/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130909.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, September 9, 2013, Vol. 17, No. 250 Headlines ACADIA HEALTHCARE: S&P Raises Corp. Credit Rating to 'B+' ACTIVECARE INC: Strengthens Balance Sheet with Debt Conversions AINSWORTH LUMBER: Moody's Review 'B2' CFR After Purchase Offer AINSWORTH LUMBER: S&P Puts 'B-' CCR on CreditWatch Positive ALLEN PARK, MI: Bankruptcy Is Not an Option ALLIANT TECHSYSTEMS: S&P Affirms 'BB' CCR; Outlook Stable ALLIED SYSTEMS: Seeks Further Extension of Exclusive Periods ALLIED SYSTEMS: Creditors, Teamsters Blast $105MM Asset Sale ALLY FINANCIAL: Offering $750 Million Senior Notes Due 2018 ALLY FINANCIAL: Inks $750MM Underwriting Pact With Citigroup AMERICAN AIRLINES: Says It Doesn't Owe Dewey $4.6MM in Fees AMERICAN AIRLINES: Mich. AG Joins Suit Against $11B Merger Deal AMERICAN APPAREL: Comparable Sales for August 2013 Increased 3% AMERICAN MEDIA: Terminates Employment of John Swider AMERICAN PATRIOT: Section 341(a) Meeting Set on Sept. 30 AMERICAN POWER: Marc Chalfen Held 10.7% Equity Stake at Nov. 28 AMERICAN STANDARD ENERGY: Incurs $93.7-Mil. Net Loss in 2012 ANCHOR BANCORP: Banking Bankruptcy That Takes a Different Path ARCAPITA BANK: Hires Hire Linklaters for EuroLog Sale Negotiations ARCAPITA BANK: Timeline Ok'd; Omnibus Hearing Reset to Sept. 19 ARCAPITA BANK: Liquidation Procs. for Non-Eligible Claimants Ok'd ARCAPITA BANK: Seeks OK of EuroLog Assets Sale to Secret Buyer ARISTA POWER: Incurs $853,000 Net Loss in Second Quarter AS AMERICA INC: S&P Withdraws 'B' Corporate Credit Rating ASPEN GROUP: Century Equity Issues Research Report ASUZA RDA: Moody's Cuts Tax Bonds Rating to Ba2 ATLANTIC COAST: Federal Reserve OKs Appointment of Two Directors ATOMIC PLAYPEN: Atomic Data Acquires Hosting Assets AVID TECHNOLOGY: Requests Hearing to Stay NASDAQ Delisting AUDIOEYE INC: Incurs $529,900 Net Loss in Second Quarter BANK OF AMERICA: DBRS Rates Preferred Stock at 'BB' BEAZER HOMES: Fitch Affirms 'B-' Issuer Default Rating BIG SANDY: Files Liquidating Chapter 11 Plan BLUE NOTE: Monarques Resources Acquires X-Ore's Four Properties BINGO.COM LTD: Reports US$10,500 Net Income in Second Quarter BMB MUNAI: Hires Eide Bailly a New Accountants BOART LONGYEAR: Moody's Lowers CFR Two Notches to 'B2' BUFFALO PARK: To Fund Plan Payments from Estate's Cash BUILDING MATERIALS: Moody's Assigns B3 CFR & Rates Sr. Notes Caa1 BUILDING MATERIALS: S&P Assigns Prelim. 'B' CCR; Outlook Stable BURCON NUTRASCIENCE: Incurs $1.6-Mil. Net Loss in June 30 Quarter CAESARS ENTERTAINMENT: Bank Debt Trades at 10% Off CARSON RDA: Moody's Confirms Ba1 Rating on Tax Allocation Bonds CASPIAN SERVICES: Hansen Barnett Resigns as Accountants CENGAGE LEARNING: BNY Mellon Rips Unsec. Creditors' 'Power Grab' CIRCLE ENTERTAINMENT: Incurs $447K Net Loss in Second Quarter COASTAL CONDOS: Has Final Approval to Hire David Rogero as Counsel COASTAL CONDOS: Can Employ Wells Marble as Special Counsel COLLEGE BOOK: Court Enters Order Converting Case to Chapter 7 COLOREP INC: Seeks to Employ Hilco IP as Exclusive Sales Agent COMARCO INC: Trial Date of Kensington Litigation Set on July 28 COMMUNITY WEST: Files Form 10-Q; Earns $2.1-Mil. in 2nd Quarter COMMUNITY FIRST: Reports $390,000 Net Income in Second Quarter COMBIMATRIX CORP: Incurs $121,000 Net Loss in Second Quarter COMPETITIVE TECHNOLOGIES: Tonaquint Has 892,514 Shares Warrants CYCLONE POWER: TCA Global Agrees to Buy $2 Million Debentures DELTA OIL & GAS: Incurs $114K Net Loss in Second Quarter DETROIT, MI: Snyder, Dillon Subpoenaed in Bankruptcy DIAGNOSTIC IMAGING: Incurs $68,900 Net Loss in Second Quarter DUMA ENERGY: Terminates Employment of VP of Operations EL FARMER: Discloses Use Terms of PR Asset's Cash Collateral ELEPHANT TALK: Has Until Nov. 30 to Regain NYSE MKT Compliance EMISPHERE TECHNOLOGIES: Incurs $14-Mil. Net Loss in Second Quarter EMPIRE RESORTS: Signs New Option Agreement with EPR Properties ENERGY FOCUS: Incurs $679,000 Net Loss in Second Quarter ENCISION INC: Incurs $241K Net Loss in June 30 Quarter ERBA DIAGNOSTICS: Reports $87K Net Income in Second Quarter FONTANA RDA: Moody's Confirms Ba1 Rating on Tax Bonds FOUNTAIN VALLEY: Moody's Confirms Ba1 Tax Bond Rating FREESEAS INC: Issues 1.8MM Add'l Settlement Shares to Hanover FREESEAS INC: Issues 1.6MM Add'l Settlement Shares to Hanover FUSION TELECOMMUNICATIONS: To Buy Cloud Services Businesses GATEHOUSE MEDIA: Has Agreement with Newcastle to File Bankruptcy GENIUS BRANDS: Incurs $543K Net Loss in Second Quarter GO DADDY: Moody's Keeps 'B1' CFR on News of Planned Acquisitions GO DADDY: S&P Retains 'B' CCR Following $100MM Term Loan Add-On GRAYMARK HEALTHCARE: Unit to Buy HCRI Assets for $39.1 Million GREAT PLAINS: Court to Consider Stay Relief on Plan Hearing GROWLIFE INC: Incurs $1.6-Mil. Net Loss in Second Quarter HOVNANIAN ENTERPRISES: Royce Held 3.7% Pref. Shares at Aug. 31 HUNTER DEFENSE: Moody's Lowers CFR to 'Caa1'; Outlook Negative HUNTER DEFENSE: S&P Lowers Corporate Credit Rating to 'CCC+' IBAHN CORP: Seeks Bankruptcy Citing Loss of Contracts, Litigation IN PLAY: Has to File Amended Disclosure Statement by Sept. 12 INDIAN WELLS RDA: Moody's Confirms Ba1 Tax Bonds Rating INDUSTRY URBAN: Moody's Confirms Ba1 Tax Bonds Rating INSPIRATION BIOPHARMACEUTICALS: Hires Hilco as IP Sales Agent IPC INTERNATIONAL: Locks Up Final Approval For $12MM DIP IVEDA SOLUTIONS: Incurs $1.5-Mil. Net Loss in Second Quarter JACKSONVILLE BANCORP: Has Rights Offering of 10MM Common Shares JEH COMPANY: Waters Vollmering Approved as Tax Accountant JEH COMPANY: Has Interim Access to Cash Collateral Until Sept. 15 JEH COMPANY: Frost Bank Withdraws Plea to Reconsider Stay Order JONES SODA: Incurs $95,000 Net Loss in Second Quarter JVMW PROPERTIES: Can File Plan Through Sept. 18 KIT DIGITAL: Judge Says Ch. 11 Equity Rule Bests $15MM Claim LIFE CARE: Gets Final OK to Use Wells Fargo's Cash Collateral LOCATION BASED TECH: Issues $500,000 Conv. Note to David Meyers LONGVIEW POWER: Section 341(a) Meeting Scheduled for Oct. 3 LOUISIANA PACIFIC: Ainsworth Bid Prompts Moody's Downgrade Watch LYON WORKSPACE: Has Until Oct. 18 to File Chapter 11 Plan MAXCOM TELECOMUNICACIONES: Banco Invex Supplements Purchase Offer MAXCOM TELECOMUNICACIONES: First Amended Plan Filed MCCLATCHY CO: Hai Nguyen Resigns as McClatchy Controller MDU COMMUNICATIONS: To Be Acquired by Access Media MILLER HEIMAN: Moody's Rates New Debt Facilities 'B2' MIRATI THERAPEUTICS: Incurs $8-Mil. Net Loss in Second Quarter MISSION NEW ENERGY: Incurs AU$2.2 Million Loss in Fiscal 2013 MOBILESMITH INC: Sells $200,000 Convertible Note MONTREAL MAINE: Covington & Burling Approved as Special Counsel MORGANS HOTEL: Kerrisdale Intends to Nominate Separate Directors MORGANS HOTEL: To Sell $500 Million Worth of Securities MSD PERFORMANCE: Files for Chapter 11 Bankruptcy NAVISTAR INTERNATIONAL: Incurs $247-Mil. Net Loss in July 31 Qtr. NAVISTAR INTERNATIONAL: GAMCO Held 6.9% Equity Stake at Sept. 5 NELSON EDUCATION: S&P Lowers CCR to 'CCC'; Outlook Negative NEOMEDIA TECHNOLOGIES: Stockholders Elect 4 Directors NMP GROUP: U.S. Trustee Balks at Combined Hearing on Plan NORSE ENERGY: Siphoned Off $50-Mil. to Other Units, Creditors Say OAKLAND RDA: Moody's Confirms Ba1 Rating on Tax Bonds OAKLEY RDA: Moody's Keeps Ba1 Tax Bonds Rating OIL PATCH: Seeks Conversion of Case into Chapter 7 Proceeding ORECK CORP: Wants to Pay Carl Marks on Standard Hourly Rates ORECK CORP: Oct. 8 Hearing on Request for Exclusivity Periods OVERLAND STORAGE: Reports $19.6-Mil. Net Loss in Fiscal 2013 OVERSEAS SHIPHOLDING: Taps Venable as Litigation Counsel OXYSURE SYSTEMS: Incurs $193K Net Loss in Second Quarter PEREGRINE FINANCIAL: Imprisoned Founder Could Face Questioning PATRIOT COAL: Peabody Objects to Oct. 1 Production Deadline PATRIOT COAL: Files Joint Chapter 11 Plan of Reorganization PATRIOT COAL: Incurs $99.7-Mil. Net Loss in Second Quarter PERSONAL COMMUNICATIONS: U.S. Trustee Appoints Creditors Panel PETALUMA CDC: Moody's Confirms Ba1 Tax Bonds Rating PHILADELPHIA AUTHORITY: S&P Lowers Rating on 2006 Bonds to 'D' PLATINUM PROPERTIES: Wants to Tap Thomas C. Scherer as Mediator PRIMCOGENT SOLUTIONS: Court Denies Reconsideration Motion on Stay PRIVATE MEDIA: Incurs EUR670,000 Net Loss in Second Quarter PRM FAMILY: Seeks to Hire Arizona Liquor as Liquor License Broker PRM FAMILY: Gursey Schneider Approved as Accountants RAPID-AMERICAN: Lawrence Fitzpatrick Okayed as Future Claims Rep. REVSTONE INDUSTRIES: Most Creditors to Get Full Payment on Claims RICHMOND RDA: Moody's Confirms Ba1 Tax Bonds Rating RIVERSIDE COUNTY RDA: Moody's Keeps Ba1 $726MM Debt Rating RURAL/METRO CORP: Plan Support Agreement Approved RURAL/METRO: Appointment of Warren H. Smith as Fee Auditor Okayed SAN FRANCISCO RDA: Moody's Confirms Ba1 Tax Bond Rating SAN MARCOS RDA: Moody's Confirms Ba1 Tax Bonds Rating SANTA ROSA RDA: Moody's Confirms Ba1 Rating on Tax Bonds SANTEE RDA: Moody's Confirms Ba1 Rating on Tax Bonds SANUWAVE HEALTH: Appoints Life Sciences Executive to Board SENECA GAMING: Dispute Resolution Cues Moody's to Raise CFR to B1 SILVERADO 2006-II: Moody's Supp. Indenture No Impact on Ratings SOCKET MOBILE: Reports $43.5K Net Income in Second Quarter SOLAR POWER: Chief Financial Officer Quits SOUTHERN FILM: Sept. 30 Sale of Assets Approved, Bids Due Sept. 23 SOUTHERN FILM: Sept. 17 Hearing on Hendren & Malone as Counsel SPIRE CORP: Maturity of Silicon Valley Loan Extended to Oct. 29 SR REAL ESTATE: Seeks to Employ Foley Lardner as General Counsel SR REAL ESTATE: Files Schedules of Assets and Liabilities STANDARD DRILLING: Incurs $913K Net Loss in Second Quarter STOCKTON PUBLIC: Fitch Raises Revenue Bonds Ratings From 'BB+' STREAMTRACK INC: Cancels Potential $2.5-Mil. Royalty Liability SUPERCONDUCTOR TECHNOLOGIES: Incurs $2.4MM Net Loss in 2nd Quarter SURGICAL CARE: Moody's Keeps B2 CFR over New Public Equity Offer T3 MOTION: Adam Benowitz Held 11.2% Equity Stake at Aug. 16 TELIK INC: Incurs $1.4-Mil. Net Loss in Second Quarter TITAN PHARMACEUTICALS: Wants to Discuss Probuphine with FDA TLO LLC: Seeks Further Extension of Exclusive Periods TNI BIOTECH: Incurs $24.7-Mil. Net Loss in Second Quarter TRIAD GUARANTY: Ill. Regulator Slams Bid to Rush $780MM Tax Fight TRIUS THERAPEUTICS: Three Merger-Related Suits Consolidated VISUALANT INC: Issues 52.3 Million Series A Shares WALTER ENERGY: S&P Lowers Corporate Credit Rating to 'B-' WALTER ENERGY: Bank Debt Trades at 5% Off WATERSTONE AT PANAMA: Needs Extension of Cash Collateral Use WAVE SYSTEMS: Amends $20 Million Securities Prospectus WEST BROMWICH: Avoids Yo-Yo Bankruptcy Curse With Solid Finances WESTERN FUNDING: Vegas Auto Loan-Maker Files for Bankr. Protection WESTINGHOUSE SOLAR: Inks $200,000 Securities Purchase Pact WIRELESS RONIN: Incurs $76,000 Net Loss in Second Quarter WORLDCOM INC: USTelecom Asks 2nd Circ. to Rehear Tax Row YSC INC: Section 341(a) Meeting Set on October 8 ZHONE TECHNOLOGIES: Reports $1.1-Mil. Net Income in Second Quarter * J.P. Morgan to End Student-Loan Business * Mortgage Rates Bounce Back on Signs of a Stronger Recovery * Bank of America Mortgage Holders Lose Bid to Sue as Group * 24% of Homeowners in Foreclosure Process Have Equity * Summers Faces Key "No" Votes if Picked for Fed * A-Rod's Troubles Push Cartoon Producer to Chapter 11 ********* ACADIA HEALTHCARE: S&P Raises Corp. Credit Rating to 'B+' --------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on Franklin, Tenn.-based Acadia Healthcare Co. Inc. to 'B+' from 'B-'. The outlook is stable. At the same time, S&P raised the issue-level rating on the company's senior unsecured notes due 2018 and 2021 to 'B-' from 'CCC+'. The recovery rating remains '6', indicating S&P's expectation of negligible (0%-10%) recovery in the event of default. "The upgrade reflects our belief that the company will be able to manage credit metrics that support an aggressive financial risk profile, while pursuing an aggressive growth strategy through acquisitions and de-novo expansion," said Standard & Poor's credit analyst Tahira Wright. The ratings on Acadia also continue to reflect its "weak" business risk and "aggressive" financial risk profiles. The weak business risk profile incorporates potential operating and integration challenges as Acadia continues to rapidly expand its business and its exposure to uncertain third-party reimbursement. The aggressive financial risk profile reflects S&P's expectation that debt leverage will likely range between 4x and 4.5x in 2013 and 2014. This incorporates annual acquisition-related spending of $240 million-$280 million, which S&P expects it to fund from a mix of debt and equity offerings. Acadia acquires and develops in- patient behavioral health care facilities that include acute in- patient psychiatric facilities, residential treatment care, and other behavioral health care operations. S&P's stable outlook on Acadia reflects its expectation that management will continue to aggressively grow the company yet still abide by a disciplined financial policy of maintaining pro forma adjusted leverage below 5.0x. S&P considers an upgrade to be unlikely as it expects the company will continue to operate with credit metrics commensurate with an "aggressive" financial risk policy. This is a result of the company's very ambitious growth strategy. S&P could consider a downgrade if Acadia makes a major debt- financed acquisition that will result in debt leverage at a sustained level above 5x, supporting a "highly leveraged" financial risk profile. S&P could also lower the rating if operations are stifled by significant reimbursement cuts, or the failed integration of recently acquired operations results in an EBITDA margin decline of more than 400 basis points. This would also result in credit metrics supportive of a highly leveraged financial risk profile. ACTIVECARE INC: Strengthens Balance Sheet with Debt Conversions --------------------------------------------------------------- ActiveCare, Inc., announced the closing of an equity investment and conversion of debt to common stock. In connection with loan conversion agreements and a securities purchase agreement, the Company will issue a total of 9,256,332 shares of common stock. This brings the total issued and outstanding shares to approximately 19,900,000. Numerous ActiveCare investors have converted short-term debt and debentures totaling $6,107,240 into 8,142,999 common shares. Furthermore, the company also closed on an equity investment of $835,000 in exchange for 1,113,336 shares of common stock from unrelated investors. This is in addition to the debt conversion and equity investment by David Derrick, CEO and Chairman of ActiveCare announced on July 17, 2013, which now puts the total debt conversion and equity investments this quarter to $7,385,776 and $3,070,000 respectively, totaling $10,455,776. As of June 30, 2013, the Company's shareholders' deficit was $7,119,629. With the recent equity investment and debt conversions, the Company currently has an estimated shareholder's equity of approximately $3,000,000, a difference of over $10,000,000. "I am pleased to announce this additional investment and debt conversions as we continue to bolster our balance sheet," commented David Derrick, chairman chief executive officer of ActiveCare. "As our forward momentum continues to yield solid results with ramping customer growth coinciding with record revenue, it was now an opportune time to close on this additional capital and debt to equity conversion as we simplify our balance sheet and focus on maximizing shareholder value. In a little over one year, ActiveCare has grown quarterly revenues from $170,000 in March of 2012 to over $4.2 million in the previous quarter positioning ActiveCare as a leader in diabetes management." About ActiveCare South West Valley City, Utah-based ActiveCare, Inc., is organized into three business segments based primarily on the nature of the Company's products. The Stains and Reagents segment is engaged in the business of manufacturing and marketing medical diagnostic stains, solutions and related equipment to hospitals and medical testing labs. The CareServices segment is engaged in the business of developing, distributing and marketing mobile health monitoring and concierge services to distributors and customers. The Chronic Illness Monitoring segment is primarily engaged in the monitoring of diabetic patients on a real time basis. The Company's business plan is to develop and market products for monitoring the health of and providing assistance to mobile and homebound seniors and the chronically ill, including those who may require a personal assistant to check on them during the day to ensure their safety and well being. ActiveCare incurred a net loss of $12.36 million for the year ended Sept. 30, 2012, compared with a net loss of $7.89 million during the prior year. The Company's balance sheet at June 30, 2013, showed $13.21 million in total assets, $20.33 million in total liabilities and a $7.11 million total stockholders' deficit. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012, citing recurring operating losses and an accumulated deficit which conditions raise substantial doubt about the Company's ability to continue as a going concern. AINSWORTH LUMBER: Moody's Review 'B2' CFR After Purchase Offer -------------------------------------------------------------- Moody's Investors Service placed the B2 corporate family rating, B2-PD probability of default rating and B2 senior secured note rating of Ainsworth Lumber Co. Ltd.'s under review for possible upgrade. The review has been precipitated by the company's announcement that it has signed a definitive agreement to be acquired by Louisiana-Pacific Corporation (Ba3). LP is the largest oriented strandboard producer in North America. On Review for Possible Upgrade: Issuer: Ainsworth Lumber Co. Ltd. Probability of Default Rating, Placed on Review for Possible Upgrade, currently B2-PD Corporate Family Rating, Placed on Review for Possible Upgrade, currently B2 Senior Secured Regular Bond/Debenture Dec 15, 2017, Placed on Review for Possible Upgrade, currently B2 Outlook Actions: Issuer: Ainsworth Lumber Co. Ltd. Outlook, Changed To Rating under Review from Stable Ratings Rationale: Moody's review will focus on the structural and implicit credit support from LP; post-closing credit metrics taking into consideration the amount of debt refinanced by LP as a result of the change of control put; the size and pace of any cost synergies that can be realized; and Ainsworth ability to maintain adequate liquidity. Moody's review will also assess the pace of industry OSB supply and demand with the recovery in the US housing market. As contemplated by LP, Ainsworth will become a wholly owned subsidiary of LP. LP plans to have Ainsworth's current debt (CND 379 million as June 30, 2013) remain outstanding. LP will fund any of Ainsworth bonds that need to refinanced due to the change of control put. The acquisition is expected to close by the end of the year and is subject to regulatory clearances and other customary closing conditions. The principal methodology used in this rating was the Global Paper and Forest Products Industry Methodology published in September 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Ainsworth, headquartered in Vancouver, British Columbia, Canada, is a manufacturer and supplier of OSB. The company owns and operates four OSB manufacturing facilities in Canada. Ainsworth has generated revenues of approximately $500 million over the past twelve months (June 2013). AINSWORTH LUMBER: S&P Puts 'B-' CCR on CreditWatch Positive ----------------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings on Vancouver-based Ainsworth Lumber Co. Ltd., including its 'B-' long-term corporate credit rating, on CreditWatch with positive implications. "The CreditWatch follows U.S.-based Louisiana-Pacific Corp.'s announcement that it will purchase all of Ainsworth's common shares for approximately C$3.76 per share, based on Louisiana- Pacific's closing price," said Standard & Poor's credit analyst Rahul Arora. "The CreditWatch placement reflects our view of the planned acquisition of Ainsworth's debt," Mr. Arora added. The transaction is valued at US$1.1 billion, including the assumption of debt less Ainsworth's estimated cash balance. Following the close of the transaction, LP currently plans to leave Ainsworth's existing debt outstanding. Ainsworth's reported debt consists of a US$315 million senior secured note (net of an optional redemption exercised on Aug. 14, 2013) and about US$15 million of equipment financing loans. S&P views Ainsworth's business risk profile as "vulnerable" reflecting its single-product focus on commodity oriented strandboard (OSB), small geographic footprint with four operating mills in western Canada, weak pricing power combined with very volatile OSB prices, and efficient low-cost operations that are in line with much larger industry peers. S&P assess the company's financial risk profile as "highly leveraged" reflecting a through- the-cycle view of credit ratios, which remain very strong at the moment given the steep increase in OSB prices earlier this year. S&P plans to resolve the CreditWatch following the close of the transaction, at which time it would raise the rating in-line with LP's and subsequently withdraw the corporate credit rating on Ainsworth. S&P will reassess the issue-level rating on Ainsworth's senior secured note at the close of the transaction. ALLEN PARK, MI: Bankruptcy Is Not an Option ------------------------------------------- CBS Local reported that the city of Allen Park has dodged the "bankruptcy bullet." According to the report, Joyce Parker, the city's emergency manager says after adjustments to city employee contracts that included wage and benefit cuts, Allen Park will avoid filing for Chapter 9 protection. But she says more consolidation and privatization could be in the plans. "So we would certainly evaluate that along with some other initiatives, even issues for opportunities for consolidation or collaborating with other communities. That's always something that we will consider as we move forward," says Parker, the report cited. She adds, "Whether it occurs or not, it really depends on whether it's cost effective and then, secondly, whether it's something that will provide a quality service." Parker says, to date, the structural reform measures have saved Allen Park $4-million -- roughly the same deficit amount the city faced when Parker was appointed in October, the report related. "We've been able to make substantial changes related to our contracts, with benefits, with wages. We've also been able to again get the millage approved, which has been a real positive," she says, the report further cited. ALLIANT TECHSYSTEMS: S&P Affirms 'BB' CCR; Outlook Stable --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its long-term 'BB' corporate credit rating on Alliant Techsystems Inc. (ATK). The outlook remains stable. S&P also placed the 'BBB-' secured debt issue ratings and 'BB' subordinated debt issue ratings on CreditWatch with negative implications. The '1' and '4' recovery ratings, respectively, are unchanged. The rating actions follow ATK's announcement that it intends to acquire Bushnell Group Holdings Inc. (Bushnell, not rated) for about $1 billion. At this stage, ATK has not determined how to permanently finance the transaction, although it has arranged a secured acquisition facility which, together with cash on hand, will initially finance the acquisition. "From a business standpoint, we believe the acquisition represents a good strategic fit and will have a modest positive impact on our assessment of ATK's "satisfactory" business risk profile," said credit analyst Sol Samson. The acquisition will enhance ATK's diversity with a broader exposure to the relatively fast-growing sporting business and strengthen its position in that segment (especially with the recently acquired Savage rifle product line.) The ratings on ATK continues to reflect S&P's assessment of its financial risk as "significant." All along, S&P has incorporated the company's propensity for making debt-financed acquisitions into this assessment. The Bushnell transaction falls within the parameters S&P established for ATK's debt capacity. S&P expects the company's leverage metrics to approach the limits of its benchmarks for "significant," but S&P also believes that ATK will adhere to its pattern of deleveraging following acquisitions, which will quickly reestablish a financial cushion relative to standards for the current rating. S&P intends to reassess the recovery prospects related to each rung of the capital structure once we know the permanent financing plans. If all of the financing is secured, as it initially will be, S&P would likely revise the recovery rating on the secured debt to '2' from '1' and lower the secured debt ratings to 'BB+'. S&P would also likely revise the recovery rating on the subordinated debt to '6' from '4' and lower the issue ratings to 'B+'. However, S&P expects ATK to use the subordinated notes for part of the permanent financing. The greater the proportion of subordinated notes in the final mix, the better prospects would be for higher recovery on the secured debt. S&P will resolve the CreditWatch placement once ATK successfully completes the transaction and finalizes its financing plans, which could extend beyond S&P's usual three-month resolution horizon. ALLIED SYSTEMS: Seeks Further Extension of Exclusive Periods ------------------------------------------------------------ Allied Systems Holdings, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to further extend the period within which they have exclusive right to file a plan through Dec. 10, 2013, and the period within which they have exclusive right to solicit acceptances of the plan through Feb. 10, 2014. According to Marisa A. Terranova, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, an extension of the exclusive periods will permit the Debtors and their creditors to make additional progress towards resolution of the bankruptcy cases. If the Court were to deny the request for an extension of the exclusive periods, it could open the door to chaos, as the Debtors might no longer be the focal point for reorganization negotiations and any party-in-interest could waste the Debtors' time and resources with an ill-conceived plan, Ms. Terranova adds. A hearing on the Debtors' request will be on Oct. 3, 2013, at 2:00 p.m. (EDT). Objections are due Sept. 18. Mark D. Collins, Esq., and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware; and Jeffrey W. Kelley, Esq., Ezra H. Cohen, Esq., Carolyn P. Richter, Esq., Matthew R. Brooks, Esq., and Benjamin R. Carlsen, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, also represent the Debtors. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. Yucaipa Cos. has 55 percent of the senior debt and took the position it had the right to control actions the indenture trustee would take on behalf of debt holders. The state court ruled in March 2013 that the loan documents didn't allow Yucaipa to vote. In March 2013, the bankruptcy court also gave the official creditors' committee authority to sue Yucaipa. The suit includes claims that the debt held by Yucaipa should be treated as equity or subordinated so everyone else is paid before the Los Angeles- based owner. The judge allowed Black Diamond to participate in the lawsuit against Yucaipa and Allied directors. ALLIED SYSTEMS: Creditors, Teamsters Blast $105MM Asset Sale ------------------------------------------------------------ Law360 reported that the unsecured creditors of Allied Systems Holdings Inc. and a key union on Sept. 5 objected to the bankrupt car hauler's proposed $105 million sale to a pair of private equity firms, saying the deal was structured as a way to liquidate the company rather than keep its assets operating. According to the report, in separate objections filed in Delaware bankruptcy court, both Allied's unsecured creditors and the Teamsters National Automobile Transporters Industry Negotiating Committee, a body representing 31 local unions that have collective bargaining agreements with the company, objected to the sale. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. Yucaipa Cos. has 55 percent of the senior debt and took the position it had the right to control actions the indenture trustee would take on behalf of debt holders. The state court ruled in March 2013 that the loan documents didn't allow Yucaipa to vote. In March 2013, the bankruptcy court also gave the official creditors' committee authority to sue Yucaipa. The suit includes claims that the debt held by Yucaipa should be treated as equity or subordinated so everyone else is paid before the Los Angeles- based owner. The judge allowed Black Diamond to participate in the lawsuit against Yucaipa and Allied directors. ALLY FINANCIAL: Offering $750 Million Senior Notes Due 2018 ----------------------------------------------------------- Ally Financial Inc. is offering an aggregate principal amount of $750 million of 4.750 percent senior guaranteed notes due 2018. The notes will mature on Sept. 10, 2018. Interest payments on the notes will be due semi-annually, in arrears on March 10 and September 10 each year, until maturity, commencing on March 10, 2014. Joint Book-Running Managers: Citigroup Global Markets Inc. Deutsche Bank Securities Inc. Merrill Lynch, Pierce, Fenner & Smith Incorporated RBC Capital Markets, LLC Co-Managers: Credit Agricole Securities (USA) Inc. Lloyds Securities Inc. PNC Capital Markets LLC Scotia Capital (USA) Inc. SG Americas Securities, LLC U.S. Bancorp Investments, Inc. Blaylock Robert Van, LLC C.L. King & Associates, Inc. Loop Capital Markets LLC Mischler Financial Group, Inc. A copy of the free writing prospectus is available at: http://is.gd/3BwN5O About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The Company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3 percent stake. Private equity firm Cerberus Capital Management LP keeps 14.9 percent, while General Motors Co. owns 6.7 percent. Ally Financial Inc. reported net income of $1.19 billion for the year ended Dec. 31, 2012, as compared with a net loss of $157 million during the prior year. As of June 30, 2013, the Company had $150.62 billion in total assets, $131.46 billion in total liabilities and $19.16 billion in total equity. ALLY FINANCIAL: Inks $750MM Underwriting Pact With Citigroup ------------------------------------------------------------ Ally Financial Inc. entered into an Underwriting Agreement incorporating Ally's Underwriting Agreement Standard Provisions (Debt Securities) with Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBC Capital Markets, LLC, as representatives of the several Underwriters named therein, pursuant to which Ally agreed to sell to the Underwriters $750,000,000 aggregate principal amount of 4.750 percent Senior Guaranteed Notes due 2018. The Notes will be guaranteed by Ally US LLC and IB Finance Holding Company, LLC, each a subsidiary of Ally, on an unsubordinated basis. The Securities were registered pursuant to Ally's shelf registration statement on Form S-3, which became automatically effective on Jan. 3, 2011. The Underwriting Agreement contains customary representations, warranties and covenants of the Company, conditions to closing, indemnification obligations of the Company and the Underwriters, and termination and other customary provisions. A copy of the Underwriting Agreement is available for free at: http://is.gd/Yk0lA5 About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The Company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3 percent stake. Private equity firm Cerberus Capital Management LP keeps 14.9 percent, while General Motors Co. owns 6.7 percent. Ally Financial Inc. reported net income of $1.19 billion for the year ended Dec. 31, 2012, as compared with a net loss of $157 million during the prior year. As of June 30, 2013, the Company had $150.62 billion in total assets, $131.46 billion in total liabilities and $19.16 billion in total equity. AMERICAN AIRLINES: Says It Doesn't Owe Dewey $4.6MM in Fees ----------------------------------------------------------- Law360 reported that AMR Corp. on Sept. 5 asked a New York bankruptcy judge to deduct $644,000 from the $4.6 million it owes Dewey & LeBoeuf LLP for fees and expenses stemming from various lawsuits, saying the firm wrongly used first-year associates for some of the billed work. According to the report, Dewey -- which was special counsel to the debtors and itself declared bankruptcy last year -- broke an agreement between the parties when it billed AMR for work performed by the five associates in bankruptcy and non-bankruptcy litigation. 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 U.S. U.S. Department of Justice, however, has launched an antitrust challenge to the proposed merger. 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: Mich. AG Joins Suit Against $11B Merger Deal --------------------------------------------------------------- Law360 reported that Michigan's attorney general on Sept. 5 joined the antitrust suit filed by federal regulators and six other states to block the proposed $11 billion merger between US Airways Group Inc. and bankrupt American Airlines parent AMR Corp, saying the deal would continue airline industry consolidation and lead to higher fares. According to the report, an amended complaint filed in Washington federal court added Michigan to the list of plaintiffs trying to ground the merger, alleging it would reduce the number of major domestic airlines from five to four. The antitrust suit is U.S. v. US Airways Group Inc., 13-cv-1236, U.S. District Court, District of Columbia. 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 U.S. U.S. Department of Justice, however, has launched an antitrust challenge to the proposed merger. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN APPAREL: Comparable Sales for August 2013 Increased 3% --------------------------------------------------------------- American Apparel, Inc., announced preliminary sales for the month ended Aug. 31, 2013. On a preliminary basis, total net sales for August 2013 were $55.7 million, a decrease of 1 percent over August 2012. Comparable sales for August 2013 increased 3 percent, including a 2 percent increase in comparable store sales in the retail store channel and an 11 percent increase in net sales in the online channel. Wholesale net sales decreased 6 percent for the month. "August represents our 27th consecutive month of positive comparable store sales growth," said Dov Charney, chairman and chief executive of American Apparel, Inc. "The 3% comparable sales increase in August is particularly meaningful given that we faced a 25% increase in August last year. We also believe the decrease in estimated wholesale net sales was primarily a timing difference in the placement of month end customer orders and we expect a return to positive sales growth for the wholesale segment in September." According to John Luttrell, chief financial officer of American Apparel, Inc., "As previously disclosed, we have had a difficult time cutting over to our new distribution center in La Mirada, CA, yet we have made major progress. Among other things, we have substantially fixed integration issues with information systems, strengthened our training efforts, and made necessary personnel changes. We are beginning to see light at the end of this tunnel. That being said, in the event there are further integration issues or if there are systems related disruptions in the future, we will most likely incur additional unanticipated costs and reduced sales." Dov Charney concluded, "Although we are disappointed with the lost sales and added costs from these problems, we believe as much today as ever before that once the transition is completed, the new center will improve efficiency for years to come and allow us to accelerate the growth of our retail, online and wholesale businesses." A full-text copy of the press release is available for free at: http://is.gd/Pn809L About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. The Company incurred a net loss of $37.27 million in 2012, as compared with a net loss of $39.31 million in 2011. The Company's balance sheet at June 30, 2013, showed $335.32 million in total assets, $392.67 million in total liabilities and a $57.35 million total stockholders' deficit. * * * American Apparel carries a Caa1 Corporate Family Rating from Moody's Investors Service and a 'B-' corporate credit rating from Standard & Poor's Ratings Services. AMERICAN MEDIA: Terminates Employment of John Swider ---------------------------------------------------- American Media Inc. on Sept. 3, 2013, divested substantially all of its assets comprising its distribution and merchandising businesses operated by Distribution Services, Inc., a wholly-owned subsidiary of the the Company. In connection with the divestiture, John Swider will cease to be an employee of the Company on or about Sept. 14, 2013. John Swider is the executive vice president, operations, of American Media, Inc., as well as the president and CEO of Distribution Services, Inc. About American Media Based in New York, American Media, Inc., publishes celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI manages 14 different Web sites. The company also owns Distribution Services, Inc., the country's #1 in-store magazine merchandising company. American Media, Inc., and 15 units, including American Media Operations, Inc., filed for Chapter 11 protection in Manhattan (Bankr. S.D.N.Y. Case No. 10-16140) on Nov. 17, 2010, with a prepackaged plan. The Debtors emerged from Chapter 11 reorganization in December 2010, handing ownership to former bondholders. The new owners include hedge funds Avenue Capital Group and Angelo Gordon & Co. American Media incurred a net loss of $55.54 million on $348.52 million of total operating revenues for the fiscal year ended March 31, 2013, as compared with net income of $22.29 million on $386.61 million of total operating revenues for the fiscal year ended March 31, 2012. The Company's balance sheet at June 30, 2013, showed $593.16 million in total assets, $667.12 million in total liabilities, $3 million in redeemable noncontrolling interest and a $76.95 million total stockholders' deficit. * * * As reported by the TCR on Jan. 22, 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Boca Raton, Fla.- based American Media Inc. to 'CCC+ ' from 'B-'. "The downgrade conveys our expectation that continued declines in circulation and advertising revenues will outweigh the company's cost reductions, resulting in deteriorating operating performance, rising debt leverage, and thinning discretionary cash flow," said Standard & Poor's credit analyst Hal Diamond. AMERICAN PATRIOT: Section 341(a) Meeting Set on Sept. 30 -------------------------------------------------------- A meeting of creditors in the bankruptcy case of American Patriot Gold, LLC, will be held on Sept. 30, 2013, at 1:30 p.m. at Houston, 515 Rusk Suite 3401. Creditors have until Dec. 30, 2013, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. American Patriot Gold, LLC, filed a bankruptcy petition (Bankr. S.D. Tex. Case No. 13-35334) on Aug. 30, 2013. The petition was signed by Rocky V. Emery as manager. The Debtor disclosed total assets of $25.9 million and total liabilities of $11.6 million. Reese W. Baker, Esq., at Baker & Associates, LLP, serves as the Debtor's counsel. AMERICAN POWER: Marc Chalfen Held 10.7% Equity Stake at Nov. 28 --------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Allen Kahn MD Revocable Trust and Marc J. Chalfen disclosed that as of Nov. 28, 2012, they beneficially owned 5,031,250 shares of common stock of American Power Group Corporation representing 10.7 percent of the shares outstanding. A copy of the regulatory filing is available for free at: http://is.gd/xUTc8Y About American Power Group American Power Group's alternative energy subsidiary, American Power Group, Inc., provides a cost-effective patented Turbocharged Natural GasTM conversion technology for vehicular, stationary and off-road mobile diesel engines. American Power Group's dual fuel technology is a unique non-invasive energy enhancement system that converts existing diesel engines into more efficient and environmentally friendly engines that have the flexibility to run on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and compressed natural gas; (3) diesel fuel and pipeline or well-head gas; and (4) diesel fuel and bio-methane, with the flexibility to return to 100 percent diesel fuel operation at any time. The proprietary technology seamlessly displaces up to 80% of the normal diesel fuel consumption with the average displacement ranging from 40 percent to 65 percent. The energized fuel balance is maintained with a proprietary read-only electronic controller system ensuring the engines operate at original equipment manufacturers' specified temperatures and pressures. Installation on a wide variety of engine models and end-market applications require no engine modifications unlike the more expensive invasive fuel-injected systems in the market. See additional information at www.americanpowergroupinc.com. American Power incurred a net loss available to common shareholders of $14.66 million for the year ended Sept. 30, 2012, compared with a net loss available to common shareholders of $6.81 million during the prior year. The Company's balance sheet at June 30, 2013, showed $10.51 million in total assets, $4.01 million in total liabilities, all current, and $6.49 million in stockholders' equity. AMERICAN STANDARD ENERGY: Incurs $93.7-Mil. Net Loss in 2012 ------------------------------------------------------------ American Standard Energy Corp. filed with the U.S. Securities and Exchange Commission on Aug. 13, 2013, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2012. BDO USA, LLP, in Houston, Texas, expressed substantial doubt about American Standard Energy's ability to continue as a going concern, citing the Company's recurring losses from operations, working capital deficiency and limited cash resources. The Company reported a net loss of $93.74 million on $19.74 million of total revenues in 2012, compared with a net loss of $13.67 million on $9.80 million of total revenues in 2011. "General and administrative ("G&A") expenses were $37,976,747 for the year ended Dec. 31, 2012, an increase of $21,589,114 (132%) from $16,387,633 for the year ended Dec. 31, 2011. The primary factor for the increase in G&A expenses was the recognition of $33,805,391 in non-cash stock based compensation expense compared to $10,622,904 for the prior year. The increase was offset by lower G&A expense due to no penalties accruing related to registration obligations which was $2,019,943 for the year ended Dec. 31, 2011. "Impairment expense for the year ended Dec. 31, 2012, was $28,640,726 compared to $1,027,552 for the year ended Dec. 31, 2011. The Company impaired $2,268,528 related to its unproved leaseholds for the year ended Dec. 31, 2012. The impairment consisted of several expired leases and an estimate of leases where expiration is probable in the foreseeable future. In addition to the unproved property impairment, the Company impaired approximately $26,372,198 of its proved properties as the carrying value of the properties was higher than the estimated fair value at Dec. 31, 2012. "Other income (expense) increased to ($15,677,549) for the year ended Dec. 31, 2012, from ($2,265,189) at Dec. 31, 2011." The Company's balance sheet at Dec. 31, 2012, showed $129.46 million in total assets, $45.67 million in total liabilities, and shareholders' equity of $83.79 million. A copy of the Form 10-K is available at http://is.gd/2HQ4iZ Scottsdale, Ariz.-based American Standard Energy Corp. is an independent oil and natural gas production company engaged in the acquisition and development of leaseholds of oil and natural gas properties. The Company's leasehold acreage is located in the Permian Basin of West Texas and Eastern New Mexico, the Eagle Ford Shale Formation of South Texas, the Bakken Shale Formation in North Dakota, the Niobrara Shale Formation of Wyoming and Nebraska, the Eagle Bine Shale Formation in South East Texas, and the Gulf Coast of South Texas. ANCHOR BANCORP: Banking Bankruptcy That Takes a Different Path -------------------------------------------------------------- Stephen J. Lubben, writing for The New York Times' DealBook, reported that when a bank holding company files for bankruptcy, it usually occurs after the Federal Deposit Insurance Corporation has taken away its banking subsidiary. In such a Chapter 11 case, the only thing left for the company to do is marshal the assets -- including a typically large tax refund -- and pay out the results to creditors before liquidating. Washington Mutual provides the most obvious example of this basic model. But a small bank holding company in Wisconsin is following a different model, the report said. The company, Anchor BanCorp Wisconsin, plans to use Chapter 11 to recapitalize rather than liquidate. And it filed for Chapter 11 before its bank, AnchorBank, was taken over by regulators. Indeed, it hopes that its Chapter 11 case will avoid such a takeover. During the financial crisis, the holding company received more than $100 million from the federal Troubled Asset Relief Program, the report recalled. But it was still wobbly, and faced the prospect of losing its bank. By filing for Chapter 11, it could take three crucial steps, the report said. First, it would be able to pay off more than $180 million in debt owed to other banks for just $49 million. Second, it could convert the United States Treasury's preferred stock -- received as part of the TARP bailout -- into a small equity stake, worth about $6 million, in the holding company, the report added. As a result, the Treasury Department would realize a loss on its TARP investment, though that is a relatively small piece of that program. And most important, Anchor said it would cancel its existing shares and sell the remaining new equity to investors, leading to the recapitalization of the holding company, the report further related. About Anchor Bancorp Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. sought protection under Chapter 11 of the Bankruptcy Code on Aug. 12, 2013 (Case No. 13-14003, Bankr. W.D. Wis.) to implement a "pre-packaged" plan of reorganization in order to facilitate the restructuring of the Company and the recapitalization of AnchorBank, fsb, a wholly-owned subsidiary of the Company. As of March 31, 2013, the Debtor listed total assets of $2,367,583,000 and total liabilities of $2,427,447,000. Chief Judge Robert D. Martin oversees the Chapter 11 case. The Debtor is represented by Kerkman Dunn Sweet DeMarb as lead bankruptcy counsel and Skadden, Arps, Slate, Meagher & Flom LLP, as special counsel. CohnReznick LLP serves as the Debtor's financial advisor. Anchor BanCorp is a registered savings and loan holding company incorporated under the laws of the State of Wisconsin. The Company is engaged in the savings and loan business through its wholly owned banking subsidiary, AnchorBank, fsb. Anchor BanCorp and its wholly-owned subsidiaries, AnchorBank FSB, each consented to the issuance of an Order to Cease and Desist by the Office of Thrift Supervision. The Corporation and the Bank continue to diligently work with their financial and professional advisors in seeking qualified sources of outside capital, and in achieving compliance with the requirements of the Orders. In connection with the Plan, the Company has entered into definitive stock purchase agreements with institutional and other private investors as part of a $175 million recapitalization of the institution. No new investor will own in excess of 9.9 percent of the common equity of the recapitalized Holding Company. The reorganization filing includes only Anchor BanCorp, the holding company for the Bank, allowing the Bank to remain outside of bankruptcy and to continue normal operations. The Bank operates 55 offices throughout Wisconsin. Operations at the Bank will continue as usual throughout the reorganization process. ARCAPITA BANK: Hires Hire Linklaters for EuroLog Sale Negotiations ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has approved Arcapita Bank B.S.C.(c), et al.'s supplemental application for authorization to modify and expand the terms of retention of Linklaters LLP as special counsel to the Debtors to include services provided in connection with negotiations for the sale of the assets of the EuroLog Affiliates, effective July 15, 2013. Upon the occurrence of the Plan's Effective Date, RA Holding Corp. and RA Holdco 2 LLC will accede to the Supplemental Engagement Letter and will assume any liability of the Debtors under the Supplemental Engagement Letter for the Linklaters Fees, at which time payment of the Linklaters Fees will not be subject to approval by the Court pursuant to the Bankruptcy Code, Bankruptcy Rules, Local Rules or any order of the Court. As reported in the TCR on Aug. 21, 2013, the Court approved Linklaters' original employment application pursuant to an order entered on May 17, 2012. As set forth in the Original Application, the Debtors retained Linklaters to, among other things, assist with international nonbankruptcy matters and to advise the Debtors with respect to their investments in various portfolio companies. Specifically, the EuroLog Affiliates have agreed to provide a retainer to Linklaters in the amount of GBP400,000, and the parties have agreed that the Debtors will be liable for legal expenses relating to (i) any internal corporate approvals required by the Debtors or their affiliates to execute the EuroLog Sale and (ii) the Debtors' bankruptcy proceedings. Under the terms of the Supplemental Engagement Letter, the Debtors will not be directly liable for Linklaters' other fees except in the case of an "Arcapita Abort Event" (for instance, if the Debtors or the EuroLog Affiliates withdraw from the EuroLog Sale), under the terms and conditions set forth in the Supplemental Engagement Letter. Even in the case of an Arcapita Abort Event, the Purchaser has agreed that it will still be liable for any amount of the Linklaters Fees attributable to additional due diligence by Linklaters. Moreover, any liability of the Debtors for the Linklaters Fees will be assumed by RA Holding Corp. and RA Holdco 2 LLC on or around the time of the Effective Date of the Plan. Therefore, the only situation in which the Debtors would be directly responsible for paying the entire amount of the Linklaters Fees would be if (a) an Arcapita Abort Event occurred and (b) the Plan's Effective Date has not occurred. Linklaters intends to (a) charge for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered and (b) seek reimbursement of actual and necessary out-of-pocket expenses. The applicable hourly billable rates for the EuroLog Services to be rendered are: i. London Rates (GBP) Partner GBP750 Counsel 650 Managing Associate 600 A2 500 A1 400 Trainee 275 ii. European Rates (Euro) Poland Spain Germany France Luxembourg ------ ----- ------- ------ ---------- Partner EUR570 EUR710 EUR710 EUR750 EUR750 Managing Associate/ Counsel 425 625 600 600 600 Associate 315 475 475 475 475 About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group had roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for the Southern District of New York entered its Findings of Fact, Conclusions of Law, and Order confirming the Second Amended Joint Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and Related Debtors with respect to teach Debtor other than Falcon Gas Storage Company, Inc. A copy of the Confirmed Second Amended Joint Plan (With First Technical Modifications) is available at: http://bankrupt.com/misc/arcapita.doc1265.pdf ARCAPITA BANK: Timeline Ok'd; Omnibus Hearing Reset to Sept. 19 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York the timeline with respect to the implementation of the confirmed Chapter 11 plan of reorganization of Arcapita Bank B.S.C.(c) and its affiliate debtors, to achieve an Effective Date of Sept. 17, 2013: * Sept. 9, 2013 - Debtors and their subsidiaries to conduct the requisite board meetings (or similar authorizing actions) necessary to approve consummation of the Plan transactions. * Sept. 10, 2013 - pursuant to Section 2.4(b) of the Master Murabaha Agreement, Debtors to provide notice to the Exit Facility Arranger of the closing of the Exit Facility on the Effective Date. * Sept. 11, 2013 - Debtors to advise share registrar of Arcapita Bank to take all actions necessary to effect transfers of Arcapita Bank shares from existing shareholders to one or more subsidiaries of RA Holding Corp., with such transfers to be effective as of the Effective Date. * Sept. 12, 2013 - Debtors to initiate all actions necessary to implement the Plan in the Cayman Islands, including the merger of certain Cayman subsidiaries of Arcapita Bank contemplated by the Plan, with such actions to be effective as of the Effective Date. * Sept. 12, 2013 - Debtors and newly formed entities to execute substantially all of the Plan implementation documents (other than the financing documents governed by UK law which will be executed on the Effective Date), to be delivered and effective as of the Effective Date. * Sept. 17, 2013 - Effective Date. On the satisfaction of each of the above deadlines, the Debtors will provide the Committee with written notice confirming that such obligations have been fulfilled. If any of the foregoing deadlines is not met, the Committee or the Debtors may request the Court to conduct a chambers conference to discuss the status of the Effective Date and actions necessary to accomplish the Effective Date, including any relief that may be requested from the Court. If such chambers conference concludes without final resolution of any dispute, the Committee or the Debtors may file with the Court any motion or other request for relief related to the Effective Date that such party believes is appropriate. Such motion or other request will be set for hearing on an expedited basis on Sept. 19, 2013, at 2:30 p.m. or at such other date and time as ordered by the Court at the chambers conference. Filing and briefing schedules related to any such motion shall be set by the Court at the chambers conference. The omnibus hearing previously scheduled for Sept. 17, 2013, is hereby rescheduled to Sept. 19, 2013, at 2:30 p.m. As used in this Order, the term Debtors does not include Falcon Gas Storage Company, Inc., whose Chapter 11 case is also being jointly administered under case number 12-11076. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group had roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for the Southern District of New York entered its Findings of Fact, Conclusions of Law, and Order confirming the Second Amended Joint Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and Related Debtors with respect to teach Debtor other than Falcon Gas Storage Company, Inc. A copy of the Confirmed Second Amended Joint Plan (With First Technical Modifications) is available at: http://bankrupt.com/misc/arcapita.doc1265.pdf ARCAPITA BANK: Liquidation Procs. for Non-Eligible Claimants Ok'd ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York confirmed in an order entered Sept. 6, 2013, Arcapita Bank B.S.C.(c), et al.'s authority to implement liquidation procedures, pursuant to the Debtors' confirmed Chapter 11 Plan of Reorganization for securities that must be liquidated pursuant to the Plan because they are distributable to Claimants who are not eligible to receive such Securities. As reported in the TCR on Aug. 21, 2013, as defined in the Plan, Non-Eligible Claimants are those Claimants who are not any of the following: (i) a Qualified Purchaser, (ii) a Knowledgeable Employee, or (iii) a Non-U.S. Person. Accordingly, the Plan provides that if a Non-Eligible Claimant is entitled to receive Securities, those Securities "shall be liquidated," and the applicable Non-Eligible Claimant "shall receive the proceeds thereof in lieu of any other Distribution." The Debtors believe that most, if not all, of the Non-Eligible Claimants will hold small Claims in Class 5(a). The Debtors have determined that because the Securities will be issued over an extended course of time pursuant to Section 8.3 of the Plan, the costs of liquidating the Securities that would otherwise be distributed to Non-Eligible Claimants (the "Non-Eligible Securities") through seriatim sales of relatively small batches of Non-Eligible Securities will be disproportionate to the proceeds that can be realized from such sales. Accordingly, the Debtors believe that they should be authorized to liquidate the Non- Eligible Securities that would otherwise be distributable to Holders of Claims in Class 5(a) by providing the Non-Eligible Claimants in Class 5(a) with a recovery that is consistent with the recovery provided to other Holders of Class 5(a) Claims that made the Convenience Class Election. Given the expected costs of liquidating the Non-Eligible Securities, the Debtors propose to treat Non-Eligible Claimants in Class 5(a) whose aggregate Allowed Class 5(a) Claims are less than or equal to $160,000 as if they had made the Convenience Class Election (the "Deemed Convenience Class Treatment"). Because of securities regulations and the costs associated with liquidating the Securities pursuant to a formal auction, the Debtors further propose to provide the Deemed Convenience Class Treatment to all other Non-Eligible Claimants with Claims in Class 5(a) unless they choose to opt-out of such treatment on a "securities eligibility form," which will be sent to all Holders of Claims and Interests entitled to receive Securities pursuant to the Plan. In other words, the Debtors propose to pay each Non- Eligible Claimant receiving the Deemed Convenience Class Treatment in Cash in an amount equal to the lesser of (i) 50% of the aggregate sum of such Non-Eligible Claimant's Allowed Class 5(a) Claims, or (ii) $12,500. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group had roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for the Southern District of New York entered its Findings of Fact, Conclusions of Law, and Order confirming the Second Amended Joint Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and Related Debtors with respect to teach Debtor other than Falcon Gas Storage Company, Inc. A copy of the Confirmed Second Amended Joint Plan (With First Technical Modifications) is available at: http://bankrupt.com/misc/arcapita.doc1265.pdf ARCAPITA BANK: Seeks OK of EuroLog Assets Sale to Secret Buyer -------------------------------------------------------------- Arcapita Bank B.S.C.(c), and its affiliate debtors ask the U.S. Bankruptcy Court for the Southern District of New York to authorize the Debtors to take actions, incur obligations, and provide the consents necessary or appropriate to authorize, approve, and facilitate the sale by certain indirect non-Debtor subsidiaries identified as the EuroLog Affiliates of their interests in a group of companies that own and operate a variety of warehousing assets located throughout Europe pursuant to a Share Purchase Agreement dated as of Sept. 4, 2013. According to the Debtors, the purchaser is an affiliate of a leading global private investment firm with in excess of $50 billion of capital under management. The Official Committee of Unsecured Creditors and the Joint Provisional Liquidators of Debtor Arcapita Investments Holdings Limited ("AIHL") have been made aware of the identity of the purchaser. Furthermore, the Debtors seek confirmation that on the Effective Date, New Arcapita Holdco 2 will assume all of the Debtors' obligations under the SPA and any related agreements, consistent with the terms therein. The Debtors also seek authorization for New Arcapita Holdco 2 to assume, as of the Effective Date and subject to ratification by New Arcapita Holdco 2, all of the Guaranteed Obligations (as defined in the SPA), including those of Arcapita Bank that existed prior to the Effective Date. Additionally, the Debtors request that the Court approve the Sale based on the process that has already taken place and, to the extent they are applicable to the Sale, exempt the EuroLog Assets from further compliance with the Disposition Procedures (governing the disposition of the Debtors' investments as set forth in the Cooperation Settlement Term Sheet, attached as Annex 8 to the Notice of Filing of Plan Supplement Documents) following the Effective Date, subject to the occurrence of the Sale's closing. According to papers filed with the Court, the Debtors have agreed, subject to Court approval, to sell the EuroLog Assets to the Purchaser pursuant to the SPA. "The EuroLog Assets have been marketed extensively including pursuant to an initial public offering that was launched with the approval of this Court on Oct. 9, 2012, but ultimately withdrawn," the Debtors tell the Court. A summary of the essential terms of the Sale is available at: http://bankrupt.com/misc/arcapita.doc1481.pdf The hearing to consider the motion will take place on Sept. 23, 2013 at 11:30 a.m. Any responses or objections to the Motion will be filed electronically with the Court so as to be received no later than Sept. 17, 2013 at 12:00 p.m. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group had roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for the Southern District of New York entered its Findings of Fact, Conclusions of Law, and Order confirming the Second Amended Joint Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and Related Debtors with respect to teach Debtor other than Falcon Gas Storage Company, Inc. A copy of the Confirmed Second Amended Joint Plan (With First Technical Modifications) is available at: http://bankrupt.com/misc/arcapita.doc1265.pdf ARISTA POWER: Incurs $853,000 Net Loss in Second Quarter -------------------------------------------------------- Arista Power, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $853,000 on $328,617 of sales for the three months ended June 30, 2013, compared with a net loss of $1.01 million on $639,810 of sales for the same period last year. The Company reported a net loss of $2.03 million on $437,260 of sales for the six months ended June 30, 2013, compared with a net loss of $1.84 million on $950,984 of sales for the comparable period of 2012. The Company's balance sheet at June 30, 2013, showed $2.54 million in total assets, $3.11 million in total liabilities, and a stockholders' deficit of $571,126. "The financial statements have been prepared assuming that the Company will continue as a going concern. Since its formation, the Company utilized funds generated from private placement offerings and debt to fund its product development and operations and has incurred a cumulative net loss of $25,789,328. The recurring losses from operations to date 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/as8C8I Rochester, N.Y.-based Arista Power, Inc., is a developer, manufacturer, and supplier of custom-designed power management systems, renewable energy storage systems, and a supplier and designer of solar energy systems. AS AMERICA INC: S&P Withdraws 'B' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services said it withdrew its 'B' corporate credit and 'B-' issue-level ratings on AS America Inc. Following the acquisition of AS America Inc. by LIXIL Corp. (unrated) and the September redemption in full of the remaining principal amount of the company's outstanding 10.75% senior secured notes due 2016, S&P no longer rates any of AS America Inc.'s debt. S&P is withdrawing the corporate credit and issue- level ratings on AS America at the request of the company. ASPEN GROUP: Century Equity Issues Research Report -------------------------------------------------- Century Equity Research issued a research report on Aspen Group, Inc., dated Sept. 3, 2013. The opinions contained in the research report are those of the author and not Aspen Group. "The summer season is generally weaker for enrollments so the financial performance for the 1st quarter of FY2014 ending 7/31/2013 is expected to be lower sequentially," the report states. A full-text copy of the research report is available for free at: http://is.gd/NabsHA About Aspen Group Denver, Colo.-based Aspen Group, Inc., was founded in Colorado in 1987 as the International School of Information Management. On Sept. 30, 2004, it was acquired by Higher Education Management Group, Inc., and changed its name to Aspen University Inc. On May 13, 2011, the Company formed in Colorado a subsidiary, Aspen University Marketing, LLC, which is currently inactive. On March 13, 2012, the Company was recapitalized in a reverse merger. Aspen's mission is to become an institution of choice for adult learners by offering cost-effective, comprehensive, and relevant online education. Approximately 88 percent of the Company's degree-seeking students (as of June 30, 2012) were enrolled in graduate degree programs (Master or Doctorate degree program). Since 1993, the Company has been nationally accredited by the Distance Education and Training Council, a national accrediting agency recognized by the U.S. Department of Education. The Company reported a net loss of $6.01 million on $2.68 million of revenues for the year ended Dec. 31, 2012, as compared with a net loss of $2.13 million on $2.34 million of revenues during the prior year. As of April 30, 2013, the Company had $3.40 million in total assets, $2.80 million in total liabilities and $594,375 in total stockholders' equity. Salberg & Company, P.A., in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the transition period ending April 30, 2013. The independent auditors noted that the Company has a net loss allocable to common stockholders and net cash used in operating activities for the four months ended April 30, 2013, of $1,402,982 and $918,941, respectively, and has an accumulated deficit of $12,740,086 at April 30, 2013. These matters raise substantial doubt about the Company's ability to continue as a going concern. ASUZA RDA: Moody's Cuts Tax Bonds Rating to Ba2 ----------------------------------------------- Moody's Investors Service has downgraded to Ba2 the rating of the Successor Agency to the City of Azusa Redevelopment Agency's (CA) Tax Allocation Refunding Bonds, Series 2005A and Tax Allocation Refunding bonds, Series 2003A. The bonds are secured by a pledge of tax increment revenues from the agency's redevelopment project area. For purposes of this analysis, the cash flow is consistent with the tax revenue allocation process under AB 1x26 notwithstanding the original indenture that prescribes the Series 2005A and Series 2003A bonds as senior to several series of subordinate lien debt service. Ratings Rationale: The downgrade to Ba2 from Ba1 reflects the weak coverage ratios for the agency's entire debt service payments net of all pass- through obligations, notwithstanding the relative strengths of the project area's size, diversity of taxpayers, and solid total assessed value to incremental value. The project area's coverage of both senior and subordinate bonds, net of all pass-through payments, for the first payment period in calendar year 2013 is a very weak 0.88 times and a modest 1.58 times in the second payment period for the same calendar year. Moody's notes that the city has been approved by the state to reserve excess funding in the second payment period to make debt service payments in the first payment period where coverage falls below sum-sufficient. Moody's anticipates the city will continue this practice for sum- sufficient coverage in the first payment period throughout the maturity of the bonds. Importantly, however, is the state legislature's willingness to modify the cash flows available for bond debt service and/or the city's reserve mechanism for debt service as a considerable source of uncertainty and a major factor in the downgrade. As a credit strength, the project area is of good size and features a somewhat diverse and stable mix of taxpayers. The project area also has solid total assessed value (AV) to incremental AV at 78.6% in fiscal 2013, comparable to the 80% threshold outlined in Moody's February special comment. The city's wealth indicators are somewhat below national averages and have been factored into the current rating. Under AB X1 26 and AB 1484, the statutes that dissolved all California redevelopment agencies, tax increment revenue is placed in trust with the County auditor, who makes semi-annual distributions of funds sufficient to pay debt service on tax allocation bonds, including other obligations. Strengths - Large project area - Assessed value expected to increase Challenges - Large amount of debt outstanding - Below 2x coverage in each payment period What could move the rating UP - Significant and sustained increase in assessed valuation - Increased debt service coverage in each payment period What could move the rating-DOWN - Erosion of semi-annual debt service coverage - Protracted assessed value decline The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. ATLANTIC COAST: Federal Reserve OKs Appointment of Two Directors ---------------------------------------------------------------- The Federal Reserve Bank of Atlanta notified Atlantic Coast Financial Corporation that it did not have any objection to the appointments of Kevin G. Champagne and John J. Dolan as directors of the Company. Messrs. Champagne and Dolan began their service as directors of the Company effective Aug. 30, 2013. Messrs. Champagne and Dolan were elected to the board of directors by stockholders at the Company's annual meeting on Aug. 16, 2013. As a result of the appointment of the two new directors, Messrs. Thomas F. Beeckler's and Charles E. Martin's service on the board has ended. The stockholders also elected Mr. Dave Bhasin to the board of directors of the Company at the annual meeting on Aug. 16, 2013. The Federal Reserve Bank of Atlanta has not completed its review of Mr. Bhasin and his appointment as a director remains subject to the Federal Reserve Bank of Atlanta's non-objection. Also on Aug. 30, 2013, the board of directors of the Company appointed Messrs. Champagne and Dolan to the Audit Committee naming Mr. Dolan as Chairman and designating Mr. Champagne as the Audit Committee Financial Expert. As a result of the appointment of an Audit Committee Financial Expert, the Company has regained compliance with Nasdaq Rule 5605(c)(2)(A) regarding the composition of its Audit Committee. About Atlantic Coast Jacksonville, Florida-based Atlantic Coast Financial Corporation is the holding company for Atlantic Coast Bank, a federally chartered and insured stock savings bank. It is a community- oriented financial institution serving northeastern Florida and southeastern Georgia markets through 12 locations, with a focus on the Jacksonville metropolitan area. The Company reported a net loss of $6.66 million on $33.50 million of total interest and dividend income for the year ended Dec. 31, 2012, as compared with a net loss of $10.28 million on $38.28 million of total interest and dividend income in 2011. The Company's balance sheet at June 30, 2013, showed $742.19 million in total assets, $711.02 million in total liabilities and $31.16 million in total stockholders' equity. McGladrey LLP, in Jacksonville, Florida, 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 that have adversely impacted capital at Atlantic Coast Bank. The failure to comply with the regulatory consent order may result in Atlantic Coast Bank being deemed undercapitalized for purposes of the consent order and additional corrective actions being imposed that could adversely impact the Company's operations. This raises substantial doubt about the Company's ability to continue as a going concern. ATOMIC PLAYPEN: Atomic Data Acquires Hosting Assets --------------------------------------------------- Atomic Data, LLC on Sept. 5 disclosed that it has purchased the hosting platform used by corporate clients of the recently bankrupt Atomic Playpen. The bankruptcy and purchase of assets follows a legal dispute between Atomic Data and Atomic Playpen over the use of the name "Atomic", which Atomic Data has utilized for more than ten years. Atomic Playpen recently began to operate under the name "Atomic," which led to market confusion. This confusion in the marketplace led to litigation between Atomic Data and Atomic Playpen. Atomic Data secured a favorable settlement to the dispute in July of 2013. Shortly after the conclusion of litigation, Atomic Playpen unexpectedly closed its doors. Upon hearing of the closure, Atomic Data CEO and co-founder Jim Wolford expressed regret that Atomic Playpen's clients would now, "be left without a solution for hosting needs". As a digital agency, Atomic Playpen and its clients relied heavily on IT infrastructure to host, develop, and support their work--the kind of infrastructure that Atomic Data has specialized in since 2001. Being perfectly suited to keep their clients' critical infrastructure up and running, Atomic Data took an active role in the bankruptcy process and bought all hosting related assets from the bankruptcy estate of Atomic Playpen. All 17 of Atomic Playpen's former corporate hosting clients have since chosen to transition to Atomic Data for their cloud hosting needs. About Atomic Data Privately held Atomic Data, founded in 2001, provides data center colocation, private cloud solutions, private enterprise networks, 24 x 7 NOC and Service Desk support, voice solutions, and Microsoft development and hosting solutions for customers large and small throughout the globe. AVID TECHNOLOGY: Requests Hearing to Stay NASDAQ Delisting ---------------------------------------------------------- Avid Technology, Inc. on Sept. 5 disclosed that on August 29, 2013 it received a letter from the staff of the Listing Qualifications Department of The NASDAQ Stock Market LLC indicating that unless the Company requests a hearing before the NASDAQ Listing Qualifications Panel by September 5, 2013, the Company's common stock would be subject to delisting based upon its non-compliance with NASDAQ's filing requirement, as set forth in Listing Rule 5250(c)(1). The Staff's determination letter was issued in accordance with standard NASDAQ procedures due to the delayed filing of the Company's Form 10-K for the fiscal year ended December 31, 2012 and Forms 10-Q for the fiscal quarters ended March 31, 2013 and June 30, 2013. The Company has requested a hearing before the Panel and also requested a stay of the Staff's delisting determination. As a result of this request, the delisting of the Company's common stock is automatically stayed until at least September 20, 2013 and, assuming the Panel grants the Company's request for a stay, any final delisting action will be further stayed until at least the Panel's final determination following the hearing. At the hearing, the Company will present its plan to regain compliance with the Rule and request the continued listing of its common stock on NASDAQ pending such compliance. The Panel has the discretion to grant the Company an extension until March 14, 2014 to regain compliance with the Rule. There can be no assurance that the Panel will grant the Company's requests. As previously announced, the Delinquent Reports were not timely filed due to the Company's ongoing accounting evaluation and pending restatement of its financial statements for the fiscal years ended December 31, 2011, 2010 and 2009 and quarterly periods ended March 31, 2012 and 2011, June 30, 2012 and 2011, and September 30, 2012 and 2011. For more information regarding the accounting evaluation, please see the Notification of Late Filing on Form 12b-25 filed by the Company on August 12, 2013, and the Current Report on Form 8-K filed by the Company on May 21, 2013. Although the Company is working diligently and has made substantial progress in the accounting evaluation process, that process is complicated and time-consuming, and additional time is needed to complete it. The Company intends to complete the restatement and to file the Delinquent Reports as promptly as practicable. During this process, Avid plans to continue to invest in its product innovation and execute on its growth strategy. Avid has no debt and ample cash to support it in these efforts and believes it is well positioned to support its customers' ongoing success. About Avid Technology Headquartered in Burlingon, Massachusetts, Avid Technology, Inc. -- http://apps.avid.com/-- is a provider of digital media content-creation products and solutions for film, video, audio and broadcast professionals, as well as artists and home enthusiasts. The Company provides digital media content-creation products and solutions to customers in the three market segments: media enterprises, professionals and Creative Enthusiasts. The Company provides a range of software and hardware products and solutions, as well as services offerings, to address the needs, skills and levels found within its customer market segments. The Company offers video and audio products and solutions, which are designed for the desktop or home studio. The Company offers a range of products and solutions, including hardware- and software-based video- and audio-editing tools, collaborative workflow and asset management solutions, and graphics-creation and automation tools, as well as scalable media storage options. AUDIOEYE INC: Incurs $529,900 Net Loss in Second Quarter -------------------------------------------------------- AudioEye, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $529,900 on $200,232 of total revenue for the three months ended June 30, 2013, compared with a net loss of $201,609 on $40,623 of revenue for the same period last year. The Company reported a net loss of $925,986 on $424,529 of total revenue for the six months ended June 30, 2013, compared with a net loss of $427,221 on $55,628 of total revenue for the corresponding period in 2012. The Company's balance sheet at June 30, 2013, showed $4.22 million in total assets, $406,826 in total liabilities, and stockholders' equity of $3.81 million. "As shown in the accompanying financial statements, the Company has incurred net losses of $925,986 and $427,221 for the six months ended June 30, 2013, and 2012, respectively. In addition, the Company had an accumulated deficit of $5,322,833 and $4,396,847 and a working capital deficit of $58,229 and $2,775,216 as of June 30, 2013, and Dec. 31, 2012, respectively. These conditions raise substantial doubt as to the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/uDkgN4 Tucson, Arizona-based AudioEye, Inc., creates voice driven technologies for Internet based content. The Company offers voice-controlled internet browsing, artificial intelligence engines and other audio interfaces. BANK OF AMERICA: DBRS Rates Preferred Stock at 'BB' --------------------------------------------------- DBRS Inc. has placed that the long and short-term ratings of Bank of America Corporation (Bank of America or the Company), including its Issuer & Senior Debt Rating of "A", its R-1 (middle) Short- Term Instruments Rating, and Bank of America, N.A.'s A (high) Deposits & Senior Debt and its R-1 (middle) Short-Term Instruments Rating Under Review with Negative Implications. This rating action follows DBRS's announcement that it has removed the Bank Holding Company "A" rating floor, and the related A (high) operating bank rating floor, for banks that were designated as critically important banking organizations (CIBs) in the United States. With the removal of the rating floor, DBRS will review the Company's fundamentals and intrinsic rating level. DBRS's review will also incorporate any improvements at Bank of America and its subsidiaries in its assessment. Previously, DBRS has indicated that both Bank of America's final debt ratings as well as the final debt ratings of its primary banking subsidiaries each incorporated one notch of uplift from DBRS' intrinsic assessments due to the application of the rating floor in the U.S. The review is expected to be completed within 90 days. Issuer Debt Rated Rating Action Rating ------ ---------- ------------- ------ Bank of America Issuer & Senior UR-Neg. A Corporation Debt Bank of America Subordinated Debt UR-Neg. A(low) Corporation Bank of America Short-Term UR-Neg. R-1 Corporation Instruments (middle) Bank of America Preferred Stock UR-Neg. BB(high) Corporation Bank of America Trust Preferred UR-Neg. A(low) Corporation Securities Bank of America, N.A. Deposits & Senior UR-Neg. A(high) Debt Bank of America, N.A. Subordinated Debt UR-Neg. A Bank of America, N.A. Short-Term UR-Neg. R-1 Instruments (middle) BAC Canada Finance Medium-Term UR-Neg. A Company Notes BAC Canada Finance Short-Term UR-Neg. R-1 Company Instruments (middle) Merrill Lynch & Co., Issuer & Senior UR-Neg. A Inc. Debt Merrill Lynch & Co., Subordinated Debt UR-Neg. A(low) Inc. Merrill Lynch & Co., Short-Term UR-Neg. R-1 Inc. Instruments (middle) FIA Card Services, Deposits & Senior UR-Neg. A(high) N.A. Debt BAC Capital Trust VI Trust Preferred UR-Neg. A(low) Securities BAC Capital Trust VII Trust Preferred UR-Neg. A(low) Securities BAC Capital Trust VIII Trust Preferred UR-Neg. A(low) Securities BAC Capital Trust XI Trust Preferred UR-Neg. A(low) Securities BankAmerica Capital Trust Preferred UR-Neg. A(low) III Securities BankBoston Capital Trust Preferred UR-Neg. A(low) Trust III Securities BankBoston Capital Trust Preferred UR-Neg. A(low) Trust IV Securities BankBoston Capital Trust Preferred UR-Neg. A(low) Trust IV Securities Barnett Capital III Trust Preferred UR-Neg. A(low) Securities Fleet Capital Trust V Trust Preferred UR-Neg. A(low) Securities Merrill Lynch Capital Trust Preferred UR-Neg. A(low) Trust I Securities Merrill Lynch Preferred Trust-Originated UR-Neg. A(low) Capital Trust III Preferred Securities (TOPrS) Merrill Lynch Preferred Trust-Originated UR-Neg. A(low) Capital Trust IV Preferred Securities (TOPrS) Merrill Lynch Preferred Trust-Originated UR-Neg. A(low) Capital Trust V Preferred Securities (TOPrS) NB Capital Trust III Trust Preferred UR-Neg. A(low) Securities Progress Capital Trust Trust Preferred UR-Neg. A(low) II Securities MBNA Capital B Trust Preferred UR-Neg. A(low) Securities Merrill Lynch & Co., Short-Term UR-Neg. R-1 Canada Ltd. Instruments (middle) BEAZER HOMES: Fitch Affirms 'B-' Issuer Default Rating ------------------------------------------------------ Fitch Ratings has affirmed the ratings for Beazer Homes USA, Inc. (NYSE: BZH), including the company's Issuer Default rating (IDR) at 'B-'. The Rating Outlook is Stable. Key Rating Drivers The rating for BZH is based on the company's execution of its business model in the current moderately recovering housing environment, its land policies, and geographic diversity. The company's rating is also supported by its solid liquidity position. The Stable Outlook takes into account the improving housing outlook for 2013 and 2014. Risk factors include the cyclical nature of the homebuilding industry, the company's high debt load and high leverage, BZH's underperformance relative to its peers in certain operational and financial categories, and its current over-exposure to the credit- challenged entry level market (approximately 60% of BZH's customers are first-time home buyers). The Industry Housing metrics have all showed improvement so far in 2013. For the first seven months of the year, single-family housing starts improved 20.1%, while existing home sales increased 12.0%. New- home sales improved 21.8% for the first seven months of 2013. The most recent Freddie Mac 30-year interest rate was 4.51%, 120 bps above the all-time low of 3.31% set the week of Nov. 21, 2012. The NAHB's latest existing home affordability index was 166.0, moderately below the all-time high of 207.3. Fitch's housing forecasts for 2013 assume a continued moderate rise off the bottom of 2011. New-home inventories are near historically low levels and affordability remains very attractive. In a slowly growing economy with still above-average distressed home sales competition, less competitive rental cost alternatives and low mortgage rates (on average), the housing recovery will be maintained this year. Fitch's housing estimates for 2013 follow: Single-family starts are forecast to grow 18.3% to 633,000 while multifamily starts expand about 19% to 292,000; single-family new-home sales should grow approximately 22% to 448,000 as existing home sales advance 7.5% to 5.01 million. Average single-family new-home prices (as measured by the Census Bureau), which dropped 1.8% in 2011, increased 8.7% in 2012. Median home prices expanded 2.4% in 2011 and grew 7.9% in 2012. Average and median home prices should improve approximately 5.0% and 4.0%, respectively, in 2013. As Fitch noted in the past, the housing recovery will likely occur in fits and starts. Rising Mortgage Rates Mortgage rates have increased during the past few months. The most recent Freddie Mac average mortgage rate was 4.51%, down 7 bps sequentially from the previous week and about 100 bps higher than the average rate during the month of April 2013, a recent low point for mortgage rates. While the current rates are still well below historical averages, the sharp increase in rates and rising home prices are moderating affordability. In the case of BZH, whose average home price is roughly $248,000, assuming a 20% down payment, a 100 bps rise in mortgage rates will increase principal and interest payment by about $120 each month or a 12.5% impact. A couple of July housing metrics showed some weakness following the increase in interest rates during the past few months. The Pending Home Sales Index declined 1.3% to 109.5 in July from 110.9 in June, although it is still 6.7% above the July 2012 level of 102.6. New home sales in July also fell 13.4% on a seasonally- adjusted basis to 394,000, compared with 455,000 during the previous month. However, the July 2013 estimate was 6.8% above the July 2012 sales level of 369,000. While Fitch does not expect the current higher mortgage rates to derail the housing recovery, a continued sharp increase in rates could slow it down. Operating Environment BZH's revenues for the first nine months of its 2013 fiscal year (ending June 30, 2013) increased 33.8% to $849.2 million as home deliveries grew 20.5% to 3,399 homes and the average selling price advanced 11.3% to $248,000. Gross profit margins (excluding inventory impairments and lot option abandonments) also showed strong improvement, growing 460 bps to 16% during the first nine months of fiscal 2013 compared with 11.4% during the same period last year. SG&A as a percentage of sales declined to 14.1% during the nine-month period in fiscal 013 from 17.3% last year. Despite the strong results for the first nine months of the year, BZH reported a pre-tax loss of $44.5 million during the period. Fitch currently expects BZH to remain unprofitable during all of fiscal 2013. New home orders improved 1.1% during the nine-month period but fell 11.2% year-over-year (yoy) during the third quarter (3Q'13). The decline in net new orders was due primarily to lower community count, which decreased 19.1% to 144 average active communities during 3Q'13 compared with 178 during 3Q'12. However, the company reported 3.2 sales per community per month during 3Q'13 compared with 2.9 sales per community per month last year. Cancellation rates also improved 450 bps to 20% during 3Q'13 compared with 24.5% during 3Q'12. BZH ended 3Q'13 with 2,358 homes (-2.6% yoy) in backlog with a value of $646.1 million (+12.8% yoy). Liquidity The company has taken steps to strengthen its balance sheet and improve its liquidity position to better participate in the housing recovery. In July 2012, BZH completed underwritten public offerings of its common stock, tangible equity units and a private placement of $300 million of 6.625% senior secured notes. Net proceeds from these transactions were roughly $466 million. Concurrently with the debt offering, BZH called for redemption all of its $250 million 12% senior secured notes due 2017 and repaid $20 million under its outstanding cash secured term loan. In September 2012, BZH also amended and expanded its secured revolving credit facility from $22 million to $150 million. The credit facility matures in September 2015. In February 2013, the company completed the issuance of $200 million 7.25% senior notes due 2023. Net proceeds from this issuance were used in part to redeem $172.5 million of the company's 6.875% senior notes due 2015 and $2 million of its 9.125% senior notes due 2018. As a result of these capital markets transactions, the company has no major debt maturities until 2016, when $172.9 million of senior notes become due. BZH ended the June 2013 quarter with $298.3 million of unrestricted cash and no borrowings under its $150 million revolving credit facility. Land Strategy Beazer maintains a 5.3-year supply of lots (based on last 12 months deliveries), 79.4% of which are owned, and the balance controlled through options. As is the case with other public homebuilders, the company is rebuilding its land position and trying to opportunistically acquire land at attractive prices. Total lots controlled increased 7.5% yoy and grew 9.2% compared with the previous quarter. The company has been aggressive in its land and development spending following the successful execution of its capital markets transactions last year. BZH spent roughly $314.4 million on land purchases and development activities during the first nine months of fiscal 2013 compared with $140.6 million expended during the same period last year. The company expects to spend about $500 million on land and development during 2013 compared with $185.6 million spent for land and development during 2012. As a result, Fitch expects BZH will be cash flow negative by approximately $200 million-$250 million during 2013, resulting in an unrestricted cash position moderately below $300 million at year-end 2013. Fitch is comfortable with BZH's land strategy given the company's liquidity position, debt maturity schedule, proven access to the capital markets, and management's demonstrated discipline in pulling back on its land and development activities during periods of distress. Rating Sensitivities Future ratings and Outlooks will be influenced by broad housing market trends as well as company-specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new-order activity, debt levels, free cash flow trends and uses, and the company's cash position. BZH's ratings are constrained in the intermediate term due to weak credit metrics and high leverage. However, positive rating actions may be considered if the recovery in housing is maintained and is meaningfully better than Fitch's current outlook, BZH shows continuous improvement in credit metrics (particularly debt-to- EBITDA consistently below 8x and interest coverage above 2x), and preserves a healthy liquidity position. Negative rating actions could occur if the recovery in housing dissipates, resulting in revenues and operating losses approaching 2011 levels, and the company maintains an overly aggressive land and development spending program. This could lead to consistent and significant negative quarterly cash flow from operations and diminished liquidity position. In particular, Fitch will review BZH's ratings if the company's liquidity position (unrestricted cash plus revolver availability) falls below $200 million. Fitch has affirmed the following ratings for BZH with a Stable Outlook: -- Long-term IDR at 'B-'; -- Secured revolver at 'BB-/RR1'; -- Second lien secured notes at 'BB-/RR1'; -- Senior unsecured notes at 'CCC+/RR5'; -- Junior subordinated debt at 'CCC/RR6'. The Recovery Rating (RR) of 'RR1' on BZH's secured credit revolving credit facility and second-lien secured notes indicates outstanding recovery prospects for holders of these debt issues. The 'RR5' on BZH's senior unsecured notes indicates below-average recovery prospects for holders of these debt issues. BZH's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debtholders. The 'RR6' on the company's junior subordinated notes indicates poor recovery prospects for holders of these debt issues in a default scenario. Fitch applied a liquidation value analysis for these recovery ratings. BIG SANDY: Files Liquidating Chapter 11 Plan -------------------------------------------- Big Sandy Holding Company filed with the U.S. Bankruptcy Court for the District of Colorado a liquidating Chapter 11 plan and accompanying disclosure statement. All four classes of claims are impaired under the Plan and will receive pro rata distribution of cash from the estate. Class 1 (General Unsecured Claims), Class 2 (Sub. Debt's Unsecured Claims) and Class 3 (TruPS Unsecured Claims) will recover an estimated 3.25% to 18.25% of the allowed claim amount, while Class 4 (Equity Interests) will recover nothing. The Debtor anticipates having $1.3 million in cash on hand as of the effective date of the Plan. A portion of this cash will be used for post-confirmation expenses and professional fees. Big Sandy has also filed federal income tax returns for several years seeking refunds of approximately $22 million in the aggregate. Recoveries from litigation could be available to supplement returns to creditors under the Plan. A full-text copy of the Disclosure Statement dated Aug. 22, 2013, is available for free at: http://bankrupt.com/misc/BIGSANDYds0822.pdf A hearing to consider the adequacy of the Disclosure Statement will be held on Oct. 16, 2013 at 10:30 a.m. Last day to oppose approval of the Disclosure Statement is Oct. 9. Michael J. Pankow, Esq., at Joshua M. Hantman, Esq., at Brownstein Hyatt Farber Schreck, LLP, in Denver, Colorado, represent the Debtor. About Big Sandy Holding Founded in 1991, Big Sandy Holding Company is a Colorado corporation registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. Big Sandy is the direct corporate parent of Mile High Banks, a Colorado state chartered Bank. Big Sandy filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 12-30138) on Sept. 27, 2012, to recapitalize the Bank. Bankruptcy Judge Michael E. Romero presides over the case. Michael J. Pankow, Esq., and Joshua M. Hantman, Esq., at Brownstein Hyatt Farber Schreck, LLP, serve as the Debtor's counsel. In its petition, Big Sandy estimated $10 million to $50 million in assets and debts. The petition was signed by Dan Allen, chairman/CEO/president. In February 2013, the Bankruptcy Court authorized Big Sandy to sell substantially all of its assets -- essentially 100% of the issued and outstanding capital stock of its wholly owned bank subsidiary, Mile High Banks -- to Strategic Growth Bancorp Incorporated, the successful bidder. The total consideration includes $5,500,000 (payable via (a) offsetting all amounts outstanding under the DIP Loan Agreement on the closing date, (b) $3,000,000 to the broker and (c) the remaining amounts to the Debtor), the allocation of the tax refund, the assumption of the assumed contract liabilities and the recapitalization of the Bank. The Strategic transaction would recapitalize the Bank in accordance with regulatory requirements -- by up to $90 million. Richard A. Wieland, U.S. Trustee for Region 19, was unable to form an official committee of unsecured creditors in the Debtor's case. BLUE NOTE: Monarques Resources Acquires X-Ore's Four Properties --------------------------------------------------------------- Monarques Resources Inc. on Sept. 5 announced the acquisition of 4 other properties belonging to X-Ore, a subsidiary of Blue Note Mining in the gold-bearing sector of Val-d'Or: the Tex-Sol, Belcourt, Lac Tavernier and Bel-Rive properties. They cover a total area of 43 km2, which adds up to the 69 km2 of the other properties recently acquired in the Val-d'Or area. These properties consist of 100 mining claims for a total of over $430,000 in credits from the Ministry of Natural Resources and Wildlife (MNRF). On May 16, 2013, Blue Note announced that as part of a notice of intention to make a proposal under the Bankruptcy and Insolvency Act (Canada), PricewaterhouseCoopers Inc. has been appointed as trustee to attend Blue Note and X-Ore in their restructuring efforts. In this context, PWC has developed a request for proposals procedure. The proposal submitted to PWC by Monarques for the acquisition of the Tex-Sol, Belcourt, Lac Tavernier and Bel-Rive properties has been accepted. The agreed purchase price is $25,000. "Monarques continues to acquire promising gold-bearing properties in Canada's largest gold producing area," commented Jean-Marc Lacoste, President and Chief Executive Officer of the Company. "We are currently in a buyer's market, and the last time it was possible to make acquisitions at such a fair price was following the Second World War. When investors regain interest in the commodity sector, Monarques will be a leader in Val-d'Or." About Monarques Monarques Resources Inc. is a junior gold exploration company, dedicated to excellence and committed to a socially and environmentally responsible development plan. The Company is currently dedicating its efforts to the acquisition and development of gold projects located along the Cadillac Break in the Val-d'Or area. Monarques owns properties that cover more than 110 km2 in Val-d'Or, comprising a total of 402 claims, 2 mining leases and over $1.45M in credits from the Ministry of Natural Resources and Wildlife (MNRF). Furthermore, Monarques continues to develop other properties located in Nemaska, on the James Bay territory in Quebec, which cover nearly 550 km2 on 1,098 claims for a total of over $7.2M in credits from the MNRF. The Company also holds a 100% interest in the Nisk-1 deposit, a project that complies with the National Instrument 43-101. About Blue Note Blue Note Mining Inc. -- http://www.bluenotemining.ca/-- is a mineral exploration and mining company with gold and base metal exploration properties located in New Brunswick, Quebec and Ontario. The minerals being targeted by the Company are gold, silver, zinc, lead, nickel, and copper. The Company staked 1,882 mineral claims in the area of the Williams Brook Property in northern New Brunswick. It acquired a 100% interest in the properties in the Armstrong project area, which include Brandy Brook and Bear Creek (4201). It also holds 100% interest in the exploration properties situated near Bathurst, New Brunswick, including Armstrong, California Lake, Canoe Landing Lake, McMaster, Orvan Brook, Rio Road, Restigouche and Wildcat Brook. X-Ore has a 100% interest in the gold exploration properties in the Val d'Or area, which includes Chimo, Nova, Pershing, Bel-Rive, Pascalis, Lac Tavernier, Belcourt and Tex-Sol. In January 2010, the Company amalgamated with X-Ore Resources Inc. (X-Ore). BINGO.COM LTD: Reports US$10,500 Net Income in Second Quarter ------------------------------------------------------------- Bingo.com, Ltd., filed its quarterly report on Form 10-Q, reporting net income of US$10,449 on US$491,259 of total revenue for the three months ended June 30, 2013, compared with a net loss of US$28,908 on US$347,742 of total revenue for the same period last year. The Company reported a net loss of US$460,740 on US$1.08 million of total revenue for the six months ended June 30, 2013, compared with a net loss of US$113,843 on US$754,049 of total revenue for the six months ended June 30, 2012. The Company's balance sheet at June 30, 2013, showed US$3.83 million in total assets, US$131,290 in total liabilities, and shareholders' equity of US$3.70 million. "The Company has reported losses from operations for the quarter ended June 30, 2013, and 2012, and has an accumulated deficit of US$16,426,564 as at June 30, 2013. This raises 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/cOL5at Bingo.com, Ltd., is in the business of owning and marketing a bingo based entertainment website that provides a variety of Internet games plus other forms of entertainment, including an online community, chat rooms, and more. Located at www.bingo.com, the Company has built one of the leading bingo portals on the Internet. The Company leases office facilities in Vancouver, British Columbia, Canada, The Valley, Anguilla, British West Indies and London, United Kingdom. BMB MUNAI: Hires Eide Bailly a New Accountants ---------------------------------------------- Hansen, Barnett & Maxell, P.C., resigned as the independent registered public accounting firm of BMB Munai, Inc. HBM recently entered into an agreement with Eide Bailly LLP, pursuant to which Eide Bailly acquired the operations of HBM, and certain of the professional staff and partners of HBM joined Eide Bailly either as employees or partners of Eide Bailly and will continue to practice as members of Eide Bailly. Concurrent with the resignation of HBM, the Company, through and with the approval of its Audit Committee, engaged Eide Bailly as its independent registered public accounting firm. Prior to engaging Eide Bailly, the Company did not consult with Eide Bailly regarding the application of accounting principles to a specific completed or contemplated transaction or regarding the type of audit opinions that might be rendered by Eide Bailly on the Company's financial statements, and Eide Bailly did not provide any written or oral advice that was an important factor considered by the Company in reaching a decision as to any such accounting, auditing or financial reporting issue. The reports of HBM regarding the Company's financial statements for the fiscal years ended March 31, 2013, and 2012 contained a going concern note as a result of the Company selling its operating subsidiary and having no continuing operations that result in positive cash flow. Other than the foregoing, the reports of HBM did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the years ended March 31, 2013, and 2012, and during the period from March 31, 2013, through Sept. 1, 2013, the date of resignation, there were no disagreements with HBM on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of HBM would have caused it to make reference to that disagreement in its reports. About BMB Munai Based in Almaty, Kazakhstan, BMB Munai, Inc., is a Nevada corporation that originally incorporated in the State of Utah in 1981. Since 2003, its business activities have focused on oil and natural gas exploration and production in the Republic of Kazakhstan through its wholly-owned operating subsidiary Emir Oil LLP. Emir Oil holds an exploration contract that allows the Company to conduct exploration drilling and oil production in the Mangistau Province in the southwestern region of Kazakhstan until January 2013. The exploration territory of its contract area is approximately 850 square kilometers and is comprised of three areas, referred to herein as the ADE Block, the Southeast Block and the Northwest Block. BMB Munai incurred a net loss of $3.08 million for the year ended March 31, 2013, as compared with a net loss of $139.21 million for the year ended March 31, 2012. The Company's balance sheet at June 30, 2013, showed $10.08 million in total assets, $9.08 million in total liabilities, all current, and $1 million in total shareholders' equity. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2013. The independent auditors noted that BMB Munai has no continuing operations that result in positive cash flow. This situation raises substantial doubt about its ability to continue as a going concern. BOART LONGYEAR: Moody's Lowers CFR Two Notches to 'B2' ------------------------------------------------------ Moody's Investors Service downgraded the corporate family and probability of default ratings of Boart Longyear Limited to B2 from Ba3 and B2-PD from Ba3-PD. At the same time, Moody's downgraded the company's senior unsecured notes rating to B3 from B1. The ratings are under review for further downgrade. The speculative grade liquidity rating remains unchanged at SGL-4. The ratings downgrade reflects Moody's expectation that Boart will evidence a steeper and more accelerated contraction in its fundamentals than previously anticipated as the mining industry that is the company's primary customer base has significantly pulled back on exploration spending and capital investments, leading to sharply lower drilling activity. These spending cuts follow the downward trend in metals prices from 2012 through the first half of 2013, particularly for copper and gold, which comprised 20% and 42% of the company's revenues during the first half of 2013. Moody's believes that Boart's fundamentals will remain under pressure over the next 12 to 18 months given ongoing global economic uncertainty (which limits upward movement on metals prices), high LME inventories for base metals and rising cost pressures facing mining companies. Considering the continued weak commodity price environment across the base and precious metals complex, mining companies are significantly reducing capital expenditures, deferring projects and significantly cutting back on exploration and development expenditures as they seek to preserve profitability and maintain acceptable financial metrics. This is particularly true in the gold industry, which comprises the single largest share of the company's revenues. Boart's performance will continue to be meaningfully impacted by these negative trends. Although Boart's performance through the first half of 2013 was reasonably in line with expectations, the risk of further downward pressure on rig utilization and backlog levels remains elevated, likely resulting in a weaker second half of 2013 and continued pressure on 2014 performance such that the rating downgrade triggers for the Ba3 rating will be exceeded. For the next 12 to 18 months, Moody's expects that debt-to-EBITDA will trend above 7 times which is more commensurate with ratings below the Ba3 level. While the company has announced plans to further cut costs (additional $90 million in savings), reduce CAPEX and rationalize inventory levels which are currently above anticipated business requirements, these measures are unlikely to sufficiently offset the deterioration in Boart's fundamentals to a magnitude that would support a rating higher than B2. The review for further downgrade will focus on the alternative financing structures that the company is evaluating to provide greater liquidity and flexibility, as referenced in the company's recent earnings release. The SGL-4 speculative grade liquidity rating reflects the expectation of more limited internal cash flow generation to support the business, the potential for increased contingent liabilities such as letters of credit to support security requirements while Boart appeals the assessments of the Canadian Revenue Agency, and the decline in cash balances ($34 million at June 30, 2013 from $90 million at December 31, 2012) due to the contraction in financial performance and substantial historical CAPEX and working capital buildup. The SGL-4 also incorporates the tightness in and potential for breach of covenants at the December 2013 and June 2014 reporting periods absent any modifications to the current capital structure. The B3 rating on the senior unsecured notes reflects the junior position of these instruments relative to the secured revolver and priority accounts payables. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in South Jordan, Utah, Boart Longyear is incorporated in Australia and listed on the Australian Securities Exchange Limited. The company provides drilling services, and complimentary drilling products and equipment principally for the mining and metals industries. Revenues for the twelve months ended June 30, 2013 were $1.6 billion. Revenues in fiscal 2012 were $2 billion. BUFFALO PARK: To Fund Plan Payments from Estate's Cash ------------------------------------------------------ Ronald P. Lewis, Carol J. Lewis, and Buffalo Park Development, Co., filed with the U.S. Bankruptcy Court for the District of Colorado a Disclosure Statement explaining the Joint Plan of Reorganization dated Aug. 30, 2013. According to the Disclosure Statement, the Debtors will restructure their debts and obligations and continue to operate in the ordinary course of business, including the sale and leasing of properties and operation of the businesses. In the Lewis bankruptcy case, the rental income from the properties and the Lewis' disposable income, together with the restructuring of the mortgage and other secured debts, will generate sufficient funds to pay on a pro rata basis a portion of the Lewis' unsecured debts. For both estates, the reduction of payments to secured creditors as a result of the plan confirmation will have a material beneficial impact on the Debtor's ability to service their debt, including making a distribution to unsecured creditors. Buffalo Park will make all payments required to be made on the Effective Date from its estate's cash. Buffalo Park estimates that the amount required to be paid on the Effective Date will be approximately $15,000, which amount is or will be on Deposit the debtor-in-possession account, to pay administrative claims. To fund the Plan beyond the Effective Date, the Buffalo Park will continue its operations and distribute payments in accordance with the terms of the Plan. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/BUFFALO_PARK_ds.pdf As reported in the Troubled Company Reporter on Aug. 26, 2013, 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, in Denver, Colorado. That hearing has been rescheduled to Sept. 24, at 11:15 a.m. About Buffalo Park Development Properties, Inc. 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. BUILDING MATERIALS: Moody's Assigns B3 CFR & Rates Sr. Notes Caa1 ----------------------------------------------------------------- Moody's Investors Service assigned a first-time B3 Corporate Family Rating and B3-PD Probability of Default Rating to Building Materials Holding Corporation d/b/a BMC, a supplier of lumber and building materials, trusses and millwork, and construction services primarily for the domestic residential new construction sector. In a related rating action, Moody's also assigned a Caa1 rating to the company's proposed $250 million senior secured notes. Proceeds from the notes issuance will be used to refinance the company's current debt, to cash collateralize letters of credit, to pay accrued interest, fees and expenses, and also to add some cash to the balance sheet. The rating outlook is stable. The following ratings will be affected by this action: Corporate Family Rating assigned B3; Probability of Default Rating assigned B3-PD; and, Senior Secured Notes due 2018 assigned Caa1 (LGD4, 68%). Ratings Rationale: BMHC's B3 Corporate Family Rating reflects the company's leveraged capital structure. Moody's estimates adjusted debt-to-EBITDA slightly above 6.0 times and debt-to-book capitalization of around 75% over the next 12 months (all ratios incorporate Moody's standard adjustments). The proposed transaction increases balance sheet debt by about $57 million. Offsetting Moody's concerns about the company's high debt burden are expectations for better operating performance as the company takes advantage of the rebound in new single-family home construction, the main driver of BMHC's revenues. The last several months have shown tremendous year-over-year improvement in operating performance, giving us confidence that BMHC's margins will continue to improve. Moody's feels that the company will be able to generate sufficient earnings relative to its debt service requirements. Adjusted interest coverage defined as (EBITDA-Capex)-to-interest expense will likely remain below 1.0 times near the end of Moody's forecast horizon, but will continue to improve steadily thereafter to more acceptable levels despite the larger amount of balance sheet debt. Furthermore, ample availability under the company's asset-based revolving credit facility and lack of near-term maturities are key credit strengths as well. The stable rating outlook reflects Moody's view that BMHC's operating performance will continue to improve as it benefits from the US residential construction sector recovery, resulting in credit metrics that are more supportive of the current rating. Also, revolver availability and lack of near-term maturities give BMHC the financial resources to support growth initiatives. The Caa1 rating assigned to the $250 million senior secured notes is one notch below the corporate family rating, as the notes are structurally subordinated to the company's asset-based revolving credit facility, which has access a priority claim on the company's most liquid assets. The notes are secured by a first lien on the company's domestic non-current assets and any assets not pledged to the revolver. They also have a second lien on the assets securing the revolver. An upgrade of BMHC's ratings is possible if the company continues to benefit from the rebound in its end markets, and generates significant levels of operating earnings and free cash flow. Operating performance that results in (EBITDA-Capex)-to-interest expense above 2.0 times and debt-to-EBITDA sustained below 4.5 times (all ratios incorporate Moody's standard adjustments) could result in positive ratings momentum. Factors that could result in negative rating actions include operating performance falling below expectations or erosion in the company's financial performance due to an unexpected decline in BMHC's end markets. (EBITDA-Capex)-to-interest expense sustained below 1.5 times or debt-to-EBITDA sustained above 6.0 times could result in rating pressures (all ratios incorporate Moody's standard adjustments). A deteriorating liquidity profile could also pressure the ratings. The principal methodology used in this rating was the Global Distribution & Supply Chain Services Industry Methodology published in November 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Building Materials Holding Corporation d/b/a BMC, headquartered in Boise, ID, is a supplier of lumber and building materials, trusses and millwork, and construction services for primarily the domestic residential new construction sector. Davidson Kempner Capital Management LLC and Robotti & Company, through their respective funds, are combined the largest owners of BMHC. Revenues for the 12 months end June 30, 2013 total approximately $1.1 billion. BUILDING MATERIALS: S&P Assigns Prelim. 'B' CCR; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its preliminary 'B' corporate credit rating to Building Materials Holding Corp. (BMC). The outlook is stable. At the same time, S&P assigned a preliminary 'B-' issue-level rating (one notch lower than the corporate credit rating) to BMC's proposed $250 million of senior secured notes. The preliminary recovery rating is '5', indicating S&P's expectation of modest (10% to 30%) recovery for lenders in the event of a payment default. The company intends to use proceeds of the notes to refinance its existing term loan debt, to repay outstanding borrowings under its $125 million asset based revolving credit facility (ABL), and to provide cash backing to about $44 million of standby letters of credit, as well as to pay accrued interest and transaction fees. "We expect end-market demand for BMC's products and services to experience strong growth in each of the next two years due to the expected improvement in housing starts. As a result, we expect credit measures will improve by the end of this year to levels consistent with an aggressive financial risk profile. Due to the strong growth in housing constructions, we expect the company to rely on its $110 million ABL facility to fund working capital growth and capital spending requirements over the next two years. Still, we expect liquidity will remain adequate," said Standard & Poor's credit analyst Thomas Nadramia. Although S&P do not expect a positive rating action in the near term given expected leverage measures and BMC's continued working capital requirements, it could consider raising the ratings if BMC' operating prospects during the next several quarters exceed its current expectations, resulting in sustained maintenance of credit measures in line with a "significant" financial risk profile, that is, debt leverage of 3x-4x and FFO to debt greater than 20%. This could occur if sales increased an additional 15% higher than S&P's expectations and profit margins increased 50 basis points from expected 2013 levels. A downgrade would be likely to occur if BMC's liquidity were to become constrained, due to the failure to close the transaction as proposed, which would result in reduced availability under the ABL facility and a pull forward of the ABL maturity to July 2014. Other downgrade scenarios include an unexpected reversal in housing starts (due to recessionary pressures or a large increase in mortgage interest rates) or a material decrease in profit margins due to increased price competition or volatile material costs that would cause leverage to exceed 6x. BURCON NUTRASCIENCE: Incurs $1.6-Mil. Net Loss in June 30 Quarter ----------------------------------------------------------------- Burcon NutraScience Corporation reported a net loss of C$1.58 million on C$23,899 of revenue for the three months ended June 30, 2013, compared with a net loss of C$1.04 million on C$nil revenue for the three months ended June 30, 2012. The Company's balance sheet at June 30, 2013, showed C$9.23 million in total assets, C$982,806 in total liabilities, and shareholders' equity of C$8.25 million. "As at June 30, 2013, the Company had minimal revenues from its technology, had an accumulated deficit of $60,020,249, and had relied on equity financings, private placements, rights offerings and other equity transactions to provide the financing necessary to undertake its research and development activities. At June 30, 2013, the Company had cash and cash equivalents of $3,316,946 and short-term investments of $2,093,255. These conditions indicate existence of a material uncertainty that casts substantial doubt about the ability of the Company to meet its obligations as they become due and, accordingly, its ability to continue as a going concern." A copy of the Company's interim financial statements for the three months ended June 30, 2013, is available at http://is.gd/g5E1V4 A copy of the Management's Discussion and Analysis for the three months ended June 30, 2013, is available at http://is.gd/fJ8juI Headquartered in Vancouver, Canada, Burcon NutraScience Corporation has developed a portfolio of composition, application, and process patents originating from its core protein extraction and purification technology. The Company's patented processes utilize inexpensive oilseed meals and other plant-based sources for the production of purified plant proteins that exhibit certain nutritional, functional and nutraceutical profiles. 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 89.78 cents-on-the-dollar during the week ended Friday, September 6, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents an increase of 0.31 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. CARSON RDA: Moody's Confirms Ba1 Rating on Tax Allocation Bonds ---------------------------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating on the Successor Agency of Carson Redevelopment Agency's (CA) Project Area No. 4 Tax Allocation Bonds, Series 2006. The bonds are secured by a pledge of tax increment revenues from the Agency's project area #4. Ratings Rationale: The Ba1 rating reflects the risks and weakness that the dissolution of redevelopment agencies (now known as successor agencies) now adds to bond's credit profile. The primary change is the narrow semi-annual debt service coverage. Still, the tax base benefits from its moderate size, moderate wealth levels of city residents, and Moody's expectation that assessed values will eventually recover and gradually grow from their depressed state. Strengths: - Moderate geographic size of project area - Moderate wealth level of residents - Assessed value expected to eventually recover and gradually grow Challenges: - Adequate semi-annual debt service coverage -Small-sized increment value What could move the rating-UP? - Significant and sustained increase in assessed valuation with at least two times coverage in both periods - Substantial improvement in wealth levels What could move the rating-DOWN? - Erosion of semi-annual debt service coverage - Protracted assessed value decline The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. CASPIAN SERVICES: Hansen Barnett Resigns as Accountants ------------------------------------------------------- Hansen, Barnett and Maxwell, P.C., resigned as the independent registered public accounting firm of Caspian Services, Inc., effective Sept. 1, 2013. HBM's reports on the financial statements for the fiscal years ended Sept. 30, 2012, and 2011 contained a going concern note resulting from the fact that the Company had negative working capital in each of the past two fiscal years. HBM's reports on the financial statements for the fiscal years ended Sept. 30, 2012, and 2011 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles. The resignation was not a result of any disagreement with the Company. About Caspian Services Headquartered in Salt Lake City, Caspian Services, Inc., was incorporated under the laws of the state of Nevada on July 14, 1998. Since February 2002 the Company has concentrated its business efforts to provide diversified oilfield services to the oil and gas industry in western Kazakhstan and the Caspian Sea, including providing a fleet of vessels, onshore, transition zone and marine seismic data acquisition and processing services and a marine supply and support base in the port of Bautino, in Bautino Bay, Kazakhstan. The Company's balance sheet at June 30, 2013, showed $81.44 million in total assets, $88.63 million in total liabilities and a $7.19 million total deficit. Bankruptcy Warning In September 2011, the Company executed an agreement to consolidate and restructure certain outstanding loans in the total aggregate amount of $35,246 with an otherwise unrelated individual. Closing of the Loan Restructuring Agreement is subject to a number of closing conditions, including among other things, the Investor reaching agreement with the European Bank for Reconstruction and Development to restructure certain EBRD financing agreements with the Company. Until the closing of the Loan Restructuring Agreement, the restructured loans will be treated as current liabilities. The Company funded a portion of the construction of its marine base through a combination of debt and equity financing with EBRD pursuant to which EBRD provided $18,600 of debt financing and made an equity investment in the marine base in the amount of $10,000 in exchange for a 22 percent equity interest in Balykshi. "Should EBRD accelerate its loan or its put option or should the Loan Restructuring Agreement with Investor not close, we would have insufficient funds to satisfy our obligations to EBRD and or to Investor, collectively or individually. If we are unable to satisfy those obligations, EBRD and/or Investor could seek any legal remedy available to obtain repayment, including forcing the Company into bankruptcy, or foreclosing on the loan collateral, which, in the case of EBRD includes the marine base and other assets and bank accounts of Balykshi and CRE, and in the case of Investor includes other assets of the Company," the Company said in its quarterly report for the period ended June 30, 2013. "The ability of the Company to continue as a going concern is dependent upon, among other things, its ability to successfully negotiate and conclude restructured financing agreements with EBRD and Investor and its ability to generate sufficient revenue from operations, or to identify a financing source that will provide the Company the ability to satisfy its repayment and guarantee obligations under the restructured financing agreements. Uncertainty as to the outcome of these factors raises substantial doubt about the Company's ability to continue as a going concern," the Company added. CENGAGE LEARNING: BNY Mellon Rips Unsec. Creditors' 'Power Grab' ---------------------------------------------------------------- Law360 reported that The Bank of New York Mellon Corp. objected to an attempt by bankrupt textbook publisher Cengage Learning Inc.'s unsecured creditors committee to take control of pursuing certain claims belonging to Cengage's estates, accusing the committee of using supposed conflicts in a power grab. According to the report, BNY Mellon, a creditor in Cengage's bankruptcy, asked a New York bankruptcy court to reject an Aug. 27 motion filed by the unsecured creditors committee seeking approval to chase down certain copyright claims and causes of action related to disputed collateral. About Cengage Learning Stamford, Connecticut-based Cengage Learning -- http://www.cengage.com/-- provides innovative teaching, learning and research solutions for the academic, professional and library markets worldwide. Cengage Learning's brands include Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South Western and Wadsworth, among others. Apax Partners LLP bought Cengage in 2007 from Thomson Reuters Corp. in a $7.75 billion transaction. The acquisition was funded in part with $5.6 billion in new debt financing. Cengage Learning Inc. filed a petition for Chapter 11 reorganization (Bankr. E.D.N.Y. Case No. 13-bk-44106) on July 2, 2013, in Brooklyn, New York, after signing an agreement where holders of $2 billion in first-lien debt agree to support a reorganization plan. The plan will eliminate more than $4 billion of $5.8 billion in debt. First-lien lenders who signed the so-called plan-support agreement include funds affiliated with BlackRock Inc., Franklin Mutual Adviser LLC, KKR & Co. and Oaktree Capital Management LP. Second- lien creditors and holders of unsecured notes aren't part of the agreement. The Debtors have tapped Kirkland & Ellis LLP as counsel, Lazard Freres & CO. LLC as financial advisor, Alvarez & Marsal North America, LLC, as restructuring advisor, and Donlin, Recano & Company, Inc., as claims and notice agent. A nine-member official committee of unsecured creditors has been appointed in the Debtors' Chapter 11 cases. Arent Fox LLP is the proposed counsel for the Committee. FTI Consulting, Inc., serves as financial advisor to the Committee. Moelis & Company LLC serves as investment banker to the Committee. CIRCLE ENTERTAINMENT: Incurs $447K Net Loss in Second Quarter ------------------------------------------------------------- Circle Entertainment Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $447,193 for the three months ended June 30, 2013, compared with a net loss of $2.26 million for the same period last year. "Operating expenses for the three months ended June 30, 2013, and 2012, were approximately $280,497 and $1,045,477, respectively. "During the three months ended June 30, 2012, the Company incurred a settlement expense of $950,000 under the Settlement Agreement for settlement of the then pending stockholder derivative lawsuit. The Company reported a net loss of $892,457 for the six months ended June 30, 2013, compared with a net loss of $3.62 million for the corresponding period in 2012. "Operating expenses for the six months ended June 30, 2013, and 2012, were approximately $528,091 and $2,165,701. "During the six months ended June 30, 2012, the Company incurred a settlement expense of $950,000 under the Settlement Agreement for settlement of the then pending stockholder derivative lawsuit." The Company's balance sheet at June 30, 2013, showed $681,100 in total assets, $16.43 million in total liabilities, and a stockholders' deficit of $15.75 million. L.L. Bradford & Company, LLC, in Las Vegas, Nevada, in its report on the Company's consolidated financial statements for the year ended Dec. 31, 2012, said that Circle Entertainment Inc. has limited available cash, has a working capital deficiency and will need to rely on the Funding Agreement or secure new financing or additional capital in order to pay its obligations. "These conditions 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/8MU0qq New York-based Circle Entertainment Inc. focuses on the development of location-based entertainment line of business in the United States. The Company, through its 8.5% membership interest in I Drive Live Parent LLC, engages in the co-development of an entertainment destination center on International Drive in Orlando, Florida. COASTAL CONDOS: Has Final Approval to Hire David Rogero as Counsel ------------------------------------------------------------------ Judge A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, gave Coastal Condos, LLC, final authority to employ David M. Rogero, P.A., as special counsel. The firm will advise and represent the Debtor generally with respect to its general business matters, including, without limitation, evictions and other landlord tenant disputes. About Coastal Condos Coastal Condos filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-20729) on May 8, 2013. The Debtor owns and manages 72 condominiums at 7601 East Treasure Drive, Miami Beach, FL 33141. Judge A. Jay Cristol presides over the case. David R. Softness, Esq., at David R. Softness, P.A., in Miami, Florida, represents the Debtor as counsel. Coastal Condos was the target of a $15.8 million foreclosure lawsuit filed by North Bay Village-based First Equitable Realty III in May 2012. Coastal Condos owns 72 condo units at Grandview Palace in North Bay Village, Florida, valued at $10.8 million. Personal property is valued at $389,000. Assets total $11.2 million and liabilities total $16.6 million. It says that no creditors are holding secured claims. Coastal Condos first sought Chapter 11 protection (Bankr. S.D. Miss. Case No. 12-07146) on May 25, 2012. The case was dismissed May 6, 2013. Until further notice, the U.S. Trustee will not appoint a committee of creditors in the Debtor's case. COASTAL CONDOS: Can Employ Wells Marble as Special Counsel ---------------------------------------------------------- Judge A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, authorized debtor Coastal Condos, LLC, to employ Roy H. Liddell, Esq., and the law firm of Wells Marble and Hurst, PLLC, as special counsel. WMH will represent the Debtor in litigation matters, including its adversary complaint against First Equitable Realty III, Ltd. The current hourly rate of Mr. Liddell is $240. About Coastal Condos Coastal Condos filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-20729) on May 8, 2013. The Debtor owns and manages 72 condominiums at 7601 East Treasure Drive, Miami Beach, FL 33141. Judge A. Jay Cristol presides over the case. David R. Softness, Esq., at David R. Softness, P.A., in Miami, Florida, represents the Debtor as counsel. Coastal Condos was the target of a $15.8 million foreclosure lawsuit filed by North Bay Village-based First Equitable Realty III in May 2012. Coastal Condos owns 72 condo units at Grandview Palace in North Bay Village, Florida, valued at $10.8 million. Personal property is valued at $389,000. Assets total $11.2 million and liabilities total $16.6 million. It says that no creditors are holding secured claims. Coastal Condos first sought Chapter 11 protection (Bankr. S.D. Miss. Case No. 12-07146) on May 25, 2012. The case was dismissed May 6, 2013. Until further notice, the U.S. Trustee will not appoint a committee of creditors in the Debtor's case. COLLEGE BOOK: Court Enters Order Converting Case to Chapter 7 ------------------------------------------------------------- Judge Marian F. Harrison of the U.S. Bankruptcy Court for the Middle District of Tennessee converted the Chapter 11 case of College Book Rental Company, LLC, to one under Chapter 7 of the Bankruptcy Code. Robert H. Waldschmidt, the Chapter 11 trustee in the Debtor's bankruptcy case, requested for the conversion of the case. No objections have been filed, and no one appeared at the hearing to contest the motion for conversion. As reported in the Troubled Company Reporter on July 26, 2013, the Court authorized the Debtor to sell certain assets to CBR Funding, LLC. According to the Debtor, no other party has made a competitive bid for those assets, such that CBR Funding was the only bidder, and the objections of McGraw-Hill Companies and the other publishers are not well-founded and overruled. The purchaser, pursuant to an asset purchase agreement, agreed to acquire the assets for $4,500,000 consisting of (i) $4,100,000 in the form of a credit bid and (ii) the assumed liabilities. The order was approved for entry by the U.S. Trustee. Counsel for the U.S. Trustee may be reached at: Robert H. Waldschmidt, Esq. 7003 Chadwick Drive, Suite 211 P.O. Box 2828 Brentwood, TN 37024-2828 Phone: 615-468-1020 Fax: 615-259-2179 E-mail: rhw@rhwlawoffice.com About College Book Four creditors filed an involuntary Chapter 11 bankruptcy petition against Murray, Kentucky-based College Book Rental Company, LLC (Bankr. M.D. Ky. Case No. 12-09130) in Nashville on Oct. 4, 2012. Bankruptcy Judge Marian F. Harrison oversees the case. The petitioning creditors are represented by Joseph A. Kelly, Esq., at Frost Brown Todd LLC. The petitioning creditors are David Griffin, allegedly owed $15 million for money loaned; Commonwealth Economics, allegedly owed $15,000 for unpaid services provided; John Wittman, allegedly owed $158 for unpaid services provided; and CTI Communications, allegedly owed $21,793 for unpaid services provided. The owners of College Book Rental consented to the Chapter 11 case and the appointment of a Chapter 11 trustee to run CBR. CBR is co-owned by Chuck Jones of Murray and David Griffin of Nashville, Tenn. An agreed order for relief under Chapter 11 was entered on Oct. 15, 2012. Robert H. Waldschmidt was appointed as trustee the next day. The Trustee employed Robert H. Waldschmidt, Esq. at Howell & Fisher, PLLC as his counsel. The Debtor disclosed $17,913,543 in assets and $25,322,442 in liabilities as of the Chapter 11 filing. COLOREP INC: Seeks to Employ Hilco IP as Exclusive Sales Agent -------------------------------------------------------------- Colorep, Inc. and Transprint USA, Inc. seek authority from the U.S. Bankruptcy Court for the Central District of California to employ Hilco IP Services LLC d/b/a Hilco Streambank as their exclusive agent for the purposes of marketing their assets for sale, nunc pro tunc to August 14, 2013. The Debtors propose to pay Hilco a fee of $60,000, which will be paid in two installments: (i) $30,000 payable upon entry of an order by the Court approving Hilco's retention; and (ii) $30,000 payable upon closing on the sale of the Assets. Hilco will also be paid a commission from the Gross Proceeds of the sale: (i) 3% of the first $20 million of the aggregate gross proceeds of the sale; and (ii) 10% for any aggregate gross proceeds in excess of $20 million. Hilco will also be reimbursed from the Gross Proceeds of the sale for all reasonable and customary expenses in connection with the performance of its services. The firm's Ian S. Fredericks assures the Court that neither Hilco nor the employees comprising it hold or represent an interest adverse to the estates with respect to the matters on which they are to be employed. The Debtors' Reorganization Counsel may be reached at: STUTMAN, TREISTER & GLATT PROFESSIONAL CORPORATION Gary E. Klausner, Esq. Danielle A. Pham, Esq. Michael S. Neumeister, Esq. 1901 Avenue of the Stars, 12th Floor Los Angeles, CA 90067 Telephone: (310)228-5600 Telecopy: (310)228-5788 E-mail: gklausner@stutman.com dpham@stutman.com mneumeister@stutman.com About Colorep Inc. Colorep Inc., an industrial printer from Harrisonburg, Virginia, filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 13-27689) on July 10 in Los Angeles, owing $17 million to secured lender Meserole LLC. The company licenses a fabric-dyeing process known as AirDye. Colorep's subsidiary Transprint USA Inc. also filed in Chapter 11. Transprint produces transfer-printing paper. Stutman, Treister & Glatt, P.C. represents Colorep as reorganization counsel while Stubbs, Alderton & Markiles LLP serves as it special corporate counsel. Meserole, LLC, is represented by Frank T. Pepler, Esq., and Stuart M. Brown, Esq., at DLA Piper LLP (US). COMARCO INC: Trial Date of Kensington Litigation Set on July 28 --------------------------------------------------------------- ACCO Brands USA LLC and its Kensington Computer Products Group division, in response to a letter from Comarco asserting infringement of five of Comarco's patents, filed a lawsuit against Comarco, Inc., alleging that five of Comarco's asserted patents relating to power technology are invalid or not infringed by products made or sold by Kensington. On Feb. 29, 2012, Comarco filed a cross-complaint alleging infringement by Kensington of each of the Company's five asserted patents. Efforts to resolve the dispute, by court ordered mediation, have been unsuccessful. The trial date for this matter was previously scheduled for January 2014. On Aug. 29, 2013, the Company learned that a new trial date has been set for July 28, 2014. This litigation is ongoing and its outcome is not determinable at this time. About Comarco Inc. Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO) -- http://www.comarco.com/-- is a provider of innovative, patented mobile power solutions that can be used to power and charge notebook computers, mobile phones, and many other rechargeable mobile devices with a single device. Comarco disclosed a net loss of $5.59 million on $6.33 million of revenue for the year ended Jan. 31, 2013, as compared with a net loss of $5.31 million on $8.06 million of revenue for the year ended Jan. 31, 2012. As of April 30, 2013, the Company had $3.86 million in total assets, $11.05 million in total liabilities and a $7.19 million total shareholders' deficit. Squar, Milner, Peterson, Miranda & Williamson, LLP, 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 and negative cashflow from operations, has negative working capital and uncertainties surrounding the Company's ability to raise additional funds. These factors, among others, raise substantial doubt about its ability to continue as a going concern. COMMUNITY WEST: Files Form 10-Q; Earns $2.1-Mil. in 2nd Quarter --------------------------------------------------------------- Community West Bancshares filed its quarterly report on Form 10-Q, reporting net income of $2.13 million on net interest income of $5.86 million for the three months ended June 30, 2013, compared with a net loss of $591,000 on net interest income of $6.56 million for the same period last year. The Company reported net income of $3.22 million on net interest income of $11.66 million for the six months ended June 30, 2013, compared with net income of $228,000 on net interest income of $13.09 million for the corresponding period in 2012. "The provision for loan losses decreased from $1.9 million for the second quarter of 2012 to ($1.1 million) for the second quarter of 2013. For the year to date 2013, provision was ($1.3 million) compared to $3.9 million in 2012. The Company has been experiencing a downward trend in net charge-offs and increased credit quality, which released some reserves due to improved quantitative factors. The ratio of allowance for loan losses to loans held for investment decreased from 3.59% at June 30,, 2012, to 3.14% at June 30, 2013. "Total non-interest income increased by $0.3 million, or 56.3%, for the second quarter 2013 compared to 2012, primarily due to fees from loan originations and loan servicing. Loan servicing, net for 2013 compared to 2012 improved mostly from declined servicing asset amortization and interest only strip fair market write-downs. "Total non-interest income for the six months ended June 30, 2013, compared to 2012 declined by $0.8 million mostly due to the sale of $10.1 million in SBA loans with the resulting gain of $973,000 and the sale of $4.0 million of investment securities resulting in a gain of $121,000, both of which occurred in the first quarter of 2012 partially offset by increased fees from loans in 2013. The Company's balance sheet at June 30, 2013, showed $536.10 million in total assets, $474.01 million in total liabilities, and stockholders' equity of $62.09 million. "Despite the Bank meeting both the capital requirements to be deemed "well capitalized" and the capital requirements of the OCC Agreement at June 30, 2013, the Bank is nevertheless deemed to be "adequately capitalized" as a result of the OCC Agreement's requirement to achieve and maintain specific capital levels. A copy of the Form 10-Q is available at http://is.gd/7TYzCC Community West Bancshares is a financial services company headquartered in Goleta, California that provides full service banking and lending through its wholly owned subsidiary Community West Bank, which has five California branch banking offices in Goleta, Santa Barbara, Santa Maria, Ventura and Westlake Village. COMMUNITY FIRST: Reports $390,000 Net Income in Second Quarter -------------------------------------------------------------- Community First, Inc., filed its quarterly report on Form 10-Q, reporting net income of $390,000 on net interest income of $3.24 million for the three months ended June 30, 2013, compared with net income of $351,000 on net interest income of $4.16 million for the same period last year. The Company reported net income of $593,000 on net interest income of $6.61 for the six months ended June 30, 2013, compared with net income of $2.12 million on net interest income of $8.53 million for the comparable period in 2012. "In the first six months of 2013, the Bank recorded a $300,000 provision for loan loss compared to $700,000 in the same period in 2012. "Total noninterest income for the first six months of 2013 was $1,429,000 a decrease of $1,948,000 or 57.7% from $3,377,000 for the same period in 2012. The decrease is primarily due to the gain of $1,466,000 on the Bank's sale of its Murfreesboro, Tennessee branch location that occurred during the first six months of 2012. The decrease is also due to a decrease in the gain on sale of securities available for sale and a decrease in other service charges, commissions and fees." The Company's balance sheet at June 30, 2013, showed $467.46 million in total assets, $458.78 million in total liabilities, and shareholders' equity of $8.68 million. "The sales of the Bank's Murfreesboro, Tennessee branch location, on March 30, 2012, and Franklin, Tennessee branch location, on Dec. 7, 2012, resulted in gains of $1,466,000 and $2,601,000, respectively. These gains contributed to the improvement in the Bank's capital in 2012. However, despite the improvement, the Bank's Tier 1 to Average Assets ratio as of June 30, 2013, was below what the Bank agreed to achieve under the terms of the Consent Order. Based on June 30, 2013 levels of average assets and risk-weighted assets, the required amount of additional Tier 1 capital necessary to meet the requirements of the Consent Order was approximately $5,100,000. The Bank's capital ratios at June 30, 2013, were above those levels necessary to be considered "well capitalized" under the regulatory framework for prompt corrective action. The existence of the Consent Order requires regulators to continue to classify the Bank as "adequately capitalized" even though the capital levels would qualify as "well capitalized" if the Consent Order were not in place." A copy of the Form 10-Q is available at http://is.gd/uEQpln Columbia, Tenn.-based Community First, Inc., is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, and became so upon the acquisition of all the voting shares of Community First Bank & Trust on Aug. 30, 2002. The Bank conducts substantially all of its banking activities in Maury, Williamson and Hickman Counties, in Tennessee. COMBIMATRIX CORP: Incurs $121,000 Net Loss in Second Quarter ------------------------------------------------------------ CombiMatrix Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $121,000 on $1.50 million of total revenues for the three months ended June 30, 2012, compared with a net loss of $2.03 million on $1.31 million of total revenues for the same period last year. The Company reported a net loss of $169,000 on $3.11 million of total revenues for the six months ended June 30, 2013, compared with a net loss of $4.40 million on $2.58 million of total revenues for the comparable period in 2012. The Company recognized a non-operating, warrant derivative gain of $1.44 million for the three months ended June 30, 2013, and combined warrant derivative gains of $3.27 million for the six months ended June 30, 2013. The Company's balance sheet at June 30, 2013, showed $8.60 million in total assets, $2.93 million in total liabilities, and stockholders' equity of $5.67 million. "We have a history of incurring net losses and net operating cash flow deficits. We are also deploying new technologies and continue to develop new and improve existing commercial diagnostic testing services. At June 30, 2013, we had cash and cash equivalents of $5.7 million and anticipate that our cash and cash equivalent balances, aided by recent financing activities (see Note 4), will be sufficient to meet our cash requirements into the third quarter of 2014. However, the uncertainty regarding our ability to execute our business plan beyond this point raises substantial doubt about our ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/xXJo7C Irvine, Calif.-based CombiMatrix Corporation (NASDAQ: CBMX) provides valuable molecular diagnostic solutions and comprehensive clinical support for the highest quality of care. The Company specializes in miscarriage analysis, prenatal and pediatric healthcare, offering DNA-based testing for the detection of genetic abnormalities beyond what can be identified through traditional methodologies. COMPETITIVE TECHNOLOGIES: Tonaquint Has 892,514 Shares Warrants --------------------------------------------------------------- Competitive Technologies, Inc., previously entered into a securities purchase agreement with Tonaquint, Inc., pursuant to which Tonaquint will acquire a $112,500 convertible promissory note, as well as a warrant for 892,514 shares. Total consideration paid by Tonaquint for the Note and the Warrant is $100,000. The note is convertible at a conversion price of $0.30 per share for a total of 375,000 shares, matures on May 16, 2014, and carries an interest rate of 7 percent, compounded daily. The Warrant is convertible at an exercise price of $0.35 per share for a total possible cash payment of $312,380, is exercisable on July 16, 2013 and expires July 31, 2018. About Competitive Technologies Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX: CTTC) -- http://www.competitivetech.net/-- was established in 1968. The Company provides distribution, patent and technology transfer, sales and licensing services focused on the needs of its customers and matching those requirements with commercially viable product or technology solutions. Sales of the Company's Calmare(R) pain therapy medical device continue to be the major source of revenue for the Company. Competitive Technologies incurred a net loss of $3 million on $546,139 of gross profit from product sales in 2012, as compared with a net loss of $3.59 million on $1.86 million of gross profit from product sales in 2011. As of June 30, 2013, the Company had $4.47 million in total assets, $9.78 million in total liabilities and a $5.31 million total shareholders' deficit. Mayer Hoffman McCann CPAs (The New York Practice of Mayer Hoffman McCann P.C.), in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that at Dec. 31, 2012, the Company has incurred operating losses since fiscal year 2006. These conditions raise substantial doubt about the Company's ability to continue as a going concern. CYCLONE POWER: TCA Global Agrees to Buy $2 Million Debentures ------------------------------------------------------------- Cyclone Power Technologies, Inc., closed a securities purchase agreement with TCA Global Credit Master Fund, LP, on Aug. 30, 2013. Pursuant to the terms of the Purchase Agreement, TCA will purchase from the Company up to $2,000,000 of senior secured redeemable debentures over the following 12 months. As of the Closing Date, TCA purchased a Debenture in the amount of $400,000 which bears simple interest at 12 percent per annum plus a 6 percent redemption premium, and matures in 12 months. Ten equal monthly interest and principal payments will commence in December 2013 with only interest due prior to then. The Debenture is not convertible into common stock unless the Company is in Default. There is no pre-payment penalty associated with the Debenture. The Company's obligations to TCA under the Debentures are secured by a security agreement granting TCA an unconditional and continuing first priority security interest in the Company's assets and a separate security agreement and guaranty signed by the Company's two subsidiaries, Cyclone-WHE LLC and Cyclone Performance LLC. Under the Purchase Agreement, as consideration for advisory services provided by TCA to the Company prior to the Closing Date, the Company has paid to TCA a fee of $100,000 in shares of restricted common stock. Additionally, TCA or its associates have received certain other legal, diligence and commitment fees pursuant to the Purchase Agreement. A copy of the Securities Purchase Agreement is available at: http://is.gd/ilPy8O 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. The Company's balance sheet at June 30, 2013, showed $1.36 million in total assets, $4.26 million in total liabilities and a $2.89 million total stockholders' deficit. 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. DELTA OIL & GAS: Incurs $114K Net Loss in Second Quarter -------------------------------------------------------- Delta Oil & Gas, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of US$113,699 on US$145,173 of revenue for the three months ended June 30, 2013, compared with a net loss of US$185,668 on US$121,057 of revenue for the same period last year. The Company reported a net loss of US$268,801 on US$291,884 of revenue for the six months ended June 30, 2013, compared with a net loss of US$289,921 on US$247,775 of revenue for the corresponding period of 2012. The Company's balance sheet at June 30, 2013, showed US$1.63 million in total assets, US$114,627 of total liabilities, and shareholders' equity of US$1.52 million. "As shown in the accompanying consolidated financial statements, the Company has incurred a net loss of US$6,221,738 since inception. To achieve profitable operations, the Company requires additional capital for obtaining producing oil and gas properties through either the purchase of producing wells or successful exploration activity. Management believes that sufficient funding will be available to meet its business objectives including anticipated cash needs for working capital and is currently evaluating several financing options. However, there can be no assurance that the Company will be able to obtain sufficient funds to continue the development of its properties and, if successful, to commence the sale of its projects under development. As a result of the foregoing, there exists 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/QTYzd7 Vancouver, Canada-based Delta Oil & Gas, Inc., is an independent natural gas and oil company engaged in the exploration, development and acquisition of natural gas and oil properties in the United States and Canada. DETROIT, MI: Snyder, Dillon Subpoenaed in Bankruptcy ---------------------------------------------------- The Associated Press reported that Gov. Rick Snyder and Treasurer Andy Dillon have been subpoenaed to give depositions about decisions they made that may be tied to Detroit's bankruptcy filing. According to the report, documents filed on Sept. 5 in Detroit federal court show Snyder's transformation manager Richard Baird also was served a subpoena. Snyder is ordered to appear Sept. 17 at the American Federation of State, County and Municipal Employees Council 25 office in Detroit, the report related. Dillon and Baird must appear Sept. 18. The union claims state-appointed emergency manager Kevyn Orr has negotiated in bad faith while trying to restructure $18 billion or more in debt, the report said. A hearing is scheduled on Sept. 10 on the state's motion to keep the officials from testifying. 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. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. DIAGNOSTIC IMAGING: Incurs $68,900 Net Loss in Second Quarter ------------------------------------------------------------- Diagnostic Imaging International Corp. filed its quarterly report on Form 10-Q, reporting a net loss of $68,916 on $1.19 million of sales for the three months ended June 30, 2013, compared with a net loss of $9,652 on $832,016 of sales for the same period last year. The Company reported a net loss of $100,946 on $2.49 million of sales for the six months ended June 30, 2013, compared with a net loss of $24,926 on $1.64 million of sales for the corresponding period of 2012. The Company's balance sheet at June 30, 2013, showed $3.04 million in total assets, $3.08 million in total liabilities, and a shareholders' deficit of $37,650. "As shown in the accompanying consolidated financial statements, the Company incurred [comprehensive] net losses of $97,656 for the six months ended June 30, 2013, as well as a working capital deficit of $707,921. These conditions raise substantial doubt as to if the company's ability to continue as a going concern. A copy of the Form 10-Q is available at http://is.gd/2kV6kE Las Vegas, Nev.-based Diagnostic Imaging International Corp. owns and operates Canadian Teleradiology Services, Inc. ("CTS"), a company that provides remote reading of diagnostic imaging scans for rural hospitals and clinics. In early 2010, the Company modified its business plan to grow its CTS subsidiary while commencing the acquisition of existing full service imaging clinics located in the United States and exploring the development of new diagnostic imaging technology. In 2012, the Company purchased Schuylkill Open MRI, Inc. ("SMI") an independent Magnetic Resonance Imaging (MRI) facility located in Pottsville, Pennsylvania. DUMA ENERGY: Terminates Employment of VP of Operations ------------------------------------------------------ Steven Carter's employment with Duma Energy Corp. was terminated effective Aug. 30, 2013. Mr. Carter served as the Company's vice president of operations since December 2006. Mr. Carter's primary responsibilities were with respect to the Company's South Texas operations. The Company's current focus is on its Galveston Bay (Texas) and Namibia oil and gas interests and as such the Company determined that Mr. Carter's services are no longer required. Mr. Carter continues to serve as a director of the Company. As a result, the Company's current directors and Executive Officers are as follows: Name Position ---- -------- Jeremy Glenn Driver President, Chief Executive Officer, Chairman and a director John E. Brewster, Jr. Director Steven L. Carter Director Leonard Garcia Director Chris Herndon Director Sarah Berel-Harrop Secretary, Treasurer and Chief Financial Officer About Duma Energy Corpus Christi, Tex.-based Duma Energy Corp. -- http://www.duma.com/-- formerly Strategic American Oil Corporation, is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers, and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. Duma Energy incurred a net loss of $4.57 million for the year ended July 31, 2012, compared with a net loss of $10.28 million during the prior fiscal year. For the nine months ended April 30, 2013, the Company incurred a net loss of $39.23 million on $5.10 million of revenues. As of April 30, 2013, the Company had $25.78 million in total assets, $15.47 million in total liabilities and $10.30 million in total stockholders' equity. EL FARMER: Discloses Use Terms of PR Asset's Cash Collateral ------------------------------------------------------------ El Farmer, Inc. disclosed the terms of the use of PR Asset Portfolio 2013-1 International, LLC's cash collateral. As of the Petition Date, the Debtor owes PR Asset two aggregate loans as: Loan A for $6,394,799 and Loan B for $5,278,231. The amount needed by the Debtor for September includes $39,061 to be paid to Banco Popular; and $128,867 for all other expenses. A copy of the budget is available for free at: http://bankrupt.com/misc/ELFARMER_cashcoll.pdf In accordance with prior authorizations, the Debtor is to pay PR Asset Portfolio $9,084 each weekly production period. A preliminary or final hearing in the matter has been scheduled for mid-September. As reported in the Troubled Company Reporter on Sept. 3, 2013, the Debtor and PR Asset jointly asked the bankruptcy court to allow the Debtor's use of PR Asset's cash collateral until Sept. 30, 2013. The TCR earlier reported on Aug. 29, 2013 that El Farmer sought Court approval of the cash collateral use, without the consent of PR Asset Portfolio (formerly Banco Popular), for the period of Sept. 1, 2013, to Oct. 31, 2013, for the payment of the Debtor's operating expenses. PR Asset only agrees to the use of its cash collateral up to September 30 conditioned on a $9,084 weekly payment. PR Asset is represented by Patrick D. O'Neill, Esq., at O'NEILL & GILMORE, P.S.C. About El Farmer El Farmer, Inc., filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-09687) in Old San Juan, Puerto Rico on Dec. 7, 2012. The Debtor scheduled $18.3 million in assets and $12.0 million in liabilities, including $11.0 million owed to secured creditor Banco Popular De Puerto Rico. The Debtor owns farm lands in Isabela, Puerto Rico. Modesto Bigas Mendez, Esq., at Bigas & Bigas, in Ponce, P.R., represents the Debtor as counsel. ELEPHANT TALK: Has Until Nov. 30 to Regain NYSE MKT Compliance -------------------------------------------------------------- Elephant Talk Communications Corp. received a notice from the NYSE MKT LLC indicating that the Company made a reasonable demonstration of its ability to regain compliance with Section 1003(a)(iv) of the Company Guide of the NYSE MKT LLC. As a result, the Exchange accepted the Company's updated plan of compliance and granted the Company a further extension until Nov. 30, 2013, to regain compliance with the continued listing standards. The Company initially received notice from the Exchange on May 17, 2013, indicating that the Company does not satisfy the continued listing standards of the Exchange set forth in Section 1003(a)(iv) of the Company Guide in that the Company has sustained losses which are so substantial in relation to its overall operations, or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the Company will be able to continue operations or meet its obligations as it matures. The Company was afforded an opportunity to submit its initial plan of compliance to the Exchange and on May 31, 2013, the Company presented its Plan to the Exchange. On June 13, 2013, the Exchange accepted the Plan and granted the Company an extension until Aug. 31, 2013. Based on a review of information provided by Elephant Talk through Aug. 28, 2013, the NYSE MKT has determined that while the Company has not yet regained full compliance with Section 1003(a)(iv) of the listing standards, the Company has made an acceptable demonstration of its ability to regain compliance by the end of the extended plan period. In an effort to improve the Company's liquidity, Steven van der Velden, the Company's chief executive officer and a board member, invested over $5.8 million as part of larger financings. The Company said it is devoted to regaining compliance with the listing standards. The Company will continue to remain subject to periodic review by the NYSE MKT during the extension period. "Management remains in discussions with the NYSE MKT in order to complete the necessary steps to regain full listing compliance," said Mr. van der Velden, CEO of the Company. "Our increased revenue in our mobile and security businesses combined with being break-even in the month of June for the first time in the Company's history provided the foundation for regaining compliance with the listing standards. Our monthly recurring revenue model produced 70% margins during the second quarter in connection with our contracts with Iusacell in Mexico, the Zain Group in the Middle East and Vodafone in Spain. In addition, we believe our cyber security business is making significant progress within the global banking industry." Failure to make progress consistent with the plan or to regain compliance with the continued listing standards by the end of the extension period could result in the Company being delisted from the NYSE MKT. About Elephant Talk Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK) -- http://www.elephanttalk.com/-- is an international provider of business software and services to the telecommunications and financial services industry. Elephant Talk disclosed a net loss attributable to the Company of $23.13 million in 2012, a net loss attributable to the Company of $25.31 million in 2011 and a net loss attributable to the Company of $92.48 million in 2010. The Company's balance sheet at March 31, 2013, showed $34.47 million in total assets, $18.29 million in total liabilities, and $16.18 million in total stockholders' equity. BDO USA, LLP, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations has an accumulated deficit of $203.3 million and continues to generate negative cash flows that raise substantial doubt about its ability to continue as a going concern. EMISPHERE TECHNOLOGIES: Incurs $14-Mil. Net Loss in Second Quarter ------------------------------------------------------------------ Emisphere Technologies, Inc., reported a net loss of $13.98 million for the three months ended June 30, 2013, compared with net income of $2.77 million for the same period last year. "Operating expenses increased $0.37 million or 26% for the three months ended June 30, 2013, in comparison to the same period last year. "Other non-operating expense for the three months ended June 30, 2013, increased $16.4 million, or 391%, in comparison to the same period last year, due primarily to a $16.9 million change in the fair value of derivative instruments arising from the Restructuring Agreement as it relates to warrants with certain conversion features and a change in valuation method from the Black Scholes model to the Monte Carlo model, offset by a $0.6 million decrease in interest expense related to the MHR Convertible Note discount fully amortized at the Sept. 26, 2012 default. The Company reported a net loss of $16.41 million for the six months ended June 30, 2013, compared with net income of $2.03 million for the corresponding period in 2012. The Company's balance sheet at June 30, 2013, showed $8.17 million in total assets, $90.56 million in total liabilities, and a stockholders' deficit of $82.39 million. "The Company is pursuing several courses of action to address its deficiency in capital resources, including the global commercialization of B12, seeking new partnerships, leveraging existing partnerships, and capital markets financings. While our plan is to raise capital and/or to pursue partnering opportunities, we cannot be sure that our plans will be successful. The Company estimates that if we fail to raise additional capital or obtain substantial cash inflows from existing or new partners prior to the third quarter of 2014, the Company could be forced to cease operations. These conditions 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/yjy5Ga Roseland, N.J.-based Emisphere Technologies, Inc. (OTC BB: EMIS) is a biopharmaceutical company that focuses on a unique and improved delivery of therapeutic molecules and commercialization of its own product candidates using its Eligen(R) Technology. These molecules could be currently available or are under development. EMPIRE RESORTS: Signs New Option Agreement with EPR Properties -------------------------------------------------------------- Empire Resorts, Inc., and EPR Properties announced that their respective subsidiaries, Monticello Raceway Management, Inc., and EPT Concord II, LLC, have agreed to amend an option agreement between MRMI and EPT in which EPT granted MRMI the right to lease certain property held by EPT at the site of the former Concord Resort in Sullivan County, New York, on which the parties have planned to develop a regional destination casino resort, hotel and harness racetrack. Emanuel Pearlman, chairman of the Board of Empire Resorts stated, "We are pleased to enter into this Option Agreement with EPR further enhancing the relationship between our Companies. Importantly, the Option Agreement provides the flexibility required to accommodate any outcome of the November 2013 New York State Constitution Amendment referendum. Consequently, we are well-positioned to provide upstate New York with desperately needed economic development and jobs." David Brain, president and CEO of EPR Properties stated, "This new Option Agreement allows us to be responsive to the outcomes of the New York State Constitution Amendment referendum, and enables maximum utilization of our existing land investment in Sullivan County." Based on the amendment, MRMI's option to lease the property is extended to various dates in the future based upon whether or not the amendment to the New York State Constitution authorizing up to seven non-tribal casinos is approved by voters at the November 2013 referendum. MRMI may extend the term of the Option Agreement on a monthly basis, by paying monthly fees that escalate annually, until a future date based upon certain trigger events. The Option Agreement marks another milestone for the project, including adoption of a comprehensive final site development plan for Phase 1 of the project by the Town of Thompson on July 10, 2013. Empire has also signed a Project Labor Agreement with the Hudson Valley Building & Construction Trades Council, as well as an executed Labor Peace Agreement with the New York Hotel and Motel Trades Council. Phase 1 of the Concord Resort project includes a casino resort with a hotel, harness horse racetrack, grandstand/showroom, simulcast facility, banquet event center, restaurants, parking facilities, and infrastructure components that are critical to support the overall success of the Project. It is also anticipated that site plan approvals for both the Golf Phase and select components of the Entertainment Village Phase will be obtained in the coming months. The combined economic impact of these phases will create over 1,000 new full-time equivalent jobs at the site. The direct effect on the local economy from this initial phase is estimated at approximately $290 million annually. For Sullivan County the total annual economic activity expected to result from the initial phase of operations alone is estimated at $395 million. About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- owns and operates Monticello Casino & Raceway, a video gaming machine and harness racing track and casino located in Monticello, New York, 90 miles northwest of New York City. Empire Resorts reported a net loss applicable to common shares of $2.26 million in 2012, as compared with a net loss applicable to common shares of $1.57 million in 2011. As of June 30, 2013, the Company had $60.48 million in total assets, $51.51 million in total liabilities and $8.96 million in total stockholders' equity. ENERGY FOCUS: Incurs $679,000 Net Loss in Second Quarter -------------------------------------------------------- Energy Focus, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $679,000 on $7.38 million of sales for the three months ended June 30, 2013, compared with a net loss of $900,000 on $7.67 million of sales for the same period last year. The Company reported a net loss of $2.11 million on $12.71 million of sales for the six months ended June 30, 2013, compared with a net loss of $2.77 million on $12.97 million of sales for the comparable period in 2012. The Company's balance sheet at June 30, 2013, showed $13.29 million in total assets, $12.00 million in total liabilities, and stockholders' equity of $1.29 million. A copy of the Form 10-Q is available at http://is.gd/eztO8g Solon, Ohio-based Energy Focus, Inc. (OTC QB: EFOI) and its subsidiaries engage in the design, development, manufacturing, marketing, and installation of energy-efficient lighting systems and solutions. * * * As reported in the TCR on April 11, 2013, Plante & Moran, PLLC, in Cleveland, Ohio, in its report on Energy Focus, Inc.'s consolidated financial statements for the fiscal year ended Dec. 31, 2012, expressed substantial doubt about the Company's ability to continue as a going concern, citing the Company's net losses of $5.7 million, $6.1 million, and $8.5 million during the years ended Dec. 31, 2012, 2011, and 2010, respectively. ENCISION INC: Incurs $241K Net Loss in June 30 Quarter ------------------------------------------------------ Encision Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $240,697 on $2.68 million of total revenue for the three months ended June 30, 2013, compared with net income of $10,310 on $3.10 million of total revenue for the three months ended June 30, 2012. "Net loss was a result of lower product and service revenue, and the lower gross profit thereon, and the medical device excise tax. The net loss was partially reduced by slightly lower operating expenses. The Company's balance sheet at June 30, 2013, showed $6.27 million in total assets, $2.10 million in total liabilities, and shareholders' equity of $4.17 million. "We have an accumulated deficit of $17,416,390 at June 30, 2013. Operating funds have been provided primarily by issuances of our common stock and warrants, a line of credit, and the exercise of stock options to purchase our common stock. Should our liquidity be diminished in the future because of operating losses, we may be required to seek additional capital in the future. Our line of credit agreement with Silicon Valley Bank is subject to renewal in May 2014. There are no assurances that additional capital will be available to us on terms acceptable to us, or at all. 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/g98S2H Encision Inc. designs, develops, manufactures and markets innovative surgical devices that allow surgeons to optimize technique and patient safety during a broad range of surgical procedures. Based in Boulder, Colorado, the Company pioneered the development of patented AEM(R) Laparoscopic Instruments to improve electrosurgery and reduce the chance for patient injury in minimally invasive surgery. ERBA DIAGNOSTICS: Reports $87K Net Income in Second Quarter ----------------------------------------------------------- ERBA Diagnostics, Inc., filed its quarterly report on Form 10-Q, reporting net income of $87,333 on $6.89 million of net revenues for the three months ended June 30, 2013, compared with a net loss of $358,680 on $4.31 million of net revenues for the same period last year. Three Months ended June 30, 2013 "Income from operations totaled $88,000 in 2013 as compared to an operating loss of $136,000 in 2012. "Other income (expense) totaled an other income, net of $11,000 in 2013 as compared to an other expense, net of $195,000 in 2012. Amounts included in other income (expense), net in the 2013 and 2012 periods were primarily net foreign currency gains and losses, resulting from deposits held in Euros and transactions of our Italian subsidiary which were denominated in currencies other than its functional currency." The Company reported a net loss of $159,719 on $13.60 million of net revenues for the six months ended June 30, 2013, compared with a net loss of $437,135 on $8.58 million of net revenues for the comparable period in 2012. Six Months Ended June 30, 2013 "Income from operations totaled $151,000 in 2013 as compared to an operating loss of $255,000 in 2012. "Other income (expense) totaled an other expense, net of $258,000 in 2013 as compared to an other income, net of $127,000 in 2012. The decrease in other income to loss from 2012 to 2013 was primarily the result of acquisition and integration costs of $211,000 incurred in 2013." The Company's balance sheet at June 30, 2013, showed $24.78 million in total assets, $8.84 million in total liabilities, and stockholders' equity of $15.94 million. A copy of the Form 10-Q is available at http://is.gd/JK96UC ERBA Diagnostics, Inc. (NYSE MKT: ERB), headquartered in Miami Lakes, Florida, is a fully integrated in vitro diagnostics company that develops, manufactures and distributes in the United States and internationally, proprietary diagnostic reagents, test kits and instrumentation, primarily for autoimmune and infectious diseases, through its legacy subsidiaries - Diamedix Corporation (U.S.), Delta Biologicals S.r.l. (Europe) and ImmunoVision, Inc. (U.S.) - and through its recently acquired subsidiaries - Drew Scientific, Inc. (U.S.) and JAS Diagnostics, Inc. (U.S.). * * * This concludes the Troubled Company Reporter's coverage of [Company] until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. ERBA Diagnostics, Inc., announced on Aug. 19, 2013, that the Company has received a letter from the NYSE MKT LLC stating that the Company has resolved its prior non-compliance with the continued listing standards contained in the Exchange's Company Guide relating to Company's failure to timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, because the Company filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, with the Securities and Exchange Commission on Aug. 9, 2013. FONTANA RDA: Moody's Confirms Ba1 Rating on Tax Bonds ----------------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating of the Successor Agency to the Fontana Redevelopment Agency's (CA) Tax allocation Revenue Bonds 2003, Series A and B and Subordinate Lien Tax Allocation Revenue Bonds, 2005 Series A. The bonds are secured by a pledge of tax increment revenues from the agency's North Fontana Redevelopment Project area. Ratings Rationale: The confirmation at Ba1 reflects the weak coverage in the second period on a combined coverage basis, notwithstanding the large combined project area, the diversity of the largest taxpayers, and the strong total assessed value (AV) to incremental AV. Importantly, however, is the state legislature's willingness to modify the cash flows available for bond debt service as a considerable source of uncertainty and a major factor for the current rating. The project area's coverage for the first payment period on a combined basis in calendar year 2013 is a strong 3.3 times, though falls to a somewhat weak 1.4 times in the second payment period for the same calendar year. These coverage ratios are expected through maturity of the bonds. The project area is larger than Moody's standard threshold of 1,000 acres at 9,476 acres. The project area's AV declined significantly in fiscal 2010 and continued to decline before increasing by 1.3% in fiscal 2013. Moody's expects the combined project area AV to increase in the near-term. Taxpayer concentration is very diverse at 9% of incremental 2013 AV. The total AV to incremental AV is strong at 94% in fiscal 2013. The city's wealth indicators are comparable to national averages. Under AB X1 26 and AB 1484, the statutes that dissolved all California redevelopment agencies, tax increment revenue is placed in trust with the County auditor, who makes semi-annual distributions of funds sufficient to pay debt service on tax allocation bonds, including other obligations. Strengths: - Strong first payment period debt service coverage - Assessed value expected to increase - Large project area - Diversity of ten largest taxpayers on a combined basis Challenges: - Below 2x coverage in the second payment period What Could Move The Rating- Up - Significant and sustained increase in assessed valuation - Increased debt service coverage in the second payment period What Could Move The Rating- Down - Erosion of semi-annual debt service coverage - Protracted assessed value decline The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. FOUNTAIN VALLEY: Moody's Confirms Ba1 Tax Bond Rating ----------------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating on the Successor Agency to Fountain Valley Agency for Community Development 1998 Tax Allocation Refunding Bonds (Industrial Area Redevelopment Project). Ratings Rationale: The rating reflects the agency's geographically small but economically well sized assessed valuation that includes solid wealth levels and a recovering economy. The rating also incorporates the agency's weak level of low period debt service coverage, high taxpayer concentration and solid ratio of increment to assessed valuation. The bonds are secured by the tax increment revenues of the agency. Strengths - Solid valuation relative to the size of the project area - Very strong high period debt service coverage - Strong level of increment to assessed valuation Challenges - Weak level of low period debt service coverage - Geographically small assessed valuation - High tax payer concentration What Could Change The Rating Up - Sizable increase in incremental AV of the project area, leading to greater debt service coverage in all semi-annual periods What Could Change The Rating Down - Material decline in the district's assessed valuation The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. FREESEAS INC: Issues 1.8MM Add'l Settlement Shares to Hanover ------------------------------------------------------------- FreeSeas Inc. issued and delivered to Hanover Holdings I, LLC, 1,800,000 additional settlement shares pursuant to the terms of the Settlement Agreement approved by the Supreme Court of the State of New York, County of New York, on June 25, 2013, in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 651950/2013. Hanover commenced the Action against the Company on May 31, 2013, to recover an aggregate of $5,331,011 of past-due accounts payable of the Company, plus fees and costs. The Order provides for the full and final settlement of the Claim and the Action. Pursuant to the terms of the Settlement Agreement approved by the Order, on June 26, 2013, the Company issued and delivered to Hanover 890,000 shares of the Company's common stock, $0.001 par value, and between July 2, 2013, and Aug. 29, 2013, the Company issued and delivered to Hanover an aggregate of 22,308,000 additional settlement shares. A copy of the Form 6-K is available for free at: http://is.gd/oZfwlo About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. Freeseas disclosed a net loss of US$30.88 million in 2012, a net loss of US$88.19 million in 2011, and a net loss of US$21.82 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed US$114.35 million in total assets, $106.55 million in total liabilities and US$7.80 million in total shareholders' equity. RBSM LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. It has also failed to make required payments to Deutsche Bank Nederland as agreed to in its Sept. 7, 2012, amended and restated facility agreement and received notices of default from First Business Bank. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. FREESEAS INC: Issues 1.6MM Add'l Settlement Shares to Hanover ------------------------------------------------------------- FreeSeas Inc. issued and delivered to Hanover Holdings I, LLC, 1,650,000 additional settlement shares pursuant to the terms of the Settlement Agreement approved by the Supreme Court of the State of New York, County of New York, on June 25, 2013, in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 651950/2013. Hanover commenced the Action against the Company on May 31, 2013, to recover an aggregate of $5,331,011 of past-due accounts payable of the Company, plus fees and costs. The Order provides for the full and final settlement of the Claim and the Action. Pursuant to the terms of the Settlement Agreement approved by the Order, on June 26, 2013, the Company issued and delivered to Hanover 890,000 shares of the Company's common stock, $0.001 par value, and between July 2, 2013, and Sept. 3, 2013, the Company issued and delivered to Hanover an aggregate of 24,108,000 additional settlement shares. A copy of the Form 6-K is available for free at: http://is.gd/wYZabb About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. Freeseas disclosed a net loss of US$30.88 million in 2012, a net loss of US$88.19 million in 2011, and a net loss of US$21.82 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed US$114.35 million in total assets, $106.55 million in total liabilities and US$7.80 million in total shareholders' equity. RBSM LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. It has also failed to make required payments to Deutsche Bank Nederland as agreed to in its Sept. 7, 2012, amended and restated facility agreement and received notices of default from First Business Bank. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. FUSION TELECOMMUNICATIONS: To Buy Cloud Services Businesses ----------------------------------------------------------- Fusion Telecommunications International, Inc., and its newly- formed subsidiary, Fusion Broadvox Acquisition Corp., entered into an Asset Purchase and Sale Agreement to acquire specified assets owned by BroadvoxGo! LLC and Cypress Communications, LLC, and used in the operation of the cloud communications services segment of Sellers' business. The Company also agreed to assume substantially all of the on-going liabilities of the Acquired Business incurred in the ordinary course of business. The aggregate purchase price for the assets to be purchased from Sellers, net of the assumed liabilities, is $32.1 million, payable in cash, at closing. The Company will deliver $200,000 into escrow as a good faith deposit to be refunded to the Company only under certain limited circumstances, such as Sellers' wrongful failure to complete the sale or the Company's termination of the Agreement due to Sellers' failure to satisfy a condition precedent to closing not waived by the Company. Consummation of the transactions contemplated by the Agreement is subject to the satisfaction of certain conditions precedent, including, but not limited to, completion of an audit of the financial books and records of the Acquired Business, receipt of any applicable regulatory approvals and certain third-party consents, receipt by the Company of sufficient funding to pay the purchase price and provide for reasonable post-acquisition working capital requirements, and other customary conditions of closing. In addition, the closing of the transactions is subject to demonstration that the Acquired Business achieves annualized earnings before interest, taxes, depreciation and amortization of not less than $5 million based on the three months preceding the closing. Consummation is also subject to the negotiation of a series of mutual acceptable agreements relating to post-closing matters such as (a) certain transition services to be provided to the Company by Sellers, (b) the shared use of certain equipment and systems of Sellers on a transition basis and (c) the Company's use of certain intellectual property of Sellers on a transition basis. While the Agreement contemplates that a closing of the sale of the Acquired Business will take place on the later of Nov. 15, 2013, or 10 business days following completion of the audit of the Acquired Business, the conditions precedent to closing are such that there can be no assurance that the Company will complete its acquisition of the Acquired Business in that time or at all. The Acquired Business currently provides a suite of cloud communications services to approximately 5,800 small, medium and large-sized companies. For the year ended Dec. 31, 2012, the Acquired Business generated unaudited revenues of approximately $30.9 million, over 90 percent of which is monthly recurring. The Company expects to realize considerable synergies after the transaction is consummated. Each Seller is a limited liability company organized under the laws of the State of Delaware and is affiliated with the other through common control. The Sellers' sister companies, not involved in the transactions, also provide wholesale voice termination and origination services to domestic customers. A copy of the Asset Purchase Agreement is available for free at: http://is.gd/qZdbf1 About Fusion Telecommunications New York City-based Fusion Telecommunications International, Inc. (OTC BB: FSNN) is a provider of Internet Protocol ("IP") based digital voice and data communications services to corporations and carriers worldwide. The Company reported a net loss of $5.20 million in 2012, as compared with a net loss of $4.45 million in 2011. The Company's balance sheet at June 30, 2013, showed $27.32 million in total assets, $31.16 million in total liabilities and a $3.84 million total stockholders' deficit. Rothstein Kass, in Roseland, 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 had negative working capital balances, incurred negative cash flows from operations and net losses since inception, and has limited capital to fund future operations that raises a substantial doubt about their ability to continue as a going concern. GATEHOUSE MEDIA: Has Agreement with Newcastle to File Bankruptcy ---------------------------------------------------------------- Newcastle Investment Corp., owner of approximately $626 million face value of Gatehouse's total indebtedness, or approximately 52 percent, disclosed, among other things, that it had entered into an agreement with the Company and certain other holders of the Company's debt related to a potential restructuring of the Company pursuant to a prepackaged plan of reorganization under Chapter 11 of the United States Code. Newcastle also disclosed financial projections for GateHouse's post-restructuring operations for 2013 - 2016. For fiscal year 2013, the Company projects that it will achieve approximately $475 million in revenue and $73 million in As Adjusted EBITDA. For fiscal year 2014, the Company projects that it will achieve approximately $489 million in revenue, $70 million in As Adjusted EBITDA and $57 million in "funds from operations", defined as GAAP net income plus depreciation and amortization after adjustments for permanent cash tax savings. For fiscal year 2015, the Company projects that it will achieve approximately $510 million in revenue, $80 million in As Adjusted EBITDA and $65 million in "funds from operations". For fiscal year 2016 the Company projects that it will achieve approximately $522 million in revenue, $85 million in As Adjusted EBITDA and $68 million in "funds from operations". The Company previously issued the following statement in its annual report for the year ended Dec. 30, 2012. "Our ability to make payments on our indebtedness as required depends on our ability to generate cash flow from operations in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. "There can be no assurance that our business will generate cash flow from operations or that future borrowings will be available to us in amounts sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. Currently we do not have the ability to draw upon our revolving credit facility which limits our immediate and short-term access to funds. If we are unable to repay our indebtedness at maturity we may be forced to liquidate or reorganize our operations and business under the federal bankruptcy laws." About GateHouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. As of June 30, 2013, the Company had $433.70 million in total assets, $1.28 billion in total liabilities and a $848.85 million total stockholders' deficit. GENIUS BRANDS: Incurs $543K Net Loss in Second Quarter ------------------------------------------------------ Genius Brands International, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $543,249 on $622,324 of revenues for the three months ended June 30, 2013, compared with a net loss of $583,247 on $1.64 million of total revenues for the same period last year. The Company reported a net loss of $1.49 million on $1.36 million of total revenues for the six months ended June 30, 2013, compared with a net loss of $1.18 million on $2.67 million of total revenues for the corresponding period of 2012. The Company's balance sheet at June 30, 2013, showed $1.88 million in total assets, $3.26 million in total liabilities, and a stockholders' deficit of $1.38 million. A copy of the Form 10-Q is available at http://is.gd/yKfKUU San Diego, Calif.-based Genius Brands International, Inc., creates and distributes music-based products which it believes are entertaining, educational and beneficial to the well-being of infants and young children under its brands, including Baby Genius and Little Genius. GO DADDY: Moody's Keeps 'B1' CFR on News of Planned Acquisitions ---------------------------------------------------------------- Moody's Investors Service affirmed Go Daddy Operating Company, LLC's B1 corporate family rating, its B1-PD probability of default rating, and the Ba3 rating for the company's first lien credit facilities. The ratings outlook is stable. Go Daddy plans to raise an incremental $100 million first lien term loan and use the net proceeds and $65 million of cash on hand to fund tuck-in acquisitions. Ratings Rationale: Go Daddy's planned acquisitions will follow the acquisition of Locu in August 2013, which the company financed with cash and stock. Moody's estimates that pro forma for the acquisitions and increase in debt Go Daddy's leverage (Moody's adjusted total debt/cash flow from operations +interest expense) will increase only by about 0.3x to 5.3x. The affirmation of Go Daddy's ratings is based on Moody's expectations that the company will maintain strong customer growth rates, produce free cash flow in the range of 8% to 10% of its total debt, and reduce leverage through operating cash flow growth to less than 5.0x in the next 12 to 18 months. The B1 corporate family rating reflects Go Daddy's position as the largest domain name registrar and a leading web-hosting services provider. The rating benefits from Go Daddy's strong brand, especially in the generic top level domain registration market, which has resulted from years of aggressive marketing and advertising campaigns funded largely by internally generated cash flow. The company's highly visible brand and significant marketing spending drive its strong subscriber growth. Go Daddy's credit profile is supported by its high levels of customer retention rates, good organic growth prospects and good levels of free cash flow relative to debt as capital expenditures have moderated and are expected to remain stable relative to cash revenue in the intermediate term. However, the rating is constrained by Go Daddy's moderately high leverage and Moody's expectations of aggressive financial policies under financial sponsors. Despite Go Daddy's good levels of free cash flow, Moody's expects deleveraging to occur slowly and primarily through operating cash flow growth, as the company is expected to allocate surplus funds toward expansion and growth initiatives. The rating also considers Go Daddy's highly competitive market for web services, which is characterized by low barriers to entry, modest pricing power for basic products, and the low attach rates for add-on services that result in low average revenue per user (ARPU). The stable rating outlook reflects Moody's view that Go Daddy will maintain organic customer growth rates in the high single digit percentages and stable customer attrition rates. Moody's could raise Go Daddy's rating if the company generates strong revenue and operating cash flow growth driven by a mix of subscriber and ARPU growth. Go Daddy's ratings could be upgraded if Moody's believes that the company could sustain leverage (Moody's adjusted total debt/cash flow from operations +interest expense) below 4.0x. Moody's could downgrade Go Daddy's ratings if material deceleration in customer growth, weak business execution or increasing competitive challenges cause leverage to exceed 6.0x (Moody's adjusted total debt/cash flow from operations +interest expense) and free cash flow weakens to the low single digit percentages of total debt. In addition, large debt-financed acquisitions or distributions to shareholder could pressure the ratings. Moody's affirmed the following ratings: Issuer -- Go Daddy Operating Company, LLC Corporate Family Rating -- B1 Probability of Default Rating -- B1-PD $75 Million Senior Secured Revolver due 2016 -- Ba3, LGD3 -- 36%, revised from LGD3 -- 35% $837 Million (outstanding and upsized) Senior Secured First Lien Term Loan due 2018 -- Ba3, LGD3 -- 36%, revised from LGD3 -- 35% Headquartered in Scottsdale, AZ, Go Daddy is a leading provider of domain name registration, web hosting, and on-demand services. The company reported approximately $1 billion in revenue under U.S. GAAP and about $1.3 billion on non-GAAP basis for the twelve months ended June 30, 2013. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. GO DADDY: S&P Retains 'B' CCR Following $100MM Term Loan Add-On --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Scottsdale, Ariz.-headquartered Go Daddy Operating Co. LLC are unchanged following the company's proposed $100 million first-lien incremental term loan add-on. S&P expects the company will use proceeds from the upsize and $65 million of cash from its balance sheet to finance its planned acquisitions. Debt leverage will remain very high, pro forma for the transaction on a GAAP basis, and will be almost 5x on a cash basis. The transaction will increase annual interest expense by approximately $4 million. The ratio of discretionary cash flow plus interest expense over interest expense decreased to 2.3x from 2.4x at June 30, 2013. S&P's rating on Go Daddy reflects the company's "weak" business risk profile and "highly leveraged" financial risk profile. S&P's business risk assessment is based on tough competition among Web services providers for small and midsize business spending. S&P's financial risk assessment is based on Go Daddy's high lease- adjusted debt-to-EBITDA ratio, pro forma for the transaction, consistent with the indicative ratio of 5x or greater S&P associates with a highly leveraged financial risk profile. S&P's governance assessment is "fair." S&P expects that the ratio of discretionary cash flow plus interest expense over interest expense will increase to the mid-2x area over the next 12 months, fueled by EBITDA growth and increased discretionary cash flow that is used, at least in part, for debt repayment. RATINGS LIST Go Daddy Operating Co. LLC Corporate Credit Rating B/Stable/-- Ratings Unchanged Go Daddy Operating Co. LLC $836.9M first-lien term loan due 2018 B Recovery Rating 3 GRAYMARK HEALTHCARE: Unit to Buy HCRI Assets for $39.1 Million -------------------------------------------------------------- Graymark Healthcare, Inc.'s wholly-owned subsidiary, Foundation Surgical Hospital Affiliates, LLC, entered into an Agreement of Sale and Purchase with HCRI Texas Properties, Ltd., and Health Care REIT, Inc., pursuant to which FSHA agreed to acquire from Seller the real property occupied and certain personal property used by FSHA's subsidiary East El Paso Physicians' Medical Center, LLC, under a master lease agreement between EEPPMC, Seller and HCN. The real property covered by the Purchase Sale Agreement includes the hospital and medical office building occupied by EEPPMC, an adjoining parcel of vacant land, a promissory note in the principal amount of $3,600,000 granted by EEPPMC dated Oct. 8, 2010, and certain personal property, including medical equipment, owned by Seller and attached to or located in and used in the operation of the Hospital and MOB. The purchase price under the Purchase Agreement was $39,066,428. Simultaneous with the execution of the Purchase Sale Agreement, FSHA entered into an Agreement in Connection with Assignment and Assumption of PSA with DOC-FSH El Paso Medical Center, LLC, whereby FSHA assigned and DOC assumed, all of FSHA's right, title, interest and obligations in, to and under the Purchase Sale Agreement, except for the Excess Land, Note and Personal Property. The consideration under the Assignment Agreement with DOC was $40,000,000 and was composed of the following: 1. $39,066,428 which was paid directly to Seller; 2. $400,000 which was retained by DOC as a security deposit for the performance of EEPPMC's payment obligations under the Master Lease; 3. $463,678 which was paid to Graymark and FSHA; and 4. $69,894 which was paid on behalf of FSHA to cover certain legal and closing expenses. FSHA has a one percent ownership interest in DOC. A copy of the Sale Agreement is available for free at: http://is.gd/tS0jgr About Graymark Healthcare Graymark Healthcare, Inc., headquartered in Oklahoma City, Okla., provides care management solutions to the sleep disorder market. As of June 30, 2012, the Company operated 107 sleep diagnostic and therapy centers in 10 states. The Company's balance sheet at June 30, 2013, showed $4.78 million in total assets, $26.20 million in total liabilities and a $21.41 million total deficit. Going Concern As of March 31, 2013, the Company had an accumulated deficit of $60.2 million and reported a net loss of $2.7 million for the first quarter of 2013. In addition, the Company used $0.3 million in cash from operating activities from continuing operations during the quarter. On March 29, 2013, the Company signed a definitive purchase agreement with Foundation Healthcare Affiliates, LLC to purchase 100 percent of the interests in Foundation Surgery Affiliates, LLC and Foundation Surgical Hospital Affiliates, LLC, in exchange for 98.5 million shares of the Company's common stock. Management expects the transaction to close in the second quarter of 2013; however, there is no assurance the acquisition will close at that time or at all. "If the Company is unable to close the Foundation transaction or raise additional funds, the Company may be forced to substantially scale back operations or entirely cease its operations and discontinue its business. These uncertainties raise substantial doubt regarding the Company's ability to continue as a going concern," according to the Company's quarterly report for the period ended March 31, 2013. GREAT PLAINS: Court to Consider Stay Relief on Plan Hearing ------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Pennsylvania has continued the hearing to consider Wells Fargo Equipment Finance Inc.'s motion for relief from the automatic stay in the Chapter 11 case of Great Plain Exploration, LLC. The Court will consider the motion at the hearing on the Second Amended Disclosure Statement. Wells Fargo has recognized that the Debtor will file a Second Amended Plan by the Sept. 23 deadline, and that the Court will most likely defer the ruling on the motion to allow that process to play out first. Wells Fargo point out, however, that it was puzzled as to why the Debtor is opposing the motion and fighting to retain the equipment which is subject of the motion when in the Debtor's prior plan efforts, there was no indication whatsoever that the equipment was going to be utilized in the reorganization. As reported in the Troubled Company Reporter on Aug. 28, 2013, the Debtor, by and through its counsel, Bernstein-Burkley, P.C., objected to the motion of Wells Fargo to convert the case to one under Chapter 7 of the Bankruptcy Code, citing that: 1. Wells Fargo is adequately protected by its lien on the Collateral, is receiving interest payments in accordance with the prior adequate protection stipulation, and does not set forth sufficient grounds for converting the case. 2. The Debtor's Plan has not been denied confirmation and the Debtor's Disclosure Statement remains under consideration by the Court. Debtor continues its attempts to work through the objections and arrive at a Plan and Disclosure statement, which must be filed by Sept. 23, 2013. 3. Wells Fargo is adequately protected by its collateral and the interest payments. No other creditor seeks to convert the case to Chapter 7. On the contrary, other creditors continue to work with the Debtor to fashion reorganization in this case. 4. The Debtor submits that if Wells Fargo feels that its protection is inadequate, it has the ability to bring that concern to the attention of the Court by way of its Motion for Relief from Stay, which the Debtor also believes in not well made. 5. Conversion is neither warranted nor appropriate under the circumstances of this case. As reported in the TCR on July 18, 2013, Wells Fargo, through its counsel, Scott McGuireWoods LLP, related that the Debtor has had more than adequate opportunity to restructure its business operations and present a viable plan of reorganization, but has failed to do so. About John D. Oil & Gas Co. Mentor, Ohio-based John D. Oil & Gas Co., is in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. The Company has 58 producing wells. The Company also has one self storage facility located in Painesville, Ohio. The self-storage facility is operated through a partnership agreement between Liberty Self-Stor Ltd. and the Company. John D. Oil's affiliated entities -- Oz Gas, LTD., and Great Plains Exploration, LLC -- filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11, 2012. Two days later, John D. Oil filed its own Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063). On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A., dba Charter One, a receiver was appointed for all three corporate Debtors, in the United States District Court for the Northern District of Ohio at case No. 11-cv-2089-CAB. District Judge Christopher A. Boyko issued an order appointing Mark E. Dottore as receiver. The Receivership Order was appealed to the Sixth Circuit Court of Appeals on Dec. 19, 2011 and the appeal is currently pending. Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. John D. Oil's balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. The petitions were signed by Richard M. Osborne, CEO. The United States Trustee said a committee under 11 U.S.C. Sec. 1102 has not been appointed because no unsecured creditor responded to the U.S. Trustee's communication for service on the committee. GROWLIFE INC: Incurs $1.6-Mil. Net Loss in Second Quarter --------------------------------------------------------- GrowLife, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.62 million on $872,557 of net revenue for the three months ended June 30, 2013, compared with a net loss of $756,720 on $208,446 of net revenue for the same period last year. The Company reported a net loss of $2.80 million on $1.63 million of net revenue for the six months ended June 30, 2013, compared with a net loss of $878,406 on $300,205 of net revenue for the comparable period of 2012. A significant portion of the Company's net loss for year-to-date 2013 is related to non-cash expenses. The Company's balance sheet at June 30, 2013, showed $3.41 million in total assets, $3.16 million in total liabilities, and shareholders' equity of $250,436. "For the six months ended June 30, 2013, the Company incurred a net loss of $2,799,929, cash used in operations was $807,857, and had an accumulated deficit of $5,820,495. The Company has experienced recurring operating losses and negative operating cash flows since inception, and has financed its working capital requirements during this period primarily through the recurring issuance of notes payable and advances from a related party. These facts indicate that there is substantial doubt of the Company's continuation as a going concern." A copy of the Form 10-Q is available at http://is.gd/kn3NQX Woodland Hills, Calif.-based GrowLife, Inc., manufactures and supplies branded equipment and expendables that promote and enhance the experience and the quality of indoor and outdoor urban gardening. HOVNANIAN ENTERPRISES: Royce Held 3.7% Pref. Shares at Aug. 31 -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Royce & Associates, LLC, disclosed that as of Aug. 31, 2013, it beneficially owned 129,600 shares of convertible preferred stock of Hovnanian Enterprises, Inc., representing 3.76 percent of the shares outstanding. Royce & Associates previously reported beneficial ownership of 307,600 conv. preferred shares at Dec. 31, 2012. A copy of the regulatory filing is available for free at http://is.gd/bJtcw2 About Hovnanian Enterprises Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV) -- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian, is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. The Company's balance sheet at April 30, 2013, showed $1.61 billion in total assets, $2.09 billion in total liabilities and a $478.52 million total deficit. * * * As reported by the Troubled Company Reporter on April 25, 2013, Standard & Poor's Ratings Services said it raised its corporate credit rating on Hovnanian Enterprises Inc. to 'B-' from 'CCC+'. "The upgrade reflects strengthening operating performance supported by the broader recovery in the housing market that, we believe, should support modest profitability in 2013," said Standard & Poor's credit analyst George Skoufis. In the Dec. 11, 2012, edition of the TCR, Fitch Ratings has affirmed the ratings for Hovnanian Enterprises, Inc. (NYSE: HOV), including the company's Issuer Default Rating (IDR), at 'CCC'. The rating for HOV is influenced by the company's execution of its business model, land policies, and geographic, price point and product line diversity. The rating additionally reflects the company's liquidity position, substantial debt and high leverage. Hovnanian carries 'Caa2' corporate family and probability of default ratings from Moody's. As reported in the TCR on Aug. 5, 2013, Moody's Investors Service raised the Corporate Family Rating of Hovnanian Enterprises, Inc. to Caa1 from Caa2. The upgrade reflects both the industry's growing strength and Hovnanian's own improved results, which make it far less likely that the company will default on its debt obligations. HUNTER DEFENSE: Moody's Lowers CFR to 'Caa1'; Outlook Negative -------------------------------------------------------------- Moody's Investors Service downgraded Hunter Defense Technologies, Inc.'s ratings including its Corporate Family Rating to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD due to the high likelihood that the company will need do a debt refinancing over the next twelve months in order to address sizable upcoming debt maturities, weaker than anticipated operating performance and continued uncertainty in the defense sector. Concurrently, Moody's lowered the ratings on the company's first and second lien bank debts by one notch to B3 and Caa3, respectively. The ratings outlook changed to negative from stable reflecting elevated near-term refinancing risk. Ratings downgraded: Corporate Family Rating to Caa1 from B3; Probability of Default Rating to Caa1-PD from B3-PD; $147 million outstanding first lien term loan (originally $200 million) due August 2014, to B3 (LGD-3, 36%) from B2 (LGD-3, 39%) $44 million outstanding second lien term loan (originally $80 million) due February 2015, to Caa3 (LGD-5, 84%) from Caa2 (LGD- 5, 88%) Outlook, changed to Negative from Stable Ratings Rationale: The ratings downgrade was prompted by the need to address meaningful upcoming debt maturities in August 2014 and February 2015 resulting in a weak liquidity profile combined with lower than expected operating earnings more reflective of the Caa1 rating level. Operating performance is expected to continue to be negatively impacted by ongoing uncertainty created by Continuing Resolutions, government furloughs and defense budget cuts including Sequestration. Lower U.S. troop levels in active theaters combined with weaker than anticipated earnings from international sales to offset lower domestic sales have pressured both revenues and profitability. A weakened liquidity profile as a result of expected continued tight covenant headroom and lack of a multi-year revolving credit facility also underlie the ratings. Hunter Defense's Caa1 corporate family rating reflects elevated refinancing risk due to the company's entire debt structure coming due in 2014-2015. In addition, credit metrics are not expected to improve meaningfully over the intermediate term given uncertainty regarding future defense budget outlays and level of possible contract funding delays. Hunter Defense's CFR also reflects the company's relatively small revenue scale and historically volatile nature of shelter sales. Performance volatility from quarter to quarter stems from the timing of orders and Department of Defense funding delays. Furthermore, the realization of orders in the company's backlog could also be affected by delays resulting from defense budget pressures. However, the ratings also consider the ongoing long-term U.S. military demand for Hunter's technologically advanced mobile shelter systems and related products for military training purposes as well as ongoing military maintenance needs. Of note, the company continues to use ample cash generated from operations (largely from working capital changes) to voluntarily prepay debt. However, annual cash generation is not expected to be sufficient to repay debt maturities over the next twelve to eighteen months. The negative outlook reflects a weak liquidity profile stemming from the timing and economics of any refinancing of senior credit facility indebtedness coming due in the 2014 to 2015 time period together with uncertainty regarding degree of operating performance improvement in light of defense budget pressures. Hunter's ratings could be subject to downward revision if the company's liquidity position weakens including not extending upcoming debt maturities or if debt is increased for large levered acquisitions or equity distributions in particular. Credit metrics that may result in a downgrade include debt/EBITDA reaching over 8.0 times and EBIT/interest coverage falling well below 1.0x and on a sustained basis. The ratings outlook could be changed to stable if the company successfully executes a refinancing to address approaching debt maturities and improves its liquidity profile. The ratings could be upgraded if the company improves its liquidity position and achieves sustained growth in credit metrics such that debt to EBITDA is maintained below 6.0 times and interest coverage over 1.0 times, respectively. The principal methodology used in this rating was the Global Aerospace and Defense Industry Methodology published in June 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. Hunter Defense Technologies, Inc., headquartered in Solon, OH, is a provider of tactical shelters, CBRN (chemical, biological, radiological, nuclear) filters and collective protective systems, and mobile power and temperature control equipment for the U.S. military and Homeland Security. Annual revenues approximate $250 million. Hunter Defense is majority owned by the private equity firm Metalmark Capital. HUNTER DEFENSE: S&P Lowers Corporate Credit Rating to 'CCC+' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Hunter Defense Technologies Inc. (Hunter) to 'CCC+' from 'B' and revised the outlook to developing from negative. At the same time, S&P revised the company's first-lien recovery rating to a '1' from '2', reflecting its expectation of very high (90%-100%) recovery in a payment default scenario. As a result of a two- notch-lower corporate credit rating, which is partially offset by better recovery prospects, S&P lowered the first-lien rating one notch to 'B' from 'B+'. S&P maintained a '6' recovery rating on the second-lien debt, reflecting its expectation of negligible recovery (0%-10), and lowered the rating to 'CCC-' from 'CCC+', in line with the change in the corporate credit rating. "The downgrade reflects deterioration in Hunter's liquidity profile over the past six months, combined with refinancing risks associated with upcoming maturities," said credit analyst Chris Mooney. In addition, Hunter's $20 million revolving credit facility expired in August 2013 and its covenant compliance remains very tight. Furthermore, approximately $145 million in debt is due in less than 12 months (August 2014) and we believe ongoing uncertainty surrounding the defense sector could complicate the company's ability to refinance upcoming maturities. "We assess the company's financial risk profile as "highly leveraged" because of its "weak" liquidity and relatively weak credit metrics. We expect debt to EBITDA to remain around 5x and funds from operations (FFO) to debt to be between 10%-15% over the next year, as the company continues to use free cash to reduce debt in an attempt to maintain covenant compliance. However, some volatility may exist around our base forecast due to the potential for further delays in orders. We also factor in Hunter's ownership by Metalmark Capital, a private equity firm, which we believe increases the chances of future debt-financed dividends or acquisitions, although we believe this is unlikely in the near term. We consider the company's business risk profile "weak" because of its modest revenue base and somewhat limited product diversity, combined with reductions to U.S. defense spending," S&P added. "Although we expect earnings to stabilize at current levels over the next year, we believe a significant amount of uncertainty still surrounds the U.S. defense budget. In March 2013, sequestration triggered $500 billion of addition cuts over the next decade on top of the $487 billion reduction to previously planned levels (roughly 9%) laid out in the Budget Control Act of 2011. We believe that sequestration will have the biggest and quickest effect on companies that receive a large portion of their funding from the operations and maintenance (O&M) portion of the budget, like Hunter, because these funds are more fungible and tend to be spent faster (within a year) than procurement funds (up to three years). Some orders could be delayed as the Department of Defense (DoD) shifts funds to higher-priority areas of the budget, such as supporting war-related activity, and away from routine repairs and upgrades to equipment returning from war, such as the tents that Hunter provides. However, the fiscal 2013 (ending Sept. 30, 2013) spending measure allocates some additional money to O&M accounts, which should soften the negative impact of sequestration to some degree in the near term," S&P noted. If Congress is unable to pass the fiscal 2014 (beginning Oct. 1) on time, as has been the case in recent years, the DoD will likely be funded under a continuing resolution (CR). A CR can result in delays to orders for certain short-cycle products funded incrementally, including most of Hunter's products. In general, most orders will eventually be placed and the long-term impact on the business will likely not be significant, assuming funding is not permanently reduced, but these potential delays could result in earnings volatility and cause issues with covenant compliance. Over time, demand for Hunter's products could fall moderately because of plans to reduce the size of the U.S. Army to 490,000 troops by 2017 from about 570,000 currently. It is possible that sequestration could result in additional cuts to the force structure, although no plans to do so have been finalized. Hunter manufactures products that support U.S. troops, such as tactical shelter; environmental control units and power systems; and military heaters and chemical, biological, radiological, and nuclear (CBRN) filters and systems. Although the longer-term outlook is challenging, the president's plan to shift toward a more agile military could partially mitigate the impact of a smaller military because Hunter's products support an expeditionary force. The rating outlook is developing. Demand for Hunter's products remains uncertain because of U.S. defense budget pressures, but S&P expects revenue and earnings to stabilize over the next year. S&P could lower the rating over the next six months if it comes to believe that challenging market conditions and weak credit metrics will likely result in difficulty refinancing maturing debt or if such conditions cause a covenant breach. Conversely, S&P could raise the rating if the company is able to successfully extend near-term maturities and loosen its financial covenants, prompting S&P to revise its liquidity assessment to "adequate." IBAHN CORP: Seeks Bankruptcy Citing Loss of Contracts, Litigation ----------------------------------------------------------------- IBahn Corp., a provider of Internet services to hotels, sought bankruptcy protection (Bankr. D. Del. Case No. 13-12285), citing a loss of contracts with largest customer Marriott International Inc. and patent litigation costs. Joe Schneider, writing for Bloomberg News, reported that IBahn Chief Financial Officer Ryan Jonson said the company had assets of $13.6 million and it listed liabilities of as much as $50 million in the Chapter 11 filing on Sept. 6 in U.S. Bankruptcy Court in Wilmington, Delaware. IBahn, based in Salt Lake City, Utah, said in a statement that it appointed Edward Helvey as its new chief executive officer and that it will continue to operate as it restructures, the report related. Marriott said in the statement that it would remain a "loyal" customer through the restructuring. The company's international operations aren't included in the bankruptcy filings, according to the statement. Marriott in 2009 sought vendor certification to establish consistent standards at its hotels, according to Jonson's filing, the report said. IBahn didn't achieve the certification until 2013, and lost a third of the Marriott contracts between 2011 and 2013, Jonson said. "The loss of revenue has made restructuring of the iBahn's business essential to ongoing operations," he said, the report further related. Defending patent litigation has also depleted cash and caused severe financial strain on the company, Jonson said. Ibahn was a target of China-based hackers, according to a U.S. intelligence official familiar with the matter who spoke on a condition of anonymity in December, 2011, the report recalled. IN PLAY: Has to File Amended Disclosure Statement by Sept. 12 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado, in a minute order on the hearing on adequacy of the Disclosure Statement, directed In Play Membership Golf, Inc., to file an amended Disclosure Statement by Sept. 12, 2013. The Court also ordered that the Amended Disclosure Statement must address the objections filed by the U.S. Trustee, Mile High Banks, Maya Water, Inc., Douglas County Treasurer, Meadow Ranch Master Association, and KenCaryl Ranch Master Association. The U.S. Trustee, in his objection, stated that, among other things, that: 1. the Debtor's projections for its plan payments do not appear to be complete; 2. the Debtor's projections, as attached to the Disclosure Statement, do not account for these payments: $4,643 due monthly to Mile High for Class 5 claims; payment of administrative claims, which generally must be paid on or before the Plan's effective date; 3. the Debtor mentioned within the Disclosure Statement that it will be disputing the $2,000,000 unsecured claim filed by Randall Weiner, Esq. on behalf of his clients, however, the Debtor does not describe the nature of this claim or their reasoning for disputing; and 4. per the Letter of Intent, the Debtor and Eagle Creek Golf Course (one of the Debtor's other golf courses) will be sold for a total price of $14 million within 18 months. Assuming the sale comes to fruition, the Debtor asserts a maximum of potential claims against the bankruptcy estate of $13,666,936; allowing for a minimum of $332,000 in potential excess over sales price to be used to pay closing costs/attorney fees and payoff any debts of Eagle Creek. It does not appear that $332,000 will not be sufficient to cover those undisclosed fees and debts. As reported in the Troubled Company Reporter on Aug. 14, 2013, the Disclosure Statement reveals that upon confirmation of the Plan, the Reorganized Debtor will implement its Plan by: a) paying holders of allowed Chapter 11 Administrative Expenses on the Effective Date of the Plan unless otherwise agreed to between these parties and the Debtor; b) paying quarterly fees to the U.S. Trustee as required by the Bankruptcy Code until its case is closed, converted to a Chapter 7 case or dismissed by the Bankruptcy Court; c) continuing to operate its business until its real property is sold to Oread Capital & Development; d) continuing to properly insure its assets until sold; e) selling its real property to Oread Capital & Development pursuant to the terms of the Letter of Intent; and f) paying creditor classes established under the Plan commencing on the Effective Date and continuing monthly thereafter until the Closing Date, at which time the creditor classes will be paid in full as provided for under the Plan. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/IN_PLAY_ds.pdf About In Play Membership Golf In Play Membership Golf, Inc., doing business as Deer Creek Golf Club and Plum Creek Golf and Country Club, filed a Chapter 11 petition (Bankr. D. Col. Case No. 13-14422) in Denver on March 22, 2013. Jeffrey A. Weinman, Esq., at Weinman & Associates, P.C., and Patrick D. Vellone at Allen & Vellone, P.C., represent the Debtor in its restructuring effort. Allen & Vellone, P.C. serves as the Debtor's co-counsel. The Debtor estimated assets and liabilities of at least $10 million. INDIAN WELLS RDA: Moody's Confirms Ba1 Tax Bonds Rating ------------------------------------------------------- Moody's Investors Service has confirmed at Ba1 the rating of the Successor Agency to the Indian Wells Redevelopment Agency's outstanding Tax Allocation Bonds. The rating action affects approximately $112 million of outstanding debt. Ratings Rationale: The confirmation at Ba1 is driven by changes to California law that dissolved redevelopment agencies (RDAs) and changed the method by which the successors agencies to the RDAs receive incremental tax revenues to pay debt service on tax allocation bonds; as a result of these changes, Moody's projects that debt service coverage net of pass-through payments will remain below its threshold of two times to be considered investment grade. Other factors affecting the rating include a large project area and strong assessed valuation; strong socio-economic indicators; the depth of incremental AV which provides protection against economic and real estate downturns; and a top taxpayer profile which is well below the median levels for other rated CA tax allocation bonds. Strengths: - A large project area and overall assessed valuation - Strong socio-economic indicators - High ratio of incremental AV to the total AV of the project area Challenges: - Relatively weak level debt service coverage in the low semi- annual period What Could Change The Rating Up - Sizable increase in incremental AV of the project area, leading to greater debt service coverage in all semi-annual periods What Could Change The Rating Down - Material decline in the district's assessed valuation The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. INDUSTRY URBAN: Moody's Confirms Ba1 Tax Bonds Rating ----------------------------------------------------- Moody's Investors Service has confirmed at Ba1 the rating of the Successor Agency to the Industry Urban Redevelopment Agency's (CA) Tax Allocation Refunding Bonds (TABs) Series 2002 (Transportation- Distribution-Industrial Redevelopment Project No. 2), Transportation-Distribution-Industrial Redevelopment Project No. 2 2003 TABs (Taxable), Taxable 2003 TABs, Series A (Civic- Recreational-Industrial Redevelopment Project No. 1), 2003 TABs, Series B (Civic Recreational Industrial Redevelopment Project No. 1), Transportation-Distribution Industrial Redevelopment Project No.3 2003 TABs (Taxable), and 2007 TABs. The bonds are secured by a pledge of tax increment revenues from the Agency's various project areas. Ratings Rationale: The confirmation at Ba1 ratings reflects the sizable increment and assessed value of the project areas, their large geographic size, and favorable location. However, top taxpayer concentration and just moderate semi-annual debt service coverage on a combined, cash-flow basis under the AB1 26x tax increment allocation method tempers the credit strength and holds the rating at the current level. Strengths - Large geographic size of project areas - Sizable total assessed value Challenges - Adequate semi-annual debt service coverage - Some taxpayer concentration What could move the rating-UP? - Ongoing debt service over two times during all semi-annual periods - Increased diversity of the largest taxpayers What could move the rating-DOWN? - Erosion of semi-annual debt service coverage - Protracted assessed value decline The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. INSPIRATION BIOPHARMACEUTICALS: Hires Hilco as IP Sales Agent ------------------------------------------------------------- Inspiration Biopharmaceuticals, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Massachusetts to employ Hilco Streambank as exclusive agent to market and sell its internet domain names and trademarks. Hilco will be paid a commission based on a percentage of aggregate gross proceeds generated from the sale, assignment, license, or other dispositions of the intellectual property equal to 10% of aggregate Gross Proceed generated from the sale, assignment, license, or other disposition of the Intellectual Property, which will be paid in full immediately only upon the successful consummation of any transaction. Hilco's David Peress assures the Court that Hilco is a "disinterested person" as that term is defined in 11 U.S.C. Section 101(14). Hilco will be reimbursed for all reasonable expenses incurred. The Court has set a hearing on the request to September 18, 2013, at 09:30 a.m. The Debtor is represented by: MURPHY & KING, PROFESSIONAL CORPORATION Andrew G. Lizotte, Esq. Christopher M. Condon, Esq. One Beacon Street Boston, Massachusetts 02108 Tel No: (617)-423-0400 E-mail: cmc@murphyking.com About Inspiration Biopharmaceuticals Inspiration Biopharmaceuticals Inc. develops recombinant blood coagulation factor products for the treatment of hemophilia. Inspiration, based in Cambridge, Massachusetts, has two products in what the company calls "advanced clinical development." Two other products are in "pre-clinical development." None of the products can be marketed as yet. Inspiration filed for voluntary Chapter 11 reorganization (Bankr. D. Mass. Case No. 12-18687) on Oct. 30, 2012, in Boston. Bankruptcy Judge William C. Hillman oversees the case. Mark Weinstein and Michael Nolan, at FTI Consulting, Inc., serve as the Debtor's Chief Restructuring Officers. The Debtor is represented by Harold B. Murphy, Esq., at Murphy & King. The petition shows assets and debt both exceed $100 million. Assets include patents, trademarks and the products in development. Liabilities include $195 million owing to Ipsen Pharma SAS, which is also a 15.5% shareholder. Ipsen -- http://www.ipsen.com/-- is also owed $19.4 million in unsecured debt. There is another $12 million in unsecured claims. Ipsen is pledged to provide $18.3 million in financing. The Debtor disclosed $20,383,300 in assets and $241,049,859 in liabilities. Ipsen is represented in the case by J. Eric Ivester, Esq., at Skadden Arps. The Official Committee of Unsecured Creditors tapped Jeffrey D. Sternklar and Duane Morris LLP as its counsel, and The Hawthorne Consulting Group, LLC as its financial advisor. IPC INTERNATIONAL: Locks Up Final Approval For $12MM DIP -------------------------------------------------------- Law360 reported that a Delaware bankruptcy judge gave final approval on Sept. 4 to IPC International Corp.'s $12 million debtor-in-possession loan, allowing the mall security firm to move forward with a planned Chapter 11 sale to an industry rival. According to the report, Illinois-based IPC entered court protection last month after securing a $12 million DIP facility from prepetition lender PrivateBank and Trust Co. and $21.3 million stalking horse bid from rival Universal Protection Service LLC. U.S. Bankruptcy Judge Mary F. Walrath signed off on the final DIP order following a hearing in Wilmington, the report related. About IPC International IPC International Corp., a provider of security services for 350 shopping malls, filed a petition for Chapter 11 protection (Bankr. D. Del. Case No. 13-12050) on Aug. 9 in Delaware after signing a contract for Universal Protection Services LLC to buy the business for $21.3 million plus assumption of specified liabilities. Scott M. Strong signed the petition as chief financial officer. The Debtor estimated assets and debts of at least $10 million. Jeremy William Ryan, Esq., and Etta Ren Wolfe, Esq., at Potter Anderson & Corroon, LLP, serves as the Debtor's counsel. Proskauer Rose, LLP, serves as the Debtor's general bankruptcy counsel. Silverman Consulting, LLC, acts as the Debtor's financial advisor and Livingstone Partners, LLP, serves as the Debtor's investment banker. KCC is the Debtor's noticing, claims and balloting agent. Judge Mary F. Walrath presides over the case. The petition shows assets and liabilities both exceeding $10 million. Liabilities include $6.9 million on a revolving credit and $10.4 million on term loans owing to PrivateBank & Trust Co., as agent. Bankruptcy was the result of losses on a U.K. affiliate that was sold, as well as competition and the cost of liability insurance. IPC, based in Bannockburn, Illinois, is asking the bankruptcy judge to approve auction procedures under which competing bids would be due on Sept. 16, followed by an auction on Sept. 18 and a hearing on Sept. 25 to approve sale. Even without a higher bid at auction, the price will be sufficient to pay secured creditors in full along with expenses of the bankruptcy. Unsecured creditors should receive some recovery from the sale. The bankruptcy is being financed with a $12 million loan from existing lender PrivateBank & Trust Co. as agent. There will be a final hearing Sept. 9 for approval of the entire loan package. The loan requires quick sale. IVEDA SOLUTIONS: Incurs $1.5-Mil. Net Loss in Second Quarter ------------------------------------------------------------ Iveda Solutions, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.51 million on $794,166 of total revenue for the three months ended June 30, 2013, compared with a net loss of $848,337 on $1.06 million of total revenue for the same period last year. The Company reported a net loss of $2.76 million on $1.41 million of total revenue for the six months ended June 30, 2013, compared with a net loss of $1.64 million on $1.77 million of total revenue for the comparable period of 2012. The Company's balance sheet at June 30, 2013, showed $5.55 million in total assets, $2.60 million in total liabilities, and stockholders' equity of $2.95 million. "Since inception, the Company has generated an accumulated deficit from operations of approximately $17.8 million at June 30, 2013, and has used approximately $1.9 million in cash from operations through the current six months ended June 30, 2013. As a result, a risk exists regarding our ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/aAT3tm Mesa, Ariz.-based Iveda Solutions, Inc., sells and installs video surveillance equipment, primarily for security purposes and secondarily for operational efficiencies and marketing, and provides video hosting in-vehicle streaming video, archiving, and real-time remote surveillance services with a proprietary reporting system, DS(TM) (Daily Surveillance Report), to a variety of businesses and organizations. JACKSONVILLE BANCORP: Has Rights Offering of 10MM Common Shares --------------------------------------------------------------- Jacksonville Bancorp, Inc., has rights offering of up to 10 million primary shares of common stock. Shares unsubscribed in the rights offering will be offered concurrently in a public offering. The price for both offerings is $0.50 per share. The rights offering period will be 30 days and the public offering will commence concurrently with the rights offering and will expire 10 trading days after the expiration of the rights offering. Proceeds of the offerings will be used to provide additional liquidity for working capital and for general corporate purposes. Hovde Group, LLC, serves as the Company's financial advisor and sales agent. A copy of the free writing prospectus is available for free at: http://is.gd/g7Js6M About Jacksonville Bancorp Jacksonville Bancorp, Inc., a bank holding company, is the parent of The Jacksonville Bank, a Florida state-chartered bank focusing on the Northeast Florida market with eight full-service branches in Jacksonville, Duval County, Florida, as well as the Company's virtual branch. The Jacksonville Bank opened for business on May 28, 1999, and provides a variety of community banking services to businesses and individuals in Jacksonville, Florida. Jacksonville Bancorp disclosed a net loss of $43.04 million in 2012, a net loss of $24.05 million in 2011 and a $11.44 million net loss in 2010. The Company's balance sheet at March 31, 2013, showed $520.89 million in total assets, $487.47 million in total liabilities and $33.42 million in total shareholders' equity. "Both Bancorp and the Bank must meet regulatory capital requirements and maintain sufficient capital and liquidity and our regulators may modify and adjust such requirements in the future. The Bank's Board of Directors has agreed to a Memorandum of Understanding (the "2012 MoU") with the FDIC and the OFR for the Bank to maintain a total risk-based capital ratio of 12.00% and a Tier 1 leverage ratio of 8.00%. As of December 31, 2012, the Bank was well capitalized for regulatory purposes and met the capital requirements of the 2012 MoU. If noncompliance or other events cause the Bank to become subject to formal enforcement action, the FDIC could determine that the Bank is no longer "adequately capitalized" for regulatory purposes. Failure to remain adequately capitalized for regulatory purposes could affect customer confidence, our ability to grow, our costs of funds and FDIC insurance costs, our ability to make distributions on our trust preferred securities, and our business, results of operation, liquidity and financial condition, generally," according to the Company's annual report for the year ended Dec. 31, 2012. JEH COMPANY: Waters Vollmering Approved as Tax Accountant --------------------------------------------------------- JEH Company et al. obtained bankruptcy court approval on Aug. 29, 2013, to employ Waters, Vollmering & Associates, L.L.P. as their tax accountant and financial advisor. The Debtors have requested authority to pay Waters Vollmering $8,000 for its 2012 tax return preparation and $165 per hour for any other services to be provided. About JEH Company JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013. Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in Ft. Worth, serves as counsel to the Debtors. JEH Company was organized in 1982 by Jim and Marilyn Helzer. According to http://www.jehroofingcompany.com/,JEHCO buys roofing material directly from the manufacturer and sell it to contractors, builders, and homeowners. JEH Leasing owns and leases equipment and vehicles primarily for use in the business of JEHCO. Stallion is in the quarter horse and thoroughbred horse business. JEH COMPANY: Has Interim Access to Cash Collateral Until Sept. 15 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas entered three separate interim orders authorizing each of JEH Company, JEH Leasing Company, Inc., and JEH Stallion Station, Inc., to use Frost Bank's cash collateral. In a fourth agreed interim order, JEH Company and Frost Bank agreed to use cash collateral until Sept. 15, 2013. In connection with this, the interim order, the second interim order and the third interim order remain in full force and effect, including but not limited to the provisions for replacement liens granted for the benefit of the secured lender, and the Debtor is required to continue to comply with the terms and conditions of the interim order, the second interim order and the third interim order. In a first agreed interim order, JEH Leasing is authorized to use of cash collateral, provided Frost Bank will receive, as adequate protection, replacement lien and security interest in and to any and all assets pledged to Frost Bank by JEH Leasing on a prepetition basis. Stallion Station is also authorized to use cash collateral to pay quarterly fees to the United States Trustee. On Aug. 1, the Debtor disclosed that Frost Bank did not claim a cash collateral interest in the cash of Stallion Station. As reported on the Troubled Company Reporter on Aug. 16, 2013, according to papers filed with the Court on July 25, Stallion related that it has no active operations at "this time", but does have a small amount of cash with which to pay quarterly fees. In its response to Stallion's motion, Frost said the extent of its collateral against the obligations of Stallion are: 1) One (1) 2010 Tigercat M726E Mulcher (Serial No. 726M3614; Master Lease 100030229097); 2) One (1) 2010 Fecon FGT 902S Mulching Head (Serial No. 9025H291A10; Master Lease 10030229097); and 3) Real property located in Tarrant, Johnson, Weld, and Denton counties. Accordingly, Frost asserts that it has no interest in Stallion Station's cash collateral. Frost thus takes no position regarding the relief by Stallion to use of cash collateral and asks only for such other relief, general or special, at law or in equity, to which it may be entitled. About JEH Company JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013. Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in Ft. Worth, serves as counsel to the Debtors. JEH Company was organized in 1982 by Jim and Marilyn Helzer. According to http://www.jehroofingcompany.com/,JEHCO buys roofing material directly from the manufacturer and sell it to contractors, builders, and homeowners. JEH Leasing owns and leases equipment and vehicles primarily for use in the business of JEHCO. Stallion is in the quarter horse and thoroughbred horse business. In its schedules, JEH Company disclosed $13,606,753 and $18,351,290 in liabilities as of the Petition Date. JEH Stallion Station, Inc., disclosed $364,007 in assets and $3,982,012 in liabilities as of the Petition Date. JEH Leasing Company, Inc., disclosed $1,242,187 in assets and $155,216 in liabilities as of the Petition Date. JEH COMPANY: Frost Bank Withdraws Plea to Reconsider Stay Order --------------------------------------------------------------- Michael J. Quilling, Esq., at Quilling Selander Lownds Winslett & Moser, on behalf of Frost Bank, notified the U.S. Bankruptcy Court for the Northern District of Texas that Frost Bank has withdrawn its motion to reconsider ruling on Wells Fargo's motion for relief from the automatic stay in the Chapter 11 case of JEH Company, et al. As reported in the Troubled Company Reporter on Aug. 15, 2013, creditor Frost Bank asked the Bankruptcy Court to reconsider the ruling on Wells Fargo's motion, stating that on July 31, 2013, the Debtors filed a response to Frost Bank's July 22 motion for reconsideration of the ruling, saying, "The Debtors pray that the relief requested by Frost Bank be considered by the Court and that appropriate relief be entered, including but not limited to authority of the Debtors to use cash collateral to make payment to Wells Fargo Bank and other creditors." On June 21, Wells Fargo filed its motion for relief from the automatic stay against property or, alternatively, for adequate protection. "Based on Judge Lynn's ruling in the docket, the 'settlement' was apparently for a single payment of $13,000 as adequate protection. In addition, however, the Court granted Wells Fargo a super priority claim in the event payment is not made. Payment is contingent on Frost's consent because the source of funds is Frost's cash collateral and no order on JEH Leasing's cash collateral motion has been entered," Ms. LaRue states. Wells Fargo, said Ms. LaRue, did not plead for a super priority claim. The super priority claim as awarded prejudices Frost because it primes Frost's secured claim. Frost was without notice of a potential super priority claim. About JEH Company JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company, Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013. Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in Ft. Worth, serves as counsel to the Debtors. JEH Company was organized in 1982 by Jim and Marilyn Helzer. According to http://www.jehroofingcompany.com/,JEHCO buys roofing material directly from the manufacturer and sell it to contractors, builders, and homeowners. JEH Leasing owns and leases equipment and vehicles primarily for use in the business of JEHCO. Stallion is in the quarter horse and thoroughbred horse business. In its schedules, JEH Company disclosed $13,606,753 and $18,351,290 in liabilities as of the Petition Date. JEH Stallion Station, Inc., disclosed $364,007 in assets and $3,982,012 in liabilities as of the Petition Date. JEH Leasing Company, Inc., disclosed $1,242,187 in assets and $155,216 in liabilities as of the Petition Date. JONES SODA: Incurs $95,000 Net Loss in Second Quarter ----------------------------------------------------- Jones Soda Co. filed its quarterly report on Form 10-Q, reporting a net loss of $95,000 on $4.29 million of revenue for the three months ended June 30, 2013, compared with a net loss of $459,000 on $5.26 million of revenue for the three months ended June 30, 2012. "Net loss for the quarter ended June 30, 2013, improved by 79.3% to $95,000 from a net loss of $459,000 for the quarter ended June 30, 2012. This improvement in net loss reflects a decrease in operating expenses due to the changes made to align our cost structure with our available capital." The Company reported a net loss of $494,000 on $7.38 million of revenue for the six months ended June 30, 2013, compared with a net loss of $2.13 million on $9.13 million of revenue for the corresponding period in 2012. "Net loss for the six months ended June 30, 2013, improved by 76.8% to $494,000 from a net loss of $2.1 million for the six months ended June 30, 2012. This improvement in net loss reflects a decrease in operating expenses due to the changes made to align our cost structure with our available capital." The Company's balance sheet at June 30, 2013, showed $7.05 million in total assets, $2.69 million in total liabilities, and stockholders' equity of $4.36 million. "The uncertainties relating to our ability to successfully execute our 2013 operating plan, combined with the difficult financing environment, continue to 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/gME64w Seattle-based Jones Soda Co. (OTC QB: JSDA), markets and distributes premium beverages under the Jones(R) Soda, Jones Zilch(R), Natural Jones(TM) Soda and WhoopAss(TM) Energy Drink brands and sells through its distribution network. JVMW PROPERTIES: Can File Plan Through Sept. 18 ----------------------------------------------- The U.S. Bankruptcy Court approved a motion filed by JVMW Properties Management Corp for an extension of the deadline to file its Disclosure Statement and Plan of Reorganization through Sept. 18, 2013. The Debtor asserts that it needs additional time to be able to file a Disclosure Statement and Plan of Reorganization. The Debtor pointed out that the principal reason that triggered its extension request has to do with the timeframe agreed to under a settlement it reached with Banco Popular de Puerto Rico. The settlement agreement filed with the principal secured creditor of the estate notes that the Debtor is currently in the process of working on a feasible settlement proposal to be negotiated with Banco Popular de Puerto Rico. The time period set forth per the stipulation to conclude the first phase of the agreement proposal is through Sept. 19, 2013. The proposal to be presented to BPPR is probably the most important matter in the Disclosure Statement and Plan of Reorganization to be filed in the case, the Debtor says. Carla Ferrari-Lugo, Esq. -- ferrarilugo@gmail.com-- is the attorney for Municipio de San Juan. Luis C. Marini-Biaggi, Esq. - - luis.marini@oneillborges.com -- is the attorney for Banco Popular de PR. Jos� M. Prieto-Carballo, Esq. -- jmprietolaw@gmail.com -- is the attorney for AFL West Inc. Luis R. Vivas, Esq. -- jmprietolaw@gmail.com -- is the attorney for AFL West Inc. Luis R. Vivas, Esq. -- lvivas@onelinkpr.net -- is the attorney for Mont Blanc's Council of Owners. Nayuan Zouairabani- Trinidad, Esq. -- nayuan.zouairabani@oneillborges.com -- is the attorney for Banco Popular de PR. Attorney for the Debtor can be reached at: LUGO MENDER & CO. Wigberto Lugo Mender. Esq. Centro Internacional de Mercadeo Carr. 165 Torre I Suite 501 Guaynabo, PR 00968 Tel: (787)707-0404 Fax: 787)707-0412 E-mail: wlugo@lugomender.com About JVMW Properties JVMW Properties Management Corp filed a Chapter 11 petition (Bankr. D.P.R. Case No. 13-02532) on April 1, 2013. The petition was signed by Julio Blanco D'Arcy, as president. The Debtor scheduled assets of $15,694,947 and liabilities of $25,782,161. Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC represents the Debtor in its restructuring effort. KIT DIGITAL: Judge Says Ch. 11 Equity Rule Bests $15MM Claim ------------------------------------------------------------ Law360 reported that a New York bankruptcy judge on Sept. 5 said KIT Digital Inc. may subordinate a $15.5 million claim below all others because the claim arises from a securities purchase agreement, making it a lower priority than claims from other creditors. According to the report, U.S. Bankruptcy Judge Robert E. Gerber issued a written opinion granting the company partial summary judgment in its dispute against an Australian investment firm, Invigor Group Ltd., over whether the claim must be subordinated under Section 501(b) of the U.S. Bankruptcy Code. About KIT digital New York-based KIT digital Inc. -- http://www.kitd.com/-- is a video management software and services company. KIT digital services nearly 2,500 clients in 50+ countries including some of the world's biggest brands, such as Airbus, The Associated Press, AT&T, BBC, BSkyB, Disney-ABC, Google, HP, MTV, News Corp, Sky Deutschland, Sky Italia, Telecom Argentina, Telecom Italia, Telefonica, Universal Studios, Verizon, Vodafone VRT and Volkswagen. KIT digital filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 13-11298) in Manhattan on April 25, 2013. The Debtor disclosed $310,206,684 in assets and $23,011,940 in liabilities. KIT's operating subsidiaries, including Ioko 365, Polymedia, Kewego, Multicast and Megahertz are not included in the Chapter 11 filing. Jennifer Feldsher, Esq., and Anna Rozin, Esq., at Bracewell & Giuliani LLP, in New York, serve as counsel to the Debtor. American Legal Claims Services LLC is the claims and noticing agent and the administrative agent. The Official Committee of Equity Security Holders tapped to retain Brown Rudnick LLP, as lead bankruptcy counsel. The Official Committee of Unsecured Creditors tapped to retain Cathy Hershcopf, Esq., at Cooley LLP as its lead bankruptcy counsel, and Odyssey Capital Group as its financial advisor. The Debtor won confirmation of its Third Amended Plan of Reorganization, dated as of Aug. 6, 2013, on August 7. The Plan became effective on Aug. 16, 2013. LIFE CARE: Gets Final OK to Use Wells Fargo's Cash Collateral ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, in a final order, authorized Life Care St. Johns, Inc.'s use of cash collateral, which Wells Fargo Bank, National Association, in its capacity as indenture trustee for the bonds, asserts an interest in. As of the Petition Date, the amount due and owing by the debtor with respect to the bonds as: (i) unpaid principal on the bonds in the amount of $55,615,000; (ii) accrued but unpaid interest on the bonds in the amount of $1,530,893 as of July 1, 2013, which interest continues to accrue at a per diem rate of $8,504; and (iii) unliquidated, acrued and unpaid fees and expenses of the bond trustee and its professionals incurred through the Petition Date. The Court has also overruled the objection to the cash collateral motion of Office of Insurance Regulation. The Debtor would use the cash collateral to preserve the value of its business. The bond trustee has informed the Debtor and the Court that it does not consent to the use of cash collateral except upon the terms and conditions of the final order. As adequate protection to the bond trustee in respect of the use of cash collateral, the Debtor will grant the bond trustee replacement liens on collateral and a superpriority administrative expense claim status. About Life Care St. Johns Life Care St. Johns, Inc., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-04158) on July 3, 2013. The Debtor is the owner and operator of a continuing care retirement community known as Glenmoor consisting of 144 independent living units located on a 40-acre site in St. Johns County, Florida. Judge Jerry A. Funk presides over the case. Richard R. Thames, Esq., and Eric N. McKay, Esq., at Stutsman Thames & Markey, P.A., serves as the Debtor's counsel. Navigant Capital Advisors, LLC, acts as the Debtor's financial advisor. American Legal Claim Services, LLC, serves as claims and noticing agent. The Committee of Creditors Holding Unsecured Claims appointed in the bankruptcy case of Life Care St. Johns, Inc., is represented by Akerman Senterfitt's David E. Otero, Esq., and Christian P. George, Esq., in Jacksonville, Florida. Bruce Jones signed the petition as CEO. The Debtor estimated assets of at least $10 million and debts of at least $50 million. $36,308,406.59 $117,305,625.18 LOCATION BASED TECH: Issues $500,000 Conv. Note to David Meyers --------------------------------------------------------------- Location Based Technologies, Inc., sold a secured convertible promissory note to David Meyers evidencing a loan of $500,000 by Mr. Meyers to the Company. The Note is convertible into the Company's common stock at $0.20 per share, bears interest at a rate of 10 percent per annum and has a term of 24 months. Additionally, Mr. Meyers received three year warrants to purchase 1,000,000 shares of the Company's common stock at $0.20 per share. The Note is senior secured against all of the Company's unencumbered assets, and has a second or third security position against all of the Company's encumbered assets. Additionally, as further inducement for Mr. Meyers to make the $500,000 loan, the Company granted Mr. Meyers a senior secured position against all of the Company's unencumbered assets and a second or third position in all of the Company's encumbered assets, for the outstanding unsecured convertible Note held by the Investor which was entered into on Nov. 1, 2012, in the amount of $100,000. The Investor will share the secured position pari-passu with the previous investor who entered into a secured transaction with the Company on Aug. 13, 2013. The Company also received an extension on the maturity date of the Previous Note, such that the Previous Note will now mature on Sept. 30, 2015. All other terms of the Previous Note remain unchanged. About Location Based Technologies Irvine, Calif.-based Location Based Technologies, Inc., designs, develops, and sells leading-edge personal locator devices and services. Comiskey & Company, the Company's independent registered public accounting firm, included an explanatory paragraph in its report on the Company's financial statements for the fiscal year ended Aug. 31, 2012, which expresses substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring losses since inception and has an accumulated deficit in excess of $45,000,000. There is minimal sales history for the Company's products, which are new to the marketplace. For the nine months ended May 31, 2013, the Company incurred a net loss of $7.95 million on $1.55 million of total net revenue, as compared with a net loss of $5.07 million on $368,440 of total revenue for the nine months ended May 31, 2012. As of May 31, 2013, the Company had $4.18 million in total assets, $8.90 million in total liabilities and a $4.72 million total stockholders' deficit. LONGVIEW POWER: Section 341(a) Meeting Scheduled for Oct. 3 ----------------------------------------------------------- A meeting of creditors in the bankruptcy case of Longview Power LLC will be held on Oct. 3, 2013, at 10:30 am, at J. Caleb Boggs Federal Building, 844 King Street, Wilmington, DE 19801, 5th Floor, Room 5209. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case. 13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery L. Keffer, the Company's chief executive officer, president, treasurer and secretary. The Debtor estimated assets and debts of more than $1 billion. Judge Brendan Linehan Shannon presides over the case. Kirkland & Ellis LLP and Richards, Layton & Finger, P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC acts as the Debtors' investment bankers. Alvarez & Marsal North America, LLC, is the Debtors' restructuring advisors. Ernst & Young serves as the Debtors' accountants. The Debtors' claims agent is Donlin, Recano & Co. Inc. LOUISIANA PACIFIC: Ainsworth Bid Prompts Moody's Downgrade Watch ---------------------------------------------------------------- Moody's Investors Service placed the Ba3 corporate family rating, Ba3-PD probability of default rating and B1 senior unsecured notes of Louisiana Pacific Corporation under review for possible downgrade. The review has been precipitated by the company's announcement that it has signed a definitive agreement to acquire all of the common shares of Ainsworth Lumber Co. Ltd (B2). Ainsworth is the fifth largest oriented strandboard producer in North America. On Review for Possible Downgrade: Issuer: Louisiana-Pacific Corporation Probability of Default Rating, Placed on Review for Possible Downgrade, currently Ba3-PD Corporate Family Rating, Placed on Review for Possible Downgrade, currently Ba3 Senior Unsecured Regular Bond/Debenture Jun 1, 2020, Placed on Review for Possible Downgrade, currently B1 Outlook Actions: Issuer: Louisiana-Pacific Corporation Outlook, Changed To Rating under Review from Stable Ratings Rationale: Moody's review will focus on: the amount of acquisition debt financing taken to fund the transaction; post-closing credit metrics taking into consideration the amount of debt used by LP to fund the Ainsworth bonds that may need to be refinanced as a result of the change of control put; the size and pace of any cost synergies that can be realized; and LP's ability to maintain strong liquidity. Moody's review will also assess the pace of industry OSB supply and demand with the recovery in the US housing market. The aggregate purchase price being paid for Ainsworth equity in the transaction is approximately CND900 million, consisting of up to CND467 million of cash (52% of purchase price) and the issuance of up to 27.5 million shares of LP common stock (48% of purchase price). LP plans to have Ainsworth's current debt (CND 379 million as June 30, 2013) remain outstanding. LP will finance the cash component of the transaction through a combination of cash (LP had $631 million cash as of June 30, 2013) and new borrowings. LP has received a commitment for $480 million in secured bank financing to pay the cash portion of the transaction (up to $100 million) and to fund any of Ainsworth bonds that need to refinanced due to the change of control put. The acquisition is expected to close by the end of the year and is subject to regulatory clearances and other customary closing conditions. The principal methodology used in this rating was the Global Paper and Forest Products Industry Methodology published in September 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Nashville, Tennessee, LP is a leading manufacturer and distributor of wood-based building materials. It is North America's largest producer of OSB (oriented strand board) with an approximate 20% market share (based on production). Most of LP's products are used in new home construction, repair and remodeling and manufactured housing. LYON WORKSPACE: Has Until Oct. 18 to File Chapter 11 Plan --------------------------------------------------------- Honorable Janet S. Baer of the U.S. Bankruptcy Court for the Northern District of Illinois extended Lyon Workspace Products, L.L.C., et al.'s exclusive periods to file a Chapter 11 Plan until Oct. 18, 2013, and solicit acceptances for that Plan until Dec. 17. The request is the Debtor's second motion for extension of exclusivity. Daniel A. Zazove, Esq., at Perkins Coie LLP, 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, he noted. 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. MAXCOM TELECOMUNICACIONES: Banco Invex Supplements Purchase Offer ----------------------------------------------------------------- Trust Number 1387, acting through Banco Invex S.A., Institucion de Banca Multiple, Invex Grupo Financiero, as Trustee for Trust Number 1387, Ventura Capital Privado, S.A. de C.V., Javier Molinar Horcasitas and Enrique Castillo Sanchez Mejorada, filed with the U.S. Securities and Exchange Commission supplement No. 1 to the U.S. Offer to Purchase, dated Aug. 23, 2013, to purchase for cash: (i) all of the outstanding Series A common stock, without par value of Maxcom Telecomunicaciones, S.A.B. de C.V.; (ii) all of the outstanding Ordinary Participation Certificates of Maxcom; and (iii) all of the outstanding American Depository Shares of Maxcom. Each ADS represents seven CPOs. Each CPO represents three Shares. In Mexico, the Purchasers offered to purchase all of the outstanding Shares and CPOs of Maxcom. The Mexican Offer was made on substantially the same terms and at the same prices as the U.S. Offer. The first paragraph in the Summary Term Sheet of the U.S. Offer is replaced in its entirety with the following text: "In the U.S. Offer, we are offering to purchase all of the outstanding ADSs at a price of Ps. 20.30 per ADS, all the outstanding Shares of Maxcom at a price of Ps. 0.9666 per Share, and all of the outstanding CPOs at a price of Ps. 2.90 per CPO, in each case in cash, less any withholding taxes and without interest thereon." A copy of the Supplement is available for free at: http://is.gd/j9m91P About Maxcom Maxcom Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico City, Mexico, is a facilities-based telecommunications provider using a "smart-build" approach to deliver last-mile connectivity to micro, small and medium-sized businesses and residential customers in the Mexican territory. Maxcom launched commercial operations in May 1999 and is currently offering local, long distance, data, value-added, paid TV and IP-based services on a full basis in greater metropolitan Mexico City, Puebla, Tehuacan, San Luis, and Queretaro, and on a selected basis in several cities in Mexico. In June 2013, Maxcom didn't make an $11 million interest payment on the notes. Maxcom sought bankruptcy protection (Bankr. D. Del. Case No. 13-11839) in Wilmington, Delaware, on July 23, 2013. Maxcom listed $11.1 billion in assets and $402.3 million in debt. The company had assets valued at 4.98 billion pesos ($394 million) in the quarter ended March 31, according to an April 26 regulatory filing. The company reached a restructuring agreement with Ventura Capital, a group holding about $86 million, or 48.7 percent, of the senior notes and about 44 percent of its equity holders, court papers show. The Company has engaged Lazard Freres & Co. LLC and its alliance partner Alfaro, Davila y Rios, S.C., as its financial advisor and Kirkland & Ellis LLP and Santamarina y Steta, S.C. as its U.S. and Mexican legal advisors in connection with its restructuring proceedings and potential Chapter 11 case. The Ad Hoc Group has retained Cleary Gottlieb Steen & Hamilton LLP and Cervantes Sainz, S.C., as its U.S. and Mexican legal advisors. Ventura has retained VACE Partners as its financial advisor, and Paul Hastings LLP and Jones Day as its U.S. and Mexican legal advisors, respectively. MAXCOM TELECOMUNICACIONES: First Amended Plan Filed --------------------------------------------------- BankruptcyData reported that Maxcom Telecomunicaciones filed with the U.S. Bankruptcy Court a First Amended Joint Chapter 11 Plan. A related Disclosure Statement was not filed for this Plan, but the Court previously scheduled a September 20, 2013 hearing to consider the Disclosure Statement related to the Company's Prepackaged Joint Plan filed with the Court on July 23, 2013 and dated July 3, 2013. About Maxcom Maxcom Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico City, Mexico, is a facilities-based telecommunications provider using a "smart-build" approach to deliver last-mile connectivity to micro, small and medium-sized businesses and residential customers in the Mexican territory. Maxcom launched commercial operations in May 1999 and is currently offering local, long distance, data, value-added, paid TV and IP-based services on a full basis in greater metropolitan Mexico City, Puebla, Tehuacan, San Luis, and Queretaro, and on a selected basis in several cities in Mexico. In June 2013, Maxcom didn't make an $11 million interest payment on the notes. Maxcom sought bankruptcy protection (Bankr. D. Del. Case No. 13-11839) in Wilmington, Delaware, on July 23, 2013. Maxcom listed $11.1 billion in assets and $402.3 million in debt. The company had assets valued at 4.98 billion pesos ($394 million) in the quarter ended March 31, according to an April 26 regulatory filing. The company reached a restructuring agreement with Ventura Capital, a group holding about $86 million, or 48.7 percent, of the senior notes and about 44 percent of its equity holders, court papers show. The Company has engaged Lazard Freres & Co. LLC and its alliance partner Alfaro, Davila y Rios, S.C., as its financial advisor and Kirkland & Ellis LLP and Santamarina y Steta, S.C. as its U.S. and Mexican legal advisors in connection with its restructuring proceedings and potential Chapter 11 case. The Ad Hoc Group has retained Cleary Gottlieb Steen & Hamilton LLP and Cervantes Sainz, S.C., as its U.S. and Mexican legal advisors. Ventura has retained VACE Partners as its financial advisor, and Paul Hastings LLP and Jones Day as its U.S. and Mexican legal advisors, respectively. MCCLATCHY CO: Hai Nguyen Resigns as McClatchy Controller -------------------------------------------------------- Hai Nguyen, corporate controller of The McClatchy Company since 2008, has resigned effective September 27 to become chief financial officer for a Northern California-based company. A search for his replacement has begun. Elaine Lintecum, McClatchy's CFO, said, "Hai has been an asset to this company in more ways than we can possibly list. His work ethic, dedication and ever-present sense of humor made him a terrific colleague who will be missed. We thank him for his many contributions to McClatchy over the years and wish him all the best in his new position." "I'm forever grateful for all the opportunities and professional development McClatchy provided me in my career," Nguyen said. "I have the utmost respect and admiration for the company and will always take pride in doing my part to support the company's transition into a 21st century news and information leader." About The McClatchy Company Sacramento, Cal.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local Web sites in each of its markets which extend its audience reach. The Web sites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The McClatchy incurred a net loss of $144,000 in 2012, as compared with net income of $54.38 million in 2011. The Company's balance sheet at March 31, 2013, showed $2.84 billion in total assets, $2.81 billion in total liabilities, and $32.83 million in stockholders' equity. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. McClatchy Co. carries a 'B-' Corporate Credit Rating from Standard & Poor's Ratings Services. MDU COMMUNICATIONS: To Be Acquired by Access Media -------------------------------------------------- MDU Communications International, Inc., entered into an Asset Purchase Agreement with Access Media 3, Inc., whereby AM3 will acquire a substantial portion of the assets of the Company in a series of transactions. The Agreement and the transactions contemplated thereby have been approved by the Board of Directors of the Company and FCC, LLC, d/b/a First Capital, and Full Circle Capital Corporationt, as lenders. AM3 and the Company have agreed to an initial closing on or about Oct. 10, 2013, with AM3 acquiring 17,442 subscribers for $10,116,360. Thereafter, but no later than 270 days, AM3 will acquire, in a series of subsequent closings, an additional 29,682 subscribers for $17,215,560. To receive the $17,215,560 proceeds in full, the Company must obtain (i) written consents to assignment on all property right of entry agreements that require consent; and (ii) term extensions for all right of entry agreements with less than one year contractual term remaining. The purchase price is generally calculated at $580 per subscriber per service, however, the price may increase slightly if an obtained term extension exceeds two years. Property right of entry agreements where a term extension is not obtained will be acquired by AM3 at a reduced price equal to two times gross margin multiplied by the number of months remaining on the term. Property right of entry agreements where consent to assignment is not obtained will not be acquired and will remain an asset of the Company. It is anticipated that the Lenders will require the collective proceeds of $27,331,920 be applied to the Credit Facility balance, net of a banking fee owed to Berkery, Noyes & Co. The Company makes no representation that any of the proceeds will be available for distribution to the stockholders. AM3 and the Company will also enter into two Management Agreements as of the initial closing whereby AM3 will be retained by the Company to (i) manage the 29,682 subscribers until the subsequent closings occur, and (ii) manage the remainder of the Company's 13,172 subscribers with the Company receiving from AM3 revenue in the amount of $4.50 per subscriber per month. Regarding the remaining 13,172 subscribers, AM3 and the Company have entered into a non-binding letter of intent for AM3 to acquire the remaining 13,172 subscribers, as well as any remaining tangible and intangible assets, for $6,500,000. The parties have not commenced negotiations to arrive at definitive documents. The Company makes no representation whether those definitive documents will be negotiated, agreed to, signed or closed. It is contemplated under the Agreement and Management Agreements that upon the initial closing the Company will immediately and significantly scale back operations. AM3 will retain, on a permanent or transitional basis, a majority of Company employees, a majority of leased office space and majority of other monthly direct and indirect expenses in the provisioning of services to the Company's subscribers. The Company will retain certain staff to fulfill its obligations under the Agreement to obtain consents to assignment and right of entry agreement extensions, as well as to finalize the transition, oversee AM3's obligations under the Agreement and Management Agreements, and perform certain accounting and corporate functions. The obligations of AM3 and the Company to consummate the transaction are subject to several conditions, including, among others, (i) AM3 receiving financing in the amount of $55 million, (ii) approval of the Agreement by the Company stockholders representing a majority of outstanding shares, (iii) consents from DIRECTV, DISH and any other required governmental body, (iv) the absence of any material adverse effect, material litigation, injunction or similar restraint prohibiting or restricting consummation of the Agreement, and (v) the material accuracy of the representations and warranties of each party. The transaction with AM3 requires approval of a majority of the outstanding shares of common stock of MDU Communications International, Inc. As previously disclosed on July 3, 2013, MDU Communications's wholly-owned subsidiary, MDU Communications (USA) Inc., entered into an Amendment to Amended Loan and Security Agreement with FCC, LLC, d/b/a First Capital, and Full Circle Capital Corporation for an extension to the senior secured $30 million revolving credit facility originally entered into on Sept. 11, 2006, amended on June 30, 2008, with a maturity date of June 30, 2013, which the Company was unable repay at that time. The Lenders provided the Company with a six month extension to the maturity of the Credit Facility, through Dec. 31, 2013, with the potential for further extension up through and including March 31, 2014, at the discretion of the Lenders. Additionally, the Lenders waived two instances of default by the Company for violation of loan covenants under the Credit Facility. As of June 30, 2013, the maximum available borrowing was $28 million, under which the Company had borrowed $27.7 million. The Credit Facility is secured by all the assets of the Company. The Company also disclosed that it does not expect its available cash, estimated revenues and remaining Credit Facility to be sufficient to cover liquidity needs for the next 12 months and forecasts that its available capital will be depleted sometime during its fourth fiscal quarter ending Sept. 30, 2013. The Company has previously disclosed its ongoing exploration of mergers and large asset sales in order to achieve liquidity and satisfy its obligations to the Lenders under the Credit Facility prior to the end of the six month extension. A copy of the Asset Purchase Agreement is available for free at: http://is.gd/ah3MWh About MDU Communications Totowa, New Jersey-based MDU Communications International, Inc., is a national provider of digital satellite television, high-speed Internet, digital phone and other information and communication services to residents living in the United States multi-dwelling unit market -- estimated to include 32 million residences. For the six months ended March 31, there was $152,000 in operating income and a net loss of $1.5 million on revenue of $12 million. The Company reported a net loss of $6.4 million on $27.3 million of revenue for fiscal year ended Sept. 30, 2012, compared with a net loss of $7.4 million on $27.9 million of revenue for 2011. The Company's balance sheet at March 31, 2013, showed $18.04 million in total assets, $32.14 million in total liabilities and a $14.09 million total stockholders' deficiency. CohnReznick LLP, in Roseland, New Jersey, expressed substantial doubt about MDU's ability to continue as a going concern following the financial results for the year ended Sept. 30, 2012. The independent auditors noted that the Company has incurred significant recurring losses, has a working capital deficit, and an accumulated deficit of $75 million at Sept. 30, 2012. They also noted that the Company's $30 million Credit Facility matures on June 30, 2013. MILLER HEIMAN: Moody's Rates New Debt Facilities 'B2' ----------------------------------------------------- Moody's Investors Services assigned a B3 first-time Corporate Family Rating and B3-PD Probability of Default Rating to Miller Heiman, Inc. Concurrently, Moody's assigned a B2 rating to MHI's proposed $233 million first lien term loan and $40 million revolving credit facility. Secured debt proceeds, along with proceeds from a $50 million subordinated debt issuance, will be used to refinance existing MHI debt and to acquire corporate training businesses from Informa, plc. The rating outlook is stable. Ratings (and Loss Given Default Assessments) assigned: Corporate Family Rating, B3 Probability of Default Rating, B3-PD Proposed $40 million Senior Secured Revolving Credit Facility due 2018, B2 (LGD3, 37%) Proposed $233 million Senior Secured Term Loan B due 2019, B2 (LGD3, 37%) The ratings are subject to Moody's review of final documentation. Ratings Rationale: Moody's B3 credit rating takes into account what it believes are the formidable integration risks posed by sales-training firm Miller Heiman, Inc.'s ("MHI") acquisition of a much larger, poorly performing target, and the high debt-to-EBITDA levels -- approximately 5.8x, using Moody's standard adjustments -- that will be borne by the pro-forma company. With private equity backing, MHI will be acquiring a suite of corporate training businesses -- in sales, leadership, credit analysis, and project management -- that are not only three times MHI's size, but that also have been posting sharp and uniform declines in sales and profitability. Through the acquisition of Informa plc's Performance Improvement business, MHI is seeking to combine two leading corporate training businesses to create a global leader in sales and leadership training, albeit one that will have a combined revenue base of only about $250 million. MHI on its own has generated strong EBITDA margins, while PI's have been far weaker, and declining, such that the combined entity will have margins that are, nevertheless, still attractive on both an absolute and relative (to peer companies) basis. A repeating- customer base, if not recurring revenues per se, may be expected to provide some operating stability. Given low working capital and capital expenditure requirements, as well as minimal scheduled amortizations, the company could, without unforeseen hurdles to the acquisition integration, generate decent free cash flow, which Moody's projects at about $12 million in each of the first two years. Additionally, a $40 million, initially undrawn revolver should enable the company to meet unforeseen liquidity demands. If MHI can stanch the decline of the acquired businesses' revenues, and successfully integrate their operations into its current platform, attractive EBITDA growth should follow. The resulting improvement in debt-to-EBITDA, if the measure could be sustained below about 4.5x, could prompt an upgrade. Without MHI's having posted an actual track record of improving operations, Moody's reserves more favorable assessment until several quarters of good performance bear out the investment rationale. If, on the other hand, MHI fails both to integrate PI successfully and to reverse the target company's trajectory of underperformance, it may require higher than anticipated funds for capex and marketing expenses, which could strain MHI's liquidity and its ability to service its debt. In Moody's view, sustained leverage at 5.5x and above would reflect both top line pressure and an underestimation of integration and SG&A expenses, which could prompt a downgrade. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Privately held by Providence Equity Partners, Miller Heiman, Inc. provides sales training, leadership, project management, and credit analysis instruction to corporate customers, and is expected to generate approximately $250 million in 2013 revenues. MIRATI THERAPEUTICS: Incurs $8-Mil. Net Loss in Second Quarter -------------------------------------------------------------- Mirati Therapeutics, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $8.01 million for the three months ended June 30, 2013, compared with a net loss of $4.68 million for the same period last year. The Company reported a net loss of $12.23 million for the six months ended June 30, 2013, compared with a net loss of $8.03 million for the corresponding period in 2012. "We have not generated any revenues from product sales. To date, we have funded our operations primarily through the sale of our common stock and through up-front payments, research funding and milestone payments from our collaboration arrangements." The Company's balance sheet at June 30, 2013, showed $23.04 million in total assets, $16.80 million in total liabilities, and stockholders' equity of $6.24 million. "As of June 30, 2013, substantial doubt exists over the ability of the Company to continue as a going concern." The Company has incurred operating losses in each year since its inception and expects to continue to incur operating losses into the foreseeable future. A copy of the Form 10-Q is available at http://is.gd/XBG4Ye San Diego, Calif.-based Mirati Therapeutics, Inc. (Nasdaq: MRTX) is a biopharmaceutical company engaged in the development of novel therapeutics for the treatment of patients with cancer. MISSION NEW ENERGY: Incurs AU$2.2 Million Loss in Fiscal 2013 ------------------------------------------------------------- Mission NewEnergy Limited reported a loss attributable to members of the parent entity of AU$2.17 million on AU$8.41 million of total revenue for the year ended June 30, 2013, as compared with a loss attributable to members of the parent entity of AU$6.13 million on AU$38.20 million of total revenue during the prior year. As of June 30, 2013, the Group had AU$7.53 million in total assets, AU$32.60 million in total liabilities, and a AU$25.07 million total deficiency. A copy of the Form 6-K Report is available for free at: http://is.gd/LsAjdx About Mission NewEnergy Based in Subiaco, Western Australia, Mission New Energy Limited is a producer of biodiesel that integrates sustainable biodiesel feedstock cultivation, biodiesel production and wholesale biodiesel distribution focused on the government mandated markets of the United States and Europe. The Company is not operating its biodiesel refining segment. The refineries are being held in care and maintenance either awaiting a return to positive operating conditions or the sale of assets. The Company has materially diminished its Jatropha contract farming operation and the company is now focused on divesting the remaining Indian assets. The Company intends to cease all Indian operations. Grant Thornton Audit Pty Ltd, in Perth, Australia, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred operating cash outflows of A$4.9 million during the year ended June 30, 2012, and, as of that date, the consolidated entity's total liabilities exceeded its total assets by A$24.4 million. MOBILESMITH INC: Sells $200,000 Convertible Note ------------------------------------------------ MobileSmith, Inc., sold an additional convertible secured subordinated note due Nov. 14, 2016, in the principal amount of $200,000, to a current noteholder upon substantially the same terms and conditions as the Company's previously issued notes. The Company is obligated to pay interest on the New Note at an annualized rate of 8 percent payable in quarterly installments commencing Dec. 3, 2013. As with the existing notes, the Company is not permitted to prepay the New Note without approval of the holders of at least a majority of the aggregate principal amount of the Notes then outstanding. The Company plans to use the proceeds to meet ongoing working capital and capital spending requirements. About MobileSmith MobileSmith, Inc. (formerly, Smart Online, Inc.) was incorporated in the State of Delaware in 1993. The Company changed its name to MobileSmith, Inc., effective July 1, 2013. The Company develops and markets software products and services tailored to users of mobile devices. The Company's flagship product is The MobileSmithTM Platform. The MobileSmithTM Platform is an innovative, patents pending mobile app development platform that enables organizations to rapidly create, deploy, and manage custom, native smartphone apps deliverable across iOS and Android mobile platforms. Smart Online disclosed a net loss of $4.39 million in 2012, as compared with a net loss of $3.54 million in 2011. The Company's balance sheet at June 30, 2013, showed $1.52 million in total assets, $31.12 million in total liabilities and a $29.59 million total stockholders' deficit. Cherry Bekaert LLP, in Raleigh, North Carolina, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficiency as of Dec. 31, 2012, which conditions raise substantial doubt about the Company's ability to continue as a going concern. MONTREAL MAINE: Covington & Burling Approved as Special Counsel --------------------------------------------------------------- Robert J. Keach, the chapter 11 trustee in the bankruptcy case of Montreal, Maine & Atlantic Railway Ltd., sought and obtained approval from the U.S. Bankruptcy Court for the District of Maine to employ Covington & Burling LLP, as his special regulatory counsel, nunc pro tunc to August 21, 2013. The legal services rendered or to be rendered by Covington may include: (a) Providing consulting and legal services necessary to obtain Authorizations from the Surface Transportation Board, the Federal Railroad Administration, and/or the United States Department of Transportation required in connection with the Case or the Canadian Case; (b) Assisting the Trustee in any investigations, proceedings, litigation, negotiations, and transactions before the STB, FRA, and/or DOT; (c) Preparing and filing any and all necessary or desirable STB, FRA, and/or DOT pleadings; (d) Appearing at any and all necessary or desirable Administrative proceedings that may be brought before the STB, FRA, and/or DOT; (e) Providing regulatory legal services and advice to the Trustee in connection with the Canadian Case; and (f) Providing regulatory legal services and advice to the Trustee In connection with the Case. The Trustee told the Court that to the best of his knowledge, and pursuant to Fed. R. Bankr. P. 2014(a), the partners and employees of Covington do not have any connection with or any interest adverse to the Trustee, the Debtor, the Debtor's creditors, any other party-in-interest. About Montreal Maine 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. Robert J. Keach, Esq., at Bernstein Shur, has been named as chapter 11 trustee. 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. MORGANS HOTEL: Kerrisdale Intends to Nominate Separate Directors ---------------------------------------------------------------- Kerrisdale Capital Management, a private investment management firm and beneficial owner of more than 4% of the shares of Morgans Hotel Group, issued the following letter on Thursday, September 5, to the stakeholders of Morgans Hotel Group: Dear Stakeholders of Morgans Hotel Group, Kerrisdale Capital Management intends to nominate a separate set of directors to the board of Morgans Hotel Group in the 2014 board of directors election. Kerrisdale believes that the current directors of Morgans Hotel do not adequately represent the interests of the majority of shareholders. We believe that the views of OTK Associates, which owns less than a 15% economic interest, are currently over-represented on the Morgans Hotel board, and the views of the other 85% of shareholders are severely under-represented. We believe that the overwhelming consensus view of the company's ownership is that Morgans should initiate an immediate public sale process to sell the company to one or multiple strategic acquirers. Despite repeated calls for an immediate sale process by shareholders including Caerus Global Investors and ourselves, as well as significant creditor Yucaipa Companies, the new Board has yet to issue a public response. Kerrisdale will support a carefully chosen slate of financial, industry and mergers and acquisitions experts to serve as directors of Morgans. As Kerrisdale previously detailed in our letter on June 20, Morgans provides an attractive luxury boutique hotel platform for an international hotel company. A well- capitalized and proven global operator can effectuate the expansion of the Mondrian, Delano and Hudson brands far faster and at better economics than the currently undercapitalized Morgans. Maintaining Morgans Hotel as a standalone entity is highly undesirable because we doubt that any management team can add sufficient operational value relative to the value leakage incurred by delaying a sale process. In addition, recent litigation and notices of default from Yucaipa and Andrew Sasson will prove not only distracting to management, but will also waste shareholder capital that could be otherwise used for Morgans' operations. Based on the current board's tepid response to the very obvious solution of an immediate sale process, which we believe is widely supported by the vast majority of the Morgans shareholder base, we believe that Morgans shareholders will be best served by the slate of directors that Kerrisdale will nominate in 2014. Sincerely, Sahm Adrangi Chief Investment Officer Kerrisdale Capital Management, LLC About Kerrisdale Capital Management, LLC Kerrisdale Capital Management, LLC is a fundamentally-oriented investment manager that focuses on long-term value investments and event-driven special situations. Kerrisdale has $250 million in assets under management and is based out of New York City. About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company reported a net loss of $16.19 million on $60.70 million of total revenues for the three months ended June 30, 2013, as compared with a net loss of $13.51 million on $47.79 million of total revenues for the same period a year ago. For the six months ended June 30, 2013, the Company had a net loss of $27.72 million on $113.35 million of total revenues, as compared with a net loss of $28.01 million on $91.08 million of total revenues for the same period during the preceding year. The Company's balance sheet at June 30, 2013, showed $580.67 million in total assets, $744.32 million in total liabilities, $6.04 million in redeemable noncontrolling interest and a $169.70 million total stockholders' deficit. MORGANS HOTEL: To Sell $500 Million Worth of Securities ------------------------------------------------------- Morgans Hotel Group Co. is offering up to $500,000,000 of debt securities, common stock, preferred stock, warrants to purchase debt securities, preferred stock, depositary shares or common stock and rights to purchase shares of common stock. In addition, the Company registered resales of shares of its common stock beneficially owned by one or more selling stockholders yet to be identified. The Company's common stock is listed on the Nasdaq Global Market under the symbol "MHGC." A copy of the Form S-3 prospectus is available for free at: http://is.gd/ccqyhd About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company incurred a net loss attributable to common stockholders of $66.81 million in 2012, a net loss attributable to common stockholders of $95.34 million in 2011, and a net loss attributable to common stockholders of $89.96 million in 2010. The Company's balance sheet at June 30, 2013, showed $580.67 million in total assets, $744.32 million in total liabilities, $6.04 million in redeemable noncontrolling interest and a $169.70 million total stockholders' deficit. MSD PERFORMANCE: Files for Chapter 11 Bankruptcy ------------------------------------------------ Jacqueline Palank, writing for DBR Small Cap, reported that MSD Performance Inc ., which makes performance auto products for street and racing use, on Thursday filed for Chapter 11 protection. NAVISTAR INTERNATIONAL: Incurs $247-Mil. Net Loss in July 31 Qtr. ----------------------------------------------------------------- Navistar International 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 $247 million on $2.86 billion of net sales and revenues for the three months ended July 31, 2013, as compared with net income attributable to the Company of $84 million on $3.24 billion of net sales and revenues for the same period a year ago. For the nine months ended July 31, 2013, Navistar reported a net loss attributable to the Company of $744 million on $8.02 billion of net sales and revenues as compared with a net loss attributable the Company of $241 million on $9.51 million of net sales and revenues for the same period last year. The Company's balance sheet at July 31, 2013, the Company had $8.24 billion in total assets, $12.17 billion in total liabilities and a $3.93 billion total stockholders' deficit. The Company ended the third quarter of 2013 with $1.13 billion of consolidated cash, cash equivalents and marketable securities, compared to $1.24 billion as of April 30, 2013. "We were pleased with our strong cash performance in the quarter. We also continued to make solid progress on key elements of our Drive to Deliver turnaround plan, especially the on-time launches of our new Class 8 product offerings, which drove Navistar's order share up to more than 20 percent in the quarter, compared to 12 percent in the second quarter. We're encouraged by the growing customer acceptance of our new products," said Troy A. Clarke, Navistar's president and chief executive officer. "At the same time, we clearly need to accelerate progress with our financial results, and we are already implementing additional cost reduction and business improvement actions to counter our near-term volume challenges. This includes resizing our company to match our current business environment." A copy of the Form 10-Q is available for free at: http://is.gd/izjYMP About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The Company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Navistar incurred a net loss attributable to the Company of $3.01 billion for the year ended Oct. 31, 2012, compared with net income attributable to the Company of $1.72 billion during the prior year. * * * In the Aug. 3, 2012, edition of the TCR, Moody's Investors Service lowered Navistar International Corporation's Corporate Family Rating (CFR), Probability of Default Rating (PDR), and senior note rating to B2 from B1. The downgrade of Navistar's ratings reflects the significant challenges the company will face during the next eighteen months in re-establishing the profitability and competitiveness of its US and Canadian truck operations in light of the failure to achieve EPA certification of its EGR emissions technology, the significant reductions in military revenues and substantially higher engine warranty reserves. As reported by the TCR on June 19, 2013, Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Illinois-based truckmaker Navistar International Corp. (NAV) to 'B-' from 'B'. The rating downgrades reflect S&P's negative reassessment of NAV's business risk profile to "vulnerable" from "weak". As reported by the TCR on Jan. 24, 2013, Fitch Ratings has affirmed the Issuer Default Ratings (IDR) for Navistar International Corporation and Navistar Financial Corporation at 'CCC' and removed the Negative Outlook on the ratings. The removal reflects Fitch's view that immediate concerns about liquidity have lessened, although liquidity remains an important rating consideration as NAV implements its selective catalytic reduction (SCR) engine strategy. Other rating concerns are already incorporated in the 'CCC' rating. NAVISTAR INTERNATIONAL: GAMCO Held 6.9% Equity Stake at Sept. 5 --------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, GAMCO Asset Management, Inc., and its affiliates disclosed that as of Sept. 5, 2013, they beneficially owned 5,548,848 shares of common stock of Navistar International Corporation representing 6.9 percent of the shares outstanding. GAMCO Asset previously reported beneficial ownership of 5,207,893 common shares or 6.48 percent equity stake as of July 11, 2013. A copy of the regulatory filing is available for free at: http://is.gd/0R5oFa About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The Company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Navistar incurred a net loss attributable to the Company of $3.01 billion for the year ended Oct. 31, 2012, compared with net income attributable to the Company of $1.72 billion during the prior year. As of April 30, 2013, the Company had $8.72 billion in total assets, $12.36 billion in total liabilities and a $3.64 billion total stockholders' deficit. * * * In the Aug. 3, 2012, edition of the TCR, Moody's Investors Service lowered Navistar International Corporation's Corporate Family Rating (CFR), Probability of Default Rating (PDR), and senior note rating to B2 from B1. The downgrade of Navistar's ratings reflects the significant challenges the company will face during the next eighteen months in re-establishing the profitability and competitiveness of its US and Canadian truck operations in light of the failure to achieve EPA certification of its EGR emissions technology, the significant reductions in military revenues and substantially higher engine warranty reserves. As reported by the TCR on June 19, 2013, Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Illinois-based truckmaker Navistar International Corp. (NAV) to 'B-' from 'B'. The rating downgrades reflect S&P's negative reassessment of NAV's business risk profile to "vulnerable" from "weak". As reported by the TCR on Jan. 24, 2013, Fitch Ratings has affirmed the Issuer Default Ratings (IDR) for Navistar International Corporation and Navistar Financial Corporation at 'CCC' and removed the Negative Outlook on the ratings. The removal reflects Fitch's view that immediate concerns about liquidity have lessened, although liquidity remains an important rating consideration as NAV implements its selective catalytic reduction (SCR) engine strategy. Other rating concerns are already incorporated in the 'CCC' rating. NELSON EDUCATION: S&P Lowers CCR to 'CCC'; Outlook Negative ----------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Toronto-based Nelson Education Ltd. to 'CCC' from 'CCC+'. The outlook is negative. At the same time, S&P revised its recovery rating on the first- lien debt to '3' from '2', indicating its reduced expectations of recovery to meaningful (50%-70%) from substantial (70%-90%). The recovery rating on the second-lien debt is unchanged at '6', indicating a negligible (0%-10%) recovery in a default scenario. "We base the downgrade on our view of the company's refinancing risk, with Nelson's senior secured first-lien term loan maturing in July 2014 and its senior secured second-lien term loan maturing in July 2015," said Standard & Poor's credit analyst Lori Harris. The ratings on Nelson reflect Standard & Poor's view of the company's "vulnerable" business risk profile and "highly leveraged" financial risk profile (as S&P's criteria defines the terms). S&P bases its business risk assessment on the company's weak operating performance, lack of geographic diversity given the high proportion of its sales in Ontario, and participation in the challenging educational publishing industry, which is mature and characterized by reduced revenues given lower government funding and increased product alternatives. S&P bases its financial risk assessment on a very aggressive financial policy, including a highly leveraged capital structure and refinancing risk. The negative outlook reflects S&P's expectation that it could lower the ratings on Nelson in the near term if the company fails to address its refinancing risk. Alternatively, S&P could raise the ratings and revise the outlook to stable after completion of the refinancing for the company's debt coming due next summer. Nelson is a private company and does not release financial information publicly. NEOMEDIA TECHNOLOGIES: Stockholders Elect 4 Directors ----------------------------------------------------- NeoMedia Technologies, Inc., held its annual meeting of stockholders on Sept. 3, 2013, with part of the meeting continuing in recess until Sept. 23, 2013. At the Meeting, four of the six scheduled proposals were submitted for a vote of the Company's stockholders. The stockholders elected Laura A. Marriott, George G. O'Leary, Sarah Fay and Peter Mannetti as directors for terms until the next succeeding annual meeting of stockholders or until that director's successor will have been duly elected and qualified. The stockholders approved, on a non-binding basis, the compensation of the Company's named executive officers and indicated "Every Three Years" as the desired frequency of future advisory votes on executive compensation. Accordingly, the Company has decided to set the frequency of future advisory votes on the compensation of the Company's named executive officers at every three years going forward. The stockholders ratified StarkSchenkein, LLP, as the Company's independent registered accounting firm. About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. After auditing the 2011 results, Kingery & Crouse, P.A, in Tampa, FL, 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 ongoing requirements for additional capital investment. NeoMedia reported a net loss of $19.38 million in 2012 and a net loss of $849,000 in 2011. As of June 30, 2013, the Company had $5.79 million in total assets, $92.13 million in total liabilities, all current, $4.81 million in series C convertible preferred stock, $348,000 in series D convertible preferred stock, and a $91.51 million total shareholders' deficit. NMP GROUP: U.S. Trustee Balks at Combined Hearing on Plan --------------------------------------------------------- Tracy Hope Davis, U.S. Trustee for Region 2, objected to NMP- Group, LLC's motion for an order scheduling a combined hearing on the adequacy of the disclosure statement and confirmation of NMP Group LLC's liquidation plan. The U.S. Trustee complains that: -- the relief requested is inconsistent with Section 1125 of the Bankruptcy Code because this is not a small business or prepackaged case; and -- the relief sought is premature because the Debtor has failed, in substance, to appear at the Section 341(a) meeting. Andrea B. Schwartz, Esq., represents the U.S. Trustee. The Court will consider the motion at a Sept. 10 hearing, at 9:45 a.m. As reported in the Troubled Company Reporter on Aug. 29, 2013, the Debtor filed with the Court a Plan of Liquidation and Disclosure Statement on Aug. 22, 2013. The Plan designates six classes of claims and interests -- Class 1 Real Estate Tax and Other In rem Governmental Lien Claims, Class 2 Mortgagee Claims estimated to total $51.64 million, Class 3 Subordinate Lien Claims, Class 4 Other Priority Claims, Class 5 General Unsecured Claims and Class 6 Equity Interests. All the claim classes are unimpaired and claimholders are expected to have 100% recovery on their claims. The Plan embodies a sale of the Debtor's property to Madison 33 Owner LLC for $51,878,784, subject to adjustments. The sale proceeds will be used to satisfy the Class 1 and 2 Claims. The Purchaser has agreed to assume the payment of (i) any Allowed General Unsecured Claim that is not paid by the Debtor because the Purchase Price is otherwise insufficient to pay in full all of the Claims secured by the Property, all of the Allowed Administrative Claims, and all such Allowed General Unsecured Claims, and (ii) administrative claims for attorneys' fees that are approved by the Bankruptcy Court, that exceed $100,000 in amount (but not to exceed $2,000,000 in the aggregate), and that cannot be paid from the Purchase Price. The Plan was signed by NMP-Group manager, Luiza Dubrovsky. A full-text copy of the Disclosure Statement dated Aug. 22, 2013 is available for free at: http://bankrupt.com/misc/NMPGROUP_DSAug22.PDF About NMP-Group NMP-Group LLC, the owner of 21 East 33rd Street in Manhattan, filed a petition for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 13-bk-12269) on July 10, 2013, in New York to prevent a foreclosure sale. Ilana Volkov, Esq. -- ivolkov@coleschotz.com -- and Felice R. Yudkin, Esq. -- fyudkin@coleschotz.com -- at Cole, Schotz, Meisel, Forman & Leonard, P.A., represent the Debtor. The U.S. Trustee has not formed a creditors' committee due to lack of interest of creditors to serve in a committee. NORSE ENERGY: Siphoned Off $50-Mil. to Other Units, Creditors Say ----------------------------------------------------------------- Law360 reported that Norse Energy Corp.'s creditors committee sued the company and its financial officers for $50 million on Sept. 5 in New York bankruptcy court, accusing them of paying other Norse units a dividend that drained the company's funds. According to the report, the creditors committee claims the company's managers moved funds from a pool scheduled to pay unsecured creditors in the event of a bankruptcy to the Norwegian core unit -- referred to in the complaint as ASA, for the word in Norway that refers to public stock companies. About Norse Energy Norse Energy Corp. ASA's U.S. subsidiary holding company, Norse Energy Holdings, Inc., filed a voluntary petition for Chapter 11 bankruptcy protection (Bankr. W.D.N.Y. Case No. 12-13695) on Dec. 7, 2012, estimating less than $50,000 in assets and less than $100,000 in liabilities. The Debtor is represented by Janet G. Burhyte, Esq., at Gross, Shuman, Brizdle & Gilfillan, P.C., in Buffalo, New York. Judge Carl L. Bucki presides over the case. The Company has a significant land position of 130,000 net acres in New York State with certified 2C contingent resources of 951 MMBOE as of June 30, 2012. OAKLAND RDA: Moody's Confirms Ba1 Rating on Tax Bonds ----------------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating on the Successor Agency to the Oakland Redevelopment Agency's Tax allocation bonds. Ratings Rationale: The rating reflects Moody's view that the credit strength of the agency's size by both value and acreage is offset by lower than two times coverage in the low period and a weaker than typical ratio of incremental to assessed valuation. The taxpayer concentration and wealth levels slightly below the national median are also factored into the rating. The bonds are secured by the tax increment revenues of the agency. Strengths: - Very large geographic and total project area - Sizeable incremental and assessed valuation - Solid high period debt service coverage Challenges: - Weak low period debt service coverage - Lower than typical ratio of incremental to assessed valuation What could change the rating up? - Sizable increase in incremental AV of the project area, leading to greater debt service coverage in all semi-annual periods What could change the rating down? - Decline in the assessed valuation that weakens coverage The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. OAKLEY RDA: Moody's Keeps Ba1 Tax Bonds Rating ---------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating on the Successor Agency to the Oakley RDA Taxable Tax Allocation Bonds, Series 2003 (Oakley Redevelopment Project Area). Ratings Rationale: The rating reflects the agency's modestly sized and recently pressured assessed value, weak coverage of total debt service albeit with fairly healthy coverage for the rated senior lien debt, and Moody's expectation that the agency will reserve excess "coverage" during low debt service periods, to make up for insufficient debt service coverage in the high payment periods. This expected practice is strengthened by the availability of cash funded reserves to mitigate any unexpected missteps in implementing the reserve procedure. Strengths - Healthy level of coverage of rated senior lien debt - Sound geographic size of project area - Moderate concentration redevelopment project area - Cash funded debt service reserve Challenges - Recently pressured economy - Weak coverage of total debt service - Small size of incremental assessed value What Could Change The Rating Up - Sizable increase in incremental AV of the project area, leading to greater debt service coverage in all semi-annual periods What Could Change The Rating Down - Decline in the assessed valuation that weakens coverage - Absence of the cash funded reserve The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. OIL PATCH: Seeks Conversion of Case into Chapter 7 Proceeding ------------------------------------------------------------- Oil Patch Brazos Valley, Inc. filed a motion with the U.S. Bankruptcy Court for the Southern District of Texas seeking the conversion of its Chapter 11 case into one under Chapter 7. The Debtor entered into a Loan and Security Agreement with FCC, LLC d/b/a First Capital. As of the Petition Date, the Debtor's principal obligation to FCC under the Loan Agreement was approximately $7,721,755.34. Before the bankruptcy filing, as the Debtor's customer payments arrived, FCC applied them to the Debtor's Prepetition Obligation. By June 24, 2013, FCC stopped advancing new funds to the Debtor under the Loan Agreement. Since FCC would not advance additional funds, the Debtor was unable to satisfy its existing obligations to its vendors and could not purchase additional inventory with which to fulfill new orders from its customers. Furthermore, the Debtor said it is unable to fulfill the contractual obligations to deliver to several public entities, including local counties and municipalities, resulting in a public safety issue as these public entities have not been able to provide fuel to critical emergency services, police and fire departments, and other functions affecting general police powers. With no working capital with which to operate, the Debtor filed for bankruptcy to regain access to its working capital and to address its obligations to its trade creditors and secured creditors through a chapter 11 plan. By early July 2013, the Debtor sought Court authority to use FCC's cash collateral. Although FCC initially opposed the request, the Debtor was eventually able to negotiate an agreed interim order with FCC for the cash collateral use through Aug. 2, 2013. Subsequently, a second interim order allowed the the Debtor to use the cash collateral on a very limited basis through Aug. 30, 2013. However, the Debtor said it was necessary to begin severely cutting back its operations in order to stay within the budget. Thus, the Debtor immediately began curtailing its fuel purchases and cutting its staff, and began working to reduce the number of trucks in its fleet by removing its equipment from its trucks and returning some of them to leasing company Salem Leasing. The Debtor reveals it hoped that while it was winding-down the business, it would be able to locate a purchaser for its business or a lender willing to extend debtor-in-possession financing. Unfortunately, the Second Interim Order has expired and the Debtor does not have a purchaser or new financing available to restart operations. The Debtor has attempted to negotiate with FCC for additional interim use of cash collateral to allow it to continue the liquidation process and allow more time for a sale. Unfortunately, the parties have been unable to reach an agreement. Because it does not believe that it could succeed in a contested hearing over the continued cash collateral use and because it has no other source of operating funds other than FCC's cash collateral, the Debtor has no choice but to cease operations and seek conversion of its case into a chapter 7 proceeding. About Oil Patch Angleton, Texas-based Oil Patch Brazos Valley, Inc., sought protection under Chapter 11 of the Bankruptcy Code on July 2, 2013. The case, assigned Case No. 13-34177, is pending before the U.S. Bankruptcy Court Southern District of Texas (Houston). Judge Jeff Bohm presides over the case. Matthew Scott Okin, Esq., and Ruth E. Piller, Esq., at Okin & Adams LLP, in Houston, Texas, represent the Debtor as counsel. The Debtor tapped James Childs, LLC as financial advisor. The Debtor disclosed $16,887,969 in assets and $15,313,489 in liabilities as of the Chapter 11 filing. The petition was signed by Wright Gore, III, chief operating officer. No trustee or creditors committee has been appointed in the case. ORECK CORP: Wants to Pay Carl Marks on Standard Hourly Rates ------------------------------------------------------------ Oreck Corporation, et al., are seeking modifications to the terms of Carl Marks Advisory Group LLC's employment with them. The firm provides crisis management services to the Debtors. The Debtors specifically propose that as of August 2013, they will pay for Carl Marks's services based on the firm's hourly rates, plus reimbursement of any related out-of-pocket expenses. The primary professionals of the firm have these hourly rates: Michael Robbins $475 Jeffrey K. Kies $425 The Debtors expect the aggregate monthly fee amount not to exceed $80,000 for August and for each month thereafter, not exceed $35,000. Pursuant to the original CM retention order, Carl Marks was retained to provide crisis management services to the Debtors for a fixed monthly fee of $80,000 through May 2013, and a fixed monthly fee of $145,000 thereafter, together with reimbursement of related expenses. The U.S. Bankruptcy Court for the Middle District of Tennessee will convene a hearing on Oct. 15, 2013, at 9 a.m., to consider the Debtors' request. Objections, if any, are due Sept. 24. About Oreck Corp. Oreck Corporation and eight affiliates sought Chapter 11 protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in Nashville, Tennessee, on May 6, 2013, with plans to sell the business as a going concern. Oreck has been in the business of manufacturing, marketing and selling vacuum cleaners and related products since the late 1960s. The corporate offices are located in Nashville, and the manufacturing and call center is located in Cookeville, Tennessee. Oreck has 70 employees in Nashville, 250 employees at its plant in Cookeville and 325 employees operating 96 company-owned and managed retail stores. The Debtor disclosed $18,013,249 in assets and $14,932,841 plus an unknown amount in liabilities as of the Chapter 11 filing. William L. Norton III, Esq., and Alexandra E. Dugan, Esq., at Bradley Arant Boult Cummings LLP, serve as counsel to the Debtor. BMC Group Inc. is the claims and notice agent. Sawaya Segalas & Co., LLC serves as financial advisor. The U.S. Trustee appointed six creditors to the Official Committee of Unsecured Creditors. Daniel H. Puryear, Esq., at Puryear Law Group, and Sharon L. Levine, Esq., and Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP represent the Committee. The Committee tapped to retain Gavin/Solmonese LLC as its financial advisor. In July 2013, Royal Appliance Mfg. Co. (RAM), a subsidiary of the TTI Group, finalized the purchase of Oreck Corp.'s assets. The Bankruptcy Court approved the sale on July 16, 2013. Royal, the maker of Dirt Devil floor-care products, won the auction for Oreck Corp. The second-place bidder was the Oreck family, which sold the business in a $272 million transaction in 2003. The Oreck family made the first bid at auction at $21.9 million, including $14.5 million cash. The terms of Royal's winning bid weren't disclosed publicly, according to a Bloomberg News report. Royal was acquired in 2003 by Hong Kong-based Techtronic Industries Co., the maker of Hoover vacuum cleaners. ORECK CORP: Oct. 8 Hearing on Request for Exclusivity Periods ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee will convene a hearing on Oct. 8, 2013, at 9 a.m., to consider motion for Oreck Corporation's exclusivity extension. Objections, if any, are due Sept. 20. The Debtors and the Official Committee of Unsecured Creditors asked the Court to extend the exclusive filing period for Chapter 11 Plan until Dec. 2, 2013, and the exclusive periof to solicit acceptances for that plan until Jan. 31, 2014. This is the Debtors' first request for an exclusivity extension. The Debtors and the Committee specify that they need additional time to negotiate with parties-in-interest in order to formulate a confirmable plan and have sufficient time to file and solicit acceptances of the Plan. About Oreck Corp. Oreck Corporation and eight affiliates sought Chapter 11 protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in Nashville, Tennessee, on May 6, 2013, with plans to sell the business as a going concern. Oreck has been in the business of manufacturing, marketing and selling vacuum cleaners and related products since the late 1960s. The corporate offices are located in Nashville, and the manufacturing and call center is located in Cookeville, Tennessee. Oreck has 70 employees in Nashville, 250 employees at its plant in Cookeville and 325 employees operating 96 company-owned and managed retail stores. The Debtor disclosed $18,013,249 in assets and $14,932,841 plus an unknown amount in liabilities as of the Chapter 11 filing. William L. Norton III, Esq., and Alexandra E. Dugan, Esq., at Bradley Arant Boult Cummings LLP, serve as counsel to the Debtor. BMC Group Inc. is the claims and notice agent. Sawaya Segalas & Co., LLC serves as financial advisor. The U.S. Trustee appointed six creditors to the Official Committee of Unsecured Creditors. Daniel H. Puryear, Esq., at Puryear Law Group, and Sharon L. Levine, Esq., and Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP represent the Committee. The Committee tapped to retain Gavin/Solmonese LLC as its financial advisor. In July 2013, Royal Appliance Mfg. Co. (RAM), a subsidiary of the TTI Group, finalized the purchase of Oreck Corp.'s assets. The Bankruptcy Court approved the sale on July 16, 2013. Royal, the maker of Dirt Devil floor-care products, won the auction for Oreck Corp. The second-place bidder was the Oreck family, which sold the business in a $272 million transaction in 2003. The Oreck family made the first bid at auction at $21.9 million, including $14.5 million cash. The terms of Royal's winning bid weren't disclosed publicly, according to a Bloomberg News report. Royal was acquired in 2003 by Hong Kong-based Techtronic Industries Co., the maker of Hoover vacuum cleaners. OVERLAND STORAGE: Reports $19.6-Mil. Net Loss in Fiscal 2013 ------------------------------------------------------------ Overland Storage reported a net loss of $5.42 million on $12.06 million of net revenue for the three months ended June 30, 2013, as compared with a net loss of $2.69 million on $15.30 million of net revenue for the same period during the prior year. For the 12 months ended June 30, 2013, the Company incurred a net loss of $19.64 million on $48.02 million of net revenue as compared with a net loss of $16.16 million on $59.63 million of net revenue last year. The Company's balance sheet at June 30, 2013, showed $31.40 million in total assets, $41.69 million in total liabilities and a $10.29 million shareholders' deficit. "We made progress in fiscal 2013 with the growth of our new branded products, including our SnapServer DX series, which grew more than 60% year-over-year," said Eric Kelly, president and CEO of Overland Storage. "The positive market traction we are seeing with our new branded products and services helped drive gross margin improvement in fiscal 2013 and we expect these branded products to continue to contribute to growth and gross margin improvement in the new fiscal year." A copy of the press release is available for free at: http://is.gd/1L9cwM Lisa Loe Joins as VP Worldwide Sales Effective on Sept. 3, 2013, Jillian Mansolf, the senior vice president of Global Sales and Marketing of the Company no longer serves as an executive officer of the Company. She continues to be employed by the Company as its senior vice president of Marketing. In connection with her change in position, Ms. Mansolf and the Company have entered into an amendment of her offer letter with the Company dated as of June 29, 2009. The amendment provides for her to continue to receive her current base salary of $238,000 and to be eligible to receive a quarterly bonus under the Company's executive bonus plan commencing Oct. 1, 2013, with a target bonus of $25,500 per quarter. She will no longer be eligible for quarterly commissions earnings after that date. In addition, the installment of her outstanding restricted stock unit award granted by the Company that is eligible to vest on Jan. 15, 2014, will instead vest on Jan. 3, 2014, subject to her continued employment through that date. If the Company terminates her employment at any time without cause, or if she voluntarily terminates her employment for any reason between Jan. 3, 2014, and June 30, 2014, the Company will pay her severance equal to three months of her base salary and reimburse the cost of her COBRA premiums for six months following her termination, subject to her providing a release of claims in favor of the Company. Ms. Mansolf's retention agreement with the Company, which provided certain severance benefits if her employment terminated in connection with a change in control, has been terminated. Lisa Loe has joined the Company as vice president of Worldwide Sales, responsible for sales strategy, channel partners and customers. "Lisa has a proven track record within both mobility enterprise and data storage of building long-term customer and strategic partner relationships," said Mr. Kelly. "With her experience at Good Technology, she is one of the few executives within the BYOD space that has built a mobility enterprise channel. She has experience in developing channels and alternative routes to market, and building world-class sales teams that scale. We are excited to have her join the leadership team at Overland as we advance our vision to be the premier data storage provider for the mobile workforce." Prior to joining Overland, Ms. Loe was vice president of Americas Channel and Partner Sales for mobility solutions provider Good Technology, where she was responsible for developing the overall enterprise and market segment business strategy with partners. While at Good Technology, she guided the team in identifying and developing the Company's industry-leading secure integrated mobile data and application management solutions. Before that, she was vice president of OEM and Global Strategic Partners at Isilon (now EMC Isilon), a leading provider of NAS and High Performance workflow storage solutions. She has also held senior management positions at McAfee and Symantec. As part of her offer letter, Ms. Loe was granted an inducement stock option at an exercise price equal to the closing price of the Company's common stock on the grant date for the purchase of up to 75,000 shares of its common stock, and an inducement award of 125,000 restricted stock units, each in accordance with NASDAQ Listing Rule 5635(c)(4). About Overland Storage San Diego, Cal.-based Overland Storage, Inc. (Nasdaq: OVRL) -- http://www.overlandstorage.com/-- is a global provider of unified data management and data protection solutions designed to enable small and medium enterprises (SMEs), corporate departments and small and medium businesses (SMBs) to anticipate and respond to change. The Company incurred a net loss of $16.16 million for the fiscal year 2012, compared with a net loss of $14.49 million for the fiscal year 2011. For the nine months ended March 31, 2013, the Company incurred a net loss of $14.22 million on $35.95 million of net revenue, as compared with a net loss of $13.46 million on $44.33 million of net revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $38.40 million in total assets, $44.79 million in total liabilities and a $6.38 million total shareholders' deficit. Moss Adams LLP, in San Diego, California, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company's recurring losses and negative operating cash flows raise substantial doubt about the Company's ability to continue as a going concern. OVERSEAS SHIPHOLDING: Taps Venable as Litigation Counsel -------------------------------------------------------- Overseas Shipholding Group, Inc., et al., seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Venable LLP as special litigation counsel to assist them in defending against allegations of improper discharge aboard a single vessel. Professionals who are expected to take a primary role in representing the Debtors are: Hourly Rates ----- Judson W. Starr, Esq. -- jwstarr@Venable.com $925 David G. Dickman, Esq. -- dgdickman@Venable.com $670 Monica D. Gibson, Esq. -- mdgibson@Venable.com $660 Amy J. McMaster, Esq. -- ajmcmaster@Venable.com $620 Ashleigh A. Allione $225 The firm will also be reimbursed for any necessary out-of-pocket expenses. Mr. Starr, a partner at Venable LLP, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. A hearing on the employment application will be on Sept. 26, 2013, at 10:00 a.m. (ET). Objections are due Sept. 19. 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. OXYSURE SYSTEMS: Incurs $193K Net Loss in Second Quarter -------------------------------------------------------- OxySure Systems, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $192,609 on $476,071 of revenues for the three months ended June 30, 2013, compared with a net loss of $218,472 on $62,891 of revenues for the same period last year. The Company reported a net loss of $361,958 on $716,491 of revenues for the six months ended June 30, 2013, compared with a net loss of $543,958 on $90,775 of revenues for the corresponding period of 2012. The Company's balance sheet at June 30, 2013, showed $1.37 million in total assets, $1.84 million in total liabilities, and a stockholders' deficit of $468,521. "We have been suffering from recurring loss from operations. We have an accumulated deficit of $14,621,080 and $14,258,667 at June 30, 2013, and Dec. 31, 2012, respectively, and stockholders' deficits of $468,521 and $652,125 as of June 30, 2013, and Dec. 31, 2012, respectively. We require substantial additional funds to manufacture and commercialize our products. Our management is actively seeking additional sources of equity and/or debt financing; however, there is no assurance that any additional funding will be available. "In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying June 30, 2013 balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financing requirements on a continuing basis, to maintain present financing, and to generate cash from future operations. These factors, among others, 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/Z3krRr Frisco, Tex.-based OxySure Systems, Inc. (OTC QB: OXYS) is a medical technology company that focuses on the design, manufacture and distribution of specialty respiratory and emergency medical solutions. The company pioneered a safe and easy to use solution to produce medically pure (USP) oxygen from inert powders. The Company owns nine (9) issued patents and patents pending on this technology which makes the provision of emergency oxygen safer, more accessible and easier to use than traditional oxygen provision systems. PEREGRINE FINANCIAL: Imprisoned Founder Could Face Questioning -------------------------------------------------------------- Jacob Bunge, writing for Daily Bankruptcy Review, reported that Russell Wasendorf Sr., the founder of Peregrine Financial Group Inc ., still faces questions more than a year after his firm collapsed in scandal, and a judge's ruling could clear the way for him to face customers who lost millions and a bank implicated in the fraud. According to the report, a bank account controlled by Mr. Wasendorf -- at the root of his decades-long fraud -- is central to several outstanding legal battles over the firm, and some lawyers involved in the case believe that Mr. Wasendorf could provide details that may tip arguments in their favor. About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. PATRIOT COAL: Peabody Objects to Oct. 1 Production Deadline ----------------------------------------------------------- Peabody Energy Corporation asks the U.S. Bankruptcy Court for the Eastern District of Missouri to (i) deny the joint motion of Patriot Coal Corporation, et al., and the Official Committee of Unsecured Creditors for an Oct. 1, 2013 deadline for Peabody to complete its production of documents, and (ii) schedule an in- person conference in St. Louis on Oct. 11, 2013, to hear a report on Peabody's further progress, including with respect to the pace of production and the additional ongoing rolling productions that will have occurred by then. The hearing to consider this Motion is scheduled for Sept. 13, 2013, at 10:00 a.m. A copy of Peabody's Objection is available at: http://bankrupt.com/misc/patriotcoal.doc4590.pdf As reported in the TCR on Sept. 4, 2013, Patriot Coal Corp. wants the bankruptcy judge to compel former parent Peabody Energy Corp. to speed up the investigation of the spinoff in October 2007. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PATRIOT COAL: Files Joint Chapter 11 Plan of Reorganization ----------------------------------------------------------- Patriot Coal Corporation filed with the U.S. Bankruptcy Court for the Eastern District of Missouri on Friday, a joint Chapter 11 Plan of Reorganization that would involve a significant investment into the Debtors' estates through a rights offering backstopped by entities managed by Knighthead Capital Management, LLC, and Aurelius Capital Management, LP. The Debtors will soon file an explanatory disclosure statement. A copy of the Joint Chapter 11 Plan is available at http://bankrupt.com/misc/patriotcfoal.doc4606.pdf About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PATRIOT COAL: Incurs $99.7-Mil. Net Loss in Second Quarter ---------------------------------------------------------- Patriot Coal Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $99.75 million on $418.63 million of total revenues for the three months ended June 30, 2013, compared with a net loss of $354.32 million on $534.07 million of total revenues for the same period last year. The Company reported a net loss of $215.65 million on $761.92 million of total revenues for the six months ended June 30, 2013, compared with a net loss of $429.62 million on $1.037 billion of total revenues for the corresponding period in 2012. The Company's balance sheet at June 30, 2013, showed $3.636 billion in total assets, $3.974 billion in total liabilities, and a stockholders' deficit of $338.02 million. "The Debtors are negotiating the potential terms of a Chapter 11 plan of reorganization with Knighthead Capital Management, LLC, and Aurelius Capital Management, LP. that would involve a significant investment into the Debtors' estates through a rights offering backstopped by entities managed by Knighthead and Aurelius." A copy of the Form 10-Q is available at http://is.gd/jhMuTo About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PERSONAL COMMUNICATIONS: U.S. Trustee Appoints Creditors Panel -------------------------------------------------------------- Christine H. Black, Assistant United States Trustee for Region 2, appointed a 3-member Official Committee of Unsecured Creditors in Personal Communications Devices LLC's Chapter 11 case. The committee members are: 1. HTC 13920 SE Eastgate Way Suite 400 Bellevue, WA 98005 2. Pantech Co., Ltd. Pantech Building 179 Seongam-ro, Mapo-gu Seoul, Korea 121-792 3. Jim Wodach TCT Mobile Inc 25 Edelman, Suite 200 Irvine, CA 92618 About Personal Communications Personal Communications Devices LLC and an affiliate, Personal Communications Devices Holdings, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case No. 13-74303) on Aug. 19, 2013, in Central Islip, N.Y., estimating between $100 million and $500 million in both assets and liabilities. Bankruptcy Judge Alan S. Trust oversees the case. The petitions were signed by Raymond F. Kunzmann as chief financial officer. Attorneys at Goodwin Procter, LLP and Togut, Segal & Segal, LLP serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. BG Strategic Advisors, LLC, is the financial advisor. Richter Consulting, Inc., is the investment banker. PCD has a proposal in place to sell itself to Quality One Wireless LLC for $105.3 million, subject to higher bids. The Company is asking the Court to approve guidelines to govern the bidding and sale process. PCD is advised in this transaction by Richter Consulting Inc., BG Strategic Advisors, and Goodwin Procter LLP. Q1W is advised by Raymond James and Associates, Inc. and Munsch Hardt Kopf & Harr, P.C. PCD -- http://www.pcdphones.com-- provides both carriers and manufacturers an array of product life cycle management services that includes planning and development; inventory; technical testing; quality control; forward and reverse logistics; sell-in and sell-thru, marketing & warranty support. Its extensive portfolio of high-quality and versatile wireless devices includes feature phones, smartphones, tablets, mobile hotspots, modems, routers, fixed wireless, M2M, GPS, and other innovative wireless connectivity devices and accessories. PCD is based in Hauppauge, New York; and maintains operations facilities in Brea, California; and Toronto, CA. PETALUMA CDC: Moody's Confirms Ba1 Tax Bonds Rating --------------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating on the former Petaluma Community Development Commission's Subordinate Tax Allocation Bonds, Series 2007; Project Refunding Tax Allocation Bonds, Series 2005A; Petaluma Community Development Project Series 2003A and Petaluma Community Development Project Series 2001A. Ratings Rationale: The Ba1 rating reflects the relatively large size of the project area, both in acreage and Incremental assessed value, (AV) relatively high increment to total (AV) ratio that minimizes revenue volatility, the moderate taxpayer concentration and above average wealth levels. The relatively narrow aggregate debt service coverage level on a semiannual basis somewhat offset these favorable factors. The bonds were previously on review for downgrade. Under AB X1 26 and AB 1484, the statutes that dissolved all California redevelopment agencies, tax increment revenue is placed in trust with the County auditor, who makes semi-annual distributions of funds sufficient to pay debt service on tax allocation bonds, including other obligations. Strengths: - Large merged project area, both in AV and Acreage - Relatively diverse tax payers - Well above average local economic indictors Challenges: - Below average debt service coverage levels, both semiannually and annually What could move the rating - UP? - Significant and sustained increase in assessed valuation What could move the rating - DOWN? - Erosion of semi-annual debt service coverage - Protracted assessed value decline - Sizable ongoing population decline The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. PHILADELPHIA AUTHORITY: S&P Lowers Rating on 2006 Bonds to 'D' -------------------------------------------------------------- Standard & Poor's Ratings Services has lowered its long-term rating to 'D' from 'BB-'on the Philadelphia Authority for Industrial Development, Pa.'s series 2006 revenue bonds, issued for the Please Touch Museum (PTM). The downgrade reflects a Sept. 4, 2013, announcement that PTM was delinquent in its scheduled debt payment. PTM has $59 million in outstanding debt. PLATINUM PROPERTIES: Wants to Tap Thomas C. Scherer as Mediator --------------------------------------------------------------- Platinum Properties, LLC et al., ask the U.S. Bankruptcy Court for permission to employ Thomas C. Scherer to serve as mediator in its bankruptcy case for purposes of conducting mediation. Mr. Scherer attests that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Counsel for the Debtors can be reached at: Kayla D. Britton, Esq. Jay Jaffe, Esq. Faegre Baker Daniels LLP 600 E. 96th Street, Suite 600 Indianapolis, IN 46240 Tel: 317-569-9600 Fax: 317-569-4800 E-mail: Kayla.britton@gaegrebd.com Jay.jaffe@faegrebd.com Counsel for Paul Shoopman, Shelley Shoopman, Paul Shoopman Custom Homes, Inc., Paul Shoopman Home Building Group, Inc., and Shoopman Acquisitions, Inc. can be reached at: RUBIN & LEVIN, P.C. John M. Rogers, Esq. Christopher M. Trapp, Esq. Thomas B. Allington, Esq. 342 Massachusetts Avenue, Suite 500 Indianapolis, IN 46204-2161 Tel: 317-634-0300 Fax: 317-453-8601 E-mail: tallington@rubin-levin.net jrogers@rubin-levin.net ctrapp@rubin-levin.net About Platinum Properties and PPV LLC Indianapolis, Indiana-based Platinum Properties, LLC, is a residential real estate developer. Platinum acquires land, designs the projects, obtains zoning and other approvals, and constructs roads, drainage, utilities, and other infrastructure of residential subdivisions. Platinum then sells the finished, platted lots. Platinum also has an ownership interest in several special purpose entities that in turn own, operate and manage individual projects. PPV LLC is a joint venture between Platinum and a non-debtor entity, Pittman Partners, Inc., each of whom hold an equity interest in PPV. PPV owned four projects directly and owns 100% of the membership interest of Sweet Charity Estates, LLC. Platinum Properties and PPV LLC filed for Chapter 11 protection (Bankr. S.D. Ind. Case Nos. 11-05140 and 11-05141) on April 25, 2011. Lawyers at Baker & Daniels LLP, in Indianapolis, Indiana, serve as the Debtors' bankruptcy counsel. Platinum Properties disclosed $14,624,722 in assets and $181,990,960 in liabilities as of the Chapter 11 filing. The U.S. Trustee has not yet appointed a creditors committee in the Debtor's case. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. PRIMCOGENT SOLUTIONS: Court Denies Reconsideration Motion on Stay ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas denied Primcogent Solutions LLC's corrected motion for (i) reconsideration of the Court's Aug. 7, 2013 order regarding the automatic stay, and (ii) continuation and reinstatement of the automatic stay pending reconsideration of the order. Secured lender ORIX Ventures, by and through Robert W. Jones, Esq., at Holland & Knight LLP, objected to the Debtor's motion stating that the Debtor's failure to make the adequate protection deposit terminated the stay. On July 30, 2013, the Court held that continuation of the automatic stay would be conditioned on the Debtor making a cash deposit in the amount of $559,700 from a source other than ORIX's collateral, as adequate protection for ORIX's interest. The Court further held that if the cash deposit is not be made by Aug. 15, the automatic stay would immediately terminate. As of the Petition Date, the Debtor was indebted to ORIX in the approximate amount of not less than $11.3 million. On Aug. 21, Paul N. Silverstein, Esq., at Andrews Kurth LLP, on behalf of the Debtor, in a corrected motion, requested for the reinstatement of the automatic stay pending reconsideration of the lift stay order. Mr. Silverstein asserted that no equity infusion was made in the Debtor and no amount was paid to ORIX. About Primcogent Solutions Primcogent Solutions, LLC, is a supplier and distributor of medical equipment and services in North America. Primcogent operates as the exclusive North American (and, through its European subsidiaries, Western European) seller or distributor of equipment manufactured by Erchonia Corporation, pursuant to exclusive license and supply agreements. Products sold include Erchonia's non-invasive body-contouring laser technology trademarked under the name Zerona(R), including the Zerona Body Laser. Primcogent was formed in late 2011 following the acquisition of the business of Santa Barbara Medical Innovations LLC for $18 million. Although the Erchonia agreement gave Primcogent perpetual rights to sell Erchonia products, Erchonia declared in March 2013 that the agreement has been terminated due to Primcogent's alleged failure to perform and starting that time stopped servicing Primcogent's products. Primcogent, on the other hand, claims Erchonia has committed fraud, breached the agreement and tortiously interfered with Primcogent's business. Primcogent cites, among other things, Erchonia's failure to obtain FDA clearance of Lunula, a laser technology used to treat or cure toe fungus. Primcogent also claims ORIX, its secured lender, is working in concert with Erchonia. A default in the Erchonia agreement triggered a cross-default in the credit agreement, and the secured lender has already seized control of Primcogent's cash account and is attempting to control warehouse inventory. Primcogent filed a bare-bones Chapter 11 petition (Bankr. N.D. Tex. Case No. 13-42368) in Ft. Worth, Texas, on May 20, 2013. The petition was signed by David Boris, chairman of board of managers of managing member. The Debtor disclosed $82,490,751 in assets and $27,236,020 in liabilities as of the Chapter 11 filing. Judge D. Michael Lynn presides over the case. Attorneys at Andrews Kurth, LLP, serve as counsel to the Debtor. ORIX is represented by Robert W. Jones, Esq., and Brian Smith, Esq., at Patton Boggs, LLP. Erchonia is represented by Ira M. Schwartz, Esq., and Lawrence D. Hirsh, Esq., at Deconcini McDonald Yetwin & Lacy, P.C., and J. Michael Sutherland, Esq., and Lisa M. Lucas, Esq., at Carrington, Coleman, Sloman & Blumenthal, LLP. The Official Committee of Unsecured Creditors is represented by Looper Reed & McGraw P.C., as counsel. PRIVATE MEDIA: Incurs EUR670,000 Net Loss in Second Quarter ----------------------------------------------------------- Private Media Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of EUR 670,000 on EUR 1.41 million of sales for the three months ended June 30, 2013, compared with net income of EUR 58,000 on EUR 1.76 million of net sales for the same period last year. "Lower sales and higher selling, general and administrative costs contributed to the net loss in the fiscal 2013 quarter." The Company reported a net loss of EUR 1.05 million on EUR 2.90 million of net sales for the six months ended June 30, 2013, compared with a net loss of EUR 863,000 on EUR 3.46 million of net sales for the corresponding period in 2012. "Lower sales and higher selling, general and administrative costs contributed to the increase in the net loss in the fiscal 2013 period." The Company's balance sheet at June 30, 2013, showed EUR 6.84 million in total assets, EUR 7.70 million in total liabilities, EUR 8.0 million of EUR 10.00 Series B 6% Convertible Redeemable Preferred Stock, and a stockholders' deficit of EUR 8.86 million. "In each of the past three years the Company has experienced losses from operations. At June 30, 2013, the Company had cash and cash equivalents of EUR 117,000 and a working capital deficit of EUR 2,193,000. As a result of the Company's operating losses and financial condition, there is substantial doubt as to its ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/mesmAP Headquartered in Barcelona, Spain, Private Media Group, Inc., acquires worldwide rights to adult media produced for the Company by independent producers and then processes this content into products suitable for popular physical media formats such as print publications, DVDs, digital media platforms (such as internet websites, mobile telephony and transactional television), and broadcasting (which includes cable, satellite and IPTV). PRM FAMILY: Seeks to Hire Arizona Liquor as Liquor License Broker ----------------------------------------------------------------- PRM Family Holding Company, L.L.C. and its debtor-affiliates seek bankruptcy court authority to employ A.L.I.C. Enterprises, LLC, dba Arizona Liquor Industry Consultants, as their liquor license broker, effective as of September 4, 2013, to be compensated at the rate of 7.5% of the sales price of any license sold. The Debtors are the owners of certain and various liquor licenses certain of which are no longer needed in the operation of their business, and not necessary to an effective reorganization. The Debtor desires to sell these liquor licenses. Any contracts for sale of the Licenses will be submitted to the Court for approval, and will be subject to higher and better bids. With respect to each transaction, the commission requested by ALIC will be included in the motion to approve the sale, and will be subject to Court approval. Further, any dispute regarding the terms of the employment of ALIC, or any sales agreement, will be subject to the jurisdiction of the Bankruptcy Court during pendency of the bankruptcy case. ALIC's Randy Nations attests that his firm represents no interest adverse to the Debtors or their bankruptcy estates. Counsel for the Debtors may be reached at: Michael McGrath, Esq. Frederick J. Petersen, Esq. Isaac D. Rothschild MESCH, CLARK & ROTHSCHILD, P.C. 259 North Meyer Avenue Tucson, Arizona 85701 Phone: (520) 624-8886 Fax: (520) 798-1037 E-mail: mmcgrath@mcrazlaw.com fpetersen@mcrazlaw.com About PRM Family PRM Family Holding Company, L.L.C., operator of 11 Pro's Ranch Markets grocery stores in Arizona and Texas and New Mexico, sought Chapter 11 protection (Bankr. D. Ariz. Case No. 13-09026) on May 28, 2013. As of the bankruptcy filing, PRM Family Holding operates seven grocery stores in Phoenix, two in El Paso, Texas, and two in New Mexico. Its corporate office is in California and it has warehouses and distribution facilities in California and Phoenix. Its Pro's Ranch Markets feature produce, baked goods and other general grocery items with a Hispanic flair and theme. The company has more than 2,200 employees. PRM Family blamed its woes on, among other things, the adverse effect of the perception in Arizona towards immigrants including the passage of SB 1070 and an immigration audit to which no other competitor was subjected. It also blamed a decline in the U.S. economy and an increase competition from other grocery store chains. Bank of America, the secured lender, declared a default in February 2013. PRM Family estimated liabilities in excess of $10 million. Judge Sarah Sharer Curley oversees the case. Michael McGrath, Esq., Scott H. Gan, Esq., Frederick J. Petersen, Esq., Kasey C. Nye, Esq., David J. Hindman, Esq., and Isaac D. Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., serve as the Debtor's counsel. HG Capital Partners' Jim Ameduri serves as financial advisor. Attorneys at Freeborn & Peters LLP, in Chicago, Ill., represent the Official Committee of Unsecured Creditors as lead counsel. Attorneys at Schian Walker, P.L.C., in Phoenix, Arizona, represent the Committee as local counsel. O'Keefe & Associates Consulting, LLC, serves as financial advisor to the Committee. Robert J. Miller, Esq., Bryce A. Suzuki, Esq., and Justin A. Sabin, Esq., at Bryan Cave LLP, in Phoenix, serve as counsel for Bank of America, N.A., as administrative agent and a lender under an amended and restated credit agreement dated July 1, 2011. PRM FAMILY: Gursey Schneider Approved as Accountants ---------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona issued a ruling on September 3, 2013, authorizing PRM Family Holding Company, L.L.C. and its debtor-affiliates to employ Gursey, Schneider LLP by Nazfar Afshar, CPA/CFF as their accountants to prepare tax returns and perform a 401k audit for tax year 2012. As reported in the Troubled Company Reporter on August 30, 2013, counsel for the Debtors, Michael McGrath, Esq. and Fredrick J. Petersen, Esq., at Mesch, Clark & Rothschild, P.C., told the Court that the proposed budget for these services is estimated in the amount of $140,710.00. The Debtors will pay the firm its regular hourly rates which are $375 per hour for partners, $310 per hour for supervisors, and $215 per hour for staff members. About PRM Family PRM Family Holding Company, L.L.C., operator of 11 Pro's Ranch Markets grocery stores in Arizona and Texas and New Mexico, sought Chapter 11 protection (Bankr. D. Ariz. Case No. 13-09026) on May 28, 2013. As of the bankruptcy filing, PRM Family Holding operates seven grocery stores in Phoenix, two in El Paso, Texas, and two in New Mexico. Its corporate office is in California and it has warehouses and distribution facilities in California and Phoenix. Its Pro's Ranch Markets feature produce, baked goods and other general grocery items with a Hispanic flair and theme. The company has more than 2,200 employees. PRM Family blamed its woes on, among other things, the adverse effect of the perception in Arizona towards immigrants including the passage of SB 1070 and an immigration audit to which no other competitor was subjected. It also blamed a decline in the U.S. economy and an increase competition from other grocery store chains. Bank of America, the secured lender, declared a default in February 2013. PRM Family estimated liabilities in excess of $10 million. Judge Sarah Sharer Curley oversees the case. Michael McGrath, Esq., Scott H. Gan, Esq., Frederick J. Petersen, Esq., Kasey C. Nye, Esq., David J. Hindman, Esq., and Isaac D. Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., serve as the Debtor's counsel. HG Capital Partners' Jim Ameduri serves as financial advisor. Attorneys at Freeborn & Peters LLP, in Chicago, Ill., represent the Official Committee of Unsecured Creditors as lead counsel. Attorneys at Schian Walker, P.L.C., in Phoenix, Arizona, represent the Committee as local counsel. O'Keefe & Associates Consulting, LLC, serves as financial advisor to the Committee. Robert J. Miller, Esq., Bryce A. Suzuki, Esq., and Justin A. Sabin, Esq., at Bryan Cave LLP, in Phoenix, serve as counsel for Bank of America, N.A., as administrative agent and a lender under an amended and restated credit agreement dated July 1, 2011. RAPID-AMERICAN: Lawrence Fitzpatrick Okayed as Future Claims Rep. ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York appointed Lawrence Fitzpatrick as the Future Claimants' Representative in the Chapter 11 case of Rapid-American Corp., nunc pro tunc to July 11, 2013. The Future Claimants' Representative will represent all persons who will assert asbestos-related personal injury claims against the Debtor after the confirmation of a plan under Section 524(g) of the Bankruptcy Code, but who have not presently done so. The claimants will be referred to as "Future Claimants" and the claims held will be referred to as "Demands." Mr. Fitzpatrick will be compensated at his hourly rate of $420, subject to periodic adjustment, plus reimbursement of reasonable expenses. About Rapid-American Corp. Rapid-American Corp. filed for bankruptcy protection in Manhattan (Bankr. S.D.N.Y. Case No. 13-10687) on March 8, 2013, to deal with debt related to asbestos personal-injury claims. New York-based Rapid-American was formerly a holding company with subsidiaries primarily engaged in retail sales and consumer products and was never engaged in an asbestos business of any kind. Through a series of merger transactions going back more than 45 years, Rapid has nevertheless incurred successor liability for personal injury claims arising from plaintiffs' exposure to asbestos-containing products sold by The Philip Carey Manufacturing Company -- Old Carey -- as that entity existed prior to June 1, 1967. Attorneys at Reed Smith LLP serve as counsel to the Debtor. The Debtor disclosed assets in excess of $4,446,261 and unknown liabilities. The Official Committee of Unsecured Creditors retained Caplin & Drysdale, Chartered, as counsel. REVSTONE INDUSTRIES: Most Creditors to Get Full Payment on Claims ----------------------------------------------------------------- Revstone Industries, LLC, et al., filed with the U.S. Bankruptcy Court for the District of Delaware an Amended Disclosure Statement in respect of their First Amended Plan of Reorganization, as modified on Aug. 28, 2013. The Plan applies solely as to Debtor Revstone Industries, LLC, and does not involve or affect Spara LLC, Greenwood Forgings, LLC, US Tool & Engineering LLC, or Metavation LLC. Under the Plan, the Debtor will be revested with all of its assets, including interests in various non-debtor subsidiaries, and such assets either will be liquidated or retained for the benefit of creditors under the supervision of the chief restructuring officer. It is expected that principal secured creditor, Wells Fargo Capital Finance, LLC, will be paid in full on or before the Effective Date. Under the Plan, all holders of allowed administrative expenses and allowed priority claims against the Debtor will be paid in full on the Effective Date out of cash on hand. Holders of allowed non- priority general unsecured claims, including intercompany claims, will receive respective pro rata share of available net proceeds of the Debtor's assets after the Effective Date. All membership interests in the Debtor, and any associated management rights held by interest holders will be suspended pending payment in full on account of all creditors' allowed claims. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/REVSTONE_INDUSTRIES_ds_1plan.pdf 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. Metavation, also known as Hillsdale Automotive, LLC, joined parent Revstone in Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No. 13-11831) to sell the bulk of its assets to industry rival Dayco for $25 million, absent higher and better offers. 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. RICHMOND RDA: Moody's Confirms Ba1 Tax Bonds Rating --------------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating on the Successor Agency of Richmond Redevelopment Agency's (CA) Richmond Joint Powers Financing Authority Tax Allocation Revenue Bonds (TABs) Series 2000A and Housing Set-Aside Tax Allocation Revenue Bonds Series 2000B. The bonds are secured by loan payments made by the Successor Agency to the Richmond Redevelopment Agency which in turn are secured by a pledge of tax increment revenues, derived from a group of sub-areas collectively known as the "Pre-2004 Limit Area." They also benefit from a 25% guarantee from "Post- 2004 Limit Area" if revenues from the pledge area are insufficient on an annual basis. Ratings Rationale: The Ba1 rating reflects the risks and weakness that the dissolution of redevelopment agencies (now known as successor agencies) now adds to bonds' credit profile. The primary change is the narrow semi-annual debt service coverage. The semi-annual process exposes the Agency to ongoing uncertainty, since it requires the ongoing approval by the state to reserve sufficient funds for the subsequent principal and interest payment. Other weaknesses such as the relatively low wealth level of city residents and elevated unemployment levels weighs on Moody's credit opinion. Strengths: - Inclusion in the Bay Area economy Challenges: - Narrow semi-annual debt service coverage - Tax base has weakened with regional decline of real-estate market - Low wealth level of city residents with elevated unemployment weakens credit What could move the rating-UP? - Significant and sustained increase in assessed valuation with at least two times coverage in both periods - Substantial improvement in wealth levels What could move the rating-DOWN? - Erosion of semi-annual debt service coverage - Protracted assessed value decline The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. Moody's carries these non-investment grade ratings: Housing Set-Aside Tax Allocation Series 2000B (Taxable); Ba1 Tax Allocation Revenue Bonds Series 2000A (Tax-Exempt); Ba1 RIVERSIDE COUNTY RDA: Moody's Keeps Ba1 $726MM Debt Rating ---------------------------------------------------------- Moody's Investors Service has confirmed at Ba1 the rating of the Successor Agency to Riverside County's Redevelopment Agency's outstanding rated bonds. The rating action affects approximately $726 million of outstanding debt. Ratings Rationale: The confirmation at Ba1 is driven by changes to California law that dissolved redevelopment agencies (RDAs) and changed the method by which the successors agencies to the RDAs receive incremental tax revenues to pay debt service on tax allocation bonds; as a result of these changes, Moody's projects that debt service coverage net of pass-through payments will remain below its threshold of two times to be considered investment grade. Other factors affecting the rating include combined project areas with a large AV relative to other rated California tax allocation bonds; the county's large and improving economy, which is recovering despite the worst housing recession since the Great Depression; socio-economic indicators that are at the US median; the depth of incremental AV which provides protection against economic and real estate downturns; and a top taxpayer profile which is well below the median levels for other rated CA tax allocation bonds. Strengths: - The successor agency's large combined project areas assessed valuation (AV), - Satisfactory ratio of incremental AV to the total AV of the project area Challenges: - Annual debt service coverage is thin, but should improve as the county's AV recovers. If AV levels decline only modestly, however, coverage could slip below one times. What Could Move The Rating-Up - Sizable increase in incremental AV of the project areas, leading to greater debt service coverage in all semi-annual periods. - Significant improvement in socio-economic indicators What Could Move The Rating-Down - Reversal of recent trends and decline in the successor agency's assessed valuation Rating Methodology The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. RURAL/METRO CORP: Plan Support Agreement Approved ------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved Rural/Metro's restructuring support agreement, pursuant to Sections 105(a) and 365(a) of the Bankruptcy Code. As previously reported, "The RSA is the lynchpin of the Debtor's consensual restructuring. Signed by holders of greater than 60% of the Debtors' prepetition secured bank debt and holders of greater than 75% of the Debtors' prepetition unsecured bonds, the RSA serves, as the roadmap for the Debtors successful emergence from chapter 11... The consenting lenders have agreed to provide the Debtors with a $75 million debtor-in-possession facility and the consenting noteholders have agreed, to invest $135 million of new equity into the recognized Debtors upon emergence from chapter 11. The collective goal of the parties is that the Debtors can effectuate a financial restructuring with virtually no impact on day-to-day operations. The relief granted at the first day hearing was the first step towards the goal, and the assumption of the RSA is the second." 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. The U.S. Trustee has appointed a three-member official committee of unsecured creditors in the Chapter 11 case. The Debtors have arranged $75 million of DIP financing from a group of prepetition lenders led by Credit Suisse AG. An interim order has allowed the Debtors to access $40 million of the DIP facility. RURAL/METRO: Appointment of Warren H. Smith as Fee Auditor Okayed ----------------------------------------------------------------- Bankruptcy Judge Kevin J. Carey approved the appointment of Warren H. Smith & Associates, P.C. as fee auditor in the cases of Rural/Metro Corporation, et al., nunc pro tunc to August 12, 2013. Warren Smith will serve as special consultant to the Court for professional fee and expense review and analysis in the Debtors' cases. Judge Carey also established uniform procedures for the payment of fees and reimbursement of expenses for professionals and members of official committees and consideration of fee applications. The fees and expenses of the Auditor will be subject to application and review pursuant to Federal Rule of Evidence 706(b), and will be paid from the Debtors' estates as an administrative expense under Section 503(b)(2) of the Bankruptcy Code. The Auditor's services will be paid for at the firm's ordinary hourly rate. 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. The U.S. Trustee has appointed a three-member official committee of unsecured creditors in the Chapter 11 case. The Debtors have arranged $75 million of DIP financing from a group of prepetition lenders led by Credit Suisse AG. An interim order has allowed the Debtors to access $40 million of the DIP facility. SAN FRANCISCO RDA: Moody's Confirms Ba1 Tax Bond Rating ------------------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating on the Successor Agency to the San Francisco Redevelopment Agency's tax allocation bonds. Ratings Rationale: The rating assignment reflects the agency's total semi-annual debt service coverage, which fluctuates from being very solid during the high periods to dropping well below two times during the low periods. In doing so, the debt service coverage does not meet the investment grade threshold of maintaining two times debt service coverage across all periods. This weakness is offset by other credit strengths including a geographically well sized project area, exceptionally large assessed and incremental valuation, satisfactory ratio of increment to total assessed valuation and growing local economy. The bonds are secured by the tax increment revenues of the agency. Strengths: - Exceptionally large increment and assessed valuation - Well sized geographic size - Strong high period debt service coverage - Strong local economy Challenges: - Narrow low period debt service coverage What could change the rating up? - Sizable increase in incremental AV of the project area, leading to greater debt service coverage in all semi-annual periods What could change the rating down? - Decline in the assessed valuation that weakens coverage The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. SAN MARCOS RDA: Moody's Confirms Ba1 Tax Bonds Rating ----------------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating on the Successor Agency to the San Marcos Redevelopment Agency's tax allocation bonds. Ratings Rationale: The rating reflects the agency's weak coverage, including a recent one-time reliance on reserves to make debt service and modestly pressured assessed valuation. The rating also incorporates the agency's large total and incremental assessed valuation, sizeable geographic area and strong taxpayer diversity. The bonds are secured by the tax increment revenues of the agency. Strengths: - Very large geographic and total project area - Well sized incremental and assessed valuation - Strong taxpayer diversity Challenges: - Weak debt service coverage - Recent reliance on agency reserves to compensate for less than sum sufficient coverage - Still pressured local economy What Could Change The Rating Up - Sizable increase in incremental AV of the project area, leading to greater debt service coverage in all semi-annual periods What Could Change The Rating Down - Decline in the assessed valuation that weakens coverage The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. SANTA ROSA RDA: Moody's Confirms Ba1 Rating on Tax Bonds -------------------------------------------------------- Moody's Investors Service has confirmed the Ba1 rating on the Successor Agency to the Santa Rosa Redevelopment Agency's Southwest Redevelopment Project Area, 2005 Tax Allocation Bonds, Series A, (Tax-Exempt) and Series B (Federally Taxable). Ratings Rationale: The rating incorporates Moody's view of the agency's very weak coverage semiannual debt service coverage. This fact significantly weighs down the credit quality of the bonds that also feature a project area with solid geographic and economic size, diversity and taxpayer income levels. The rating also reflects the agency's weak ratio of incremental to assessed valuation and a surety rather than cash funded debt service reserve fund. The bonds are secured by the tax increment revenues of the agency. Strengths: - Solid geographic size of project area - Well sized total and incremental assessed valuation - Solid resident income levels Challenges: - Recently pressured economy -Weak coverage of total debt service - Low ratio of increment to total assessed valuation What could change the rating up? - Sizable increase in incremental AV of the project area, leading to greater debt service coverage in all semi-annual periods What could change the rating down? - Decline in the assessed valuation that weakens coverage - Absence of the cash funded reserve The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. SANTEE RDA: Moody's Confirms Ba1 Rating on Tax Bonds ---------------------------------------------------- Moody's Investors Service has confirmed at Ba1 the rating of the Successor Agency to the Community Development Commission of the City of Santee's outstanding Tax Allocation Bonds. The rating action affects approximately $19 million of outstanding debt. Ratings Rationale: The confirmation at Ba1 is driven by changes to California law that dissolved redevelopment agencies (RDAs) and changed the method by which the successors agencies to the RDAs receive incremental tax revenues to pay debt service on tax allocation bonds; as a result of these changes, Moody's projects that debt service coverage net of pass-through payments will remain below its threshold of two times to be considered investment grade. Other factors affecting the rating include a large project area and healthy assessed valuation; above average socio-economic indicators; an average ratio of incremental assessed value to total value of the project area which provides protection against economic and real estate downturns; and a top taxpayer profile which is average compared to other rated CA tax allocation bonds. Strengths: - A large project area and healthy overall assessed valuation - Above average socio-economic indicators - Ratio of incremental AV to the total AV of the project area which compares to CA medians Challenges: - Relatively weak level debt service coverage in the low semi- annual period What Could Change The Rating Up - Sizable increase in incremental AV of the project area, leading to greater debt service coverage in all semi-annual periods What Could Change The Rating Down - Material decline in the district's assessed valuation The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. SANUWAVE HEALTH: Appoints Life Sciences Executive to Board ---------------------------------------------------------- SANUWAVE Health, Inc., has appointed Alan L. Rubino to the Company's Board of Directors. Mr. Rubino has more than 30 years of experience at every level of the biopharmaceutical industry, including positions focused on sales and marketing and Securities and Exchange Commission matters. With this appointment, the Company's Board has four members. "We are delighted to welcome Alan to our Board of Directors," said Kevin A. Richardson, chairman of the Board of Directors of SANUWAVE. "Throughout his career, Mr. Rubino has developed a strong network of industry experts including medical device distributors. His industry knowledge and strong relationships with companies that are addressing chronic diabetes issues will be of great value to SANUWAVE. We look forward to benefiting from his guidance as we work diligently to advance SANUWAVE and create shareholder value." Mr. Rubino has served as president and chief executive officer of Emisphere Technologies, Inc., since September, 2012. Previously, Mr. Rubino served as the CEO and president of New American Therapeutics, Inc., CEO and President of Akrimax Pharmaceuticals, LLC., and President and COO of Pharmos Corporation. Mr. Rubino has continued to expand upon a highly successful and distinguished career that included Hoffmann-La Roche Inc. where he was a member of the U.S. Executive and Operating Committees and a Securities and Exchange Commission (SEC) corporate officer. During his Roche tenure, he held key executive positions in marketing, sales, business operations, supply chain and human resource management, and was assigned executive committee roles in marketing, project management, and globalization. Mr. Rubino also held senior executive positions at PDI, Inc. and Cardinal Health. He holds a BA in economics from Rutgers University with a minor in biology/chemistry and completed post-graduate educational programs at the University of Lausanne and Harvard Business School. Mr. Rubino serves on the Boards of Aastrom Biosciences, Inc., and Genisphere, LLC, and is also on the Rutgers University Business School Board of Advisors. Commenting on his appointment, Mr. Rubino said, "I am most enthusiastic about joining the Company's Board of Directors at this time. SANUWAVE represents a compelling growth opportunity with the dermaPACE Phase III clinical trial underway in the U.S. and the on-going use of the dermaPACE and orthoPACE devices outside the United States. I look forward to working with the management team to expand the international distribution of their medical devices and to develop value-enhancing strategies to compete in multiple large market opportunities." In connection with his election as a director of the Company, Mr. Rubino was granted a stock option under the Amended and Restated 2006 Stock Incentive Plan of SANUWAVE Health to purchase 100,000 shares of the Company's common stock at an exercise price of $0.65 per share, which options were fully vested when issued. The options will expire on Sept. 3, 2023. About SANUWAVE Health Alpharetta, Ga.-based SANUWAVE Health, Inc., is an emerging global regenerative medicine company focused on the development and commercialization of noninvasive, biological response activating devices for the repair and regeneration of tissue, musculoskeletal and vascular structures. BDO USA, LLP, in Atlanta, Georgia, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations, has a net working capital deficit, and is economically dependent upon future issuances of equity or other financing to fund ongoing operations, each of which raise substantial doubt about its ability to continue as a going concern. SANUWAVE Health reported a net loss of $6.40 million on $769,217 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $10.23 million on $802,572 of revenue in 2011. The Company's balance sheet at June 30, 2013, showed $1.61 million in total assets, $13.36 million in total liabilities and a $11.74 million total stockholders' deficit. SENECA GAMING: Dispute Resolution Cues Moody's to Raise CFR to B1 ----------------------------------------------------------------- Moody's Investors Service upgraded Seneca Gaming Corporation's Corporate Family Rating to B1, its Probability of Default rating to B1-PD and its $325 million senior unsecured notes due 2018 to B1. SGC's rating outlook is stable. These actions conclude the review of SGC's ratings that was initiated on June 17, 2013. The upgrade to SGC's ratings reflects the favorable resolution of a payment dispute between the Seneca Nation of Indians (the "Nation") and New York State. The two parties executed a memorandum of understanding in which, among other things, the State reconfirmed the exclusivity of the SGC's Class III casino operations within the Nation's exclusivity zone, and the Nation agreed to resume exclusivity fee payments and to make pro-rated payments for past amounts that were in dispute. At the same time, the State agreed to limit the type of marketing and the types of games offered at racinos operating within the Nation's exclusivity zone. The agreement also materially reduces the risk related to the renewal of the Nation's gaming compact with the state in 2016. According to Moody's Analyst Pete Trombetta, "The cloud of uncertainty that had been hanging over the gaming operations as a result of the payments dispute has now been lifted. This was the key driver of the rating upgrade." In early August, the Seneca Nation distributed approximately $408 million of the exclusivity fee payments and regulatory reimbursements that the Nation had withheld from the State of New York during the dispute. The $408 million was paid to the State of New York ($209 million), the local governments in Buffalo, Niagara Falls, and Salamanca (total of $140 million), the New York State Police ($54 million) and the New York State Gaming Commission ($4 million). The agreement allows the Seneca Nation to retain $209 million of the funds it had withheld. Ratings upgraded: Corporate Family Rating to B1 from B2 Probability of Default Rating to B1-PD from B2-PD $325 million senior unsecured notes due 2018 to B1 (LGD 4, 54%) from B2 (LGD 4, 54%) Ratings Rationale: The B1 Corporate Family Rating recognizes SGC's exclusive ability to offer Class III slot machines and table games in Western New York State and its relatively strong financial leverage and coverage metrics. For the LTM period ended June 30, 2013, SGC's debt/EBITDA (including $159 million Special Obligation Bond issued by the Nation) and EBIT/interest expense was 3.3 times and 3.2 times, respectively. Although SGC's credit metrics are strong for the rating category, the ratings are constrained by its lack of geographic diversification -- all three of SGC's casinos are in Western New York and its Niagara Falls casino accounts for about 65% of total property-level gaming revenue -- and the relatively weak gaming demand trends in its primary market area. SGC's ratings also take into consideration the company's significant dividend/head lease obligations and other risks common to Native American Gaming issuers. The stable rating outlook considers Moody's view that the opening of the Buffalo Creek permanent facility in August will help grow SGC's gaming revenues over the next 12 months despite increasing competition from the Pennsylvania and Ohio gaming markets. The outlook also considers Moody's expectation that SGC's debt/EBITDA will improve over time due to the incremental earnings from the Buffalo Creek facility and the 20% (or $35 million) annual principal amortization requirement on its $175 million term loan facility. The stable outlook also assumes that Seneca will continue to maintain a good liquidity profile. Ratings could be downgraded if earnings at SGC's properties declined such that debt/EBITDA was to increase above 4.5 times or if liquidity deteriorates for any reason. In addition, ratings could be downgraded if the Nation were to lose its exclusivity in Western New York or if for some reason the Nation had difficulty renewing its compact in 2016. Downward rating pressure could develop if the IRS review at the Nation level resulted in negative action against SGC's operations. A higher rating could be considered if SGC shows the ability and willingness to achieve and maintain debt/EBITDA of about 3.0 times and EBIT/interest expense about 4.0 times on a sustained basis, as well as maintain healthy free cash flow. SGC would also have to maintain a good working relationship with New York State and a reasonable capital allocation policy with respect to capital expenditures and dividends to the Nation. The principal methodology used in this rating was the Global Gaming methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Seneca Gaming Corporation is an incorporated instrumentality of the Seneca Nation of Indians, a federally recognized tribe, which entered into a compact with the State of New York in August 2002, permitting the Nation to establish and operate three Class III gaming facilities in Western New York. SILVERADO 2006-II: Moody's Supp. Indenture No Impact on Ratings --------------------------------------------------------------- Moody's Investors Service has determined that entry by Silverado CLO 2006-II Ltd., into a supplemental indenture dated as of September 5, 2013 among the Issuer, Silverado CLO 2006-II Corp., as Co-Issuer and Deutsche Bank Trust Company Americas as Trustee (the "Second Supplemental Indenture") and performance of the obligations contemplated therein, will not in and of itself and at this time cause an immediate withdrawal or reduction of the current Moody's ratings of any Class of Rated Notes issued by the Issuer. The Second Supplemental Indenture changes the defined term "Weighted Average Life Test" by replacing the existing Weighted Average Life Test satisfaction "trigger" years, "3.5", "3.25" and "3.00", respectively, with "4.75", "4.50" and "4.25", respectively. By measuring satisfaction of the Weighted Average Life Test against a hurdle date occurring 1.25 years later, one likely effect of the change is to permit the Issuer to satisfy the Weighted Average Life Test (which it failed as of the measurement date occurring on 11 May 2012) in the immediate future. Moody's analyzed the proposed change by looking at modeling scenarios involving hypothetical collateral portfolios with various weighted average lives and amortization profiles that conform to the contemplated modification of the Weighted Average Life Test. The result of this analysis indicates that changing the Weighted Average Life Test by the designated time period at this time has no impact on the current ratings assigned to the rated notes issued by the Issuer. The principal methodology used in reaching its conclusion and in monitoring the ratings of the Notes issued by the Issuer is "Moody's Global Approach to Rating Collateralized Loan Obligations", published in May 2013. Other methodologies and factors that may have been considered in the process of rating the Notes issued by the Issuer can also be found in the Rating Methodologies sub-directory on Moody's website. On August 20, 2013, Moody's upgraded the ratings of the following notes issued by Silverado CLO 2006-II Limited: $15,000,000 Class A-1-J Senior Secured Floating Rate Notes due 2020, Upgraded to Aaa (sf); previously on September 1, 2011 Upgraded to Aa1 (sf); $16,000,000 Class A-2 Senior Secured Floating Rate Notes due 2020, Upgraded to Aa1 (sf); previously on September 1, 2011 Upgraded to Aa3 (sf); $20,750,000 Class B Senior Secured Deferrable Floating Rate Notes due 2020, Upgraded to A1 (sf); previously on September 1, 2011 Upgraded to A3 (sf); $17,500,000 Class C Senior Secured Deferrable Floating Rate Notes due 2020, Upgraded to Baa3 (sf); previously on September 1, 2011 Upgraded to Ba1 (sf); and $12,250,000 Class D Secured Deferrable Floating Rate Notes due 2020, Upgraded to Ba3 (sf); previously on September 1, 2011 Upgraded to B1 (sf). Moody's also affirmed the ratings of the following notes: $107,250,000 Class A-1 Senior Secured Floating Rate Notes due 2020, Affirmed Aaa (sf); previously on December 27, 2006 Assigned Aaa (sf); and $135,000,000 Class A-1-S Senior Secured Floating Rate Notes due 2020; Affirmed Aaa (sf); previously on December 27, 2006 Assigned Aaa (sf). SOCKET MOBILE: Reports $43.5K Net Income in Second Quarter ---------------------------------------------------------- Socket Mobile, Inc., filed its quarterly report on Form 10-Q, reporting net income of $43,509 on $4.44 million of revenues for the three months ended June 30, 2013, compared with a net loss of $755,400 on $4.04 million of revenues for the same period last year. The Company reported net income of $118,311 on $8.70 million of revenues for the six months ended June 30, 2013, compared with a net loss of $1.63 million on $7.99 million of revenues for the corresponding period in 2012. The Company's balance sheet at June 30, 2013, showed $9.16 million in total assets, $8.41 million in total liabilities, and stockholders' equity of $745,268. "The Company was profitable in each of the first two quarters in 2013, but only to the extent of $118,311 in total. In the year ended Dec. 31, 2012, the Company incurred a net loss of $3,298,082. As of June 30, 2013, the Company has an accumulated deficit of $60,383,870. The Company's cash balances at June 30, 2013, were $659,834, including $1,145,053 advanced on its bank lines of credit. At June 30, 2013, the Company had additional unused borrowing capacity of approximately $410,000 on its bank lines of credit. The Company's balance sheet at June 30, 2013, has a current ratio of 0.5 to 1.0, and a working capital deficit of $3,658,592. These circumstances 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/HtNrnp Newark, Calif.-based Socket Mobile, Inc. (OTC: SCKT) is a producer of mobile handheld computers and barcode scanning products serving the business mobility markets. SOLAR POWER: Chief Financial Officer Quits ------------------------------------------ Jim Pekarsky, chief financial officer of Solar Power, Inc., provided notice of his planned resignation date of Sept. 13, 2013, in order to join a private company as its chief executive officer. To the knowledge of the Company, there were no disagreements between Mr. Pekarsky and the Company on any matter relating to the Company's operations, policies, or practices. There are no severance terms, deferred compensation or other financial arrangements between Mr. Pekarsky and the Company. The Company appointed Ms. Charlotte Xi as interim chief financial officer effective Sept. 13, 2013. Ms. Xi will be the principal financial and accounting officer for the Company. Ms. Xi will serve at-will and her compensation has yet to be determined. Ms. Xi has spent the past six and half years at Canadian Solar Inc. (CSI) with progressive responsibilities. She served as Senior Vice President of Global Operations at CSI from November 2009 to June 2013. Prior to that, she was the Vice President of Finance, and later Vice President of Overseas Operations. She was also compliance officer and corporate controller of CSI since February 2007. Prior to joining CSI, Ms. Xi spent 18 years in the United States, obtaining her advanced education degrees and professional experience. Between 2004 and 2006, Ms. Xi was director of accounting and compliance at ARAMARK Corporation, a Fortune 500 company, and TV Guide Magazine in the United States, responsible for financial reporting and successfully implementing Sarbanes?Oxley compliance during the first year of its applicability. In addition to her corporate reporting experience, Ms. Xi spent eight years in manufacturing facilities with progressive job responsibilities from cost accountant to plant controller for the Saint?Gobain Corporation and Worthington?Armstrong Venture. Ms. Xi holds a bachelor's degree from the Shanghai Teachers University and MA and MBA degrees from the Midwestern State University in Texas. She is also a member of the AICPA and has been a Texas?licensed CPA since 1996. During the last fiscal year, Ms. Xi has not been a party to any transaction or any proposed transaction to which the Company is or was to be a party and in which Ms. Xi would have a direct or indirect interest. Ms. Xi has no family relationships with any director or executive officers of the Company, or with any persons nominated or chosen by the Company to become directors or executive officers. There is no material plan, contract or arrangement to which Ms. Xi is a party or in which she participates that is entered into or an material amendment in connection with the Company's appointment of Ms. Xi, or any grant or award to Ms. Xi or modification thereto, under any such plan, contract or arrangement in connection with the Company's appointment of Ms. Xi. About Solar Power Roseville, Cal.-based Solar Power, Inc., is a global solar energy facility ("SEF") developer offering its own brand of high- quality, low-cost distributed generation and utility-scale SEF development services. Primarily, the Company works directly with and for developers around the world who hold large portfolios of SEF projects for whom it serves as an engineering, procurement and construction contractor. The Company also performs as an independent, turnkey SEF developer for one-off distributed generation and utility-scale SEFs. Solar Power disclosed a net loss of $25.42 million in 2012, as compared with net income of $1.60 million in 2011. The Company's balance sheet at June 30, 2013, showed $141.13 million in total assets, $124.38 million in total liabilities and $16.75 million in total stockholders' equity. Crowe Horwath LLP, in San Francisco, 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 current year net loss of $25.4 million, has an accumulated deficit of $23.8 million, has experienced a significant reduction in working capital, has past due related party accounts payable and material adverse change and default clauses in certain debt facilities under which the banks can declare amounts immediately due and payable. Additionally, the Company's parent company LDK Solar Co., Ltd, has experienced financial difficulties, which among other items, has caused delays in project financing. These matters raise substantial doubt about the Company's ability to continue as a going concern. SOUTHERN FILM: Sept. 30 Sale of Assets Approved, Bids Due Sept. 23 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of North Carolina authorized Southern Film Extruders, Inc., to sell its assets in an auction led by Epsilon Plastics, Inc. The assets for sale include the Debtor's real property and manufacturing facilities located at 2327 West English Road, High Point, Guilford County, North Carolina, and substantially all of Debtor's personal property. Epsilon has offered to pay (i) $7,372,109 -- the sum of all principal, interest, fees, costs and expenses owed by the Debtor to Epsilon as of the Closing date under the secured credit facilities; plus (ii) $1,500,000. The bid deadline is set at 4 p.m. on Sept. 23, 2013. The auction will take place at 12 noon on Sept. 30, at the 101 South Edgeworth Street, Greensboro, North Carolina, or such other place as may be ordered by the Bankruptcy Court. A bidder dispute hearing will be held on Sept. 25. The Court will convene a final hearing on Oct. 1, at 9:30 a.m., to confirm the auction sale. The Court also authorized the payment of a breakup fee in the amount of $350,000 in the event the purchased assets are sold at the auction and Epsilon is not the highest bidder. The Official Committee of Unsecured Creditors, by and through its attorney Hendren & Malone, PLLC, objected to the emergency motion unless sufficient modifications are made by the Debtor that addressed the issues raised in the objection. UCC objected to Epsilon having the ability to credit bid a deposit of $850,000. UCC also noted that there was an absence of a transferable lease for the two parcels of real property and related improvements. UCC also said that the proposed break up fee must be limited to actual, out of-pocket expenses from the petition date, to be capped at $100,000. About Southern Film Southern Film Extruders, Inc., is the business of developing and manufacturing specialized film used in packaging various products. It has two plants in High Point, North Carolina. On July 25, 2013, an involuntary Chapter 7 petition was filed against Southern Film. In response thereto, Southern Film filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 13-11026) on Aug. 4, 2013. The Debtor experienced severe cash flow issues as a result of the loss of its largest customer prompted the bankruptcy filing. John L. Barnes, Jr., signed the Chapter 11 petition as vice president. The Debtor disclosed $16,276,001 in assets and $16,987,844 in liabilities as of the Chapter 11 filing. Charles M. Ivey, III, Esq., at Ivey, McClellan, Gatton, & Talcott, LLP, represents the Debtor as counsel. SOUTHERN FILM: Sept. 17 Hearing on Hendren & Malone as Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of North Carolina will convene a hearing on Sept. 17, 2013, at 9:30 a.m., to consider the approval of employment of Jason L. Hendren, Esq., Rebecca F. Redwine, Esq., at Hendren & Malone, PLLC, as counsel for the Official Committee of Unsecured Creditors in the Chapter 11 case of Southern Film Extruders, Inc. Objections, if any, are due Sept. 8. The hourly rates of the firm's personnel are: Attorney Hourly Rate -------- ----------- Jason L. Hendren $350 Rebecca F. Redwine $265 Paralegal Hourly Rate --------- ----------- Jenny Gorman $105 Terri Womble $105 Brandy Baul $90 To the best of the Committee's knowledge, Hendren Malone is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. On Aug. 13, the U.S. Trustee appointed these creditors in the official committee of unsecured creditors in the Chapter 11 cases of Southern Film Extruders, Inc.: * Westlake Polymers, LLC * ExxonMobil Chemical Co. * Bradco Transporation About Southern Film Southern Film Extruders, Inc., is the business of developing and manufacturing specialized film used in packaging various products. It has two plants in High Point, North Carolina. On July 25, 2013, an involuntary Chapter 7 petition was filed against Southern Film. In response thereto, Southern Film filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 13-11026) on Aug. 4, 2013. The Debtor experienced severe cash flow issues as a result of the loss of its largest customer prompted the bankruptcy filing. John L. Barnes, Jr., signed the Chapter 11 petition as vice president. The Debtor disclosed $16,276,001 in assets and $16,987,844 in liabilities as of the Chapter 11 filing. Charles M. Ivey, III, Esq., at Ivey, McClellan, Gatton, & Talcott, LLP, represents the Debtor as counsel. SPIRE CORP: Maturity of Silicon Valley Loan Extended to Oct. 29 --------------------------------------------------------------- Spire Corporation and Silicon Valley Bank entered into (i) the Sixth Loan Modification Agreement amending certain terms of the Second Amended and Restated Loan and Security Agreement dated as of Nov. 16, 2009, and (ii) the Sixth Loan Modification Agreement amending certain terms of the Amended and Restated Export-Import Bank Loan and Security Agreement dated as of Nov. 16, 2009. Pursuant to the terms of the Sixth Loan Modification Agreements, the Company and the Bank agreed to extend the maturity date of the Revolving Credit Facility and the Ex-Im Facility to Oct. 29, 2013. About Spire Corp Bedford, Massachusetts-based Spire Corporation currently develops, manufactures and markets customized turn-key solutions for the solar industry, including individual pieces of manufacturing equipment and full turn-key lines for cell and module production and testing. McGladrey LLP, in Boston, Massachusetts, expressed substantial doubt about Spire Corporation's ability to continue as a going concern. The independent auditors noted that during the year ended Dec. 31, 2012, the Company incurred a loss from continuing operations of $4.8 million and continuing operating cash flows used $6.9 million in cash. In addition, the independent auditors noted that the Company's credit agreements are due to expire on June 29, 2013. The Company reported a net loss of $1.9 million on total net sales and revenues of $22.1 million in 2012, compared with a net loss of $1.5 million on total net sales of $58.7 million in 2011. As of June 30, 2013, the Company had $13.46 million in total assets, $10.15 million in total liabilities and $3.31 million in total stockholders' equity. SR REAL ESTATE: Seeks to Employ Foley Lardner as General Counsel ---------------------------------------------------------------- SR Real Estate Holdings, LLC, seeks authority from the U.S. Bankruptcy Court for the Northern District of California to employ Foley & Lardner LLP as its general bankruptcy counsel, nunc pro tunc to the Petition Date. The firm will be paid based on its customary hourly rates. The rates for some of the attorneys and paraprofessionals expected to be primarily involved in the case are: Attorney E-mail Hourly Rate -------- ------ ----------- Victor A. Vilaplana vavilaplana@foley.com $700.00 Dawn Messick dmessick@foley.com $510.00 Jennifer Pinder jpinder@foley.com $495.00 Matthew Riopelle mriopelle@foley.com $455.00 Marshall Hogan mhogan@foley.com $335.00 Paraprofessional Hourly Rate ---------------- ----------- Kerry Farrar $225.00 The Firm will be reimbursed for its actual, necessary expenses incurred. Prior to the Petition Date, the Debtor provided the Firm a $350,000 retainer for prepetition and postpetition bankruptcy planning and advice. At the time of the filing, after the deduction of $32,500 in fees and the filing fee in the amount of $1,213, the Firm had on deposit a retainer of $316,287.00 Mr. Vilaplana assures the Court that Foley & Lardner is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtors' Proposed Counsel may be reached at: FOLEY & LARDNER LLP 402 W. Broadway, Suite 2100 San Diego, CA 92101-3542 Telephone: 619-234-6655 Facsimile: 619-234-3510 About SR Real Estate SR Real Estate Holdings, LLC, owner of 14 parcels of real property totaling 6,400 acres straddling Santa Cruz and Santa Clara counties, filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-54471) in San Jose, California, on Aug. 20, 2013. The Debtor estimated that its assets total at least $10 million and liabilities are at least $500 million. Victor A. Vilaplana, Esq., at Foley and Lardner, serves as counsel to the Debtor. This is the third bankruptcy filed with respect to the property. The prior owner, Sargent Ranch, LLC, filed Chapter 11 cases in January 2010 (Bankr. S.D. Cal. Case No. 10-00046-PB) and November 2011 (Bankr. S.D. Cal. Case No. 11-18853). The second bankruptcy case was dismissed in February 2012. SR REAL ESTATE: Files Schedules of Assets and Liabilities --------------------------------------------------------- SR Real Estate Holdings, LLC, filed with the U.S. Bankruptcy Court for the Northern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $15,000,000.00 B. Personal Property 16,593.35 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $548,891,454.69 E. Creditors Holding Unsecured Priority Claims 0 F. Creditors Holding Unsecured Non-priority Claims 16,484.00 -------------- --------------- TOTAL $15,016,593.35 $548,907,938.69 About SR Real Estate SR Real Estate Holdings, LLC, owner of 14 parcels of real property totaling 6,400 acres straddling Santa Cruz and Santa Clara counties, filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-54471) in San Jose, California, on Aug. 20, 2013. The Debtor estimated that its assets total at least $10 million and liabilities are at least $500 million. Victor A. Vilaplana, Esq., at Foley and Lardner, serves as counsel to the Debtor. This is the third bankruptcy filed with respect to the property. The prior owner, Sargent Ranch, LLC, filed Chapter 11 cases in January 2010 (Bankr. S.D. Cal. Case No. 10-00046-PB) and November 2011 (Bankr. S.D. Cal. Case No. 11-18853). The second bankruptcy case was dismissed in February 2012. STANDARD DRILLING: Incurs $913K Net Loss in Second Quarter ---------------------------------------------------------- Standard Drilling, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $912,865 on $228,175 of net revenues for three months ended June 30, 2013, compared with a net loss of $630,802 on $71,641 of net revenues for the same period last year. The Company reported a net loss of $2.04 million on $416,937 of net revenues for the six months ended June 30, 2013, compared with a net loss of $1.42 million on $94,676 of net revenues for the comparable period of 2012. "Our net loss increased to $912,865 from $630,802, for the three month period ended June 30, 2013, compared to June 30, 2012, and to $2,039,983 from $1,416,046 for the six month period ended June 30, 2013, compared to June 30, 2012. The significant increase in operating loss and net loss compared to the prior year period is primarily a result of increase in administrative costs from the acquisition and addition of two new entities EQmentor and MCC International and the additional costs involved in public company compliance costs. The Company's balance sheet at June 30, 2013, showed $4.24 million in total assets, $3.92 million in total liabilities, and stockholders' equity of $317,250. "The Company has suffered losses from operations and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/C9WJlR San Francisco, Calif.-based Standard Drilling, Inc., was originally formed as a Nevada corporation on July 27, 2001, under the name Online Holdings, Inc. Subsequently, on Sept. 1, 2006, pursuant to an Agreement and Plan of Merger dated July 24, 2006, by and among our company, Standard Drilling Acquisition Co., a Delaware corporation, and Standard Drilling, Inc., a Delaware corporation ("Standard Drilling Delaware"), Standard Drilling Acquisition was merged with and into Standard Drilling Delaware, and Standard Drilling Delaware became the Company's wholly-owned subsidiary. As a result of the merger, the Company, which previously had no material operations, acquired the business of Standard Drilling Delaware. In conjunction with the merger, the Company changed its name to Standard Drilling, Inc. On Feb. 1, 2013, the Company entered into an Acquisition and Share Exchange Agreement by and among (i) Standard Drilling, (ii) EFactor, and (iii) certain shareholders of EFactor, pursuant to which 20 holders of approximately 70% of the outstanding common stock of EFactor transferred to the Company 6,580,250 of the common stock of EFactor in exchange for the issuance of 50,000,000 shares of the Company's common stock and 5,000,000 shares of a yet to be created series of preferred stock to be entitled the "Series A Convertible Preferred Stock". This transaction closed on Feb. 11, 2013. EFactor was deemed to be the accounting acquirer in this transaction and as a result this transaction was accounted for as reverse merger. EFactor was incorporated in the state of Delaware on Oct. 30, 2007, and provides full-featured social network for entrepreneurs. EFactor provides a platform that enables access to a network of contacts, registration for networking events, advisory consulting, various business tools and a broad range of services and information. STOCKTON PUBLIC: Fitch Raises Revenue Bonds Ratings From 'BB+' -------------------------------------------------------------- Fitch Ratings upgrades the following Stockton Public Financing Authority, CA (the authority) obligations: -- $55 million variable rate demand water revenue bonds, series 2010A (Delta Water Supply Project) to 'BBB' from 'BB+'; -- $24.23 million 2005 water revenue bonds, series A (Water System Capital Improvement Projects) to 'BBB' from 'BB+'; -- $15.54 million water revenue bonds, series 2009A (Delta Water Supply Project) to 'BBB-' from 'BB+'; -- $154.55 million water revenue bonds, series 2009B (taxable Build America Bonds) (Delta Water Supply Project) to 'BBB-' from 'BB+'. The series 2010A bonds will be converted to fixed rate from variable rate with pricing expected on or around Sept. 24, 2013. The bonds were originally issued to fund the Delta Water Supply Project, which has been completed. The bonds are removed from Rating Watch Negative and a Stable Rating Outlook is assigned. Security The 2005 series A and series 2010A bonds are secured by installment payments from the City of Stockton to the authority, payable from a senior lien pledge of net revenues of the city's water system (the system). The series 2009A and 2009B bonds are secured by net system revenues after payment of senior lien obligations. The authority has assigned its rights to receive installment payments from the city to the trustee for the benefit of bondholders. Key Rating Drivers Upgrade/Stable Outlook Reflect Lowered Risk: The upgrade and Stable Outlook reflect the system's lower risk profile stemming from the planned conversion of the 2010A bonds to fixed rate from variable rate, which would eliminate risks associated with the letter of credit (LOC). The system's debt profile will be entirely fixed rate after the conversion. Uncertainty Remains: Fitch remains concerned about potential event risks that may arise during the city's bankruptcy period that could negatively impact the financial health of the system or the ability of the system to make full and timely payment to bondholders. However, the general protection of water utility revenues from bankruptcy discussions to date and Fitch's general view of the special revenue status of pledged revenues tend to mitigate these concerns. Adequate Financial Profile: System financial performance appears adequate for the current and forecast period assuming the upper limit interest rate scenario for the converted bonds and no additional rate increases beyond inflationary adjustments. Elevated Leverage But Manageable Capital: The system maintains a high debt burden coupled with an extended amortization schedule. However, given the recent completion of the Delta Water Supply Project (DWSP), capital needs are more limited going forward. Weak Service Area: The agricultural based service area has been significantly affected by weak economic and housing conditions. Rating Sensitivities Developments Affecting The System: Future actions by the city and developing external pressures, including bankruptcy court rulings, could adversely impact system operations and result in rapid and significant credit deterioration. Credit Profile The system serves about 48,492 customers representing about 55% of the Stockton MSA, with the California Water Services Company serving most of the remainder. The customer base is 95% residential, with the top 10 customers comprising just 3% of revenues. With the completion of the DWSP in 2012, the system's primary source of supply is the San Joaquin River, supplemented with water purchased from the Stockton East Water District (SEWD) and Woodbridge Irrigation District (WID), as well as groundwater sources. Interest Rate, Renewal, And Acceleration Risks Removed The upgrade reflects the anticipated elimination of certain risks as a result of the planned conversion of the series 2010A bonds to fixed from variable rate. These risks include acceleration by the LOC provider (Union Bank), elevated reset rates, renewal of the letter of credit, and potential bank bonds associated with the 2010A bonds. The city council has set a not to exceed interest rate of 6.75% for the conversion. Thus, if the market rate is above that amount, the conversion will not occur as planned. In that event, management has indicated it would accept an extension of the LOC offered by Union Bank requiring $5 million principal pay down. However, it is Fitch's view that the actions taken to date will eventually result in a conversion to fixed rate. Union Bank's offer to extend the LOC tends to support the city's ability to ultimately convert the bonds without acceleration. Remaining Risks Related to City Bankruptcy The system is still exposed to other risks, including, but not limited to, treatment of pledged revenues and allowable system operating and maintenance expenses under a plan of adjustment to be proposed by the city in fall of 2013. However, as noted, the general protection of water utility revenues from bankruptcy discussions to date and Fitch's general view of the special revenue status of pledged revenues tend to mitigate these concerns. The city's actions will continue to have some direct bearing on the system's credit quality. Evidence or expectation of deteriorating system performance or increased system exposure to various risks would likely lead to deterioration of system credit quality, and such downward rating action(s) may be acute and rapid. City General Fund Drives Bankruptcy The city's general fund operations have faced severe financial weakness in recent years as a result of escalating budgetary costs coupled with deteriorating revenues stemming from a significant economic downturn within the city. As a result, the city initiated a neutral evaluation process with creditors in February 2012 for the purpose of obtaining concessions that would allow the city to balance its fiscal 2013 budget. The confidential mediation process concluded on June 25, 2012, as scheduled, without providing sufficient cost reductions to balance the city's fiscal 2013 budget. As a result, the city council passed various resolutions at its June 26, 2012, meeting which included the adoption of a pendency plan (the plan), and on June 28, 2012, the city formally filed for Chapter 9 bankruptcy protection. After a trial held in March 2013 to determine the city's bankruptcy eligibility, the judge approved the city's bankruptcy eligibility on April 1, 2013. The city expects to file a plan of adjustment in fall 2013. Water System Remains Solvent Despite the city's general fund fiscal problems, the system continues to perform largely as expected relative to projections at the time of the issuance of the 2010A bonds. For fiscal 2011 total debt service coverage (DSC) on system bonds equaled 1.15x, with the federal interest rate subsidy for related to the series 2009B Build America Bonds (BABs) treated as revenue as opposed to an offset to debt service. For the same period, the system maintained strong liquidity at 779 days cash while surplus net revenues covered depreciation expenses by a reasonable 89%. Unaudited fiscal 2012 results are largely as expected. For the year total DSC rose to 1.5x when treating the BABs subsidy as revenues and deducting capitalized interest from debt service costs. The city also reports that unaudited cash balances were little changed from fiscal 2011, with the system maintaining around $36 million in unrestricted cash as well as slightly more than $8 million in the system rate stabilization fund (RSF). Fitch expects that the results of the fiscal 2012 audit for the water fund to be released shortly will not be materially different from unaudited results. Fiscal 2013 financial results are also forecasted to remain relatively favorable based on the plan adopted by the city council which included implementation of a 10% rate increase - the final year of a package that was approved by the city council in 2009. Total DSC for fiscal 2013 as indicated in fiscal 2014 budget is estimated at 1.2x. The utility utilized $2.5 million in rate stabilization funds in fiscal 2013 versus expected $3.05 million leaving a balance of $5.6 million at fiscal year-end. Adequate Financial Performance In Forecast Period The fiscal 2014 budget produces coverage of 1.14x assuming an 8.7% cut in the federal BABs subsidy due to sequestration as well as the use of $3.4 million in rate stabilization funds. Coverage through fiscal 2020 assuming conversion of the bonds at a 6.75% interest rate ranges from 1.08x to 1.3x and coverage less connection fees, which are forecast at more recent actual levels considered reasonable by Fitch, ranges from 1.02x to 1.2x. The forecast assumes no additional rate increases given the seemingly low political will and customer support for such hikes. It also assumes draws on the rate stabilization fund of between $1.8 million and $3.4 million per year, with annual replenishment. As such, the rate stabilization fund year-end balance remains at least $4.7 million through fiscal 2020 in the pro forma. Overall cash levels are projected to decline from about $31 million, equal to about 500 days cash, in fiscal 2013 to $9.9 million, or about 128 days, in fiscal 2019. Elevated Debt Profile But Manageable Capital Needs The system's debt profile is weak as a result of borrowing for historical growth-related projects as well as DWSP costs. Financing of the DWSP increased the utilities leverage with debt to net plant of 92%. Overall, debt per customer and debt per capita are around 3x the national median. While improvement in the system's capital structure is expected over time, debt levels will continue to be a long-term concern as only 50% of principal amortizes within 20 years. Free cash to depreciation is currently sound at 156%, but expected to decline due to increased debt service costs. However, the utility has manageable capital needs, expecting to cash-fund between $1.8 million and $5.4 million per year through fiscal 2018. Water Supply Enhanced With Delta Project The DWSP allows the district to pump and treat 33,600 acre-feet (af) of water from the San Joaquin River. With the completion of the DWSP, the district has been able to reduce its treated water purchases from the Stockton East Water District to 17,500 af from 27,000 af under a take-or-pay contract. The DWSP's capacity of 30 million gallons per day (mgd) is sufficient through about 2025. Further, the utility can double the capacity of the DWSP to 60 mgd relatively easily and ultimately to 160 mgd with major investment. Weak Service Area The Stockton area was among the hardest hit in the recent recession as evidenced by high unemployment rates and severe declines in housing prices. Located in the most productive agricultural region of the country, it has historically posted elevated unemployment. However, June 2013 unemployment of 14.6% was down from 18% year over year and much improved from the high of 20.7% in 2010 due to strong employment growth. Median household incomes remain below state and national averages. Large employers include government, food production, and medical centers. According to Zillow, Stockton housing prices are up 26.7% year over year as of June 2013, but still down 60% from their peak in 2005. STREAMTRACK INC: Cancels Potential $2.5-Mil. Royalty Liability -------------------------------------------------------------- StreamTrack, Inc., has executed a settlement agreement with Lenco Mobile, Inc., the former owner of the Company's proprietary RadioloyaltyTM music streaming and internet radio monetization platform. The following is a summary of the key attributes of the transaction. 1. StreamTrack's liability to Lenco for any earn-out consideration associated with the assets the Company purchased from Lenco in December 2011 is cancelled in full. StreamTrack will write off the current full value of the contingent royalty payable of approximately $820,000. 2. StreamTrack will waive its claim to collect on approximately $130,000 in accounts receivable owed from Lenco, of which an $80,000 reserve was previously recorded against. 3. StreamTrack will transfer to Lenco certain assets included in the December 2011 transaction that have remained dormant and not utilized by the Company since December 2011. The assets were previously recorded on StreamTrack's books with no value. Michael Hill, chief executive officer of StreamTrack, stated, "The settlement with Lenco removes a significant liability from our balance sheet that could have ultimately totaled $2,500,000. The assets we relinquished have little value to our core business but have particular value to Lenco. We are pleased to move forward with our business without the overhang of this large potential royalty liability." Santa Barbara, California-based SteamTrack, Inc., is a digital media and technology services company. The Company provides audio and video streaming and advertising services through the RadioLoyalty(TM) Platform to over a global group of over 1,500 internet and terrestrial radio stations and other broadcast content providers. The Company' balance sheet at May 31, 2013, showed $1.2 million in total assets, $4 million in total liabilities, and a stockholders' deficit of $2.8 million. SUPERCONDUCTOR TECHNOLOGIES: Incurs $2.4MM Net Loss in 2nd Quarter ------------------------------------------------------------------ Superconductor Technologies Inc. filed its quarterly report on Form 10-q, reporting a net loss of $2.44 million on $555,000 of revenues for the three months ended June 29, 2013, compared with a net loss of $3.42 million on $596,000 of revenues for the three months ended June 30, 2012. The Company reported a net loss of $4.84 million on $1.33 million of revenues for the six months ended June 29, 2013, compared with a net loss of $6.41 million on $995,000 of revenues for the nine months ended June 30, 2012. The Company's balance sheet at June 29, 2013, showed $9.46 million in total assets, $1.77 million in total liabilities, and stockholders' equity of $7.69 million. "For the first six months of 2013, we incurred a net loss of $4.8 million and had negative cash flows from operations of $3.8 million. In the full 2012 year, we incurred a net loss of $10.9 million and had negative cash flows from operations of $8.2 million. Our independent registered public accounting firm has included in their audit reports for 2012 and 2011 an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. "At June 29, 2013, we had $1.6 million in cash and cash equivalents. At that time, our cash resources were not sufficient to fund our planned operations for the next twelve months. Subsequently, in an underwritten public offering in early August 2013, we raised net proceeds of $10.9 million from the sale of units of common stock and warrants, and now expect our cash resources to be sufficient to fund our planned operations through June 2014." A copy of the Form 10-Q is available at http://is.gd/JiYaKm Austin, Tex.-based Superconductor Technologies Inc. (Nasdaq: SCON) operates in a single business segment, the research, development, manufacture and marketing of high performance products used in cellular base stations to maximize the performance of wireless telecommunications networks by improving the quality of uplink signals from mobile wireless devices. * * * As reported in the TCR on March 15, 2013, Marcum LLP, in Los Angeles, California, in its report on Superconductor Technologies, Inc.'s consolidated financial statements for the fiscal year ended Dec. 31, 2012, cited that the Company has incurred significant net losses since its inception, has an accumulated deficit of $261,944,000, and expects to incur substantial additional losses and costs to sustain operations. SURGICAL CARE: Moody's Keeps B2 CFR over New Public Equity Offer ---------------------------------------------------------------- Moody's Investors Service said that Surgical Care Affiliates, LLC's filing of a Form S-1 with the SEC on September 5, 2013 indicating the company's intentions of making a public equity offering, is a credit positive. The principal methodology used in rating Surgical Care was the Global Healthcare Service Providers Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Surgical Care Affiliates is headquartered in Birmingham, Alabama, operates one of the largest networks of surgical facilities in the US, comprised of 144 ambulatory surgery centers (ASCs) and four surgical hospitals at December 31, 2012. On April 29, 2013, Moody's assigned a B1 rating to Surgical Care's proposed $291 million senior secured term loan B add-on due 2018. In addition, Moody's lowered the ratings on its exiting senior secured credit facilities to B1 from Ba3. Furthermore, the Corporate Family Rating at B2, the Probability of Default Rating at B2-PD and the Speculative Grade Liquidity Rating at SGL-2 were affirmed. T3 MOTION: Adam Benowitz Held 11.2% Equity Stake at Aug. 16 ----------------------------------------------------------- Adam Benowitz and his affiliates disclosed in an amended Schedule 13D filing with the U.S. Securities and Exchange Commission that as of Aug. 16, 2013, they beneficially owned 2,613,641 shares of common stock of T3 Motion, Inc., representing 11.2 percent of the shares outstanding. Mr. Benowitz reported beneficial ownership of 5,147,707 shares of common stock of T3 Motion representing 31.3 percent of the shares outstanding as of May 29, 2013. A copy of the regulatory filing is available for free at: http://is.gd/9nnwii About T3 Motion Costa Mesa, Calif.-based T3 Motion, Inc., develops and manufactures T3 Series vehicles, which are electric three-wheel stand-up vehicles that are directly targeted to the public safety and private security markets. T3 Motion reported a net loss of $21.52 million on $4.51 million of net revenues for the year ended Dec. 31, 2012, as compared with a net loss of $5.50 million on $5.29 million of net revenues during the prior year. The Company's balance sheet at March 31, 2013, showed $3.07 million in total assets, $19.63 million in total liabilities, all current, and a $16.55 million total stockholders' deficit. "The Company has incurred significant operating losses and has used substantial amounts of working capital in its operations since its inception (March 16, 2006). Further, at March 31, 2013, the Company had an accumulated deficit of $(76,980,775) and used cash in operations of $(1,614,252) for the three months ended March 31, 2013. These factors raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time," according to the Company's Form 10-Q for the period ended March 31, 2013. TELIK INC: Incurs $1.4-Mil. Net Loss in Second Quarter ------------------------------------------------------ Telik, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.39 million for the three months ended June 30, 2013, compared with a net loss of $2.05 million for the same period last year. The Company reported a net loss of $3.32 million for the six months ended June 30, 2013, compared with a net loss of $4.33 million for the corresponding period in 2012. "To date, we have not obtained regulatory approval for the commercial sale of any products, and we have not received any revenue from the commercial sale of products." The Company's balance sheet at June 30, 2013, showed $4.78 million in total assets, $1.25 million in total current liabilities, and stockholders' equity of $3.53 million. "We have incurred significant losses from operations and expect to continue to incur losses for the foreseeable future. In the event we are unable to obtain sufficient additional funding in the next quarter to enable us to commence a Phase 3 registration trial of TELINTRA, we will be required to focus on other strategic alternatives including the further restructuring of our operations to conserve resources, the sale of company assets, in whole or in part, ceasing operations, or some other arrangement through which the value of our assets to stockholders could be optimized. These conditions raise a substantial doubt about our ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/zIGllD Palo Alto, Calif.-based Telik, Inc. (Nasdaq: TELK) is a clinical stage drug development company focused on discovering and developing small molecule drugs to treat cancer. The Company's most advanced drug candidate is Telintra(R), a modified glutathione analog intended for the treatment of hematologic disorders including myelodysplastic syndrome; followed by Telcyta(R), a cancer activated prodrug for the treatment of a variety of cancers. Telik's product candidates were discovered using its proprietary drug discovery technology, TRAP(R), which enables the rapid and efficient discovery of small molecule drug candidates. TITAN PHARMACEUTICALS: Wants to Discuss Probuphine with FDA ----------------------------------------------------------- Titan Pharmaceuticals, Inc., has submitted a Type B meeting request to the U.S. Food and Drug Administration (FDA) to discuss Probuphine(R), the Company's investigational subdermal implant designed to deliver continuous, blood levels of buprenorphine for six months following a single treatment. The goal of this meeting is to understand more fully the issues raised in the April 2013 Complete Response Letter (CRL) to the New Drug Application (NDA) for Probuphine for the maintenance treatment of opioid dependence in adults, review and discuss the available data from the Probuphine studies conducted to date and gain further clarity regarding the regulatory path forward for Probuphine. In accordance with FDA guidance that establishes performance goals for meeting requests, Titan expects to learn within 21 days whether the meeting request will be granted and, if the meeting is granted, expects to have a meeting scheduled within 60 days. Titan and its partner, Braeburn Pharmaceuticals, which has licensed the exclusive rights to commercialize Probuphine in the U.S. and Canada, continue to work closely with regulatory counsel and a team of expert advisors to systematically evaluate the options available to address the concerns identified by the FDA in the CRL. About Titan Pharmaceuticals South San Francisco, California-based Titan Pharmaceuticals is a biopharmaceutical company developing proprietary therapeutics primarily for the treatment of central nervous system disorders. The Company's balance sheet at March 31, 2013, the Company's balance sheet showed $23.53 million in total assets, $26.58 million in total liabilities and a $3.04 million total stockholders' deficit. Titan Pharmaceuticals incurred a net loss applicable to common stockholders of $15.18 million in 2012, as compared with a net loss applicable to common stockholders of $15.20 million in 2011. TLO LLC: Seeks Further Extension of Exclusive Periods ----------------------------------------------------- TLO, LLC, asks the U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach Division, to further extend the time within which only the Debtor may file a plan to Nov. 5, 2013, and the time within which only the Debtor may solicit acceptances of that plan to Jan. 3, 2014. The Claims Bar Date expired on Sept. 3, and the Debtor will need to file objections to some of the filed claims. Additional time is needed so that claims can be reviewed, analyzed and evaluated and a plan of reorganization formulated, Alvin S. Goldstein, Esq., at FURR AND COHEN, P.A., in Boca Raton, Florida, tells the Court. About TLO LLC TLO LLC, a provider of risk-mitigation services, filed a petition for Chapter 11 reorganization (Bankr. S.D. Fla. Case No. 13-bk20853) on May 9, 2013, in West Palm Beach, Florida, near the company's headquarters in Boca Raton. The petition was signed by E. Desiree Asher as CEO. Judge Paul G. Hyman, Jr., presides over the case. Robert C. Furr, Esq., and Alvin S. Goldstein, Esq., at Furr & Cohen, serve as the Debtor's counsel. Bayshore Partners, LLC is the Debtor's investment banker. Thomas Santoro and GlassRatner Advisory & Capital Group, LLC are the Debtor's financial advisors. Paul J. Battista, Esq., and Mariaelena Gayo-Guitian, Esq., at Genovese, Joblove & Battista, P.A., represent the Official Committee of Unsecured Creditors as counsel. The Debtor disclosed assets of $46.6 million and liabilities of $109.9 million, including $93.4 million in secured claims. The principal lender is Technology Investors Inc., owed $89 million. TII is owned by the estate of Hank Asher, the company's primary owner who died this year. There is $4.6 million secured by computer equipment. TNI BIOTECH: Incurs $24.7-Mil. Net Loss in Second Quarter --------------------------------------------------------- TNI BioTech, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $24.68 million for the three months ended June 30, 2013, compared with a net loss of $17,115 for the same period last year. The Company reported a net loss of $39.37 million for the six months ended June 30, 2013, compared with a net loss of $28,068 for the corresponding period of 2012. "We had no revenues from operations for the period ending June 30, 2013, and for the years ended Dec. 31, 2012, and 2011. We do not anticipate having any significant future revenues until we have sufficiently funded operations." The Company's balance sheet at June 30, 2013, showed $20.26 million in total assets, $2.34 million in total liabilities, and stockholders' equity of $17.92 million. "The Company has incurred significant net losses since inception and has relied on its ability to fund its operations through private equity financings. Management expects operating losses and negative cash flows to continue at more significant levels in the future. As the Company continues to incur losses, transition to profitability is dependent upon the successful development, approval, and commercialization of its product candidate and achieving a level of revenues adequate to support the Company's cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings, and may seek additional capital through arrangements with strategic partners or from other sources. Based on the Company's operating plan, existing working capital at June 30, 2013, was not sufficient to meet the cash requirements to fund planned operations through June 30, 2014, without additional sources of cash. These conditions 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/AJ8lGT TNI BioTech, Inc., was initially incorporated in Florida on Dec. 2, 1993, as Resorts Club International, Inc. It was formed to manage and market golf course properties in resort markets throughout the United States. Galliano International Ltd. ("Galliano") was incorporated in Delaware on June 27, 1998. The Company began trading in November 1999 through the filing of a 15C-211. On Nov. 3, 2004, Galliano merged with Resorts Club International, Inc. Resorts Club was the surviving corporation. On Aug. 10, 2010, Resorts Club changed its name to pH Environmental Inc. On April 23, 2012, pH Environmental completed a name change to TNI BioTech, Inc., and on April 24, 2012, pH Environmental executed a share exchange agreement for the acquisition of all of the outstanding shares of TNI BioTech, Inc. TNI BioTech is a biopharmaceutical company focused on developing and commercializing therapeutics to treat cancer, HIV/AIDS and autoimmune diseases by combating these chronic and often life- threatening diseases through the activation and rebalancing of the body's immune system. The Company has been developing active and adoptive forms of immunotherapies through the acquisition of patents, INDs (investigational new drug) and clinical data and all proprietary technical information, know-how, procedures, protocols, methods, prototypes, designs, data and reports, which are not readily available to others through public means, and which are owned, generated or developed through experiments or testing by Dr. Plotnikoff, Professor Shan, Dr. Bernard Bihari, Dr. Ian Zagon, Dr. Jill Smith, Dr. Patricia J. McLaughlin and Moshe Rogosnitzky. The Company currently has offices in Bethesda, Maryland and Orlando, Florida. TRIAD GUARANTY: Ill. Regulator Slams Bid to Rush $780MM Tax Fight ----------------------------------------------------------------- Law360 reported that the state regulator holding subsidiaries of bankrupt mortgage insurance holding company Triad Guaranty Inc. in rehabilitation blasted on Sept. 5 the debtor's request to fast- track a fight over about $780 million in tax assets, arguing the proposed timetable is too truncated and would "short-circuit" federal statutory protections. According to the report, Andrew Boron, director of the Illinois Department of Insurance, objected in filing in the U.S. Bankruptcy Court for the District of Delaware to the scheduling proposal. About Triad Guaranty Winston-Salem, N.C-based Triad Guaranty Inc. (OTC BB: TGIC) -- http://www.triadguaranty.com/-- is a holding company that historically provided private mortgage insurance coverage in the United States through its wholly-owned subsidiary, Triad Guaranty Insurance Corporation. TGIC is a nationwide mortgage insurer pursuing a run-off of its existing in-force book of business. In December 2012, the Company's mortgage insurer subsidiary, Triad Guaranty Insurance Corporation, was placed into rehabilitation, whereby the Illinois Department of Insurance was vested with possession and control over all of TGIC's assets and operations. On May 30, 2013, the magistrate judge for the U.S. District Court of the Middle District of North Carolina issued an order denying the Company's motion to dismiss a class action lawsuit against the company and two of its former officers. Shareholders filed the class action suit in 2009, claiming the company misled investors about poor financial results caused by improper underwriting procedures. Triad Guaranty Inc. filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-11452) on June 3, 2013. The Company estimated assets of at least $100 million and liabilities of less than $50,000. Attorneys at Womble Carlyle Sandridge & Rice, LLP, serve as counsel to the Debtor. The Debtor said in court filings that it has no significant operating activities, and has limited remaining cash and other assets on hand. The Debtor has been exploring various strategic alternatives, and will continue to do so from and after the Petition Date. The Debtor said that expenses primarily consist of legal fees, fees paid to its board, annual premiums for directors' and officers' liability insurance and general operating expenses. The expenses range from $100,000 to $500,000 per quarter. Unless the expenses are reduced, the Debtor expects to deplete all of its remaining cash by the end of 2013 or earlier. TRIUS THERAPEUTICS: Three Merger-Related Suits Consolidated ----------------------------------------------------------- The Court of Chancery of the State of Delaware, on Sept. 4, 2013, granted the requested consolidation of three actions as well as the appointment of co-lead counsel. In the lawsuits, the plaintiffs alleged that Trius Therapeutics and Cubist Pharmaceuticals, Inc., breached their fiduciary duties in connection with their proposed merger agreement. The plaintiffs filed a motion to consolidate the three actions (Beidler v. Stein, et al., Weeks v. TriusTherapeutics, Inc., et al., and Shifrin v. Stein, et al.) filed in the Court of Chancery of the State of Delaware between Aug. 9, 2013, and Aug. 14, 2013. Those actions were filed, respectively, by plaintiff David Beidler; plaintiffs John K. Weeks, Jr. and Lynn Weeks; and plaintiffs Norman Shifrin and Irmgard Kaufhold. Those stockholder plaintiffs also moved to have the law firms of Levi & Korsinsky, LLP; Pomerantz Grossman Hufford Dahlstrom & Gross LLP; and Rigrodsky & Long, P.A. appointed as co-lead counsel for the proposed class of Trius stockholders. As reported in the TCR on Aug. 7, 2013, Cubist and its wholly- owned subsidiary, BRGO Corporation, entered into an Agreement and Plan of Merger with Trius which was approved by the boards of directors of the companies. Pursuant to the Merger Agreement, BRGO will commence a tender offer to purchase all of the issued and outstanding shares of Trius common stock for (a) $13.50 per share in cash, plus (b) one non-transferrable contingent value right for each share of Trius common stock, which represents the contractual right to receive up to $2.00 per share upon the achievement of certain milestones. If successful, the Offer will be followed by a merger of BRGO with and into Trius. A copy of the regulatory filing is available for free at: http://is.gd/c3W6rV About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. Trius Therapeutics incurred a net loss of $53.92 million in 2012, a net loss of $18.25 million in 2011 and a $23.86 million net loss in 2010. As of June 30, 2013, the Company had $74.05 million in total assets, $19.37 million in total liabilities and $54.68 million in total stockholders' equity. VISUALANT INC: Issues 52.3 Million Series A Shares -------------------------------------------------- On June 10, 2013, Visualant entered into a Purchase Agreement, Warrants, Registration Rights Agreement and Voting Agreement with accredited investors. As part of the transaction which closed June 14, 2013, the Company issued to the investors Series A Warrants for 52,300,00 common shares at $0.15 per share and Series B Warrants for 52,300,000 common shares at $0.20 per share. If fully exercised, the warrants would provide the following liquidity (before fees) to fund the Company's operations: Series A Warrants - up to $7,845,000 and Series B Warrants - up to $10,460,000. Expiration of Ascendiant Line of Credit Transaction The Company entered into an equity line of credit or an "equity drawdown facility" with Ascendiant on June 17, 2011. Under the equity line of credit, the Company issued a total of 6,358,933 shares of common stock to Ascendiant for $483,141 or $.076 per share. This equity line of credit expired on Aug. 29, 2013. Legal Proceedings with Ascendiant On May 31, 2013, the Company exercised its option to purchase 4,000,000 Option Shares from Ascendiant and paid to Ascendiant the $300,000 purchase price. To date, Ascendiant has delivered only 2,284,525 of the 4,000,000 Option Shares purchased by the Company and has failed to deliver the remaining 1,715,475 Option Shares. On June 17, 2013, the Company filed a complaint against Ascendiant in the Orange County Superior Court of California (Case No. 30- 2013-00656770-CU-BC-CJC) for breach of contract, seeking damages, specific performance and injunctive relief. The matter is currently scheduled for hearing by the California Superior Court on Sept. 24, 2013. Voting Agreement Visualant, Inc., entered into a Purchase Agreement, Warrants, Registration Rights Agreement and Voting Agreement with accredited investors on June 10, 2013. In connection with and as a condition to the closing of the Transaction, the Investors obtained voting agreements from existing stockholders holding an aggregate of 38,359,633 shares of the Company's common stock. The voting agreements required those stockholders to vote their shares in favor of an increase in the number of the Company's authorized shares of common stock from 200,000,000 to 500,000,000 at the upcoming special meeting of stockholders. At the special meeting of stockholders held on Aug. 9, 2013, 69.9 percent of the Company's stockholders approved an increase in the number of authorized shares of common stock from 200,000,000 to 500,000,000 and authorized an amendment to the Company's articles of incorporation to reflect this change in share authorization. The voting agreements obtained by the Investors were not utilized at the special stockholders meeting since there were a sufficient number of stockholders present at the meeting, either in person or by proxy, who voted in favor of the increase in the Company's authorized shares of common stock. About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant incurred a net loss of $2.72 million for the year ended Sept. 30, 2012, compared with a net loss of $2.39 million for the same period during the prior year. The Company's balance sheet at June 30, 2013, showed $5.59 million in total assets, $7.32 million in total liabilities, $46,609 in noncontrolling interest and a $1.78 million total stockholders' deficit. PMB Helin Donovan, LLP, in Nov. 10, 2012, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has sustained a net loss from operations and has an accumulated deficit since inception which raise substantial doubt about the Company's ability to continue as a going concern. WALTER ENERGY: S&P Lowers Corporate Credit Rating to 'B-' --------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Birmingham, Ala.-based Walter Energy Inc. to 'B-' from 'B'. S&P also lowered the ratings on the existing senior secured debt to 'B' from 'B+' and the senior unsecured debt to 'CCC+' from 'B-'. S&P also removed all the ratings from CreditWatch, where they were placed with negative implications on June 20, 2013. The recovery rating on the secured facilities is '2', indicating S&P's expectation of substantial recovery in the event of a payment default. The recovery rating on the unsecured notes is '5', indicating a modest (10% to 30%) recovery in the event of a payment default. The downgrade and negative outlook reflects S&P's expectation that Walter Energy's leverage will be more than 10x in 2013 and is likely to remain well above 5x in 2014, with funds from operations (FFO) to total debt remaining less than 10% in both years, as the company continues to face low met coal prices. Prices have fallen significantly and have remained low in the wake of lower demand in Europe, slowing economic activity in China, and lack of operating disruptions among competitors (particularly in Australia, where floods in 2011 caused prices to spike). S&P currently do not expect significant improvement in the next 12 months as global economic activity remains sluggish and excess capacity has been slow to come off line. As a result, S&P expects that Walter's EBITDA will be about $200 million in 2013 and less than $400 million in 2015, resulting in very weak credit measures that are consistent with a "highly leveraged" financial risk profile. "The negative outlook reflects our view that market conditions will remain challenging during the next 12 months and that Walter Energy's leverage is likely to remain well above 5x and FFO to total debt less than 10% through 2014," said Standard & Poor's credit analyst Marie Shmuruk. S&P could lower its rating further if market conditions do not improve and prices remain low, causing the company to face liquidity issues, including the inability to repay or refinance its 2015 maturities. S&P could revise the outlook to stable if market conditions improve and the company is able to successfully refinance its term loan A and leverage begins to trend toward 5x and FFO to total debt above 10%. WALTER ENERGY: Bank Debt Trades at 5% Off ----------------------------------------- Participations in a syndicated loan under which Walter Energy Inc is a borrower traded in the secondary market at 94.46 cents-on- the-dollar during the week ended Friday, September 6, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents an increase of 0.72 percentage points from the previous week, The Journal relates. Walter Energy pays 575 basis points above LIBOR to borrow under the facility. The bank loan matures on March 14, 2018. The bank debt carries Moody's B2 rating and Standard & Poor's B+ rating. The loan is one of the biggest gainers and losers among 249 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Walter Energy, Inc., headquartered in Birmingham, Alabama, is primarily a metallurgical coal producer which also produces metallurgical coke, steam and industrial coal, and natural gas. The company acquired met coal producer Western Coal Corporation in April 2011. * * * As reported in the Troubled Company Reporter on July 26, 2013, Moody's Investors Service downgraded Walter Energy Inc.'s long- term ratings, including the Corporate Family Rating to Caa1 from B2, and affirmed the short-term liquidity rating at SGL-4. The downgrade was prompted by continued deterioration in market fundamentals for metallurgical coal, increasing evidence that the market will remain oversupplied for at least several quarters, and potential liquidity concerns in such a scenario. WATERSTONE AT PANAMA: Needs Extension of Cash Collateral Use ------------------------------------------------------------ Waterstone at Panama City Apartments, LLC, asks the U.S. Bankruptcy Court for the District of Nebraska to further extend the order authorizing the Debtor to use the cash collateral securing its prepetition indebtedness to Lenox Mortgage XVIII, LLC. The Debtor is represented by Frederick D. Stehlik, Esq., and William L. Biggs, Esq., at GROSS & WELCH, P.C., L.L.O., in Omaha, Nebraska. Omaha, Nebraska-based Waterstone at Panama City Apartments, LLC, filed for Chapter 11 protection (Bankr. D. Neb. Case No. 13-80751) on April 9, 2013. Bankruptcy Judge Timothy J. Mahoney presides over the case. William L. Biggs, Jr., Esq., at Gross & Welch, P.C., L.L.O., represents the Debtor in its restructuring efforts. The Debtor disclosed $26,159,064 in assets and $26,120,989 in liabilities as of the Chapter 11 filing. The petition was signed by Edward E. Wilczewski, manager. WAVE SYSTEMS: Amends $20 Million Securities Prospectus ------------------------------------------------------ Wave Systems Corp. has amended its registration statement relating to the public offering of up to $20,000,000 worth of class A common stock, preferred stock, warrants and units. The Company's Class A common stock is traded on the Nasdaq Capital Market under the symbol "WAVX." As of Aug. 30, 2013, the aggregate market value of the Company's outstanding Class A common stock held by non-affiliates, or the public float, was approximately $43.2 million, which was calculated based on 31,538,367 shares of outstanding Class A common stock held by non-affiliates and on a price per share of $1.37, the closing price of the Company's Class A common stock on the Nasdaq Capital Market on Aug. 30, 2013. A copy of the Amended Form S-3 is available for free at: http://is.gd/yMXQhs About Wave Systems Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. For the 12 months ended Dec. 31, 2012, the Company incurred a net loss of $33.96 million, as compared with a net loss of $10.79 million in 2011. The Company's balance sheet at June 30, 2013, showed $10.28 million in total assets, $20.06 million in total liabilities and a $9.77 million total stockholders' deficit. KPMG LLP, in Boston Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that Wave Systems Corp. has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. WEST BROMWICH: Avoids Yo-Yo Bankruptcy Curse With Solid Finances ---------------------------------------------------------------- Ravi Ubha, writing for Daily Bankruptcy Review, reported that West Bromwich Albion used to be a yo-yo club, a team that bounced up and down between the top two tiers of English soccer. It would fight for promotion glory one season and then for its Premier League life the next. But after sinking from the top-flight three times in the last decade, the club is beginning to forget what relegation worries are like, the report said. Last season, the modest club from the Birmingham area in central England recorded its best season in the top flight in more than 30 years, finishing eighth with its highest ever Premier League points tally. WESTERN FUNDING: Vegas Auto Loan-Maker Files for Bankr. Protection ------------------------------------------------------------------ Katy Stech, writing for DBR Small Cap, reported that Las Vegas car-loan maker Western Funding Inc., whose customers usually have less-than-perfect credit, has filed for bankruptcy protection after its own lender said the company broke borrowing promises made last year. WESTINGHOUSE SOLAR: Inks $200,000 Securities Purchase Pact ---------------------------------------------------------- Westinghouse Solar, Inc., on Aug. 30,2013, entered into a securities purchase agreement with certain institutional accredited investors relating to the sale and issuance of a convertible note in the principal amount of $200,000 that matures Aug. 29, 2015. The Convertible Note bears interest at the rate of 8 percent per annum compounded annually, is payable at maturity and the principal and interest outstanding under the Convertible Note are convertible into shares of the common stock of the Company, at any time after issuance, at the option of the Purchaser, at a conversion price equal to $.02, subject to adjustment upon the happening of certain events, including stock dividends, stock splits and the issuance of Common Stock Equivalents at a price below the conversion price. Subject to the Company fulfilling certain conditions, including beneficial ownership limits, the Convertible Note is subject to a mandatory conversion if the closing price of the Company's common stock for any 20 consecutive days commencing six months after the issue date of the Convertible Note equals or exceeds $0.04. Unless waived in writing by the Purchaser, no conversion of the Note can be effected to the extent that as a result of that conversion the Purchaser would beneficially own more than 9.99 percent in the aggregate of the Company's issued and outstanding common stock immediately after giving effect to the issuance of common stock upon conversion. The Company has the option of repaying the outstanding principal amount of the Convertible Note, in whole or in part, by paying the Purchaser a sum of money equal to one 120 percent of the principal together with accrued but unpaid interest upon 30 days notice, subject to certain beneficial ownership limits. For so long as the Company has any obligation under the Convertible Note, the Company agreed to certain restrictions regarding, among other things, incurrence of additional debt, liens, amendments to charter documents, repurchase of stock, payment of cash dividends, affiliated transactions. The Company is also prohibited from entering into certain variable priced agreements until the Convertible Note is repaid in full. For a period of two years after the initial issuance of the Convertible Note, the Purchase Agreement also provides the Purchaser a right to participate in any future debt and equity offerings of Company securities. The Purchaser also has a piggyback registration right. The Convertible Note contains events of default which, if triggered, will result in the requirement to pay a default amount (up to 24 percent) as specified in the Convertible Note. In connection with the issuance of the Convertible Note, the Purchaser agreed to surrender to the Company for cancellation 200 shares of Series D Convertible Preferred Stock owned by it. As a result of the sale of the Convertible Note, pursuant to the terms of the outstanding Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, and Series D Preferred, the conversion price of each of the Series B Preferred, Series C Preferred and Series D Preferred will be reduced from $0.03, $0.03 and $0.10 per share of common stock, respectively, to become $0.02 per share of common stock. There are currently 912, 147 and 930 shares of Series B Preferred, Series C Preferred and Series D Preferred, respectively that remain outstanding (after taking into account the surrender of 200 shares of Series D Preferred). After adjustment to the conversion price as a result of the sale of the Convertible Note, the outstanding Series B Preferred, Series C Preferred and Series D Preferred would be convertible into 41,020,149, 7,333,350 and 46,500,000 shares of common stock, respectively. About Westinghouse Campbell, Cal.-based Westinghouse Solar, Inc., is a designer and manufacturer of solar power systems and solar panels with integrated microinverters. The Company designs, markets and sells these solar power systems to solar installers, trade workers and do-it-yourself customers in the United States and Canada through distribution partnerships, the Company's dealer network and retail outlets. Burr Pilger Mayer, Inc., in San Francisco, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing significant operating losses and negative cash flow from operations that raise substantial doubt about its ability to continue as a going concern. Westinghouse Solar disclosed a net loss of $8.62 million on $5.22 million of net revenue in 2012, as compared with a net loss of $4.63 million on $11.42 million of net revenue in 2011. As of June 30, 2013, the Company had $3.04 million in total assets, $5.30 million in total liabilities, $247,761 in series C convertible redeemable preferred stock, $545,000 in series D convertible redeemable preferred stock, and a $3.05 million total stockholders' deficit. WIRELESS RONIN: Incurs $76,000 Net Loss in Second Quarter --------------------------------------------------------- Wireless Ronin Technologies, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $76,000 on $2.63 million of sales for the three months ended June 30, 2013, compared with a net loss of $1.21 million on $1.56 million of sales for the same period last year. The Company reported a net loss of $1.49 million on $4.03 million of sales for the six months ended June 30, 2013, compared with a net loss of $3.04 million on $3.33 million of sales for the comparable period in 2012. The Company's balance sheet at June 30, 2013, showed $4.27 million in total assets, $1.86 million in total liabilities, and stockholders' equity of $2.41 million. "Due to losses suffered from operations, in its report attached to our financial statements for the year ended Dec. 31, 2012, our independent registered public accounting firm expressed substantial doubt about our ability to continue as a going concern. Even with the savings we expect to achieve from the restructuring initiated on July 29, 2013, we do not currently have sufficient capital resources to fund our operations beyond Dec. 31, 2013. We continue to experience operating losses." The Company's balance sheet at June 30, 2013, showed $4.27 million in total assets, $1.86 million in total current liabilities, and shareholders' equity of $2.41 million. A copy of the Form 10-Q is available at http://is.gd/nH1DpY Minnetonka, Minn.-based Wireless Ronin Technologies, Inc. (OTC QB: RNIN), provides marketing technology solutions, which include digital signage, interactive kiosks, mobile messaging, social networking and web development solutions, to customers who use the Company's products and services in certain retail and service markets. WORLDCOM INC: USTelecom Asks 2nd Circ. to Rehear Tax Row -------------------------------------------------------- Law360 reported that the United States Telecom Association on Sept. 5 filed a brief with the Second Circuit supporting WorldCom Inc.'s petition for a rehearing of the appellate court's decision that WorldCom is liable for millions in excise taxes on its dial- up Internet systems, saying the ruling could lead to confusion about the applicability of the excise tax. According to the report, in an amicus curiae brief, USTelecom said a Second Circuit panel's ruling that WorldCom's systems for dial- up Internet services constituted a local telephone service and thus were taxable under the relevant federal laws. The case is INTERNAL REVENUE SERVICE, Appellant, v. WORLDCOM, INC., Debtor-Appellee, Docket No. 12-803 (2nd Cir.). WorldCom, Inc., a Clinton, Mississippi-based global communications company, filed for chapter 11 protection (Bankr. S.D.N.Y. Case No. 02-13532) on July 21, 2002. On March 31, 2002, WorldCom disclosed $103,803,000,000 in assets and $45,897,000,000 in debts. The Debtors were represented by Weil, Gotshal & Manges LLP. The Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and on April 20, 2004, the Company formally emerged from Chapter 11 protection as MCI, Inc. On Jan. 6, 2006, MCI merged with Verizon Communications, Inc. MCI is now known as Verizon Business, a unit of Verizon Communications. YSC INC: Section 341(a) Meeting Set on October 8 ------------------------------------------------ A meeting of creditors in the bankruptcy case of YSC Inc. will be held on Oct. 8, 2013, at 1:00 p.m. at US Courthouse, Room 4107. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. YSC Inc. filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 13-17946) on Aug. 30, 2013. The petition was signed by Sang K. Yim as president. The Debtor disclosed assets of $17.8 million and liabilities of liabilities of $18.5 million. Jeffrey B. Wells, Esq., at WELLS AND JARVIS, P.S., represents the Debtor as counsel. Judge Marc Barreca presides over the case. ZHONE TECHNOLOGIES: Reports $1.1-Mil. Net Income in Second Quarter ------------------------------------------------------------------ Zhone Technologies, Inc., filed its quarterly report on Form 10-Q, reporting net income of $1.06 million on $30.05 million of net revenue for the three months ended June 30, 2013, compared with a net loss of $2.12 million on $30.84 million of net revenue for the same period last year. The Company reported net income of $1.29 million on $58.43 million of net revenue for the six months ended June 30, 2013, compared with a net loss of $5.52 million on $57.90 million of net revenue for the corresponding period in 2012. The Company's balance sheet at June 30, 2013, showed $63.39 million in total assets, $29.93 million in total liabilities, and stockholders' equity of $33.46 million. "Since inception, with the exception of the three most recent quarters, we have incurred significant operating losses and had an accumulated deficit of $1,039.9 million as of June 30, 2013, and we expect that our operating losses may continue. If we are unable to access or raise the capital needed to meet liquidity needs and finance capital expenditures and working capital, or if the economic, market and geopolitical conditions in the United States and the rest of the world do not continue to improve or if they deteriorate, we may experience material adverse impacts on our business, operating results and financial condition." A copy of the Form 10-Q is available at http://is.gd/wE3uJl Oakland, Calif.-based Zhone Technologies, Inc. (NASDAQ: ZHNE) is a global leader in all IP multi-service access solutions, serving more than 750 of the world's most innovative network operators. * J.P. Morgan to End Student-Loan Business ------------------------------------------ Dan Fitzpatrick and Robin Sidel, writing for The Wall Street Journal, reported that the market for student loans suffered another blow on Sept. 5 when J.P. Morgan Chase & Co., the nation's largest lender by assets, said it is getting out of the business. According to the report, J.P. Morgan's departure, effective Oct. 12, leaves Wells Fargo & Co. as the only major U.S. commercial bank still making student loans. Big banks have been fleeing the industry since 2009, when the Obama administration signaled that the federal government would become much more active in making loans directly to students, the report said. Since then, banks' share of the roughly $1 trillion student-loan market has shriveled, the report related. All told, private lenders made about $8.1 billion in student loans in the 2011-12 academic year, according to estimates from Moody's Investors Service, down about 70% from $25.2 billion in 2007-08. Banks and other private lenders now account for only about 15% of the outstanding student debt in the U.S, the report further related. The U.S. government accounts for the rest. * Mortgage Rates Bounce Back on Signs of a Stronger Recovery ------------------------------------------------------------ Kathy Orton, writing for The Washington Post, reported that after a slight dip a week ago, mortgage rates have bounced back, according to the latest data released by Freddie Mac. The 30-year fixed-rate average rebounded to near its two-year high, rising to 4.57 percent with an average 0.7 point, the report related. It was up from 4.51 percent a week ago, but down from 3.55 percent a year ago. The 30-year fixed rate reached its highest level since July 2011, 4.58 percent, two weeks ago. It has remained above 4.5 percent for three weeks. According to the report, the 15-year fixed-rate average also hovered near its two-year high, increasing to 3.59 percent with an average 0.7 point. It was 3.54 percent a week ago and 2.86 percent a year ago. The 15-year fixed rate hit its highest level since July 2011, 3.6 percent, two weeks ago. It has stayed above 3 percent since early June. Hybrid adjustable rate mortgages increased as well, the report said. The five-year ARM rose to 3.28 percent with an average 0.5 point. It was 3.24 percent last week. The one-year ARM jumped to 2.71 percent with an average 0.5 point, the report further related. It was 2.64 percent a week ago. * Bank of America Mortgage Holders Lose Bid to Sue as Group ----------------------------------------------------------- Don Jeffrey & Janelle Lawrence, writing for Bloomberg News, reported that Bank of America Corp. can't be sued by unified groups of homeowners in different states over its failure to modify mortgages, a federal judge in Boston ruled. According to the report, home-mortgage borrowers in 26 states claimed in lawsuits that Bank of America mismanaged loan requests under the Home Affordable Modification Program and sought class- action status to pursue their cases. The suits were consolidated in Boston. "Plaintiffs' claims may well be meritorious; but they rest on so many individual factual questions that they cannot sensibly be adjudicated on a classwide basis," U.S. District Judge Rya Zobel said in a decision dated Sept. 5, the report related. Bank of America is one of many mortgage lenders participating in the U.S. government's mortgage-modification program, known as HAMP, designed to prevent mortgage foreclosures, the report said. The homeowners who sued claimed they made all required trial payments under the plan to the bank and still didn't receive permanent loan modifications or written denials of eligibility by a certain date. Jerry Dubrowski, a spokesman for Charlotte, North Carolina-based Bank of America, didn't immediately respond to an e-mail seeking comment on the ruling, the report noted. Steve Berman and Thomas Sobol, lawyers for the plaintiffs, also didn't immediately respond to e-mails. The case is In re Bank of America Home Affordable Modification Program Contract Litigation, 10-02193, U.S. District Court, District of Massachusetts (Boston). * 24% of Homeowners in Foreclosure Process Have Equity ------------------------------------------------------ RealtyTrac(R) on Sept. 5 released its U.S. Home Equity & Underwater Report for September 2013, which shows that while 10.7 million residential homeowners nationwide owe at least 25 percent or more on their mortgages than their properties are worth, another 8.3 million homeowners are either slightly underwater or slightly above water, putting them on track to have enough equity to sell sometime in the next 15 months -- without resorting to a short sale. The 8.3 million include homeowners with a loan to value (LTV) ratio from 90 to 110 percent, meaning they have between 10 percent positive equity and 10 percent negative equity. These homeowners represented 18 percent of all U.S. homeowners with a mortgage as of the beginning of September. The 10.7 million residential properties with an LTV ratio of at least 125 percent represented 23 percent of U.S. residential properties with a mortgage -- down from 11.3 million deeply underwater properties representing 26 percent of all residential properties with a mortgage in May 2013 and down from 12.5 million deeply underwater properties representing 28 percent of all residential properties with a mortgage in September 2012. "Steadily rising home prices are lifting all boats in this housing market and should spill over into more inventory of homes for sale in the coming months," said Daren Blomquist, vice president at RealtyTrac. "Homeowners who already have ample equity are quickly building on that equity, while the 8.3 million homeowners on the fence with little or no equity are on track to regain enough equity to sell before 2015 if home prices continue to increase at the rate of 1.33 percent per month that they have since bottoming out in March 2012." "In addition, nearly one in four homeowners in foreclosure has at least some equity, giving them a better chance to avoid foreclosure without resorting to a short sale -- assuming they realize they have equity and don't miss the opportunity to leverage that equity," Blomquist added. "Even homeowners deeply underwater have reason for hope, with about 150,000 each month rising past the 25 percent negative equity milestone -- although it will certainly take years rather than months before most of those homeowners have enough equity to sell other than via short sale." Other high-level findings from the report: -- More than 126,000 properties in the foreclosure process nationwide had an LTV of 100 percent or lower in September, representing 24 percent of all homes in the foreclosure process. States with the highest percentage of foreclosures with equity included Oklahoma (54 percent), Hawaii (51 percent), New York (47 percent), and Texas (46 percent). -- States with the highest percentage of deeply underwater homes (LTV of 125 percent or higher) included Nevada (46 percent), Illinois (40 percent), Florida (40 percent), Michigan (38 percent), Rhode Island (34 percent), and Ohio (31 percent). -- Metro markets with the highest percentage of homes with resurfacing equity (LTV from 90 to 110 percent) included Omaha, Neb., (29 percent), Colorado Springs, Colo., (29 percent), Tulsa, Okla., (29 percent), Little Rock, Ark., (28 percent), and Raleigh, N.C. (28 percent). -- Nationwide 7.4 million homeowners with a mortgage had 50 percent equity or more, representing 16 percent of all homeowners with a mortgage. Metro markets with the highest percentage of homeowners with at least 50 percent equity included Honolulu (36 percent), San Jose, Calif., (35 percent), Poughkeepsie, N.Y. (30 percent), Pittsburgh (29 percent), San Francisco (29 percent), and New York (27 percent). Local broker perspectives "Negative equity will always hamper the housing market from making a strong recovery; however, the amount of homeowners with negative equity is shrinking," said Emmett Laffey, CEO of Laffey Fine Homes International, covering Long Island and the five boroughs of New York City. "New York metro home prices are increasing at a rate of about 1 percent per quarter and thousands of homeowners will now be in a position to sell and take some equity with them post-closing." "The housing market in Oklahoma City and Tulsa continues to improve, with a majority of homeowners having at least some equity in their homes," said Shel Detrick, CEO of Prudential Detrick/Prudential Alliance Realty, covering the Oklahoma City and Tulsa markets. "If home prices continue to rise, close to one- third of all homeowners in the Oklahoma City metro area will have enough equity to sell their homes in the next year, which is exciting in this inventory-sparse market." "Due to the increased market demand and low inventory levels we have experienced during much of 2013, negative equity situations have only been noted in isolated circumstances in many areas of Ohio," said Michael Mahon, Executive Vice President of HER Realtors, covering the Columbus, Cincinnati and Dayton markets in Ohio. "This trend will continue to add more buyers and sellers into a positively increasing equity market in months to come, as well as an increased rate of recovery across Ohio for 2013." "Negative equity certainly impacts a homebuyer's decision to sell, and we expect sellers to come off the fence as prices rise and equity is gained back," said Steve Roney, CEO of Prudential Utah Real Estate. "This will provide added momentum to the recovery as inventories rise and buyers have more options." "Negative equity continues to be an issue in the Reno-Sparks marketplace, however the situation is improving due to strong price increases," said Craig King, COO of Chase International, covering the Reno and Lake Tahoe markets. "The effect of rising home prices and homeowners with resurfacing equity are both encouraging trends. We believe some of these individuals are starting to show up in our sales activity right now as part of a move-up market. There has been no move up market in the area since 2006 so we are excited about that." "For the past few years, many people have been unable to sell their homes and upgrade due to lack of equity or in some cases negative equity," said Rich Cosner, president of Prudential California Realty, covering Orange, Riverside and San Bernardino counties in Southern California. "With the tremendous growth in equity over the past year, many homeowners are now able to sell their homes and re-buy, which is a very positive outcome for the real estate market." "Many homeowners have been predisposed to having negative equity for several years and may not realize that if they put their home on the market at the right price they could sell for a favorable outcome," said Dan Forsman, president and CEO of Prudential Georgia Realty. "The market is starving from a lack of inventory, but as the dial of the housing market moves towards positive and home appreciation continues to climb, there will certainly be an increase in the supply of properties." Report methodology The RealtyTrac U.S. Home Equity & Underwater report provides counts of residential properties based on several categories of equity -- or loan to value (LTV) -- at the state, metro and county level, along with the percentage of total residential properties with a mortgage that each equity category represents. The equity/LTV calculation is derived from a combination of record- level open loan data and record-level estimated property value data, and is also matched against record-level foreclosure data to determine foreclosure status for each equity/LTV category. Definitions Deeply underwater: Loan to value ratio of 125 percent or above, meaning the homeowner owed at least 25 percent more than the estimated market value of the property. Resurfacing Equity: Loan to value ratio from 90 percent to 110 percent, meaning the homeowners had anywhere from 10 percent positive equity to 10 percent negative equity. Equity Rich: Loan to value ratio of 50 percent or lower, meaning the homeowner had at least 50 percent equity. Foreclosures w/Equity: Properties in some stage of the foreclosure process (default or scheduled for auction, not including bank- owned) where the loan to value ratio was 100 percent or lower. Click here to view detailed data by state and to learn about RealtyTrac's report methodology. About RealtyTrac Inc. RealtyTrac -- http://www.realtytrac.com-- is a supplier of U.S. real estate data, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 100 million homes nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 20 categories of key housing-related facts provided by RealtyTrac's wholly-owned subsidiary, Homefacts(R). RealtyTrac's foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate. * Summers Faces Key "No" Votes if Picked for Fed ------------------------------------------------ Damian Paletta and Kristina Peterson, writing for The Wall Street Journal, reported that at least three Democrats on the Senate Banking Committee are expected to oppose Lawrence Summers if he is nominated to become Federal Reserve chairman, setting up a razor- thin vote to determine who will lead the central bank at a critical moment for its easy-money policies. According to the report, Democrats hold a two-vote majority on the 22-member panel, so the loss of three Democrats would make it impossible for Mr. Summers to advance to the full Senate for a confirmation vote without the backing of some of the 10 Republicans. No Republican has publicly expressed support so far for any potential White House nominee for Fed chief, giving President Barack Obama little margin for error. The committee Democrats expected to oppose Mr. Summers are Jeff Merkley of Oregon, Sherrod Brown of Ohio, and Elizabeth Warren of Massachusetts, according to congressional aides, the report related. The banking committee is the panel that will hold confirmation hearings on the nominee and vote on whether to send him or her to face a final vote in the 100-member Senate. "I think he'd have a tough time" getting confirmed in the Senate, said Sen. Mark Begich (D., Alaska), who isn't on the panel but has suggested he would vote "no" on the Senate floor if Mr. Summers makes it that far, the report said. He said the president has the right to nominate the candidate of his choice but "I think this one is problematic." Mr. Summers couldn't be reached for comment, according to WSJ. * A-Rod's Troubles Push Cartoon Producer to Chapter 11 ------------------------------------------------------ Peg Brickley, writing for DBR Small Cap, reported that one of the companies behind the new cartoon "Henry & Me" has filed for bankruptcy protection. ********* 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 ***