/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130819.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 19, 2013, Vol. 17, No. 229 Headlines 1ST GPS: Case Summary & Unsecured Creditor 91 WEST CLINTON: Case Summary & 2 Unsecured Creditors 1250 OCEANSIDE: Exit Plan Filed for Hokulia Project ALION SCIENCE: Incurs $7.1 Million Net Loss in June 30 Quarter ALLIED NEVADA: Moody's Cuts CFR to Caa1 & Sr. Notes Rating to Caa2 ALPHA NATURAL: Bank Debt Trades At 4% Off AMERICAN AIRLINES: Aug. 29 Status Hearing on Exit Plan AMERICAN APPAREL: Unveils Initial Sales Results for July 2013 AMERICAN APPAREL: Had $37.5 Million Net Loss in Second Quarter ANCHOR BANCORP: Files for Bankruptcy, Gets $175MM Add'l Capital ASHTON GROVE: Case Summary & 20 Largest Unsecured Creditors BARAJAS & ASSOCIATES: Case Summary & 20 Largest Unsec. Creditors BG MEDICINE: Incurs $4.8 Million Net Loss in Second Quarter BILL PULLUM REALTY: Voluntary Chapter 11 Case Summary BIOLIFE SOLUTIONS: Incurs $282,500 Net Loss in Second Quarter BLACKPOINT LAKE: Case Summary & 2 Unsecured Creditors BOMBARDIER INC: S&P Revises Outlook to Neg. & Affirms 'BB' CCR BUDINGER WINDMILL: Case Summary & 13 Unsecured Creditors CAESARS ENTERTAINMENT: Bank Debt Trades at 10% Off CETERA FINANCIAL: Moody's Revises Outlook on B3 CFR to Positive CHG ENERGY: Voluntary Chapter 11 Case Summary CHRIST LUTHERAN: Case Summary & 4 Unsecured Creditors CINEMARK HOLDINGS: Dividend Hike No Impact on Moody's Ratings CLEARWIRE CORP: S&P Withdraws 'BB-' Corporate Credit Rating COMET LACE: Case Summary & 12 Unsecured Creditors CROWN CASTLE: Fitch Assigns 'BB+' Rating to $500MM Term Loan CROWN CASTLE: S&P Retains 'B+' Term Loan Rating Following Add-On DELTATHREE INC: Incurs $414,000 Net Loss in Second Quarter DETROIT, MI: Milliman Pension Studies Support Emergency Manager DETROIT, MI: Deadline Today to Challenge Chapter 9 Eligibility DEX MEDIA EAST: Bank Debt Trades at 23% Off DEX MEDIA WEST: Bank Debt Trades at 16% Off DIVERSITY MANAGEMENT: Case Summary & Creditors List DIGERATI TECHNOLOGIES: Bid to Incur Debt Denied DYNASIL CORP: Fails to Comply with Loan Financial Covenants EASTMAN KODAK: Reports Improvement in Earnings for Second Quarter EASTMAN KODAK: US Trustee Questions Incentive Payment Provision EASTMAN KODAK: Court Denies Appointment of Equity Committee EASTMAN KODAK: Wins Court Approval to Assume IP Contracts ENERGY SERVICES: Amends Forbearance Pact with United Bank EXPLO SYSTEMS: Case Summary & 20 Largest Unsecured Creditors FIRST FINANCIAL: Incurs $1.4 Million Net Loss in Second Quarter FLABEG SOLAR: Case Summary & 20 Largest Unsecured Creditors FNBH BANCORP: To Raise $17.1 Million From Securities Offering FLOOR RESOURCES: Case Summary & 20 Largest Unsecured Creditors FREESEAS INC: Issues Add'l 950,000 Settlement Shares to Hanover FMW COMPOSITE: Case Summary & 20 Largest Unsecured Creditors FRIENDFINDER NETWORKS: Obtains Forbearance Until August 31 GENERAL CABLE: Moody's Keeps Corp Family Rating at Ba3 GOLDFIELD 1: Case Summary & 6 Unsecured Creditors GPSH INC: Case Summary & Unsecured Creditor GUNDLE/SLT ENVIRONMENTAL: S&P Lowers CCR to 'CCC+'; Outlook Neg. HAAS ENVIRONMENTAL: Section 341(a) Meeting Set on Sept. 19 HD SUPPLY: Moody's Affirms B3 CFR & Cuts Sr. Notes Rating to Caa3 HOLYOKE HOSPITAL: Moody's Affirms 'Ba3' Rating; Outlook Negative IPC INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors J.C. PENNEY: Ackman Steps Down From Board J.C. PENNEY: Bank Debt Trades at 4% Off JAMES RIVER: Amends 24.6 Million Shares Resale Prospectus JEFFERSON COUNTY, AL: Moody's Affirms Ca Rating on Rev. Warrants K-V PHARMACEUTICAL: Clindesse Cream Available for Prescribing KIDZ N ACTION: Case Summary & 10 Unsecured Creditors LIBERACE FOUNDATION: Plan Outline Hearing Continued to Sept. 25 MARTIN MIDSTREAM: S&P Revises Outlook to Stable & Affirms 'B+' CCR MEDICAL PROPERTIES: $150MM Senior Notes Get Moody's Ba1 Rating MEDICAL PROPERTIES: S&P Retains BB Sr. Unsec. Rating After Add-On MERRIMACK PHARMACEUTICALS: Incurs $30.2 Million Net Loss in Q2 MOHDSAMEER ALJANEDI: Case Summary & 12 Unsecured Creditors NPS PHARMACEUTICALS: Had $12.4 Million Net Loss in 2nd Quarter OM GROUP: S&P Withdraws 'BB' Corporate Credit Rating ONCURE HOLDINGS: Sec. 341 Meeting Continued to Aug. 20 OTELCO INC: Files Form 10-Q, Posts $109.6MM Net Income in Q2 PARK-OHIO INDUSTRIES: Moody's Changes Ratings Outlook to Positive PATRIOT COAL: Labor Agreements Ratified; Hearing Set for Aug. 20 PLAYA HOTELS: S&P Assigns 'B' CCR & Rates $400MM Facility 'BB-' PLUG POWER: Incurs $9.3 Million Net Loss in Second Quarter PMI GROUP: Suspends Filing of Reports With SEC PROCESS CONTROLS: Voluntary Chapter 11 Case Summary PULTEGROUP INC: Fitch Affirms 'BB' Issuer Default Rating RAHEEL FOODS: Case Summary & 14 Unsecured Creditors RG STEEL: Wins Court Approval of Longer Plan-Filing Exclusivity SAGE COLLEGES: Moody's Changes Ratings Outlook to Negative SANCTIONED AUTOMOTIVE: Case Summary & 20 Largest Unsec. Creditors SCHOLAR TOTS: Case Summary & 17 Unsecured Creditors SINCLAIR BROADCAST: S.A.C. Capital Holds 5.2% of Class A Shares SHERIDAN GROUP: Posts $105,000 Net Income in Second Quarter STELLAR BIOTECHNOLOGIES: Updates Shareholders on Recent Progress STEREOTAXIS INC: Incurs $3 Million Net Loss in Second Quarter SUN BANCORP: Files Form 10-Q, Posts $678,000 Net Income in Q2 SUNTECH POWER: Regains Compliance With NYSE's Listing Rule TNP STRATEGIC: Extends Forbearance with Keybank Until Jan. 31 TPF II LC: S&P Raises Prelim. Rating on Credit Facilities to 'BB-' TRAILBLAZER'S INC: Voluntary Chapter 11 Case Summary TRUSTEES OF YWCA: Case Summary & 3 Unsecured Creditors TWIN SILOS: Case Summary & 8 Unsecured Creditors TXU CORP: Bank Debt Trades at 31% Off WALTER ENERGY: Bank Debt Trades at 6% Off WEB.COM: Moody's Revises Outlook to Positive & Keeps CFR at B1 WHIRLPOOL CORP: Investment in Hefei Sanyo is Credit Positive ZOGENIX INC: Reports $13.3 Million Net Loss in Second Quarter * Fitch Says Delinquencies and Foreclosures Decreasing * Fitch: U.S. Corporate Pension Plans Underfunded Status Improves * Moody's Notes Looming Challenges for Colleges and Universities * Moody's Says Progress in LIBOR Litigation is Credit Positive * Moody's Sees Dip in Covenant Quality for North America in July * Moody's Notes Improving Commercial Real Estate Fundamentals * Moody's Points to Risks Facing IMF Support Program Countries * Moody's Confirms 'Ba1' Rating on Watsonville RDA TABs * BOND PRICING -- For The Week From Aug. 12 to 16, 2013 ********* 1ST GPS: Case Summary & Unsecured Creditor ------------------------------------------ Debtor: 1st GPS, Inc. aka GS Auto Body and Fiberglass 3613 Foothill Boulevard La Cresenta, CA 91214 Bankruptcy Case No.: 13-30303 Chapter 11 Petition Date: August 12, 2013 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Richard M. Neiter Debtor's Counsel: Neil C. Evans, Esq. LAW OFFICES OF NEIL C. EVANS 13351D Riverside Drive, Suite 612 Sherman Oaks, CA 91423 Tel: (818) 802-8333 Fax: (818) 707-8983 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Petros Gumrikyan, president. The Company's list of its largest unsecured creditor filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Khachik Kesheshyan, Shaheed Alleged Fraudulent $1,400,000 Kesheshyan, Hamlet Derhovanessian Conveyance c/o Michael Rubin & Associates 18321 Ventura Boulevard, Suite 815 Tarzana, CA 91356 91 WEST CLINTON: Case Summary & 2 Unsecured Creditors ----------------------------------------------------- Debtor: 91 West Clinton LLC 91 W. Clinton Avenue Tenafly, NJ 07670 Bankruptcy Case No.: 13-27516 Chapter 11 Petition Date: August 9, 2013 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Rosemary Gambardella Debtor's Counsel: David S. Catuogno, Esq. FORMAN HOLT ELIADES & YOUNGMAN LLC 80 Route 4 East, Suite 290 Paramus, NJ 07652 Tel: (201) 845-1000 E-mail: dcatuogno@formanlaw.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 two unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/njb13-27516.pdf The petition was signed by Marina Blyumin, principal. 1250 OCEANSIDE: Exit Plan Filed for Hokulia Project --------------------------------------------------- Nancy Cook Lauer, writing for West Hawaii Today, reports that debtors 1250 Oceanside Partners, Pacific Star Company and Front Nine, together with investment firm Sun Kona Finance I LLC, which acquired Bank of Scotland's loans late last year, submitted a joint consolidated plan of reorganization for the bankrupt Hokulia luxury development. The Plan proponents say the plan will revive the long-stalled development and ensure the county gets its $20 million to complete the Mamalahoa bypass. A hearing on the plan is scheduled for Sept. 16 at U.S. Bankruptcy Court. According to the report, the debtor entities have $68 million in assets but liabilities of $646 million. According to the report, Craig Pickett, manager of debtor entities for Sun Kona Finance I, said the plan will address Oceanside's $20 million obligation to the county and assure the funds will be available to complete the road. The report relates Hawaii County Corporation Counsel Lincoln Ashida said the county is "first in line" ahead of other creditors for the money. As a secured creditor for $20 million, it is on the top of the creditor list, with 80 Keopuka lots, valued at more than $20 million, as collateral. According to the report, the restructuring plan also includes more than $1.5 million in community contributions for affordable housing, drug abuse initiatives and scholarship initiatives. The plan also addresses protection of cultural and historical sites, access rights and the establishment of agricultural and cultural preserves, said Chief Restructuring Officer G. Rick Robinson. The report notes the restructuring plan includes a $65 million line of credit from Sun Kona Finance to cover debtors' obligations and operating shortfalls as they move forward to complete the project. About 1250 Oceanside Partners 1250 Oceanside Partners, Front Nine LLC, and Pacific Star Company LLC, owners of the 1,800-acre Hokuli'a luxury real estate development near Kona on the island of Hawaii, sought Chapter 11 protection (Bankr. D. Hawaii Lead Case No. 13-00353) on March 6, 2013, in Honolulu. The Debtors were formed by developer Lyle Anderson and were part of his development "empire", which included developments in Hawaii, Arizona, New Mexico and Scotland. The secured lender, Bank of Scotland, declared a default and obtained control of the Debtors in January 2008. Development of the property, which has 3.5 miles of waterfront on the Kona coast, stopped after the developers were declared in default under the loan. Oceanside and Front Nine own most of the land within the Hokuli'a project, which is the principal development. Pacific Star owns the land referred to as "Keopuka", near Hokuli'a. The Hokuli'a was to have 730 residential units, an 18-hole golf course, club and other amenities. The Debtors say their assets are worth $68.1 million while they are jointly liable to $625 million of debt to Sun Kona Finance LLC, which acquired the Hawaii loan from Bank of Scotland. Simon Klevansky, Esq., Alika L. Piper, Esq., and Nicole D. Stucki, Esq., at Klevansky Piper, LLP, represent the Debtor in its restructuring effort. They replace the law firm of Gelber, Gelber & Ingersoll as general counsel. A creditors committee has not been appointed. James A. Wagner, Esq., at Wagner Choi & Verbrugge, represents Sun Kona Finance I, LLC and Sun Kona Finance II, LLC, as counsel. ALION SCIENCE: Incurs $7.1 Million Net Loss in June 30 Quarter -------------------------------------------------------------- Alion Science and Technology Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $7.08 million on $220.94 million of contract revenue for the three months ended June 30, 2013, as compared with a net loss of $8.86 million on $211.51 million of contract revenue for the same period during the prior year. For the nine months ended June 30, 2013, the Company reported a net loss of $27.23 million on $646.55 million of contract revenue, as compared with a net loss of $31.92 million on $598.51 million of contract revenue for the same period a year ago. Alion Science incurred a net loss of $41.44 million for the year ended Sept. 30, 2012, a net loss of $44.38 million for the year ended Sept. 30, 2011, and a net loss of $15.23 million for the year ended Sept. 30, 2010. As of June 30, 2013, the Company had $632.86 million in total assets, $799.58 million in total liabilities, $111.01 million in redeemable common stock, $20.78 million in common stock warrants, $149,000 in accumulated other comprehensive loss and a $298.37 million accumulated deficit. A copy of the Form 10-Q is available for free at: http://is.gd/Btz96D Alion Science disclosed on August 9 the following non-public information: "Consolidated EBITDA (as defined in the Company's Credit Agreement dated as of March 22, 2010, as amended) for the twelve months ended June 30, 2013, was approximately $72.3 million, and for the three months ended June 30, 2013, was approximately $18.3 million." A copy of the Form 8-K report is available for free at: http://is.gd/4IQY7b About Alion Science Alion Science and Technology Corporation, based in McLean, Virginia, is an employee-owned company that provides scientific research, development, and engineering services related to national defense, homeland security, and energy and environmental analysis. Particular areas of expertise include communications, wireless technology, netcentric warfare, modeling and simulation, chemical and biological warfare, program management. Bankruptcy Warning The Company said in its annual report for the fiscal year ended Sept. 30, 2012, "Our credit arrangements, including our unsecured and secured note indentures and our revolving credit facility include a number of covenants. We expect to be able to comply with our indenture covenants and our credit facility financial covenants for at least the next twenty-one months. If we were unable to meet financial covenants in our revolving credit facility in the future, we might need to amend the revolving credit facility on less favourable terms. If we were to default under any of the revolving credit facility covenants, we could pursue an amendment or waiver with our existing lenders, but there can be no assurance that lenders would grant an amendment or waiver. In light of current credit market conditions, any such amendment or waiver might be on terms, including additional fees, increased interest rates and other more stringent terms and conditions materially disadvantageous to us. If we were unable to meet these financial covenants in the future and unable to obtain future covenant relief or an appropriate waiver, we could be in default under the revolving credit facility. This could cause all amounts borrowed under it and all underlying letters of credit to become immediately due and payable, expose our assets to seizure, cause a potential cross-default under our indentures and possibly require us to invoke insolvency proceedings including, but not limited to, a voluntary case under the U.S. Bankruptcy Code. ALLIED NEVADA: Moody's Cuts CFR to Caa1 & Sr. Notes Rating to Caa2 ------------------------------------------------------------------ Moody's Investors Service downgraded the Corporate Family and Probability of Default Ratings of Allied Nevada Gold Corp. to Caa1 from B3 and Caa1-PD from B3-PD. At the same time, Allied Nevada's senior unsecured notes rating was downgraded to Caa2 from B3 and the Speculative Grade Liquidity rating was lowered to SGL-4 from SGL-3. The outlook is negative. Downgrades: Issuer: Allied Nevada Gold Corp. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Corporate Family Rating, Downgraded to Caa1 from B3 Senior Unsecured Regular Bond/Debenture Jun 1, 2019, Downgraded to Caa2, LGD 4, 67% from B3 Outlook Actions: Issuer: Allied Nevada Gold Corp. Outlook, Changed To Negative from Stable Ratings Rationale: The downgrade to a Caa1 Corporate Family Rating reflects the challenges confronting Allied Nevada which will likely result in operating and financial performance, debt protection metrics and liquidity profile tracking meaningfully below Moody's original expectations, particularly should gold and silver prices continue to decline from current levels and/or the company encounter more operating issues at its Hycroft mine. During both 2012 and the first half of 2013, a series of obstacles that caused delays with the ramp-up at Hycroft resulted in Allied Nevada underachieving its production target for 2012 and revising its 2013 target downward to 175,000 to 200,000 ounces of gold (from 225,000 to 250,000 ounces) and 0.9 million to 1.1 million ounces of silver (from 1.5 million to 1.8 million ounces). The lower volumes and additional expenses to remediate these operating issues will result in higher cash costs. The company expects net cash costs (including silver by-product credits) for 2013 to range from $800/oz to $825/oz versus an average of $709/oz during the first half of 2013. These operating issues and the corresponding effect on financial performance, which are reflective of the risks faced by companies that own single mines, are further compounded by the recent slide in metals prices with gold and silver average spot prices in July 2013 down around 23% and 37%, respectively since the beginning of the year. Due to the significantly lower cash flows that Allied Nevada expects to achieve from Hycroft, the company recently announced that it has postponed the construction of its planned 130,000 tons per day (TPD) mill until a new feasibility study has been completed, the date of which has not yet been determined. The mill was a key component to achieving an earlier production target of approximately 552,000 ounces of gold and 25.5 million ounces of silver per year from 2015 to 2024. As a consequence of the deferral of the mill's construction and recent production delays, the company has cut its long-term annual production target to an average of 225,000 ounces of gold and 2.7 million ounces of silver through 2020, assuming heap leach operations only. Additionally, operating the mill would have allowed the company to process higher grade sulfide ore which would have benefitted the mine's cost position versus relying only on heap leach operations that can only process oxide ore which has a lower grade than sulfide ore. As a result of these combined headwinds, particularly should gold prices reach an average of $1,200/oz, Moody's anticipates that the company's key debt protection metrics will deteriorate such that debt-to-EBITDA will exceed 6.5x and EBIT-to-interest and cash from operations less dividends-to-debt will fall below 2.5x and 10%, respectively, over the next 12 to 18 months. Credit metrics at these levels exceed the range for the B3 rating and are commensurate with a level of financial risk for which a lower rating at the "Caa" level is more appropriate. Moody's recognizes that the company has taken steps to mitigate the aforementioned challenges. These steps include cutting workforce headcount and reducing planned capital expenditures in 2014 to less than $50 million, mainly by deferring the mill's construction. However, Moody's believes that these initiatives will not sufficiently offset Allied Nevada's reduced production profile, operating cost pressures, higher cost profile and lower gold and silver prices. The lowering of Allied Nevada's Speculative Grade Liquidity to SGL-4 from SGL-3 reflects Moody's view that Allied Nevada will maintain weak liquidity over the next four quarters. Moody's anticipates that free cash flow will be negative due to lower gold prices, cost inflation, and high levels of near-term capital expenditures. The company has forecasted CAPEX of around $470 million in 2013 (approximately $204 million spent during the first half of 2013) to complete development projects such as the heap leach expansion, crusher and Merrill --Crowe facility. Consequently, at Moody's projected rate of cash burn, it forecasts that the company will likely consume a substantial portion of its cash balances (approximately $245 million at June 30, 2013) by the end of 2013. Furthermore, Moody's anticipates tighter cushions in the financial maintenance covenants under the company's revolving credit facility and certain of its capital lease financings. These include a maximum leverage ratio (net debt-to-EBITDA) of 3.0 times, minimum interest coverage ratio of 3.0 times and minimum tangible net worth equal to the sum of $392 million and 25% of positive net income. The company had previously amended its covenants for the testing periods ending March 31, 2013 and June 30, 2013 to comply with the required financial ratios. Moody's expects that the September 30, 2013 testing period will also need such an amendment. The negative outlook reflects Moody's view that Allied Nevada will be challenged to maintain compliance with its financial maintenance covenants under the current terms of the credit agreement and the uncertainty over the timing of when the company can resolve its covenant compliance issues on a more permanent basis. The outlook also incorporates the potential for further price and cost headwinds and the risk that, as a single mine operation, Allied Nevada may encounter unexpected additional production issues that would further delay the time horizon for achieving its current annual production target. The Caa2 rating on Allied Nevada's senior unsecured notes reflects their junior position in the capital structure relative to the secured revolver, which was upsized to $120 million from $30 million on October 2012. Borrowings under the revolver or the further issuance of secured debt, which would have a priority position in the company's capital structure, could have a negative impact on the unsecured rating. Ratings could be downgraded if prices of gold and silver decline sharply, if operational problems at Hycroft are not resolved, and if input costs escalate such that profit margins, debt protection metrics and the company's liquidity position deteriorate significantly. Quantitatively, metrics could be lowered if debt/EBITDA is likely to exceed 7.0x, EBIT/interest likely to fall below 1.5x and (cash from operations less dividends)/debt likely to fall below 6%. Furthermore, the rating could be downgraded if a longer-lasting solution to tightening cushions under Allied Nevada's financial covenants is not achieved or if its liquidity profile deteriorates to the point that the company loses access to its revolver. Given Allied Nevada's product and geographic concentration, dependence of its performance on a single mine, exposure to volatile gold prices, inflationary pressures on operating and development costs, substantial near-term capital expenditures resulting in negative free cash flow and potential covenant compliance issues, an upward movement in the rating is unlikely at this point. The outlook could be changed to stable if the company can achieve and sustain sufficient cushions under its financial covenants and demonstrate stable operating performance even at lower gold and silver prices. The principal methodology used in this rating was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Allied Nevada Gold Corp. is a gold producer which operates the Hycroft Mine in Nevada as its single operating mine. Hycroft is currently an open pit, run-of-mine and crushed ore heap leach gold mine that concurrently produces silver as a byproduct. In the 12 months ending June 30, 2013, the company produced approximately 151,000 ounces of gold and 740,600 ounces of silver. Assuming that Hycroft continues to operate as a heap leach only mine, the company has targeted an annual production rate of 225,000 ounces of gold and 2.7 million ounces of silver through 2020. The company also owns six exploration properties in Nevada, including Hasbrouck, Mountain View, Three Springs, Wildcat, Pony Creek/Elliot Dome and Maverick Springs, a 45% joint venture with Silver Standard Resources Inc., although further exploration activities have been suspended at the present time. Revenues for the 12 months ending June 30, 2013 were approximately $250 million. ALPHA NATURAL: Bank Debt Trades At 4% Off ----------------------------------------- Participations in a syndicated loan under which Alpha Natural Resources, Inc. is a borrower traded in the secondary market at 95.83 cents-on-the-dollar during the week ended Friday, August 16, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a drop of 0.25 of percentage points from the previous week, The Journal relates. Alpha Natural pays 275 basis points above LIBOR to borrow under the facility. The bank loan matures on May 31, 2020. The bank debt carries Moody's Ba1 rating and S&P's BB rating. The loan is one of the biggest gainers and losers among 254 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. * * * As reported in the Troubled Company Reporter on Aug. 7, 2013, Moody's Investors Service placed all ratings of Alpha Natural Resources, Inc. on review for possible downgrade, including the company's B1 Corporate Family Rating, B1-PD Probability of Default Rating, Ba1 rating on senior secured term loan, and the B2 rating on senior unsecured debt. The rating action was prompted by recent deterioration in performance and persistent weakness in market conditions for both thermal and metallurgical coal. AMERICAN AIRLINES: Aug. 29 Status Hearing on Exit Plan ------------------------------------------------------ On Tuesday, the U.S. Department of Justice commenced a lawsuit to block the proposed merger of American Airlines parent AMR Corp. and US Airways Group Inc., citing antitrust grounds. Susan Carey, writing for The Wall Street Journal, reports that the government's unexpected intervention puts the two sides in an awkward position as they continue the planning they began after the deal was announced in February for a complex, years-long integration process. According to WSJ, people familiar with the matter said that executives from both US Airways and AMR who had expected to be cut loose must choose whether to stay on and help run the airlines during the litigation -- in hopes of collecting the severance packages they have coming if the deal goes ahead -- or leave for new jobs elsewhere, said people familiar with the matter. WSJ also reports the DOJ's lawsuit has been assigned to a U.S. district judge in Washington, and the parties hope to negotiate a trial schedule soon. An antitrust lawyer for US Airways said last week that the airlines "hope to get to trial before the end of the year." WSJ notes there is an Aug. 29 hearing on the status of American parent's bankruptcy-exit plan. Both airlines are also expected to file an integration plan with the Federal Aviation Authority by mid-October. The merger deal is set to expire mid-December if it hasn't received regulatory approval, is prohibited by government order, or abandoned by either party. WSJ notes that, according to people close to the situation, the two airlines could extend the expiration date if both sides agreed. But if one or the other doesn't want to go along, the merger plan would die. WSJ also notes that, according to one person close to the matter, the committee representing AMR's creditors -- convinced that a merger offers them a better financial outcome than AMR emerging from bankruptcy on its own -- is expected to keep up the heat on AMR to fight for the deal. Washington lawyer Richard Parker, Esq., at O'Melveny & Myers LLP, is representing US Airways in the DOJ suit. He may be reached at: Richard Parker, Esq. O'MELVENY & MYERS LLP 1625 Eye Street, NW Washington, DC 20006 Tel: 202-383-5380 Fax: 202-383-5414 E-mail: rparker@omm.com 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 APPAREL: Unveils Initial Sales Results for July 2013 ------------------------------------------------------------- American Apparel, Inc., announced preliminary sales for the month ended July 31, 2013. On a preliminary basis, total net sales for July 2013 were $57.6 million, an increase of 5 percent over June 2012. Comparable sales for July 2013 increased 8 percent, including a 6 percent increase in comparable store sales in the retail store channel and a 23 percent increase in net sales in the online channel. Wholesale net sales increased 2 percent for the month. "July represents our 26th consecutive month of positive comparable store sales growth," said Dov Charney, chairman and chief executive of American Apparel, Inc. "The 8% comparable store sales increase in July is particularly noteworthy given that it was on top of a 19% increase in July last year, which demonstrates continued gains in our store productivity. As we enter August, we anticipate continued strength in our sales channels and we are looking forward to back-to-school, Halloween and holiday selling season." A copy of the press release is available for free at: http://is.gd/HQlGIq About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. The Company incurred a net loss of $37.27 million in 2012, as compared with a net loss of $39.31 million in 2011. The Company's balance sheet at March 31, 2013, showed $326.95 million in total assets, $349.33 million in total liabilities, and a $22.38 million total stockholders' deficit. * * * American Apparel carries a Caa1 Corporate Family Rating from Moody's Investors Service and a 'B-' corporate credit rating from Standard & Poor's Ratings Services. AMERICAN APPAREL: Had $37.5 Million Net Loss in Second Quarter -------------------------------------------------------------- American Apparel, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $37.50 million on $162.23 million of net sales for the three months ended June 30, 2013, as compared with a net loss of $15.27 million on $149.46 million of net sales for the same period a year ago. For the six months ended June 30, 2013, the Company incurred a net loss of $84.01 million on $300.29 million of net sales, as compared with a net loss of $23.16 million on $282.12 million of net sales for the same period a year ago. The Company incurred a net loss of $37.27 million in 2012, as compared with a net loss of $39.31 million in 2011. The Company's balance sheet at June 30, 2013, showed $335.32 million in total assets, $392.67 million in total liabilities and a $57.35 million total stockholders' deficit. John Luttrell, chief financial officer of American Apparel, Inc., stated, "Today we reported Adjusted EBITDA of $7.9 million vs. $7.6 million reported in the second quarter of 2012. We saw a healthy increase in sales across all three business channels, but our second quarter Adjusted EBITDA performance was negatively affected by approximately $2.9 million of costs associated with the transition to a new distribution center and other performance measures we took to improve our distribution operations... As a result, we have adjusted our outlook for the year to reflect these factors and now estimate Adjusted EBITDA to be in the range of $46 million to $51 million as compared to our prior estimate of $47 million to $54 million." Dov Charney, Chairman and CEO of American Apparel, Inc., stated: "We are pleased with the continued strong sales performance in all three business channels, particularly in light of the sales we believe we lost as a result of the supply chain issues we faced this quarter. We are, however, executing at the store level and in our manufacturing facility, and customer demand of our offering remains strong. While the transition to a new distribution center and other supply chain initiatives negatively impacted the quarter, we are committed to making the necessary investments to reduce costs and improve our operating efficiency over the longer- term. These initiatives will strengthen our supply chain and better position us to achieve our long-term objective of a double- digit EBITDA margin. Finally, for the first week of August we have seen positive comparable store sales momentum in our stores." A copy of the Form 10-Q is available for free at: http://is.gd/xYPa9z About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. * * * American Apparel carries a Caa1 Corporate Family Rating from Moody's Investors Service and a 'B-' corporate credit rating from Standard & Poor's Ratings Services. ANCHOR BANCORP: Files for Bankruptcy, Gets $175MM Add'l Capital --------------------------------------------------------------- Anchor BanCorp Wisconsin Inc. filed a voluntary Chapter 11 petition (Bankr. W.D. Wis. Case No. 13-14003) on August 12 to implement a "pre-packaged" plan of reorganization in order to facilitate the restructuring of the Company and the recapitalization of AnchorBank, fsb, a wholly-owned subsidiary of the Company. As reported in the TCR on July 9, 2013, The Federal Reserve System, the successor regulator to the Office of Thrift Supervision, denied approval of further extension of the maturity date and related amendments under Anchor Bancorp's credit agreement with a group of lenders led by U.S. Bank National Association. The loan matured June 30. Prior to the Petition Date, the Company obtained the consents of U.S. Bank National Association and Bank of America, N.A., as senior secured creditors of the Company, and the consent of the United States Department of the Treasury, as sole preferred stockholder of the Company, to vote for and accept the Plan of Reorganization. In connection with the Plan, the Company has entered into definitive stock purchase agreements with institutional and other private investors as part of a $175 million recapitalization of the institution. No new investor will own in excess of 9.9 percent of the common equity of the recapitalized Holding Company. The reorganization filing includes only Anchor BanCorp, the holding company for the Bank, allowing the Bank to remain outside of bankruptcy and to continue normal operations. The Bank operates 55 offices throughout Wisconsin. Operations at the Bank will continue as usual throughout the reorganization process. "It is important for our customers, employees and the community to know that AnchorBank, which operates separately from the Holding Company, is not a part of the Chapter 11 process. The Chapter 11 filing includes only the holding company and does not affect AnchorBank, its people, or its services," said Chris Bauer, AnchorBank president & CEO. "It will be business as usual at the Bank. Our customers will continue to work with the same employees, our leadership team remains in place, committed to AnchorBank and its success, and all customer deposits remain safe and insured to the fullest extent possible by the FDIC. As such, there will be no interruption of AnchorBank services and customer programs, and there will be no changes in employment or leadership within the Bank." Pursuant to the plan of reorganization, the Holding Company will discharge its senior secured credit facility with approximately $183 million in outstanding obligations for a cash payment of $49 million. In addition, the Holding Company's TARP preferred securities with an aggregate liquidation preference and deferred dividends of approximately $139 million will be cancelled in exchange for new common equity that will represent approximately 3.3 percent of the pro forma equity of the reorganized Holding Company. The new equity investors will represent in the aggregate approximately 96.7 percent of the pro forma equity of the reorganized Holding Company. The shares of common stock of the Holding Company currently outstanding will be cancelled for no consideration pursuant to the plan of reorganization. Consummation of the reorganization and recapitalization is subject to certain conditions, including bankruptcy court approval of the plan of reorganization, receipt of all required regulatory approvals and closing of the capital raise, including satisfaction of the conditions contained in the subscription agreements for the new common equity. The reorganization process is expected to be completed within 45-90 days. Mr. Bauer continued: "This is an important and necessary step in the transformation and turnaround of the institution. Upon completion of this transaction, AnchorBank will have capital in excess of levels required by our regulators. This will position the Bank for a return to profitability and growth." Additional information is available for free at: http://is.gd/VzmXKb About Anchor Bancorp Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. is a registered savings and loan holding company incorporated under the laws of the State of Wisconsin. The Company is engaged in the savings and loan business through its wholly owned banking subsidiary, AnchorBank, fsb. Anchor BanCorp and its wholly-owned subsidiaries, AnchorBank FSB, each consented to the issuance of an Order to Cease and Desist by the Office of Thrift Supervision. The Corporation and the Bank continue to diligently work with their financial and professional advisors in seeking qualified sources of outside capital, and in achieving compliance with the requirements of the Orders. ASHTON GROVE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Ashton Grove, L.C. c/o W. Dow Hamm, Jr. 1402 Country Club Midland, TX 79701 Bankruptcy Case No.: 13-70104 Chapter 11 Petition Date: August 12, 2013 Court: United States Bankruptcy Court Western District of Texas (Midland) Judge: Ronald B. King Debtor's Counsel: Sabrina L. Streusand, Esq. STREUSAND LANDON & OZBURN, LLP 811 Barton Springs Road, Suite 811 Austin, TX 78704-0001 Tel: (512) 236-9900 Fax: (512) 236-9904 E-mail: streusand@slollp.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by William Dow Hamm, III, board chairman/president of W. Dow Hamm III Corp. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Jackson Walker L.L.P. Professional Fees $494,063 901 Main Street, Ste 600 Dallas, TX 75202 The Ashton Grove Master Assessments $201,212 Association, Inc. c/o C. David Rhoades, Receiver Fraud & Forensic Investigations 1920 First National Center 120 N. Robinson Oklahoma City, OK 73102 Haynes and Boone, LLP Professional Fees $175,123 One Houston Center 1221 McKinney St., Ste. 2100 Houston, TX 77010 David Williams Earnest Money $160,000 Contracting, Inc. Matthew Trenching Trade Debt $127,174 Co., Inc. Schwartz Paving Trade Debt $105,798 Co., Inc. Greg Byram Earnest Money $85,000 Durbin, Larimore & Professional Fees $77,092 Bialick, P.C. Jacobs Engineering Trade Debt $73,170 Hal W. Smith Earnest Money $65,000 William R. Oliver Earnest Money $60,000 Rod Thornton Earnest Money $50,000 Mo Karami Earnest Money $40,000 Vahid Salalati Earnest Money $40,000 Glenn Foster Earnest Money $38,200 Fred & Sandra Chambers Earnest Money $35,000 Anita Holloway Vendee Lien $35,000 Miller Dollarhide Professional Fees $34,147 Alan Holloway Vendee Lien $30,000 Jackson & Ryan Architects Trade Debt $29,879 BARAJAS & ASSOCIATES: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Barajas & Associates, Inc. 3073 S. Highland Drive Las Vegas, NV 89109 Bankruptcy Case No.: 13-16913 Chapter 11 Petition Date: August 10, 2013 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce T. Beesley Debtor's Counsel: Matthew C. Zirzow, Esq. LARSON & ZIRZOW 810 S. Casino Center Blvd. #101 Las Vegas, NV 89101 Tel: (702) 382-1170 Fax: (702) 382-1169 E-mail: mzirzow@lzlawnv.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/nvb13-16913.pdf The petition was signed by Antonio Barajas, president. BG MEDICINE: Incurs $4.8 Million Net Loss in Second Quarter ----------------------------------------------------------- BG Medicine, Inc., reported a net loss of $4.83 million on $1 million of total revenues for the three months ended June 30, 2013, as compared with a net loss of $6.39 million on $622,000 of total revenues for the same period during the prior year. For the six months ended June 30, 2013, the Company reported a net loss of $10.24 million on $1.89 million of total revenues, as compared with a net loss of $14.05 million on $1.10 million of total revenues for the same period a year ago. BG Medicine reported a net loss of $23.8 million in 2012, compared with a net loss of $17.6 million in 2011. The Company's balance sheet at June 30, 2013, showed $18.32 million in total assets, $14.32 million in total liabilities and $3.99 million in stockholders' equity. "These results reflect the early impact of our efforts to rigorously control our operations and our finances," said Dr. Paul Sohmer, president and CEO of BG Medicine. "We have made progress, but, this is only a start." A copy of the Form 10-Q is available for free at: http://is.gd/qRJ4nf About BG Medicine Waltham, Mass.-based BG Medicine is a diagnostics company focused on the development and commercialization of novel cardiovascular diagnostic tests to address significant unmet medical needs, improve patient outcomes and contain healthcare costs. The Company is currently commercializing two diagnostic tests, the first of which is the BGM Galectin-3 test, a novel assay for measuring galectin-3 levels in blood plasma or serum for use as an aid in assessing the prognosis of patients diagnosed with heart failure. The Company's second diagnostic test is the CardioSCORE test, which is designed to identify individuals at high risk for near-term, significant cardiovascular events, such as heart attack and stroke. In its annual report for the period ended Dec. 31, 2012, the Company said: "We expect to incur further losses in the commercialization of our cardiovascular diagnostic test and the operations of our business and have been dependent on funding our operations through the issuance and sale of equity securities. These circumstances may raise substantial doubt about our ability to continue as a going concern." BILL PULLUM REALTY: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Bill Pullum Realty, Inc. 8494 Navarre Pkwy Navarre, FL 32566 Bankruptcy Case No.: 13-31020 Chapter 11 Petition Date: August 9, 2013 Court: United States Bankruptcy Court Northern District of Florida (Pensacola) Judge: William S. Shulman Debtor's Counsel: J. Steven Ford, Esq. WILSON, HARRELL, FARRINGTON 307 S. Palafox Street Pensacola, FL 32502 Tel: (850) 438-1111 Fax: (850) 432-8500 E-mail: jsf@whsf-law.com Scheduled Assets: $1,018,586 Scheduled Liabilities: $1,838,101 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Bart R. Pullum, vice president. BIOLIFE SOLUTIONS: Incurs $282,500 Net Loss in Second Quarter ------------------------------------------------------------- Biolife Solutions, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $282,506 on $2.33 million of total revenue for the three months ended June 30, 2013, as compared with a net loss of $498,893 on $1.09 million of total revenue for the same period during the prior year. For the six months ended June 30, 2013, the Company incurred a net loss of $289,682 on $4.49 million of total revenue, as compared with a net loss of $795,770 on $1.93 million of total revenue for the same period a year ago. BioLife Solutions disclosed a net loss of $1.65 million in 2012, as compared with a net loss of $1.95 million in 2011. The Company's balance sheet at June 30, 2013, showed $3.43 million in total assets, $16.09 million in total liabilities and a $12.66 million total shareholders' deficiency. Mike Rice, BioLife Solutions president and CEO, remarked on the Company's second quarter revenue by stating, "We are pleased with the growth in total revenue and our core product revenue during the second quarter of 2013. Several orders were from new customers as we continue to see evidence of adoption of our proprietary HypoThermosol and CryoStor biopreservation media products." A copy of the Form 10-Q is available for free at: http://is.gd/J2ilor About BioLife Solutions Bothell, Washington-based BioLife Solutions, Inc., develops and markets patented hypothermic storage and cryo-preservation solutions for cells, tissues, and organs, and provides contracted research and development and consulting services related to optimization of biopreservation processes and protocols. BLACKPOINT LAKE: Case Summary & 2 Unsecured Creditors ----------------------------------------------------- Debtor: Blackpoint Lake Group, Inc. P.O. Box 224 Walden, NY 12586 Bankruptcy Case No.: 13-12012 Chapter 11 Petition Date: August 12, 2013 Court: U.S. Bankruptcy Court Northern District of New York (Albany) Debtor's Counsel: Robert S. Lewis, Esq. LAW OFFICES OF ROBERT S. LEWIS, P.C. 53 Burd Street Nyack, NY 10960 Tel: (845) 358-7100 E-mail: robert.lewlaw1@gmail.com Scheduled Assets: $1,600,000 Scheduled Liabilities: $1,038,000 A copy of the Company's list of its two unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nynb13-12012.pdf The petition was signed by Dwayne Handley. BOMBARDIER INC: S&P Revises Outlook to Neg. & Affirms 'BB' CCR -------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Montreal-based Bombardier Inc. to negative from stable. At the same time, Standard & Poor's affirmed its 'BB' long-term corporate credit rating on the company. "The outlook revision follows two recently announced delays to the first flight of Bombardier's CSeries plane," said Standard & Poor's credit analyst Jamie Koutsoukis. "We believe these delays create a heightened risk of further capital costs for the CSeries program, as well as a possible delay in our expected timeline for the recovery of Bombardier's credit metrics," Ms. Koutsoukis added. As of June 30, 2013, the company's adjusted debt-to-EBITDA leverage ratio was 9x, which S&P views as very weak for a 'BB' rating. The negative outlook also reflects S&P's opinion that Bombardier could be challenged in the next 24 months to improve its credit metrics to be commensurate with a 'BB' rating. The ratings on Bombardier reflect what S&P views as the company's "satisfactory" business risk profile and "aggressive" financial risk profile (as S&P's criteria define the terms). S&P's ratings take into consideration Bombardier's leading market positions in the transportation and business aircraft segments, its good cost efficiency, and increasing product range and diversity. These positive factors are partially offset, in S&P's opinion, by significant execution risk in the launch of Bombardier's upcoming CSeries jet, and its very high leverage for the 'BB' rating. Bombardier is engaged in the manufacture of transport solutions worldwide. It operates in two distinct industries: aerospace and rail transportation. It has 64 production and engineering sites in 26 countries, and a worldwide network of service centers. The company's aerospace division manufactures business, commercial, and amphibious military aircraft, while its Germany-based transportation division manufactures rail vehicles, including monorails, light rails, metros, commuter trains, high-speed trains, and locomotives. The negative outlook reflects S&P's view that Bombardier will be challenged to improve its credit metrics in line with a 'BB' rating in the next 24 months. Furthermore, the outlook incorporates S&P's opinion that, given Bombardier's current leverage and debt-to-cash flow metrics, there remains very limited room for delays on project execution or margin deterioration. "We could downgrade the company if it is unable to achieve an adjusted debt-to-EBITDA leverage ratio of 8x or lower at year-end 2013. In addition, we could lower our rating on Bombardier if there are further delays in the CSeries program, resulting in increased capital expenditures that would ultimately delay improvement in the adjusted leverage ratio from our current expectations in the next two years and weaken our assessment of the company's financial risk profile. Furthermore, should Bombardier's liquidity deteriorate to a point where we believe it will need additional funds over the next two years, we could downgrade the company," S&P said. A return to a stable outlook would require Bombardier to be on a definitive path to successfully placing the CSeries into service, which in S&P's view, would support the recovery of its credit metrics, including a funds from operations-to-debt ratio of about 12% or higher by year-end 2014. BUDINGER WINDMILL: Case Summary & 13 Unsecured Creditors -------------------------------------------------------- Debtor: Budinger Windmill Trust 117 Broadyway, Suite B Kissimmee, FL 34741 Bankruptcy Case No.: 13-09907 Chapter 11 Petition Date: August 8, 2013 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Judge: Karen S. Jennemann Debtor's Counsel: Kenneth D. Herron, Jr., Esq. WOLFF, HILL, MCFARLIN & HERRON, P.A. 1851 West Colonial Drive Orlando, FL 32804 Tel: (407) 648-0058 Fax: (407) 648-0681 E-mail: kherron@whmh.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 13 unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb13-09907.pdf The petition was signed by Randy Sheive, manager. CAESARS ENTERTAINMENT: Bank Debt Trades at 10% Off -------------------------------------------------- Participations in a syndicated loan under which Caesars Entertainment Inc. is a borrower traded in the secondary market at 90.23 cents-on-the-dollar during the week ended Friday, August 16, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents an increase of 1.05 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. CETERA FINANCIAL: Moody's Revises Outlook on B3 CFR to Positive --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Cetera Financial Group, Inc. (B3 senior term loan and B3 Corporate Family Rating) and changed the rating outlook to positive from stable. The rating agency also assigned a B3 rating to the firm's $25 million first- lien senior secured revolving credit facility. The positive outlook reflects the firm's reduced debt burden following the closing of a smaller debt recapitalization than originally planned when the ratings were first assigned on July 15, 2013. Ratings Rationale: Cetera is an independent retail brokerage firm in the United States formed in 2010 through the purchase of three retail brokerage subsidiaries of ING by Lightyear Capital, Cetera's private equity sponsor. Since its formation, the company has grown substantially through acquisition, most recently with an acquisition of 2 brokerage subsidiaries from MetLife agreed to in April 2013. As of March 31, 2013, on a pro forma basis including the Met Life acquisition, Cetera had over 6,500 financial advisors managing $138 billion in client assets. The rated senior term loan was used to finance the MetLife acquisition, refinance existing debt, and fund a dividend to shareholders. The B3 ratings reflect Cetera's significant scale within the fragmented independent broker industry and its ability to attract financial advisors to its platform. In addition, financial advisor recruitment and broker dealer platform acquisitions have been an important source of revenue and client asset growth for Cetera and its senior management team has demonstrated the ability to successfully integrate these financial advisors while maintaining their productivity. Moreover, a significant portion of Cetera's revenue streams are recurring which should make revenues less volatile during cyclical periods. Cetera's pretax and EBITDA margins are significantly below comparable industry peers which make the Company's operating profitability more sensitive to revenue declines. However, the firms highly variable cost structure helps to alleviate some of this risk. The recent debt refinancing and subsequent dividend distribution resulted in high cash flow leverage (pro forma Moody's Adjusted Debt/EBITDA of approximately 4.2x for the 12 months ended June 30, 2013) and limited future financial flexibility. While the incremental debt added by the firm was less than originally planned, the original plan called for a substantial dividend payout to the firm's majority private equity owners, highlighting an aggressive financial policy that could weaken the company's credit profile going forward. Additionally, Moody's believes that Cetera's integration of the MetLife businesses presents a turnaround challenge based on its weak historic operating performance and may not deliver the projected profitability improvements. Moody's notes that Cetera has demonstrated a sound track record of successfully integrating similar financial advisor platforms in the past. The positive rating outlook reflects the improved terms of the final refinancing, including tighter restrictions on incremental leverage and increased debt amortization requirements. Moody's believes these terms reduce the risk of a more aggressive leveraging of the firm over the medium term. In addition, if accompanied by a more favorable market environment and a successful integration of the MetLife platform, the reduced leverage and increased amortization could allow the firm to more rapidly de-lever, improving its financial profile such that a higher rating might be warranted over the next year and a half. What Could Change the Rating Up/Down? Positive rating pressure could develop if Cetera experiences consistently improving profitability and debt reduction that results in substantial cash flow deleveraging, or increases its business diversification without increasing the company's risk profile. Negative rating pressure could develop if there was a material decrease in operating profitability or margins that further increased cash flow leverage, or if the firm undertook additional debt financed acquisitions or dividends that led to materially higher cash flow leverage. The principal methodology used in this rating was Global Securities Industry Methodology published in May 2013. CHG ENERGY: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: CHG Energy, LLC 13465 Midway Road, Suite 310 Dallas, TX 75244 Bankruptcy Case No.: 13-34138 Chapter 11 Petition Date: August 12, 2013 Court: U.S. Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Richard W. Ward, Esq. 6860 N. Dallas Parkway, Suite 200 Plano, TX 75024 Tel: (214) 220-2402 E-mail: rwward@airmail.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Stanley V. Graff, manager. CHRIST LUTHERAN: Case Summary & 4 Unsecured Creditors ----------------------------------------------------- Debtor: Christ Lutheran Church, Inc. 2911 Del Prado Boulevard South Cape Coral, FL 33904 Bankruptcy Case No.: 13-10625 Chapter 11 Petition Date: August 12, 2013 Court: U.S. Bankruptcy Court Middle District of Florida (Ft. Myers) Debtor's Counsel: Richard A Johnston, Jr., Esq. JOHNSTON CHAMPEAU, LLC P.O. Box 1000 Fort Myers, FL 33902-1000 Tel: (239) 600-6200 Fax: (877) 727-4513 E-mail: richard.johnston@johnstonchampeau.net Scheduled Assets: $5,710,000 Scheduled Liabilities: $3,599,114 A copy of the Company's list of its four unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb13-10625.pdf The petition was signed by Cindy Johnson, president. CINEMARK HOLDINGS: Dividend Hike No Impact on Moody's Ratings ------------------------------------------------------------- Moody's says that the announced increase of the quarterly dividend for Cinemark Holdings, Inc. to $0.25 per share from $0.21 per share effective September 2013 does not impact the B1 corporate family rating of Cinemark USA, Inc. (a wholly owned subsidiary of Cinemark) or its SGL-1 speculative grade liquidity rating. The dividend raise will consume an incremental approximately $17 million of cash annually. Headquartered in Plano, Texas, Cinemark operates 504 theaters with 5,794 screens in 39 U.S. states, Brazil, Mexico, Argentina and 10 other Latin American countries. Its annual revenue is approximately $2.5 billion. On May 21, 2013, Moody's assigned a B2 rating to the proposed $530 million senior unsecured notes of Cinemark USA, Inc. The transaction did not meaningfully alter total debt or the mix of debt capital, and all other ratings, including Cinemark's B1 corporate family rating, were unchanged. CLEARWIRE CORP: S&P Withdraws 'BB-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' corporate credit rating on Clearwire Corp. following its acquisition by Overland Park, Kan.-based wireless carrier Sprint. The 'BB+' issue-level ratings and '1' recovery ratings on Clearwire's debt remain in place and are not affected by this action. COMET LACE: Case Summary & 12 Unsecured Creditors ------------------------------------------------- Debtor: Comet Lace, Inc. P.O. Box 597 Fairview, NJ 07022 Bankruptcy Case No.: 13-27466 Chapter 11 Petition Date: August 8, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Morris Stern Debtor's Counsel: Robert L. Sweeney, Esq. 141 Main Street, 2nd Floor Hackensack, NJ 07601 Tel: (201) 488-0182 Fax: (201) 488-3463 E-mail: rsweeneylaw@aol.com Scheduled Assets: $1,010,250 Scheduled Liabilities: $839,560 A copy of the Company's list of its 12 unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb13-27466.pdf The petition was signed by Alex Crudello, president and sole shareholder. CROWN CASTLE: Fitch Assigns 'BB+' Rating to $500MM Term Loan ------------------------------------------------------------ Fitch Ratings has assigned a 'BB+' rating to Crown Castle Operating Company's (CCOC) proposed $500 million senior secured term loan maturing Jan. 31, 2019. CCOC is a wholly-owned subsidiary of Crown Castle International Corp. (Crown). Both CCOC and Crown have an IDR of 'BB'. The Rating Outlook is Stable. CCOC intends to use the net proceeds of the term loan to pay down amounts on its senior secured revolving credit facility (RCF). As of June 30, 2013, the $1.5 billion RCF had $1.046 billion outstanding. Key Rating Drivers The one-notch ratings uplift for the secured debt at CCOC to 'BB+' reflects the superior recovery and over collateralization of the debt at the CCOC operating company level. Crown's ratings are supported by the strong recurring cash flows generated from its leasing operations, the robust EBITDA margin that should continue to increase as a result of new lease-up opportunities, and the scale of its tower portfolio. Crown's primary focus on the U.S. market, compared with seeking growth in emerging markets, reduces operating risk. These factors lend considerable stability to cash flows and lead to a lower business risk profile than most typical corporate credits. A key factor in future revenue and cash flow growth for Crown, as well as the rest of the tower industry, is the growth within mobile broadband. Growth in 4G services will drive amendment activity and new lease-up revenues from the major operators, leading to at least midsingle-digit growth prospects for the next couple of years. The addition of NextG Networks within its asset mix will strengthen its position in distributed antenna systems and should allow Crown to capture additional share in the small- cell infrastructure required for scaling 4G networks. In the fourth quarter of 2012, Crown acquired, or acquired rights to, a total of approximately 7,100 towers from T-Mobile USA, Inc. for $2.5 billion. For the 6,200 towers Crown will have the exclusive right to lease and operate, the weighted average lease term is approximately 28 years. Crown will also have the option to purchase such towers from T-Mobile at the end of the respective lease term for aggregate option payments of approximately $2 billion. Leverage at June 30, 2013, based on the last quarter's annualized EBITDA, which includes results from the late-2012 T-Mobile tower acquisition, was approximately 6.0x. This is the upper end of Fitch's current range for Crown's 'BB' rating. Fitch expects Crown to deleverage through a mix of cash flow growth and debt reduction over the course of 2013. This should improve credit protection measures back within rating expectations. Fitch projects leverage based on full year EBITDA to be approximately 6x or lower by the end of 2013. Crown has meaningful FCF generation, balance sheet cash, and favorable maturity schedule relative to available liquidity. Cash, excluding restricted cash, was $127 million as of June 30, 2013. For the LTM period FCF was approximately $472 million. Crown spent $536 million on capital during this period with a significant portion allocated for land purchases, which is discretionary in nature. CCOC had drawn $1.046 billion on its $1.5 billion senior secured revolving credit facility maturing in 2017 as of June 30, 2013. Pro forma for the term loan offering, the outstanding amount on the facility will approximate $546 million. The financial covenants within the credit agreement include a total net leverage ratio of 6.0x, and consolidated interest coverage of 2.5x. The financial leverage covenant has an additional stepdown to 5.5x in March 2014. The credit agreement also has security fallaway provisions in the event Crown achieves investment grade ratings. For 2013, Crown expects adjusted funds from operations of approximately $1.187 billion to $1.197 billion. Contractual maturities over the remainder of 2013 through 2015 are $47 million, $102 million and $114 million, respectively. Common stock repurchases have been scaled back significantly compared to past levels and were less than $100 million for the last 12 months. Rating Sensitivities Negative: Future developments that may, individually or collectively, lead to Fitch taking a negative rating action include: -- If Crown does not deleverage the company below 6x by year-end 2013; or -- If Crown makes additional material acquisitions that are debt financed. Positive: Fitch believes Crown's longer-term ratings have upward potential from further operational and credit profile improvements. In the 2015-2016 timeframe, Crown has indicated the potential for a REIT conversion. As such, Crown may consider lowering its future leverage target, which could lead to an upgrade. In Fitch's view, if the company operated in the 5.0x to 5.5x range, an upgrade could be considered. CROWN CASTLE: S&P Retains 'B+' Term Loan Rating Following Add-On ---------------------------------------------------------------- Standard & Poor's Ratings Services said its 'B+' issue-level rating and '4' recovery rating on Crown Castle Operating Co.'s term loan B are not affected by the company's $500 million proposed add-on. The company will use proceeds to repay borrowings under its revolving credit facility. All S&P's existing ratings on the company, including its 'B+' corporate credit rating on parent Crown Castle International Corp., remain on CreditWatch, where S&P placed them with positive implications on Aug. 6, 2013, as part of its review of the U.S. wireless tower sector. S&P expects to resolve the CreditWatch before the end of August and believes any upgrade in its ratings on Crown would be limited to one notch. RATINGS LIST Crown Castle International Corp. Corporate Credit Rating B+/Watch Pos/-- Crown Castle Operating Co. $2.1 Bil. Term Loan B B+/Watch Pos Recovery Rating 4 DELTATHREE INC: Incurs $414,000 Net Loss in Second Quarter ---------------------------------------------------------- deltathree, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $414,000 on $4.21 million of revenues for the three months ended June 30, 2013, as compared with a net loss of $353,000 on $3.40 million of revenues for the same period during the prior year. For the six months ended June 30, 2013, the Company incurred a net loss of $770,000 on $7.94 million of revenues, as compared with a net loss of $895,000 on $6.25 million of revenues for the same period a year ago. As of June 30, 2013, the Company had $1.33 million in total assets, $7.69 million in total liabilities and a $6.36 million total stockholders' deficiency. "Due to the limited availability of additional loan advances under the Fourth Loan Agreement, we believe that, unless we are able to increase revenues and generate additional cash flows, our current cash and cash equivalents will not satisfy our current projected cash requirements beyond the foreseeable future. As a result, there is substantial doubt about our ability to continue as a going concern," the Company said in the regulatory filing. Bankruptcy Warning "In view of the Company's current cash resources, nondiscretionary expenses, debt and near term debt service obligations, the Company may begin to explore all strategic alternatives available to it, including, but not limited to, a sale or merger of the Company, a sale of its assets, recapitalization, partnership, debt or equity financing, voluntary deregistration of its securities, financial reorganization, liquidation and/or ceasing operations. In the event that the Company requires but is unable to secure additional funding, the Company may determine that it is in its best interests to voluntarily seek relief under Chapter 11 of the U.S. Bankruptcy Code. Seeking relief under the U.S. Bankruptcy Code, even if the Company is able to emerge quickly from Chapter 11 protection, could have a material adverse effect on the relationships between the Company and its existing and potential customers, employees, and others. Further, if the Company was unable to implement a successful plan of reorganization, the Company might be forced to liquidate under Chapter 7 of the U.S. Bankruptcy Code. There can be no assurance that exploration of strategic alternatives will result in the Company pursuing any particular transaction or, if the Company pursues any such transaction, that it will be completed," the Company stated in the Report. A copy of the Form 10-Q is available for free at: http://is.gd/IZR5QE About deltathree Based in New York, deltathree, Inc. (OTC QB: DDDC) -- http://www.deltathree.com/-- is a global provider of video and voice over Internet Protocol (VoIP) telephony services, products, hosted solutions and infrastructures for service providers, resellers and direct consumers. DETROIT, MI: Milliman Pension Studies Support Emergency Manager --------------------------------------------------------------- Nathan Bomey and Alisa Priddle, writing for the Detroit Free Press, report that two independent pension studies appear to back Detroit emergency manager Kevyn Orr's position that the city's retirement funds are seriously underfunded and based on optimistic assumptions. The Milliman reports, dated June 4 and obtained through Freedom of Information Act requests filed by the Free Press, offer projections of the financial liabilities of the General Retirement System and the Police and Fire Retirement System under several potential scenarios. The Free Press says a more complete report from Milliman will be released next week. The city commissioned the $350,000 Milliman report. According to the Free Press: -- Milliman estimates the city's unfunded pension liabilities range from about $3 billion this year to as high as $3.7 billion in 2016, using the assumption of lower future returns and other factors, such as freezing all cost-of-living adjustments and cutting in half the length of time it'll take to meet the pensions unfunded obligations. -- Mr. Orr estimated the current unfunded liabilities at $3.5 billion in a June 14 report to Detroit creditors, part of the $18 billion to $20 billion he says the city has in debt and future obligations. Mr. Orr's figures are more dire, and the Free Press has learned that's because he built in an extra worst-case scenario liability of $600 million in the event the city had to sell assets in a fire sale at today's market value. A copy of the General Retirement System pension report is available at http://www.freep.com/assets/freep/pdf/C4210423816.PDF from the Free Press. A copy of the Police and Fire Retirement System pension report is available at http://www.freep.com/assets/freep/pdf/C4210424816.PDF from the Free Press. 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. Detroit 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. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. DETROIT, MI: Deadline Today to Challenge Chapter 9 Eligibility -------------------------------------------------------------- Corey Williams, writing for the Associated Press, reports that Monday is the deadline for creditors to file eligibility objections to Detroit's Chapter 9 bankruptcy petition. The AP says the deadline is just one of several steps that could lead to federal Judge Steven Rhodes allowing Detroit into bankruptcy protection while it restructures. Conversely, it also could spell disaster for the city if its petition is denied, allowing creditors to sue Detroit if it defaults on payments, said Doug Bernstein, a managing partner of the Banking, Bankruptcy and Creditors' Rights Practice Group for the Michigan-based Plunkett Cooney law firm. The report recounts that state-appointed emergency manager Kevyn Orr filed for bankruptcy July 18. He claims the city has at least $18 billion in liabilities, from underfunded pensions and health care costs to bonds that lack city revenue to be paid off. Mr. Orr stopped payment on $2.5 billion in debt in June. AP says a multi-day hearing on the eligibility question is scheduled to start Oct. 23. Several other creditors contacted by The Associated Press, including National Public Finance Guarantee Corp. and BlackRock's Municipal Bonds Group, declined to comment on whether they would make an objection filing by Monday. Detroit has until Sept. 6 to file its responses to any objections by creditors. 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. Detroit 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. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. DEX MEDIA EAST: Bank Debt Trades at 23% Off ------------------------------------------- Participations in a syndicated loan under which Dex Media East LLC is a borrower traded in the secondary market at 77.40 cents-on- the-dollar during the week ended Friday, August 16, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.93 percentage points from the previous week, The Journal relates. Dex Media East LLC pays 250 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2016. The bank debt carries is not rate by Moody's and Standard & Poor's rating. The loan is one of the biggest gainers and losers among 232 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Dex One Dex One Corp., headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. The company employs 2,200 people across the United States. Dex One provides print yellow pages directors, which it co-brands with other recognizable brands in the industry, including Century Link and AT&T. It also provides the yellow pages websites DexKnows.com and DexPages.com, as well as mobile apps Dex Mobile, Dex CityCentral. Dex One and 11 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10534) on March 17 and 18, 2013, with a prepackaged plan of reorganization designed to effectuate a merger with SuperMedia Inc. Dex One disclosed total assets of $2.84 billion and total liabilities of $2.79 billion as of Dec. 31, 2012. Houlihan Lokey is acting as financial advisor to Dex One, and Kirkland & Ellis LLP is acting as its legal counsel. Pachulski Stang Ziehl & Jones LLP is co-counsel. Epiq Systems serves as claims agent. This is Dex One's second stint in Chapter 11. Its predecessor, R.H. Donnelley Corp., and 19 affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-11852) on May 28, 2009. They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. As of Dec. 31, 2012, persons or entities directly or indirectly own, control, or hold 5% or more of the voting securities of Dex One are Franklin Advisers, Inc., Hayman Capital Management LP, Robert E. Mead, Restructuring Capital Associates LP, Paulson & Co., Inc., and Mittleman Investment Management LLC. The 2013 Debtors emerged from Chapter 11 bankruptcy protection on April 30, 2013. DEX MEDIA WEST: Bank Debt Trades at 16% Off ------------------------------------------- Participations in a syndicated loan under which Dex Media West LLC is a borrower traded in the secondary market at 83.80 cents-on- the-dollar during the week ended Friday, August 16, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.74 percentage points from the previous week, The Journal relates. Dex Media West LLC pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2016. The bank debt is withdrawn by Moody's and not rated by Standard & Poor's. The loan is one of the biggest gainers and losers among 236 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Dex One Dex One Corp., headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. The company employs 2,200 people across the United States. Dex One provides print yellow pages directors, which it co-brands with other recognizable brands in the industry, including Century Link and AT&T. It also provides the yellow pages websites DexKnows.com and DexPages.com, as well as mobile apps Dex Mobile, Dex CityCentral. Dex One and 11 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10534) on March 17 and 18, 2013, with a prepackaged plan of reorganization designed to effectuate a merger with SuperMedia Inc. Dex One disclosed total assets of $2.84 billion and total liabilities of $2.79 billion as of Dec. 31, 2012. Houlihan Lokey is acting as financial advisor to Dex One, and Kirkland & Ellis LLP is acting as its legal counsel. Pachulski Stang Ziehl & Jones LLP is co-counsel. Epiq Systems serves as claims agent. This is Dex One's second stint in Chapter 11. Its predecessor, R.H. Donnelley Corp., and 19 affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-11852) on May 28, 2009. They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. As of Dec. 31, 2012, persons or entities directly or indirectly own, control, or hold 5% or more of the voting securities of Dex One are Franklin Advisers, Inc., Hayman Capital Management LP, Robert E. Mead, Restructuring Capital Associates LP, Paulson & Co., Inc., and Mittleman Investment Management LLC. The 2013 Debtors emerged from Chapter 11 bankruptcy protection on April 30, 2013. DIVERSITY MANAGEMENT: Case Summary & Creditors List --------------------------------------------------- Debtor: The Diversity Management Group, LLC dba Redline Honda P.O. Box 360 1196 Connellsville Street Lemont Furnace, PA 15456 Bankruptcy Case No.: 13-23379 Chapter 11 Petition Date: August 12, 2013 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Judge: Jeffery A. Deller Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 E-mail: rol@lampllaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/pawb13-23379.pdf The petition was signed by Michael Marchky, managing member. DIGERATI TECHNOLOGIES: Bid to Incur Debt Denied ----------------------------------------------- Judge Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, denied, without prejudice, Digerati Technologies, Inc.'s motion for authority to incur debt. To recall, the Court already denied the Debtor's first motion to incur debt. In denying the Debtor's second motion, the Court found that the Debtor again failed to adduce testimony regarding several line item categories. Judge Bohm specifically noted that the record is wholly devoid on why the Debtor needs postpetition financing to pay the expenses associated with several line item categories and how those line item amounts were calculated. Moreover, Judge Bohm found that the Debtor has failed to convince the Court that the Debtor needs the services of both Smith and Estrada, with each receiving $5,000 per month. The Debtor, according to Judge Bohm, has sufficient professionals to help it attain its stated objective -- to sell stock of Hurley Enterprises, Inc., and Dishon Disposal, Inc., in order to pay off all creditors through a plan of reorganization. About Digerati Technologies Digerati Technologies, Inc., filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 13-33264) in Houston, on May 30, 2013. Digerati -- http://www.digerati-inc.com-- is a diversified holding company which owns operating subsidiaries in the oil field services and the cloud communications industry. Digerati and its subsidiaries maintain Texas Offices in San Antonio and Houston. The Debtor has no independent operations apart from its subsidiaries. The Debtor's subsidiaries include Shift 8 Networks, a cloud communication service, Hurley Enterprises, Inc., and Dishon Disposal, Inc., both oil field services companies. The Debtor disclosed $60 million in assets and $62.5 million in liabilities as of May 29, 2013. Bankruptcy Judge Jeff Bohm oversees the case. Deirdre Carey Brown, Esq., Annie E. Catmull, Esq., Melissa Anne Haselden, Esq., Mazelle Sara Krasoff, Esq., and Edward L Rothberg, at Hoover Slovacek, LLP, in Houston, represent the Debtor as counsel. The Debtor tapped Gilbert A. Herrera and Herrera Partners as the investment banker. DYNASIL CORP: Fails to Comply with Loan Financial Covenants ----------------------------------------------------------- Dynasil Corporation of America is in violation of certain financial covenants contained in each of the loan agreements with Sovereign Bank, N.A., Massachusetts Capital Resource Company that require the Company to maintain certain ratios of earnings before interest, taxes, depreciation and amortization to fixed charges and to total debt and senior debt. As of June 30, 2013, the Company had approximately $7.6 million of indebtedness with Sovereign Bank and $3 million of indebtedness with Massachusetts Capital Resource, which is subordinated to the Sovereign Bank loan. This indebtedness is secured by substantially all of the Company's accounts and assets and is guaranteed by its subsidiaries. Although the Company continues to be current with all principal and interest payments with Sovereign Bank, as of June 30, 2013, the Company is currently delinquent on five months of interest payments ($125,000) on the Company's $3 million note from Massachusetts Capital Resource Company. Neither of the Company's lenders has accelerated its payment obligations. The Company is currently evaluating potential transactions involving the sales of divisions or product lines which, if consummated, would result in additional debt principal payments to the bank. "If we are not successful making additional debt principal payments to the bank or negotiating a waiver or forbearance agreement or other relief under our loan agreements, our obligations under those agreements may be accelerated in the future and our lenders may exercise other remedies for default. Even if we successfully obtain forbearance from our lenders for our current covenant non-compliance, we can provide no assurance that we will not violate our covenants in the future," the Company said in a regulatory filing with the U.S. Securities and Exchange Commission. "If we do not raise the necessary funds, we may need to curtail or cease our operations, sell certain assets and/or file for bankruptcy, which would have a material adverse effect on our financial condition and results of operations," the Company maintained. About Dynasil Watertown, Mass.-based Dynasil Corporation of America (NASDAQ: DYSL) -- http://www.dynasil.com/-- develops and manufactures detection and analysis technology, precision instruments and optical components for the homeland security, medical and industrial markets. The Company reported a net loss of $4.30 million for the year ended Sept. 30, 2012, as compared with net income of $1.35 million during the prior fiscal year. The Company's balance sheet at March 31, 2013, showed $28.27 million in total assets, $17.07 million in total liabilities and $11.19 million in total stockholders' equity. McGladrey LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012, citing default with the financial covenants under the Company's outstanding loan agreements and a loss from operations which factors raise substantial doubt about the Company's ability to continue as a going concern. EASTMAN KODAK: Reports Improvement in Earnings for Second Quarter ----------------------------------------------------------------- Eastman Kodak Company reported a $157 million loss from continuing operations before provision for income taxes in the second quarter, a 49 percent improvement from the $306 million loss reported in the prior-year quarter. The loss from continuing operations in the quarter was $208 million, compared to $297 million in the prior-year quarter. The current quarter loss includes $101 million in restructuring and reorganization costs and a $51 million provision for income taxes, attributable in part to the establishment of a deferred tax asset valuation allowance outside the U.S. These results reflect separation of the Personalized Imaging and Document Imaging businesses, which are being spun off to Kodak Pension Plan, the pension plan for U.K. employees, and the discontinuation of certain consumer businesses, including Kodak Gallery and digital cameras. With discontinued operations included, the consolidated net loss for the quarter was $224 million. Both of the Company's continuing reportable segments maintained their year-to-date momentum, recording improvements in the second quarter. Graphics, Entertainment and Commercial Films (GECF) reported a $5 million segment loss, compared to a $26 million loss in the prior-year quarter. Digital Printing and Enterprise (DPE) reported a $13 million segment loss compared to a $61 million loss in the second quarter of 2012. "In this quarter we continued our progress in recreating Kodak as a technology company focused on imaging for business, and serving customers worldwide with breakthrough solutions and enterprise services," said Antonio M. Perez, chairman and chief executive officer. "At the same time, we moved forward significantly with our restructuring, and we remain on track to emerge in the third quarter." Sales for the continuing operations in the second quarter were $583 million, compared to $699 million in the prior-year quarter, a decline of 17 percent. GECF had sales of $371 million, a decline of 17 percent, reflecting volume declines in Entertainment Imaging and Commercial Films, as well as lower sales for digital plates as the business focused on profitable accounts. DPE had a revenue decline of 11 percent from the prior-year quarter, primarily attributable to discontinuance of consumer inkjet printer production and lower sales of ink for the installed base of consumer inkjet printers. Partially offsetting these declines was an increase in sales within the commercial inkjet printing business. As a result of the company's focus on profitability, the gross profit margin in the quarter from continuing operations improved to 23 percent, an improvement of more than nine percentage points compared to the same period in the previous year. The Company also noted that it remained on track through the first half with its Adjusted EBITDA and cash goals. "Our team is committed to continuing the improvement required to emerge in the coming weeks as a profitable and sustainable company," Perez said. "Everyone at Kodak is focused on achieving our EBITDA and cash goals for 2013 and on emerging from Chapter 11 as a company that - having removed excess legacy costs and infrastructure and exited non-core businesses - is leaner, financially stronger, and poised for growth with a great portfolio of businesses in commercial imaging." 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: US Trustee Questions Incentive Payment Provision --------------------------------------------------------------- The U.S. trustee overseeing Eastman Kodak's Chapter 11 case is opposing the confirmation of the company's proposed plan to get out of bankruptcy protection. Tracy Hope Davis, the official charged with regulating bankruptcy cases in the New York region, questioned a provision of the plan that calls for payments of incentives to insiders, including a $1.9 million payment to Kodak's chief executive officer. Ms. Davis said the incentive payments violate Section 503(c), a provision that was added to the Bankruptcy Code in 2005 to limit executive compensation. The U.S. trustee also said the restructuring plan proposes to reimburse the legal fees of U.S. Bank, an indenture trustee and a member of the unsecured creditors' committee. According to Ms. Davis, it is unclear whether Kodak will reimburse the bank for its legal fees as an indenture trustee or as a member of the committee, and that the proposed reimbursement does not have legal basis. The U.S. trustee also questioned another provision that clears and releases "non-debtor third party" from liabilities, saying it is "overly broad." Kodak's restructuring plan also drew flak from shareholders who argued that the company breached its fiduciary duty when it hired Lazard Freres & Co. LLC to prepare a valuation analysis. The firm, they said, has conflict of interest. Joseph Dallal of Los Angeles, Calif., said the firm, which Kodak employed as its financial adviser since its bankruptcy filing, will earn a "substantial advisory fee" if the plan is approved. "It is evident that there is conflict of interest in the employment of Lazard by debtors to carry out the valuation analysis for the plan," Mr. Dallal said in a July 14 filing. Mr. Dallal said the shareholders found "intentional misrepresentations and intentional incorrect assumptions" when they reviewed the valuation analysis. "Lazard grossly underestimated the reorganization value of new Kodak," he said. U.S. Bankruptcy Judge Allan Gropper is slated to hold a hearing on August 20 to consider approval of the restructuring plan. The U.S. trustee is represented by: Brian S. Masumoto, Esq. Susan D. Golden, Esq. Michael T. Driscoll, Esq. Trial Attorneys Office of the United States Trustee 201 Varick Street, Suite 1006 New York, NY 10014 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: Court Denies Appointment of Equity Committee ----------------------------------------------------------- U.S. Bankruptcy Judge Allan Gropper denied the appointment of an equity committee proposed by Eastman Kodak Co.'s shareholders. Judge Gropper said the appointment of a new committee to represent shareholders is unnecessary and "would likely result in a substantial delay" given that the hearing on the confirmation of Kodak's Chapter 11 plan is just a few days away. "This would delay the possibility of any distribution and possibly result in the loss of the debtors' exit and reorganization financing to the detriment of Kodak's thousands of creditors who have a statutory priority over the shareholders," Judge Gropper said in an August 15 decision. At the hearing held on August 5, the shareholders tried to sway the court in their favor by arguing that Kodak has "grossly underestimated" its reorganization value. The shareholders called two witnesses to testify: Maulin Shah of Envision IP LLC, who testified as to alleged undisclosed value in Kodak's patent portfolio, and Elise Neils, a managing director of Brand Finance, who testified as to value in the Kodak brand. The court, however, finds both testimonies unreliable. According to the court, Mr. Shah based his opinion on "outdated and obviously overstated income figures." Meanwhile, the court noted the failure of the other witness to collect enough information to perform a thorough analysis. This is the second time that Judge Gropper issued a ruling in favor of Kodak. The bankruptcy judge in July 2012 denied the shareholders' bid to form a committee, saying they are already adequately represented by other groups committed to maximizing the value of Kodak's estate. Judge Gropper also said the formation of a new committee would saddle the bankruptcy proceedings with unnecessary administrative costs. A copy of Judge Gropper's Aug. 15 order is available for free at http://is.gd/kWnX4G 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: Wins Court Approval to Assume IP Contracts --------------------------------------------------------- Eastman Kodak Co. obtained court approval of its agreements with tech firms to take over their intellectual property contracts as part of the company's Chapter 11 reorganization plan. The firms are Canon Inc., Fujifilm Corp., Hewlett Packard Co., Intel Corp., International Business Machines Co., Imax Corp., LG Display Co. Ltd., LG Electronics Inc., Motorola Mobility LLC, Nintendo Co. Limited, Nokia Corp., Seiko Epson Corp. and Sony Corp. In a related development, Kodak signed separate agreements with Dai Nippon Printing Co. Ltd., Moxtek Inc., Nikon Corp., Technicolor Inc., Oracle Corp. and Ricoh Company Ltd., which also call for the assumption of their IP contracts. The agreements can be accessed for free at http://is.gd/APEemX 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. ENERGY SERVICES: Amends Forbearance Pact with United Bank --------------------------------------------------------- Energy Services of America Corp. and its subsidiary corporations, C.J. Hughes Construction Company, Inc., Contractors Rental Corporation, Nitro Electric Company, Inc., and S.T. Pipeline, Inc., (collectively, the "Obligors") entered into a forbearance agreement with United Bank, Inc., whereby the Obligors acknowledge that they are in default under the terms of two credit facilities between United Bank, Inc., and the Company and United Bank, Inc., has agreed to forbear from exercising certain of its rights and remedies under the loan agreements and related documents. On July 31, 2013, the parties entered into an amendment to the forbearance agreement which extends the period under which the Company may raise funds and perform certain of its obligations under the Forbearance Agreement. In consideration of the extension, the Company will pay $25,000 upon execution of the amendment. The amendment also specifies periodic repayment over a period from Aug. 6, 2013, to Sept. 30, 2013. The remaining provisions of the new forbearance agreement are substantially the same as those in the Agreement. A copy of the Forbearance Agreement Amendment is available at: http://is.gd/vcrADE About Energy Services Huntington, West Virginia-based Energy Services of America Corporation provides contracting services to America's energy providers, primarily the gas and electricity providers. The Company reported a net loss of $48.5 million on $157.7 million of revenue in fiscal 2012, compared with a net loss of $5.3 million on $143.4 million of revenue in fiscal 2011. The Company's balance sheet at March 31, 2013, showed $50.19 million in total assets, $45.69 million in total liabilities and $4.50 million in total stockholders' equity. Arnett Foster Toothman PLLC, in Charleston, West Virginia, expressed substantial doubt about Energy Services' ability to continue as a going concern following the annual report for the year ended Sept. 30 ,2012. The independent auditors noted that the Company has suffered recurring losses from operations and has entered into a forbearance arrangement with its lenders as a result of continued noncompliance with certain debt covenants. EXPLO SYSTEMS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Explo Systems, Inc. 1600 Java Road Minden, LA 71055 Bankruptcy Case No.: 13-12046 Chapter 11 Petition Date: August 12, 2013 Court: U.S. Bankruptcy Court Western District of Louisiana (Shreveport) Judge: Stephen V. Callaway Debtor's Counsel: Robert W. Raley, Esq. RALEY & ASSOCIATES 290 Benton Road Spur Bossier City, LA 71111 Tel: (318) 747-2230 Fax: (318) 747-0106 E-mail: rraley52@bellsouth.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/lawb13-12046.pdf The petition was signed by David A. Smith, vice president, secretary/treasurer. FIRST FINANCIAL: Incurs $1.4 Million Net Loss in Second Quarter --------------------------------------------------------------- First Financial Service Corporation reported a net loss attributable to common shareholders of $1.38 million on $8.21 million of total interest income for the three months ended June 30, 2013, as compared with a net loss attributable to common shareholders of $4.40 million on $10.73 million of total interest income for the same period during the prior year. For the six months ended June 30, 2013, the Company reported a net loss attributable to common shareholders of $1.53 million on $16.75 million of total interest income, as compared with a net loss attributable to common shareholders of $4.95 million on $22.62 million of total interest income for the same period a year ago. As of June 30, 2013, the Company had $884.51 million in total assets, $849.91 million in total liabilities and $34.60 million in total stockholders' equity. "We continue to see significant progress in credit trends with an improvement in the overall loan portfolio," said President, Greg Schreacke. "This is extremely important to us as we continue to shift our focus from dealing with problem assets to positioning the Company for profitable performance. While net loans declined 3.2% from the previous quarter mainly due to normal pay downs in the loan portfolio and continued reduction in non-performing loans, new loan production is accelerating. The Company generated $38 million in new loans during the second quarter following $34 million in the first quarter of 2013 and $26 million in quarter ended December 31, 2012." "The improvement to the net interest margin is consistent with our expectations," said Chief Financial Officer, Frank Perez. "The combination of improved net interest margin and better asset quality are key factors as we move forward and put our challenges behind us." A copy of the press release is available for free at: http://is.gd/PGwdQz About First Financial Elizabethtown, Kentucky-based First Financial Service Corporation is the parent bank holding company of First Federal Savings Bank of Elizabethtown, which was chartered in 1923. The Bank serves six contiguous counties encompassing central Kentucky and the Louisville metropolitan area, through its 17 full-service banking centers and a commercial private banking center. In its 2012 Consent Order, the Bank agreed to achieve and maintain a Tier 1 capital ratio of 9.0 percent and a total risk-based capital ratio of 12.0 percent by June 30, 2012. "At December 31, 2012, the Bank's Tier 1 capital ratio was 6.53% and the total risk-based capital ratio was 12.21%. We notified the bank regulatory agencies that one of the two capital ratios would not be achieved and are continuing our efforts to meet and maintain the required regulatory capital levels and all of the other consent order issues for the Bank," the Company said in its annual report for the year ended Dec. 31, 2012. First Financial disclosed a net loss attributable to common shareholders of $9.44 million in 2012, a net loss attributable to common shareholders of $24.21 million in 2011 and a net loss attributable to common shareholders of $10.45 million in 2010. Crowe Horwath LLP, in Louisville, Kentucky, said in its report on the consolidated financial statements for the year ended Dec. 31, 2012, "[T]he Company has recently incurred substantial losses, largely as a result of elevated provisions for loan losses and other credit related costs. In addition, both the Company and its bank subsidiary, First Federal Savings Bank, are under regulatory enforcement orders issued by their primary regulators. First Federal Savings Bank is not in compliance with its regulatory enforcement order which requires, among other things, increased minimum regulatory capital ratios. First Federal Savings Bank's continued non-compliance with its regulatory enforcement order may result in additional adverse regulatory action." FLABEG SOLAR: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: FLABEG Solar US Corporation 2201 Sweeney Drive Clinton, PA 15026 Bankruptcy Case No.: 13-23353 Chapter 11 Petition Date: August 9, 2013 Court: United States Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Judge: Carlota M. Bohm Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 E-mail: rol@lampllaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $50,000,001 to $100,000,000 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/pawb13-23353.pdf The petition was signed by William Otto, president. FNBH BANCORP: To Raise $17.1 Million From Securities Offering ------------------------------------------------------------- FNBH Bancorp, Inc., on Aug. 7, 2013, entered into a series of subscription agreements with various investors pursuant to which the Company has agreed to sell, subject to the satisfaction of certain conditions, additional shares of preferred stock that would result in aggregate gross proceeds to the Company of $9.6 million. The Company previously entered into a Securities Purchase Agreement with Stanley B. Dickson, Jr., a director of the Company and the largest beneficial owner of its stock. Pursuant to the Securities Purchase Agreement, Mr. Dickson has agreed, among other things, to purchase shares of the Company's Series B Mandatorily Convertible Non-Cumulative Junior Participating Preferred Stock for an aggregate purchase price of $7.5 million in a private placement transaction to be conducted by the Company. Together with the gross proceeds to be received by the Company pursuant to the Securities Purchase Agreement, the aggregate gross proceeds to the Company from this private placement transaction are expected to approximate $17.1 million. Of this amount, approximately $8.5 million is expected to be invested by current directors and executive officers of the Company, including Mr. Dickson's investment. A copy of the Form 8-K is available for free at: http://is.gd/hDEjdZ About FNBH Bancorp Howell, Michigan-based FNBH Bancorp, Inc., is a one-bank holding company, which owns all of the outstanding capital stock of First National Bank in Howell. The Bank was originally organized in 1934 as a national banking association. As of Dec. 31, 2011, the Bank had approximately 85 full-time and part-time employees. The Bank serves primarily five communities, Howell, Brighton, Green Oak Township, Hartland, and Fowlerville, all of which are located in Livingston County. FNBH disclosed net income of $329,000 in 2012, as compared with a net loss of $3.57 million in 2011. The Company's balance sheet at March 31, 2013, showed $295.38 million in total assets, $285.44 million in total liabilities and $9.94 million in total shareholders' equity. BDO USA, LLP, in Grand Rapids, Michigan, issued a "going concern" qualification in its consolidated financial statements for the year ended Dec. 31, 2012. "The Corporation's subsidiary bank ("Bank") is significantly undercapitalized under regulatory capital guidelines and, during 2009, the Bank entered into a consent order regulatory enforcement action ("consent order") with its primary regulator, the Office of the Comptroller of the Currency. The consent order requires management to take a number of actions, including, among other things, increasing and maintaining its capital levels at amounts in excess of the Bank's current capital levels. As discussed in Note 20, the Bank has not yet met the higher capital requirements and is therefore not in compliance with the consent order. As a result of the uncertain potential impact of future regulatory actions, circumstances exist that raise substantial doubt about the Corporation's ability to continue as a going concern," the Company said. FLOOR RESOURCES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Floor Resources, Inc. P.O. Box 774 Pleasantville, NJ 08232 Bankruptcy Case No.: 13-27486 Chapter 11 Petition Date: August 8, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Camden) Judge: Judith H. Wizmur Debtor's Counsel: Douglas S. Stanger, Esq. FLASTER/GREENBERG, P.C. - LINWOOD 646 Ocean Heights Avenue Linwood, NJ 08221 Tel: (609) 645-1881 Fax: (609) 645-9932 E-mail: doug.stanger@flastergreenberg.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb13-27486.pdf The petition was signed by Christopher Gill, vice president. FREESEAS INC: Issues Add'l 950,000 Settlement Shares to Hanover --------------------------------------------------------------- FreeSeas Inc. issued to Hanover 950,000 additional settlement shares pursuant to the terms of the Settlement Agreement approved by the Supreme Court of the State of New York, County of New York, on June 25, 2013. The Order provides for the full and final settlement of claim in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 651950/2013. Hanover commenced the Action against the Company on May 31, 2013, to recover an aggregate of $5,331,011 of past-due accounts payable of the Company, plus fees and costs. Pursuant to the terms of the Settlement Agreement approved by the Order, on June 26, 2013, the Company issued and delivered to Hanover 890,000 shares of the Company's common stock, $0.001 par value, and between July 2, 2013, and Aug. 6, 2013, the Company issued and delivered to Hanover an aggregate of 10,383,000 additional settlement shares. A copy of the Form 6-K is available for free at: http://is.gd/RbxZF0 About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. Freeseas disclosed a net loss of US$30.88 million in 2012, a net loss of US$88.19 million in 2011, and a net loss of US$21.82 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed US$114.35 million in total assets, $106.55 million in total liabilities and US$7.80 million in total shareholders' equity. RBSM LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. It has also failed to make required payments to Deutsche Bank Nederland as agreed to in its Sept. 7, 2012, amended and restated facility agreement and received notices of default from First Business Bank. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. FMW COMPOSITE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: FMW Composite Systems, Inc. 1200 W. Benedum Industrial Drive Bridgeport, WV 26330 Bankruptcy Case No.: 13-00933 Chapter 11 Petition Date: August 8, 2013 Court: U.S. Bankruptcy Court Northern District of West Virginia (Clarksburg) Judge: Patrick M. Flatley Debtor's Counsel: Stephen L. Thompson, Esq. BARTH & THOMPSON P.O. Box 129 Charleston, WV 25321 Tel: (304) 342-7111 Fax: (304) 342-6215 E-mail: sthompson@barththompson.com Scheduled Assets: $3,961,743 Scheduled Liabilities: $8,504,434 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wvnb13-00933.pdf The petition was signed by Dale R. McBride, president. FRIENDFINDER NETWORKS: Obtains Forbearance Until August 31 ---------------------------------------------------------- In order to address potential event of default as well as to allow FriendFinder Networks to retain maximum liquidity and financial flexibility and to more effectively approach the capital markets, commencing on Aug. 5, 2013, FriendFinder Networks and Interactive Network, Inc., received forbearance agreements from 93 percent of the unaffiliated holders of each of the 14 percent Senior Notes. In addition, the Issuers received Forbearance Agreements from the holders of 100 percent of the Cash Pay Notes, all of those Cash Pay Notes are held by affiliates. Under the terms of the Forbearance Agreements, the forbearing holders of the 14 percent Senior Notes and the Cash Pay Notes have agreed not to take any remedial action and to refrain from directing the trustee, U.S. Bank National Association, to exercise certain remedies on their behalf, with respect to each of the 14 percent Senior Notes and the Cash Pay Notes as a result of the excess cash flow prepayment defaults and financial covenant defaults. The forbearance period runs from Aug. 5, 2013, and ends automatically and immediately upon the occurrence of any of the following events: (a) Aug. 31, 2013; (b) the failure of the Issuers, the guarantors of each of the 14 percent Senior Notes and holders of at least a majority in outstanding principal amount of each of the 14 percent Senior Notes and the Cash Pay Notes to have entered into a transaction support agreement, with respect to a refinancing, that is satisfactory to the forbearing holders, on or before Aug. 15, 2013; (c) the occurrence or existence of any default or event of default other than the excess cash flow prepayment defaults or financial covenant defaults; (d) any representation, warranty, certification or other statement made by any Issuer or guarantor in the Forbearance Agreements or in any certificate given by or on behalf of any Issuer or guarantor or in connection herewith will be untrue, incorrect or incomplete in any material respect on the date as of which made; or (e) any of the Issuers will initiate, against a forbearing holder, any judicial, administrative or arbitration proceeding relating to the Forbearance Agreements, the Indentures or the other note documents, unless that forbearing holder is not in compliance with the terms thereof. On Nov. 5, 2012, Feb. 4, 2013, May 5, 2013, and Aug. 5, 2013, FriendFinder Networks and Interactive Network, based upon excess cash flow of the Companies and their subsidiaries for the quarterly periods ended Sept. 30, 2012, Dec. 31, 2012, March 31, 2013, and June 30, 2013, respectively, were obligated, under the terms of the Indenture, dated as of Oct. 27, 2010, relating to the Issuers' 14 percent Senior Secured Notes due 2013, and the Indenture, dated as of Oct. 27, 2010, relating to the Cash Pay Secured Notes due 2013, to prepay a portion of the Notes, plus any accrued and unpaid interest thereon. The failure of the Companies to make the excess cash flow payments within 10 calendar days of the date when they were due would constitute an event of default under the terms of the Indentures. Also, on Aug. 5, 2013, the Company received notice from the Trustee, pursuant to Section 6.1 of the Indenture relating to the 14 percent Senior Notes, declaring all the 14 percent Senior Notes in the aggregate principal amount of $213 million, plus accrued and unpaid interest to date, to be due and payable. On Aug. 7, 2013, the Company received notice from the Trustee, pursuant to Section 6.1 of the Indenture relating to the Cash Pay Notes, declaring all the Cash Pay Notes in the aggregate principal amount of $9.6 million, plus accrued and unpaid interest to date, to be due and payable. Those notices are subject to the terms of the Forbearance Agreements. About FriendFinder Networks FriendFinder Networks (formerly Penthouse Media Group) owns and operates a variety of social networking Web sites, including FriendFinder.com, AdultFriendFinder.com, Amigos.com, and AsiaFriendFinder.com. All total, its Web sites are offered in 12 languages to users in some 170 countries. The company also publishes the venerable adult magazine PENTHOUSE, and produces adult video content and related images. The Company is based in Boca Raton, Florida. FriendFinder Networks reported a net loss of $49.44 million in 2012, a net loss of $31.14 million in 2011, and a net loss of $43.15 million in 2010. The Company's balance sheet at March 31, 2013, showed $461.21 million in total assets, $647.78 million in total liabilities and a $186.56 million total stockholders' deficiency. * * * In the Nov. 14, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered its rating on FriendFinder Networks Inc. to 'CC' from 'CCC'. "The downgrade follows FriendFinder's announcement that it had reached a forbearance agreement with 85% of the lenders in its senior secured notes and 100% of the lenders in its second lien cash pay notes that defers the excess cash flow payments through Feb. 4, 2013," said Standard & Poor's credit analyst Daniel Haines. "The company has decided to preserve liquidity as it attempts to refinance its debt. We are withdrawing our ratings at the company's request." GENERAL CABLE: Moody's Keeps Corp Family Rating at Ba3 ------------------------------------------------------ Moody's Investors Service affirmed General Cable Corporation's Ba3 Corporate Family Rating, and Ba3-PD Probability Default Rating. In a related rating action, Moody's lowered the company's speculative grade liquidity rating to SGL-2 from SGL-1, and changed the rating outlook to negative from stable. These rating actions result from Moody's view that the company's operating performance is below expectations, resulting in lower levels of free cash flow and key debt credit metrics that are very weak relative to the current ratings. The following ratings/assessments were affected by this action: Corporate Family Rating affirmed at Ba3; Probability of Default Rating affirmed at Ba3-PD; Sr. Unsec. Notes due 2013 affirmed at B1 (LGD5, 75% from LGD5, 71%); Sr. Unsec. Notes due 2015 affirmed at B1 (LGD5, 75% from LGD5, 71%); Sr. Unsec. Notes due 2022 affirmed at B1 (LGD5, 75% from LGD5, 71%); Sr. Sub. Conv. Notes due 2029 affirmed at B2 (LGD6, 93%); and, The speculative grade liquidity rating lowered to SGL-2 from SGL- 1. Ratings Rationale: General Cable's Ba3 Corporate Family Rating incorporates Moody's view that the company's business profile is a credit strength. The company's large size and strong geographic diversification position it well among its peers. It manufacturers more than 100,000 products for electric utilities, electrical infrastructure, construction, and communications end uses. The acquisitions of Alcan Cable (former wire/cable business of Rio Tinto plc) and a 60% interest in Procables, S.A. in late 2012 improve General Cable's ability to compete in a very fragmented industry that offers few opportunities for product differentiation. Moody's also recognizes General Cable's global footprint as a credit enhancer. It currently derives slightly more than 60% of its revenues from outside of the U.S., providing geographic diversity and less reliance on the US market. However, Moody's remains cautious about the company's exposure to Europe, where it currently earns about 30% of its revenues. Ongoing economic uncertainties surrounding Europe could reverberate to other regions around the world. The lowering of General Cable's speculative grade liquidity rating to SGL-2 from SGL-1 reflects Moody's concern that its ability to generate significant levels of free cash flow is being negatively impacted by contraction in operating performance. EBITA margin for the 12 months through 1Q13 was 3.3%. Moody's recognizes that historical EBITA margins were driven down partly by acquisition- related costs. However, with ongoing expenses associated with accounting errors related to inventory, as well as settlement costs related to a German submarine turnkey project, General Cable's already thin operating margins leave little room for disruptions. Moody's also anticipates higher working capital needs to meet higher demand especially in the US and Asia, which will further stress free cash flow. Domestic cash on hand is limited. Depending upon seasonal working capital cash generation, General Cable will need to borrow up to $335 million under its revolving credit facility to redeem its Notes due November 2013. The change in rating outlook to negative from stable results from debt leverage metrics that are elevated for the current rating. For the 12 months ended March 29, 2013 General Cable had adjusted EBITA interest coverage of 1.6 times and adjusted debt-to-EBITDA of 6.5 times. Current EBITA margins are below previous expectations, and the ability to use free cash flow for debt reduction is limited. The ratings could be downgraded if General Cable's operating performance fails to meet Moody's expectations over the next 12 to 18 months. EBITA-to-interest expense remaining below 2.5 times without significant improvement or debt-to-EBITDA sustained above 5.0 times (all ratios incorporate Moody's standard adjustments) could pressure the ratings. Further deterioration in the company's liquidity profile, significant shareholder return activities, such as debt-financed dividends or share repurchases, or more debt- financed acquisitions could result in downward ratings pressures. Ongoing uncertainty created by the Comment Letter process with the SEC, which has led to a delay in the company filing its second quarter 10Q, as well as any future delays in timely filing statements could stress the company's ratings as well. Stabilization of the rating outlook could occur if General Cable's operating performance improves such that EBITA-to-interest expense is trending towards 3.0 times or debt-to-EBITDA improving towards 4.5 times (all ratios incorporate Moody's standard adjustments), key credit metrics more indicative of the current corporate family rating. The principal methodology used in this rating was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. General Cable Corporation is a global manufacturer of copper, aluminum and fiber optic and power cable products. Primary end markets served include electrical utility, electrical infrastructure, and construction. Revenues for the 12 months ended June 28, 2013 totaled about $6.3 billion. GOLDFIELD 1: Case Summary & 6 Unsecured Creditors ------------------------------------------------- Debtor: Goldfield 1 LLC 4375 Polaris Avenue, #4 Las Vegas, NV 89103 Bankruptcy Case No.: 13-16862 Chapter 11 Petition Date: August 8, 2013 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce T. Beesley Debtor's Counsel: Nedda Ghandi, Esq. GHANDI LAW OFFICES 601 South 6th Street Las Vegas, NV 89101 Tel: (702) 878-1115 E-mail: bankruptcy@ghandilaw.com Scheduled Assets: $720,000 Scheduled Liabilities: $4,009,131 A copy of the Company's list of its six unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb13-16862.pdf The petition was signed by Brian Spilsbury, manager. GPSH INC: Case Summary & Unsecured Creditor ------------------------------------------- Debtor: GPSH Inc. aka Pierre Garden Restaurant 145 Maryland Avenue Glendale, CA 91206 Bankruptcy Case No.: 13-30297 Chapter 11 Petition Date: August 12, 2013 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Richard M. Neiter Debtor's Counsel: Neil C. Evans, Esq. LAW OFFICES OF NEIL C. EVANS 13351D Riverside Drive, Suite 612 Sherman Oaks, CA 91423 Tel: (818) 802-8333 Fax: (818) 707-8983 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Petros Gumrikyan, president. The Company's list of its largest unsecured creditor filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Khachik Kesheshyan, Shaheed Alleged Fraudulent $1,400,000 Kesheshyan, Hamlet Derhovanessian Conveyance c/o Michael Rubin & Associates 18321 Ventura Boulevard, Suite 815 Tarzana, CA 91356 GUNDLE/SLT ENVIRONMENTAL: S&P Lowers CCR to 'CCC+'; Outlook Neg. ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Houston, Texas-based Gundle/SLT Environmental Inc. (GSE) to 'CCC+' from 'B'. The outlook is negative. At the same time, S&P lowered its issue-level rating on GSE's $157 million senior secured credit facility to 'CCC+' from 'B'. The recovery rating remains '3', indicating S&P's expectation of meaningful (50%-70%) recovery of principal in the event of a default. "The downgrade reflects our belief that the company's ability to meet financial commitments is unsustainable in the long term, absent favorable business, financial, and economic conditions, and that its liquidity position could remain constrained over the next year," said Standard & Poor's credit analyst James Siahaan. Such conditions may include a macroeconomic rebound, leading to increased project activity and order flow in GSE's European and North American operations, and progress in reducing costs such that EBITDA exceeds $30 million annually and the company's cushion under its financial covenants improves. Unexpectedly weak demand and competitive pricing in GSE's European operations caused a covenant breach and a diminution in liquidity. S&P now views GSE's existing liquidity as "weak". The rating outlook is negative and incorporates S&P's belief that there is at least a one-in-three chance of lower ratings within the next year, stemming from continued weakness in operating performance and credit measures, along with continued tightness in liquidity. S&P believes the company depends on favorable business, financial, and economic conditions to meet its financial commitments. S&P could lower the rating if it believed that continued weakness in earnings could result in GSE defaulting on its debt obligations in the next 12 months or seeking a financial restructuring. Triggers for a downgrade would include a lack of improvement in run-rate EBITDA, additional deterioration in EBITDA or difficulties in obtaining new debt financing. Although unlikely in the next 12 months, a positive rating action would be predicated on improving profitability such that total debt to EBITDA improves toward 5.5x and EBITDA headroom under the leverage covenant improves to 15%. Under this scenario, trailing- 12-month EBITDA would have to increase by nearly 21% from June 30, 2013, levels, assuming the adjusted debt balance remains constant. HAAS ENVIRONMENTAL: Section 341(a) Meeting Set on Sept. 19 ---------------------------------------------------------- A meeting of creditors in the bankruptcy case of Haas Environmental, Inc., will be held on Sept. 19, 2013, at 3:00 p.m. at Room 129, Clarkson S. Fisher Courthouse. Creditors have until Dec. 18, 2013, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Haas Environmental, Inc., filed a Chapter 11 petition (Bankr. D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the petition as president. Judge Kathryn C. Ferguson presides over the case. The Debtor estimated assets and debts of at least $10 million. Jerrold N. Poslusny, Jr., Esq., at COZEN O'CONNOR, in Cherry Hill, NJ, serves as the Debtor's counsel. HD SUPPLY: Moody's Affirms B3 CFR & Cuts Sr. Notes Rating to Caa3 ----------------------------------------------------------------- Moody's Investors Service affirmed HD Supply, Inc.'s B3 corporate family rating and its B3-PD probability of default rating. In a related rating action, Moody's lowered the rating on HDS' senior unsecured notes due 2020 to Caa2 from Caa1, since these notes are now the most junior debt in HDS' capital structure and are in a first-loss position following the redemption of the company's subordinated notes. All other ratings on the company's existing first-lien and second-lien secured debt were affirmed, along with HDS' SGL-3 speculative-grade liquidity rating. However, Moody's recognizes the sizeable reduction in balance sheet debt is clearly a credit positive, and moves key leverage ratios toward metrics that would support higher ratings. The rating outlook is stable. The following ratings were affected by this action: Corporate Family Rating affirmed at B3 Probability of Default Rating affirmed at B3-PD 1st-lien Term Loan B due 2017 affirmed at B1 (LGD3, 31% from LGD2, 26%) 1st-lien Senior Secured Notes due 2019 affirmed at B1 (LGD3, 31% from LGD2, 26%) 2nd-lien Senior Secured Notes due 2020 affirmed at B3 (LGD4, 57% from LGD3, 49%) Senior Unsecured Notes due 2020 lowered to Caa2 (LGD5, 82%) from Caa1 (LGD5, 73%) Speculative-Grade Liquidity Rating affirmed at SGL-3 Rating Rationale: HDS' B3 corporate family rating reflects its highly leveraged capital structure and debt service burden even though Moody's anticipates better operating performance over its forecast horizon. Despite applying IPO proceeds to reduce balance sheet debt by close to $1.0 billion dollars in early August, the company's pro forma adjusted debt-to-EBITDA as of the end of 1Q13 remains elevated at close to 8.0 times, and Moody's expects debt leverage to remain elevated at above 7.0 times over the next 12 to 18 months. Debt-to-book capitalization will also remain in excess of 100%. HDS has significantly negative net worth. The redemption of the company's senior subordinated notes reduced annual debt service requirements by close to $100 million, but cash interest payments of approximately $450 million per year going forward, impairing HDS' ability to generate large amounts of free cash flow. Adjusted (EBITDA-Capex)-to-interest expense improved to slightly over 1.0 times on a pro forma basis for the 12 months ended 1Q13, and Moody's projects interest coverage improving only marginally to close to 1.25 times over the next 12 to 18 months (all ratios incorporate Moody's standard adjustments). Moody's recognizes that operating performance is improving on a year-over- year basis, driven by sustained strength in the residential construction and the repair and remodeling end markets. The stable rating outlook reflects Moody's view that the company will see gradual improvement in credit metrics over the next 12 to 18 months as its key end markets continue to recover, positioning HDS more solidly within the current rating category. The SGL-3 speculative-grade liquidity rating reflects HDS' adequate liquidity profile, characterized by cash on hand and revolver availability totaling approximately $785 million in aggregate as of May 5, 2013. Free cash flow generation will also be bolstered by the sizeable interest savings resulting from the note redemption, which could reduce future borrowings under the revolver. Also, beyond term loan amortization of $10 million per year, the company faces no debt maturities until October 2017, when its 1st-lien revolving credit facility and term loan mature. These liquidity factors provide an offset to HDS' leveraged capital structure. The lowering of HDS' senior unsecured notes due 2020 to Caa2 from Caa1 results from the redemption of HDS' $950 million senior subordinated notes due 2021. The elimination of subordinated notes in the capital structure places the senior unsecured notes in a first-loss position in a recovery scenario. The ratings could be upgraded if HDS demonstrates further improvement in operating performance such that its interest coverage -- defined as (EBITDA -- Capex)-to-interest expense trends toward 2.0 times, while debt-to-EBITDA nears 6.0 times (all ratios incorporate Moody's standard adjustments). A better liquidity profile would also support positive ratings momentum. A sustained recovery in the domestic economy should strengthen demand for HDS' products, particularly in the construction end market, which would likely translate into stronger earnings. Developments that could lead to downward rating pressure include any erosion in the company's financial performance due to a downturn in its end markets or deterioration in HDS' liquidity profile. Additional debt-financed transactions that weaken credit metrics could also have a negative impact on ratings. The principal methodology used in this rating was the Global Distribution & Supply Chain Services Industry Methodology published in November 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. HD Supply, Inc., headquartered in Atlanta, GA, is one of the largest North American industrial distributors providing products for residential and non-residential construction, infrastructure, and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. The Carlyle Group, Bain Capital, and Clayton, Dubilier & Rice, through their respective affiliates, are the majority owners of HDS. Revenues for the 12 months through May 5, 2013, excluding divested businesses, totaled approximately $8.3 billion. HOLYOKE HOSPITAL: Moody's Affirms 'Ba3' Rating; Outlook Negative ---------------------------------------------------------------- Moody's Investors Service has affirmed the Ba3 rating assigned to Holyoke Hospital's bonds. The outlook remains negative. The Ba3 rating reflects Holyoke's weak operating performance absent supplemental funding and large unfunded pension liability. Ratings Rationale: The affirmation of the Ba3 rating reflects continued fundamental operating challenges at Holyoke including patient volume declines, a challenging local economy, and high exposure to Medicaid. Nevertheless, challenged core operating performance is mitigated by the Massachusetts Medicaid Waiver agreement signed in December 2011 which provides supplemental funding to Holyoke through fiscal 2014 of approximately $8 million, annually. This funding will help the organization maintain adequate balance sheet metrics and debt coverage metrics. The negative outlook reflects the fundamental challenges facing Holyoke. The rating could be downgraded if Holyoke is unable to secure additional supplemental funding when the current program expires or if the organization incurs additional debt or undertakes construction projects that weaken the balance sheet Strengths - Financial performance and operating cash flow are supported by supplemental funding through the Commonwealth's Medicaid waiver agreement with the Federal government. The agreement provides Holyoke with supplemental funding of $8 million annually. Although the agreement expires in 2014 (Holyoke will receive the full funding in FY 2014 so long as it continues to comply with the program's funding criteria), given Holyoke's successful track-record of securing supplemental funding, there is a possibility they will secure additional funding, either through an extension of the current program, or creation of a new program. Holyoke has a long history of receiving supplemental funds through various programs. - Holyoke has a relatively small amount of debt outstanding, and as a result, leverage measures are relatively strong for the rating category. At six months FY 2013 (March 31, 2013), cash- to-debt is a strong 188%, and debt-to-cash flow a very low 1.33x. Day's cash on hand is more modest at only 56 days. - Absolute unrestricted cash has grown substantially over the last several years, reaching $18.1 million at March 31, 2013, although absolute amount of unrestricted cash remains low. Growth in cash is driven by supplemental payments. Challenges - Core operating performance remains weak and cash flow is driven by supplemental payments. Absent supplemental Medicaid payments, operating cash flow margin would have measured a very weak 1.9% in FY 2012 and would have been flat through six months FY 2013. - Patient volumes have exhibited multi-year declines across both inpatient and outpatient services - Holyoke operates in a very competitive market and the hospital's market position is weak given its small size relative to its competitors and relatively weak financial performance that precludes significant investments in the facility. The two competing hospitals are Baystate Medical Center (A2, stable) and Mercy Medical Center (part of Catholic Health East, A2, stable) - The defined pension plan has an unfunded liability of $40 million (64% funding on PBO basis); although the plan is frozen, annual cash contributions average $2 million - $3 million limit Holyoke's ability to make other strategic investments - The average age of plant is very high at 24.7 years at FYE 2012, and although capital spending has increased over the last two years, since FY 2008 the average capital spending ratio is low at 0.8 times depreciation expense. Outlook The negative outlook reflects Holyoke's core operating challenges including declining patient volumes, the hospital's small size in the broader Springfield market which puts it at a disadvantage regarding market share and contract negotiations, and the hospital's long standing reliance on supplemental payments in order to generate sufficient cash flow and debt service coverage. What Could Make the Rating Go Up? The rating is unlikely to be upgraded considering Holyoke's weak core operating performance. The outlook could be revised to stable from negative if Holyoke is able to secure supplemental funding that extends beyond the maturity of the bonds, or the organization is able to demonstrate sustained improvement in core operating performance absent supplemental payments. What Could Make the Rating Go Down? The rating could be downgraded if Holyoke is unable to secure additional supplemental funding when the current Medicaid supplemental funding expires in 2014. Additional factors that could lead to a downgrade include a weakening of core operating performance or material capital plans that would increase leverage or decrease unrestricted cash and investments. The principal methodology used in this rating was Not-for-Profit Healthcare Rating Methodology published in March 2012. IPC INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: IPC International Corporation 2111 Waukegan Road Bannockburn, IL 60015 Bankruptcy Case No.: 13-12050 Chapter 11 Petition Date: August 9, 2013 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Mary F. Walrath Debtors' Counsel: Jeremy William Ryan, Esq. POTTER ANDERSON & CORROON, LLP 1313 N. Market Street P.O Box 951 Wilmington, DE 19801 Tel: (302) 984-6108 Fax: (302) 778-6108 E-mail: jryan@potteranderson.com - and ? Etta Ren Wolfe, Esq. POTTER ANDERSON & CORROON, LLP 1313 North Market Street P.O. Box 951 Wilmington, DE 19899 Tel: (302) 984-6202 Fax: (302) 658-1192 E-mail: ewolfe@potteranderson.com Debtors' General Bankruptcy Counsel: PROSKAUER ROSE, LLP Debtors' Financial Advisor: SILVERMAN CONSULTING, LLC Debtors' Investment Banker: LIVINGSTONE PARTNERS, LLP Debtors' Noticing, Claims And Balloting Agent: KURTZMAN CARSON CONSULTANTS, LLC Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 Affiliate that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- The Security Network Holdings Corporation 13-12051 Assets: $10,000,001 to $50,000,000 Debts: $10,000,001 to $50,000,000 The petitions were signed by Scott M. Strong, chief financial officer. IPC International and Security Network's List of Their 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Weinberg, Wheeler, Hudgins, Gunn -- $764,661 & Dial, LLC 3344 Peachtree Road, N.E. Atlanta, GA 30326 Seyfarth Shaw, LLP -- $346,116 3807 Collections Center Drive Chicago, IL 60693 Underwriters Adjustment Company, -- $226,891 Inc. P.O. Box 10018 San Juan, PR 00908 Morris Polich & Purdy, LLP -- $199,813 Arnie Yusim Leasing -- $119,252 Vericlaim -- $114,638 Jackson Lewis, LLP -- $90,973 Hinshaw & Culbertson -- $86,248 Cole Scott & Kissane -- $82,249 Keane Law Offices -- $80,894 Underwood/Thomas -- $70,932 Littler Mendelson, P.C. -- $68,007 Littlefield Cavo -- $63,662 Wilson, Elser, Moskowitz, Eldelman -- $57,708 & Dicker, LLP Mercer Health & Benefits, LLC -- $57,201 Drew Eckl & Farnham, LLP -- $54,436 Officemax Incorporated -- $44,832 Grant Thornton, LLP -- $43,994 Bolan Jahnsen -- $43,130 Resolution Economics, LLC -- $42,771 J.C. PENNEY: Ackman Steps Down From Board ----------------------------------------- Siddharth Cavale, writing for Reuters, reports that J.C. Penney Co Inc. last week has entered into an agreement with former board member and largest shareholder William Ackman that paves the way for him to completely walk away from the company. According to the report, Mr. Ackman, whose firm Pershing Square Capital Management owns about 18 percent of J.C. Penney, resigned from the board earlier this week after two years of campaigning to transform the struggling department store operator. Mr. Ackman has not said publicly what he plans to do with his shares but if he were to sell at current prices, he would lose more than $300 million. The paper loss figure does not include shares bought through swaps. "It is paving the way for (Pershing Square) to sell the stock if they choose to do so," Imperial Capital analyst Mary Ross Gilbert said after J.C. Penney disclosed the agreement in a regulatory filing on Friday, according to Reuters. On Aug. 8, Thomas Engibous, chairman of the Board of Directors of J. C. Penney, responded to the public disclosure of a letter to the Board of Directors from Mr. Ackman. Maureen Farrell of CNN Money reported that Mr. Ackman wanted the Company's CEO and Chairman be removed. Mr. Ackman complained he has not been given access to the Company's financials. "I think J.C. Penney is at a very critical stage in its history and its very existence is at risk," Mr. Ackman wrote. Mr. Alckman prefers that former Company CEO Allen Questrom be brought back as chairman of the board to initiate a search process for the new CEO. In the Aug. 8 statement, Mr. Engibous said, "The Company has made significant progress since Myron E. (Mike) Ullman, III returned as CEO four months ago, under unusually difficult circumstances. Since then, Mike has led significant actions to correct the errors of previous management and to return the Company to sustainable, profitable growth." In a separate statement, Mr. Engibous said, "The Board is focused on the important work of stabilizing and rejuvenating the business. It is following proper governance procedures, and members of the Board have been fully informed and are making decisions as a group. This includes the CEO search process, which is being conducted at an appropriate pace. The Board also continues to actively oversee management as it conducts the important work underway to rebuild the Company. Mr. Ackman's statements are misleading, inaccurate and counterproductive." About J.C. Penney Plano, Texas-based J.C. Penney Company, Inc. is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. J.C. Penney disclosed a net loss of $985 million in 2012, as compared with a net loss of $152 million in 2011. As of May 4, 2013, the Company had $10.37 billion in total assets, $7.50 billion in total liabilities and $2.86 billion in total stockholders' equity. * * * The Company carries Moody's Investors Service's B3 Corporate Family Rating with negative outlook. Early in March 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Penney to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P lowered the issue- level rating on the company's unsecured debt to 'CCC+' from 'B-' and maintained its '3' recovery rating on this debt, indicating S&P's expectation of meaningful (50% to 70%) recovery for debtholders in the event of a payment default. "The downgrade reflects the performance erosion that has accelerated throughout the previous year and seems likely to persist over the next 12 months," explained Standard & Poor's credit analyst David Kuntz. At the same time, Fitch Ratings downgraded the Company's Issuer Default Ratings to 'B-' from 'B'. The Rating Outlook is Negative. The rating downgrades reflect Fitch's concerns that there is a lack of visibility in terms of the Company's ability to stabilize its business in 2013 and beyond after a precipitous decline in revenues leading to negative EBITDA of $270 million in 2012. Penney, Fitch said, will need to tap into additional funding to cover a projected FCF shortfall of $1.3 billion to $1.5 billion in 2013, which could begin to strain its existing sources of liquidity. In February 2013, Penney received a notice of default from a law firm representing more than 50% of its 7.4% Debentures due 2037. The Company has filed a lawsuit in Delaware Chancery Court seeking to block efforts by the bondholder group to declare a default on the 2037 bonds. Penney also asked lawyers at Brown Rudnick LLP to identify the investors they represent. In March 2013, Penney received a letter from bondholders withdrawing and rescinding the Notice of Default. On April 12, 2013, Penney borrowed $850 million out of its $1.85 billion committed revolving credit facility with JPMorgan Chase Bank, N.A., as Administrative Agent, and Wells Fargo Bank, National Association, as LC Agent. Penney said the move was to enhance the Company's financial flexibility and position. J.C. PENNEY: Bank Debt Trades at 4% Off --------------------------------------- Participations in a syndicated loan under which J.C. Penney Co. is a borrower traded in the secondary market at 95.95 cents-on-the- dollar during the week ended Friday, August 16, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 2.14 percentage points from the previous week, The Journal relates. J.C. Penney Co. pays 500 basis points above LIBOR to borrow under the facility. The bank loan matures on April 29, 2016. 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 236 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. JAMES RIVER: Amends 24.6 Million Shares Resale Prospectus --------------------------------------------------------- James River Coal Company has amended its registration statement on Form S-3 relating to the resale by Funds managed by Clutterbuck, Funds managed by GLG, Funds managed by Columbia Management, et al., of up to 24,652,200 shares of the Company's common stock, $0.01 par value per share, issuable upon the conversion of an aggregate principal amount of $123,261,000 of the Company's 10.00 percent convertible senior notes due 2018. The Company amended the registration statement to delay its effective date until the Company will file a further amendment which specifically states that this registration statement will become effective or until the registration statement will become effective as the Securities and Exchange Commission may determine. The Notes are convertible into shares of the Company's common stock at an initial conversion rate of 200 shares per $1,000 in original principal amount of Notes, which is equal to an initial conversion price of $5.00 per share upon the occurrence of certain events specified in the indenture relating to the Notes. The Company will not receive any proceeds from the sale of the shares of common stock issuable upon conversion of the Notes. The Company's common stock is listed on The Nasdaq National Market under the symbol "JRCC." On Aug. 9, 2013, the last sales price of the Company's common stock as reported on the Nasdaq National Market was $1.99 per share. A copy of the amended Form S-3 is available for free at: http://is.gd/SvMuav About James River Headquartered in Richmond, Virginia, James River Coal Company (NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines, processes and sells bituminous steam and industrial-grade coal primarily to electric utility companies and industrial customers. The company's mining operations are managed through six operating subsidiaries located throughout eastern Kentucky and in southern Indiana. James River reported a net loss of $138.90 million in 2012, as compared with a net loss of $39.08 million in 2011. The Company's balance sheet at March 31, 2013, showed $1.16 billion in total assets, $944.75 million in total liabilities and $215.26 million in total shareholders' equity. * * * In the May 24, 2013, edition of the TCR, Moody's Investors Service downgraded James River Coal Company's Corporate Family Rating to Caa2 from Caa1. "While the company continues to take actions to reposition operations and shore up its balance sheet, we expect external factors will preclude James River from maintaining credit measures and liquidity consistent with the Caa1 rating level," said Ben Nelson, Moody's lead analyst for James River Coal Company. As reported by the TCR on Nov. 19, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Richmond, Va.-based James River Coal Co. to 'CCC' from 'SD' (selective default). "We raised our rating on James River Coal because we understand that the company has stopped repurchasing its debt at deep discounts, for the time being," said credit analyst Megan Johnston. JEFFERSON COUNTY, AL: Moody's Affirms Ca Rating on Rev. Warrants ---------------------------------------------------------------- Moody's Investors Service has affirmed the Ca rating on Jefferson County (AL) $3.1 billion in outstanding sewer revenue warrants; the outlook remains negative. The warrants are secured solely by revenues of the sewer system available after paying the sewer system's operating and maintenance expenses. The county has filed for bankruptcy protection and has been in default on certain sewer warrants since 2008, and all sewer warrants since February 2013. Moody's ratings represent expected loss, encompassing both default probability and bondholders' likely post-default recovery. When a security is in or approaching default, then placement of the rating will largely depend on the expected recovery to bondholders. Ratings of defaulted bonds with expected recoveries of 65-95% will typically be in the Caa range, 35-65% at Ca, and under 35% at the lowest rating of C. In the rare case when expected recoveries exceed 95%, such ratings will be in the single B range. Ratings Rationale: The Ca rating reflects a significant expected loss on the county's sewer revenue warrants given the county's bankruptcy filing, proposed plan of adjustment and the likely degree of insufficiency of net sewer revenues relative to debt service. Moody's believes the proposed restructuring of the sewer warrants would lead to a recovery toward the high end of the Ca rating category. The negative outlook reflects the possibility that the ultimate recovery rate could fall below 35% if the proposed restructuring fails to materialize as currently envisioned. The Ca is an underlying rating and does not incorporate payments from financial guarantors that have insured portions of the debt. Strengths - Continuing revenue from sewer system sufficient to pay a portion of debt service - Recent sewer rate increase Challenges - Uncertain timing and extent of ultimate recovery to bondholders - Challenges in executing recovery plan giving rising interest rate environment Outlook The negative outlook reflects the possibility that the proposed restructuring will fail to proceed according to plan and the ultimate recovery will be lower than currently contemplated. Risks that could affect the restructuring include rising interest rates, insufficient investor demand for bonds at the projected credit spreads, and a higher percentage of warrantholders who choose to waive their claims against the bond insurers in exchange for a higher recovery rate. What Could Make The Rating Go Up Increase in net sewer revenue or other actions by involved parties that would cause estimated recovery to increase above 65%. What Could Make The Rating Go Down Decrease in net sewer revenue or other actions by involved parties that would cause recovery to decrease below 35%. Rating Methodology The principal methodology used in this rating was Analytical Framework For Water And Sewer System Ratings published in August 1999. K-V PHARMACEUTICAL: Clindesse Cream Available for Prescribing ------------------------------------------------------------- Ther-Rx Corporation, a subsidiary of K-V Pharmaceutical Company announced that Clindesse(R) (clindamycin phosphate) Vaginal Cream, 2 percent indicated for the treatment of bacterial vaginosis (BV) in non-pregnant women, is now available for prescribing. Wholesalers have ordered and received product and are distributing to retail pharmacies. "We are pleased to be able to once again offer Clindesse," said Greg Divis, CEO of Ther-Rx and K-V. "Together with Gynazole- 1(R)'s reintroduction in January, the availability of Clindesse represents a key positive milestone for the Company as the two products comprising our anti-infectives franchise are both available for prescribing." Bacterial vaginosis (BV) is a complex polymicrobial infection that results from an overgrowth of a number of different bacterial species and is the most common vaginal infection in women of childbearing age. Clindesse has been used to treat 2.2 million women and is the first and only single-dose therapy approved for the treatment of BV in non-pregnant women. Women with BV often self-diagnose and try over-the-counter anti- fungal creams used for yeast infections, which are not effective in treating BV. According to one study published in 2002 of women seeking OTC treatments for self-diagnosed yeast infections, 66 percent of women had misdiagnosed their condition, which reinforces the importance of being examined by a healthcare provider to diagnose and determine the appropriate treatment. "Women experiencing vaginal infections are eager for treatments that provide fast relief from symptoms and convenience in dosing and administration," said Michael Randell, M.D., an Obstetrician and Gynecologist at Northside Hospital in Atlanta, Georgia. "Clindesse and Gynazole-1 are well-established treatment options with high patient satisfaction, so it's great to be able to prescribe them for my patients again." 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. KIDZ N ACTION: Case Summary & 10 Unsecured Creditors ---------------------------------------------------- Debtor: Kidz N Action LLC 119 N. Hewitt Drive Hewitt, TX 76643 Bankruptcy Case No.: 13-60738 Chapter 11 Petition Date: August 9, 2013 Court: United States Bankruptcy Court Western District of Texas (Waco) Judge: Ronald B. King Debtor's Counsel: Martha G. Stahr, Esq. LAW OFFICE OF MARTHA STAHR 4251 FM 2181, Suite 230-235 Corinth, TX 76210 Tel: (940) 243-6050 Fax: (972) 767-3802 E-mail: mstahrlawyer@charter.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 10 unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/txwb13-60738.pdf The petition was signed by Tracy Cowan, manager. LIBERACE FOUNDATION: Plan Outline Hearing Continued to Sept. 25 --------------------------------------------------------------- Judge Mike K. Nakagawa of the U.S. Bankruptcy Court for the District of Nevada approved a stipulation between U.S. Bank National Association, as Trustee for the Registered Holders of Bear Stearns Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates, Series 2000-WF2, by and through CWCapital Asset Management LLC, solely in its capacity as Special Servicer, and Liberace Foundation for the Creative and Performing Arts continuing the hearing on the disclosure statement explaining the Debtor's Liquidating Plan of Reorganization to Sept. 25, 2013 at 9:30 a.m. The hearing on the Debtor's objection to Claim No. 2 filed by CWCapital Asset will also be continued to Sept. 25. On May 10, 2013, the Debtor received Court authorization to sell its property located at 1775 East Tropicana Avenue, Las Vegas, Nevada. Shortly thereafter the Debtor sold the property for the purchase price of $2,300,000. The undisputed portion of the Disputed Claim of US Bank in Class 1 was paid out of the Property sale proceeds upon closing. The disputed portion will be paid out of the remaining Property sale proceeds pursuant to the agreement of the parties or a court order determining the Allowed amount of the disputed portion. The total estimated amount of the General Unsecured Claims in Class 2 asserted against the Debtor is $38,655.25. Class 2 Claims will be paid in full in Cash, from the funds held in the Debtor's Nevada Trust account, on the Effective Date. The Liberace Revocable Trust, the Equity Interest Holder in Class 3 will be retaining its equity interests, and thus, is unimpaired by the Plan. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/liberacefoundation.doc134.pdf Nedda Ghandi, Esq., at Ghandi Law Offices, in Las Vegas, Nevada, represents the Debtor. Hamid R. Rafatjoo, Esq., at Venable LLP, in Los Angeles, California, and Jon T. Pearson, Esq., at Ballad Spahr LLP, in Las Vegas, Nevada, represents U.S. Bank. About Liberace Foundation Founded in 1976, the Liberace Foundation for the Creative and Performing Arts -- http://www.liberace.org/-- helps students in Southern Nevada pursue careers in the performing and creative arts through scholarship assistance and artistic exposure. The foundation has awarded more than 2,700 students with scholarships. It owns the Liberace Museum Collection at 1775 E. Tropicana, in Las Vegas. The Liberace Museum, which has exhibited the jewelry, pianos, garish gowns and other artifacts owned by the great pianist and showman, was opened in 1979. The property is valued at $13 million. The secured creditor, U.S. Bank N.A., is owed $1.269 million. Liberace Foundation filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-22004) in Las Vegas on Oct. 24, 2012, estimating $10 million to $50 million in both assets and liabilities. Bankruptcy Judge Mike K. Nakagawa presides over the case. The Ghandi Law Offices serves as the Debtor's counsel. Brownstein Hyatt Farber Schreck, LLP serves as special counsel. The petition was signed by Anna Nateece, business manager. No committee has been appointed or designated by the U.S. Trustee. MARTIN MIDSTREAM: S&P Revises Outlook to Stable & Affirms 'B+' CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services said it revised its outlook on Martin Midstream Partners L.P. to stable from negative. S&P also affirmed its 'B+' corporate credit rating on the partnership and its 'B-' issue-level rating on its senior unsecured notes. "Martin announced that Alinda, an $8 billion private-equity fund with a focus on infrastructure investments, will acquire a 49% indirect voting interest (50% economic interest) in Martin's general partner (GP). MRMC will hold the remaining 51% interest in the GP in addition to 20% of the limited partnership units. As a result of the transaction, we expect consolidated leverage will decline to 4.8x because proceeds from the sale will be used to pay down outstanding debt at MRMC. In our analysis, we consider MRMC and Martin's consolidated credit measures given MRMC's ownership and close business ties to Martin. MRMC, which we estimate could account for 30% to 35% of Martin's 2013 EBITDA, provides transportation, marketing, and logistical services for various petroleum and specialized products. MRMC takes far greater direct price exposure compared with Martin, including exposure to the Cross refinery, which could lead to more volatile cash flows. Besides improved financial measures, we believe Alinda is generally a long-term investor in energy infrastructure and this investment will benefit Martin's credit profile by providing the partnership with direct access to potential asset drop-downs and alternate funding sources vis-a-vis Alinda," S&P noted. "Our rating on Martin reflects the partnership's weak business risk profile and aggressive financial risk profile under our criteria," said Standard & Poor's credit analyst Nora Pickens. Martin's small size, dependency on a few key assets, and volume risk across most operating segments characterize the weak business risk profile. The aggressive financial risk profile incorporates Martin's current financial measures, its business interactions with its parent, and the master limited partnership structure. Martin's diverse business lines, largely fee-based revenue streams, and expertise handling certain specialty products partially offset these risks. S&P is unlikely to raise the rating in the intermediate term due to Martin's limited scale, including its EBITDA concentration with parent MRMC. S&P could lower the rating if one or more of the partnership's business segments underperform, or if an acquisition weakens the financial profile, resulting in a total debt to EBITDA ratio of more than 5x. S&P could also lower the rating if MRMC's credit quality weakens, which could result in consolidated leverage of more than 5.5x and could pressure Martin's cash flow. MEDICAL PROPERTIES: $150MM Senior Notes Get Moody's Ba1 Rating -------------------------------------------------------------- Moody's Investors Service has assigned a Ba1 rating to the proposed $150 million senior unsecured debt add-on offering being co-issued by MPT Operating Partnership, L.P. and MPT Finance Corporation, wholly-owned subsidiaries of Medical Properties Trust, Inc. The rating outlook is stable. The following ratings were assigned with a stable outlook: MPT Operating Partnership, L.P. - $150 million senior unsecured debt at Ba1; senior unsecured shelf at (P)Ba1. MPT Finance Corporation -- senior unsecured shelf at (P)Ba1. Ratings Rationale: Moody's notes that net proceeds from the proposed $150 million bond offering currently being marketed will be used towards funding the REIT's planned acquisition of three acute care hospitals under agreement for $283 million. MPT also priced a common stock offering this morning, expected to net an estimated $122 million of proceeds, excluding the underwriters' option. With these transactions, the REIT is effectively executing its strategic growth plan, while maintaining leverage within its stated targets (net debt between 40% and 45% of gross assets). Moody's also notes that the acquisitions will improve MPT's tenant concentrations, with its top two tenants expected to comprise 24% and 17% of gross assets on a pro forma basis (down from 29% and 18% as of 2Q13, respectively). MPT's Ba1 senior unsecured credit rating continues to reflect the REIT's prudent capital structure, strong fixed charge coverage (3.3x for 2Q13), well-laddered debt maturity schedule, and generally sound operating performance. Also, the REIT's portfolio is substantially unencumbered, enhancing financial flexibility. MPT's maintenance of a conservative financial profile is a key strength given the potential earnings volatility it could experience from its healthcare investments. Hospitals are operating intensive assets whose earnings are subject to a high degree of volatility due to reimbursement and regulatory risks. The industry faces some acute challenges over the intermediate term, including pressure on government and commercial pay sources and adaptation of business models to keep pace with the evolving demands stemming from healthcare reform. MPT has strong EBITDAR ratios throughout most of its portfolio, which provides cushion should an individual operator struggle amidst this environment, but risks remain. Furthermore, the REIT is still of modest size with larger tenant concentrations (including Prime and Ernest) that magnify the potential risks. The stable outlook reflects Moody's expectation that MPT will successfully continue to grow and diversify its portfolio, while maintaining relatively conservative credit metrics for its rating category. Upward ratings movement would be very difficult given MPT's investments in property types that are highly reliant on government reimbursement and subject to regulatory risks. The REIT would need to grow substantially bigger, while meaningfully diversifying its tenant base so as to avoid any major concentrations. Downward ratings movement would be likely should MPT's fixed charge coverage fall below 2.5x on a sustained basis or leverage rise above 50%. In addition, should one of MPT's larger operators experience a reduced capacity to meet rental obligations, the REIT's ratings could be downgraded. The last rating action with respect to Medical Properties Trust, Inc. was on March 1, 2012, when Moody's upgraded the REIT's senior unsecured and corporate family rating to Ba1. Medical Properties Trust (NYSE: MPW) is a real estate investment trust based in Birmingham, Alabama that acquires, develops, leases and makes investments in healthcare facilities, including acute care hospitals, inpatient rehabilitation hospitals, and long-term acute care hospitals. The REIT had total gross assets of $2.4 billion as of June 30, 2013. The principal methodology used in this rating was Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. MEDICAL PROPERTIES: S&P Retains BB Sr. Unsec. Rating After Add-On ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its issue-level rating on the senior notes issued by MPT Operating Partnership L.P. and MPT Finance Corp. (guaranteed by Medical Properties Trust Inc.) remains unchanged following the company's plan to add $150 million to the $200 million 6.375% senior notes due 2022. The issue-level rating on these notes is 'BB' (the same as the corporate credit rating) with a '3' recovery rating, indicating S&P's expectation of a meaningful (50%-70%) recovery in the event of a payment default. Proceeds from the add-on offering, as well as proceeds from a proposed equity capital raise of up to about $150 million, will be used primarily to finance its $283.3 million acquisition and leaseback of three general acute-care hospitals with affiliates of hospital operator Iasis Healthcare LLC. "Our 'BB' corporate credit rating and stable outlook are unaffected by the transaction. The rating reflects an "intermediate" financial risk profile supported by strong fixed charge coverage, adequate liquidity, and no significant debt maturities until 2016. In addition, the ratings reflect a "fair" business risk profile, which considers the company's meaningful tenant and geographic concentration along with high tenant/facility exposure to government reimbursement risk. Additional growth and further reductions in tenant and geographic concentrations could bolster the company's business risk profile," S&P said. "Our stable outlook reflects our expectation that strong rent coverage will continue to support core cash flow and stable coverage measures. Consistent with our base case expectations, the announced acquisitions with its proposed debt and equity financing would return leverage to the 5.5x-6.0x range until these acquisitions accrete to a full run rate contribution to EBITDA cash flow. We would expect the company to continue to finance its growth opportunities with a proportionate and prudent mix of debt and equity. We would consider raising our ratings one notch if the company's acquisitions season and perform as expected, portfolio growth is profitable and tenant concentrations are further diluted, and the REIT maintains healthy dividend coverage while consistently sustaining key credit measures at recent averages or better (i.e. 45% debt to capital and 5.0x-6.0x debt to EBITDA). Alternatively, we would lower our rating one notch if the portfolio experiences meaningful tenant distress reducing its fixed charge coverage ratio to the 2.0x area, if the REIT increases leverage more aggressively than we currently anticipate, and/or if the common dividend coverage weakens materially," S&P added. RATINGS LIST Medical Properties Trust Inc. Corporate Credit Rating BB/Stable/-- MPT Operating Partnership L.P. MPT Finance Corp. Senior Unsecured BB Recovery Rating 3 MERRIMACK PHARMACEUTICALS: Incurs $30.2 Million Net Loss in Q2 -------------------------------------------------------------- Merrimack Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $30.25 million on $18.45 million of collaboration revenues for the three months ended June 30, 2013, as compared with a net loss of $20.13 million on $12.06 million of collaboration revenues for the same period during the prior year. For the six months ended June 30, 2013, the Company incurred a net loss of $58.57 million on $33.10 million of collaboration revenues, as compared with a net loss of $43.54 million on $23.40 million of collaboration revenues for the same period a year ago. Merrimack Pharmaceuticals disclosed a net loss of $91.75 million in 2012, following a net loss of $79.67 million in 2011. The Company incurred a $50.15 million net loss in 2010. As of June 30, 2013, the Company had $107.32 million in total assets, $165.66 million in total liabilities, $242,000 in non- controlling deficit and a $58.09 million total stockholders' deficit. "We are pleased with a strong quarter of progress advancing our pipeline of six novel therapeutic candidates," said Robert Mulroy, president and CEO of Merrimack. "We remain on track for a robust set of milestones in the months ahead and we remain focused on our goal of delivering transformative therapies to patients to dramatically improve cancer outcomes." A copy of the Form 10-Q is available for free at: http://is.gd/2Qxquw About Merrimack Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a biopharmaceutical company discovering, developing and preparing to commercialize innovative medicines consisting of novel therapeutics paired with companion diagnostics. The Company's initial focus is in the field of oncology. The Company has five programs in clinical development. In it most advanced program, the Company is conducting a pivotal Phase 3 clinical trial. MOHDSAMEER ALJANEDI: Case Summary & 12 Unsecured Creditors ---------------------------------------------------------- Debtor: Mohdsameer Aljanedi Dental Corporation dba Beachside Dental Group fdba Beachside Dental Group, Inc. 13600 Marina Pointe Drive, #1904 Marina Del Rey, CA 90292 Bankruptcy Case No.: 13-30138 Chapter 11 Petition Date: Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Ernest M. Robles Debtor's Counsel: M Jonathan Hayes, Esq. SIMON RESNIK HAYES LLP 15233 Ventura Blvd Ste 250 Sherman Oaks, CA 91403 Tel: (818) 783-6251 Fax: (818) 783-6253 E-mail: jhayes@srhlawfirm.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 12 unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/cacb13-30138.pdf The petition was signed by Mohdsameer Aljanedi, president. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Mohdsameer Aljanedi, DDS, Inc. 13-30136 08/09/13 Mohdsameer Y Aljanedi 13-30127 08/09/13 NPS PHARMACEUTICALS: Had $12.4 Million Net Loss in 2nd Quarter -------------------------------------------------------------- NPS Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $12.38 million on $36.50 million of total revenues for the three months ended June 30, 2013, as compared with net income of $7.35 million on $53.51 million of total revenues for the same period during the prior year. For the six months ended June 30, 2012, the Company incurred a net loss of $20.18 million on $61.93 million of total revenues, as compared with a net loss of $3.20 million on $76.44 million of total revenues for the same period a year ago. NPS has been in the red since 2009. It posted a net loss of $36.26 million in 2011, a net loss of $31.44 million in 2010, and a net loss of $17.86 million in 2009. As of June 30, 2013, the Company had $281.48 million in total assets, $196.42 million in total liabilities and $85.05 million in total stockholders' equity. "Having successfully addressed the fill-finish issue, we are pleased to report that we will file our Biologic License Application for Natpara before the end of this year," said Francois Nader, MD, president and chief executive officer of NPS Pharmaceuticals. "Our commitment to flawless execution has yielded solid second quarter results including Gattex sales that exceeded our own expectations. We are particularly gratified to have already brought this life-changing treatment to 141 Short Bowel Syndrome patients and I am pleased to report that we are increasing our guidance to 275 to 325 patients on therapy by the end of the year." A copy of the Form 10-Q is available for free at: http://is.gd/Dls0la About NPS Pharmaceuticals Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing new treatment options for patients with rare gastrointestinal and endocrine disorders. OM GROUP: S&P Withdraws 'BB' Corporate Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services said it withdrew its 'BB' corporate credit rating and all other ratings on OM Group Inc. "The ratings withdrawal reflects OM Group Inc.'s repayment of rated debt and its request to have the ratings on its undrawn revolving credit facility withdrawn," said Standard & Poor's credit analyst Paul Kurias. ONCURE HOLDINGS: Sec. 341 Meeting Continued to Aug. 20 ------------------------------------------------------ The meeting of creditors pursuant to 11 U.S.C. 341(a) in the Chapter 11 case of OnCure Holdings, Inc., will be continued to Aug. 20, 2013, at 2:00 p.m. About OnCure Holdings Headquartered in Englewood, Colorado, OnCure Holdings, Inc. -- http://www.oncure.com/-- provides management services and facilities to oncology physician groups throughout the country. OnCure Holdings and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 13-11540 to 13-11562) in Wilmington on June 14, 2013. Bradford C. Burkett signed the petition as CEO. On the Petition Date, the Debtors disclosed total assets of $179,327,000 and total debts of $250,379,000. There's at least $15 million owing on a first-lien term loan facility, as well as $210 million on prepetition secured notes. Paul E. Harner, Esq., and Keith A. Simon, Esq., at Latham & Watkins LLP, in New York, serve as the Debtors' lead bankruptcy counsel. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware, serves as the Debtors' local Delaware counsel. Kurtzman Carson Consultants is the claims and notice agent. Match Point Partners LLC provides management services to OnCure. The Debtors have signed a deal to sell the business to Radiation Therapy Services Holdings Inc. for $125 million, absent higher and better offers. RTS's offer comprises $42.5 million in cash (plus covering certain expenses and subject to certain working capital adjustments) and up to $82.5 million in assumed debt. Secured noteholders are supporting the RTS deal. Millstein & Co., Kirkland & Ellis LLP, Alvarez & Marsal and Deloitte advise Radiation Therapy in connection with the transaction. Promptly before the bankruptcy filing, the Debtors entered into a restructuring support agreement with the members of an ad hoc committee of its secured notes, constituting 100% of the lenders under the first lien term loan credit agreement and approximately 73% of the secured notes, pursuant to which they have agreed to support a stand-alone restructuring of the Debtors, subject to an auction process for a sale of substantially all of the Debtors' assets or the equity of the reorganized Debtors pursuant to a chapter 11 plan. Roberta A. DeAngelis, U.S. Trustee for Region 3 notified the Court that she was unable to appoint an official committee of unsecured creditors due to insufficient response from creditors. OTELCO INC: Files Form 10-Q, Posts $109.6MM Net Income in Q2 ------------------------------------------------------------ Otelco Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $109.64 million on $19.66 million of revenues for the three months ended June 30, 2013, as compared with a net loss of $128.01 million on $24.71 million of revenues for the same period during the prior year. For the six months ended June 30, 2013, the Company reported net income of $107.87 million on $40.65 million of revenues, as compared with a net loss of $127.19 million on $50.08 million of revenues for the same period a year ago. As of June 30, 2013, the Company had $137.70 million in total assets, $168.65 million in total liabilities and a $30.94 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/UtZHYi About Otelco Inc. Oneonta, Alabama-based Otelco Inc. operates eleven rural local exchange carriers ("RLECs") serving subscribers in north central Alabama, central Maine, western Massachusetts, central Missouri, western Vermont and southern West Virginia. On March 24, 2013, the Company and each of its direct and indirect subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13- 10593) in order to effectuate their prepackaged Chapter 11 plan of reorganization -- a plan that already has been accepted by 100% of the Company's senior lenders, as well as holders of over 96% in dollar amount of Otelco's senior subordinated notes who cast ballots. Otelco's restructuring plan will strengthen the Company by deleveraging its balance sheet and reducing its overall indebtedness by approximately $135 million. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Partners. The restructuring counsel for the administrative agent for the senior lenders is King & Spalding LLP and its financial advisor is FTI Consulting. Otelco on May 24 disclosed that it has emerged from bankruptcy and completed its balance sheet restructuring process, including an extension of its senior credit facility. The Court confirmed the Plan on May 6. PARK-OHIO INDUSTRIES: Moody's Changes Ratings Outlook to Positive ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Park-Ohio Industries Incorporated, including the B2 Corporate Family Rating, and revised the rating outlook to positive from stable. Moody's also assigned a short term liquidity rating of SGL-2 designating good liquidity to support operations in the near-term. "The outlook revision recognizes improvements to Park-Ohio's business model and continued strengthening in credit measures. We will need evidence that these improvements can be sustained at better than current levels and more clarity on management's plans to grow the company and how that growth will be financed before we decide whether to take the ratings higher," said Ben Nelson, Moody's Assistant Vice President and lead analyst on Park-Ohio Industries Incorporated. An upgrade likely would require evidence that credit measures will be sustained at better than current levels, as well as improvement in end market conditions to drive organic growth and more clarity regarding the company's plans to achieve its ambitious growth strategy. Management has stated publicly an intention to increase revenue to $2 billion by 2017 from $1.1 billion in 2012. Park-Ohio's business has become stronger and more resilient as a result of company's decision to reinvest the vast majority of operating cash flow generated over the past several years in operational realignment programs, growth projects and well- executed bolt-on acquisitions. These investments have improved the business beyond what would have been expected by some cyclical end market recovery, especially in the automotive industry. Business conditions in key end markets remain below pre-recession levels, but revenue exceeds the previous high water mark set in 2007 with meaningfully higher profit margins. Credit measures, including Moody's standard adjustments for capitalization of operating leases and stock-based compensation, have strengthened with adjusted financial leverage in the high 3 times (Debt/EBITDA), interest coverage in the high 2 times (EBIT/Interest), and free cash flow in the mid-single digit range as a percentage of debt. Moody's expects further improvement to levels supportive of a higher rating over the next several quarters, including adjusted financial leverage well below 4 times, interest coverage over 3 times (EBIT/Interest), and free cash flow approaching 10% of debt. Issuer: Park-Ohio Industries Incorporated Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD $250 million Senior Unsecured Notes due 2021, Affirmed B3 (LGD5 75% from 73%) Speculative Grade Liquidity Rating, Assigned SGL-2 Outlook, Revised to Positive from Stable Ratings Rationale: The B2 CFR is constrained by moderate size, cyclical end market demand, and an acquisitive financial philosophy. The rating also benefits from a broad product portfolio, relatively diversified customer base, successful integration of recent business acquisitions, and countercyclical cash flows that support liquidity during an economic downturn. Good near-term liquidity also supports the rating. The SGL-2 short-term liquidity rating indicates good liquidity to support operations over the next four quarters with expectations for positive free cash flow and over $100 million of available liquidity. Moody's expects the company to generate positive free cash flow on an annual basis, though not necessarily in all quarters owing to due to working capital fluctuations and the timing of interest payments. The company reported $48.4 million of balance sheet cash, the vast majority of which is held at foreign subsidiaries, and about $74 million of availability on its $220 million revolving credit facility after considering borrowing base restrictions, letters of credit, and cash borrowings. Moody's does not expect a springing debt service coverage ratio test will be activated in the near-term. The positive rating outlook anticipates that credit measures will continue to strengthen and could warrant a rating upgrade within the next eighteen months. Moody's could upgrade the rating with expectations for leverage sustained below 4 times, interest coverage sustained above 2 times, free cash flow approaching 10% of debt, and prudent financial policies with respect to debt- funded acquisitions. Moody's could stabilize the rating outlook if it no longer expects credit measures to strengthen to levels indicative of a potential upgrade to the rating. Moody's could downgrade the rating with expectations for leverage above 6 times, interest coverage below 2 times, sustained negative free cash flow, or a substantive deterioration in liquidity. Ratings would also be pressured by a change to more aggressive financial policies. The principal methodology used in this rating was the Global Automotive Supplier Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Park-Ohio Industries Incorporated is an industrial supply chain logistics and diversified manufacturing company with three primary business segments: Supply Technologies; Assembly Components; and Engineered Products. Headquartered in Cleveland, Ohio, the company generated revenue of $1.1 billion in 2012. PATRIOT COAL: Labor Agreements Ratified; Hearing Set for Aug. 20 ---------------------------------------------------------------- Patriot Coal Corporation on Aug. 16 disclosed that employees represented by the United Mine Workers of America have ratified 5- year labor agreements. These agreements were reached between Patriot's signatory subsidiaries and the UMWA, as previously announced on August 12. "Ratification of these agreements provides labor stability and ensures cost savings essential to Patriot's plan of reorganization," said Patriot President and Chief Executive Officer Bennett K. Hatfield. "These agreements should set Patriot on a path to emerge from bankruptcy by the end of 2013." A motion seeking authorization to enter into these agreements has been filed with the Bankruptcy Court in St. Louis and will be heard at the August 20, 2013 Omnibus Hearing. 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 serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. 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. PLAYA HOTELS: S&P Assigns 'B' CCR & Rates $400MM Facility 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned parent guarantor Playa Hotels & Resorts B.V. a 'B' corporate credit rating. The outlook is stable. At the same time, S&P assigned borrower Playa Resorts Holding B.V.'s $400 million senior secured credit facility its 'BB-' issue-level rating, with a recovery rating of '1', indicating S&P's expectation for very high (90% to 100%) recovery for lenders in the event of a payment default. The credit facility consists of a $25 million revolver due 2018 and a $375 million term loan due 2019. In addition, S&P assigned the company's $300 million senior unsecured notes due 2020 its 'B-' issue-level rating, with a recovery rating of '5', indicating S&P's expectation for modest (10% to 30%) recovery for lenders. The company used proceeds from the proposed debt issuances, along with a $325 million preferred and common equity investment by Hyatt Hotels Corp., a $50 million preferred equity investment by a current shareholder of BD Real Resorts, and more than $400 million in common equity contributed by certain predecessor company shareholders, to acquire eight all-inclusive resorts from Playa's predecessor company, four all-inclusive resorts and a management company from BD Real Resorts, and one resort in Jamaica. The company also used proceeds to repay debt and other obligations at predecessor companies, pay transaction fees and expenses, and place cash on the balance sheet to finance resort renovations through 2015. The 'B' corporate credit rating reflects S&P's assessment of Playa's financial risk as "highly leveraged" and S&P's assessment of the company's business risk as "weak," according to its criteria. PLUG POWER: Incurs $9.3 Million Net Loss in Second Quarter ---------------------------------------------------------- Plug Power Inc. reported a net loss attributable to the Company of $9.32 million on $7.49 million of total revenue for the three months ended June 30, 2013, as compared with a net loss attributable to the Company of $6.47 million on $7.65 million of total revenue for the same period a year ago. For the six months ended June 30, 2013, the Company incurred a net loss attributable to the Company of $17.89 million on $13.94 million of total revenue, as compared with a net loss attributable to the Company of $13.06 million on $15.41 million of total revenue for the same period during the year before. As of June 30, 2013, the Company had $36.38 million in total assets, $26.96 million in total liabilities, $2.45 million in redeemable preferred stock and $6.96 million in stockholders' equity. "What is most encouraging about this quarter's sales is realizing the business coming from long-time customers who are both growing their fleets in existing installations and expanding to new facilities. This, plus our recent investment from Air Liquide, are proof points to prospects that GenDrive fuel cells are a superior alternative to lead-acid batteries," said Andy Marsh, CEO of Plug Power. "From an execution perspective, I'm pleased with the progress we're making toward meeting the targets we've set for revenue and for managing our operational costs." A copy of the press release is available for free at: http://is.gd/CDh5Uf About Plug Power Plug Power Inc. is a provider of alternative energy technology focused on the design, development, commercialization and manufacture of fuel cell systems for the industrial off-road (forklift or material handling) market. KPMG LLP, in Albany, New York, expressed substantial doubt about Plug Power's ability to continue as a going concern, following their audit of the Company's financial statements for the year ended Dec. 31, 2012, citing the Company's recurring losses from operations and substantial decline in working capital. PMI GROUP: Suspends Filing of Reports With SEC ---------------------------------------------- The PMI Group, Inc., filed a Form 15 with the U.S. Securities and Exchange Commission to voluntarily terminate the registration of its common Stock, par value $0.01 per share, and preferred stock purchase rights. As a result of the Form 15 filing, the Company will not anymore be obligated to file periodic reports with the SEC. As of Jan. 1, 2013, the Company had 144 holders of record of Common Stock and Preferred Stock Purchase Rights. Because the Common Stock and Preferred Stock Purchase Rights were held of record by fewer than 300 persons as of and since that date, the duty of the Company to file reports under Section 15(d) of the Exchange Act was automatically suspended commencing with the fiscal year beginning Jan. 1, 2013. The Company thereafter continued to file Exchange Act reports with the SEC on a voluntary basis. The Company also filed post-effective amendments to its registration statements on Form S-3 and Form S-8 to terminate the offerings of securities under those registration statements. 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. The U.S. Bankruptcy Court approved the Plan of Reorganization and related disclosure statement of PMI Group on July 25, 2013. PROCESS CONTROLS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Process Controls International, Inc. 13871 Parks Steed Drive Earth City, MO 63045 Bankruptcy Case No.: 13-47323 Chapter 11 Petition Date: August 9, 2013 Court: United States Bankruptcy Court Eastern District of Missouri (St. Louis) Judge: Charles E. Rendlen III Debtor's Counsel: Robert E. Eggmann, Esq. Thomas H. Riske, Esq. DESAI EGGMANN MASON LLC 7733 Forsyth Boulevard, Suite 2075 Clayton, MO 63105 Tel: (314) 881-0800 Fax: (314) 881-0820 E-mail: reggmann@demlawllc.com triske@demlawllc.com Estimated Assets: $500,001 to $1,000,000 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 Roderick Barnett, president. PULTEGROUP INC: Fitch Affirms 'BB' Issuer Default Rating -------------------------------------------------------- Fitch Ratings has affirmed PulteGroup, Inc.'s (NYSE: PHM) Issuer Default Rating (IDR) and senior unsecured ratings at 'BB'. The Rating Outlook is Stable. Key Rating Drivers The ratings and Stable Outlook for PHM reflect year-over-year improvement in operational and financial categories (especially absorption rates and gross profit margin) during recent quarters and better performance relative to its peers. They also reflect a moderate, sustained housing recovery, broad geographic and product diversity, a long track record of adhering to a disciplined financial strategy and, somewhat more recently an at times aggressive growth strategy via acquisitions. The merger with Centex in August 2009 further enhanced the company's broad geographic and product line diversity. Centex's significant presence in the entry-level and first move-up categories complements PHM's strength in both the move-up and active adult segment. PHM's Del Webb (active adult) segment is perhaps the best recognized brand name in the homebuilding business. The company also did a good job in reducing its inventory and generating positive operating cash flow during the severe housing downturn from 2007 to 2011. PHM's future ratings and Outlook will be influenced by broad housing market trends as well as company specific activity, such as land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels and free cash flow trends and uses. Debt And Liquidity PHM's rating also takes into account the company's strong liquidity position as well as the successful execution of its debt repayment strategy following the merger with Centex in August 2009 and more recently. Subsequent to the merger the company repurchased $1.5 billion of senior notes through a tender offer. PHM also retired $898.5 million of debt in 2010, $323.9 million in 2011, $592 million in 2012 and $434 million in the first half of 2013. The company's remaining debt maturities are well laddered with $327 million scheduled to mature in 2015 and $458.4 million due in 2016. As a cost saving measure and to provide increased operational flexibility, PHM voluntarily terminated its $250 million unsecured revolving credit facility effective March 30, 2011. Fitch anticipates that PHM will re-establish a credit facility over the next 12-18 months. PHM ended the June 2013 quarter with $1.21 billion of unrestricted cash and equivalents and $2.08 billion of senior notes. As is the case with other public homebuilders, PHM is using the liquidity accumulated over the past few years to rebuild its land position and trying to opportunistically acquire land at attractive prices. Also, the company indicated in late July 2013 that the board of directors reinstituted a quarterly dividend ($0.05 per share). The board had eliminated the $0.04 per share quarterly dividend in November 2008 to conserve cash. Also in July 2013, the company announced that the board approved a share repurchase authorization for an additional $250 million, raising PHM's total repurchase authorization to $352 million. There have been no repurchases under the prior program since 2006. Even with substantial land and development spending in 2013 as well as some moderate share repurchase activity and close to $40 million paid out in dividends, Fitch expects PHM will end the year with a cash position between $1 billion and $1.5 billion. MARGIN ENHANCEMENT AND COST-REDUCTION EFFORT PHM has realized significant gross margin improvement from prior severely depressed levels. From 1Q'09 to 2Q'12, the margin improved 1,088 basis points (bps). Compared to the 2Q'12, the 2Q'13 margin is up a further 370 bps. In addition the company is targeting further gross margin expansion through various operational initiatives. These initiatives include a rising share of closings from recently acquired, often lower cost land; favorable product mix benefiting from move-up and active adult closings; pushing design, engineering and purchasing activities out to field operations to drive down local costs; and working to ensure proper balance of dirt vs. spec sales. Also, the long-term land strategy and decision to retain strategic land positions is starting to benefit margins. REAL ESTATE As of June 30, 2013, PHM controlled 123,871 lots, of which 79.2% are owned and the remaining 20.8% are controlled through options. Total lots controlled represent an approximately 7.1-year supply of total lots based on LTM closings and the company owns 5.6 years of lots. The company's land position has historically been longer compared to other public homebuilders due to its Del Webb operations. PHM's active adult and certain master-planned communities can extend from five to seven years or longer during their build-out. During the past few years, the company has been relatively subdued in committing to incremental land purchases because of its sizeable land position. Of course, the acquisition of Centex in 2009 allowed the company to sharply increase its land position. Management estimates that 30% of its total lots controlled are fully developed. PHM spent $750 million on land and development in 2009, while Centex spent roughly $200 million. PHM spent $980 million on land and development in 2010 and $1.04 billion in 2011. The company paid out $924 million for land and development in 2012 - roughly 1/3 for land and 2/3 for development activities. PHM expects to spend about $1.6 billion on land and development in 2013, up from $1.2 billion forecast earlier in the year. (For perspective, PHM alone spent $4.6 billion on land and development in 2006.) PHM continues to have meaningful development expenditures, largely due to its Del Webb active adult (retiree) operations. Currently, fewer developed lots are available to buy, thus more raw land, which will require development spending, is being acquired. Fitch is comfortable with PHM's land strategy given the company's cash position, debt maturity schedule, proven access to the capital markets, and management's demonstrated discipline in pulling back on its land and development activities during periods of distress. Additionally, Fitch expects management to be disciplined with the uses of its cash, refraining from significant share repurchases or one-time dividends to its stockholders that would meaningfully deplete its liquidity position. THE INDUSTRY Housing metrics have all showed improvement so far in 2013. For the first six months of the year, single-family housing starts improved 20.2%, while existing home sales increased 10.3%. New home sales improved 28.4% for the first six months of 2013. The most recent Freddie Mac 30-year interest rate was 4.40%, 109 bps above the all-time low of 3.31% set the week of Nov. 21, 2012. The NAHB's latest existing home affordability index was 172.7, moderately below the all-time high of 207.3. Fitch's housing forecasts for 2013 assume a continued moderate rise off the bottom of 2011. New-home inventories are at historically low levels and affordability is near record highs. In a slowly growing economy with still above-average distressed home sales competition, less competitive rental cost alternatives and low mortgage rates (on average), the housing recovery will be maintained this year. Fitch's housing estimates for 2013 follow: Single-family starts are forecast to grow 18.3% to 633,000, while multifamily starts expand about 19% to 292,000; single-family new home sales should increase approximately 22% to 448,000 as existing home sales advance 7.5% to 5.01 million. Average single-family new home prices (as measured by the Census Bureau), which dropped 1.8% in 2011, increased 8.7% in 2012. Median home prices expanded 2.4% in 2011 and grew 7.9% in 2012. Average and median home prices should improve approximately 5.0% and 4.0%, respectively, in 2013. As Fitch noted in the past, the housing recovery will likely occur in fits and starts. Rating Sensitivities Fitch would consider taking positive rating actions if the recovery in housing persists in 2013 and 2014 and PHM shows further steady improvement in credit metrics (such as debt leverage approaching 2.5x and interest coverage approximately 6.5x). A negative rating action could occur if the recovery in housing dissipates, PHM maintains an overly aggressive land and development spending program and/or substantial share repurchase program which meaningfully diminishes its liquidity position (below $500 million). Fitch has affirmed the following ratings for PHM with a Stable Outlook: PulteGroup, Inc.: -- IDR at 'BB'; -- Senior unsecured debt at 'BB'. Centex Corp.: -- IDR at 'BB'; -- Senior unsecured debt at 'BB'. RAHEEL FOODS: Case Summary & 14 Unsecured Creditors --------------------------------------------------- Debtor: Raheel Foods, Inc., a Michigan corporation aka Raheel Foods Michigan c/o David Findling, Receiver 415 S. West Street Royal Oak, MI 48067 Bankruptcy Case No.: 13-55132 Chapter 11 Petition Date: August 8, 2013 Court: U.S. Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Richard E. Kruger, Esq. JAFFE, RAITT, HEUER & WEISS, P.C. 27777 Franklin Road, Suite 2500 Southfield, MI 48034 Tel: (248) 351-3000 Fax: (248)351-3082 E-mail: rkruger@jaffelaw.com - and ? Alicia S. Schehr, Esq. JAFFE, RAITT, HEUER & WEISS, P.C. 27777 Franklin Road, Suite 2500 Southfield, MI 48034-8214 Tel: (248) 351-3000 E-mail: aschehr@jaffelaw.com - and ? Jay L. Welford, Esq. JAFFE, RAITT, HEUER & WEISS, P.C. 27777 Franklin Road, Suite 2500 Southfield, MI 48034-8214 Tel: (248) 351-3000 E-mail: jwelford@jaffelaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 14 largest unsecured creditors is available for free at http://bankrupt.com/misc/mieb13-55132.pdf The petition was signed by David Findling, receiver and authorized representative. RG STEEL: Wins Court Approval of Longer Plan-Filing Exclusivity --------------------------------------------------------------- U.S. Bankruptcy Judge Kevin Carey extended RG Steel LLC's exclusive right to file a Chapter 11 plan to Dec. 2, 2013, and to solicit votes from creditors to Jan. 31, 2014. 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. SAGE COLLEGES: Moody's Changes Ratings Outlook to Negative ---------------------------------------------------------- Moody's Investors Service has affirmed the B2 long-term debt rating on the Series 1999 fixed rate bonds issued through the City of Albany Industrial Development Agency (Albany Industrial Development Agency) and the underlying rating on the Series 2002 variable rate demand bonds issued through the Rensselaer County Industrial Development Agency (Rensselaer IDA). The outlook is negative. The B2 and negative outlook reflect continued thin liquidity, considerable bank debt with renewal and acceleration risk, and intense competition for students. The Series 2002 bonds also carry an enhanced rating of A2/VMIG 1 based on Moody's joint default rating methodology and letter of credit provided by Manufacturers and Traders Trust Company (M&T rated A2/P-1 stable), which has a stated expiration date of June 30, 2014. Rating Rationale: The B2 rating and negative outlook for The Sage Colleges incorporates various challenges including thin liquidity (34 monthly days cash on hand for fiscal 2012), concentrated bank debt exposure with the bank enjoying stronger legal security than bondholders, and limited tuition pricing power. Nearly all of the FY 2012 unrestricted funds are held as collateral for a cyclical cash flow operating line of credit, which places the Series 1999 fixed rate bondholders in a subordinate position that could impact expected recovery in the event of distress. While the rating outlook remains negative Moody's acknowledges several points of positive momentum including slight enrollment growth, increased donor support, improved operating cash flow, and modified collateral requirements related to the bank line of credit. Challenges - Sage's balance sheet and capital structure remain extremely weak, though slight improvements in FY 2012 reflect the strategic efforts of the management team, as evidenced by expendable resources of $12,000 in FY 2012, up from negative $1.3 million in FY 2011. - The college has extremely narrow liquidity of $4.1 million in FY 2012, which provided only 34 days of monthly days cash on hand and is held as collateral for the college's $6.0 million operating line of credit, used for operating cash flow needs. With the March 2013 modification of certain credit facilities for the M&T operating line of credit, liquidity in excess of $4.1 million will be unencumbered. The rebuilding of flexible reserves remains critical to Sage's long term improvement in its credit profile. - Significant bank concentration with a letter of credit and a line of credit provided by Manufacturers and Traders Trust Company. Further, the college's endowment assets are held at M&T. - Sage retains heavy reliance on tuition and auxiliaries revenues at 86% of Moody's adjusted operating revenues for FY 2012, though revenue streams are distributed among the four program- diverse Sage colleges. Strengths - Sage recorded a second year of Improvement in financial performance through FY 2012, with a narrow, but positive operating margin of 0.3% (Moody's calculated), as a result of continued enrollment management success, revenue and expense containment. Operating cash flow margin was 7.8% in FY 2012, with overall debt service coverage of a sound 1.7 times. - Measured improvements and enhanced marketing supporting momentum in the student market position of the college as full- time equivalent (FTE) enrollment rose to 2,521 in fall 2012, an 18% increase over fall 2008, and management expectations for continued growth in the fall of 2013 in its undergraduate programs despite the intense competitive climate. - The recent renegotiation of terms and conditions of the operating line of credit with M&T bank reduced the necessary collateral funding from $6.2 million to $4.1 million, allowing Sage access to much needed unencumbered liquidity. - Sage recorded gift and donor support milestones, with $36 million raised as of April 2013 toward the $50 million Centennial Campaign goal anticipated to be met by 2016, and average gift revenue of $8.6 million over the FY 2010 to 2012 period. The majority of funds have been used for capital projects and endowment support. - Governance and management teams are focused and strategically aligned, demonstrated by recent market momentum, fundraising success and improved financial stewardship. Outlook The negative outlook reflects The Sage Colleges' continued thin liquidity, exposure to bank facility renewal risk and limited headroom for error, in addition to intense competition for students. What Could Change The Rating Up Upward rating pressure is possible with sustained balanced operations in the near term, significant improvement in liquidity position and non-reliance on external liquidity for operations, and continued donor support improvements. In addition, meeting enrollment targets to grow net tuition revenue and growth of surpluses in excess of the line of credit collateral requirements will position Sage favorably going forward. Growth in liquidity reserves that would be available to Series 1999 bondholders would also be favorably viewed. What Could Change The Rating Down A return to operating deficits and deterioration of unrestricted assets, an inability to increase net student revenue, continued deterioration in liquidity, and an inability to access needed liquidity. A downgrade of M&T Bank and resulting acceleration of debt repayment by Sage would also be credit negative. Methodology The principal methodology used in this rating was U.S. Not-for- Profit Private and Public Higher Education in August 2011. SANCTIONED AUTOMOTIVE: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Sanctioned Automotive Group, LLC 1375 E 6th Street, No 2 Los Angeles, CA 90021 Bankruptcy Case No.: 13-30217 Chapter 11 Petition Date: August 9, 2013 Court: United States Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: John P. Schafer, Esq. THE SCHAFER LAW FIRM P.C. 30211 Avenida de las Banderas, Suite 200 Rancho Santa Margarita, CA 92688 Tel: (949) 398-8302 Fax: (949) 398-8320 E-mail: jschafer@theschaferfirm.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 unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/cacb13-30217.pdf The petition was signed by Atticus Firey, CEO and president, co- managing member. SCHOLAR TOTS: Case Summary & 17 Unsecured Creditors --------------------------------------------------- Debtor: Scholar Tots, Inc. dba ABC Children's Learning Academy 4330 Summit Boulevard West Palm Beach, FL 33406 Bankruptcy Case No.: 13-28836 Chapter 11 Petition Date: August 8, 2013 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Kaleb R. Bell, Esq. ROSEN, P.A. 2925 PGA Boulevard, #100 Palm Bch Gardens, FL 33410 Tel: (561) 799-6040 Fax: (561) 799-4047 E-mail: kbell@rosenpa.com - and ? Eric A. Rosen, Esq. ROSEN, P.A. 2925 PGA Boulevard, #100 Palm Beach Gardens, FL 33410 Tel: (561) 799-6040 Fax: (561) 799-4047 E-mail: erosen@rosenpa.com Scheduled Assets: $2,286,965 Scheduled Liabilities: $4,205,184 A copy of the Company's list of its 17 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb13-28836.pdf The petition was signed by Eric B. Epstein, president. SINCLAIR BROADCAST: S.A.C. Capital Holds 5.2% of Class A Shares --------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, S.A.C. Capital Advisors, L.P., and its affiliates disclosed that as of Aug. 9, 2013, they beneficially owned 3,850,741 shares of class A common stock of Sinclair Broadcast Group, Inc., representing 5.2 percent of the shares outstanding. A copy of the regulatory filing is available for free at: http://is.gd/Icjh2o About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. "Any insolvency or bankruptcy proceeding relating to Cunningham, one of our LMA partners, would cause a default and potential acceleration under the Bank Credit Agreement and could, potentially, result in Cunningham's rejection of our seven LMAs with Cunningham, which would negatively affect our financial condition and results of operations," the Company said in its annual report for the period ended Dec. 31, 2012. The Company's balance sheet at March 31, 2013, showed $2.73 billion in total assets, $2.83 billion in total liabilities and a $97.28 million total deficit. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Sinclair to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. In September 2010, Moody's raised its ratings for Sinclair Broadcast and subsidiary Sinclair Television Group, including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. SHERIDAN GROUP: Posts $105,000 Net Income in Second Quarter ----------------------------------------------------------- The Sheridan Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $105,049 on $66.38 million of net sales for the three months ended June 30, 2013, as compared with a net loss of $15,338 on $65 million of net sales for the same period a year ago. For the six months ended June 30, 2013, the Company posted net income of $499,920 on $134.43 million of net sales, as compared with a net loss of $181,018 on $134.95 million of net sales for the same period during the prior year. The Group disclosed a net loss of $93,546 in 2012, a net loss of $8.96 million in 2011 and a $5.94 million net loss in 2010. As of June 30, 2013, the Company had $196.45 million in total assets, $166.85 million in total liabilities and $29.59 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/edbZXm About The Sheridan Group Hunt Valley, Maryland-based The Sheridan Group, Inc. -- http://www.sheridan.com/-- is a specialty printer offering a full range of printing and value-added support services for the journal, catalog, magazine and book markets. * * * As reported by the TCR on Sept. 16, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on Hunt Valley, Md.-based printing company The Sheridan Group Inc. to 'CCC+' from 'B-'. "The 'CCC+' corporate credit rating reflects Sheridan's ongoing thin margin of compliance with its minimum EBITDA covenant," said Standard & Poor's credit analyst Tulip Lim. "It also reflects our expectation of continued difficult operating conditions across the company's niche printing segments, its vulnerability to prevailing economic pressures, its high debt leverage, and the secular shift away from print media." In the Dec. 14, 2012, edition of the TCR, Moody's Investors Service downgraded the Corporate Family Rating (CFR) for The Sheridan Group, Inc. (Sheridan) to Caa1 from B3. Sheridan's Caa1 CFR reflects risks that the intense secular challenges facing the printing industry will compromise refinance activities as the company addresses its upcoming maturities, including the $15 million revolving working capital facility due October 2013 and the $128 million senior secured notes in April 2014. STELLAR BIOTECHNOLOGIES: Updates Shareholders on Recent Progress ---------------------------------------------------------------- Stellar Biotechnologies, Inc., has issued a letter from Stellar President and CEO Frank Oakes, to update shareholders on the status of the Company. A full-text of Stellar's Letter is available for free at: http://www.stellarbiotechnologies.com/_resources/letter.pdf "This letter gives us the opportunity to highlight Stellar's progress and strategies, and to demonstrate how we believe the past year's hard work and many accomplishments can transform our corporate goals into long-term growth and shareholder value," said Mr. Oakes. The letter recaps recent advancements made in Stellar's business, including: * Clostridium difficile Vaccine Program; Exclusive Worldwide License & Preclinical Progress * Aquaculture Manufacturing Major Milestones * Regulatory Progress; New BB-MF Filed with FDA * Expanded Intellectual Property and Market Opportunities * Scientific Presentations & Peer-Review Recognition * Leadership * Growth Roadmap About Stellar Port Hueneme, Cal.-based Stellar Biotechnologies, Inc.'s business is to commercially produce and market Keyhole Limpet Hemocyanin ("KLH") as well as to develop new technology related to culture and production of KLH and subunit KLH ("suKLH") formulations. The Company markets KLH and suKLH formulations to customers in the United States and Europe. KLH is used extensively as a carrier protein in the production of antibodies for research, biotechnology and therapeutic applications. The Company's balance sheet at March 31, 2013, showed US$1.4 million in total assets, US$4.6 million in total liabilities, and a stockholders' deficit of US$3.2 million. The Company reported a net loss of US$4.4 million on US$177,208 of revenues for the six months ended Feb. 28, 2013, compared with a net loss of US$2.1 million on US$193,607 of revenues for the six months ended Feb. 29, 2012. STEREOTAXIS INC: Incurs $3 Million Net Loss in Second Quarter ------------------------------------------------------------- Stereotaxis, Inc., reported a net loss of $3 million on $9.73 million of total revenue for the three months ended June 30, 2013, as compared with net income of $2.80 million on $10.51 million of total revenue for the same period during the prior year. For the six months ended June 30, 2013, the Company recorded a net loss of $7.92 million on $18.14 million of total revenue, as compared with a net loss of $3 million on $22.79 million of total revenue for the same period a year ago. The Company incurred a net loss of $9.23 million in 2012, as compared with a net loss of $32.03 million in 2011. As of June 30, 2013, the Company had $23.99 million in total assets, $49.63 million in total liabilities and a $25.63 million total stockholders' deficit. William Mills, Stereotaxis Board chairman and interim chief executive officer, said, "In the second quarter, we achieved sequential improvement in revenue, gross margin and operating loss and secured two orders for our Niobe(R) ES system. One of these orders was a second system sale to a leading U.S. healthcare provider, which is one of four major integrated delivery networks in the country to invest in the EpochTM platform. Capital Transactions On Aug. 8, 2013, holders of all of the Company's convertible subordinated notes exercised outstanding warrants to purchase an aggregate of 2.5 million shares of common stock for cash at an exercise price of $3.361 per share and converted a portion of their notes into shares of common stock. In a separate transaction, the holders exchanged the balance of their convertible notes for shares and additional warrants to purchase 2.5 million shares, also having an exercise price of $3.361 per share. The convertible notes held by these holders were extinguished, and the Company issued shares at a combined rate of $3.00 per share in these transactions. As a result of these transactions, the Company is issuing a total of 5.2 million shares of common stock and will receive an aggregate of $8.475 million in cash from the warrant exercise. In addition, $8.1 million of convertible subordinated notes have been retired. In connection with the exchange, the holders and the Company amended the terms of the original securities purchase agreement under which the notes and warrants were issued to remove certain ongoing covenants. The Company also intends to conduct a rights offering to all existing stockholders, pursuant to which its stockholders may elect to purchase a specified fraction of a share for each share of stock held as of the record date for the offering, at a price of $3.00 per share. The Company currently anticipates that fraction would not be less than 0.25 per share for each share of common stock held. The Company will register the rights offering with the Securities and Exchange Commission, and as a result, the record date for the rights offering has not been set at this time. Stereotaxis entered into these transactions with the assistance of Gordian Group to help alleviate its immediate liquidity concerns. The Company continues to work on a long-term resolution of these liquidity issues with its financial advisors to mitigate the operational and financial risks that it faces. NASDAQ Status On July 25, Company representatives appeared before the NASDAQ Listing Qualifications Panel to request a transfer from the NASDAQ Global Market to the NASDAQ Capital Market and to present a compliance plan. The hearing was granted following a determination letter by the NASDAQ staff which denied the Company's request for an extension to achieve compliance with Global Market requirements. If the Panel decides to continue Stereotaxis' listing on the Capital Market, the Company could have until Dec. 16, 2013, to achieve compliance with applicable listing requirements. The Company does not have the results of the hearing at this time, but intends to continue to pursue its plans to achieve compliance with Capital Market criteria and to report to the Panel on its progress no later than Aug. 15, 2013, as requested by the Panel. A copy of the press release is available for free at: http://is.gd/eL9HDJ About Stereotaxis Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures and markets the Epoch Solution, which is an advanced remote robotic navigation system for use in a hospital's interventional surgical suite, or "interventional lab", that the Company believes revolutionizes the treatment of arrhythmias and coronary artery disease by enabling enhanced safety, efficiency and efficacy for catheter-based, or interventional, procedures. For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis, Missouri, expressed substantial doubt about Stereotaxis' ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. SUN BANCORP: Files Form 10-Q, Posts $678,000 Net Income in Q2 ------------------------------------------------------------- Sun Bancorp, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income available to common shareholders of $678,000 on $25.71 million of total interest income for the three months ended June 30, 2013, as compared with net income available to common shareholders of $1.31 million on $29.40 million of total interest income for the same period a year ago. For the six months ended June 30, 2013, the Company reported net income available to common shareholders of $3.13 million on $52.79 million of total interest income, as compared with a net loss available to common shareholders of $26.76 million on $58.80 million of total interest income for the same period during the prior year. 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. A copy of the Form 10-Q is available for free at: http://is.gd/jiSaQe 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. SUNTECH POWER: Regains Compliance With NYSE's Listing Rule ---------------------------------------------------------- Suntech Power Holdings Co., Ltd., has regained compliance with the New York Stock Exchange's minimum share price listing requirement. In a letter dated Aug. 2, 2013, the NYSE notified the Company that a calculation of Suntech's average stock price for the 30 trading days ended July 31, 2013, indicated that its stock price was above the NYSE's minimum requirement of an average trading price of $1 over a 30-day trading period and was above $1 on the last calendar day of the month of the trading period. On July 31, 2013, the Company's closing stock price was $1.44. On May 14, 2013, the Company received notification from the NYSE that it had failed to timely file its Form 20-F for the fiscal year ended Dec. 31, 2012. The Company continues to work on its restated financials for 2010 and 2011, as well as the 2012 annual report. The NYSE has indicated that it will closely monitor the status of the Company's late filing and related public disclosures for up to a six-month period from its due date. If the Company fails to file its annual report within six months from the filing due date, the NYSE may allow the Company's securities to trade for up to an additional six months. About Suntech Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP) produces solar products for residential, commercial, industrial, and utility applications. With regional headquarters in China, Switzerland, and the United States, and gigawatt-scale manufacturing worldwide, Suntech has delivered more than 25,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. As reported by the TCR on March 20, 2013, Suntech Power Holdings Co., Ltd., has received from the trustee of its 3 percent Convertible Notes a notice of default and acceleration relating to Suntech's non-payment of the principal amount of US$541 million that was due to holders of the Notes on March 15, 2013. That event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corporation and Chinese domestic lenders. TNP STRATEGIC: Extends Forbearance with Keybank Until Jan. 31 ------------------------------------------------------------- TNP Strategic Retail Trust, Inc., TNP Strategic Retail Operating Partnership, LP, the Company's operating partnership, certain subsidiaries of the Company, as borrowers, and KeyBank National Association, as administrative agent, entered into an amendment to Forbearance Agreement on July 31, 2013. Pursuant to the Amendment, the Lenders' obligation to provide forbearance will terminate on the first to occur of (1) Jan. 31, 2014, (2) a default under or breach of any of the representations, warranties or covenants of the Forbearance Agreement, or (3) an event of default under the loan documents related to the Credit Facility occurring or becoming known to any Lender. The Forbearance Amendment also provides that the entire outstanding principal balance, and all interest thereon, of the outstanding Tranche A loans under the Credit Facility will become due and payable in full on Jan. 31, 2014. As previously reported, in connection with the Forbearance Agreement, the Borrowers and KeyBank entered into a Fee Letter pursuant to which the Borrowers paid KeyBank a forbearance fee. In connection with the Forbearance Amendment, the Borrowers and KeyBank entered into an amendment to the Fee Letter pursuant to which the Borrowers agreed to pay KeyBank, for the accounts of the Lenders, an additional forbearance fee. The parties originally entered into the Forbearance on April 1, 2013, which amended the terms of the Company's Revolving Credit Agreement, dated as of Dec. 17, 2010, with KeyBank. Pursuant to the original terms of the Forbearance Agreement, KeyBank and the other lenders agreed to forbear from exercising their rights and remedies under the Credit Facility with respect to (1) the failure by the Borrowers to make certain loan payments to the Lenders as required under the Credit Facility, (2) the failure by the Borrowers to use the total proceeds from or with respect to certain capital events to repay the amounts outstanding under the Tranche A loans as required by the Credit Facility, and (3) the Company's agreement to make a prohibited restricted payment during an event of default under the Credit Facility; provided, however, that the Lenders' obligation to provide that forbearance would terminate on July 31, 2013. A copy of the Amendment to Forbearance Agreement is available at: http://is.gd/ipA36Q About TNP Strategic TNP Strategic Retail Trust, Inc., was formed on Sept. 18, 2008, as a Maryland corporation. The Company believes it qualifies as a real estate investment trust under the Internal Revenue Code of 1986, as amended, and has elected REIT status beginning with the taxable year ended Dec. 31, 2009, the year in which the Company began material operations. The Company was initially capitalized by the sale of 22,222 shares of common stock for $200,000 to Thompson National Properties, LLC, on Oct. 16, 2008. TNP Strategic's balance sheet at Sept. 30, 2012, showed $272.33 million in total assets, $197.98 million in total liabilities and $74.34 million in total equity. The Company reported a net loss of $11.63 million for the nine months ended Sept. 30, 2012, compared with a net loss of $4.39 million for the same period a year ago. TPF II LC: S&P Raises Prelim. Rating on Credit Facilities to 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it raised its preliminary ratings on the credit facilities to 'BB-' from 'B+' due to a reduction in debt. S&P also maintained its preliminary '1' recovery rating on the debt. The outlook is stable. The 'BB-' rating for TPF II's portfolio of three merchant peaking power plants in Illinois and Ohio reflects a high debt leverage that relies on merchant peaking energy revenues, which are inherently volatile, but also relies favorably on PJM Interconnection capacity market revenues that are much less risky than energy revenues. Revenues from capacity and ancillary services provide generally about 80% to 85% of revenue (depending on the future year), making the credit story mostly a view of long-term PJM capacity markets. The plants have limited geographic diversity--Crete with 328 megawatts (MW) and Lincoln with 656 MW are located south of Chicago in the PJM-ComEd zone and the 850 MW Rolling Hills is located in the PJM-AEP zone in southeast Ohio. Each plant earns the same base PJM regional transmission organization zone capacity price. "The stable outlook reflects our view that cash flows will be stable over the next several years based on most revenue coming from capacity payments that are known through mid-2017 and based on proven plant performance assumptions," said Standard & Poor's credit analyst Terry Pratt. Furthermore, S&P thinks it likely that the plants will show very low capacity factors, further mitigating operation risk. An improvement in the rating would require a track record of sound operational performance, continued comfort that quarterly covenants would not be tripped, and lower debt at maturity in S&P's base case -- below around $50 per kW -- that would come from energy revenues that well exceed S&P's expectations or capacity zrices from mid-2017 onward well above $90/kW-month. Developments that could result in a rating downgrade would be operational problems that materially reduce availability, much lower-than- expected energy revenue from Rolling Hills, or debt at maturity of 2018 -- generally around the $100/kW mark. TRAILBLAZER'S INC: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Trailblazer's, Inc. dba Warnfactoryoutlet.com dba Truckaddons.com 2040 Creative Drive, #300 Lexington, KY 40505 Bankruptcy Case No.: 13-51959 Chapter 11 Petition Date: August 10, 2013 Court: United States Bankruptcy Court Eastern District of Kentucky (Lexington) Debtor's Counsel: Matthew B. Bunch, Esq. BUNCH & BROCK, ATTORNEYS-AT-LAW 271 West Short Street, Suite 805 P.O. Box 2086 Lexington, KY 40588-2086 Tel: (859) 254-5522 E-mail: matt@bunchlaw.com Estimated Assets: not indicated 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 Barry Sanders, president and CEO. TRUSTEES OF YWCA: Case Summary & 3 Unsecured Creditors ------------------------------------------------------ Debtor: Trustees of YWCA of Essex & West Hudson, Inc. 395 Main Street Orange, NJ 07050 Bankruptcy Case No.: 13-27693 Chapter 11 Petition Date: August 12, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Rosemary Gambardella Debtor's Counsel: Stuart M. Nachbar, Esq. LAW OFFICE OF STUART M. NACHBAR 570 West Mount Pleasant Avenue, Suite 101 P.O. Box 2205 Livingston, NJ 07039 Tel: (973) 567-0954 Fax: (973) 629-1294 E-mail: stuart@snanj.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb13-27693.pdf The petition was signed by Donna K. Williams, de facto president ? board member. TWIN SILOS: Case Summary & 8 Unsecured Creditors ------------------------------------------------ Debtor: Twin Silos at Lavalette, LLC 400 Royal Birkdale Drive Lavalette, WV 25535 Bankruptcy Case No.: 13-30403 Chapter 11 Petition Date: August 12, 2013 Court: U.S. Bankruptcy Court Southern District of West Virginia (Huntington) Judge: Ronald G. Pearson Debtor's Counsel: Mitchell Lee Klein, Esq. KLEIN LAW OFFICE 3566 Teays Valley Road Hurricane, WV 25526 Tel: (304) 562-7111 Fax: (304) 562-7115 E-mail: swhittington@kleinandsheridan.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 eight unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wvsb13-30403.pdf The petition was signed by Gregory D. Hatfield, managing member. TXU CORP: Bank Debt Trades at 31% Off ------------------------------------- Participations in a syndicated loan under which TXU Corp is a borrower traded in the secondary market at 68.85 cents-on-the- dollar during the week ended Friday, August 16, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.69 percentage points from the previous week, The Journal relates. TXU Corp pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2017. The bank debt carries Moody's Caa3 rating and Standard & Poor's CCC 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 Energy Future Holdings, fka TXU Corp. Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. Restructuring Talks With Creditors In April 2013, Energy Future Holdings Corp., Energy Future Competitive Holdings Company, Texas Competitive Electric Holdings Company LLC, and Energy Future Intermediate Holding Company LLC confirmed in a regulatory filing that they are in restructuring talks with certain unaffiliated holders of first lien senior secured claims concerning the Companies' capital structure. The Companies expect to continue to explore all available restructuring alternatives to facilitate the creation of sustainable capital structures for the Companies and to otherwise attempt to address the Creditors' concerns with the Restructuring Proposal and Sponsor Proposal. The Companies have retained Kirkland & Ellis LLP and Evercore Partners to advise the Companies with respect to the potential changes to the Companies' capital structure and to assist in the evaluation and implementation of other potential restructuring options. The Creditors have retained Paul, Weiss, Rifkind, Wharton & Garrison LLP and Millstein & Co., L.P. to advise the Creditors and to assist in the Creditors' evaluation of potential restructuring options involving the Companies. According to a Wall Street Journal report, people familiar with the matter said Apollo Global Management LLC, Oaktree Capital Management, Centerbridge Partners and GSO Capital Partners, the credit arm of buyout firm Blackstone Group LP, all hold large chunks of Energy Future Holdings' senior debt. Many of these firms belong to a group being advised by Jim Millstein, a restructuring expert who helped the U.S. government revamp American International Group Inc. According to the Journal, people familiar with Apollo's thinking said Apollo recently enlisted investment bank Moelis & Co. for additional advice to ensure it gets as much attention as possible on the case given its large debt holdings. * * * In the Feb. 1, 2013, edition of the TCR, Fitch Ratings lowered the Issuer Default Ratings (IDR) of Energy Future Holdings Corp (EFH) and Energy Future Intermediate Holding Company LLC (EFIH) to 'Restricted Default' (RD) from 'CCC' on the conclusion of the debt exchange and removed the Rating Watch Negative. As reported by the TCR on Feb. 4, 2013, Standard & Poor's Ratings Services said it raised its corporate credit ratings on EFH, EFIH, TCEH, and Energy Future Competitive Holdings Co. (EFCH) to 'CCC' from 'D' following the completion of several debt exchanges, each of which S&P considers distressed. In February 2013, Moody's Investors Service withdraw Energy Future Holdings Corp.'s Caa3 Corporate Family Rating, Caa3-PD Probability of Default Rating, SGL-4 Speculative Grade Liquidity Rating and developing rating outlook. At the same time, Moody's assigned a Ca CFR to Energy Future Competitive Holdings Company and a B3 CFR to Energy Future Intermediate Holdings Company LLC. Both EFCH and EFIH are intermediate subsidiary holding companies wholly-owned by EFH. EFCH's rating outlook is negative. EFIH's rating outlook is negative. "We see different default probabilities between EFCH and EFIH," said Jim Hempstead, senior vice president. "We believe EFCH has a high likelihood of default over the next 6 to 12 months, because it is projected to run out of cash in early 2014. EFIH has a much lower likelihood of default owing to the credit separateness that EFH is creating between EFIH and Texas Competitive Electric Holdings Company LLC along with EFIH's reliance on stable cash flows from its regulated transmission and distribution utility, Oncor Electric Delivery Company." WALTER ENERGY: Bank Debt Trades at 6% Off ----------------------------------------- Participations in a syndicated loan under which Walter Energy Inc is a borrower traded in the secondary market at 94.20 cents-on- the-dollar during the week ended Friday, August 16, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 1.52 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. WEB.COM: Moody's Revises Outlook to Positive & Keeps CFR at B1 -------------------------------------------------------------- Moody's Investors Service affirmed Web.com's B1 corporate family rating and revised the company's probability of default rating to B1-PD, from B2-PD, and the rating for its first lien credit facilities to Ba3, from B1. The ratings changes were prompted by Web.com's plan to use approximately $251 million of net proceeds from the new senior convertible notes offering to repay a portion of outstanding loans under the first lien bank facilities to reduce interest expense and increase financial flexibility. Moody's also changed Web.com's ratings outlook to positive from stable reflecting the ratings agency's expectations for Web.com's strong free cash flow generation relative to debt and continued deleveraging. Moody's has taken the following ratings actions: Issuer: Web.com Group, Inc. Corporate Family Rating -- Affirmed, B1 Probability of Default Rating -- Revised to B1-PD from B2-PD $70 million 1st lien revolving credit facility due 2016 -- Revised to Ba3 (LGD3, 30%) from B1 (LGD3, 34%) $419 million (outstanding) senior 1st lien term loan due 2017 -- Revised to Ba3 (LGD3, 30%) from B1 (LGD3, 34%) Speculative grade liquidity rating -- Affirmed, SGL- 2 Outlook Action Outlook: Changed to Positive from Stable Ratings Rationale: The positive outlook reflects Moody's expectations that Web.com's free cash flow should increase to about 20% of total debt in 2014 driven by revenue growth rates in at least the high single digits, lower interest expense and debt reduction. Moody's expects Web.com's total debt to EBITDA (incorporating Moody's standard analytical adjustments including non-cash stock compensation and capitalized operating leases) to decline to about 3.5x by year-end 2014 through accelerated debt repayments and EBITDA growth. Although Web.com's leverage has progressively declined since closing the Network Solutions acquisition, the B1 CFR continues to reflect the company's still high financial leverage and its moderate operating scale. The company operates in a highly competitive market for web services to small and medium size businesses which is characterized by low barriers to entry, modest pricing power for basic products, and the low attach rates for add-on services that result in low average revenue per user (ARPU). The B1 rating also incorporates Web.com's track record of acquisitive growth and high financial risk tolerance to complete acquisitions. However, the rating also reflects Web.com's stronger competitive position and enhanced scale through consolidation over the past few years, and its strong prospective free cash flow relative to debt, which partly reflects the cost synergies from the Network Solutions acquisition. The rating additionally considers management's good business execution, which is evidenced by stable subscriber retention rates and sequential increases in ARPU and subscribers since the acquisition of Network Solutions in 4Q 2011. Web.com's credit profile is further supported by the company's good organic revenue growth prospects and management's track record of applying free cash flow to reduce debt and its commitment to delever toward its target of 3.0x debt/EBITDA (on a non-GAAP basis). The SGL-2 liquidity rating primarily reflects Web.com good free cash flow and access to borrowings under the $70 million revolving credit facility. Moody's raised Web.com's first lien debt ratings to Ba3 from B1 reflecting improved recovery prospects for the first lien debt as a result of the addition of junior convertible notes that will provide support to what will now be a lower amount of first lien debt. In accordance with its Loss Given Default methodology, Moody's also revised Web.com's probability of default rating to B1-PD from B2-PD, reflecting the impact of changes in the company's capital structure. Moody's could upgrade Web.com's ratings if the company generates sustained growth in revenue and cash flow from operations and demonstrates a commitment to conservative financial policies. Web.com's ratings could be raised if Moody's believes that the company could sustain financial leverage of less than 3.5x total debt to EBITDA (Moody's adjusted) and free cash flow in excess of 15% of total debt, incorporating the potential for acquisitions. Conversely, Moody's could change the positive outlook to stable or downgrade Web.com's ratings if revenue growth decelerates materially, weak business execution or increasing competitive challenges cause leverage to exceed 4.5x (Moody's adjusted) and free cash flow weakens to the low single digit percentages of total debt. Additionally, changes in financial policies that result in weakening of the balance sheet could trigger a downgrade. Headquartered in Jacksonville, FL, Web.com provides internet services and online marketing solutions to small businesses. The company reported revenues of $453 million in the twelve months ended June 30, 2013. The principal methodology used in this rating 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. WHIRLPOOL CORP: Investment in Hefei Sanyo is Credit Positive ------------------------------------------------------------ Moody's said Whirlpool's has entered into agreements to become a majority shareholder (51 percent ownership) for $552 million cash (based on exchange rate at August 9, 2013) in Hefei Rongshida Sanyo is credit positive. The principal methodology used in rating Whirlpool was the Global Consumer Durables methodology published in October 2010. Based in Benton Harbor, MI, Whirlpool Corporation manufactures and markets a full line of major appliances and related products including laundry appliances, refrigerators and freezers, cooking appliances and other appliance products. The company markets products under several brands including Whirlpool, Maytag, KitchenAid and several others. The company reported net sales of approximately $18.3 billion for the twelve months ended June 30, 2013 ($18.9 billion pro forma for Hefei Sanyo acquisition). Moody's carries these ratings for Whirlpool Corp: LT Issuer Rating; Baa3 Senior Unsecured (Domestic); Baa3 Senior Unsec. Shelf (Domestic); (P)Baa3 Subordinate Shelf (Domestic); (P)Ba1 ZOGENIX INC: Reports $13.3 Million Net Loss in Second Quarter ------------------------------------------------------------- Zogenix, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $13.33 million on $8.94 million of total revenue for the three months ended June 30, 2013, as compared with a net loss of $17.16 million on $8.03 million of total revenue for the same period during the prior year. For the six months ended June 30, 2013, the Company incurred a net loss of $34.38 million on $15.92 million of total revenue, as compared with a net loss of $27.46 million on $26.37 million of total revenue for the same period a year ago. Zogenix incurred a net loss of $47.38 million in 2012, as compared with a net loss of $83.90 million in 2011. As of June 30, 2013, the Company had $53.39 million in total assets, $69.48 million in total liabilities and a $16.08 million total stockholders' deficit. Roger Hawley, chief executive officer of Zogenix, stated, "Based on our recent interactions, the FDA is working on the Zohyrdo ER NDA and has indicated that it is reviewing the NDA as fast as possible and that nothing has changed with respect to reaching an action letter this summer. We have been reassured again that there are no deficiencies in the application. If approved, Zogenix will be prepared to launch Zohydro ER approximately three to four months after approval." A copy of the Form 10-Q is available for free at: http://is.gd/qvfs0g About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Ernst & Young LLP, in San Diego, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring losses from operations and lack of sufficient working capital which raise substantial doubt about the Company's ability to continue as a going concern. * Fitch Says Delinquencies and Foreclosures Decreasing ------------------------------------------------------ The second quarter of 2013 continued to see movement of non-agency RMBS away from banks and into the hands of non-bank servicers, according to a new report from Fitch Ratings. Additional large mortgage servicing right (MSR) transfers are scheduled to be completed in the last half of 2013, which continues to signal the banks' strategies to offload defaulted/high-risk loans. In addition to its acquisition of the Homeward Residential and GMAC Mortgage portfolios, Ocwen announced its intention to acquire MSRs from IndyMac Mortgage Services, a division of OneWest Bank, FSB and from Greenpoint Mortgage Funding, Inc. With the acquisition of Homeward Residential and GMAC Mortgage completed, Ocwen not only materially increased its volume of subprime loans, but added both prime and Alt-A products to its portfolio mix. At end of the second quarter, Ocwen was servicing 47% of all non- agency RMBS subprime loans. Nationstar continues onboarding its sizeable MSR acquisition from Bank of America that was announced in January. The second quarter also saw servicer-related loss volatility as several servicers and master servicers adjusted principal forbearance loss reporting. Both Ocwen and Nationstar passed through roughly $1 billion in principal forbearance-related losses during the quarter as part of their acquisitions of portfolios. This has led to concerns regarding servicer and master servicer reporting and the timing of loss recognition. Fitch believes this reporting issue will continue to drive further loss adjustments in the third quarter. Overall, delinquencies and foreclosures continue to decrease. However, residential mortgage servicers are still faced with issues regarding management of foreclosure and delinquency timelines. There continues to be a marked difference in the time to resolve delinquent loans between bank and non-bank servicers due to many factors, including regulations and staffing levels. Fitch believes that it will be challenging for non-bank servicers to maintain shorter timelines as additional highly delinquent loans move from the banks' portfolios to the non-bank servicers' portfolios. * Fitch: U.S. Corporate Pension Plans Underfunded Status Improves ----------------------------------------------------------------- A majority of large U.S. corporate pension plans were underfunded at the end of 2012. Fitch Ratings believes funding levels at mid- year have improved with recent discount rate increases and strong equity market performance. While pension underfunding gaps have narrowed, Fitch believes severely underfunded plans taking advantage of funding relief could still face steep funding requirements in the years ahead. Fitch's review encompassed 224 nonfinancial U.S.-based companies with defined benefit pensions plans having U.S. projected benefit obligations (PBOs) of $100 million or more. Of the 224 companies analyzed, 148 were less than 80% funded and warrant further investigation, based on the 80% 'at-risk' threshold in the Pension Protection Act (PPA). Of the remaining 76 companies, 57 were funded in the 80%-90% range while 19 companies were funded above the 90% level. The energy (oil and gas), retail and telecommunications sectors stood out with median plan funding levels of 70% or less. Fitch believes the contribution amounts are material for many issuers. In Fitch's sample, 36% of the 224 companies have an estimated pension outflow as a percentage of precontribution funds from operations (FFO; cash flow from operations less working capital) above a 10% threshold. Fitch estimates that the potential funding requirements of 16 companies could amount to 40% or more of their 2012 precontribution FFO. Relief provided for under the 'Moving Ahead for Progress in the 21st Century Act' (MAP-21) signed in July 2012 allows plan sponsors to lower near-term pension contributions through a materially higher discount rate for funding purposes. In Fitch's opinion, cash flow constrained issuers may benefit from the near- term relief, but for the majority of plan sponsors a more prudent approach will call for funding above minimum levels. Fitch does not anticipate taking any rating actions on an issuer based solely on possible pension contributions in 2013 or 2014. However, for a company on the edge of a rating category, the combination of weak earnings and the need for ongoing pension contributions could lead to a negative rating action. Fitch would evaluate the company's plans to address pension plan funding needs in the context of potential pressure on its liquidity needs. The full report is 'U.S. Corporate Pensions 2013 Overview.' * Moody's Notes Looming Challenges for Colleges and Universities ---------------------------------------------------------------- Median financial data for public and private colleges and universities for fiscal year 2012 show flat enrollment, relatively stable operating performance despite declining revenues, and continued constrained capital spending, says Moody's Investors Service in two new reports. Among the public universities, median revenue growth in fiscal year 2012 slowed to 1.7%, down from 4.8% in fiscal year 2011. Revenue declined at more than one-third of US public universities. At the same time, expenses grew at almost double the rate of revenues, at 3.3%. "Although cash flow remained ample at most public universities in fiscal year 2012, the developing trend of expense growth outpacing revenue growth is unsustainable," says Moody's Assistant Vice President Emily Schwarz, author of the median report "Heightened Pressure on Revenues to Persist for US Public Universities." "Future expense reductions will likely need to be more significant and include re-evaluation of existing business models to maintain long-term financial health," says Moody's Schwarz. Moody's expects several revenue streams will continue to contract for public universities, particularly net tuition per student, because of affordability concerns as well as limits on tuition increases in certain states. The severity of these revenue challenges will vary across the public university sector, with flagship universities and systems better able to leverage their brand and economies of scale. Among private colleges and universities, operating margins remained relatively stable over the past five years, in the 4% - 5% range, despite revenue declines. "Governing boards and management teams continue to exhibit fiscal stewardship of private colleges and universities by holding median operating margins relatively constant over the last five years even as revenue declined," says Moody's Assistant Vice President Mary Kay Cooney, author of the median report "Private College and University Medians Highlight Challenges in Post-Recession Era." The median for growth in net tuition per student among the private universities strengthened to 3.5% in fiscal year 2012, up from 3.0% in fiscal year 2011, but has not returned to pre-recession levels. Nearly one-third of private universities were unable to grow net tuition at inflationary levels. Overall enrollment in private universities in the fall of 2012 was flat, with Aaa- and Aa-rated universities experiencing modest enrollment growth of 1.2% and 0.7%, respectively, but enrollment at Baa-rated colleges declined by 1.1%. These lower-rated universities also rely more heavily on federal financial aid than higher-rated ones and are, therefore, more vulnerable to federal cuts, says Moody's. As for fiscal year 2013, Moody's expects healthy investment returns among the private universities to provide some revenue and balance sheet relief. Longer term, public scrutiny regarding higher education costs and questions on new educational delivery models will continue to pressure the sector. Moody's rates 283 not-for-profit private universities, with nearly $87 billion of debt outstanding. Moody's also rates 228 US four- year public universities with $135.9 billion in debt. * Moody's Says Progress in LIBOR Litigation is Credit Positive -------------------------------------------------------------- The recent dismissal by the New York Federal District Court of antitrust and racketeering claims with regard to alleged LIBOR manipulation is credit positive for those banks that participate in LIBOR-setting panels, but the banks remain vulnerable to fraud- based and other legal claims. Inter-dealer brokers have also recently come under investigation, and have less financial flexibility to absorb any potential LIBOR-related fines and legal damages, says Moody's Investors Service in its latest special comment "Continuing LIBOR Litigation and Regulatory Risks -- Answers to Frequently Asked Questions." The FAQ updates Moody's previous commentary from November 2012 on the ongoing investigations and associated legal and regulatory risks, the impact of recent rulings both in the US and abroad, and discusses recently announced market practice reforms in the UK. The litigation in the US based on securities fraud and other state law is ongoing and its potential impact difficult to quantify at this point, says Moody's. The LIBOR panel banks, especially the largest institutions, have capital capacity to absorb potential LIBOR-related regulatory charges and legal damages but inter- dealer brokers have more limited capital resources, adds the rating agency. "Regulatory investigations and actions have been proceeding at a brisk pace both in the US and abroad, and are expected to continue," said Moody's Senior Vice President Geoffrey Richards. "The level of regulatory scrutiny and visibility of the allegations is intense and will remain a source of management distraction." Indeed, investigations are underway relating to a number of other benchmark rates that use processes similar to that for LIBOR, including those in Hong Kong and Singapore, as well as EURIBOR. In addition to the focus on past instances of alleged manipulation of LIBOR and other related benchmark rates, Moody's believes that regulators will continue to analyze and develop alternatives to the current rate setting mechanisms. These developments will unfold over a number of years given the absolute size and complexity of the markets and the range of instruments involved. * Moody's Sees Dip in Covenant Quality for North America in July ---------------------------------------------------------------- The covenant quality of North American high-yield bonds deteriorated modestly last month, Moody's Investors Service says in a new report, "Bond Covenant Quality Declines in July." July's average was 3.79, a modest deterioration from 3.72 in June. However, Moody's Covenant Quality Index, which reflects trends on a three-month rolling average basis, improved in July, declining to 3.87 from 3.93 as a weaker score rolled out of the index. The index uses a five-point scale, in which 1.0 denotes the strongest covenant protections and 5.0, the weakest. "Last month's downtick does not yet augur a trend toward worsening terms, as issuers continue to offer better structures than they did earlier this year," says Vice President -- Head of Covenant Research, Alexander Dill. "Overall, our Covenant Quality Index shows improvement." July's single-month average of 3.79 is still well above the 4.17 reached in February, Dill says. And volumes increased again in July after a sharp downturn in June, when many companies postponed deals amid concerns about rising interest rates. A key driver of last month's weaker covenant quality was a deterioration among bonds rated Caa/Ca at issuance. These had an average covenant score of 3.85 in July, much worse than the 3.59 recorded for June and the historical average of 3.37. They comprised 28% of July's issuance, compared with 22% historically. Conversely, bonds rated single B had an average covenant quality score of 3.62 last month, materially better than the 3.72 average for June. And those rated Ba, which typically have weaker covenant packages, comprised only 12% of July's high-yield issuance, compared with 21% in June and a record high of 41% in April. PIK issuance contributed to July's weaker covenant quality score. PIK bonds receive low scores mainly because they lack subsidiary guarantees and offer limited protection against liens subordination. Among PIK issuers last month were PC Nextco Holdings, LLC, a holding company of Party City Holdings Inc., whose bond scored 4.26, and Michaels Stores Inc., whose bond scored 4.91 and broke the record for weakest covenant quality score in Moody's High-Yield Covenant Database. Bonds with the strongest investor protections in July were issued by Kodiak Oil & Gas Corp., whose issue received a covenant quality score of 2.28; Quiksilver Inc.'s two tranches, which scored 2.59 and 2.89; and Post Holdings, Inc.'s bond, which scored 3.04. * Moody's Notes Improving Commercial Real Estate Fundamentals ------------------------------------------------------------- All of the commercial real estate sectors performed strongly in second-quarter 2013 and will continue to do so, according to the latest "Q2 2013: US CMBS and CRE CDO Surveillance Review" from Moody's Investors Service. "Despite some muted economic indicators, commercial real estate property markets benefitted from a limited amount of construction, as well as positive absorption," said Michael Gerdes, Managing Director and head of Moody's US CMBS & CRE CDO Surveillance. "With favorable fundamentals, transaction volumes remained healthy." "As in the previous quarter, multifamily and hotel markets continue to perform strongly, although the pace of improvement is going to slow down. The recovery of the office and retail sectors has been more muted but their performance will also improve, in tandem with employment and economic growth." "Our central economic scenario remains the same; our Macroeconomic Board Outlook forecast is for US GDP growth of about 2% this year because of fiscal policy and public spending cuts. With housing starts and employment still growing and consumer sentiment improving, we expect US growth of 2.0%-3.0% and a decline in the unemployment rate to 6.5%-7.5% in 2014," added Gerdes. Moody's base expected loss for conduit/fusion transactions was 9.06%, down from 9.07% in first-quarter 2013 because of lower delinquencies and overall better asset performance. Moody's Commercial Mortgage Metrics (CMM) weighted average base expected loss was 7.6%, down from 8.3%. The share of delinquent loans declined to 9.9% from 10.2% in the first quarter, while the share of loans in special servicing declined to 11.5% from 11.8%. Base expected losses will decline slightly as delinquencies continue to decline and loss recoveries improve in tandem with improving market fundamentals. The overall share of specially serviced (SS) loans decreased 76 basis points to 10.28%, from 11.04% in the first quarter. The share of SS loans contracted 244 basis points from the April 2011 peak of 12.72%, in large part because non-performing, five-year SS loans from 2006 and 2007 are being worked out at a faster pace than new loans have entered special servicing. Lenders modified 59 loans amounting to $1.9 billion. Monthly volume averaged 20 loans and $641.6 million. Among the individual sector highlights: The retail sector will post modest gains, with positive rental growth by the end of 2013. Office market fundamentals are improving gradually and the number of the improving markets is broadening. Depending on regional employment growth, vacancy and rental rates will improve moderately in 2013. The hotel sector will continue to improve given minimal growth in supply, although the pace is slowing. Revenue per available room (RevPAR) rose 5.0% from the second quarter of 2012, with Luxury Hotels up 6.0% and Urban Hotels up 6.1%. The most improved market performers were San Francisco/San Mateo, CA, and Oahu, Hawaii. The multifamily sector will remain stable with moderate growth through the end of 2013. The multifamily sector also grew strongly in the second quarter, with the vacancy rate dropping 20 basis points to 4.6%. Six markets currently have vacancy rates lower than 3.0%, among them, Minneapolis, MN, Miami, FL, and Oakland, CA. Effective rent growth rose by an annualized rate of 3.1%, which is solid, but slower than in 2012. Moody's quarterly US commercial mortgage-backed securities (CMBS) and commercial real estate collateralized debt obligations (CRE CDO) surveillance review reports on recent rating actions, relevant surveillance statistics and topics of interest in the commercial real estate sector from a monitoring perspective. * Moody's Points to Risks Facing IMF Support Program Countries -------------------------------------------------------------- Countries in IMF support programs face significant default risk because of their long-term vulnerabilities despite the obvious boost these programs generally give them, says Moody's Investors Service in "IMF Program Participation Underscores Medium-Term Sovereign Credit Challenges." The Moody's study finds that during 1983-2012, among all sovereigns that entered IMF programs, 16.4% defaulted over a five-year horizon. "The elevated historical default rate for program countries is consistent with Moody's practice of generally maintaining non- investment-grade ratings on countries in support programs," says Elena Duggar, Moody's Group Credit Officer for Sovereign Risk. "A question we frequently get asked is why Moody's generally maintains non-investment-grade ratings on countries in support programs. The fact is that many countries enter support programs when they are in distress, and support programs are not always sufficient to eliminate the elevated risk of default associated with those conditions," says Moody's Duggar. The default statistics also imply that the vast majority of sovereigns with IMF programs did not default, even though many of them entered programs in severe distress and with no access to private capital, indicating that IMF programs have often been effective in reducing the risk of default. "Moreover, even when defaults have not been avoided, IMF programs have often been effective in reducing the macroeconomic impact of default, for example by providing interim financing and supporting a more orderly restructuring process," adds Duggar. In the study Moody's looked at 168 sovereigns over the 1983-2012 period. During this timeframe, among this group there were 131 instances in which sovereigns defaulted on foreign and local currency bonds or bank loans by 84 countries. Over the same period, there were 632 IMF arrangements in 114 countries. Half of sovereign defaults since 1983 had been preceded by an IMF program in the two years prior to default. Further, this share has been almost 70% since 2000. During 1983-2012, the average default rate of sovereigns conditional on being in an IMF program in the previous two years was almost twice as high as the default rate of sovereigns that have not been in an IMF program -- 3.8% vs. 2.1% over a one-year horizon and 16.4% vs. 8.0% over a five-year horizon. The observed correlation between an IMF program and a higher risk of default reflects the fact that countries approaching the IMF face significant underlying credit challenges, including the presence of risk factors that can cause sovereign defaults, such as banking crisis, very high debt burden, chronic economic stagnation, or institutional weaknesses, says Moody's. * Moody's Confirms 'Ba1' Rating on Watsonville RDA TABs ------------------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating on the Successor Agency to the Watsonville RDA 2004 Tax Allocation Bonds, Series 2004A (non-housing), 2004B-1 (housing) and 2004B-2 (housing). The bonds were previously on review for downgrade. Rating Rationale: The Ba1 rating incorporates current and projected total project area debt service coverage amounts that are sum sufficient but narrow on a semi-annual basis for one period each year. Coverage is healthier on an annual basis. The rating also reflects the above average sized merged project area, moderate taxpayer concentration of the project area, and weak socioeconomic profile of the area. The low incremental assessed valuation to total AV unfavorably factors into the rating as well. The bonds are secured by tax increment revenues of the merged project areas. Under AB X1 26 and AB 1484, the statutes that dissolved all California redevelopment agencies (RDAs), tax increment revenue is placed in trust with the County auditor, who makes semi-annual distributions of funds sufficient to pay debt service on tax allocation bonds, including other obligations. Strengths - Local economy is slowly emerging from downturn - Above average sized project area Challenges - Weak debt service coverage in principal and interest payment periods - Multiyear declines in assessed valuation - Weaker than average socio-economic profile - Below average ratio of incremental assessed valuation to total project areas assessed valuation What Could Change the Rating Up? - Sizable increase in incremental AV, leading to greater debt service coverage in all semi-annual periods What Could Change the Rating Down? - Decline in the project areas incremental AV leading to lower debt service coverage - Materially higher tax payer concentration The principal methodology used in this rating was Moody's Analytic Approach to Rating California Tax Allocation Bonds published in December 2003. * BOND PRICING -- For The Week From Aug. 12 to 16, 2013 ------------------------------------------------------- Company Ticker Coupon Bid Price Maturity Date ------- ------ ------ --------- ------------- AES Eastern Energy LP AES 9.67 3.1 1/2/2029 AES Eastern Energy LP AES 9 1.75 1/2/2017 AGY Holding Corp AGYH 11 52.063 11/15/2014 Affinion Group Holdings Inc AFFINI 11.625 58.474 11/15/2015 Alion Science & Technology Corp ALISCI 10.25 65.441 2/1/2015 Buffalo Thunder Development Authority BUFLO 9.375 31.875 12/15/2014 California Baptist Foundation CALBAP 7.8 6.222 5/15/2015 Cengage Learning Acquisitions Inc TLACQ 10.5 21 1/15/2015 Cengage Learning Acquisitions Inc TLACQ 12 13.375 6/30/2019 Cengage Learning Acquisitions Inc TLACQ 10.5 21 1/15/2015 Cengage Learning Acquisitions Inc TLACQ 13.25 1.375 7/15/2015 Cengage Learning Acquisitions Inc TLACQ 13.25 1.375 7/15/2015 Cengage Learning Holdco Inc TLACQ 13.75 1.375 7/15/2015 Champion Enterprises Inc CHB 2.75 0.375 11/1/2037 Eastman Kodak Co EK 7 3.1 4/1/2017 Eastman Kodak Co EK 9.95 1.5 7/1/2018 Eastman Kodak Co EK 9.2 3.6 6/1/2021 Energy Conversion Devices Inc ENER 3 7.875 6/15/2013 Energy Future Holdings Corp TXU 5.55 50 11/15/2014 Federal Home Loan Banks FHLB 1.55 96.5 6/13/2023 FiberTower Corp FTWR 9 1 1/1/2016 GMX Resources Inc GMXR 9 15 3/2/2018 GMX Resources Inc GMXR 4.5 6.25 5/1/2015 Global Aviation Holdings Inc GLAH 14 31.875 8/15/2013 HP Enterprise Services LLC HPQ 3.875 94.525 7/15/2023 James River Coal Co JRCC 4.5 33.75 12/1/2015 LBI Media Inc LBIMED 8.5 28.875 8/1/2017 Lehman Brothers Holdings Inc LEH 1 21.375 8/17/2014 Lehman Brothers Holdings Inc LEH 1 21.375 8/17/2014 Lehman Brothers Holdings Inc LEH 0.25 21.375 1/26/2014 Lehman Brothers Holdings Inc LEH 1.25 21.375 2/6/2014 Lehman Brothers Holdings Inc LEH 1 21.375 3/29/2014 OnCure Holdings Inc ONCJ 11.75 49.25 5/15/2017 PMI Group Inc/The PMI 6 31 9/15/2016 Penson Worldwide Inc PNSN 12.5 24 5/15/2017 Penson Worldwide Inc PNSN 8 8.625 6/1/2014 Penson Worldwide Inc PNSN 12.5 24 5/15/2017 Platinum Energy Solutions Inc PLATEN 14.25 57.85 3/1/2015 Powerwave Technologies Inc PWAV 1.875 1 11/15/2024 Powerwave Technologies Inc PWAV 1.875 1 11/15/2024 Residential Capital LLC RESCAP 6.875 30.5 6/30/2015 SLM Corp SLMA 5.25 85.086 3/15/2023 Savient Pharmaceuticals Inc SVNT 4.75 23.71 2/1/2018 School Specialty Inc SCHS 3.75 38.375 11/30/2026 TMST Inc THMR 8 9.5 5/15/2013 Terrestar Networks Inc TSTR 6.5 10 6/15/2014 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15 26.416 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.25 6.5 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.25 7.375 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.5 7.2 11/1/2016 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15 26.6 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.5 7 11/1/2016 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.25 6.625 11/1/2015 UAL 2000-2 Pass Through Trust UAL 7.762 2.008 4/29/2049 USEC Inc USU 3 29.5 10/1/2014 Verso Paper Holdings LLC / Verso Paper Inc VRS 11.375 47.375 8/1/2016 Verso Paper Holdings LLC / Verso Paper Inc VRS 8.75 30.848 2/1/2019 WCI Communities Inc/Old WCI 4 0.5 8/5/2023 Western Express Inc WSTEXP 12.5 66.25 4/15/2015 Western Express Inc WSTEXP 12.5 66.25 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 ***