/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130826.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 26, 2013, Vol. 17, No. 236 Headlines 2279-2283 THIRD: Plan Confirmation Hearing Set for Sept. 17 ABSORBENT TECHNOLOGIES: Hires Stoel Rives as Patent Counsel ACADEMY OF CHARTER SCHOOLS: Fitch Rating Removed From Watch Neg. ALVARION LTD: Asks for Extension of Operating Plan Until Aug. 30 AMERICAN AIRLINES: Judge to Set Initial Scheduling Conference AMERICAN AIRLINES: Asks Bankr. Judge to Proceed With Confirmation AMERICAN REALTY: Hearing on Case Dismissal Continued to Oct. 2 AMERICAN SUPERCONDUCTOR: Incurs Net Loss of $10.5MM In 1st Quarter ARMORWORKS ENTERPRISES: Has Final Authority for $3.5MM DIP Loan ARMORWORKS ENTERPRISES: Has Final Authority to Use Cash Collateral ARMORWORKS ENTERPRISES: Hearing on Bid to Dismiss Set for Sept. 17 ARMORWORKS ENTERPRISES: Disclosure Statement Hearing on Oct. 1 ARRHYTHMIA RESEARCH: Gets NYSE MKT Listing Non-Compliance Notice ATARI INC: Committee Balks at Exclusivity Extension ATARI INC: Extends Control Over Ch. 11 Case for 30 Days AVALON OIL: Incurs $749K Net Loss in Fiscal Year Ended March 31 BAJA MINING: Incurs $10.7-Mil. Net Loss in Second Quarter BERJAC OF OREGON: Pacific Continental Named Defendant in Suit BIOLASE INC: Violates Bank Covenants; Faces Class Action in Calif. BLUEJAY PROPERTIES: Settles Motion for Trustee Appointment, et al. BUFFALO PARK: Joint Plan Filing Deadline Extended Until Aug. 30 CAESARS ENTERTAINMENT: Bank Debt Trades at 10% Off CALDERA PHARMACEUTICALS: Incurs $1-Mil. Net Loss in Second Quarter CALIBRE ACADEMY: Fitch Keeps 'B' Bond Rating on Watch Negative CHINA CEETOP.COM: Incurs $293K Net Loss in Second Quarter CHINA LOGISTICS: Incurs $493K Net Loss in Second Quarter CIRTRAN CORP: Reports $1.7-Mil. Net Income in Second Quarter COGECO CABLE: DBRS Confirms Issuer Rating at 'BB' COLDWATER PORTFOLIO: U.S. Bank Withdraws Proposed Exit Plan COMMONWEALTH BIOTECHNOLOGIES: Conn. Court Dismisses "Chien" Suit COMMONWEALTH REIT: Moody's Revises Ratings Outlook to Negative COMMUNICATION INTELLIGENCE: Incurs $1.2MM Net Loss in 2nd Quarter COMMUNITY SOUTH BANK: FDIC Named as Receiver; CB&S Takes Deposits CONNACHER OIL: Moody's Cuts CFR to Caa2; 2nd Lien Notes to Caa3 CROWN REAL ESTATE: Case Summary & 6 Unsecured Creditors CRYOPORT INC: Incurs $1.3 Million Net Loss in June 30 Quarter CYCLONE POWER: Delays Form 10-Q for Second Quarter DAIS ANALYTIC: Amends Second Quarter Form 10-Q DETROIT, MI: Bankruptcy Mediator's Past Sparks Ethics Debate DETROIT, MI: Bankruptcy Judge Allows Property Tax Appeals DETROIT, MI: Union Officials among Nine Named to Bankruptcy Panel DEWEY & LEBOEUF: Trust Targets Ex-Clients Over $6MM in Unpaid Fees DEWEY COMMERCIAL: Voluntary Chapter 11 Case Summary DEX MEDIA EAST: Bank Debt Trades at 23% Off DEX MEDIA WEST: Bank Debt Trades at 16% Off DIVERSINET CORP: Special Meeting of Shareholders on September 11 DOGWOOD PROPERTIES: Settles With Merchants & Farmers Bank DOGWOOD PROPERTIES: Files Amended Plan Outline DRYSHIPS INC: Annual Shareholders' Meeting Scheduled for Oct. 31 EASTGATE AUTO: Voluntary Chapter 11 Case Summary EASTMAN KODAK: Wins Court Approval to Expand Deloitte Services EDISON MISSION: Spars with Chevron Over Natural-Gas Venture ELITE PHARMACEUTICALS: Posts $921,600 Net Income in June 30 Qtr. ELWOOD ENERGY: Moody's Downgrades Senior Secured Bonds to Ba3 EMPRESAS INTEREX: Files First Amended Plan & Disclosure Statement ENVIRONMENTAL WORLDWIDE: Incurs $4-Mil. Net Loss in Second Quarter EQUIPOWER RESOURCES: Moody's Cuts First Lien Debt's Rating to B1 FOURTH QUARTER PROPERTIES: Sept. 13 Hearing on Exclusivity FURNITURE BRANDS: Fails to Cure NYSE MKT Listing Non-Compliance GALA CORAL: Sees Modest Growth but Challenges Remain GATEWAY ENERGY: Incurs $160K Net Loss in Second Quarter GIL INC: Updated Case Summary & Creditors' Lists GLOBAL BEVERAGE: Suspending Filing of Reports with SEC GLOBAL FOOD: Incurs $753,500 Net Loss in Second Quarter GLYECO INC: Incurs $199,000 Net Loss in Second Quarter GUIDED THERAPEUTICS: Incurs $1.7 Million Net Loss in 2nd Qtr. GYMBOREE CORP: Bank Debt Trades At 4% Off HCA INC: Fitch Affirms 'B+' Issuer Default Rating HIGHWAY TECHNOLOGIES: Amends Schedules of Assets and Liabilities HOWREY LLP: Has Settlement With Baker Firm & Citibank ICEWEB INC: Incurs $1.6 Million Net Loss in June 30 Quarter IDQ HOLDINGS: S&P Lowers CCR to 'B-'; Outlook Stable IZEA INC: Incurs $893,000 Net Loss in Second Quarter JANABI ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors K-V PHARMACEUTICAL: Says Creditor Rejection Won't Delay Ch.11 Exit KEYCORP: DBRS Confirms Preferred Stock at 'BB' KEYUAN PETROCHEMICALS: Reports $2.9-Mil. Net Income in 1st Quarter KIDSPEACE CORP: Seeks Extension of Exclusive Plan Filing Deadline LAFAYETTE YARD HOTEL: Owners Mull Sale or Bankruptcy Filing LATTICE INC: Posts $51,000 Net Income in Second Quarter LONE PINE RESOURCES: Incurs C$15.8-Mil. Net Loss in Second Quarter LOUISIANA-PACIFIC: S&P Revises Outlook to Pos. & Affirms 'BB' CCR LPATH INC: Incurs $1.4 Million Net Loss in Second Quarter LYFE COMMUNICATIONS: Incurs $523,000 Net Loss in Second Quarter LYON WORKSPACE: Tuesday Hearing on Exclusivity Extension Bid MEADOWBROOK INSURANCE: Obtains Waiver on Defaulted Loan Covenants MERUS LABS: Incurs C$1-Mil. Net Loss in Fiscal Third Quarter MMRGLOBAL INC: Incurs $1.1 Million Net Loss in Second Quarter MONITOR COMPANY: After Deloitte Sale, Remnants Convert to Ch. 7 MONTREAL MAINE: Legal Fees a Concern for Judge in Bankruptcy Case MPG OFFICE: Brookfield Extends Tender Offer to August 30 NATIONAL ENVELOPE: Brings in $65MM With 3-Way Sale NET MEDICAL: Reports $1,000 Net Income in Second Quarter NETWORK CN: Incurs $749,000 Net Loss in Second Quarter OHANA GROUP: Plan Outline Hearing Continued Until Sept. 27 ORAGENICS INC: To Sell $30 Million Worth of Securities OSAGE EXPLORATION: Posts $30,000 Net Income in Second Quarter OVERSEAS SHIPHOLDING: Blasts Lenders' Bid to Limit Exclusivity PANACHE BEVERAGE: Has $7.5-Mil. Accumulated Deficit at June 30 PEABODY ENERGY: Fitch Downgrades Issuer Default Rating to 'BB' PEER REVIEW: Delays Form 10-Q for Second Quarter PENSACOLA BEACH: American Fidelity Wants Case Dismissal PENSACOLA BEACH: HighPoint Hospitality May Continue as Manager PENSACOLA BEACH: Plan Proposes Payments to American Fidelity PILGRIM'S PRIDE: Strong Performance Prompts Moody's Upgrade Watch PRESIDENTIAL REALTY: Incurs $514,000 Net Loss in Second Quarter PROMMIS HOLDINGS: Has Until Oct. 14 to File Chapter 11 Plan R&J NATIONAL: Court Dismisses Chapter 11 Case RECEPTOS INC: Incurs $9.9-Mil. Net Loss in Second Quarter REUTAX AG: Chapter 15 Case Summary REVSTONE INDUSTRIES: Bankrupt Unit Gets Nod on Chrysler, GM Pact ROTECH HEALTHCARE: Grossman Pension Plan Quits Equity Panel ROTECH HEALTHCARE: Equity Panel Retains Cooley LLP as Counsel ROTECH HEALTHCARE: Equity Panel Taps Bayard as Replacement Counsel ROTECH HEALTHCARE: Noteholders Rip Bid to Junk Make-Whole Claims RURAL/METRO CORP: 3-Member Creditors' Committee Appointed SEAFOOD SHANTY: Spring Township Restaurant Closes SEARS HOLDINGS: B3 CFR Unchanged Following Poor 2Q Results START SCIENTIFIC: Incurs $161K Net Loss in Second Quarter STEWART & STEVENSON: Moody's Withdraws All Ratings STOCKTON, CA: Lawyer Says Plan Won't Interfere with Talks SUNEDISON INC: IPO of Semiconductor Unit Won't Impact 'B3' CFR SUNRISE BANK: FDIC Named as Receiver; First Fidelity Gets Deposits SWIFT AIR: Obtains Conditional Approval in Bankruptcy Court TC GLOBAL: Dempsey Out of Investment Group TOUCHPOINT METRICS: Incurs $140K Net Loss in Second Quarter TECHPRECISION CORP: KPMG LLP Raises Going Concern Doubt TRIBUNE CO: Koch Brothers Decide Not to Buy Newspapers TXU CORP: Bank Debt Trades at 31% Off UNIVERSAL HEALTH: Trustee Hires E-Hounds as Imaging Consultant URBAN AG. CORP: Incurs $448K Net Loss in Second Quarter VENTURE HOLDINGS: JPMorgan Succeeds in Guaranty Suit v. Winget WEIGHT WATCHERS: Membership Woes Cue Moody's to Lower CFR to Ba2 * Morgan Drexen Asks Judge to Halt CFPB's Data Mining Countersuit * Moody's Puts Largest U.S. Banks' Ratings Under Review * Moody's Reviews Debt Ratings on Holding Cos. for 6 US Banks * Reinsurers' Underwriting Gains Offset By Unrealized Losses * Argentina's ATFA Lauds Second Circuit Ruling in Debt Case * BOND PRICING -- For Week From Aug. 19 to 23, 2013 ********* 2279-2283 THIRD: Plan Confirmation Hearing Set for Sept. 17 ----------------------------------------------------------- Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York approved 2279-2283 Third Avenue Associates LLC's first amended disclosure statement explaining its Plan of Reorganization and scheduled a hearing on Sept. 17, 2013, at 10:00 a.m., to consider confirmation of the Plan and final applications for allowance of professional fees and reimbursement of expenses. Sept. 10 is the last date for serving written objections to the confirmation of the Plan and final applications for allowance of professional fees and reimbursement of expenses. The Plan contemplates the transfer of the property commonly known as 2279-2283 Third Avenue, in New York, to LSV-JCR 124th LLC, as senior lender, in full satisfaction of its Allowed Secured Claims in the estimated amount of $14.5 million. In consideration thereof, the Senior Lender will: (1) fund the distributions to creditors under the Plan, including (a) payment of all outstanding real estate taxes and related administrative charges claimed by the City of New York (approx. $250,000), the fees of Debtor's attorney (approx. $50,000) and an approximate 13.5% distribution to holders of Allowed Unsecured Claims ($100,000); and (2) waive its deficiency Unsecured Claim of approximately $500,000. Under the Plan, Class 3 (Senior Lender Claim) and Class 4 (General Unsecured Claims) are impaired and entitled to vote on the Plan. Class 5 (Equity Interests) will receive no distributions under the Plan and is therefore deemed to have rejected the Plan. Classes 1 and 2 are unimpaired and conclusively deemed to have accepted the Plan. A full-text copy of the First Amended Disclosure Statement, dated Aug. 9, 2013, is available for free at: http://bankrupt.com/misc/22792283_ds_0809.pdf Jonathan S. Pasternak, Esq., and Jule A. Cvek, Esq., at DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP, in White Plains, New York, represent the Debtor. About 2279-2273 Third Avenue 2279-2283 Third Avenue Associates LLC and 2279-2283 Third Avenue Development LLC sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 12-13092 and 12-13093) on July 17, 2012. Jonathan S. Pasternak, Esq., at DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, in White Plains, N.Y., represents the Debtors as counsel. Third Avenue Associates owns two contiguous multi residential buildings located at 2279-2283 Third Avenue, in New York. Third Avenue Development is the sole member of Associates. The Property is Associate's primary asset, while Development's membership interests in Associates is its sole asset. Debtor 2279-2283 Third Avenue disclosed $14,839,697 in assets and $16,973,992 in liabilities as of the Chapter 11 filing. The managing member of each of the Debtors is Michael Waldman. He is also the managing member of 3210 Riverdale Associates LLC and the managing member of the sole member of 3210 Riverdale Development LLC, other Chapter 11 proceedings currently pending before the SDNY Court under Case Nos. 12-11286 and 12-11109. Third Avenue Associates obtained financing from commerce bank of $14 million and Development obtained mezzanine financing from HSBC Capital (USA) Inc. in the amount of $6 million. HSBC refused to grant additional $700,000 in financing requested by the Debtor to fund build-outs required by the Internal Revenue Service. The Commerce note -- which was assigned to TD Bank and then to LSV-JCR 124th LLC -- was secured by a mortgage on the Properties, and the HSBC obligation is secured by a mortgage on Associates' membership interest owned by Development. The HSBC note matured in 2011 and HSBC called the loan into default and commenced foreclosure action. The state court entered an order appointing Steven Weiss as receiver of rents. THSBC has assigned its mezzanine note to LCP-GC LLC. On July 3, 2012, the Debtors and their two secured lenders, LSV- JCR 124th LLC and LCP-GC LLC entered into a settlement that requires the Debtors to transfer ownership of the buildings to the secured lenders through a Chapter 11 plan. Judge James Peck oversees the case. No trustee, examiner or official committee has been appointed in the cases. ABSORBENT TECHNOLOGIES: Hires Stoel Rives as Patent Counsel ----------------------------------------------------------- Absorbent Technologies, Inc. asks the U.S. Bankruptcy Court for permission to employ Stoel Rives LLP as special counsel to, among other things, provide these services: a. prepare a response to Restriction Requirement for US Patent Application No. 13/281,028; b. work with a Canadian Agent to prepare Request for Examination and Payment of Back Annuities for Canadian Patent Application No. 2,693,796; and c. work with an Indian Agent to prepare Payment of Back Annuities and Taxes for Indian Patent Application No. 3400/DELNP/2006. Stoel Rives has received, and is holding, a retainer in the amount of $16,500 from the Debtor. These funds are presently held in Stoel Rives' trust account. Of this total amount, $3,500 was received prior to the filing of this case to pay for legal services that were requested by the Debtor and performed prior to the date of the Petition. Additionally, $13,000 was received in May 2013 to cover anticipated legal fees and costs associated with patent filings necessary to maintain critical patent rights and intellectual property assets. The amount is being held in Stoel Rives' trust account pending approval of the engagement. The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Stoel Rives performed some of the emergency patent filings in May and June 2013. The individuals presently designated to represent the Debtor and their hourly rates are: Professional Rates ------------ ----- Matthew Bethards $380/hr Rachel Slade $265/hr Ted Ririe $200/hr Julie Barnett (paralegal) $205/hr Attorneys for Debtors can be reached at: Gary Underwood Scharff, Esq. Lead Attorney LAW OFFICE OF GARY UNDERWOOD SCHARFF 621 S.W. Morrison Street, Suite 1300 Portland, OR 97205 Tel.: 503-493-4353 Fax: 503-517-8143 E-mail: gs@scharfflaw.com - and - Heather A. Brann, Esq. Of Counsel PO Box 11588 Portland, OR 97211 Tel.: 503 490-6563 E-mail: branns@earthlink.net Absorbent Technologies Absorbent Technologies, Inc., filed a Chapter 11 petition (Bankr. D. Ore. Case No. 13-31286) on March 8, 2013, without citing a reason. David C. Moffenbeier signed the petition as CEO. Judge Trish M. Brown presides over the case. The Law Office of Gary U. Scharff serves as the Debtor's counsel. The Beaverton, Oregon-based company develops, produces, and markets starch-based superabsorbent products and ingredients in the United States and internationally. It offers Zeba, a corn starch-based polymer that helps farmers grow bigger crops with less water. Placed near a plant's roots, Zeba serves as a Grape Nut-sized sponge that holds and distributes water as a plant needs it. The Debtor estimated assets and debts of at least $10 million. The Debtor has a manufacturing facility at 140 Queen Avenue SW, Albany, Oregon. Fluffco LLC and Ephesians Equity Group LLC own equity interests in privately held Absorbent Technologies. The Debtor is seeking a buyer for its assets and property. The U.S. Trustee formed a four-member committee of unsecured creditors. Green & Markley, P.C. represents the Committee. ACADEMY OF CHARTER SCHOOLS: Fitch Rating Removed From Watch Neg. ---------------------------------------------------------------- Fitch Ratings removed from Rating Watch Negative the 'B-' rating assigned to approximately $35.2 million in outstanding charter school revenue bonds of the Colorado Educational and Cultural Facilities Authority issued on behalf of The Academy of Charter Schools (The Academy). The Rating Outlook is Stable. SECURITY The bonds are essentially a general obligation of the school, with each series secured by first liens on their respectively financed facilities. KEY RATING DRIVERS WAIVER OBTAINED: The removal of the Rating Watch Negative reflects management's success in obtaining a waiver related to a covenant breach under the 2004 Indenture and 2008 Supplemental Indenture. MANAGEMENT TURNOVER AND FINANCIAL CHALLENGES: Following the release of audited financial statements that raised material management concerns, a new executive director is on board and the school has a remediation plan in place. However, the 'B-' rating is constrained by the absence of a multi-year track-record of stabilization under the new senior management team and The Academy's unfavorable financial and debt credit attributes. SOUND DEMAND AND ENROLLMENT TRENDS: Despite the aforementioned challenges, The Academy's demand profile remains sound. Steady and growing enrollment trends are supported by healthy school-wide retention rates, favorable academic performance relative to district- and state-wide averages, and an established reputation given its 19-year operating history. DEBT MANAGEABILITY CONCERNS: The Academy's considerable debt burden, weak debt service coverage from net operating income, and elevated pro forma debt to net income available for debt service metric are negative rating factors. RATING SENSITIVITIES TIMELY INFORMATION: Maintenance of the rating is contingent upon receipt of timely and relevant information sufficient to maintain an accurate rating. STANDARD SECTOR CONCERNS: The Academy's modest financial cushion, substantial reliance on enrollment-driven per pupil funding, and charter renewal risk are credit concerns common among all charter school transactions. If pressured these issues could negatively impact the rating over time. FINANCIAL AND DEBT PROFILE: Evidence of steady, sustained financial improvement could warrant positive rating movement. Conversely, failure to make sustained progress toward achieving full compliance with the covenant breach could place downward rating pressure. CREDIT PROFILE Located in Westminster, Colorado, The Academy has been in operation since 1994, one year after the state enacted its initial charter authorization law. The school's headcount enrollment totaled 1,752 in fall 2012, reflecting a student body ranging from pre-school through grade 12. To date, the school has received a total of three charter renewals, with the most recent five-year contract in effect until June 30, 2014. The Academy successfully attained a waiver for an unrestricted working capital balance covenant breach. Under the waiver, The Academy has until fiscal year-end 2016 to achieve full compliance with the covenant. Management is required to demonstrate progress on an annual cycle toward re-establishing covenant compliance. Failure to demonstrate annual progress results in a modest monetary fine rather than in a waiver invalidation. Management believes the timeframe set forth in the waiver provides sufficient flexibility to achieve covenant compliance. Fitch will monitor management's progress in future credit reviews. ALVARION LTD: Asks for Extension of Operating Plan Until Aug. 30 ---------------------------------------------------------------- Alvarion(R) Ltd., which is in receivership, disclosed that Yoav Kfir, the court-appointed Receiver, submitted a request to the District Court of Tel Aviv -- Yaffo to extend the term of the operating plan until Aug. 30, 2013. The operating plan, as originally approved by the Court on July 21, 2013, allows for the business operation of the company until Aug. 23, 2013, as well as for a bidding process to sell the company and/or its assets. This extension will also permit the Receiver to continue discussions with the parties which submitted offers as part of the bidding process to sell the company and/or its assets. Existing offers are currently being evaluated prior to being submitted to the Court for selection and approval. There is no guarantee as to the outcome of such discussions which are subject to Court approval and other matters. Furthermore, the hearing to appeal NASDAQ's decision to delist the company's ordinary shares from NASDAQ, which was previously scheduled to take place on Aug. 29, 2013, was postponed to Sept. 11, 2013. About Alvarion Alvarion Ltd. (in Receivership)-- http://www.alvarion.com/-- provides optimized wireless broadband solutions addressing the connectivity, coverage and capacity challenges of telecom operators, smart cities, security, and enterprise customers. AMERICAN AIRLINES: Judge to Set Initial Scheduling Conference ------------------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reports that U.S. District Judge Colleen Kollar-Kotelly, who is assigned to hear the antitrust case brought by the government against the planned merger of AMR Corp. and US Airways Group Inc., on Friday ordered the opposing parties to an initial scheduling conference in her Washington D.C. court in one week. In her order, Judge Kollar-Kotelly advised the two sides that she has a criminal trial set to begin on Jan. 14 that is expected to last for six to eight weeks. It is her decision on when to schedule the antitrust trial. AMR and US Airways on Aug. 22 disclosed that they filed a motion to set a trial date and a supporting brief, requesting a Nov. 12, 2013 trial date. The Justice Department has requested the trial to begin on Feb. 10. WSJ notes the airlines are anxious for a resolution of the complaint so they can close their merger and get American out of bankruptcy-court protection. WSJ recounts that the airlines warned in a court filing that the merger agreement has a termination clause that gives either side the right to kill the deal on Dec. 13 if the necessary regulatory hurdles haven't yet been cleared. If both airlines want to keep the pact alive, they could move back the termination date. WSJ reports that four unions representing American employees and some US Airways workers on Friday filed an amicus brief with Judge Kollar-Kotelly, supporting the airlines' motion to set an early trial date. The unions, which have endorsed the merger, also asked the court to deny the government's attempts to block the transaction. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. In April 2013, AMR filed a Chapter 11 plan of reorganization that will carry out the merger. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. The hearing before the Court to consider confirmation of the Plan is scheduled for Aug. 15, 2013. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN AIRLINES: Asks Bankr. Judge to Proceed With Confirmation ----------------------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reports that American Airlines on Friday filed a memorandum with the U.S. Bankruptcy Court in New York asking Judge Sean Lane to move ahead and confirm its plan of reorganization at a hearing scheduled for Thursday. Despite the Justice Department's efforts to block the combination on antitrust grounds, AMR said the plan has met all the requirements for confirmation by the court, AMR creditors and directors. According to WSJ, if the merger isn't allowed to proceed, the judge's confirmation order could be vacated and the merger plan nullified. That would send AMR back to square one, requiring it to craft a new reorganization plan, most likely built on exiting from Chapter 11 on its own. It would then submit that plan to its creditors for a vote, in a process that could take months. If the two airlines reach a settlement with the Justice Department and avoid a trial, the new terms would be brought to the bankruptcy court for approval, AMR said. WSJ notes that the Justice Department filed a statement on Friday in the bankruptcy case, saying it doesn't take a position on whether Judge Lane should confirm the plan. 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 REALTY: Hearing on Case Dismissal Continued to Oct. 2 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas continued to Oct. 2, 2013, at 9 a.m., the hearing to consider (i) the Atlantic Creditors' motion to dismiss the Chapter 11 case of American Realty Trust, Inc.; and (ii) Bank of New York Mellon's motion to convert the Debtor's case to one under Chapter 7 of the Bankruptcy Code. Bank of New York Mellon is successor to Bank of New York - Global Corporate Trust, as trustee for the Registered Certificate Holders of Commercial Capital Access One, Inc., Commercial Mortgage Bonds, Series 3 acting through Berkadia Commercial Mortgage, LLC, its special servicer a creditor. As reported by the Troubled Company Reporter on May 30, 2013, Bank of New York said that the so-called Atlantic Parties, creditors of the Debtor, filed a motion to dismiss case as a bad faith filing based on the Debtor's inability to reorganize, fraud, incompetence, dishonesty, and gross mismanagement. According to the Bank, while the Trust agrees that the Atlantic Parties' Motion to Dismiss establishes "cause" for relief, the Trust does not believe that it is in the best interest of the estate or the Debtor's other creditors to dismiss the case. Rather, the Trust requests that the Court order the appointment of a chapter 11 trustee, and the appointment of an examiner. Keith M. Aurzada, Esq., and John C. Leininger, Esq. -- keith.aurzada@bryancave.com and john.leininger@bryancave.com -- at Bryan Cave LLP, represent the Bank. About American Realty Trust Dallas, Texas-based American Realty Trust, Inc., is a subsidiary of the real estate giant American Realty Investors Inc. Coping with a $73 million legal judgment from an apartment purchase that collapsed more than a decade ago, American Realty Trust, Inc., filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-10883) in Las Vegas on Jan. 26, 2012. The case was later dismissed on Aug. 1, 2012, by Judge Mike K. Nakagawa. Creditors David M. Clapper, Atlantic XIII, LLC, and Atlantic Midwest, LLC -- Clapper Parties -- sought the dismissal, citing, among other things, the Debtor has been stripped off of its assets prepetition and its ownership structure changed 10 days before the bankruptcy filing in an admitted effort to avoid disclosures to the Securities and Exchange Commission. American Realty Trust then filed for Chapter 11 protection (Bankr. N.D. Ga. Case No. 12-71453) on Aug. 29, 2012, with Bankruptcy Judge Barbara Ellis-Monro presiding over the case. The case was later transferred from Atlanta to Dallas (Bankr. N.D. Tex. Case No. 13-30891) effective Feb. 22, 2013, at the behest of the Clapper Parties. The Clapper Parties, who won a $72 million judgment against the Debtor, again has sought to move the case to Forth Worth and reassign the case to Judge Russell Nelms on grounds that Judge Nelms has experience with the parties and the issues raised in the dismissal motion filed by the Atlantic Parties. The Debtor has scheduled assets totaling $79,954,551, comprised of (i) real property valued at $87,884; (ii) equity interests in affiliated entities of an unknown value; and (iii) litigation claims valued at $79,866,667. The Debtor has scheduled liabilities totaling $85,347,587.95, comprised of: (i) $10,437.73 in unsecured priority tax claims; and (ii) unsecured non-priority claims of $85,336,886.61 (of which at least $77,164,701.14 are contested litigation claims against the Debtor). The Bankruptcy Court authorized the Debtor to employ Gerrit M. Pronske, Esq., and Pronske & Patel, P.C. as counsel. AMERICAN SUPERCONDUCTOR: Incurs Net Loss of $10.5MM In 1st Quarter ------------------------------------------------------------------ American Superconductor Corporation iled its quarterly report on Form 10-Q, reporting a net loss of $10.5 million on $23.1 million of revenues for the three months ended June 30, 2013, compared with a net loss of $10.3 million on $28.7 million of revenues for the three months ended June 30, 2012. The Company' balance sheet at June 30, 2013, showed $194.2 million in total assets, $75.7 million in total liabilities, and stockholders' equity of $118.5 million. "The Company has experienced recurring operating losses and as of June 30, 2013, the Company had an accumulated deficit of $810.6 million. In addition, the Company has experienced recurring negative operating cash flows, which has resulted in a decrease in its cash balance. These factors raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/qAdONu Devens, Massachusetts-based American Superconductor Corporation is a leading provider of megawatt-scale solutions that lower the cost of wind power and enhance the performance of the power grid. In the wind power market, the Company enables manufacturers to field highly competitive wind turbines through its advanced power electronics products, engineering, and support services. In the power grid market, the Company enables electric utilities and renewable energy project developers to connect, transmit and distribute power through its transmission planning services and power electronics and superconductor-based products. ARMORWORKS ENTERPRISES: Has Final Authority for $3.5MM DIP Loan --------------------------------------------------------------- Judge Brenda Moody Whinery of the U.S. Bankruptcy Court for the District of Arizona gave final authority to ArmorWorks Enterprises, LLC ("AWE"), and TechFiber, LLC, to obtain up to $3,500,000 of secured postpetition financing from Lancelot Armor, LLC. The DIP Lender is granted an allowed superpriority administrative expense claim for the DIP Facility and all obligations owing thereunder. The DIP Lender is also granted automatically perfected senior security interests in and liens on all of the DIP Collateral, including all property constituting "cash collateral," which liens are junior only to the carve-out. Carve-out means the statutory fees payable to the U.S. Trustee and the unpaid fees and expenses incurred by professionals employed by the Debtors and any statutory committee appointed, which carve-out will not exceed $250,000 in the aggregate. The objection filed by C Squared Capital Partners, LLC, a 40% member and creditor of AWE, to the motion for interim and final order authorizing borrowing with priority over administrative expenses and secured by senior liens on the property of the estate, is withdrawn. However, a court-approved stipulation clarified that C Squared's consent to the DIP Loan is not a waiver of its request to dismiss the Debtors' Chapter 11 cases and is not a consent or ratification by C Squared to the bankruptcy petitions filed on June 17, 2013; Steven D. Jerome, Esq., Evans O'Brien, Esq., and Jill H. Perrella, Esq., at Snell & Wilmer L.L.P., in Phoenix, Arizona, represent C Squared and Anchor Management, LLC. About ArmorWorks Enterprises Military armor systems provider ArmorWorks Enterprises, LLC, and affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17, 2013, along with a plan that resolves a dispute with a minority shareholder and $3.5 million of financing that would save the company from running out of cash. ArmorWorks develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. The Debtors have tapped Todd A. Burgess, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. The Plan would resolve the ongoing dispute with C Squared by allowing ArmorWorks to redeem C Squared's 40% minority interest, or alternatively, allow C Squared to purchase the 60% majority interest of AWI. ArmorWorks and TechFiber sought and obtained an order (i) transferring the In re TechFiber, LLC chapter 11 case to the Honorable Brenda Moody Whinery, the judge assigned to the ArmorWorks Chapter 11 case, and (ii) authorizing the joint administration of the Debtors' cases. ARMORWORKS ENTERPRISES: Has Final Authority to Use Cash Collateral ------------------------------------------------------------------ Judge Brenda Moody Whinery of the U.S. Bankruptcy Court for the District of Arizona gave final authority to ArmorWorks Enterprises, LLC, and TechFiber, LLC, to continue to use cash collateral until until the earlier to occur of the "Termination Declaration Date" or the "Maturity Date" as those terms are defined under the DIP Facility documents. About ArmorWorks Enterprises Military armor systems provider ArmorWorks Enterprises, LLC, and affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17, 2013, along with a plan that resolves a dispute with a minority shareholder and $3.5 million of financing that would save the company from running out of cash. ArmorWorks develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. The Debtors have tapped Todd A. Burgess, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. The Plan would resolve the ongoing dispute with C Squared by allowing ArmorWorks to redeem C Squared's 40% minority interest, or alternatively, allow C Squared to purchase the 60% majority interest of AWI. ArmorWorks and TechFiber sought and obtained an order (i) transferring the In re TechFiber, LLC chapter 11 case to the Honorable Brenda Moody Whinery, the judge assigned to the ArmorWorks Chapter 11 case, and (ii) authorizing the joint administration of the Debtors' cases. ARMORWORKS ENTERPRISES: Hearing on Bid to Dismiss Set for Sept. 17 ------------------------------------------------------------------ The hearing on C Squared Capital Partners, LLC's motion to dismiss the Chapter 11 cases of ArmorWorks Enterprises, LLC, and TechFiber LLC, is continued to Sept. 17, 2013, at 10:00 a.m., before the U.S. Bankruptcy Court for the District of Arizona. As previously reported, C Squared, the 40% member of the Debtors, filed the motion to dismiss the Chapter 11 cases of the Debtors, and lodged objections to the Debtors' "first day" motions. C Squared claims that the co-manager of the Debtor/AWI's principal William Perciballi improperly initiated the filing of the Chapter 11 bankruptcy proceeding. C Squared is also accusing Mr. Perciballi of filing the voluntary petition in bad faith. "It is screamingly obvious that there is no legitimate bankruptcy purpose behind these bankruptcy cases. Rather, it appears that Perciballi's goal is to effectuate a hostile takeover of AWE, a solvent entity, for his own benefit," says Steven D. Jerome, Esq., at Snell & Wilmer L.L.P., counsel for C Squared. The issue between Mr. Perciballi and C Squared is a two-party dispute that can, and should, be remedied through the pending state court proceedings, says Mr. Jerome. About ArmorWorks Enterprises Military armor systems provider ArmorWorks Enterprises, LLC, and affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17, 2013, along with a plan that resolves a dispute with a minority shareholder and $3.5 million of financing that would save the company from running out of cash. ArmorWorks develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. The Debtors have tapped Todd A. Burgess, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. The Plan would resolve the ongoing dispute with C Squared by allowing ArmorWorks to redeem C Squared's 40% minority interest, or alternatively, allow C Squared to purchase the 60% majority interest of AWI. ArmorWorks and TechFiber sought and obtained an order (i) transferring the In re TechFiber, LLC chapter 11 case to the Honorable Brenda Moody Whinery, the judge assigned to the ArmorWorks Chapter 11 case, and (ii) authorizing the joint administration of the Debtors' cases. ARMORWORKS ENTERPRISES: Disclosure Statement Hearing on Oct. 1 -------------------------------------------------------------- The hearing to consider the disclosure statement explaining the Chapter 11 plan of Armorworks Enterprises, LLC, and TechFiber LLC, will be continued to October 1, 2013, at 2:00 p.m. The deadlines to file objections to the Disclosure Statement will be one week prior to the continued hearing date. The Plan aims to resolve a dispute with C Squared Capital Partners, L.L.C., a passive investor in ArmorWorks and owner of a 40% minority interest after making a $1 million passive investment in the business in 2001. The Chapter 11 plan provides for these terms: * There are no secured claims. To the extent there are any secured claims, the creditors will receive installment payments over 60 months on 5% simple interest or receive possession of their collateral. * Holders of general unsecured claims against ArmorWorks and TechFiber will be paid in installments. They will be paid an initial distribution equal to 20% of the allowed amount of their claim. The balance of the claims will be paid in annual distributions, equal to 20% of the allowed claim plus accrued interest, beginning on the first anniversary of the Effective Date and continuing on the anniversary date of each subsequent year until paid in full. The claims will accrue interest from and after the Effective Date at the rate of 5% per annum simple interest. All claims plus interest will be paid in full on or before the later of the fourth anniversary of the Effective Date or allowance of the Claim. Holders of unsecured claims are impaired and are entitled to vote on the Plan. * Holders of vendor claims against ArmorWorks and TechFiber will be paid an initial distribution equal to 25% of the allowed amount of their Claim, with the balance to be paid in annual distributions, equal to 25% of the allowed claim plus accrued interest, beginning on the first anniversary of the Effective Date and continuing on the anniversary date of each subsequent year until paid in full. The claims will accrue interest from and after the Effective Date at the rate of 5% per annum simple interest. The claims are impaired, and holders are entitled to vote to accept or reject the Plan. * On account of its equity interest, C Squared may elect, in full and final satisfaction of its 40 percent stake in the company, (a) accept a certain redemption amount from ArmorWorks; or (b) pay AWI the AWI Purchase Price to acquire AWI's 60% equity security interest in ArmorWorks. If C Squared fails to accept any of the offer, it will be deemed to have accepted ArmorWorks;' offer to pay the redemption amount. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Armorworks_Plan_Outline.pdf About ArmorWorks Enterprises Military armor systems provider ArmorWorks Enterprises, LLC, and affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17, 2013, along with a plan that resolves a dispute with a minority shareholder and $3.5 million of financing that would save the company from running out of cash. ArmorWorks develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. The Debtors have tapped Todd A. Burgess, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. The Plan would resolve the ongoing dispute with C Squared by allowing ArmorWorks to redeem C Squared's 40% minority interest, or alternatively, allow C Squared to purchase the 60% majority interest of AWI. ArmorWorks and TechFiber sought and obtained an order (i) transferring the In re TechFiber, LLC chapter 11 case to the Honorable Brenda Moody Whinery, the judge assigned to the ArmorWorks Chapter 11 case, and (ii) authorizing the joint administration of the Debtors' cases. ARRHYTHMIA RESEARCH: Gets NYSE MKT Listing Non-Compliance Notice ---------------------------------------------------------------- Arrhythmia Research Technology, Inc. on Aug. 23 disclosed that, on August 20, 2013, it received notice from the NYSE MKT LLC that it is not in compliance with certain of the Exchange's continued listing standards as set forth in Sections 134 and 1101 of the Exchange's Company Guide as a result of the failure to file its interim report on Form 10-Q on a timely basis. The Company has therefore become subject to the procedures and requirements of Section 1009 of the Company Guide. Such procedures require the Company to communicate with the Exchange by August 26, 2013 to confirm receipt of the letter and indicate whether or not it intends to submit a plan of compliance. The Company intends to submit a plan of compliance to the Exchange by September 3, 2013 in accordance with the notice advising the Exchange of action it has taken or intends to take that will bring the Company into compliance with Sections 134 and 1101 of the Company Guide by no later than November 14, 2013. If the plan is accepted but the Company is not in compliance with the continued listing standards of the Company Guide by November 14, 2013 or if the Company is not making progress consistent with the plan, the Company may be subject to delisting procedures. About Arrhythmia Research Technology, Inc. Arrhythmia Research Technology, Inc. (NYSE MKT:HRT) -- http://www.arthrt.com-- through its wholly-owned subsidiary, Micron Products, Inc. -- http://www.micronproducts.com-- has diversified manufacturing capabilities with the capacity to participate in full product life cycle activities from early stage development and engineering from prototyping to full scale manufacturing as well as packaging and product fulfillment services. Its subsidiary, Micron Products, Inc., also manufactures silver plated and non-silver plated conductive resin sensors and distributes metal snaps used in the manufacture of disposable ECG, EEG, EMS and TENS electrodes. The Company also has developed and distributes a customizable proprietary signal- averaging electrocardiography (SAECG) software used to diagnose the risk of certain heart arrhythmias and that is reconfigurable for a variety of hardware platforms. ATARI INC: Committee Balks at Exclusivity Extension --------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Atari, Inc., et al., asks the U.S. Bankruptcy Court for the Southern District of New York to deny the Debtor's motion for extension of their exclusivity periods. According to the Committee, the Debtors' exclusivity must terminate immediately so third-party, non-insiders could propose their own plans of reorganization. An extension of the Debtors' exclusivity would serve only to further delay the re-marketing of the Debtors' remaining assets while administrative expenses of the estates continue to accrue. As reported in the Troubled Company Reporter on Aug. 9, 2013, Atari Inc. asked the Court to give the company another 60 days to keep control of its Chapter 11 case, saying it won't be able to meet a fast-approaching deadline to file a reorganization or liquidation plan. Law360 reported that the U.S. branch of French holding firm Atari SA recently obtained court approval of its bid to sell off its assets piece by piece, which Atari said represented the best opportunity to maximize asset value for the benefit of all stakeholders. About Atari Atari -- http://www.atari.com-- is a multi-platform, global interactive entertainment and licensing company. Atari owns and/or manages a portfolio of more than 200 games and franchises, including world renowned brands like Asteroids(R), Centipede(R), Missile Command(R), Pong(R), Test Drive(R), Backyard Sports(R), and Rollercoaster Tycoon(R). Atari Inc. and its U.S. affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) on Jan. 21, 2013, to break away from their unprofitable French parent company and secure independent capital. A day after its American unit filed for Chapter 11 bankruptcy protection, Paris-based Atari S.A. took a similar measure under Book 6 of that country's commercial code. Atari S.A. said it was filing for legal protection because its longtime backer BlueBay has sought to sell its 29% stake and demanded repayment by March 31 on a credit line of $28 million that it cut off in December. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP are proposed to serve as lead counsel for the U.S. companies in their Chapter 11 cases. BMC Group is the claims and notice agent. Protiviti Inc. is the financial advisor. Duff & Phelps Securities LLC serves as financial advisor to the Official Committee of Unsecured Creditors. Cathy Hershcopf, Esq., at Cooley LLP represents the Committee. ATARI INC: Extends Control Over Ch. 11 Case for 30 Days ------------------------------------------------------- Law360 reported that Atari Inc. received a New York bankruptcy judge's approval to extend its control over its Chapter 11 case for 30 days after resolving an objection from creditors who argued that it's time for an outside party to submit a reorganization plan. According to the report, U.S. Bankruptcy Judge James M. Peck signed off on the video game company's compromise with the official committee of unsecured creditors that allows it until Sept. 20 to file an exit plan without the threat of rival plans being submitted. Atari had initially asked for another 60 days to keep control of its Chapter 11 case, saying it won't be able to meet a fast- approaching deadline to file a reorganization or liquidation plan. The U.S. branch of French holding firm Atari SA in early August obtained court approval of its bid to sell off its assets piece by piece, which Atari said represented the best opportunity to maximize asset value for the benefit of all stakeholders. About Atari Atari -- http://www.atari.com-- is a multi-platform, global interactive entertainment and licensing company. Atari owns and/or manages a portfolio of more than 200 games and franchises, including world renowned brands like Asteroids(R), Centipede(R), Missile Command(R), Pong(R), Test Drive(R), Backyard Sports(R), and Rollercoaster Tycoon(R). Atari Inc. and its U.S. affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) on Jan. 21, 2013, to break away from their unprofitable French parent company and secure independent capital. A day after its American unit filed for Chapter 11 bankruptcy protection, Paris-based Atari S.A. took a similar measure under Book 6 of that country's commercial code. Atari S.A. said it was filing for legal protection because its longtime backer BlueBay has sought to sell its 29% stake and demanded repayment by March 31 on a credit line of $28 million that it cut off in December. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP serve as lead counsel for the U.S. companies in their Chapter 11 cases. BMC Group is the claims and notice agent. Protiviti Inc. is the financial advisor. The Debtors won court approval to sell seven video-game franchises for a total of about $5.1 million. Duff & Phelps Securities LLC serves as financial advisor to the Official Committee of Unsecured Creditors. Cooley LLP serves as the Committee's counsel. AVALON OIL: Incurs $749K Net Loss in Fiscal Year Ended March 31 --------------------------------------------------------------- Avalon Oil & Gas, Inc., filed with the U.S. Securities and Exchange Commission on Aug. 20, 2013, its annual report on Form 10-K for the fiscal year ended March 31, 2013. Bernstein & Pinchuk LLP, in New York, expressed substantial doubt about Avalon Oil's ability to continue as a going concern, citing the Company's significant losses from operations since its inception and working capital deficiency. The Company reported a net loss of $749,314 on $163,574 of oil & gas sales for the fiscal year ended March 31, 2013, compared with a net loss of $737,154 on $253,882 of oil & gas sales for the previous fiscal year. The Company' balance sheet at March 31, 2013, showed $2.57 million in total assets, $2.12 million in total liabilities, and stockholders' equity of $442,088. A copy of the Form 10-K is available at http://is.gd/Fpksb1 Minneapolis, Minn.-based Avalon Oil & Gas, Inc. OTC BB: AOGN) acquires oil & gas producing properties that have proven reserves and established in-field drilling locations with a combination of cash, debt, and equity. BAJA MINING: Incurs $10.7-Mil. Net Loss in Second Quarter --------------------------------------------------------- Baja Mining Corp. reported a net loss of $10.7 million and $28.3 million for the three and six months ended June 30, 2013, compared with a net loss of $140.5 million and $170.7 million for the three and six months ended June 30, 2012, respectively. The Company's balance sheet at June 30, 2013, showed $25.5 million in total assets, $12.7 million in total liabilities, and shareholders' equity of $12.8 million. Going Concern Uncertainty The Company said that as at June 30, 2013, MMB remains in an Event of Default. Should MMB remain in an Event of Default and be unable to negotiate an extension to the latest standstill agreement that expired in May 2013, as a result of this (or any other arising) default, the Remaining 2010 Project Finance Lenders may exercise any combination of available remedies, including accelerated payment demand of the debt facilities. "Under the terms of the current senior lending facilities completion guarantee, the Company is liable as a guarantor for its proportionate obligation (70%) of the senior borrowings and any amounts required under the economic completion guarantee. "Critical factors, amongst others, impacting the likelihood of any demand arising under the senior borrowing guarantee and, therefore, the Company's ability to continue as a going concern, include the following: (i) the continued funding to the Boleo Project by the Consortium or KORES; (ii) the continued support of the Remaining 2010 Project Financing Lenders in choosing not to exercise any further remedies available to them under the Event of Default; (iii) the agreement on a new standstill agreement and/or the reinstatement or replacement of the Remaining 2010 Project Financing; (iv) the completion of development of the Boleo Project; and (v) establishing profitable operations. "In addition, should the Company be required to repay to the Consortium the refundable manganese deposit liability of $10 million, it currently has insufficient funds available to settle this liability. "The success of these factors above cannot be assured and, accordingly, there is substantial doubt about the Company's ability to continue as a going concern." A copy of the Company's interim consolidated financial statements dated June 30, 2013, is available at http://is.gd/DO0JqR A copy of the Management Discussion and Analysis for the second quarter ended June 30, 2013, is available at http://is.gd/QAjNEa About Baja Mining Vancouver, Canada-based Baja Mining Corp. was incorporated on July 15, 1985, under the Company Act (British Columbia). The Company's principal asset is its investment in the Boleo Project, a copper-cobalt-zinc-manganese deposit located near Santa Rosalia, Baja California Sur, Mexico. The Project is currently under construction, and surface and underground mining activities have commenced. Baja controlled and operated the Boleo Project up until the change in control of Minera y Metalurgica del Boleo S.A.P.I. de C.V. ("MMB") on Aug. 27, 2012. In addition, the Company intends to investigate and potentially pursue alternative project opportunities (see "Cinto Colorado Option Agreement"). As at June 30, 2013, the Company owned a 15.7% interest in the Project through its wholly owned Luxembourg subsidiary, Baja International S.a r.l., which owns 100% of a Luxembourg subsidiary, Boleo International S.a r.l., which in turn owned 15.7% of the shares of MMB. MMB holds all mineral and property rights in the Project. As at June 30, 2013, the remaining 84.3% of MMB was indirectly owned by members of a Korean consortium (the "Consortium"), comprised of KORES, LS-Nikko Copper Inc., Hyundai Hysco Co. Ltd., SK Networks Co. Ltd., and Iljin Materials Co. Ltd., which acquired an initial 30% interest in June 2008. During the quarter ended June 30, 2013, after giving effect to contributions by KORES, Baja's interest in MMB was reduced from 26.2% to 20.9% on April 18, 2013, and to 15.7% on May 10, 2013. Subsequent to the quarter end, KORES contributed further funds to MMB completing the Phase II Funding Requirement and reducing the Company's interest in MMB to 10%. Following the loss of control of MMB on Aug. 27, 2012, the Company is no longer the operator of the Boleo Project and no longer has day-to-day involvement in the management and development of the Project. The Company's current focus is on addressing outstanding matters relating to the change of control in MMB and considering alternative opportunities for the benefit of its stakeholders. BERJAC OF OREGON: Pacific Continental Named Defendant in Suit ------------------------------------------------------------- Northwest-based Pacific Continental Corporation, the holding company for Pacific Continental Bank, on Aug. 23 disclosed that Pacific Continental Bank, along with Holcomb Family Limited Partnership, Fred "Jack" W. Holcomb, Holcomb Family Trust, Jones & Roth, P.C. and Umpqua Bank, has been named as a defendant in a lawsuit filed in Oregon on behalf of individuals who placed money with Berjac of Oregon and Berjac of Portland, both currently in Chapter 11 bankruptcy. Per the complaint, damages sought are more than $10 million. "Although we can't discuss this matter in detail due to its legal nature, be assured we take this matter very seriously. While we intend to vigorously defend against this lawsuit, we remain unwavering in our 40-year plus commitment to our clients, employees, shareholders and community partners," said Pacific Continental CEO, Hal Brown. About Berjac of Oregon Berjac of Oregon filed a bare-bones Chapter 11 petition (Bankr. D. Ore. Case No. 12-63884) in Eugene on Aug. 31, 2012. Its affiliate, Berjac of Portland, Oregon, also sought Chapter 11 bankruptcy protection. Berjac -- http://www.berjac.com/-- has provided insurance premium financing to insureds in the Western United States since 1963. Michael S. Holcomb, owns the Berjac partnerships with his brother Gary. According to The Oregonian, on the date of the bankruptcy filing, state regulators fined Berjac $900,000, saying that 275 investors might have lost up to $35 million making risky loans to the Holcombs' firms. The Oregonian said state officials moved quickly to issue a press release before the Labor Day weekend to warn other investors of the firm's alleged illegal scheme and apparent financial woes. In cease-and-desist orders issued late August 2012, the Oregon Division of Finance and Corporate Securities accused Berjac and the Holcomb brothers of violating Oregon securities laws. The orders allege the Holcombs sold unsecured notes to investors without registering them, getting a license or offering investors a detailed prospectus. Judge Frank R. Alley, III, presides over the case. The Law Offices of Keith Y. Boyd, Esq., serves as the Debtors' counsel. Berjac of Oregon disclosed $5,412,444 in assets and $44,761,597 in liabilities as of the Chapter 11 filing. Thomas A. Huntsberger is appointed as the Chapter 11 trustee. Thomas A. Geber and the law firm of Bullivant Houser Bailey, P.C.O, serves as the trustee's general counsel. The seven-member Official Committee of Unsecured Creditors is represented by David B. Mills. BIOLASE INC: Violates Bank Covenants; Faces Class Action in Calif. ------------------------------------------------------------------ Robbins Geller Rudman & Dowd LLP on Aug. 23 disclosed that a class action has been commenced in the United States District Court for the Central District of California on behalf of purchasers of Biolase, Inc. common stock during the period between January 7, 2013 and August 12, 2013. If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from August 23, 2013. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/biolaseinc/ Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. The complaint charges Biolase and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Biolase manufactures and distributes dental lasers. The complaint alleges that during the Class Period, defendants issued false and misleading statements regarding Biolase's business and future prospects. Specifically, defendants failed to disclose and/or concealed the following adverse facts during the Class Period: (a) contrary to defendants' statements during the Class Period, there is little evidence demonstrating the use of dental lasers (instead of drills) provides long-term benefits to teeth, and because both children and adults can have cavities filled without the numbing injections Biolase claims its WaterLase products preclude, only 5% of dental offices use dental lasers and dentists were hesitant to adopt dental lasers -- especially Biolase's -- because of their high costs; (b) due to the relatively high costs associated with its dental laser offerings, Biolase's efforts to switch to a direct sales model in the United States during the Class Period were failing; (c) contrary to defendants' Class Period statements, the high debt burden the Company assumed to exit its arrangement with the former exclusive distributor of its WaterLase products, coupled with the onerous terms of certain of its Comerica lines of credit, were financially handicapping the Company; and (d) contrary to defendants' Class Period statements that "the cash generated from operations and the borrowings available under the lines of credit with Comerica [would] be sufficient to fund [Biolase's] working capital requirements for 2013," there was no cash being generated from operations and the Company was in default of its Comerica lines of credit. On August 7, 2013, Biolase issued a press release announcing its second quarter 2013 financial results. Rather than the $15.69 million in revenues defendants had led the market to expect, Biolase reported revenues of just $14.2 million -- down 2.74% from the $14.6 million the Company had reported in the fourth quarter 2012 -- and a loss of $.06 per share. Then, on August 13, 2013, before the markets opened, the Company disclosed that it was in violation of its bank covenants. On the news of the revenue and earnings misses and the Company's violation of prior debt covenants, the price of Biolase common stock, which had traded as high as $6.05 per share in intraday trading during the Class Period, fell more than 80% from that level to close at $1.19 per share on August 13, 2013. Plaintiff seeks to recover damages on behalf of all purchasers of Biolase common stock during the Class Period. The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. Robbins Geller -- http://www.rgrdlaw.com-- represents U.S. and international institutional investors in contingency-based securities and corporate litigation. With nearly 200 lawyers in nine offices, the firm represents hundreds of public and multi- employer pension funds with combined assets under management in excess of $2 trillion. About BIOLASE, Inc. Irvine, Calif.-based BIOLASE, Inc., incorporated in Delaware in 1987, is a biomedical company that develops, manufactures, and markets lasers in dentistry and medicine. The Company currently operates in one business segment with laser systems that are designed to provide clinically superior performance for many types of dental procedures with less pain and faster recovery times than are generally achieved with drills, scalpels, and other dental instruments. The Company also markets and distributes dental imaging equipment and other products designed to improve technologies for applications and procedures in dentistry and medicine. BLUEJAY PROPERTIES: Settles Motion for Trustee Appointment, et al. ------------------------------------------------------------------ The Hon. Robert D. Berger of the U.S. Bankruptcy Court for the District of Kansas gave his stamp of approval on the compromise and settlement among Bluejay Properties, LLC, creditor Kaw Valley Bank, creditor University National Bank, creditor Banker's Bank of Kansas, the Larkin parties and the U.S. Trustee. Bankruptcy Judge Berger said that no objections were received prior to the objection deadline, however, creditor KVB filed a response, and the Court has reviewed and heard statements of counsel in regards to that response. On July 11, 2013, the Debtor, BBOK and UNB met to determine a course of action for the plan of liquidation in the case. From that meeting, the parties were able to arrive at a settlement. The compromise and settlement is in the best interests of the Debtor and the Chapter 11 estate as it will enable the Debtor to liquidate its property in an orderly and appropriate fashion, and provide certainty for the creditors in the case. As a result of the compromise and settlement, the motion to appoint trustee, motion to terminate asset manager, motion to require closing of real estate contract are denied. The Court also approves the application to employ CBRE, through its individual brokers, Jeff Stingley and Gina Anderson as property broker to assist in the selling of the Debtor's apartment complex. The Debtor will pay the broker a two percent commission from the proceeds of the sale of the Debtor's real estate. If the sale is not completed, pursuant to the contract, the Debtor would only be responsible for marketing costs not to exceed $1,500. In addition, the Court approved the motion to continue the Debtor's use of cash collateral. Patricia Hamilton, Esq. -- phamilton@stevensbrand.com -- of Stevens & Brand, LLP represents KVB; Edward J. Nazar, Esq. -- ednazar@redmondnazar.com -- of Redmond & Nazar, L.L.P represents UNB; and Arthur S. Chalmers, Esq. -- chalmers@hitefanning.com -- of Hite, Fanning & Honeyman, L.L.P. represents BBOK; Benoit M.J. Swinnen, Esq. -- ben@swinnenlaw.com -- of Swinnen & Associates, LLC represents the Larkin parties; and Joyce Owen represents the U.S. Trustee. About Bluejay Properties Based in Junction City, Kansas, Bluejay Properties, LLC, doing business as Quinton Point, filed a bare-bones Chapter 11 petition (Bankr. D. Kan. Case No. 12-22680) in Kansas City on Sept. 28, 2012. Bankruptcy Judge Robert D. Berger presides over the case. Todd A. Luckman, Esq., and Kathryn E. Sheedy, Esq., at Stumbo Hanson, LLP in Topeka. The Debtor owns the Quinton Point Apartment Complex in Kansas City valued at $17 million. The Debtor scheduled liabilities of $13,112,325. The petition was signed by Michael L. Thomas of TICC Prop., managing member. Bankers' Bank of Kansas, owed approximately $13.08 million, is represented by Arthur S. Chalmers of Hite, Fanning & Honeyman, LLP. The University National Bank, owed approximately $1.2 million, is represented by Edward J. Nazar of Redmond & Nazar, L.L.P., and Todd Thompson of Thompson Ramsdell & Qualseth, P.A. BUFFALO PARK: Joint Plan Filing Deadline Extended Until Aug. 30 --------------------------------------------------------------- Ronald P. Lewis and Carol Lewis, and Buffalo Park Development Properties, Inc. et al., sought and obtained an extension until Aug. 30, 2013, of the deadline to file their Joint Plan of Reorganization and disclosure statement. The deadline for parties-in-interest to file any objections to the adequacy of the Debtors' Disclosure Statement is extended from Aug. 30, 2013, to Sept. 13, 2013. On July 2, 2013, the court held a status and scheduling conference in the Lewis case on several pending matters, including the Lewis Second Amended Disclosure Statement. At that hearing, counsel for Lewis advised the Court that the Debtors intend to file a Joint Plan and Disclosure Statement and would be requesting joint administration of their cases. A hearing on the Debtor's disclosure statement was previously set for Tuesday, Sept. 10 at 9:00 a.m. in Courtroom C203, Byron G. Rogers U.S. Courthouse, 1929 Strout Street, Denver, Colorado. That hearing has now been rescheduled to Sept. 24 at 11:15 a.m. On July 15, 2013, the Debtors filed a motion for joint administration of their cases, which the Court granted on July 18. Since the status and scheduling conference on July 2, the Lewis and Colorado Community Bank entered into a Stipulation which granted CCB relief from the automatic stay and resolved CCB's objections to the Lewis plan and disclosure statement. Buffalo Park has been attempting to reach agreements with its primary secured lenders, CCB and Mutual Omaha. Offers have been exchanged and the parties are working toward a resolution of claims. The Debtors sought a brief extension of the deadline to file their Joint Plan and Disclosure Statement to the enable parties to continue their discussion in the hopes that the Debtors will be able to propose a Joint Plan and Disclosure Statement that incorporates any agreements reached. This requested extension will result in fewer, if any, revisions to the Joint Plan and Disclosure Statement as the cases move forward toward confirmation. A resolution for the Mutual Omaha claim would also resolve the pending motion for relief from stay set for final, evidentiary hearing on Sept. 25, 2013. Attorneys for the Debtors can be reached at: Jeffrey S. Brinen, Esq. Leigh A. Flanagan, Esq. KURTNER MILLER BRINEN, P.C. 303 East 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 Fax: (303) 832-1510 E-mail: laf@kutnerlaw.com Attorneys for Buffalo Park can be reached at: Robert Padjen, Esq. LAUFER AND PADJEN, LLC 5290 DTC Parkway, Suite 150 Englewood, CO 80111 Tel: (303) 830-3173 Fax: (303) 830-3135 E-mail: laf@kutnerlaw.com Buffalo Park Development Properties, Inc., filed a Chapter 11 petition (Bankr. D. Colo. Case No. 13-17669) on May 7, 2013. Ronald P. Lewis signed the petition as owner and CEO. Buffalo Park disclosed $20,777,601 assets and $11,294,567 liabilities in its schedules. Robert Padjen, Esq., at Laufer and Padjen LLC serves as counsel to Buffalo Park. Judge Elizabeth E. Brown presides over the case. U.S. Trustee Richard A. Wieland has been unable to appoint an official committee of unsecured creditors in the Debtor's Chapter 11 case because there were too few unsecured creditors who were willing to serve on the creditors' committee. 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 89.84 cents-on-the-dollar during the week ended Friday, August 23, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.47 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. CALDERA PHARMACEUTICALS: Incurs $1-Mil. Net Loss in Second Quarter ------------------------------------------------------------------ Caldera Pharmaceuticals, Inc., reported a net loss of $1.0 million and $1.8 million for the three and six months ended June 30, 2013, compared with a net loss of $315,853 and $629,347 for the three and six months ended June 30, 2012. Sales were $82,881 and $320,295 for the three and six months ended June 30, 2013, compared with sales of $493,288 and $871,025 for the three and six months ended June 30, 2012. The Company's balance sheet at June 30, 2013, showed $2.9 million in total assets, $3.4 million in total liabilities, $133,350 of Series A Cumulative Convertible Redeemable Preferred Stock, and a stockholders' deficit of $635,724. The Company said: "We have generated losses to date and have limited working capital. We incurred a net loss of for the six months ended June 30, 2013, of $(1,810,498). At June 30, 2013, we had an accumulated deficit of $(10,654,430) and a working capital deficiency of $(1,107,739). We have generated losses to date and have limited working capital. At Dec. 31, 2012, we had an accumulated deficit of $(6,967,435) and a working capital deficiency of $(742,499). We incurred a net loss of for the year ended Dec. 31, 2012, of $(792,061) and for the year ended Dec. 31, 2011, of $(2,152,923). These factors raise substantial doubt about our ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/9GI1sY Based in Cambridge, Massachusetts, Caldera Pharmaceuticals, Inc., is a drug discovery and pharmaceutical services company that is based on a proprietary x-ray fluorescence technology, called XRpro(R). CALIBRE ACADEMY: Fitch Keeps 'B' Bond Rating on Watch Negative -------------------------------------------------------------- Fitch Ratings has maintained the Negative Rating Watch on the 'B' rating assigned to approximately $16.5 million in outstanding education revenue refunding bonds for Calibre Academy (Calibre, the school) - formerly Carden Traditional Schools (CTS) project, series 2012, issued by the Industrial Development Authority of the County of Pima (AZ). RATING WATCH NEGATIVE: Maintenance of the Negative Watch reflects Calibre's going concern note as a result of a severely deteriorated financial position in fiscal 2012 and no additional disclosure since Fitch's last review on June 5, 2013. The interim financial performance of both E-Institute Charter School Inc., (EICS; the guarantor) and Calibre is inconclusive, and does not currently indicate the combined entity's ability to cover transaction maximum annual debt service (TMADS). Fitch expects updated information regarding fiscal 2013 operations for both Calibre and EICS in the coming months but believes substantial near-term improvement is unlikely at Calibre. Fitch also considers EICS' wherewithal and operations insufficient to support Calibre's operations indefinitely. RATING SENSITIVITIES FAILURE OF COVERAGE TEST: The loan agreement for the bonds states that less than sum-sufficient TMADS coverage from the combined entity (Calibre and EICS) for the fiscal year that began July 1, 2012 would constitute an event of default (EOD). According to terms of the loan agreement and indenture for the bonds, the trustee could implement accelerated redemption provisions if bondholders do not waive the EOD. In such a scenario, Fitch would likely downgrade the bonds to at least 'CCC' and keep the bonds on Rating Watch Negative. INADEQUATE PROGRESS TOWARDS FISCAL BALANCE: Calibre's management began implementing various expense reduction measures into fiscal 2013. Fitch does not anticipate breakeven operations this year, and a lack of meaningful fiscal improvement at Calibre, or EICS' inability to stand behind its guarantee of the charter school's debt, could make a payment default a real possibility. Annual debt service coverage in fiscal 2012 was an adequate 1.4x. The next annual debt service payment of $1.36 million is due on Jan. 1, 2014 and according to trustee comments received at the June review, scheduled deposits are being made to the debt service account without interruption. The debt service reserve, funded at issuance, totals $1.38 million. TIMELY INFORMATION: Calibre has not posted interim disclosure in the past quarter, which Fitch believes is likely due to the change in the financial and reporting manager function. Maintenance of the current rating is contingent upon the receipt of timely and relevant information going forward. CHINA CEETOP.COM: Incurs $293K Net Loss in Second Quarter --------------------------------------------------------- China Ceetop.com, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $293,230 on $0 sales for the three months ended June 30, 2013, compared with a net loss of $274,180 on $1.3 million of sales for the same period last year. The Company reported a net loss of $502,999 on $0 sales for the six months ended June 30, 2013, compared with a net loss of $512,479 on $2.6 million of sales for the corresponding period of 2012. The 100% decrease in net sales was due to the Company's transition from online retail sales to B to B supply chain service. The Company' balance sheet at June 30, 2013, showed $3.5 million in total assets, $4.0 million in total liabilities, and a stockholders' deficit of $463,482. Going Concern Uncertainty "For the year ended Dec. 31, 2012, our independent auditors, in their report on the financial statements, have indicated that the Company has experienced recurring losses from operations and may not have enough cash and working capital to fund its operations beyond the very near term, which raises substantial doubt about our ability to continue as a going concern. Management has made a similar note in the financial statements. As indicated herein, we must raise capital for the implementation of our business plan, and we will need additional capital for continuing our operations. We do not have sufficient revenues to pay our expenses of operations. Unless the Company is able to raise working capital, it is likely that the Company either will have to cease operations or substantially change its methods of operations or change its business plan." A copy of the Form 10-Q is available at http://is.gd/cQveKQ Shenzhen, China-based China Ceetop.com, Inc., is an Oregon- registered corporation. Before 2013 the company owned and operated the online retail platform, http://www.ceetop.com/ Due to excessive competition in online retail, the Company has transformed itself into an integrated supply chain services provider, and focuses on Business to Business "B to B" supply chain management and related value-added services among enterprises. CHINA LOGISTICS: Incurs $493K Net Loss in Second Quarter -------------------------------------------------------- China Logistics Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $492,809 on $3.49 million of sales for the three months ended June 30, 2013, compared with net income of $136,242 on $6.20 million of sales for the same period last year. The Company reported a net loss of $307,624 on $6.89 million of sales for the six months ended June 30, 2013, compared with net income of $695,507 on $11.57 million of sales for the same period of 2012. The decrease in net income for the second quarter and first six months of 2013, respectively, was primarily due to lower revenues and gross profits and an increase in interest expense and bad debt expense. The Company' balance sheet at June 30, 2013, showed $3.55 million in total assets, $3.57 million in total liabilities, and a stockholders' deficit of $17,822. The Company said: "The Company has an accumulated deficit of $20,553,440 at June 30, 2013, and a working capital deficit of $138,121 at June 30, 2013. During the six months ended June 30, 2013, the Company used cash in operating activities of $82,417. The Company has incurred net (loss) income of $(307,624) and $695,507 for the six months ended June 30, 2013, and 2012, respectively. The Company's ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and to obtain any necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted at this time. These matters raise substantial doubt about the ability of the Company to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/1DhxCC Shanghai, China-based China Logistics Group, Inc., is a Florida corporation and was incorporated on March 19, 1999, under the name of ValuSALES.com, Inc. The Company changed its name to Video Without Boundaries, Inc., on Nov. 16, 2001. On Aug. 31, 2006, it changed its name from Video Without Boundaries, Inc., to MediaReady, Inc., and on Feb. 14, 2008, it changed its name from MediaReady, Inc., to China Logistics Group, Inc. On Dec. 31, 2007, the Company entered into an acquisition agreement with Shandong Jiajia International Freight and Forwarding Co., Ltd., and its sole shareholders Messrs. Hui Liu and Wei Chen, through which the Company acquired a 51% interest in Shandong Jiajia. The transaction was accounted for as a capital transaction, implemented through a reverse recapitalization. Shandong Jiajia, formed in 1999 as a Chinese limited liability company, is an international freight forwarder and logistics management company. Headquartered in Qingdao, Shandong Jiajia has branches in Shanghai, Xiamen, Lianyungang and Tianjin with additional sales office in Rizhao. CIRTRAN CORP: Reports $1.7-Mil. Net Income in Second Quarter ------------------------------------------------------------ CirTran Corporation reported net income of $1.7 million and $1.3 million for the three and six months ended June 30, 2013, compared with a net loss of $705,487 and $2.0 million for the three and six months ended June 30, 2012, respectively. Sales were $1.1 million and $2.0 million for the three and six months ended June 30, 2013, compared with sales of $315,755 and $934,455 for the three and six months ended June 30, 2012. The Company said: "We recorded a gain of $365,222 on our derivative valuation for the three months ending June 30, 2013, as compared to a loss of $32,925 recorded for the three months ended June 30, 2012. We recorded a gain of $371,066 on our derivative valuation for the six months ended June 30, 2013, as compared to a loss of $166,530 recorded for the six months ended June 30, 2012. The swing in the derivative valuation is primarily the result of the change in estimating the fair value of convertible debentures and associated warrants from using the Black-Scholes model to a multinomial lattis model, together with the varying market values of our common stock. "We recorded a gain of $1,443,557 on our settlement of debt for the six months ended June 30, 2013. We recorded a gain of $1,405,205 on our settlement of debt for the three months ended June 30, 2013. This was a result of settling payable, accrued liabilities and debt for equity and relief of about $1.4 million in amounts due LIB-MP. See Notes 5 and 10, in the notes to the unaudited financial statements above for more details." The Company's balance sheet at June 30, 2013, showed $1.3 million in total assets, $24.6 million in total liabilities, and a stockholders' deficit of $23.3 million. "The Company had a net income of $1,262,866 and a net loss of $1,993,583 for the six months ended June 30, 2013, and 2012, respectively. As of June 30, 2013, the Company had an accumulated deficit of $48,089,198. In addition, the Company provided cash by operations in the amount of $15,948 during the six months ended June 30, 2013, and used cash in operations in the amount of $531 during the six months ended June 30, 2012. The Company also had a negative working capital balance of $23,788,078 as of June 30, 2013, and $26,458,490 as of December 31, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern," according to the regulatory filing. A copy of the Form 10-Q is available at http://is.gd/bEyhNM West Valley City, Utah-based CirTran Corporation manufactures, markets, and distributes domestically and internationally an energy drink under a license, now in dispute, with Playboy Enterprises, Inc., or Playboy, and in the U.S., it provides a mix of high- and medium-volume turnkey manufacturing services and products using various high-tech applications for leading electronics OEMs in the communications, networking, peripherals, gaming, law enforcement, consumer products, telecommunications, automotive, medical, and semiconductor industries. Its services include pre-manufacturing, manufacturing, and post-manufacturing services. Its goal is to offer customers the significant competitive advantages that can be obtained from manufacture outsourcing. COGECO CABLE: DBRS Confirms Issuer Rating at 'BB' ------------------------------------------------- DBRS Inc. has confirmed Cogeco Cable Inc.'s Issuer Rating at BB (high), its Senior Secured Notes & Debentures rating at BBB (low), with a recovery rating of RR1, and its Senior Unsecured Notes rating at BB, with a recovery rating of RR5. All trends remain Stable. The confirmation reflects the Company's ability and willingness to reduce financial leverage by a meaningful degree (i.e., to a range of 3.1 to 3.5 times (x), from 3.7x currently) within the next 12 months, following the recent debt-financed acquisitions of PEER 1 Network Enterprises (PEER 1) and Atlantic Broadband Group, LLC (ABB). The ratings continue to be supported by the Company's established footprint in existing markets and the growth potential of data services, while reflecting increasing competition in Canada and the Company's maturing cable subscriber base. Cogeco's Canadian operations remained fairly stable, as a result of relative steady operating results from its Canadian subscriber base and the ongoing integration of recent acquisitions. DBRS notes that revenue growth over the past year was primarily a result of rate increases as Cogeco's Canadian cable television subscriber base has continued its trajectory of declines quarter over quarter, while subscriber growth in high-speed internet and telephony subscribers has decelerated. After Cogeco's acquisition of Atlantic Broadband in 2012, DBRS assigned the Company an Issuer Rating of BB (high). DBRS believed Cogeco was best positioned in the BB (high) rating category, based on the execution risk and increased financial leverage associated with the acquisition, combined with the existing pressure on its Canadian subscriber base. In early 2013, DBRS confirmed Cogeco's ratings following its acquisition of PEER 1, as DBRS believed encouraging growth prospects may help supplant slowing growth and potential declines from a maturing cable segment. DBRS notes Cogeco's substantial increase in leverage after its two debt- financed acquisitions. Cogeco's gross debt-to-EBITDA ratio increased to 3.1x from 1.6x following the ABB acquisition, rising further to 3.8x as a result of the Peer 1 purchase. DBRS expects the earnings profile of Cogeco to remain relatively stable in the near term as the Company continues to focus on acquisition integration and execution. DBRS will continue to focus on the competitive landscape, Cogeco's Canadian subscriber base and the operating performance of Cogeco's acquisitions going forward. Although Cogeco currently benefits from limited overlap with its telco competitors, the Company must continue to enhance its service offerings as IPTV deployment expands. The Company must also focus on growing its ABB operations and expanding its data services offerings to diversify its revenue streams over the longer term. DBRS expects the Company's financial profile to become consistent with its current rating categories, based on the strength of its cash generating capacity and the Company's willingness and ability to de-lever. DBRS believes Cogeco will decrease leverage by a meaningful degree (i.e., to a range of 3.1x to 3.5x, from approximately 3.7x currently) within 12 months through EBITDA growth and the use of free cash flow after dividends to reduce bank debt by at least $150 million (on a consolidated basis) in F2014. DBRS has concluded that holders of the Senior Secured Notes & Debentures could likely recover 100% of their value in a default scenario, a level that corresponds with a recovery rating of RR1. In accordance with the criteria DBRS Recovery Ratings for Non- Investment Grade Corporate Issuers, DBRS has confirmed a security rating of BBB (low) for Cogeco's Senior Secured Notes & Debentures, one notch above the Issuer Rating of BB (high). DBRS has also concluded that the holders of the Senior Unsecured Debt could likely recover 10% to 30% of their value in a default scenario, a level that corresponds with a recovery rating of RR5. Also in accordance with these criteria, DBRS has confirmed a security rating of BB for Cogeco's Senior Unsecured Debt, one notch below the Issuer Rating of BB (high). COLDWATER PORTFOLIO: U.S. Bank Withdraws Proposed Exit Plan ----------------------------------------------------------- U.S. Bank National Association notified the U.S. Bankruptcy Court for the Northern District of Indiana that it has withdrawn as moot the Chapter 11 Plan for Coldwater Portfolio Partners, LLC, in light of the order confirming the joint Chapter 11 Plan filed by the Debtor and the lenders. The hearing set for approval of the Disclosure Statement is canceled and removed from the Court's calendar. U.S. Bank is the successor trustee for GS Mortgage Securities Corporation II, Commercial Mortgage Pass-Through Certificates, Series 2006-G G6 and RBS, secured creditors. In a separate notice, the Debtor withdrew its motion to expand the use of cash collateral and its disclosure Statement as moot. As reported in the Troubled Company Reporter on July 23, 2013, the Debtor and the lender won confirmation of their plan on July 17, 2013. The bankruptcy judge also approved the adequacy of the disclosure statement in explaining the terms of the Plan. As reported in the TCR on June 5, 2013, the Joint Plan calls for unsecured creditors with $225,000 in claims to be paid 44 percent. Properties will be transferred to a liquidating trust, with sale proceeds earmarked for the lenders. If they wish, the lenders may buy the properties using debt rather than cash. Two plans were originally filed in the case. The Debtor's Plan provides that the Debtor will reorganize with the help of financing proposed by N3 retail Investors, LLC, as the plan sponsor. The Lenders' Plan provides for the orderly sale or other disposition of the Debtor's Property and other assets, the payment in full of all allowed administrative claims and priority claims in the Chapter 11 case and guarantees that unsecured trade creditors receive no less than a pro rata share of $100,000. About Coldwater Portfolio Coldwater Portfolio Partners LLC filed a voluntary Chapter 11 petition (Bankr. N.D. Ind. Case No. 12-31182) on April 4, 2012. CPP, a limited liability company organized under the laws of the state of Delaware, was formed in January 2006 with the purpose of owning and operating 38 commercial real estate properties. The majority of the properties are shadow retail centers located adjacent to Wal-Mart Supercenters throughout the Midwest and Southern States. The Debtor has developed relationships with nationwide retailers who operate local stores at the Shadow Retail Centers, including Dollar Tree, Game Stop, Sally Beauty, and Fashion Bug. The Shadow Retail Centers are particularly attractive commercial retail properties with business arising from the Wal-Mart customer traffic. Bankruptcy Judge Harry C. Dees, Jr., oversees the case. Forrest B. Lammiman, Esq., and David L. Kane, Esq., at Meltzer, Purtill & Stelle LLC, serve as the Debtor's counsel. Variant Capital Advisors LLC provides investment banking services to the Debtor. In its schedules, CPP disclosed $43,795,511 in assets and $73,808,077 in liabilities as of the Petition Date. CPP is a subsidiary of CPP Holdings LLC. Kenneth S. Klein, manager of CPP, signed the Chapter 11 petition. A related entity, Coldwater Portfolio Partners II, LLC, owns and operates nine shadow retail centers in the Midwest and Southern United States. Klein Retail Centers, Inc. is the parent of Coldwater II. COMMONWEALTH BIOTECHNOLOGIES: Conn. Court Dismisses "Chien" Suit ---------------------------------------------------------------- Connecticut District Judge Alvin W. Thompson on Wednesday dismissed the pro se complaint originally brought by Andrew Chien in Connecticut Superior Court against Commonwealth Biotechnologies, Inc., Dr. Richard J. Freer, and LeClairRyan, A Professional Corporation, for malicious prosecution, abuse of process, "bad faith and submitted falsified or perjury information," unjust enrichment, securities fraud, violations of fiduciary duties and "manipulation operation." The defendants removed the case to the District Court pursuant to 28 U.S.C. Sec. 1441(b) based on diversity jurisdiction and filed two motions to dismiss. Defendant Freer has moved to dismiss the complaint pursuant to Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure, and all defendants have moved to dismiss the complaint pursuant to Rule 12(b)(6). On Oct. 16, 2012, the Court dismissed the case without prejudice as to CBI because CBI "filed a Voluntary Chapter 11 Bankruptcy Petition, and therefore proceedings against [CBI] are subject to the automatic stay pursuant to Sec. 362 of the Bankruptcy Code." A copy of the Court's Aug. 21, 2013 Ruling is available at http://is.gd/5bohYrfrom Leagle.com. The case is, ANDREW CHIEN, Plaintiff, v. COMMONWEALTH BIOTECHNOLOGIES, INC., RICHARD FREER AND LECLAIRRYAN, A PROFESSIONAL CORPORATION, Defendants, Civil No. 3:12CV1378(D. Conn.). Richard J. Freer and LeClairRyan are represented by Joaquin L. Madry, Esq., at LeClairRyan. About Commonwealth Biotechnologies Based in Midlothian, Virginia, Commonwealth Biotechnologies, Inc., was a specialized life sciences outsourcing business that offered cutting-edge expertise and a complete array of Peptide-based discovery chemistry and biology products and services through its wholly owned subsidiary Mimotopes Pty Limited. Commonwealth Biotechnologies Inc. filed for Chapter 11 bankruptcy protection (Bankr. E.D. Va. Case No. 11-30381) on Jan. 20, 2011. Judge Kevin R. Huennekens presides over the case. Paula S. Beran, Esq., at Tavenner & Beran, PLC, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. On March 29, 2013, the Bankruptcy Court entered an order confirming the company's Plan of Reorganization. On April 17, the Company disclosed that its Plan has become effective April 15. Pursuant to the plan, CBI is in the process of finalizing definitive documentation with HedgePath, LLC, a drug development company focused on cancer therapies, pursuant to which HedgePath will contribute the intellectual property assets relating to its business to CBI in exchange for a new class of preferred stock representing 90% of the outstanding voting stock of CBI on a fully-diluted basis. When the transaction is consummated, CBI's current shareholders will retain a 10% equity interest in the new entity and will retain one seat on the Board of Directors of CBI, which is expected to be renamed HedgePath Pharmaceuticals, Inc. On April 7, 2011, the Bankruptcy Court approved the private sale of Mimotopes for a gross sales price of $850,000. The sale closed on April 29, 2011. Mimotopes was deconsolidated during the second quarter of 2011. During the bankruptcy, CBI also sold its real property holdings in Chesterfield County, Virginia. The Company's balance sheet at June 30, 2012, showed $1.20 million in total assets, $1.79 million in total liabilities, and a $598,484 total stockholders' deficit. On Aug. 19, 2013, HedgePath disclosed that it has completed a series of transactions to effectuate the reorganization of Commonwealth Biotechnologies and CBTI's exit from its Chapter 11 proceedings via a Plan of Reorganization that will enable HPPI to operate as a public company. COMMONWEALTH REIT: Moody's Revises Ratings Outlook to Negative -------------------------------------------------------------- Moody's Investors Service has affirmed CommonWealth REIT's Baa3 senior unsecured rating and revised the outlook to negative from stable. The negative outlook reflects the office REIT's weak operating performance, which is expected to persist for the intermediate term as it works to address a large number of challenged properties in its portfolio. The following ratings were affirmed with a negative outlook: CommonWealth REIT -- senior unsecured debt at Baa3; preferred stock at Ba1; senior unsecured shelf at (P)Baa3; preferred stock shelf at (P)Ba1. Ratings Rationale: CWH's wholly-owned portfolio was a modest 85.8% occupied as of 2Q13 (excluding 70 very weak assets being held for sale) and it continues to contend with high capital costs in conjunction with its leasing activities. The REIT's operating performance remains impeded by a large number of non-core assets it has identified as challenged, with high vacancy and limited prospects for cash flow improvement. Moody's notes that CWH has made good progress in executing its business plan to dispose of its weakest assets and accelerate its transition to becoming an office REIT focused on second tier CBD markets (CBD properties comprised 58% of wholly-owned NOI for 2Q13). The REIT sold 24 assets in the first half of 2013, with 70 remaining held for assets expected to be sold by year end. Once it has disposed of this bottom tranche, CWH has identified about another 150 non-core assets that are cash flowing but challenged with high vacancy and weak market locations. Moody's would view positively the REIT's ability to make substantial progress with these assets, either through disposition or lease up, over the next twelve months. Positively, Moody's notes that CWH has taken substantial steps to improve its credit profile as it undergoes its portfolio transition. In 1Q13, the REIT issued $627 million of common equity and raised another $240 million by selling its stake in Government Properties Income Trust (GOV). CWH used much of these combined proceeds to tender for $670 million of bonds. As a result, CWH's leverage as measured by Net Debt/EBITDA declined to 6.1x for 2Q13, down from 7.6x in 2012. Fixed charge coverage improved to 2.5x for 2Q13, up from 2.2x for 2012. CWH's liquidity profile is adequate. The REIT has $120 million of debt maturities in 2014 and $332 million in 2015. 2016 maturities are much more significant with $964 million coming due. Sources of liquidity include its $750 million unsecured line of credit ($135 million drawn at 2Q13), 22 million publicly traded common shares of Select Income REIT (NYSE-SIR), and $65 million cash as of 2Q13. Moody's continues to monitor the arbitration proceedings and shareholder activist campaign underway, which Moody's feels has been a distraction for CWH's management and Board of Trustees. A return to stable would likely reflect improving core occupancy trends and substantial progress in repositioning its portfolio resulting in an improved long-term growth profile. Sustaining Net Debt/EBITDA below 6.5x and fixed charge coverage above 2.5x would also be necessary to return to stable. A downgrade would be precipitated by continued negative operating trends or strategic missteps, with fixed charge coverage below 2.2x or Net Debt/EBITDA above 7x on a sustained basis. The last rating action with respect to CommonWealth REIT was on November 20, 2012 when the ratings were downgraded and the outlook revised to stable. CommonWealth REIT (NYSE: CWH) is a REIT that principally owns office properties located throughout the United States. The REIT is externally managed by Reit Management & Research, LLC, based in Newton, MA. As of 2Q13, CWH had total assets of $8 billion. The principal methodology used in this rating was Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. COMMUNICATION INTELLIGENCE: Incurs $1.2MM Net Loss in 2nd Quarter ----------------------------------------------------------------- Communication Intelligence Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.18 million on $263,000 of total revenue for the three months ended June 30, 2013, as compared with a net loss of $746,000 on $525,000 of total revenue for the same period a year ago. For the six months ended June 30, 2013, the Company reported a net loss of $2.37 million on $498,000 of total revenue, as compared with a net loss of $1.56 million on $1.19 million of total revenue for the same period during the prior year. The Company reported a net loss of $4.50 million for 2011, compared with a net loss of $4.16 million for 2010. The Company's balance sheet at June 30, 2013, showed $2.11 million in total assets, $1.48 million in total liabilities and $631,000 in total stockholders' equity. "As of June 30, 2013, the Company's accumulated deficit was approximately $116,798, and for the six months ended June 30, 2013, the Company had incurred a net loss of $2,378. The Company also has a working capital deficit at June 30, 2013, of approximately $581. The Company has primarily met its working capital needs through the issuance of debt and sale of equity securities. As of June 30, 2013, the Company's cash balance was approximately $406. These factors raise substantial doubt about the Company's ability to continue as a going concern," according to the Company's interim report. In its audit report accompanying the financial statements for 2011, PMB Helin Donovan, LLP, in San Francisco, Calif., expressed substantial doubt about Communication Intelligence's ability to continue as a going concern. The independent auditors noted that of the Company's significant recurring losses and accumulated deficit. A copy of the Form 10-Q is available for free at: http://is.gd/ldPbfj About Communication Intelligence Redwood Shores, California-based Communication Intelligence Corporation is a supplier of electronic signature products and the recognized leader in biometric signature verification. COMMUNITY SOUTH BANK: FDIC Named as Receiver; CB&S Takes Deposits ----------------------------------------------------------------- Community South Bank, Parsons, Tennessee, was closed by the Tennessee Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with CB&S Bank, Inc. Russellville, Alabama, to assume all of the deposits of Community South Bank. The 15 branches of Community South Bank will reopen as branches of CB&S Bank, Inc. during their normal business hours. Depositors of Community South Bank will automatically become depositors of CB&S Bank, Inc. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Community South Bank should continue to use their existing branch until they receive notice from CB&S Bank, Inc. that it has completed systems changes to allow other CB&S Bank, Inc. branches to process their accounts as well. Friday evening and over the weekend, depositors of Community South Bank were able to access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of June 30, 2013, Community South Bank had approximately $386.9 million in total assets and $377.7 million in total deposits. In addition to assuming all of the deposits of the failed bank, CB&S Bank, Inc. agreed to purchase approximately $121.7 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $72.5 million. Compared to other alternatives, CB&S Bank, Inc.'s acquisition was the least costly resolution for the FDIC's DIF. Community South Bank is the 19th FDIC-insured institution to fail in the nation this year, and the second in Tennessee. The last FDIC-insured institution closed in the state was Mountain National Bank, Sevierville, on June 7, 2013. CONNACHER OIL: Moody's Cuts CFR to Caa2; 2nd Lien Notes to Caa3 --------------------------------------------------------------- Moody's Investors Service downgraded Connacher Oil and Gas Limited's Corporate Family Rating and Probability of Default Rating to Caa2/Caa2-PD from Caa1/Caa1-PD. The $550 million and CAD350 million senior secured second lien notes ratings were downgraded to Caa3. The Speculative Grade Liquidity rating was changed to SGL-4 from SGL-3 and the rating outlook remained negative. "The downgrade reflects Connacher's weakening liquidity, inability to fund its large annual interest payment with internal cash flow and likely covenant breach in 2014," said Terry Marshall, Moody's Senior Vice President. "Connacher's high level of debt makes its current capital structure untenable and the likelihood of debt restructuring is high." Downgrades: Issuer: Connacher Oil and Gas Limited Probability of Default Rating, Downgraded to Caa2-PD from Caa1-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Corporate Family Rating, Downgraded to Caa2 from Caa1 Senior Secured Regular Bond/Debenture Aug 1, 2018, Downgraded to Caa3 from Caa2 Senior Secured Regular Bond/Debenture Aug 1, 2019, Downgraded to Caa3 from Caa2 Senior Secured Regular Bond/Debenture Aug 1, 2018, Downgraded to a range of LGD4, 62 % from a range of LGD4, 58 % Senior Secured Regular Bond/Debenture Aug 1, 2019, Downgraded to a range of LGD4, 62 % from a range of LGD4, 58 % Outlook Actions: Issuer: Connacher Oil and Gas Limited Outlook, Remains Negative Rating Rationale: Connacher's Caa2 Corporate Family Rating reflects its very high leverage and debt service cost, small production base, low unleveraged cash margin and exposure to light/heavy differentials. The CFR is supported by Connacher's large and long-lived proven and probable reserve base. Connacher's SGL-4 Speculative Grade Liquidity rating reflects weak liquidity. Pro forma the August 1, 2013 $38 million interest payment Connacher had CAD42 million in cash and CAD82 million available, after CAD13 million in letters of credit, under its CAD95 million borrowing base revolving credit facility due May 2014. Moody's expects CAD100 million of negative free cash flow through 2014 to be funded with cash and revolver drawings. Moody's expects that the company may need to amend or have waived its debt to capitalization covenant (not to exceed 75%) during 2013, but it should remain well in compliance with its other financial covenant (revolver debt to EBITDA not to exceed 2x.). The company's assets are pledged under the revolver and second lien notes. All of Connacher's conventional and refining assets have been sold leaving only the oil sands assets available to sell or joint venture. In accordance with Moody's Loss Given Default Methodology the notching of the second lien notes at Caa3, one notch below the Caa2 CFR, reflects their junior ranking in the capital structure to the secured revolver and a one notch override to the model driven outcome given the negative outlook. The negative outlook reflects Moody's expectation of further deterioration in liquidity as the company funds negative free cash flow and that a debt restructuring is likely. The rating could be downgraded if liquidity appears insufficient to meet anticipated funding requirements. While unlikely in the foreseeable future given the company's performance and high debt load, the rating could be upgraded if Connacher is able to maintain bitumen production at 12,000 bbls/d and fund its maintenance capex interest payments with internal cash flow. The principal methodology used in this rating was Global Independent Exploration & Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Connacher is a small exploration and production company that operates two steam assisted gravity drainage oil sands projects in Alberta. CROWN REAL ESTATE: Case Summary & 6 Unsecured Creditors ------------------------------------------------------- Debtor: Crown Real Estate Services, LLC c/o Robert E. Thomas 723 4th Street Ironton, OH 45638 Bankruptcy Case No.: 13-30414 Chapter 11 Petition Date: August 21, 2013 Court: United States 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 Scheduled Assets: $2,336,000 Scheduled Liabilities: $2,130,794 A copy of the Company's list of its largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/wvsb13-30414.pdf The petition was signed by Robert Eugene Thomas, managing member. CRYOPORT INC: Incurs $1.3 Million Net Loss in June 30 Quarter ------------------------------------------------------------- Cryoport, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.32 million on $487,963 of net revenues for the three months ended June 30, 2013, as compared with a net loss of $1.54 million on $191,299 of net revenues for the same period during the prior year. Cryoport incurred a net loss of $6.38 million for the year ended March 31, 2013, as compared with a net loss of $7.83 million for the year ended March 31, 2012. The Company's balance sheet at June 30, 2013, showed $1.66 million in total assets, $4.68 million in total liabilities and a $3.02 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/oYgSLP About Cryoport Lake Forest, Calif.-based CryoPort, Inc. (OTC BB: CYRX) provides comprehensive solutions for frozen cold chain logistics, primarily in the life science industries. Its solutions afford new and reliable alternatives to currently existing products and services utilized for bio-pharmaceuticals and biologics, including in-vitro fertilization, cell lines, vaccines, tissue and other commodities requiring a reliable frozen solution. KMJ Corbin & Company LLP, in Costa Mesa, California, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2013. The independent auditors noted that the Company has incurred recurring operating losses and has had negative cash flows from operations since inception. Although the Company has cash and cash equivalents of $563,104 at March 31, 2013, management has estimated that cash on hand, which include proceeds from convertible bridge notes received in the fourth quarter of fiscal 2013, will only be sufficient to allow the Company to continue its operations into the second quarter of fiscal 2014. These matters raise substantial doubt about the Company's ability to continue as a going concern. CYCLONE POWER: Delays Form 10-Q for Second Quarter -------------------------------------------------- Cyclone Power Technologies, Inc., was unable to file its quarterly report on Form 10-Q for the period ended June 30, 2013, by the prescribed date without unreasonable effort or expense because the Company's financial review with its auditors is in process and has not been completed. The Company believes that the quarterly report will be completed within the five day extension period provided under Rule 12b-25 of the Securities Exchange Act of 1934. About Cyclone Power Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink Sheets: CYPW) is a clean-tech engineering company, whose business is to develop, commercialize and license its patented Rankine cycle engine technology for applications ranging from renewable power generation to transportation. The Company is the successor entity to the business of Cyclone Technologies LLLP, a limited liability limited partnership formed in Florida in June 2004. Cyclone Technologies LLLP was the original developer and intellectual property holder of the Cyclone engine technology. Cyclone Power disclosed a net loss of $3 million on $1.13 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $23.70 million on $250,000 of revenue in 2011. Mallah Furman, in Mallah Furman, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company's dependence on outside financing, lack of sufficient working capital, and recurring losses raises substantial doubt about its ability to continue as a going concern. The Company's balance sheet at March 31, 2013, showed $1.38 million in total assets, $4.14 million in total liabilities and a $2.76 million total stockholders' deficit. DAIS ANALYTIC: Amends Second Quarter Form 10-Q ---------------------------------------------- Dais Analytic Corporation has amended its quarterly report on Form 10-Q for the period ended June 30, 2013, filed with the U.S. Securities and Exchange Commission on Aug. 13, 2013, to update Exhibit 101 for printer update errors in accordance with Rule 405 of Regulation S-T. Exhibit 101 the report provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language). No other changes have been made to the Form 10-Q. A copy of the amended Form 10-Q is available for free at http://is.gd/qzHSWl About Dais Analytic Odessa, Fla.-based Dais Analytic Corporation has developed and patented a nano-structure polymer technology, which is being commercialized in products based on the functionality of these materials. The initial product focus of the Company is ConsERV, an energy recovery ventilator. The Company also has new product applications in various developmental stages. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Cross, Fernandez & Riley LLP, in Orlando, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses since inception and has a working capital deficit and stockholders' deficit of $3.22 million and $4.90 million at Dec. 31, 2011. The Company reported a net loss of $2.33 million in 2011, compared with a net loss of $1.43 million in 2010. The Company's balance sheet at March 31, 2013, showed $1.08 million in total assets, $4.26 million in total liabilities and a $3.18 million total stockholders' deficit. DETROIT, MI: Bankruptcy Mediator's Past Sparks Ethics Debate ------------------------------------------------------------ Law360 reported that a mediator for Detroit's historic bankruptcy case said he will not recuse himself even though the city is a former client, raising an ethical debate about whether his role is forbidden by the American Bar Association's model rules of conduct. According to the report, a declaration by Eastern District of Michigan Chief Judge Gerald Rosen thoroughly details the credentials of the five mediators he picked to officiate negotiations in the largest municipal bankruptcy in American history. The declaration omits, however, that the city is a former client of mediator Eugene Driker, the report related. 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: Bankruptcy Judge Allows Property Tax Appeals --------------------------------------------------------- Christine Macdonald, writing for The Detroit News, reported that a U.S. bankruptcy judge cleared the way for the state to hear hundreds of Detroit owners' property assessment appeals. But it's not clear when the city will pay out refunds if state officials find that owners were overtaxed. According to the report, Judge Steven Rhodes had frozen all lawsuits and claims against the city in its bankruptcy case, but he issued an order allowing the Michigan Tax Tribunal appeal hearings to proceed. The order says that the stay is "not modified" to permit collection of refunds, but city officials have said they plan on paying owners that successfully appeal, the report related. "The court order provides relief the city requested which was to ensure that property tax appeals can proceed during bankruptcy," said Bill Nowling, a spokesman for Emergency Manager Kevyn Orr, the report cited. "Payments of refunds, if any, due from the city as a result of the appeals will be addressed in due course as a part of the bankruptcy." Southfield attorney Yuliy Osipov, who represents firms that appeal Detroit assessments, said it's unclear when and how refunds will be paid, but the ruling is good news for owners, the report further related. 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: Union Officials among Nine Named to Bankruptcy Panel ----------------------------------------------------------------- Kirk Pinho, writing for Crain's Detroit Business, reported that the nine-member committee that will represent city of Detroit retirees during the city's bankruptcy case includes former and current union officials as well as individuals who have held legal and HR positions for the city of Detroit and U.S. District Court. The U.S. Trustee monitoring the bankruptcy for the Justice Department released the names in a filing in U.S. Bankruptcy Court in Detroit. The committee members are: 1. Ed McNeil, special assistant to the president of the American Federation of State, County and Municipal Employees Michigan Council 25 2. Wendy Fields-Jacobs, executive administrative assistant to the president of the United Auto Workers 3. Michael Karwoski, retired assistant corporation counsel for the city of Detroit 4. Shirley Lightsey, president of the Detroit Retired City Employees Association 5. Terri Renshaw, retired senior vice president and general council, Comerica Inc. (in Detroit) and deputy corporation counsel for city of Detroit. 6. Robert Shinske, treasurer of the Detroit Fire Fighters Association, Local 344 7. Donald Taylor, president of the Retired Detroit Police and Fire Fighters Association 8. Gail Wilson Turner, former deputy chief of police for Detroit. 9. Gail M. Wilson, vice president of human resources for the Detroit-based Legal Aid and Defender Association and formerly director of human resources for the 36th District Court in Detroit. The report said the committee will represent 23,500 Detroit retirees in U.S. Bankruptcy Judge Steven Rhodes' court and during negotiations. 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. DEWEY & LEBOEUF: Trust Targets Ex-Clients Over $6MM in Unpaid Fees ------------------------------------------------------------------ Law360 reported that secured lender trustee for bankrupt global law firm Dewey & LeBoeuf LLP launched a slew of complaints in New York bankruptcy court against more than a dozen of the firm's former clients, seeking to recover more than $6 million in allegedly unpaid fees for legal services. According to the report, FTI Consulting filed 14 near-identical complaints against individuals and companies who purportedly received legal services from Dewey between November 2002 and May 2012 and failed to pay fees and expenses. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. FTI Consulting, Inc. was appointed secured lender trustee for the Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A. Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at Togut, Segal & Segal LLP, serve as counsel to the Liquidation Trustee. Dewey's liquidating Chapter 11 plan was approved by the bankruptcy court in February 2013 and implemented in March. The plan created a trust to collect and distribute remaining assets. The firm estimated that midpoint recoveries for secured and unsecured creditors under the plan would be 58.4 percent and 9.1 percent, respectively. DEWEY COMMERCIAL: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Dewey Commercial Investors, L.P. 435 Devon Park Drive Building 600, Suite 613 Wayne, PA 19087 Bankruptcy Case No.: 13-17294 Chapter 11 Petition Date: August 21, 2013 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Magdeline D. Coleman Debtor's Counsel: Jeffrey Kurtzman, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 1835 Market Street, Suite 1400 Philadelphia, PA 19103 Tel: (215) 569 4493 Fax: (215) 568-6603 E-mail: jkurtzma@klehr.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by John Dewey, managing member. 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 77.10 cents-on- the-dollar during the week ended Friday, August 23, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.45 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 83.65 cents-on- the-dollar during the week ended Friday, August 23, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.47 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 and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., sought 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. DIVERSINET CORP: Special Meeting of Shareholders on September 11 ---------------------------------------------------------------- In a regulatory Form 6-K filing on Aug. 16, 2013, Diversinet Corp. announced that the annual and special meeting of shareholders of the Corporation will be held at the offices of the Corporation, 2235 Sheppard Avenue East, Suite 1700, Toronto, Ontario, on Wednesday Sept. 11, 2013, at the hour of 10:00 o'clock in the morning (Toronto time), for the following purposes: 1. To consider and receive the financial statements of the Corporation for the year ended Dec. 31, 2012, together with the report of the auditors thereon; 2. To approve as a special resolution, the sale of substantially all of the assets of the Corporation as described in the enclosed management information circular of the Corporation; 3. To approve as a special resolution, (i) the voluntary winding up of the Corporation pursuant to the Business Corporations Act (Ontario) at a time to be determined by the Directors of the Corporation, (ii) the plan of liquidation and distribution substantially in the form attached hereto as Schedule C, and (iii) one or more distributions to shareholders of any remaining property of the Corporation under the voluntary winding up by way of a return of capital; 4. To elect directors; 5. To appoint auditors and authorize the directors to fix their remuneration; and, 6. To transact such other business as may properly come before the Meeting or any adjournments thereof. A copy of the Form 6-K is available at http://is.gd/DvbL1Y Toronto-based Diversinet Corp. (TSX Venture: DIV, OTCQB: DVNTF) provides healthcare organizations and partners with ultra-secure, patented mobile technologies and connected health solutions. Revenues for the second quarter were US$263,000, compared to US$419,000 in the same year-ago period. Revenues for the six months ended June 30, 2013, were US$566,000 compared to US$701,000 in the same period in 2012. Net loss in the second quarter totaled US$794,000, compared to US$1.1 million in the same year ago period. Net loss for the six months ended June 30, 2013, was US$1.8 million, compared to US$2.6 million in the first six months of 2012. The Company's balance sheet at June 30, 2013, showed US$1.9 million in total assets, US$529,368 in total current liabilities, and stockholders' equity of US$1.4 million. Diversinet announced on August 9 that it has entered into an asset purchase agreement with certain subsidiaries of IMS Health Incorporated to sell substantially all of the intellectual property, software, customer contracts and certain other assets of Diversinet for US$3,500,000. An amount equal to one-half of the sale proceeds will be deposited with an independent escrow agent to be available to satisfy indemnity claims by IMS Health, if any, made prior to the proposed winding-up. Certain employees of Diversinet have been offered employment by IMS Health, subject to closing of the transaction contemplated by the Agreement. The closing is subject to customary conditions precedent at closing, including Diversinet shareholder approval. Holders of an aggregate of appropriately 38% of the outstanding common shares of Diversinet, including shareholders who are Directors and their respective affiliated companies, have agreed with IMS Health to vote in favor of the transaction. Under the Agreement, IMS Health is entitled to a break fee in certain circumstances, including a US$750,000 payment upon the acceptance by Diversinet of an unsolicited superior proposal from a third party. IMS Health has also been granted other typical deal protection provisions including a right to match any superior proposal that is received by Diversinet on an unsolicited basis. Craig-Hallum Capital Group LLC acted as financial advisor to Diversinet. The Company is delisting its common shares from the TSX Venture Exchange effective Aug. 13, 2013. Trading of the Company's common shares will continue for a transitional period prior to the wind up on the OTCQB under the trading symbol DVNTF. * * * KPMG LLP, in Toronto, Canada, expressed substantial doubt about Diversinet Corp.'s ability to continue as a going concern, following its audit of the Company's consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company incurred significant losses from operations and used significant amounts of cash in operating activities during 2012 and 2011 that raise substantial doubt about its ability to continue as a going concern. DOGWOOD PROPERTIES: Settles With Merchants & Farmers Bank --------------------------------------------------------- The Hon. Jennie D. Latta of the U.S. Bankruptcy Court for the Western District of Tennessee signed off on an agreed order resolving the motion for relief from the automatic stay and abandoning property of Dogwood Properties, G.P. The Debtor and creditor Merchants & Farmers Bank agreed that, among other things: 1. The automatic stay will be terminated immediately upon entry of the order with regard to the following real property: 4606 Hampton Valley, 1544 Beringer, 4669 Shira Drive, 4752 Hampton Ridge, 7343 Hampton Valley, 7464 Shadow Run Lane, 7450 Shadow Run Lane. 2. Any and all insurance proceeds pertaining to 2281 Ardmore Cove, including but not limited to the $19,379 check from Builders Mutual, will be surrendered to M&F Bank. M&F Bank will release its deed of trust and assignment of rents and leases with regard to 2281 Ardmore. 3. The properties are being surrendered in full satisfaction of the debts owed to M&F Bank by the Debtor, Jon McCreery and Philip Chamberlain, and these individuals will be released from all liability to M&F Bank accordingly. Russell W. Savory, Esq., represents the Debtor, and Brent A. Heilig, Esq. -- bheilig@harrisshelton.com at Harris Shelton Hanover Walsh, PLLC, represents M&F Bank. About Dogwood Dogwood Properties, G.P., owns and operates 110 single-family rental homes, all located in Shelby and DeSoto counties in Tennessee. The total value of its real estate holdings is estimated to be $9,985,000. Dogwood has nine secured lenders who are owed a total of approximately $14,486,000. Dogwood Properties filed a Chapter 11 petition (Bankr. W.D. Tenn. Case No. 13-21712) on Feb. 16, 2013. Judge Jennie D. Latta presides over the case. Russell W. Savory, Esq. at Gotten, Wilson, Savory & Beard, PLLC, serves as the Debtor's counsel. The Plan filed in the Debtor's case provides that the Debtor continue operating under existing management. Brad Rainey, individually, will remain the president of the Debtor. The Debtor's property will be managed by Reed & Associates and members of the Debtor's staff. The Plan provides that claims will be paid from future operations and the collection of rents. DOGWOOD PROPERTIES: Files Amended Plan Outline ---------------------------------------------- Dogwood Properties, G.P., submitted to the U.S. Bankruptcy Court for the Western District of Tennessee an Amended Disclosure Statement explaining its Chapter 11 Plan. According to the Amended Disclosure Statement, the Plan provides that claims will be paid from future operations and the collection of rents. The Plan also provides that the Debtor continue operating under existing management. A Plan of Reorganization was filed in the case on May 31, 2013. During the course of the proceedings, the Debtor has sought and obtained permission to use cash collateral and make adequate protection payments to secured creditors. The Debtor negotiated a settlement with Paragon Bank whereby this lender's collateral would be surrendered in exchange for releases from further obligations on all of the Debtor's obligations under the loan agreements, and a release of some obligations of non-debtor borrowers and guarantors. The Debtor also negotiated a settlement with Merchants & Farmers Bank whereby all but one property constituting this lender's collateral would be surrendered in exchange for releases from further obligations on all of the Debtor's obligations under the loan agreements, and a release of obligations of non-debtor borrowers and guarantors. A copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/DOGWOOD_PROPERTIES_ds_amended.pdf About Dogwood Dogwood Properties, G.P., owns and operates 110 single-family rental homes, all located in Shelby and DeSoto counties in Tennessee. The total value of its real estate holdings is estimated to be $9,985,000. Dogwood has nine secured lenders who are owed a total of approximately $14,486,000. Dogwood Properties filed a Chapter 11 petition (Bankr. W.D. Tenn. Case No. 13-21712) on Feb. 16, 2013. Judge Jennie D. Latta presides over the case. Russell W. Savory, Esq. at Gotten, Wilson, Savory & Beard, PLLC, serves as the Debtor's counsel. The Plan filed in the Debtor's case provides that the Debtor continue operating under existing management. Brad Rainey, individually, will remain the president of the Debtor. The Debtor's property will be managed by Reed & Associates and members of the Debtor's staff. The Plan provides that claims will be paid from future operations and the collection of rents. DRYSHIPS INC: Annual Shareholders' Meeting Scheduled for Oct. 31 ---------------------------------------------------------------- DryShips Inc. on Aug. 23 disclosed that the Company's 2013 Annual General Meeting of Shareholders will be held at the Company's offices located at 74-76 V. Ipeirou Street, GR 151 25, Marousi, Athens, Greece on Thursday, October 31, 2013 at 12:00 p.m., local time. The Company's board of directors has fixed the close of business on Tuesday, September 3, 2013 as the record date for the determination of the shareholders entitled to receive notice and to vote at the Annual Meeting or any adjournments or postponements thereof. Formal notice of the Annual Meeting and the Company's proxy statement are expected to be sent to shareholders on or about Thursday, September 19, 2013. About DryShips Inc. Headquartered in Athens, Greece, DryShips Inc. (NASDAQ: DRYS) is an owner of drybulk carriers and tankers that operate worldwide. Through its majority owned subsidiary, Ocean Rig UDW Inc., DryShips owns and operates 10 offshore ultra deepwater drilling units, comprising of 2 ultra deepwater semisubmersible drilling rigs and 8 ultra deepwater drillships, 3 of which remain to be delivered to Ocean Rig during 2013 and 1 is scheduled for delivery during 2015. DryShips owns a fleet of 46 drybulk carriers (including newbuildings), comprising of 12 Capesize, 28 Panamax, 2 Supramax and 4 Very Large Ore Carriers (VLOC) with a combined deadweight tonnage of about 5.1 million tons, and 10 tankers, comprising 4 Suezmax and 6 Aframax, with a combined deadweight tonnage of over 1.3 million tons. The Company reported a net loss of US$288.6 million on US$1.210 billion of revenues in 2012, compared with a net loss of US$47.3 million on US$1.078 billion of revenues in 2011. The Company's balance sheet at Dec. 31, 2012, showed US$8.878 billion in total assets, US$5.010 billion in total liabilities, and shareholders' equity of US$3.868 billion. Going Concern Doubt Ernst & Young (Hellas), in Athens, Greece, expressed substantial doubt about DryShips Inc.'s ability to continue as a going concern, citing the Company's working capital deficit of US$670 million at Dec. 31, 2012, and in addition, the non- compliance by the shipping segment with certain covenants of its loan agreements with banks. As of Dec. 31, 2012, the shipping segment was not in compliance with certain loan-to-value ratios contained in certain of its loan agreements. In addition, as of Dec. 31, 2012, the shipping segment was in breach of certain financial covenants, mainly the interest coverage ratio, contained in the Company's loan agreements relating to US$769,098,000 of the Company's debt. As a result of this non-compliance and of the cross default provisions contained in all bank loan agreements of the shipping segment and in accordance with guidance related to the classification of obligations that are callable by the creditor, the Company has classified all of its shipping segment's bank loans in breach amounting to US$941,339,000 as current at Dec. 31, 2012. EASTGATE AUTO: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Eastgate Auto & RV Sales Center LLC 14486 N. US Hwy 25E Corbin, KY 40701 Bankruptcy Case No.: 13-61080 Chapter 11 Petition Date: August 21, 2013 Court: United States Bankruptcy Court Eastern District of Kentucky (London) Debtor's Counsel: Jamie L. Harris, Esq. DELCOTTO LAW GROUP PLLC 200 North Upper Street Lexington, KY 40507 Tel: (859) 231-5800 E-mail: jharris@dlgfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Daniel Day, member. EASTMAN KODAK: Wins Court Approval to Expand Deloitte Services -------------------------------------------------------------- U.S. Bankruptcy Judge Allan Gropper authorized Deloitte Consulting LLP to provide additional services to Eastman Kodak Co. The services to be provided by the firm include consulting support services related to the divestiture of Kodak's document imaging and personal imaging business units, and those related to a potential plan change and the impact of liquidity shortfall requirements in the Kodak Retirement Income Plan during 2013. Deloitte will also provide actuarial valuation services for some of the employee benefit programs of Kodak and its affiliates. 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. EDISON MISSION: Spars with Chevron Over Natural-Gas Venture ----------------------------------------------------------- Patrick Fitzgerald, writing for Daily Bankruptcy Review, reported that the war of words between Edison Mission Energy and estranged partner Chevron Corp. is heating up, with Edison Mission saying Chevron has just one reason -- "greed, pure and simple" -- to oust it from a gas deal that has brought in billions of dollars over the past three decades. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. In its schedules, Edison Mission Energy disclosed total assets of assets of $5,721,559,170 and total liabilities of $6,202,215,094 as of the Petition Date. The Debtors other than Camino Energy Company are represented by: David R. Seligman, P.C., Esq. James H.M. Sprayregen, P.C., Esq. Sarah Hiltz Seewer, Esq. KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 - and - Joshua A. Sussberg, Esq. KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, NY 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Counsel to Debtor Camino Energy Company is: David A. Agay, Esq. Joshua Gadharf, Esq. MCDONALD HOPKINS LLC 300 North LaSalle, Suite 2100 Chicago, IL 60654 Telephone: (312) 280-0111 Facsimile: (312) 280-8232 Perella Weinberg Partners, LP is acting as the Debtors' financial advisor and McKinsey Recovery & Transformation Services U.S., LLC is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case and is represented by Ira S. Dizengoff, Esq., Stephen M. Baldini, Esq., Arik Preis, Esq., and Robert J. Boller, Esq., at AKIN GUMP STRAUSS HAUER & FELD LLP in New York; James Savin, Esq., and Kevin M. Eide, Esq., at AKIN GUMP STRAUSS HAUER & FELD LLP in Washington, DC; and David M. Neff, Esq., and Brian Audette, Esq., at PERKINS COIE LLP. The Committee also has tapped Blackstone Advisory Partners as investment banker and FTI Consulting as financial advisor. EME said it doesn't plan to emerge from Chapter 11 until December 2014 to receive benefits from a tax-sharing agreement with parent Edison International Inc. ELITE PHARMACEUTICALS: Posts $921,600 Net Income in June 30 Qtr. ---------------------------------------------------------------- Elite Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income attributable to common shareholders of $921,666 on $721,689 of total revenues for the three months ended June 30, 2013, as compared with a net loss attributable to common shareholders of $10.52 million on $578,556 of total revenues for the same period during the prior year. The Company's balance sheet at June 30, 2013, showed $10.39 million in total assets, $16.79 million in total liabilities and a $6.40 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/QL8KG6 About Elite Pharmaceuticals Northvale, New Jersey-based Elite Pharmaceuticals, Inc., is a specialty pharmaceutical company principally engaged in the development and manufacture of oral, controlled-release products, using proprietary technology and the development and manufacture of generic pharmaceuticals. The Company has one product, Phentermine 37.5mg tablets, currently being sold commercially. Elite Pharmaceuticals reported net income attributable to common shareholders of $1.48 million on $3.40 million of total revenues for the year ended March 31, 2013, as compared with a net loss attributable to common shareholders of $15.05 million on $2.42 million of total revenues for the year ended March 31, 2012. Demetrius Berkower LLC, in Wayne, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2013. The independent auditors noted that the Company has experienced significant losses resulting in a working capital deficiency and shareholders' deficit. These conditions raise substantial doubt about its ability to continue as a going concern. ELWOOD ENERGY: Moody's Downgrades Senior Secured Bonds to Ba3 ------------------------------------------------------------- Moody's Investors Service downgraded Elwood Energy LLC's senior secured bond ratings to Ba3 from Ba2. The rating outlook is stable. This concludes the review for possible downgrade initiated on April 30, 2013. Ratings Rationale: The downgrade of Elwood's bonds to Ba3 from Ba2 reflects the soon to be completed sale of Dominion Resources, Inc. (Dominion, Baa2- stable) 50% interest in Elwood to the lower rated EquiPower Resources Holdings (B1-stable). On August 20th, the Federal Energy Regulatory Commission (FERC) approved the transaction and Moody's understands that no other approvals remain outstanding and that the transaction should close shortly. Moody's previously viewed Dominion's substantial ownership in Elwood to be a material credit positive especially given the affiliate relationships with Elwood and Dominion's strong investment grade profile. As part of its ownership of Elwood, Dominion backed half of Elwood's 6-month debt service reserve, provided a $10 million working capital facility, and provided operations and maintenance services. EquiPower will step into the Dominion's roles and EquiPower will support its obligations with letters of credit issued under its revolver. J- POWER USA Generation, L.P which owns the other 50% of Elwood is expected to maintain its ownership in Elwood. The rating action also recognizes the substantial drop in PJM's RTO price to $59/MW-day in the most recent capacity auction for the 2016/2017 time period, which is substantially below the $100/MW-day price Moody's views as necessary for Elwood to properly service its debt from cash flow. Given the capacity price for the 2016/2017 period and rising scheduled debt service in 2018, Moody's sees Elwood's DSCR possibly dropping to 1.0x or below around 2018 depending on future capacity auction results. The potential for steep DSCR deterioration in 2018 is negative and could lead to future negative rating action if prices do not improve. That said, Moody's sees Elwood as having a substantial amount of time to address this issue including a possible refinancing at some point prior to 2018. A hypothetical refinancing could avoid the large debt service step up that begins in 2018 and provide Elwood greater flexibility to withstand volatile capacity prices. At the Ba3 rating, Elwood's credit quality remains supported by strong historical operational performance, Elwood's contracts on four units through August 2016/2017, and known capacity prices through April 2017 that should enable the Project to achieve debt service coverage above 2.0x in most years through 2016. Additionally, project finance protections including a forward looking cash trapping mechanism are supportive of credit quality. The stable outlook reflects Elwood's expected strong financial metrics through 2016 based on known cash flows and expectations of continued strong operational performance. The Project's rating could improve if Elwood is able to enter into new, long term PSAs with investment grade off-takers that result in annual DSCRs being at or above 1.3 times through debt maturity based solely on fully contracted cash flows. Elwood's rating could decline if PJM capacity prices do not significantly improve or if Elwood incurs operational problems. This is especially the case beginning in 2016 when two of the four Power Supply Agreements (PSAs) currently in place with Exelon Generation Company (ExGen: Baa2 stable) expire. Elwood Energy LLC owns a 1,469 megawatt (MW) peaking facility consisting of nine 156.5 MW natural gas-fired, simple cycle units, located in Elwood, Illinois (about 50 miles southwest of Chicago). Elwood sells its energy and capacity under four PSAs with ExGen: that expire in 2016 and 2017. Elwood is expected to be 50% owned by EquiPower Resources Holdings (B1-stable) and 50% indirectly owned by J-POWER USA Generation, L.P. (J-Power Gen), which is a 50/50 joint venture between John Hancock Life Insurance Company and J-POWER USA Investment Co., Ltd. The last rating action on Elwood occurred on April 30, 2013 when Moody's placed Elwood's Ba2 rating under review for possible downgrade. The principal methodology used in this rating was Power Generation Projects methodology published in December 2012. EMPRESAS INTEREX: Files First Amended Plan & Disclosure Statement ----------------------------------------------------------------- Empresas Interex, Inc., filed with the U.S. Bankruptcy Court for the District of Puerto Rico a first amended disclosure statement to provide for the following treatment of claims: * The claim of DF Services, LLC, the Plan sponsor, estimated to amount to $7,547,006, is impaired. DF's claim will be satisfied through the transfer of the Debtor's residential project on the effective date of the Plan. In consideration of the transfer of the Property, DF's claim will be reduced to $6,870,728, and DF will fund the 50% payment to be made to Holders of Allowed General Unsecured Claims. * The claim of the Debtor's shareholder, Universidad Interamericana de Puerto Rico, estimated to amount to $360,440, is impaired, but is estimated to recover 100% of the allowed amount. The Allowed Claim of the University, bearing an annual interest at 2% over the prime rate, with a floor of 6%, collateralized by a parcel of land of 1,598 square meters at PR-830, Bayamon, Puerto Rico, will be paid on the basis of $1,953 per month, including principal and interest at 4.25% per annum, over a period of 25 years. * Allowed General Unsecured Claims, estimated to total $175,694, are impaired and are estimated to recover 50% of the total allowed amount. Holders of Allowed General Unsecured Claims will be paid pro-rata from the $87,847 to be provided by DF. A full-text copy of the First Amended Disclosure Statement, dated Aug. 19, 2013, is available for free at: http://bankrupt.com/misc/EMPRESAS_ds0819.pdf The Debtor is represented by Charles A. Cuprill, Esq. -- ccuprill@cuprill.com -- at CHARLES A. CUPRILL P.S.C. LAW OFFICES, in San Juan, Puerto Rico. About Empresas Interex Inc. San Juan, Puerto Rico-based Empresas Interex Inc. is engaged in the development, construction, and lease of real estate. One of the Debtor's construction project is known as Ciudad Atlantis at Hato Bajo Ward, Arecibo, Puerto Rico. Empresas Interex filed for Chapter 11 bankruptcy (Bankr. D.P.R. Case No. 11-10475) on Dec. 7, 2011. Bankruptcy Judge Mildred Caban Flores presides over the case. The company disclosed $11,412,500 in assets and $9,335,561 in liabilities. The Debtor is represented by CHARLES A. CUPRILL P.S.C. LAW OFFICES. ENVIRONMENTAL WORLDWIDE: Incurs $4-Mil. Net Loss in Second Quarter ------------------------------------------------------------------ Environmental Solutions Worldwide, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $4.0 million on $3.3 million of revenue for the three months ended June 30, 2013, compared with a net loss of $258,197 on $2.3 million of revenue for the same period last year. The Company reported a net loss of $4.6 million on $4.7 million of revenue for the six months ended June 30, 2013, compared with a net loss of $684,268 on $4.9 million of revenue for the comparable period of 2012. 2013 vs. 2012 "In the second quarter of 2013, sales of the ThermaCat significantly rose relative to a slow first quarter. "Loss from operations for the three month period ended June 30, 2013, increased by $2,249,484, to $2,507,681 from $258,197 for the three month period ended June 30, 2012. ESW's loss from operations for the three month period ended June 30, 2013, included the following non-cash items: a one-time warranty provision of $1,504,900, depreciation expenses of $168,418 and loss on write down of inventory of $230,002. In addition loss from operations was higher in the three month period ended June 30, 2013, as compared to June 30, 2012, due to expenses related to the set-up of ESWCT operations in San Diego. "During the three month period ended June 30, 2013, the Company recorded the following costs and gain related to a senior secured convertible loan facility: * $68,811 - Interest on notes payable to related parties * $44,381 - Debt related discount amortization * $1,330,893 - Loss on convertible derivative "No costs related to financing and debt transactions were incurred in the six month period ended June 30, 2012. 1H of 2013 vs. 1H of 2012 "The decrease in revenue [for the six months period ended June 30, 2013] is related to reduced sales of military product in 2013 versus prior year, the growth in market demand for passive- regeneration retrofit products in the first half of 2013, and uncertainty in the retrofit market with the shutdown of Cleaire's operations. "Loss from operations for the six month period ended June 30, 2013, increased by $2,287,213 to $3,425,381 from $1,138,168 for the six month period ended June 30, 2012. ESW's loss from operations for the six month period ended June 30, 2013, included the following non-cash items: a one-time warranty provision of $1,504,900, depreciation expenses of $339,019, loss on write down of inventory of $230,002 and stock based compensation expense of $172,951. In addition, loss from operations was higher in the six month period ended June 30, 2013, as compared to June 30, 2012, due to expenses related to the set-up of ESWCT operations in San Diego. "Effective Feb. 3, 2012, ESW's wholly-owned non-operational subsidiary BBL Technologies Inc., filed for bankruptcy in the Province of Ontario, Canada. Due to the insolvency of BBL, the redeemable Class A special shares were cancelled and the Company recorded a $453,900 gain on the consolidated condensed statement of operations and comprehensive loss [for the six months period ended June 30, 2012]. During the six month period ended June 30, 2013, the Company recorded the following costs and gain related to a senior secured convertible loan facility: * $72,311 - Interest on notes payable to related parties * $46,437 - Debt related discount amortization * $1,038,323 - Loss on convertible derivative No costs related to financing and debt transactions were incurred in the six month period ended June 30, 2012." Balance Sheet The Company' balance sheet at June 30, 2013, showed $8.7 million in total assets, $10.2 million in total liabilities, and a stockholders' deficit of $1.5 million. Going Concern Uncertainty "The Company has sustained recurring operating losses. As of June 30, 2013, the Company had an accumulated deficit of $59,092,830 and has cash and cash equivalents of $2,550,537. ESW's history of losses and the current prevailing economic conditions all create uncertainty in the operating results and, accordingly, there is no assurance that the Company will be successful in generating sufficient cash flow from operations or achieving profitability in the near future. As a result, there is substantial doubt regarding the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/EKVWMZ Montgomerville, Pa.-based Environmental Solutions Worldwide, Inc., through its wholly-owned subsidiaries is engaged in the design, development, manufacturing and sales of emissions control technologies. ESW also provides emissions testing and environmental certification services with its primary focus on the North American on-road and off-road diesel engine, chassis and after-treatment market. ESW currently manufactures and markets a line of catalytic emission control and enabling technologies for a number of applications focused on the medium and heavy duty diesel ("MHDD") retrofit market. EQUIPOWER RESOURCES: Moody's Cuts First Lien Debt's Rating to B1 ---------------------------------------------------------------- Moody's Investors Service downgraded EquiPower Resources Holdings' 1st lien debt facilities to B1 from Ba3 and assigned a B1 rating to EquiPower's new $635 million tranche C term loan. Moody's expects to withdraw the rating on the Project's 2nd lien term loan once it is repaid at financial close. The rating outlook is stable. This concludes the review for possible downgrade initiated on April 30, 2013. On August 20, the Federal Energy Regulatory Commission approved the acquisitions of Kincaid, Brayton Point, and 50% of Elwood Energy from Dominion Resources, Inc. Moody's understands no further approvals are necessary to close the acquisition of Kincaid and 50% of Elwood and that the associated financing (the Transaction) will be completed shortly. EquiPower is not acquiring Brayton Point. EquiPower's debt financing consists of $1.3 billion in 1st lien term loans and a $146 million 1st lien working capital facility. Ratings Rationale: The downgrade of EquiPower's 1st lien debt facilities to B1 from Ba3 reflects Moody's expectation that the Transaction will close shortly and the key credit drivers for the B1 rating remain unchanged since the review for possible downgrade was initiated on April 30, 2013. Specifically, the financing for the Transaction will result in incremental debt, the effective combining of the current 1st and 2nd lien debt into a single tranche, the reduction in debt service reserve to 6 months from 12 months, moderately increased leverage at around 65% debt to capital, and the weakening of covenants including the removal of the financial covenants from the term loan and a broader allowance for asset sales, except Liberty Electric Power, (Liberty) subject to minimum debt repayment thresholds. Also weighing on the B1 rating are heightened environmental risks at Kincaid, sizeable merchant energy and capacity exposure, refinancing risk, and financial metrics in the 'B' category under Moody's conservative scenarios. That said, EquiPower benefits from portfolio diversification of seven assets across four states with transparent capacity and energy markets, about 50% of gross margins hedged under management's base case through either energy hedges or known capacity prices, termination of the Connecticut generator tax after September 2013, and some project finance features including the inability to sell Liberty and a 100% excess cash sweep. Moody's considers EquiPower's diversification across multi-regions to be a key strength that helps blunt the impact of new environmental regulations. Additional credit strengths include enhanced liquidity via the approximately $110 million of expected availability under the project's expected $146 million revolving credit facility, the attractive competitive position of four of the main cash flow generating plants, and EquiPower's resiliency to Moody's conservative cases, albeit with low metrics. EquiPower's stable outlook reflects Moody's expectation of consolidated FFO/Debt of around 6% and a Debt Service Coverage Ratio (DSCR) of around 1.7 times under conservative assumptions. The stable outlook also considers Moody's view that energy prices will moderately improve over time and that the environmental work scheduled for Kincaid will be completed by year-end 2013. In light of this rating action, limited prospects exist for a rating upgrade in the near term. Over the longer term, positive trends that could lead to an upgrade include substantial debt reduction according to the management case or significant additional contracted cash flows that sustain 'Ba' category financial metrics under Moody's methodology on a continuing basis, along with the resolution of any environmental uncertainty at Kincaid. The rating could be downgraded if the EquiPower incurs operating problems, if the EquiPower's financial metrics fall below expectations or if EquiPower's debt amortization ends up being significantly below forecasted levels. Additionally, the inability to extend the revolving credit facility well-in advance of the 2017 maturity or environmental costs substantially higher than expected at Kincaid could pressure EquiPower's credit quality. EquiPower expects to have full or partial ownership interests in seven power projects totaling a net 4,204 MW. The projects consist of the 812 MW Lake Road and 548 MW Milford projects in Connecticut, the 568 MW Liberty asset in Pennsylvania, the 1,100 MW Kincaid coal plant in Illinois, 50% interest in the 1,487 MW Elwood plant in Illinois, and the 264 MW MassPower and 168 MW Dighton projects in Massachusetts. These assets reached commercial operation from 1993 to 2004 except for Kincaid. EquiPower is owned by EquiPower Resources Corp. EquiPower Resources Corp is owned by a private equity fund managed by Energy Capital Partners and several of the funds co-investors. Energy Capital Partners manages private equity funds that invest in the power generation, midstream gas, renewable energy, and electric transmission sectors of North America's energy infrastructure. The principal methodology used in this rating was Power Generation Projects published in December 2012. FOURTH QUARTER PROPERTIES: Sept. 13 Hearing on Exclusivity ---------------------------------------------------------- The U.S. Bankruptcy Court continued until Sept. 13, 2013, at 10 a.m., the hearing to consider Fourth Quarter Properties XXXVIII LLC's motion to extend its exclusive periods to file and solicit acceptances for a proposed Chapter 11 Plan. As reported in the Troubled Company Reporter on Aug. 14, 2013, with the consent of Cornerstone Commercial Mortgages, LLC, and Charter Bank, the Debtor asked the Court for a continuance of the Aug. 6 hearing on the motion for exclusivity extension until Sept. 13. According to papers filed with the Court Aug. 6, the parties have reached an agreement regarding their claims and the resolution of the Debtor's case, subject to the Court's approval, and the Debtor has contemporaneously filed a motion to approve settlement with Cornerstone and Charter. The Parties have agreed, subject to the Court's approval, to the continuance of the hearing on the Debtor's Motion to Extend Exclusivity, until the Court has had an opportunity to hear the Settlement Motion. As reported in the TCR on July 10, 2013, the Debtor asked that the Court extend its exclusive periods to file and solicit acceptances of a plan for 60 days, through and including Sept. 3, 2013, and Nov. 2, respectively. About Fourth Quarter Properties Fourth Quarter Properties XXXVIII, LLC, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 13-10585) in Newnan, Georgia, on March 5, 2013. The Debtor is a single asset real estate debtor as defined in 11 U.S.C. Sec. 101(51B) and has property in 45, 47 & 59 Ansley Drive, in Newnan. The Debtor estimated at least $10 million in assets and at least $1 million in liabilities as of the Chapter 11 filing. Austin E. Carter, Esq., and Matthew Stewart Cathey, Esq., at Stone & Baxter, LLP, in Macon, Georgia, serve as the Debtor's counsel. FURNITURE BRANDS: Fails to Cure NYSE MKT Listing Non-Compliance --------------------------------------------------------------- Furniture Brands International on Aug. 23 disclosed that it will voluntarily delist its common stock from The New York Stock Exchange and transfer quotation of its common stock to the OTCQB Marketplace. The company's decision to voluntarily delist the common stock and transfer to the OTCQB was driven by a number of factors, including its non-compliance with the NYSE's market capitalization and stockholders' equity requirements. The company expects to file an application on Form 25 to notify the Securities and Exchange Commission of its withdrawal of its common stock from listing on the NYSE. The company expects that the last day of trading of its common stock on the NYSE will be on or about August 27, 2013 and that the next trading day will be the first day of quotation on the OTCQB. The company will issue a subsequent press release confirming the first trading date on the OTCQB and the trading symbol for the OTCQB before the transfer occurs. Following the transfer, the company will continue to file the same periodic reports and other information it currently files with the SEC. As previously announced, on July 10, 2013, the company received a notice from the NYSE that it had fallen below the NYSE's continued listing criteria requiring listed companies to maintain an average market capitalization of not less than $50 million over a consecutive 30 trading-day period and total stockholders' equity of not less than $50 million. On July 15, 2013, the company announced its intention, in accordance with NYSE rules, to submit a business plan to the NYSE within 45 days from the notice date to attempt to demonstrate its ability to cure the non-compliance within an 18-month period. Subsequently, the company's absolute market capitalization has fallen below $15 million. If the company's average market capitalization for 30 trading-days is below $15 million, the company will be subject to initiation of delisting procedures by the NYSE without regard to the submission of a business plan for attempting to cure non-compliance. As a result, and in light of its decision to voluntarily delist, the company has informed the NYSE that it will not be submitting a business plan. The company made the decision to voluntarily delist from the NYSE because it believes it will not be able to comply with the NYSE's continued listing criteria. The company believes that this voluntary transfer to the OTCQB will provide greater certainty and assist in an orderly transition. About Furniture Brands Furniture Brands International -- http://www.furniturebrands.com -- engages in designing, manufacturing, sourcing and retailing home furnishings. Furniture Brands markets products through a wide range of channels, including company owned Thomasville retail stores and through interior designers, multi-line/ independent retailers and mass merchant stores. Furniture Brands serves its customers through some of the best known and most respected brands in the furniture industry, including Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith and LaBarge. GALA CORAL: Sees Modest Growth but Challenges Remain ---------------------------------------------------- Ayesha Javed, writing for DBR Small Cap, reported that Gala Coral Group Ltd., the U.K. betting and gambling operator seized by its mezzanine lenders in 2010, has achieved modest growth in earnings and debt reduction in its third quarter, ending July 6, according to company accounts filed this week. But the group's bingo and casino businesses continue to suffer from fewer customers, the report said. Gala Coral Group Ltd. -- http://www.galacoral.co.uk/-- is a gaming company in the UK, with operations encompassing bingo, casinos, and sports betting. It runs more than 150 bingo halls throughout the country, as well as some 30 casinos. The company is also a bookmarker with nearly 1,600 betting shops and online betting sites. Gala Coral Group was formed in 2005 when Gala Group acquired Coral Eurobet. The company is jointly owned by private equity firms Cinven Group, Candover Investments, and Permira. As reported by the Troubled Company Reporter-Europe on June 23, 2010, the FT said that Gala finalized a restructuring of its GBP2.5 billion (US$3.7 billion) debt. The FT disclosed as a result, Gala is freed from GBP588 million of mezzanine debt that is being written off in exchange for giving creditors control of the business. The FT said the new shareholder group will be led by Apollo Management, Cerberus, Park Square Capital and York Capital, which are providing GBP200 million to repay debt. GATEWAY ENERGY: Incurs $160K Net Loss in Second Quarter ------------------------------------------------------- Gateway Energy Corporation reported a net loss of $159,675 and $446,416 for the three and six months ended June 30, 2013, compared with a net loss of $49,100 and $195,849 for the three and six months ended June 30, 2012, respectively. Operating revenues were $1.5 million and $2.8 million for the three and six months ended June 30, 2013, compared with operating revenues of $1.3 million and $2.7 million for the three and six months ended June 30, 2012, respectively. The Company's balance sheet at June 30, 2013, showed $4.5 million in total assets, $3.7 million in total liabilities, and stockholders' equity of $848,656. The Company said: "Based on the Company's cash position and its projected cash flows from operations as of June 30, 2013, the Company will not have the ability to repay its existing debt obligations (including its $1,682,674 current debt obligation), the customer demand amount, committed capital expenditures or asset retirement obligations unless it is able to obtain additional financing or raise cash through other means, such as asset sales. If the Company is unsuccessful in those efforts, if it is unable to successfully resolve the foregoing customer claim or if Meridian Bank exercises its right to declare the outstanding balance of the Meridian Loan Agreement immediately due and payable, the Company and/or its subsidiaries, including Gateway Offshore Pipeline Company, may be unable to continue its operations or be required to seek bankruptcy protection." According to the regulatory filing, the foregoing conditions, among others, create a deficiency in short term and long term liquidity and raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at http://is.gd/VReld0 Houston-based Gateway Energy Corporation is engaged in the midstream natural gas business. The Company owns and operates natural gas distribution, transmission and gathering systems located onshore in the continental United States and offshore in federal and state waters of the Gulf of Mexico. GIL INC: Updated Case Summary & Creditors' Lists ------------------------------------------------ Lead Debtor: GIL, Inc. 1150 E. Plant Street, Suite F Winter Garden, FL 34787 Bankruptcy Case No.: 13-10404 Chapter 11 Petition Date: August 21, 2013 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Debtors' Counsel: Justin M. Luna, Esq. Christopher R. Thompson, Esq. LATHAM, SHUKER, EDEN & BEAUDINE, LLP P.O. Box 3353 Orlando, FL 32802-3353 Tel: (407) 481-5800 Fax: (407) 481-5801 E-mail: jluna@lseblaw.com bknotice@lseblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed separate Chapter 11 petitions: Debtor Case No. ------ -------- Exclusive Homes, Inc. 13-10405 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by George D. Laman, president. A. A copy of GIL's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb13-10404.pdf B. A copy of Exclusive Homes' list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb13-10405.pdf GLOBAL BEVERAGE: Suspending Filing of Reports with SEC ------------------------------------------------------ Global Beverage Solutions, Inc., filed with the U.S. Securities and Exchange Commission a Form 15 to voluntarily terminate the registration of its common stock, $0.001 par value. As of Aug. 12, 2013, there were only 395 holders of records of the common shares. As a result of the Form 15 filing, the Company will not anymore be obligated to file reports with the SEC. About Global Beverage Headquartered in Plantation, Fla., GlobaL Beverage Solutions Inc. (OTC BB: GBVS.OB) -- http://www.globalbeveragesolutions.com/-- is a business development company organized pursuant to applicable provisions of the Investment Company Act of 1940. The company primarily focuses on manufacturing, distribution and sales of unique beverages globally. The Company has not filed financial reports on Form 10-Q or 10-K with the Securities and Exchange Commission since November 2008. The Company's principal accountant, Turner, Stone & Company, LLP, resigned in April 2009. The Company hired a new accountant Lawrence Scharfman & Co CPA PA, Certified Public Accountants but terminated the engagement in August 2009 after the Company was advised by the SEC that Scharfman was not registered with the Public Company Accounting Oversight Board. As reported in the Troubled Company Reporter on May 14, 2008, Turner, Stone & Company LLP, in Dallas, expressed substantial doubt about Global Beverage Solutions Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the the year ended Dec. 31, 2007. As of September 30, 2008, the Company had an accumulated deficit totaling $35,860,896. It also had a net loss of $1,252,987 during the nine months ended September 30, 2008. As of September 30, 2008, the Company's balance sheet showed total assets of $3,125,389 and total liabilities of $8,815,558, resulting in total stockholders' deficit of $5,690,169. GLOBAL FOOD: Incurs $753,500 Net Loss in Second Quarter ------------------------------------------------------- Global Food Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $753,504 on $580,790 of revenues for the three months ended June 30, 2013, as compared with a net loss of $796,659 on $36,540 of revenues for the same period during the prior year. For the six months ended June 30, 2013, the Company reported a net loss of $1.39 million on $830,031 of revenues, as compared with a net loss of $1.45 million on $66,276 of revenues for the same period last year. The Company's balance sheet at June 30, 2013, showed $823,533 in total assets, $4.51 million in total liabilities, all current, and a $3.69 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/Sk866x About Global Food Headquartered in Hanford, California, Global Food Technologies, Inc., is a life sciences company focused on food safety processes for the food processing industry by using its proprietary scientific processes to substantially increase the shelf life of commercially packaged seafood and to make those products safer for human consumption. The Company has developed a process using its technology called the "iPuraT Food Processing System". The System is installed in processor factories in foreign countries with the product currently sold in the United States. Global Food disclosed a net loss of $3.07 million on $377,036 of sales for the year ended Dec. 31, 2012, as compared with a net loss of $3.68 million on $133,078 of sales during the prior year. Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred a significant accumulated deficit through Dec. 31, 2012, has significant negative cash flow from operating activities for the year ended Dec. 31, 2012, and has negative working capital at Dec. 31, 2012. These factors raise substantial doubt about the Company's ability to continue as a going concern. GLYECO INC: Incurs $199,000 Net Loss in Second Quarter ------------------------------------------------------ Glyeco, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $199,435 on $1.41 million of net sales for the three months ended June 30, 2013, as compared with a net loss of $506,911 on $173,117 of net sales for the same period during the prior year. For the six months ended June 30, 2013, the Company reported a net loss of $678,363 on $2.65 million of net sales, as compared with a net loss of $818,818 on $591,934 of net sales for the same period a year ago. As of June 30, 2013, the Company had $9.86 million in total assets, $3.43 million in total liabilities, $1.17 million in redeemable series AA convertible preferred stock, and $5.26 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/jmHTyj About GlyEco, Inc. Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company formed to roll-out its proprietary and patent pending glycol recycling technology that transforms waste glycols, a hazardous material, into profitable green products. Glyeco disclosed a net loss of $1.86 million on $1.26 million of net sales for the year ended Dec. 31, 2012, as compared with a net loss of $592,171 on $824,289 of net sales for the year ended Dec. 31, 2011. Jorgensen & Co., in Lehi, UT, 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 not yet achieved profitable operations and is dependent on its ability to raise capital from stockholders or other sources and other factors to sustain operations. These factors, among other matters, raise substantial doubt that the Company will be able to continue as a going concern. GUIDED THERAPEUTICS: Incurs $1.7 Million Net Loss in 2nd Qtr. ------------------------------------------------------------- Guided Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.75 million on $222,000 of contract and grant revenue for the three months ended June 30, 2013, as compared with a net loss of $1.16 million on $915,000 of contract and grant revenue for the same period a year ago. For the six months ended June 30, 2013, the Company reported a net loss of $3.56 million on $389,000 of contract and grant revenue, as compared with a net loss of $2.18 million on $1.63 million of contract and grant revenue for the same period during the prior year. The Company's balance sheet at June 30, 2013, showed $4.39 million in total assets, $2.65 million in total liabilities and $1.74 million in total stockholders' equity. Bankruptcy Warning "Management may obtain additional funds through the private sale of preferred stock or debt securities, public and private sales of common stock, funding from collaborative arrangements, and grants, if available, and believes that such financing will be sufficient to support planned operations through the fourth quarter of 2014. If sufficient capital cannot be raised by the end of the fourth quarter of 2014, the Company has plans to curtail operations by reducing discretionary spending and staffing levels, and attempting to operate by only pursuing activities for which it has external financial support, such additional NCI, NHI or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In such a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate and/or file for bankruptcy protection," the Company said in the interim report. A copy of the Form 10-Q is available for free at: http://is.gd/sMJGBU About Guided Therapeutics Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) -- http://www.guidedinc.com/-- is developing a rapid and painless test for the early detection of disease that leads to cervical cancer. The technology is designed to provide an objective result at the point of care, thereby improving the management of cervical disease. Unlike Pap and HPV tests, the device does not require a painful tissue sample and results are known immediately. GT has also entered into a partnership with Konica Minolta Opto to develop a non-invasive test for Barrett's Esophagus using the LightTouch technology platform. Guided Therapeutics disclosed a net loss of $4.35 million on $3.33 million of contract and grant revenue for the year ended Dec. 31, 2012, as compared with a net loss of $6.64 million on $3.59 million of contract and grant revenue in 2011. UHY LLP, in Sterling Heights, Michigan, issued a "going concern" qualification on the Company's consolidated financial statements for the year ended Dec. 31, 2012, citing recurring losses from operations and accumulated deficit that raise substantial doubt about its ability to continue as a going concern. GYMBOREE CORP: Bank Debt Trades At 4% Off ----------------------------------------- Participations in a syndicated loan under which Gymboree Corp. is a borrower traded in the secondary market at 95.79 cents-on-the- dollar during the week ended Friday, August 23, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.76 of percentage points from the previous week. The bank loan matures on Feb. 23, 2018. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank debt is rated by Moody's B2 and Standard & Poor's B- 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. Headquartered in San Francisco, California, The Gymboree Corporation is a leading retailer of infant and toddler apparel. The company designs and distributes infant and toddler apparel through its stores which operates under the "Gymboree", "Gymboree Outlet", "Janie and Jack" and "Crazy 8" brands in the United States, Canada and Australia. Revenues are approximately $1.2 billion. The company is owned by affiliates of Bain Capital Partners LLC. HCA INC: Fitch Affirms 'B+' Issuer Default Rating ------------------------------------------------- Fitch Ratings has affirmed HCA Inc.'s (HCA) 'B+' Issuer Default Rating (IDR) and upgraded the unsecured notes rating to 'BB-' from 'B+'. The Rating Outlook is revised to Positive from Stable. A full list of ratings follows at the end of this release. The ratings apply to $28.2 billion of debt outstanding at June 30, 2013. KEY RATING DRIVERS -- HCA has good headroom in credit metrics at the 'B+' rating category. Fitch forecasts total debt-to-EBITDA of 4.5x and EBITDA-to-gross interest expense of 3.5x at the end of 2013. -- HCA's financial flexibility has improved following the extension of its 2013 and 2016 debt maturity walls and refinancing of high coupon second lien secured debt at lower rates. -- Fitch expects continued solid discretionary free cash flow (FCF; cash from operations less capital expenditures and distributions to minority interests) of about $1.2 billion annually for HCA in 2013. -- While strong cash generation could support debt pay down, Fitch does not believe that there is compelling financial incentive for the company to apply cash to debt reduction. -- HCA's debt agreements do not significantly limit the company's ability to undertake leveraging transactions. A demonstrated commitment to maintaining debt below 4.5x EBITDA would support a positive rating action. SOLID FINANCIAL FLEXIBILITY HCA has recently improved its balance sheet flexibility by extending near-term debt maturities, eliminating high coupon second lien secured notes from the capital structure, and securing a reduction in pricing on a cumulative $5.1 billion in bank loans. Near-term maturities remaining in the capital structure are manageable and include $341 million of bank term loans maturing in 2013 and $81 million of bank term loans and $621 million of HCA Inc. unsecured notes maturing in 2014. At June 30, 2013, HCA's liquidity included $462 million of cash on hand, $3.0 billion of capacity on its bank facility revolving loans and latest 12 month (LTM) discretionary FCF of about $ 1.1 billion. HCA's LTM EBITDA-to-gross interest expense was solid for the 'B+' rating category at 3.5x and the company had about a 35% EBITDA cushion under its bank facility financial maintenance covenant, which requires debt net of cash maintained below 6.75x EBITDA. Fitch's 2013 operating forecast for HCA projects the company generating $3.6 billion - $3.7 billion in cash from operations (CFO) and about $1.2 billion in discretionary FCF, assuming capital expenditures of $2.0 billion and minority distributions of about $400 million. This is an approximately $680 million drop versus the 2012 level, and is consistent with Fitch's forecast for the broader for-profit hospital sector in 2013. Fitch expects a lower level of profitability and cash generation for most hospital companies in 2013, with operating trends influenced by various economic, policy and company specific headwinds. With respect to HCA, the absence of a one-time $270 million Medicare settlement received in 2012, higher capital expenditures and lower electronic health record (EHR) incentive payments in 2013 explain most of the drop in forecasted cash flow. EVOLVING CAPITAL DEPLOYMENT STRATEGY The sponsors of a 2006 LBO directed HCA's financial strategy for the last several years. Following a series of public equity offerings and a buyback of Bank of America's shares, HCA was no longer considered a controlled company as of February 2013, and must appoint a majority of independent directors during 2014. Four of the 14 current Board of Director members are independent. In addition, the company's CEO has announced plans to retire at the end of 2013. The CEO will stay on as Chairman of the Board and the current CFO will assume the CEO position. Although Fitch does not expect a major departure in strategic direction under an independent board or different CEO, there may be some shifts in the company's capital deployment strategy. Under the direction of the LBO sponsors, HCA managed its capital structure in an aggressively shareholder-friendly manner, paying out $7.4 billion in special dividends since 2010 that were largely debt financed. With the 2014 implementation of the coverage expansion elements of the Affordable Care Act (ACA) encouraging scale and consolidation in the hospital industry, Fitch thinks HCA is now more likely to prioritize acquisitions and capital investment as a use of cash as opposed to debt reduction or payments to shareholders. The company's recent acquisitions have been small though; the last large transaction was in late 2011 when HCA acquired the 40% remaining ownership interest in the Denver, CO HealthONE joint venture for $1.45 billion. HCA could increase debt to fund further dividends to shareholders or acquisitions. The debt agreements do not significantly limit the ability to issue additional debt. The bank agreements include a 3.75x first lien secured leverage ratio debt incurrence test and a 6.75x net debt-to-EBITDA financial maintenance covenant. At 4.4x at June 30, 2013, debt leverage is consistent with that of HCA's peer companies. While discretionary FCF generation could support debt pay down, Fitch does not believe that there is compelling financial incentive for the company to significantly reduce its debt balances, so it expects that any further leverage reduction will come from incremental growth in EBITDA. HOSPITAL INDUSTRY OUTLOOK BOOSTED BY ACA Fitch projects a positive benefit to the hospital industry's revenue and cash flow generation from the implementation of the ACA in 2014 - 2015. The initial benefits to the industry are the result of the coverage expansion elements of the legislation, including the individual mandate to purchase health insurance and expansion of Medicaid eligibility. An increase in the number of individuals with health insurance will lead to a drop in uncompensated care and associated bad debt expense for hospital providers, as well as an increase in the organic volume of patients. The positive boost to financial trends is likely to erode over time as hospital providers experience lower payment rates from both government and private insurers in the subsequent years. The start of the ACA coverage expansion coincides with a prolonged trend of weak organic patient volume growth in the hospital sector, which is partly explained by weak economic conditions and party by secular changes in the healthcare delivery system. As the largest operator of acute-care hospitals in the country, with a broad geographic footprint, HCA is in a decent position to capture market share to whatever extent the ACA results in a boost in patient volumes. However, almost half of HCA's revenues come from its hospitals in Florida and Texas, two states that appear unlikely to expand Medicaid eligibility in 2014. This will dampen the ACA's tailwind to revenue and EBITDA for HCA. HCA's organic revenue growth has outpaced that of the broader for- profit hospital industry since early 2012. Operating concerns center on a deteriorating patient payor mix with shifts to less profitable government volumes. Growth in pricing has recently lagged the broader industry for HCA and other urban market hospital companies (Tenet, Universal Health Services) as a result of the higher volumes of Medicaid and uninsured patient volumes, although HCA did post improved growth in pricing of 2.9% in Q2'13. RATING SENSITIVITIES With LTM debt-to-EBITDA of 4.4x and EBITDA-to-gross interest expense of 3.5x, HCA's credit metrics are strong relative to the 'B+' IDR. A one-notch upgrade to 'BB-' will require HCA to maintain debt below 4.5x EBITDA. In addition, the following factors would support an upgrade: -- More information on how HCA intends to manage capital deployment under an independent board and new CEO. -- Sustained improvement in organic operating trends, in particular a continuation of the stronger growth in pricing seen in Q2'13. -- Better clarity on the effects of the ACA on operating results. Fitch believes that the coverage expansion elements of the ACA will be a tailwind to revenue and EBITDA growth starting in 2014, but there is still considerable uncertainty about the magnitude of the influence. A downgrade of the ratings is not likely in the near-term but could result from debt above 5.0x EBITDA and interest coverage below 3.0x EBITDA because of a stressed operating scenario and aggressive capital deployment. Fitch sees the most likely driver of a stressed operating scenario as continued weakness in payments due to ongoing strained government payor reimbursement coupled with persistent shift in HCA's mix of patients to those with less profitable Medicaid coverage, as well as uninsured patients. DEBT ISSUE RATINGS AND RECOVERY ANALYSIS Fitch has taken the following actions on HCA's ratings: HCA, Inc. -- IDR affirmed at 'B+'; -- Senior secured credit facilities (cash flow and asset backed) affirmed at 'BB+/RR1' (100% estimated recovery); -- Senior secured first lien notes affirmed at 'BB+/RR1' (100% estimated recovery); -- Senior unsecured notes upgraded to 'BB-/RR3' (65% estimated recovery). HCA Holdings Inc. -- IDR affirmed at 'B+'; -- Senior unsecured notes affirmed at 'B-/RR6' (0% estimated recovery). The upgrade of HCA Inc. unsecured notes is based on improved recovery prospects for bondholders. The recovery ratings are based on a financial distress scenario which assumes that value for HCA's creditors will be maximized as a going concern (rather than a liquidation scenario). Fitch estimates a post-default EBITDA for HCA of $3.9 billion, which is a 40% haircut from the LTM EBITDA level of $6.5 billion. A 40% haircut represents roughly the level of EBITDA decline that would trip the 6.75x net leverage bank facility financial maintenance covenant. Fitch then applies a 7.0x multiple to post-default EBITDA, resulting in a post-default EV of $27.2 billion for HCA. The multiple is based on observation of both recent transactions/takeout and public market multiples in the healthcare industry. This represents a haircut to recently announced hospital industry transaction multiples (Tenet Healthcare Corp. to purchase Vanguard Health Systems in a deal valued at 7.9x LTM EBITDA and Community Health Systems' offer to acquire Health Management Associates for 8.2x LTM EBITDA). Fitch applies a waterfall analysis to the post-default EV based on the relative claims of the debt in the capital structure. Administrative claims are assumed to consume $2.7 billion or 10% of post-default EV, which is a standard assumption in Fitch's recovery analysis. Fitch assumes that HCA would fully draw the $2.0 billion available balance on its cash flow revolver and 50% of the $2.5 billion available balance on its asset backed lending facility. The 'BB+/RR1' rating for HCA's secured debt (which includes the bank credit facilities and first lien notes) reflects Fitch's expectations for 100% recovery under a bankruptcy scenario. The 'BB-/RR3' rating on the HCA Inc. unsecured notes rating reflects Fitch's expectations for recovery of 65%. The 'B-/RR6' rating on the HCA Holdings, Inc. unsecured notes, including the proposed notes, reflects expectation of 0% recovery. Based on Fitch's current recovery assumptions, HCA has capacity to issue up to an additional $1.2 billion of secured debt without diminishing recovery prospects for the HCA Inc. unsecured note holders to below the 'RR3' recovery band of 51%-70%. Should the company increase the amount of secured debt in the capital structure by more than that amount, Fitch would likely downgrade the HCA Inc. unsecured notes by one-notch, to 'B+/RR4. The ratings on the secured debt and HCA Holdings Inc. unsecured notes would not be affected. HCA has good incremental capacity for additional secured debt issuance under its debt agreements. The only limit on secured debt is a 3.75x first lien leverage ratio test in the bank agreements. First lien debt includes the bank debt and the first lien secured notes. At June 30, 2013, total first lien debt equals $17.5 billion and 2.7x debt-to-EBITDA. Based on $6.5 billion in LTM EBITDA, Fitch estimates total first lien secured debt capacity of $24.4 billion, implying additional first lien capacity of about $6.9 billion. HIGHWAY TECHNOLOGIES: Amends Schedules of Assets and Liabilities ---------------------------------------------------------------- Highway Technologies, Inc., filed an amendment to its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $41,350,616 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $67,109,036 E. Creditors Holding Unsecured Priority Claims $1,228,316 F. Creditors Holding Unsecured Non-priority Claims $23,442,828 ----------- ----------- TOTAL $41,350,616 $91,780,181 As reported in the Troubled Company Reporter on July 26, 2013, Highway Technologies disclosed $41,350,616 in assets and $92,522,939 in liabilities as of the Chapter 11 filing. A copy of the amended schedules is available for free at http://bankrupt.com/misc/HIGHWAY_TECHNOLOGIES_sal_amended.pdf About Highway Technologies Highway Technologies Inc. and affiliate HTS Acquisition Inc. sought Chapter 11 protection (Bankr. D. Del. Case Nos. 13-11325 to 13-11326) on May 22, 2013, to conduct an orderly liquidation. Richard M. Pachuiski, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The prepetition lenders are represented by David M. Hilllman, Esq., at Schulte Roth & Zabel, in New York. The company's balance sheet as of March 31, 2013, showed $55 million in total assets and $102 million in liabilities. Richards, Layton & Finger, P.A. represents the Official Unsecured Creditors' Committee as counsel. Gavin/Solmonese LLC serves as its financial advisor. HOWREY LLP: Has Settlement With Baker Firm & Citibank ----------------------------------------------------- Claire Zillman, writing for The Am Law Daily, reports that Allan Diamond, the trustee overseeing the liquidation of the Howrey estate, said on Aug. 16 that he had reached a pair of what he called "monumental" multimillion dollar settlements with Baker & Hostetler and Citibank that will help pay off nearly all the defunct firm's remaining bank debt. Baker & Hostetler hired 11 former antitrust partners from Howrey amid that firm's collapse in early 2011. According to the report, Baker & Hostetler agreed to pay the Howrey estate $41 million in cash. Nearly the entire sum -- $38 million -- comes from attorney fee awards recovered from settlements in a massive antitrust case that the former Howrey partners filed on behalf of dairy farmers while at their own firm and took with them when they joined Baker & Hostetler. According to the report, former Howrey partner Robert Abrams -- who now chairs Baker & Hostetler's antitrust practice -- served as lead attorney for the farmers, who settled their claims against Dean Foods for $145 million, including $48.33 million in attorney fees, in June 2012. Their case against the Dairy Farmers of America settled in January 2013 for $158 million, with $52.66 million of that going to the lawyers on the case. The Aug. 16 deal also gives the Howrey estate a fixed interest in attorneys fees that could be awarded in three of the former partners' ongoing cases. As part of the settlement, Baker & Hostetler will also pay the estate $2.3 million to resolve unfinished business claims filed under the California statute known as Jewel v. Boxer, $275,000 to end the estate's clawback claims, and $20,000 to settlement claims related to the $92,204 that Gregory Commins, now a Baker Hostetler partner, received for his service on Howrey's dissolution committee. Steven Kestner -- skestner@bakerlaw.com -- executive partner at Baker & Hostetler, said in a statement that the firm "is pleased to have reached this agreement with the trustee." According to the report, under the terms of the second deal announced on Aug. 16, the Howrey estate will use $37 million of the $41 million it is getting from Baker & Hostetler to pay off all the principal and most of the interest owed to primary lender Citibank. That payment will reduce the sum Howrey owes Citibank to $2.5 million. The remaining $4 million from the Baker & Hostetler settlement will go toward the Howrey estate's expenses. The report says Citibank had no comment on the deal. Both settlements are subject to approval by the U.S. Bankruptcy Court in San Francisco. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Cal. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March 2011. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June 2011 at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. ICEWEB INC: Incurs $1.6 Million Net Loss in June 30 Quarter ----------------------------------------------------------- Iceweb, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.59 million on $104,891 of sales for the three months ended June 30, 2013, as compared with a net loss of $3.99 million on $654,996 of sales for the same period a year ago. For the nine months ended June 30, 2013, the Company reported a net loss of $4.51 million on $873,446 of sales, as compared with a net loss of $6.52 million on $2.54 million of sales for the same period a year ago. The Company's balance sheet at June 30, 2013, showed $1 million in total assets, $2.74 million in total liabilities and a $1.73 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/FIG3Y8 About IceWEB Sterling, Va.-based IceWEB, Inc., manufactures and markets purpose-built appliances, network and cloud-attached storage solutions and delivers on-line cloud computing application services. The Company's customer base includes U.S. government agencies, enterprise companies, and small to medium sized businesses (SMB). D'Arelli Pruzansky, P.A., in Boca Raton, Florida, expressed substantial doubt about IceWEB's ability to continue as a going concern. The independent auditors noted that the Company had net losses of $6,485,048 for the year ended Sept. 30, 2012. The Company reported a net loss of $6.5 million on $2.6 million of sales in fiscal 2012, compared with a net loss of $4.7 million on $2.7 million of sales in fiscal 2011. IDQ HOLDINGS: S&P Lowers CCR to 'B-'; Outlook Stable ---------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Garland, Texas-based IDQ Holdings Inc. to 'B-' from 'B'. The outlook is stable. At the same time, S&P lowered its issue-level rating on the company's $220 million senior secured notes due 2017 to 'B-' from 'B'. The recovery rating on this debt remains '4', indicating S&P's expectation for average (30%-50%) recovery in the event of a payment default. "The downgrade reflects IDQ's weakening operating performance and cash flow generation resulting from unfavorable weather conditions in the first half of 2013 that resulted in a 17.5% sales decline in the first half of the year. Under our revised forecast, we project IDQ's key credit measures will remain weak in 2013, including leverage in the mid- to high-5x range and funds from operations (FFO) to total debt between 3% and 4%. We expect a modest rebound in performance in 2014, including a reduction in leverage to the low-5x area. However, we still expect metrics will remain indicative of a "highly leveraged" financial risk profile over the next year. Ratios indicative of a highly leveraged financial risk profile include total debt to EBITDA above 5x and FFO to total debt below 12%. Under our prior forecasts, we had expected the company to reduce leverage to below 5x by the end of fiscal 2013. In addition to the company's highly leveraged financial risk profile, the ratings also continue to reflect our view that the company will continue to maintain a "vulnerable" business risk profile," S&P said. Standard & Poor's economists believe the risk of another U.S. recession during the next 12 months is between 10% and 15%, and forecast real U.S. GDP growth of 2% in 2013 and 3.1% in 2014. Considering these economic forecasts, S&P's base-case forecast for the company's operating performance in fiscal years 2013 and 2014 is as follows: -- Mid-teens percentage revenue decline in fiscal 2013 attributed to unfavorable weather conditions in the first half of the year. S&P assumes sales rebound somewhat, at a low- to mid-single-digit revenue growth pace in 2014. This is based on S&P's assumption for weather conditions to not have as severe of an impact in 2014 on a comparable basis, and for A/C PRO sales to more than offset continued shrinkage of the straight refrigerant segment. -- EBITDA margins expanding more than 200 basis points in fiscal 2013 as a result of a continued favorable mix shift toward higher-margin product offerings (as sales of IDQ's A/C PRO outpace its straight refrigerant product offering) in addition to lower input costs, most notably 134-a refrigerant costs; -- S&P expects margins will be somewhat stable in fiscal 2014, as it expects the company's continued marketing and promotional efforts to support education and consumer awareness of its products will offset continued favorable mix shift; -- S&P assumes input costs in 2014 will be close to 2013 levels, although this remains subject to supply and demand dynamics. -- S&P believes total capital expenditures will be modest, in the low-single-millions area, which generally includes maintenance of the sole manufacturing plant as well as support of R&D as it pertains to chemical formulations and delivery mechanisms. IZEA INC: Incurs $893,000 Net Loss in Second Quarter ---------------------------------------------------- Izea, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $893,470 on $1.71 million of revenue for the three months ended June 30, 2013, as compared with a net loss of $1.83 million on $1.20 million of revenue for the same period during the prior year. For the six months ended June 30, 2013, the Company incurred a net loss of $1.77 million on $3.10 million of revenue as compared with a net loss of $2.75 million on $2.81 million of revenue for the same period a year ago. The Company's balance sheet at June 30, 2013, showed $1.64 million in total assets, $4.35 million in total liabilities and a $2.70 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/GqLDPV About IZEA, Inc. IZEA, Inc., headquartered in Orlando, Fla., believes it is a world leader in social media sponsorships ("SMS"), a rapidly growing segment within social media where a company compensates a social media publisher to share sponsored content within their social network. The Company accomplishes this by operating multiple marketplaces that include its platforms SocialSpark, SponsoredTweets and WeReward, as well as its legacy platforms PayPerPost and InPostLinks. The Company has incurred significant losses from operations since inception and has an accumulated deficit of $20.9 million as of June 30, 2012. Cross, Fernandez & Riley, LLP, in Orlando, Florida, expressed substantial doubt about IZEA's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred recurring operating losses and had an accumulated deficit at Dec. 31, 2011, of $18.1 million. JANABI ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Janabi Associates, Inc. P.O. Box 34977 Bethesda, MD 20827 Bankruptcy Case No.: 13-24323 Chapter 11 Petition Date: August 21, 2013 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Debtor's Counsel: James Greenan, Esq. MCNAMEE, HOSEA, ET. AL. 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Tel: (301) 441-2420 E-mail: jgreenan@mhlawyers.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/mdb13-24323.pdf The petition was signed by Haifa A. Shaban, M.D., president. K-V PHARMACEUTICAL: Says Creditor Rejection Won't Delay Ch.11 Exit ------------------------------------------------------------------ Stephanie Gleason, writing for Daily Bankruptcy Review, reported that a class of K-V Pharmaceutical Co. creditors has voted against the company's proposed bankruptcy-exit plan, complicating its attempt to implement this plan. 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. KEYCORP: DBRS Confirms Preferred Stock at 'BB' ---------------------------------------------- DBRS Inc. has confirmed the ratings of KeyCorp, including its Issuer & Senior Debt rating of BBB (high) and Short-Term Instruments rating of R-2 (high). The trend on all ratings remains Stable. The rating action follows a detailed review of the Company's operating results, financial fundamentals and future prospects. KeyCorp's ratings consider its solid community focused commercial banking franchise, diverse revenue streams, sound and stabilizing credit quality, strong capital and funding profile, and solid liquidity position. Ratings also reflect the Company's primary challenges, which include generating higher sustained levels of operating revenues and profitability. DBRS expects positive rating pressure if the Company is able to exhibit sustained improvement in core revenues and profitability, while maintaining a sound risk profile. KeyCorp maintains a deeply entrenched, geographically diverse commercial and retail banking franchise with over 1,000 branches located in 13 states across the Northeast, Great Lakes, and Rocky Mountain and Northwest regions. In addition to its in-footprint businesses, the Company also has several national businesses, including equipment finance and institutional/capital markets. Moreover, KeyCorp maintains a deposit franchise that is defensible in many of its markets. Indeed, the Company has a top 5 market position in 6 of the 13 states where it operates community bank branches. On a more granular basis, KeyCorp has the number one deposit market share in several large metropolitan statistical areas (MSAs), including Cleveland Ohio, and Albany and Poughkeepsie, New York. The Company also has the number two market share in Syracuse, New York. As with most banks, KeyCorp's revenues remain pressured by the difficult operating environment. Indeed, the slowly improving U.S. economy as well as continued amortization of the Company's exit loan portfolio continues to pressure average loan growth. Importantly, the exit portfolio is becoming less a factor, totaling just $2.6 billion at June 30, 2013, down 24% from the end of 2Q12. Moreover, competition for quality loans continues to pressure net interest margin (NIM), as loan yields remain moderate. Although, KeyCorp maintains an asset sensitive balance sheet, its structure is such that it would benefit more from rising short term rates. Finally, driving stability in revenues, fee income continues to represent better than 40% of total revenues. Although still somewhat elevated, DBRS views favorably the Company's success to date in reducing its operating costs which should contribute to improved profitability. Specifically, KeyCorp has attained approximately $171 million of its targeted $200 million in annualized expense savings, which it expects to achieve by YE13. Despite the progress on expenses, KeyCorp's calculated efficiency ratio from continuing operations was a high 69% in 2Q13. Excluding efficiency initiative charges, the Company's calculated efficiency ratio was 65%. Credit quality remains sound and continues to stabilize. Over the past eighteen months, credit risk related to KeyCorp's continuing loan portfolio has moderated. Specifically, non-performing assets from continuing operations represented a manageable 1.30% of loans and OREO, at June 30, 2013, down from 1.39%, at December 31, 2012 and 1.73% at December 31, 2011. Meanwhile, net charge-offs (continuing operations) decreased to a moderate 0.34% of average loans for 2Q13, from 0.44% for 4Q12 and 0.86% for 4Q11. Finally, KeyCorp's allowance for loan and lease losses remains adequate at 1.65% of period-end loans and 134% of non-performing loans. Capitalization remains strong and provides an ample buffer for unexpected losses. Despite the 2Q13 $112 million of common share repurchases under Key's $426 million repurchase program, the Company's risk weighted capital ratios remain sound, including its Tier 1 common ratio of 11.18%, Tier 1 ratio of 11.93% and Total ratio of 14.65%. Furthermore, the Company estimates its Basel III Tier 1 common equity ratio to be 10.7%, which is well-above the minimum requirement. KeyCorp received no objection from the Federal Reserve to utilize the proceeds from its 3Q13 sale of Victory Capital Management and its broker-dealer affiliate Victory Capital Advisor to buy-back additional common stock. Meanwhile, funding remains ample, as reflected by the Company's loans (excluding education loans in securitization trusts) to deposits (excluding deposits in foreign office) ratio of 84%, at June 30, 2013. KeyCorp, a diversified financial services corporation headquartered in Cleveland, Ohio, reported approximately $91 billion in consolidated assets as of June 30, 2013. Issuer Debt Rated Rating Action Rating ------ ---------- ------------- ------ KeyCorp Issuer & Senior Debt Confirmed BBB(high) KeyCorp Subordinated Debt Confirmed BBB KeyCorp Short-Term Instruments Confirmed R-2(high) KeyCorp Non-Cumulative Perpetual Confirmed BB(low) KeyBank N.A. Deposits & Senior Debt Confirmed A (low) KeyBank N.A. Subordinated Debt Confirmed BBB(high) KeyBank N.A. Short-Term Instruments Confirmed R-1(low) KeyCorp Trust Preferred Confirmed BBB Capital I Securities KeyCorp Trust Preferred Confirmed BBB Capital II Securities KeyCorp Trust Preferred Confirmed BBB Capital III Securities KEYUAN PETROCHEMICALS: Reports $2.9-Mil. Net Income in 1st Quarter ------------------------------------------------------------------ Keyuan Petrochemicals, Inc., reported net income of $2.9 million on $209.6 million of sales for the three months ended March 31, 2013, compared with net income of $1.6 million on $183.3 million of sales for the same period last year. The Company's balance sheet at March 31, 2013, showed $769.1 million in total assets, $683.0 million in total current liabilities, $16.5 million of Series B convertible preferred stock, and stockholders' equity of $69.6 million. "The Company reported net income and cash flows used in operations approximately $2.92 million and $67.1 million, respectively for the three months ended March 31, 2013, and a net loss and cash flows used in operations of approximately $5.85 million and $7.1 million, respectively for the year ended Dec. 31, 2012. At March 31, 2013, and Dec. 31, 2012, the Company had a working capital deficit of approximately $162 million and $159 million, respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/7OVSRo Located in Ningbo, Zhejiang Province, China, Keyuan Petrochemicals, Inc., is engaged in the manufacture and sale of petrochemical and rubber products in the PRC. KIDSPEACE CORP: Seeks Extension of Exclusive Plan Filing Deadline ----------------------------------------------------------------- KidsPeace Corporation, et al., ask the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to extend their exclusive period within which to file a plan of reorganization through and including Jan. 16, 2014, and their exclusive period to obtain acceptances of that plan through and including March 17, 2014. The Debtors' counsel, Morris S. Bauer, Esq., at Norris, McLaughlin & Marcus, PA, in Allentown, Pennsylvania, asserts that the additional time is needed for the Debtors to continue negotiations with parties-in-interest to formulate a consensual plan of reorganization. Mr. Bauer relates that holders of the majority in principal amount of bonds issued by the Debtors contemplated the filing of a plan of reorganization within 30 days of the Petition Date. As a result of on-going negotiations with the Pension Benefit Guaranty Corporation and the Official Committee of Unsecured, the deadline to file a proposed plan was extended until Sept. 30, 2013, or be in default under the Debtors' prepetition agreements with the bondholders. Mr. Bauer says it is possible that further extensions may be necessary as a result of the continued discussions. A hearing on the extension motion is scheduled to be held on Sept. 3, 2013, at 11:00 a.m. About KidsPeace Corp. KidsPeace Corp., a provider of behavioral services for children, filed a petition for Chapter 11 reorganization (Bankr. E.D. Pa. Case No. 13-14508) on May 21, 2013, in Reading, Pennsylvania. KidsPeace operates a 96-bed pediatric psychiatric hospital in Orefield, Pennsylvania. Assets are $86.7 million, and debt on the books is $158.6 million, according to a court filing. The Debtor, which sought bankruptcy protection with eight affiliates, tapped Norris McLaughlin & Marcus, P.A. as counsel; EisnerAmper LLP as financial advisor, and Rust Omni as claims and notice agent. Assets total $158,587,999 at the end of 2012. The Debtors owe approximately $56,206,821 in bond debt, and they have been told that their pension liability is allegedly about $100,000,000 of which the Debtors currently reflect $83,049,412 on their books. KidsPeace sought Chapter 11 (i) as a means to implement a negotiated restructuring of bond debt currently aggregating approximately $51,310,000 plus accrued interest to a reduced amount of approximately $24 million in new 30-year bonds with interest at 7.5 percent, and (ii) to continue on-going negotiations with the Pension Benefit Guaranty Corporation in hopes of reducing the PBGC asserted obligation of $100+ million to an amount that the Debtors can reasonably expect to satisfy. The Debtor disclosed $157,930,467 in assets and $168,768,207 in liabilities as of the Chapter 11 filing. Since March 2012, MK has been exploring possible affiliation or acquisition opportunities; however, no offer of an affiliation or acquisition has been presented to the Debtors. Gemino Healthcare Finance, LLC, the prepetition revolving lender, is represented by James S. Rankin, Jr., Esq., at Parker, Hudson, Rainer & Dobbs LLP; and Weir & Partners LLP's Walter Weir, Jr., Esq. UMB Bank, N.A., on behalf of bondholders, Performance Food Group d/b/a AFI, W.B. Mason Co., Inc., Pension Benefit Guaranty Corporation, and Teresa Laudenslager were appointed to an official committee of unsecured creditors in the Debtors' cases. The Official Committee of Unsecured Creditors is represented by Fitzpatrcik Lentz & Bubba, P.C., and Lowenstein Sandler LLP as counsel. FTI Consulting, Inc. serves as the panel's financial advisor. LAFAYETTE YARD HOTEL: Owners Mull Sale or Bankruptcy Filing ----------------------------------------------------------- David Foster, writing for The Trentonian, reports that in an email sent Thursday night by the chairwoman of the Lafayette Yard Community Development Corporation, which currently owns the Lafayette Yard Hotel & Conference Center, previously called the Trenton Marriott, the public board said it will discuss the potential sale of the property, a reorganization and restructuring plan, and Chapter 11 bankruptcy filing at a special meeting scheduled for this week. "We have inquiries," Chairwoman Joyce Kersey said of interested buyers, according to the report. "It was always our intention to improve the asset so it could be sold. So we're still working with that understanding." The report says Ms. Kersey declined to say how many parties are interested in purchasing the hotel. LATTICE INC: Posts $51,000 Net Income in Second Quarter ------------------------------------------------------- Lattice Incorporated filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $51,160 on $1.91 million of revenue for the three months ended June 30, 2013, as compared with net income of $99,540 on $1.83 million of revenue for the same period during the prior year. For the six months ended June 30, 2013, the Company reported a net loss of $65,667 on $4.09 million of revenue, as compared with net income of $128,302 on $3.92 million of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2013, showed $5.09 million in total assets, $6.92 million in total liabilities and a $1.82 million deficit attributable to shareowners of the Company. A copy of the Form 10-Q is available for free at: http://is.gd/CgJUMM About Lattice Inc. Pennsauken, New Jersey-based Lattice Incorporated provides telecommunications services to correctional facilities and specialized telecommunication service providers in the United States. Lattice Incorporated disclosed a net loss of $570,772 on $10.77 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $6.06 million on $11.44 million of revenue for the year ended Dec. 31, 2011. Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, 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 a history of operating losses, has a working capital deficit and requires additional working capital to meet its current liabilities. These factors raise substantial doubt about the Company's ability to continue as a going concern. LONE PINE RESOURCES: Incurs C$15.8-Mil. Net Loss in Second Quarter ------------------------------------------------------------------ Lone Pine Resources Inc. filed its quarterly report on Form 10-Q, reporting a net loss of C$15.8 million on C$31.0 million of total revenues for the three months ended June 30, 2013, compared with a net loss of C$105.0 million on C$42.4 million of total revenues for the same period last year. The Company reported a net loss of C$44.0 million on C$59.9 million of total revenues for the six months ended June 30, 2013, compared with a net loss of C$114.5 million on C$86.8 million of total revenues for the corresponding period of 2012. The Company's balance sheet at June 30, 2013, showed C$596.8 million in total assets, C$424.4 million in total liabilities, and stockholders' equity of C$172.4 million. "Several conditions and events cast doubt about Lone Pine's ability to continue as a going concern. Lone Pine has incurred net losses for the three and six months ended June 30, 2013, and at June 30, 2013, had an accumulated deficit of C$814.5 million (Dec. 31, 2012 - C$770.5 million), and requires additional financing in order to finance its business activities on an ongoing basis." A copy of the Form 10-Q is available at http://is.gd/XAuUh8 Calgary, Canada-based Lone Pine Resources Inc. is an independent oil and gas exploration, development and production company with operations in Canada. The Company's reserves, producing properties and exploration prospects are located in the provinces of Alberta, British Columbia and Quebec, and in the Northwest Territories. The Company is incorporated under the laws of the State of Delaware. LOUISIANA-PACIFIC: S&P Revises Outlook to Pos. & Affirms 'BB' CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Louisiana-Pacific Corp. to positive from stable. At the same time, S&P affirmed all existing ratings, including its 'BB' corporate credit rating on the company. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%) recovery in the event of a default. S&P revised the outlook to positive because Louisiana-Pacific was tracking ahead of its 2013 EBITDA forecast through the first six months of the year. This outperformance reflects an improvement in sales volumes, which was expected given the accelerating housing recovery, plus higher-than-expected sales prices, as competitive supply remains in check. "The positive outlook acknowledges stronger demand for many of Louisiana-Pacific's products as the housing market continues to recover, as well as favorable prices, particularly for OSB, as supply remains in check. If these trends continue, leverage would drop to about 2x EBITDA, which would warrant a one-notch upgrade. This scenario also assumes that acquisition activity and expansion capital expenditures remain manageable," said Standard & Poor's credit analyst James Fielding. A downgrade is unlikely over the next 12 months given S&P's economists' forecast for double-digit growth in new housing starts, which is the primary driver of demand for Louisiana- Pacific's products. However, S&P would revise its outlook back to stable if the housing recovery stalled, perhaps because of another recession in the U.S. S&P assess the risk of another recession in the next year at 15% to 20%. S&P would also revise its outlook back to stable if the company pursued aggressive expansion initiatives and funded those investments with debt such that leverage would stay closer to 3x EBITDA. S&P ascribes a low probability to this scenario over the next 12 months. LPATH INC: Incurs $1.4 Million Net Loss in Second Quarter --------------------------------------------------------- Lpath, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.38 million on $2.01 million of total revenues for the three months ended June 30, 2013, as compared with a net loss of $646,649 on $1.32 million 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 $2.63 million on $3.12 million of revenues, as compared with a net loss of $720 on $4.08 million of total revenues for the same period last year. Lpath disclosed a net loss of $2.75 million in 2012, as compared with a net loss of $3.11 million in 2011. The Company's balance sheet at June 30, 2013, showed $20.20 million in total assets, $7.54 million in total liabilities and $12.65 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/RJ4UDS In a separate filing with the SEC, the Company registered 1,015,715 shares of common stock issuable under the Amended and Restated 2005 Equity Incentive Plan. The proposed maximum aggregate offering price is $5.88 million. A copy of the Form S-8 prospectus is available at http://is.gd/SELbc9 About Lpath, Inc. San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. LYFE COMMUNICATIONS: Incurs $523,000 Net Loss in Second Quarter --------------------------------------------------------------- Lyfe Communications, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $523,090 on $58,726 of revenues for the three months ended June 30, 2013, as compared with a net loss of $491,495 on $159,241 of revenues for the same period during the prior year. For the six months ended June 30, 2013, the Company reported a net loss of $1.24 million on $110,258 of revenues, as compared with a net loss of $757,465 on $325,547 of revenues for the same period a year ago. The Company's balance sheet at June 30, 2013, showed $1.16 million in total assets, $3.68 million in total liabilities and a $2.52 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/kYdhti About LYFE Communications South Jordan, Utah-based LYFE Communications, Inc.'s business is to develop, deploy, and operate next generation media and communications network based services to single-family, multi- family, high-rise resort and hospitality properties. LYFE Communications incurred a net loss of $1.74 million on $531,531 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $3.88 million on $621,830 of revenue for the year ended Dec. 31, 2011. HJ & Associates, LLC, in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered losses since inception. The Company has not established operations with consistent revenue streams and has a working capital deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern. LYON WORKSPACE: Tuesday Hearing on Exclusivity Extension Bid ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Illinois will convene a hearing on Aug. 27, 2013, at 10 a.m., to consider Lyon Workspace Products, L.L.C., et al.'s second motion for extension of exclusivity. The Debtor, by and through their counsel Daniel A. Zazove, Esq., at Perkins Coie LLP, requested that the Court extend the exclusive periods to file a Plan until Oct. 18, and solicit acceptances for that Plan until Dec. 17, 2013. Mr. Zazove said the Debtors have sold substantially all of their assets and are winding-up operations as their responsibilities under the assets purchase agreement expire. Upon completion of the wind-up period, the Debtors will be able to properly analyze their options and develop a plan of reorganization. About Lyon Workspace Lyon Workspace Products, L.L.C. and seven affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 13-2100) on Jan. 19, 2012. Lyon Workspace -- http://www.lyonworkspace.com/-- was a manufacturer and supplier of locker and storage products. It had 400 full-time employees, 53% of whom are salaried employees. Eight percent of the employees are members of the Local Union No. 1636 of the United Steelworkers of America, A.F.L.-C.I.O. The Debtor disclosed $41,275,474 in assets and $37,248,967 in liabilities as of the Chapter 11 filing. Attorneys at Perkins Coie LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. MEADOWBROOK INSURANCE: Obtains Waiver on Defaulted Loan Covenants ----------------------------------------------------------------- Meadowbrook Insurance Group, Inc. on Aug. 23 disclosed that it has obtained a waiver from members of the lending group under its bank credit facility on certain defaulted loan covenants. The Company was in default on two of its financial covenants under the Facility as of June 30, 2013, including its net worth covenant. The defaults were triggered by an after-tax non-cash goodwill impairment of $101.5 million the Company recorded in the second quarter, which directly impacted the Company's book value. Karen M. Spaun, the Company's Chief Financial Officer, stated: "We are continuing to work with our bank group to negotiate an amendment to the credit facility to adjust the financial covenants. Absent the non-cash goodwill impairment, we would have been in compliance with all of our financial covenants." The waiver is effective until September 20, 2013, and includes specific authorization for the Company to pay its scheduled common stock dividend on Monday, August 26, 2013. The Company is progressing in its discussions with its lenders to re-set the covenants to reflect the impact of the goodwill charge. The Company expects to execute and announce an amendment to its Facility in the coming weeks. About Meadowbrook Insurance Group Based in Southfield, Michigan, Meadowbrook Insurance Group, Inc. (NYSE:MIG) -- http://www.meadowbrook.com-- operates in the specialty program management market. Meadowbrook includes several agencies, claims and loss prevention facilities, self-insured management organizations and six property and casualty insurance underwriting companies. Meadowbrook has twenty-eight locations in the United States. Meadowbrook is a risk management organization, specializing in specialty risk management solutions for agents, professional and trade associations, and small to medium-sized insureds. MERUS LABS: Incurs C$1-Mil. Net Loss in Fiscal Third Quarter ------------------------------------------------------------ Merus Labs International Inc. reported a net loss of C$1.0 million on C$7.3 million of revenues for the three months ended June 30, 2013, compared with net income of C$674,271 on C$2.9 million of revenues for the three months ended June 30, 2012. The Company reported a net loss of C$3.0 million on C$20.1 million of revenues for the nine months ended June 30, 2013, compared with net income of C$16,143 on C$5.4 million for the nine months ended June 30, 2012. At June 30, 2013, the Company's balance sheet showed C$94.6 million in total assets, C$53.4 million in total liabilities, and equity of C$41.2 million. The Company said: "For the nine months ended June 30, 2013, the Company had positive cash flow from operations of C$8,190,672, but a net loss of C$3,048,973 and negative net current assets of C$19,954,197. In addition, one of the Company's products is contending with the recent emergence of a generic competitor. These uncertainties cast substantial doubt upon the Company's ability to continue as a going concern." A copy of the Third Quarter Report Fiscal 2013 for the three months ended June 30, 2013, is available at http://is.gd/OXPRVc About Merus Labs Toronto, Canada-based Merus Labs International Inc. (TSX: MSL, NASDAQ: MSLI) is a specialty pharmaceutical company engaged in the acquisition and licensing of pharmaceutical products. * * * As reported in the TCR on Jan. 7, 2013, Deloitte & Touche LLP, in Toronto, Canada, expressed substantial doubt Merus Labs International Inc.'s ability to continue as a going concern in its report on the consolidated financial statements of the Company for the year ended Sept. 30, 2012. The independent auditors noted that the Company has suffered recurring losses from operations. MMRGLOBAL INC: Incurs $1.1 Million Net Loss in Second Quarter ------------------------------------------------------------- MMRGlobal, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.14 million on $300,549 of total revenues for the three months ended June 30, 2013, as compared with a net loss of $1.37 million on $198,779 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 $2.65 million on $422,577 of total revenues, as compared with a net loss of $2.95 million on $371,577 of total revenues for the same period a year ago. The Company's balance sheet at June 30, 2013, showed $2.61 million in total assets, $9.06 million in total liabilities and a $6.44 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/oltgcG About MMRGlobal Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF) -- http://www.mmrglobal.com/-- through its wholly-owned operating subsidiary, MyMedicalRecords, Inc., provides secure and easy-to- use online Personal Health Records (PHRs) and electronic safe deposit box storage solutions, serving consumers, healthcare professionals, employers, insurance companies, financial institutions, and professional organizations and affinity groups. MMRGlobal incurred a net loss of $5.90 million in 2012, as compared with a net loss of $8.88 million in 2011. Rose, Snyder & Jacobs LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred significant operating losses and negative cash flows from operations during the years ended Dec. 31, 2012, and 2011, that raise substantial doubt about the Company's ability to continue as a going concern. MONITOR COMPANY: After Deloitte Sale, Remnants Convert to Ch. 7 --------------------------------------------------------------- Law360 reported that the bankruptcy of Monitor Co. Group LP has been converted to Chapter 7, as attorneys sweep up the remnants of the once powerful consulting firm following its $116.2 million sale to rival Deloitte Consulting LLP, according to a court filing. The report related that Monitor, joined by the unsecured creditors committee and secured lender Caltius Partners IV LP, had told a Delaware bankruptcy court that since there is no realistic prospect of the company's rehabilitation in light of the Deloitte sale, a Chapter 7 conversion is the best path forward. About Monitor Company Monitor Company Group LP -- http://www.monitor.com/-- was a global consulting firm with 1,200 personnel in offices across 17 countries worldwide. Founded in 1983 by six entrepreneurs, and headquartered in Cambridge, Massachusetts, Monitor advised for- profit, sovereign, and non-profit clients on growing their businesses and economies and furthering their charitable purposes. Monitor and several affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 12-13042 to 12-13062) on Nov. 7, 2012. Judge Hon. Christopher S. Sontchi presides over the case. Pepper Hamilton LLP and Ropes & Gray LLP served as the Debtors' counsel. The financial advisor was Carl Marks Advisory Group LLC. Epiq Bankruptcy Solutions, LLC served as claims and noticing agent. The petitions were signed by Bansi Nagji, president. Cole, Schotz, Meisel, Forman & Leonard, P.A., represented the Committee of Unsecured Creditors as counsel. Bank of America was represented in the case by Jinsoo Kim, Esq., and Timothy Graulich, Esq., at Davis Polk & Wardwell LLP; and Mark D. Collins, Esq., at Richards Layton & Finger PA. J. Gregory Milmoe, Esq., and Shana A. Elberg, Esq., at Skadden Arps Slate Meagher & Flom LLP in New York; and Mark Chehi, Esq., and Christopher DiVirgilio, Esq., at Skadden Arps in Delaware, represented Deloitte Consulting LLP. Caltius Partners IV LP; Caltius Partners Executive IV, LP; and CP IV Pass-Through (Monitor) LP were represented by John Sieger, Esq., at Katten Muchin Rosenman LLP. Monitor's consolidated unaudited financial statements as of June 30, 2012, which include the assets and liabilities of non- Debtor foreign subsidiaries, reflected total assets of roughly $202 million (including $93 million in current assets) and total liabilities of roughly $200 million. Monitor filed for bankruptcy to sell substantially all of their businesses and assets to Deloitte Consulting LLP, a Delaware registered limited liability partnership and DCSH Limited, a UK company limited by shares, subject to higher or otherwise better offers. The base purchase price set forth in the Stalking Horse Agreement is $116.2 million, plus (i) assumption of certain liabilities and (ii) certain cure costs for assumed contracts. The Stalking Horse Agreement provides for the Stalking Horse Bidder to receive a combined breakup fee and expense reimbursement of $4 million. The Debtors held an auction on Nov. 28, 2012, at the offices of the Sellers' counsel, Ropes & Gray LLP in New York. In mid- January 2013, Judge Sontchi allowed the Debtors to sell its assets to Deloitte Consulting for $116.2 million. In July 2013, Monitor Co. and the official creditors' committee decided that the liquidation can be most efficiently concluded now that the business was sold by converting the Chapter 11 reorganization to a liquidation in Chapter 7. MONTREAL MAINE: Legal Fees a Concern for Judge in Bankruptcy Case ----------------------------------------------------------------- J. Craig Anderson, writing for Kennebec Journal, reported that in a courtroom packed with dozens of lawyers on Aug. 22, the judge presiding over the Montreal, Maine & Atlantic Railway's bankruptcy proceedings expressed concern that attorneys' fees will suck the company dry of funds before victims of last month's deadly train derailment in Quebec can be compensated. "What's concerning me is a run-up of administrative expenses that would make operation of the railroad impossible," said U.S. Bankruptcy Judge Louis Kornreich, the report related. "There's not a lot of extra revenue." If legal fees drain the company of its cash, nothing will be left to compensate victims of the accident July 6 in which an unmanned train loaded with crude oil rolled downhill into the town of Lac- Megantic, Quebec, derailed and exploded, killing 47 people and destroying 40 buildings in the heart of town, the report related. Several groups of lawyers, representing various interests in the bankruptcy, attended the Aug. 22 hearing on motions to keep the railroad running while its newly appointed trustee assesses its financial situation, the report added. Interested parties include creditors such as Wheeling & Lake Erie Railway Co.; New Brunswick Southern Railway Co. Ltd.; state and federal transportation agencies; unions; banks; the Montreal, Maine & Atlantic; its affiliated company, Rail World Inc.; and its court-appointed trustee, Robert Keach, the report further related. About Montreal, Maine & Atlantic Railway Montreal, Maine & Atlantic Railway Ltd., the railway company that operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec, sought bankruptcy protection in U.S. Bankruptcy Court in Bangor, Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the U.S. case. The Maine law firm of Verrill Dana serves as counsel to MM&A. Justice Martin Castonguay oversees the case in Canada. MPG OFFICE: Brookfield Extends Tender Offer to August 30 -------------------------------------------------------- Brookfield Office Properties Inc. said that DTLA Fund Holding Co. and Brookfield DTLA Fund Properties Holding Inc., both direct wholly owned subsidiaries of the DTLA Fund, are extending their previously announced cash tender offer to purchase all outstanding shares of preferred stock of MPG Office Trust, Inc., until 12:00 midnight, New York City time, at the end of Friday, Aug. 30, 2013. BPO previously announced its intention to acquire MPG pursuant to a merger agreement, dated as of April 24, 2013, by and among Brookfield DTLA Holdings LLC, a newly formed fund controlled by BPO (the DTLA Fund), Brookfield DTLA Fund Office Trust Investor Inc., Brookfield DTLA Fund Office Trust Inc., Brookfield DTLA Fund Properties LLC, MPG and MPG Office, L.P. Upon the closing of the tender offer, preferred stockholders of MPG will receive $25.00 in cash for each share of MPG preferred stock validly tendered and not validly withdrawn in the offer, without interest and less any required withholding taxes. Shares of MPG preferred stock that are tendered and accepted for payment in the tender offer will not receive any accrued and unpaid dividends on those shares. The tender offer had been previously set to expire at 12:00 midnight, New York City time, at the end of Friday, Aug. 23, 2013. Except for the extension of the expiration date, all other terms and conditions of the tender offer remain unchanged. The Depositary and Paying Agent for the tender offer is American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, New York 11219. The Information Agent for the tender offer is MacKenzie Partners, Inc., 105 Madison Avenue, New York, New York 10016. The tender offer materials may be obtained at no charge by directing a request by mail to MacKenzie Partners, Inc. or by calling (800) 322-2885. Fried, Frank, Harris, Shriver & Jacobson LLP is acting as legal advisor to BPO. Based on information received from the Depositary, as of Aug. 22, 2013, approximately 83,224 shares of MPG preferred stock had been tendered and not withdrawn from the offer. Stockholders who have already tendered their shares do not have to re-tender their shares or take any other action as a result of the extension of the expiration date. About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- owns and operates Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high-quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. For the year ended Dec. 31, 2012, the Company reported net income of $396.11 million, as compared with net income of $98.22 million on $234.96 million of total revenue during the prior year. The Company's balance sheet at March 31, 2013, showed $1.45 billion in total assets, $1.98 billion in total liabilities, and a $530.56 million total deficit. In its Form 10-K filing with the Securities and Exchange Commission for the fiscal year ended Dec. 31, 2012, the Company said it is working to address challenges to its liquidity position, particularly debt maturities, leasing costs and capital expenditures. The Company said, "We do not currently have committed sources of cash adequate to fund all of our potential needs, including our 2013 debt maturities. If we are unable to raise additional capital or sell assets, we may face challenges in repaying, extending or refinancing our existing debt on favorable terms or at all, and we may be forced to give back assets to the relevant mortgage lenders. While we believe that access to future sources of significant cash will be challenging, we believe that we will have access to some of the liquidity sources identified above and that those sources will be sufficient to meet our near- term liquidity needs." On March 11, 2013, the Company entered into an agreement to sell US Bank Tower and the Westlawn off-site parking garage. The transaction was to close June 28, 2013, subject to customary closing conditions. The net proceeds from the transaction are expected to be roughly $103 million, a portion of which may potentially be used to make loan re-balancing payments on the Company's upcoming 2013 debt maturities at KPMG Tower and 777 Tower. Roughly $898 million of the company's debt matures in 2013. "Our ability to access the capital markets to raise capital is highly uncertain. Our substantial indebtedness may prevent us from being able to raise debt financing on acceptable terms or at all. We believe we are unlikely to be able to raise equity capital in the capital markets," the Company said in a regulatory filing. "Future sources of significant cash are essential to our liquidity and financial position, and if we are unable to generate adequate cash from these sources we will have liquidity-related problems and will be exposed to material risks. In addition, our inability to secure adequate sources of liquidity could lead to our eventual insolvency." NATIONAL ENVELOPE: Brings in $65MM With 3-Way Sale -------------------------------------------------- Law360 reported that private equity-owned NE Opco Inc., which does business as National Envelope, struck a $65 million sales trifecta Wednesday as the bankrupt envelope maker announced a series of deals to parcel out its assets among three separate buyers. The report related that the proposed transactions would see Connecticut-based printer Cenveo Inc. acquire National Envelope's operating assets for $25 million, Hilco Receivables LLC pick up accounts receivable for $25 million and Southern Paper LLC take on its inventory for $15 million, according to a sale motion filed in Delaware bankruptcy court. About National Envelope National Envelope is the largest privately-held manufacturer of envelopes in North America. Headquartered in Frisco, Texas, National Envelope has eight plants and 15 percent of the envelope market. Revenue of $427 million in 2012 resulted in a $60.1 million net loss, continuing an unbroken string of losses since 2007. NE OPCO, Inc., doing business as National Envelope, along with affiliate NEV Credit Holdings, Inc., filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-11483) on June 10, 2013. The company disclosed liabilities including $148.4 million in secured debt, with $37.5 million owing on a revolving credit and $15.6 million on a secured term loan. There is a $55.7 million second-lien debt 82 percent held by a Gores Group LLC affiliate. National Envelope, then known as NEC Holdings Corp., first sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. The business was bought by Gores Group LLC for $208 million in a bankruptcy sale. National Envelope, through NE OPCO, has returned to bankruptcy to pursue a plan of reorganization or sell the assets as a going concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a sale of the business with publicly traded competitor Cenveo Inc. In the new Chapter 11 case, the company has tapped the law firm Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP as financial adviser, and Epiq Bankruptcy Solutions as claims and notice agent. The Gores Group is represented by Weil, Gotshal and Manges LLP and Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht & Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition senior agent, is represented by Goldberg Kohn Ltd and DLA Piper. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP's Laura Davis Jones, Esq., Bradford J. Sandier, Esq., Robert J. Feinstein, Esq., and Peter J. Keane, Esq. Guggenheim Securities, LLC, serves as its investment banker and financial advisor. NET MEDICAL: Reports $1,000 Net Income in Second Quarter -------------------------------------------------------- Net Medical Xpress Solutions, Inc., filed its quarterly report on Form 10-Q, reporting net income of $1,000 on $1.2 million of gross revenues for the three months ended June 30, 2013, compared with a net loss of $12,000 on $960,000 of gross revenues for the same period last year. The Company reported net income of $54,000 on $2.4 million of gross revenues for the six months ended June 30, 2013, compared with a net loss of $35,000 on $1.9 million of gross revenues for the corresponding period of 2012. The Company's balance sheet at June 30, 2013, showed $1.1 million in total assets, $877,000 in total liabilities, and stockholders' equity of $270,000. "The Company has incurred cumulative net losses of approximately $15,287,000 since its inception and requires capital for its contemplated operational and marketing activities to take place. The Company's ability to raise additional capital through the future issuances of the common stock is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at http://is.gd/R7ULrW Albuquerque, New Mexico-based Net Medical Xpress Solutions, Inc., ervices, Inc., develops and markets proprietary Internet technology-based software. NETWORK CN: Incurs $749,000 Net Loss in Second Quarter ------------------------------------------------------ Network CN Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $749,294 on $150,318 of advertising services revenues for the three months ended June 30, 2013, as compared with net income of $1.15 million on $536,208 of advertising services revenues for the same period during the prior year. For the six months ended June 30, 2013, the Company reported a net loss of $1.77 million on $556,955 of advertising services revenues, as compared with net income of $534,947 on $942,983 of advertising services revenues for the same period a year ago. The Company's balance sheet at June 30, 2013, showed $1.09 million in total assets, $6.70 million in total liabilities and a $5.61 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/svSEJh About Network CN Causeway Bay, Hong Kong-based Network CN Inc. provides out-of-home advertising in China, primarily serving the needs of branded corporate customers. In the auditors' report on the consolidated financial statemetns for the period ended Dec. 31, 2012, Union Power Hong Kong CPA Limited, in Hong Kong SAR, expressed substantial doubt about Network CN's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses of $1.2 million, $2.1 million and $2.6 million for the years ended Dec. 31, 2012, 2011, and 2010, respectively. The Company reported a net loss of $1.2 million on $1.8 million of revenues in 2012, compared with a net loss of $2.1 million on $1.8 million of revenues in 2011. OHANA GROUP: Plan Outline Hearing Continued Until Sept. 27 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington continued until Sept. 27, 2013, at 9:30 a.m., the hearing to consider the adequacy of information in the Disclosure Statement explaining Ohana Group LLC's Plan of Reorganization. The hearing was originally set for Aug. 30. According to the Disclosure Statement, the Debtor will continue to operate the Fremont Village Square condominium development Project in the ordinary course of business. Funding for payments to creditors under the Plan will come from Cash on hand as of the Effective Date, and operating revenues. The Debtor or its designee will act as disbursing agent for payments and distributions due under the Plan. The secured claim of Wells Fargo, N.A., as trustee for the registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2007-C5 (the "Lender"), which filed a proof of claim of $13,434,336 on Jan. 25, 2013, will be satisfied through equal monthly principal and interest payments based upon a 30-year amortization schedule through the month prior to the Class 1 Maturity Date, with all amounts due and payable on the Class Maturity date. Holders of general unsecured claims will be paid in full in 12 equal monthly payments. Members will retain their interests following Confirmation but will receive no distributions on account of such interests (i) if there exists a default under payments owing to any Class, or (ii) if the Debtor will fail to make any payment due on the Effective Date. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/ohanagroup.doc115.pdf About Ohana Group LLC Ohana Group LLC, is a Washing limited liability company formed in 2006 for the purpose of managing and operating a mixed-used real property development located at 3601 Fremont Avenue N. in Seattle, Washington. The Company filed for Chapter 11 bankruptcy (Bankr. W.D. Wash. Case No. 12-21904) on Nov. 30, 2012. The Debtor's members are Patricia Cawdrey and Daniel Cawdrey, Jr. Judge Marc Barreca oversees the case. James I. Day, Esq., at Bush Strout & Kornfeld LLP, in Seattle, serves as bankruptcy counsel. The Law Offices of Brian H. Krikorian represents the Debtor as special counsel in connection with the litigation against one of the Debtor's former tenants. In its petition, the Debtor scheduled $16,000,000 in assets and $11,696,131 in liabilities. ORAGENICS INC: To Sell $30 Million Worth of Securities ------------------------------------------------------ Oragenics, Inc., filed with the U.S. Securities and Exchange Commission a Form S-3 registration statement relating to the sale of up to $30,000,000 of any combination of common stock, warrants and units. The Company currently intends to use the net proceeds from the sale of the securities for ongoing clinical development of lantibiotics, probiotics sales and marketing and for general corporate purposes, including research and development activities for the Company's other product candidates and any future product candidates that the Company may develop or acquire, as well as for general and administrative costs. The Company's common stock is listed on the NYSE MKT under the symbol "OGEN." The last reported sale price of the Company's common stock on Aug. 9, 2013, was $3.30 per share. A copy of the Form S-3 prospectus is available for free at: http://is.gd/mkIFnE About Oragenics Inc. Tampa, Fla.-based Oragenics, Inc. -- http://www.oragenics.com/-- is a biopharmaceutical company focused primarily on oral health products and novel antibiotics. Within oral health, Oragenics is developing its pharmaceutical product candidate, SMaRT Replacement Therapy, and also commercializing its oral probiotic product, ProBiora3. Within antibiotics, Oragenics is developing a pharmaceutical candidate, MU1140-S and intends to use its patented, novel organic chemistry platform to create additional antibiotics for therapeutic use. Oragenics incurred a net loss of $13.09 million in 2012, as compared with a net loss of $7.67 million in 2011. The Company's balance sheet at March 31, 2013, showed $8.82 million in total assets, $1.17 million in total liabilities, all current, and $7.64 million in total shareholders' equity. OSAGE EXPLORATION: Posts $30,000 Net Income in Second Quarter ------------------------------------------------------------- Osage Exploration and Development, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $30,702 on $2.39 million of total operating revenues for the three months ended June 30, 2013, as compared with a net loss of $613,484 on $1.35 million of total operating revenues for the same period a year ago. For the six months ended June 30, 2013, the Company reported a net loss of $42,723 on $4.81 million of total operating revenues, as compared with a net loss of $157,458 on $2.71 million of total operating revenues for the same period during the prior year. As of June 30, 2013, the Company had $27.11 million in total assets, $18.84 million in total liabilities and $8.26 million in total stockholders' equity. "The Company's operating plans require additional funds which may take the form of debt or equity financings. The Company's ability to continue as a going concern is in substantial doubt and is dependent upon achieving profitable operations and obtaining additional financing. There is no assurance additional funds will be available on acceptable terms or at all. In the event we are unable to continue as a going concern, we may elect or be required to seek protection from our creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence," the Company said in the quarterly report. A copy of the Form 10-Q is available for free at: http://is.gd/13JCQN About Osage Exploration Based in San Diego, California with production offices in Oklahoma City, Oklahoma, and executive offices in Bogota, Colombia, Osage Exploration and Development, Inc. (OTC BB: OEDV) -- http://www.osageexploration.com/-- is an independent exploration and production company with interests in oil and gas wells and prospects in the US and Colombia. Goldman, Kurland and Mohidin LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has an accumulated deficit as of Dec. 31, 2011. These conditions raise substantial doubt about the Company's ability to continue as a going concern. OVERSEAS SHIPHOLDING: Blasts Lenders' Bid to Limit Exclusivity -------------------------------------------------------------- Law360 reported that bankrupt Overseas Shipholding Group Inc. slammed an objection seeking to truncate its requested extension of the Chapter 11 exclusivity period, calling opposition from its bank lenders a "self-serving" attempt to gain leverage over other creditors. According to the report, the Oil tanker giant entered bankruptcy protection in November and is seeking to extend the period during which it is the only entity allowed to file a Chapter 11 plan. U.S. Bank NA, agent for a $1.5 billion credit agreement, filed a limited objection saying the Delaware court should limit the exclusivity. U.S. Bank argued that a four-month delay will only heap on more costs. U.S. Bank also contended that all of the major roadblocks for the New York-based oil tanker giant to negotiate with its creditors have been removed since filing for bankruptcy protection. About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. PANACHE BEVERAGE: Has $7.5-Mil. Accumulated Deficit at June 30 -------------------------------------------------------------- Panache Beverage, Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $935,888 on $1.4 million of revenues for the three months ended June 30, 2013, compared with a net loss of $760,038 on $671,041 of revenues for the same period last year. The Company reported a net loss of $1.7 million on $2.8 million of revenues for the six months ended June 30, 2013, compared with a net loss of $1.6 million on $1.0 million for the corresponding period of 2012. The Company' balance sheet at June 30, 2013, showed $6.4 million in total assets, $10.4 million in total liabilities, and a stockholders' deficit of $4.0 million. As of June 30, 2013, the Company had an accumulated deficit of $7.5 million. "Management has taken certain actions and continues to implement changes designed to improve the Company's financial results and operating cash flows. The actions involve certain cost-saving initiatives and growing strategies, including (a) reductions in operating expenses; and (b) expansion of the business model into new markets. Management believes that these actions will enable the Company to improve future profitability and cash flow in its continuing operations through June 30, 2014. As a result, the financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/Vek3Tt New York-based Panache Beverage, Inc., specializes in the strategic development and aggressive early growth of spirits brands establishing its assets as viable and attractive acquisition candidates for the major global spirits companies. Panache builds its brands as individual acquisition candidates while continuing to develop its pipeline of new brands into the Panache portfolio. * * * Silberstein Ungar, PLLC, in Bingham Farms, Michigan, expressed substantial doubt about the Company's ability to continue as a going concern, following its audit of the Company's financial statements for the year ended Dec. 31, 2012. The independent auditors noted that has negative working capital, and has incurred losses from operations. The Company reported a net loss of $3.3 million on $3.3 million of revenues in 2012, compared with a net loss of $1.5 million on $1.9 million of revenues in 2011. The Company's balance sheet at Dec. 31, 2012, showed $2.9 million in total assets, $5.7 million in total liabilities, and a stockholders' deficit of $2.8 million. A copy of the Company's 2012 annual report on Form 10-K is available at http://is.gd/55z8hx PEABODY ENERGY: Fitch Downgrades Issuer Default Rating to 'BB' -------------------------------------------------------------- Fitch Ratings has downgraded Peabody Energy Corporation's (Peabody; NYSE: BTU) Issuer Default Rating (IDR) to 'BB' from 'BB+'. The Rating Outlook has been revised to Stable from Negative. Key Rating Drivers: The downgrade results from Fitch's expectations for leverage above 4x for a prolonged period in advance of a full recovery of the seaborne coal markets. Peabody's credit ratings reflect large, well-diversified operations, good control of low-cost production, strong liquidity and high financial leverage following the acquisition of Macarthur Coal Limited for $4.8 billion in an all-cash transaction in 2011. Peabody is the largest private sector coal company, globally, with 28 mining operations producing primarily low-sulfur thermal coal from the Powder River Basin (PRB - 2012, 139 million tons), high heat thermal coal from the Illinois Basin (IB - 2012, 27 million tons), and thermal and metallurgical coal in Australia primarily for the seaborne markets (2012, 33 million tons). Proven and probable reserves are 9 billion tons. Earnings are supported by top line visibility in the U.S.; virtually all of 2013 shipments and 70%-80% of 2014 expected shipments are priced. Domestic segment adjusted EBITDA was $1.3 billion in 2012 and $535 million in first half of 2013. In 2012, domestic volumes dropped 5% to 193 million tons given industry- wide lower coal burns given extraordinarily cheap natural gas. The company's U.S. operations account for roughly 20% of U.S. coal production. Earnings are leveraged to metallurgical coal prices. The Australian segment comprises seaborne coking, PCI and steam coal sales. For the first half of 2013, the Australian adjusted EBITDA was $212.9 million on 16.9 million tons sold at an average realization of $87.84/ton compared with $536.3 million on 14.8 million tons sold at average realizations of $117.59/ton for the first half of 2012. Fitch's calculation of consolidated operating EBITDA for the half ended June 30, 2013 was $480 million compared with $952 million in the first half of 2012. Strong supply in the Asia Pacific region and slower demand growth are currently weighing on prices. There are indications that the domestic steam coal market has bottomed with improving coal burn, declining inventories and firmer contracting. Fitch expects softness in the seaborne thermal market through 2013 given ramp-up of new capacity. Metallurgical coal prices are likely to remain at depressed levels to flush excess supply out of the market; this could stretch into 2014. Liquidity is strong, with cash on hand of $518 million as of June 30, 2013 (of which approximately $350 million was in the U.S.) and availability under the company's $1.5 billion revolver of $1.4 billion after utilization for $112 million in letters of credit. Covenants under the bank facilities include an interest coverage minimum of 2.5 times (x) and a leverage maximum of 5.5x for 2013. Fitch anticipates that Peabody will operate within its covenants. Total debt with equity credit of $6 billion compares to latest 12 months (LTM) June 30, 2013 operating EBITDA of $1.3 billion at 4.5x. Free cash generation has been positive despite lower than anticipated earnings on capital and cost discipline. Peabody has substantial legacy liabilities and adjusted leverage is about 5.1x. Peabody has prepaid the 2013 and 2014 maturities of its term loans. Scheduled maturities of debt over the next five years are estimated at $352 million in 2015, $1.5 billion in 2016, and $9 million in 2017. Fitch expects Peabody to continue to focus on debt repayment while leverage is above 3x but thereafter to continue to invest in Australia and Asia to the extent of its excess free cash flow. Capital expenditure guidance for 2013 is between $350 million and $450 million. Fitch expects operating EBITDA of at least $1 billion and negative free cash flow of about $100 million in 2013. The Stable Outlook reflects Fitch's view that the coal markets are at or near the bottom of the cycle and should show slow recovery. Fitch expects leverage will be above 4.5x through 2014 dropping below 4x by the end of 2015. Ratings Sensitivities Negative: Future developments that may, individually or collectively, lead to a negative rating action include: -- Cash operating losses in Australia; -- Expectations of negative free cash flow in 2014; -- Failure to reduce debt. Positive: Future developments that may lead to a positive rating action are not anticipated over the next 12 months but may include: -- Leverage sustainably below 3.5x. Fitch has downgraded Peabody's ratings as follows: -- IDR to 'BB' from 'BB+'; -- Senior unsecured notes to 'BB' from 'BB+'; -- Senior unsecured revolving credit and term loans to 'BB' from 'BB+'; -- Convertible junior subordinated debentures due 2066 to 'B+' from 'BB-'. PEER REVIEW: Delays Form 10-Q for Second Quarter ------------------------------------------------ Peer Review Mediation and Arbitration, Inc., was not able to complete its financial statements for the period ended June 30, 2013. As a result, the Company was not able to file its quarterly report in a timely manner. About Peer Review Deerfield Beach, Fla.-based Peer Review Mediation and Arbitration, Inc., was incorporated in the State of Florida on April 16, 2001. The Company provides peer review services and expertise to law firms, medical practitioners, insurance companies, hospitals and other organizations in regard to personal injury, professional liability and quality review. The Company's balance sheet at Sept. 30, 2012, showed $1.8 million in total assets, $5.9 million in total liabilities, and a stockholders' deficit of $4.1 million. As reported in the TCR on Aug. 6, 2012, Peter Messineo, CPA, in Palm Harbor, Fla., expressed substantial doubt about Peer Review's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. Mr. Messineo noted that the Company has recurring losses from operations, a working capital deficit, negative cash flows from operations and a stockholders' deficit. PENSACOLA BEACH: American Fidelity Wants Case Dismissal ------------------------------------------------------- American Fidelity Life Insurance Company asks the U.S. Bankruptcy Court for the Northern District of Florida to dismiss the Chapter 11 case of Pensacola Beach, LLC, and prohibit the Debtor from filing for protection under the Bankruptcy Code for two years. American Fidelity notes that: 1) the Debtor, a single asset entity that owns the Marriott Springhill Suites located on Pensacola Beach, commenced the proceeding to avoid a foreclosure sale scheduled for May 3, 2013. The foreclosure sale had been ordered in the litigation between American Fidelity, the Debtor and David Brannen. 2) David Brannen is the Debtor's sole representative that has signed verifications and schedules as the managing member in the bankruptcy case, and he was the designated representative in the Debtor's Rule 2004 Examination conducted on June 10, 2013. American Fidelity asserts that case dismissal is appropriate because, among other things: 1. the case was filed in bad faith; 2. there is uncertainty of whether this bankruptcy is authorized; and 3. there is a substantial and continued loss and diminution of the estate. About Pensacola Beach, LLC Gulf Breeze, Florida-based Pensacola Beach, LLC, aka Springhill Suites by Marriott Pns Beach, filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 13-30569) on May 2, 2013. Judge William S. Shulman oversees the case. Sherry F. Chancellor, Esq., at The Law Office of Sherry F. Chancellor, serves as the Debtor's counsel. The Debtor also tapped Mark J. Proctor and Travis P. Lepicier and the law firm of Levin, Papantonio, Thomas, Mitchell, Rafferty and Proctor, P.A., as attorneys in regard to the British Petroleum/Deep Water Horizon Oil Spill claims. In its petition, Pensacola Beach estimated $10 million to $50 million in both assets and debts. The petition was signed by David Brannen, managing member. In its schedules, the Debtor disclosed $22,523,252 in assets and $16,655,337 in liabilities. The U.S. Trustee said that, until further notice, it will not appoint a committee of creditors in the Debtor's case. PENSACOLA BEACH: HighPoint Hospitality May Continue as Manager -------------------------------------------------------------- The Hon. William S. Shulman of the U.S. Bankruptcy Court for the Northern District of Florida authorized Pensacola Beach, LLC, to employ Highpointe Hospitality, Inc., doing business as Highpointe Hotel Corporation Management Company, to continue the daily management of the Marriott Springhill Suites, located on Pensacola Beach. The Debtor has agreed to pay Highpointe a basic management fee of 3 percent of the total net revenues, plus state sales taxes. Highpointe will be entitled to deduct its management fee from the general account. As reported in the Troubled Company Reporter on July 9, 2013, Highpointe will continue the daily management of the hotel, subject to the terms of the Management Agreement and Stipulated Order Regarding Management of Hotel and Dismissal of Highpointe Hospitality, Inc. as Defendant, dated March 25, 2010, entered in the Circuit Court In and For Escambia County, Florida, Case No. 2010-CA-810-J. Highpointe's duties will include: a. Recruit, train and hire and fire employees; b. Handle promotions, publicity, sales, and marketing; c. Maintain licenses and permits; d. Purchase inventory and and supplies; e. Coordinate entertainment, food & beverage services and amusement; f. Establish reservation services and policies; g. Receive, hold and distribute funds; h. Oversee necessary maintenance, repair, and cleaning i. Payment of employees; j. Obtain and maintain insurance; and k. Handle all other matters that the manager deems consistent to maintain good order and management. To the best of the Debtor's knowledge, Highpointe attests it is disinterested as required by Sec. 327 of the Bankruptcy Code. A copy of the Management Agreement is available at: http://bankrupt.com/misc/pensacola.doc106 About Pensacola Beach, LLC Gulf Breeze, Florida-based Pensacola Beach, LLC, aka Springhill Suites by Marriott Pns Beach, filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 13-30569) on May 2, 2013. Judge William S. Shulman oversees the case. Sherry F. Chancellor, Esq., at The Law Office of Sherry F. Chancellor, serves as the Debtor's counsel. The Debtor also tapped Mark J. Proctor and Travis P. Lepicier and the law firm of Levin, Papantonio, Thomas, Mitchell, Rafferty and Proctor, P.A., as attorneys in regard to the British Petroleum/Deep Water Horizon Oil Spill claims. In its petition, Pensacola Beach estimated $10 million to $50 million in both assets and debts. The petition was signed by David Brannen, managing member. In its schedules, the Debtor disclosed $22,523,252 in assets and $16,655,337 in liabilities. PENSACOLA BEACH: Plan Proposes Payments to American Fidelity ------------------------------------------------------------ Pensacola Beach, LLC, submitted to the U.S. Bankruptcy Court for the Northern District of Florida a Plan of Reorganization and an explanatory Disclosure Statement. According to the Disclosure Statement, the Debtor proposes that for a six-month period American Fidelity Life Insurance Company will continue to receive funds as they have been since the entry of the stipulated order regarding management of hotel and dismissal of Highpointe Hospitality, Inc. as defendant, dated March 25, 2010, and the order authorizing use of cash collateral entered by the Court. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/PENSACOLA_BEACH_ds.pdf Gulf Breeze, Florida-based Pensacola Beach, LLC, aka Springhill Suites by Marriott Pns Beach, filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 13-30569) on May 2, 2013. Judge William S. Shulman oversees the case. Sherry F. Chancellor, Esq., at The Law Office of Sherry F. Chancellor, serves as the Debtor's counsel. The Debtor also tapped Mark J. Proctor and Travis P. Lepicier and the law firm of Levin, Papantonio, Thomas, Mitchell, Rafferty and Proctor, P.A., as attorneys in regard to the British Petroleum/Deep Water Horizon Oil Spill claims. In its petition, Pensacola Beach estimated $10 million to $50 million in both assets and debts. The petition was signed by David Brannen, managing member. In its schedules, the Debtor disclosed $22,523,252 in assets and $16,655,337 in liabilities. PILGRIM'S PRIDE: Strong Performance Prompts Moody's Upgrade Watch ----------------------------------------------------------------- Moody's Investors Service placed the ratings of Pilgrim's Pride Corporation under review for upgrade, including its B2 Corporate Family Rating, B2-PD Probability of Default Rating, and Caa1 senior unsecured debt rating. Moody's also upgraded the company's Speculative Grade Liquidity Rating to SGL-1 from SGL-2. The review for upgrade reflects PPC's strengthening operating performance, the significant amount of debt repaid over the past year through free cash flow, and Moody's expectation than the operating environment of the U.S. chicken processing industry will remain favorable during most of the next 12 months. The review also reflects implicit support from the higher-rated controlling company, JBS S.A., which was confirmed at Ba3 in a separate rating action. The upgrade of the Speculative Grade Liquidity Rating to SGL-1 reflects PPC's very good liquidity profile evidenced by over $750 million of combined cash and borrowing capacity and Moody's expectation for positive free cash flow over the next twelve months. Moody's review will focus on PPC's long-term prospects for sustaining strong free cash flow and its priorities for future uses of cash. Moody's will also take into consideration any influence that JBS S.A. may have on PPC's credit profile in the future. Ratings Rationale: The B2 Corporate Family Rating reflects PPC's concentration in the highly competitive U.S. chicken industry, modest financial leverage, narrow profit margins, positive but volatile cash flow, and very good liquidity. The ratings are supported by the company's position as one the world's largest producers of poultry and by its majority ownership by Sao Paulo, Brazil-based JBS, S.A. (Ba3 negative), one of the largest protein processors in the world. The B2 CFR also incorporates the wide range of operating performance that is typical of the cyclical commodity chicken industry. At the top of the cycle, Moody's expects leverage to be very modest relative to the rating category. Conversely, at the bottom of the cycle Moody's can often tolerate leverage that is outside normal bounds for a given rating category for a limited period of time. Importantly, periods of high leverage should be balanced against ample access to external sources of liquidity. Pilgrim's Pride Corporation: Ratings under review for upgrade: (LGD assessments updated): Corporate Family Rating at B2; Probability of Default Rating at B2-PD; $500 million senior unsecured notes due 2018 at Caa1 (LGD 5, 86%) from Caa1 (LGD 5, 87%). Ratings upgraded and not under review: Speculative Grade Liquidity Rating to SGL-1 from SGL-2. Headquartered in Greeley, Colorado, Pilgrim's Pride Corporation (NYSE: PPC), is the second largest chicken producer in the world, with operations in the United States, Mexico and Puerto Rico. The company produces, processes, markets and distributes fresh, frozen and value-added chicken products to foodservice customers, distributors and retail operators worldwide. For the twelve months ended June 30, 2013, revenues for the company approximated $8.5 billion. Pilgrim's Pride is controlled by JBS, S.A. through an indirect 75% equity ownership stake. The principal methodology used in this rating was the Global Protein and Agriculture 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. PRESIDENTIAL REALTY: Incurs $514,000 Net Loss in Second Quarter --------------------------------------------------------------- Presidential Realty Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $514,426 on $215,802 of total revenues for the three months ended June 30, 2013, as compared with a net loss attributable to the Company of $421,792 on $192,566 of total revenues for the same period last year. For the six months ended June 30, 2013, the Company reported a net loss attributable to the Company of $924,473 on $429,907 of total revenues, as compared with a net loss attributable to the Company of $840,244 on $384,860 of total revenues for the same period a year ago. The Company's balance sheet at June 30, 2013, showed $15.83 million in total assets, $20.33 million in total liabilities and a $4.49 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/WH2L6U About Presidential Realty Headquartered in White Plains, New York, Presidential Realty Corporation, a real estate investment trust, is engaged principally in the ownership of income-producing real estate and in the holding of notes and mortgages secured by real estate or interests in real estate. On Jan. 20, 2011, Presidential stockholders approved a plan of liquidation, which provides for the sale of all of the Company's assets over time and the distribution of the net proceeds of sale to the stockholders after satisfaction of the Company's liabilities. Following the 2011 results, Holtz, Rubenstein Reminick LLP, in Melville, New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficiency. The Company reported a net loss of $6.16 million in 2011, compared with a net loss of $2.57 million in 2010. PROMMIS HOLDINGS: Has Until Oct. 14 to File Chapter 11 Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended Prommis Holdings, LLC, et al.'s exclusive periods to file a Chapter 11 Plan until Oct. 14, 2013, and solicit acceptances for that Plan until Dec. 13. As reported in the Troubled Company Reporter on July 23, 2013, Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice, LLP, said that the extension of exclusivity will afford the Debtors and their stakeholders an adequate runway to follow through on the plan process in the event that any course corrections are warranted, without the risk of the substantial additional costs and disruption that could follow an expiration of either of the Exclusive Periods. About Prommis Holdings Atlanta, Georgia-based Prommis Holdings, LLC, and its 10 affiliates delivered their petitions for voluntary bankruptcy under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10551) on March 18, 2013. Three subsidiaries -- EC Closing Corp., EC Closing Corp. of Washington, and EC Posting Closing Corp. -- sought Chapter 11 protection (Bankr. D. Del. Case Nos. 13-11619 to 13-11621) on June 25, 2013. Prommis Holdings estimated assets between $10 million and $50 million and debts between $50 million and $100 million. Prommis Solutions, LLC, a debtor-affiliate disclosed $18,488,803 in assets and $260,232,313 in liabilities as of the Chapter 11 filing. Judge Brendan Linehan Shannon presides over the case. Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice, LLP, serves as the Debtors' counsel, while David S. Meyer, Esq., at Kirkland & Ellis LLP serves as co-counsel. The Debtors' restructuring advisor is Huron Consulting Services, LLC. Donlin Recano & Company, Inc., is the Debtors' claims agent. The Official Committee of Unsecured Creditors tapped Saul Ewing LLP and Hahn & Hessen LLP as its co-counsels, and FTI Consulting, Inc., as its financial advisor. R&J NATIONAL: Court Dismisses Chapter 11 Case --------------------------------------------- The U.S. Bankruptcy Court has approved the motion filed by R&J National Enterprises, Inc., for voluntarily dismissal of its Chapter 11 case. The Debtor will pay the United States Trustee the appropriate sum required pursuant to 28 U.S.C. Sec. 1930(a)(6) within 10 days of the entry of the Court's Order and simultaneously file with the Court an affidavit of disbursements or monthly operating report through the date of the Court Order, indicating the cash disbursements for the relevant period since the last filed report through and including the date of the Order. Attorney for the Debtor can be reached at: Bradley S. Shraiberg, Esq. SHRAIBERG, FERRARA & LANDAU, P.A. 2385 NW Executive Center Drive, #300 Boca Raton, FL 33431 Tel.: 561-443-0800 Fax: 561-998-0047 E-mail: bshraiberg@sfl-pa.com R & J National Enterprises, Inc. filed a Chapter 11 petition (Bankr. D. Fla. Case No. 10-22765) on May 10, 2010 in West Palm Beach, Southern District of Florida. The Debtor estimated up to $50,000 in assets and up to $10 million in liabilities. RECEPTOS INC: Incurs $9.9-Mil. Net Loss in Second Quarter --------------------------------------------------------- Receptos, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $9.9 million on $1.2 million of collaborative revenue for the three months ended June 30, 2013, compared with a net loss of $3.3 million on $1.7 million of collaborative revenue for the same period last year. The Company reported a net loss of $17.5 million on $2.7 million of collaborative revenue for the six months ended June 30, 2013, compared with a net loss of $7.3 million on $3.0 million of collaborative revenue for the corresponding period of 2012. The Company's balance sheet at June 30, 2013, showed $92.6 million in total assets, $13.5 million in total liabilities, and stockholders' equity of $79.1 million. The report of the Company's independent registered public accounting firm on the Company's audited consolidated financial statements at Dec. 31, 2012, contained an explanatory paragraph that there was substantial doubt about the Company's ability to continue as a going concern. "Such an opinion could materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise. There is no assurance that sufficient financing will be available when needed to allow us to continue as a going concern. The perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations." A copy of the Form 10-Q is available at http://is.gd/cbpBFN San Diego, Calif.-based Receptos, Inc., is a biopharmaceutical company focused on discovering, developing and commercializing innovative therapeutics in immune disorders. REUTAX AG: Chapter 15 Case Summary ---------------------------------- Chapter 15 Debtor: Reutax AG Speyerer Strae 4 69115 Heidelberg, Germany Chapter 15 Case No.: 13-12135 Chapter 15 Petition Date: August 21, 2013 Court: District of Delaware (Delaware) Judge: Mary F. Walrath Chapter 15 Debtor's Counsel: Michael Joseph Custer, Esq. PEPPER HAMILTON LLP Hercules Plaza, Suite 5100 1313 Market Street, PO BOX 1709 Wilmington, DE 19899 Tel: (302) 777-6516 Fax: (302) 421-8390 E-mail: custerm@pepperlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Tobias Wahl, insolvency administrator and authorized foreign representative. REVSTONE INDUSTRIES: Bankrupt Unit Gets Nod on Chrysler, GM Pact ---------------------------------------------------------------- Law360 reported that a Delaware bankruptcy judge approved a sale support agreement between Revstone Industries LLC's bankrupt subsidiary Metavation Inc. and General Motors Co. and Chrysler Group Inc., which the debtor argued was crucial to the going- concern value of the affiliate leading up to a proposed $25 million stalking horse sale. According to the report, U.S. Bankruptcy Judge Brendan L. Shannon made his ruling over the objections from several creditors in the Revstone case -- which is not jointly administered with Metavation's -- including the creditors committee and major secured creditor. About Revstone Industries et al. Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP represents Revstone. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. Affiliate Metavation, also known as Hillsdale Automotive, LLC, also sought protection under Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No. 13-11831) to sell the bulk of its assets to industry rival Dayco for $25 million, absent higher and better offers. Metavation has tapped Pachulski as its counsel. Pachulski also serves as counsel to Revstone and Spara. Metavation also has tapped McDonald Hopkins PLC as special counsel, and Rust Consulting/Omni Bankruptcy as claims agent and to provide administrative services. Mark L. Desgrosseilliers, Esq., at Womble Carlyle Sandridge & Rice, LLP represents the Official Committee of Unsecured Creditors in Revstone's case. ROTECH HEALTHCARE: Grossman Pension Plan Quits Equity Panel ----------------------------------------------------------- Kenneth S. Grossman P.C. Pension Plan resigned as a member of the official committee of Rotech Healthcare Inc.'s equity security holders on Aug. 15, 2013. The Committee members are: 1. Alden Global Value Recovery Master Fund, L.P., c/o Alden Global Capital LLC Attn: Alex Zyngier, 885 Third Ave. New York, NY 10022 Tel: 212-418-6867 2. Bastogne Capital Partners, LP Attn: Vikas Tandon 2 Landmark Square, Ste. 212 Stamford, CT 06902 Tel: 203-965-8345 3. Varana Capital Master, L.P. Attn: Philip Broenniman 623 Fifth Ave., Ste. 3101 New York, NY 10022 Tel: 212-993-1564 4. Wynnefield Partners Small Cap Value, L.P. I Attn: Stephen Zelkowicz 450 Seventh Ave., Ste. 509 New York, NY 10123 Tel: 212-760-0278 Fax: 212-760-0824 Attorney assigned to this case can be reached at: Jane M. Leamy, Esq. Tel: (302) 573-6491 Fax: (302) 573-6497 Debtors' Counsel can be reached at: Joseph M. Barry, Esq. Tel: (302) 571-6600 Fax: (302) 571-1253 About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP is the special healthcare regulatory counsel; Barclays Capital Inc. is the financial advisor; Alix Partners, LLP is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders are represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The Equity Panel is represented by Bayard, P.A. as Delaware counsel. The plan is supported by holders of a majority of the first- and second-lien secured notes. The $290 million in 10.5 percent second-lien notes are to be exchanged for the new equity. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTECH HEALTHCARE: Equity Panel Retains Cooley LLP as Counsel ------------------------------------------------------------- The Official Committee of Equity Security Holders of Rotech Healthcare, Inc., et al., asks the U.S. Bankruptcy Court for authority to retain Cooley LLP as lead replacement counsel. Ronald R. Sussman, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP is the special healthcare regulatory counsel; Barclays Capital Inc. is the financial advisor; Alix Partners, LLP is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders are represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The Equity Panel is represented by Bayard, P.A. as Delaware counsel. The plan is supported by holders of a majority of the first- and second-lien secured notes. The $290 million in 10.5 percent second-lien notes are to be exchanged for the new equity. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTECH HEALTHCARE: Equity Panel Taps Bayard as Replacement Counsel ------------------------------------------------------------------ The Official Committee of Equity Security Holders of Rotech Healthcare Inc. et al, ask the U.S. Bankruptcy Court for permission to retain Bayard, P.A. as Delaware replacement counsel. Neil B. Glassman, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP is the special healthcare regulatory counsel; Barclays Capital Inc. is the financial advisor; Alix Partners, LLP is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders are represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The plan is supported by holders of a majority of the first- and second-lien secured notes. The $290 million in 10.5 percent second-lien notes are to be exchanged for the new equity. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTECH HEALTHCARE: Noteholders Rip Bid to Junk Make-Whole Claims ---------------------------------------------------------------- BankruptcyData reported that Rotech Healthcare's second lien noteholders filed with the U.S. Bankruptcy Court an objection to official committee of equity security holders' motion to disallow any make-whole payment under the Debtors' second lien indenture. The objection explains, "The Motion to Disallow -- which seeks an order prohibiting hypothetical 'makewhole' payments to creditors that are receiving no cash on account of their Second Lien Notes and are instead investing $157.5 million in new capital to fund the amended Plan -- highlights the truly untenable position that the Equity Committee has adopted in these cases. Without regard to the disputed 'makewhole,' the Debtors have approximately $647.5 million in secured and unsecured debt. In 2012, the Debtors generated $30.3 million in free cash flow (EBITDA minus Capex), and that number is projected to decline in 2013. Based on their performance and projections, the Debtors cannot even service the approximately $300 million of debt that is senior to the Second Lien Notes. Litigation over a 'makewhole' for Second Lien Noteholders, who are owed $320 million and are receiving no cash or new debt on account of their claims, is a pointless and wasteful exercise. The Motion to Disallow should be denied because it does not present any live case or controversy. As will be demonstrated, the Debtors' enterprise value is far below their $647.5 million in debt. All available evidence shows that the Debtors are insolvent, and the Equity Committee's own valuation expert has not opined to the contrary. Since the Second Lien Noteholders are not being paid in full on their claims for principal and accrued interest, the allowance or disallowance of the Make-Whole Payment is academic. The Motion to Disallow thus does not present a real-world dispute for resolution." Rotech Healthcare and Wilmington also filed separate joinders to the objection. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP is the special healthcare regulatory counsel; Barclays Capital Inc. is the financial advisor; Alix Partners, LLP is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders are represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The plan is supported by holders of a majority of the first- and second-lien secured notes. The $290 million in 10.5 percent second-lien notes are to be exchanged for the new equity. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. RURAL/METRO CORP: 3-Member Creditors' Committee Appointed --------------------------------------------------------- Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed three members to the committee of unsecured creditors in the Chapter 11 cases of Rural/Metro Corporation, et al. The Committee members are: 1. Wilmington Trust National Association Attn: Geoffrey J. Lewis and Steven Cimalore Rodney Square North 1100 North Market Street Wilmington, DE 19890 Phone: 302-636-6438 E-Mail: GLewis@WilmingtonTrust.com 2. Henry Schein, Inc. Attn: Timothy Ingoelia 135 Duryea Road Melville, NY 11747 Phone: 631-843-5500 Fax: 631-845-2864 E-Mail: Timothy.Ingoelia@HenrySchein.com 3. Brownstone Investment Group Attn: Robert Stevens 5055th Ave., New York 10017 Phone: 212-905-0559 E-Mail: RStevens@brownstone.com Mark S. Kenney, Esq., for T. Patrick Tinker, Assistant U.S. Trustee. About Rural/Metro Corporation Headquartered in Scottsdale, Arizona, Rural/Metro Corporation -- http://www.ruralmetro.com-- is a national provider of 911- emergency and non-emergency interfacility ambulance services and private fire protection services, operating in 21 states and nearly 700 communities. Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District of Delaware. The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq., Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, serve as the Debtors' local Delaware counsel. Alvarez & Marsal Healthcare Industry Group, LLC, and FTI Consulting, Inc., are the Debtors' financial advisors, while Lazard Freres & Co. L.L.C. is their investment banker. Donlin, Recano & Company, Inc., is the Debtors' claims and noticing agent. SEAFOOD SHANTY: Spring Township Restaurant Closes ------------------------------------------------- Seafood Shanty has closed, according to a handwritten note posted on the door of the Spring Township restaurant, in Pennsylvania. The report notes in June, owner Eddie Riegel said the Reading Eagle reports that Seafood Shanty has closed, according to a handwritten note posted on the door of the Spring Township restaurant. The report notes in June, owner Eddie Riegel said the business had filed for Chapter 11 bankruptcy and would continue to operate during bankruptcy reorganization. However, a note on the door Saturday said the restaurant was closed and referred all inquiries to the phone number of the owner's company in Exeter Township. Mr. Riegel did not immediately respond to questions about the closing. SEARS HOLDINGS: B3 CFR Unchanged Following Poor 2Q Results ---------------------------------------------------------- Moody's Investors Service said that while Sears Holdings' weak second quarter results are a credit negative for the company, there is no immediate impact on the company's B3 Corporate Family Rating, the SGL-2 Speculative Grade Liquidity rating or the stable rating outlook. Sears Holdings is an integrated retailer with almost 2,500 full- line and specialty retail stores in the US and Canada primarily operating under the "Sears" and "Kmart" brands. START SCIENTIFIC: Incurs $161K Net Loss in Second Quarter --------------------------------------------------------- Start Scientific, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $161,302 for the three months ended June 30, 2013, compared with a net loss of $426,788 for the same period last year. The Company reported a net loss of $316,730 for the six months ended June 30, 2013, compared with a net loss of $493,925 for the corresponding period of 2012. The Company generated net revenues of $-0- for the three and six month periods ended June 30, 2013, and 2012. "The lack of revenues is mainly the result of the change in our business model from a reseller of computer hardware and software to an oil and gas exploration and development company." The Company's balance sheet at June 30, 2013, showed $25.2 million in total assets, $1.4 million in total liabilities, and stockholders' equity of $23.8 million. "As reported in its Annual Report on Form 10-K for the year ended Dec. 31, 2012, the Company has incurred operating losses of $5,921,881 from inception of the Company through Dec. 31, 2012. The Company's accumulated deficit at June 30, 2013, was $6,238,611 and had a working capital deficit, continued losses, and negative cash flows from operations. These factors combined, raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/guPIt7 San Antonio, Tex.-based Start Scientific, Inc., was, prior to April 2012, a reseller of technology-related hardware and software, including laptops, desktops, networking devices, telecommunication systems and networks, servers and software. In April, 2012 in connection with the acquisition of two separate one-fourth (1/4) working interests in certain oil and gas leases located in Yazoo County, Mississippi, the Company's principal business became the exploration, development, and production of oil and gas interests. On May 16, 2012, the Company entered into an agreement to acquire all of the outstanding shares of Carpathian Energy SRL, in exchange for 90,000,000 shares of restricted common stock of the Company. Carpathian is a Romanian limited liability company engaged in oil & gas exploration and development. Pursuant to the terms of agreement entered into in connection with the Acquisition, the former owners of Carpathian may rescind the Acquisition and reclaim the shares of Carpathian in the event that the Company does not invest at least $5 million toward development of Carpathian's oil and gas assets. STEWART & STEVENSON: Moody's Withdraws All Ratings -------------------------------------------------- Moody's Investors Service has withdrawn all assigned ratings to Stewart & Stevenson LLC. The company used proceeds from perpetual preferred units to repay in full its 10% senior notes due 2014. Moody's withdrew the Corporate Family Rating and Probability of Default Rating as well. Ratings withdrawn: Issuer: Stewart & Stevenson LLC B2 Corporate Family Rating B2-PD Probability of Default Rating SGL-3 Speculative Grade Liquidity Rating Caa1, LGD5 - 83% Senior Unsecured Regular Bond/Debenture Rating outlook withdrawn Ratings Rationale: Stewart & Stevenson LLC is a private company headquartered in Houston, TX that designs, manufactures and provides specialized equipment for the oil and gas industry, among various others. The company operates through two business segments: manufacturing and distribution. Products include equipment used in hydraulic fracturing, well stimulation, workover, intervention and drilling operations. STOCKTON, CA: Lawyer Says Plan Won't Interfere with Talks --------------------------------------------------------- Steven Church, writing for Bloomberg News, reported that representatives of Stockton, California, met with creditors and a mediator on Aug. 23 in an effort to win support for a proposal it will file in court next month to cut debt and exit bankruptcy, the city's lead attorney said. According to the report, that proposal would be a so-called cramdown plan, Marc A. Levinson, the attorney for Stockton, said in an e-mail dated Aug. 23, 2013. That means the plan lacks widespread support among creditors. By meeting with the mediator, U.S. Bankruptcy Judge Elizabeth Perris of Oregon, the city could reach a deal with some creditors before the plan is submitted, Levinson said. "The goal is to change it to a consensual plan before it is filed," Levinson said he told the federal judge overseeing Stockton's bankruptcy, the report related. "That, of course, depends on whether the mediation results in deals." Stockton, an agricultural center of 296,000 about 80 miles (130 kilometers) east of San Francisco, is among four municipalities that have said they will ask creditors including bondholders to take less than the principal they are owed, the report noted. The others are Detroit, San Bernardino, California, and Jefferson County, Alabama. Should Stockton file a cramdown plan, it can still try to negotiate a settlement, Levinson said, the report further related. About Stockton, Cal. The City of Stockton, California, filed a Chapter 9 petition (Bankr. E.D. Cal. Case No. 12-32118) in Sacramento on June 28, 2012, becoming the largest city to seek creditor protection in U.S. history. The city was forced to file for bankruptcy after talks with bondholders and labor unions failed. Stockton estimated more than $1 billion in assets and in excess of $500 million in liabilities. The city, with a population of about 300,000, identified the California Public Employees Retirement System as the largest unsecured creditor with a claim of $147.5 million for unfunded pension costs. In second place is Wells Fargo Bank NA as trustee for $124.3 million in pension obligation bonds. The list of largest creditors includes $119.2 million owing on four other series of bonds. The city is being represented by Marc A. Levinson, Esq., and John W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The petition was signed by Robert Deis, city manager. Mr. Levinson also represented the city of Vallejo, Cal. in its 2008 bankruptcy. Vallejo filed for protection under Chapter 9 (Bankr. E.D. Cal. Case No. 08-26813) on May 23, 2008, estimating $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Vallejo Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. Bankruptcy Judge Michael McManus released Vallejo from bankruptcy on Nov. 1, 2011. The bankruptcy judge on April 1, 2013, ruled that the city of Stockton is eligible for municipal bankruptcy in Chapter 9. SUNEDISON INC: IPO of Semiconductor Unit Won't Impact 'B3' CFR -------------------------------------------------------------- Moody's Investors Service said SunEdison, Inc.'s B3 corporate family rating is not affected by the announced plan for an initial public offering (IPO) of a minority stake in SunEdison's Semiconductor Materials segment, though it is credit positive. SunEdison, Inc., based in St. Peters, Missouri, is a supplier of polysilicon semiconductor wafers to semiconductor foundries and integrated device manufacturers and develops, constructs, and operates solar energy power projects. SUNRISE BANK: FDIC Named as Receiver; First Fidelity Gets Deposits ------------------------------------------------------------------ Sunrise Bank of Arizona, Phoenix, Arizona, was closed by the Arizona Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Fidelity Bank, National Association, Oklahoma City, Oklahoma, to assume all of the deposits of Sunrise Bank of Arizona. The six branches of Sunrise Bank of Arizona will reopen as branches of First Fidelity Bank, National Association during their normal business hours. Depositors of Sunrise Bank of Arizona will automatically become depositors of First Fidelity Bank, National Association. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Sunrise Bank of Arizona should continue to use their existing branch until they receive notice from First Fidelity Bank, National Association that it has completed systems changes to allow other First Fidelity Bank, National Association branches to process their accounts as well. Friday evening and over the weekend, depositors of Sunrise Bank of Arizona were able to access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of June 30, 2013, Sunrise Bank of Arizona had approximately $202.2 million in total assets and $196.9 million in total deposits. In addition to assuming all of the deposits of the failed bank, First Fidelity Bank, National Association agreed to purchase essentially all of the assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $17.0 million. Compared to other alternatives, First Fidelity Bank, National Association's acquisition was the least costly resolution for the FDIC's DIF. Sunrise Bank of Arizona is the 20th FDIC-insured institution to fail in the nation this year, and the third in Arizona. The last FDIC-insured institution closed in the state was Central Arizona Bank, Scottsdale, on May 14, 2013. SWIFT AIR: Obtains Conditional Approval in Bankruptcy Court ----------------------------------------------------------- On Aug. 23, the U.S. Bankruptcy Court, District of Arizona granted conditional approval to Swift Air of its proposed second amended disclosure statement and authorized the company to immediately begin the process of soliciting creditor acceptances of its proposed plan of reorganization. The Bankruptcy Court has also scheduled a confirmation hearing with regard to the company's reorganization plan for September 30, 2013. In an important development, the Official Creditors' Committee in the company's chapter 11 reorganization case indicated its full support and endorsement of the company's plan and strategies for emergence from bankruptcy, anticipated to occur by mid-October. In addition, the Bankruptcy Court authorized the company to secure additional Boeing 737 aircraft supporting the current VIP clientele as well as serving new customers with the planned diversification into the ACMI market. Following the Aug. 23 proceedings, Swift's CEO Jeff Conry said, "This is an important milestone in the company's continuing steps to emerge from chapter 11 in the very near future. We are gratified to have the support of our plan sponsor, Nimbos Holdings, as well as the Official Creditors' Committee. We will continue to work cooperatively with our key constituents to assure our plan is approved by the Court at the September 30th hearing, with a view toward emerging from bankruptcy protection in, or about, mid-October. About Swift Air LLC Swift Air LLC filed a Chapter 11 petition in its home-town in Phoenix (Bankr. D. Ariz. Case No. 12-14362) on June 27, 2012. Michael W. Carmel, Ltd., serves as counsel. The Debtor estimated assets of under $1 million and debts exceeding $10 million. TC GLOBAL: Dempsey Out of Investment Group ------------------------------------------ KOMO News reports that actor Patrick Dempsey bid farewell to ownership of the Tully's Coffee chain that his investment group, Global Baristas, rescued from Chapter 11 bankruptcy less than a year ago. Global Baristas completed its $9.15 million acquisition of Tully's Coffee chain in July after winning a bankruptcy auction in January, beating out a combined rival bid of about $10.6 million from AgriNurture Inc. and Starbucks Corp. According to KOMO News, reports show Mr. Dempsey filed a lawsuit Tuesday, suing his business partner, Michael Avenatti, for taking a $2 million loan against Tully's assets without Mr. Dempsey's knowledge. In a statement released early Friday, Messrs. Dempsey and Avenatti, and Global Baristas announced a tentative agreement to terminate the recent litigation, and resolve the disagreement amongst themselves. KOMO says the settlement is confidential. Hours later, according to KOMO News, Mr. Dempsey was quoted in a press release saying "Although Michael and I have dissolved our business relationship, I am happy to have been a part of the effort that brought awareness to the Tully's brand. I wish the Company and Michael all the best." "I am happy that we have resolved our differences and have put this behind us, and I know we each wish the other well in our respective future endeavors," Mr. Dempsey added. About TC Global Headquartered in Seattle, Washington, TC Global, Inc., dba Tully's Coffee -- http://www.tullyscoffeeshops.com/-- is a specialty coffee retailer and wholesaler. Through company owned, licensed and franchised specialty retail stores in Washington, Oregon, California, Arizona, Idaho, Montana, Colorado, Wyoming and Utah, throughout Asia with Tully's Coffee International, and with its global alliance partner Tully's Coffee Japan, Tully's premium coffees are available at 545 branded retail locations globally. TC Global Inc. filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 12-20253-KAO) on Oct. 10, 2012. The Debtor is represented by attorneys at Bush Strout & Kornfeld LLP, in Seattle. The Debtor disclosed assets of $4.9 million and debt totaling $3.7 million, including $2.6 million in unsecured claims. The Seattle-based chain has 57 company-owned stores and 12 franchised. There are another 71 franchises in grocery stores, schools and airports. Tully's will close nine stores following bankruptcy. Tully's sold the wholesale and distribution business in 2009, generating $40 million that allowed a $5.9 million distribution to shareholders. TOUCHPOINT METRICS: Incurs $140K Net Loss in Second Quarter ----------------------------------------------------------- Touchpoint Metrics, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $139,851 on $273,325 of total revenue for the three months ended June 30, 2013, compared with a net loss of $89,946 on $165,283 of total revenue for the same period last year. The Company reported a net loss of $295,618 on $539,713 of total revenue for the six months ended June 30, 2013, compared with a net loss of $297,798 on $288,124 of total revenue for the corresponding period of 2012. The Company's balance sheet at June 30, 2013, showed $1.5 million in total assets, $344,064 in total liabilities, and stockholders' equity of $1.2 million. "As reflected in the consolidated financial statements included in this report, for the six months ended June 30, 2013, we had a net loss of $295,618, and a net loss of $306,948 for the year ended Dec. 31, 2012. We have had material operating losses and have not yet created positive cash flows. These factors raise substantial doubt as to our ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/H4QtHH San Francisco, Calif.-based Touchpoint Metrics, Inc., is engaged in the business of developing and delivering technology-enabled products and services that improve customer experience management capabilities for corporations. TECHPRECISION CORP: KPMG LLP Raises Going Concern Doubt ------------------------------------------------------- TechPrecision Corporation filed with the U.S. Securities and Exchange Commission on Aug. 16, 2013, its annual report on Form 10-K for the year ended March 31, 2013. KPMG LLP, in Philadelphia, Pa., said that the Company was not in compliance with the fixed charges and interest coverage financial covenants under their credit facility, and the Bank has not agreed to waive the non-compliance with the covenants. "Since the Company is in default, the Bank has the right to accelerate payment of the debt in full upon 60 days written notice. The Company has suffered recurring losses from operations, and the Company's liquidity may not be sufficient to meet its debt service requirements as they come due over the next twelve months." The Company reported a net loss of $2.4 million on $32.5 million of sales for the year ended March 31, 2013, compared with a net loss of $2.1 million on $33.3 million of sales in fiscal 2012. Loss from operations was $1.6 million in fiscal 2013 compared to an operating loss of $3.4 million in fiscal 2012. For fiscal 2013, the Company recorded tax expense of $472,331 compared with a tax benefit of $1.5 million in fiscal 2012. The Company's balance sheet at March 31, 2013, showed $21.6 million in total assets, $11.5 million in total liabilities, and stockholders' equity of $10.1 million. A copy of the Form 10-K is available at http://is.gd/l3ExZx TechPrecision Corporation (OTC BB: TPCSE), through its wholly owned subsidiaries, Ranor, Inc., and Wuxi Critical Mechanical Components Co., Ltd., globally manufactures large-scale, metal fabricated and machined precision components and equipment. TRIBUNE CO: Koch Brothers Decide Not to Buy Newspapers ------------------------------------------------------ Reuters reported that Charles and David Koch, two of the world's richest men, have walked away from talks to buy the Tribune Co's newspaper assets, concluding that the papers were not economically viable. According to the report, their company, Koch Industries, continues to have an interest in the media business and is exploring a broad range of opportunities, spokeswoman Melissa Cohlmia said, confirming a report on their Tribune decision by the Daily Caller news website. The Daily Caller said the brothers had decided not to pursue the newspapers, which include the Chicago Tribune and the LA Times, as Tribune Co plans for them to be separated from web sites like CareerBuilder.com which could leave the newspapers without an important source of revenue, the report said. Koch Industries is a sprawling conglomerate whose holdings include crude oil and natural gas pipelines, paper products like Dixie Cups and Angel Soft toilet tissue, and cattle ranches. The brothers are known for their conservative views. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors listed $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP served as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP served as the Committee's financial advisor. Landis Rath Moelis & Company served as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represented the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending four years of reorganization. The reorganization allowed a group of banks and hedge funds, including Oaktree Capital Management and JPMorgan Chase & Co., to take over the media company. 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 68.80 cents-on-the- dollar during the week ended Friday, August 23, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.70 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, 2014. Moody's withdraws the bank debt and Standard & Poor's has not rated the bank debt. 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." UNIVERSAL HEALTH: Trustee Hires E-Hounds as Imaging Consultant -------------------------------------------------------------- Soneet R. Kapila, as the duly appointed Chapter 11 Trustee for the estate of Universal Health Care Group, Inc., asks the U.S. Bankruptcy Court for permission to employ E-Hounds, Inc. as a forensic imaging consultant and to approve the compensation negotiated between the Trustee and E-Hounds. The Chapter 11 Trustee seeks to employ E-Hounds to perform forensic imaging of servers and computers belonging to Universal and/or AMC. The firm attests that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Attorneys for the Chapter 11 Trustee and American Managed Care, LLC can be reached at: Roberta A. Colton, Esq. Rhys P. Leonard, Esq. TRENAM, KEMKER, SCHARF, BARKIN, 101 E. Kennedy Blvd., Suite 2700 Tampa, FL 33602 Tel: (813) 223-7474 E-mail: rcolton@trenam.com rleonard@trenam.com About Universal Health Care Universal Health Care Group, Inc., owns an insurance company and three health-maintenance organizations that provide managed care services for government sponsored health care programs, focusing on Medicare and Medicaid. Universal Health was founded in 2002 by Dr. A.K. Desai and grew its operations of offering Medicare plans to more than 37,000 members to over 20 states. Universal Health filed a Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida regulators moved to put two of the company's subsidiaries in receivership. Universal Health Care estimated assets of up to $100 million and debt of less than $50 million in court filings in Tampa, Florida. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, serves as counsel to the Debtor. URBAN AG. CORP: Incurs $448K Net Loss in Second Quarter ------------------------------------------------------- Urban AG. Corp filed its quarterly report on Form 10-Q, reporting a net loss of $448,014 on $163,936 of revenue for the three months ended June 30, 2013, compared with a net loss of $989,956 on $1.7 million of revenue for the same period last year. The Company reported a net loss of $772,949 on $385,023 of revenue for the six months ended June 30, 2013, compared with a net loss of $1.0 million on $3.5 million of revenue for the corresponding period of 2012. The Company' balance sheet at June 30, 2013, showed $3.4 million in total assets, $12.6 million in total liabilities, and a stockholders' deficit of 9.2 million. The Company said: "The Company has experienced substantial losses, has a working capital deficiency of approximately $12.3 million, a stockholders' deficit of approximately $9.2 million and is in default on several financial obligations at June 30, 2013, which raises substantial doubt about the Company's ability to continue as a going concern "Additionally, the Company's accounts receivable financing arrangement has been terminated by the lender. Also, as of June 30, 2013, the Company has delinquent payroll taxes of approximately $1.2 million." A copy of the Form 10-Q is available at http://is.gd/KjhU8t North Andover, Massachusetts-based Urban AG. Corp, through its wholly-owned subsidiary CCS Environmental World Wide, Inc., provides hazardous material abatement and environment remediation services. VENTURE HOLDINGS: JPMorgan Succeeds in Guaranty Suit v. Winget -------------------------------------------------------------- District Judge Avern Cohn granted JPMorgan Chase Bank, N.A.'s motion for summary judgment and rejected the defenses raised by Larry Winget and the Larry Winget Living Trust in the bank's suit against Winget et al. to enforce a guaranty and two pledge agreements entered into by Winget and the Winget Trust in 2002 in which they guaranteed the obligations of Venture Holdings Company, LLC, a company owned and controlled by Winget and/or the Winget Trust. JPMorgan is the Administrative Agent for a group of lenders that extended credit to Venture. Venture defaulted on the loan in 2003 when it filed a Chapter 11 bankruptcy petition. Deluxe filed a Chapter 11 bankruptcy petition in 2004. Both Venture's and Deluxe's bankruptcy cases were subsequently converted to Chapter 7 proceedings, and bankruptcy trustees were appointed. The Venture and Deluxe bankruptcy proceedings have largely been wound down. The cases are In re NM Holdings Co., LLC, No. 03-48939 (E.D. Mich. Bankr.; and In re Deluxe Pattern Corp., No. 04-54977 (E.D. Mich. Bankr.). As of Aug. 31, 2012, more than $425,113,115.59 in principal remains on the Venture debt after accounting for distributions from the bankruptcy proceedings. In spring 2005, the Venture and Deluxe debtors-in-possession sold their operating assets as going concern. The Operating Assets Sale was carried out under an Asset Purchase Agreement, and the buyer acquired all of Venture's and Deluxe's assets except for those specifically excluded under the Agreement. The bankruptcy court approved the sale; it closed on May 2, 2005. According to Judge Cohn's decision, "Chase has been in this Court since 2005 seeking to enforce Winget's guarantee of Venture's debt. The dispute has moved forward slowly, sometimes stalled. What we have seen is an enormous amount of attorney effort to get to this day. While the issue for trial has been defined as 'whether there is any more 'other collateral' that Chase has not yet made reasonable efforts to collect on which remains unliquidated,' the reality of what is left is unclear. What is left for the Court to deal with before a final judgment enters will be discussed at a status conference on Tuesday, September 24, 2013 at 2:00 pm. Prior to the conference, Chase shall file a proposed judgment on the summary judgment motion as well as advising the Court in advance of the conference as to what remains before the case is closed." A copy of the Court's Aug. 21, 2013 Memorandum and Order is available at http://is.gd/y6IHTRfrom Leagle.com. The case is JP MORGAN CHASE BANK, N.A., Plaintiff/Counter- Defendant, v. LARRY WINGET and the LARRY WINGET LIVING TRUST, Defendants/Counter-Plaintiffs, Case No. 08-13845 (E.D. Mich.). JPMorgan Chase Bank, N.A., is represented by Melville W. Washburn, Esq. -- mwashburn@sidley.com -- at Sidley, Austin; and William T. Burgess, Esq. -- wburgess@dickinsonwright.com -- at Dickinson Wright. Larry J. Winget and Larry J Winget Living Trust are represented by: John E. Anding, Esq. Theodore J. Westbrook, Esq. Thomas V. Hubbard, Esq. DREW, COOPER, & ANDING Aldrich Place, Suite 200 80 Ottawa Avenue NW Grand Rapids, MI 49503 E-mail: janding@dca-lawyers.com twestbrook@dca-lawyers.com thubbard@dca-lawyers.com About Venture Holdings Headquartered in Fraser, Michigan, Venture Holdings Company, LLC, nka NM Holdings Company, LLC, and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. Mich. Case No. 03-48939) on March 28, 2003. Deluxe Pattern Corporation and its debtor- affiliates filed for chapter 11 protection on May 24, 2004 (Bankr. E.D. Mich. Case No. 04-54977). Venture's prepetition lenders acquired Venture's assets during the chapter 11 proceeding. John A. Simon, Esq., at Foley & Lardner LLP represented the Debtors. On Jan. 17, 2006, the Court converted the Debtors' chapter 11 cases to chapter 7 liquidation. Stuart A. Gold was appointed as the chapter 7 Trustee for the Debtors' estates. WEIGHT WATCHERS: Membership Woes Cue Moody's to Lower CFR to Ba2 ---------------------------------------------------------------- Moody's Investors Service downgraded the debt ratings of Weight Watchers' International. The Corporate Family rating was revised to Ba2 from Ba1, the Probability of Default rating was dropped to Ba3-PD from Ba2-PD and the senior secured credit facility ratings were downgraded to Ba2 from Ba1. In addition, a Speculative Grade Liquidity rating of SGL-2 was assigned. The ratings outlook was revised to negative from stable. Ratings Rationale: "Weight Watchers has been seemingly slow to react to accelerating declines in meeting attendance and growing competition from internet-based calorie counting services, focusing instead on longer term business to business initiatives," noted Edmond DeForest, Moody's Senior Analyst. The downgrade to Ba2 CFR reflects Moody's expectation for continued declines in revenues, profits and free cash flow, resulting in debt to EBITDA (all financial metrics reflect Moody's standard adjustments) remaining above 4.5 times. Moody's anticipates Weight Watchers will experience further declines in meeting attendance, paid weeks and fees in 2013 before stabilizing in 2014; these important operating metrics have declined for 6 straight quarters. However, Weight Watchers is highly profitable and free cash flow generative, with Moody's expecting pre-tax income of over $300 million per year and over $200 million a year in free cash flow. Liquidity from free cash flow, an unused $250 million revolving credit facility and about $120 million of cash is considered good. The negative ratings outlook reflects Moody's concerns that stabilization of meeting attendance and paid weeks may not occur by early 2014, which could result in debt to EBITDA remaining at about 4.5 times for a prolonged period. The ratings outlook could be stabilized if meeting attendance and paid weeks stabilize and revenue and profit declines subside, resulting in Moody's adjusted debt to EBITDA of less than 4 times and free cash flow to debt of about 10%. A further downgrade to ratings is possible if meeting attendance, paid weeks and fees do not stabilize, resulting in greater than anticipated declines in revenues and profits, or if operating profit margins decline, or if Moody's anticipates any departure from the company's deleveraging commitment. Downgrades: Corporate Family Rating, Downgraded to Ba2 from Ba1 Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD Senior Secured Revolving Credit Facility due Apr 2, 2018, Downgraded to Ba2 (LGD3, 33%) from Ba1 (LGD3, 33%) Senior Secured Term Loan due Apr 2, 2016, Downgraded to Ba2 (LGD3, 33%) from Ba1 (LGD3, 33%) Senior Secured Term Loan due Apr 2, 2020, Downgraded to Ba2 (LGD3, 33%) from Ba1 (LGD3, 33%) Assignments: Speculative Grade Liquidity Rating, Assigned SGL-2 Outlook Actions: Outlook, Changed To Negative From Stable The principal methodology used in this rating was 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. Weight Watchers is a leading global provider of weight management services and a leading global branded consumer company. * Morgan Drexen Asks Judge to Halt CFPB's Data Mining Countersuit ----------------------------------------------------------------- First thing's first. Morgan Drexen has asked a federal judge to put a stop to a lawsuit filed last week by the Consumer Financial Protection Bureau (CFPB) until the agency's constitutionality can be determined. On Aug. 20, the CFPB filed a complaint against Morgan Drexen in a California federal court, essentially defying a request from a District of Columbia judge not to pursue legal action until she issues a ruling on the agency's constitutional legitimacy. The CFPB ignored the request, filing the lawsuit exactly one week before it was due to issue a response to Morgan Drexen's motion for summary judgment in the lawsuit the company filed against the CFPB in July. Morgan Drexen is asking U.S. District Court Judge Colleen Kollar-Kotelly to issue a temporary restraining order and preliminary injunction preventing the California lawsuit from moving forward until she renders her decision, which is expected in late September. "This retaliatory move by the CFPB is disruptive, distracting, and, we believe, disrespectful to the Court," said Randall K. Miller, the attorney representing Morgan Drexen. "The judge set forth an expedited schedule that all parties agreed to, yet the CFPB chose to file suit 3,000 miles away before any resolution regarding the agency's very legitimacy had been reached." Morgan Drexen's lawsuit argues the CFPB lacks the constitutionally-required checks, balances, and oversight required of a federal agency. Further, the complaint accuses the CFPB of attempting to data mine private bankruptcy documents and communications protected by attorney-client privilege. As described in the motion filed: "An injunction is necessary to permit the orderly disposition of this case, which is proceeding on an expedited schedule ordered by the Court, and consented to by the CFPB, and to avoid the duplication, inefficiency, and risk of inconsistent decisions on the foundational constitutional issue." The CFPB's lawsuit against Morgan Drexen inaccurately characterizes the company as a debt settlement firm. Morgan Drexen is a business-to-business provider that offers software and back-office support services to help companies, including law firms, operate more efficiently. Morgan Drexen's support services model has been evaluated and confirmed by at least 16 jurisdictions across the country, including state bars and district courts. Morgan Drexen's attorney, Randall K. Miller, has called the CFPB's lawsuit "procedural gamesmanship" designed to derail its own case in federal court. * Moody's Puts Largest U.S. Banks' Ratings Under Review ------------------------------------------------------- Daily Bankruptcy Review reported that Moody's Investors Service put ratings of big U.S. bank holding companies on watch for possible downgrade, citing a possible removal of extraordinary government support now that the industry is moving closer to formalizing plans for liquidating banks in crisis. According to the report, the agency joins Standard & Poor's Corp ., which said it was also reviewing the holding company ratings of Bank of America , Wells Fargo & Co., J.P. Morgan Chase & Co ., Citigroup , Bank of New York Mellon Corp., State Street, Morgan Stanley and Goldman Sachs for similar reasons. * Moody's Reviews Debt Ratings on Holding Cos. for 6 US Banks ------------------------------------------------------------- Moody's Investors Service has placed the senior and subordinated debt ratings of the holding companies for the six largest US banks on review as it considers reducing its government (or systemic) support assumptions to reflect the impact of US bank resolution policies. Four -- Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo -- are on review for downgrade. Two, Bank of America and Citigroup, are on review direction uncertain, as the rating agency considers the potentially offsetting influence of improvements in the standalone credit strength of their main operating subsidiaries, the ratings on which were simultaneously placed on review for upgrade. Included in the review are the short-term ratings of several of these bank holding companies. Two additional banks, Bank of New York Mellon and State Street, whose ratings were previously placed on review for downgrade, are also included in this review. At the same time, and also in response to the possible reduction of government support assumptions, the ratings on the bank-level subordinated debt of JP Morgan Chase Bank N.A. and Wells Fargo Bank N.A. were placed on review for downgrade, while those at Bank of America N.A. are on review direction uncertain. The bank-level subordinated debt ratings of The Bank of New York Mellon and State Street Bank and Trust, which were previously placed on review for downgrade, are also included in the review. There is no rated bank-level subordinated debt outstanding at Citibank N.A., Goldman Sachs Bank USA or Morgan Stanley Bank N.A. Moody's actions follow its March 2013 announcement that it would reassess its support assumptions for bank holding companies in the US and that it would consider whether to revise these assumptions by the end of the year. As US bank resolution policies continue to evolve, Moody's will assess the opposing forces that may have an impact on bondholders at the holding company level should a bank become financially distressed. The first is a lower level of systemic support that could result in a higher probability of default. The second is the potential for a more orderly workout and a required minimum level of holding company debt that may well limit losses in the event of a default. The reviews will also consider the implications of such policies for bank-level subordinated bonds, which may also be subject to burden-sharing in the event of severe financial distress. In addition, for four of the eight banks -- Bank of America, Citigroup, Bank of New York Mellon, and State Street -- the reviews will also consider the banks' standalone or baseline credit assessments -- positively for the first two, and negatively for the latter two. "In the past year, we have seen progress towards establishing a framework to credibly resolve these large systemically-important banks, as called for under the Dodd-Frank Act," said Robert Young, Managing Director. "We have also seen greater cooperation and discussion among international banking regulators to manage the coordinated resolution of global banking groups." The following ratings were placed on review for downgrade: The Goldman Sachs Group, Inc. -- A3 senior, Baa1 subordinated and Baa3 (hyb) trust preferred vehicles JP Morgan Chase & Co. -- A2 senior, A3 subordinated, Baa2 (hyb) trust preferred vehicles and Prime-1 short-term rating JP Morgan Chase Bank N.A. -- A1 subordinated Morgan Stanley -- Baa1 senior, Baa2 subordinated, Ba1 (hyb) trust preferred vehicles and Prime-2 short-term rating Wells Fargo & Company, Inc. -- A2 senior, A3 subordinated, Baa1 (hyb) trust preferred vehicles and Prime-1 short-term rating Wells Fargo Bank, N.A. -- A1 subordinated and A3 (hyb) trust preferred vehicles Bank of America Corporation -- Prime-2 short-term rating Citigroup, Inc. -- Prime-2 short-term rating The following ratings continue to be on review for downgrade, as initiated on July 2, 2013: The Bank of New York Mellon Corporation -- Aa3 senior, A1 subordinated, A2 (hyb) trust preferred vehicles and Baa1 (hyb) noncumulative preferred The Bank of New York Mellon -- B bank financial strength rating (BFSR)/aa3 baseline credit assessment (BCA), Aa1 deposits and senior and (P)Aa2 subordinated State Street Corporation -- A3 (hyb) trust preferred vehicles and Baa1 (hyb) noncumulative preferred State Street Bank and Trust Company -- B BFSR/aa3 BCA, Aa2 deposits and senior and Aa3 subordinated The following ratings were placed on review for upgrade: Bank of America, N.A. -- D+ BFSR/baa3 BCA, A3/Prime-2 deposits and senior Bank of America Corporation -- B1 (hyb) noncumulative preferred Citibank, N.A. -- D+ BFSR/baa3 BCA, A3/Prime-2 deposits and senior Citigroup, Inc. -- B1 (hyb) noncumulative preferred The following ratings were placed on review direction uncertain: Bank of America Corporation -- Baa2 senior, Baa3 subordinated and Ba2 (hyb) trust preferred vehicles Bank of America, N.A. -- Baa1 subordinated Citigroup, Inc. -- Baa2 senior, Baa3 subordinated and Ba2 (hyb) trust preferred vehicles State Street Corporation -- A1 senior, A2 subordinated (direction of review initiated July 2 changed from review for downgrade) The Prime-2 short-term rating of The Goldman Sachs Group, Inc. was affirmed. The noncumulative preferred stock ratings of The Goldman Sachs Group, Inc., JP Morgan Chase & Co., Morgan Stanley and Wells Fargo & Company, Inc. have also been affirmed. The standalone credit assessments and the short- and long-term deposit, issuer, and senior debt ratings of Goldman Sachs Bank USA, JP Morgan Chase Bank N.A., Morgan Stanley Bank N.A. and Wells Fargo Bank, N.A. were also affirmed. Ratings Rationale: Progress Towards Credible Resolution Mechanism Affects Risks For Bank Holding Company Creditors: As US bank resolution policies evolve, Moody's will review two opposing effects that influence risks for bondholders at the holding company level. The first effect is the reduced likelihood and predictability of systemic support that would result from a credible bank resolution mechanism. Such mechanisms are designed to allow regulators to restore the solvency of a distressed bank without using taxpayer funds. The second, opposing effect is the possible reduction in the severity of losses for holding company creditors in the event of a default under a future US bank resolution. If executed as intended, more of a banking group's value may be preserved versus a bankruptcy scenario due to a more orderly resolution of the entity. And expected requirements regarding holding company debt levels may provide greater resources for restoring solvency, reducing the size of haircuts imposed on holding company creditors. "In other words, the risk of default may be increasing because authorities may be less likely to support a banking group, while losses in the event of default (loss severity) may be decreasing," said Robert Young, Managing Director. Moody's Continues To Assess Evolving Resolution Policies: In June 2012, Moody's placed negative outlooks on the holding company ratings of all systemically-important US banking groups whose debt ratings benefit from "uplift" due to government support above what they would be rated based solely on their standalone credit quality. The negative outlooks reflected the progress the Federal Deposit Insurance Corporation (FDIC) had made in devising a mechanism to implement the Orderly Liquidation Authority (OLA) enacted as part of the Dodd-Frank Act. OLA gives the FDIC the authority to resolve financially-distressed systemically-important financial institutions but also requires that it be done without using taxpayer funds while avoiding financial market contagion. At the same time, Moody's assigned stable rating outlooks to the bank/operating subsidiary obligations of these firms. In a March 2013 comment, "Reassessing Systemic Support in US Bank Ratings -- An Update and FAQs," Moody's outlined the four areas where major hurdles remained to an orderly resolution of these banks: international regulatory cooperation, capital structure, corporate structure, and market structure. Although hurdles to the successful use of OLA by the FDIC remain, conviction is clear, progress continues, and momentum has built. This progress includes continued dialogue among international regulators, an expectation that the Federal Reserve will establish minimum standards for holding company debt to facilitate OLA, further refinement of "living wills," and some reduction in interconnectedness among banks. If Used, Single Point-Of-Entry Receivership Would Result In A Default For Holding Company Creditors: In its review, Moody's will focus on the resolution mechanism referred to as Single Point-of-Entry Receivership (SER). SER is the FDIC's stated preferred mechanism for implementing OLA. Under this framework, the FDIC would impose losses on bank holding company creditors in order to recapitalize and maintain the operations of its systemically-important subsidiaries. If resolution through SER is likely to be attempted in the event of distress at these banks, this will result in a lower expected probability of government support for bank holding company debt, signifying a higher risk of default. Seven of the eight holding companies on review currently benefit from one notch (for Bank of New York Mellon and Wells Fargo) or two notches (for Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, and Morgan Stanley) of uplift from government support. State Street's holding company ratings do not currently incorporate any uplift. A conclusion that the probability of government support is lower may result in either a partial or complete removal of this uplift from the current ratings. However, Losses May Become Less Severe Under Single Point-Of-Entry Receivership: Moody's will also consider whether the use of SER is likely to reduce the severity of loss for holding company creditors. Moody's current ratings anticipate that these creditors would sustain very high losses in the event of a default because bank holding company defaults have typically involved a holding company bankruptcy following the seizure and liquidation of its bank subsidiary. In contrast, under SER, a distressed banking group's systemically- important subsidiaries continue to operate, thus potentially preserving their value to the benefit of senior holding company creditors. Another development that may reduce loss severity is the US regulators' plan to require banks to hold a certain amount of debt at the holding company level. This holding company debt is designed to be the primary cushion to absorb losses in the event of a workout. For a given loss, the larger the cushion, the more likely that not all of the holding company debt would be written down or converted to equity in a default scenario under SER. For each of the banks on review, a reduction in Moody's severity of loss assumptions for holding company bondholders may offset some or all of the negative ratings effect of a higher probability of default stemming from a reduction in government support assumptions. However, any ratings benefit from a lower loss severity assumption is unlikely to exceed one notch. Subordinated Creditors At Bank Level Could Also Face Greater Risks: The review will also consider the implications of the evolving US bank resolution policies on bank-level subordinated debt that currently includes uplift due to the potential for systemic support. SER is intended to allow systemically-important subsidiaries to continue to operate without defaulting on their own obligations, even if holding company creditors experience a default. However, Moody's sees two potential risks for bank-level subordinated creditors. The first is that even if SER were to be utilized, there remains the risk that bank-level subordinated creditors could be subject to a distressed exchange at the outset of the resolution. The second is that, unlike senior creditors at the operating bank level, bank-level subordinated creditors may not benefit from any incremental government support the authorities may feel compelled to provide to ensure systemic stability if SER is not sufficient to prevent a default at the operating bank. During the review, Moody's will evaluate these risks and will also consider the risk to bank-level subordinated creditors relative to holding company senior creditors. While these risks may result in lower ratings for bank-level subordinated debt, the ratings are unlikely to fall below the holding company senior debt ratings. Standalone Credit Considerations: The standalone credit assessments of four of the eight banks are also on review. Moody's placed the standalone credit assessments of Bank of America and Citigroup on review for upgrade. An upgrade of either Bank of America's or Citigroup's standalone credit assessment may offset some or all of the negative ratings effect of a potential reduction in government support assumptions. The standalone credit assessments of State Street and Bank of New York Mellon had been placed on review for downgrade last month. They remain on review. A downgrade of Bank of New York Mellon's standalone credit assessment could amplify the ratings effect of a potential reduction in government support. State Street's ratings would be negatively affected only by a lower standalone credit assessment; its holding company ratings do not currently incorporate any uplift due to government support. However, as with the other seven banks, its holding company debt ratings may benefit from a lower loss severity assumption. Other Systemically-Important Subsidiaries: As part of this rating action, Moody's placed the ratings of a number of these firms' systemically-important and highly- integrated subsidiaries on review, primarily for upgrade. SER is designed to stabilize all systemically-important operating subsidiaries of these firms, which may include non-banks and non- domestic subsidiaries. Historically, Moody's has not attributed the full benefit of potential government support to these subsidiaries' ratings. The review of these entities will also consider whether support is more likely for them under SER. The ratings of Bank of New York Mellon's other systemically-important subsidiaries were placed on review for downgrade last month, reflecting pressures on their baseline credit assessments. This rating action changes the direction of the review to uncertain to consider the potential for more support under SER. Bank-Specific Considerations: Bank of America and Citigroup The review of Bank of America N.A.'s D+/baa3 baseline credit assessment will consider the benefits to Bank of America's creditors from reduced tail risks and expenses related to its legacy mortgage exposures. The bank has reached settlements on a variety of legal fronts, and a legal decision expected this fall may well further reduce the risk of additional mortgage repurchase losses by approving the bank's settlement of Countrywide's repurchase obligations on private-label RMBS. In addition, as the US housing market improves, stress losses on mortgages have declined and mortgage servicing costs are also expected to decline. During the review, Moody's will evaluate the extent to which these developments, together with ongoing efficiency initiatives, are likely to improve Bank of America's profitability as well the consistency of its earnings over the next few years. Stronger, more consistent earnings from Bank of America's core banking franchises would provide thicker shock absorbers to protect creditors from the potential volatility and inherent risk opacity of the bank's sizeable global capital markets business. Moody's placed Citibank N.A.'s D+/baa3 baseline credit assessment on review for upgrade, reflecting the firm's declining exposure to legacy assets, strengthened profitability and improved capital. Nonetheless, Citigroup remains one of the world's most complex and global banks and represents a formidable risk management challenge, particularly as pressure for growth and increased returns continues. Management incentives and risk controls are also important, given the absolute size of Citigroup's global markets activities. Given these challenges, Moody's review will focus on Citigroup's potential returns and earnings stability as management continues to hone its strategy. An upgrade of Bank of America's or Citigroup's baseline credit assessment may at least partially offset the ratings effect of a potential reduction in government support for holding company creditors. In addition, the holding company ratings may benefit from a lower loss severity assumption from Moody's. For these reasons, the review of Bank of America's and Citigroup's senior and subordinated holding company ratings is with direction uncertain. Because Moody's is not reconsidering its support assumptions for bank deposits and bank-level senior debt obligations, ratings for those obligations are on review for upgrade along with the baseline credit assessments. The holding company short-term ratings at Bank of America Corporation and Citigroup, Inc. are on review for downgrade, in contrast with the review direction uncertain of their long-term ratings. The potential negative impact of a lower government support assumption is not expected to be offset enough by other factors, including any positive benefits of improvements in their standalone credit strength, to result in a higher short-term rating. Bank of New York Mellon and State Street On July 2, 2013, Moody's placed the B/aa3 baseline credit assessments and all other long-term ratings of State Street and Bank of New York Mellon on review for downgrade. The review was initiated in order to examine the long-term profitability challenges facing these very highly-rated banks. These profitability challenges are driven by the aggressive pricing of these banks' core custody products and services, such that their overall fee revenue is roughly similar to their total expenses. The review will also examine the banks' ability to generate more revenue from custody-related services and cut costs. The review for Bank of New York Mellon will now also include a reassessment of the level of systemic support incorporated into the holding company ratings. The review for both firms will now include a reassessment of Moody's loss severity assumptions for holding company creditors and the level of systemic support included in the subordinated debt ratings at the bank operating company level. State Street's ratings would be negatively affected only by a lower standalone credit assessment; its holding company ratings do not currently incorporate any uplift due to government support. However, as with the other seven banks, its holding company debt ratings may benefit from a lower loss severity assumption. For these reasons, the review of State Street's senior and subordinated holding company ratings has been changed from review for downgrade to review direction uncertain. Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo, The reviews will consider the level of systemic support incorporated into the bank holding company ratings, the loss severity assumptions in those ratings, and the level of systemic support included in the bank-level subordinated debt ratings of each firm. The holding company short-term ratings at JP Morgan Chase & Co., Morgan Stanley, and Wells Fargo & Company, Inc. are also on review for downgrade, reflecting the potential impact of a downgrade of their long-term ratings. The holding company short-term rating at Goldman Sachs Group, Inc. was affirmed because even if all government support is removed and no benefit from lower loss severity is included, the holding company's current Prime-2 short- term rating would not change. The baseline credit assessments of all four banks were affirmed, together with the ratings on their bank deposits and bank-level senior debt obligations. The principal methodology used in ratings of Citigroup Inc., Wells Fargo & Company, State Street Corporation, and Bank of New York Mellon Corporation (The) was Global Banks Methodology published in May 2013. The principal methodology used in ratings of Goldman Sachs Group, Inc. was Global Securities Industry Methodology published in May 2013. The methodologies used in ratings of JPMorgan Chase & Co., Bank of America Corporation, Morgan Stanley were Global Banks Methodology published in May 2013, and Global Securities Industry Methodology published in May 2013. * Reinsurers' Underwriting Gains Offset By Unrealized Losses ------------------------------------------------------------ Fitch Ratings says reinsurers' solid underwriting gains in the first half of 2013 were offset by increased unrealized investment losses, according to a newly-published report. The global reinsurers that Fitch rates improved their underwriting combined ratio to 85.9% in H113, compared with 87.7% in H112, as catastrophe-related losses were manageable and loss reserve development remained favorable. The global reinsurance industry experienced below-average natural catastrophe losses of USD13bn in H113, below the 10-year average of USD22bn. The majority of losses were from flooding in Europe, Canada and Australia, and severe thunderstorms in the US. Solid underwriting profitability was offset by increased unrealized investment losses on fixed maturities, resulting in shareholders' equity growth of only 1.3% for non-life reinsurers during H113. Underwriting opportunities remained somewhat limited, resulting in only marginal growth in premiums written. Several individual reinsurance product lines continued to experience unfavorable reserve development during H113, primarily longer-tail casualty and liability lines. However, earnings continue to be supported by surpluses from prior-year reserves. Reserve releases were equivalent to 6.4% of earned premiums in H112, against 6.6% at end-2012. * Argentina's ATFA Lauds Second Circuit Ruling in Debt Case ----------------------------------------------------------- The American Task Force Argentina on Aug. 23 welcomed a ruling from the U.S. Court of Appeals for the Second Circuit that upholds the rule of law and reinforces the principle that the law applies equally to all parties that submit to the judgment of U.S. courts. Regarding the Court's ruling, ATFA Executive Director Robert Raben made the following statement: "[Fri]day's unanimous, well-reasoned decision is a victory for the rule of law and the enforcement of contracts in the United States." "In order to raise billions of dollars at inexpensive rates in the U.S. financial markets, Argentina promised in its bond contract to submit to the jurisdiction of U.S. courts, adhere to New York law and waive its sovereign immunity. Since defaulting on those bonds in 2001, Argentina has ignored those promises, waged a vicious campaign against its creditors, and resisted every attempt by creditors to engage in good-faith negotiations. ATFA hopes that Argentina will see today's ruling as motivation to resolve its financial obligations through good-faith negotiations and discontinue its defiance of court judgments and the rule of law." The Second Circuit's decision directly addressed Argentina's uniquely defiant and disorderly treatment of its unpaid creditors and U.S. courts. The decision cited Argentina's threats to pay "not one dollar" to its unpaid creditors and to "not voluntarily obey" the Court's orders, despite being fully able to pay. "It is within this context that we review the amended injunctions for abuse of discretion and, finding none, we affirm," the Court wrote. Importantly, the Court rejected Argentina's claims that upholding the lower court's orders would force it to default on its current debt. The Court cited the lower court's finding that Argentina "has the financial wherewithal" to pay both holders of its current debt and holders of its defaulted debt. The Court rightly decided that it was "unwilling to permit Argentina's threats to punish [holders of its current debt] to dictate the availability or terms of relief [available to holders of its defaulted debt]." The Court also rejected Argentina's claims that upholding the lower court's orders would have a negative impact on future sovereign restructurings. The Court called these claims, "speculative, hyperbolic, and almost entirely of the Republic's own making." The Court called this case "an exceptional one with little apparent bearing on transactions that can be expected in the future." In fact, this ruling should serve to increase global economic stability by discouraging sovereigns from attempting to follow what the ratings agency Moody's called Argentina's "unique[ly] unilateral and coercive approach to debt restructuring." The Second Circuit appeared to agree, observing that "cases like this one are unlikely to occur in the future because Argentina has been a uniquely recalcitrant debtor," among other reasons. On Aug. 23, ATFA renewed its calls for Argentina to sit down with its creditors and reach a fair resolution of its defaulted debt. * BOND PRICING -- For Week From Aug. 19 to 23, 2013 --------------------------------------------------- Company Ticker Coupon Bid Price Maturity Date ------- ------ ------ --------- ------------- AES Eastern Energy LP AES 9.670 3.100 1/2/2029 AES Eastern Energy LP AES 9.000 1.750 1/2/2017 AGY Holding Corp AGYH 11.000 52.063 11/15/2014 Affinion Group Holdings Inc AFFINI 11.625 61.375 11/15/2015 Alion Science & Technology Corp ALISCI 10.250 62.500 2/1/2015 Buffalo Thunder Development Authority BUFLO 9.375 31.875 12/15/2014 California Baptist Foundation CALBAP 7.800 6.222 5/15/2015 Cengage Learning Acquisitions Inc TLACQ 10.500 20.750 1/15/2015 Cengage Learning Acquisitions Inc TLACQ 12.000 13.000 6/30/2019 Cengage Learning Acquisitions Inc TLACQ 10.500 20.750 1/15/2015 Cengage Learning Acquisitions Inc TLACQ 13.250 1.375 7/15/2015 Cengage Learning Acquisitions Inc TLACQ 13.250 1.375 7/15/2015 Cengage Learning Holdco Inc TLACQ 13.750 1.375 7/15/2015 Champion Enterprises Inc CHB 2.750 0.375 11/1/2037 Eastman Kodak Co EK 7.000 2.000 4/1/2017 Eastman Kodak Co EK 9.950 1.500 7/1/2018 Eastman Kodak Co EK 9.200 2.913 6/1/2021 Energy Conversion Devices Inc ENER 3.000 7.875 6/15/2013 Energy Future Holdings Corp TXU 5.550 50.000 11/15/2014 Federal Home Loan Banks FHLB 1.550 96.500 6/13/2023 FiberTower Corp FTWR 9.000 1.000 1/1/2016 GMX Resources Inc GMXR 9.000 14.833 3/2/2018 GMX Resources Inc GMXR 4.500 5.980 5/1/2015 James River Coal Co JRCC 4.500 38.725 12/1/2015 LBI Media Inc LBIMED 8.500 29.000 8/1/2017 Lehman Brothers Holdings Inc LEH 1.000 21.500 8/17/2014 Lehman Brothers Holdings Inc LEH 1.000 21.500 8/17/2014 Lehman Brothers Holdings Inc LEH 1.000 21.500 3/29/2014 Lehman Brothers Holdings Inc LEH 0.250 21.500 1/26/2014 Lehman Brothers Holdings Inc LEH 1.250 21.500 2/6/2014 Mashantucket Western Pequot Tribe MASHTU 6.500 15.250 7/1/2036 Orbital Sciences Corp ORB 2.438 88.000 1/15/2027 PMI Group Inc/The PMI 6.000 31.000 9/15/2016 Penson Worldwide Inc PNSN 8.000 8.625 6/1/2014 Platinum Energy Solutions Inc PLATEN 14.250 57.850 3/1/2015 Powerwave Technologies Inc PWAV 1.875 0.875 11/15/2024 Powerwave Technologies Inc PWAV 1.875 0.875 11/15/2024 Public Service Electric & Gas Co PEG 5.375 99.654 9/1/2013 Residential Capital LLC RESCAP 6.875 30.500 6/30/2015 Rotech Healthcare Inc ROHI 10.500 40.000 3/15/2018 SLM Corp SLMA 5.250 85.086 3/15/2023 Savient Pharmaceuticals Inc SVNT 4.750 17.500 2/1/2018 School Specialty Inc SCHS 3.750 38.375 11/30/2026 TMST Inc THMR 8.000 9.500 5/15/2013 Terrestar Networks Inc TSTR 6.500 10.000 6/15/2014 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 6.550 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15.000 25.370 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 4.625 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.500 7.200 11/1/2016 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15.000 26.600 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.500 5.250 11/1/2016 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 4.625 11/1/2015 UAL 2000-2 Pass Through Trust UAL 7.762 2.008 4/29/2049 USEC Inc USU 3.000 30.000 10/1/2014 Verso Paper Holdings LLC / Verso Paper Inc VRS 11.375 40.488 8/1/2016 Verso Paper Holdings LLC / Verso Paper Inc VRS 8.750 30.848 2/1/2019 WCI Communities Inc/Old WCI 4.000 0.500 8/5/2023 Western Express Inc WSTEXP 12.500 66.250 4/15/2015 Western Express Inc WSTEXP 12.500 66.250 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 ***