Case Summary & 11 Unsecured Creditors TYLER WATERFORD: Case Summary & 20 Largest Unsecured Creditors UNITED AIRLINES: Antitrust Suit Will Hurt Debtors, 2nd Circ. Told UNITED AIRLINES: Fitch Rates $209.03MM Class B Certificates 'BB+' UNITED AIRLINES: S&P Assigns BB+ Rating to 2013-1 Class B Certs UNITED SILVER: Secured Creditor Demands Fully Repayment of Loan UNITEK GLOBAL: Closes Amendment to Term Credit Agreement UNIVERSAL BIOENERGY: Amends 2012 10-K to Amend Disclosures UNIVITA HEALTH: S&P Raises Secured Debt Rating to 'B' USEC INC: Freezes Benefits Under Retirement and Pension Plans USEC INC: Government to Fund Add'l $29.9MM Under Amended Pact USG CORP: Posts $25 Million Net Income in Second Quarter VAIL LAKE: Court Affirms Tentative Ruling Approving Use of Cash VANTAGE PIPELINE: S&P Assigns 'BB-' Rating to US$225MM Term Loan B VILLAGE AT KNAPP'S: Case Summary & 15 Unsecured Creditors VPR CORP: Creditors Say PE Owner's $50MM Claim Must Be Redefined VPR CORP: Can Employ Holland & Knight as Counsel VUZIX CORP: To Offer $6 Million Worth of Securities VYSTAR CORP: Incurs $790,000 Net Loss in Q1 WALTER ENERGY: Bank Debt Trades at 4% Off WAVE SYSTEMS: To Complete $1.5 Million Stock Offering WAVE SYSTEMS: Regains Compliance with NASDAQ Marketplace Rule WERNER LADDER: App. Ct. Says New Werner Not Liable in Doyle Suit WESTMORELAND COAL: Incurs $622,000 Net Loss in 2nd Quarter WORLD SURVEILLANCE: Files Lawsuit Against La Jolla Cove Investors WPCS INTERNATIONAL: Chairman and CEO Resigns WPCS INTERNATIONAL: Lowers Net Loss to $6.9 Million in 2013 WPCS INTERNATIONAL: Incurs $6.8-Mil. Net Loss in Fiscal 2013 * Cohen, SAC Capital Sought "Edge," Prosecutors Say * Fitch: U.S. Public Finance Downgrades Exceed Upgrades in 2Q'13 * Oliver Wyman Sees Challenges Ahead for Automotive Industry * U.S. Prosecutors Says Ring Stole 160 Million Credit Card Numbers * Blackstone, Deutsche in Talks to Sell Bond Backed by Rentals * Despite Detroit, S&P Says U.S. Public Finance Ratings Improve * JPMorgan Agrees to Pay $410MM in Power Market Manipulation Case * SAC Capital Probe Yields New Insider-Tipping Arrest * Over a Million Are Denied Bank Accounts for Past Errors * UBS to Pay Fine over Mortgage-Bond Deal * UBS to Pay $885 Million to Settle U.S. Mortgage Suit * CoreLogic Reports 55,000 Completed Foreclosures in June * Equifax Says First Mortgage Severe Delinquencies Hit 5-Year Low * U.S. Residential Sales Up 8% From Year Ago, RealtyTrac Says * Obama to Offer New Deal on Corporate Taxes, Jobs * New Defaults Trouble Mortgage Program * Regulators Weigh Easing of Mortgage Rules * Regulators Face Scrutiny on Banks' Commodities at Senate Hearing * Senate Scrutiny of Bank Commodity Holdings Has Levin's Backing * BOND PRICING -- For Week From July 29 to Aug. 2, 2013 ********* 307 HAMILTON: Case Summary & 2 Unsecured Creditors -------------------------------------------------- Debtor: 307 Hamilton Avenue, LLC 4 Perryridge Road Greenwich, CT 06830 Bankruptcy Case No.: 13-51176 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN 123 York Street, Ste 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 E-mail: ressmul@yahoo.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its two unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ctb13-51176.pdf The petition was signed by Danny Gabriel, attorney in fact for Luca Gabriel, member. ALKERMES INC: Moody's Hikes Ratings to Ba3 on Good Performance -------------------------------------------------------------- Moody's Investors Service upgraded the ratings of Alkermes, Inc., including the Corporate Family Rating to Ba3 from B1 and the Probability of Default Rating to Ba3-PD from B1-PD. At the same time, Moody's upgraded the company's secured credit facility ratings to Ba3 from B1 and upgraded the Speculative Grade Liquidity Rating to SGL-1. Alkermes, Inc. is a subsidiary of Alkermes plc. (collectively referred to as "Alkermes"). Following these actions the outlook remains positive. Ratings upgraded: Corporate Family Rating to Ba3 from B1 Probability of Default Rating to Ba3-PD from B1-PD Senior secured term loans to Ba3 (LGD4, 50%) from B1 (LGD3, 49%) Speculative Grade Liquidity Rating to SGL-1 from SGL-2 "The rating upgrade reflects our expectation that positive trends from Alkermes' five key products coupled with conservative financial policies will result in improving credit metrics," stated Michael Levesque, Moody's Senior Vice President. "The upgrade of the Speculative Grade Liquidity Rating reflects growth in Alkermes' cash levels and our expectations that cash flow will rise and exhibit less volatility," continued Levesque. Rating Rationale: The Ba3 Corporate Family Rating reflects Alkermes' limited size and scale relative to pharmaceutical peers, high reliance on collaboration partners on key products, and modest leverage with debt/EBITDA of approximately 2.4 times as of June 30, 2013. The company has high concentration among its top five products and its late-stage pipeline is concentrated in schizophrenia candidate aripiprazole lauroxil. At the same time, the ratings are supported by Alkermes' expertise in proprietary drug delivery technologies, high operating margins, good growth prospects over the next several years and a decreasing reliance on its key revenue driver Risperdal Consta. Alkermes will soon reach a juncture in its corporate strategy depending on the success of several pipeline products. These products could drive significant future growth for the company, or create a strong rationale for external business development if the programs are not successful. The outlook is positive based on Moody's view that rising profitability and good pipeline execution could result in a stronger credit profile over the next 12 to 18 months. Moody's could upgrade Alkermes' ratings if the company's key products continue to grow, if pipeline momentum is positive and if debt/EBITDA is sustained below 2.5 times. Specific pipeline catalysts that could be positive include: (1) phase III data on aripiprazole lauroxil; and (2) entering marketing collaborations with large pharmaceutical companies involving Alkermes' pipeline drugs like aripiprazole lauroxil or ALKS 5461. Conversely, Moody's could downgrade Alkermes' ratings if growth rates falter or if leverage is sustained above 3.5 times. Such scenarios could arise if one of Alkermes' key products performs significantly below Moody's expectations or if the company engages in large debt- financed M&A. Alkermes, Inc. is a U.S. subsidiary of Dublin, Ireland-based Alkermes plc. Alkermes is a specialty biopharmaceutical company that develops long-acting medications for the treatment of central nervous system disorders, alcohol and opioid dependence and diabetes. For the twelve months ended June 30, 2013 revenues were approximately $562 million. The principal methodology used in this rating was Global Pharmaceutical Industry published in December 2012. AMERICAN AIRLINES: Merger Plan Accepted by AMR Creditors -------------------------------------------------------- AMR Corporation, the parent company of American Airlines, Inc., on Aug. 1 announced the preliminary voting results on the Company's Plan of Reorganization, which indicate overwhelming acceptance of the Plan by those creditors and shareholders entitled to vote. Of the eight creditor classes entitled to vote, at least 88 percent of the ballots received and tabulated in each class, representing more than 97 percent of the claims value voting in each class, were voted in favor of the Plan. Additionally, more than 99 percent of the shares tabulated for the class of AMR stockholders voted to accept the Plan. "This is another important milestone toward our launch of the new American. The overwhelming support for our Plan of Reorganization is a testament to the resilience and hard work of the entire American team," said Tom Horton, AMR's chairman, president and CEO. "Our people have stood tall and remained focused on putting our customers at the forefront of everything we do. That has made all the difference." The final voting results for the Plan will be certified and filed with the U.S. Bankruptcy Court for the Southern District of New York in advance of the confirmation hearing on Aug. 15, 2013. On June 7, 2013, the Court authorized the company to begin soliciting approval of the Plan from AMR's creditors and stockholders. Voting on the Plan ended July 29, 2013 at 5 p.m. EDT. The effective date of the Plan and American's Chapter 11 emergence are expected to occur simultaneously with the closing of the merger with US Airways. The merger is expected to close in the third quarter of 2013. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Draws Few Objections to Plan Confirmation ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp., the parent of American Airlines Inc., received few objections to approval of the reorganization plan at the Aug. 15 confirmation hearing. The deadline for objections was July 30. According to the report, in terms of dollars and cents, the potentially most costly objections came from two indenture trustees who contend bondholders are entitled to interest at the higher default rates although they are to be paid in full. The report relates that several single-dip unsecured creditors with disputed claims contend the plan is flawed because it doesn't guarantee them full payment, even though similar creditors with undisputed claims are to be paid in full. The union for pilots at US Airways Group Inc. submitted a limited objection. The most potentially controversial objection, the report discloses, came from plaintiffs in an antitrust lawsuit named Fjord v. US Airways Group Inc. pending in federal district court in San Francisco. They contend the merger between AMR and US Airways will violate federal antitrust laws. The plaintiffs want the bankruptcy judge to allow the filing of an antitrust suit in federal district court. They don't want the bankruptcy judge to approve the reorganization plan until a district judge decides whether the merger will be enjoined. According to the report, Cantor Fitzgerald & Co. filed a limited objection related to the 9/11 World Trade Center disaster. The objection recites how AMR previously agreed that Cantor Fitzgerald could continue a lawsuit nominally against AMR with recoveries limited to insurance. Cantor Fitzgerald is concerned that broad language in the plan would prohibit the firm from continuing the lawsuit to recover from insurance. More than 650 Cantor Fitzgerald employees were killed when the World Trade Center fell. The report notes that AMR will likely use the two weeks before confirmation to work out settlements allowing many of the objections to be withdrawn. Sometimes, settlements take the form of alterations to the confirmation order approving the plan. AMR's plan is premised on a merger with US Airways. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. In April 2013, AMR filed a Chapter 11 plan of reorganization that will carry out the merger. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. The hearing before the Court to consider confirmation of the Plan is scheduled for Aug. 15, 2013. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN AIRLINES: Fitch Affirms 'BB-' Term Loan Rating ------------------------------------------------------- Fitch Ratings has affirmed the ratings for American Airlines, Inc.'s senior secured term loan at 'BB-/RR1' following the company's decision to upsize the transaction by $350 million, bringing the total funds raised to $850 million. This is an add-on to the $1.05 billion term loan American issued in June. The ratings for American Airlines and its parent company AMR Corp. remain unchanged at 'D' while American remains under chapter 11 bankruptcy protection. A full list of ratings follows at the end of this release. Following American's announcement to launch a $500 million add-on to its existing $1.05 billion secured term loan, the company has decided to further upsize the transaction by $350 million bringing the total term loan to $1.9 billion. The existing term loan was launched in June of this year and is scheduled to amortize at 1% per annum with the remainder due at maturity. The proceeds are expected to be used to repay American's 10.5% secured notes, for the acquisition of aircraft and for general corporate purposes. As with the existing term loan, the additional debt will initially be structured as a Debtor-in-Possession (DIP) loan to be funded while American is in bankruptcy. While in bankruptcy, the term loan will have a priority administrative claim. Once American emerges from bankruptcy and completes the proposed merger with US Airways (assuming that the merger and exit from bankruptcy are contemporaneous as described in American's plan of reorganization), the DIP loan will then convert to a standard six- year senior secured term loan. Upon completion of the proposed merger, US Airways Group, Inc. and US Airways, Inc. will become additional guarantors under the facility. The revolving credit facility will not be available to American until the company exits from bankruptcy. KEY RATING DRIVERS The 'BB-/RR1' rating is supported by the expected recovery from the collateral securing the facility. While the potential recovery is somewhat diluted by the additional debt being raised, Fitch still expects total recovery of 91 - 100%. Fitch's recovery analysis focuses on a 'going-concern' valuation in which distressed enterprise value (EV) is allocated to the various classes of debt in the company's capital structure. Fitch analyzed distressed EV in both a merger scenario and a stand-alone (no merger) scenario. In both scenarios Fitch applied a haircut to estimated EBITDA and then applied a distressed multiple to determine distressed EV. Both scenarios resulted in an estimated recovery of at least 91-100% to the entire credit facility (term loan and revolver), which equates to an 'RR1' rating under Fitch's recovery analysis criteria. For further information on the secured term loan please see the press release titled 'Fitch Rates American Airlines' Add-on $500MM Term Loan 'BB-/RR1' dated July 30, 2013 at www.fitchratings.com. Fitch has affirmed the following: American Airlines, Inc. -- Senior Secured Credit Facility at 'BB-/RR1' . Fitch currently rates American Airlines as follows: AMR Corp. -- IDR 'D' American Airlines, Inc. -- IDR 'D' AMERICAN AIRLINES: U.S. Trustee Again Objects to Horton Severance ----------------------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reports that the Office of the U.S. Trustee again filed an objection late Friday to AMR Corp.'s proposed $20 million severance package for Tom Horton, AMR's current chief executive. According to the report, the U.S. Trustee asked the court to deny the provisions of the bankruptcy- exit plan that provide for Mr. Horton's payment, as well as the provisions of the exit plan that permit expenses to be paid to indenture trustees and members of AMR's creditors committee without full compliance with certain bankruptcy rules. The report says AMR is expected to file its response to the objection this week. "The company disagrees with the U.S. Trustee's position," a spokesman for American Airlines said Friday, according to WSJ. The agreement for Mr. Horton's payout "is not in any way prohibited by the terms and provisions of the bankruptcy code," he said. "Furthermore, AMR's creditors and shareholders have voted overwhelmingly to accept the plan," which includes the executive payout. The report notes U.S. Bankruptcy Judge Sean Lane has scheduled an Aug. 15 hearing to confirm AMR's plan of reorganization and the creditor vote, and to rule on last-minute objections brought by a number of parties. The objection deadline was July 30 but the U.S. Trustee was granted an extension until Friday to make its points. AMR plans to exit bankruptcy pursuant to a merger with US Airways Group Inc. As part of that transaction, Mr. Horton is to step down when the deal closes in the third quarter and become nonexecutive chairman of the merged company for a brief period. Doug Parker, US Airways CEO, is scheduled to take on the CEO role at the enlarged airline. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. In April 2013, AMR filed a Chapter 11 plan of reorganization that will carry out the merger. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. The hearing before the Court to consider confirmation of the Plan is scheduled for Aug. 15, 2013. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 AMERICAN CAPITAL: S&P Puts 'B+' Rating on CreditWatch Positive -------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its 'B+' counterparty credit and senior secured ratings on Bethesda, Md.-based American Capital Ltd. (ACAS) on CreditWatch with positive implications. "The CreditWatch positive listing reflects the firm's improved financial profile and our view that the firm will further improve its business profile as a hybrid with both on-balance-sheet investments and fee income from managing third-party funds," said Standard & Poor's credit analyst Sebnem Caglayan. Although nonaccrual assets remain high -- at 19.5% of loans at cost and 14.2% of loans at fair value as of June 30, 2013 -- realized returns have stabilized in recent periods. Management has also moved to change the firm's business profile so that a larger portion of the firm's earnings will come from management fee income, which S&P views as less risky and more recurring. The proposed amendment to ACAS' $600 million term loan would improve the firm's financial risk profile. Interest on the loan would drop to LIBOR plus 325 basis points (bps) to 350 bps from LIBOR plus 425 bps, and the floor would be reduced to 1.0% from 1.25%. The amendment would be executed concurrent with a $150 million amortization payment due in August 2013 (S&P expects it to be made using cash on balance sheet), which would reduce the firm's total debt outstanding to just more than $450 million from just more than $600 million at the end of the second quarter. The amendment also slightly improves advance rates, reduces cash flow sweep requirements, and eliminates the mandatory $150 million amortization payments due in August 2014 and 2015, which enhances ACAS' liquidity profile. ACAS also has access to a fully undrawn $250 million revolver as of June 30, 2013, which provides the company an ability to raise emergency funds, as well as funds for working capital purposes if needed. S&P expects to resolve the CreditWatch positive listing in the very near term. If S&P decides to raise the rating upon completion of its review, S&P believes upside is likely limited to one notch. ARCHDIOCESE OF MILWAUKEE: Abuse Claimants Can't Get Cemetery Funds ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. District Judge Rudolph T. Randa ruled last week that the federal Religious Freedom Restoration Act of 1993 protects the Archdiocese of Milwaukee from claims by creditors that $55 million was fraudulently transferred to a trust for the maintenance of cemeteries. According to the report, the Roman Catholic archdiocese filed a petition for Chapter 11 reorganization in January 2011 to deal with sexual abuse claims. The perpetual care trust for the cemeteries sued the creditors' committee in June 2011, seeking a declaration that money for upkeep of burial grounds isn't property of the archdiocese and can't be used to pay abuse claims. U.S. Bankruptcy Judge Susan V. Kelley in Milwaukee rejected the archdiocese's reliance on RFRA in a 12-page opinion in January. The report notes that Judge Randa needed 30 pages to explain why the bankruptcy judge was mistaken. Judge Randa recited how the RFRA prohibits the "government" from imposing a "substantial burden" on the exercise of religion absent a "compelling governmental interest." Contrary to Kelley's conclusion, Judge Randa ruled that the creditors' committee "falls within the definition of 'government' because it acts under color of law pursuant to authority granted by the bankruptcy court." The report relates that buttressing his conclusion, Judge Randa said brining lawsuits for a bankrupt entity "is a traditional public function." Judge Randa said taking cemetery funds for distribution to creditors would substantially burden the exercise of religion because there would be insufficient money to care for the 1,000 acres of cemeteries where 500,000 Catholic faithful are interred. Judge Randa sent the case back to the bankruptcy court with conclusions giving Judge Kelley no alternative but to rule in favor of the archdiocese and exclude cemetery funds from the reach of abuse claimants. The report says that consequently, the committee could have the right to take the case to the U.S. Court of Appeals. Judge Kelley didn't always rule against the archdiocese. In December, she said assets of the parishes can't be thrown into the pot for payment of sexual-abuse claims. The appeal in district court is Listecki v. Official Committee of Unsecured Creditors (In re Archdiocese of Milwaukee), 13-00179, U.S. District Court, Eastern District Wisconsin (Milwaukee). The cemetery lawsuit in bankruptcy court is Listecki v. Official Committee of Unsecured Creditors (In re Archdiocese of Milwaukee), 11 02459, U.S. Bankruptcy Court, Eastern District of Wisconsin (Milwaukee). A copy of Judge Randa's July 29 Decision and Order is available at http://is.gd/LCua2Vfrom Leagle.com. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/news ASHLAND GROUP: Case Summary & 2 Unsecured Creditors --------------------------------------------------- Debtor: The Ashland Group, LLC P.O. Box 581 Kingston Springs, TN 37082 Bankruptcy Case No.: 13-06543 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Randal S. Mashburn Debtor's Counsel: Steven L. Lefkovitz, Esq. LAW OFFICES LEFKOVITZ & LEFKOVITZ 618 Church St Ste 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 255-4516 E-mail: slefkovitz@lefkovitz.com Scheduled Assets: $1,000,120 Scheduled Liabilities: $800,648 A copy of the Company's list of its largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/tnmb13-6543.pdf The petition was signed by Ronald Keith Parker, member. CAESARS ENTERTAINMENT: Bank Debt Trades at 11% Off -------------------------------------------------- Participations in a syndicated loan under which Caesars Entertainment Inc. is a borrower traded in the secondary market at 88.66 cents-on-the-dollar during the week ended Friday, August 2, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 1.54 percentage points from the previous week, The Journal relates. Caesars Entertainment Inc. pays 525 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 1, 2018. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 249 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company incurred a net loss of $1.49 billion on $8.58 billion of net revenues for the year ended Dec. 31, 2012, as compared with a net loss of $666.70 million on $8.57 billion of net revenues during the prior year. As of June 30, 2013, the Company had $26.84 billion in total assets, $27.58 billion in total liabilities and a $738.1 million total deficit. * * * Caesars Entertainment carries a 'CCC' long-term issuer default rating, with negative outlook, from Fitch and a 'Caa1' corporate family rating with negative outlook from Moody's Investors Service. As reported in the TCR on Feb. 5, 2013, Moody's Investors Service lowered the Speculative Grade Liquidity rating of Caesars Entertainment Corporation to SGL-3 from SGL-2, reflecting declining revolver availability and Moody's concerns that Caesars' earnings and cash flow will remain under pressure causing the company's negative cash flow to worsen. In the May 7, 2013, edition of the TCR, Standard & Poor's Ratings Services said that it lowered its corporate credit ratings on Las Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned subsidiary Caesars Entertainment Operating Co. (CEOC) to 'CCC+' from 'B-'. "The downgrade reflects weaker-than-expected operating performance in the first quarter, and our view that Caesars' capital structure may be unsustainable over the next two years based on our EBITDA forecast for the company," said Standard & Poor's credit analyst Melissa Long. CASA CASUARINA: Hires SCA Group's Michael Mazzarino as CRO ---------------------------------------------------------- Casa Casuarina LLC sought and obtained approval from the U.S. Bankruptcy Court to employ SCA Group LLC and Michael Mazzarino as Chief Restructuring Officer and manager for the Debtor, replacing Peter Loftin as its sole manager. Michael Mazzarino will serve as the Debtor's sole officer and manager, and be responsible for all day-to-day tasks in the management of the Debtor's affairs, including, but not limited to, carrying out the debtor-in-possession's fiduciary duty to the estate and more importantly, facilitating the sale process and the involvement of all interested parties. SCA Group attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Casa Casuarina Casa Casuarina, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-25645) in Miami on July 1, 2013. Peter Loftin signed the petition as manager. Judge Laurel M. Isicoff presides over the case. The Debtor estimated assets of at least $50 million and debts of at lease $10 million. Joe M. Grant, Esq., at Marshall Socarras Grant, P.L., serves as the Debtor's counsel. CASA CASUARINA: Won't Have Chapter 11 Trustee for Now ----------------------------------------------------- The U.S. Bankruptcy Court, having heard Casa Casuarina, LLC's Emergency Motion for Appointment of Chapter 11 Trustee and the Order Setting Evidentiary Hearing on VM South Beach, LLC's Emergency Motion for the Appointment of a Chapter 11 Trustee and Hearings on Related Matters, and Fixing Deadlines for Compliance by Debtor, has ruled that: 1. The Trustee Motion is withdrawn without prejudice; subject to the conditions set forth below. 2. The Debtor shall obtain one or more policies of comprehensive property, general liability, fire, flood, windstorm and other insurance on the Casa Casuarina property upon such terms and in such in such amounts as may be satisfactory to the Office of the United States Trustee. VM shall advance the amounts necessary to pay the insurance premiums. 3. The Debtor shall adopt and implement the security recommendations set forth in the report prepared by Wayne Black and titled, "Security Survey Casa Casuarina." VM shall advance the amounts necessary to pay for these security measures. 4. The Debtor shall correct all of the violations identified in the "Report of Fire Violations" prepared by the Fire Prevention Division of the City of Miami Beach. VM shall advance the amounts necessary to pay for these fire prevention corrections. 5. The Advances shall be additional advances under the lien of the mortgage held by VM, be treated as part of VM's allowed secured claim, is in an amount that is "reasonable" within the meaning of Section 506(b) of the Bankruptcy Code, and shall be included in the amount VM may credit bid at the auction of the Casa Casuarina property. 6. No later than July 31, 2013, the Debtor was to provide VM and the Office of the United States Trustee a complete accounting of the rents paid by 1116 Ocean Drive, LLC since the inception of the lease between 1116 Ocean Drive, LLC and the Debtor. 7. Peter Loftin shall attend the Meeting of Creditors under 11 U.S.C. Sec. 341(a). Mr. Loft must submit to an examination by the United States Trustee and creditors, in accordance with the customary rules for the conduct of a Meeting of Creditors. 8. If the Debtor fails to comply with any of the provisions of this Order, then upon notice of any such failure, VM South Beach may immediately renew the Trustee Motion, and the Court shall hold an expedited hearing on such Renewed Motion. Attorneys can be reached at: Mark D. Bloom, Esq. John R. Dodd, Esq. Greenberg Traurig, P.A. 333 Avenue of the Americas Miami, FL 33131 Tel: (305) 579-0730 Fax: (305) 579-0717 E-mail: bloomm@gtlaw.com doddj@gtlaw.com About Casa Casuarina Casa Casuarina, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-25645) in Miami on July 1, 2013. Peter Loftin signed the petition as manager. Judge Laurel M. Isicoff presides over the case. The Debtor estimated assets of at least $50 million and debts of at lease $10 million. Joe M. Grant, Esq., at Marshall Socarras Grant, P.L., serves as the Debtor's counsel. CASA CASUARINA: Can Employ Marshall Socarras as Counsel ------------------------------------------------------- Casa Casuarina, LLC, sought and obtained approval from the U.S. Bankruptcy Court to employ Joe M. Grant, Esq., and the law firm of Marshall Socarras Grant, P.L. as counsel. The firm attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Joe M. Grant, Esq. 197 South Federal Highway, Suite 300 Boca Raton, FL 33432 Tel: 561-361-1000 E-mail: jgrant@msglaw.com About Casa Casuarina Casa Casuarina, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-25645) in Miami on July 1, 2013. Peter Loftin signed the petition as manager. Judge Laurel M. Isicoff presides over the case. The Debtor estimated assets of at least $50 million and debts of at lease $10 million. Joe M. Grant, Esq., at Marshall Socarras Grant, P.L., serves as the Debtor's counsel. CASA CASUARINA: Has Green Light to Hire Auctioneers and Brokers --------------------------------------------------------------- Casa Casuarina LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Lamar P. Fisher and Fisher Auction Company and "The Jills" and Coldwell Banker Residential Real Estate, LLC, relative to the proposed auction sale of the Debtor estate's interest in certain real property. According to the Debtor, the Auctioneer/Broker and the Cooperating Broker's marketing and advertising costs, up to $50,000, will be advanced by a third party with all such advances being a super priority lien and repaid from the first proceeds of the sale of the Property. The Auctioneer/Broker and Cooperating Broker collectively will charge a 4% Buyer's Premium to the final bid price on the Property and the Buyer's Premium will be added to the contract price. The Buyer's Premium shall be distributed at the time of closing as follows: (a) 1.5% of the final bid price shall be retained by the Auctioneer/Broker as their fee; (b) 1.5% of the final bid price shall be retained by the Cooperating Broker as their fee; (c) 1% shall be retained by a "procuring cause broker" as their fee (as defined in the Auctioneer/Broker's Plan) and if no procuring cause broker and/or "The Jills" become the procuring cause broker, then the Auctioneer/Broker shall retain an additional 0.5% and the Cooperating Broker shall retain an additional 0.5%. The Debtor attests the Auctioneer/Broker and the Cooperating Broker are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. About Casa Casuarina Casa Casuarina, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-25645) in Miami on July 1, 2013. Peter Loftin signed the petition as manager. Judge Laurel M. Isicoff presides over the case. The Debtor estimated assets of at least $50 million and debts of at lease $10 million. Joe M. Grant, Esq., at Marshall Socarras Grant, P.L., serves as the Debtor's counsel. CATAMARAN CORP: Moody's Retains Ba2 CFR After Restat Acquisition ---------------------------------------------------------------- Moody's notes that Catamaran Corporation's announcement that it has signed a definitive agreement to acquire Restat, LLC, a pharmacy benefit manager for about $409 million is credit negative, but does not have an effect on CTRX's ratings (Ba2 CFR) at this time. Catamaran Corporation, headquartered in Lisle, Illinois, is a provider of pharmacy benefit management services and healthcare information technology solutions to the healthcare benefit management industry. CLOVER INVESTMENT: Case Summary & 3 Unsecured Creditors ------------------------------------------------------- Debtor: Clover Investment Corporation 1098 Brown Street Wauconda, IL 60084 Bankruptcy Case No.: 13-30026 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Janet S. Baer Debtor's Counsel: James E. Stevens, Esq. BARRICK, SWITZER, LONG, BALSLEY & VAN EVERA 6833 Stalter Drive Rockford, Il 61108 Tel: (815) 962-6611 Fax: (815) 962-1758 E-mail: jimstevens@bslbv.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ilnb13-30026.pdf The petition was signed by Michael M. Morris, president. DETROIT, MI: Women Lawyers Take Center Stage -------------------------------------------- According to data compiled by Dow Jones, women hold leadership roles in fewer than one-fifth of the 100 biggest U.S. law firms' bankruptcy practices. However, Jacqueline Palank, writing for Dow Jones Newswires, reports that the main parties squaring off in Detroit's $18 billion bankruptcy case will be led by women. Dow Jones calls this "an unusual feat in a legal field typically dominated by men." According to the Dow Jones report: -- Heather Lennox, Esq., a Jones Day restructuring partner, is representing Detroit. Ms. Lennox also led the team arguing Hostess Brands Inc.'s Chapter 11 case. -- Sharon Levine, Esq., is representing the American Federation of State, County and Municipal Employees and the International Union. Ms. Levine also was involved in the Hostess case, representing the unionized mechanics and other workers. She also assisted the Transport Workers Union in the American Airlines case. -- Babette Ceccotti, Esq., a lawyer at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America, or UAW. The report notes UAW General Counsel Michael Nicholson said Ms. Ceccotti has been "a big part" of the union's bankruptcy strategy, representing it in the Chapter 11 cases of Chrysler and General Motors as well as those of auto suppliers such as Dana Corp. DETROIT, MI: Judge Proposes Fast Track for Bankruptcy ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Steven W. Rhodes proposed an aggressive schedule for completion of the initial phase of Detroit's Chapter 9 municipal bankruptcy. According to the report Judge Rhodes wants to hold a trial beginning Oct. 23 to determine if the city is eligible for bankruptcy. He would have objections initially due Aug. 19, with final briefs filed Oct. 17. Judge Rhodes was slated to hold a hearing on Aug. 2 where parties in the case can comment on the schedule. The report notes that Judge Rhodes is proposing a March 1 deadline for Detroit to file a Chapter 9 debt-adjustment plan. The city's emergency financial manager, Kevyn Orr, is aiming for an emergence from bankruptcy in September 2014, when the city council can remove him from managing the city and its bankruptcy. Because retirees don't have a formal representative to negotiate or litigate should the city attempt to reduce their benefits, the city immediately asked the court to appoint an official retirees' committee. The report relates that groups representing former city workers filed papers July 30 objecting to having anyone on the committee who is a current city worker or union representative. They say current workers and the unions would have conflicts of interest where they might be willing to sacrifice retirement benefits for better treatment as ongoing workers. 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. DRYSHIPS INC: Q2 Results Conference Call Scheduled for August 8 --------------------------------------------------------------- DryShips Inc. on Aug. 1 disclosed that it will release its results for the second quarter 2013 after the market closes in New York on Wednesday, August 7, 2013. DryShips' management team will host a conference call the following day on Thursday, August 8, 2013, at 9:00 a.m. EDT to discuss the Company's financial results. Conference Call details: Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote "DryShips." A replay of the conference call will be available until Thursday, August 15, 2013. The United States replay number is 1(866) 247- 4222; from the UK 0(800) 953-1533; the standard international replay number is (+44) (0) 1452 550 000 and the access code required for the replay is: 2133051#. Slides and audio webcast: There will also be a simultaneous live webcast over the Internet, through the DryShips Inc. website (www.dryships.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. About DryShips Inc. Headquartered in Athens, Greece, DryShips Inc. (NASDAQ: DRYS) is an owner of drybulk carriers and tankers that operate worldwide. Through its majority owned subsidiary, Ocean Rig UDW Inc., DryShips owns and operates 10 offshore ultra deepwater drilling units, comprising of 2 ultra deepwater semisubmersible drilling rigs and 8 ultra deepwater drillships, 3 of which remain to be delivered to Ocean Rig during 2013 and 1 is scheduled for delivery during 2015. DryShips owns a fleet of 46 drybulk carriers (including newbuildings), comprising of 12 Capesize, 28 Panamax, 2 Supramax and 4 Very Large Ore Carriers (VLOC) with a combined deadweight tonnage of about 5.1 million tons, and 10 tankers, comprising 4 Suezmax and 6 Aframax, with a combined deadweight tonnage of over 1.3 million tons. The Company reported a net loss of US$288.6 million on US$1.210 billion of revenues in 2012, compared with a net loss of US$47.3 million on US$1.078 billion of revenues in 2011. The Company's balance sheet at Dec. 31, 2012, showed US$8.878 billion in total assets, US$5.010 billion in total liabilities, and shareholders' equity of US$3.868 billion. Going Concern Doubt Ernst & Young (Hellas), in Athens, Greece, expressed substantial doubt about DryShips Inc.'s ability to continue as a going concern, citing the Company's working capital deficit of US$670 million at Dec. 31, 2012, and in addition, the non- compliance by the shipping segment with certain covenants of its loan agreements with banks. As of Dec. 31, 2012, the shipping segment was not in compliance with certain loan-to-value ratios contained in certain of its loan agreements. In addition, as of Dec. 31, 2012, the shipping segment was in breach of certain financial covenants, mainly the interest coverage ratio, contained in the Company's loan agreements relating to US$769,098,000 of the Company's debt. As a result of this non-compliance and of the cross default provisions contained in all bank loan agreements of the shipping segment and in accordance with guidance related to the classification of obligations that are callable by the creditor, the Company has classified all of its shipping segment's bank loans in breach amounting to US$941,339,000 as current at Dec. 31, 2012. DYNEGY INC: Posts $145-Mil. Net Loss in Second Quarter ------------------------------------------------------ Dynegy Inc. on Aug. 1 reported second quarter 2013 Enterprise-wide Adjusted EBITDA of $8 million compared to $11 million for the same period in 2012. The Company's operating loss was $111 million for the second quarter 2013 compared to an operating loss of $8 million for the same period in 2012. The net loss was $145 million for the second quarter 2013 compared to a net loss of $69 million for the same period in 2012. During 2012, Dynegy's operating loss and net loss only included results from the Coal segment after June 5, 2012. For the first half of 2013, Enterprise-wide Adjusted EBITDA was $51 million compared to $49 million for the same period in 2012. The operating loss for the first half of 2013 was $226 million compared to operating income of $4 million in the first half of 2012. The net loss for the first half of 2013 totaled $287 million compared to a net loss of $1,151 million for the first half of 2012. During 2012, Dynegy's operating loss and net loss only included results from the Coal segment after June 5, 2012. "Our Gas segment delivered a strong quarter despite a number of planned outages while our Coal segment results were negatively impacted by extended outages and transmission congestion in southern Illinois. As a result, the Gas segment is expected to exceed its previously established guidance range whereas the Coal segment's downward revision results in the lowering of our overall Adjusted EBITDA guidance for 2013. In addition, our successful second quarter refinancing enables us to revise upward free cash flow guidance for 2013 by $50 million. Progress in addressing congestion impacting the coal segment, both near and longer term, continued as we have executed a number of commercial hedges to increase protection from this congestion and identified specific transmission system constraints we plan to address and alleviate," said Dynegy President and Chief Executive Officer Robert C. Flexon. "We remain focused on closing the Ameren Energy Resources acquisition during the fourth quarter and on July 22, we filed a variance petition with the Illinois Pollution Control Board which remains a critical step in the approval process and is a closing condition. We made significant progress with integration during the quarter including our annual synergy analysis resulting in an upward revision from $60 million to $75 million." Segment Review of Results Quarter-Over-Quarter Coal - The second quarter 2013 operating loss was $49 million compared to a second quarter 2012 operating loss of $17 million. The coal segment, including the operating results in Legacy Dynegy's consolidated financial statements until June 5, 2012, had an operating loss of $2,720 million for the second quarter 2012, or $68 million excluding the Loss on the Coal Holdco Transfer. Adjusted EBITDA totaled $(24) million during the second quarter 2013 compared to $5 million during the same period in 2012. The $29 million decrease in Adjusted EBITDA resulted from an increase in outages, higher rail expense and a decline in hedge settlements this quarter compared to the same period last year. An increase in outages, primarily at Baldwin and Hennepin, led to lower gross margin and increased operating expenses which reduced Adjusted EBITDA by $10 million. Rail transportation costs increased $4 million as a result of the rail contract modification that was signed during 2012. Hedge settlement revenues decreased $19 million compared to the second quarter of 2012 because the company benefitted from hedges during the second quarter of 2012 when commodity prices were weak but was a net payer on its hedges during the second quarter of 2013 due to the stronger commodity price environment. These lower hedge settlements were partially offset by a $6 million increase in physical energy margin attributable to higher power prices which more than offset an increase in transmission congestion. Gas - The second quarter 2013 operating loss was $36 million compared to second quarter 2012 operating income of $28 million. Adjusted EBITDA totaled $53 million during the second quarter 2013 compared to $27 million during the same period in 2012. The $26 million increase in Adjusted EBITDA is primarily due to the absence of $61 million in negative settlements in 2012 related to legacy put options and other commercial positions. The benefit associated with lower financial settlements was partially offset by $5 million in lower market capacity payments primarily at the Kendall facility, a $4 million decrease in tolling payments associated with the early termination of the Morro Bay contract and a $19 million decrease in physical energy margin before hedges due to lower generation volumes and spark spreads. Liquidity As of July 26, 2013, Dynegy's available liquidity was $787 million which included $500 million in cash and cash equivalents and $287 million of revolver availability under the Company's revolving credit facility. In April 2013, Dynegy closed $1.775 billion in new credit facilities including $1.3 billion in new senior, secured term loans and a $475 million corporate revolver. The proceeds of the term loans were used, together with cash on hand, to repay existing indebtedness at GasCo and CoalCo and to fund related transaction costs. In May 2013, Dynegy completed a Rule 144A private placement of $500 million in aggregate principal amount of 5.875% Senior Notes due 2023. Dynegy used the proceeds of the offering to repay $500 million of the term loans issued in April 2013. The remaining $800 million term loan matures in 2020 and is priced at LIBOR plus 300 basis points with a LIBOR floor of one percent. The new 5-year, $475 million revolving credit facility at Dynegy Inc. replaced an existing $150 million GasCo revolving credit facility. The interest rate charged on borrowings under the revolver will be LIBOR plus 275 basis points with no LIBOR floor. Together these financing activities released $335 million in restricted cash and reduced annual interest expense by approximately $100 million compared to the annual interest expense run rate at the Company's emergence from bankruptcy in October 2012. Consolidated Cash Flow Cash flow used in operations during the first half of 2013 was $10 million compared to cash flow used in operations of $107 million during the same period in 2012. During the first half of 2013, the business provided Adjusted EBITDA of $51 million which was more than offset by $44 million in interest payments; $7 million in negative changes in working capital, which includes $2 million of increased collateral postings to satisfy counterparty collateral requirements; and $10 million related to acquisition, integration and other expenses . During the first half of 2012, the business provided Adjusted EBITDA from continuing operations of $42 million and $2 million related to receipt of a tax refund. This was more than offset by $20 million in negative Adjusted EBITDA related to discontinued operations, $34 million in interest payments and $97 million in negative working capital changes, primarily associated with collateral postings to satisfy counterparty collateral demands. Cash flow provided by investing activities totaled $283 million during the first half of 2013 compared to cash flow provided by investing activities of $372 million during the same period in 2012. During the first half of 2013, capital expenditures totaled $55 million, including $51 million in maintenance capital expenditures and $4 million in environmental capital expenditures. During the first half of 2012, capital expenditures totaled $37 million, including $31 million in maintenance capital expenditures and $6 million in environmental capital expenditures. During the first half of 2013, there was a $335 million net cash inflow related to restricted cash balances compared to a $134 million net cash inflow in the same period in 2012. In 2012 there was a $256 million cash inflow related to the DMG acquisition that did not recur in 2013. Cash flow used in financing activities during the first half 2013 was $160 million compared to cash flow used in financing activities of $7 million during the same period in 2012. During 2012, proceeds related to refinancing of $1,753 million were more than offset by borrowings and debt issuance costs of $1,913 million. PRIDE Update Dynegy continues to use the PRIDE initiative to improve operating performance, cost structure and the balance sheet and to drive recurring cash flow benefits. Total PRIDE related contributions for 2013 are expected to include margin and cost improvements of approximately $40 million. Additionally, 2013 balance sheet improvements are projected to be $162 million, an increase of $79 million from the prior forecast. Since the program's inception, a total of $157 million in margin and cost improvements compared to our 2010 baseline and $686 million in balance sheet improvements have been identified. Guidance Update Enterprise-wide Adjusted EBITDA guidance range is being lowered by $50 million to $200-$225 million due to the impact of extended outages in the Coal segment and persistent, high basis differentials which negatively impacted physical energy revenues and correlations with the Company's hedges. These factors more than offset improvements in the Gas segment including higher realized prices at the Independence facility during the first quarter and increased resource adequacy sales from our California facilities. As a result of the second quarter refinancing which led to lower than expected interest rates, a higher than anticipated release of restricted cash and a reduced debt repayment net of incremental costs associated with the refinancing, Dynegy is increasing its Free Cash Flow guidance by $50 million to a range $190-$215 million. AER Integration Update The estimate of annual synergies of the combined operations is being increased from $60 million to $75 million. The increase is largely due to greater cost reductions than expected from corporate infrastructure and increased savings from operational and procurement initiatives. In July, Illinois Power Holdings along with AER and AmerenEnergy Medina Valley Cogen filed a new variance petition with the Illinois Pollution Control Board requesting materially the same relief that AER was granted in 2012. The Ameren Energy Resources acquisition continues to progress, with an expected closing in the fourth quarter. About Dynegy Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) on Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Holdings and its parent, Dynegy Inc., completed their Chapter 11 reorganization and emerged from bankruptcy Oct. 1, 2012. Under the terms of the DH/Dynegy Plan, DH merged with and into Dynegy, with Dynegy, Inc., remaining as the surviving entity. Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., won confirmation of their plan of liquidation in March 2013, allowing the former operating units of Dynegy to consummate a settlement agreement resolving some lease trustee claims and sell their facilities. EASTMAN KODAK: Completes Syndication of $695MM Exit Term Loans -------------------------------------------------------------- Kodak on Aug. 1 disclosed that it has completed the syndication of its previously announced $695 million exit and post-emergence term-loan credit facilities. The credit facilities, along with the proceeds from the previously announced rights offering, cash on hand and other financing transactions, will enable Kodak at emergence from Chapter 11 to fund its Plan of Reorganization, and repay its secured creditors under its existing Debtor-in- Possession loan facilities and second lien notes. The credit facilities are comprised of a $420 million, six-year first lien term loan, and a $275 million, seven-year second lien term loan. The term loans have more favorable pricing and other terms than the existing rollover exit financing commitment, which are expected to result in interest savings of at least $25 million within the first 12 months. "These new financing commitments demonstrate the financial market's confidence in our Plan of Reorganization and provide Kodak substantially more advantageous terms than the existing DIP rollover commitment," said Antonio M. Perez, Kodak Chairman and Chief Executive Officer. "The result will be significant savings for Kodak, as we execute our post-emergence business strategy and generate value for our stakeholders." Definitive documentation is expected to be filed with the U.S. Bankruptcy Court for the Southern District of New York in the coming days. The credit facilities are expected to close upon Kodak's emergence from Chapter 11, subject to certain customary conditions. Kodak is also in the final stages of completing syndication of an asset-based revolving credit facility that would be effective at emergence. Affiliates of J.P. Morgan, Barclays and Bank of America Merrill Lynch are serving as joint lead arrangers for the term loans. Lazard is serving as Kodak's financial advisor and Sullivan & Cromwell LLP as its legal advisor in the arrangement of the financing. 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: Perez to Be Replaced as CEO After Bankruptcy ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Eastman Kodak Co., whose reorganization plan is up for approval at an Aug. 20 hearing, said last week that Chief Executive Officer Antonio Perez will vacate his position when the new board elects a successor after the company emerges from bankruptcy. According to the report, Mr. Perez, 67, has been CEO since 2005. After his successor is named, Mr. Perez will continue as a full- time adviser to the board for the remainder of the first year outside bankruptcy. For the next two years, he will be a consultant. Confirmation of Kodak's plan would complete a reorganization begun in January 2012. The report notes that when Kodak revised the plan, the price of the $400 million in 7 percent convertible notes due in 2017 declined. The last trade before the original plan filing was 12.853 cents on the dollar on April 24. The notes rose to 26.125 cents by May 15, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt last traded on July 30 for 3.1 cents, a decline of 88 percent from the peak. 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. EMIGRANT BANCORP: Fitch Raises Issuer Default Rating to 'B+' ------------------------------------------------------------ Fitch Ratings has upgraded Emigrant Bancorp Inc.'s (EMIG) long- term Issuer Default Rating (IDR) to 'B+' from 'B'. The ratings for the bank subsidiaries were affirmed at 'B+'. The Ratings Outlook remains Stable. Rating Action and Rationale The upgrade of EMIG's IDR reflects reduced liquidity risk at the holding company. With the additional liquidity from the bank subsidiary, the holding company repaid $283 million of its TARP shares, which were set to reprice to a 9% coupon in 2014, up from 5%. Furthermore, Fitch believes that the additional flexibility at the holding company has reduced uncertainty around the $200 million of senior notes coming due in 2014. Rating Drivers and Sensitivities Asset quality metrics are improving, though non-performing assets (NPAs) remain stubbornly high. The elevated level of NPAs remain a drag on EMIGs current ratings. NPAs are driven primarily by EMIG's residential portfolio. Fitch expects NPAs to remain elevated as the judicial foreclosure process limits the speed at which lenders can resolve problem residential mortgages in New York. That said, credit losses for this portfolio have been minimal as most of the mortgages have relatively low loan to values (LTVs). Earning is a ratings weakness for the institution as core earnings continue to struggle. Given the low interest rate environment, Fitch expects earnings will face headwinds. That said, EMIG's recent branch sale will substantially reduce both interest expense and overhead expenses in the near term. To combat margin pressures, EMIG has placed strategic focus on building up its fee income businesses. These businesses include HPM Partners (investment advisor/wealth management), Personal Risk Management (insurance brokerage), NYPB&T (wealth management and trust services) and Galatioto Sports Partners (sports M&A advisory boutique), and Fiduciary Network (boutique lender to financial services companies). Meaningful fee income growth from EMIG's new business could be positive drivers for its current ratings. As the economic environment worsened during the credit cycle, EMIG shifted its focus to commercial lending through a number of different channels. EMIG offers a number of different commercial lending products including fine arts lending, sports lending, CRE bridge loans and private equity sponsored cash flow loans. Additionally, EMIG participates in the syndicated loan market. Each of these lending channels has limited exposure on its own. Collectively, however, they represent a nearly one-quarter of the loan portfolio. Any deterioration in these portfolios could result in negative ratings pressure. Fitch believes EMIGs ratings could move higher as NPAs decline and operating performance improves. In addition, further clarity around BASEL III rules and its effect on EMIG's trust preferred securities and capital levels could provide positive ratings momentum. Conversely, deterioration to asset quality or sizeable reductions to capital levels could negatively impact ratings. KEY RATING DRIVERS - Support and Support Rating Floors: EMIG and subsidiaries have Support Ratings of '5' and Support Rating Floors of 'NF'. Fitch believes that they are not systemically important and therefore, the probability of support is unlikely. The IDRs and Viability Ratings (VRs) do not incorporate any external support. RATING SENSITIVITIES - Support and Support Rating Floors: Fitch does not anticipate changes to the Support Ratings or Support Rating Floors given size and the lack of systemic importance of the institution. KEY RATING DRIVERS - Subordinated Debt and Other Hybrid Securities: Subordinated debt and other hybrid capital issued by the banks and by various issuing vehicles are all notched down from the holding company or its bank subsidiaries' VRs. This is in accordance with Fitch's assessment of each instrument's respective nonperformance and relative loss severity risk profiles. RATING SENSITIVITIES - Subordinated Debt and Other Hybrid Securities: Ratings are primarily sensitive to any change in the VRs, where the notching would be realigned in conjunction with any change in the VR. KEY RATING DRIVERS - Subsidiary and Affiliated Company Rating: Fitch has equalized the ratings of Emigrant Bancorp with its bank subsidiaries as it has addressed liquidity concerns at the holding company. RATING SENSITIVITIES - Subsidiary and Affiliated Company Rating: Ratings are primarily sensitive to any change in the VRs of the associated bank subsidiaries. Fitch has upgraded the following ratings with a Stable Outlook. Emigrant Bancorp -- Long-term IDR to 'B+' from 'B'; -- VR to 'b+' from 'b'; -- Senior unsecured to 'B-/RR6' from 'CCC/RR6'. Emigrant Capital Trust I & II -- Preferred stock to 'CCC/RR6' from 'CC/RR6'. Fitch has affirmed the following ratings with a Stable Outlook. Emigrant Bancorp -- Short-term IDR at 'B'; -- Support Rating at '5'; -- Support Rating Floor 'NF'. Emigrant Bank -- Long-term IDR at 'B+'; -- Short-term IDR at 'B'; -- Viability Rating at 'b+'; -- Support Rating at '5'; -- Support Rating Floor at 'NF'; -- Long-term Deposits at 'BB-'; -- Short-term deposits at 'B'. Emigrant Mercantile Bank -- Long-term IDR at 'B+'; -- Short-term IDR at 'B'; -- Support Rating at '5'; -- Support Rating Floor at 'NF'. ENDEAVOR ENERGY: New $300MM Sr. Notes Issue Get Moody's B3 Rating ----------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Endeavor Energy Resources LP's proposed $300 million senior unsecured notes due 2021. The notes are being co-issued by EER Finance, Inc. Moody's also assigned a B1 Corporate Family Rating (CFR) and a B1-PD Probability of Default Rating (PDR) to Endeavor. The outlook is stable. The proceeds of the offering will be used to repay drawings under the company's revolving credit facility and for general corporate purpose. Issuer: Endeavor Energy Resources LP Rating Assignments: Corporate Family Rating (CFR), assigned B1 Probability of Default Rating (PDR), assigned B1-PD $300 million Senior Unsecured Regular Bond/Debenture, assigned B3 (LGD6-91%) Outlook Assignment Assigned stable outlook Ratings Rationale: Endeavor's B1 Corporate Family Rating reflects the high quality of its Permian focused asset base and large, oil-weighted drilling inventory with upside production trends based on proven and statistically repeatable well characteristics. The rating is restrained by the company's small scale production and reserves, high leverage, and weak capital efficiency relative to higher rated E&P companies. The B1 CFR also incorporates the company's high reliance on external financing to fund its capital intensive drilling program and Moody's expectation that Endeavor's corporate governance and transactions with affiliated companies will be managed in-line with stated financial policies, including maintaining access to liquidity and targeting debt / EBITDA leverage metric no greater than 3.0x. The B3 rating on the proposed $300 million senior unsecured notes reflects both the overall probability of default of Endeavor, to which Moody's assigned a PDR of B1-PD, and a loss given default of LGD6-91%. The company has a $2.0 billion senior secured revolving credit facility with an adjusted borrowing base of $1.325 billion. The credit facility has a first-lien priority claim on substantially all of Endeavor's assets. The size of the potential senior secured claim relative to the unsecured notes results in the senior notes being rated two notches below the B1 CFR under Moody's Loss Given Default Methodology. Founded in 2000, privately-held Endeavor has focused on expanding its acreage position across the Midland and Delaware Basins of the Permian Basin. The company holds approximately 509,000 net acres with over 90% held by production. As of 31 December 2013, Endeavor had a proved reserve base of about 184 million barrels of oil equivalent (MMboe), of which 79% was classified as proved developed and 66% was comprised of oil. For the quarter ended 31 March 2013, Endeavor's daily production volumes averaged approximately 35,000 boe, yielding a healthy reserve life of about 14 years on a proved developed reserve basis. Endeavor has historically relied on drawings under its bank revolving credit facility to fund acquisitions and the drilling and completion of new wells. The company drilled approximately 575 wells in the three year period from 2010 to 2012 under a capital budget that totaled approximately $1.7 billion. The outspending of internally generated cash flows has resulted in elevated leverage metrics relative to peers. As of 31 March 2013, Endeavor had a total outstanding debt balance of $1.4 billion primarily consisting of borrowings under its revolver with debt / average daily production of approximately $39,500 per boe and debt / PD reserve approaching $9.30 per boe. High finding & development (F&D) costs have also offset unlevered cash margins that have averaged around $40 per boe and pressured returns with a full cycle ratio of around 1.2x, less than the 1.5x median for B1-rated E&Ps. With a development focus concentrated in the Midland Basin, Endeavor is positioned to benefit from its extensive, oil- weighted, low-risk drilling inventory. The company plans to drill an additional 108 wells in 2013, 96 of which represent vertical wells targeting the Wolfberry play and the remaining 12 consisting of horizontal wells in the Wolfcamp, primarily in the Midland and Delaware Basins. Over time, Moody's expects to see improved operating efficiencies to support its larger scale drilling and development program with lower F&D costs providing for enhanced returns and a leveraged full cycle ratio approaching the level of its peers. Endeavor has adequate liquidity. Pro-forma for the proposed $300 million notes offering, Endeavor has approximately $24 million of cash and equivalents on hand and about $260 million of availability under its $1.325 billion borrowing base. The revolving credit facility matures in January 2015 and contains three financial covenant requirements: a minimum current ratio of 1.0x, a maximum debt / EBITDA ratio of 3.5x, and a minimum interest coverage ratio of 2.75x. Moody's anticipates that the company will be in compliance with these covenants through 2014. The stable outlook is based upon the expectation that the company will execute on reserve and production growth targets without any substantial increase in leverage. The ratings may be downgraded if debt / average daily production or debt / PD reserves are sustained above $40,000 per boe and $12.00 per boe, respectively, or if liquidity deteriorates below current level. Successful execution of its Permian development projects and improved capital efficiency will dictate upward ratings progression. An upgrade would be considered if production can be sustained above 50,000 boe per day, while keeping debt / average daily production under $30,000 boe. The principal methodology used in this rating was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Endeavor Energy Resources, LP is a privately held independent oil and gas exploration and production company, which is headquartered in Midland, Texas. FIRST COMMUNITY SW FL: FDIC Named as Receiver; C1 Assumes Deposits ------------------------------------------------------------------ First Community Bank of Southwest Florida, Fort Myers, Florida, also operating as Community Bank of Cape Coral, was closed on Friday by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with C1 Bank, Saint Petersburg, Florida, to assume all of the deposits of First Community Bank of Southwest Florida. The seven former branches of First Community Bank of Southwest Florida will reopen as branches of C1 Bank during their normal business hours. Depositors of First Community Bank of Southwest Florida will automatically become depositors of C1 Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of First Community Bank of Southwest Florida should continue to use their current branch until they receive notice from C1 Bank that systems conversions have been completed to allow full-service banking at all branches of C1 Bank. Friday evening and over the weekend, depositors of First Community Bank of Southwest Florida could access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of March 31, 2013, First Community Bank of Southwest Florida had approximately $265.7 million in total assets and $254.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, C1 Bank agreed to purchase essentially all of the failed bank's assets. GENTILE FAMILY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Gentile Family Industries aka GF Industries 122 North Harbor Blvd., Suite 201 Fullerton, CA 92832 Bankruptcy Case No.: 13-16402 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Jeffrey W. Broker, Esq. BROKER & ASSOCIATES PC 18111 Von Karman Ave, Ste.460 Irvine, CA 92612-7152 Tel: (949) 222-2000 Fax: (949) 222-2022 E-mail: jbroker@brokerlaw.biz Scheduled Assets: $5,676,747 Scheduled Liabilities: $5,820,275 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/cacb13-16402.pdf The petition was signed by Steven Gentile, chief executive officer. GLS CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: GLS Construction Services, LLC 4655 Huntingtown Road Huntingtown, MD 20639 Bankruptcy Case No.: 13-22707 Chapter 11 Petition Date: July 25, 2013 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Debtor's Counsel: James Greenan, Esq. MCNAMEE, HOSEA, ET. AL. 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Tel: (301) 441-2420 E-mail: jgreenan@mhlawyers.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/mdb13-22707.pdf The petition was signed by Gary Leonard Sydnor, Jr., managing member. GRYPHON GOLD: Case Summary & 16 Unsecured Creditors --------------------------------------------------- Debtor: Gryphon Gold Corporation 748 S. Meadows Parkway A9 Reno, NV 89521 Bankruptcy Case No.: 13-51496 Chapter 11 Petition Date: July 29, 2013 Court: U.S. Bankruptcy Court District of Nevada (Reno) Judge: Mike K. Nakagawa Debtor's Counsel: Stephen R. Harris, Esq. HARRIS LAW PRACTICE, LLC 6151 Lakeside Drive, Suite 2100 Reno, NV 89511 Tel: (775) 786-7600 Fax: (775) 786-7764 E-mail: steve@harrislawreno.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by William Goodhard, director. Debtor's List of Its Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Waterton Global, LLC Legal Fees per $77,805 199 Bay Stree, Suite 5050 Agreement Toronto, Ontario M5L 1E2 Canada Faegre Baker Daniels Goods/Services $72,727 1470 Walnut Street, Suite 300 Boulder, CO 80302 Kei Advisors Goods/Services $47,268 7606 Transit Road, Suite 300 Buffalo, NY 14221 Borden Ladner Gervais In Trust Legal Services $22,331 Willis Canada, Inc. Insurance Premium $3,937 Erwin & Thompson, LLP Goods/Services $3,672 Viavid Goods/Services $2,045 Jones & Keller Legal Services $1,803 Newsfile Corp. Goods/Services $1,497 Donald Tschabrun Cobra Reimbursement $1,001 James T. O'Neil, Jr. Employee Expense $926 Computershare Inc. Goods/Services $693 Blender Media -- $485 Inkling Print Solutions Goods/Services $424 Accutel, Inc. USD -- $201 Allstream Inc. -- $72 GREATER RISING: Case Summary & 2 Unsecured Creditors ---------------------------------------------------- Debtor: Greater Rising Star Missionary Baptist Church 1819 Prairie Avenue Saint Louis, MO 63113 Bankruptcy Case No.: 13-46913 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court Eastern District of Missouri (St. Louis) Judge: Barry S. Schermer Debtor's Counsel: Syreeta L. McNeal, Esq. 3610 Buttonwood Drive, Suite 200 Columbia, MO 65201 Tel: (573) 445-1955 E-mail: mcneallawoffice@gmail.com Scheduled Assets: $2,459,487 Scheduled Liabilities: $413,445 A copy of the Company's list of its largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/moeb13-46913.pdf The petition was signed by Nathaniel Griffin, Sr., pastor. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Nathaniel Griffin, Sr. 13-44932 05/27/13 GREEN SPRING: Case Summary & 5 Unsecured Creditors -------------------------------------------------- Debtor: Green Spring Valley Overlook, LLC 101 St. Thomas Lane Owings Mills, MD 21117 Bankruptcy Case No.: 13-22870 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: James F. Schneider Debtor's Counsel: James C. Olson, Esq. 10451 Mill Run Circle, Suite 400 Owings Mills, MD 21117 Tel: (410) 356-8852 Fax: (410) 356-8804 E-mail: jolson@jamesolsonattorney.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's five largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/mdb13-22870.pdf The petition was signed by William A. Green, managing member. HAPCO PETROLEUM: Updated Case Summary & Creditors' Lists -------------------------------------------------------- Lead Debtor: Hapco Petroleum Corporation 2051 Route 130 South Burlington, NJ 08016 Bankruptcy Case No.: 13-26293 Chapter 11 Petition Date: July 25, 2013 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Michael B. Kaplan Debtors' Counsel: Edmond M. George, Esq. Obermayer, Rebmann, Maxwell & Hippel 1617 JFK Boulevard, Suite 1900 Philadelphia, PA 19103 Tel: (215) 665-3140 Fax: (215) 665-3165 E-mail: edmond.george@obermayer.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed separate Chapter 11 petitions: Debtor Case No. ------ -------- Hightstown Petroleum Corporation 13-26296 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 Avtar Heir 13-26297 The petitions were signed by Malkit Singh Heir, president. A. Hapco Petroleum did not file a list of its largest unsecured creditors together with its petition. B. Hightstown Petroleum did not file a list of its largest unsecured creditors together with its petition. HARBINGER GROUP: Fitch Affirms 'B' Issuer Default Rating -------------------------------------------------------- Fitch Ratings has affirmed the 'B' Issuer Default Rating (IDR) and 'B/RR4' debt ratings of Harbinger Group Inc. (HRG). The Rating Outlook is a Stable. Key Ratings Drivers The ratings consider HRG's relatively high leverage, adequate debt service capabilities, and acquisition-focused operating strategy. The company has three major business segments: consumer products through its 59.2% ownership in Spectrum Brands, Inc. (SPB; Fitch IDR of 'BB-'), insurance through its wholly owned subsidiary Fidelity & Guaranty Life Holdings, Inc. (F&G Life; Fitch Insurer Financial Strength rating of 'BBB'), and energy through the EXCO/HGI joint venture (EXCOJV). Fitch views HRG's leverage as high. Debt and preferred have almost doubled since HRG's fiscal year-end of Sept. 30, 2012 to complete the above mentioned acquisitions and provide funds for future growth. Outstanding debt and preferred stock totaled $5 billion at March 31, 2013, with approximately $3.3 billion of SPB, $1.1 billion at HRG, approximately $0.3 billion at intermediate insurance holding company Fidelity & Guaranty Life Holdings (FGLH), and approximately $0.3 billion at HRG's share of the EXCOJV debt. HRG's financial leverage ratio, excluding SPB, FGLH, and EXCO related debt was 59% at March 31, 2013. Debt will increase further after HRG's recent addition of $225 million to its existing 7.785% senior secured security, bringing it to $925 million. Fitch notes that HRG's ability to increase secured debt to fund future acquisitions is somewhat limited by financial covenants, which includes a minimum collateral coverage ratio of 2x at HRG only. A large part of the collateral is the value of SPB, whose share price is up over 25% year-to-date and has created a comfortable collateral covenant cushion. Consolidated leverage is expected to trend down to the 4x (Debt/EBITDA) range over the next 18 months based on management's plans for further debt reduction at SPB and additional EBITDA and cash flows from recent acquisitions. HRG also has the ability to force conversion of its preferred debt in 2014, under certain conditions. Fitch expects the recent acquisition of Stanley's Black & Decker Hardware and Home Improvement Group (HHI) by SPB and the oil and gas properties acquired through EXCOJV (in December 2012 and March 2013 respectively) to enhance HRG's cash flows and debt service capabilities. However these operations have yet to provide meaningful dividends due to their recent addition. Dividends to HRG from SPB and F&G Life are somewhat constrained due to contractual and regulatory limits on cash flows. Cash flow from SPB is limited by its 9.5% notes. Cash flow from F&G Life is primarily limited by statutory dividend restrictions (currently to $90 million) but business plans are expected to limit dividends on a run-rate basis to approximately $40 million. In March 2013 there was a special dividend of $73 million from FGLH to HRG, but that was supported by a $300 million debt issuance. Based largely on those restrictions, interest and preferred dividend coverage is expected to be in the 1x to 1.5x range. Over the near term, HRG's liquidity position benefits from existing holding company cash and invested assets ($209 million as of March 31, 2013) and a financial covenant that requires HRG to maintain minimum cash balances equal to six months of HRG's senior secured debt interest expense. Further, HRG's ability to pay dividends or other cash distributions to its shareholders is limited by financial covenants to no more than 50% of net income and is subject to collateral coverage ratio tests. The Stable Outlook reflects Fitch's view that improved operating trends at both SPB and F&G Life are sustainable over the near term and energy operations contribute increasing dividends. HRG's acquisition strategy is likely to keep leverage high. Leverage could also be erratic whenever there is a sizeable acquisition until the overall enterprise attains a much larger scale. Debt and debt service payments are likely to dampen near- term profitability. As a result, the rating is likely to remain in this range in the intermediate term. Rating Sensitivities Key rating triggers that could lead to a downgrade include a reduction in F&G Life's ordinary statutory dividend capacity to below $40 million, a change in SPB's strategy to reduce leverage to between 2.5x to 3.5x within 18 to 24 months, an increase in HRG's (parent only) financial leverage ratio to above 70%, and the deployment of existing cash balances that increases the enterprise's credit risk. Key rating triggers that could lead to an upgrade include a significant increase in F&G Life's ordinary statutory dividend capacity from its current level of approximately $90 million, a reduction in HRG (parent only) financial leverage ratio below 40%, and the deployment of existing cash balances that improves the magnitude and diversity of cash flows to HRG. HRG is a NYSE-traded holding company that is majority owned by investment funds affiliated with Harbinger Capital Partners LLC (Harbinger). Harbinger established HRG as a permanent capital vehicle to obtain controlling equity interests in established, dividend-paying businesses that operate across a diversified set of industries. The company currently operates in four business segments: consumer products through its 59.2% ownership in SPB, insurance through its wholly owned subsidiary F&G Life, EXCOJV, the energy partnership, and Salus, an asset based lending business. Fitch has affirmed the following ratings with a Stable Outlook: Harbinger Group Inc. -- Long-Term IDR at 'B'; -- $925 million 7.875% senior unsecured notes at 'B/RR4'. HEALTH MANAGEMENT: S&P Puts 'BB-' Rating on CreditWatch Developing ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BB-' issue-level rating on Health Management Associates Inc.'s senior secured credit facility and its 'BB-' issue-level rating on the company's senior secured notes on CreditWatch with developing implications following the announcement that HMA will be acquired by hospital operator Community Health Systems. This reflects uncertainty regarding recovery prospects for this debt in the combined company's eventual capital structure. At the same time, S&P placed its 'B-' rating on HMA's senior unsecured notes on CreditWatch with positive implications. This reflects S&P's belief that this debt could see some improved recovery under the combined capital structure, as opposed to S&P's current expectation of negligible recovery in the event of payment default. S&P's 'B+' corporate credit rating on HMA is unaffected by this announcement. S&P will monitor the progress of the acquisition and resolve the CreditWatch placement accordingly. If the transaction is completed, S&P will likely withdraw the corporate credit rating on HMA. If HMA's shareholders rejects the sale, S&P will likely affirm its corporate credit rating at 'B+'. RATINGS LIST Health Management Associates Inc. Corporate Credit Rating B+/Stable/-- CreditWatch Actions To From Health Management Associates Inc. Senior Secured Facility BB-/Watch Dev BB- Recovery Rating 2 2 Senior Secured Notes BB-/Watch Dev BB- Recovery Rating 2 2 Senior Unsecured Notes B-/Watch Pos B- Recovery Rating 6 6 HOLT DEVELOPMENT: Discloses Payments Made to Bankruptcy Counsel --------------------------------------------------------------- Holt Development Co., LLC filed papers with the U.S. Bankruptcy Court to amend the employment of Gullett, Sanford, Robinson & Martin, PLLC as attorneys. The amended papers provide that within one year prior to Holt's Chapter 11 filing, the Debtor paid to Gullett Sanford $85,754.24, for services rendered and to be rendered in and in connection with this case. The Debtor has agreed to pay (i) additional amounts to the extent that the product of the hours of legal services rendered, multiplied by the customary hourly rates charged from time to time by the firm for comparable services, exceeds $85,754.24; and (ii) the amounts of all reimbursable expenses incurred by Gullett Sanford in the course of rendering such legal services. Gullett Sanford's customary hourly rates, as may be adjusted from time to time, including during the pendency of this case, are presently as: Professional Rates ------------ ----- Members $350 - $450 per hour Associates $150 - $275 per hour Paralegals $90 - $125 per hour In particular, prior to the filing of the petition, the Debtor paid from its funds to Gullett Sanford four installments totaling $85,754.24. Of the total, sums totaling $41,237.74 have been disbursed to Gullett Sanford as compensation for legal services rendered pre-bankruptcy, including services rendered in preparation for filing the petition, or as reimbursement of expenses incurred. In addition, from the funds which the Debtor paid to Gullett Sanford, there was disbursed $1,213.00, to pay the filing and administrative fees incident to the commencement of this Chapter 11 Case. The balance remaining after the disbursements, $43,303.50, will continue to be held in Gullett Sanford's Client Fiduciary Account pending further Court orders. Attorneys for the Debtor can be reached at: D. Hiatt Collins, Esq. G. Rhea Bucy, Esq. GULLETT, SANFORD, ROBINSON & MARTIN, PLLC 150 3rd Ave. South, Suite 1700 Nashville, TN 37201 Tel: (615) 244-4994 E-mail: hcollins@gsrm.com rbucy@gsrm.com Holt Development Co., LLC, filed a Chapter 11 petition (Bankr. M.D. Tenn. Case No. 13-06154) on July 16, 2013. The petition was signed by Dannie R. Holt as chief manager. Judge Randal S. Mashburn presides over the case. Gullett, Sanford, Robinson & Martin, PLLC, serves as the Debtor's counsel. The Debtor estimated assets of at least $10 million and debts of at least $1 million. HOLT DEVELOPMENT: Wants Schedules Deadline Extended to Aug. 15 -------------------------------------------------------------- Holt Development Co., LLC, has asked the U.S. Bankruptcy Court to extend the time to file its schedules of assets and liabilities, and statement of financial affairs to Aug. 15, 2013. Holt Development Co., LLC, filed a Chapter 11 petition (Bankr. M.D. Tenn. Case No. 13-06154) on July 16, 2013. The petition was signed by Dannie R. Holt as chief manager. Judge Randal S. Mashburn presides over the case. Gullett, Sanford, Robinson & Martin, PLLC, serves as the Debtor's counsel. The Debtor estimated assets of at least $10 million and debts of at least $1 million. HORIZON HEALTH CENTER: Meeting to Form Creditors' Panel on Aug. 8 ----------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on August 8, 2013 at 10:00 a.m. in the bankruptcy case of Horizon Health Center, Inc. The meeting will be held at: United States Trustee's Office One Newark Center 1085 Raymond Blvd. 21st Floor, Room 2106 Newark, NJ 07102 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Horizon Health Based in Lewisville, Texas, Horizon Health Corp. owns/leases 15 behavioral healthcare hospitals and related facilities as of Feb. 28, 2007, which provide behavioral healthcare programs for children, adolescents, and adults. It serves as contract manager of clinical and related services, primarily of behavioral health and physical rehabilitation programs, offered by acute care hospitals in the United States. HOVNANIAN ENTERPRISES: Moody's Hikes CFR to Caa1; Outlook Stable ---------------------------------------------------------------- Moody's Investors Service raised the Corporate Family Rating of Hovnanian Enterprises, Inc. to Caa1 from Caa2 and Probability of Default rating to Caa1-PD from Caa2-PD. Concurrently, Moody's upgraded the company's first lien notes to B1 from B3, second lien notes to Caa1 from Caa2, unsecured notes to Caa2 from Caa3, and preferred stock to Caa3 from Ca. Moody's also affirmed Hovnanian's Speculative-Grade Liquidity (SGL) Rating at SGL-3. The ratings outlook is stable. The upgrades reflect both the industry's growing strength and Hovnanian's own improved results, which make it far less likely that the company will default on its debt obligations. Similarly, the improved trading environment for homebuilding bonds and Hovnanian's own bond trading levels render a near-term distressed exchange improbable. The rating outlook is stable. The following rating actions were taken: Corporate family rating, upgraded to Caa1 from Caa2; Probability of default rating, upgraded to Caa1-PD from Caa2-PD; First lien senior secured notes, upgraded to B1 (LGD2, 23%) from B3 (LGD2, 24%); Second lien senior secured notes, upgraded to Caa1 (LGD4, 57%) from Caa2 (LGD4, 61%); Senior unsecured notes, upgraded to Caa2 (LGD5, 80%) from Caa3 (LGD5, 85%); Preferred stock, upgraded to Caa3 (LGD6, 95%) from Ca (LGD6, 98%); Senior unsecured shelf, upgraded to (P)Caa2 from (P)Caa3; Speculative grade liquidity assessment affirmed at SGL-3. All of K. Hovnanian Enterprises' debt is guaranteed by its parent company, Hovnanian Enterprises, Inc. and its restricted operating subsidiaries. Ratings Rationale: The Caa1 rating reflects Hovnanian's elevated debt levels, with adjusted homebuilding debt/capitalization at 146% as of April 30, 2013; negative cash flow generation; continued, albeit greatly reduced, losses; and still-negative interest coverage. At the same time, the rating is supported by the impressive strength being shown by the homebuilding industry; the improvement in Hovnanian's operating performance, including growing revenues and improving gross margins; and Hovnanian's slow return to profitability, which Moody's expects to continue. The company's SGL-3 speculative grade liquidity assessment reflects the company's adequate liquidity profile, supported by the absence of significant debt maturities until 2016. Liquidity is constrained by the company's weak unrestricted cash position of about $236 million at April 30, 2013 and negative cash flow generation. Hovnanian was recently able to obtain a $75 million senior unsecured revolving credit facility, due 2018, which has no financial maintenance covenants. The stable ratings outlook reflects expected improvement in Hovnanian's operating performance, including growing revenues, increasing gross margins, and the slow return to profitability. The ratings could be lowered if the company were to materially deplete its liquidity either through sharper-than-expected operating losses or through a substantial investment or other transaction. The outlook could be changed to positive or ratings upgraded if the company were to generate sizable amounts of operating cash flow, maintain profitability on a net income basis, or receive a significant infusion of equity capital. The principal methodology used in rating Hovnanian Enterprises, Inc. was the Global Homebuilding Industry Methodology published in March 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. Established in 1959 and headquartered in Red Bank, New Jersey, Hovnanian Enterprises, Inc. designs, constructs and markets single-family detached homes and attached condominium apartments and townhouses. Homebuilding revenue and consolidated net loss for the last twelve months ending April 30, 2013 were approximately $1.6 billion and ($60) million, respectively. IGPS CO: Pallet Business Sold After Settlement Reached ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that IGPS Co. received court approval on July 29 to sell the business largely in exchange for secured debt after the unsecured creditors' committee negotiated a settlement with the buyers. According to the report, the company filed under Chapter 11 early June, banking on a quick sale of the business of leasing plastic pallets. There already was a contract where holders of secured debt would take the business in exchange for $36 million in secured debt, $1 million in cash, and assumption of the loan financing bankruptcy. The report relates that in the settlement, the cash portion of the purchase price was increased by $1.5 million to $2.5 million. In addition, the buyers agreed to pay all priority tax claims and claims by workers for being fired without required notice. The report notes that the buyers are Balmoral Funds LLC, One Equity Partners LLC, and Jeff and Robert Liebesman. They purchased the $148.8 million working-capital loan shortly before bankruptcy. The buyers are also picking up costs of the Chapter 11 effort. As icing on the cake, the buyers are waiving deficiency claims and agreeing not to receive any distribution in bankruptcy. Finally, they won't sue creditors for preferences, or payments received within 90 days of bankruptcy. The report relates that there were no qualified competing bids, so an auction was canceled. The official creditors' committee and the U.S. Trustee had failed in their attempts at slowing down the sale. About iGPS Co. iGPS Company LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 13-11459) on June 4, 2013, to sell its assets to a group led by Balmoral Funds LLC, absent higher and better offers. iGPS Company -- http://www.igps.net-- is the first and only plastic pallet pooling rental and leasing company in the U.S. It offers plastic pallets with embedded radio frequency identification (RFID) tags. Founded in 2006, the company is headquartered in Orlando, Florida, and has a sales and innovation center in Bentonville, Arkansas. The Debtor estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. According to the board resolution authorizing the bankruptcy, Pegasus IGPS LLC owns 12.55% of the company; iGPS Co-Investment LLC owns 18.75%; Kia VIII (iGPS Sub), LLC owns 30.74%; and KIA VIII iGPS Blocker, LLC, owns 12.27%. IMS HEALTH: Policy Change Prompts Moody's to Cut CFR to 'B2' ------------------------------------------------------------ Moody's Investors Service downgraded IMS Health, Inc.'s Corporate Family and Probability of Default Ratings to B2 from B1 and B2-PD from B1-PD, respectively. Moody's affirmed the secured debt ratings at Ba3 and the senior unsecured debt ratings at B3. Moody's also assigned a Caa1 rating to the proposed $750 million senior unsecured PIK toggle notes due 2018 to be issued by Healthcare Technology Intermediate, Inc., a holding company. Proceeds will fund a cash distribution to IMS's management team and to the private equity investors TPG Capital, Leonard Green Partners, and CPIBB. The ratings outlook is stable. Downgrades: Issuer: IMS Health Incorporated Corporate Family Rating, Downgraded to B2 from B1 Probability of Default Rating, Downgraded to B2-PD from B1-PD Affirmations: Issuer: IMS Health Incorporated Senior Secured Bank Credit Facility Aug 26, 2017, Affirmed Ba3 (LGD2, 25% from LGD3, 30%) Senior Secured Bank Credit Facility Sep 1, 2017, Affirmed Ba3 (LGD2, 25% from LGD3, 30%) Senior Secured Bank Credit Facility Aug 26, 2017, Affirmed Ba3 (LGD2, 25% from LGD3, 30%) Senior Secured Bank Credit Facility Aug 26, 2017, Affirmed Ba3 (LGD2, 25% from LGD3, 30%) Senior Secured Bank Credit Facility Sep 1, 2017, Affirmed Ba3 (LGD2, 25% from LGD3, 30%) Senior Unsecured Regular Bond/Debenture Mar 1, 2018, Affirmed B3 (LGD5, 75% from LGD5, 85%) Senior Unsecured Regular Bond/Debenture Nov 1, 2020, Affirmed B3 (LGD5, 75% from LGD5, 85%) Assignments: Issuer: Healthcare Technology Intermediate, Inc. Senior Unsecured Regular Bond/Debenture, Assigned Caa1 (LGD6, 93%) Ratings Rationale: The downgrade reflects IMS's change in financial policy given the choice to forego expected deleveraging in favor of even-higher- than-anticipated debt and leverage levels. Coming not long after a $1.20 billion, October 2012 distribution to IMS's private equity owners, this latest, $750 million dividend highlights the company's more aggressive financial policy. Pro-forma for the new PIK notes, debt-to-EBITDA jumps to 6.7x, from 5.8x (after Moody's standard adjustments), which is high compared to other companies also rated at the B2 level. Even with IMS's additional debt burden, Moody's anticipates the company can generate free cash flow (after capital expenditures) of about $150 million over the next year, giving it the ability, if not necessarily the inclination, to delever modestly. While the company has posted lackluster, partly acquisition-driven revenue growth since 2009 (about 2.7% CAGR through 2012), ongoing cost rationalization and restructuring initiatives have enabled it to drive solid EBITDA growth over the same period, with operating cash flow margin having grown by 500 basis points, to approximately 32%. Based on expectations of profits and cash flow, Moody's forecasts year-end leverage to be just below 6.5x, and at about 5.8x at the end of 2014. However, further debt funded dividend distributions are possible during that span of time. The Caa1 rating on the new, $750 million notes to be issued by Healthcare Technology Intermediate, Inc. reflects the structural subordination of these notes to other senior unsecured debt of IMS, since these new notes will not benefit from upstream guarantees from IMS's operating subsidiaries. The stable ratings outlook reflects Moody's expectations for predictable revenue (approximately $2.5 billion in 2013) and steady free cash flow of at least $150 million, which provides the basis for possible deleveraging. The EBITDA margin is expected to remain at a minimum of 30%, given the benefits of cost restructuring. Moody's anticipates some acquisitions for growth, as organic revenue increases are likely to be modest. The ratings could be downgraded if Moody's expects any decline in organic revenue or disruption in EBITDA or profit margins, if IMS makes acquisitions that are larger than internally generated cash flow, or if Moody's anticipates that IMS will be off the trajectory of debt-to-EBITDA of the low 6x level. The ratings could be upgraded if debt-to-EBITDA can be sustained at below 4.5x, with free cash flow to debt solidly above 10% and a demonstrated commitment to balanced financial policies. Based in Danbury, CT, IMS Health, Inc. is a leading global provider of market intelligence to the pharmaceutical and healthcare industries. The principal methodology used in this rating was the Global Business and Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. IMS HEALTH: S&P Affirms 'B+' CCR & Rates New $750MM Notes 'B-' -------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its ratings, including its 'B+' corporate credit rating on IMS Health Inc., a Danbury, Conn.-based provider of information, services, and technology for the health care industry. The outlook is stable. At the same time, S&P assigned its 'B-' issue-level rating to the company's proposed $750 million holding company notes with a recovery rating of '6', indicating its expectation of negligible (0%-10%) recovery in the event of payment default. Holding company Healthcare Technology Intermediate Inc. is issuing the notes. "Our rating on IMS reflects the company's "highly leveraged" financial risk profile (according to Standard & Poor's Ratings Services' criteria), highlighted by our expectation that the company will sustain leverage at more than 5x over the near term," said credit analyst Shannan Murphy. "We believe IMS has a "satisfactory" business risk profile because of its dominant position as a provider of critical information to the pharmaceutical market, offset by its narrow focus in providing information primarily to that market." S&P's stable rating outlook on IMS Health Inc. reflects its expectation that IMS' size, scale, and clear leadership position will help it sustain EBITDA margins in the low-30% range. This should support continued solid free cash flow generation, although S&P do not expect a permanent improvement in its financial risk profile. S&P could lower its rating if its business risk assessment changes under the unlikely scenario that IMS' reputation for providing quality, critical data is damaged. A modest cyclical downturn or margin erosion, which would likely result in some weakening of credit protection measures, would not likely result in a lower rating, given the company's strong liquidity. An upgrade is unlikely because S&P believes that IMS' highly leveraged financial risk profile will persist over the next year due to the company's sponsors' aggressive financial policy. This is the second sponsor dividend in less than one year, and S&P expects that the sponsor will continue to use growing debt capacity or free cash flow to fund shareholder friendly actions, instead of permanent debt reduction. ISAACSON STRUCTURAL: Case Conversion Hearing Continued to Sept. 24 ------------------------------------------------------------------ The hearing on a motion to covert the chapter 11 case of Isaacson Structural Steel, Inc. to one under chapter 7 of the Bankruptcy Code has been continued to Sept. 24, 2013, at 9:00 a.m. at Courtroom 2 (JMD), 1000 Elm Street, 11th Floor, in Manchester, New Hampshire. Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc., filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416) on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over the case. Isaacson Structural Steel estimated both assets and debts of $10 million to $50 million. The petition was signed by Arnold P. Hanson, Jr., president. An official committee of unsecured creditors has been appointed in Isaacson Structural Steel's case. Nixon Peabody LLP, and Mesirow Financial Consultants represents the Committee. A bankruptcy petition was also filed for Isaacson Steel, Inc. (Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating assets and debts of $1 million to $10 million. The petition was signed by Arnold P. Hanson, Jr., president. William S. Gannon, Esq., also represents Isaacson Steel. The cases are being jointly administered. No trustee or examiner has been appointed. JEFFERSON COUNTY: Water Works Opposes High Sewer Taxes ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the public authority that supplies water for Jefferson County, Alabama, said in a court filing that long-term debt on the sewer system of $21,000 a customer after bankruptcy is so high that sewer taxes "will discourage economic development." According to the report, the Water Works Board for the cities of Birmingham and Bessemer submitted papers July 29 for an Aug. 5 hearing on approval of disclosure materials explaining the county's Chapter 9 debt-adjustment plan. The board cited an expert as saying long-term debt for most utility customers ranges from $1,200 to $2,000. Also concerned that high debt after emergence from Chapter 9 could result in a second bankruptcy, the board said disclosure materials lack sufficient information to determine whether financial assumptions are sound and whether customers will be able to foot the bill. The report notes that the board hinted that it could oppose confirmation of the plan on the theory that sewer debt after bankruptcy will exceed the "used and useful value of the sewer system." Similarly presaging an objection to approval of the plan, lawyers in a group lawsuit by sewer customers said in a filing that the county is settling for too little the claims that $8 billion in debt and swap liability on the sewer system was "procured by fraud and bribery." The report relates that the lawyers faulted disclosure materials for not telling customers the claims have "more settlement value." There's an alternative plan, they said, that would cost sewer customers $3.6 billion, rather than $14.3 billion under the county's plan. The settlement faulted by the sewer customers is supported by holders of more than 75 percent of the $3.2 billion in sewer debt at the core of the county's financial problems. The settlement lays out the Chapter 9 plan under which sewer bondholders would get 65 percent in cash, or 80 percent if they waive claims against JPMorgan Chase & Co. and bond insurers. Distributions would be financed by selling new sewer bonds calculated to generate $1.96 billion to cover the $1.84 billion earmarked for existing sewer bondholders. The report discloses that JPMorgan, the holder of $1.22 billion in bonds, is waiving $842 million of the sewer debt and a $657 million swap debt, resulting in an 88 percent write-off by JPMorgan. The bank's agreement to take less allows other creditors to get more. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff& Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. In June 2013, the county reached settlement with holders of 78 percent of the $3.1 billion in sewer debt at the core of the county's financial problems. The bondholders will be paid $1.84 billion through a refinancing, according to a term sheet. The settlement calls for JPMorgan Chase & Co., the owner of $1.22 billion in bonds, to make the largest concessions so other bondholder will recover more. On June 30, 2013, Jefferson County filed a Chapter 9 plan of debt adjustment. Pursuant to the Plan, sewer bondholders will receive 65 percent in cash. If they elect to waive claims against JPMorgan and bond insurers, they receive 80 percent in cash. Bondholders supporting the plan already agreed to waive claims and receive the larger recovery. Existing sewer bonds will be canceled in exchange for payments under the plan. The county will fund plan distributions by selling new sewer bonds calculated to generate $1.96 billion to cover the $1.84 billion earmarked for existing sewer bondholders. JPMorgan has agreed to waive $842 million of the sewer debt and a $657 million swap debt, resulting in an 88 percent overall write off by JPMorgan. To finance the new sewer bonds, there will be 7.4 percent in rate increases for sewer customers in each of the first four years. In later years, rate increases will be 3.5 percent. JIN CORPORATION: Case Summary & 10 Unsecured Creditors ------------------------------------------------------ Debtor: Jin Corporation dba Asahi Japanese Restaurant dba Asahi Sushi Bar dba Asahi Steakhouse 8010 E. 106th Street Tulsa, OK 74133 Bankruptcy Case No.: 13-11803 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court Northern District of Oklahoma (Tulsa) Judge: Dana L. Rasure Debtor's Counsel: Karen Carden Walsh, Esq. RIGGS, ABNEY, ET AL 502 West 6th Street Tulsa, OK 74119-1010 Tel: (918) 587-3161 E-mail: kwalshattorney@riggsabney.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 10 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/oknb13-11803.pdf The petition was signed by In Sung Kim, president. K-V PHARMACEUTICAL: Creditors Balk at Ex-CEO's $83MM Claim ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that how much K-V Pharmaceutical Co. initially pays unsecured creditors after emerging from Chapter 11 reorganization hinges on the outcome of an Aug. 6 hearing where the company is seeking to chop down the $83 million claim filed by former Chief Executive Marc Hermelin. According to the report, a confirmation hearing for approval of K-V's plan is set for Aug. 28. The plan incorporates a compromise where junior creditors can buy the lion's share of the reorganized business. The company and the official creditors' committee say Mr. Hermelin's claim is based on an employment contract terminated in 2008 when he was fired "for cause." If Mr. Hermelin's claim stands for the time being, it will dwarf all other unsecured claims estimated to total $13.9 million to $18.3 million. If the claim isn't reduced to the range of $3 million, the recovery by unsecured creditors will decline from a high of 73.6 percent to a low of 10.1 percent. The report notes that Mr. Hermelin pleaded guilty in March 2011 to violating drug labeling laws. A year earlier, K-V's Ethex unit pleaded guilty to failing to tell the U.S. Food and Drug Administration about pill manufacturing problems. In papers filed July 31 in support of his claim, Mr. Hermelin said the company made the primary guilty plea. He said he only pleaded guilty to two misdemeanors and admitted no wrongdoing. However the hearing ends on Aug. 6, K-V is reserving the right to knock out the claim entirely or have the judge rule that it should be subordinated, or not paid unless other unsecured creditors are fully paid. The bankruptcy court has already approved a stock-purchase agreement and exit financing enabling K-V to pay off senior secured noteholders in full in cash, with interest. When the plan is approved by creditors and the court, holders of $200 million in convertible notes in large part will be the new owners. The plan allows Silver Point Finance LLC, one of the senior noteholders being paid in full, to participate with holders of subordinated debt in ownership of the reorganized business. In exchange for the $200 million in convertible debt, holders will receive 7 percent of the reorganized company's stock, for a predicted recovery of 10.9 percent, according to the revised disclosure statement. General unsecured creditors with claims ranging from $13.9 million to $18.3 million will share a pot of $10.25 million in cash, for a recovery of 56.2 percent to 73.6 percent. About K-V Pharmaceutical K-V Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4, 2012, filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V employed Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V tapped Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five members to serve in the Official Committee of Unsecured Creditors. Kristopher M. Hansen, Esq., Erez E. Gilad, Esq., and Matthew G. Garofalo, Esq., at Stroock & Stroock & Lavan LLP, represent the Creditors Committee. Weil, Gotshal & Manges LLP's Robert J. Lemons, Esq., and Lori R. Fife, Esq., represent an Ad Hoc Senior Noteholders Group. LAXMI INC: Case Summary & 17 Unsecured Creditors ------------------------------------------------ Debtor: Laxmi, Inc. of Palm Bay dba Comfort Suites of Palm Bay 1175 Malabar Road, NE Palm Bay, FL 32907 Bankruptcy Case No.: 13-09182 Chapter 11 Petition Date: July 25, 2013 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Judge: Karen S. Jennemann Debtors' Counsel: R. Scott Shuker, Esq. LATHAM SHUKER EDEN & BEAUDINE LLP P.O. Box 3353 Orlando, FL 32802 Tel: (407) 481-5800 Fax: (407) 481-5801 E-mail: bknotice@lseblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/flmb13-9182.pdf The petition was signed by Sameet A. Patel, president. LAZARUS HOLDINGS: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Lazarus Holdings, LLC 5424 Deerbrooke Creek Circle, Unit 25 Tampa, FL 33624 Bankruptcy Case No.: 13-09698 Chapter 11 Petition Date: July 25, 2013 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: Leon A. Williamson, Jr., Esq. LEON A. WILLIAMSON, JR., P.A. 306 S. Plant Avenue, Ste. B Tampa, FL 33606 Tel: (813) 253-3109 Fax: (813) 253-3215 E-mail: leon@lwilliamsonlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 19 largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb13-9698.pdf The petition was signed by Jarrod A. Lazarus, managing member. LAZY DAYS: Judges May Issue Rulings for Use in Other Courts ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Philadelphia ruled July 31 that a bankruptcy judge was entitled to reopen a closed Chapter 11 case to issue an order interpreting a ruling during bankruptcy and thereby short-circuit a lawsuit in state court. Mr. Rochelle notes that the case is important because it gives bankruptcy judges a green light to issue rulings interpreting their own decisions for use in lawsuits pending in other courts. According to the report, the opinion by the Third Circuit in Philadelphia set aside a ruling from September by a Delaware federal district judge who concluded that reopening a Chapter 11 case to write an opinion for use in a state court lawsuit amounted to an advisory opinion where the bankruptcy court had no jurisdiction. The case involved Lazy Days' R.V. Center Inc., which confirmed a prepackaged Chapter 11 plan in 2009 in less than five weeks. After confirmation, there were two lawsuits in state court over the ability to exercise a purchase option. One year after confirmation, the successor to the bankrupt company filed papers in bankruptcy court to clarify the right to exercise a purchase option contained in a lease for real property. The bankruptcy judge reopened the closed Chapter 11 case and quickly ruled it was proper to interpret the confirmation order and enforced a provision that was "central" to the plan and confirmation order. On appeal, district court reversed, saying it was an abuse of discretion to reopen the case. Writing for three judges on the appellate panel, Circuit Judge Thomas M. Hardiman reinstated the ruling in bankruptcy court. Judge Hardiman said the action in bankruptcy court was no advisory opinion because the lower court "ordered the parties to do something." He went on to interpret Section 350(b) of the Bankruptcy Code as giving the bankruptcy court "broad discretion" to reopen closed cases. The report relates that the district judge relied on the proposition that the effect of an order in subsequent litigation is normally decided by the court in the later lawsuit. Judge Hardiman, by contrast, said the bankruptcy judge was "well suited to provide the best interpretation of his own order." Rejecting the notion the bankruptcy court was acting without jurisdiction, Judge Hardiman ruled that the "bankruptcy court plainly had jurisdiction to interpret and enforce its own prior orders." The report discloses that in a final ruling of significance, Judge Hardiman agreed with the U.S. Court of Appeals in Richmond, Virginia, by saying that an adversary proceeding isn't required to reopen a bankruptcy. The July 30 reversal is important because the district court judge had ruled that a bankruptcy court "should not provide advisory opinions for state court litigants." The appeal in the circuit court is Lazy Days' RV Center Inc. v. I-4 Land Holdings Ltd. (In re Lazy Days' RV Center Inc.), 12-4047, U.S. Court of Appeals for the Third Circuit. The appeal in district court was I-4 Land Holdings Ltd. v. Lazy Days' RV Center Inc. (In re Lazy Days' RV Center Inc.), 11-626, U.S. District Court, District of Delaware (Wilmington). About Lazy Days' R.V. Founded in 1976, Lazydays(R) -- http://www.BetterLazydays.com/-- considers itself the largest single-site RV dealership in North America. Lazy Days' was acquired by Bruckmann Rosser Sherrill & Co. II LP in May 2004 in a $217 million transaction. The company has one mobile home and recreational vehicle sales and service center on 126 acres near Tampa, Florida. Lazy Days' R.V. Center Inc. filed for Chapter 11 on Nov. 5 (Bankr. D. Del. Case No. 09-13911). The Company's legal advisor is Kirkland & Ellis LLP and its financial advisor is Macquarie Capital (USA) Inc. Lazy Days' RV Center Inc. completed its financial restructuring and Wayzata Investment Partners LLC became majority and controlling shareholder of the company in December 2009. LEHMAN'S EGG: Updated Case Summary & Creditors' Lists ----------------------------------------------------- Lead Debtor: Lehman's Egg Service, Inc., a Corporation 1226 Kauffman Road West Greencastle, PA 17225 Bankruptcy Case No.: 13-03852 Chapter 11 Petition Date: July 25, 2013 Court: United States Bankruptcy Court Middle District of Pennsylvania (Harrisburg) Judge: Mary D. France Debtors' Counsel: Markian R. Slobodian, Esq. LAW OFFICES OF MARKIAN R. SLOBODIAN 801 North Second Street Harrisburg, PA 17102 Tel: (717) 232-5180 Fax: (717) 232-6528 E-mail: law.ms@usa.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed separate Chapter 11 petitions: Debtor Case No. ------ -------- G. Buckwalter Family Limited Partnership 13-03853 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Gregg A. Buckwalter, president and partner. A. Lehman's Egg Service did not file a list of its largest unsecured creditors together with its petition. B. G. Buckwalter Family Limited Partnership did not file a list of its largest unsecured creditors together with its petition. LIFE UNIFORM: Ombudsman Taps Womble Carlyle as Delaware Counsel --------------------------------------------------------------- Boris Segalis, consumer privacy ombudsman for Life Uniform Holding Corp., et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ the law firm of Womble Carlyle Sandridge & Rice, LLP as his Delaware counsel, effective as of July 15, 2013. Womble Carlyle will, among other things: a. investigate any proposed sale or lease of personally identifiable information by the Debtors; b. appearing before the Court relating to the proposed sale or lease of personally identifiable information by the Debtors; and c. providing advice on issues of bankruptcy law and procedure, including issues relating to sales under Bankruptcy Code Section 363, and the procedures applicable in the Court. To the best of the ombudsman's knowledge, Womble Carlyle is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Womble Carlyle intends to apply to the Court for allowance of compensation and reimbursement of expenses in accordance with applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and the Local Rules of the Court. An Aug. 15, hearing at 11 a.m., has been set. Objections, if any, are due Aug. 8, at 4 p.m. 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. Life Uniform Holding disclosed $10,695,870 in assets and $36,821,034 in liabilities as of the Chapter 11 filing. 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. 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. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg, LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions acts as the Debtors' administrative agent, and claims and noticing agent. The Debtors' financial advisor is Capstone Advisory Group, LLC. The Official Committee of Unsecured Creditors is represented by Seth Van Aalten, Esq., at Cooley LLP, and Ann M. Kashishian, Esq., at Cousins Chipman & Brown, LLP as counsel. The U.S Trustee for Region 3 appointed Boris Segalis of InfoLawGroup LLP as consumer privacy ombudsman in the case. LIFE UNIFORM: Taps Littler Mendelson as Special ERISA Counsel ------------------------------------------------------------- Life Uniform Holding Corp., et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Littler Mendelson P.C. as special ERISA counsel nunc pro tunc from July 19, 2013, to Jan. 1, 2015. Littler Mendelson will, among other things: -- advise on the termination of any employee benefit plans, including, but not limited to, a 401(k) plan and welfare benefit arrangement; -- advise on purchase agreement regarding employee benefit plan sponsored by the Debtors; and -- make communications with Trustee, the Debtors, the Debtors' counsel, buyer, buyer's counsel and service providers regarding the termination of any employee benefit plans. The hourly rates of Littler Mendelson's personnel are: Shareholders $480 - $660 Of Counsel Associates $340 - $500 Paraprofessionals $285 To the best of the Debtors' knowledge, Littler Mendelson is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. Life Uniform Holding disclosed $10,695,870 in assets and $36,821,034 in liabilities as of the Chapter 11 filing. 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. 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. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg, LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions acts as the Debtors' administrative agent, and claims and noticing agent. The Debtors' financial advisor is Capstone Advisory Group, LLC. The Official Committee of Unsecured Creditors is represented by Seth Van Aalten, Esq., at Cooley LLP, and Ann M. Kashishian, Esq., at Cousins Chipman & Brown, LLP as counsel. The U.S Trustee for Region 3 appointed Boris Segalis of InfoLawGroup LLP as consumer privacy ombudsman in the case. LIN MEDIA: LIN TV Merger No Impact on Moody's 'B1' CFR ------------------------------------------------------ Moody's Investors Service said that the merger of LIN Media LLC with LIN TV Corp., the former parent company of LIN Television Corporation, has no immediate impact on LIN's B1 corporate family rating or positive outlook since Moody's ratings already incorporated the tax implications from the transaction. LIN Television Corporation is headquartered in Providence, RI, and owns or operates 43 network affiliated television stations plus 7 digital channels in 23 mid-sized U.S. markets ranked #22 to #189 reaching 10.5% of U.S. television households. The company's digital media division operates from 28 markets including New York City, Los Angeles, Chicago, and Austin. LIN is publicly traded with HM Capital Partners LLC holding an approximate 43% economic interest in LIN with roughly 70% of voting control being held by HMC and Mr. Royal Carson III, a LIN director and advisor for HMC. The company reported $635 million of net revenues for LTM ended June 30, 2013 (includes New Vision Television since the acquisition on October 12, 2012). LOUIS PEARLMAN: Trustee's Bid for Jury Trial in BofA Suit Denied ---------------------------------------------------------------- Chief Bankruptcy Judge Karen S. Jennemann denied the request of the Chapter 11 Trustee of Louis J. Pearlman, et al., for a jury trial in the adversary complaint SONEET R. KAPILA, Plaintiff, v. BANK OF AMERICA, N.A., Defendant, Adv. No. 6:09-AP-00054-KSJ (Bankr. M.D. Fla.). The complaint seeks recovery of alleged fraudulent transfers made by the Debtors to the Defendant. In a July 16, 2013 Memorandum Order available at http://is.gd/MffJPnfrom Leagle.com, Judge Jennemann opined, "Although the Trustee timely demanded a jury trial in this adversary proceeding, the Defendant's Motion to Strike is granted. The Trustee is bound by the Defendant's contractual waiver. n addition, under the theory that the legal fraudulent transfer claim was 'converted' to a public right requiring resolution by an equitable forum, the Trustee is not entitled to a jury trial because of the Defendant's proof of claim and, more importantly, his inherent role in adjusting the debtor-creditor relationship between all parties involved in this Chapter 11 case." About Louis Pearlman Louis J. Pearlman started Trans Continental Records which managed boy bands such as the Backstreet Boys, 'N Sync, O-Town, Lyte Funky Ones (LFO), Take 5, Natural and US5. Other artists on the Trans Continental's label included Aaron Carter, Jordan Knight, C Note, and Smilez & Southstar. On March 1, 2007, creditors Tatonka Capital Corporation, First National Bank & Trust Co. of Williston, and American Bank of St. Paul, and Integra Bank filed an involuntary chapter 11 petition against Mr. Pearlman and his company, Trans Continental Airlines, Inc. (Bankr. M.D. Fla. Case Nos. 07-00761 and 07-00762). The creditors disclosed an aggregate of more than $40 million in claims. Fletcher Peacock, Esq., is Mr. Pearlman's legal counsel. Tatonka Capital is represented by Derek F. Meek, Esq., and Robert B. Rubin, Esq., at Burr & Forman LLP, and Richard B Webber, II, Esq., Zimmerman Kiser & Sutcliffe PA. First national Bank is represented by Raymond V. Miller, Esq., at Gunster Yoakley & Stewart PA, and Richard P. Olson, Esq., at Olson & Burns PC. American Bank of St. Paul is represented by William P. Wassweiler, Esq., at Rider Bennett LLP. Integra bank is represented by Lawrence E. Rifken, Esq., at McGuire Woods LLP. Soneet R. Kapila, the Chapter 11 trustee appointed to oversee Mr. Pearlman's estate, is represented by Denise D. Dell-Powell, Esq., and Jill E. Kelso, Esq., at Akerman Senterfitt, and Gregory M. Garno, Esq., and Paul J. Battista, Esq., at Genovese Joblove & Battista PA. METROPLEX LUCKY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Metroplex Lucky Star, LLC dba Valero Food Mart #3 1800 N.E. Green Oaks Blvd. Arlington, TX 76006 Bankruptcy Case No.: 13-43374 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Joyce W. Lindauer, Esq. JOYCE W. LINDAUER, ATTORNEY AT LAW 8140 Walnut Hill Ln. Ste. 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: courts@joycelindauer.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Mulaw W. Alemayehu, manager. MF GLOBAL: Files Class Antitrust Suit Against Swap Banks -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that MF Global Capital LLC is the named plaintiff in a class lawsuit filed last week accusing about a dozen major banks of violating federal antitrust laws by restricting information about credit-default swaps. According to the report, the suit, filed in federal district court in Chicago, is the fourth alleging antitrust violations by swap dealers. MF Global Capital is a subsidiary of MF Global Holdings Ltd. The Chapter 11 plan for the companies was approved by the bankruptcy court in April and implemented in June. The antitrust case is MF Global Capital LLC v. Bank of America Corp., 13-cv-05417, U.S. District Court, Northern District of Illinois (Chicago). 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 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. MJK PROPERTIES: Case Summary & 18 Unsecured Creditors ----------------------------------------------------- Debtor: MJK Properties, Inc. 1440 Broadway Oakland, CA 94610 Bankruptcy Case No.: 13-44316 Chapter 11 Petition Date: July 28, 2013 Court: United States Bankruptcy Court Northern District of California (Oakland) Debtor's Counsel: Selwyn D. Whitehead, Esq. LAW OFFICES OF SELWYN D. WHITEHEAD 4650 Scotia Ave. Oakland, CA 94605 Tel: (510) 632-7444 E-mail: selwynwhitehead@yahoo.com Scheduled Assets: $288,545 Scheduled Liabilities: $4,639,579 A list of the Company's 18 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/canb13-44316.pdf The petition was signed by Eui Youn Kang, president and chief executive officer. MOHEGAN TRIBAL: Moody's Rates New $425MM Sr. Notes Issue 'Caa1' --------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Mohegan Tribal Gaming Authority's proposed $425 million senior unsecured notes due 2021. MTGA's existing ratings were affirmed, including the company's Caa1 Corporate Family Rating and Caa1-PD Probability of Default Rating. The rating outlook is stable. Proceeds from the proposed offering will be used to refinance MTGA's $417.7 million 10.5% 3rd lien notes due 2016 (not-rated). The Caa1 rating on the proposed notes, the same as MTGA's Corporate Family Rating, considers the significant amount of debt, both ahead and below of the proposed notes. Ratings Rationale: MTGA's Caa1 Corporate Family Rating considers the company's high leverage with debt/EBITDA at almost 6.0 times, and significant amount of debt that matures in 2015 when the company credit facility matures. Also considered is Moody's view that MTGA will continue to face significant earnings pressure from new competition as more casinos are expected to open in the company's primary and secondary feeder markets. These factors along with the continued uncertainty regarding any material improvement in gaming demand in the Northeastern U.S. is also a concern given the importance of earnings growth to MTGA's ability to maintain a viable capital structure over the longer-term. The ratings also incorporate the unique risks common to Native American gaming issuers which are largely a function of a tribe's status as a sovereign entity. Favorable rating consideration is given to cost saving initiatives that were recently implemented that are expected to result in approximately $30 million of savings during fiscal year 2013. Also considered is the newly formed Mohegan Gaming Advisers, an unrestricted subsidiary, to pursue gaming opportunities outside the State of Connecticut, including management contracts and consulting agreements for casino and entertainment properties in the United States. The stable outlook incorporates Moody's view that MTGA's lower cost structure will provide the company with enough flexibility and resources to deal with near-term competitive issues and demand uncertainty. The stable outlook also anticipates that MTGA will not have to rely on additional borrowing to fund growth related capital expenditures and/or tribal distributions over the next two years. Ratings could go up if MTGA is able to further extend its debt maturity profile as well as achieve and sustain a level of earnings improvement that allows the company to reduce absolute amounts of debt in the next 12-18 months above and beyond required amortization amounts. MTGA's ratings could also benefit from the expiration of the relinquishment payments at the end of 2014 which would improve the company's financial flexibility. The amount of flexibility it will provide could be significant assuming MTGA is able to stabilize it earnings. However, earnings declines over the next two years, should they occur, would absorb some of this flexibility. As a result, the timing and amount of rating benefit received from the anticipated expiration of the relinquishment payment will depend on the company's earnings performance during the next 12-18 month period. Ratings could go down if it appears MTGA's will not able to further extend its debt maturity profile which Moody's believes the company will have to address within the next 12 months. Ratings could also be lowered if Moody's believes MTGA's earnings will not improve at a pace that will support the company's existing level of debt over the longer-term. The principal methodology used in this rating was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. MTGA owns and operates a gaming and entertainment complex located near Uncasville, Connecticut, known as Mohegan Sun, and a gaming and entertainment facility offering slot machines and harness racing in Plains Township, Pennsylvania known as Mohegan Sun at Pocono Downs. Net revenue for the latest 12-month period ended June 30, 2013 was $1.3 billion. NGPL PIPECO: Bank Debt Trades at 4% Off --------------------------------------- Participations in a syndicated loan under which NGPL PipeCo LLC is a borrower traded in the secondary market at 95.88 cents-on-the- dollar during the week ended Friday, August 2, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 1.41 percentage points from the previous week, The Journal relates. NGPL PipeCo LLC pays 550 basis points above LIBOR to borrow under the facility. The bank loan matures on May 4, 2018. The bank debt carries Moody's B2 rating and Standard & Poor's B rating. The loan is one of the biggest gainers and losers among 249 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. NGPL PipeCo LLC is a holding company for Natural Gas Pipeline Company of America and other interstate natural gas pipeline assets. NGPL is 80% owned by Myria Acquisition LLC and 20% owned and operated by Kinder Morgan, Inc., based in Houston Texas. OCI BEAUMONT: S&P Assigns Preliminary 'B-' CCR; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its preliminary 'B-' corporate credit rating to OCI Beaumont LLC (OCI). The outlook is stable. At the same time, S&P assigned its preliminary 'B' issue rating and preliminary '2' recovery rating to the company's proposed $360 million first-lien term loan. The term loan consists of two tranches of $235 million and $125 million. OCI plans to use proceeds from the loan to refinance existing debt. The preliminary '2' recovery rating indicates S&P's expectation for substantial recovery (70%-90%) in the event of a payment default. "The rating on OCI reflects the company's highly leveraged financial profile, including its very aggressive financial policy, and its vulnerable business risk profile as a single-site producer of commodity chemicals," said Standard & Poor's credit analyst Paul Kurias. The stable outlook reflects S&P's expectation that the company will successfully execute on its proposed capital structure including the proposed debt, revolving credit facility, and extension of maturity of existing unrated debt. S&P expects EBITDA in 2013 will improve to levels around $150 million reflecting a full year of near-capacity operations at the company's recently refurbished plant. S&P could lower ratings if the company is unable to implement its proposed capital structure and is unable to extend its near-term debt maturities. S&P could also lower ratings if total debt to EBITDA increases over 5x with no near-term prospects for improvement. Leverage could increase if debt levels increase to fund shareholder rewards or growth, or if EBITDA declines in the company's commodity businesses. A decline in EBITDA to levels of $100 million or lower under the current capital structure could result in a lower rating. S&P considers an upgrade over the next year unlikely given the risks related to the company's asset concentration, absence of an operating track record, and S&P's view of financial policy as very aggressive. S&P could consider an upgrade over the longer term if the business risk profile improves as a result of geographic diversification that reduces dependence on the company's key manufacturing location, and if the company demonstrates in S&P's view a more conservative financial policy. OIL STATES: Spin-Off Plan Triggers Moody's Review for Downgrade --------------------------------------------------------------- Moody's Investors Service placed Oil States International, Inc.'s Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating (PDR) and Ba3 senior unsecured note rating under review for downgrade following an announcement that the company plans to spin-off its accommodations business into a standalone publicly traded company through a tax-free distribution to OIS' shareholders. The spin-off is expected to close around mid-2014 and will be subject to receipt of an affirmative IRS ruling, SEC review and OIS' final board approval. Rating Actions: Issuer: Oil States International, Inc. Corporate Family Rating, Placed on Review for Possible Downgrade, currently Ba2 Probability of Default Rating, Placed on Review for Possible Downgrade, currently Ba2-PD Senior Unsecured Regular Bond/Debenture Jun 1, 2019, Placed on Review for Possible Downgrade, currently Ba3 Senior Unsecured Regular Bond/Debenture Jan 15, 2023, Placed on Review for Possible Downgrade, currently Ba3 Outlook Actions: Outlook, Changed To Rating Under Review From Positive Ratings Rationale: Following the separation of the accommodation business, OIS will become a smaller and less diversified entity with a portfolio of assets and services that have significantly less cash flow stability and visibility and more commodity-like characteristics. Operating margins will also take a hit given the accommodations segment's track record of superior margin performance over OIS' other businesses. The accommodations segment represented 50% of operating income and 48% of assets in 2012. The split, however, will help OIS focus on its core energy services segment that may facilitate more efficient capital allocation and faster growth over the long run. At separation, if debt is allocated between the two companies in a balanced manner leading to leverage near the 1.4x level, it is unlikely that OIS' CFR will be lowered more than one notch. However, it is difficult to project the exact post spin-off capital structure based on information available now. Over the next few months, Moody's review will focus on establishing: (i) the timing and steps the company will take to complete the spin- off; (ii) the likely level of debt and leverage at OIS; (ii) the specific assets and liabilities that will get allocated; and (ii) management and governance plans for the future. The Ba2 Corporate Family Rating (CFR) reflects OIS' large scale integrated accommodation service operations in Canada and Australia that generate stable revenues under long-term contracts, diversified service offerings to the oil and gas industry, global scope of its growing offshore services business serving the more durable deep water markets, and improving leverage. The rating also considers the anticipated growth in the accommodations segment through 2014 and the associated capital spending and execution risks, the inherent volatility in the North American drilling capex cycle, as well as the exposure to the cyclical nature of the Canadian oil sands and Australian mining industries. The principal methodology used in rating this issuer was the Global Oilfield Services Rating Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Oil States International, Inc., headquartered in Houston, Texas, manufactures, owns, and operates housing accommodations for the oil and gas and mining industries, provides oilfield services for North American onshore exploration and production companies, and manufactures and services products used in offshore oil and gas exploration and production. ORECK CORP: Panel May Hire Lowenstein Sandler as Counsel -------------------------------------------------------- The Bankruptcy Court authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of Oreck Corporation, et al., to retain Lowenstein Sandler LLP as counsel. AS reported in the Troubled Company Reporter on June 24, 2013, Sharon L. Levine, Esq., a partner at the firm, said Lowenstein Sandler's hourly rates are: Partners $475 - $945 Senior Counsel and Counsel $385 - $685 Associates $260 - $495 Paralegals and Assistants $155 - $260 To the best of the Committee's knowledge Lowenstein Sandler is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Oreck Corp. Oreck Corporation and eight affiliates sought Chapter 11 protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in Nashville, Tennessee, on May 6, 2013, with plans to sell the business as a going concern. Oreck has been in the business of manufacturing, marketing and selling vacuum cleaners and related products since the late 1960s. The corporate offices are located in Nashville, and the manufacturing and call center is located in Cookeville, Tennessee. Oreck has 70 employees in Nashville, 250 employees at its plant in Cookeville and 325 employees operating 96 company-owned and managed retail stores. The Debtor disclosed $18,013,249 in assets and $14,932,841 plus an unknown amount in liabilities as of the Chapter 11 filing. William L. Norton III, Esq., and Alexandra E. Dugan, Esq., at Bradley Arant Boult Cummings LLP, serve as counsel to the Debtor. BMC Group Inc. is the claims and notice agent. Sawaya Segalas & Co., LLC serves as financial advisor. The U.S. Trustee appointed six creditors to the Official Committee of Unsecured Creditors. Daniel H. Puryear, Esq., at Puryear Law Group, and Sharon L. Levine, Esq., and Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP represent the Committee. The Committee tapped to retain Gavin/Solmonese LLC as it financial advisor. In July 2013, Royal Appliance Mfg. Co. (RAM), a subsidiary of the TTI Group, finalized the purchase of Oreck Corp.'s assets. The Bankruptcy Court approved the sale on July 16, 2013. Royal, the maker of Dirt Devil floor-care products, won the auction for Oreck Corp. The second-place bidder was the Oreck family, which sold the business in a $272 million transaction in 2003. The Oreck family made the first bid at auction at $21.9 million, including $14.5 million cash. The terms of Royal's winning bid weren't disclosed publicly, according to a Bloomberg News report. Royal was acquired in 2003 by Hong Kong-based Techtronic Industries Co., the maker of Hoover vacuum cleaners. ORECK CORP: Pillsbury Winthrop to Handle FTC Matters ---------------------------------------------------- Oreck Corporation, et al., ask the U.S. Bankruptcy Court for the Middle District of Tennessee for permission to employ Pillsbury Winthrop Shaw Pittman LLP as special counsel to represent the Debtors regarding matters with the Federal Trade Commission and matters of Chinese corporate law during the pendency of the cases. The current discounted rate for the services of Michael Sibarium, partners, that will be the Debtor's main contact is $815. Prepetition, Pillsbury was paid $10,000 as a prepetition retainer. To the best of the Debtors' knowledge, Pillsbury is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. An Aug. 27, 2013, hearing at 9 a.m., has been set. Objections, if any, are due Aug. 12. About Oreck Corp. Oreck Corporation and eight affiliates sought Chapter 11 protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in Nashville, Tennessee, on May 6, 2013, with plans to sell the business as a going concern. Oreck has been in the business of manufacturing, marketing and selling vacuum cleaners and related products since the late 1960s. The corporate offices are located in Nashville, and the manufacturing and call center is located in Cookeville, Tennessee. Oreck has 70 employees in Nashville, 250 employees at its plant in Cookeville and 325 employees operating 96 company-owned and managed retail stores. The Debtor disclosed $18,013,249 in assets and $14,932,841 plus an unknown amount in liabilities as of the Chapter 11 filing. William L. Norton III, Esq., and Alexandra E. Dugan, Esq., at Bradley Arant Boult Cummings LLP, serve as counsel to the Debtor. BMC Group Inc. is the claims and notice agent. Sawaya Segalas & Co., LLC serves as financial advisor. The U.S. Trustee appointed six creditors to the Official Committee of Unsecured Creditors. Daniel H. Puryear, Esq., at Puryear Law Group, and Sharon L. Levine, Esq., and Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP represent the Committee. The Committee tapped to retain Gavin/Solmonese LLC as it financial advisor. In July 2013, Royal Appliance Mfg. Co. (RAM), a subsidiary of the TTI Group, finalized the purchase of Oreck Corp.'s assets. The Bankruptcy Court approved the sale on July 16, 2013. Royal, the maker of Dirt Devil floor-care products, won the auction for Oreck Corp. The second-place bidder was the Oreck family, which sold the business in a $272 million transaction in 2003. The Oreck family made the first bid at auction at $21.9 million, including $14.5 million cash. The terms of Royal's winning bid weren't disclosed publicly, according to a Bloomberg News report. Royal was acquired in 2003 by Hong Kong-based Techtronic Industries Co., the maker of Hoover vacuum cleaners. PATRIOT COAL: Seeks to Avoid Violation of Loan Covenant ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Patriot Coal Corp. is soliciting consents from lenders to modify covenants in the $802 million secured loan financing the bankruptcy reorganization begun in July 2012. According to the report, without an amendment, the coal producer said, there could be a default by the third quarter of 2013 cutting off access the loan. Patriot said in a court filing that it's still negotiating with the United Mine Workers on consensual modifications to wages and benefits even though the bankruptcy court in St. Louis authorized the company to impose new contract terms. The report notes that for a third time, Patriot is seeking a three-month expansion of the exclusive right to propose a Chapter 11 plan. Patriot said the "continuous and sharp" decline in coal prices has eroded cash flow so it may be unable to comply with a $148 million cash-flow requirement for Sept. 30. If approved by the required number of lenders and authorized by the bankruptcy court at an Aug. 20 hearing, the threshold would be lowered to $65.2 million. The company said it expects to complete the consent solicitation by Aug. 6. The report relates that the existing loan includes $500 million in so-called new money. The lenders providing the new money are those whose consent is required. The fees payable to the lenders and the agent for the covenant modifications aren't being disclosed publicly. The bankruptcy judge in early May gave Patriot the right to modify labor contracts and retiree health benefits. The United Mine Workers union appealed. The report discloses that Patriot previously said it hoped to work out consensual contract revisions with the union by the end of July. This time, Patriot isn't saying when talks might conclude successfully. Negotiations continue because the union has the right to strike if Patriot imposes a contract without the workers' consent. At an Aug. 20 hearing, Patriot will ask the court to extend its exclusive right to file a reorganization plan until Nov. 1. In its exclusivity motion, Patriot mentioned how talks are still under way with Knighthead Capital Management LLC and Aurelius Capital Management LP about a rights offering to supply some of the financing to emerge from bankruptcy. Patriot said it's also talking with "certain other" unnamed parties. 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. PENN NATIONAL: S&P Revises Outlook to Negative & Affirms 'BB' CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Penn National Gaming Inc. to negative from stable, and affirmed the 'BB' corporate credit rating. "The revision of the outlook to negative from stable reflects our expectation that Penn National is increasingly likely to complete the planned spin-off of its real estate assets into a gaming- focused REIT (Gaming & Leisure Properties Inc., or GLPI)," said credit analyst Melissa Long. Penn National has now received a substantial number of regulatory approvals and believes no further approvals will be required by 15 of the 27 regulatory agencies that have jurisdiction over its gaming and racing operations. Under the proposed transaction, Penn National will manage the properties and pay GLPI a sizable rent payment, roughly equivalent to half of its current cash flow base. The planned spin-off will increase Penn National's leverage to the high-5x area on a lease- adjusted basis, weaker than where S&P generally expects Penn National to maintain leverage at S&P's current 'BB' rating. (The company will enter into new financing agreements and refinance existing debt as part of the transaction.) Additionally, S&P believes the large fixed rent expense will reduce operating flexibility, potentially leading to greater operating volatility in an economic downturn, and could result in a revision of S&P's assessment of Penn National's business risk profile. The current 'BB' corporate credit rating reflects S&P's assessment of the company's financial risk profile as "aggressive" and its business risk profile as "satisfactory." S&P's assessment of Penn National's existing financial risk profile as aggressive reflects the company's expansion-based growth strategy and leverage of about 5x, as well as construction and ramp-up risks associated with its development projects. S&P's expectation that Penn National will be able to fund most of its development spending from internally generated cash flow and that the company will generate relatively stable cash flow over the near term, given its broad portfolio of regional gaming properties, somewhat offsets the negative risk factors. S&P's assessment of Penn National's current business risk profile as satisfactory reflects the company's geographically diverse portfolio of assets, experienced management team, solid operating track record, and EBITDA margins that compare favorably with other U.S. commercial gaming operators. A portfolio with several properties that are not leaders in competitive markets, and increasing competitive pressures in some of Penn National's key markets, somewhat offset the positive business risk factors. In 2013, S&P expects EBITDA to grow about 10%. This reflects S&P's belief that the two casinos in Ohio, along with EBITDA from the St. Louis casino acquired in 2012, will more than offset the effects of additional competition surrounding some of Penn National's other key properties. Based on S&P's performance expectations, S&P expects Penn National to improve leverage to closer to 5x by the end of 2013, and S&P expects interest coverage to remain strong at over 7x. Given S&P's assessment of Penn National's business risk profile, it expects leverage, including the zero-coupon preferred equity, to track below 5x over time at S&P's 'BB' rating on Penn National, although short-term spikes to facilitate developments or acquisitions that S&P believes strengthen Penn National's business profile would not lead to a ratings change. The negative rating outlook reflects S&P's belief that Penn National's planned spin-off of its real estate assets into a REIT is increasingly likely to occur, given that a significant number of gaming jurisdictions have approved the transaction. S&P could lower its ratings on Penn National if it completes the transaction because of the resulting increase in leverage to the high-5x area and S&P's view that the large fixed rent expense that Penn National will pay to the REIT to manage the properties will reduce its operating flexibility, potentially leading to greater volatility of cash flows, particularly in an economic downturn. While less likely, S&P could revise the outlook to stable if the transaction were not completed in its current form for regulatory or other reasons. PMI GROUP: Reorganization Plan Confirmed July 25 ------------------------------------------------ The U.S. Bankruptcy Court entered an order confirming the Plan of Reorganization and related disclosure statement of The PMI Group, Inc., on July 25, 2013. The Plan provides for the resolution of outstanding claims against the Debtor. Among other things, the Plan provides that: (i) holders of allowed priority non-tax claims and holders of allowed secured claims will generally be paid in full; (ii) holders of allowed general unsecured claims, allowed senior notes claims and allowed subordinated note claims will receive their pro rata share of Creditor Cash, provided, however, that the receipt of Creditor Cash and New Common Stock by the holders of allowed subordinated note claims will be redistributed for the benefit of holders of allowed senior note claims due to subordination provisions applicable to the subordinated notes; (iii) holders of allowed Convenience Claims will receive 90 percent of the amount of those claims; and (iv) holders of equity interests in the Debtor will receive no distribution. The Plan also includes certain releases, injunctions and exculpation provisions. At July 12, 2013, the Debtor had 197,078,767 shares of common stock issued and outstanding. Under the terms of the Plan, all those shares of the Debtor's common stock and any other equity interests in the Debtor will be cancelled on the effective date of the Plan and shares of New Common Stock will be issued to certain holders of allowed claims under the Plan. A copy of the First Amended Plan is available for free at: http://is.gd/cVonJh A copy of the Disclosure Statement is available for free at: http://is.gd/ahBrm1 A copy of the Confirmation Order is available for free at: http://is.gd/vFec1d 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. PORCHLIGHT ENTERTAINMENT: Case Summary & 20 Unsecured Creditors --------------------------------------------------------------- Debtor: Porchlight Entertainment, Inc. 14724 Ventura Blvd., Suite 1105 Sherman Oaks, CA 91403 Bankruptcy Case No.: 13-14983 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Debtor's Counsel: Mary D. Lane, Esq. MITCHELL SILBERBERG & KNUPP LLP 11377 W Olympic Blvd. Los Angeles, CA 90064-1683 Tel: (310) 312-2000 Fax: (310) 312-3100 E-mail: mal@msk.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/cacb13-14983.pdf The petition was signed by Peter Bergmann, president of Porchlight Worldwide, Inc. PORTER BANCORP: Reports $1.7 Million Net Loss in Second Quarter --------------------------------------------------------------- Porter Bancorp, Inc., reported a net loss available to common shareholders of $1.68 million on $8.35 million of net interest income for the three months ended June 30, 2013, as compared with a net loss available to common shareholders of $319,000 on $10.79 million of net interest income for the same period during the prior year. For the six months ended June 30, 2013, the Company incurred a net loss available to common shareholders of $2.21 million on $16.65 million of net interest income, as compared with net income available to common shareholders of $661,000 on $22.24 million of net interest income for the same period a year ago. As of June 30, 2013, the Company had $1.07 billion in total assets, $1.03 billion in total liabilities and $38.75 million in stockholders' equity. Consent Order At June 30, 2013, PBI Bank's Tier 1 leverage ratio was 6.08 percent compared to 5.95 percent at March 31, 2013, and its Total risk-based capital ratio was 10.60 percent at June 30, 2013, compared to 10.29 percent at March 31, 2013, which are below the minimums of 9.0 percent and 12.0 percent required by the Bank's Consent Order. At June 30, 2013, Porter Bancorp's leverage ratio was 4.91 percent, compared with 4.91 percent at March 31, 2013, and 4.50 percent at Dec. 31, 2012, and its Total risk-based capital ratio was 10.46 percent compared with 10.16 percent at March 31, 2013, and 9.81 percent at Dec. 31, 2012. "We are continuing our efforts to strengthen our capital levels and comply with the Consent Order. Management and the Board of Directors are evaluating appropriate strategies for increasing the Company's capital in order to meet the capital requirements of our Consent Order. These include, among other things, a possible public offering or private placement of common stock to new and existing shareholders," the Company said in a press release. Sandler O'Neill & Partners, LP, is acting as the Company's financial advisor and assisting its Board in this evaluation. According to the Company, asset quality remediation, capital restoration, and lowering the risk profile of the Company continue to be major objectives during 2013 as well as delivering quality financial products and services to its customers throughout the Commonwealth of Kentucky. A copy of the press release is available for free at: http://is.gd/KuhRlK About Porter Bancorp Porter Bancorp, Inc., is a bank holding company headquartered in Louisville, Kentucky. Through its wholly-owned subsidiary PBI Bank, the Company operates 18 full-service banking offices in 12 counties in Kentucky. Porter Bancorp disclosed a net loss of $32.93 million in 2012, a net loss of $107.30 million in 2011 and a net loss of $4.38 million in 2010. Crowe Horwath, LLP, in Louisville, Kentucky, 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 substantial losses in 2012, 2011 and 2010, largely as a result of asset impairments. In addition, the Company's bank subsidiary is not in compliance with a regulatory enforcement order issued by its primary federal regulator requiring, among other things, increased minimum regulatory capital ratios. Additional significant asset impairments or continued failure to comply with the regulatory enforcement order may result in additional adverse regulatory action. These events raise substantial doubt about the Company's ability to continue as a going concern. PPL MONTANA: S&P Lowers Rating on $338MM Certs Due 2020 to 'BB+' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its ratings on PPL Montana LLC's $338 million (about $90 million outstanding) pass-through certificates due 2020 to 'BB+' from 'BBB-'. S&P also assigned its '1' recovery rating to the debt (90% to 100% of recovery of principal if a default occurs). The outlook is negative. Ratings on PPL Montana reflect S&P's view of its low-cost hydrogeneration plants and low debt levels on a dollar-per- kilowatt (kW) basis. Pressure on margins through 2015 from a combination of weakening power prices in the Mid-Columbia market, a larger merchant power market exposure, increasingly stringent environmental regulations, and a weak economy in Montana offset those strengths. Although ultimate parent PPL Energy Supply LLC provides liquidity support through a $100 million credit line, S&P do not see PPL Montana as core to PPL's business strategy and are no longer factoring parental support in the project's ratings. The negative outlook reflects S&P's expectation that PPL Montana's indenture-based fixed-charge coverage will decrease to about 2.0x to 2.25x in 2014 from about 3.5x at year-end 2012. S&P would consider lowering the rating if the expected stand-alone credit profile weakened further for 2014 and 2015 relative to the measures outlined above. This could occur as a result of deteriorating power markets or operational setbacks. S&P would consider revising the outlook to stable if it projected greater- than-expected improvement in measures or if it gained confidence that the project would be able to weather the expected 2014-2015 trough. PREMIER BEVERAGE: Restructures Defaulted Senior Secured Note ------------------------------------------------------------ On July 31, 2013, Premier Beverage Group Corp. released a letter to shareholders from its President, Fouad Kallamni, which highlights that the Company: - Completed a financing to bring SEC filings current - Restructured a senior secured note that had been in default - Converted unsecured promissory notes into common stock - Expects the arrival of OSO All Natural Energy Beverages in September - Will be current in all of its filings with the SEC within 30 days The complete text of Mr. Kallamni's letter follows: "Dear Shareholders, I am pleased to report that in the second quarter of 2013 we accomplished many strategic corporate activities that have positioned Premier Beverage Group for growth. We secured sufficient capital to bring our public filings current and shortly will return to fully reporting status under the securities laws. We also restructured our outstanding senior secured promissory note, which was technically in default, giving us adequate time to execute upon our planned business objectives. While we haven't disclosed much about OSO since the financing challenges we experienced in 2012, I am pleased to report that OSO continues to be offered in key accounts in New York City and that we have been able to maintain many relationships that will be important to our next phase. To that end, we expect our new all- natural formulated OSO Energy Beverages to be introduced in the NYC market this September. We plan to offer OSO and OSO Light in 8.4oz aluminum cans initially, with the sought-after glass bottle OSO to be launched in 2014. With our new product line, we plan to build on our current distribution channels that service top NYC on-premise accounts. We have also identified certain national and regional distribution relationships that we are evaluating to introduce our products to retail. On the corporate side, we expect to be current in our securities filings no later than the end of August. We have re-engaged our auditors, Liebman Goldberg & Hymowitz, and are actively at work preparing our audited financial statements for years ended December 31, 2011 and December 31, 2012, along with all of the quarterly filings through June 30, 2013. With our focus solely on the initiatives above, we have put our Captive Brands private label strategy on hold. The previously announced acquisition of Monsoon and True Colors brands from Universal Brands did not close, and we are re-evaluating our relationship with these brands and their captive retailers. As we re-enter the market, I believe that OSO's superior taste and uniqueness separate it from all other brands in the "energy drink" space and set the stage for a true ultra premium experience. I thank you for your continued support of Premier Beverage Group and look forward to keeping you posted on our progress. Sincerely, Fouad Kallamni President Premier Beverage Group Corp. About Premier Beverage Group Premier Beverage Group (otc pink:PBGC) -- http://www.premierbeveragegroup.com/-- is a holding company that -- through its subsidiaries, OSO Beverages and Captive Brands -- owns, develops, markets and distributes premium functional beverages. Premier Beverage Group's flagship brand, OSO, is a premium energy beverage offered primarily in on-premise venues. OSO, offered in both original and light flavors, is produced in Austria using only the finest ingredients -- resulting in a clear, crisp energy beverage and an up-market consumer experience. Captive Brands provides a turnkey private label program for retailers seeking to offer functional beverage and related products. PREMIER PAVING: Plan Confirmation Hearing Slated for Aug. 27 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Colorado last month entered an order approving the disclosure statement filed by Premier Paving, Inc., in support of the Debtor's Third Amended Plan of Reorganization dated July 9, 2013. According to the July 11, 2013 order, ballots accepting or rejecting the Plan must be submitted on or before 5:00 p.m. on Aug. 16, 2013. Any objection to confirmation of the Plan must be filed no later than Aug. 16, 2013. The hearing to confirm the Plan is set for Tuesday, Aug. 27, 2013, at 9:00 a.m. The Plan proposes a payment to unsecured creditors over time through the Debtor's gross revenue. The Debtor also proposes to continue its efforts to sell the asphalt plant or restructure the associated debt. The Plan is also restructuring the secured debt of its primary secured creditors. According to papers filed with the Bankruptcy Court, the Plan is a balance of the varying interests of the creditor body. All creditors, except for Suncor Energy (Class 12(b)) and the convenience class (Class 12(a)), are paid over 7 years. Suncor Energy is paid at an accelerated rate (within 3 years of the Effective Date) because Suncor Energy is the only provider of asphalt cement in Colorado. Insider Unsecured Claims in Class 12(d) will receive nothing. Interest in the Debtor will retain their interests. A copy of the Disclosure Statement for the Debtor's Third Amended Plan of Reorganization is available at: http://bankrupt.com/misc/premierpaving.doc439.pdf About Premier Paving Headquartered in Denver, Colorado Premier Paving Inc. -- http://www.premierpavinginc.com/-- operates a full-service highway construction company, which services include paving, grading and milling, geo-textiles, trucking, traffic control and quality control. Premier Paving also owns and operates an asphalt plant. Premier Paving filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 12-16445) on April 2, 2012. Judge Michael E. Romero presides over the case. In its petition, the Debtor estimated up to $50 million in assets and debts. The petition was signed by David Goold, treasurer. Lee M. Kutner, Esq., at Kutner Miller Brinen, P.C., serves as the Debtor's counsel. Pinnacle Real Estate Advisors LLC provides professional broker services related to the sale of certain of the Debtor's real estate assets. The Official Unsecured Creditors Committee is represented by J. Brian Fletcher, Esq., at Onsager, Staelin & Guyerson, LLC. PREMIER PAVING: Wants Continued Access to Cash Until Sept. 1 ------------------------------------------------------------ Premier Paving, Inc., asks the U.S. Bankruptcy Court for the District of Colorado for authorization to continue using cash collateral of Wells Fargo Bank, N.A., for an additional month through Sept. 1, 2013, pursuant to the terms of the Stipulation of Use of Cash Collateral entered into by the Debtor and Wells Fargo dated July 26, 2013. A copy of the Stipulation for Use of Cash Collateral is available at http://bankrupt.com/misc/premierpaving.doc446.pdf About Premier Paving Headquartered in Denver, Colorado Premier Paving, Inc. -- http://www.premierpavinginc.com/-- operates a full-service highway construction company, which services include paving, grading and milling, geo-textiles, trucking, traffic control and quality control. Premier Paving also owns and operates an asphalt plant. Premier Paving filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 12-16445) on April 2, 2012. Judge Michael E. Romero presides over the case. In its petition, the Debtor estimated up to $50 million in assets and debts. The petition was signed by David Goold, treasurer. Lee M. Kutner, Esq., at Kutner Miller Brinen, P.C., serves as the Debtor's counsel. Pinnacle Real Estate Advisors LLC provides professional broker services related to the sale of certain of the Debtor's real estate assets. The Official Unsecured Creditors Committee is represented by J. Brian Fletcher, Esq., at Onsager, Staelin & Guyerson, LLC. PRORHYTHM INC: Del. Court Issues Revised Opinion on ReCor Lawsuit ----------------------------------------------------------------- The Court of Chancery of Delaware entered a revised memorandum opinion pertaining to ReCor Medical Inc.'s rightful ownership of two patent applications on the use of ultrasound in renal denervation to treat hypertension. In a July 16, 2013 revised opinion available at http://is.gd/DG1rwhfrom Leagle.com, the Court clarified that the Defendants, who are former employees of ProRhythm Inc., are enjoined from making further use of the technology claimed in the applicable patents -- except to the extent that such technology was in the public doman as of the filing date of such rintellectual property -- and are ordered to take all necessary steps to transfer to ReCor the applicable patents. As reported in The Troubled Company Reporter on June 14, 2013, the Court of Chancery of Delaware declared ReCor Medical as the rightful owner of the '757 PCT patent application and the patent applications from which the '757 PCT patent application claims priority (i.e., the '429 and '618 patent applications). ReCor acquired the patents from ProRhythm Inc., an insolvent medical device company. The case is RECOR MEDICAL, INC., a Delaware corporation, Plaintiff, v. REINHARD WARNKING and SOUND INTERVENTIONS, INC., a Delaware corporation, Defendants, C.A. No. 7387-VCN (Del. Ch.). Daniel B. Rath, Esq., Rebecca L. Butcher, Esq., and K. Tyler O'Connell, Esq., at Landis Rath & Cobb LLP, Wilmington, Delaware; and John W. Holcomb, Esq. at Knobbe Martens Olson & Bear LLP, Riverside, California, attorneys for ReCor. Thomas M. Horan, Esq., at Womble Carlyle Sandridge & Rice, LLP, Wilmington, Delaware; and Joseph N. Campolo Esq., and Eryn Y. Deblois, Esq., at Campolo, Middleton & McCormick, LLP, in Bohemia, New York, attorneys for Defendants. Headquartered in Ronkonkoma, New York, ProRhythm Inc. -- http://www.prorhythm.com/-- developed medical H.I.F.U. products, including a device for the treatment of atrial fibrillation. The company filed for Chapter 11 protection on Dec. 11, 2007 (Bankr. D. Del. Case No. 07-11861). Chun I. Jang, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., represented the Debtor. When the Debtor filed for protection form its creditors, it disclosed estimated assets between $10 million and $50 million and estimated debts between $1 million and $10 million. QUANTUM FUEL: Stockholders Elect Two Directors ---------------------------------------------- Quantum Fuel Systems Technologies Worldwide, Inc., held its 2013 annual meeting of stockholders on July 25, 2013, at which the stockholders: (1) elected two Class III directors, Brian Olson and Carl E. Sheffer, to the Company's Board of Directors, to hold office until the 2016 annual meeting of stockholders or until his respective successor is duly elected and qualified; (2) ratified the appointment of Haskell & White LLP as its independent registered public accounting firm for the fiscal year ending Dec. 31, 2013; (3) approved a resolution authorizing the Company's Board of Directors, in its sole discretion, to implement a reverse stock split at a ratio in the range of 1-for-2 to 1-for-5 at any time prior to July 31, 2013; (4) approved the compensation of the Company's named executive officers; and (5) approved the proposal given the Company the authorization to adjourn the 2013 Annual Meeting if necessary to solicit additional proxies. About Quantum Fuel Lake Forest, Cal.-based Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced vehicle propulsion systems, fuel storage technologies, and alternative fuel vehicles. Quantum's portfolio of technologies includes electronic and software controls, hybrid electric drive systems, natural gas and hydrogen storage and metering systems and other alternative fuel technologies and solutions that enable fuel efficient, low emission, natural gas, hybrid, plug-in hybrid electric and fuel cell vehicles. Quantum Fuel disclosed a net loss attributable to stockholders of $30.91 million in 2012 and a net loss attributable to common stockholders of $38.49 million in 2011. The Company's balance sheet at March 31, 2013, showed $58.40 million in total assets, $49.77 million in total liabilities and $8.62 million in total stockholders' equity. Haskell & White LLP, in Irvine, California, 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 sufficient existing sources of liquidity to operate its business and service its debt obligations for a period of at least twelve months. These conditions, along with the Company's working capital deficit and recurring operating losses, raise substantial doubt about the Company's ability to continue as a going concern. QUEBECOR MEDIA: DBRS Confirms 'BB' Issuer Rating ------------------------------------------------ DBRS has confirmed Quebecor Media Inc.'s (QMI or the Company) Issuer Rating at BB (low) and its Secured Bank Debt rating at BB (high), with a recovery rating of RR1, and has downgraded the Company's Senior Notes rating to B (high) from BB (low) based on the Senior Notes' recovery prospects in a default scenario falling from RR4 to RR5. These actions follow the Company's announcement that it will raise approximately $350 million of Secured Bank Debt. Concurrently, the Company is redeeming a portion of its 7.75% unsecured Senior Notes due 2016 with cash on hand. Given that the Company is issuing Secured Bank Debt and concurrently redeeming a portion of its unsecured Senior Notes at the QMI holding company level, DBRS has concluded that holders of the Senior Notes are now likely to recover between 10% and 30% of their value in a default scenario (as opposed to 30% to 60% prior to the Company's financing actions) - a level that corresponds with a recovery rating of RR5. As such, in accordance with the "DBRS Recovery Ratings for Non-Investment Grade Corporate Issuers" criteria, DBRS has downgraded the Company's Senior Notes rating to B (high) from BB (low), one notch below the Issuer Rating of BB (low). RADIOSHACK CORP: S&P Lowers Corporate Credit Rating to 'CCC' ------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its corporate credit rating on Fort Worth, Texas-based RadioShack Corp. to 'CCC' from 'CCC+'. The outlook is negative. At the same time, S&P lowered its issue-level rating on the company's senior unsecured notes to 'CCC' from 'CCC+.'. S&P's recovery rating of '4' remains unchanged, which indicates its expectation for average (30% to 50%) recovery in the event of a payment default. "The downgrade of RadioShack reflects our view that a default could occur within 12 months, absent a major business turnaround or increased liquidity. The company's operating performance has experienced steady deterioration over several quarters and we now view liquidity as weak under our criteria," said credit analyst Nalini Saxena. "Our view incorporates an assumption of ongoing tightening of vendor terms and outlays required to pursue the roduct mix shift and store refresh initiatives designed to kick start a revival of the business." S&P's negative outlook on RadioShack Corp. reflects its view that the company is dependent on progress with its strategic turnaround to reverse the substantial decline in profitability and ongoing cash use in order to avoid a financial restructuring. S&P would lower the ratings if a default appears inevitable within six months, absent significantly favorable changes. S&P is unlikely to consider an upgrade in the near future. Longer term, S&P could consider raising the rating if there is a transformative series of events--such as an overhaul of product mix, a restoration of margins, and a return to sales growth--that improve the company's competitive position and credit measures. Improved liquidity would also be necessary. READER'S DIGEST: Once Again Emerges From Bankruptcy --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Reader's Digest Association has emerged from bankruptcy reorganizations twice in less than four years. According to the report, the publisher on July 30 implemented the Chapter 11 plan approved by the bankruptcy judge in a June 28 confirmation order. The plan was mostly negotiated before the filing in February. The holders of what amounts to $465 million in second lien floating-rate notes became the owners in exchange for debt. Approval of the new plan was facilitated by the lenders' concession increasing the pot for unsecured creditors from $500,000 to $3.88 million, raising the recovery from 0.1 percent to 3 percent. The plan lowered debt to about $100 million, an 80 percent reduction. The report relates that the floating-rate notes last traded on July 22 for 39 cents on the dollar, according to Trace, the bond- price reporting system of the Financial Industry Regulatory Authority. The notes traded between 30 cents and 31 cents on Feb. 19, the first reported trades after bankruptcy. About Reader's Digest Reader's Digest is a global media and direct marketing company that educates, entertains and connects consumers around the world with products and services from trusted brands. For more than 90 years, the flagship brand and the world's most read magazine, Reader's Digest, has simplified and enriched consumers' lives by discovering and expertly selecting the most interesting ideas, stories, experiences and products in health, home, family, food, finance and humor. RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No. 13-22233) filed for Chapter 11 protection on Feb. 17, 2013, with an agreement with major stakeholders for a pre-negotiated chapter 11 restructuring. Under the plan, the Debtor will issue the new stock to holders of senior secured notes. RDA Holding Co. listed total assets of $1,118,400,000 and total liabilities of $1,184,500,000 as of the Petition Date. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Evercore Group LLC is the investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Reader's Digest, together with its 47 affiliates, first sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24, 2009 and exited bankruptcy Feb. 19, 2010. The plan in the new Chapter 11 case provides that holders of allowed general unsecured claims in such sub-class will receive their pro rata share of the GUC distribution; holders of allowed general unsecured claims of Reader's Digest will also receive their pro rata share of the RDA GUC distribution and the senior noteholder deficiency claims in such sub-class will be deemed waived solely for purposes of participating in the GUC distribution and the RDA GUC distribution. The Official Committee of Unsecured Creditors is represented by Otterbourg, Steindler, Houston & Rosen, P.C. The Committee tapped Alvarez & Marsal North America, LLC, as financial advisors. REALAUCTION.COM LLC: Declared Bankruptcy After Patent Ruling ------------------------------------------------------------ Grant Street Group on Aug. 1 disclosed that Realauction.com, LLC of Plantation, Florida declared bankruptcy after a federal judge in Pittsburgh denied the company's request to reduce the amount Realauction must pay to secure a jury award of $8.1 million to Grant Street Group. In June, a jury found Realauction guilty of willfully infringing a Grant Street patent. Realauction asked the court to stop Grant Street from collecting the $8.1 million verdict pending further rulings by the court on post-trial motions. The court agreed to do so provided Realauction pay $4.3 million by midnight on July 31. Instead, Realauction filed a petition on the night of July 31 seeking bankruptcy protection. The bankruptcy filing automatically halts Realauction's efforts to overturn the verdict in favor of Grant Street Group. About Grant Street Group Grant Street Group -- http://www.GrantStreet.com-- has been supplying software as a service to more than 4,300 government and financial institution clients since 1997. Grant Street is the world's largest internet auctioneer, conducting online auctions of bonds, notes, CDs, tax certificates, tax deeds, foreclosures and other financial and legal instruments with a value exceeding $12 trillion. G rant Street Group is also the nation's only supplier of fully-hosted tax billing, collection and cashiering software as a service, including e-payment processing. RENAISSANCE PROPERTIES: Case Summary & Unsecured Creditor --------------------------------------------------------- Debtor: Renaissance Properties, LLC 2510 E. South Blvd. Montgomery, AL 36116 Bankruptcy Case No.: 13-31936 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court Middle District of Alabama (Montgomery) Judge: Dwight H. Williams Jr. Debtor's Counsel: Daniel Gary Hamm, Esq. HAMM & WILKINS, P.C. 560 South McDonough St., Ste A Montgomery, AL 36104 Tel: (334) 269-0269 Fax: (334) 323-5666 E-mail: dhamm@hammwilkins.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The required list of 20 largest unsecured creditors contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ River Bank & Trust $24,902 7075 halcyon Park Drive Montgomery, AL 36117 The petition was signed by Tony Richards, member. RESIDENTIAL CAPITAL: Judge Rejects Intercompany Conflict Argument ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Residential Capital LLC's march toward an Aug. 21 hearing for approval of disclosure materials won't be delayed by claims of junior secured creditors that settlements engrafted in the reorganization plan don't give enough value for intercompany claims. According to the report, junior noteholders argued that lawyers for ResCap and the creditors' committee have inherent conflicts of interest and shouldn't be permitted to participate in disputes regarding the value of intercompany claims. U.S. Bankruptcy Judge Martin Glenn rejected the argument at a hearing July 30. He said the noteholders were trying to "derail" the plan. The report notes that the junior noteholders oppose the plan because they aren't slated to be paid in full. They say the value of intercompany claims should result in full payment on their debt. ResCap's plan is based largely on a settlement where the parent Ally Financial Inc. will pay $2.1 billion in return for a release of claims. Holders of ResCap's $2.15 billion in general unsecured claims are in line for a 36.3 percent recovery, according to the disclosure statement. Unsecured creditors with $2 billion in claims against the so-called GMACM companies are slated to receive 30.1 percent. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Creditors Slam Bondholders' 'Disruption' ------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that junior secured noteholders in Residential Capital LLC's bankruptcy lost their bid to disqualify ResCap attorneys in a dispute over intercompany claims after a judge was unpersuaded by their argument that the lawyers have a conflict of interest. According to the report, U.S. Bankruptcy Judge Martin Glenn rejected a motion from the ad hoc group of bondholders, who claim to hold $2.2 billion in ResCap's debt, to issue an order directing counsel for each of the bankrupt ResCap entities, the creditors' committee and the chief restructuring officer to remain neutral. ResCap's official committee of unsecured creditors says a request by dissident bondholders to disqualify "conflicted" attorneys from a fight over interest payments is driven by "a desire to create maximum disruption," according to Joseph Checkler writing for Dow Jones' DBR Small Cap. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESPONSE BIOMEDICAL: VP Human Resources' Employment Terminated -------------------------------------------------------------- Patricia Massitti's employment with Response Biomedical Corp. as vice president of Human Resources & Corporate Communications terminated. In connection with her departure, Ms. Massitti and the Company have agreed to enter into a separation agreement and mutual release pursuant to which the Company and Ms. Massitti have agreed as follows: (i) Ms. Massitti's employment with the Company will be terminated effective as of July 18, 2013; (ii) Ms. Massitti's base salary and regular group benefits (excluding her long term disability coverage which terminated effective of the date of the Separation Agreement) will continue to be paid for a period of 10 months until May 10, 2014, unless Ms. Massitti obtains new employment during the Salary Continuance Period; (iii) options granted to Ms. Massitti will continue to vest and be exercisable in accordance with the terms of the stock option plan and the terms of the Company's incentive stock option plan until the earlier of the end of the Salary Continuance Period and the date Ms. Massitti obtains new employment; and (iv) the Company will reimburse Ms. Massitti for legal fees incurred in relation to the termination of her employment up to a maximum of $3,000. About Response Biomedical Based in Vancouver, Canada, Response Biomedical Corporation develops, manufactures and sells diagnostic tests for use with its proprietary RAMP(R) System, a portable fluorescence immunoassay- based diagnostic testing platform. The RAMP(R) technology utilizes a unique method to account for sources of error inherent in conventional lateral flow immunoassay technologies, thereby providing the ability to quickly and accurately detect and quantify an analyte present in a liquid sample. Consequently, an end-user on-site or in a point-of-care setting can rapidly obtain important diagnostic information. Response Biomedical currently has thirteen tests available for clinical and environmental testing applications and the Company has plans to commercialize additional tests. Response Biomedical disclosed a net loss and comprehensive loss of C$5.28 million on C$11.75 million of product sales for the year ended Dec. 31, 2012, as compared with a net loss and comprehensive loss of C$5.37 million on C$9.02 million of product sales during the prior year. The Company incurred a C$10.08 million net loss and comprehensive loss in 2010. "We have incurred significant losses to date. As at December 31, 2012, we had an accumulated deficit of $112,171,008 and have not generated positive cash flow from operations. Accordingly, there is substantial doubt about our ability to continue as a going concern. We may need to seek additional financing to support our continued operation; however, there are no assurances that any such financing can be obtained on favorable terms, if at all. In view of these conditions, our ability to continue as a going concern is dependent upon our ability to obtain such financing and, ultimately, on achieving profitable operations," according to the Company's annual report for the period ended Dec. 31, 2012. The Company's balance sheet at March 31, 2013, showed C$14.65 million in total assets, C$23.68 million in total liabilities and a C$9.02 million total shareholders' deficit. REVSTONE INDUSTRIES: Creditors Buck Hiring of Jacobs, Much Shelist ------------------------------------------------------------------ Matt Chiappardi of BankruptcyLaw360 reported that the creditors committee in the Revstone Industries LLC bankruptcy case objected to the company hiring law firms Much Shelist PC and Jacobs Associates, arguing that it's not clear who they'll be working for, and whether their retentions would create a conflict of interest. According to the report, the official committee of unsecured creditors said Metavation LLC -- a subsidiary of the auto parts conglomerate that filed for bankruptcy protection, but does not have a case jointly administered with its parent -- also requested court approval to hire the professionals. About Revstone Industries, Greenwood Forgings, & US Tool & Engineering Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. A motion for joint administration of the cases has been filed. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. Metavation, also known as Hillsdale Automotive, LLC, joined parent Revstone in Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No. 13-11831) to sell the bulk of its assets to industry rival Dayco for $25 million, absent higher and better offers. REVSTONE INDUSTRIES: Unit Unveils Pact With Chrysler, GM -------------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that Revstone Industries LLC's bankrupt subsidiary unveiled details about a sale support agreement with General Motors Co. and Chrysler Group Inc. that is designed to keep the debtor in business as the days count down to its proposed $25 million stalking horse sale to Dayco. According to the report, Metavation Inc.'s bankruptcy court motion did not include all of the precise figures comprising the agreement, but did outline the general idea behind the proposed pact among the debtor, Revstone, some of its nondebtor affiliates and the automakers. About Revstone Industries, Greenwood Forgings, & US Tool & Engineering Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. A motion for joint administration of the cases has been filed. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. Metavation, also known as Hillsdale Automotive, LLC, joined parent Revstone in Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No. 13-11831) to sell the bulk of its assets to industry rival Dayco for $25 million, absent higher and better offers. RG STEEL: Seeks Review of Ruling Allowing Caruso as Substitute -------------------------------------------------------------- A group of RG Steel creditors filed court papers in connection with its appeal of a bankruptcy judge's decision that authorized the company's CEO to act on behalf of RG Steel Wheeling LLC under a trust agreement. In the July 29 filings, the group led by Richard Carter wanted a district court in Delaware to review whether U.S. Bankruptcy Judge Kevin Carey erred in authorizing RG Steel CEO Richard Caruso to act on behalf of the steel maker in order to direct PNC Bank N.A. to return the funds held in trust by the bank. The group also wanted to review whether Judge Carey erred in directing RG Steel to maintain distribution of, or proceeds from, the trust assets in an escrow account, subject to an agreement with Wilmington Trust or another third-party escrow agent. RG Steel Wheeling, as successor to Wheeling-Pittsburgh Steel Corp., is a party to a 1990 agreement between WPSC and PNC Bank N.A. The companies signed the agreement to establish the trust to hold and distribute funds held in connection with WPSC's employee benefit plans. 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. ROCKWOOD SPECIALTY: Moody's Keep Ba1 Rating over Subsidiary Sale ---------------------------------------------------------------- Moody's Investors Service said Rockwood Specialty Group, Inc.'s (Rockwood, Ba1 stable) ratings are unchanged following the firm's announcement that it has reached an agreement to sell its Clay Based Additives business to ALTANA Group for a purchase price of $635 million. Rockwood Specialties Group, Inc., headquartered in Princeton, New Jersey, is a wholly owned subsidiary of Rockwood Holdings, Inc. (Ticker: ROC). Rockwood produces of a variety of specialty chemicals and advanced materials, including pigments, additives, surface treatment chemicals, ceramics, and lithium. Revenues were $3.5 billion for the year ended March 31, 2013. ROTECH HEALTHCARE: Exit Financing Letters, Seal Approved -------------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved Rotech Healthcare's motion to (a) enter into exit financing commitment letters and related fee letter; (b) incur and pay certain fees and/or premiums, indemnities, costs and expenses in connection therewith and (c) file the fee letter under seal. As previously reported, "The Debtors and their advisors, in consultation with representatives of the consenting second lien noteholders, determined the Debtors would require aggregate funding of $332.5 million along with a $25 million revolving facility to consummate the Plan and provide sufficient liquidity to fund the Debtors' post-emergence operations, all in the form of the Exit Facilities...As more fully set forth in the Commitment Letters, it is contemplated that on the effective date of the Plan (the 'Effective Date'), the reorganized Debtors will enter into (i) the First Lien Credit Facilities comprised of a $25 million Revolving Facility, a $100 million TLA Facility, and a $75 million TLB Facility, and (ii) the Second Lien Credit Facility comprised of $157.5 million term loan." 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. SANUWAVE HEALTH: Obtains $1.6 Million from Units Offering --------------------------------------------------------- SANUWAVE Health, Inc., has sold approximately $1.6 million in Units, with each Unit consisting of one share of common stock and a warrant to purchase one-half share of common stock, in a public offering which closed on July 25, 2013. The price per Unit is $0.55. The approximately 2.9 million Units separated immediately and the common stock and warrants were issued separately. The approximately 1.45 million warrants have an exercise price of $0.80 per share and are exercisable during the five-year period beginning on the date of issuance. The Company plans to use the net proceeds from the offering primarily for expenses related to its dermaPACE(R) clinical trial for treating diabetic foot ulcers in the United States and other general corporate purposes. CIM Securities, LLC, served as placement agent for the offering. About SANUWAVE Health Alpharetta, Ga.-based SANUWAVE Health, Inc., is an emerging global regenerative medicine company focused on the development and commercialization of noninvasive, biological response activating devices for the repair and regeneration of tissue, musculoskeletal and vascular structures. BDO USA, LLP, in Atlanta, Georgia, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations, has a net working capital deficit, and is economically dependent upon future issuances of equity or other financing to fund ongoing operations, each of which raise substantial doubt about its ability to continue as a going concern. SANUWAVE Health reported a net loss of $6.40 million on $769,217 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $10.23 million on $802,572 of revenue in 2011. The Company's balance sheet at March 31, 2013, showed $2.33 million in total assets, $13.64 million in total liabilities and a $11.31 million total stockholders' deficit. SARKIS INVESTMENTS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Sarkis Investments Company, LLC 2600 W. Olive Street, Suite 500 Burbank, CA 91505 Bankruptcy Case No.: 13-29180 Chapter 11 Petition Date: July 29, 2013 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: Ashley M. McDow, Esq. BAKER & HOSTETLER, LLP 12100 Wilshire Boulevard, 15th Floor Los Angeles, CA 90025 Tel: (310) 820-8800 Fax: (310) 820-8859 E-mail: amcdow@bakerlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Pamela Muir, manager. SCOOTER STORE: Pays Off Loan, Seeks More Exclusivity ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Scooter Store Inc. for the first time is seeking an expansion of the exclusive right to propose a reorganization plan. At the Aug. 19 hearing, the company will ask the judge to preclude anyone else from filing a plan before Nov. 11. According to the report, the bankruptcy was being financed with a $10 million secured loan provided by second-lien creditor Crystal Financial LLC. Last week, the company was authorized to use excess cash to pay off and terminate the financing. The business will be sold at auction on Aug. 6. A hearing for sale approval is set for Aug. 19. No buyer was under contract when the court in Delaware approved auction procedures. On July 31, the bankruptcy court extended the interim right to use secured lenders' cash collateral until the Aug. 19 hearing. About The Scooter Store The Scooter Store is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the Company's customers. It has 57 distribution centers in 41 states. Scooter Store Holdings Inc., and 71 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in Wilmington. The closely held company listed assets of less than $10 million and debt of more than $50 million. Affiliates of private equity firm Sun Capital Partners, based in Boca Raton, Florida, purchased a majority voting interest in the debtors in 2011. Scooter Store is 66.8 percent owned by Sun Capital Partners Inc., owed $40 million on a third lien. In addition to Sun's debt and $25 million on a second lien owing to Crystal Financial LLC, there is a $25 million first-lien revolving credit owing to CIT Healthcare LLC as agent. Crystal is providing $10 million in financing for bankruptcy. SMALL TOWN: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Small Town Dream Homes, LLC 4050 West Costco Drive Tucson, AZ 85741 Bankruptcy Case No.: 13-12978 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court District of Arizona (Prescott) Judge: Daniel P. Collins Debtor's Counsel: James M. McGuire, Esq. DAVIS MILES MCGUIRE GARDNER, PLLC 80 E. Rio Salado Parkway, Suite 401 Tempe, AZ 85281 Tel: (480) 733-6800 Fax: (480) 733-3748 E-mail: jmcguire@davismiles.com Scheduled Assets: $0 Scheduled Liabilities: $1,393,100 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/azb13-12978.pdf The petition was signed by D. Michael Romano, trustee. SMILE BRANDS: Moody's Rates New Senior Debt Facility 'B1' --------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Smile Brands Group Inc.'s proposed senior secured credit facilities, including a $50 million senior secured revolving credit facility (undrawn at close) expiring 2018 and a $260 million senior secured term loan due 2019. At the same time, Moody's affirmed Smile Brands' B3 Corporate Family Rating and B3-PD Probability of Default Rating. The rating outlook has been revised to stable from negative. The proceeds from the new credit facilities will be used to refinance in full all amounts outstanding under the company's existing credit facilities and pay related transaction fees and expenses. Moody's assigned the following ratings: $50 million senior secured revolver due 2018, B1 (LGD 3, 32%) $260 million senior secured first lien term loan due 2019, B1 (LGD 3, 32%) Moody's expects to withdraw the following ratings upon close of the transaction: $35 million senior secured revolving credit facility due 2015, B1 (LGD 3, 31%) $240 million senior secured term loan B due 2017, B1 (LGD 3, 31%) Ratings affirmed: Corporate Family Rating at B3 Probability of Default Rating at B3-PD The rating outlook has been changed to stable from negative. All ratings are subject to review of final documentation. Ratings Rationale: Smile Brands' B3 Corporate Family Rating reflects the company's relatively small size, high financial leverage, and weak cash flow and interest coverage metrics due to the company's aggressive growth strategy. Also constraining the rating is the high proportion of patient out-of-pocket expenses, exposing the company to economic cycles and consumer spending patterns. The ratings also incorporate Moody's expectation of continued expansion activity over the intermediate-term, a strategy that the rating agency expects to continue to constrain profitability margins and free cash flow. The ratings are supported by Smile Brands' strong market position as one of the largest dental service organizations (DSO) in the United States, maintaining leading competitive positions across many of its primary markets. Smile Brands' credit profile also benefits from the company's ability to reduce its pace of new office growth, if necessary, which would allow it to generate free cash flow that could be used to reduce debt. The revision of the rating outlook to stable from negative reflects company's improved liquidity and debt maturity profile following the proposed refinancing transaction, as well as the stabilization of earnings during the first half of 2013 following a number of operating challenges in 2012 which constrained earnings and cash flow. The stable outlook reflects Moody's expectation that the company's financial leverage will remain high over the next 12 to 18 months, offset by Moody's expectation that the company will achieve low-to-mid-single-digit earnings growth supported by flat to low-single digit same-store sales growth and continued de novo office expansion. The ratings could be downgraded if the company's liquidity profile or key credit metrics deteriorate, or if the company undertakes material debt-financed acquisitions or shareholder initiatives. While a rating upgrade over the near to intermediate term is unlikely, the ratings could be upgraded if the company can demonstrate revenue and EBITDA growth such that debt to EBITDA is sustained below 5.5 times, and EBITDA minus capital expenditures to interest expense is maintained above 1.2 times. The principal methodology used in rating Smile Brands Group Inc. was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Irvine, California, Smile Brands Group Inc. is a leading dental service organization in the United States. Through its owned subsidiaries and affiliated professional corporations (PCs), the company provides comprehensive business support services, non-clinical personnel, facilities and equipment to dentists. Dentists are at-will employees of the PCs, where the PCs own the medical records, patient lists, and operating records. The company's services support more than 1,300 dentists and hygienists practicing in 369 offices nationally. Smile Brands' primary equity sponsor is Welsh, Carson, Anderson & Stowe. For the twelve months ended June 30, 2013, the company generated revenues of approximately $500 million. SPRINGLEAF FINANCE: Prepays $235MM Under 2011 Credit Agreement -------------------------------------------------------------- Springleaf Financial Funding Company, as borrower, prepaid, without penalty or premium, $235,062,500 under its Amended and Restated Credit Agreement, dated as of May 10, 2011, with Bank of America, N.A., and the other lenders party thereto, et al. Following the prepayment, the current outstanding principal amount under the credit agreement is approximately $1.800 billion. About Springleaf Finance Evansville, Indiana-based Springleaf Finance Corporation is a financial services holding company with subsidiaries engaged in the consumer finance and credit insurance businesses. The Company provides secured and unsecured personal loans to customers who generally need timely access to cash and also offers associated insurance products. At Dec. 31, 2012, SLFC had $11.7 billion of net finance receivables due from over 973,000 customer accounts and $3.4 billion of credit and non-credit life insurance policies in force covering over 630,000 customer accounts. At Dec. 31, 2012, the Company had 852 branch offices in the United States, Puerto Rico, and the U.S. Virgin Islands. Springleaf Finance reported a net loss of $220.7 million on net interest income (before provision for finance receivable losses) of $625.3 million in 2012, compared with a net loss of $224.7 million on net interest income (before provision for finance receivable losses) of $601.2 million in 2011. * * * As reported in the TCR on March 3, 2013, Standard & Poor's Ratings Services splaced its ratings on SLFC, including its 'CCC/C' issuer credit ratings, on CreditWatch with positive implications. SUN BANCORP: Keith Stock Appointed as Director ---------------------------------------------- Sun Bancorp, Inc., has appointed Keith Stock as a director of the Company, subject to the non-objection of the Board of Governors of the Federal Reserve System. Mr. Stock is expected to be seated as a director of the Company following the receipt of non-objection of the FRB. It is preliminarily anticipated that Mr. Stock will be appointed to the Audit Committee of the board of directors. Mr. Stock is expected to receive customary board and committee fees. Mr. Stock was also appointed as a director of Sun National Bank, the Company's wholly-owned subsidiary, subject to the non- objection of the Office of the Comptroller of the Currency. Mr. Stock is expected to be seated as a director of the Bank following receipt of non-objection of the OCC. Mr. Stock is a managing director of C&Co/PrinceRidge LLC, a full service investment bank. He also serves as chairman and chief executive officer of First Financial Investors, Inc., a financial services investment firm, and senior executive advisor with The Brookside Group, a private investment firm. Previously, from 2009 to 2011, Mr. Stock served as senior managing director and chief strategy officer of TIAA-CREF. He was a member of the Office of the CEO with responsibility for corporate development and strategy. From 2004 until 2008, Mr. Stock served as president of MasterCard Advisors, LLC, the professional services business of MasterCard Worldwide. He was a member of the MasterCard Operating Committee and Management Council. Mr. Stock previously served as chairman and chief executive officer of St. Louis Bank, FSB and First Financial Partners Fund I, LP, a private equity firm, chairman of Treasury Bank, Ltd, and as a director of Severn Bancorp, Inc., and Severn Savings Bank. Earlier in his career, Mr. Stock was a partner with McKinsey & Company, a senior officer of A.T. Kearney, and financial services sector executive with Capgemini and Ernst & Young. He began his career with the Mellon Bank (now Bank of New York Mellon). Mr. Stock is a director of the Foreign Policy Association, Independence Bancshares, Inc., and Alcar, LLC, a privately owned bank holding company. He is a member of the Economic Club of New York, the Advisory Board of the Institute for Ethical Leadership of Rutgers University Business School, and the International Trustee Election Commission of AFS Intercultural Programs, Inc. (formerly known as the American Field Service). He received his undergraduate degree from Princeton University and his M.B.A in finance from The Wharton School, University of Pennsylvania. About Sun Bancorp Sun Bancorp, Inc. (NASDAQ: SNBC) is a $3.23 billion asset bank holding company headquartered in Vineland, New Jersey, with its executive offices located in Mt. Laurel, New Jersey. Its primary subsidiary is Sun National Bank, a full service commercial bank serving customers through more than 60 locations in New Jersey. On April 15, 2010, Sun National Bank entered into a written agreement with the OCC which contained requirements to develop and implement a profitability and capital plan which provides for the maintenance of adequate capital to support the Bank's risk profile in the current economic environment. As of June 30, 2013, the Company had $3.20 billion in total assets, $2.94 billion in total liabilities and $261.66 million in total shareholders' equity. STANDARD PACIFIC: Moody's Ups CFR to B2 & Rates $250MM Notes B2 --------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating of Standard Pacific Corp. to B2 from B3 and the Probability of Default Rating to B2-PD from B3-PD. Concurrently, Moody's assigned a B2 rating to the proposed $250 million unsecured notes offering and upgraded all of its existing senior unsecured notes to B2 from B3. The Speculative-Grade Liquidity rating was affirmed at SGL-2. The ratings outlook was changed to stable from positive. The proceeds from the proposed $250 million unsecured note offering will be used for general corporate purposes including land acquisition and development, home construction and other related purposes. This transaction is expected to increase pro forma adjusted debt leverage to about 58% from 54%. The upgrade of the Corporate Family Rating reflects the expectation that Standard Pacific's credit metrics continue to improve as the homebuilding industry strengthens. Moody's anticipates that Standard Pacific's adjusted homebuilding debt-to- capitalization will remain below 60% as the company is projected to improve its equity base via earnings growth driven by increase in deliveries, average selling price, and gross margins. The following rating actions were taken: Corporate Family Rating, upgraded to B2 from B3; Probability of Default Rating, upgraded to B2-PD from B3-PD; Proposed $250 million senior unsecured notes, due 2021, assigned B2 (LGD4, 52%); Senior unsecured notes, upgraded to B2 (LGD4, 52%) from B3 (LGD4, 51%); Senior unsecured and subordinated shelf ratings, upgraded to (P)B2/(P)Caa1 from (P)B3/(P)Caa2 Speculative-Grade Liquidity Rating, affirmed at SGL-2; Ratings outlook changed to stable from positive. All of Standard Pacific's debt is guaranteed by its principal operating subsidiaries. Ratings Rationale: The B2 Corporate Family Rating considers Standard Pacific's homebuilding debt leverage that is anticipated to be maintained below 60% and improvement in industry conditions that will continue to fuel to the company's financial performance. Additionally, the rating considers the company's good liquidity profile (as reflected in the SGL-2 rating), attractive gross margin performance and increased pricing power. In addition, Standard Pacific has substantially reduced its off-balance sheet joint venture exposure, eliminating recourse JV debt of over $500 million outstanding in 2007. At the same time, the rating remains constrained by projected negative cash flow generation as Standard Pacific pursues land acquisitions and development. Additionally, the rating is constrained by the company's limited geographic diversification as it operates in six states with two states -- California and Florida -- representing 60% of trailing twelve month 6/30/13 deliveries. The stable ratings outlook considers the expected improvement in the company's credit metrics as industry conditions continue to solidify. The ratings could be downgraded if adjusted homebuilding debt-to- capitalization increases and is projected to be maintained above 60%. Additionally, deterioration in liquidity including a decline in its cash reserves through sharper-than-expected operating losses or through sizeable investment could pressure the ratings. Also, debt financed dividend payments could lead to a ratings downgrade. The ratings could improve if the company were to maintain its profitability and solid liquidity, grow its tangible equity base, and reduce debt leverage to below 50%. The principal methodology used in this rating was the Global Homebuilding Industry Methodology published in March 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Irvine, California and begun in 1966, Standard Pacific Corp. constructs and sells single-family attached and detached homes focusing on the move-up market, which, together with a modest amount for the luxury market, represents about 73% of the company's overall product mix, with 27% represented by the entry level market. The company has homebuilding operations in California, Texas, Arizona, Colorado, Florida, North Carolina, and South Carolina, and serves 25 markets. Revenues and net income before declaration of preferred dividends for the LTM period ending June 30, 2013 were approximately $1.5 billion and $574 million, respectively. STANDARD PACIFIC: S&P Assigns 'B+' Rating to $250MM Senior Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue rating and '3' recovery rating to Standard Pacific Corp.'s proposed $250 million senior notes due 2021. S&P's '3' recovery rating indicates its expectation for an average (50%-70%) recovery in the event of default. The 'B+' corporate credit rating and stable outlook on Standard Pacific remains unchanged. Standard Pacific's newly issued notes will rank equally with its $1.5 billion of existing senior unsecured notes. The company intends to use the net proceeds for general corporate purposes. The net proceeds initially will replenish unrestricted cash, which declined to $80.6 million as of June 30, 2013. Standard & Poor's ratings on Standard Pacific reflects the company's "aggressive" financial risk profile, as measured by elevated leverage metrics and low interest coverage, though near- term debt maturities are modest and liquidity is adequate. Standard Pacific does not face meaningful debt maturities until 2016 when $280 million of senior notes mature. The company's business risk profile is "fair" reflecting Standard Pacific's long land position in many of the strongest U.S. housing markets and operating leverage from sector-leading homebuilding margins, which leave the company well-positioned to participate in the housing recovery, in S&P's opinion. The stable outlook reflects S&P's expectation that Standard Pacific will continue to deleverage through sustained profitability given its presence in the relatively stronger California, Texas, and Southwest homebuilding markets. S&P could consider positive ratings movement if profitability strengthens faster than expected such that leverage improvements outpace S&P's projections and the company can balance maintaining adequate liquidity while continuing to invest in land as the housing sector recovers. While less likely in the near term, S&P would lower its rating if the housing market takes another sharp downward turn, profitability weakens materially, and liquidity becomes less than adequate. For the complete corporate credit rating rationale, see Standard & Poor's research update on Standard Pacific, published March 27, 2013, on RatingsDirect. RATINGS LIST Standard Pacific Corp. Corporate Credit Rating B+/Stable/-- New Rating Standard Pacific Corp. $250 mil. notes due 2021 Senior Unsecured B+ Recovery Rating 3 TANDY BRANDS: Provides Update on Restructuring Plan --------------------------------------------------- Tandy Brands Accessories, Inc. on July 26 provided an update on the results achieved from its restructuring plan announced March 18 and announced the execution of new credit facilities. "We learned some tough lessons in fiscal year 2013. {Fri]day we are pleased to announce that we have not only executed our previously announced restructuring plans, but we have also finalized a new capital structure, both of which we expect will improve our competitive and financial position as we begin fiscal 2014," said Rod McGeachy, President and Chief Executive Officer. "Furthermore, I am pleased that we were able to accomplish this with no equity dilution to our current shareholders," continued Mr. McGeachy. Update on Restructuring Plan The restructuring plan, announced on March 18, 2013, was designed to increase profitability for the Company, improve working capital efficiency, improve customer service and reduce overhead. The key elements of the plan included: -- Eliminating low-volume products -- Emphasizing licensed products and high volume private label products -- Reducing the amount of risk associated with the Gifts business -- Reducing corporate employee headcount by approximately 32% -- Closing or downsizing four of eight leased facilities -- Outsourcing and relocating Gifts distribution from Dallas to a third-party provider in California -- Exiting development efforts and accelerating recognition of future expenses associated with non-core brands The Company has successfully reduced the risk profile associated with its Gifts business, which was the primary source of the fiscal 2013 financial issues, by significantly reducing product return privileges, limiting margin agreements with retailers, locking freight rates, exiting underperforming products, and relocating and outsourcing its Gifts distribution function. "We think the steps we have taken have effectively reduced the risk associated with our Gifts business and believe the profitability of this segment will be greatly improved in fiscal 2014," said Mr. McGeachy. Furthermore, the company confirmed on July 26 that it had successfully executed all of the headcount reductions and facility consolidations as previously announced. The Company also announced the elimination of the Chief Restructuring Officer ("CRO") role. On March 8, 2013, the Company appointed John Little from Deloitte Financial Advisory Services LLP as a consultant filling the CRO role and performing the following duties under the CRO engagement: -- Evaluating capital structure alternatives and identifying additional sources of financing -- Developing and executing plans to improve liquidity against existing assets -- Executing profitability improvement initiatives -- Communicating with select key stakeholders "John and the CRO role added value to our organization during a difficult time," said Mr. McGeachy. "During the past four months we've successfully maintained service to our retailers, executed our restructuring initiatives, and closed our new credit facilities. We thank John for his contributions," said Mr. McGeachy. Senior Credit Facility with Salus Capital Partners, LLC On July 24th, the Company entered into a new credit agreement with Salus Capital Partners, LLC, to provide senior financing up to $29 million. The facility is comprised of a revolving credit facility in the amount of $27.5 million, and a term loan facility in the amount of $1.5 million, and expires in July 2015. Under the Credit Facility, borrowings bear interest at either the base rate or LIBOR, plus an additional percentage for each of the revolver and the term loan. The Credit Facility is secured by a first priority lien on substantially all of the assets of the Company and its subsidiaries, excluding certain goods and related accounts receivable financed pursuant to the King Trade Facility, for which Salus will have a second priority lien. The Credit Facility contains covenants which address minimum consolidated EBITDA requirements, account concentration limitations, budgeted expenses and accounts payable to inventory ratios. The Credit Agreement also provides for customary representations, warranties, affirmative covenants, negative covenants and events of default. The Company used the proceeds of the initial advance under the Credit Facility to repay indebtedness owing to Wells Fargo and to pay fees and expenses incurred in connection with the Credit Agreement. The Company will use the proceeds of future advances under the Credit Agreement for working capital purposes. Credit Facility with King Trade Capital On July 24th, the Company entered into a Master Agreement with EPK Financial Corporation, d/b/a King Trade Capital, that provides for a purchase and sale facility with $11.5 million of maximum aggregate amount permitted to be outstanding. The King Trade Facility is expected to provide the Company with financing to purchase certain inventory related to the Company's holiday 2013 seasonal gifts business. The King Trade Facility is secured by (i) a first priority lien on the goods and related accounts receivable financed by the Company under the King Trade Facility, and (ii) a second priority lien on substantially all other assets of the Company. The amounts payable under the King Trade Facility bear interest at varying rates which depend primarily on the length of time such amounts are outstanding, the amount advanced for each transaction and the aggregate of all amounts advanced. The Master Agreement contains representations and warranties and covenants that are customary for such financing arrangements. Outlook "Although we experienced choppy waters in fiscal 2013, our organization is stronger and we are excited about starting fiscal 2014 with new credit facilities, additional liquidity, no equity dilution and with our restructuring actions completed," said Mr. McGeachy. About Tandy Brands Headquartered in Dallas, Texas, Tandy Brands -- http://www.tandybrands.com-- is a designer and marketer of branded men's, women's and children's accessories, including belts, gifts, small leather goods and bags. Merchandise is marketed under various national as well as private brand names through all major retail distribution channels. TERESA GIUDICE: Reality Show Stars Hit With Fraud Claims -------------------------------------------------------- Jeff Sistrunk of BankruptcyLaw360 reported that two stars of the Bravo reality show "The Real Housewives of New Jersey" have been accused of lying on loan applications, committing bankruptcy fraud and failing to file tax returns, according to an indictment by a New Jersey grand jury. According to the report, the 39-count indictment charges Teresa Giudice and her husband, Giuseppe "Joe" Giudice, both of Towaco, N.J., with conspiracy to commit mail and wire fraud, bank fraud, making false statements on loan applications, bankruptcy fraud and failure to file tax returns. Kathryn Brenzel of BankruptcyLaw360 reported that two stars were released on bonds of $500,000 each following their initial court appearance. The Giudices, who were indicted, appeared in New Jersey federal court on various fraud charges, according to court documents. The pair have not yet entered a plea, but are slated to be arraigned Aug. 14, a spokesman for the U.S. attorney's office told Law360. About the Giudices In June 2010, Teresa Giudice, who portrays a role in Real Housewives of New Jersey, and her husband, Joe, filed for bankruptcy under Chapter 11 in the U.S. Bankruptcy Court in New Jersey. The Giudices owe creditors $10.85 million. Chapter 7 trustee John Sywilok sued the Giudices. The suit claimed that the Debtors concealed key documents about their finances and business transactions. Mr. Sywilok also accused the couple of making false statements under oath about their assets, income and expenses. TITAN ENERGY: Extends Repayment of $2.4MM of Notes in Default ------------------------------------------------------------ Titan Energy Worldwide, Inc. on Aug. 1 released its financial statements for the 2nd quarter of 2013. The Company reported a profit of $281,267 on revenues of $6,434,283, compared to a loss of $70,137 on revenues of $5,342,261 for the same quarter in 2012. Service revenues were a record $3.2 million for the quarter, an increase of nearly 100% over 2012. Equipment sales were down 12% compared to the same period in 2012. The Company reported that it was profitable for the first six months of 2013, while revenues for the first six months were 31% greater than the same period in 2012. Service revenues for the first six months were 77% over the same period in 2012. The Company also reported that it was successful in extending $2.4 million of $2.7 million in Notes that were previously in default. These notes are now due and payable July 2014. "Titan Energy reached an important milestone this quarter by posting strong profits for the first time in the Company's history. A large factor in our ability to achieve profitability came from a 100% increase in service revenues when compared to the same quarter in 2012. More than $1 million in service revenue was due to modification work we did for peak-shaving generator customers to meet new EPA emission standards for diesel generators. This work, which is required by the EPA's RICE NESHAP ruling, is a unique skillset that we have developed at Titan, and is an area that we plan to continue into 2014," stated Jeffrey Flannery, Chief Executive Office of Titan Energy Worldwide, Inc. "We ended the first six months of 2013 with nearly $400,000 in positive operating income, compared to a negative $120,000 in 2012. We also had a slight profit for the first six months of 2013 compared to a loss of more than $687,000 in 2012. Again, profitability was achieved through increased service revenues, up 77% from 2012," added Mr. Flannery. "We were also able to defer more than 90% of our convertible notes until July 2014, which we believe will be enough time for us to restructure our balance sheet and recapitalize the Company. Looking ahead, we are expecting to continue to realize strong service revenues in the third quarter of 2013 and maintain our profitability. We are taking measures to further expand our service offerings in our regional territories, and are beginning to deploy our monitoring technology in more target markets as we hope to begin the commercial deployment of that service later this year. We have created, I believe, a solid foundation on which Titan Energy can now begin to grow at an even greater rate in the future," further added Flannery. About Titan Energy New Hudson, Mich.-based Titan Energy Worldwide, Inc., is a provider of onsite power generation, energy management and energy efficiency products and services. Titan Energy disclosed a net loss of $1.43 million on $19.15 million of net sales for the year ended Dec. 31, 2012, as compared with a net loss of $3.43 million on $14.06 million of net sales for the year ended Dec. 31, 2011. Going Concern "The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company incurred a net loss for the year ended December 31, 2012 of $1,430,961. At December 31, 2012, the Company had an accumulated deficit of $34,795,695. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern." The Company's Consolidated Financial Statements have not been audited as of Dec. 31, 2012, or for the years ended Dec. 31, 2012 and 2011. The audit has not been performed due to the cost and availability of cash required to pay past due fees owed to the Company's independent accountant firm. TITAN PHARMACEUTICALS: Amends 2012 Form 10-K to Add Disclosure -------------------------------------------------------------- Titan Pharmaceuticals, Inc., has amended its annual report on for the year ended Dec. 31, 2012, to expand the disclosure under "License Agreements" to include the term and termination provisions of the Company's license agreement with Braeburn Pharmaceuticals Sprl. In December 2012, the Company entered into a license agreement with Braeburn Pharmaceuticals Sprl that grants Braeburn exclusive commercialization rights to Probuphine(R) in the United States and Canada. The Company received a non-refundable up-front license fee of $15.75 million and will receive a $50 million milestone payment upon the approval of the NDA by the FDA. Additionally, the Company will be eligible to receive up to $130 million upon achievement of specified sales milestones and up to $35 million in regulatory milestones in the event of future NDA submissions and approvals for additional indications, including chronic pain. Titan will receive tiered royalties on net sales of Probuphine ranging from the mid-teens to the low twenties. In addition to the potential milestone payments, Apple Tree Partners IV, Braeburn's parent company, has allocated in excess of $75 million to launch, commercialize and continue the development of Probuphine. Unless earlier terminated, the license agreement will expire on the later of (i) the 15th anniversary of the date of product launch in the Territory or (ii) the expiration of the last to expire patent in the Territory covered by the agreement. A copy of the amended annual report is available for free at: http://is.gd/4IbnIw About Titan Pharmaceuticals South San Francisco, California-based Titan Pharmaceuticals is a biopharmaceutical company developing proprietary therapeutics primarily for the treatment of central nervous system disorders. The Company's balance sheet at March 31, 2013, the Company's balance sheet showed $23.53 million in total assets, $26.58 million in total liabilities and a $3.04 million total stockholders' deficit. Titan Pharmaceuticals incurred a net loss applicable to common stockholders of $15.18 million in 2012, as compared with a net loss applicable to common stockholders of $15.20 million in 2011. TONGJI HEALTHCARE: Taps Anton & Chia as New Accountants ------------------------------------------------------- Tongji Healthcare Group, Inc., signed an engagement letter appointing Anton & Chia, LLP, as the new independent registered public accounting firm for the Company, effective as of July 24, 2013. On July 26, 2013, the Board of Directors of the Company ratified the engagement of A&C as the new independent registered public accounting firm for the Company. During the two most recent fiscal years and through the date of its engagement, the Company did not consult with A&C regarding (i) the application of accounting principles to a specific transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on the Company's financial statements, and none of the following was provided to the Company (a) a written report, or (b) oral advice that A&C concluded was an important factor considered by the Company in reaching a decision as to an accounting, auditing, or financial reporting issue; or (iii) any matter that was subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K, or a reportable event, as described in Item 304(a)(1)(v) of Regulation S-K. About Tongji Healthcare Based in Nanning, Guangxi, the People's Republic of China, Tongji Healthcare Group, Inc., a Nevada corporation, operates Nanning Tongji Hospital, a general hospital with 105 licensed beds. Tongji Healthcare disclosed a net loss of $1.20 million on $2.77 million of total operating revenue for the year ended Dec. 31, 2012, as compared with a net loss of $218,150 on $2.68 million of total operating revenue during the prior year. The Company's balance sheet at March 31, 2013, showed $14.20 million in total assets, $15.50 million in total liabilities and a $1.29 million total stockholders' deficit. EFP Rotenberg, LLP, in Rochester, 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 negative working capital of $12,264,823, an accumulated deficit of $1,785,336, and shareholders' deficit of $1,208,670 as of Dec. 31, 2012. The Company's ability to continue as a going concern ultimately is dependent on the management's ability to obtain equity or debt financing, attain further operating efficiencies, and achieve profitable operations." TOUSA INC: Plan, Exhibits Filed, Supporting Memorandum Filed ------------------------------------------------------------ BankruptcyData reported that TOUSA and its official committee of unsecured creditors filed with the U.S. Bankruptcy Court a revised Amended Joint Plan of Liquidation of and related Exhibits, including an amendment to the inter-creditor settlement agreement and revised schedule of term loan lender disgorgement payments. A related Disclosure Statement was not filed, the report said. The Company and its official creditors' committee also filed a memorandum in support of Plan confirmation, asserting, "Three years of mediation and several months of intense negotiations regarding documentation of the grand bargain yielded the Joint Plan. The Joint Plan, a carefully crafted and extremely fragile agreement -- with each provision closely intertwined and dependent on the whole -- is supported by the Debtors, the Committee, the First Lien Revolver Agent, the First Lien Revolver Sub-Agent, the First Lien Term Loan Agent, the Second Lien Term Loan Agent, the First Lien Revolver Lenders, the First Lien Term Loan Lenders, the Second Lien Term Loan Lenders, the Settling Transeastern Lenders, MatlinPatterson, Aurelius, Monarch, the Directors and Officers and the Settling D&O Insurers. It is no surprise that the Debtors' creditors voted overwhelmingly in favor of the Joint Plan....[T]wo of the four objections standing in the way of confirmation have been resolved and the two remaining objections should be overruled....After more than five years in chapter 11, with the support of each of the Debtors'major stakeholders, it is time to bring an end to these cases. The Joint Plan should be confirmed." About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case No. 08-10928). Richard M. Cieri, Esq., M. Natasha Labovitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in New York, N.Y.; and Paul S. Singerman, Esq., at Berger Singerman, in Miami, Fla., represent the Debtors in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. Daniel H. Golden, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, N.Y., represent the creditors committee. The unsecured creditors committee initially proposed a chapter 11 liquidating plan for Tousa. However, the committee decided not to pursue approval of its liquidation plan because of a pending appeal of its fraudulent transfer action in the U.S. Court of Appeals for the Eleventh Circuit. In May 2012, the Court of Appeals in Atlanta held that Tousa's bank lenders received fraudulent transfers exceeding $400 million. After mediation before Peter L. Borowitz, Tousa and the unsecured creditors committee, MatlinPatterson Global Advisers and Monarch Alternative Capital, as investment adviser to Monarch Master Funding, collectively reached an agreement in principle on a settlement proposal. The proposal would form the foundation for a joint bankruptcy-exit plan for the Debtors. In May 2013, Tousa and the unsecured creditors committee filed a proposed liquidating Chapter 11 plan. On July 12, 2013, Tousa won court approval of a $67 million settlement with several insurance companies allowing the Debtors to proceed with an Aug. 1 hearing to confirm the plan. The dispute with the insurance companies involved the pre-bankruptcy fraudulent transfers. The insurance companies included Federal Insurance Co., XL Specialty Insurance Co. and Zurich American Insurance Co. According to Bloomberg News, in settlement, the insurance companies will pay $67 million, with $47.9 million going to creditors of the Tousa companies that were forced to take on debt improperly. The first-lien lenders receive $7.66 million, while second-lien lenders take home $11.5 million. Some of the insurance companies also pay $8.27 million of the directors' and officers' defense costs. Bloomberg relates Tousa's Chapter 11 plan has recoveries ranging from 58 percent for senior noteholders to 5 percent for creditors with general unsecured claims. The plan was the result of the decision from the appeals court in May 2012 finding banks received fraudulent transfers exceeding $400 million. The opinion reinstated a ruling by U.S. Bankruptcy Judge John K. Olson which had been set aside on the first appeal in federal district court. TRENDSET INC: Trustee and Timberland Inks Settlement on Deposits ---------------------------------------------------------------- Katie Goodman, as Chapter 11 Trustee for Debtor Trendset, Inc., and Timberland, LLC, ask the U.S. Bankruptcy Court for the District of South Carolina to approve the parties' settlement and compromise pertaining to the Motion of Timberland to Prohibit Use of Cash Collateral and for Adequate Protection. The Motion sought an accounting of funds related to four deposits made by Timberland between April 15, 2013, and April 17, 2013, into accounts maintained by the Debtor for the purpose of paying freight invoices as directed by Timberland: (1) Cdn$29,513.25 on April 15, 2013 (the "RBC Account Deposit"); (2) US$5,243.81 on April 15, 2013 (the "April 15th Pinnacle Bank Deposit"); (3) US$63,892.40 on April 17, 2013 (the "April 17th Pinnacle Bank Deposit"); and (4) Eur545,592.98 on April 17, 2013 (the "Bank of America Account Deposit"). On July 9, 2013, the Trustee provided an accounting of the Deposits to Timberland, and the parties have agreed to resolve the issues related to the Deposits: A) RBC Account Deposit The parties agree that the RBC Account Deposit is not traceable and, as a result, is not subject to abandonment or surrender as requested by Timberland in its Motion. The Trustee's accounting and the Debtor's bank records indicate that the account these funds were deposited into had a negative balance shortly after the RBC Account Deposit was made and the Trustee does not have possession, custody or control over these funds. The parties reserve any and all rights and defenses they have or may claim to have with respect to any potential claims Timberland may subsequently assert on account of the RBC Account Deposit, including, without limitation, any general unsecured or administrative expense claims. B) April 15th Pinnacle Bank Deposit and April 17th Pinnacle Bank Deposits The parties require additional time to investigate what, if any, claims each may have to any remaining funds from the April 15th Pinnacle Bank Deposit and the April 17th Pinnacle Bank Deposit. The parties have agreed to submit a separate proposed order to the Court extending the objection deadline and hearing date with respect to Timberland's request for the abandonment and surrender of these funds pursuant to the Motion. C) Bank of America Account Deposit The parties agree that Eur286,436.35 of the Bank of America Account Deposit is directly traceable to funds held by the Trustee and, as such, is subject to abandonment and surrender as requested by Timberland in its Motion. On or about May 23, 2013, the Trustee converted such funds to U.S. Dollars. The Trustee agrees to pay such funds, totaling US$369,685.61, to Timberland within five (5) days after entry of the Order approving this settlement. A copy of the accounting for the Bank of America Account Deposit will be made available to any party upon request to the undersigned counsel for the Trustee. Any response, return and/or objection to the foregoing application for settlement and compromise, should be filed with the Court no later than twenty-one (21) days from service of the application for settlement and compromise. No hearing will be held on the application, except at the direction of the judge, unless a response, return and/or objection is timely filed and served, in which case, the Court will conduct a hearing on Aug. 20, 2013, at 10:00 a.m. Counsel for the Trustee can be reached at: Michael H. Weaver, Esq. MCNAIR LAW FIRM, P.A. P.O. Box 11390 Columbia, SC 29211 Tel: (803) 799-9800 E-mail: mweaver@mcnair.net Counsel for Timberland, LLC, can be reached at: David B. Wheeler, Esq. MOORE & VAN ALLEN PLLC 78 Wentworth Street P.O. Box 22828 Charleston, SC 29413-2828 Tel: (843) 579-7015 E-mail: davidwheeler@mvalaw.com - and - Keith J. Cunningham. Esq. PIERCE ATWOOD LLP Merrill's Wharf 254 Commercial Street Portland, ME 04101 Tel: (207) 791-1100 E-mail: kcunningham@pierceatwood.com The objection deadline with respect to the relief requested in the Motion to Prohibit Use of Cash Collateral and for Adequate Protection filed by Timberland with respect to the April 15th Pinnacle Bank Deposit and the April 17th Pinnacle Bank Deposit has been extended to Aug. 13, 2013. The hearing date with respect to Timberland's request for the abandonment and surrender of these funds is scheduled for Aug. 20, 2013, at 10:00 a.m. About Trendset, Inc. Trendset, Inc., is a pre-audit and freight payment services company, offering services to customers using carriers to deliver products. Trendset, Inc., was the subject of an involuntary Chapter 11 petition (Bankr. D. S.C. Case No. 13-02225) filed on April 15, 2013. Creditors who signed the Chapter 11 petition are Husqvarna Professional Products, Inc. (owed $5,782,524), Legrand North America, Inc. (owed $4,642,653) and DH Business Services, LLC (owed $3,883,360). Rory D. Whelehan, Esq., at Womble Carlyle Sandridge & Rice, LLP, serves as counsel to the petitioning creditors. Julio E. Mendoza, Jr., Esq., at Nexsen Pruet, LLC, and William J. Perlstein, Esq., at Wilmer Cutler Pickering Hale Dorr, also represent petitioning creditor DH Business Services, LLC, as counsel. G. William McCarthy, Jr., Esq., and William Harrison Penn, Esq., at McCarthy Law Firm, LLC, represented the Alleged Debtor as counsel. On April 26, 2013, the Court signed off on an agreed order for relief in the Involuntary Petition and directed the appointment of a Chapter 11 trustee. Michael M. Beal, Esq., Robin C. Stanton, Esq., Michael H. Weaver, Esq., and Elizabeth J. Philp, Esq., at McNair Law Firm, P.A., represent Katie Goodman, Chapter 11 trustee, as counsel. Joseph V. Pegnia and Curtos S. Friedberg at GGG Partners serve as the Chapter 11 trustee's financial advisor. According to the schedules filed by the Chapter 11 Trustee on June 3, 2013, the Debtor had $5,858,667 in total assets and $68,898,068 in total liabilities as of the Petition Date. TRENDSET INC: Court Approves Rejection of Contracts and Leases -------------------------------------------------------------- On July 23, 2013, the U.S. Bankruptcy Court for the District of South Carolina entered an order approving the motion of Katie Goodman, as Chapter 11 Trustee for Trendset, Inc., for an Order Approving Rejection of Certain Executory Contracts and Unexpired Leases Not Assumed by Buyer as Part of Sale [Dkt. No. 271]. The Contracts and Leases are rejected as of the Petition Date. The Debtor's contract with Timberland, LLC, is rejected as of June 14, 2013. A copy of the rejected Contracts and Leases, including the Debtor's contract with Timberland, LLC, is available at: http://bankrupt.com/misc/trendset.doc391.pdf Timberland, LLC, withdrew on July 17, 2013, its limited objection to the Rejection Motion filed June 17, 2013, As reported in the TCR on July 1, 2013, the U.S. Bankruptcy Court for the District of South Carolina authorized Katie Goodman, as Chapter 11 Trustee, to sell all or substantially all of the Debtor's assets to AFS Logistics, L.L.C., who bested two other interested buyers. AFS Logistics offered $1,140,000 for the Debtor's assets, which offer was substantially higher than the $1,025,000 offer from Europe Management SPRL, a Belgian limited liability company, who was the stalking horse bidder. Europe Management was chosen as the Back-up Bidder. About Trendset, Inc. Trendset, Inc., is a pre-audit and freight payment services company, offering services to customers using carriers to deliver products. Trendset, Inc., was the subject of an involuntary Chapter 11 petition (Bankr. D. S.C. Case No. 13-02225) filed on April 15, 2013. Creditors who signed the Chapter 11 petition are Husqvarna Professional Products, Inc. (owed $5,782,524), Legrand North America, Inc. (owed $4,642,653) and DH Business Services, LLC (owed $3,883,360). Rory D. Whelehan, Esq., at Womble Carlyle Sandridge & Rice, LLP, serves as counsel to the petitioning creditors. Julio E. Mendoza, Jr., Esq., at Nexsen Pruet, LLC, and William J. Perlstein, Esq., at Wilmer Cutler Pickering Hale Dorr, also represent petitioning creditor DH Business Services, LLC, as counsel. G. William McCarthy, Jr., Esq., and William Harrison Penn, Esq., at McCarthy Law Firm, LLC, represented the Alleged Debtor as counsel. On April 26, 2013, the Court signed off on an agreed order for relief in the Involuntary Petition and directed the appointment of a Chapter 11 trustee. Michael M. Beal, Esq., Robin C. Stanton, Esq., Michael H. Weaver, Esq., and Elizabeth J. Philp, Esq., at McNair Law Firm, P.A., represent Katie Goodman, Chapter 11 trustee, as counsel. Joseph V. Pegnia and Curtos S. Friedberg at GGG Partners serve as the Chapter 11 trustee's financial advisor. According to the schedules filed by the Chapter 11 Trustee on June 3, 2013, the Debtor had $5,858,667 in total assets and $68,898,068 in total liabilities as of the Petition Date. TRINET HR: Moody's Assigns B1 Rating to $705MM Debt Facilities -------------------------------------------------------------- Moody's Investors Service rated TriNet HR Corporation's new $705 million First Lien Senior Secured Credit Facilities at B1 and the $190 million Second Lien Term Loan at Caa1. Moody's affirmed the Corporate Family Rating at B2. Moody's upgraded the Probability of Default Rating to B2-PD from B3-PD to reflect the inclusion of second lien debt in the capital structure. TriNet will use the proceeds to refinance the existing debt and to pay up to a $360 million distribution to its owners. The ratings outlook is stable. Ratings Rationale: "Although the debt-funded shareholder distribution will increase TriNet's leverage to about 6x trailing twelve month EBITDA (Moody's adjusted) proforma for the Ambrose acquisition, we believe that the company will deleverage over the near term to less than 5.5x due to strong organic EBITDA growth," noted Terry Dennehy, Senior Analyst at Moody's Investors Service. TriNet's expected financial leverage will be high considering the company's small scale. Leverage is further compounded by short customer contracts and the low barriers to entry in the Professional Employer Organization ("PEO") industry, which makes for significant competition from many other companies. Moreover, as the employees of TriNet's customers become 'co-employees' of TriNet, TriNet is exposed to liability risk from these employees. Nonetheless, TriNet is growing rapidly both organically and through acquisitions and Moody's expects that TriNet will continue to generate consistent cash from operations, which comfortably exceeds capital expenditures. Moody's believes that TriNet's financial policy is aggressive and that TriNet is likely to maintain financial leverage of between five and six times EBITDA over time, as Moody's expect that TriNet will periodically releverage to fund shareholder distributions and debt financed acquisitions. The stable outlook reflects Moody's expectation that TriNet will organically grow revenues by at least ten percent over the near term and will maintain an operating margin (Moody's adjusted) of at least high teens percent. Moody's expects that the revenue growth will produce expanding EBITDA such that debt to EBITDA (Moody's adjusted) will be on course to decline below 5.5x over the near term. The ratings could be upgraded if Moody's believes that TriNet is growing organically faster than the market and annual client attrition will be maintained below twenty percent. Furthermore, Moody's would expect TriNet to use free cash flow to reduce debt, refraining from equity distributions, such that the ratio of debt to EBITDA (Moody's adjusted) will be maintained below 4x. The ratings could be downgraded if Moody's believes that TriNet is losing market share or if it believes that client attrition will exceed 20% on a sustained basis. The rating could be pressured if operating margins decline to the low teens percent. The rating could be lowered if TriNet engages in further shareholder-friendly actions prior to meaningful deleveraging or if Moody's expects that debt to EBITDA (Moody's adjusted) will be sustained above 6x. Issuer: TriNet HR Corp. Corporate Family Rating -- Affirmed at B2 Probability of Default Rating -- Upgraded to B2-PD Proposed First Lien Senior Secured Credit Facilities -- B1, LGD3, 38% Proposed Second Lien Senior Secured Term Loan -- Caa1, LGD6, 90% Existing Senior Secured Credit Facilities -- B1, to be withdrawn The principal methodology used in this rating was the Global Business and Consumer Services Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative Grade Non-Financial Companies in the US, Canada, and EMEA, published in June 2009. TriNet, based in San Leandro, California, is a professional employer organization, which provides outsourced human resource functions, including payroll, benefits acquisition, and regulatory compliance management to small and mid-sized businesses. TriNet is owned by affiliates of private equity firm General Atlantic LLC. TRINET HR: S&P Assigns 'B+' Rating to $705MM Sr. Secured Facility ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' rating to San Leandro, Calif.-based TriNet HR Corp.'s proposed $705 million senior secured first-lien facility (composed of a $75 million revolver, $150 million first-lien tranche B-1, and $480 million first-lien tranche B-2). The recovery rating on this debt is '2', indicating S&P's expectation of substantial recovery (70%-90%) in a payment default scenario. S&P also assigned a 'CCC+' issue-level rating to the company's proposed $190 million senior secured second-lien debt. The recovery rating on the second-lien debt is '6', indicating S&P's expectation of negligible recovery (0%-10%) in a payment default scenario. "We expect the company to use proceeds from the proposed transaction to refinance about $445 million of outstanding debt under its existing senior secured credit facility and to fund a $353 million dividend to its shareholders. We estimate pro forma leverage (including the company's recent Ambrose acquisition) increases to about 5.6x, from about 4x prior to the transaction. We expect credit measures to improve over the next year, including leverage decreasing to just below 5x and the ratio of funds from operations to total debt above 12%, measures that are in line with the indicative financial ratios for an "aggressive" financial profile. This is supported by the smooth integration thus far of Strategic Outsourcing Inc. (which was acquired in October) and our expectation of continued positive operating performance from recent acquisitions and organically, underpinned by improving economic conditions in the U.S," S&P said. The ratings on TriNet reflects S&P's view that the company continues to have an "aggressive" financial risk profile, based on the company's aggressive financial policy (including its ownership by a financial sponsor and acquisitive nature), good cash flow generation, and adequate liquidity. The ratings also reflects the company's "vulnerable" business risk profile, which is supported by the company's limited geographic diversity and its narrow product focus in the highly competitive and fragmented outsourced human resource services industry, which could be susceptible to weak economic conditions. RATINGS LIST TriNet HR Corp. Corporate credit rating B/Stable/-- Ratings Assigned TriNet HR Corp. Senior secured First-lien $75 mil. revolver B+ Recovery rating 2 $150 mil. term loan B-1 B+ Recovery rating 2 $480 mil. term loan B-2 B+ Recovery rating 2 Second-lien $190 term loan CCC+ Recovery rating 6 TRIUS THERAPEUTICS: Inks Manufacturing Agreement with Patheon ------------------------------------------------------------- Trius Therapeutics, Inc., entered into a Manufacturing Services Agreement with Patheon Inc. and Patheon UK Limited on July 22, 2013, pursuant to which Patheon has agreed to manufacture commercial quantities of Trius' product candidate tedizolid phosphate, which is currently in development for the treatment of serious Gram-positive bacterial infections, including those caused by methicillin-resistant Staphylococcus aureus (MRSA). The Agreement provides for Patheon to supply both the oral tablet and intravenous lyophilized vial formulations of tedizolid phosphate. Although Trius is not required to purchase any minimum quantity of tedizolid phosphate under the Agreement, Trius has agreed to purchase from Patheon not less than specified percentages of Trius's and its licensees' total annual commercial requirements of tedizolid phosphate, which vary depending upon the territory being supplied and whether such territory is in the commercial launch phase. The term of the Agreement continues until the date that is five years after the initial regulatory approval for the product candidate, and thereafter automatically continues for successive 24-month terms unless terminated by written notice at least 18 months prior to the end of the then-current term. A copy of the Form 8-K is available for free at: http://is.gd/eYBLeC About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. Trius Therapeutics incurred a net loss of $53.92 million in 2012, a net loss of $18.25 million in 2011 and a $23.86 million net loss in 2010. The Company's balance sheet at March 31, 2013, showed $89.81 million in total assets, $17.54 million in total liabilities, and $72.27 million in total stockholders' equity. TRIUS THERAPEUTICS: To be Acquired by Cubist for $818 Million ------------------------------------------------------------- Cubist Pharmaceuticals, Inc., and Trius Therapeutics, Inc., have signed a definitive agreement under which Cubist will acquire all outstanding shares of Trius for $13.50 per share in cash or approximately $707 million on a fully diluted basis. In addition to the upfront cash payment, each Trius stockholder will receive one Contingent Value Right (CVR), entitling the holder to receive an additional cash payment of up to $2.00 for each share they own if certain commercial sales milestones are achieved. The total transaction is valued at up to $818 million on a fully diluted basis. The transaction has been approved by the Boards of Directors of both companies. The companies' expectation is to close the transaction later this year, subject to required regulatory approvals and other customary closing conditions. Cubist hosted a conference call and webcast on July 30, 2013. Trius brings to Cubist a highly complementary, late-stage antibiotic candidate, tedizolid phosphate (TR-701), as well as several pre-clinical antibiotic programs. Tedizolid phosphate is an IV and orally administered second generation oxazolidinone in development for the potential treatment of certain Gram-positive infections, including methicillin-resistant Staphylococcus aureus (MRSA). Tedizolid phosphate met all primary and secondary endpoints in two Phase 3 clinical trials studying patients with acute bacterial skin and skin structure infections (ABSSSI). Trius has partnered with Bayer Pharma AG for the development and commercialization of tedizolid phosphate outside of the U.S., Canada and the European Union. It is currently expected that a New Drug Application for tedizolid phosphate seeking approval for an indication in ABSSSI will be submitted to the U.S. Food and Drug Administration (FDA) during the second half of 2013 and a Marketing Authorization Application will be submitted to the European Medicines Agency in the first half of 2014. "Trius is a tremendous strategic fit with Cubist that supports our Building Blocks of Growth long-range goals while extending our global leadership in the acute care environment," said Cubist Chief Executive Officer Michael Bonney. "Tedizolid is an exciting late-stage antibiotic candidate that we believe has the potential to be an important new tool in the infectious disease community's battle against resistant infections caused by MRSA. We have a high regard for the entire Trius team and the excellent work they have done with the tedizolid program and their promising discovery programs. We believe our extensive clinical, regulatory, and commercial experience in acute care will allow us to complement this team's work and maximize the potential for tedizolid while driving substantial near and long-term benefits for hospitals, patients and shareholders alike." "As a recognized leader in acute care, we believe Cubist is best- positioned to maximize tedizolid's potential to patients in the U.S. and other world regions," said Jeffrey Stein, Ph.D., President and CEO of Trius. "This transaction culminates years of intense work by the Trius team to achieve this outcome, and our shareholders are being rewarded for their involvement and support of the company." The terms of the non-tradable CVR include an additional payment of up to $2.00 if certain sales milestones are achieved. The CVR will entitle each Trius stockholder to receive $1.00 per share if net sales of tedizolid in the U.S., Canada and Europe are greater than or equal to $125 million in 2016 and up to an additional $1.00 per share, paid on a pro rata basis, for 2016 net sales between $125 million and $135 million. Barclays is acting as the exclusive financial advisor to Cubist, and Ropes & Gray LLP is serving as its legal counsel. Citi and Centerview Partners LLC are acting as financial advisors to Trius, and Cooley LLP is serving as its legal counsel. About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. Trius Therapeutics incurred a net loss of $53.92 million in 2012, a net loss of $18.25 million in 2011 and a $23.86 million net loss in 2010. The Company's balance sheet at March 31, 2013, showed $89.81 million in total assets, $17.54 million in total liabilities, and $72.27 million in total stockholders' equity. TRX SOFTWARE: Case Summary & 11 Unsecured Creditors --------------------------------------------------- Debtor: TRX Software Development, Inc. P.O. Box 10935 Murfreesboro, TN 37129 Bankruptcy Case No.: 13-06558 Chapter 11 Petition Date: July 29, 2013 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Marian F. Harrison Debtor's Counsel: Steven L. Lefkovitz, Esq. LAW OFFICES LEFKOVITZ & LEFKOVITZ 618 CHURCH ST STE 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 255-4516 E-mail: slefkovitz@lefkovitz.com Scheduled Assets: $9,150 Scheduled Liabilities: $1,054,849 A copy of the Company's list of its largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/tnmb13-6558.pdf The petition was signed by Terrell D. Hughes, Jr., president and CEO. TYLER WATERFORD: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Tyler Waterford Park, Ltd. dba Kensington Place Apartments 4400 Paluxy Tyler, TX 75703-0000 Bankruptcy Case No.: 13-60588 Chapter 11 Petition Date: July 25, 2013 Court: United States Bankruptcy Court Eastern District of Texas (Tyler) Debtor's Counsel: Joshua P. Searcy, Esq. SEARCY & SEARCY, P.C. P.O. Box 3929 Longview, TX 75606 Tel: (903) 757-3399 Fax: (903) 757-9559 E-mail: jrspc@jrsearcylaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/txeb13-60588.pdf The petition was signed by Charles B. Wills, managing member of Willsco, LLC. UNITED AIRLINES: Antitrust Suit Will Hurt Debtors, 2nd Circ. Told ----------------------------------------------------------------- Jeff Sistrunk of BankruptcyLaw360 reported that United Airlines Inc. told the Second Circuit that allowing DHL to continue with an antitrust lawsuit alleging the airline participated in a price- fixing conspiracy would create massive, unprecedented investigative burdens on Chapter 11 debtors. According to the report, United, which filed for Chapter 11 protection in December 2002, says DHL's claim that debtors should conduct extensive investigations to uncover and provide notice of all potential claims and causes of action against them would create a dangerous precedent. As previously reported, the Second Circuit is mulling whether claims that United and its competitors engaged in a seven-year price-fixing conspiracy were discharged during the airline's Chapter 11 proceedings, which concluded in 2009. A New York federal judge said last year that the suit should stick, but United has appealed the decision, the report related. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. UNITED AIRLINES: Fitch Rates $209.03MM Class B Certificates 'BB+' ----------------------------------------------------------------- Fitch Ratings assigns the following ratings to United Airline's (UAL, rated 'B', Outlook Positive) proposed Pass Through Trusts Series 2013-1: -- $720,315,000 Class A Certificates (A-tranche) with an expected maturity of August 2025 'A'; -- $209,036,000 Class B Certificates (B-tranche) with an expected maturity of August 2021 'BB+'. The final legal maturities are scheduled to be 18 months after the expected maturities. UAL may subsequently offer additional classes of certificates per the transaction documents. The A-tranche rating is primarily driven by a significant amount of overcollateralization and a high quality collateral pool which support Fitch's expectations for full recovery of A-tranche principal even in harsh stress scenarios. The initial A-tranche LTV, as cited in the prospectus, is 55.1% and Fitch's maximum stress case LTV (primary driver for the A-tranche rating) through the life of the transaction is 94.3%. This level of overcollateralization provides a significant amount of protection for the A-tranche holders. The 'BB+' rating for the B-tranche represents a four notch uplift (maximum is four per Fitch's EETC criteria) from United's IDR of 'B' based on the affirmation factor of the collateral pool. Fitch considers the affirmation factor for the aircraft in this portfolio to be very high as both the 737-900ER and 787-8 are considered core to UAL's fleet. The affirmation factor is also a supporting consideration for the A-tranche rating. Transaction Overview: UAL plans to raise $929,351,000 in an EETC transaction to fund 21 new aircraft including 18 Boeing 737-900ERs and three 787-8 aircraft scheduled for expected delivery between October 2013 and April 2014. United will have the right to select the aircraft from a pool of 24 eligible 737-900ERs and four eligible 787-8s, as referenced in the prospectus. The proceeds of the certificates will be used to acquire class A and class B equipment notes, i.e. the aircraft mortgage obligations issued by United. This transaction will represent the first EETC issued by the new United Airlines, Inc. following the completion of the legal merger of United and Continental in March 2013. The A-tranche will be sized at $720,315,000 with a 12.0 year tenor, a weighted average life of 9.1 years and an initial LTV of 55.1% (per the prospectus). Fitch calculates the initial LTV at 59.5% using values provided by an independent appraiser. The subordinate B-tranche will be sized at $209,036,000 with an 8.0 year tenor and a weighted average life of 5.9 years. The initial prospectus LTV for the B-tranche is 71.0%. Fitch calculates the initial LTV at 76.7%. Collateral Pool: The transaction will be secured by a perfected first priority security interest in 21 new Boeing aircraft including 18 737-900ER, and three 787-8s. Fitch classifies both aircraft types as Tier 1 collateral, and both types are considered core to UAL's fleet. The 737-900ERs are expected to replace United's aging 757-200s in the company's domestic fleet, while the 787-8s are expected to supplant older vintages of smaller widebodies used for international service. Liquidity Facility: The Class A and Class B certificates benefit from a dedicated 18-month liquidity facility which will be provided by Natixis (rated 'A'/'F1' with a Stable Outlook). Cross-default & cross-collateralization provisions: Each note will be fully cross-collateralized and all indentures will be fully cross-defaulted from day one, which Fitch believes will limit UAL's ability to 'cherry-pick' aircraft in a potential restructuring. Pre-funded deal: Proceeds from the transaction will be used to pre-fund deliveries expected between October 2013 and April 2014. Accordingly, proceeds will initially be held in escrow by Natixis, the designated depositary, until the aircraft are delivered. Key Rating Drivers A-Tranche: The A-tranche rating is primarily supported by a significant amount of overcollateralization and a high quality collateral pool which allows the structure to withstand a harsh downside scenario while maintaining a full expected recovery for the senior tranche holders. The ratings are also supported by the inclusion of an 18 month liquidity facility, cross- collateralization/cross-default features, and the legal protection afforded by Section 1110 of the U.S. bankruptcy code. The 'A' rating is also in line with Fitch's existing rating on the CAL 2012-2 A-tranche which was issued last year. The UAL 2013-1 A tranche and CAL 2012-2 A tranche are quite similar in terms of LTV, makeup of the collateral pool, average life, and affirmation factor. Stress Case: Fitch's stress analysis utilizes a top-down approach assuming a rejection of the entire pool in a severe global aviation downturn. The analysis incorporates a full draw on the liquidity facility, and an assumed repossession/remarketing cost of 5% of the total portfolio value. Fitch then applies immediate haircuts to the collateral value. The 787-8s in this pool receive a 20% haircut representing the low end of Fitch's Tier 1 stress range of 20-30%, reflecting Fitch's view of the 787-8 as a top quality aircraft. The 737-900ERs receive a more severe haircut of 30%, which incorporates the 737-900ER's limited user base, which could translate into a more difficult remarketing process if the aircraft had to be repossessed and sold. These assumptions produce a maximum stress LTV of 94.3%, suggesting full recovery for the A- tranche holders. The highest stress LTVs are experienced early in the life of the transaction and are expected to decline gradually as the deal amortizes. High Collateral Quality: The quality of the collateral pool underlying the transaction is considered solid. Fitch views the 737-900ER as a quality Tier 1 aircraft due to its attractive operating economics which make it an ideal replacement for older narrow bodies. However, the aircraft has a somewhat limited user base and a concentration among a few large carriers. In particular, Lion Air operates roughly 40% of the total active fleet. While the 737-900ER has increased in popularity in recent years, the limited user base and market penetration represent potential risks factors for future market values. For this reason, Fitch incorporates a larger haircut for the 737-900ER in its stress case when compared to narrow bodies with a larger market presence such as the A321-200 and the 737-800. Despite the aircraft being grounded for several months earlier in the year due to technical issues, Fitch still views the 787-8 as a top quality Tier 1 aircraft. The fact that the airlines did not cancel orders for the 787 series during the grounding is a testament to the plane's desirability and unique position in the market. Boeing has built a significant backlog of 453 787-8s with nearly 50 customers through June 2013. The larger 787-9 has a backlog of 361 aircraft, and the 787-10 recently received its first formal orders for 50 aircraft. The superior operating economics and lack of available near-term delivery slots for the 787 series should support market values for the foreseeable future. Affirmation Factor: The high affirmation factor for this pool of aircraft is supported by the strategic importance of both the 737- 900ER and the 787-8 to United. The 737-900ER is the premier narrow body of choice for UAL (and a few of its U.S. peers including Delta and Alaska) and is expected to become the backbone of its domestic narrow body fleet, as they replace the aging 757-200s. The 737-900ER is expected to constitute around 9% of United's narrow body fleet by the end of 2013 as new orders are delivered. The range of the 737-900ER makes it an ideal plane for longer distance domestic routes, while incorporating significantly lower trip costs than the less fuel efficient 757-200. The 787-8s are expected to revamp UAL's international fleet, allowing UAL to serve city pairs that were not previously accessible with older 767s. In addition the 787-8 features significantly lower estimated costs, including 20% lower fuel consumption, and 30% lower airframe maintenance costs, compared to similarly sized aircraft. Structural Enhancements: The ratings also benefit from structural enhancements inherent in most modern EETCs. Structural features include an 18 month liquidity facility for both the A and B- tranche, which will cover missed interest payments in the event of non-payment by United, cross-default and cross-collateralization provisions that are present from the start of the transaction, and the benefits afforded by Section 1110 of the U.S. bankruptcy code. B-Tranche: The 'BB+' rating for the subordinate B-tranche is assigned by notching up from UAL's IDR of 'B' based on the Affirmation Factor as per Fitch's EETC criteria. The four notch uplift (Fitch's methodology prescribes a two to four notch uplift when the likelihood of affirmation is considered to be above 50%) reflects a very high Affirmation Factor as discussed above. The 'BB+' rating represents a one-notch difference from Fitch's rating of 'BBB-' (a five notch uplift that represented an exception to Fitch's criteria) for the CAL 2012-2 B-tranche. The notching differential primarily reflects the higher leverage incorporated in the UAL 2013-1 B-tranche, which has an initial prospectus LTV of 71.0%, nearly 6% higher than the CAL 2012-2 B-tranche. Leverage is considered as a secondary factor in Fitch's B-tranche ratings. Rating Sensitivities Potential ratings concerns for the senior tranche primarily consist of unexpected declines in aircraft values. For the 787-8, concerns primarily involve the possibility for future technical problems resulting in further groundings or production delays. 737-900ER market values could face pressure from the entrance of the 737-MAX 9. However, the first delivery of the MAX is not expected until 2017 and it will take some time to produce a sufficient number of the new planes before it starts impacting market values. Fitch does not expect to upgrade the ratings above 'A'. The subordinated tranche ratings are tied to the credit quality of the underlying airline. Fitch revised UAL's Outlook to Positive from Stable on May 16, 2013. An upgrade of United's IDR could lead to an upgrade for the subordinated tranche. Likewise, ratings could be downgraded if Fitch were to take a negative action on UAL's IDR. Fitch has assigned the following ratings: United Airlines 2013-1 pass-through trust -- Series 2013-1 class A certificates 'A', -- Series 2013-1 Class B certificates 'BB+'. Fitch currently rates United as follows: United Continental Holdings, Inc. -- IDR 'B'; -- Senior Unsecured Ratings 'CCC+/RR6'. United Airlines, Inc. -- IDR 'B'; -- Secured bank credit facility 'BB/RR1'; -- Senior secured notes 'BB/RR1'; -- Senior unsecured rating 'B-/RR5'; -- Junior subordinated convertible debentures 'CCC+/RR6'. UNITED AIRLINES: S&P Assigns BB+ Rating to 2013-1 Class B Certs --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'A- (sf)' rating to United Airlines Inc.'s (United's) series 2013-1 Class A pass-through certificates with an expected maturity of Aug. 15, 2025, and its preliminary 'BB+ (sf)' rating to United's series 2013-1 Class B pass-through certificates with an expected maturity of Aug. 15, 2021. The final legal maturities will be 18 months after the expected maturity. United is issuing the certificates under a Rule 415 shelf registration. S&P will assign final ratings once it completes its legal and structural review. The preliminary 'A- (sf)' and 'BB+ (sf)' ratings are based on the credit quality of United's parent, United Continental Holdings Inc. (United Continental; B/Stable/--); the substantial collateral coverage by good-quality aircraft; and the legal and structural protections available to the pass-through certificates. The company will use the proceeds from the offerings to finance 2013 and 2014 deliveries of 18 Boeing B737-900ER (extended-range) aircraft and three new Boeing B787-8s. Each aircraft's secured notes are cross-collateralized and cross-defaulted--a provision S&P believes increases the likelihood that United would cure any defaults and agree to perform its future obligations, including its payment obligations, under the indentures in bankruptcy. The pass-through certificates are a form of enhanced equipment trust certificates (EETC) and benefit from both legal protections afforded under Section 1110 of the federal bankruptcy code and liquidity facilities provided by Natixis S.A., through its New York branch (A/Negative/A-1). The liquidity facilities would cover up to three semiannual interest payments, a period during which the certificateholders could repossess and remarket the collateral if United does not enter into an agreement under Section 1110 in bankruptcy or maintain continuity of interest payments on the certificates as certificateholders negotiate with United in a bankruptcy proceeding. The preliminary ratings applies to a unit consisting of certificates that represent the trust property and escrow receipts, which represent interests in deposits that are the proceeds of the offerings. The proceeds will be deposited with Natixis S.A., acting through its New York branch, pending delivery of the new aircraft. Amounts deposited under the escrow agreements are not United's property and are not entitled to the protections of Section 1110. S&P's rating on Natixis S.A. is sufficiently high so that, under its counterparty criteria, this does not represent a constraint on our preliminary ratings on the certificates. Neither the certificates nor the escrow receipts may be separately assigned or transferred. S&P believes that United Continental views these planes as important and would, given the cross-collateralization and cross- default provisions, likely cure any defaults and agree to perform its future obligations, including its payment obligations, under the indenture in an insolvency-related event of the airline. In contrast to most EETCs that airlines issued before 2009, the cross-default would take effect immediately in a bankruptcy if United rejected any of the aircraft notes. This should prevent United from selectively affirming some aircraft notes and rejecting others ("cherry-picking"), which often harms certificateholders' interests in a bankruptcy. This transaction is very similar to Continental Airlines Inc.'s (whose name was changed to United Airlines Inc. on March 31, 2013) series 2012-1 and 2012-2 pass-through certificates (to which S&P assigned 'A-' and 'BBB-' ratings) issued in March and September 2012 (although Class B had lower loan to values in those transactions). As in the earlier certificates, the collateral pool consists of B737-900ER (72% by value) and B787-8 (28%) aircraft, both of which S&P views as good-quality models. The B737-900ER is the largest model in Boeing's range of current technology narrowbody planes. Entering service in 2007 as a longer-range version of the relatively unsuccessful B737-900, the model has gradually gained orders, although it has fewer orders (about 500) and deliveries (around 170 delivered thus far) and operators (15) than Airbus' competing model, the A321-200. The B737-900ER has not yet been as successful as its operating economics and capabilities would suggest. This may be partly because it entered into service only in 2007, fairly recently and shortly before the financial crisis and recession in 2008-2009. However, it is the best plane available to replace B757-200s in domestic U.S. service, a factor borne out by Delta Air Lines Inc.'s 2012 order. S&P believes that the global fleet and operator base will continue to expand, particularly if it appears that fuel prices will increase further in coming years. Boeing will offer a B737-900ER with its new engine option (the "MAX" series), but S&P do not believe that this will materially decrease current B737-900ER values in the near term. Companies are still ordering the current version to replace many of their B757-200s. Following the merger of United and Continental, the combined company operates two families of narrowbody planes, Boeing 737s and Airbus 320s. The combined company appears to favor the B737-900ER to the competing A321-200, based on recent orders and management's stated preference. The remaining collateral value is represented by B787-8s, Boeing's new long-range, midsize, widebody plane, which it began delivering (after long delays) in September 2011. The B787 family (there is also the larger B787-9, which has not yet been delivered) has been a huge success in terms of orders. There are more than 800 orders (both -8 and -9 versions) to more than 50 airline operators, one of the fastest starts for any aircraft model. The airline user base is globally diversified, and includes a mix of types of airlines and aircraft leasing companies. The B787-8 is intended mainly as a replacement for the B767-300ER, a small widebody. "We are applying a depreciation rate of 6.5% annually of the preceding year's value for the 787-8, which is equal to the lowest depreciation rate we currently use for a widebody plane (for the B777-300ER). We chose the 6.5% depreciation rate for the B787-8 based on several factors. Its resale liquidity should be good for a widebody plane, although not as good as the most popular narrowbody planes (which usually have a greater number of airline operators globally). With its advanced technology, the 787 should face little technological risk for many years to come. At the same time, the first version of a widebody family of planes that a manufacturer introduces (the B787-8, in this case) is often partly superseded by later, improved versions that can carry more passengers (the B787-9 and, potentially, even larger variants). The B787-9 will, according to Boeing, have both a higher seat capacity and slightly longer range than the B787-8, and S&P believes that this version will ultimately be more successful. For the B737-900ER, S&P also used a depreciation rate of 6.5%, the same as it has used before. "The initial loan to values are 55.1% for the Class A certificates and 71.0% for Class B, using the appraised base values and depreciation assumptions in the offering memorandum. When we evaluate an EETC, we compare the values provided by the appraisers that the airline hired with our own sources. In this case, we are focusing on the lowest of three base values provided by the appraisers, which are included in the prospectus. We apply more conservative (faster) depreciation rates than those used in the prospectus (3% of the initial value each year), and our loan to values start out modestly higher (54.2% for Class A and 70.0% for Class B) and gradually diverge further from those shown in the prospectus, reaching a maximum of more than 59% for the Class A certificates and around 74% for the Class B certificates. Our analysis also considered that a full draw of the liquidity facility, plus interest on those draws, represents a claim senior to the certificates. This amount is typical of recent EETCs, equal to around 5% of the collateral value. We factored that added priority claim in our analysis. We note that the transaction is structured so that United could later issue subordinated classes of certificates without a liquidity facility. In the past, airlines have structured follow-on certificates of this kind in such a way so that it does not affect the rating on the outstanding senior certificates," S&P said. Chicago, Ill.-based United Continental is the largest U.S. airline, and the world's largest based on traffic. S&P's corporate credit rating reflects the company's substantial market position and expected synergies from the 2010 merger of UAL Corp., parent of United, and Continental; and also the company's heavy debt and lease burden. S&P characterizes United Continental's business position as "weak," its financial position as "highly leveraged," and its liquidity as "adequate" under its criteria. The rating outlook is stable. S&P don't expect to change its ratings over the next year. However, S&P could raise its ratings if strong earnings and faster-than-expected achievement of merger synergies allows the company to generate adjusted funds from operations (FFO) to debt consistently in the mid-teens percent area. On the other hand, S&P could lower its ratings if United's financial results deteriorate such that FFO to debt falls into the mid-single-digit percentage area. This could happen in adverse industry conditions, possibly resulting from a major recession or much-worse-than-anticipated merger integration problems. RATINGS LIST United Airlines Inc. Corporate credit rating B/Stable/-- New Ratings United Airlines Inc. Equipment trust certificates Series 2013-1 Class A pass-thru certs A- (sf) (prelim) Series 2013-1 Class B pass-thru certs BB+ (sf) (prelim) UNITED SILVER: Secured Creditor Demands Fully Repayment of Loan --------------------------------------------------------------- United Silver Corp. on Aug. 1 disclosed that HUSC, LLC, the Company's secured lender, has sent to the Company a notice of default on its secured loan and demanded repayment in full by August 12, 2013. The Company disputes that an event of default has occurred, and the matter may result in litigation. The Company has been negotiating with several parties with respect to the refinance of the HUSC debt and the further development of the Crescent Mine, but there is no binding or definitive agreement yet reached. The Company will provide further updates if and when an agreement may be reached. About United Silver Corp. United Silver Corp. (TSX:USC) -- http://www.unitedsilvercorp.com- - is a vertically integrated Canadian mining company with operations in Idaho, USA. It has an 80% interest in the Crescent Silver Mine project in the Silver Valley's prolific Silver Belt -- directly between two of the district's historically largest silver producing properties, the Sunshine and Bunker Hill mines. USC also offers a full suite of mining services including contract mining and providing a complete fabrication shop and service for building and repairing mining equipment to silver miners in the district. UNITEK GLOBAL: Closes Amendment to Term Credit Agreement -------------------------------------------------------- UniTek Global Services, Inc. on July 26 disclosed that it has closed the previously announced amendment to its Term Credit Agreement. The Term Amendment waives all existing defaults and resets financial and other covenants related to the Company's previously announced financial restatements. The facility will keep its original maturity date of April 15, 2018. In conjunction with the closing of the Term Amendment, the previously issued 180-day notice of the termination of the master services agreement between the Company's DirectSat subsidiary and DIRECTV, LLC, has been withdrawn. Rocky Romanella, Chief Executive Officer of UniTek Global Services, said, "We are grateful for DIRECTV's ongoing support. Their willingness to work with us through our efforts to refinance the debt is indicative of the strength of our relationship, and we are pleased to be in a position to continue in our role as an integrated, value-added fulfillment service provider for them." Dave Baker, Senior Vice President of DIRECTV, stated, "We are pleased that UniTek was able to satisfy the requirements for the automatic withdrawal of the termination notice. Throughout this process, they have maintained the high levels of service and performance that we have come to expect from them, and we look forward to continuing our relationship." "Our work on the financial restatements is progressing toward completion, and with the recently closed refinancing of the ABL Revolver, this comprehensive amendment to our Term Loan and the rescission of the DIRECTV termination notice, our team is more energized and more committed than ever to meeting our near- and longer-term growth objectives. We have made great progress recently, and look forward to the completion of additional milestone events in this process," concluded Mr. Romanella. Under the Term Amendment, the Term Lenders have waived existing defaults and revised the financial covenants and covenants related to the delivery by the Company of its audited financial statements for the year ended December 31, 2012 and unaudited financial statements for the quarters ended March 31 and June 30, 2013. The amended term loan will continue to bear monthly interest payable in cash at a rate equal either to LIBOR (with a 1.50% floor) plus 9.50% or the prime rate plus 8.50%, plus, in either case, an amount to be added to the principal balance of the term loan at an annual rate equal to 4.00% of the outstanding balance. In connection with the Term Amendment, the Company has issued to the Term Lenders warrants, exercisable at $0.01 per share, for shares of the Company's common stock equal to 19.99% of the shares outstanding prior to the date of the Term Amendment. The lenders will also receive a waiver and amendment fee, which has been added to the principal balance of the term loan, equal to 2.00% of the outstanding loan balance. About UniTek Global Services UniTek Global Services, Inc., based in Blue Bell, Pennsylvania, provides fulfillment and infrastructure services to media and telecommunication companies in the United States and Canada. As reported by the TCR on June 11, 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Blue Bell, Pa.- based UniTek Global Services Inc. to 'D' from 'CCC'. "The downgrade follows UniTek's announcement that it did not make a scheduled interest payment on May 29, 2013, on its senior secured term loan due 2018, which we consider to be a default under our timeliness of payments criteria," said Standard & Poor's credit analyst Michael Weinstein. In the June 11, 2013, edition of the TCR, Moody's Investors Service lowered UniTek Global Services, Inc.'s probability of default and corporate family ratings to Ca-PD/LD and Ca, respectively. The Ca corporate family rating reflects UniTek's missed interest payment on the term loan which is considered a default under Moody's definition, the heightened possibility of another default event, continued delays in the filing of restated financials including the last two audits, management turnover, the potential loss of the company's largest customer and other business and legal risks stemming from issues at the company's Pinnacle subsidiary. UNIVERSAL BIOENERGY: Amends 2012 10-K to Amend Disclosures ---------------------------------------------------------- Universal Bioenergy, Inc., has amended its annual report for the year ended Dec. 31, 2012, to modify certain disclosures in the descriptive text set forth in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. There are no modifications to any financial disclosures. A copy of the amended Form 10-K is available for free at http://is.gd/pYQHfI About Universal Bioenergy Headquartered in Irvine, California, Universal Bioenergy Inc. develops markets alternative and natural energy products including, natural gas, solar, biofuels, wind, wave, tidal, and green technology products. Universal Bioenergy disclosed a net loss of $3.65 million on $50.51 million of revenues for the year ended Dec. 31, 2012, as compared with a net loss of $2.23 million on $71.74 million of revenues during the prior year. The Company's balance sheet at March 31, 2013, showed $7.05 million in total assets, $8.68 million in total liabilities and a $1.62 million total stockholders' deficit. Bongiovanni & Associates, CPA'S, in Cornelius, North Carolina, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring operating losses, has an accumulated deficit, has negative working capital, and has yet to generate an internal cash flow that raises substantial doubt about its ability to continue as a going concern. UNIVITA HEALTH: S&P Raises Secured Debt Rating to 'B' ----------------------------------------------------- Standard & Poor's Ratings Services raised its issue-level rating on Univita Health Inc.'s secured debt to 'B' from 'B-' and revised the recovery rating to '2' from '3'. This reflects an increase in S&P's assessment of the company's fixed charges, which suggests that if a default occurred, it would likely happen at a higher level of EBITDA than S&P previously estimated. As a result, S&P raised its EBITDA-based default-level valuation by $30 million to $200 million. The '2' recovery rating on the secured debt (revolver and term loan) reflects S&P's expectation for substantial recovery (70%-90%) in the event of a default. S&P's issue-level rating on this debt is 'B' (one notch above the corporate credit rating). The 'B-' corporate credit rating is unchanged. The company's "vulnerable" business risk profile reflects its small size, vulnerability to competitive threats, customer and geographic concentration, as well as the challenges of establishing a relatively new business model for home-based health care. The company's "highly levered" financial risk profile reflects adjusted debt leverage of 13.1x, with funded debt leverage of 7.2x, at March 31, 2013. S&P views liquidity as "adequate" following the May 2013 amendment, the $10 million increase to the credit facility, and the $10 million capital contribution by the private-equity owners. RATINGS LIST Univita Health Inc. Corporate Credit Rating B-/Negative/-- Rating Raised; Recovery Rating Revised To From Univita Health Inc. Senior Secured B B- Recovery Rating 2 3 USEC INC: Freezes Benefits Under Retirement and Pension Plans ------------------------------------------------------------- USEC Inc. froze accrued benefits for active employees under its retirement plan as part of its internal organizational structure review effort, effective Aug. 5, 2013. The Board of Directors of the Company approved an amendment to the Pension Restoration Plan to also freeze benefit accruals under that Plan, effective Aug. 5, 2013. USEC has maintained the Employees' Retirement Plan of USEC Inc., a broad-based, tax-qualified defined benefit pension plan whose maximum benefits are limited by legislation. In addition, executive officers of the Company who are eligible to participate in the Qualified Plan, have had the opportunity to participate in the USEC Inc. Pension Restoration Plan, a non-qualified supplemental pension benefit that is designed to continue the accrual of pension benefits that exceed the legislated limits under the Qualified Plan. A copy of the Second Amendment to Pension Plan is available for free at http://is.gd/udDZyh About USEC Inc. Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) -- http://www.usec.com/-- supplies enriched uranium fuel for commercial nuclear power plants. USEC disclosed a net loss of $1.20 billion in 2012, as compared with a net loss of $491.1 million in 2011. The Company's balance sheet at March 31, 2013, showed $1.52 billion in total assets, $1.99 billion in total liabilities, and a $469.6 million stockholders' deficit. PricewaterhouseCoopers LLP, in McLean, Virginia, 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 reported net losses and a stockholders' deficit at Dec. 31, 2012, and is engaged with its advisors and certain stakeholders on alternatives for a possible restructuring of its balance sheet, which raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "A delisting of our common stock by the NYSE and the failure of our common stock to be listed on another national exchange could have significant adverse consequences. A delisting would likely have a negative effect on the price of our common stock and would impair stockholders' ability to sell or purchase our common stock. As of December 31, 2012, we had $530 million of convertible notes outstanding. A 'fundamental change' is triggered under the terms of our convertible notes if our shares of common stock are not listed for trading on any of the NYSE, the American Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market. Our receipt of a NYSE continued listing standards notification described above did not trigger a fundamental change. If a fundamental change occurs under the convertible notes, the holders of the notes can require us to repurchase the notes in full for cash. We do not have adequate cash to repurchase the notes. In addition, the occurrence of a fundamental change under the convertible notes that permits the holders of the convertible notes to require a repurchase for cash is an event of default under our credit facility. Accordingly, the exercise of remedies by holders of our convertible notes or lenders under our credit facility as a result of a delisting would have a material adverse effect on our liquidity and financial condition and could require us to file for bankruptcy protection," according to the Company's annual report for the year ended Dec. 31, 2012. * * * USEC Inc. carries 'Caa1' corporate and probability of default ratings, with "developing" outlook, from Moody's. As reported by the TCR on Aug. 17, 2012, Standard & Poor's Ratings Services lowered its ratings on USEC Inc., including the corporate credit rating to 'CCC' from 'CCC+'. "The downgrade reflects our assessment of USEC's long-term viability after the company publicly stated that it will be difficult to continue enrichment operations at the Paducah Gaseous Diffusion Plant after a one-year multiparty agreement to extend operations expires in May 2013," said Standard & Poor's credit analyst Maurice S. Austin. USEC INC: Government to Fund Add'l $29.9MM Under Amended Pact ------------------------------------------------------------- USEC Inc. and its subsidiary American Centrifuge Demonstration, LLC, entered into Amendment No. 006 to the cooperative agreement dated June 12, 2012, between the U.S. Department of Energy and USEC and ACD for the research, development and demonstration program for the American Centrifuge project. The Amendment amends the cooperative agreement to provide for additional government obligated funds of $29.9 million, bringing total government obligated funding to $227.7 million. The other terms and conditions, including the milestones and performance indicators under the RD&D program were not changed by the Amendment. The cooperative agreement provides funding for a cost-share RD&D program for the American Centrifuge project to enhance the technical and financial readiness of the centrifuge technology for commercialization. The cooperative agreement provides for 80 percent DOE and 20 percent USEC cost sharing for work performed during the period June 1, 2012, through Dec. 31, 2013, with a total estimated cost of $350 million. DOE's total contribution would be up to $280 million and USEC's contribution would be up to $70 million. DOE's contribution is incrementally funded. The cooperative agreement, as previously amended, provided DOE funding of $197.8 million. The Amendment increases the obligated DOE funding to $227.7 million and allowable costs for the RD&D program to $284.6 million through Sept. 30, 2013. USEC is providing cost sharing equal to 20 percent of those allowable costs or $56.9 million through Sept. 30, 2013. USEC's 20 percent contribution includes investments made by USEC commencing June 1, 2012. DOE's remaining cost share under the RD&D program of up to $52.3 million is conditioned upon USEC continuing to meet all milestones and deliverables on schedule, USEC continuing to demonstrate to DOE's satisfaction its ability to meet future milestones, and the availability of appropriations or other sources of consideration. USEC is continuing to work with Congress and the administration to obtain funding for the remaining DOE cost-share needed to fund the RD&D program through December 2013. The administration has included transfer authority of $48 million to fund the RD&D program in the President's Government Fiscal Year 2014 budget, and the same level of funding is in the FY 2014 Energy and Water Appropriations bill approved by the House of Representatives on July 10, 2013, and in the Senate version of the bill reported to the Senate by the Senate Appropriations Committee on June 27, 2013. USEC believes that this level of funding, if provided, would be sufficient to complete the RD&D program. However, there is no assurance that this additional funding will be made available. The Company, or its subsidiaries, is also a party to a number of other agreements or arrangements with the U.S. government. About USEC Inc. Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) -- http://www.usec.com/-- supplies enriched uranium fuel for commercial nuclear power plants. USEC disclosed a net loss of $1.20 billion in 2012, as compared with a net loss of $491.1 million in 2011. The Company's balance sheet at March 31, 2013, showed $1.52 billion in total assets, $1.99 billion in total liabilities, and a $469.6 million stockholders' deficit. PricewaterhouseCoopers LLP, in McLean, Virginia, 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 reported net losses and a stockholders' deficit at Dec. 31, 2012, and is engaged with its advisors and certain stakeholders on alternatives for a possible restructuring of its balance sheet, which raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "A delisting of our common stock by the NYSE and the failure of our common stock to be listed on another national exchange could have significant adverse consequences. A delisting would likely have a negative effect on the price of our common stock and would impair stockholders' ability to sell or purchase our common stock. As of December 31, 2012, we had $530 million of convertible notes outstanding. A 'fundamental change' is triggered under the terms of our convertible notes if our shares of common stock are not listed for trading on any of the NYSE, the American Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market. Our receipt of a NYSE continued listing standards notification described above did not trigger a fundamental change. If a fundamental change occurs under the convertible notes, the holders of the notes can require us to repurchase the notes in full for cash. We do not have adequate cash to repurchase the notes. In addition, the occurrence of a fundamental change under the convertible notes that permits the holders of the convertible notes to require a repurchase for cash is an event of default under our credit facility. Accordingly, the exercise of remedies by holders of our convertible notes or lenders under our credit facility as a result of a delisting would have a material adverse effect on our liquidity and financial condition and could require us to file for bankruptcy protection," according to the Company's annual report for the year ended Dec. 31, 2012. * * * USEC Inc. carries 'Caa1' corporate and probability of default ratings, with "developing" outlook, from Moody's. As reported by the TCR on Aug. 17, 2012, Standard & Poor's Ratings Services lowered its ratings on USEC Inc., including the corporate credit rating to 'CCC' from 'CCC+'. "The downgrade reflects our assessment of USEC's long-term viability after the company publicly stated that it will be difficult to continue enrichment operations at the Paducah Gaseous Diffusion Plant after a one-year multiparty agreement to extend operations expires in May 2013," said Standard & Poor's credit analyst Maurice S. Austin. USG CORP: Posts $25 Million Net Income in Second Quarter -------------------------------------------------------- USG Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $25 million on $916 million of net sales for the three months ended June 30, 2013, as compared with a net loss of $57 million on $798 million of net sales for the same period during the prior year. For the six months ended June 30, 2013, the Company had net income of $27 million on $1.73 billion of net sales, as compared with a net loss of $84 million on $1.58 billion of net sales for the same period a year ago. As of June 30, 2013, the Company had $3.68 billion in total assets, $3.64 billion in total liabilities and $40 million in total stockholders' equity including noncontrolling interest. "We are pleased to generate net income for the second consecutive quarter," said James S. Metcalf, chairman, president and CEO. "Results in all major business units have improved from one year ago, including L&W Supply, which achieved an operating profit for the first time since 2008." The corporation's adjusted net income was $26 million in the second quarter of 2013, which compares to an adjusted net loss of $18 million in the second quarter of 2012. The adjusted net income for the second quarter of 2013 excludes $1 million in restructuring charges. The adjusted net income for the second quarter of 2012 excluded $2 million in income from discontinued operations and $41 million in loss on the extinguishment of debt. A copy of the Form 10-Q is available for free at: http://is.gd/rjMJE3 About USG Corporation Based in Chicago, Ill., USG Corporation -- http://www.usg.com/-- through its subsidiaries, manufactures and distributes building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The company filed for Chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). When the Debtors filed for protection from their creditors, they disclosed $3.252 billion in assets and $2.739 billion in liabilities. The Debtors emerged from bankruptcy protection on June 20, 2006. For the 12 months ended Dec. 31, 2012, the Company incurred a net loss of $125 million on $3.22 billion of net sales, as compared with a net loss of $390 million on $2.91 billion of net sales during the prior year. * * * As reported by the TCR on Aug. 15, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on USG Corp. to 'B' from 'B+'. "The downgrade reflects our expectation that USG's operating results and cash flow are likely to be strained over the next year due to the ongoing depressed level of housing starts and still- weak commercial construction activity," said Standard & Poor's credit analyst Thomas Nadramia. "It is now more likely, in our view, that any meaningful recovery in housing starts may be deferred until late 2012 or into 2013. As a result, the risk that USG's liquidity in the next 12 to 24 months will continue to erode (and be less than we incorporated into our prior ratings) has increased. The ratings previously incorporated a greater improvement in housing starts, which would have enabled USG to reduce its negative operating cash flow in 2012 and achieve breakeven cash flow or better by 2013." In the Sept. 11, 2012, edition of the TCR, Fitch Ratings has affirmed USG Corporation's (NYSE: USG) ratings, including the company's Issuer Default Rating (IDR) at 'B-'. The Rating Outlook has been revised to Stable from Negative. The ratings for USG reflect the company's leading market position in all of its businesses, strong brand recognition, its large manufacturing network and sizeable gypsum reserves. Risks include the cyclicality of the company's end-markets, excess capacity currently in place in the U.S. wallboard industry, volatility of wallboard pricing and shipments and the company's high leverage. As reported by the TCR on Dec. 5, 2012, Moody's Investors Service affirmed USG Corporation's Caa1 Corporate Family Rating and Caa1 Probability of Default Rating. USG's Caa1 Corporate Family Rating reflects its high debt leverage characteristics, despite Moody's expectation of improving operating performance. VAIL LAKE: Court Affirms Tentative Ruling Approving Use of Cash --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California affirmed at a final hearing on July 18, 2013, the Court's tentative ruling dated July 15, 2013, approving the Motion of Vail Lake Rancho California, LLC, for Final Order for Use of Cash Collateral. The Motion was granted on the same limited grounds indicated in the interim order; that is, without a determination of the extent of any lien asserted against the Debtors' estates (by Cambridge or any other purportedly secured creditor) or ownership of its cash. Further, although the tentative order is characterized as "final", the Debtors must understand that the finality of the order may be affected by any determination arising out of the adjudication of the validity, priority or extent of any lien asserted against the Debtors' estates and/or ownership of its cash, in an adversary proceeding. As reported in the TCR on July 1, 2013, Bankruptcy Judge Louise DeCarl Adler entered an interim order granting Vail Lake Rancho California, LLC, et al., authority to use cash for business operations in accordance with a prepared budget. The Court is reserving final ruling on whether any of the Cash constitutes collateral of any Prepetition Lienholder. To the extent any Cash may be the collateral of any Prepetition Lienholders, the Debtors are authorized to use such Cash for expenses in the ordinary course of business, pursuant to Sec. 361 and 363 of the Bankruptpcy Code on an interim basis pending a final hearing on the Motion. About Vail Lake Vail Lake Rancho California, LLC and its affiliates own the California campground Vail Lake Resort. Vail Lake is a large reservoir in western Riverside County, California, located on Temecula Creek in the Santa Margarita River watershed, approximately 15 miles east of Temecula, California. Properties cover approximately 9,000 acres and have an estimated water storage capacity of approximately 51,000 acre-feet. On Dec. 26, 2012, creditors of Vail Lake filed an involuntary Chapter 11 petition (Bankr. S.D. Cal. Case No. 12-16684) for Vail Lake. In a filing on June 6, 2013, the Debtor said it consents to the entry of an order for relief and does not contest the involuntary Chapter 11 petition. On June 5, 2013, the company sent 5 related entities -- Vail Lake USA, LLC ("VLU"), Vail Lake Village & Resort, LLC ("VLRC"), Vail Lake Groves, LLC, Agua Tibia Ranch, LLC, and Outdoor Recreational Management, LLC -- to Chapter 11 bankruptcy. The new debtors have sought and obtained an order for joint administration of their Chapter 11 cases with Vail Lake Rancho (Case No. 12-16684). The Debtors are represented by attorneys at Cooley LLP and Phillips, Haskett & Ingwalson, A.P.C. Thomas C. Hebrank at E3 Realty Advisors, Inc., serves as the Debtors' chief restructuring officer. The Debtors' consolidated assets, as of May 31, 2013, total approximately $291,016,000 and liabilities total $52,796,846. VANTAGE PIPELINE: S&P Assigns 'BB-' Rating to US$225MM Term Loan B ------------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'BB-' issue-level rating and '3' recovery rating to Calgary, Alta.-based Vantage Pipeline Canada ULC and Vantage Pipeline US L.P. (collectively, Vantage) US$225 million term loan B. The '3' recovery rating indicates S&P's expectation of meaningful recovery (50%-70%) in a default scenario. "The ratings on Vantage reflect our assessment of the company's "satisfactory" business risk profile and "highly leveraged" financial risk profile," said Standard & Poor's credit analyst Gerry Hannochko. Vantage will construct an ethane pipeline that has a 10-year take- or-pay transport agreement for 50% of the pipeline capacity with Nova Chemicals Corp. that provides stable cash flows. S&P believes that offsetting the strengths is that the company relies on one contracted speculative-grade shipper and one supply source, and has a single pipeline asset. In addition, there is construction risk because the pipeline is set to be completed in October 2013 for an early November 2013 in-service date. After construction, S&P expects the company to have a very high degree of financial leverage Vantage is a private company that is constructing a high vapor pressure, 10-inch liquid ethane pipeline between Hess Corp.'s Tioga natural gas processing facility in North Dakota and an interconnect with the Alberta Ethane Gathering System near Empress, Alta. The 40,000 barrel per day pipeline will run for more than 700 kilometers and have two pumping stations. RATINGS LIST Vantage Pipeline Canada ULC Vantage Pipeline US L.P. Corporate credit rating BB-/Stable/-- Ratings Assigned US$225 million term loan B BB- Recovery rating 3 VILLAGE AT KNAPP'S: Case Summary & 15 Unsecured Creditors --------------------------------------------------------- Debtor: The Village At Knapp's Crossing, L.L.C. 6274 28th, S.E. Grand Rapids, MI 49546 Bankruptcy Case No.: 13-06094 Chapter 11 Petition Date: July 25, 2013 Court: U.S. Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Scott W. Dales Debtor's Counsel: John W. Zaskiewicz, Esq. TISHKOFF & ASSOCIATES, PLLC 407 N. Main Street Ann Arbor, MI 48104 Tel: (734) 663-4077 Fax: (734) 665-1613 E-mail: jack@tishlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Steven D. Benner, managing member on behalf of S.D. Benner, sole member. Debtor's List of Its Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ City of Grand Rapids Water Main $70,519 1101 Monroe Avenue NW Installation Grand Rapids, MI 49503 Foster Swift Attorney Fees $17,890 1700 East Beltline Avenue NE, Suite 200 Grand Rapids, MI 49525 Detroit Testing Company Environmental Soil $10,500 601 W. Fort Street Testing Detroit, MI 48226 John Huizinga, CPA Accounting Work $9,500 Arthur J. Gallagher Risk Bond Fees $6,450 Cunningham Dalman, P.C. Attorney Fees $6,000 Robert Attmore Attorney At Law Attorney Fees $3,445 Equipment Solutions Equipment Rental $2,400 Michael A. McInerney, PLC Attorney Fees $350 First Community Bank Mortgage $167,114 Net Unsecured: $0 International Bank of Chicago Mortgage $4,142,007 Net Unsecured: $0 Commerica Bank Mortgage $468,243 Net Unsecured: $0 Steven D. Benner Leasing Commissions Unknown SD Benner, LLC Loans, etc. Unknown Evergreen Properties of Management Fees, etc. Unknown Michigan, Inc. VPR CORP: Creditors Say PE Owner's $50MM Claim Must Be Redefined ---------------------------------------------------------------- Stewart Bishop of BankruptcyLaw360 reported that creditors of oil and gas company VPR Corp. sued affiliates of the company's private equity owner in Texas bankruptcy court, saying their alleged $50 million secured claim is actually equity and should be reclassified. According to the report, the official creditors committee contends that the "secured loan" from affiliates of Chicago-based Victory Park Capital Advisors LLP was actually a capital infusion into a "vastly undercapitalized company" in exchange for equity. About VPR Operating VPR Operating, LLC, and three related entities sought Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 13-10599) in Austin on March 29, 2013. Brian John Smith, Esq., at Patton Boggs LLP, serves as the Debtor's counsel. Judge Craig A. Gargotta presides over the case. The Debtor disclosed $13,400,000 in assets and $11,119,045 in liabilities as of the Chapter 11 filing. Privately owned VPR is an oil and gas company focused on acquiring and developing assets in the domestic onshore basins of the United States. It has 53 producing wells, which generate revenue of approximately $375,000 per month on average after royalty payments. VPR was founded in 2008, and maintains producing oil and gas properties in Oklahoma and New Mexico. The U.S. Trustee appointed five entities to an official committee of creditors. Kell C. Mercer, Esq., at Brown McCarroll, L.L.P. represents the Official Committee of Creditors. VPR CORP: Can Employ Holland & Knight as Counsel ------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Texas authorized VPR Operating, LLC, et al., to employ Holland & Knight LLP as bankruptcy counsel, nunc pro tunc to July 1, 2013. As reported in the TCR on July 9, 2013, the Debtors initially selected Patton Boggs LLP to act as bankruptcy counsel for the Debtors. On April 11, 2013, the Debtor filed an application to employ Patton Boggs LLP as bankruptcy counsel, and the Court entered an order approving the application on May 15, 2013, which was subsequently amended on May 20, 2013. Patton Boggs' representation of the Debtors was led by Robert W. Jones and Brent R. McIlwain, both partners at Patton Boggs as of the Petition Date. Effective June 28, 2013, Messrs. Jones and McIlwain resigned from Patton Boggs and joined Holland & Knight as partners. Indeed, all of the attorneys who have assisted in representing the Debtors since the Petition Date will be joining Holland & Knight. Given that all of the attorneys who have assisted in representing the Debtors are now attorneys at Holland & Knight, the Debtors have determined that it is in the best interests of their estates to retain Holland & Knight as bankruptcy counsel for Debtors in the place of Patton Boggs. The Debtors believe that Holland & Knight will be able to efficiently and effectively represent the estates, and will maintain the continuity of counsel necessary to ensure that the Debtors continue to proceed toward realizing value for creditors. Holland & Knight will, among other things, assist the Debtors in preparation of all documents, motions, applications, reports, and papers necessary for the administration of these Chapter 11 cases, at these hourly rates: Robert W. Jones, Partner $755 Brent R. McIlwain, Partner $615 Brian Smith, Associate $460 About VPR Operating VPR Operating, LLC, and three related entities sought Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 13-10599) in Austin on March 29, 2013. Brian John Smith, Esq., at Patton Boggs LLP, serves as the Debtor's counsel. Judge Craig A. Gargotta presides over the case. The Debtor disclosed $13,400,000 in assets and $11,119,045 in liabilities as of the Chapter 11 filing. Privately owned VPR is an oil and gas company focused on acquiring and developing assets in the domestic onshore basins of the United States. It has 53 producing wells, which generate revenue of approximately $375,000 per month on average after royalty payments. VPR was founded in 2008, and maintains producing oil and gas properties in Oklahoma and New Mexico. The U.S. Trustee appointed five entities to an official committee of creditors. Kell C. Mercer, Esq., at Brown McCarroll, L.L.P. represents the Official Committee of Creditors. VUZIX CORP: To Offer $6 Million Worth of Securities --------------------------------------------------- Vuzix Corporation plans to offer approximately $6 million shares of common stock and warrants, according to the Company's free writing prospectus filed with the U.S. Securities and Exchange Commission on July 30, 2013. The Company expects to use the net proceeds received from this offering to complete commercialization of its waveguide, smart glasses and HD display engine technologies, debt repayment and for working capital and general corporate purposes. The sole bookrunner of the offering is Aegis Capital Corp. A copy of the FWP is available for free at: http://is.gd/duDEwG About Vuzix Corp. Rochester, New York-based Vuzix Corporation (TSX-V: VZX) OTC BB: VUZI) -- http://www.vuzix.com/-- is a supplier of Video Eyewear products in the defense, consumer and media & entertainment markets. Vuzix reported net income of $322,840 for the year ended Dec. 31, 2012, as compared with a net loss of $3.87 million during the prior year. The Company's balance sheet at March 31, 2013, showed $3.08 million in total assets, $10.14 million in total liabilities and a $7.05 million total stockholders' deficit. EFP Rotenberg, LLP, in Rochester, 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 substantial losses from operations in recent years. In addition, the Company is dependent on its various debt and compensation agreements to fund its working capital needs. The Company was not in compliance with its financial covenants under a senior secured debt holder and had other debts past due in some cases. These conditions raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "We have engaged an investment banking firm to assist us with respect to a planned public stock offering of up to $15,000,000. Our future viability is dependent on our ability to execute these plans successfully. If we fail to do so for any reason, we would not have adequate liquidity to fund our operations, would not be able to continue as a going concern and could be forced to seek relief through a filing under U.S. Bankruptcy Code," the Company said in its annual report for the year ended Dec. 31, 2012. VYSTAR CORP: Incurs $790,000 Net Loss in Q1 ------------------------------------------- Vystar Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $790,880 on $296,578 of net revenues for the three months ended March 31, 2013, as compared with a net loss of $684,992 on $124,028 of net revenues for the same period during the prior year. As of March 31, 2013, the Company had $921,378 in total assets, $3.29 million in total liabilities and a $2.36 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/d84mR8 About Vystar Corp Duluth, Ga.-based Vystar Corporation is the creator and exclusive owner of the innovative technology to produce Vytex(R) Natural Rubber Latex. This technology reduces antigenic protein in natural rubber latex products to virtually undetectable levels in both liquid NRL and finished latex products. Vystar reported a net loss of $2.74 million on $540,168 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $3.60 million on $347,250 of revenue during the prior year. Habif, Arogeti & Wynne, LLP, in Atlanta, Georgia, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company's recurring losses from operations, capital deficit, and limited capital resources raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "There can be no assurances that the Company will be able to achieve its projected level of revenue in 2013 and beyond. If the Company is unable to achieve its projected revenue and is not able to obtain alternate additional financing of equity or debt, the Company would need to significantly curtail or reorient its operations during 2013, which could have a material adverse effect on the Company's ability to achieve its business objectives and as a result may require the Company to file for bankruptcy or cease operations," the Company said. WALTER ENERGY: Bank Debt Trades at 4% Off ----------------------------------------- Participations in a syndicated loan under which Walter Energy Inc is a borrower traded in the secondary market at 96.42 cents-on- the-dollar during the week ended Friday, August 2, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 3.00 percentage points from the previous week, The Journal relates. Walter Energy Inc pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on March 14, 2018. The bank debt carries Moody's B2 rating and Standard & Poor's B+ rating. The loan is one of the biggest gainers and losers among 249 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Walter Energy, Inc., headquartered in Birmingham, Alabama, is primarily a metallurgical coal producer which also produces metallurgical coke, steam and industrial coal, and natural gas. The company acquired met coal producer Western Coal Corporation in April 2011. WAVE SYSTEMS: To Complete $1.5 Million Stock Offering ----------------------------------------------------- Wave Systems Corp. agreed to sell to investors 1,204,470 shares of its Class A common stock at a price of $1.27 per share, yielding gross proceeds of approximately $1,529,677. The $1.27 share price reflects the closing bid price on July 24, 2013. The net proceeds of the financing will be used to fund Wave's ongoing operations. Security Research Associates acted as placement agent in connection with the offering. The shares sold to investors in this offering are being issued under a $30 million shelf registration statement declared effective by the Securities and Exchange Commission on July 22, 2011. A prospectus supplement related to the public offering will be filed with the Securities and Exchange Commission. In connection with the offering, Wave agreed to pay the Placement Agent a cash fee of $91,781 (6 percent of the gross proceeds paid to Wave in connection with the offering) and will issue to the Placement Agent or its designees warrants to purchase up to 72,268 common shares at an exercise price of $1.27 per share. The warrants are exercisable for 36 months beginning on the date of issuance. About Wave Systems Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. KPMG 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 Wave Systems Corp. has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. For the 12 months ended Dec. 31, 2012, the Company incurred a net loss of $33.96 million, as compared with a net loss of $10.79 million in 2011. The Company's balance sheet at March 31, 2013, showed $10.77 million in total assets, $22.19 million in total liabilities and a $11.42 million total stockholders' deficit. WAVE SYSTEMS: Regains Compliance with NASDAQ Marketplace Rule ------------------------------------------------------------- Wave Systems Corp. received notice from the NASDAQ Listing Qualifications Department that Wave has regained compliance with NASDAQ Marketplace Rule 5550(a)(2) relating to the minimum $1.00 per share bid price of the company's Class A common stock. Shares of the company's Class A common stock maintained a closing bid price of at least $1.00 per share for the required ten consecutive days, from July 9 through July 22, 2013. Because the company has regained compliance with the minimum bid price rule, a previously scheduled hearing with the NASDAQ Hearing Panel has been deemed moot and will not be held. About Wave Systems Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. KPMG 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 Wave Systems Corp. has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. For the 12 months ended Dec. 31, 2012, the Company incurred a net loss of $33.96 million, as compared with a net loss of $10.79 million in 2011. The Company's balance sheet at March 31, 2013, showed $10.77 million in total assets, $22.19 million in total liabilities and a $11.42 million total stockholders' deficit. WERNER LADDER: App. Ct. Says New Werner Not Liable in Doyle Suit ---------------------------------------------------------------- The Court of Civil Appeals of Oklahoma upheld a trial court order granting the motions for summary judgment of New Werner Holding Company, Inc. and Home Depot Inc., and denying Plaintiff Rick Doyle's motion for default judgment against Werner Co., aka Old Ladder Company in a product liability lawsuit. RICK DOYLE, individually, Plaintiff/Appellant, v. NEW WERNER HOLDING COMPANY, INC., a Pennsylvania corporation, WERNER CO., a Pennsylvania corporation, ABC COMPANY, a fictitious corporation, and HOME DEPOT, INC., a Delaware corporation, Defendants/ Appellees, Case No. 110794, alleges that the Defendants negligently designed, manufactured and sold him a defective ladder without adequate warnings. In a July 9, 2013 decision, the Appeals Court concluded that New Werner did not design or distribute the Plaintiff's ladder, and did not agree in writing to assume liability for any such claims against Old Ladder Co. -- indeed, the Old Ladder Co. bankruptcy court expressly held New Werner was not so liable as successor to Old Ladder Co., and Old Ladder Co., having invoked the protection of the bankruptcy court, is beyond the reach of Plaintiff's claims. The Appeals Court adds that as the mere seller of the ladder, any liability of Home Depot depends on the existence of a defect, but the Plaintiff wholly failed to controvert the opinion of the Defendants' expert of no such defect. A copy of the Appeals Court's July 9, 2013 decision is available at http://is.gd/XjSag1from Leagle.com. Appellant Rick Doyle is represented by Robert P. Coffey, Jr., Esq., and David C. Senger, Esq., of Coffey, Gudgel & McDaniel -- amy@cgmlawok.com -- in Tulsa, Oklahoma. Appellees New Werner Holding Company, et al., are represented by Joseph R. Farris, Esq. -- jfarris@tulsalawyer.com -- and Sarah E. Buchan, Esq. -- sbuchan@tulsalawyer.com -- of Franden, Woodard & Farris, in Tulsa, Oklahoma. About Werner Ladder Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactured and distributed ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors were represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. was the Debtors' financial advisor. The Official Committee of Unsecured Creditors was represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company served as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. On June 19, 2007, the Creditors Committee submitted a Liquidating Plan and Disclosure Statement for Werner. On September 10, 2007, the Committee filed an Amended Plan and Disclosure Statement. On September 13, 2007, the Committee filed its 2nd Amended Plan and on September 14, the Court approved the adequacy of the Amended Disclosure Statement explaining the 2nd Amended Plan. The Court confirmed the 2nd Amended Plan on October 25. New Werner Holding Co. (DE), LLC, a newly formed corporation, purchased substantially all the Debtors' assets in 2007. New Werner is a separate operating company. WESTMORELAND COAL: Incurs $622,000 Net Loss in 2nd Quarter ---------------------------------------------------------- Westmoreland Coal Company filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss applicable to common shareholders of $622,000 on $162.49 million of revenues for the three months ended June 30, 2013, as compared with a net loss applicable to common shareholders of $12.42 million on $132.84 million of revenues fo rthe asme period a year ago. For the six months ended June 30, 2013, the Company incurred a net loss applicable to common shareholders of $3.34 million on $323.94 million of revenues, as compared with a net loss applicable to common shareholders of $11.90 million on $280.07 million of revenues for the same period during the prior year. As of June 30, 2013, the Company had $933.60 million in total assets, $1.21 billion in total liabilities and a $281.56 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/M8eg4Y About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. Westmoreland Coal incurred a net loss of $13.66 million in 2012, a net loss of $36.87 million in 2011, and a net loss of $3.17 million in 2010. * * * As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Englewood, Co.-based Westmoreland Coal Co. (WLB). to 'B-' from 'CCC+'. "The upgrade reflects our view that WLB is less vulnerable to default after successfully negotiating less restrictive covenant requirements for an unrated $110 million term loan due 2018," said credit analyst Gayle Bowerman. "Our assessment of WLB's business risk profile as 'vulnerable' and financial risk profile as 'highly leveraged' are unchanged. We also revised our liquidity score to 'adequate' based on the covenant relief and additional liquidity provided under the company's new $20 million asset-based loan (ABL) facility from 'less than adequate'." Westmoreland Coal carries a Caa1 corporate family rating from Moody's Investors Service. WORLD SURVEILLANCE: Files Lawsuit Against La Jolla Cove Investors ----------------------------------------------------------------- World Surveillance Group Inc. has filed a lawsuit against La Jolla Cove Investors, Inc., in the United States District Court for the Northern District of California relating to the finance documents entered into by the Company with La Jolla in January 2012. World Surveillance Group seeks injunctive relief in addition to unspecified monetary damages as well as other relief. In the lawsuit, World Surveillance Group is alleging breach of contract and other causes of action. A copy of the complaint is available for free at http://is.gd/7weA28 Glenn D. Estrella, president and CEO of World Surveillance Group, stated, "We have been very disappointed in the relationship between the Company and La Jolla for some time, and believe that the actions we have taken to file this lawsuit are in the best interests of the Company and our shareholders. As we strive to enhance shareholder value, we look forward to securing other options to advance our business that are more beneficial to the Company and our stakeholders." About World Surveillance World Surveillance Group Inc. designs, develops, markets and sells autonomous lighter-than-air (LTA) unmanned aerial vehicles (UAVs) capable of carrying payloads that provide persistent security and/or wireless communication from air to ground solutions at low, mid and high altitudes. The Company's airships, when integrated with electronics systems and other high technology payloads, are designed for use by government-related and commercial entities that require real-time intelligence, surveillance and reconnaissance or communications support for military, homeland defense, border control, drug interdiction, natural disaster relief and maritime missions. The Company is headquartered at the Kennedy Space Center, in Florida. World Surveillance disclosed a net loss of $3.36 million on $272,201 of net revenues for the year ended Dec. 31, 2012, as compared with a net loss of $1.12 million on $19,896 of net revenues in 2011. The Company's balance sheet at March 31, 2013, showed $3.89 million in total assets, $16.59 million in total liabilities and a $12.69 million total stockholders' deficit. Rosen Seymour Shapss Martin & Company 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 experienced significant losses and negative cash flows, resulting in decreased capital and increased accumulated deficits. These conditions raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "Our indebtedness at March 31, 2013 was $16,591,883. A portion of such indebtedness reflects judicial judgments against us that could result in liens being placed on our bank accounts or assets. We are continuing to review our ability to reduce this debt level due to the age and/or settlement of certain payables but we may not be able to do so. This level of indebtedness could, among other things: * make it difficult for us to make payments on this debt and other obligations; * make it difficult for us to obtain future financing; * require us to redirect significant amounts of cash from operations to servicing the debt; * require us to take measures such as the reduction in scale of our operations that might hurt our future performance in order to satisfy our debt obligations; and * make us more vulnerable to bankruptcy or an unwanted acquisition on terms unsatisfactory to us," according to the Company's Form 10-Q for the period ended March 31, 2013. WPCS INTERNATIONAL: Chairman and CEO Resigns -------------------------------------------- WPCS International Incorporated said that its Chairman and CEO, Andrew Hidalgo will be stepping down from his position, effective July 30, 2013, to pursue private equity investments. Mr. Hidalgo will be replaced by Sebastian Giordano, a current director, who will assume an Interim CEO role, while the WPCS Board of Directors undertakes a search for a permanent Chairman and CEO. Mr. Hidalgo stated, "I have enjoyed my time at WPCS and look forward to supporting the continued success of the Company. I have been interested in private equity for some time however, due to the two difficult fiscal years prior to this fiscal year I felt an obligation to turnaround the financial performance before exiting. This fiscal year has been a healthier fiscal year for the Company and now I can step back and allow new leadership to bring WPCS to its next level of success." Joseph Heater, chief financial officer for WPCS, commented, "We cannot express enough gratitude to Andy, as founder of WPCS, for building the Company from the ground up into a multi-million dollar corporation operating on three continents. Andy's efforts created value for all investors and his recent success in turning around the Company from a difficult financial period just accentuates his leadership skills." Mr. Giordano who has over 25 years of strategic, financial and operational experience serving as a board member, CEO, CFO, and Chief Restructuring Officer, added, "With a strong management team that includes Executive Vice President, Myron Polulak and Chief Financial Officer, Joseph Heater, as well as strong operation center presidents, we look forward to building upon the recent positive developments the Company has achieved. As part of his separation agreement, Mr. Hidalgo intends to submit a bid to acquire certain underperforming operation centers from WPCS, which is consistent with the Company's ongoing plan to improve its financial results, including evaluating such opportunities, that can increase shareholder value for all our investors in the near future." Effective Aug. 1, 2013, the Company entered into a letter agreement with Mr. Giordano to serve as Interim CEO on a part-time basis until a permanent chief executive officer is appointed. The Giordano Agreement can be terminated by either party upon 30 days prior notice. Pursuant to the Giordano Agreement, Giordano will receive a monthly consulting fee of $10,833. A copy of the Form 8-K is available for free at: http://is.gd/uxH55H About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. J.H. COHN LLP, in Eatontown, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended April 30, 2012. The independent auditors noted that the Company is in default of certain covenants of its credit agreement and has incurred operating losses, negative cash flows from operating activities and has a working capital deficiency as of April 30, 2012. These matters raise substantial doubt about the Company's ability to continue as a going concern. WPCS reported a net loss attributable to the Company of $20.54 million for the year ended April 30, 2012, compared to a net loss attributable to the Company of $36.83 million during the prior fiscal year. For the nine months ended Jan. 31, 2012, the Company incurred a net loss of $724,000 on $32.9 million of revenue, as compared with a net loss of $12.02 million on $53.5 million of revenue for the same period a year ago. The Company's balance sheet at Jan. 31, 2013, showed $24.10 million in total assets, $18.62 million in total liabilities and $5.48 million in total equity. WPCS INTERNATIONAL: Lowers Net Loss to $6.9 Million in 2013 ----------------------------------------------------------- WPCS International Incorporated filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss attributable to the Company of $6.91 million on $42.32 million of revenue for the year ended April 30, 2013, as compared with a net loss attributable to the Company of $20.54 million on $65.46 million of revenue during the prior year. For the three months ended April 30, 2013, the Company incurred a net loss attributable to the Company of $6.18 million on $9.42 million of revenue, as compared with a net loss attributable to the Company of $8.52 million on $11.96 million of revenue for the same period a year ago. As of April 30, 2013, the Company had $18.14 million in total assets, $19.07 million in total liabilities and a $927,428 total deficit. CohnReznick LLP, in Roseland, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2013. The independent auditors noted that the Company has incurred net losses and negative cash flows from operating activities, had a working capital deficiency as of and for the years ended April 30, 2013, and 2012 and has an accumulated deficit as of April 30, 2103. These matters raise substantial doubt about the company's ability to continue as a going concern. Andrew Hidalgo, CEO of WPCS, commented, "We are pleased to report that fiscal year 2013 was successful and a significant turnaround from the prior fiscal year. The management team worked diligently to mitigate the past project losses and improve the efficiency of the organization so that we could post positive EBITDA. The company looks forward to building on this momentum for fiscal year 2014." A copy of the Form 10-K is available for free at: http://is.gd/6GsrT4 On July 29, 2013, the Company held an earnings conference call to discuss its audited financial results for the fiscal year ended April 30, 2013. The script of the earnings conference call is available for free at http://is.gd/Wyxsj4 About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. WPCS INTERNATIONAL: Incurs $6.8-Mil. Net Loss in Fiscal 2013 ------------------------------------------------------------ WPCS International Incorporated filed with the U.S. Securities and Exchange Commission on July 29, 2013, its annual report on Form 10-K for the year ended April 30, 2013. CohnReznick LLP, in Roseland, New Jersey, expressed substantial doubt about WPCS International's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses and negative cash flows from operating activities, had a working capital deficiency as of and for the years ended April 30, 2013, and 2012, and has an accumulated deficit as of April 30, 2103. The Company reported a net loss of $6.8 million on $42.3 million of revenue in fiscal 2013, compared with a net loss of $20.6 million on $65.5 million in fiscal 2012. According to the regulatory filing, the decrease in revenue was due to two factors: (1) the planned strategic change to re-focus the Trenton Operation as a smaller revenue producing operation that returns to profitability; and (2) project delays or postponement of new project bid awards at the state and local government level due to political and economic climate, primarily in the Australia Operations. Cost of revenue was approximately $29.0 million or 70.8% of revenue for the year ended April 30, 2013, compared to $63.5 million or 97.0% for the same period of the prior year. For the year ended April 30, 2013, the Company recorded income from discontinued operations of approximately $1.2 million, net of tax. For the year ended April 30, 2012, the Company recorded a loss from discontinued operations of approximately $3.9 million, net of tax, including the allocation of valuation allowances on deferred tax assets. The Company's balance sheet at April 30, 2013, showed $18.1 million in total assets, $19.1 million in total liabilities, and a stockholders' deficit of $927,428. A copy of the Form 10-K is available at http://is.gd/6GsrT4 Exton, Pennsylvania-WPCS International Incorporated is a global provider of design-build engineering services for communications infrastructure, with approximately 250 employees in five operations centers on three continents. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to a diversified customer base in the public services, healthcare, energy and corporate enterprise markets worldwide. * Cohen, SAC Capital Sought "Edge," Prosecutors Say --------------------------------------------------- Greg Farrell, writing for Bloomberg News, reported that Steven Cohen used to woo potential investors to his hedge fund, SAC Capital Advisors LP, by promising in marketing materials to give them an "edge." According to the report, now that four-letter word, used 14 times in the insider-trading indictment of the $14 billion hedge fund he founded, has come back to haunt him. In the 41-page indictment filed July 25, prosecutors alleged that Cohen and his top managers sought to hire traders and analysts who had the ability to deliver any kind of "edge" over the market, the report related. Take Richard Lee, who joined the Stamford, Connecticut-based hedge fund from Citadel LLC in April 2009 even though prosecutors claim SAC had been warned by one of Lee's former colleagues that he was suspected of insider trading at Citadel, the report recalled. Lee pleaded guilty on July 23 to two counts of insider trading, both of which occurred at SAC in 2009. The latter of those took place on Nov. 11, 2009, according to court filings, the report said. Three weeks prior to that, Raj Rajaratnam, co-founder of the Galleon Group of hedge funds, was arrested and charged with insider trading, a headline-producing event that put Wall Street on notice that the U.S. attorney's office had a major effort going to punish insider trading. The case is U.S. v. SAC Capital Advisors LP, 13-00541, U.S. District Court for the Southern District of New York (Manhattan). * Fitch: U.S. Public Finance Downgrades Exceed Upgrades in 2Q'13 ---------------------------------------------------------------- Fitch Ratings notes that during the second quarter of 2013 (2Q'13) and for the 18th consecutive quarter, U.S. public finance rating downgrades outnumbered upgrades. The number of downgrades increased compared to the first quarter, while the number of upgrades decreased. Negative actions are expected to remain elevated, as Negative Rating Outlooks exceeded Positive Rating Outlooks (3.3:1) at the end of 2Q'13. However, a vast majority of rating actions (84%) during the second quarter were affirmations, with no change in Rating Outlook or Rating Watch status. Furthermore, 90% of ratings had a Stable Rating Outlook at the end of the second quarter. Downgrades still account for a small percentage of total public finance rating actions. Fitch downgraded 68 credits, which represented approximately 6.5% of all rating actions and $53.8 billion in par value. In 1Q'13, Fitch downgraded 57 credits. Fitch upgraded 24 credits in 2Q'13, which represented 2.3% of all rating actions and $9.7 billion in par value. In 1Q'13, Fitch upgraded 31 credits. The number of downgrades in 2Q'13 exceeded upgrades by a margin of 2.8:1, which increased from 1.8:1 in the prior quarter. The downgrade to upgrade ratio by par value also increased to 5.5:1 from 3.9:1 in the prior quarter. * Oliver Wyman Sees Challenges Ahead for Automotive Industry ------------------------------------------------------------ Oliver Wyman on Aug. 1 disclosed that the automotive industry will be facing enormous challenges over the next few years. In the wake of the expected growth, OEMs and suppliers will have to deal with the next wave of structural change. While this will open up new opportunities, it will also require huge investments. Even today, the financial scope for manoeuvre of many suppliers is limited -- not least due to low profitability and increasingly demanding investors. This means that the classic medium-sized automotive suppliers are walking a fine line. If they want to accept structural change 2.0 and the associated costs, they will have to work primarily on their strategic orientation and operational excellence, thereby ensuring their profitability and creditworthiness. These are the findings of the Oliver Wyman study on the impact of the structural change involving the supplier industry. In the next few years, globalization and technological progress will bring dynamism and growth to the automotive industry across the world. The major emerging countries are still developing rapidly, and so further accelerating the regional market shift. In China alone, annual car production volume will almost double by 2020 (from 18 to 33 million vehicles). In India it is expected to nearly triple from four to 11 million. Traditional automotive regions such as Western and Southern Europe are stagnating due, in particular, to low sales. In June 2013, for instance, the Western European car market lost more than five percent compared to June 2012. Furthermore, OEMs, owing to their increasing focus, will in the future assign an increasing number of tasks to suppliers. Especially in research and development and in production, suppliers will gain additional value components. According to Oliver Wyman, automotive value creation in 2025 will amount to 1.25 billion euros. Of this amount, 69 percent will go to suppliers -- a clear increase as against the 61 percent from 840 billion euros in 2012. Ultimately, the complexity of the product range is taking on new dimensions. More than ever, the automotive industry will be shaped in the next few years by new vehicle concepts, new models and new technologies. High capital requirements - cheap debt financing but only with an intact business model The imminent growth will trigger the next wave of structural change. For all players in the automotive industry, this will open up major opportunities. But the fact is that only profitable and financially strong suppliers will be able to make the necessary investments in global structures and new technologies. "It is precisely the medium-sized supplier landscape that is under huge pressure from the creation of structures for the expected growth outside their home region," emphasizes Lars Stolz, a partner at Oliver Wyman. "Many could see their profitability severely impaired for a long time". In fact, over the next few years there will be high investment requirements. Even the structural adjustments of recent years required enormous expenditure and had significant consequences for profitability. Total depreciation on investments in value-creation structures and expenditure on research, product development and management increased from 2008 to 2011 on an annual average from 19.1 to 20.3 percent of sales, while operating income fell internationally on average from 7.5 to 5.5 percent. However, much higher investment and additional expenses will be needed for the forthcoming structural change and the related, but repeated, transition to a new value system. This will put profitability once again, and much more severely, under pressure. According to calculations by Oliver Wyman these structurally related costs could amount in the transitional phase to up to 23.3 percent of sales and push down operating profit to only 2.5 percent on average. For a supplier with a turnover of 300 million euros, for example, such an increase would mean an additional cost of around 10 million euros and make the profits shrink accordingly. An operating margin of 2.5 percent will only in the rarest cases be sufficient to achieve a positive result after interest and tax. In addition, the global automotive industry does not enjoy linear growth, but is subject to considerable fluctuations. If revenues fail to meet expectations in periods of high investment, the profit could slip even faster below the zero line. Without adequate profitability cushions, however, most suppliers are unlikely to be able to handle structural change 2.0 on their own. External financing is in turn experiencing certain difficulties. Due to the tightening of risk management requirements, banks are required to scrutinize the creditworthiness of companies more closely. This will also be felt by the automotive suppliers. Successful and profitable suppliers currently benefit from low interest rates and good availability of debt. Companies with an unclear business model or an unfavorable competitive position, however, are finding access to much-needed external funding more difficult. Localized globalization required Especially small suppliers maintaining strong customer relationships with manufacturers headquartered in their home region have only occasionally driven the structural change in recent years and participate in the international expansion mostly through exports. This was possible because the OEMs frequently still supplied new markets from their home region. In the future, however, the clocks of globalization will be ticking differently. The automakers will establish an increasing number of development centers and numerous production locations in the major emerging economies, especially China, but also in America, something they now also expect from their suppliers. If small suppliers want to continue to benefit from the global volume growth, they need to swim in the waters of their customers and create the corresponding structures on site. But most of them have neither the financial resources nor the profitability to make the necessary investments. "For many medium-sized suppliers, it is five to twelve," said Tom Sieber of Oliver Wyman. "Now they are paying for having, in the past, mostly stood by and watched the decline of their profitability. If they do not act rapidly, they will be putting the existence of their company at risk because they lack the resources for future growth." Rethinking needed More rigorously than ever the medium-sized suppliers now have to work on their strategic positioning -- and from a long-term perspective. This includes, among other things, clear footprint and portfolio strategies, but also the strategic definition of high-value activities and their own value-creation contribution. At the same time, it is important to be well prepared not only in purchasing, production or development. The challenge is to be better than the competition in all segments of the entire value chain in order to be able to set yourself apart. This includes the optimal selection and prioritization of projects, a professional purchasing organization, strict cost management, optimizing production efficiency and quality and the outsourcing of logistics processes. Moreover, medium-sized suppliers should be open to all financing options -- whether corporate bonds or subordinated loans, or capital inflow through private equity partnerships, or other strategic investors. "The line between getting through and crashing is extremely narrow," admits Mr. Stolz. "Anyone who does not want to slip into the red and risk a liquidity bottleneck should now adopt the right strategic orientation and, in operational terms, concentrate massively on profitability". About Oliver Wyman Oliver Wyman -- http://www.oliverwyman.de-- is a global management consulting firm with 3,000 employees worldwide in more than 50 offices in 25 countries. The company combines in-depth industry knowledge with specialized expertise in strategy development, process design, risk management and organizational consultancy. Together with its clients, Oliver Wyman designs and implements sustainable growth strategies. The company help companies to improve their business models, processes, IT, risk structures and organizations, accelerate processing and to leverage market opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies. * U.S. Prosecutors Says Ring Stole 160 Million Credit Card Numbers ------------------------------------------------------------------ Nathaniel Popper and Somini Sengupta, writing for New York Times, reported that a prolific gang of foreign hackers stole and sold 160 million credit card numbers from more than a dozen companies, causing hundreds of millions of dollars in losses, federal prosecutors charged in what they described as the largest hacking and data breach case in the country. According to the report, the scheme was run by four Russian nationals and a Ukrainian, said Paul J. Fishman, the U.S. attorney for the District of New Jersey. He announced the indictments in Newark. The victims in the scheme, which prosecutors said ran from 2005 until last year, included J.C. Penney; 7-Eleven; JetBlue; Heartland Payment Systems, one of the world's largest credit and debit processing companies; and French retailer Carrefour, the report related. Separate indictments involving some of the same men, accusing them of computer attacks on Citibank, PNC Bank and the Nasdaq stock exchange, were filed by federal prosecutors in Manhattan, the report said. Computer security experts said the scheme was notable for how long it lasted, how well coordinated it was and how it carefully singled out specific systems in the financial companies' servers to steal from so many personal credit and debit card accounts, the report added. * Blackstone, Deutsche in Talks to Sell Bond Backed by Rentals -------------------------------------------------------------- Jeannette Neumann, writing for The Wall Street Journal, reported that two major Wall Street firms are in detailed discussions to create and sell the world's first bond backed by home-rental payments, people familiar with the matter say. According to the report, Blackstone Group LP is in negotiations to bundle monthly rental payments on about 1,500 to 1,700 of its homes. The private-equity giant is among the firms that have spent billions buying homes out of foreclosure, an investment strategy that has helped to bolster demand and strengthen the U.S. housing market. The bond comprised of the Blackstone homes would be structured and marketed to investors by Deutsche Bank AG, the people say, the report said. The creation of a new type of security shows that Wall Street's financial engineering, blamed for deepening the financial crisis, is revving back up, the report noted. Some investors and analysts have said they are wary of a bond backed by rental payments, citing the dearth of long-term data on how often tenants living in previously foreclosed homes pay their rent on time, the report added. * Despite Detroit, S&P Says U.S. Public Finance Ratings Improve --------------------------------------------------------------- Reuters reported that rating trends across the U.S. public finance sector were "decidedly positive" in the second quarter despite the default by Detroit, Standard & Poor's Ratings Service said, as it noted that its upgrades of municipal debt outpaced downgrades. According to the report, the credit ratings agency said in a report that it raised 194 ratings and only lowered 94 during the second quarter, the third straight quarter in which municipal debt upgrades outpaced downgrades. "Since the economy has continued to expand, albeit at a slow pace by historical standards, credit quality has held up and, in fact, has strengthened as the year has progressed," the report said. Detroit, which recently filed for the largest municipal bankruptcy in U.S. history, accounted for five of the seven defaults in the quarter. Fritch, Texas, and West Penn Allegheny Healthy System in Pennsylvania also defaulted on their debt. S&P said the defaults "were a higher number than normal." Before Detroit filed for bankruptcy, it defaulted on a $39.7 million payment on taxable pension debt. * JPMorgan Agrees to Pay $410MM in Power Market Manipulation Case ----------------------------------------------------------------- Scott DiSavino, writing for Reuters, reported that JPMorgan Chase & Co agreed to pay $410 million to settle allegations of power market manipulation in California and the Midwest, the latest in a series of high-profile inquiries by U.S. federal energy regulators. According to the report, the settlement, announced by the Federal Energy Regulatory Commission (FERC), will allow Chief Executive Jamie Dimon to close the books on one of several costly run-ins with regulators over the past year. It came days after the bank said it was quitting the physical commodities business. JPMorgan Ventures Energy Corp, the commodity trading unit that became one of the biggest U.S. electricity traders with the 2008 acquisition of Bear Stearns, agreed to pay a civil penalty of $285 million and disgorge $125 million for "manipulative bidding strategies" from September 2010 through November 2012, the report related. It is the second largest penalty in FERC history, and comes as the once-quiet government regulator steps up its pursuit of market malfeasance after gaining expanded powers from Congress in 2005, part of efforts to crack down on market manipulation after Enron Corp's spectacular collapse, the report said. JPMorgan spokesman Brian Marchiony said the settlement would "not have a material impact on our earnings" because the bank had previously set aside reserves, the report added. * SAC Capital Probe Yields New Insider-Tipping Arrest ----------------------------------------------------- Patricia Hurtado, writing for Bloomberg News, reported that the probe of SAC Capital Advisors LP, which has led to insider-trading charges against the hedge fund and eight SAC employees, has snared an outside analyst who is accused of giving illegal tips to a former SAC manager. According to the report, Sandeep Aggarwal, 40, of Gurgaon, India, was arrested July 29 by agents of the Federal Bureau of Investigation in San Jose, California, said Peter Donald, an FBI spokesman in New York. SAC Capital, owned by billionaire Steven Cohen, last week was indicted in what prosecutors called an unprecedented insider trading scheme stemming from the government's six-year crackdown on Wall Street crime, the report said. While Cohen wasn't charged, the U.S. indicted the fund he founded, saying it had become "a magnet for market cheaters," the report related. The U.S. alleged there had been a "failure by the fund owner and others" at SAC, and described separate insider trading schemes by eight SAC fund managers and analysts. They include Noah Freeman, Donald Longueuil, Jon Horvath, Wesley Wang, Mathew Martoma, Richard Choo-Beng Lee, Michael Steinberg and Richard Lee, the report further related. Steinberg and Martoma have pleaded not guilty and both are scheduled to go on trial in November. The others have pleaded guilty and are cooperating with the U.S. Aggarwal formerly worked at Collins Stewart LLC in San Francisco, said a person familiar with the situation, who requested anonymity because the matter wasn't public. Andrea Sergautis, a spokeswoman for Canaccord Genuity in Toronto, which acquired Collins Stewart, didn't immediately respond to a call seeking comment on Aggarwal's case. Criminal Case Jenny Strasburg and James Sterngold, writing for The Wall Street Journal, reported that U.S. prosecutors accused SAC Capital Advisors LP, one of the country's largest hedge-fund firms, of acting as a criminal enterprise where executives including founder Steven A. Cohen encouraged insider trading on a "scale without known precedent." According to the report, the government charged that SAC, which has about $14 billion under management, repeatedly took inside information related to public companies and turned it into trading profits. Prosecutors said the firm encouraged the use of illegal tips and hired traders even after they "implied" their performance was based on the use of inside information. U.S. Attorney Preet Bharara, at a news conference, called the company a "magnet for market cheaters," the report said. An SAC spokesman said the firm "never encouraged, promoted or tolerated insider trading and takes its compliance and management obligations seriously," the report related. The Wall Street Journal previously reported that the government was planning criminal charges against SAC, but the scope of the action and the language used by prosecutors caught many lawyers and financial executives by surprise. The government's bold move comes after prosecutors determined they didn't have sufficient evidence to personally charge Mr. Cohen, according to people familiar with the matter. * Over a Million Are Denied Bank Accounts for Past Errors --------------------------------------------------------- Jessica Silver-Greenberg, writing for The New York Times' DealBook, reported that mistakes like a bounced check or a small overdraft have effectively blacklisted more than a million low- income Americans from the mainstream financial system for as long as seven years as a result of little-known private databases that are used by the nation's major banks. According to the report, the problem is contributing to the growth of the roughly 10 million households in the United States that lack a banking account, a basic requirement of modern economic life. Unlike traditional credit reporting databases, which provide portraits of outstanding debt and payment histories, these are records of transgressions in banking products, the report said. Institutions like Bank of America, Citibank and Wells Fargo say that tapping into the vast repositories of information helps them weed out risky customers and combat fraud -- a mounting threat for banks. But consumer advocates and state authorities say the use of the databases disproportionately affects lower-income Americans, who tend to live paycheck to paycheck, making them more likely to incur negative marks after relatively minor banking missteps like overdrawing accounts, amassing fees or bouncing checks, the report added. When the databases were created more than 20 years ago, they were intended to help banks guard against serial fraud artists, like those accused of writing bogus checks. Since then, though, the databases have ensnared millions of low-income Americans, according to interviews with financial counselors, consumer lawyers and more than two dozen low-income people in California, Illinois, Florida, New York and Washington, the report further related. * UBS to Pay Fine over Mortgage-Bond Deal ----------------------------------------- Jean Eaglesham, writing for The Wall Street Journal, reported that UBS AG has agreed to pay less than $60 million to settle Securities and Exchange Commission allegations that it misled investors in a mortgage-bond deal that soured during the financial crisis, according to a person with knowledge of the case. According to the report, none of the Swiss bank's current or former employees will be charged as part of the civil action, the person said. The amount would be one of the smallest paid by a Wall Street firm to the SEC to settle allegations involving toxic securities sold leading up the 2008 financial meltdown. The deal could be announced as early as Wednesday, the person said, the report added. The pact will resolve an SEC investigation into a collateralized debt obligation, or CDO, that UBS created in 2007, the report related. CDOs are securities linked to pools of risky mortgages and other loans, sold to investors in slices of varying risks and returns. The SEC probe centered on allegations that UBS improperly retained upfront cash it received when it was constructing the CDO, the person said, the report further related. * UBS to Pay $885 Million to Settle U.S. Mortgage Suit ------------------------------------------------------ Clea Benson & Elena Logutenkova, writing for Bloomberg News, reported that UBS AG, Switzerland's largest bank, agreed to pay $885 million to Fannie Mae and Freddie Mac to settle claims that it improperly sold them mortgage-backed securities during the housing bubble, a U.S. regulator said. According to the report, the Federal Housing Finance Agency claimed Zurich-based UBS misrepresented the quality of loans underlying billions of dollars in residential mortgage-backed securities purchased by Fannie Mae and Freddie Mac. The firms have operated under U.S. conservatorship since 2008, when they were seized amid subprime mortgage losses that pushed them toward insolvency. UBS disclosed that it had reached an agreement in principle to settle the suit, the report related. The FHFA sued UBS in 2011 over $4.5 billion in residential mortgage-backed securities that UBS sponsored and $1.8 billion of third-party RMBS sold to Fannie Mae and Freddie Mac. The suits alleged losses of at least $1.2 billion plus interest. Fifteen other banks still need to resolve such lawsuits. "The satisfactory resolution of this matter provides greater clarity and certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae's and Freddie Mac's assets on behalf of taxpayers," Acting Director Edward J. DeMarco said in an e-mailed statement to Bloomberg. FHFA sued UBS and 17 other banks in 2011, seeking to recover losses on a total of $200 billion in mortgage-backed securities sold to the two government-sponsored enterprises, the report said. UBS is the third bank to reach an agreement with FHFA, the report noted. Citigroup Inc. and General Electric Co. both paid undisclosed amounts to settle the regulator's claims. The case is Federal Housing Finance Agency v. UBS Americas Inc., U.S. District Court, Southern District of New York (Manhattan). * CoreLogic Reports 55,000 Completed Foreclosures in June --------------------------------------------------------- CoreLogic(R), a leading residential property information, analytics and services provider, on July 30 released its June National Foreclosure Report which provides data on completed U.S. foreclosures and the national foreclosure inventory. According to CoreLogic, there were 55,000 completed foreclosures in the U.S. in June 2013, down from 68,000 in June 2012, a year- over-year decrease of 20 percent. On a month-over-month basis, completed foreclosures increased 2.5 percent from the 53,000* reported in May. As a basis of comparison, prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 4.5 million completed foreclosures across the country. As of June 2013, approximately 1 million homes in the U.S. were in some stage of foreclosure, known as the foreclosure inventory, compared to 1.4 million in June 2012, a year-over-year decrease of 28 percent. Month over month, the foreclosure inventory was down 2.9 percent from May 2013 to June 2013. The foreclosure inventory as of June 2013 represented 2.5 percent of all homes with a mortgage compared to 3.4 percent in June 2012. "So far this year, distressed inventories have fallen dramatically, down 14.4 percent, and serious delinquencies are down 15.9 percent," said Dr. Mark Fleming, chief economist for CoreLogic. "In the first six months of 2013, the stock of seriously delinquent mortgages has dropped by 412,000." "Completed foreclosures continued to drop for the 19th straight month. The improvement is broad-based, with 49 states posting a year-over-year decline in foreclosure rates in June," said Anand Nallathambi, president and CEO of CoreLogic. "The housing market is clearly on the mend, but we expect the ultimate conclusion of the present housing down cycle to be another several years away." Highlights as of June 2013: -- The five states with the highest number of completed foreclosures for the 12 months ending in June 2013 were: Florida (107,000), California (72,000), Michigan (63,000), Texas (48,000) and Georgia (44,000). These five states account for almost half of all completed foreclosures nationally. -- The five states with the lowest number of completed foreclosures for the 12 months ending in June 2013 were: District of Columbia (106), Hawaii (397), North Dakota (481), West Virginia (534) and Maine (692). -- The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (8.6 percent), New Jersey (6.0 percent), New York (4.8 percent), Connecticut (4.2 percent) and Maine (4.1 percent). -- The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.5 percent), Alaska (0.6 percent), North Dakota (0.7 percent), Nebraska (0.7 percent) and Colorado (0.8 percent). *May data was revised. Revisions are standard, and to ensure accuracy, CoreLogic incorporates newly released data to provide updated results. Table 1: Judicial Foreclosure States Foreclosure Ranking (Ranked by Completed Foreclosures Table 2: Non-Judicial Foreclosure States Foreclosure Ranking (Ranked by Completed Foreclosures) Table 3: Foreclosure Data for the Largest Core Based Statistical Areas (CBSAs) (Ranked by Completed Foreclosures) Figure 1: Number of Mortgaged Homes per Completed Foreclosure Figure 2: Foreclosure Inventory as of June 2013 Figure 3: Foreclosure Inventory by State Map Methodology The data in this report represents foreclosure activity reported through June 2013. This report separates state data into judicial vs. non-judicial foreclosure state categories. In judicial foreclosure states, lenders must provide evidence to the courts of delinquency in order to move a borrower into foreclosure. In non-judicial foreclosure states, lenders can issue notices of default directly to the borrower without court intervention. This is an important distinction since judicial states, as a rule, have longer foreclosure timelines, thus affecting foreclosure statistics. A completed foreclosure occurs when a property is auctioned and results in the purchase of the home at auction by either a third party, such as an investor, or by the lender. If the home is purchased by the lender, it is moved into the lender's real estate owned (REO) inventory. In "foreclosure by advertisement" states, a redemption period begins after the auction and runs for a statutory period, e.g., six months. During that period, the borrower may regain the foreclosed home by paying all amounts due as calculated under the statute. For purposes of this Foreclosure Report, because so few homes are actually redeemed following an auction, it is assumed that the foreclosure process ends in "foreclosure by advertisement" states at the completion of the auction. The foreclosure inventory represents the number and share of mortgaged homes that have been placed into the process of foreclosure by the mortgage servicer. Mortgage servicers start the foreclosure process when the mortgage reaches a specific level of serious delinquency as dictated by the investor for the mortgage loan. Once a foreclosure is "started," and absent the borrower paying all amounts necessary to halt the foreclosure, the home remains in foreclosure until the completed foreclosure results in the sale to a third party at auction or the home enters the lender's REO inventory. The data in this report accounts for only first liens against a property and does not include secondary liens. The foreclosure inventory is measured only against homes that have an outstanding mortgage. Homes with no mortgage liens can never be in foreclosure and are, therefore, excluded from the analysis. Approximately one-third of homes nationally are owned outright and do not have a mortgage. CoreLogic has approximately 85 percent coverage of U.S. foreclosure data. About CoreLogic CoreLogic -- http://www.corelogic.com-- is a property information, analytics and services provider in the United States and Australia. The company's combined data from public, contributory and proprietary sources includes over 3.3 billion records spanning more than 40 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, transportation and government. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in seven countries. * Equifax Says First Mortgage Severe Delinquencies Hit 5-Year Low ----------------------------------------------------------------- According to the latest Equifax National Consumer Credit Trends Report, the total balance of severely delinquent first mortgages (90 days past due or in foreclosure) in June 2013 is $325 billion, a five-year low and a decrease of more than 27% from same time a year ago ($450 billion). The total balance of first-mortgage loans that completed the foreclosure process and transitioned to bank-owned property or other severe derogatory status decreased more than 19%, from $16.7 billion in June 2012 to $13.5 billion in June 2013. This is the lowest level for June since 2007. "Rising home values are reducing the incentives for homeowners to default on their mortgage loans, resulting in more and more homeowners transitioning into positive or near-positive equity territory," said Equifax Chief Economist Amy Crews Cutts. "The implications of this trend are that more homeowners will be able to sell their homes without the hassles of negotiating a short sale or move to take a new job without worrying how they can afford to pay for two homes. The healing in the housing market is really gaining momentum and will fuel a stronger pace of economic recovery." Other highlights include: -- Of total severely delinquent first mortgage balances, loans opened 2010 and later represent only 7% ($21.7 billion). -- The total balance of first mortgages in foreclosure in June 2013 is $105 billion, a five-year low and a decrease of 38% from same time a year ago. -- In June 2013, the total balance of severely delinquent home equity revolving loans (including foreclosures) is $8.8 billion, a five year low and a year-over-year decrease of more than 31%. -- In that same time, the total balance of severely delinquent home equity installment loans (including foreclosures) is $4.3 billion, a five-year low and a year-over-year decrease of more than 28%. About Equifax, Inc. Equifax -- http://www.equifax.com-- is a global leader in consumer, commercial and workforce information solutions that provide businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 500 million consumers and 81 million businesses worldwide, and uses advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers. Headquartered in Atlanta, Equifax operates or has investments in 18 countries and is a member of Standard & Poor's (S&P) 500(R) Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2013, Equifax was named a Bloomberg BusinessWeek Top 50 company, was #3 in Fortune's Most Admired list in its category, and was named to InfoWeek 500 as well as the Fintech 100. * U.S. Residential Sales Up 8% From Year Ago, RealtyTrac Says ------------------------------------------------------------- RealtyTrac(R) on July 25 released its first-ever U.S. Residential Sales Report, which shows that U.S. residential property sales reached an estimated annualized pace of 5.3 million in June 2013, up 2 percent from the previous month and up 8 percent from a year ago. The report also shows a national median sales price of $168,000 for the month, up 3 percent from the previous month and up 5 percent from a year ago. The median price of a distressed sale -- in foreclosure or bank owned -- was $120,000, 34 percent below the median price of a non-distressed sale ($181,500). Other high-level findings from the report: -- All-cash purchases accounted for 30 percent of all sales in June, down from 31 percent of all sales in the previous month and a year ago. Metro areas with higher percentages of cash sales included Cape Coral-Fort Myers, Fla. (70 percent), Miami (64 percent), Las Vegas (62 percent), Sarasota, Fla. (59 percent), Tampa, Fla. (58 percent), and Detroit (56 percent). -- Institutional investor purchases (sales to non-lending entities that purchased at least 10 properties in the last 12 months) accounted for 9 percent of all residential sales in June, up from 8 percent of all sales in May but down from 10 percent of all sales in June 2012. States with the highest percentage of institutional investor sales included Georgia (23 percent), Nevada (16 percent), Arizona (15 percent), Oklahoma (13 percent), North Carolina (12 percent), and Florida (12 percent). -- Sales of bank-owned properties (REO) accounted for 9 percent of all residential sales in June, down from 10 percent in May 2013 and on par with a year ago. Metro areas where REO sales accounted for higher percentages of total sales included Detroit (24 percent), Modesto, Calif. (24 percent), Stockton, Calif. (24 percent), Las Vegas (22 percent), and Akron, Ohio (21 percent). -- Short sales (where the sale price is below the combined total of outstanding mortgages secured by the property) accounted for 14 percent of all residential sales in June, down from 15 percent in May but up from 8 percent a year ago. States with the highest percentage of short sales in June included Nevada (30 percent), Florida (29 percent), Maryland (21 percent), Tennessee (19 percent), and Arizona (19 percent). -- Metro areas with annual increases in median prices of 20 percent or more included Sacramento, Calif. (35 percent), San Francisco (30 percent), Los Angeles (27 percent), Las Vegas (26 percent), and Phoenix (25 percent). -- States with the biggest distressed sale discount included Ohio (58 percent), Michigan (48 percent), Illinois (47 percent), Massachusetts (46 percent), and Wisconsin (45 percent). "The U.S. housing market is slowly but surely moving toward a more normalized and sustainable pattern after a flurry of institutional and cash buyers flocked to residential real estate last year, pushing up prices and picking clean the best inventory available in many areas," said Daren Blomquist, vice president at RealtyTrac. "Rising home values should continue to unlock more non-distressed inventory while also pricing institutional investors out of more markets, which, combined with rising interest rates, will cool off the pace of price appreciation." "Still, lingering distressed inventory in many markets will continue to provide fodder for institutional investors and cash buyers in those markets," Mr. Blomquist continued. "Markets where sales increased in June tend to be in states with that lingering distressed inventory, whereas markets where sales decreased tend to be in states that more quickly absorbed distressed inventory thanks to a relatively fast foreclosure process and strong demand." Local broker perspectives "I have an increasing number of home buyers in the Oklahoma City and Tulsa markets compared to a year ago but half of the REO inventory. This is causing a feeding frenzy that's driving up the price of homes," said Sheldon Detrick, CEO of Prudential Detrick/Alliance Realty in Oklahoma City and Tulsa. "Home values have increased so much that fewer people are upside-down on their homes. Last month's increase in short sales is the tail end as short sales are becoming rarer. I guarantee there will not be any new short sales in the future." "There continues to be an increase in institutional investors in the Reno area based on the level of distress the market encountered during the economic downturn. Their purchases vary widely on a monthly basis depending on availability," said Craig King, COO at Chase International brokerage serving the Reno and Lake Tahoe markets. "As the market continues to improve, the amount of REO and short sales have dramatically declined, and the market as a whole has made a return to equity sales." RealtyTrac(R) -- http://www.realtytrac.com-- is an online marketplace for real estate data. * Obama to Offer New Deal on Corporate Taxes, Jobs -------------------------------------------------- Peter Nicholas and John McKinnon, writing for The Wall Street Journal, reported that hoping to break an impasse, President Barack Obama will extend a new offer to congressional Republicans in which he will back an overhaul of the corporate-tax system in exchange for a guarantee that a resulting one-time windfall be used to underwrite various job-creation proposals. According to the report, Mr. Obama will lay out the plan in a speech he is to deliver in Chattanooga, Tenn., in a bid to win over Republican lawmakers who have opposed White House requests for new spending on roads and bridges and other projects aimed at boosting employment. The deal is part of a renewed White House effort to jump-start its domestic agenda and focus attention on jobs and the economy, the report said. Last week, Mr. Obama began a series of speeches devoted to the theme that Washington needs to take more aggressive steps to shore up the middle class and to boost long-term economic growth, the report related. He is also rethinking his strategy for motivating Congress to act. In Tuesday's speech, his aim is to entice Republican lawmakers to agree to jobs proposals he has long advocated in exchange for tax changes that are important to the GOP's allies among big businesses. "As part of his efforts to focus Washington on the middle class, in Tennessee the president will call on Washington to work on a grand bargain focused on middle-class jobs by pairing reform of the business-tax code with a significant investment in middle- class jobs," said Dan Pfeiffer, senior adviser to the president, the report further related. * New Defaults Trouble Mortgage Program --------------------------------------- Shaila Dewan, writing for The New York Times, reported that banks and other mortgage servicers have accepted $815 million in taxpayer-funded incentives for helping homeowners who have since redefaulted on their home loans, a watchdog for the Treasury Department's Troubled Asset Relief Program, or TARP, reported. According to the report, more than than a third of homeowners who received loan modifications under TARP's mortgage modification program have since stopped paying, but servicers kept the money they received for modifying those loans, according to a report by Christy L. Romero, the special inspector for TARP. Many of the homeowners received scant relief, with a large majority benefiting from a reduction of less than 10 percent on their monthly payments, according to an analysis by Ms. Romero's office, the report related. The Treasury has spent only about a fifth of the $38.5 billion allocated to help homeowners under TARP, the report said. Any TARP money not spent by the end of 2015 will be returned to the general fund. "Treasury took extraordinary action to bail out the banks," Ms. Romero said, the report further related. "They still have to do the same for homeowners. The idea was not to put money into the banks and then have them fail later, and the same is true for homeowners." * Regulators Weigh Easing of Mortgage Rules ------------------------------------------- Nick Timiraos and Alan Zibel, writing for The Wall Street Journal, reported that, concerned that tougher mortgage rules could hamper the housing recovery, regulators are preparing to relax a key plank of the rules proposed after the financial crisis. According to the report, the watchdogs, which include the Federal Reserve and Federal Deposit Insurance Corp., want to loosen a proposed requirement that banks retain a portion of the mortgage securities they sell to investors, according to people familiar with the situation. The plan, which hasn't been finalized and could still change, would be a major U-turn for the regulators charged with fleshing out the Dodd-Frank financial-overhaul law passed three years ago, the report said. It also would represent a victory for an unusual alliance of banks and consumer advocates that opposed the new rules, arguing that they would restrict lending and do little to make the financial system safer, the report added. Advocates of more stringent standards said that a broad exemption to the risk-retention rules would undermine the initial goal of imposing market discipline, the report said. "My sense is that Washington has lost its political will for serious reform of the securitization market," said Sheila Bair, who served as FDIC chairman until 2011. * Regulators Face Scrutiny on Banks' Commodities at Senate Hearing ------------------------------------------------------------------ Cheyenne Hopkins, writing for Bloomberg News, reported that U.S. banks' ownership and trading of physical commodities will face further scrutiny when the heads of the Commodity Futures Trading Commission and Securities and Exchange Commission testify before lawmakers. According to the report, Senator Sherrod Brown, the Ohio Democrat who led a hearing on the issue last week, said he plans to question the CFTC's Gary Gensler and the SEC's Mary Jo White on their oversight when the two chairmen appear before the chamber's Banking Committee on implementation of Dodd-Frank Act reforms. JPMorgan Chase & Co. is among lenders facing pressure after the Federal Reserve said it will review a decade-old decision letting them trade commodities seen as complementary to banking, the report related. JPMorgan, which agreed to pay $410 million to settle U.S. claims that it manipulated power markets, said on July 26 that it will sell or spin off holdings including warehouses, stakes in power plants and traders of gas and coal. "Banks should focus on core banking activities," Brown said in an e-mail last week to Bloomberg. "Our economy is strengthened when financial conflict of interest and financial risk are reduced." Meghan Dubyak, a spokesman for Brown, said the senator hopes to use the hearing to examine the CFTC's authority to address anti- competitive practices such as aluminum hoarding and to encourage the agency to act, the report added. * Senate Scrutiny of Bank Commodity Holdings Has Levin's Backing ---------------------------------------------------------------- Cheyenne Hopkins, writing for Bloomberg News, reported that U.S. Senator Carl Levin, the Michigan Democrat who leads the Permanent Subcommittee on Investigations, said lawmakers may use subpoena power to examine banks' trading and ownership of physical commodities. "We have been into this issue for a long time and it's a very, very significant issue," Levin said in an interview after a Banking subcommittee hearing led by Senator Sherrod Brown on whether power plants and oil refineries should be owned by financial holding companies such as JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, the report related. The potential for conflicts of interest and manipulating prices to benefit their proprietary holdings "is huge," said Levin, whose subcommittee held hearings over Goldman Sachs's packaging and sale of toxic mortgage-backed securities and JPMorgan's "London Whale" trading losses, the report further related. "I'm very, very glad that Senator Brown's subcommittee got into it [last Wednesday]," Levin said, the report added. "He and I have talked and he is hopefully going to continue and we're going to continue looking as we have I think six months or a year." Levin said he may hold hearings in his own subcommittee if he isn't satisfied with the outcome of Brown's effort, the report said. * BOND PRICING -- For Week From July 29 to Aug. 2, 2013 ------------------------------------------------------- Company Ticker Coupon Bid Price Maturity Date ------- ------ ------ --------- ------------- AES Eastern Energy LP AES 9.670 3.100 1/2/2029 AES Eastern Energy LP AES 9.000 1.750 1/2/2017 AGY Holding Corp AGYH 11.000 52.063 11/15/2014 ATP Oil & Gas Corp ATPG 11.875 1.250 5/1/2015 ATP Oil & Gas Corp ATPG 11.875 0.750 5/1/2015 ATP Oil & Gas Corp ATPG 11.875 0.750 5/1/2015 Affinion Group Holdings Inc AFFINI 11.625 58.500 11/15/2015 Alion Science & Technology Corp ALISCI 10.250 64.142 2/1/2015 Buffalo Thunder Development Authority BUFLO 9.375 31.875 12/15/2014 California Baptist Foundation CALBAP 7.800 6.222 5/15/2015 Cengage Learning Acquisitions Inc TLACQ 10.500 19.750 1/15/2015 Cengage Learning Acquisitions Inc TLACQ 12.000 12.500 6/30/2019 Cengage Learning Acquisitions Inc TLACQ 13.250 1.375 7/15/2015 Cengage Learning Acquisitions Inc TLACQ 10.500 19.750 1/15/2015 Cengage Learning Acquisitions Inc TLACQ 13.250 1.375 7/15/2015 Cengage Learning Holdco Inc TLACQ 13.750 1.375 7/15/2015 Champion Enterprises Inc CHB 2.750 0.375 11/1/2037 Eastman Kodak Co EK 7.000 3.100 4/1/2017 Eastman Kodak Co EK 9.200 3.600 6/1/2021 Eastman Kodak Co EK 9.950 2.100 7/1/2018 Energy Conversion Devices Inc ENER 3.000 7.875 6/15/2013 Energy Future Holdings Corp TXU 5.550 68.260 11/15/2014 Federal National Mortgage Association FNMA 5.240 99.625 8/7/2018 Ferro Corp FOE 6.500 98.750 8/15/2013 FiberTower Corp FTWR 9.000 8.750 1/1/2016 GMX Resources Inc GMXR 9.000 15.000 3/2/2018 GMX Resources Inc GMXR 4.500 4.000 5/1/2015 Gasco Energy Inc GSXN 5.500 17.000 10/5/2015 HP Enterprise Services LLC HPQ 3.875 94.525 7/15/2023 JPMorgan Chase & Co JPM 2.610 99.068 8/13/2013 James River Coal Co JRCC 4.500 40.400 12/1/2015 LBI Media Inc LBIMED 8.500 30.000 8/1/2017 Lehman Brothers Holdings Inc LEH 1.000 21.375 8/17/2014 Lehman Brothers Holdings Inc LEH 1.000 21.375 8/17/2014 Lehman Brothers Holdings Inc LEH 1.000 21.375 3/29/2014 Lehman Brothers Holdings Inc LEH 0.250 21.375 1/26/2014 Lehman Brothers Holdings Inc LEH 1.250 21.375 2/6/2014 Lehman Brothers Inc LEH 7.500 16.500 8/1/2026 MF Global Holdings Ltd MF 1.875 43.000 2/1/2016 PMI Group Inc/The PMI 6.000 27.500 9/15/2016 Penson Worldwide Inc PNSN 12.500 24.125 5/15/2017 Penson Worldwide Inc PNSN 8.000 8.625 6/1/2014 Penson Worldwide Inc PNSN 12.500 24.125 5/15/2017 Platinum Energy Solutions Inc PLATEN 14.250 57.850 3/1/2015 Powerwave Technologies Inc PWAV 1.875 0.875 11/15/2024 Powerwave Technologies Inc PWAV 1.875 0.875 11/15/2024 Residential Capital LLC RESCAP 6.875 30.500 6/30/2015 Savient Pharmaceuticals Inc SVNT 4.750 22.939 2/1/2018 School Specialty Inc SCHS 3.750 40.000 11/30/2026 THQ Inc THQI 5.000 50.500 8/15/2014 TMST Inc THMR 8.000 9.500 5/15/2013 Terrestar Networks Inc TSTR 6.500 10.000 6/15/2014 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15.000 25.500 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 6.875 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 6.750 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.500 7.200 11/1/2016 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15.000 26.200 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 6.750 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.500 7.000 11/1/2016 UAL 2000-2 Pass Through Trust UAL 7.762 2.008 4/29/2049 USEC Inc USU 3.000 28.150 10/1/2014 Verso Paper Holdings LLC / Verso Paper Inc VRS 11.375 50.100 8/1/2016 WCI Communities Inc/Old WCI 4.000 0.375 8/5/2023 Western Express Inc WSTEXP 12.500 66.375 4/15/2015 Western Express Inc WSTEXP 12.500 66.375 4/15/2015 ********* 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 ***