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/raid1/www/Hosts/bankrupt/TCR_Public/130912.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, September 12, 2013, Vol. 17, No. 253 Headlines 6537 MELROSE: Stipulation Dismissing Involuntary Case Approved ALBERTSON'S LLC: S&P Affirms 'B' Corp. Credit Rating; Outlook Neg. ALLIED SYSTEMS: Reopens Ch. 11 Auction Amid $135MM Rival Bid ALLIED SYSTEMS: Auction for Auto Hauler Reopens ALLY FINANCIAL: 7.35 Percent Notes Delisted From NYSE ALVARION LTD: NASDAQ Delisting Hearing Postponed AMERICAN AIRLINES: AMR, US Airways to Seek Extension for Merger AMERICAN AIRLINES: Refuses to Pay for Work by First-Year Lawyers AMERICAN AIRLINES: Will Allow Govt to Appeal Antitrust Suit Ruling AMES DEPARTMENT STORES: Modified Second Amended Plan Filed ANCESTRY.COM HOLDINGS: Moody's Rates Sr. Unsecured Bonds 'Caa1' ANCESTRY.COM HOLDINGS: S&P Assigns B CCR & Rates $250MM Notes CCC+ ANCHOR BANCORP: Schedules Filing Requirement Waived ANCHOR BANCORP: Has Authority to Employ Kerkman Dunn as Counsel ANCHOR BANCORP: Can Employ Skadden Arps as Special Counsel ANCHOR BANCORP: Court OKs CohnReznick Employment as Fin'l Advisor ANCHOR BANCORP: Can Employ Kurtzman Carson as Notice Agent ARAMARK CORPORATION: IPO Favorable to Moody's 'B1' Rating ARCAPITA BANK: To Sell EuroLog Warehouses for Eur105-Mil. Cash ARCHDIOCESE OF MILWAUKEE: Says District Judge Not Conflicted ARMSTRONG WORLD: Improving Margins Cue Moody's to Affirm B1 CFR ASHTON GROVE: Files Amended Schedules of Assets and Liabilities ATLANTIC COAST: Names John Stephens as President and CEO ATLANTIC COAST: Offering $46 Million Worth of Common Shares BERNARD L. MADOFF: Madoff Customers Denied Interest on Claims BIOZONE PHARMACEUTICALS: Sells Glyderm(R) Assets for $1 Million CENTENNIAL BEVERAGE: Wants to Use Cash Collateral Thru Sept. 30 CARDELL CABINETRY: Closes Doors, Cuts 900 Jobs CASA CASUARINA: Two Bankruptcies Settle Dispute on Ownership CENGAGE LEARNING: Opposes Delay in Plan-Confirmation Process CENTRAL FALLS, RI: Mayor Draws No Campaign Opponent COSTA DORADA: Ordered to File Amended Disclosures by Oct. 1 CENGAGE LEARNING: Book Dog Books Lawsuit Transferred to S.D.N.Y. CENGAGE LEARNING: Seeks Appointment of Mediator to Resolve Dispute COLONIAL BANK: PwC Fails in Bid to Toss FDIC's $1B Negligence Suit CPG INTERNATIONAL: S&P Rates $315MM Notes CCC+ & Affirms B+ CCR DELL INC: Fitch Downgrades LT Issuer Default Rating to 'BB-' DETROIT, MI: Bond Insurer Appeals Casino Tax Revenue Ruling DETROIT, MI: Michigan Governor to Be Deposed in Bankruptcy Case DEWEY & LEBOEUF: Former Managers to Face Suit in Iowa DETROIT, MI: Rebuts Objections to Municipal Bankruptcy Filing DFC GLOBAL: Young Law Firm Mulls Legal Claims Over UK Unit Default DIOCESE OF STOCKTON: May File for Bankruptcy Amid Abuse Claims DPL INC: Fitch Lowers Issuer Default Rating to 'B+' DUPONT FABROS: S&P Revises Outlook to Positive & Affirms 'BB-' CCR ELBIT VISION: Incurs $31,000 Net Loss in Second Quarter ENERGY SERVICES: Amends Forbearance Agreement with United Bank ERF WIRELESS: Brad Baloun Held 6.8% Equity Stake at Sept. 6 EXCEL MARITIME: Says Creditors Can't Touch $20MM in Escrow EXIDE TECHNOLOGIES: Wants a Lid on Vernon Plant Suit and Claims FIELDWOOD ENERGY: S&P Assigns 'B' CCR & Rates 2nd Lien Debt 'B-' FLORIDA GAMING: Wannabe Buyer Blasts Ch. 11 Filing FLUX POWER: Files Updated Investor Presentation FREESEAS INC: Fully Satisfies Settlement with Hanover FRIENDSHIP DAIRIES: Fails to File Agreed Order by Sept. 3 Deadline FRIENDSHIP DAIRIES: Files First Modification to 2nd Amended Plan GATEHOUSE MEDIA: Fortress Using Bankr. to Assemble Newspaper Group GMX RESOURCES: Lenders Settle With Committee as Plan Forthcoming HAMPTON CAPITAL: U.S. Trustee Balks at Plan of Liquidation HAMPTON CAPITAL: Disputes SABAL's Bid for Stay Relief HD SUPPLY: Incurs $72 Million Net Loss in Fiscal Q2 HOLT DEVELOPMENT: Claims Bar Date Set for Oct. 25 HOVNANIAN ENTERPRISES: Posts $8.5 Million Net Income in Q3 HRK HOLDINGS: Wants Extension of Plan Filing Period to Oct. 29 HRK HOLDINGS: Can Borrow Up to $794,087 From Regions Thru Year End HUB INT'L: Moody's Assigns B3 Corp. Family Rating; Outlook Stable HUB INT'L: S&P Removes 'B' Corp. Credit Rating From Watch Negative IBAHN CORPORATION: Meeting to Form Creditors' Panel on Sept. 23 IMH FINANCIAL: Files Copy of Amended Sedona Agreement With SEC INSPIREMD INC: Names HeartFlow CMO to Board of Directors INTERLEUKIN GENETICS: Amends 120.4MM Shares Resale Prospectus INT'L ENVIRONMENTAL: Trustee Can Tap GTFAS as Financial Advisor INVESTORS CAPITAL: Reaches PBI Deal on Adeq. Protection Payments IPC INT'L: Court OKs Proskauer Rose as Lead Counsel IPC INT'L: Gets Court Nod to Tap Anderson & Corroon as Co-Counsel IPC INT'L: Can Hire Silverman Consulting as Financial Advisor IPC INT'L: Court OKs Hiring of Livingstone Partners as Banker IPC INT'L: Gets Court Nod to Tap Kurtzman Carson as Admin. Agent IZEA INC: CEO Buys 70,000 Common Shares JERRY'S NUGGET: Confirmation Hearing Continued to Sept. 24 JERRY'S NUGGET: Hearing on Trustee Appointment Moved to Sept. 24 JOSEPH DELGRECO: 2nd Circ. Pushed to Revive $17MM DLA Piper Suit KINGSBURY CORP: Case Dismissal Hearing Set for Nov. 17 LAGUNA BRISAS: Receiver May Use Cash Collateral Thru Oct. 31 LANDAUER HEALTHCARE: Sale Procedures Hearing Today LEHMAN BROTHERS: Baupost Funds Seek $600-Mil. in Damages LEHMAN BROTHERS: Recovery Seen as Justifying $2 Billion Bankruptcy LEHMAN BROTHERS: What Might Have Been, and the Fall of the Company LIGHTSQUARED INC: Dish Network Director Quits Amid Flap LIGHTSQUARED INC: Dish's Ergen Seeks Dismissal of Harbinger Suit LIN MEDIA: S&P Assigns 'B+' Corp. Credit Rating; Outlook Positive LONGVIEW POWER: Given Interim Cash Collateral Use MED-DEPOT INC: Reorganization Plan Set for Oct. 21 Confirmation MERCANTILE BANCORP: Investors Pan Planned $22MM Ch. 11 Sale MERRIMACK PHARMACEUTICALS: Copies of Investor Presentations MF GLOBAL: Corzine Seeks Dismissal of CFTC Lawsuit MONTREAL MAINE: MM&A Railway Given Cross-Border Court Protocol MONTREAL MAINE: N.D. Ill. Judge Discusses Removal of Grimard Case MPG OFFICE: BPO Further Extends Tender Offer Until Sept. 16 MSD PERFORMANCE: Meeting to Form Creditors' Panel on Sept. 17 MTR GAMING: S&P Puts 'B-' CCR on CreditWatch Positive NEIMAN MARCUS: Moody's Mulls Downgrade Following Purchase Offer NEIMAN MARCUS: S&P Puts 'B+' CCR on CreditWatch Negative NEW HOPE CHRISTIAN: Wins Exclusivity Through November NORSE ENERGY: Creditors Sue Parent for $70-Mil. in Transfers O&G LEASING: Matters Resolved, Motion for Ch. 11 Trustee Dismissed OASIS PETROLEUM: Moody's Rates New Sr. Notes B3; Outlook Stable OASIS PETROLEUM: S&P Rates $600 Million Sr. Unsecured Notes 'B' ORCHARD SUPPLY: Lender, Creditor Settlement Approved OVERLAND STORAGE: Converts Registration Statements to Form S-1 PATRIOT COAL: Asks Court to Approve Settlement with ACE Companies PATRIOT COAL: To File Disclosure Statement on Joint Plan on Oct. 2 PATRIOT COAL: Peabody Must Focus on Completion of Documents PERSONAL COMMUNICATIONS: Creditors Want Boost in Sale, Financing PICCADILLY RESTAURANTS: Yucaipa Corporate Withdraws Joint Plan PICCADILLY RESTAURANTS: Taps Monroe Firm for Franchising Issues PINNACLE OPERATING: Moody's Rates $300MM Notes Caa1; Keeps B2 CFR PROPETRO SERVICES: Moody's Assigns B3 CFR & Rates $260MM Debt B3 PROPETRO SERVICES: S&P Assigns 'B-' CCR & Rates $260MM Debt 'B' QUBEEY INC: Section 341(a) Meeting Scheduled for Oct. 15 QUIKRETE HOLDINGS: Moody's Assigns 'B1' CFR; Outlook Stable QUIKRETE HOLDINGS: S&P Assigns Prelim. 'B+' CCR; Outlook Stable RESIDENTIAL CAPITAL: Objects to Haffey's $10-Mil. in Claims RESIDENTIAL CAPITAL: PNC Bank Defends Contribution Claim RESIDENTIAL CAPITAL: Malinowski's $138-Mil. Claim Disallowed RESIDENTIAL CAPITAL: Wants Class Suit Barred Until Dec. 31 RESIDENTIAL CAPITAL: MoFo Agrees to Trim $23MM Bill RHYTHM & HUES: Wants Until Sept. 20 to File Chapter 11 Plan ROCK POINTE: Ch.11 Trustee Taps Crumb & Munding as Counsel ROGERS BANCSHARES: Simmons First Wins Metropolitan Nat'l Auction ROSETTA GENOMICS: Incurs $6.3 Million Net Loss in H1 2013 SAN JOSE, CA: Makes Final Argument in Battle over Pension Cuts SAN DIEGO HOSPICE: Calif. Ban on Third-Party Releases Not Absolute SARALAND LLLP: S.D. Georgia Judge Won't Stay Proceedings SOLAR POWER: Interim CFO to Receive $300,000 Annual Salary SENTINEL MANAGEMENT: Bank of New York Seeks Rehearing on Loss SEVEN COUNTIES: Can Access Cash Collateral Until March 17 STEREOTAXIS INC: Has Rights Offering of 6.3-Mil. Common Shares SURTRONICS INC: Case Summary & 20 Largest Unsecured Creditors SWJ MANAGEMENT: Gets Approval to Hire David Carlebach as Counsel SWJ MANAGEMENT: Seeks to Tap EisnerAmper LLP as Accountants SWJ MANAGEMENT: Case Transferred to New Jersey Bankruptcy Court TARGETED MEDICAL: Files Copy of Presentation with SEC TECHDYNE LLC: Court OKs Settlement With HIOX; Case is Dismissed TOMSTEN INC: Taps SIB Development as Billings Consultant TONGJI HEALTHCARE: Two Directors Quit for Personal Reasons TOWNE INC: Charging Legal Fees to Collateral Difficult to Achieve TRAINOR GLASS: Court Approves Epiq as Balloting & Claims Agent TRIBUNE CO: Court Tosses Emerson Tucker's Claims UNIVERSAL HEALTH CARE: AMC Files List of Top Unsecured Creditors US AIRWAYS: PBGC Incorrectly Nixed Pilot Benefits, DC Circ. Hears VALEANT PHARMACEUTICALS: S&P Rates $1.28 Million Term Loan 'BB' VIRGINIA BROADBAND: Committee Fails in Bid to Dismiss Case VERITY CORP: Edward Jakos Appointed as Director VPR CORP: Names Stalking-Horse Bidders for Oil and Gas Wells W.R. GRACE: Facing 430 Property Damage Claims as of June 30 W.R. GRACE: To End Silica SOL FCC Catalyst Production W.R. GRACE: Files Post-Confirmation Report for 2nd Quarter WENDY'S INT'L: Moody's Rates $225MM Loan 'B1' & Hikes CFR to 'B1' WILLIAMS LOVE: Oregon Court Affirms Ruling on Brann Dispute WVSV HOLDINGS: Sept. 30 Hearing on Adequacy of Plan Outline * Executive Benefits Case Addresses Stern Rights Waiver * Reference Not Withdrawn on Post-Petition Contract * Turnover and Fraudulent Transfer Not Inconsistent * Bankrupt's Domicile Determines Residence on Diversity * Filling Out Chapter 13 Petition Isn't Ghost Writing * S&P Capital Publishes 10 Warning Signs of Municipal Bankruptcy * Yelp Inc. Sues McMillan Law Group for Fake Positive Reviews * Recent Small-Dollar & Individual Chapter 11 Filings ********* 6537 MELROSE: Stipulation Dismissing Involuntary Case Approved -------------------------------------------------------------- The Hon. Richard M. Neiter of the U.S. Bankruptcy Court for the Central District of California on Aug. 29 gave his stamp of approval on a stipulation dismissing the involuntary case of 6537 Melrose Avenue Partnership. The stipulation was entered into by the probate estate of Jack A. Werner and David Abner on Aug. 9, 2013. Barbara Leibovic and David Abner supported the stipulation. The Debtor also represented that it has closed the sale of real property, related improvements and certain personal property located at 6537 Melrose Avenue, Los Angeles, California, for the gross sales price of $2,975,000, and has paid all known creditors from the proceeds of the sale of the property. Daniel H. Reiss, Esq. -- dhr@lnbyb.com -- at Levene, Neale, Bender, Yoo & Brill L.L.P. represented the Probate Estate of Jack A. Werner, petitioning general partner. About 6537 Melrose Avenue Barbara Leibovic filed for a Chapter 11 protection against Los Angeles, California-based 6537 Melrose Avenue Partnership (Bankr. C.D. Calif. Case No. 13-13451) on Feb. 11, 2013. Bankruptcy Judge Richard M. Neiter presided over the case. ALBERTSON'S LLC: S&P Affirms 'B' Corp. Credit Rating; Outlook Neg. ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed all ratings on Boise- based Albertson's LLC, including the 'B' corporate credit rating. The outlook is negative. This action comes after the company agreed to purchase the Lubbock, Texas-based United Supermarkets LLC. Concurrently, the company is upsizing its term loan B-2 by $300 million to $1 billion and its revolving credit facility by $100 million to $950 million. S&P expects additional borrowings from these facilities to fund the transaction. S&P affirmed its 'BB-' issue-level rating, with a '1' recovery rating on the upsized term loan B-2 and revolver. The '1' recovery rating reflects S&P's expectations for very high (90%- 100%) recovery of principal in the event of default. "The rating on Albertson's LLC reflects our view of the company's financial risk profile as "highly leveraged". We based this on our forecasted credit ratios and our expectation of meaningful profit decline over the next six months primarily as a result of price investments and gross margin contraction at the stores Albertson's acquired from SUPERVALU Inc. earlier this year," said credit analyst Charles Pinson-Rose. "We expect relatively stable performance at the legacy Albertson's and United stores. The increased debt and operating lease commitment only modestly weaken forecasted credit ratios." The rating outlook is negative, which incorporates the possibility of greater-than-expected profit deterioration over the next year. S&P forecasts meaningful gross margin contraction as a result of the company's price investments, but S&P also expects Albertson's more competitive pricing strategies should stabilize sales declines. However, given the likelihood of slow economic growth and intense industry competition, S&P believes Albertson's could still face sales pressure throughout fiscal 2014. For example, if sales decrease 2% in fiscal 2014 and the company experiences an additional 10 basis points of gross margin contraction, S&P believes adjusted EBITDA would fall about 20%, adjusted leverage would be just above 7x, and adjusted EBITDA coverage of interest would be in the low 2x. S&P could lower the corporate credit rating with ratios at these levels. On the other hand, if the company's sales trends stabilize, operating margins are in line with S&P's expectations, and it feels adjusted leverage would peak in the high-6x area and gradually improve, S&P would consider revising the outlook to stable. S&P would likely consider a stable outlook upon receiving fiscal 2014 operating results, at which time it would be one year after the company acquired the Albertson's stores previously operated by SUPERVALU. At that time, S&P would determine if management's strategies at the acquired Albertson's supermarkets change the operating trajectory. ALLIED SYSTEMS: Reopens Ch. 11 Auction Amid $135MM Rival Bid ------------------------------------------------------------ Law360 reported that a Delaware bankruptcy judge on Sept. 9 greenlighted Allied Systems Holdings Inc.'s reopening of its Chapter 11 auction after a rival bidder upped its offer for the automotive transporter to $135 million, potentially delivering a blow to the two private equity firms that initially won the auction. The decision comes less than one month after Allied tapped two PE firms, Black Diamond Capital Partners LLC and Spectrum Investment Partners LP, as the victors in its asset sale, with a bid of $105 million, the report said. 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: Auction for Auto Hauler Reopens ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the auction for Allied Systems Holdings Inc. is being reopened. Last month, there was an auction for the auto hauler where first-lien creditors were declared the winner by making an offer of $105 million, consisting of $40.5 million cash and a credit bid of $64.5 million, by which the lenders pay with secured debt rather than cash. The judge decided in a phone conference Sept. 10 to let the auction be reopened, according to a court record. The judge rescheduled the sale approval hearing for Sept. 17. The auction resumed Sept. 11. In seeking to reopen the auction, the creditors' committee said auto hauler Jack Cooper Holding Corp. was improving its offer and would buy the business for $135 million, including $125 million in cash and $10 million in cash or notes. According to Allied's majority owner, Yucaipa Cos., which also holds a majority of the first- and second-lien debt, the business in reality would be purchased by Black Diamond Capital Management LP and Spectrum Group Management LLC, assuming secured lenders were the prevailing bidders at auction. The two creditors hold first-lien debt. Yucaipa 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 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: 7.35 Percent Notes Delisted From NYSE ----------------------------------------------------- The New York Stock Exchange LLC filed a Form 25 with the U.S. Securities and Exchange Commission notifying the SEC of the removal from listing or registration of Ally Financial Inc.'s 7.35 percent notes due Aug. 8, 2032. 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. ALVARION LTD: NASDAQ Delisting Hearing Postponed ------------------------------------------------ Alvarion(R) Ltd., in receivership, disclosed that due to personal circumstances of a key participant in the delisting hearing, Nasdaq has agreed to postpone the hearing, previously scheduled for Sept. 11, 2013, to a future date. The Company shall issue a public announcement of the new hearing date once determined. Alvarion Ltd. -- http://www.alvarion.com/-- provides optimized wireless broadband solutions addressing the connectivity, coverage and capacity challenges of telecom operators, smart cities, security, and enterprise customers. AMERICAN AIRLINES: AMR, US Airways to Seek Extension for Merger --------------------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reported that American Airlines parent AMR Corp. and US Airways Group Inc., whose expected merger has been held up by a Justice Department antitrust complaint that is slated to go to trial Nov. 25, on Sept. 10 reiterated their support for the combination and told AMR creditors that the two carriers plan to ask their respective boards to extend the merger termination date beyond its current Dec. 17 expiration, said two people familiar with the matter. According to the report, if the stock-swap combination hasn't received regulatory approval by then, if a government order prohibits the deal or if either party wants to abandon it, the plan would die, according to the merger fine print. But the two airlines could extend the expiration date if both sides agree. Tom Horton, AMR's CEO, and Doug Parker, his counterpart at US Airways, said Tuesday in response to questions from members of the creditors committee in AMR's bankruptcy case that they intend to do just that, these people said. The new potential termination date couldn't be learned. In a statement, the two airlines said that they continue to work closely with the creditors committee on all key matters, including the Justice Department litigation, the report related. "We remain confident in our case and are eager to get to court in order to make the case for the new American Airlines?as soon as possible," they said. AMR, which has been in bankruptcy-court protection since late 2011, has built its Chapter 11 exit on the merger with US Airways, the report noted. That plan has the support of AMR creditors, both airlines' unions, US Airways shareholders, the boards of both companies and European Union antitrust regulators. But the Justice Department unexpectedly filed suit on Aug. 13, arguing the deal would harm industry competition and result in higher fares, higher fees and fewer choices for consumers. The airlines contend the combination would allow them to offer more flights to more destinations, reduce costs and offer better service. Four previous big airline mergers since 2005 have gone unopposed by the Justice Department. US Airways and American expect the trial to last about 10 days, they said at a scheduling hearing last month before the U.S. District Court judge in Washington who has been assigned the case, the report said. The carriers had initially hoped for a Nov. 12 start to the trial; the government had requested a March 3 start date. Judge Colleen Kollar-Kotelly chose Nov. 25, saying she would proceed on an expedited basis. 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: Refuses to Pay for Work by First-Year Lawyers ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp. doesn't intend to pay for work performed by untrained, first-year law firm associates. The now-defunct law firm Dewey & LeBoeuf LLP was working for AMR before the airline's bankruptcy, providing representation in antitrust suits. The work continued after the Chapter 11 filing in November 2011. Although the Dewey firm went into its own bankruptcy in early 2012, the firm's lawyers billed $4.57 million to AMR before the firm collapsed. Dewey's fee request comes up for approval on Sept. 12 in U.S. Bankruptcy Court in New York. AMR wants the fees reduced by $584,000 for 1,650 hours spent by first-year associates. AMR points to a pre-bankruptcy agreement where the parent of American Airlines Inc. told its lawyers not to charge for time of first-year lawyers. AMR also doesn't want to pay for $57,200 run up by a partner in "getting up to speed." AMR says the partner at the time was negotiating to join another law firm and left Dewey before he could perform any beneficial services. AMR wants Dewey's fees reduced by $642,000. The official fee examiner negotiated a $250,000 reduction by Dewey. 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: Will Allow Govt to Appeal Antitrust Suit Ruling ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp. and its proposed merger partner US Airways Group Inc. agreed that if they win the antitrust lawsuit brought by the U.S. Justice Department, they will wait at least seven days before completing the merger. The agreement gives the government time to seek a stay pending appeal if U.S. District Judge Colleen Kollar-Kotelly finds no antitrust violation by combining US Airways and AMR's American Airlines Inc. According to the report, the agreement was part of detailed pretrial procedures negotiated between the airlines and the government in the antitrust suit begun last month by the Justice Department and seven states. The trial will begin Nov. 25. The government has the right to examine 40 witnesses under oath, almost as many as it wanted. The airlines can have the same number of examinations under oath. The government filed a revised complaint yesterday, one day ahead of a deadline. The state of Michigan joined the suit as a plaintiff. The airlines were to answer the complaint by Sept. 10. The next status conference with Judge Kollar-Kotelly will take place Oct. 25. To handle discovery disputes, Judge Kollar-Kotelly named former Washington Superior Court Judge Richard A. Levie as special master. His rulings on discovery will be final unless he decides they are of sufficient importance for review by Judge Kollar- Kotelly. So the lawyers don't become carried away with their own prose, a discovery dispute cannot employ more than 750 words. Three times in the course of the lawsuit, a party can file a 2,500-word discovery dispute. The government didn't want the trial to begin until March. 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) AMES DEPARTMENT STORES: Modified Second Amended Plan Filed ---------------------------------------------------------- BankruptcyData reported that Ames Department Stores filed with the U.S. Bankruptcy Court a Modified Second Amended Chapter 11 Plan and related Disclosure Statement. According to the Disclosure Statement, "The Plan is a straightforward mechanism for liquidating the Debtors' Assets. Under the Plan, an initial Distribution will occur on the Effective Date or as soon as practicable thereafter to satisfy Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims, and Indenture Trustee Fees, i.e., the reasonable and documented compensation, fees, expenses, disbursements, and indemnity claims of the Indenture Trustees and their attorneys, advisors, and agents (up to $125,000 per Indenture Trustee). Additional Distributions will be made to holders of Allowed Note and General Unsecured Claims to the extent the Debtors have sufficient Available Cash to make Distributions to such Claimholders. If the Debtors do not have sufficient Available Cash to make Distributions to such Claimholders, the balance of the Debtors' Assets, once Professional Fee Claims are paid, will be distributed to one or more reputable charitable organization(s) pursuant to the Plan." The Court subsequently approved the Disclosure statement and scheduled a November 13, 2013 hearing to consider confirming the Plan. About Ames Department Stores Rocky Hill, Connecticut-based Ames Department Stores was founded in 1958. At its peak, Ames operated 700 stores in 20 states, including the Northeast, Upper South, Midwest and the District of Columbia. In April 1990, Ames filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. In Ames I, the retailer closed 370 stores and emerged from chapter 11 on Dec. 30, 1992. Ames filed a second bankruptcy petition under Chapter 11 (Bankr. S.D.N.Y. Case No. 01-42217) on Aug. 20, 2001. Togut, Segal & Segal LLP; Weil, Gotshal & Manges; and Storch Amini Munves PC; Cadwalader, Wickersham & Taft LLP. When the Company filed for protection from their creditors, they reported $1,901,573,000 in assets and $1,558,410,000 in liabilities. The Company closed all of its 327 department stores in 2002. ANCESTRY.COM HOLDINGS: Moody's Rates Sr. Unsecured Bonds 'Caa1' --------------------------------------------------------------- Moody's Investors Service affirmed Ancestry.com Inc.'s Corporate Family at B2 and Probability of Default Ratings at B2-PD and assigned a Caa1 rating to the new Senior Notes of Ancestry.com Holdings LLC. Holdings is Ancestry.com's ultimate parent. Moody's raised the Senior Secured rating to Ba3 from B1 and the Senior Unsecured rating to B3 from Caa1. The approximately $250 million of Notes will finance a similarly-sized distribution to Holding's private equity owners. Moody's also assigned a Speculative Grade Liquidity rating of SGL-2. The outlook is stable. Ratings Rationale: With the proposed incremental $250 million of debt, Ancestry's resulting financial leverage and other credit metrics will be very weak for the B2 rating level. Free cash flow (FCF) will be strained by the higher interest burden, since Moody's expects that Holdings will be required to make cash interest payments, rather than pay-in-kind, on the Notes for at least the next year. This will limit financial flexibility, potentially limiting the company's capacity to fund future data content acquisitions. Moody's believes that purchases of data content are needed to maintain Ancestry.com's competitive position and subscriber growth over time. Nevertheless, Ancestry.com has performed somewhat better than Moody's expected in terms of profitability. Moreover, with over two million subscribers Ancestry.com holds a commanding competitive position in the online genealogy research sector. The company reports that the subscriber retention rate is nearly 50% after the first year and exceeds 25% after three years. This provides a degree of revenue stability, and due to the modest working capital and capital expenditure requirements, Ancestry.com generates predictable FCF, which supports the B2 CFR. Over the near term, Moody's expects that debt repayment and continued growth in EBITDA will improve leverage, such that the multiple of debt to EBITDA (Moody's adjusted) will decline to the low 6x range. Since Moody's expects that free cash flow (FCF) will be limited due to the increased interest burden, it expects FCF to debt (Moody's adjusted) will be maintained in the low to mid- single digits. Since growth in EBITDA and FCF is largely dependent upon increasing the subscriber base, any indication that the pace of subscriber additions is slowing, or subscriber retention rates are declining, could result in a rating downgrade. The rating could also be downgraded if Ancestry.com fails to reduce debt or to achieve growth in EBITDA or increases debt such that Moody's believes that debt to EBITDA (Moody's adjusted) will remain above 6.5x or FCF will turn negative. The rating could experience positive ratings pressure if leverage improves through a combination of debt reduction and EBITDA growth such that it believes that debt to EBITDA will be maintained below 4.5x. The Caa1 rating of the Notes reflects its structural subordination, as the Notes are issued by the indirect parent of Ancestry.com, which issues the rest of Ancestry.com's debt. Given the unchanged B2-PD PDR, the inclusion of the Notes in the capital structure leads to higher ratings of both the Senior Secured debt, whose rating will improve to Ba3 from B1, and the Senior Unsecured debt, whose rating will improve to B3 from Caa1. The SGL-2 Speculative Grade Liquidity rating reflects the good liquidity, as Moody's anticipates Ancestry will generate free cash flow of at least $50 million, and maintain an undrawn revolving credit facility (now at $50 million). Upgrades: Issuer: Ancestry.com Inc. Senior Secured Bank Credit Facility May 15, 2018, Upgraded to Ba3 from B1 Senior Secured Bank Credit Facility Dec 18, 2018, Upgraded to Ba3 from B1 Senior Secured Bank Credit Facility Dec 28, 2017, Upgraded to Ba3 from B1 Senior Secured Bank Credit Facility May 15, 2018, Upgraded to a range of LGD2, 24 % from a range of LGD3, 33 % Senior Secured Bank Credit Facility Dec 18, 2018, Upgraded to a range of LGD2, 24 % from a range of LGD3, 33 % Senior Secured Bank Credit Facility Dec 28, 2017, Upgraded to a range of LGD2, 24 % from a range of LGD3, 33 % Senior Unsecured Regular Bond/Debenture Dec 15, 2020, Upgraded to B3 from Caa1 Senior Unsecured Regular Bond/Debenture Dec 15, 2020, Upgraded to a range of LGD5, 70 % from a range of LGD5, 87 % Assignments: Issuer: Ancestry.com Holdings LLC Senior Unsecured Regular Bond/Debenture Sep 30, 2018, Assigned Caa1 Senior Unsecured Regular Bond/Debenture Sep 30, 2018, Assigned a range of LGD6, 91 % Issuer: Ancestry.com Inc. Speculative Grade Liquidity Rating, Assigned SGL-2 Outlook Actions: Issuer: Ancestry.com Inc. Outlook, Remains Stable Affirmations: Issuer: Ancestry.com Inc. Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Ancestry.com, based in North Provo, Utah, is the world's largest online family history resource, including an extensive collection of over 11 billion digitized records that subscribers can use to research and construct family trees. The principal methodology used in this rating was the Global Business and Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ANCESTRY.COM HOLDINGS: S&P Assigns B CCR & Rates $250MM Notes CCC+ ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned Provo, Utah-based online family history resources provider Ancestry.com Holdings LLC its 'B' corporate credit rating. Ancestry.com Holdings LLC is the parent company of Ancestry.com Inc., which S&P currently rates 'B'. At the same time, S&P assigned Ancestry.com Holdings' $250 million senior unsecured notes its 'CCC+' issue-level rating (two notches below the 'B' corporate credit rating), with a recovery rating of '6', indicating S&P's expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default. The 'B' rating reflects the company's aggressive financial policy and narrow business focus. S&P views the company's business risk profile as "weak" as its reliance on one Web site for the majority of revenue and EBITDA and need to replenish its customer base offset its leading market position and solid EBITDA margin. Pro forma for the transaction, lease-adjusted leverage is high, at 6.8x, based on GAAP financials (6.2x pro forma for deferred revenue that was eliminated as part of the take private transaction; S&P's calculation of EBITDA does not add back content amortization). EBITDA coverage of interest is 2x (2.2x pro forma for the deferred revenue adjustment). In S&P's view, the company's financial risk profile is "highly leveraged." S&P views Ancestry.com's management and governance as "fair." Ancestry.com is the global leader in the commercial market for online family history research, although it has prominent competitors that offer genealogical content at no charge. The company's main Web site, Ancestry.com, has more than two million subscribers and accounts for 90% of revenue. Subscribers pay about $19 per month on average to research their genealogy and build a family tree using extensive historical records provided by the company. Ancestry.com has a modest degree of geographic diversity, generating about three quarters of its revenue in the U.S., 12% from the U.K., and the rest from Australia, Canada, and Sweden. The company has recently acquired content in Ireland and Germany. Additional content provides an incentive for current subscribers to continue using the service and could also provide the foundation for the company to launch new local services in additional countries. S&P believes that launches in new countries are likely, but not imminent, given the financial investment and the time it takes to acquire and process enough content to start a service. S&P views the company's collection of records as providing a barrier to entry, although competitors also have exclusive content. ANCHOR BANCORP: Schedules Filing Requirement Waived --------------------------------------------------- Judge Robert D. Martin of the U.S. Bankruptcy Court for the Western District of Wisconsin waived the requirement for Anchor Bancorp Wisconsin Inc., to file schedules of assets and liabilities and monthly operating reports and the requirement for the Debtor to comply with investment and deposit restrictions, together with the requirement that the U.S. Trustee's office convene a meeting or meetings pursuant to Section 341 of the Bankruptcy Code. If the Debtor fails to consummate the plan by Oct. 31, 2013, then the parties will treat the Consummation Deadline as the Petition Date for purposes of calculating the deadline for filing Schedules and Statements of Financial Affairs and scheduling the Section 341 Meeting. In addition, then the Debtor will be required to file all usual monthly operating reports, beginning with the report for August of 2013 being filed within fifteen days of the Consummation Deadline. 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. Anchor BanCorp Wisconsin Inc. on Aug. 30 disclosed that the Holding Company has received court approval of its recently announced plan of reorganization. U.S. Bankruptcy Court Judge Robert Martin approved the plan at a hearing on Aug. 30. ANCHOR BANCORP: Has Authority to Employ Kerkman Dunn as Counsel --------------------------------------------------------------- Judge Robert D. Martin of the U.S. Bankruptcy Court for the Western District of Wisconsin authorized Anchor Bancorp Wisconsin Inc. to employ Kerkman Dunn Sweet DeMarb as general counsel. Professionals will take an active role in representing the Debtor and their customary hourly rates are: James D. Sweet, Esq. $515 Rebecca R. DeMarb, Esq. $400 Jerome Kerkman, Esq. $400 Justin M. Mertz, Esq. $275 Laura D. Steele, Esq. $255 Greg Schrieber, Esq. $255 Non-attorney paraprofessionals will be paid $150 to $185 per hour. The firm will also be reimbursed its necessary out-of-pocket expenses. 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. Anchor BanCorp Wisconsin Inc. on Aug. 30 disclosed that the Holding Company has received court approval of its recently announced plan of reorganization. U.S. Bankruptcy Court Judge Robert Martin approved the plan at a hearing on Aug. 30. ANCHOR BANCORP: Can Employ Skadden Arps as Special Counsel ---------------------------------------------------------- Anchor Bancorp Wisconsin Inc. obtained authority from Judge Robert D. Martin of the U.S. Bankruptcy Court for the Western District of Wisconsin to employ Skadden, Arps, Slate, Meagher & Flom LLP, as its special counsel to, among other things, advise the Debtor with respect to the $175 million in new equity investments and the up to $30 million in debt financing contemplated by the prepackaged plan of reorganization. The firm will be paid the following hourly rates: Partners $840 to $1,220 Counsel $845 to $930 Associates $365 to $795 The firm will also be reimbursed for any necessary out-of-pocket expenses. Van C. Durrer, Esq., Ramon M. Naguiat, Esq., and Annie Li, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, have primary roles in representing the Debtor. 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. Anchor BanCorp Wisconsin Inc. on Aug. 30 disclosed that the Holding Company has received court approval of its recently announced plan of reorganization. U.S. Bankruptcy Court Judge Robert Martin approved the plan at a hearing on Aug. 30. ANCHOR BANCORP: Court OKs CohnReznick Employment as Fin'l Advisor ----------------------------------------------------------------- Judge Robert D. Martin of the U.S. Bankruptcy Court for the Western District of Wisconsin authorized Anchor Bancorp Wisconsin Inc. to employ CohnReznick LLP as its financial advisor to be paid the following hourly rates: Partner/Senior Partner $585 to $800 Manager/Senior Manager/Director $435 to $620 Other Professional Staff $275 to $410 Paraprofessional $185 The firm will also be reimbursed for any necessary out-of-pocket expenses. About Anchor Bancorp Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. sought protection under Chapter 11 of the Bankruptcy Code (Case No. 13- 14003, Bankr. W.D. Wis.) on Aug. 12, 2013, 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. Anchor BanCorp Wisconsin Inc. on Aug. 30 disclosed that the Holding Company has received court approval of its recently announced plan of reorganization. U.S. Bankruptcy Court Judge Robert Martin approved the plan at a hearing on Aug. 30. ANCHOR BANCORP: Can Employ Kurtzman Carson as Notice Agent ---------------------------------------------------------- Anchor Bancorp Wisconsin Inc. obtained authority from Judge Robert D. Martin of the U.S. Bankruptcy Court for the Western District of Wisconsin to employ Kurtzman Carson Consultants LLC as notice agent. Evan Gershbein, senior vice president of corporate restructuring services, said, prior to the Petition Date, the Debtor provided KCC with a retainer in the amount of $5,000 and made prepetition payments totalling $5,170. 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. Anchor BanCorp Wisconsin Inc. on Aug. 30 disclosed that the Holding Company has received court approval of its recently announced plan of reorganization. U.S. Bankruptcy Court Judge Robert Martin approved the plan at a hearing on Aug. 30. ARAMARK CORPORATION: IPO Favorable to Moody's 'B1' Rating --------------------------------------------------------- Moody's Investors Service says ARAMARK Corporation's plan to sell primary shares in an initial public offering later this year and use the proceeds to repay bank debt would be a credit favorable development, but does not affect the debt ratings at this time. ARAMARK Corporation is a leading provider of food and related services to a broad range of institutions and the second largest uniform and career apparel business in the United States. ARAMARK is owned by a consortium of affiliates of private equity sponsors (GS Capital Partners, CCMP Capital Advisors, J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus) and the company's management team. Moody's expects fiscal 2013 revenue of over $13.5 billion. ARCAPITA BANK: To Sell EuroLog Warehouses for Eur105-Mil. Cash -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Arcapita Bank BSC, a Bahrain investment bank completing it reorganization in New York, lined up a buyer to pay more than 110 million euros ($145.95 million) for its 96 percent interest in the European warehouse business EuroLog. The report relates that through non-bankrupt affiliates, Arcapita owns the EuroLog business, which has 15 million square feet of space in 46 warehouses in seven countries across Europe. EuroLog has six undeveloped parcels where another 6.6 million square feet of warehouse space could be built. The report recounts that Arcapita tried unsuccessfully to sell its EuroLog interest through an initial public offering. After the IPO failed, Arcapita located an as-yet-unidentified private investment firm to be the buyer. The buyer declined to be named publicly until the transaction is completed. The price will be 105 million euros in cash plus repayment of as much as 6.5 million in loans from Arcapita. The creditors' committee supports the sale, according to Arcapita's court filing. The bankruptcy judge will hold a hearing on Sept. 23 to approve the sale. Arcapita said it expects the transaction to be completed as soon as Oct. 2. 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 TCRr on Jun 19, 2013, the Bankruptcy Court entered an order confirming the Second Amended Joint Chapter 11 Plan of Reorganization with respect to teach Debtor other than Falcon Gas Storage Company, Inc. The Plan hasn't been implemented yet. A copy of the Confirmed Second Amended Joint Plan (With First Technical Modifications) is available at: http://bankrupt.com/misc/arcapita.doc1265.pdf ARCHDIOCESE OF MILWAUKEE: Says District Judge Not Conflicted ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to papers filed by the archbishop in the Archdiocese of Milwaukee, U.S. District Judge Rudolph T. Randa had no obligation to remove himself from consideration of an appeal involving the Archdiocese cemetery where his parents are buried. The report recounts that Judge Randa handed down a decision in July protecting $55 million in trust for maintenance of cemeteries. Abuse victims, represented by the official creditors' committee in the archdiocese's Chapter 11 reorganization, filed papers in August saying Judge Randa had an undisclosed interest in the subject matter of the appeal because his parents and several family members are buried in church cemeteries in Milwaukee. The committee wants Judge Randa to remove himself from any matters involving the cemetery and vacate his July ruling. The report relates that Archbishop Jerome Listecki, in his capacity as trustee of the cemetery fund, filed papers on Sept. 2 saying Judge Randa isn't required to step down. Having buried his parents in an archdiocese mausoleum doesn't give him a "financial interest," according to the papers. The sexual-abuse victims represented by the creditors' committee "provided no credible evidence that Judge Randa would be impacted if the cemetery plots were to fall into disrepair," the trust said in its papers. The committee is appealing Judge Randa's July opinion. The cemetery trust cites precedents saying that failure of a judge to recuse himself is "harmless" when the ruling will be revised "de novo." Reversing a ruling by the bankruptcy judge on appeal, Judge Randa concluded that the federal Religious Freedom Restoration Act of 1993 protects the church from loss of the $55 million. The cemetery trust may be the single largest asset abuse victims might recover in compensation for their claims. In a July 29 ruling, Judge Randa reversed a bankruptcy court decision that granted the unsecured creditors committee's motion for partial summary judgment in an adversary complaint the Archdiocesan Cemetery Trust filed against the Committee. The Cemetery Trust stands apart from the Archdiocese and holds more than $50 million in trust for the perpetual care of more than $50,000 deceased, interred under the tenets of the Catholic faith. In its lawsuit, the Trust argues the Committee, in representing creditors of the Archdiocese who mostly are clerical abuse victims, cannot access funds in the Trust. The bankruptcy court held that neither the Religious Freedom Restoration Act nor its first amendment barred the Committee's claims or defenses in an adversary complaint. The U.S. District Court for the District of Wisconsin held that, "The Committee, in pursuing the claims of the unsecured creditors under the authority granted to it by the bankruptcy court, acts "under color of law" and is subject to RFRA. Sec. 2000bb-2(1). Therefore, RFRA and the First Amendment prevent the Committee from appropriating the funds in the Trust because doing so would substantially burden the Trustee's free exercise of religion." The appellate case before Judge Randa is ARCHBISHOP JEROME E. LISTECKI, as Trustee of the Archdiocese of Milwaukee Catholic Cemetery Perpetual Care Trust, Appellant, v. OFFICIAL COMMITTEE OF UNSECURED CREDITORS, Appellee, Adv No. 11-24529-SVK, Case No. 13-C-179. A copy of Judge Randa's July 29, 2013 Decision and Order is available at http://is.gd/LxJbYk Archbishop Jerome E Listecki is represented by Brady C Williamson, Esq. -- bwilliam@gklaw.com , Jennifer L Vandermeuse, Esq. -- jvandermeuse@gklaw.com , Linda S Schmidt, Esq. -- lschmidt@gklaw.com , Matthew M Wuest, Esq. -- mwuest@gklaw.com , Timothy F Nixon, Esq. -- tnixon@gklaw.com and William E Duffin, Esq. -- wduffin@gklaw.com -- of GODFREY & KAHN SC. The Archdiocese of Milwaukee is represented by Bruce G Arnold, Esq. -- barnold@whdlaw.com , Daryl L Diesing, Esq. -- ddiesing@whdlaw.com , Francis H LoCoco, Esq. -- flococo@whdlaw.com and Lindsey M Johnson, Esq. -- ljohnson@whdlaw.com -- of WHYTE HIRSCHBOECK DUDEK SC. The Official Committee of Unsecured Creditors is represented by Albert Solochek, Esq. -- alsolochek@hswmke.com , and Jason R Pilmaier, Esq. -- jpilmaier@hswmke.com -- of HOWARD SOLOCHEK & WEBER; as well as Kenneth H Brown, Esq. -- gbrown@pszjlaw.com , Marci A Hamilton Esq. -- mhamilton@pszjlaw.com , Gillian N Brown, Esq. -- gbrown@pszjlaw.com and James I Stang, Esq. -- jstang@pszjlaw.com of PACHULSKI STANG ZIEHL & JONES. The cemetery lawsuit in bankruptcy court is Listecki v. Official Committee of Unsecured Creditors (In re Archdiocese of Milwaukee), 11-02459, U.S. Bankruptcy Court, Eastern District of Wisconsin (Milwaukee). About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ARMSTRONG WORLD: Improving Margins Cue Moody's to Affirm B1 CFR --------------------------------------------------------------- Moody's Investors Service affirmed Armstrong World Industries, Inc.'s B1 Corporate Family Rating, and B1-PD Probability Default Rating. In a related rating action, Moody's lowered the company's speculative grade liquidity rating to SGL-3 from SGL-2, and changed the rating outlook to stable from positive due to the negative impact on the company's liquidity profile resulting from ongoing shareholder-friendly activities. Armstrong recently announcement that it is using most of its cash on hand and some revolver borrowings to repurchase approximately $260 million of common stock from Armor TPG Holdings LLC and the Asbestos Personal Injury Settlement Trust, which together own a controlling interest in Armstrong. The following ratings/assessments were affected by this action: Corporate Family Rating affirmed at B1; Probability of Default Rating affirmed at B1-PD; Senior Secured Revolving Credit Facility due 2018 affirmed at B1 (LGD3, 42%); Senior Secured Term Loan A due 2018 affirmed at B1 (LGD3, 42%); and, Senior Secured Term Loan B due 2020 affirmed at B1 (LGD3, 42%). Speculative Grade Liquidity rating downgraded to SGL-3 from SGL-2. Ratings Rationale: Armstrong's B1 Corporate Family Rating reflects Moody's expectations that its operating margins will continue to improve as the company benefits from the recovery in the new housing construction and remodeling end markets. Armstrong is a North American market leader in providing flooring to these sectors. It should gain from more favorable product mixes, better pricing, and ongoing cost reduction initiatives. Additionally, Armstrong continues to benefit from the WAVE JV, a critical earnings and cash contributor. Moody's conservatively estimate that Armstrong's adjusted EBITA margin will likely be around 9.5% over the next 12 months, inclusive of WAVE. Leverage and interest coverage metrics are solid for the rating category. Moody's projects that the company will maintain interest coverage, defined as EBITA-to- interest expense, in the 3.5 to 3.75 times range and leverage, inclusive of the debt utilized for the share repurchase, slightly below 4.0 times by the end of 2014 (all ratios include Moody's standard adjustments). However, the ratings are constrained by the on-going economic malaise in Europe, from which Armstrong earns about 20% of its revenues, as well as the company's aggressive shareholder-friendly activities. The downgrade of Armstrong's speculative grade liquidity rating to SGL-3 from SGL-2 results from the company's recent communication that it is using a significant portion of its liquidity to enhance shareholders. Armstrong recently announced that TPG and the Asbestos Trust are monetizing some of their holdings in Armstrong through a secondary public offering and by the repurchase of shares by the company, itself. Armstrong will repurchase $260 million aggregate principal amount of common shares from TPG and the Asbestos Trust on a pro rata basis in accordance with their respective ownership interest. Pro forma domestic cash on hand at 2Q13 is reduced to a minimal amount of about $2.3 million from $222 million. Revolver and accounts receivable securitization facility availability will be reduced by about $40 million, resulting in pro forma combined availability of about $213 million. The company will no longer benefit from excess domestic cash for its debt leverage financial covenants, but Moody's believes Armstrong will retain adequate headroom under its financial covenants over the next 12 months. The significant use of cash on hand and some revolver availability for share repurchases, and reduced pro forma financial covenant headroom warrants the lower liquidity rating. The change in rating outlook to stable from positive reflects Moody's view that the controlling shareholders are negatively impacting Armstrong's liquidity profile to enrich themselves, events that Moody's previously indicated could result in a stabilization of the rating outlook. Also, the $260 million being used for share repurchases represent about 17 years of Armstrong's LTM 2Q13 reported GAAP free cash flows. A rating upgrade is not likely over the intermediate term given Armstrong's recent share repurchases. However, if operating performance over the long term results in EBITA-to-interest expense trending near 4.0 times and debt-to-EBITDA improving towards 3.5 times (all ratios include Moody's standard adjustments) ratings may be considered for an upgrade. Ongoing cash dividends commensurate with the strong equity earnings from the WAVE JV are critical to supporting upwards rating pressures. The ratings could be downgraded if operating performance falls below expectations or if the company experiences erosion in financial performance due to an unexpected decline in its end markets. EBITA-to-interest expense trending below 3.0 times or debt-to-EBITDA sustained above 4.5 times (all ratios incorporate Moody's standard adjustments) could pressure the ratings. Deterioration in the company's liquidity profile, significant shareholder return activities, such as debt-financed dividends or share repurchases, or debt-financed acquisitions may also stress Armstrong's ratings. Any disruption in the reported equity earnings from the WAVE JV could pressure Armstrong's operating margins, potentially resulting in negative rating actions. The principal methodology used in this rating was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Armstrong World Industries, Inc., headquartered in Lancaster, PA, is a global manufacturer of flooring products and ceiling systems for use primarily in the construction and renovation of residential, commercial and institutional buildings. Together, Armor TPG Holdings LLC and the Asbestos Personal Injury Settlement Trust own a controlling interest in Armstrong. Revenues for the 12 months through June 30, 2013 totaled approximately $2.6 billion. ASHTON GROVE: Files Amended Schedules of Assets and Liabilities --------------------------------------------------------------- Ashton Grove, L.C. filed with the Bankruptcy Court for the Western District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $9,705,000 B. Personal Property $27,519 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $5,997,792 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $2,183,053 ----------- ----------- TOTAL $9,732,519 $8,180,845 Midland, Texas-based Ashton Grove, L.C., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 13-70104) on Aug. 12, 2013. Judge Ronald B. King oversees the case. ATLANTIC COAST: Names John Stephens as President and CEO -------------------------------------------------------- Atlantic Coast Financial Corporation, the holding company for Atlantic Coast Bank, said that its Board of Directors has named John K. Stephens president and chief executive officer of both Atlantic Coast Financial and Atlantic Coast Bank, contingent upon receipt of regulatory non-objection from the Office of the Comptroller of the Currency and the Federal Reserve Bank of Atlanta. Mr. Stephens will replace Thomas B. Wagers, Sr., who has served as interim president and chief executive officer since July 2013. Mr. Stephens will have an annual base salary of $300,000, and in connection with his relocation to the Jacksonville, Florida area, the Company will pay for 90 days of temporary housing. As of Sept. 10, 2013, Mr. Stephens held no securities in the Company. Mr. Stephens is a 23-year veteran of the banking and financial services industry. From 2006 to 2011, he served as chief lending officer for the Central and North Florida affiliate banks of Fifth Third Bank, N.A., overseeing a loan portfolio of almost $2 billion and responsible for strategic leadership for all wholesale banking activities. Mr. Stephens began his career in 1986 with Wachovia Bank, N.A., where he started as a regional banking officer, later became a relationship manager responsible for originating and managing senior debt and ancillary service relationships with corporate clients, and was ultimately selected to start and lead a leveraged finance group. Most recently, Mr. Stephens served as president of Orlando, Florida-based Tower Bridge Capital, Inc. Mr. Stephens received an MBA, with a concentration in corporate finance and capital markets, from the University of Notre Dame, Mendoza Graduate School of Business, and earned a Bachelor of Arts degree from the University of South Carolina. In commenting on the announcement, Jay Sidhu, who led the CEO search committee for the Company, said, "Our Board is very excited that John has accepted our invitation to lead the Company as its CEO, and we believe all of our constituents - shareholders, customers and employees - will be equally excited once they get to know him. John is a proven leader who brings significant banking experience to our company, including working in our northeast Florida market. During his more than 23 years in the financial industry, he has been a key player in all aspects of the banking industry, advancing to virtually every critical position in a bank's structure. We expect his diverse experience and excellent track record to be invaluable to Atlantic Coast Financial as we continue to develop and implement our strategic initiatives." In commenting on his new position, Mr. Stephens added, "I am indeed honored to become part of the Atlantic Coast Financial management team. I am impressed by the Company's potential, the markets in which it operates and the opportunities they present, as well as the energy and commitment demonstrated by the entire team to strengthening the Company's capital structure and building Atlantic Coast Bank's community banking model. I look forward to working with such a talented team of management and associates to build a strong future for the Company." 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. ATLANTIC COAST: Offering $46 Million Worth of Common Shares ----------------------------------------------------------- Atlantic Coast Financial Corporation is offering an aggregate of $46 million shares of common stock, par value $0.01 per share. The Company's common stock is listed on the Nasdaq Global Market under the symbol "ACFC." On Sept. 9, 2013, the last reported sale price for the Company's common stock was $4.21 per share. The Company has granted the underwriters an option, exercisable within 30 days of the date of this prospectus, to purchase up to [ ] additional shares of the Company's common stock at the initial public offering price, less the underwriting discounts and commissions, to cover over-allotments of shares of the Company's common stock, if any. A copy of the Form S-1 prospectus as filed with the U.S. Securities and Exchange Commission is available at: http://is.gd/puuDFC 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. BERNARD L. MADOFF: Madoff Customers Denied Interest on Claims ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for Bernard L. Madoff Investment Securities Inc. surmounted one hurdle Sept. 10 to distributing $1.37 billion to fraud victims when the bankruptcy judge ruled that customers aren't entitled to inflate their claims to reflect how long they invested in the Ponzi scheme. The report relates that the federal appeals court in Manhattan ruled in August 2011 in the Madoff liquidation that fictitious account statements issued to customers must be disregarded in calculating claims, because no securities were ever purchased on their behalf. Instead, the appeals court said that claims are correctly calculated on the basis of cash invested less cash taken out, thus disregarding fictitious profits shown on account statements. According to the report, two years ago, the appeals court didn't rule on whether claim amounts could be raised to reflect the time- value of money. Consequently, creditors went to bankruptcy court seeking interest. Because there's only a limited pool for compensating Madoff victims, increasing customer claims for interest would mean that those who invested a shorter time would recover less. Madoff trustee Irving Picard and the Securities Investor Protection Corp. argued that the statute has no provision allowing interest. U.S. Bankruptcy Judge Burton R. Lifland held a hearing Sept. 10, announced his decision and filed a 25-page opinion ruling in favor of the trustee. The report relates that because the dispute is holding up the distribution of almost $1.4 billion, Judge Lifland said he would authorize customers to appeal directly to the circuit court, bypassing an intermediate appeal in district court. According to the report, Judge Lifland ruled that interest wasn't available in view of the "plain language" of the statute, the distribution scheme under the Securities Investor Protection Act, and a decision in April from the U.S. Court of Appeals in Manhattan in a case called Commodity Futures Trading Commission v. Walsh. In that case, the appeals court ruled that a federal court receiver for a Ponzi scheme made no error in refusing to increase claims to reflect the time-value of money. The U.S. Securities and Exchange Commission took the position with Judge Lifland that interest should be permitted if benefits outweigh the costs. Judge Lifland ruled that the SEC's position was entitled to no deference. Looking at the SIPA statute, Judge Lifland said Congress made explicit provisions when it intended to allow interest. The judge said the statute doesn't entitle customers to recover every form of damage resulting from a brokerage bankruptcy. Allowing interest on claims, Judge Lifland said, would be akin to permitting damages "not covered by SIPA." According to the report, Judge Lifland said that allowing interest would not further customers' legitimate expectations. On investing with Madoff, customers were hoping for profits from trading in securities. They weren't promised a guaranteed return like interest. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. The most recent distribution was in March 2013. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Picard is holding almost $4.4 billion he can't distribute on account of outstanding appeals and disputes. The largest holdback, almost $2.8 billion, results from disputed claims. BIOZONE PHARMACEUTICALS: Sells Glyderm(R) Assets for $1 Million --------------------------------------------------------------- BioZone Pharmaceuticals, Inc., entered into an Asset Purchase Agreement, dated as of Sept. 3, 2013, by and among the Company, BioZone Laboratories, Inc., the Company's wholly owned subsidiary and Lautus Pharmaceuticals LLC. Pursuant to the APA, Lautus purchased from the Sellers certain assets relating to the Glyderm(R) brand of skin care products currently manufactured and sold by BZL. Specifically, the Sellers sold all of their interests in (A) the Glyderm(R) trademark, the Glyderm(R) patents, the Glyderm(R) product formulations, the domain names, www.glydermonline.com and www.glydermskincare.com, and the Glyderm(R) internet Web site; and (B) the Sellers' entire inventory of Glyderm(R) products held for resale. Lautus is a new entity formed by seasoned pharmaceutical company executives with extensive experience in all facets of pharmaceutical manufacturing, marketing and distribution, with a particular focus on the dermatology and aesthetics markets. Lautus intends to re-launch the Glyderm(R) product line, which will be supported by a combination of personal and non-personal promotion. The marketing strategy will include a newly created on-line presence to manage both consumer and professional purchasing transactions, provide on-line training and information to the professional audience and facilitate on-line sales detailing with professional customers. Neither Lautus nor any of its employees or directors has any material relationship with the Company or BZL other than with respect to the sale transaction. The purchase price for the Purchased Assets is an aggregate amount equal to $1,000,000. Simultaneous with the closing of the APA, BZL and Lautus entered into a Supply Agreement providing for the manufacture of Glyderm(R) products by BZL on behalf of Lautus. The term of the Supply Agreement is five years and is subject to termination upon various events set forth in the Supply Agreement, including termination at Lautus' option upon 90 days prior written notice. The Supply Agreement contains a schedule of the price per unit that Lautus has agreed to pay BZL for the manufacture of Glyderm(R) products. Lautus is not obligated to purchase any minimum amount of Glyderm(R) products from BZL during the term of the Supply Agreement. In addition, BZL and Lautus entered into a Services Agreement on the Closing Date pursuant to which BZL will provide to Lautus certain ongoing operational support on behalf of Buyer for a period of 12 months from the Closing Date. The Company used proceeds from the sale of the Glyderm(R) assets (A) to repay a portion of the principal plus interest owed under outstanding promissory notes issued by the Company to a shareholder in 2012 that are currently in default and (B) for general working capital purposes. About Biozone Pharmaceuticals Biozone Pharmaceuticals, Inc., formerly, International Surf Resorts, Inc., was incorporated under the laws of the State of Nevada on Dec. 4, 2006, to operate as an internet-based provider of international surf resorts, camps and guided surf tours. The Company proposed to engage in the business of vacation real estate and rentals related to its surf business and it owns the Web site isurfresorts.com. During late February 2011, the Company began to explore alternatives to its original business plan. On Feb. 22, 2011, the prior officers and directors resigned from their positions and the Company appointed a new President, Director, principal accounting officer and treasurer and began to pursue opportunities in medical and pharmaceutical technologies and products. On March 1, 2011, the Company changed its name to Biozone Pharmaceuticals, Inc. Since March 2011, the Company has been engaged primarily in seeking opportunities related to its intention to engage in medical and pharmaceutical businesses. On May 16, 2011, the Company acquired substantially all of the assets and assumed all of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an Asset Purchase Agreement dated as of that date. Aero manufactures markets and distributes a line of dermatological products under the trade name of Baker Cummins Dermatologicals. On June 30, 2011, the Company acquired the Biozone Labs Group which operates as a developer, manufacturer, and marketer of over- the-counter drugs and preparations, cosmetics, and nutritional supplements on behalf of health care product marketing companies and national retailers. Biozone incurred a net loss of $7.96 million in 2012, as compared with a net loss of $5.45 million in 2011. The Company's balance sheet at June 30, 2013, showed $7.70 million in total assets, $13.00 million in total liabilities and a $5.30 million total shareholders' deficiency. Paritz and Company. P.A., in Hackensack, 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 incurred operating losses for its last two fiscal years, has a working capital deficiency of $5,255,220, and an accumulated deficit of $14,128,079. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. CENTENNIAL BEVERAGE: Wants to Use Cash Collateral Thru Sept. 30 --------------------------------------------------------------- Centennial Beverage Group, LLC and Compass Bank entered into a ninth stipulation for the Debtor's extended use of the cash collateral through Sept. 30, 2013 in accordance with a prepared budget. A copy of the September 2010 budget is available for free at: http://bankrupt.com/misc/CENTENNIALBEVERAGE_BudgetSpt2013.PDF The Debtor may seek reimbursement from JWV Associates, Ltd. of certain budgeted expenses paid by the Debtor that relate primarily to the real property owned by JWV. The Lender does not object to JWV's reimbursement of the Debtor for such expenses, up to the amounts set forth in the budget, provided that JWV will pay Lender $80,744.33 in accrued but unpaid interest owing under the Term Loan Agreement. Otherwise, all terms and conditions of the Final Cash Collateral Order are unchanged and remain in full force and effect. J. Frasher Murphy, Esq., and Matthew T. Ferris, Esq., of Winstead PC, are counsel to Compass Bank. About Centennial Beverage Centennial Beverage Group LLC, a chain of 23 liquor stores in Texas, filed a petition for Chapter 11 reorganization (Bankr. N.D. Tex. Case No. 12-37901) amid lower sales brought by competition from big-box retailers. The 75-year-old-company once had 70 stores throughout Texas. They are now concentrated in the Dallas-Fort Worth area. Sales for the year ended in November 2012 were $158 million. Year-over-year, revenue was down 50%, according to a court filing. In its schedules, the Debtor disclosed $24,053,049 in assets and $48,451,881 in liabilities as of the Petition Date. Robert Dew Albergotti, Esq., and Ian T. Peck, Esq., at Haynes and Boone, LLP, in Dallas, serve as counsel to the Debtor. M. Jack Martin, III, Esq., at Jack Martin & Associates, in Austin, Tex., serves as special counsel. RGS LLC serves as the Debtor's financial advisor. BYGH Tax Consulting is property tax consultant to the Debtor. The Official Committee of Unsecured Creditors has retained Munsch Hardt Kopf & Harr, P.C. as its attorneys, and Lain, Faulkner & Co., P.C. as financial advisors. CARDELL CABINETRY: Closes Doors, Cuts 900 Jobs ---------------------------------------------- Woodworking Network reports that Cardell Cabinetry has closed its doors without warning, leaving approximately 900 workers unemployed. The closure of all Cardell Cabinetry's business operations was confirmed in a statement from attorney Howard Marc Spector, AT Spector & Johnson PLLC, according to Woodworking Network. The report relates that sources cite the economy and mounting debts for the closure. Cardell Cabinetry had debts of $45 million and had been put in receivership late last month, Woodworking Network notes. According to Spector, the appointed receiver, "the company owed its unsecured creditors more than $15 million and its lenders in excess of $30 million, and it did not have sufficient liquidity to manufacture products to meet outstanding orders," the report relates. "These are unfortunate circumstances, but the harsh reality is that the company cannot sustain itself and meet its business and financial obligations," Spector said in a statement provided to Woodworking Network. Compounding its problems, Cardell Cabinetry last month was cited for combustible dust and other safety and health violations by the U.S. Department of Labor's Occupational Safety and Health Administration, the report discloses. The semi-custom cabinetry firm was facing a penalty of $267,434 for 29 violations at the San Antonio, TX, facility, the report notes. Cardell had more than 900,000 square feet of combined manufacturing space between its San Antonio facilities and a secondary manufacturing facility located in El Campo, Texas. The closure, which affects all business operations, was effective Sept. 8, the report relays. The statement from Spector said it will continue efforts to sell the company's assets, the report adds. CASA CASUARINA: Two Bankruptcies Settle Dispute on Ownership ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that in the case with the former Versace Mansion on Ocean Drive in Miami Beach, Florida, two different bankruptcy judges must approve the same sale. The current owner, Casa Casuarina LLC, filed for Chapter 11 protection in July in Miami. Until his Ponzi scheme fell apart in 2009, Scott Rothstein had controlled the company that owned the property. Herbert Stettin is the Chapter 11 trustee for Rothstein's law firm Rothstein Rosenfeldt Adler PA, which has been in Chapter 11 liquidation since November 2009. Before Casa Casuarina filed bankruptcy, Mr. Stettin had reached agreement to settle his claim to partial ownership. The settlement is set for approval on Sept. 11 by the judge overseeing the firm's bankruptcy and on Sept. 18 by the judge in the property's bankruptcy. The settlement calls for Stettin to receive 9.99 percent of net sale proceeds, or 49.99 percent if he exercises an option. The auction of the property will take place on Sept. 17. The hearing for approval of sale will occur Sept. 18. About Casa Casuarina Casa Casuarina, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-25645) in Miami on July 1, 2013. Peter Loftin signed the petition as manager. Judge Laurel M. Isicoff presides over the case. The Debtor estimated assets of at least $50 million and debts of at lease $10 million. Joe M. Grant, Esq., at Marshall Socarras Grant, P.L., serves as the Debtor's counsel. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- was suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on Jan. 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case is represented by Michael Goldberg, Esq., at Akerman Senterfitt. RRA won approval of an amended liquidating Chapter 11 plan pursuant to the Court's July 17, 2013 confirmation order. The revised plan, filed in May, is centered around a $72.4 million settlement payment from TD Bank NA. CENGAGE LEARNING: Opposes Delay in Plan-Confirmation Process ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Cengage Learning Inc. opposed an initiative by its official creditors' committee seeking court permission to file a suit testing whether liens are valid on 15,500 copyrights. The Debtor said the validity of the liens is among the "key disputed issues" in the Chapter 11 case begun in July. The company said it intends to sue in the "near future," thus knocking the props from underneath the committee's request for authority to sue. Cengage cited case law for the proposition that a committee can't be given authority to sue when the bankrupt company is willing to pursue a suit. Cengage said the copyright-lien dispute should be resolved in the context of emerging from bankruptcy before year-end. According to the report, the company said the agreement with senior lenders on the contours of a Chapter 11 plan requires emergence by Nov. 14. Cengage is therefore against the committee's request for a one-month delay in a hearing scheduled for Sept. 27 to approve disclosure materials explaining the Chapter 11 plan. There was a hearing slated for Sept. 11 in bankruptcy court in Brooklyn, New York, where the judge was set to decide whether the creditors can sue and the plan process be delayed. 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. CENTRAL FALLS, RI: Mayor Draws No Campaign Opponent --------------------------------------------------- seattlepi.com reports that Central Falls Mayor James Diossa has drawn no opponent in his bid for a full three-year term, nearly 11 months after the city emerged from bankruptcy. Mr. Diossa formally launched his re-election campaign last month. The former councilman is serving out the term of Charles Moreau, who was sentenced to two years in prison on a federal corruption charge, according to seattlepi.com. The deadline to file papers was Sept. 6. Mr. Diossa handily defeated former Central Falls Police Chief Joseph Moran in a December special election to become the city's first Latino mayor, the report notes. Turnout among registered voters was about 21 percent. The report discloses that there is only one contested campaign for seven city council seats. Central Falls was taken over by a state-appointed receiver in 2010 and in 2011 became the first in Rhode Island to declare municipal bankruptcy, the report adds. COSTA DORADA: Ordered to File Amended Disclosures by Oct. 1 ----------------------------------------------------------- At the Sept. 10, 2013 hearing to consider the adequacy of the Second Disclosure Statement filed by Costa Dorada Apartments Corp., in support of its proposed Plan of Reorganization, the Hon. Enrique S. Lamoutte, U.S. Bankruptcy Judge for the District of Puerto Rico granted the Debtor 21 days to file an amended/supplemental Disclosure Statement, with 21 days objection language. As reported in the TCR on Aug. 16, 2013, The Debtor's proposed Plan divides creditors into six classes -- Class 1 Administrative Expenses, Class 2 Secured Creditors, Class 3 Secured Creditor Banco Popular de PR, Class 4 General Unsecured Creditors, Class 5 Time Sharing (Vacation Club) Agreements, and Class 6 Equity Interests. The Second Disclosure Statement reveals that Banco Popular transferred its $3.68 million unsecured claim to PRLP 2011 Holding LLC in October 2011. The Second Disclosure Statement further clarifies that general unsecured creditors will be paid upon the sale of 20 apartments pertaining to the estate. The Debtor will sell these apartments, and after payment in full of the secured claim due to Scotiabank, the administrative expenses and allowed secured government claims pursuant to 11 U.S.C. Sec. 506, will use any remaining proceeds, to pay the creditors under Class 4 at pro-rata. The dividend to be paid to Class 4 will be in the amount of $700,000. These sales are expected to be completed by the Debtor within 12 months from confirmation date or no later than the effective date of the plan. Disbursement of the sales proceeds of property will be governed by the following provisions: * First, all selling and administrative expenses will be paid in full from the gross proceeds. * Second, payment in full of the secured Class 2 of Scotiabank. * Third, allowed secured government claims pursuant and unsecured priority claims, as allowed by the Court, will be paid in full from the gross proceeds. Only upon full payment of all allowed claims with superior rank will general unsecured claimants be paid on a pro-rata basis. A full-text copy of the Second Disclosure Statement dated July 15, 2013 is available for free at: http://bankrupt.com/misc/COSTADORADA_2ndDSJul15.PDF About Costa Dorada Apartments Costa Dorada Apartments Corp., dba Villas De Costa Dorada, in Isabela, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D.P.R. Case No. 11-03960) on May 10, 2011. The Debtor disclosed $10.7 million in assets and $8.6 million in liabilities as of the Chapter 11 filing. The Hon. Enrique S. Lamoutte Inclan, presides over the case. The petition was signed by Carlos R. Fernandez Rodriguez, its president. Wigberto Lugo Mender, Esq., at Lugo Mender & Co., in Guaynabo, Puerto Rico, represents the Debtor as counsel. CENGAGE LEARNING: Book Dog Books Lawsuit Transferred to S.D.N.Y. ---------------------------------------------------------------- District Judge James L. Graham of the Southern District of Ohio transferred to the U.S. District Court for the Southern District of New York the venue of the lawsuit commenced by book sellers Book Dog Books LLC and SPL Management LLC against Cengage Learning, Inc. and Pearson Education, Inc. Book Dog Books and SPL Management filed the action in December 2012 for preliminary injunctive relief to require Cengage Learning and Pearson to supply the plaintiffs with college textbooks before the start of the 2013 winter semester at The Ohio State University. The Defendants had refused to supply books because they believed the plaintiffs had engaged in copyright infringement. Proceeding under a theory of promissory estoppel, the plaintiffs alleged that the publishers had made binding promises to supply the plaintiffs with books. Following an evidentiary hearing, the S.D. Ohio court found that the plaintiffs had failed to put forth evidence of a binding promise and denied the motion for injunctive relief. The Plaintiffs have also asserted claims for declaratory judgment that they have not infringed the copyrights of defendants, for antitrust violations relating to the defendants' refusal to sell books to the plaintiffs, and for defamation relating to the defendants' accusation that the plaintiffs engaged in copyright infringement. In February 2013, the defendants and John Wiley & Sons, Inc. filed suit against Book Dog Books and its sole member and CEO Phillip Smyres in the United States District Court for the Southern District of New York. The book publishers allege in that action that Smyres and Book Dog Books have infringed their copyrights and have breached a 2008 Settlement Agreement between the parties that terminated a prior copyright lawsuit in the Southern District of New York. Cengage Learning and Pearson filed a motion to transfer venue of the lawsuit on the grounds that a forum selection clause in a 2008 Settlement Agreement requires that subsequent disputes arising out of, or related to, the Agreement be heard in a court in New York. In July 2013, the S.D. Ohio court received notice that Cengage had filed a petition for Chapter 11 bankruptcy in New York. The court stayed the claims against Cengage and directed plaintiffs and Pearson to advise the court as to whether the claims against Person should proceed. Pearson responded by holding to its position in the motion to transfer venue that the case should not go forward because any claims against it must proceed only in a New York court. In a notice filed August 28, 2013, the plaintiffs have advised the court that they consent to transfer of this action to the Southern District of New York. The Plaintiffs believe that the interests of economy will be best served by having one court hear the disputes among the non-bankrupt parties and that from New York it will be easier for them to attempt to pursue their claims against Cengage, whether by filing an adversary proceeding or by moving to lift the automatic stay. The Plaintiffs note that they oppose the fee request made by the defendants in the motion to transfer venue. The Defendants argued in the motion that they were entitled to an award of costs and attorneys' fees incurred in defending this action because plaintiffs breached the 2008 Settlement Agreement's forum selection clause. The Defendants further allege that the Agreement contained a provision under which a breaching party is liable in damages for the reasonable costs and attorneys' fees incurred by the non-breaching party. The S.D. Ohio Court, however, declines to award costs and fees to defendants. The S.D. Ohio Court said the issue of whether the plaintiffs breached the Settlement Agreement is best resolved in the New York action, and the S.D. Ohio court, by declining to award costs and attorneys' fees to defendants, is in no way making any factual or legal determinations as to that issue. The case is Book Dog Books, LLC, et al., Plaintiffs, v. Cengage Learning, Inc., et al., Defendants, Case No. 2:12-cv-1165 (S.D. Ohio). A copy of the Court's Sept. 5, 2013 Opinion and Order is available at http://is.gd/dZaIU5from Leagle.com. 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. CENGAGE LEARNING: Seeks Appointment of Mediator to Resolve Dispute ------------------------------------------------------------------ Cengage Learning, Inc. asked U.S. Bankruptcy Judge Elizabeth Stong to approve the appointment of a mediator who would help resolve issues related to the confirmation of its Chapter 11 reorganization plan. "The appointment of a mediator and the setting of a schedule for mediation will help facilitate negotiations, resolve issues and enable the debtors to emerge from Chapter 11 in a timely manner," the company said in court papers. Cengage said it has already identified key issues that need to be resolved through mediation to allow the company to emerge from bankruptcy protection. These issues include the company's total enterprise value, claims tied to the 2007 leveraged buy-out, the additional 14,000 disputed copyrights, and the use of the trust structure to address issues that are not resolved or adjudicated by the time of the company's bankruptcy exit. Early this month, Cengage's official committee of unsecured creditors criticized the company for failing to provide enough information in the disclosure statement, including information about the alleged invalidity of secured lenders' claims on more than 15,000 copyrights. The group proposed to postpone the hearing on the company's disclosure statement to Oct. 25, and on the confirmation of the plan to Dec. 10. According to Cengage, the timeframe suggested by the unsecured creditors "achieves the debtors' need of emerging from chapter 11 by year end," adding that it can only be accomplished if a mediator is appointed and a schedule in connection with the confirmation is set. Cengage proposed that the appointment of a mediator be approved no later than Sept. 13, and that three mediation sessions be held following the appointment. The company also suggested a timetable for the conduct of investigation and the filing of court papers in connection with the confirmation of its plan. The proposed schedule can be accessed for free at http://is.gd/41jOX1 CSC Trust, First Lien Lenders Respond CSC Trust Company of Delaware said the timeframe proposed by Cengage is an attempt by the company to "fast track the cases to the detriment of other parties." CSC Trust said discovery and briefing will take months given the complexity of the confirmation-related issues that need to be resolved. "Any mediation schedule must give the parties a reasonable amount of time to gather information, analyze the facts and the various legal issues at play, and form independent views on matters to be able to engage constructively with the other parties," the indenture trustee said in a Sept. 10 filing. "Unfortunately, the debtors' proposed schedule is not intended to give parties a fair shake at participating in these processes," CSC Trust said. Meanwhile, the ad hoc group of first lien lenders said that the timeline for confirmation proposed by Cengage should be shortened, and that the issues not necessary to plan confirmation should be subject to a separate schedule that does not interfere with or cause delay with respect to the resolution of the core confirmation issues. BankruptcyData reported that multiple parties -- including Centerbridge Partners, Apax Partners and Cengage Learning's second lien trustee -- filed with the U.S. Bankruptcy Court separate objections to the Debtors' motion for entry of an order (a) approving appointment of a mediator and scheduling mediation in connection with confirmation of the Debtors' Plan and (b) scheduling certain hearing dates and deadlines. The second lien trustee states, "By the Scheduling Motion, the Debtors have requested that this Court (a) appoint a mediator and schedule a mediation to attempt to achieve consensus among the primary parties in interest in these chapter 11 cases regarding a myriad of legal and factual disputes and (b) establish a confirmation litigation schedule for the Plan, neither of which was ever discussed with the Second Lien Trustee. While the Second Lien Trustee would be in favor of both Court order meditation and establishing a reasonable schedule to consider confirmation of a viable Plan of reorganization in these cases, the relief requested by the Debtors is premature and has been advanced in a manner that is highly prejudicial to the Debtors' non-first lien lender stakeholders. As the Court is aware, there are a number of complex legal and factual issues that must be addressed in these cases before a feasible chapter 11 plan can be proposed and confirmed." CSC Trust Company is represented by: Ira S. Dizengoff, Esq. Philip C. Dublin, Esq. Brad M. Kahn, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, New York 10036 Tel: 872-1000 (Telephone) Fax: 872-1002 (Facsimile) E-mail: idizengoff@akingump.com pdublin@akingump.com The ad hoc group is represented by: Dennis F. Dunne, Esq. Gerard Uzzi, Esq. Milbank Tweed Hadley & McCloy LLP 1 Chase Manhattan Plaza New York, New York 10005 Tel: (212) 530-5000 Fax: (212) 530-5219 E-mail: ddunne@milbank.com guzzi@milbank.com 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. COLONIAL BANK: PwC Fails in Bid to Toss FDIC's $1B Negligence Suit ------------------------------------------------------------------ Law360 reported that an Alabama federal judge on Sept. 10 refused to dismiss an Federal Deposit Insurance Corp. lawsuit against PricewaterhouseCoopers LLP over its auditing of Colonial Bank, which collapsed after the bank became ensnared in the massive Taylor Bean & Whitaker Mortgage Corp. mortgage fraud scheme. According to the report, Chief U.S. District Judge W. Keith Watkins rejected PwC and fellow defendant Crowe Horwath LLP's argument that federal law, not state law, determined whether the wrongdoing of Colonial Bank insiders could be legally attributed to the FDIC. The case is Federal Deposit Insurance Corporation v. PricewaterhouseCoopers LLP et al., Case No. 2:12-cv-00957 (M.D. Ala.) before Judge William Keith Watkins. CPG INTERNATIONAL: S&P Rates $315MM Notes CCC+ & Affirms B+ CCR --------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed the 'B' corporate credit rating on Scranton Pa.-based CPG International Inc. The outlook is stable. At the same time, S&P assigned a 'B' issue-level rating to the company's proposed $625 million seven- year secured bank term loan with a recovery rating of '4', indicating that lenders can expect average recovery (30%-50%) in the event of a default. S&P also assigned its 'CCC+' issue level rating to the proposed $315 million eight-year senior unsecured notes with a recovery rating of '6', indicating negligible recovery (0%-10%) for noteholders in the event of a default. S&P's affirmation of the 'B' corporate credit rating follows CPG's announcement that private equity firms Ares Management and Teachers' Private Capital, the private investment department of Ontario Teachers' Pension Plan, have reached an agreement to purchase the company from current majority owner, AEA Investors L.P., in a leveraged transaction valued at $1.5 billion including about $500 million in assumed debt. "The stable outlook reflects our assessment that CPG will produce positive discretionary cash flow at $50 million or more over the next several years, allowing the company to modestly improve its highly leveraged financial profile while maintaining adequate liquidity," said Standard & Poor's credit analyst Thomas Nadramia. Under the proposed financing structure, CPG will benefit from the lack of any near-term debt maturities, modest capital spending requirements, and good coverage of interest requirements (2.5x or higher). S&P would lower its rating if CPG's EBITDA were to fall short of expectations, resulting in interest coverage of less than 1.5x, reduced discretionary cash flow, or constrained liquidity. S&P views an upgrade during the next 12 months as highly unlikely given the high debt leverage and prospects for only modest deleveraging, as well as private equity ownership. For such an upgrade to occur in the longer term, CPG would have to benefit from a greater-than-expected recovery in remodeling markets and delever to less than 5x and, as per S&P's financial sponsor criteria, CPG's owners would need to adopt a financial policy consistent with an "aggressive" financial risk profile. DELL INC: Fitch Downgrades LT Issuer Default Rating to 'BB-' ------------------------------------------------------------ Fitch Ratings has downgraded Dell Inc.'s (Dell) ratings as follows: -- Long-term Issuer Default Rating (IDR) to 'BB-' from 'BB+'; -- Senior unsecured debt to 'B+' from 'BB+'; Fitch has also withdrawn Dell's bank credit facility rating of 'BB-' and short-term IDR and commercial paper rating of 'B'. Fitch expects to rate the following upon closing of Dell's leverage buyout (LBO): -- Senior secured first lien ABL facility 'BB+'; -- Senior secured first lien term loans 'BB+'; -- Senior secured first-lien notes 'BB+'; and -- Senior secured second-lien notes 'BB'; Fitch has removed Dell's ratings from Rating Watch Negative and assigned a Stable Rating Outlook. The ratings were previously placed on Negative Watch in February 2013 following Dell's announcement that it will be acquired by Michael Dell and Silver Lake in a leverage buyout (LBO). Key Rating Drivers The ratings and Outlook reflect: -- Fitch's expectations that Dell's shareholders will approve the LBO at a special meeting on Sept. 12, 2013. -- Moderate credit metrics for a LBO, especially core (non- financing). Fitch estimates pro forma total and core leverage of 4.8x and 4.0x as of Aug. 3, 2012. Fitch previously indicated an IDR of 'BB-' was possible based on pro forma leverage of 3.5x - 4.5x. Despite total leverage at the higher end of Fitch's prior range, Dell's IDR of 'BB-' is supported by the agency's belief that Dell will aggressively de- lever with free cash flow (FCF), and recent profitability pressures will be at least mitigated by substantial cost savings opportunities, initial returns on significant prior long-term investments that have weighed on margins (primarily R&D and sales force), and a moderation in the highly aggressive pricing environment for industry standard servers. -- Solid market position in industry standard servers (#2), density optimized servers for large scale datacenters (#1), PC (#3), storage (#5) and services (#13). -- Increasing contribution of higher value and margin enterprise solutions and services (servers, networking, storage and services), accounting for nearly 36% of revenue, up five percentage points since fiscal 2011, and half of gross margin. -- Significant scale, which provides procurement efficiencies for memory, hard disk drives and other components utilized across the hardware business, specifically PCs, servers and storage. -- Highly diversified revenue base by customer and geography (50% outside U.S.) Credit concerns center on: -- The highly competitive, low margin PC business accounts for approximately one-third of Dell's operating profit in the first half of fiscal 2014. Positively, Fitch estimates consumer end-user computing (EUC), which has performed considerably poorer than the commercial side due to tablet and smartphone substitution, will account for only 20% - 25% of EUC revenue, 14% of total revenue and 0% of operating profit in fiscal 2014. The direct to consumer EUC business does generate considerable cash flow due to the strongest cash conversion cycle relative to Dell's other business. -- Aggressive industry pricing pressure in PCs and servers that has pressured near-term profitability. Fitch expects aggressive PC pricing to continue. -- Potential hardware revenue pressures from aggressive cloud adoption by the U.S. federal government, a key Dell customer, and/or significant market concentration of cloud providers that have significant pricing leverage due to scale or utilize unbranded custom-built servers. -- Limited financial flexibility to make significant acquisitions to fill product and service gaps that may arise as technologies evolve. Rating Sensitivities The ratings may be upgraded in the event of: -- FCF is primarily used for debt reduction rather than acquisitions. -- Revenue mix materially shifts toward enterprise solutions, resulting in significant operating profit margin expansion, reduced reliance on the extremely competitive PC industry and lower financial performance volatility due to a greater percentage of recurring revenue from long-term contracts, such as IT services or software. The ratings may be downgraded in the event of: -- Accelerating PC revenue declines, materially pressuring liquidity, profitability and FCF generation. -- Revenue growth is negative for an extended duration, resulting in significant liquidity pressures. Dell's negative cash conversion cycle generates significant cash flow usage from working capital in a declining revenue environment. DETROIT, MI: Bond Insurer Appeals Casino Tax Revenue Ruling ----------------------------------------------------------- Katy Stech, writing for Daily Bankruptcy Review, reported that Syncora Guarantee Inc., the bond insurer caught up in the battle over Detroit's casino tax revenue, is appealing a bankruptcy judge decision that has allowed millions of dollars of those taxes to continue flowing to the city throughout its historic $18 billion bankruptcy. 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. DETROIT, MI: Michigan Governor to Be Deposed in Bankruptcy Case --------------------------------------------------------------- Nick Carey and Joseph Lichterman, writing for Reuters, reported that after a testy exchange between the judge presiding over Detroit's bankruptcy and a Michigan official, attorneys for the state agreed on Sept. 10 to drop a challenge to a request by creditors' lawyers to depose Governor Rick Snyder on the city's eligibility for bankruptcy. According to the report, citing executive privilege, the office of the state attorney general had filed a motion late Sept. 9 arguing Snyder should not be deposed. Creditors' attorneys had said they wanted the governor's deposition to determine his motivation in approving a request in mid-July from Detroit's state-appointed emergency manager, Kevyn Orr, to take the city into Chapter 9 bankruptcy. If Detroit's bankruptcy goes ahead, it will be the largest municipal bankruptcy in U.S. history, the report said. The city owes some $18.5 billion in long-term debt, and public sector unions have challenged the bankruptcy filing on grounds that it violates protections for worker pensions and benefits enshrined in Michigan's constitution. Some unions have also argued in filings that Snyder and Orr arranged the bankruptcy filing specifically to target worker pay and benefits, the report noted. Clearly annoyed, U.S. bankruptcy Judge Steven Rhodes took issue with the lateness of the filing on Sept. 9 and said he had half a mind to waive the Sept. 10 hearing, the report related. About Detroit, Michigan The city of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The city's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. Detroit is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. DEWEY & LEBOEUF: Former Managers to Face Suit in Iowa ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the three former top executives from Dewey & LeBoeuf LLP, the defunct law firm, must face trial before a U.S. district judge in Des Moines, Iowa, after failing to have a lawsuit by Aviva Life & Annuity Co. transferred to the bankruptcy court in Manhattan where Dewey was liquidated. According to the report, Des Moines-based Aviva alleged in a complaint filed in December that the trio induced the insurance company into buying $35 million of secured notes in April 2010. Aviva said the firm represented it was "financially sound" when there was $100 million in "undisclosed debt to certain highly compensated partners." The report relates that Aviva sued Steven Davis, the former Dewey chairman; Stephen DiCarmine, the former executive director; and Joel Sanders, the chief financial officer. The firm itself couldn't be named in the suit because it was in bankruptcy. The Dewey managers asked U.S. District Judge James E. Gritzner in Des Moines to transfer the case to the bankruptcy court in New York, where Dewey's Chapter 11 plan was approved by confirmation order in February. Judge Gritzner in an opinion Sept. 9 concluded that it was proper for the suit to remain in Iowa. Aviva alleges that Dewey kept obligations secret even from the firm's own partners to avoid the "possibility of a mass defection" and misstated revenue "by over $100 million per year." The managers said the insurance company was given a private placement memorandum that "clearly explained the dire financial situation." According to the report, Judge Gritzner analyzed how the bankruptcy court in New York could have what is known as "related- to" jurisdiction over the suit. Jurisdiction would be based on the possible effect of the suit on Dewey's Chapter 11 plan. He said the case must stay in Iowa because the bankruptcy judge could only issue a recommended decision. In the interest of judicial economy, the district court should keep the case, Judge Gritzner said. Ned Bassen of Hughes Hubbard & Reed LLP, attorneys for DiCarmine and Sanders, called the suit "preposterous." The Iowa case is Aviva Life & Annuity Co. v. Davis, 12-00603, U.S. District Court, Southern District of Iowa (Des Moines). About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. FTI Consulting, Inc. was appointed secured lender trustee for the Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A. Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at Togut, Segal & Segal LLP, serve as counsel to the Liquidation Trustee. Dewey's liquidating Chapter 11 plan was approved by the bankruptcy court in February 2013 and implemented in March. The plan created a trust to collect and distribute remaining assets. The firm estimated that midpoint recoveries for secured and unsecured creditors under the plan would be 58.4 percent and 9.1 percent, respectively. DETROIT, MI: Rebuts Objections to Municipal Bankruptcy Filing ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Detroit's lawyers filed papers explaining why the city is eligible for Chapter 9 municipal bankruptcy given an "unsustainable $18 billion debt burden." The 135 pages of papers lay out the city's arguments coming to bankruptcy court for hearing on Sept. 18. The city's papers about purely legal issues filed Sept. 6 answer a labor union's contention that Chapter 9 is unconstitutional by impinging on the state's sovereign immunity. Although the U.S. Supreme Court decision upholding municipal bankruptcy is more than 100 years old, the ruling hasn't even been "impliedly overruled," Detroit says. The bulk of the objectors contend that the state constitution precludes reducing workers' pensions. Detroit quotes the constitution and shows how it only gives pensions the status of contracts, not "gratuitous allowances" that could be modified at the whim of government. Although states can't impair contract, federal law can under the U.S. Constitution. Thus, Detroit says, the possibility of reducing pension benefits doesn't bar a Chapter 9 filing. Many objections were based on the idea that Michigan's emergency manager law violated the state's home rule protections because the decision to file in Chapter 9 was made by an emergency manager and approved by the governor. Detroit laid out multiple provisions in state law showing how the state has the ability to intercede in a city's affairs for a limited time. According to the report, U.S. Bankruptcy Judge Steven W. Rhodes will decide Detroit's eligibility for bankruptcy in two phases. At the first hearing Sept. 18, he will hear five hours of argument on purely legal issues entailing no factual disputes. The second major hearing will take place Oct. 23 when Judge Rhodes commences a trial on eligibility objections based on factual disputes. Individuals who filed objections without being represented by lawyers have their own hearing Sept. 19 where the judge will listen to comments from individuals allowed to speak for three minutes each. Judge Rhodes prescribed that the Sept. 18 hearing will consider the constitutionality of federal municipal bankruptcy law, the power of a bankruptcy judge to rule on constitutional issues, constitutional issues under the state constitution, the right of the emergency manager to authorize bankruptcy, and the effect of a state court ruling barring a bankruptcy filing. Unlike corporate bankruptcies, in municipal bankruptcy the court must make a threshold determination of whether the city is eligible for bankruptcy under both state and federal law. 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. DFC GLOBAL: Young Law Firm Mulls Legal Claims Over UK Unit Default ----------------------------------------------------------------- The Young Law Firm, a shareholder rights firm, is investigating potential legal claims on behalf of investors in DFC Global Corp. The investigation relates to the Company's announcement that the Consumer Financial Protection Bureau intended to initiate an administrative proceeding relating to the Company's MILES program. The investigation further relates to the Company's announcements on August 22, 2013 regarding regulatory requirements in the United Kingdom and loan defaults in the Company's United Kingdom business. The investigation by The Young Law Firm is ongoing. If you purchased DFC Global securities and have questions concerning the investigation, or if you have information about statements made by the Company, then please contact The Young Law Firm to discuss these matters at: Henry Young Esq. The Young Law Firm Toll Free: 888-452-7252 Email: contact@theyounglf.com or visit: http://www.theyounglf.com/dfc-global-corp-class-action-lawsuit/ Henry Young Esq., the Firm's founder, has over 10 years of experience litigating complex shareholder class action lawsuits, including cases resulting in the recovery of millions of dollars for shareholders. The Firm -- http://www.theyounglf.com-- routinely works with and refers cases to other leading law firms around the country to enforce shareholder rights. Headquartered in Berwyn, Pennsylvania -- http://www.dfcglobalcorp.com-- DFC Global Corp., formerly Dollar Financial Corp. is an international non-bank provider of alternative financial services, unsecured short term consumer loans, secured pawn loans, check cashing, money transfers and reloadable prepaid debit cards. As of June 2012, the Company served unbanked and under-banked consumers through its over 1,400 retail storefront locations and its multiple Internet platforms in eight countries across Europe and North America: the United Kingdom, Canada, the United States, Sweden, Finland, Poland, Spain and the Republic of Ireland. Its products and services, including its unsecured short-term consumer loans, secured pawn loans and check cashing and gold buying services, provide customers with access to cash for living expenses and other needs. In June 2013, the Company announced the acquisition of Express Credit. DIOCESE OF STOCKTON: May File for Bankruptcy Amid Abuse Claims -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Catholic Dioceses of Stockton, California, and Gallup, New Mexico, may become the ninth and 10th to seek protection from sexual-abuse claims by filing petitions for reorganization under Chapter 11 of the Bankruptcy Code. Bishop Stephen Blaire of Stockton told parishioners in a letter last week that funds to settle abuse claims are "almost depleted" and said a Chapter 11 filing is "likely" because options to avoid bankruptcy "have not emerged." A week earlier, Bishop James S. Wall of Gallup told his flock that bankruptcy is "the most effective and thoughtful course" to deal with sexual-abuse claims in his diocese. The Gallup diocese is planning a Chapter 11 filing in late September or October, according to an interview with the diocese spokesman, Timothy Farrell. The Gallup diocese principally encompasses American Indian reservations in northwest New Mexico and northeast Arizona, according to Farrell, a priest in the diocese. He said his diocese is one of the poorest in the U.S. The Stockton diocese is in a city that itself is going through bankruptcy reorganization. Bishop Blaire said in his letter that Catholic schools, cemeteries and other organizations are "separate corporations" whose assets shouldn't be tied up in a diocesan bankruptcy. He warned his followers that sexual abuse victims may challenge the separate nature of the assets of other Catholic institutions. In a letter in June, Bishop Blaire said the Stockton diocese's annual budget is about $5 million. DPL INC: Fitch Lowers Issuer Default Rating to 'B+' --------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating (IDR) of DPL, Inc. (DPL) to 'B+' from 'BB' and Dayton Power & Light Company's (DP&L) IDR to 'BB+' from 'BBB-'. In addition, both companies are removed from the Rating Watch Negative that they were placed on on Nov. 7, 2012. The Rating Outlook is Stable. Key Rating Drivers: Consolidated Leverage Weighs on DP&L: The IDR of both entities consider the combined leverage, consisting of approximately $1.5 billion of debt at DPL and $0.9 billion of debt at DP&L. Fitch currently notches DP&L's IDR by three notches from the IDR of DPL, reflecting a low-risk regulated business, stability of cash flow, supportive regulatory framework in Ohio, and a supportive stand- alone financial profile. Fitch will continuously monitor DP&L's funding needs, sustainability of its current capital structure, and operating cash flow for future notching or aligning of the future ratings to its standalone credit profile. Limited Financial Flexibility: Recently, the Public Utility Commission of Ohio (PUCO) approved an electric security plan (ESP) for DP&L providing it sufficient cash flow to partially reduce its leverage. The ESP will provide at least $330 million in a service stability rider (SSR) from January 2014 through 2016. Fitch expects DP&L to refinance its October 2013 FMB maturities. However, with the expected transfer of DP&L's generating assets to a non-regulated affiliate in 2017, DP&L will need to retire a portion of its debt, which includes tax-exempt bonds, prior to the asset transfer. Cash flow from the utility operations and margins from wholesale power sales could fall short to fully meet DPL's consolidated debt maturities. In Fitch's view, post ESP consolidated cash flow volatility will increase for DPL as it will operate the generating assets as a merchant generator in a relatively depressed electricity margin environment. Post ESP liquidity and capital needs at DPL will place further pressure on the leveraged consolidated capital structure. Deleveraging at DPL Crucial: DPL remains highly leveraged, and Fitch sees limited financial flexibility for any meaningful reduction in its debt at least through 2016. Liquidity needs for DPL's non-regulated business operations will increase with the transfer of mainly coal-fired generating plants to its non- regulated subsidiary from its utility subsidiary in 2017, further accentuating its business risk profile. DPL needs to recalibrate its current capital structure prior to the generating assets being transferred by DP&L to DPL or its non-regulated subsidiary. Declining Credit Metrics: The assigned IDR takes DPL's weak financial profile into consideration as well. Consolidated FFO based leverage (FFO/debt) will be around 10% over the rating horizon (2014-2016), and interest coverage ratio (FFO/Interest) for the same period will be around 3x. These ratios are within Fitch's metrics for a 'B+' rated entity and include supportive SSR embedded in the PUCO approved ESP. The Stable Outlook is supported by a sustainable regulatory cash flow base and ample liquidity to cover short-term obligations through 2015. AES' Ownership Credit Neutral: DPL's IDR is not linked to the ratings of AES Corporation, its ultimate parent. Fitch does not factor equity infusions from AES for DPL's capital needs nor any liquidity support. Future DPL funding will depend on its consolidated funds from operations and debt markets. Current Corporate Initiatives: DPL is currently pursuing various corporate initiatives to lower operating costs and capital expenditure, and Fitch believes that it will also opportunistically pursue the sale of non-core assets. Fitch believes that improved cash flow and proceeds from sale of assets will be used by DPL to reduce leverage. These will be positive for DPL's credit profile once achieved. Fitch will monitor the net cash flow enhancement from these measures along with capital needs of the company to reassess its credit profile once these measures are realized. Sufficient Short-term Liquidity: At the end of June 2013, DPL had about $100 million in cash and $350 million available in revolving credit facilities. The current liquidity is sufficient to cover short-term capital needs of the group at least through the 2015. Manageable Debt maturities: DPL and DP&L have manageable debt maturities through 2015, including refinancing of DP&L's first mortgage debt due in October 2013. Recovery Analysis: The unsecured debt rating at DPL is notched above or below the IDR, as a result of the relative recovery prospects in a hypothetical default scenario. Fitch values the power generation assets using a net present value (NPV) analysis and the equity value in DP&L is added to the parent recovery prospects. The generation asset NPVs vary significantly based on future gas price assumptions and other variables, such as the discount rate and heat rate forecasts in DP&L's service territory. For the NPV of generation assets used in Fitch's recovery analysis, Fitch uses the plant valuation provided by its third-party power market consultant, Wood Mackenzie as well as Fitch's own gas price deck and other assumptions. Fitch has used a multiple of equity only cash flow to derive value of DP&L's 'wire only' business and added to the NPV of its generating assets. Fitch has assigned a 'BB/RR2' rating to DPL's senior unsecured notes. The 'RR2' rating reflects a two-notch positive differential from the 'B+' IDR and indicates that Fitch estimates superior recovery of principal and related interest of between 71%-90%. Rating Sensitivities Ratings Upgrade Unlikely: Positive rating actions are unlikely given a highly leveraged balance sheet at DPL. Negative Rating Action: Fitch will monitor the pace of debt reduction at DPL along with capital spending and consider a negative rating action if the credit protection measures deteriorate from current levels. Fitch expects DPL to significantly reduce debt from the current levels and provide a viable liquidity plan to support a merchant generation business post ESP to prevent further downgrade to the ratings. Fitch downgrades the following rating with a Stable Outlook: DPL -- Long-term IDR to 'B+' from 'BB'. Fitch affirms and assigns a Recovery Rating to the following debt class: DPL -- Senior unsecured debt 'BB/RR2'. Fitch affirms the following rating: DPL -- Short-term IDR at 'B'. Fitch downgrades the following ratings: DP&L -- Long-term IDR to 'BB+' from 'BBB-'; -- Senior secured debt to 'BBB' from 'BBB+'; -- Preferred stock to 'BB' from 'BB+'; -- Short-term IDR to 'B' from 'F3'. Fitch downgrades and assigns a Recovery Rating to: DPL Capital Trust II -- Junior subordinate debt to 'B/RR5' from 'B+'. DUPONT FABROS: S&P Revises Outlook to Positive & Affirms 'BB-' CCR ------------------------------------------------------------------ Standard Poor's Ratings Services revised its ratings outlook on DuPont Fabros Technology Inc. and its subsidiary DuPont Fabros Technology L.P. (collectively, DuPont Fabros) to positive from stable and affirmed its 'BB-' corporate credit ratings on both entities. S&P also assigned its 'BB' issue rating ('2' recovery rating) to the company's proposed $600 million senior unsecured notes due 2021. "The outlook revision reflects the company's recent leasing progress and strengthened debt coverage measures," said Standard & Poor's credit analyst Eugene Nusinzon. DuPont Fabros has continued to profitably develop and lease-up wholesale data enters since S&P's initial rating of the company four years ago. Steady but lumpy leasing strengthened the company's total portfolio occupancy to 94% as of Aug. 28, 2013, from about 84% a year earlier. Commencement of cash flow from previously signed leases contributed to a 24% year-over-year increase in DuPont Fabros' adjusted EBITDA in the second quarter of 2013, which strengthened its fixed-charge coverage (FCC) to 2.8x (from 2.2x a year earlier) and lowered its debt-plus-preferred-to-EBITDA to 4.7x (from 5.7x). However, S&P estimates that the company's debt-plus-preferred-to- EBITDA will run in the mid-5x area as it funds new development with more debt than equity. The outlook is positive. S&P will continue to monitor the execution of DuPont Fabros' financial policies and growth strategy. S&P believes maintenance of recently strengthened debt coverage measures would offset the company's high asset and tenant concentration, exposure to floating-rate debt, and development- oriented expansion at the higher rating. S&P would raise its ratings on DuPont Fabros by one notch if the company continues to expand its portfolio profitably and prudently by developing in smaller phases and employing moderate pre-leasing, while maintaining its recently strengthened debt coverage measures. However, S&P would revise the outlook back to stable if the underlying spread of the company's negative market-to-market rent profile significantly widens over time. Although S&P believes a downgrade is unlikely in the near term, it would consider lowering its ratings on DuPont Fabros if a meaningful development stumble, aggressive share repurchases, or more aggressive-than-anticipated debt-funded expansion pushes its debt-plus-preferred-to-EBITDA above 7.0x. ELBIT VISION: Incurs $31,000 Net Loss in Second Quarter ------------------------------------------------------- Elbit Vision Systems Ltd. reported a net loss of $31,000 on $1.18 million of revenues for the three months ended June 30, 2013, as compared with net income of $519,000 on $1.96 million of revenues for the same period last year. For the six months ended June 30, 2013, the Company reported a net loss of $90,000 on $2.43 million of revenues as compared with net income of $753,000 on $3.58 million of revenues for the same period during the prior year. The Company's balance sheet at June 30, 2013, showed $3.49 million in total assets, $3.47 million in total liabilities and $19,000 shareholders' equity. "While our results are being effected by the continued realignment of our global operational structure, which includes sales, marketing, service and manufacturing, we expect improvement in the second half of the year and for all of 2013," Sam Cohen, CEO, stated. "We have completed our investment in our infrastructure and our training programs will continue in order to support our customer base and worldwide sales efforts." "The overall satisfaction with our systems on the part of our customers and the reduction of their costs has been gratifying. The company maintains a worldwide sales and support network to serve our customers' needs on a 24/7 basis. At the present time our systems are going through test runs in several new industries which will result in increased orders worldwide," he added. A copy of the press release is available for free at: http://is.gd/RJkkcq About Elbit Vision Based in Caesarea, Israel, Elbit Vision Systems Ltd. (OTC BB: EVSNF.OB) offers a broad portfolio of automatic State-of-the-Art Visual Inspection Systems for both in-line and off-line applications, and process monitoring systems used to improve product quality, safety, and increase production efficiency. The Company reported income of US$824,000 in 2012, as compared with income of US$1.08 million in 2011. ENERGY SERVICES: Amends Forbearance Agreement with United Bank -------------------------------------------------------------- Energy Services of America Corp. and its subsidiaries, as obligors, entered into an amendment to the forbearance agreement with United Bank, Inc., which extends the period under which the Company must raise funds and establishes tranches in which the capital and cash components of the capital raise must be undertaken. Pursuant to the Amended Forbearance Agreement, the Obligors will raise a total of $7.4 million in equity. The parties acknowledge that as of Sept. 6, 2013, $3 million has been raised, of which $1 million has been paid to the Lender as a principal reduction to the Indebtedness. Of the remaining monies to be raised, $1.5 million is to be raised by Aug. 31, 2013, $1.5 million cash to be raised by Sept. 30, 2013, and the remaining $1.4 million cash to be raised by Dec. 31, 2013. The Company and its subsidiaries entered into a forbearance agreement with United Bank, whereby they acknowledge that they are in default under the terms of two credit facilities with United Bank. United Bank has agreed to forbear from exercising certain of its rights and remedies under the loan agreements and related documents. The Forbearance Agreement was subsequently amended. The amendment also requires the Company to pay the greater of $1 million or 50 percent of the amount collected on a claim the Company is pursuing against a third party. The claim is currently being arbitrated and there can be no assurance of if, or when, the arbitration will be settled in favor of the Company. The remaining provisions of the new forbearance agreement are substantially the same as those in the Agreement. A copy of the Amended Forbearance is available for free at: http://is.gd/bxVxXt About Energy Services Huntington, West Virginia-based Energy Services of America Corporation provides contracting services to America's energy providers, primarily the gas and electricity providers. Arnett Foster Toothman PLLC, in Charleston, West Virginia, expressed substantial doubt about Energy Services' ability to continue as a going concern following the annual report for the year ended Sept. 30 ,2012. The independent auditors noted that the Company has suffered recurring losses from operations and has entered into a forbearance arrangement with its lenders as a result of continued noncompliance with certain debt covenants. The Company reported a net loss of $48.5 million on $157.7 million of revenue in fiscal 2012, compared with a net loss of $5.3 million on $143.4 million of revenue in fiscal 2011. The Company's balance sheet at June 30, 2013, the Company had $44.10 million in total assets, $36.66 million in total liabilities and $7.44 million in total stockholders' equity. ERF WIRELESS: Brad Baloun Held 6.8% Equity Stake at Sept. 6 ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Brad David Baloun disclosed that as of Sept. 6, 2013, he beneficially owned 794,115 shares of common stock of ERF Wireless, Inc., representing 6.8 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/aQckiw About ERF Wireless Based in League City, Texas, ERF Wireless, Inc., provides secure, high-capacity wireless products and services to a broad spectrum of customers in primarily underserved, rural and suburban parts of the United States. The Company incurred a consolidated net loss of $3.75 million for the nine months ended Sept. 30, 2012, as compared with a consolidated net loss of $2.32 million for the same period a year ago. The Company's balance sheet at June 30, 2013, showed $6.80 million in total assets, $10.69 million in total liabilities and a $3.88 million total shareholders' deficit. EXCEL MARITIME: Says Creditors Can't Touch $20MM in Escrow ---------------------------------------------------------- Law360 reported that Excel Maritime Carriers Ltd. on Sept. 9 urged a New York bankruptcy judge to reject its creditors' bid to access $20 million sitting in an escrow account, saying that money belongs to the entity that is slated to take over the shipping company when it exits bankruptcy. According to the report, in a cross-motion for summary judgment in the official committee of unsecured creditors' adversary proceeding, Excel contends the funds were placed into the account as part of a March 2012 agreement with senior lenders. About Excel Maritime Based in Athens, Greece, Excel Maritime Carriers Ltd. -- http://www.excelmaritime.com/-- is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products. Excel owns a fleet of 40 vessels and, together with 7 Panamax vessels under bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of approximately 3.9 million DWT. Excel Class A common shares have been listed since Sept. 15, 2005, on the New York Stock Exchange (NYSE) under the symbol EXM and, prior to that date, were listed on the American Stock Exchange (AMEX) since 1998. The company blamed financial problems on low charter rates. The balance sheet for December 2011 had assets of $2.72 billion and liabilities totaling $1.16 billion. Excel owes $771 million to secured lenders with liens on almost all assets. There is $150 million owing on 1.875 percent unsecured convertible notes. Excel Maritime, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-bk- 23060) on July 1, 2013, in New York after signing an agreement where secured lenders owed $771 million support a reorganization plan filed alongside the petition. Excel, which sought bankruptcy with a number of affiliates, has tapped Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Miller Buckfire & Co. LLC, as investment banker; and Global Maritime Partners Inc., as financial advisor. A five-member official committee of unsecured creditors was appointed by the U.S. Trustee. The Creditors' Committee is represented by Michael S. Stamer, Esq., Sean E. O'Donnell, Esq., and Sunish Gulati, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York; and Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas. EXIDE TECHNOLOGIES: Wants a Lid on Vernon Plant Suit and Claims --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that lead-acid battery maker Exide Technologies and the official creditors' committee are against the idea of allowing a class lawsuit to proceed on behalf of Los Angeles residents exposed to lead from the plant in Vernon, California. The report recounts that about six weeks before bankruptcy, a class suit was filed in the name of an individual named Zach Hernandez. It is based partly on a determination by state environmental regulators that the Vernon plan should close. According to the report, lawyers for Hernandez want permission to file one claim in the Exide bankruptcy on behalf of everyone who suffered damage from exposure to lead from the Vernon plant. They also want the bankruptcy judge to allow the California suit to proceed. Hernandez's lawyers are willing to collect only from insurance. Exide and the committee filed papers urging the bankruptcy court in Delaware to continue a halt on the suit and not allow a class claim. The issue comes up in bankruptcy court at a Sept. 17 hearing. Where the class plaintiffs are seeking $115 million in damages, Exide says it has an insurance policy with limits of $4 million for each occurrence and $8 million in total. The policy has a $500,000 deductible. There are already 100 lawsuit claims made against the policy, Exide says. There is no reason to allow the Vernon-plant claimants to jump ahead of everyone else, the company says. Even if recovery were only against the insurance company, the suit would distract management, according to Exide. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002 and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick and Company Inc. as public relations consultant and GCG as claims agent. The Debtor disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co counsel. Zolfo Cooper, LLC serves as its bankruptcy consultants and financial advisors. FIELDWOOD ENERGY: S&P Assigns 'B' CCR & Rates 2nd Lien Debt 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to Houston-based Fieldwood Energy LLC. The outlook is stable. At the same time, S&P assigned its 'BB-' issue-level rating to Fieldwood's proposed $900 million first-lien term loan and $1 billion RBL credit facility with a recovery rating of '1', indicating S&P's expectation of very high (90% to 100%) recovery in the event of a payment default. S&P also assigned its 'B-' issue-level rating to Fieldwood's proposed $1.725 billion second-lien term loan with a recovery rating of '5', indicating its expectation of modest (10% to 30%) recovery in the event of a payment default. S&P expects Fieldwood to use proceeds from the offerings and $100 million drawn on the credit facility to partially fund its $3.75 billion acquisition of shallow-water Gulf of Mexico properties from Apache Corp. The remainder of the purchase price will be funded with $1.275 billion of equity contributed by Fieldwood's sponsor, Riverstone Holdings LLC. "The stable outlook incorporates our expectation that we are unlikely to raise or lower the corporate credit rating during the next 12 months. We expect that Fieldwood will be successful in stemming (within a reasonable time frame) the recent declines in reserves and production on the acquired assets and lower the assets' historical finding and development costs, and that the debt to EBITDA ratio will remain less than 3.5x for the next 12-18 months," said Standard & Poor's credit analyst Carin Dehne-Kiley. A downgrade to 'B-' could occur if the company's debt leverage exceeded 4x or if liquidity deteriorated meaningfully, which S&P sees as unlikely within the next year. However, this could occur if production fell short of S&P's expectations or if costs were significantly higher than its estimates. S&P could raise the rating if the company were able to meaningfully improve the historical reserve replacement associated with the acquired assets, while bringing and maintaining leverage at less than 3x. FLORIDA GAMING: Wannabe Buyer Blasts Ch. 11 Filing -------------------------------------------------- Law360 reported that after Florida Gaming Centers Inc. blasted its creditors' recent request for a Chapter 11 trustee Sept. 9, the owner of Miami Jai-Alai faced another challenge the following day from Silvermark LLC, which urged the bankruptcy court not to allow FGC to reject their $129 million stock purchase agreement. According to the report, FGC, which filed for bankruptcy protection the day before it was expected to complete its sale to Silvermark on Aug. 19, accused lead creditor ABC Funding LLC of twisting and misstating facts and working to delay the Silvermark closing. About Florida Gaming Florida Gaming Centers Inc. filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 13-29597) in Miami on Aug. 19, 2013. Florida Gaming Centers operates a casino and jai-alai frontons in Miami. The Company listed debt of $138.3 million and assets of $180 million in its petition. Its parent, Florida Gaming Corp. (FGMG:US), and two other affiliates also sought court protection. Florida Gaming previously negotiated a sale of virtually all its assets to casino operator Silvermark LLC for $115 million in cash and $14 million in assumed liabilities. A provision in the financing agreement required Florida Gaming to make an additional payment to the lender -- ABC Funding -- if the assets are sold to third party. Jefferies LLC was hired to determine that amount, about $26.8 million, and valued the company at more than $180 million. Luis Salazar, Esq., Esq., at Salazar Jackson in Miami, represents Florida Gaming. ABC Funding, LLC, as Administrative Agent for a consortium of prepetition lenders, and the prepetition lenders are represented by Dennis Twomey, Esq., and Andrew F. O'Neill, Esq., at SIDLEY AUSTIN LLP, in Chicago, Illinois; and Drew M. Dillworth, Esq., and Marissa D. Kelley, Esq., at STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A., in Miami, Florida. The Prepetition Lenders are Summit Partners Subordinated Debt Fund IV-A, L.P., Summit Partners Subordinated Debt Fund IV-B, L.P., JPMorgan Chase Bank, N.A., Locust Street Funding LLC, Canyon Value Realization Fund, L.P., Canyon Value Realization Master Fund, L.P., Canyon Distressed Opportunity Master Fund, L.P., and Canyon-GRF Master Fund II, L.P. FLUX POWER: Files Updated Investor Presentation ----------------------------------------------- Flux Power Holdings, Inc., added an updated investor presentation titled "Flux Power Kleenspeed Investor Presentation" to its corporate Web site. The presentation can be found in the "Investor" section under "Events and Presentations" at www.fluxpwr.com. A copy of the presentation is available for free at http://is.gd/c8brsa About Flux Power Escondido, California-based Flux Power Holdings, Inc., designs, develops and sells rechargeable advanced energy storage systems. The Company reported a net loss of $231,000 on $700,000 of net revenue for the nine months ended March 31, 2013, compared with a net loss of $1.1 million on $3.0 million of revenue for the nine months ended March 31, 2012. The Company's balance sheet at March 31, 2013, showed $2.5 million in total assets, $4.7 million in total liabilities, and a stockholders' deficit of $2.1 million. According to the quarterly report for the period ended March 31, 2013, there are certain conditions which raise substantial doubt about the Company's ability to continue as a going concern. "We have a history of losses and have experienced a lack of revenue due to the time to launch the Company's revised business strategy. Our operations have primarily been funded by the issuance of common stock. Our continued operations are dependent on our ability to complete equity financings, increase credit lines, or generate profitable operations in the future." FREESEAS INC: Fully Satisfies Settlement with Hanover ----------------------------------------------------- FreeSeas Inc., on Sept. 9, 2013, issued and delivered to Hanover 1,750,000 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. 6, 2013, the Company issued and delivered to Hanover an aggregate of 25,758,000 additional settlement shares. The "Calculation Period" expired on Sept. 6, 2013. Based on the adjustment formula, Hanover was entitled to receive an aggregate of 30,532,714 VWAP Shares. Accordingly, since Hanover had received an aggregate of only 28,398,000 Initial Settlement Shares and Additional Settlement Shares, on Sept. 10, 2013, the Company issued and delivered to Hanover 2,134,714 additional shares of Common Stock pursuant to the terms of the Settlement Agreement approved by the Order. No additional shares of Common Stock are issuable to Hanover pursuant to the Settlement Agreement. A copy of the Form 6-K is available for free at: http://is.gd/RaTAZ7 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. FRIENDSHIP DAIRIES: Fails to File Agreed Order by Sept. 3 Deadline ------------------------------------------------------------------ On Aug. 20, 2013, the U.S. Bankruptcy Court for the Northern District of Texas (Amarillo Division) conducted a hearing regarding various matters related to the hearings scheduled for Sept. 10, 2013, and Sept. 11, 2013, in the Chapter 11 case of Friendship Dairies. The following matters were set for hearing: Debtor's Second Amended Plan of Reorganization; Motion for Relief from Stay, or in the Alternative to Convert Case to a Chapter 7, or in the Alternative to Dismiss Case. At the Aug. 20 hearing, the Court directed the parties in attendance -- Debtor Friendship Dairies, the Official Committee of Unsecured Creditors, creditor AgStar Financial Services, FLCA, and creditor Frontier Capital Group, Ltd. -- to submit an agreed order by Sept. 3, 2013, allocating the parties' time (at 6.5 hours per day) for the hearings. As the parties failed to submit an agreed order by the specified date, the Court has ordered that the parties' time be allocated as follows: Debtor: 5.2 hours; AgStar: 5.2 hours; Creditors Committee and Frontier: combined time of 2.6 hours. The Creditors Committee and Frontier may allocate a portion of their time to the Debtor or any other creditor. As stated by the Court at the August 20 hearing, a third day will be allowed for closing arguments; no additional evidence on plan confirmation will be received. The Court will, if necessary, entertain a request for additional time to submit evidence on AgStar's Motions. The Order was signed by on September 4, and entered into the Court's dockets on September 5. As reported in the TCR on Aug. 9, 2013, AgStar, as loan servicer and attorney-in-fact for McFinney Agri-Finance, LLC, objected to the Second Amended Plan of Reorganization of Friendship Dairies dated July 2, 2013. According to papers filed with the Court, AgStar believes that the Debtor cannot make the payments due under the Plan, and this will lead to a loss to AgStar in light of the thin equity cushion. Therefore, AgStar requests that Friendship surrender the Collateral to AgStar to avoid a loss to AgStar. "If Friendship will not surrender the Collateral, AgStar requests that its pending motion for relief from stay be granted." As reported in the TCR on July 24, 2013, the U.S. Bankruptcy Court for the Northern District of Texas will conduct hearings on Sept. 10 and 11, 2013, at 9:00 a.m. to consider creditor AgStar Financial Services, FLCA's motions to grant relief from stay, or alternatively, order conversion of the case from Chapter 11 to Chapter 7; or dismissal of the case. On June 21, 2013, AgStar Financial Service, FLCA, as loan servicer and attorney in fact for McFinney Agri-Finance, filed documents asking the Bankruptcy Court for relief from the automatic stay, citing that the Debtor has no material equity in the Collateral and the Collateral is not necessary for an effective reorganization in this case because the Debtor cannot effectively reorganize and for cause, including lack of adequate protection. According to AgStar, as of June 19, 2013, the Debtor owed it $19,350,176.67, secured by Collateral with a current gross value of approximately $19,563,466.73. As such, based on the amounts due to it as of June 19, 2013, the Debtor's equity cushion at best is only $46,761.28 or less than 1% and is decreasing daily. AgStar adds that alternatively, the case should be converted to Chapter 7 or dismissed entirely, citing that there is no sound business justification for the Debtor to continue operating in light of the fact that the Debtor continues to accrue losses, has made no viable effort to pay its creditors, and there is no reasonable likelihood of reorganization. Frienship Dairies objects to the motion, asserting that AgStar is adequately protected for the continuation of the automatic stay and that the equity cushion continues to be sufficient adequate protection for both the Debtor's use of cash collateral and the imposition of the automatic stay. Alternatively, the Debtor says, in the event the Court determines that AgStar's equity cushion has eroded, AgStar's interest in its Collateral may be protected by periodic payments. About Friendship Dairies Friendship Dairies, a general partnership, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The Debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C., serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. FRIENDSHIP DAIRIES: Files First Modification to 2nd Amended Plan ---------------------------------------------------------------- Friendship Dairies filed with the U.S. Bankruptcy Court for the Northern District of Texas (Amarillo Division) on Sept. 10, 2013, a First Modification to the Debtor's Second Amended Plan of Reorganization. The modification does not adversely change the treatment of the claim of a creditor or the interest of any equity security holder who has not accepted the modification. The modification has been consented to by Frontier Capital Group, Lone Star Milk Producers, Dimmitt Flaking, Gavilon Ingredients, Archer Daniels Midland, DBS Commodities, Commodity Specialists Company, GEA Farm Technologies, Link Feed Ingredients, and the Official Creditors' Committee. According to the Debtor, as the modification does not materially modify the Plan, no further disclosures are necessary under 11 U.S.C. Section 1125. A copy of the First Modification to the Debtor's Second Amended Plan of Reorganization is available at: http://bankrupt.com/misc/friendshipdairies.doc651.pdf About Friendship Dairies Friendship Dairies, a general partnership, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The Debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C., serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. GATEHOUSE MEDIA: Fortress Using Bankr. to Assemble Newspaper Group ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Fortress Investment Group LLC will use a prepackaged Chapter 11 filing to assemble a chain of more than 430 daily, weekly, and community newspapers. New York-based Fortress began the process by having Newcastle Investment Corp. pay $87 million to buy Dow Jones Local Media Group Inc. from News Corp. The acquired company has eight daily and 15 weekly newspapers in 7 states. Fortress will use a prepackaged Chapter 11 filing to acquire control of newspaper publisher GateHouse Media Inc., the owner of 400 community newspapers. Fortress owns 52 percent, or $626 million of GateHouse's $1.2 billion in debt. Fortress already holds 39.5 percent of GateHouse's equity, according to data compiled by Bloomberg. The plan will call for Fortress to convert its debt to equity in Fairport, New York-based GateHouse, whose other lenders will have the option of receiving stock or 40 percent of the face amount of debt in cash. Local Media will manage GateHouse, according to a statement. 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. GMX RESOURCES: Lenders Settle With Committee as Plan Forthcoming ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that after the GMX Resources Inc. unsecured creditors' committee objected to selling the assets to lenders in exchange for debt, everyone came to an agreement on a "global resolution," canceling a hearing that would have been held to approve sale. The report recounts that secured lenders to the oil and gas exploration and production company won an auction to buy the assets in exchange for $338 million in secured debt. The committee said the sale would leave nothing for unsecured creditors. The bankruptcy judge in Oklahoma City put unsecured creditors' backs further to the wall when she ruled in August that the lenders are owed $402.4 million because a so-called make-whole premium is owing, even though it became due as a consequence of the Chapter 11 filing. According to the report, GMX filed papers with the bankruptcy judge saying that the lenders and the committee agreed on a settlement encompassing a Chapter 11 plan and resolving the creditors' objection to sale. Details of the plan weren't disclosed. The plan is "still under discussion," according to the court paper. Transferring ownership to the lender will now be accomplished through a reorganization plan rather than with a sale. A hearing Sept. 10 status conference was slated to bring the judge up to date. About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. GMX Resources filed a Chapter 11 petition in its hometown (Bankr. W.D. Okla. Case No. 13-11456) on April 1, 2013, so secured lenders can buy the business in exchange for $324.3 million in first-lien notes. David A. Zdunkewicz, Esq. at Andrews Kurth LLP represented the Debtors as counsel. GMX missed a payment due in March 2013 on $51.5 million in second- lien notes. Other principal liabilities include $48.3 million in unsecured convertible senior notes. The DIP financing provided by senior noteholders requires court approval of a sale within 75 days following approval of sale procedures. The lenders and principal senior noteholders include Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors Inc. and Whitebox Advisors LLC. Looper Reed is substituted as counsel for the Official Committee of Unsecured Creditors in place of Winston & Strawn LLP, effective as of April 25, 2013. The Committee tapped Conway MacKenzie, Inc., as financial advisor. HAMPTON CAPITAL: U.S. Trustee Balks at Plan of Liquidation ---------------------------------------------------------- Judy A. Robbins, U.S. Trustee for Region 4, by and through Elisabetta G. Gasparini, asks the Bankruptcy Court to deny confirmation of Hampton Lake, LLC's Plan of Liquidation dated May 3, 2013. According to the U.S. Trustee, the Plan contemplates that, among other things (a) Sabal Financial Group, LP, will receive an aggregate of approximately 88.5% of its allowed claim as of the Petition Date from the sale of the remaining lots; (b) general unsecured trade vendors will be paid in full; (c) the Charter Note Holders will receive approximately 8.75% of the principal loan balance owed at the Petition Date; and (d) the equity interests in the Debtor will be extinguished. In addition, Hampton Lake Realty, LLC, the Debtor's sales arm, which may have value beyond the term of the Plan, will be marketed and sold at the end of the Plan term, with the net proceeds going to the Charter Note Holders in addition to the payments set forth above. The U.S. Trustee relates that none of the parties that are being released through the Plan are providing a substantial contribution to the Plan. Reed and Reed Development are not providing any contribution to the Plan. Moreover, the proposed subordination of Hampton Funding, which has a second mortgage, ignores the fact that the Debtor's projected proceeds from the liquidation of its assets are insufficient to pay the senior lender, SABAL, in full. In addition, the Plan contemplates that Hampton Lake Funding, LLC, which is an entity controlled by Reed that loaned the Debtor $2,000,000 in return for a second priority mortgage on the Debtor's real property, and is now owed $2,290,835, will subordinate its claims to all other creditors in return for third- party releases well as for declarant rights contemplated in the Community Charter for the Hampton Lake Subdivision. The U.S. Trustee notes that to date, there has not been a record of specific factual findings that would support the releases proposed in the Plan. About Hampton Capital Partners Hampton Capital Partners, LLC, an Aberdeen, N.C.-based manufacturer of residential and commercial tufted carpets under the Gulistan name, filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 13-bk-80015) on Jan. 7, 2013. The Company has been producing carpet under the Gulistan name since 1924, although it traces its roots back to 1818, when an Armenian textile importer established a business in Turkey. The company began manufacturing carpet in Aberdeen in 1957, and was acquired by J.P. Stevens & Co. Inc. in 1964. Over the last 25 years, Gulistan Carpet has undergone several ownership changes. In addition to its headquarters and manufacturing operations in Aberdeen, the company has a plant in Wagram, N.C. John Paul H. Cournoyer, Esq., at Northen Blue, LLP, serves as counsel to the Debtor. Getzler Henrich & Associates LLC is the financial consultant. Five creditors have been appointed to serve on the Official Committee of Unsecured Creditors. The Committee tapped Lowenstein Sandler LLP as its counsel and Wilson and Ratledge PLLC as its North Carolina counsel. The Committee also tapped BDO Consulting, a division of BDO USA LLP, as its financial advisors. HAMPTON CAPITAL: Disputes SABAL's Bid for Stay Relief ----------------------------------------------------- Hampton Lake, LLC, asks the U.S. Bankruptcy Court for the District of South Carolina to deny the motion of Crimson Portfolio, LLX and Sabal Financial Group, L.P., for relief from the automatic stay. SABAL asserts a first priority mortgage on all of the Debtor's real property holdings. SABAL asserts a claim of $20,102,695. Upon information and belief, Hampton Lake Funding, LLC, an affiliate of the Debtor, opposes the relief sought by SABAL in its motion. HL Funding asserts a $2,290,800 claim and second priority mortgage on all of the Debtor's real property holdings. SABAL asserts that it is entitled to relief from the stay because the Debtor has no equity and the property is not necessary for an effective reorganization. According to the Debtor, the Court has ample authority to approve the Debtor's Plan. Even if the Debtor's current Plan were denied, the Debtor believes and asserts that it can show the value of its property such that it can pay SABAL the full. About Hampton Capital Partners Hampton Capital Partners, LLC, an Aberdeen, N.C.-based manufacturer of residential and commercial tufted carpets under the Gulistan name, filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 13-bk-80015) on Jan. 7, 2013. The Company has been producing carpet under the Gulistan name since 1924, although it traces its roots back to 1818, when an Armenian textile importer established a business in Turkey. The company began manufacturing carpet in Aberdeen in 1957, and was acquired by J.P. Stevens & Co. Inc. in 1964. Over the last 25 years, Gulistan Carpet has undergone several ownership changes. In addition to its headquarters and manufacturing operations in Aberdeen, the company has a plant in Wagram, N.C. John Paul H. Cournoyer, Esq., at Northen Blue, LLP, serves as counsel to the Debtor. Getzler Henrich & Associates LLC is the financial consultant. Five creditors have been appointed to serve on the Official Committee of Unsecured Creditors. The Committee tapped Lowenstein Sandler LLP as its counsel and Wilson and Ratledge PLLC as its North Carolina counsel. The Committee also tapped BDO Consulting, a division of BDO USA LLP, as its financial advisors. HD SUPPLY: Incurs $72 Million Net Loss in Fiscal Q2 --------------------------------------------------- HD Supply Holdings, Inc., reported a net loss of $72 million on $2.25 billion of net sales for the three months ended Aug. 4, 2013, as compared with a net loss of $56 million on $2.05 billion of net sales for the three months ended July 29, 2012. For the six months ended Aug. 4, 2013, the Company reported a net loss of $203 million on $4.32 billion of net sales as compared with a net loss of $416 million on $3.89 billion of net sales for the six months ended July 29, 2012. The Company's balance sheet at Aug. 4, 2013, showed $6.58 billion in total assets, $7.34 billion in total liabilities and a $753 million total stockholders' deficit. As of Aug. 4, 2013, the Company's combined liquidity of approximately $946 million was comprised of $109 million in cash and cash equivalents and $837 million of additional available borrowings under HD Supply, Inc.'s senior asset-backed lending facility, based on qualifying inventory and receivables. "We continue to deliver above market revenue growth in all of our primary business units," stated Joe DeAngelo, CEO of HD Supply. "The fiscal 2013 second quarter was another strong performance for HD Supply despite limited non-residential and municipal end market growth in addition to unusually cooler and wetter weather affecting outdoor construction and HVAC product sales in various parts of the country. We continue to deliver on our controllable execution and growth initiatives to drive growth regardless of the market environment." A copy of the press release is available for free at: http://is.gd/DT5DTd About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. For the 12 months ended Feb. 3, 2013, the Company incurred a net loss of $1.17 billion on $8.03 billion of net sales, as compared with a net loss of $543 million on $7.02 billion of net sales for the 12 months ended Jan. 29, 2012. * * * As reported by the TCR on Jan. 11, 2013, Moody's Investors Service upgraded HD Supply, Inc.'s ("HDS") corporate family rating to B3 from Caa1 and its probability of default rating to B3 from Caa1. This rating action results from our expectations that HDS will refinance a significant portion of its senior subordinated notes due 2015, effectively extending the remainder of its maturities by at least two years to 2017. HD Supply carries a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. HOLT DEVELOPMENT: Claims Bar Date Set for Oct. 25 ------------------------------------------------- The deadline to file proofs of claim in the bankruptcy case of Holt Development Co., LLC, is set for Oct. 25, 2013. Holt Development Co., LLC, filed a Chapter 11 petition (Bankr. M.D. Tenn. Case No. 13-06154) on July 16, 2013. The petition was signed by Dannie R. Holt as chief manager. Judge Randal S. Mashburn presides over the case. Gullett, Sanford, Robinson & Martin, PLLC, serves as the Debtor's counsel. The Debtor estimated assets of at least $10 million and debts of at least $1 million. The Debtor is in the business of developing improved and unimproved properties in Pleasant View, Cheatham County, Tennessee. HOVNANIAN ENTERPRISES: Posts $8.5 Million Net Income in Q3 ---------------------------------------------------------- Hovnanian Enterprises, Inc., and its subsidiaries filed with the U.S. Securities and Exchange Commission their quarterly report on Form 10-Q disclosing net income of $8.46 million on $478.35 million of total revenues for the three months ended July 31, 2013, as compared with net income of $34.67 million on $387.01 million of total revenues for the same period a year ago. For the nine months ended July 31, 2013, the Companies reported a net loss of $1.52 million on $1.25 billion of total revenues as compared with net income of $18.21 million on $998.31 million of total revenues for the same period last year. As of July 31, 2013, the Companies' balance sheet showed $1.66 billion in total assets, $2.13 billion in total liabilities and a $467.20 million total deficit. "We were pleased that we were able to raise home prices, grow revenues and increase our gross margin during the third quarter of fiscal 2013," stated Ara K. Hovnanian, chairman of the Board, president and chief executive officer. "Our emphasis on raising home prices combined with concerns over rising mortgage rates and weakened consumer confidence dampened our home sales during July and August of 2013. We believe we are in a period where consumers are adjusting to current home prices and mortgage rates and remain confident that the combination of pent-up housing demand and the positive long-term demographic trends for housing will drive increased demand for new homes going forward. We continue to project profitability for the full fiscal 2013 year and strong results for our fourth quarter, excluding any expenses related to early retirement of debt," concluded Mr. Hovnanian. "We ended the third quarter of fiscal 2013 with $227 million of homebuilding cash," said J. Larry Sorsby, executive vice president and chief financial officer. "During the third quarter, we increased our liquidity beyond the cash we have on hand with the addition of a $75 million revolving credit facility, providing us with increased financial flexibility. This additional liquidity will allow us to invest in even more new land parcels and increase further our participation in the housing industry's recovery," concluded Mr. Sorsby. A copy of the Form 10-Q is available for free at: http://is.gd/vew3aK 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. * * * 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. HRK HOLDINGS: Wants Extension of Plan Filing Period to Oct. 29 -------------------------------------------------------------- HRK Holdings, LLC and HRK Industries, LLC are seeking further extension of their exclusive plan filing period through Oct. 29, 2013, and a corresponding extension of their exclusive plan solicitation period through Dec. 30, 2013. The Debtors relay that they are seeking the extension to allow them the time necessary to close anticipated sales of their assets to the successful bidders. About HRK Holdings Based in Palmetto, Florida, HRK Holdings LLC owns roughly 675 contiguous acres of real property in Manatee County, Florida. Roughly 350 acres of the property accommodates a phosphogypsum stack system, called Gypstaks, a portion of which was used as an alternate disposal area for the management of dredge materials pursuant to a contract with Port Manatee and as authorized under an administrative agreement with the Florida Department of Environmental Protection. The remaining acres of usable land are either leased to various tenants or available for sale. HRK Industries holds various contracts and leases associated with the Debtors' property. HRK Holdings and HRK Industries LLC filed for Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on June 27, 2012. Judge K. Rodney May oversees the case. Barbara A. Hart, Esq., and Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents the Debtors. HRK Holdings disclosed $33,366,529 in assets and $26,092,559 in liabilities in its revised schedules. According to the Debtors, the bankruptcy filing was necessitated by the immediate need to sell a portion of the remaining property to create liquidity for (a) funding the urgent management of the site-related environmental concerns; the benefit of creditors; funding a litigation filed by the Debtors; and funding of expenses related to additional sales of the remaining property. HRK HOLDINGS: Can Borrow Up to $794,087 From Regions Thru Year End ------------------------------------------------------------------ Judge Rodney May granted HRK Holdings, LLC, et al., on Sept. 6, 2013, permission to borrow up $794,087 in additional funds in an existing Operating Line of Credit to be advanced by Regions Bank, N.A. Under their Fourth DIP Loan Motion, the Debtors originally sought up to $2,500,000 in additional funds from the Lender. The $794,087 in approved Additional Funds may be used for expenses actually incurred by the Debtors and as consistent with a prepared budget, including interest reserves and closing costs. A copy of the HRK DIP Budget is available for free at: http://bankrupt.com/misc/HRK_BudgetSepttoDec2013.pdf The maturity date under the Operating Lne of Credit and the Site Work Line of Credit is also extended to Dec. 31, 2013. The Additional Borrowing advances under the Second DIP Loan will bear a 9% interest per annum. Regions will not be entitled to any default interest in conjunction with the Second DIP Loan. The Debtors' obligation to repay Regions will be accorded a first lien on all of the Debtors' assets. The DIP Lender Liens will prime and be senior in priority to all other liens in favor of all secured creditors ? except for the ad valorem taxes in favor of Manatee County, Florida, for 2012 and subsequent years. The loan repayment obligations is also accorded superpriority administrative expense status pursuant to Sec. 364(c)(1) of the Bankruptcy Code. Under the First DIP Motion, the Court allowed the Debtors to borrow $125,000 from the Arsenal Group, LLC. Under the Second DIP Motion, the Debtors were allowed to borrow $3,480,139 from Regions Bank under an Operating Line Credit and a subsequent $1,251,826 in additional funds. Under the Third DIP Loan Motion, the Debtor was allowed to borrow $237,251 from Regions Bank. About HRK Holdings Based in Palmetto, Florida, HRK Holdings LLC owns roughly 675 contiguous acres of real property in Manatee County, Florida. Roughly 350 acres of the property accommodates a phosphogypsum stack system, called Gypstaks, a portion of which was used as an alternate disposal area for the management of dredge materials pursuant to a contract with Port Manatee and as authorized under an administrative agreement with the Florida Department of Environmental Protection. The remaining acres of usable land are either leased to various tenants or available for sale. HRK Industries holds various contracts and leases associated with the Debtors' property. HRK Holdings and HRK Industries LLC filed for Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on June 27, 2012. Judge K. Rodney May oversees the case. Barbara A. Hart, Esq., and Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents the Debtors. HRK Holdings disclosed $33,366,529 in assets and $26,092,559 in liabilities in its revised schedules. According to the Debtors, the bankruptcy filing was necessitated by the immediate need to sell a portion of the remaining property to create liquidity for (a) funding the urgent management of the site-related environmental concerns; the benefit of creditors; funding a litigation filed by the Debtors; and funding of expenses related to additional sales of the remaining property. HUB INT'L: Moody's Assigns B3 Corp. Family Rating; Outlook Stable ----------------------------------------------------------------- Moody's Investors Service has assigned a B3 corporate family rating and a B3-PD probability of default rating to Hub International Limited. Moody's also assigned ratings to credit facilities and notes being issued by Hub to help fund a leveraged buyout of the company by funds advised by Hellman & Friedman LLC. The proposed buyout, which gives Hub an enterprise value of approximately $4.3 billion, is subject to customary closing conditions and regulatory approvals, and is expected to close by early October. The rating outlook for Hub is stable. Ratings Rationale: Moody's said Hub's ratings reflect its solid market position in North American insurance brokerage, good diversification across products and geographic areas, and strong operating margins. These strengths are tempered by the company's aggressive financial leverage and reduced fixed charge coverage associated with the proposed buyout. The rating agency expects that Hub will continue to pursue a combination of organic growth and acquisitions, the latter giving rise to integration and contingent risks (e.g., exposure to errors and omissions), although Hub has a favorable track record in absorbing small and mid-sized brokers. Hub's growth strategy is supported by its "hub and spoke" structure, which includes some 26 regional or specialty offices called "hubs," and numerous smaller offices called "spokes" or "fold-ins" that are integrated into specific hubs. The hubs are responsible for generating organic growth while also helping to identify fold-in acquisition opportunities within their respective regions or specialties. Based on Moody's calculations, Hub's debt-to-EBITDA ratio will be in the range of 8x-8.5x immediately following the buyout, which is high for the rating category. "We expect Hub to reduce its leverage comfortably below 8x within the next year based on its track record of organic growth in revenues and EBITDA," said Bruce Ballentine, Moody's lead analyst for Hub. Hub's proposed financing arrangement includes a $225 million senior secured revolving credit facility (rated B1, expected to be undrawn at closing), a CAD50 million senior secured revolving credit facility (available to a Canadian subsidiary with a guaranty from Hub, rated B1, expected to be undrawn at closing), a $1,785 million senior secured term loan (rated B1) and $1,035 million of senior unsecured notes (rated Caa2). Other funding sources include sponsor-contributed and management rollover equity. Proceeds will be used to purchase all of Hub's outstanding common stock, repay its existing debt and pay related fees and expenses. When the transaction closes, Moody's expects to withdraw Hub's existing ratings, including its B1 first-lien and Caa2 senior unsecured ratings as these facilities will be repaid and terminated. Factors that could lead to an upgrade of Hub's ratings include: (i) debt-to-EBITDA ratio below 5.5x, (ii) (EBITDA - capex) coverage of interest exceeding 2x, and (iii) free-cash-flow-to- debt ratio exceeding 5%. Factors that could lead to a rating downgrade include: (i) debt- to-EBITDA ratio remaining above 8x, (ii) (EBITDA - capex) coverage of interest below 1.2x, or (iii) free-cash-flow-to-debt ratio below 2%. Moody's has assigned the following ratings (and loss given default (LGD) assessments) to Hub: Corporate family rating B3; Probability of default rating B3-PD; $225 million 5-year senior secured revolving credit facility B1 (LGD3, 30%); $1,785 million 7-year senior secured term loan B1 (LGD3, 30%); $1,035 million 8-year senior unsecured notes Caa2 (LGD5, 84%). Moody's has assigned the following rating (and LGD assessment) to Hub International Canada West ULC: C$50 million 5-year senior secured revolving credit facility B1 (LGD3, 30%). The principal methodology used in this rating was Moody's Global Rating Methodology for Insurance Brokers and Service Companies published in February 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Chicago, Illinois, Hub is a major North American insurance brokerage firm providing a variety of property and casualty, life and health, employee benefits and risk management products and services through offices located in the U.S., Canada and Brazil. The company generated total revenue of $580 million and net income of $50 million in the first half of 2013. Shareholders' equity was $544 million as of June 30, 2013. HUB INT'L: S&P Removes 'B' Corp. Credit Rating From Watch Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its 'B' long-term corporate credit rating on HUB International Ltd. The outlook is stable. S&P removed all ratings from CreditWatch with negative implications, where it had placed them on Aug. 5, 2013, following the announcement that private equity firm Hellman & Friedman had agreed to acquire HUB from equity sponsor Apax Partners. Terms of the transaction were not disclosed at that time. "We also assigned our 'B' debt rating with a '3' recovery rating, indicating our expectation for meaningful (50%-70%) recovery of principal in the event of a default, to HUB's proposed senior secured facilities, consisting of a $1.785 billion term loan due 2020, a $225 million U.S. revolver (undrawn at close) due 2018, and a $50 million Canadian revolver due 2018 (the borrower for the Canadian revolver will be HUB International Canada West ULC or another Canadian subsidiary). We also assigned our 'CCC+' debt rating with a '6' recovery rating, indicating our expectation for negligible (0%-10%) recovery of principal in the event of a default, to HUB's proposed $1.035 billion unsecured notes due 2021," S&P said. The rating affirmation reflects S&P's belief that, although the proposed recapitalization under private equity sponsor Hellman & Friedman results in meaningfully weaker credit-protection measures, the company's sustained competitive position and improving earnings and cash-flow generating capabilities enable it to carry this increased debt load and de-lever modestly during the next year. S&P characterizes HUB's financial profile, under new owner Hellman & Friedman, as highly levered. Following the proposed transaction, HUB's credit quality deteriorates materially, as the acquisition is being funded through $2.8 billion in new debt (with all $1.9 billion of existing debt being retired), as well as an equity contribution of about $1.7 billion. S&P characterizes HUB's business profile as fair, reflecting its participation and narrow focus in the highly competitive, fragmented, and cyclical middle-market insurance brokerage industry. The company's favorable market position (10th-largest broker in Business Insurance's global rankings and the largest in Canada), good product and geographic diversification in its U.S. and Canadian markets, and successful acquisition track record somewhat offset these risks. The stable outlook reflects S&P's belief that HUB's credit measures will improve modestly from profit growth but will remain on the weaker end of a highly levered financial profile, mitigated by a business risk profile on the higher end of fair. S&P expects modest strengthening in insurance pricing and successful sales strategies to propel low to mid-single-digit organic revenue growth. S&P also expects the company to continue its acquisitive strategy, adding about $80 million in annualized revenue per year. Margins should remain in the 31%-33% range. Given the earnings improvement, S&P expects a trajectory of modest de-levering, with a debt-to-EBITDA ratio of less than 8.5x in 2013 and less than 8x in 2014. If the company does not meet these leverage thresholds, either due to earnings declines or additional debt financing, S&P could consider lowering the rating. Given the company's substantial leverage profile, S&P believes rating upside during the next 12 months is limited. IBAHN CORPORATION: Meeting to Form Creditors' Panel on Sept. 23 --------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on September 23, 2013 at 10:30 a.m. in the bankruptcy case of iBAHN Corporation, et al. The meeting will be held at: J. Caleb Boggs Federal Building 844 King St., Room 5209 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. iBAHN Corporation, 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. IMH FINANCIAL: Files Copy of Amended Sedona Agreement With SEC -------------------------------------------------------------- IMH Financial Corporation filed with the U.S. Securities and Exchange Commission an amended version of its agreement with Sedona, a copy of which is available at http://is.gd/g1702b As reported by the TCR on April 16, 2013, IMH Financial Corporation, through various subsidiaries, entered into an agreement to acquire the hotel properties L'Auberge de Sedona and Orchards Inn, 28 residential lots in a 38-lot scenic canyon subdivision abutting the National Forest, as well as other related assets, all located in Sedona, Arizona. About IMH Financial Scottsdale, Ariz.-based IMH Financial Corporation was formed from the conversion of IMH Secured Loan Fund, LLC, or the Fund, a Delaware limited liability company, on June 18, 2010. The conversion was effected following a consent solicitation process pursuant to which approval was obtained from a majority of the members of the Fund to effect the Conversion Transactions and involved (i) the conversion of the Fund from a Delaware limited liability company into a Delaware corporation named IMH Financial Corporation, and (ii) the acquisition by the Company of all of the outstanding shares of the manager of the Fund Investors Mortgage Holdings Inc., or the Manager, as well as all of the outstanding membership interests of a related entity, IMH Holdings LLC, or Holdings on June 18, 2010. The Company is a commercial real estate lender based in the southwest United States with over 12 years of experience in many facets of the real estate investment process, including origination, underwriting, documentation, servicing, construction, enforcement, development, marketing, and disposition. The Company focuses on a niche segment of the real estate market that it believes is underserved by community, regional and national banks: high yield, short-term, senior secured real estate mortgage loans. The intense level of underwriting analysis required in this segment necessitates personnel and expertise that many community banks lack, yet the requisite localized market knowledge of the underwriting process and the size of the loans the Company seeks often precludes the regional and community banks from efficiently entering this market. IMH Financial disclosed a net loss of $32.19 million in 2012, a net loss of $35.19 million in in 2011, and a net loss of $117.04 million in 2010. The Company's balance sheet at June 30, 2013, showed $255.27 million in total assets, $130.62 million in total liabilities and $124.65 million in total stockholders' equity. INSPIREMD INC: Names HeartFlow CMO to Board of Directors -------------------------------------------------------- InspireMD Inc. appointed Dr. Campbell Rogers to the Board of Directors on Sept. 3, 2013. Dr. Rogers currently serves as the chief medical officer of HeartFlow, Inc., a private cardiovascular diagnostics company based in California. In connection with his appointment, Dr. Rogers was granted an option to purchase 125,000 shares of the Company's common stock on Sept. 3, 2013, at an exercise price of $2.12, which was the closing price of the common stock on the date of grant, subject to the terms and conditions of the 2011 U.S. Equity Incentive Plan, a sub-plan of the Company's 2011 Umbrella Option Plan. The Rogers Option vests and becomes exercisable in three equal annual installments beginning on the one-year anniversary of the date of grant, provided that in the event that Dr. Rogers is either (i) not reelected as a director at the Company's 2014 annual meeting of stockholders, or (ii) not nominated for reelection as a director at the Company's 2014 annual meeting of stockholders, the option vests and becomes exercisable on the date of Dr. Rogers's failure to be reelected or nominated. The Rogers Option has a term of 10 years from the date of grant. The Company has also agreed to pay Dr. Rogers an annual stipend of $25,000. "Dr. Rogers has incredible experience with and insight into this industry. We are extremely pleased to welcome him to our Board of Directors and are confident he will be a great addition," said Sol Barer, Chairman of the Board of InspireMD. "Dr. Rogers brings a wealth of knowledge with vast clinical, academic and industry experience that will be instrumental to our Company as we continue to grow. We intend to leverage his expertise and strategic vision as we continue to establish ourselves as a leader in the stent market while delivering value to our shareholders." Prior to joining HeartFlow, Dr. Rogers was the chief scientific officer and global head of Research and Development at Cordis Corporation, a Johnson & Johnson company. Before Cordis, he was an associate professor of Medicine and Director of the Cardiac Catheterization Laboratory at Harvard Medical School, Brigham and Women's Hospital in Boston. Dr. Rogers has also served as principal investigator for numerous interventional cardiology devices, diagnostic and pharmacology trials and is well published in the cardiovascular disease space. Along with his publications, Dr. Rogers has also been the recipient of numerous research grant awards from the National Institute of Health and American Heart Association. Concurrently with this new appointment, Ofir Paz resigned from the Board. Dr. Barer continued, "We thank Mr. Paz for his leadership throughout his time with the Company. His vision, hard work and dedication were vital in bringing us to where we are today." About InspireMD InspireMD, Inc., was organized in the State of Delaware on Feb. 29, 2008, as Saguaro Resources, Inc., to engage in the acquisition, exploration and development of natural resource properties. On March 28, 2011, the Company changed its name from "Saguaro Resources, Inc." to "InspireMD, Inc." Headquartered in Tel Aviv, Israel, InspireMD, Inc., is a medical device company focusing on the development and commercialization of its proprietary stent platform technology, Mguard. MGuard provides embolic protection in stenting procedures by placing a micron mesh sleeve over a stent. The Company's initial products are marketed for use mainly in patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions (bypass surgery). InspireMD reported a net loss of US$17.59 million on US$5.35 million of revenue for the year ended June 30, 2012, compared with a net loss of US$6.17 million on US$4.67 million of revenue during the prior year. For the nine months ended March 31, 2013, the Company incurred a net loss of $14.31 million on $3.37 million of revenues. The Company's balance sheet at March 31, 2013, showed $9.79 million in total assets, $13.20 million in total liabilities, and a $3.40 million total capital deficiency. Kesselman & Kesselman, in Tel Aviv, Israel, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company has had recurring losses, negative cash flows from operating activities and has significant future commitments that raise substantial doubt about its ability to continue as a going concern. The Company said the following statement in its quarterly report for the period ended Dec. 31, 2012: "The Company has had recurring losses and negative cash flows from operating activities and has significant future commitments. For the six months ended December 31, 2012, the Company had losses of approximately $9.4 million and negative cash flows from operating activities of approximately $5.8 million. The Company's management believes that its financial resources as of December 31, 2012 should enable it to continue funding the negative cash flows from operating activities through the three months ended September 30, 2013. Furthermore, commencing October 2013, the Company's senior secured convertible debentures (the "2012 Convertible Debentures") are subject to a non-contingent redemption option that could require the Company to make a payment of $13.3 million, including accrued interest. Since the Company expects to continue incurring negative cash flows from operations and in light of the cash requirement in connection with the 2012 Convertible Debentures, there is substantial doubt about the Company's ability to continue operating as a going concern. These financial statements include no adjustments of the values of assets and liabilities and the classification thereof, if any, that will apply if the Company is unable to continue operating as a going concern." INTERLEUKIN GENETICS: Amends 120.4MM Shares Resale Prospectus ------------------------------------------------------------- Interleukin Genetics, Inc., has amended its Form S-1 registration statement relating to the resale, from time to time, by Bay City Capital Fund V, L.P., Growth Equity Opportunities Fund III, LLC, Merlin Nexus IV, LP, et al., of up to 120,408,197 shares of the Company's common stock. These shares consist of 85,326,230 issued and outstanding shares and 35,081,967 shares underlying warrants. These shares and warrants were issued in connection with a private placement completed on May 17, 2013, and consist of: (1) 43,715,847 shares and 32,786,885 shares underlying warrants issued to the investors in the private placement; (2) 28,160,200 shares issued to Pyxis Innovations Inc. upon conversion of 5,000,000 shares of the Company's Series A-1 Convertible Preferred Stock immediately prior to the private placement; (3) 2,521,222 shares issued to Pyxis upon conversion of $14,316,255 in principal amount of convertible debt immediately prior to the private placement; (4) 10,928,961 shares issued to Delta Dental Plan of Michigan, Inc., upon conversion of 500,000 shares of the Company's Series B Convertible Preferred Stock immediately prior to the private placement; and (5) 2,295,082 shares underlying warrants issued to BTIG, LLC, the placement agent in the private placement, and its affiliates, as placement agent compensation. The Company's common stock is traded on the OTCQB under the symbol "ILIU". On July 25, 2013, the closing sale price of the Company's common stock on the OTCQB was $0.375 per share. The Company will not receive any proceeds from the sale of any shares by the selling stockholders. The Company may, however, receive the proceeds of any cash exercises of warrants. The Company amended the Registration Statement to delay its effective date until the Company will file a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement will become effective on that date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. A copy of the Form S-1/A is available for free at: http://is.gd/LgSvNz About Interleukin Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized health company that develops unique genetic tests to provide information to better manage health and specific health risks. Interleukin Genetics disclosed a net loss of $5.12 million in 2012, as compared with a net loss of $5.02 million in 2011. The Company's balance sheet at June 30, 2013, showed $12.24 million in total assets, $8.45 million in total liabilities and $3.78 million in total shareholders' equity. Grant Thornton LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company incurred a net loss of $5,120,084 during the year ended December 31, 2012, and as of that date, the Company's total liabilities exceeded its total assets by $13,623,800. These conditions, among other factors, raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "We have retained a financial advisor and are actively seeking additional funding, however, based on current economic conditions, additional financing may not be available, or, if available, it may not be available on favorable terms. In addition, the terms of any financing may adversely affect the holdings or the rights of our existing shareholders. For example, if we raise additional funds by issuing equity securities, further dilution to our then- existing shareholders will result. Debt financing, if available, may involve restrictive covenants that could limit our flexibility in conducting future business activities. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our technologies, tests or products in development. Our common stock was delisted from the NYSE Amex in 2010 and is currently trading on the OTCQBTM. As a result, our access to capital through the public markets may be more limited. If we cannot obtain additional funding on acceptable terms, we may have to discontinue operations and seek protection under U.S. bankruptcy laws," the Company said in its quarterly report for the ended March 31, 2013. INT'L ENVIRONMENTAL: Trustee Can Tap GTFAS as Financial Advisor --------------------------------------------------------------- Howard B. Grobstein, the court-appointed Chapter 11 trustee for International Environmental Solutions Corporation, won bankruptcy court approval to hire Grobstein Teeple Financial Advisory Services, LLP, as his financial advisors. GTFAS is replacing Crowe Horwath LLP. Crowe was the previously court-approved accountant to the trustee pursuant to a Aug. 30, 2012 order. GTFAS will, among other things (i) obtain and evaluate financial records; (ii) investigate assets and liabilities of the estate; and (iii) prepare tax returns. Hourly rates for GTFAS' personnel range from $95 to $400. About International Environmental Solutions Corporation Karen Bertram, James Hinkle, Blaine Scott Molle & Dennis Molle, and Linda Babb filed an involuntary Chapter 11 petition against International Environmental Solutions Corporation, dba IES Corporation (Bankr. C.D. Cal. Case No. 12-16268) on March 13, 2012. Judge Wayne E. Johnson presides over the case. On April 16, 2012, the Debtor filed their consent for relief under Chapter 11. The Debtor hired Goe & Forsythe, LLP, as counsel. The Debtor disclosed $25,129,244 in assets and $10,387,254 in liabilities. At the behest of a shareholder, the U.S. Trustee appointed Howard Grobstein as Chapter 11 trustee for the Debtor's estate. Marshack Hays serve as his general counsel. He originally tapped Crowe Horwath LLP as his accountants but has sought to replace the firm with Grobstein Teeple Financial Advisory Services, LLP. Dzida, Carey & Steinman as his special transactional counsel. Stetina Brunda Garred & Brucker as his special patent and trademark counsel. INVESTORS CAPITAL: Reaches PBI Deal on Adeq. Protection Payments ---------------------------------------------------------------- Investors Capital Partners II, LP, and PBI Bank, Inc., recently agreed on the terms of stipulation regarding the payment of adequate protection to PBI. Before filing for bankruptcy, the Debtor borrow about $9.5 million from PBI, which loans are secured by a mortgage on the Debtor's real property and related assignments of rents. In October 2010, the parties entered into an escrow agreement whereby rent, income and other amounts owed to the Debtor in connection with the real property are deposited in an escrow account. Under the Agreement, PBI has the right to use the Escrow Funds to pay the costs and operating expenses for the Debtor's real property like rent, maintenance fees, utilities, taxes and repairs. The parties now stipulate on these terms: -- PBI will be authorized to collect the Escrow Funds through the confirmation a Chapter 11 plan in the Debtor's bankruptcy case. -- The Debtor with transmit any bill for operating expenses on the property within seven days of receipt. PBI will in turn pay the expense in full within seven days of receipt from the Debtor. -- On a monthly basis, starting August 2013, PBI will provide the Debtor with a schedule of rental income received and expenses paid by PBI in the prior month, along with the adequate protection for the month. The Debtor will use this information to timely complete its monthly operating report. -- As adequate protection for its use of the Escrow Funds, the remaining balance of the rental income received for the same month, starting August 2013, after the payment of all submitted expenses, will be paid to PBI towards its claims against the Debtor. That payment will constitute "adequate protection" paid by the Debtor to PBI as the term is defined under 11 U.S.C. Sec. 361 and 363(e). Counsel to PBI Bank, Inc. is: MORGAN & POTTINGER, P.S.C. Bradley Salyer, Esq. 601 West Main Stret Louisville, KY 40202 Tel No: (502) 560-6762 Email: bss@morganandpottinger.com About Investors Capital Brentwood, Tennessee-based Investors Capital Partners II, LP and two affiliates sought Chapter 11 protection (Bankr. W.D. Ky. Case Nos. 12-11575 to 11677) in Bowling Green, Kentucky, on Dec. 19, 2012. ICP II estimated assets of at least $10 million and liabilities of less than $10 million. It owns a 35-acre commercial development near Glasgow, Kentucky. The ICP II property is home to a Marquee Cinema, Dollar Tree, and Aaron's Rents and also consists of seven parcels of undeveloped land. Debtor-affiliate Investors Capital Partners I, LP owns multiple parcels of undeveloped land near Nolensville, Tennessee. Investors Land Partners II, LP owns partially developed land, consisting of six adjoining parcels of real property, near Nashville, Tennessee. Travis Kent Barber, Esq., and Laura Day DelCotto, at DelCotto Law Group, PLLC, represent the Debtor as counsel. In court filings, the Debtors said their lenders have attempted to foreclose against the Debtors' assets, and the Debtors have been unable to reach agreements with their lenders that would allow the Debtors to reorganize their debts in an orderly manner; thus, the Debtors have little option except for the development of a joint plan to reorganize operations and restructure debts for the benefit of all creditors and parties in interest. IPC INT'L: Court OKs Proskauer Rose as Lead Counsel --------------------------------------------------- Judge Mary Walrath grants IPC International Corporation, et al., authority to employ Proskauer Rose LLP as lead counsel in their bankruptcy cases nunc pro tunc to the Petition Date. As reported in the Aug. 29, 2013 edition of The Troubled Company Reporter, Proskauer will be paid these hourly rates: $600-$1,250 for partners, $475-$1,150 for senior counsel, $200-$800 for associates, and $110-$325 for paraprofessionals, and will be reimbursed for any necessary out-of-pocket expenses. 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 R. Mayers, Esq., at Potter Anderson & Corroon, LLP, serves as local counsel. Paul V. Possinger, Esq., and Brandon W. Levitan, Esq., at Proskauer Rose, LLP, serve 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. A three-member panel has been appointed as the official unsecured creditors committee in the case. The panel consists of Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC; Mary Carmona-Rousse; and Drew Eckl & Farnham, LLP. 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. IPC INT'L: Gets Court Nod to Tap Anderson & Corroon as Co-Counsel ----------------------------------------------------------------- IPC International Corporation and The Security Network Holdings Corporation won bankruptcy court approval to hire Potter Anderson & Corroon LLP as co-counsel. The firm's services will be paid according to its standard hourly rates: Partners - $440-$720, Counsel $310-$540, Associates - $255- $425, and Paralegals - $80-$245. It will also be reimbursed for any necessary out-of-pocket expenses. 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 R. Mayers, Esq., at Potter Anderson & Corroon, LLP, serves as local counsel. Paul V. Possinger, Esq., and Brandon W. Levitan, Esq., at Proskauer Rose, LLP, serve 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. A three-member panel has been appointed as the official unsecured creditors committee in the case. The panel consists of Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC; Mary Carmona-Rousse; and Drew Eckl & Farnham, LLP. 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. IPC INT'L: Can Hire Silverman Consulting as Financial Advisor ------------------------------------------------------------- IPC International Corporation, et al., won bankruptcy court approval to employ Silverman Consulting Group, Inc., as financial advisor nunc pro tunc to the Petition Date. The Debtors will pay for Silverman's services according to the firm's standard hourly rates: Michael Silverman - $650, Constadinos Tsitsis - $340, and Ryan Perrone - $230. The firm will also be reimbursed for any necessary out-of-pocket expenses. The Court's order on the Silverman employment application will not prejudice or otherwise affect the rights of the U.S. Trustee to challenge the reasonableness of Silverman's fees. 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 R. Mayers, Esq., at Potter Anderson & Corroon, LLP, serves as local counsel. Paul V. Possinger, Esq., and Brandon W. Levitan, Esq., at Proskauer Rose, LLP, serve 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. A three-member panel has been appointed as the official unsecured creditors committee in the case. The panel consists of Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC; Mary Carmona-Rousse; and Drew Eckl & Farnham, LLP. 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. IPC INT'L: Court OKs Hiring of Livingstone Partners as Banker ------------------------------------------------------------- Judge Mary Walrath gave IPC International Corporation, et al., authority to hire Livingstone Partners LLC and Stoneliving Securities LLC as investment banker. The Bankruptcy Court specifies that any provision of the Livingstone Engagement Letter or Application that purports to eliminate any of the fiduciary duties that Livingstone owes to the Debtors is null and void. Livingstone is also not authorized to provide the Debtors with financial advisory services within the scope of the Debtors' financial advisor, Silverman Consulting Group, Inc. As reported on the Aug. 28, 2013 edition of The Troubled Company Reporter, Livingstone Partners LLC will be paid a $200,000 monthly fee and transaction fees equal or more than $725,000 for the consummation of a merger and acquisition transaction or restructuring transaction. The firm will also be paid its necessary out-of- pocket expenses. 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 R. Mayers, Esq., at Potter Anderson & Corroon, LLP, serves as local counsel. Paul V. Possinger, Esq., and Brandon W. Levitan, Esq., at Proskauer Rose, LLP, serve 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. A three-member panel has been appointed as the official unsecured creditors committee in the case. The panel consists of Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC; Mary Carmona-Rousse; and Drew Eckl & Farnham, LLP. 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. IPC INT'L: Gets Court Nod to Tap Kurtzman Carson as Admin. Agent ---------------------------------------------------------------- IPC International Corporation and The Security Network Holdings Corporation won bankruptcy court permission to hire Kurtzman Carson Consultants LLC as claims and noticing agent, and administrative agent. As administrative agent, KCC will assist the Debtors in the prepetition of schedules of assets and liabilities and statements of financial affairs, and manage any distribution pursuant to a confirmed Plan. 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 R. Mayers, Esq., at Potter Anderson & Corroon, LLP, serves as local counsel. Paul V. Possinger, Esq., and Brandon W. Levitan, Esq., at Proskauer Rose, LLP, serve 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. A three-member panel has been appointed as the official unsecured creditors committee in the case. The panel consists of Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC; Mary Carmona-Rousse; and Drew Eckl & Farnham, LLP. 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. IZEA INC: CEO Buys 70,000 Common Shares --------------------------------------- Edward H. Murphy, IZEA, Inc.'s president and chief executive officer, purchased 70,000 shares of the Company's common stock in the open market for a total purchase price of $24,902 for investment purposes, from September 4 through Sept. 9, 2013. About IZEA, Inc. IZEA, Inc., headquartered in Orlando, Fla., believes it is a world leader in social media sponsorships ("SMS"), a rapidly growing segment within social media where a company compensates a social media publisher to share sponsored content within their social network. The Company accomplishes this by operating multiple marketplaces that include its platforms SocialSpark, SponsoredTweets and WeReward, as well as its legacy platforms PayPerPost and InPostLinks. IZEA reported a net loss of $4.67 million in 2012 as compared with a net loss of $3.97 million in 2011. The Company's balance sheet at June 30, 2013, showed $1.64 million in total assets, $4.35 million in total liabilities and a $2.70 million total stockholders' deficit. Cross, Fernandez & Riley, LLP, in Orlando, 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 incurred recurring operating losses and had a negative working capital and an accumulated deficit at Dec. 31, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern without raising sufficient additional financing. JERRY'S NUGGET: Confirmation Hearing Continued to Sept. 24 ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada approved a stipulation continuing until Sept. 24, 2013, at 9:30 a.m., the hearing to consider the confirmation of Jerry's Nugget, Inc., et al.'s Chapter 11 Plan. An evidentiary hearing, if necessary, is scheduled for Oct. 7, at 9:30 a.m. The Plan hearing was first scheduled for Aug. 26, 2013, at 9:30 a.m. Then for Sept. 4. The stipulation was entered between the Debtors and U.S. Bank National Association. The Plan As reported in the Troubled Company Reporter on July 23, 2013, the Debtors' Plan generally provides for the repayment of claims against the Debtors: (i) Allowed Secured Claims will be paid in full with interest; (ii) Allowed Priority Claims will be paid in full with interests; (iii) Allowed Administrative Convenience Claims will be paid in full; and (iv) Allowed General Unsecured Claims will be paid their Pro Rata portion of $2,500,000, which will be funded by Debtors' ongoing operations and the $400,000 or greater contribution from the Stamis Trusts. Existing Equity Securities in JNI and Spartan Gaming will be canceled and 100% of the Reorganized Debtors' stock and membership issued to the Stamis Trusts. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/JERRYS_NUGGET_ds.pdf About Jerry's Nugget and Spartan Gaming Jerry's Nugget Inc., operates Jerry's Nugget, a casino consisting of approximately 87,187 square feet of building area and 24,511 square fee of casino floor space with approximately 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area and a small live pit. Jerry's Nugget Inc. and affiliate Spartan Gaming LLC sought Chapter 11 protection (Bankr. D. Nev. Lead Case No. 12-19387) in Las Vegas, Vegas, on Aug. 13, 2012. Jerry's Nugget, owned by the Stamis family, has a 9.1-acre casino property in North Las Vegas. The property consists of 87,187 square feet of building area and 24,511 square feet of casino floor space, with 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area, and a small live pit. There are two restaurants the Uncle Angelo's Pizza Joint and Jerry's Famous Coffee shop as well as Uncle Angelo's Bakery, a locals' favorite. Net revenues totaled $22.5 million, including $15.3 million in gaming revenue, in the year ended Dec. 31, 2011. Spartan Gaming owns 12 parcels of real property in Nevada. Two of the parcels provide parking access for Jerry's Nugget. Judge Mike K. Nakagawa presides over the case. Gerald M. Gordon, Esq., at Gordon Silver represent the Debtors. Jerry's Nugget estimated assets and debts of $10 million to $50 million. Jerry's Nugget said its current going concern value is at least $8 million. Spartan Gaming estimated $1 million to $10 million in assets and debts. The petitions were signed by Jeremy Stamis, president. In its schedules, Jerry's Nugget disclosed $12,378,944 in assets and $10,771,442 in liabilities as of the Petition Date. The law firm of Dorsey & Whitney represents US Bank; Morris Law Group and H3 Law represent CRE; The Schwartz Law Firm represent The George Stamis Family Trust, George Stamis and Effie Stamis. JERRY'S NUGGET: Hearing on Trustee Appointment Moved to Sept. 24 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada approved a stipulation continuing until Sept. 24, 2013, at 9:30 a.m., the hearing to consider a motion to appoint a Chapter 11 Trustee for Jerry's Nugget, Inc., et al. The stipulation was entered between the Debtors and U.S. Bank National Association. The initial hearing on the trustee motion is continued from Sept. 4. As reported in the Troubled Company Reporter on Aug. 16, 2013, U.S. Bank National Association, a secured creditor, asked the Court to employ a trustee in the Debtors' cases on these grounds: A. The Debtors have not fulfilled their fiduciary duties to creditors. B. The Debtors have been dishonest by failing to disclose significant transfers to insiders C. The Debtors refuse to pursue valuable fraudulent transfer and intercompany claims against insiders. D. Current management has grossly mismanaged the Debtors and wasted corporate assets. In the event the Court does not appoint a trustee, U.S. Bank wants the Court to appoint an examiner. About Jerry's Nugget and Spartan Gaming Jerry's Nugget Inc., operates Jerry's Nugget, a casino consisting of approximately 87,187 square feet of building area and 24,511 square fee of casino floor space with approximately 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area and a small live pit. Jerry's Nugget Inc. and affiliate Spartan Gaming LLC sought Chapter 11 protection (Bankr. D. Nev. Lead Case No. 12-19387) in Las Vegas, Vegas, on Aug. 13, 2012. Jerry's Nugget, owned by the Stamis family, has a 9.1-acre casino property in North Las Vegas. The property consists of 87,187 square feet of building area and 24,511 square feet of casino floor space, with 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area, and a small live pit. There are two restaurants the Uncle Angelo's Pizza Joint and Jerry's Famous Coffee shop as well as Uncle Angelo's Bakery, a locals' favorite. Net revenues totaled $22.5 million, including $15.3 million in gaming revenue, in the year ended Dec. 31, 2011. Spartan Gaming owns 12 parcels of real property in Nevada. Two of the parcels provide parking access for Jerry's Nugget. Judge Mike K. Nakagawa presides over the case. Gerald M. Gordon, Esq., at Gordon Silver represent the Debtors. Jerry's Nugget estimated assets and debts of $10 million to $50 million. Jerry's Nugget said its current going concern value is at least $8 million. Spartan Gaming estimated $1 million to $10 million in assets and debts. The petitions were signed by Jeremy Stamis, president. In its schedules, Jerry's Nugget disclosed $12,378,944 in assets and $10,771,442 in liabilities as of the Petition Date. The Debtors' Plan generally provides for the repayment of claims against the Debtors as: (i) Allowed Secured Claims will be paid in full with interest; (ii) Allowed Priority Claims will be paid in full with interests; (iii) Allowed Administrative Convenience Claims will be paid in full; and (iv) Allowed General Unsecured Claims will be paid their pro rata portion of $2,500,000, which will be funded by Debtors' ongoing operations and the $400,000 or greater contribution from the Stamis Trusts. Existing Equity Securities in JNI and Spartan Gaming will be canceled and 100 percent of the Reorganized Debtors' stock and membership issued to the Stamis Trusts. The Bankruptcy Court approved on June 28, 2013, the amended disclosure statement describing the Debtors' Joint Plan. The law firm of Dorsey & Whitney represents US Bank; Morris Law Group and H3 Law represent CRE; The Schwartz Law Firm represent The George Stamis Family Trust, George Stamis and Effie Stamis. JOSEPH DELGRECO: 2nd Circ. Pushed to Revive $17MM DLA Piper Suit ---------------------------------------------------------------- Law360 reported that a bankrupt furniture company asked the Second Circuit on Sept. 10 to reopen a $17 million malpractice suit against DLA Piper, arguing the firm's negligence led it to botch a licensing and loan deal. According to the report, DLA Piper's failure to make sure $767 in interest due was paid directly led to Joseph DelGreco & Co. defaulting on a loan provided by a Taiwanese supplier, DelGreco's lawyer Hartley T. Bernstein of Bernstein & Wasserman LLP said at oral arguments before a panel of judges in Manhattan. The case is In Re: Joseph Delgreco & Company, 12-4524 (2d Cir.). Based in New York, Joseph DelGreco & Company Inc. filed for Chapter 11 Protection (Bankr. Case No. 09-16041) on Oct. 8, 2009. Joel Martin Shafferman, Esq., at Shafferman & Feldman, LLP, represents the company. The Debtor estimated assets of less than $50,000 and debts of between $1 million and $10 million. KINGSBURY CORP: Case Dismissal Hearing Set for Nov. 17 ------------------------------------------------------ Hearing on the U.S. Trustee's motion to dismiss the chapter 11 case of Kingsbury Corp. is set for Nov. 17, 2013 at 1:30 p.m. at Courtroom 2 (JMD), 1000 Elm Street, 11th Floor, Manchester, New Hampshire. Kingsbury Corp. -- http://www.kingsburycorp.com/-- makes and assembles machine systems. Kingsbury and affiliate Ventura Industries, LLC, filed Chapter 11 petition (Bankr. D. N.H. Case Nos. 11-13671 and 11-13687) on Sept. 30, 2011. Maire B. Corcoran, Esq., Robert J. Keach, Esq., Jessica A. Lewis, Esq., and Jennifer Rood, Esq., at Berstein, Shur, Sawyer & Nelson, serve as counsel to the Debtors. Donnelly Penman & Partners serves as its investment banker. In its schedules, the Debtor disclosed $10,134,679 in assets, and $24,534,973 in liabilities as of the petition date. William K. Harrington, the U.S. Trustee for Region 1, appointed five members to serve on the Official Committee of Unsecured Creditors. Steven C. Reingold, Esq., at Jager Smith P.C., represents the Official Committee of Unsecured Creditors as counsel. LAGUNA BRISAS: Receiver May Use Cash Collateral Thru Oct. 31 ------------------------------------------------------------ Laguna Brisas, LLC disclosed the terms of a stipulation authorizing Byron Chapman, the receiver, to further use cash collateral for limited purpose until Oct. 31, 2013. The receiver may use up to $50,000 in cash collateral for purchasing and installing new, flat-screed televisions as required by Best Western International, Inc., which the Debtor is a member. On Aug. 29, the Debtor provided the receiver with an opportunity to purchase televisions that the Debtor assets would comply with the BW rules as a cost savings of approximately $10,000, and would remain compliant with the BW rules for seven years. Wells Fargo Bank, N.A., Mehrdad Elie, Kay Nam Kim and the receiver consent to use of cash collateral to purchase and install new, commercial grade televisions. Keith C. Owens, Esq. -- kowens@venable.com -- at Venable LLP represents Wells Fargo, as trustee for the registered holders of Banc of America Commercial Mortgage Inc., Commercial Mortgage pass-Through Certificates, Series 2006-3, by and through CW Capital Assets Management LLC solely in its capacity as special servicer. About Laguna Brisas Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Chapman of Rim Hospitality, since Oct. 3, 2011. Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy" Kim -- represents the Debtor as special counsel. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. The Debtor has filed a Plan to be funded from income the Debtor receives from the operation of the Hotel. The management of the Debtor will continue to be Andy Kim, as it was prior to the appointment of the Receiver. By the effective date of the Plan, the Receiver will turn over the Debtor's assets to the Debtor. The Debtor, through the management company, Matrix Hospital Group LLC, will act as the disbursing agent for the purpose of making the distributions provided for under the Plan. Creditor Wells Fargo Bank, N.A., is represented by Hamid R. Rafatjoo, Esq., at Venable LLP, as counsel. LANDAUER HEALTHCARE: Sale Procedures Hearing Today -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the creditors' committee for Landauer-Metropolitan Inc. won a requested eight-day delay in the hearing to approve the sale of the provider of home health-care equipment and supplies. The report relates that the creditors' committee was appointed on Aug. 26, selected lawyers the next day, and asked the bankruptcy judge in Delaware for one-week delay in the hearing for approval of auction and sale procedures that was on the Sept. 4 calendar. Landauer didn't grant the request because the prospective buyer, competitor Quadrant Management Inc., opposed a delay. Quadrant is under contract to make the first offer of $22 million at auction. Quadrant eventually acceded to a delay of about one week in sale procedures. According to the report, the hearing to approve sale procedures will now take place Sept. 12. Assuming the judge goes along with the schedule, competing bids will be due Sept. 23 rather than Sept. 16. The auction will occur Sept. 24 instead of Sept. 18, and the hearing for sale approval will be Sept. 26. About Landauer Healthcare Holdings Home medical equipment provider Landauer Healthcare Holdings, Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12098) on Aug. 16, 2013, with a deal to sell all assets to Quadrant Management Inc. for $22 million, absent higher and better offers. The Company has 32 operating locations, with 50% of inventory concentrated in Mount Vernon, New York; Great Neck, New York; Warwick, Rhode Island; and Philadelphia, Pennsylvania. Landauer, which derives revenues by reimbursement from insurers, Medicare and Medicaid, reported net revenues of $128.5 million in fiscal year ended March 31, 2013. Landauer estimated assets and debt of at least $50 million. Michael R. Nestor, Esq., Matthew B. Lunn, Esq., and Justin H. Rucki, Esq., at Young Conaway Stargatt & Taylor, LLP; and John A. Bicks, Esq., Charles A. Dale III, Esq., and Mackenzie L. Shea, Esq., at K&L Gates LLP, serve as the Debtor's counsel. Carl Marks Advisory Group serves as the Debtor's financial advisors, and Epiq Systems as claims and notice agent. LEHMAN BROTHERS: Baupost Funds Seek $600-Mil. in Damages -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lehman Brothers Holdings Inc. is further than ever from resolving what once was a $301 million claim by Giants Stadium LLC related to two swap agreements made in connection with $700 million in auction-rate bonds sold to fund the venue. According to the report, hedge funds advised by Baupost Group LLC bought the claim and amended it to seek $600 million in damages arising from termination of the swaps immediately after Lehman's 2008 bankruptcy filing. Lehman, the report discloses, says the amended claim seeks "an absurd amount" that's more than the face value of bonds the swaps were intended to hedge. Lehman is demanding that Boston-based Baupost turn over documents that shed light on the value of the swaps at termination. Baupost has asked the bankruptcy judge to void the demand, claiming that what Lehman seeks is either irrelevant or would duplicate materials already sought from Giants Stadium. The dispute comes before the bankruptcy court in Manhattan for resolution on Sept. 18. The face amount of the claim, even in its disputed state, has practical consequences because Lehman must retain reserves on account of disputed claims. By doubling the size of the claim, Baupost is requiring the bank to hold back more reserves, cutting down the size of the next distribution for creditors, to be made Oct. 3. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: Recovery Seen as Justifying $2 Billion Bankruptcy ------------------------------------------------------------------ Erik Larson, writing for Bloomberg News, reported that Harvey Miller, the lawyer guiding Lehman Brothers Holdings Inc. through the biggest-ever U.S. bankruptcy, sipped a cappuccino at a tourist-filled cafe near Manhattan's Central Park and reflected on how his client's collapse five years ago went from unthinkable to inevitable. Lehman's demise "ignited a worldwide conflagration that almost brought down the global financial system," said Miller, who filed the Chapter 11 petition at 2 a.m. on Sept. 15, 2008, in New York after the bank failed to win U.S. government aid or attract a buyer, according to the report. "The consequences were unknown." Five years later, Miller takes credit for helping fend off some creditors' liquidation demands and instead turning the remains of one of the biggest failures of the financial crisis into a going concern, the report related. In the process, the Lehman estate has paid more than $2 billion in fees and expenses to professionals like him for that work, dwarfing the previous record of $757 million in Enron Corp.'s bankruptcy. In exchange for that eye-popping payday, approved by the judge in charge of the case, Lehman creditors are poised to get 18 cents on the dollar by 2016, from an estate valued at $65 billion, according to a liquidation plan approved in December 2011, the report further related. Miller, 80, estimated that recovery may rise to as much as 22 cents as the value of Lehman's assets increases over the next three years to about $80 billion. His estimate is a "somewhat educated guess," Miller said in an interview near the offices of his law firm, New York-based Weil, Gotshal & Manges LLP, the report said. "I am sure debt traders have their own projected recovery valuations." About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: What Might Have Been, and the Fall of the Company ------------------------------------------------------------------ Andrew Ross Sorkin, writing for The New York Times' DealBook, stated in a commentary that as the world observes the five-year anniversary of the financial crisis -- Lehman Brothers filed for bankruptcy five years ago this coming weekend -- the most intriguing hypothetical question about those fateful days is what would have happened had the government bailed out Lehman. It would have changed the course of history, certainly, but maybe not for the better, the article said. According to the article, the collapse of Lehman has long been considered the domino that led to the tumbling of so many others: Merrill Lynch's hasty sale to Bank of America; the bailout of the American International Group; the breaking of the buck in the money market; the near collapse of Goldman Sachs and Morgan Stanley that led them to become banking holding companies; and the decision by the government to pursue the $700 billion Troubled Asset Relief Program to bail out the entire banking industry. The decision not to rescue Lehman has been called a mistake and worse, the article said. Christine Lagarde, the French finance minister at the time, called it "horrendous." No one suggested Lehman deserved to be saved, the article noted. But the argument has been made that the crisis might have been less severe if it had been saved, because Lehman's failure created remarkable uncertainty in the market as investors became confused about the role of the government and whether it was picking winners and losers. The government had bailed out Bear Stearns and then nationalized Fannie Mae and Freddie Mac but left Lehman for dead only to turn around and save A.I.G. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LIGHTSQUARED INC: Dish Network Director Quits Amid Flap ------------------------------------------------------- Sharon Terlep, writing for Daily Bankruptcy Review, reported that a Dish Network Corp. director who resigned in recent weeks did so amid a disagreement over the company's handling of a bid for a telecommunications firm that could deliver hundreds of millions of dollars of personal profits to Dish Chairman Charlie Ergen, people involved in the situation said. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LIGHTSQUARED INC: Dish's Ergen Seeks Dismissal of Harbinger Suit ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Charles Ergen and his Dish Network Corp. contend they had no duty to disclose that an Ergen-owned company named SP Special Opportunities Holdings LLC was buying secured debt owed by bankrupt LightSquared Inc., the developer of a satellite-based wireless-communications system. According to the report, the statements were contained in papers Ergen and Dish filed seeking dismissal of a fraud lawsuit filed in early August by Philip Falcone's Harbinger Capital Partners LLC, LightSquared's controlling shareholder. The dismissal bid comes up for hearing Oct. 8 in U.S. Bankruptcy Court in New York. The report relates that according to Harbinger, Dish, SP and Ergen committed fraud by failing to disclose that Ergen owned SP. Harbinger also contended that Ergen's companies were barred from buying LightSquared debt in an effort to take over the bankrupt company. Ergen and his companies met the allegations head on, contending Harbinger's lawsuit is fatally defective on its face and must be dismissed. They said that only Dish and its units were prohibited from buying LightSquared debt. According to the papers, Dish has no ownership stake in SP, which is controlled by Ergen. Because affiliates of Dish aren't prohibited buyers, the debt purchases by SP were permitted and there was no duty to disclose, according to the papers. Dish, the report relates, further argued that there are no allegations the company made any representations to support a fraud allegation. Dish contended the suit is a "transparent effort by Harbinger to retain control of a company that it has driven into bankruptcy." The suit is designed to "discredit" the $2.22 billion cash offer Dish is making to buy LightSquared, according to the filing. Harbinger will file another set of papers on Sept. 30. Dish and Ergen will make their final written arguments Oct. 4. The lawsuit is Harbinger Capital Partners LLC v. Ergen (In re LightSquared Inc.), 13-01390, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The bankruptcy is In re LightSquared Inc., 12-bk-12080, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LightSquared's bankruptcy is a clash of competing reorganization plans. Alongside LightSquared's own plan, Harbinger has filed a plan, as have secured lenders to LightSquared. The lenders' plan is based on an auction with a $3.5 billion opening bid from Dish. There will be a hearing Sept. 24 for approval of auction and sale procedures, and a hearing six days later to approve disclosure materials explaining the competing plans. A confirmation hearing to approve one of the plans is tentatively set for Dec. 10. The auction is to occur Dec. 6. There are competing plans because LightSquared lost the exclusive right to propose a reorganization. LIN MEDIA: S&P Assigns 'B+' Corp. Credit Rating; Outlook Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned Providence, R.I.-based TV broadcaster LIN Media LLC its 'B+' corporate credit rating. The outlook is positive. At the same time, S&P withdrew its corporate credit rating on LIN TV Corp. The rating action follows the company's announcement that LIN TV Corp. merged with and into LIN Media LLC, with LIN Media LLC continuing as the surviving entity. The company performed this transaction in order to resolve its NBC joint venture guarantee and tax overhang. The merger does not affect the credit quality of the company, though the unwinding of the joint venture and the release of the guarantee alleviated a significant financial risk for the company, in S&P's opinion. "Our rating on LIN reflects our assessment of the company's business risk profile as "fair" and its financial risk profile as "aggressive," based on our criteria. We view LIN's business risk profile as fair based on its sizable portfolio of TV stations in midsize markets, its strong position in local news, and its EBITDA margin, which is comparable to its peers. We assess LIN's financial risk profile as aggressive because we expect leverage, on a trailing-eight-quarters EBITDA basis, to decline to the mid- 5x area by the end of 2013, and to be below 5x in 2014. We estimate current leverage, on a trailing-eight-quarters basis, to be about 5.9x as of June 30, 2013," S&P said. LIN, a midsize TV broadcaster, operates or services 50 broadcast network affiliate stations in 23 markets, reaching 10.6% of U.S. TV households. Its recent acquisition of 18 New Vision TV stations confers increased geographic diversity, particularly in the western U.S. markets. LIN's station affiliations are diversified across the four major U.S. broadcast networks, shielding it from the risk of individual network underperformance. Most of the company's stations are ranked first or second in local news--an important competitive edge for building loyal local viewing and attractive political advertising. Additionally, its duopoly positions in a number of its markets provide cost savings, enhancing cash flow. LIN's EBITDA margin of about 30% is average among its broadcasting peers and significantly lags its larger, more efficient competitors, whose EBITDA margins are in the high- 30% area. LONGVIEW POWER: Given Interim Cash Collateral Use ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Longview Power LLC was given interim permission from the bankruptcy court to pay bills using cash representing collateral for secured lenders' claims. There will be a final hearing to use cash collateral on Oct. 7 in U.S. Bankruptcy Court in Delaware. 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. MED-DEPOT INC: Reorganization Plan Set for Oct. 21 Confirmation --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Med-Depot Inc. intends to have its reorganization plan approved at an Oct. 21 confirmation hearing in U.S. Bankruptcy Court in Sherman, Texas. According to the report, the bankruptcy judge approved disclosure materials Sept. 10, allowing creditors to vote on the plan. The company has $18 million in consolidated debt. The plan offers a pot of $200,000 cash to unsecured creditors. The company projected a $1.8 million net loss this fiscal year on revenue of $14.5 million. Med-Depot forecast revenue of $20.8 million and net income of $1.6 million by fiscal 2015, according to data attached to the proposed disclosure statement. About Med-Depot Inc. Med-Depot, Inc., filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 13-41815) on July 26, 2013, in Sherman, Texas. Attorneys at Powell Goldstein, LLP and Bryan Cave, LLP, serve as counsel to the Debtor. The Debtor estimated assets of $1,000,001 to $10,000,000 and debt of $10,000,001 to $50,000,000. Parent Med-Depot Holdings, Inc., also sought bankruptcy protection. Based in Plano, Texas, 64 miles (103 kilometers) north of Dallas, Med-Depot entered bankruptcy after working out a plan to restructure the first-lien debt and give stock in return for the second-lien loan. MERCANTILE BANCORP: Investors Pan Planned $22MM Ch. 11 Sale ----------------------------------------------------------- Law360 reported that Mercantile Bancorp Inc. securities holders urged a Delaware bankruptcy judge Sept. 10 to reject the holding company's planned $22.3 million asset sale to United Community Bancorp Inc., contending the deal will actually result in a $1.9 million loss for the estate. According to the report, Illinois-based MBI seeks approval to sell the bulk of its assets -- primarily a 100 percent equity interest in nondebtor Mercantile Bank -- to stalking horse bidder UCB, but the proposed deal will lose money once an expected $23.5 million claim from Federal Deposit Insurance Corp. is allowed. About Mercantile Bancorp Mercantile Bancorp -- http://www.mercbanx.com/-- is a Quincy, Illinois-based bank holding company with wholly owned subsidiaries consisting of one bank in Illinois and one each in Kansas and Florida, where the Company conducts full-service commercial and consumer banking business, engages in mortgage banking, trust services and asset management, and provides other financial services and products. The Company also operated Mercantile Bank branch offices in Missouri and Indiana. On Aug. 10, 2011, the Illinois Division of Banking released a Consent Order that Mercantile Bank, the Federal Deposit Insurance Corporation, and the Division entered into as of July 28, 2011. Under the Order, Mercantile Bank will cease operating with all money transmitters and currency businesses providing brokerage, sale or exchange of non-United States currency for deposit customers. Furthermore, Mercantile Bank may not enter into a new line of business without the prior written consent of the FDIC and the Division. Mercantile Bancorp filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-11634) on June 27, 2013. The petition shows assets and debt both exceeding $50 million. Liabilities include $61.9 million owing on junior subordinated debentures. Mercantile stopped paying interest on the debentures in 2009, since then running up $14 million in unpaid interest. Stuart M. Brown, Esq. at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Kimberly D. Newmarch, Esq., and Aaron M. Paushter, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are the attorneys for the Debtor. A three-member official committee of unsecured creditors was appointed by the U.S. Trustee. MERRIMACK PHARMACEUTICALS: Copies of Investor Presentations ----------------------------------------------------------- Merrimack Pharmaceuticals, Inc., from time to time, presents or distributes to the investment community at various industry and other conferences slide presentations to provide updates and summaries of its business. The Company is posting to the Investors portion of its Web site at investors.merrimackpharma.com copies of its current corporate slide presentation and factsheet. These slides are available for free at: http://is.gd/hlfACf http://is.gd/8y8Cmo About Merrimack Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a biopharmaceutical company discovering, developing and preparing to commercialize innovative medicines consisting of novel therapeutics paired with companion diagnostics. The Company's initial focus is in the field of oncology. The Company has five programs in clinical development. In it most advanced program, the Company is conducting a pivotal Phase 3 clinical trial. Merrimack Pharmaceuticals disclosed a net loss of $91.75 million in 2012, following a net loss of $79.67 million in 2011. The Company incurred a $50.15 million net loss in 2010. As of June 30, 2013, the Company had $107.32 million in total assets, $165.66 million in total liabilities, $242,000 in non-controlling deficit and a $58.09 million total stockholders' deficit. MF GLOBAL: Corzine Seeks Dismissal of CFTC Lawsuit -------------------------------------------------- Joel Rosenblatt, writing for Bloomberg News, reported that Jon Corzine, former chief executive officer of bankrupt MF Global Holdings Ltd., asked that a lawsuit against him by the Commodity Futures Trading Commission be dismissed. According to the report, the CFTC sued Corzine in June for failing to oversee the brokerage company properly while it spiraled toward failure in 2011 as $1.6 billion in customer funds went missing. After "exhaustive investigations lasting 19 months," the CFTC hasn't produced evidence to support its claims, Corzine said in a filing on Sept. 10 in federal court in New York. The CFTC's complaint "relies on irrelevant allegations calculated to sully Mr. Corzine's character, as well as rambling hindsight criticisms of complex management decisions, many of which were made during times of extreme stress," Corzine said in the filing, the report related. MF Global's collapse on Oct. 31, 2011, a year and half after Corzine joined the firm, was the eighth-biggest bankruptcy in U.S. history, the report recalled. Wrong-way $6.3 billion trades on bonds of some of Europe's most-indebted nations helped destroy the firm and its brokerage unit, which listed assets of $41 billion and debt of $39.7 billion in its Chapter 11 filing. Corzine, who is also a former U.S. senator and Goldman Sachs Group Inc. co-chairman, came to MF Global in March 2010 intent on turning the commodity brokerage firm into a global investment bank that generated substantial revenue from proprietary trading, the CFTC said in the complaint, the report further related. His plans included making larger and riskier investments from the company's funds, according to the complaint. The case is U.S. Commodity Futures Trading Commission v. MF Global Inc., 13-cv-04463 and 11-cv-07866, U.S. District Court, Southern District of New York (Manhattan.) MONTREAL MAINE: MM&A Railway Given Cross-Border Court Protocol -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the dual bankruptcies of Montreal Maine & Atlantic Railway Ltd. will be facilitated by a cross-border protocol designed for the courts in the U.S. and Canada to coordinate their cases. The report relates that the protocol, approved Sept. 4 by the U.S. Bankruptcy Court in Maine, allows the judges to confer with one another. It ensures that neither court loses any of its jurisdiction or powers. If they elect, the judges can hold joint hearings by video or audio. The protocol is also to be approved by the court in Canada presiding over a reorganization under the Companies' Creditors Arrangement Act. The U.S. judge will hold a hearing on Sept. 13 to consider appointment of an official committee to represent victims. According to papers filed in U.S. Bankruptcy Court on Aug. 22, the representatives of the probate estate of Marie Semie Alliance, Stephanie Bolduc, Yannick Bouchard, Marie France Boulet, Karine Champagne, Marie-Noelle Faucher, Michael Guertin, Jr. Stephanie Lapierre, Joannie Lapointe, Marianne Poulin, Martin Rodrique, Jean Pierre Roy, Kenin Roy, Melissa Roy, Andree-Anne Sevigny, Jimmy Sirios, Elodie Turcotte and Joannie Turnel -- each of them killed in the massive explosion in Lac Megantic, Quebec on July 6, 2013, resulting from derailment of a train operated by the Debtor -- ask the Bankruptcy to direct the appointment of a committee of wrongful death and personal injury claimants. The Debtor has acknowledged $33.5 million of secured debt together with unsecured trade payables of $3.5 million. The representatives state that the committee to represent wrongful death and personal injury claimants will benefit the bankruptcy estate by solving difficult issue of due process. 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, Sawyer, and Nelson, P.A., has been named as chapter 11 trustee. His firm serves as his chapter 11 bankruptcy counsel. Development Specialists, Inc., serves as his financial advisor. 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. MONTREAL MAINE: N.D. Ill. Judge Discusses Removal of Grimard Case ----------------------------------------------------------------- Senior District Judge Milton I. Shadur issued sua sponte a Memorandum Opinion and Order dated Sept. 5, 2013, to address what the judge called "highly problematic" aspects of the attempted removal of the case, MARIE-JOSEE GRIMARD, etc., Plaintiff, v. MONTREAL, MAINE AND ATLANTIC RAILWAY, INC., et al., Defendants, No. 13 C 6197 (N.D. Ill.). A copy of the memorandum is available at http://is.gd/RBG9GQfrom Leagle.com. The case has been removed from the Circuit Court of Cook County to the Northern District of Illinois, with the Joint Notice of Removal seeking to invoke federal jurisdiction on the basis of (1) the action's assertedly "being related to cases under Title XI" (see 28 U.S.C. Sections 1334(b) and 1452(a)1) as well as (2) diversity of citizenship pursuant to Section 1332. According to Judge Shadur, the removing counsel have failed to conform to the mandate of the District Court's LR 5.2(f), which requires the delivery of a Judge's Copy of every filing to the chambers of the assigned judge unless that judge has indicated that such delivery is not needed. "With the two removing defendants being represented by one of the country's mega-law firms, there is just no excuse for this Court's first direct knowledge of this action having come from receiving the consents by four other codefendants . . . to the removal, rather than receiving the Notice itself from the originating law firm (shades of the old Johnny Carson "Carnac the Magnificent" routine: "Here's the answer. What's the question?")," Judge Shadur said. "As it has done in numerous other cases, this Court imposes a $100 fine on the removing counsel (not their clients) for that LR violation, with the "Clerk of the U.S. District Court" to be the payee of a check for that amount delivered to this Court's chambers." MARIE-JOSEE GRIMARD, Plaintiff, Pro Se. Defendants Western Petroleum Company, Petroleum Transport Solutions, and World Fuel Services Corporation are represented by Leslie M. Smith, Esq., and Mark Robert Filip, Esq., at Kirkland & Ellis LLP. Defendants Rail World, Inc., and Edward A. Burkhardt are represented by Alan Scott Gilbert, Esq., Steven Lawrence Merouse, Esq., and Tiffany L. Amlot, Esq., at Dentons US LLP. Defendants Dakota Petroleum Transport Solutions, LLC, and DPTS Marketing, LLC, are represented by Cal Richard Burnton, Esq., Michael R. Dockterman, Esq., Edward Timothy Walker, Esq., Esq., Megan Colleen Hugo, Esq., and William Robert Andrichik, Esq., at Edwards Wildman Palmer LLP. 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, Sawyer, and Nelson, P.A., has been named as chapter 11 trustee. His firm serves as his chapter 11 bankruptcy counsel. Development Specialists, Inc., serves as his financial advisor. The Chapter 11 trustee tapped Kugler Kandestin LLP as his special counsel, and Covington & Burling LLP, as his special regulatory counsel. U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the U.S. case. The Maine law firm of Verrill Dana serves as counsel to MM&A. Justice Martin Castonguay oversees the case in Canada. MPG OFFICE: BPO Further Extends Tender Offer Until Sept. 16 ----------------------------------------------------------- Brookfield Office Properties Inc. said that DTLA Fund Holding Co. and Brookfield DTLA Fund Properties Holding Inc., both direct wholly owned subsidiaries of the DTLA Fund, are extending their previously announced cash tender offer to purchase all outstanding shares of preferred stock of MPG Office Trust, Inc., until 12:00 midnight, New York City time, at the end of Monday, Sept. 16, 2013. BPO previously announced its intention to acquire MPG pursuant to a merger agreement, dated as of April 24, 2013, by and among Brookfield DTLA Holdings LLC, a newly formed fund controlled by BPO (the DTLA Fund), Brookfield DTLA Fund Office Trust Investor Inc., Brookfield DTLA Fund Office Trust Inc., Brookfield DTLA Fund Properties LLC, MPG and MPG Office, L.P. Upon the closing of the tender offer, preferred stockholders of MPG will receive $25.00 in cash for each share of MPG preferred stock validly tendered and not validly withdrawn in the offer, without interest and less any required withholding taxes. Shares of MPG preferred stock that are tendered and accepted for payment in the tender offer will not receive any accrued and unpaid dividends on those shares. The tender offer had been previously set to expire at 12:00 midnight, New York City time, at the end of Monday, Sept. 9, 2013. Except for the extension of the expiration date, all other terms and conditions of the tender offer remain unchanged. The Depositary and Paying Agent for the tender offer is American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, New York 11219. The Information Agent for the tender offer is MacKenzie Partners, Inc., 105 Madison Avenue, New York, New York 10016. The tender offer materials may be obtained at no charge by directing a request by mail to MacKenzie Partners, Inc., or by calling (800) 322-2885. Fried, Frank, Harris, Shriver & Jacobson LLP is acting as legal advisor to BPO. Based on information received from the Depositary, as of Sept. 6, 2013, approximately 83,224 shares of MPG preferred stock had been tendered and not withdrawn from the offer. Stockholders who have already tendered their shares do not have to re-tender their shares or take any other action as a result of the extension of the expiration date. About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- owns and operates Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high-quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. For the year ended Dec. 31, 2012, the Company reported net income of $396.11 million, as compared with net income of $98.22 million on $234.96 million of total revenue during the prior year. As of June 30, 2013, the Company had $1.28 billion in total assets, $1.71 billion in total liabilities and a $437.26 million total deficit. In its Form 10-K filing with the Securities and Exchange Commission for the fiscal year ended Dec. 31, 2012, the Company said it is working to address challenges to its liquidity position, particularly debt maturities, leasing costs and capital expenditures. The Company said, "We do not currently have committed sources of cash adequate to fund all of our potential needs, including our 2013 debt maturities. If we are unable to raise additional capital or sell assets, we may face challenges in repaying, extending or refinancing our existing debt on favorable terms or at all, and we may be forced to give back assets to the relevant mortgage lenders. While we believe that access to future sources of significant cash will be challenging, we believe that we will have access to some of the liquidity sources identified above and that those sources will be sufficient to meet our near- term liquidity needs." On March 11, 2013, the Company entered into an agreement to sell US Bank Tower and the Westlawn off-site parking garage. The transaction is expected to close June 28, 2013, subject to customary closing conditions. The net proceeds from the transaction are expected to be roughly $103 million, a portion of which may potentially be used to make loan re-balancing payments on the Company's upcoming 2013 debt maturities at KPMG Tower and 777 Tower. Roughly $898 million of the company's debt matures in 2013. "Our ability to access the capital markets to raise capital is highly uncertain. Our substantial indebtedness may prevent us from being able to raise debt financing on acceptable terms or at all. We believe we are unlikely to be able to raise equity capital in the capital markets," the Company said. "Future sources of significant cash are essential to our liquidity and financial position, and if we are unable to generate adequate cash from these sources we will have liquidity-related problems and will be exposed to material risks. In addition, our inability to secure adequate sources of liquidity could lead to our eventual insolvency." MSD PERFORMANCE: Meeting to Form Creditors' Panel on Sept. 17 ------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on September 17, 2013 at 10:30 a.m. in the bankruptcy case of MSD Performance, Inc., et al. The meeting will be held at: The DoubleTree Hotel 700 King Street Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. MTR GAMING: S&P Puts 'B-' CCR on CreditWatch Positive ----------------------------------------------------- Standard & Poor's Ratings Services placed all ratings, including its 'B-' corporate credit rating, on Chester, W. Va.-based gaming operator MTR Gaming Group Inc. on CreditWatch with positive implications. At the same time, S&P placed its ratings, including its 'B+' corporate credit rating, on Reno, Nev.-based gaming operator Eldorado Resorts LLC on CreditWatch with negative implications. MTR and Eldorado announced that they entered into a definitive agreement, under which MTR will combine with the parent company of Eldorado in a stock merger. The merger will include the 50% interest in the Silver Legacy (not rated), a joint venture between Eldorado's majority owners and MGM Resorts International. As part of the transaction, a cash election provision allows for current MTR shareholders to redeem their shares for $5.15 per share, up to 5.8 million shares in total. S&P believes the company will fund the approximate $30 million for this cash election through cash on hand. MTR's remaining common shares will be exchanged for shares in the combined new company, which will remain publicly traded and will be named Eldorado Resorts Inc. S&P expects all existing debt to remain in place through the close of the merger. The transaction is anticipated to close in mid-2014 and is contingent upon satisfying regulatory and closing conditions. The positive CreditWatch listing on MTR reflects the potential for higher ratings, given the merger for MTR into a currently higher- rated entity, and S&P's expectation that geographic diversity will increase, pro forma for the combined company. The negative CreditWatch listing on Eldorado reflects S&P's expectation that, if the merger is completed, adjusted leverage for the combined companies will be at least in the mid-5x area over the intermediate term (compared with current leverage for Eldorado in the low-4x area). This level of adjusted leverage is aligned with a "highly leveraged" financial risk profile, and a one-notch lower rating for Eldorado. S&P's pro forma adjusted credit measures do not currently include the benefit of any potential synergies. However, S&P don't expect synergies to move adjusted leverage metrics out of the range for a highly leveraged financial risk profile. In resolving S&P's CreditWatch listing, it will monitor MTR and Eldorado's progress toward satisfying regulatory and closing conditions as well as assess further information, if any, relating to potential synergies. NEIMAN MARCUS: Moody's Mulls Downgrade Following Purchase Offer --------------------------------------------------------------- Moody's Investors Service placed Neiman Marcus Group, Inc. B2 Corporate Family Rating and B2-PD Probability of Default Rating on review for downgrade. The review for downgrade follows the announcement that Ares Management LLC and Canada Pension Plan Investment Board have agreed to acquire Neiman Marcus for $6 billion. A portion of the purchase price will be used at the closing to repay all amounts outstanding under NMG's credit facilities other than the $125m senior secured debentures. There is no change to NMG's Speculative Grade Liquidity rating of SGL-1 at this time. The following ratings are placed on review for downgrade: Corporate Family Rating of B2 Probability of Default Rating of B2-PD Senior secured debentures due 2028 at B2 (LGD 4, 53%) The following rating is affirmed Senior secured bank credit facility at B2 (LGD 4, 53%) Ratings Rationale: Although the capital structure to finance the transaction has not yet been determined, Moody's expects that the transaction will be largely financed with debt as is typical for most leveraged buy outs. This will likely result in NMG's credit metrics deteriorating to levels that are indicative of a lower rating. The review for downgrade of NMG's Corporate Family Rating and Probability of Default Rating acknowledges the likely weakening in NMG's credit metrics as a result of the transaction. The affirmation of the $2.6 billion senior secured bank credit facility acknowledges that this facility will be repaid in full upon closing of the transaction. The review for downgrade of the $125 million senior secured debentures reflects that this instrument will remain in place after the close of the transaction. The review for downgrade will focus on the capital structure being put in place to finance the acquisition, the pro forma credit metrics, the company's future operating and business strategies, earnings prospects, and liquidity. The review for downgrade will also focus on the closing of the transaction and should the acquisition not close, NMG's going forward financial policies. The principal methodology used in this rating was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Neiman Marcus Group, Inc., ("NMG") headquartered in Dallas, TX, operates 41 Neiman Marcus stores, 2 Bergdorf Goodman stores, 6 CUSP stores, 36 Last Call outlet centers, and a direct business. Total revenues are about $4.5 billion. NEIMAN MARCUS: S&P Puts 'B+' CCR on CreditWatch Negative -------------------------------------------------------- Standard & Poor's Ratings Services placed all of its ratings, including the 'B+' corporate credit rating, on Dallas-based The Neiman Marcus Group Inc. on CreditWatch with negative implications. "The CreditWatch placement reflects the widespread news that the company is being acquired by Ares Management LLC and Canada Pension Plan Investment Board instead of pursuing an IPO," said credit analyst David Kuntz. "In our opinion, such a transaction could add a substantial amount of debt to the company. Although the company's credit metrics are currently commensurate with its "highly leveraged" financial risk profile, we believe the company would add additional debt to its balance sheet because of the acquisition." NEW HOPE CHRISTIAN: Wins Exclusivity Through November ----------------------------------------------------- New Hope Christian Church may file an amended plan no later than October 8, 2013, and will have until November 23, 2013, to confirm its amended plan, according to a Sept. 9, 2013 Memorandum Opinion by Bankruptcy Judge Stephani W. Humrickhouse, available at http://is.gd/1VR0pJfrom Leagle.com. New Hope Christian Church filed a voluntary chapter 11 petition (Bankr. E.D.N.C. Case No. 13-03691) on June 10, 2013. In its petition, the debtor designated itself a "small business debtor" pursuant to Sec. 101(51C) of the Bankruptcy Code. Approximately two days after the petition date, Antioch Partners, LLC, a secured creditor, filed a motion to dismiss the case pursuant to Sec. 1112(b) or, in the alternative, for relief from the automatic stay to proceed with a pending foreclosure proceeding in state court. New Hope Christian Church filed its chapter 11 plan of reorganization on June 24, 2013, which was subsequently amended on June 25, 2013. On June 25, 2013, the court set the hearing on confirmation of the debtor's plan of reorganization for August 6, 2013. In accordance with 11 U.S.C. Sec. 1129(e), the deadline for confirmation of the debtor's plan of reorganization was August 8, 2013. On July 16, 2013, 36 days after the petition date and prior to the scheduled confirmation hearing, the court denied Antioch's motion to dismiss, concluding that "[t]he attempt by the debtor to hold on to its property and work diligently to effectuate a plan does not constitute cause pursuant to section 1112(b) nor should it warrant relief from stay pursuant to section 362(d)(4)." On Aug. 1, 2013, New Hope Christian Church filed the motion currently before the court, seeking a 60-day extension of the deadline for confirmation of its plan. In its motion, the debtor is requesting a 60-day extension to file an amended plan. Antioch filed an objection opposing the extension requested by the debtor on August 5, 2013. At the Aug. 6, 2013 hearing, the debtor provided evidence as to the progress which has been made by the debtor since filing. Pastor Page, on behalf of the debtor, testified that he is currently seeking new loans to refinance the debtor's secured debt. Specifically, the debtor has submitted one application for a new loan in an amount that would pay off the current secured creditors. Additionally, Pastor Page has spoken with two other individuals regarding the possibility of new financing. With regard to other creditors, Pastor Page stated that unsecured creditors who were not listed on the petition but were owed prepetition debts have been identified and a new amended plan will be needed to treat these claims. Further evidence of the debtor's ability and willingness to reorganize, according to Pastor Page, is the debtor's resolve to sell its excess property. Pastor Page has been speaking with an individual at Focus Realty in an attempt to get the property sold. To be better able to reorganize the debtor, Pastor Page informed the court that he had recently retained a business manager, Teresa Thompson, to assist with many of the financial responsibilities of the debtor. Ms. Thompson testified that the debtor is actively trying to expand its membership, which is currently at 24 members. By building the ministry, the debtor will be able to collect between $1,000 and $2,000 in tithes and offerings per month. Additionally, Ms. Thompson said the rental of the property to two different ministries will provide the debtor revenue of $1,400 per month. Family Friends Christian Fellowship and Judd Ministries will each pay $700 per month to rent the property. One ministry will begin renting in September and one has already started renting the space. At the hearing, counsel for the debtor argued that the above efforts showed it is more likely than not that the court will be able to confirm a plan within a reasonable period of time. Debtor's counsel reasoned that, based on the testimony of the increase in revenue, a plan with payments of $1,200 per month would be feasible for the debtor. A plan with such payments would, according to debtor's counsel, be likely to meet the requirements for confirmation and an extension of time to confirm such a plan is warranted. NORSE ENERGY: Creditors Sue Parent for $70-Mil. in Transfers ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the creditors' committee for Norse Energy Corp. USA started a lawsuit against the parent company along with officers and directors, seeking a recovery including almost $70 million paid within two years of bankruptcy. According to the report, the lawsuit, allowed this month by the bankruptcy court in Buffalo, New York, contends the bankrupt company's officers authorized paying $38 million to the Norwegian parent Norse Energy Corp. within one year of bankruptcy when the U.S. company owed nothing. The officers authorized paying $11.7 million within a year of bankruptcy to the parent company Norse Energy Holding Inc., which is one of the companies in bankruptcy in the U.S. The bankruptcy judge authorized Norse to sue its parent while collecting only from insurance policies. Norse sold all its income-producing properties in May 2012, paying $20 million to the Norwegian parent company, according to the complaint. The creditors said the payments were fraudulent transfers or wasted corporate assets, and they contend that the officers and directors breached their duties. The company said the lawsuit is "without merit." Norse holds oil and gas leases on 130,000 acres in central and western New York. The committee said the suit "potentially" means full recovery for unsecured creditors. Norse last month said it might drop plans to sell the leases because bids were coming in lower than expected. Under court-approved procedures, prospective buyers were to submit bids for the leases by Aug. 23. The court had scheduled a Sept. 23 hearing to approve sale. Secured lenders could pay for the assets with debt rather than cash. The lawsuit is Official Committee of Unsecured Creditors v. Dice, 13-01061, U.S. Bankruptcy Court, Western District of New York (Buffalo). 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. O&G LEASING: Matters Resolved, Motion for Ch. 11 Trustee Dismissed ------------------------------------------------------------------ The Hon. Edward Ellington of the U.S. Bankruptcy Court for the Southern District of Mississippi signed an agreed order dismissing motion to appoint a Chapter 11 trustee for O&G Leasing, LLC, et al. The Debtor and secured creditor First Security Bank, as indenture trustee, resolved the issues giving rise to the motion. As reported in the Troubled Company Reporter on Sept. 25, 2012, according to First Security, cause exists for the appointment of an operating trustee because. First Security, among other things, pointed out that: 1. The Debtors have failed to demonstrate that they have the ability to obtain a confirmed plan within a reasonable period of time; 2. Past and present performance of the Debtors and little prospect for the Debtors' rehabilitation; and 3. The Debtors have failed to communicate with their primary secured creditor concerning the collateral, operations and other matters. First Security asserts that a Chapter 11 trustee is needed in the event neither of the pending Chapter 11 plans is confirmed, and for other general relief to which the Court deems it entitled. First Security relates that neither of the Disclosure Statements for the Debtors' Initial Plan dated July 1, 2011, nor the indenture trustee's Initial Plan dated July 22, 2011, was ever approved. About O&G Leasing Jackson, Mississippi-based O&G Leasing, LLC, was formed in 2006 to acquire and construct land drilling rigs that it would lease to its wholy-owned subsidiary, Performance Drilling Company, LLC. Performance was formed to provide contract drilling services for tArkLaTex (Arkansas, Louisiana and Eastern Texas) region, as well as Alabama, Florida, Mississippi and Oklahoma. O&G Leasing filed for Chapter 11 bankruptcy protection (Bankr. S.D. Miss. Case No. 10-01851) on May 21, 2010. The Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in debts. Performance filed a separate petition for Chapter 11 relief (Bankr. S.D. Miss. Case No. 10-01852) on May 21, 2010. Performance estimated assets and debts of between $1 million and $10 million in its petition. The Debtors retained McCraney, Montagnet, Quin & Noble, PLLC as their bankruptcy counsel and Young Williams, P.A., as corporate counsel. Young Williams was replaced by Bradley Arant Boult Cummings, LLP, as corporate counsel effective March 8, 2012, but remained engaged as special counsel on litigation matters. BMC Group, Inc., serves as the Debtors' solicitation and voting agent. OASIS PETROLEUM: Moody's Rates New Sr. Notes B3; Outlook Stable --------------------------------------------------------------- Moody's assigned a B3 rating to Oasis Petroleum Inc.'s proposed senior notes due 2022. The rating outlook is stable. The proceeds from the senior notes offering, along with revolver borrowings and cash on the balance sheet, will fund acquisitions of assets in the Williston Basin in North Dakota. "The acquisition of additional producing and undeveloped leasehold acreage in the Bakken/Three Forks will increase production by 25%. However, the majority debt financing of these acquired properties, at a cost per flowing barrel in excess of $150,000, materially increases debt leverage above $60,000 per Boe of average daily production, which is high relative to its peer group," said Arvinder Saluja, Moody's Assistant Vice President. "However, with oil comprising about 90% of its production, Oasis Petroleum's expanded presence in the Bakken/Three Forks places it in a good position to convert high oil prices and production growth into increasing cash flow for a reduction in debt leverage." Ratings assigned: Senior Unsecured Notes Rating, assigned B3, LGD5 - 73% Ratings Rationale: The B3 rating on the proposed $600 million of senior notes reflects both the overall probability of default of Oasis, to which Moody's assigns a PDR of B2-PD, and a loss given default of LGD5 - 73%. Oasis' senior unsecured notes are subordinate to its $1.5 billion secured revolving credit facility's potential priority claim to the company's assets. The size of the potential claims relative to Oasis' outstanding senior unsecured notes results in the notes being rated one-notch below the B2 Corporate Family Rating under Moody's Loss Given Default Methodology. The B2 CFR reflects the company's growing scale, single basin concentration, and its successful execution and track record of growing its production and reserves. The rating is supported by very strong returns with oil representing over 90% of production and a high quality Williston Basin asset base with a large drilling inventory. Since its initial public offering in June 2010, Oasis has rapidly grown its scale and operations in the Williston Basin. Oasis has consistently outspent internally generated cash as it accelerated the drilling and development of its assets causing leverage on production and reserves to remain at elevated levels. With the recent acquisition of assets, Oasis' pro-forma debt on production will increase to above $60,000 (including Moody's standard adjustments). Leverage will be very high initially as Oasis doesn't have the benefit of a full year's production from the acquired assets. Moody's expects leverage to trend down in 2014 once Oasis realizes the incremental production. Moody's expects Oasis to have good liquidity through the end of 2014. While Oasis could have significant negative free cash flow, the company's pro forma credit facility availability of $700 million will provide sufficient liquidity. The credit facility matures in April 2018 and has recently upsized total commitment and borrowing base of $1.5 billion. The borrowing base is subject to redetermination twice per year in April and October. Financial covenants under the facility include an EBITDAX to interest expense ratio of at least 2.5x and a current ratio of at least 1.0x. Moody's expects the company to remain compliant with these covenants at least through the end of 2014. There are no debt maturities prior to 2018 when the credit facility matures. Substantially all of the company's assets are pledged as collateral for the revolving credit facility. Any asset sales with proceeds in excess of 5% of the borrowing base then in effect automatically reduce the borrowing base. Therefore, depending on usage at the time, an asset sale may or may not provide additional liquidity to Oasis. The stable ratings outlook incorporates Oasis' growing scale and the expectation that the company's credit metrics will improve in 2014 from elevated levels post-acquisition. An upgrade could be considered if Oasis maintains financial leverage below $40,000 per Boe of average daily production while attaining sustained production exceeding of 35 mboe per day and maintaining a LFCR above 2.5x. Conversely, Moody's could downgrade the ratings if Oasis experiences a deterioration of operating performance resulting in a LFCR below 2.0x. Moody's could also downgrade the ratings if the ratio of retained cash flow (RCF) to debt is expected to be sustained below 20% due to a deterioration in returns, another leveraging acquisition, distributions, or share repurchases. The principal methodology used in this rating was Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Oasis Petroleum Inc. is an independent E&P company headquartered in Houston, Texas. OASIS PETROLEUM: S&P Rates $600 Million Sr. Unsecured Notes 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' issue-level rating and '5' recovery rating to Oasis Petroleum Inc.'s proposed $600 million senior unsecured notes due 2022. In addition, S&P has placed the rating on CreditWatch with positive implications pending the completion of the bond sale. The existing ratings on Oasis remain on CreditWatch with positive implications. Upon successful completion of the new issue, S&P will raise the corporate credit rating on Oasis to 'BB-' from 'B+' and the unsecured debt ratings to 'B+' from 'B'. However, if the bond issue were to be upsized to strictly above $800 million, S&P would assign a '6' recovery rating and a 'B-' issue-level rating to the notes, and S&P would remove the rating from CreditWatch. Upon successful completion of the new issue, S&P would still raise the corporate credit rating on Oasis to 'BB-' from 'B+', but it would revise the recovery rating on the existing senior unsecured debt ratings to '6' and would leave the issue-level rating on this debt at 'B', two notches below the corporate credit rating. Oasis intends to use the net proceeds from this offering to fund a portion of its recent acquisitions in the Williston Basin. Ratings List Oasis Petroleum Inc. Corporate Credit Rating B+/WatchPos Ratings Assigned Senior Unsecured $600 mil sr unsecd nts due 2022 B/WatchPos Recovery Rating 5 ORCHARD SUPPLY: Lender, Creditor Settlement Approved ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Orchard Supply Hardware Stores Corp. creditors' committee secured court approval of a settlement with secured term-loan lenders assuring payment of costs of the Chapter 11 case and the ability to confirm a liquidating plan that includes a distribution to unsecured creditors. According to the report, by giving up the right to sue lenders over the validity of a $127 million term loan, bankruptcy financing will be paid in full from sale proceeds and the term lenders will receive the remainder after Orchard Supply retains $25 million. There is $118 million owing on an asset-backed loan that comes ahead of the term-loan lenders. The funds kept by the company will provide full payment of costs of the bankruptcy case and claims entitled to priority. The remainder of the estate's funds will go to the term lenders until they are paid in full, subject to carveouts for unsecured creditors. Approved by the bankruptcy judge on Sept. 4, the settlement calls for creating a trust for unsecured creditors funded with $500,000 from the company. After term lenders recover 90 percent of their claims, the next $1.5 million will go to the creditors' trust. From proceeds of lease sales at the 19 stores Lowe's didn't purchase, the creditors' trust receives the first $250,000, with the remainder for term lenders. The term lenders, the committee and the company agreed to support a plan incorporating the settlement. About Orchard Supply San Jose, Cal.-based Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. It was spun off from Sears Holdings Corp. in 2012. Orchard Supply and two affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-11565) on June 16 to facilitate a restructuring of the company's balance sheet and a sale of its assets for $205 million in cash to Lowe's Companies, Inc., absent higher and better offers. In addition to the $205 million cash, Lowe's has agreed to assume payables owed to nearly all of Orchard's supplier partners. Bankruptcy Judge Christopher S. Sontchi oversees the case. Michael W. Fox signed the petitions as senior vice president and general counsel. The Debtors disclosed total assets of $441,028,000 and total debts of $480,144,000. Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Chun I. Jang, Esq., and Daniel M. Simon, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker. FTI Consulting, Inc., serves as the Debtors' financial advisors. A&G Realty Partners, LLC, serves as the Debtors' real estate advisors. BMC Group Inc. is the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors appointed in case has retained Pachulski Stang Ziehl & Jones LLP as counsel, and Alvarez & Marsal as financial advisors. Lowe's Cos. completed the $205 million acquisition of 72 of Orchard Supply's 91 stores. OVERLAND STORAGE: Converts Registration Statements to Form S-1 -------------------------------------------------------------- overland Storage filed a post-effective amendment No. 1 to the Form S-3 which was declared effective by the U.S. Securities and Exchange Commission on May 23, 2011, which registered 12,564,212 shares of common stock for resale, from time to time, on behalf of certain selling shareholders, into a registration statement on Form S-1. Upon the date of filing the Company's annual report on Form 10-K for the fiscal year ended June 30, 2013, with the Commission, the Company will no longer be eligible to use Form S-3 in connection with the current offering. A copy of the amendment is available for free at http://is.gd/S7AXXs The Company separately filed with the SEC a post-effective amendment No. 1 to Form S-3 to convert the Company's registration statement on Form S-3 declared effective by the SEC on May 19, 2010, which registered 13,878,380 shares of common stock for resale, from time to time, on behalf of certain selling shareholders, into a registration statement on Form S-1. A copy of the amendment is available at http://is.gd/3sHmLI 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. For the 12 months ended June 30, 2013, Overland Storage 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. 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. PATRIOT COAL: Asks Court to Approve Settlement with ACE Companies ----------------------------------------------------------------- Patriot Coal Corporation, Heritage Coal Company LLC and Pine Ridge Coal Company, LLC, ask the U.S. Bankruptcy Court for the Eastern District of Missouri to approve a settlement agreement with ACE American Insurance Company, Pacific Employers Insurance Company, Century Indemnity Company and Indemnity Insurance Company. On July 10, 2009, Patriot Coal, et al., filed a third-party complaint against, among others, the ACE Companies, one of the insurers seeking coverage for the Boone County Well Water Litigation. The Settlement resolves all claims underlying the Boone County insurance coverage action. Boone County Well Water Litigation Beginning in 2008, 362 plaintiffs brought actions against Patriot Coal in the Circuit Court of Boone County, West Virginia, each making substantially similar allegations and claims that the Debtors' mining operations near their residences in Seth and Prenter, Boone County, West Virginia resulted in (i) damage to the water supply near the Underlying Plaintiffs' residences and (ii) bodily harm to the Underlying Plaintiffs. The West Virginia Circuit Court consolidated the Boone County Well Water Litigation cases for pretrial purposes under the caption Bowles v. Massey Energy Company, Civil Action No. 09-C-212. The Boone County Well Water Litigation was settled as between the Underlying Plaintiffs and the Plaintiff Debtors, and such settlement was approved by the West Virginia Circuit Court on Nov. 17, 2011. Terms of the Settlement The key terms of the Settlement are summarized as follows: (a) The effectiveness of the Settlement is conditioned upon approval by the Bankruptcy Court. (b) The ACE Companies will pay the Plaintiff Debtors $1,250,000 in full and final settlement and satisfaction of any and all past, present and future claims and liability under the policies in connection with, arising out of, or relating in any way to the Boone County Insurance Coverage Action, and any and all past, present and future claims arising out of the Boone County Well Water Litigation. (c) Upon payment of the Settlement Payment by the ACE Companies, the Plaintiff Debtors will dismiss with prejudice all of their claims against the ACE Companies in the Boone County Insurance Coverage Action, including dismissal with prejudice and release of any bad faith, improper claims handling, and similar claims, and all claims for past, present and future defense costs and attorney's fees. (d) The ACE Companies agree to waive and dismiss any past, present and future claims for contribution, subrogation, setoff and similar relief against the Plaintiff Debtors, the Plaintiff Debtors' other insurers, and any other parties that were in the Boone County Insurance Coverage Action or the Boone County Well Water Litigation. The ACE Companies reserve the right to assert claims for contribution in response to any claim for contribution filed against them by any other insurer that was or is a party to the Boone County Insurance Coverage Action, including any rights of the ACE Companies against a reinsurer, retrocessionaire, or similar entity. The motion is scheduled for hearing on Sept. 24, 2013, at 10:00 a.m. The objection deadline is 4:00 p.m. on Sept. 18, 2013. 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 Corporation on Sept. 6 filed a Plan of Reorganization with the U.S. Bankruptcy Court for the Eastern District of Missouri as contemplated by the terms of Patriot's Debtor-in- Possession financing. PATRIOT COAL: To File Disclosure Statement on Joint Plan on Oct. 2 ------------------------------------------------------------------ Patriot Coal Corporation, et al., according to papers filed with the U.S. Bankruptcy Court for the Eastern District of Missouri on Sept. 11, 2013, intend to file and serve the Disclosure Statement for the Debtors' Joint Chapter 11 Plan of Reorganization on or before Oct. 2, 2013, in accordance with Rule 2002(b) of the Federal Rules of Bankruptcy Procedure. A hearing is scheduled for Nov. 6, 2013, at 10:00 a.m., to consider, among other things, entry of an order (i) approving the Disclosure Statement; (ii) approving solicitation and notice materials; (iii) approving forms of ballots; (iv) establishing solicitation and voting procedures; (v) establishing notice and objection procedures; and (vi) scheduling a confirmation hearing. The Debtors intend to file and serve a motion seeking approval of the proposed order with the Court on or before Oct. 16, 2013. Any objections to the motion must be filed no later than Oct. 30, 2013 at 4:00 p.m. Any reply to any objection, or any joinder or statement of support, must be filed no later than Nov. 3, 2013, at 12:00 p.m. Patriot Coal on Sept. 6, 2013, filed its proposed Plan of Reorganization. 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 Corporation on Sept. 6 filed a Plan of Reorganization with the U.S. Bankruptcy Court for the Eastern District of Missouri as contemplated by the terms of Patriot's Debtor-in- Possession financing. PATRIOT COAL: Peabody Must Focus on Completion of Documents ----------------------------------------------------------- Patriot Coal Corporation, et al., and the Official Committee of Unsecured Creditors of the Debtors tell the U.S. Bankruptcy Court for the Eastern District of Missouri that Peabody Energy Corporation's objection to their Joint Motion to compel production of documents by Oct. 1, 2013, "focuses on a wealth of quibbles and minutiae concerning the record of its 'compliance' with the Fiduciaries' Rule 2004 discovery requests." "This fog of detail - some accurate, some not - cannot, however, obscure several basic points," the Debtors and the Committee said. They cited: * Rule 2004 investigations are a central element of Chapter 11, allowing the prompt assessment of assets of the estate, including causes of action. Excessive delay of such investigations injures all stakeholders, who are deprived of appropriate information about, among other things, the assets available to satisfy their claims. * In this case, it has been eight months since the Fiduciaries began the Rule 2004 process by delivering a form of document request to Peabody. In virtually all cases, that is more than sufficient time to make substantial progress toward completing production of requested documents. Here, production has barely begun. * The record here demonstrates that an unsupervised discovery process, without clear time limitations, has not resulted in a timely production. It has instead allowed multiplication of preliminary issues, all laboriously resolved over lengthy periods of time, at significant cost to the estates and without substantially advancing the investigation. A clear deadline for production will focus Peabody's efforts on completion of production rather than on collateral matters, and preserve estate resources. * Nowhere in fifteen densely packed pages does Peabody even argue that it cannot complete its production by Oct. 1, 2013. In fact, it admits that it had begun running searches and reviewing electronic materials by the end of July, giving it more than sixty days to complete production. Moreover, instead of explaining how it has fulfilled the Court's direction to accelerate the production so as to complete before January, Peabody attempts to avoid the imposition of a deadline altogether, suggesting only that the Court hold a further status conference in October. That approach, however, promises only more focus on preliminary matters, more irrelevant recriminations about collateral issues, and more delays in production. As reported in the TCR on Sept. 9, 2013, Peabody is asking the Bankruptcy Court to (i) deny the Debtors and the Committee's joint motion 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. A copy of Peabody's Objection is available at: http://bankrupt.com/misc/patriotcoal.doc4590.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. PERSONAL COMMUNICATIONS: Creditors Want Boost in Sale, Financing ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Personal Communications Devices LLC, a distributor of wireless communications devices, faces opposition from the creditors' committee at the hearing for final approval of financing and a schedule for selling the business at auction. According to the report, the committee in a court filing at the end of last week said the $105 million sale price is "purely fictional" and confers no benefit on unsecured creditors. The panel flyspecked proposed sale procedures to pinpoint changes that would increase the likelihood of obtaining a higher offer. The report relates that the proposed Sept. 28 deadline for competing offers and the Oct. 3 auction must be delayed so other buyers will have ability to participate and raise the price, the committee said. As for the financing, the committee said it's "extremely onerous." 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. A three-member official committee of unsecured creditors was appointed in the Chapter 11 case. 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. PICCADILLY RESTAURANTS: Yucaipa Corporate Withdraws Joint Plan -------------------------------------------------------------- Yucaipa Corporate Initiatives Fund I, L.P., in a Sept. 6 filing notified the Bankruptcy Court that it has withdrawn the Joint Plan of Reorganization dated July 8, 2013, proposed with Piccadilly Restaurants, LLC, et al., and the Official Committee of Unsecured Creditors. Tristan E. Manthey, Esq. -- tmanthey@hellerdraper.com -- at Heller, Draper, Patrick & Horn, LLC and Robert A. Klyman, Esq. -- robert.klyman@lw.com -- at Latham & Watkins LLP represent Yucaipa Corporate. As reported in the Troubled Company Reporter on July 22, 2013, the Debtors together with Yucaipa Corporate Initiatives Fund I, L.P., filed the Joint Plan which contemplates that Yucaipa will advance cash to the Debtors, which will be available to the Reorganized Debtors for the purpose of effectuating the Joint Plan. The Yucaipa Advance will accrue interest at a fixed rate of 9% per annum, with the Debtors' obligation to pay the Advance be secured with a first priority lien. Payment of the Yucaipa Advance will be subordinated to the General Unsecured Claim Note in right of payment -- but not in lien priority -- until the General Unsecured Claim Note is paid in full. On the Plan Effective Date, Piccadilly Investments would form a direct subsidiary, Intermediate Holdco, to which it would transfer its Interests in Piccadilly Restaurants. An administrator would be appointed under the Plan, who would be responsible for collecting and disbursing Cash from the General Unsecured Distribution Account, among other things. The administrator would be selected by Yucaipa. The Plan also provided for the classification and treatment of claims against, and interests in, the Debtors -- 5 claim classes against each of Piccadilly Food Service LLC and Piccadilly Investments LLC and 7 claim classes against Piccadilly Restaurants LLC. Claim classes common to all three Debtors are Other Priority Claims; Atalaya Secured Claim; Other Secured Claims; General Unsecured Claims and Interests -- with Piccadilly Restaurants having two more claim classes, Convenience Claims and Litigation Claims. For the Atalaya Secured Claim, a New Atalaya Secured Note would be executed and delivered to Atalaya on the Effective Date. The New Note will provide for interest at a rate of 4.75% per annum, payable quarterly in Cash. Under the withdrawn Plan, Convenience Claims would receive 100% of the Allowed Amount, provided that the aggregate amount of Convenience Claims will not exceed $500,000. For the General Unsecured Claims, the Reorganized Debtors would deposit $700,000 into a General Unsecured Distribution Account. On the Effective Date, the Reorganized Debtors would execute the General Unsecured Claim Note in an amount equal to 100% of the face amount of the Allowed General Unsecured Claims. The Note would bear interest at a fixed per annum rate of 9% until paid in full, and would mature and become payable in 24 months after the Effective Date. The Plan was signed by Thomas J. Sandeman, Chief Executive Officer of Piccadilly Restaurants, LLC and Robert P. Bermingham, Vice- President of Yucaipa Corporate Initiatives Fund I, LLC. Full-text copies of the Joint Chapter 11 Plan and Disclosure Statement dated July 8, 2013, are available for free at: http://bankrupt.com/misc/PICCADILLYREST_PlanDSJul8.pdf Counsel to Debtors Piccadilly Restaurants, LLC; Piccadilly Food Service, LLC; and Piccadilly Investments, LLC is Elizabeth J. Futrell, Esq., at Jones Walker LLP. Counsel for Yucaipa Corporate Initiatives Fund I, L.P., are Robert Klyman, Esq., at Latham & Watkins, LLP, and William H. Patrick, III, Esq., at Heller, Draper, Patrick & Horn. About Piccadilly Restaurants Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fla. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. Judge Robert Summerhays oversees the 2012 cases. Mark A. Mintz, Esq. at Jones Walker LLP represents the Debtors in their restructuring efforts. BMC Group, Inc., serves as claims agent, noticing agent and balloting agent. In its schedules, the Debtor disclosed $34,952,780 in assets and $32,000,929 in liabilities. Jeffrey L. Cornish serves as the Debtors' consultant. Postlethwaite & Netterville, PAC, serve as their independent auditors, accountants and tax consultants. GA Keen Realty Advisors, LLC, serve as the Debtors' special real estate advisors while FTI Consulting, Inc., as their financial consultants. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. Henry G. Hobbs, Jr., Acting United States Trustee for Region 5, has appointed seven members to the official committee of unsecured creditors in the Debtors' Chapter 11 cases. The Committee sought and obtained Court approval to employ Frederick L. Bunol, Albert J. Derbes, IV, of The Derbes Law Firm, L.L.C. as attorneys. Greenberg Traurig LLP also serves as counsel for the Committee while Protiviti Inc. serves as financial advisor. PICCADILLY RESTAURANTS: Taps Monroe Firm for Franchising Issues --------------------------------------------------------------- Piccadilly Restaurants LLC and its debtor affiliates ask the court for authority to employ and compensate Monroe Moxness Berg PA, as of October 3, 2013, as an ordinary course of business professional. The Debtors seek to retain Monroe to assist them in investigating potential franchising opportunities, which is a practice area in which Monroe is uniquely qualified, says Elizabeth J. Futrell, Esq., at Jones Walker LLP. The legal work and expenses, however, will not exceed $10,000, without the Debtors first seeking further Court authority, after notice and hearing, she adds. James A. Wahl, shareholder of the firm, attests that Monroe Moxness is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. A hearing will be held on the Debtors' request on October 1, 2013, 10:00 a.m. Counsel for the Debtors may be reached at: R. PATRICK VANCE, Esq. ELIZABETH J. FUTRELL, Esq. MARK A. MINTZ, Esq. TYLER J. RENCH, Esq. Jones Walker LLP 201 St. Charles Avenue, 51st Floor New Orleans, LA 70170 Telephone: (504) 582-8000/ Direct: (504) 582-8194 Direct Facsimile: (504) 589-8194 E-mail: pvance@joneswalker.com efutrell@joneswalker.com mmintz@joneswalker.com trench@joneswalker.com About Piccadilly Restaurants Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fla. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. Judge Robert Summerhays oversees the 2012 cases. Mark A. Mintz, Esq. at Jones Walker LLP represents the Debtors in their restructuring efforts. BMC Group, Inc., serves as claims agent, noticing agent and balloting agent. In its schedules, the Debtor disclosed $34,952,780 in assets and $32,000,929 in liabilities. Jeffrey L. Cornish serves as the Debtors' consultant. Postlethwaite & Netterville, PAC, serve as their independent auditors, accountants and tax consultants. GA Keen Realty Advisors, LLC, serve as the Debtors' special real estate advisors while FTI Consulting, Inc., as their financial consultants. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. Henry G. Hobbs, Jr., Acting United States Trustee for Region 5, has appointed seven members to the official committee of unsecured creditors in the Debtors' Chapter 11 cases. The Committee sought and obtained Court approval to employ Frederick L. Bunol, Albert J. Derbes, IV, of The Derbes Law Firm, L.L.C. as attorneys. Greenberg Traurig LLP also serves as counsel for the Committee while Protiviti Inc. serves as financial advisor. PINNACLE OPERATING: Moody's Rates $300MM Notes Caa1; Keeps B2 CFR ----------------------------------------------------------------- Moody's Investors Service affirmed Pinnacle Operating Corporation's B2 Corporate Family Rating and rated the proposed $300 million second lien notes Caa1. Moody's also raised the rating of the existing $350 million first lien term loan facility to B1 from B2 due to the uplift from an increase in structurally subordinated debt. Proceeds from the proposed second lien notes will be used to repay the existing $125 million second lien term loan, the outstanding borrowings under the ABL Revolver, and for general corporate purposes. Upon completion of the proposed refinancing, the rating on the second lien term loan will be withdrawn. As a result of the refinancing, the LGD assessment rates have changed as shown in the table below. The outlook is stable. Pinnacle Operating Corporation Ratings affirmed: Corporate Family Rating -- B2 Probability of Default Rating -- B2-PD Ratings assigned: $300 million senior secured second lien notes due 2020 -- Caa1 (LGD5/78%) Ratings upgraded: $348 million senior secured first lien term loan due 2019 -- B1 (LGD3, 40%) from B2 (LGD3, 46%) Ratings to be withdrawn: $125-mil. senior secured second lien term loan due 2019 -- WR Ratings Rationale: Pinnacle's B2 CFR reflects the company's elevated leverage (under 7.0x on a Moody's proforma basis), volatile cash flow metrics, along with ongoing debt financed acquisitions. The agricultural distribution model has historically been a relatively stable business with free cash flow generation and high single digit EBITDA margins. The bulk of the company is formed from the acquisition of Jimmy Sanders, Inc., whose steady operations have benefited from favorable industry dynamics. Sales have increased from $402 million in 2009 to approximately $1.0 billion as of the LTM June 30, 2013 as a function of acquisitions and organic growth. The B2 CFR rating also reflects a limited operating track record as well as the anticipation of sustained investment spending in order to achieve the sponsor's goals of growing the company through both organic development and the acquisition of other agricultural distributors. Moody's notes that there are other players larger than Pinnacle that may be interested in bidding for the same assets and this competition is likely to result in high purchase price multiples. Moody's also notes the ability to buy distribution assets does not always occur at a steady pace such that debt leverage may end up being higher than anticipated if Pinnacle were to be successful on multiple bids. The upgrade to the senior secured first lien term loan rating is driven by the increase to structurally subordinated debt in the capital structure. Specifically, Pinnacle is replacing their $125 million senior secured second lien term loan with the proposed $300 million senior secured second lien notes due 2020. The stable outlook reflects Moody's expectation that Pinnacle will be able to grow its business in a relatively steady manner without significant increases in leverage. Before an upgrade is considered, Moody's would expect to see Pinnacle maintain a Debt/EBITDA ratio of less than 4.5x on a sustained basis as well as generate meaningful free cash flow. Should the company be successful in improving profitability and generating meaningful free cash flow/debt above 4%, to be applied towards debt reduction, the ratings could be upgraded. The rating could be lowered if the company increases its leverage sustainably over 7.0x and fails to successfully generate positive free cash flow for a sustained period. Pinnacle Operating Corporation, formed in mid-2012 by the financial sponsor Apollo Global Management LLC, is an agricultural input (seed, fertilizer, and crop protection chemicals) supply and distribution business. Revenues were $979 million for the twelve months ended June 30, 2013. The principal methodology used in this rating was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. PROPETRO SERVICES: Moody's Assigns B3 CFR & Rates $260MM Debt B3 ---------------------------------------------------------------- Moody's Investors Service assigned first time ratings to ProPetro Services, Inc., including a B3 Corporate Family Rating, a B3 rating to the company's proposed $260 million senior secured bank credit facility (comprised of a $220 million term loan B and a $40 million revolver), and an SGL-2 Speculative Grade Liquidity Rating reflecting good liquidity through 2014. The rating outlook is stable. Net proceeds from the term loan offering will be used to refinance existing debt, add cash to balance sheet for the acquisition of an eighth hydraulic fracturing fleet, and cover transaction fees. ProPetro was formed in 2005 and is 87%-owned and controlled by Energy Capital Partners. Assignments: Issuer: ProPetro Services, Inc. Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Speculative Grade Liquidity Rating, Assigned SGL-2 $240 Million Senior Secured Term Loan B, Assigned B3 (LGD3, 49%) $40 Million Senior Secured Revolver, Assigned B3 (LGD3, 49%) Ratings Rationale: The B3 CFR reflects ProPetro's small size and scale within the broader oilfield services industry, concentrated operations in the Permian Basin, and significant reliance on a highly volatile oilfield services sub-segment (pressure pumping/hydraulic fracturing) for cash flow generation. Pressure Pumping is expected to represent about two-thirds of ProPetro's consolidated EBITDA through 2015. The rating also considers the highly cyclical and competitive nature of onshore drilling and completion services demand, the short duration of ProPetro's service contracts, and its private ownership. The rating is supported by ProPetro's good- quality fracturing fleet, operating track record in one of the most active and productive hydrocarbon basins in North America and conservative leverage. Due to the preponderance of one class of debt in the capital structure, the proposed $220 million Term Loan and $40 million revolver are rated B3, the same level as the CFR. The Term Loan and the Revolver both have first-lien claims to ProPetro's assets, rank pari passu, and have identical terms and conditions. The SGL-2 rating reflects Moody's belief that following the debt issue, ProPetro will have good liquidity through 2014 supported by free cash flow and an undrawn $40 million revolving credit facility. Moody's expects approximately $85 million of EBITDA in 2013 and $100 million of EBITDA in 2014 that should cover the company's capex and working capital adequately. The revolver is expected to have a five-year term. ProPetro is still negotiating covenants for the credit facility and Moody's final ratings will be subject to review of final documentation. The stable outlook assumes continued healthy leverage and liquidity profile. Given the highly cyclical nature of ProPetro's operating environment, an upgrade would be contingent on improved scale and diversification, and reduced leverage. If EBITDA can be sustained above $150 million and leverage (Debt to EBITDA) trends towards 2x, an upgrade could be considered. A downgrade is likely if ProPetro is unable to maintain leverage below 4x or faces liquidity challenges. The principal methodology used in this rating was the Global Oilfield Services Rating Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ProPetro Services, Inc. is a Midland, Texas, based private oilfield services company with primary operations in the Permian Basin, the Uinta-Piceance region of the Rocky Mountains, and the Mid-Continent. PROPETRO SERVICES: S&P Assigns 'B-' CCR & Rates $260MM Debt 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' corporate credit rating to Midland, Texas-based ProPetro Services Inc. The outlook is stable. S&P assigned a 'B' issue-level rating (one notch above the corporate credit rating) to ProPetro's planned $220 million term loan B due 2019 and $40 million revolving credit facility due 2018. S&P also assigned a recovery rating of '2' to this debt, which indicates its expectation of substantial (70% to 90%) recovery in the event of a payment default. "The stable outlook is based on our expectation that ProPetro's liquidity will remain adequate, at more than $25 million over the next year, despite the potential for fracking overcapacity in the Permian. Moreover, in the event of stress, we believe that ProPetro has the ability to cut capital spending to $10 million to $20 million. Under our baseline forecast, we expect that ProPetro will maintain debt to EBITDA leverage of 2.5x to 3x," said Standard & Poor's credit analyst Marc Bromberg. S&P could lower the rating if revolving credit facility availability plus cash on hand deteriorates to less than $20 million. S&P views an upgrade as highly unlikely over the intermediate term given its assessment of the company's vulnerable business risk profile. An upgrade will be predicated on the company improving the scale and diversity of its business lines and reducing its geographic concentration. QUBEEY INC: Section 341(a) Meeting Scheduled for Oct. 15 -------------------------------------------------------- A meeting of creditors in the bankruptcy case of Qubeey, Inc., will be held on Oct. 15, 2013, at 9:00 a.m. at RM 105, 21051 Warner Center Lane, Woodland Hills, CA. 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. Qubeey, Inc., filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-15805) on Sept. 5, 2013. Rocky Wright signed the petition as president. The Debtor estimated assets of at least $10 million and debts of at least $1 million. Douglas M. Neistat, Esq., -- E-mail: tkrant@greenbass.com -- at GREENBERG & BASS, in Encino, CA, serves as the Debtor's counsel. Judge Maureen Tighe presides over the case. QUIKRETE HOLDINGS: Moody's Assigns 'B1' CFR; Outlook Stable ----------------------------------------------------------- Moody's Investors Service assigned a first-time B1 Corporate Family Rating and B1-PD Probability of Default Rating to Quikrete Holdings, Inc., a manufacturer and distributor of packaged concrete and cement mixes. Moody's also assigned a B1 rating to the company's proposed $1.23 billion senior secured term loan B due 2020, and a B3 rating to its proposed $190 million second lien senior secured term loan due 2021. Some cash on hand, borrowings under the company's new $200 million asset-based revolving credit facility (unrated), and proceeds from the term loans will be used to acquire CBP Holding Corporation for approximately $765 million from Kelso & Company, the primary owner of CBP, to refinance about $680 million of existing debt, and to pay related fees and expenses. The rating outlook is stable. The following ratings are affected by this action: Corporate Family Rating assigned B1; Probability of Default Rating assigned B1-PD; Senior Secured Term Loan B due 2020 assigned B1 (LGD3, 49%), and 2nd Lien Senior Secured Term Loan due 2021 assigned B3 (LGD6, 92%). Ratings Rationale Quikrete's B1 Corporate Family Rating incorporates Moody's view that the company's healthy operating margins are a key credit strength. Margin performance is aided by ongoing improvements to operating efficiency, and an ability to mitigate cost increases over a period of time. Moody's also believes the company's variable cost structure gives it added flexibility to size its work force relatively quickly to meet changing demands and to maintain its margins. Quikrete should also reap some benefits from future growth prospects in the repair and remodeling market and new housing construction, the primary drivers of its revenues. Moody's projects adjusted interest coverage, defined as EBITA-to- interest expense, could approach 3.0 times by year-end 2014, aided by debt reduction from free cash flow. Quikrete's ability to generate free cash flow, and expectations of ample availability under its proposed revolving credit facility contribute to Moody's view that the company will have a good liquidity profile over the next 12 months. The good liquidity profile provides Quikrete financial flexibility to meet potentially higher demand for its products and to contend with a more leveraged capital structure. Constraining the rating at this time is the company's pro forma leveraged capital structure. Moody's calculates the pro forma leverage at June 30, 2013 to be about 5.5 times. Balance sheet debt is increasing by about $815 million, or 120% upon consummation of the acquisition, and will have significant negative tangible net worth. Although Moody's recognizes that CBP will expand Quikrete's product offerings, it still views the Quikrete as a single line of business, which it feels is a weakness despite the rebound in the company's end markets. Also, majority of the Quikrete future revenues are through the big box retailers, representing a significant distribution concentration. The stable rating outlook incorporates Moody's view that Quikrete's operating performance will continue to improve and that free cash flow will be used for debt reduction, resulting in credit metrics that are more supportive of the current corporate family rating. Quikrete's good liquidity profile and the absence of any near-term maturities beyond term loan amortization also give the company sufficient financial flexibility to contend with potential disruption with its primary big box retail customers, and to support growth initiatives as the repair and remodeling and new housing construction sectors continue to recover. Quikrete's liquidity position is supported by the availability under the new $200 million ABL revolving credit facility due 2018, lack of term loan maturities until 2020, solid cash flow generative capabilities, and lack of financial maintenance covenants, with the exception of a fixed charge coverage ratio that needs to be maintained if the revolver availability falls below a certain level. On the other hand, the liquidity is constrained by the expected very limited cash balances and lack of alternate liquidity sources. The rating could be considered for an upgrade, if the company accomplished its adjusted debt to EBITDA deleveraging to below 4.0x, if adjusted debt to capitalization ratio was trending sustainably towards 60%, and if EBITA interest coverage improved above 3.5x, while sufficient liquidity was maintained. The rating could experience a downward pressure if the company's leverage remains elevated for an extended period of time, if EBITA interest coverage declines below 2.5x or if significant integration challenges emerge. The principal methodology used in this rating was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Quikrete Holdings, Inc., founded in 1940 and headquartered in Atlanta, Georgia, is a North American manufacturer and a distributor of packaged concrete and cement mixes. The company operates 136 facilities and manufactures over 1,000 products for professional and consumer use. CBP manufactures and distributes ceramic tile installation products, offering over 1,000 products. The combined company will have distribution capabilities to 50 states and 30 countries. QUIKRETE HOLDINGS: S&P Assigns Prelim. 'B+' CCR; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its preliminary 'B+' corporate credit rating to Atlanta, Ga.-based Quikrete Holdings Inc. The outlook is stable. At the same time, S&P assigned its preliminary 'B+' (same as the corporate credit rating) issue-level rating to Quikrete's $1.23 billion senior secured bank term loan B due 2020. The preliminary recovery rating is '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for lenders under its default scenario. In addition, S&P assigned its preliminary 'B-' (two notches lower than the corporate credit rating) issue-level rating to Quikrete's $190 million second-lien term loan due 2021. The preliminary recovery rating is '6', indicating S&P's expectation of negligible (0% to 10%) recovery for lenders under its default scenario. The company used the transaction's proceeds to finance the acquisition of Custom Building Products Inc., repay existing debt, and pay related transaction expenses. "The stable rating outlook reflects our expectation that the company will continue to generate positive free cash flow and maintain strong liquidity. We expect leverage to fall but to remain high at about 5x by year-end 2013," said Standard & Poor's credit analyst Maurice Austin. S&P would consider an upgrade if financial performance were better than expected, resulting in more-than-expected repayment of debt such that 2014 leverage strengthens and is sustained at less than 5x. This could occur if residential improvement spending grew at least in line with Standard & Poor's economists' estimates of 7.4% growth in 2014, and if the company did not pursue another large, leveraged acquisition in that time frame. A downgrade is less likely in the near term, given S&P's favorable outlook for residential home construction and remodeling spending. However, S&P could consider a negative rating action if the increase in remodeling spending failed to materialize as it expected, resulting in less-than-expected financial performance such that the company maintains a continuing balance on the ABL. Consequently, availability would decline to $100 million, which in S&P's view would be considered "adequate" liquidity. RESIDENTIAL CAPITAL: Objects to Haffey's $10-Mil. in Claims ----------------------------------------------------------- Residential Capital LLC and its affiliates object to, and ask the Court to disallow and expunge, Claim Nos. 2582 and 4402 filed by Shane M. Haffey against Debtor Residential Capital, LLC, on the grounds that the Proofs of Claim: (a) are not properly asserted against ResCap, and (b) fail to state a basis for liability against the Debtors. The Claims, each alleging at least $5 million against ResCap, identify the basis for the claims as "Document Fraud, forgery, fraud on the court" and "QUI TAM Document Fraud, Document Forgery, Slander of Title, Quiet title, Fraud on the Court" and attach in support various documents and pleadings from other cases. Each of the causes of action asserted in the Proofs of Claim arise out of the 2007 refinancing of a $1 million mortgage loan by Claimant and his wife and counsel, Heather Boone McKeever, which loan was serviced by Debtor GMAC Mortgage LLC. According to Norman S. Rosenbaum, Esq., at Morrison & Foerster LLP, in New York, as of Aug. 26, 2013, all borrowers' claims asserted against the Debtors have been conclusively resolved in the Debtors' favor. Despite his inability to assert any viable claims, as established by the dispositive rulings of a federal court in six separate lawsuits, the Claimant filed the Proofs of Claim asserting $5 million in claims based on the very same failed legal theories, Mr. Rosenbaum relates. The claims asserted in the Proofs of Claim are barred by the doctrines of res judicata and collateral estoppel, and do not establish any liability of the Debtors to Claimant, Mr. Rosenbaum asserts. Moreover, the filing of these meritless Proofs of Claim by Claimant, who has an established history as a vexatious litigant, appear to be yet another attempt to harass the Debtors through abusive legal tactics, Mr. Rosenbaum further asserts. A hearing on the Debtors' objection will be on Oct. 2, 2013 at 10:00 a.m. (Prevailing Eastern Time). The response deadline is Sept. 16. The Debtors are also represented by Gary S. Lee, Esq., Melissa A. Hager, Esq., and Erica J. Richards, Esq., at MORRISON & FOERSTER LLP, in New York. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The bankruptcy court approved disclosure materials so creditors can vote on ResCap's reorganization plan. There will be a Nov. 19 confirmation hearing for approval of the plan, funded in part by a $2.1 billion settlement payment from Ally. The settlement gives Ally freedom from most lawsuits, although not from those brought by the FHFA. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: PNC Bank Defends Contribution Claim -------------------------------------------------------- Residential Capital LLC and its affiliates ask the Court to disallow and expunge Claim No. 4760 filed by PNC Bank, N.A., against Debtor Residential Funding Company, LLC, on the grounds that there does not exist any statutory or contractual basis for the PNC Claim. In the alternative, should the Court find that PNC has a basis for a contribution/indemnification claim against the Debtors alleged in the PNC Claim, the Debtors assert that the PNC Claim must be disallowed pursuant to Section 502(e)(1)(B) of the Bankruptcy Code. PNC Bank vigorously disputes that the claims asserted are without substantive basis under applicable non-bankruptcy law but acknowledges that the claims remain contingent and unliquidated, and are therefore subject to disallowance under Section 502(e)(1) of the Bankruptcy Code. Accordingly, PNC states that it does not object to disallowance solely under, and by operation of, Section 502(e)(1), and will withdraw the Proof of Claim on that basis. Notwithstanding that PNC has acknowledged that the Proof of Claim is subject to disallowance under Section 502(e)(1), PNC reserves, among other things, its rights to subrogation to distributions made on any proofs of claim filed in this proceeding by or on behalf of any named or putative class plaintiffs in the MDL as and when any right will arise. A hearing on the claims objection was slated for Sept. 11, 2013, at 10:00 a.m. Vincent J. Marriott, Esq., and Sarah Schindler-Williams, Esq., at Ballard Spahr LLP, in Philadelphia, Pennsylvania, represent PNC. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The bankruptcy court approved disclosure materials so creditors can vote on ResCap's reorganization plan. There will be a Nov. 19 confirmation hearing for approval of the plan, funded in part by a $2.1 billion settlement payment from Ally. The settlement gives Ally freedom from most lawsuits, although not from those brought by the FHFA. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Malinowski's $138-Mil. Claim Disallowed ------------------------------------------------------------ Judge Martin Glenn sustained Residential Capital's objection to Claim No. 1154 filed by Kenneth J. Malinowski, asserting $138 million. Accordingly, Claim No. 1154 is expunged and disallowed. In their objection, the Debtors said that Claim No. 1154 (a) lacks sufficient supporting documentation, (b) is not a liability of the Debtors, and (c) fails to state a basis for liability against the Debtors. Norman S. Rosenbaum, Esq., Gary S. Lee, Esq., and Jordan A. Wishnew, Esq., at Morrison & Foerster LLP, in New York, represent the Debtors. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The bankruptcy court approved disclosure materials so creditors can vote on ResCap's reorganization plan. There will be a Nov. 19 confirmation hearing for approval of the plan, funded in part by a $2.1 billion settlement payment from Ally. The settlement gives Ally freedom from most lawsuits, although not from those brought by the FHFA. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Wants Class Suit Barred Until Dec. 31 ---------------------------------------------------------- Residential Capital LLC, the Official Committee of Unsecured Creditors, and Ally Financial Inc. and Ally Bank ask the Bankruptcy Court to extend the automatic stay and enjoin the prosecution of claims against Ally in the putative class action entitled Rothstein, et al. v. GMAC Mortgage, LLC, et al., No. 1:12-cv-03412 (AJN) (S.D.N.Y.) until the earlier of the effective date of the Plan and Dec. 31, 2013. A hearing on the motion will be on Sept. 24, 2013 at 10:00 a.m. (ET). Objections are due Sept. 13. Gary S. Lee, Esq., Stefan W. Engelhardt, Esq., and Lorenzo Marinuzzi, Esq., at MORRISON & FOERSTER LLP, in New York, represent the Debtors. Kenneth H. Eckstein, Esq., and Douglas H. Mannal, Esq., at KRAMER LEVIN NAFTALIS & FRANKEL LLP, in New York, represent the Creditors' Committee. Richard M. Cieri, Esq., Ray C. Schrock, Esq., and Stephen E. Hessler, Esq., at KIRKLAND & ELLIS LLP, in New York; and Jeffrey S. Powell, Esq., Daniel T. Donovan, Esq., and Judson D. Brown, Esq., at KIRKLAND & ELLIS LLP, in Washington, D.C., represent AFI and Ally Bank. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The bankruptcy court approved disclosure materials so creditors can vote on ResCap's reorganization plan. There will be a Nov. 19 confirmation hearing for approval of the plan, funded in part by a $2.1 billion settlement payment from Ally. The settlement gives Ally freedom from most lawsuits, although not from those brought by the FHFA. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: MoFo Agrees to Trim $23MM Bill --------------------------------------------------- Law360 reported that Morrison & Foerster LLP agreed to marginally reduce what is expected to be a nearly $23 million bill in Residential Capital LLC's New York bankruptcy proceedings, arguing that the attorneys' fees are a product of a complex case that has required several professionals. Attorneys for ResCap agreed to cut $39,526 from its fees and expenses for services provided between May 2012 and April 2013 in order to avoid "protracted litigation" over the contested fees and expenses, according to court documents, the report related. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The bankruptcy court approved disclosure materials so creditors can vote on ResCap's reorganization plan. There will be a Nov. 19 confirmation hearing for approval of the plan, funded in part by a $2.1 billion settlement payment from Ally. The settlement gives Ally freedom from most lawsuits, although not from those brought by the FHFA. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RHYTHM & HUES: Wants Until Sept. 20 to File Chapter 11 Plan ----------------------------------------------------------- AWTR Liquidation, Inc., formerly known as Rhythm and Hues, Inc. asks the U.S. Bankruptcy Court for the Central District of California to approve a third stipulation extending the deadline to file a plan and disclosure statement. The stipulation, entered among the Debtor, the Official Committee of Unsecured Creditors and the plaintiffs in certain adversary proceedings, provides that, among other things: 1. the deadline for the Debtor to file a chapter 11 plan and disclosure statement will be extended from Sept. 6, 2013, to Sept. 20; 2. a status conference on the plan and disclosure statement will be held on Oct. 15, at 11 a.m., and required the filing of a case status report by Oct. 4. At the Aug. 27, hearing, the Debtor, the Committee and the plaintiffs in the adversary proceedings in the matter styled as, Thomas C. Capizzi and Anthony Barcelo v. AWTR Liquidation, Inc., f/k/a Rhythm And Hues, Inc., Adv, Proc. and Thomas C. Capizzi v. AWTR Liquidation, Inc., f/k/a Rhythm and Hues, Inc., engaged in mediation of their dispute with the Hon. Mitchell Jay Goldberg as mediator. The Debtor, the Committee, and the plaintiffs in the adversary proceedings reached a settlement in principle at the mediation and are working to document the settlement. The Court will consider the Debtor's motion in an Oct. 15, 2013 hearing at 11 a.m. About Rhythm and Hues Rhythm and Hues, Inc., aka Rhythm and Hues Studios Inc., filed its Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-13775) in Los Angeles on Feb. 13, 2013, estimating assets ranging from $10 million to $50 million and liabilities ranging from $50 million to $100 million. Judge Neil W. Bason oversees the case. Brian L. Davidoff, Esq., C. John M Melissinos, Esq., and Claire E. Shin, Esq., at Greenberg Glusker, serve as the Debtor's counsel. Houlihan Lokey Capital Inc., serves as investment banker. The petition was signed by John Patrick Hughes, president and CFO. R&H provided visual effects and animation for more than 150 feature films and has received Academy Awards for Babe and the Golden Compass, an Academy Award nomination for The Chronicles of Narnia and Life of Pi. R&H owned a 135,000 square-foot facility in El Segundo, California, and had more than 460 employees. Key clients Universal City Studios LLC and Twentieth Century Fox, a division of Twentieth Century Fox Film Corporation, provided DIP financing. They are represented by Jones Day's Richard L. Wynne, Esq., and Lori Sinanyan, Esq. The Official Committee of Unsecured Creditors tapped Stutman, Treister & Glatt Professional Corporation as its counsel. At the end of March 2013, the Debtor sold the business to 34x118 Holdings Inc., an affiliate of competitor Prana Studios Inc. The buyer agreed to pay $1.2 million cash, take over payment of the loan financing the Chapter 11 effort, pay defaults on contracts going along with the sale, and assume liabilities to employees for as much as $5 million. On May 24, 2013, the Debtor obtained Court permission to change its corporate name to AWTR Liquidation, Inc. ROCK POINTE: Ch.11 Trustee Taps Crumb & Munding as Counsel ---------------------------------------------------------- The Chapter 11 trustee for Rock Pointe Holdings Company LLC filed papers with the U.S. Bankruptcy Court for the Eastern District of Washington seeking approval to hire his firm, Crumb & Munding, P.S., as counsel. The Chapter 11 Trustee said he requires legal counsel experienced in bankruptcy and litigation matters for representation involving legal issues arising in the case including, but not limited to, plan proposal. The professional services to be rendered by Crumb & Munding, P.S. are legal services related to representation of the Estate's interest in real and personal property as necessary for the efficient administration of the estate as the case proceeds, he says. The firm's professionals will be paid based on these hourly rates: John D. Munding $325 Associates $150 Legal Assistants $50 Interns/clerks $50 Mr. Munding assures the Court that Crumb & Munding does not hold or represent an interest adverse to the estate, and that the firm is a "disinterested person" and has not served as examiner in the case. The Chapter 11 Trustee may be reached at: JOHN D. MUNDING, Esq. CRUMB & MUNDING, P.S. 111 S. Post Street, PH 2290 Spokane, WA 99201 Phone: (509) 624-6464 E-mail: munding@crumb-munding.com About Rock Pointe Rock Pointe Holdings Company LLC owns the Rock Pointe Corporate Center in Spokane, Washington. The Company filed for Chapter 11 protection (Bankr. E.D. Wash. Case No.11-05811) on Dec. 2, 2011. The Debtor estimated both assets and debts of between $50 million and $100 million. Southwell & O'Rourke, P.S., serves as counsel for the Debtor. The U.S. Trustee appointed five unsecured creditors to serve on the Debtor's Official Committee of Unsecured Creditors. Kenneth W. Gates is the counsel for the Committee. Ford Elsaesser served as mediator for of all issues regarding the treatment of the debt owed to DMARC. The United States Trustee appointed John Munding as Chapter 11 trustee in the bankruptcy case. ROGERS BANCSHARES: Simmons First Wins Metropolitan Nat'l Auction ---------------------------------------------------------------- Marie Beaudette, writing for DBR Small Cap, reported that Simmons First National Corp. said it won a bankruptcy auction for Rogers Bancshares Inc.'s Metropolitan National Bank. About Rogers Bancshares Inc. Little Rock, Arkansas-based Rogers Bancshares Inc., filed for Chapter 11 relief (Bankr. E.D. Ark. Case No. 13-13838) on July 5, 2013. Bankruptcy Judge James G. Mixon presides over the case. Samuel M. Stricklin, Esq. -- sam.stricklin@bgllp.com -- at Bracewell & Giuliani, LLP represents the Debtor in its restructuring efforts. The Debtor estimated $10 million to $50 million in assets and debts. Rogers owes $41.3 million on three issues of junior subordinated debentures and $39.6 million on four issues of preferred stock. The petition was signed by Susan F. Smith, secretary. The Official Committee of Unsecured Creditors has hired Hunton & Williams LLP and James F. Dowden PA as counsel; and Carl Marks Advisory Group LLC as financial advisors. ROSETTA GENOMICS: Incurs $6.3 Million Net Loss in H1 2013 --------------------------------------------------------- Rosetta Genomics Ltd. and its subsidiary reported a net loss after discontinued operations of $6.29 million on $193,000 of revenues for the six months ended June 30, 2013, as compared with a net loss after discontinued operations of $6.58 million on $51,000 of revenues for the same period last year. As of June 30, 2013, the consolidated balance sheets showed $30.28 million in total assets, $2.34 million in total liabilities and $27.93 million total shareholders' equity. A copy of the Form 6-K is available for free at: http://is.gd/7fXuEF About Rosetta Based in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to develop and commercialize new diagnostic tests based on a recently discovered group of genes known as microRNAs. MicroRNAs are naturally expressed, or produced, using instructions encoded in DNA and are believed to play an important role in normal function and in various pathologies. The Company has established a CLIA- certified laboratory in Philadelphia, which enables the Company to develop, validate and commercialize its own diagnostic tests applying its microRNA technology. Rosetta Genomics disclosed a net loss of US$10.45 million on US$201,000 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of US$8.83 million on US$103,000 of revenue during the prior year. Bankruptcy Warning In its annual report for the year ended Dec. 31, 2012, the Company said: "We will require substantial additional funding and expect to augment our cash balance through financing transactions, including the issuance of debt or equity securities and further strategic collaborations. On December 7, 2012, we filed a shelf registration statement on Form F-3 with the SEC for the issuance of ordinary shares, various series of debt securities and/or warrants to purchase any of such securities, either individually or in units, with a total value of up to $75 million, from time to time at prices and on terms to be determined at the time of such offerings. The filing was declared effective on December 19, 2012. However there can be no assurance that we will be able to obtain adequate levels of additional funding on favorable terms, if at all. If adequate funds are not available, we may be required to: * delay, reduce the scope of or eliminate certain research and development programs; * obtain funds through arrangements with collaborators or others on terms unfavorable to us or that may require us to relinquish rights to certain technologies or products that we might otherwise seek to develop or commercialize independently; * monetizing certain of our assets; * pursue merger or acquisition strategies; or * seek protection under the bankruptcy laws of Israel and the United States." SAN JOSE, CA: Makes Final Argument in Battle over Pension Cuts -------------------------------------------------------------- Tim Reid, writing for Reuters, reported that California's third largest city, San Jose, and its employee unions presented final court arguments on Sept. 10 in a case that has major implications for other cash-strapped local authorities wanting to cut pensions, including bankrupt Detroit. According to the report, even though voters in San Jose overwhelmingly backed a measure last year that would cut pensions for new workers and force current employees to contribute more to their retirement benefits, the city's unions sued, claiming the reforms were unconstitutional. Both sides, following a judge's request made at the end of a five- day trial last month, filed voluminous closing arguments and summaries late Sept. 10, much of which will likely be reprised in the litigation between unions and city authorities in Detroit, which filed for the biggest municipal bankruptcy in U.S. history in July, the report related. San Jose's pension overhaul was promoted by Democratic mayor Chuck Reed and approved by 70 percent of voters in 2012, the report said. Reed believed it was the best way to alleviate an acute budget shortfall and a rapidly growing unfunded pension liability, which sits at nearly $3 billion, and to save further cuts to essential city services. City workers, led by San Jose's police union, sued, demonstrating how difficult it is for local governments in the United States -- even with a reform measure backed by voters -- to rein in soaring pension and other retirement costs, the report added. SAN DIEGO HOSPICE: Calif. Ban on Third-Party Releases Not Absolute ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that when San Diego Hospice & Palliative Care Corp. won approval of its liquidating Chapter 11 plan, the bankruptcy court handed down a decision saying that the prohibition against third- party releases isn't absolute in the region covered by the U.S. Court of Appeals for the Ninth Circuit in San Francisco. The report relates that unlike circuit courts in other parts of the country, the Ninth Circuit ruled in a 1995 case called Lowenschuss that third-party releases are broadly prohibited in bankruptcy plans. A third-party release is a plan provision that gives a nonbankrupt party, such as an officer or lender, immunity from being sued by creditors. As a result of Lowenschuss, few major bankruptcies are filed in the Ninth Circuit because courts elsewhere are more flexible on third-party releases. The Ninth Circuit covers bankruptcy courts in western states including California, Oregon, Washington, Nevada and Arizona. According to the report, U.S. Bankruptcy Judge Margaret M. Mann, in her opinion on Sept. 4, ruled that Lowenschuss doesn't bar a plan provision precluding suits against a creditors' committee because the members remain liable for gross misconduct and the release provision is consistent with the doctrine of judicial immunity. Similarly, Judge Mann said there is no objection to giving immunity to the trustee of a liquidating trust for anything less than gross misconduct. She said that Lowenschuss only governs releases for conduct during or before bankruptcy, while California trust law permits limiting a trustee's liability going forward. The report relates that Judge Mann said she would sign a confirmation order approving the Chapter 11 plan jointly proposed by the company and the official creditors' committee. Unsecured creditors with claims totaling between $12 million and $16 million were told their recovery may range from nothing to 43 percent. The principal asset, an unused 24-bed hospice facility, is being sold to Scripps Health for $16.6 million. Although the court approved the sale in April, the transfer can't be completed until California regulators also give approval. The estimated unsecured claims didn't include claims resulting from termination of contracts and leases nor claims of employees for mass firings. Just before confirmation, it was agreed to set aside $3.4 million for former workers. About San Diego Hospice San Diego Hospice & Palliative Care Corporation filed a Chapter 11 petition (Bankr. S.D. Cal. Case No. 13-01179) in San Diego on Feb. 4, 2013. The Debtor is the operator of the San Diego Hospice and The Institute for Palliative Medicine, one of the largest community-owned, not-for-profit hospices in the country. The Debtor scheduled $20,369,007 in total assets and $14,888,058 in total liabilities. Before the bankruptcy filing, the Debtor was under a federal investigation, focusing whether it allowed patients to stay in the program even when their diagnosis changed. The Debtor said that it will meet with government agencies to address their concerns, explore partnerships with other health care organizations, and work to restructure and resize San Diego Hospice. The Debtor said it has encouraged Scripps Health, the region's largest provider of health care services, to enter the hospice business. Procopio, Cory, Hargreaves & Savitch LLP serves as counsel to the Debtor. On April 30, 2013, San Diego Hospice received Court authority to sell its unused 24-bed hospice facility to Scripps Health for $16.55 million. Scripps made the opening bid of $10.7 million at the auction that took place before the sale-approval hearing. The other bidder was Sharp Healthcare. The sale is also subject to approval by regulators in California. In May 2013, San Diego Hospice and its creditors' committee jointly filed a liquidating Chapter 11 plan and an explanatory disclosure statement. SARALAND LLLP: S.D. Georgia Judge Won't Stay Proceedings -------------------------------------------------------- Bankruptcy Judge Susan D. Barrett denied the request of individual debtor Lister Harrell for a stay until February 12, 2014, of these bankruptcy proceedings pending before the U.S. Bankruptcy Court for the Southern District of Georgia, in Dublin: Debtor Case No. ------ -------- Paradise Farms, Inc., Chapter 7 12-30111 Lister W. Harrell, Chapter 7 12-30112 Saraland, LLLP, Chapter 11 12-30113 Mr. Harrell filed several pro se requests that the bankruptcy proceedings be stayed until February 2014 due to his incarceration and inability to hire counsel to represent his interests. Mr. Harrell further alleges the Chapter 11 Trustee appointed in the Saraland case is improperly seizing property that does not belong to Saraland. He also seeks an extension of the time to object to discharge and to determine nondischargeability of debt. Mr. Harrell arranged for transportation from the Dodge County jail and attended the hearing on Sept. 3, 2013 representing himself. Judge Barrett noted that decisions to stay proceedings "are left to the sound discretion of the Court." A copy of the Court's Sept. 9, 2013 Opinion and Order is available at http://is.gd/2ZwtyJfrom Leagle.com. SOLAR POWER: Interim CFO to Receive $300,000 Annual Salary ---------------------------------------------------------- Charlotte Xi, the newly appointed president, global chief operating officer and interim chief financial officer of Solar Power, Inc., will serve at-will and her compensation will be approximately $300,000 per year subject to currency exchange rate adjustments, the Company disclosed in an amended Form 8-K filing with the U.S. Securities and Exchange Commission. 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. 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. SENTINEL MANAGEMENT: Bank of New York Seeks Rehearing on Loss ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Bank of New York Mellon Corp., after a stinging defeat last month in a lawsuit with the bankruptcy trustee for defunct money manager Sentinel Management Group Inc., is asking all active judges on the U.S. Court of Appeals in Chicago to review and reverse an Aug. 26 opinion by a three-judge panel of that court. According to the report, in the Sept. 9 filing with the appellate court, the bank said that the August opinion by the three judges "conflicts with 400 years of fraudulent transfer law." The bank believes the opinion is in conflict with opinions from the U.S. Supreme Court from 1909 and 1938. Mr. Rochelle notes that the opinion last month was unusual because three appellate judges reversed themselves, at the bank's expense. The bank initially emerged victorious when the Seventh Circuit appeals court in Chicago upheld dismissal of the suit in August 2012. At the Sentinel trustee's request, the three judges announced they would review their conclusion. Reversing themselves, the same three judges decided on Aug. 26 that the district judge was wrong in dismissing fraudulent transfer and equitable subordination claims against Bank of New York. The decision last month meant that the bank might find itself with an unsecured rather than secured claim for $312 million. Mr. Rochelle adds that last month's ruling might also eventually mean that the bank's claim will come behind other creditors under a theory known as equitable subordination. Bank of New York, the report discloses, faults last month's ruling by inferring intent to defraud just because Sentinel knew it was misappropriating customers' segregated property. The bank says there is no intent to defraud when a company is only trying to stay in business, even if Sentinel was stealing from one creditor to pay another. The appeal is In re Sentinel Management Group Inc., 1903378, Seventh U.S. Circuit Court of Appeals (Chicago). The suit in District Court is Grede v. Bank of New York, 08-cv-02582, U.S. District Court, Northern District of Illinois (Chicago). About Sentinel Management Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- was a full service firm offering a variety of security solutions. The Company filed a voluntary Chapter 11 petition (Bankr. N.D. Ill. Case No. 07-14987) on Aug. 17, 2007. Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd., represented the Debtor. Lawyers at Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represented the Official Committee of Unsecured Creditors. When the Debtor sought bankruptcy protection, it estimated assets and debts of more than $100 million. On Aug. 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper US LLP, and Vincent E. Lazar, Esq, at Jenner & Block LLP, represent the Chapter 11 Trustee. The Court confirmed the Fourth Amended Chapter 11 Plan of Liquidation for Sentinel on Dec. 15, 2008, which created a Liquidation Trust. The Plan became effective Dec. 17, 2008, and Mr. Grede was appointed Liquidation Trustee. SEVEN COUNTIES: Can Access Cash Collateral Until March 17 --------------------------------------------------------- In an interim order entered Sept. 6, 2013, the U.S. Bankruptcy Court for the Western District of Kentucky authorized Seven Counties Services, Inc., effective as of Sept. 1, 2013, to use cash collateral of Fifth Third Bank through the earlier of (i) the tenth calendar day following entry by the Court of an any order ruling on the Motion for Preliminary Injunction (Adversary No. 13- 03019); or (ii) March 17, 2014. A copy of the fifth interim cash collateral order is available at: http://bankrupt.com/misc/sevencounties.doc263.pdf About Seven Counties Seven Counties Services Inc., a not-for-profit behavioral services provider from Louisville, Kentucky, filed for Chapter 11 protection (Bankr. W.D. Ky. Case No. 13-31442) in the hometown on April 4, 2013. The petition was signed by Anthony M. Zipple as president/CEO. The Debtor scheduled assets of $45,603,716 and scheduled liabilities of $232,598,880. Seiller Waterman LLC serves as the Debtor's counsel. Judge Joan A. Lloyd presides over the case. Wyatt, Tarrant & Combs LLP represents the Debtor as special counsel. Hall, Render, Killian, Heath & Lyman, PLLC, is special counsel to represent and advise it in the implementation of its new software system. The agency generates more than $100 million a year in revenue and employs a staff of 1,400 providing services at 21 locations and 120 schools and community centers. STEREOTAXIS INC: Has Rights Offering of 6.3-Mil. Common Shares -------------------------------------------------------------- Stereotaxis, Inc., is distributing, at no charge, to the holders of the Company's common stock and of certain of its warrants, transferable subscription rights to purchase an aggregate of up to 6,315,953 shares of the Company's common stock, par value $0.001 per share. Holders will receive a subscription right to purchase one-third of a share of common stock at a price of $3.00 per share for each whole share of common stock that they owned as of 5:00 p.m. New York City time on [ ], 2013, the record date. The Company has agreed with Broadridge Corporate Issuer Solutions, Inc., to serve as the rights agent for the rights offering. The rights agent will hold in escrow the funds the Company receives from subscribers until the Company completes or cancels the rights offering. The rights offering will expire at 5:00 p.m., New York City time, on the date that is 21 days after the commencement of the rights offering. The rights offering is currently expected to expire at 5:00 p.m. New York City time, on [ ], 2013. A copy of the Form S-1 prospectus is available for free at: http://is.gd/R4ocOE About Stereotaxis Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures and markets the Epoch Solution, which is an advanced remote robotic navigation system for use in a hospital's interventional surgical suite, or "interventional lab", that the Company believes revolutionizes the treatment of arrhythmias and coronary artery disease by enabling enhanced safety, efficiency and efficacy for catheter-based, or interventional, procedures. Ernst & Young LLP, in St. Louis, Missouri, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring operating losses and working capital deficiency which conditions raise substantial doubt about the Company's ability to continue as a going concern. Stereotaxis incurred a net loss of $9.23 million in 2012, as compared with a net loss of $32.03 million in 2011. The Company's balance sheet at June 30, 2013, showed $23.99 million in total assets, $49.63 million in total liabilities and a $25.63 million total stockholders' deficit. SURTRONICS INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Surtronics, Inc. P.O. Box 33459 Raleigh, NC 27636 Bankruptcy Case No.: 13-05672 Chapter 11 Petition Date: September 9, 2013 Court: U.S. Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Stephani W. Humrickhouse Debtor's Counsel: David A. Matthews, Esq. SHUMAKER, LOOP & KENDRICK, LLP 128 S. Tryon Street, Suite 1800 Charlotte, NC 28202 Tel: (704) 945-2140 Fax: (704) 332-1197 E-mail: dmatthews@slk-law.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Angela Stanley, president. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Angela Stanley Trade Debt $1,367,000 P.O. Box 33459 Raleigh, NC 27636 Perkinelmer Health Science -- $87,350 P.O. Box 101668 Atlanta, GA 30392-1668 I.D.S.C. Inc. -- $30,707 P.O. Box 50107 Lighthouse, FL 33074 Precision Metal Sales -- $7,154 Brenntag Southeast, Inc. -- $4,128 Brenntag Southeast, Inc. -- $3,967 NET Global -- $3,449 Triangle Refrigeration Services -- $3,432 Mid-Carolina Supply -- $2,822 Univar USA, Inc. -- $2,787 Mid-Carolina Supply -- $2,587 Reliant Aluminum -- $2,213 Mac Demid, Inc. -- $2,101 Metal Chem, Inc. -- $2,096 American Express-Delta -- $2,039 Metalast -- $1,896 G & W Equipment Inc. -- $1,889 Technical Equipment -- $1,873 Alphanumeric Systems, Inc. Debt $1,855 ChemPoint -- $1,812 SWJ MANAGEMENT: Gets Approval to Hire David Carlebach as Counsel ---------------------------------------------------------------- SWJ Management LLC sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ the Law Offices of David Carlebach, Esq., as its counsel, nunc pro tunc to June 28, 2013. The professional services Carlebach will render include, but are not limited to: (a) providing the Debtor with legal counsel with respect to its powers and duties as a debtor-in-possession in the continued management of its property during the Chapter 11 case; (b) preparing on behalf of the Debtor all necessary applications, answers, orders, reports, and other legal documents which may be required in connection with the Chapter 11 case; (c) providing the Debtor with legal services with respect to formulating and negotiating a plan of reorganization with creditors; and (d) performing other legal services for the Debtor as may be required during the course of the Chapter 11 case, including but not limited to, the institution of actions against third parties, objections to claims, and the defense of actions which may be brought by third parties against the Debtor. The Debtors assured the Court that Carlebach has no connection with, and no interests adverse to, the Debtor, its creditors, other parties-in-interest, or their respective attorneys or accountants. The Debtor's Counsel may be reached at: David Carlebach, Esq. LAW OFFICES OF DAVID CARLEBACH, ESQ. 40 Exchange Place, Suite 1306 New York, NY 10005 Tel: (212) 785-3041 Fax: (646) 355-1916 E-mail: david@carlebachlaw.com About SWJ Management LLC New York-based SWJ Management LLC filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 13-12123) on June 28, 2013. Judge Allan L. Gropper oversees the case. The Law Offices of David Carlebach, Esq., serves as the Debtor's counsel. In its petition, the Debtor estimated $50 million to $100 million in both assets and debts. The petition was signed by Richard Annunziata, managing member. An affiliate, Ridgewood Realty of LL, SK Mulberry Contract, filed a separate Chapter 11 petition (Case No. 12-14085) on Sept. 28, 2012. SWJ MANAGEMENT: Seeks to Tap EisnerAmper LLP as Accountants ----------------------------------------------------------- SWJ Management LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to employ the accounting firm of EisnerAmper LLP, as its accountants, nunc pro tunc to June 28, 2013. The Accounting Firm's Ira Spiegel assures the Court that EisnerAmper has no connection with the Debtor, any of the creditors, or any other party in interest in this case, or any of the respective attorneys and accountants, and is a "disinterested person" as that term is defined in 11 U.S.C. Section 101(14). About SWJ Management LLC New York-based SWJ Management LLC filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 13-12123) on June 28, 2013. Judge Allan L. Gropper oversees the case. The Law Offices of David Carlebach, Esq., serves as the Debtor's counsel. In its petition, the Debtor estimated $50 million to $100 million in both assets and debts. The petition was signed by Richard Annunziata, managing member. An affiliate, Ridgewood Realty of LL, SK Mulberry Contract, filed a separate Chapter 11 petition (Case No. 12-14085) on Sept. 28, 2012. SWJ MANAGEMENT: Case Transferred to New Jersey Bankruptcy Court --------------------------------------------------------------- U.S. Bankruptcy Judge Allan L. Gropper granted on September 4, 2013, the motion of First Connecticut Group, LLC IV to transfer the Chapter 11 case of SWJ Management LLC, case 13-12123 (ALG), and the related adversary proceeding 13-1385 (ALG), to the United States Bankruptcy Court for the District of New Jersey pursuant to 28 U.S.C. Section 1412 and Fed. R. Bankr. Proc. 1014. All outstanding discovery requests in the case and in adversary proceeding 13-1385 are suspended, and all outstanding subpoenas are quashed, without prejudice to the renewal of any appropriate discovery after the transfer of venue, ruled Judge Gropper. The Court further held that the pending application of the Debtor for the retention of accountants should be renewed before the New Jersey Bankruptcy Court. The Debtor had objected to the Motion saying that the interests of justice demand that the Debtor's bankruptcies remain in the Southern District of New York where they are owned and properly venued. The Debtor demanded to have basic due process rights and its day in court through an evidentiary hearing on the issues raised by the Motion. However, Judge Gropper held that the Motion was in the best interests of the Debtors and their estates and creditors as well as convenient for all parties-in-interest, and there was no need for an evidentiary hearing. About SWJ Management LLC New York-based SWJ Management LLC filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 13-12123) on June 28, 2013. Judge Allan L. Gropper oversees the case. The Law Offices of David Carlebach, Esq., serves as the Debtor's counsel. In its petition, the Debtor estimated $50 million to $100 million in both assets and debts. The petition was signed by Richard Annunziata, managing member. An affiliate, Ridgewood Realty of LL, SK Mulberry Contract, filed a separate Chapter 11 petition (Case No. 12-14085) on Sept. 28, 2012. TARGETED MEDICAL: Files Copy of Presentation with SEC ----------------------------------------------------- Targeted Medical Pharma, Inc., filed with the U.S. Securities and Exchange Commission a form of presentation that the Company expects to use in connection with presentations to certain potential investors. A copy of the presentation is available for free at http://is.gd/LpOjMv About Targeted Medical Los Angeles, Calif.-based Targeted Medical Pharma, Inc., is a specialty pharmaceutical company that develops and commercializes nutrient- and pharmaceutical-based therapeutic systems. Targeted Medical disclosed a comprehensive loss of $9.58 million on $7.29 million of total revenue for the year ended Dec. 31, 2012, as compared with a comprehensive loss of $4.18 million on $8.81 million of total revenue during the prior year. The Company's balance sheet at March 31, 2013, showed $12.22 million in total assets, $14.20 million in total liabilities and a $1.98 million total shareholders' deficit. EFP Rotenberg, LLP, in Rochester, New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has losses for the year ended Dec. 31, 2012, totaling $9,586,182 as well as accumulated deficit amounting to $13,684,789. Further the Company does not have adequate cash and cash equivalents as of Dec. 31, 2012, to cover projected operating costs for the next 12 months. As a result, the Company is dependent upon further financing, related party loans, development of revenue streams with shorter collection times and accelerating collections on the Company's physician managed and hybrid revenue streams. TECHDYNE LLC: Court OKs Settlement With HIOX; Case is Dismissed --------------------------------------------------------------- On Sept. 4, 2013, the U.S. Bankruptcy Court for the District of Arizona approved the settlement agreement between TechDyne, LLC, and HIOX Capital, LLC. The Bankruptcy Court also ordered the dismissal of the Debtor's Chapter 11 case. As reported in the TCR on Sept. 4, 2013, a hearing on the motion to approve the settlement agreement between Debtor TechDyne, LLC, and HIOX Capital, LLC, was set for Sept. 10, 2013, at 11:00 a.m. As previously reported, the Debtor asked the Bankruptcy Court to approve the settlement agreement with HIOX Capital, which agreement will satisfy the debt owing by the Debtor to HIOX and provide a buy/sell mechanism to retire HIOX's 4.8770546% member interest in the Debtor. The Debtor will pay HIOX $405,590, at $75,000 down payment upon approval of the settlement and payments over time at 10% interest in monthly installments of $15,000. On or before the year after the end of the payoff, the Debtor will buy and HIOX will sell its 4.8770546% member interest in TechDyne for 50% of the then- existing fair market value of the Debtor. According to the Debtor's counsel, Bradley J. Stevens, Esq., at Jennings, Strouss & Salmon, P.L.C., in Phoenix, Arizona, the satisfaction of the HIOX Claim will resolve all remaining issues with the case. Accordingly, the Debtor also asks the Court to dismiss the bankruptcy case upon the Court's approval of the settlement. David D. Cleary, Esq. -- cleary@gtlaw.com -- at Greenberg Traurig, LLC, in Phoenix, Arizona, represents HIOX Capital. About TechDyne, LLC Scottsdale, Arizona-based TechDyne, LLC, is a developer and entrepreneur of two patented technologies: light armor and a medical cervical devise to prevent premature births. The Company filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 11-16739) on June 9, 2011. Judge Charles G. Case, II, presides over the case. In its schedules, the Debtor disclosed $100,000,070 in assets and $701,313 in debts. The petition was signed by Benjamin V. Booher, Sr., managing member. The U.S. Trustee for Region 8, has not appointed an official committee of unsecured creditors in the Debtor's case because an insufficient number of persons holding unsecured claims have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee would interest develop among the creditors. Bradley J. Stevens, Esq. -- bstevens@jsslaw.com -- at Jennings, Strouss & Salmon, PLC, in Phoenix, Ariz., represents the Debtor as counsel. TOMSTEN INC: Taps SIB Development as Billings Consultant -------------------------------------------------------- Tomsten, Inc. seeks permission from the U.S. Bankruptcy Court for the District of Minnesota to employ SIB Development & Consulting, Inc., as consultant, to provide services including evaluation of the Debtor's vendor billings relating to utilities and related services; to identify opportunities for cost savings; and negotiate agreements to achieve those savings. SIB will be paid a fee contingent on achieving the cost savings with the fee being equal to 50% of the savings over a 60 month period commencing when the particular vendor relationship is reviewed. SIB estimates cost savings for the Debtor of $30-50,000 per year. Tom Loutrel, Senior Vice President of SIBS, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Debtor with respect to the matter upon which it is to be engaged. About Tomsten, Inc. Hennepin, Minnesota-based Tomsten, Inc., doing business as Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million as of the Chapter 11 filing. The Debtor has tapped and Michael L. Meyer, Esq., and the firm of Ravich Meyer Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F. Kishel presides over the case. Steven M. Rubin and the law firm of Leonard Street and Deinard serve as the Debtor's corporate counsel. M Squared Group, Inc., is the Debtor's marketing consultant while Lighthouse Management Group, Inc., is the Debtor's financial consultant. Baker Tilly Virchow Krause, LLP, serve as tax accountant to the Debtor. The Official Unsecured Creditors' Committee is represented by Jay Jaffe, Esq., at Faegre Baker Daniels LLP. CBIZ Accounting, Tax and Advisory of New York, LLC, serves as the Committee's financial advisor. TONGJI HEALTHCARE: Two Directors Quit for Personal Reasons ---------------------------------------------------------- Mr. Jingxi Lu, vice president and director and Mr. Lin Lin, vice president and director, resigned from all positions they held with Tongji Healthcare Group, Inc., for personal reasons. Messrs. Lu and Lin did not resign due to any disagreement with the Company, its board of directors or its management regarding any matters relating to the Company's operations, policies or practices. About Tongji Healthcare Based in Nanning, Guangxi, the People's Republic of China, Tongji Healthcare Group, Inc., a Nevada corporation, operates Nanning Tongji Hospital, a general hospital with 105 licensed beds. Tongji Healthcare disclosed a net loss of $1.20 million on $2.77 million of total operating revenue for the year ended Dec. 31, 2012, as compared with a net loss of $218,150 on $2.68 million of total operating revenue during the prior year. The Company's balance sheet at March 31, 2013, showed $14.20 million in total assets, $15.50 million in total liabilities and a $1.29 million total stockholders' deficit. EFP Rotenberg, LLP, in Rochester, New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has negative working capital of $12,264,823, an accumulated deficit of $1,785,336, and shareholders' deficit of $1,208,670 as of Dec. 31, 2012. The Company's ability to continue as a going concern ultimately is dependent on the management's ability to obtain equity or debt financing, attain further operating efficiencies, and achieve profitable operations." TOWNE INC: Charging Legal Fees to Collateral Difficult to Achieve ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Philadelphia ruled on Aug. 29 that locating a buyer and negotiating a contract to sell real property don't entitle a lawyer to collect fees from a later sale. The report recounts that a law firm serving as a Chapter 11 debtor's special counsel received an offer from a prospective buyer and negotiated a contract. The sale was never completed because the secured lender didn't consent. After the reorganization was converted to a liquidation in Chapter 7, the law firm withdrew as counsel. The property was sold later to a different buyer. Although the bankruptcy court granted the firm about $90,000 in fees for services in Chapter 11, there were no funds to pay the award. The firm sought to compel the secured lender to pay the fees under Section 506(c) of the Bankruptcy Code that permits a professional to recover reasonable expenses from a secured creditor for the cost of "preserving or disposing" of collateral. According to the report, Circuit Judge Thomas I. Vanaskie wrote an opinion on Aug. 29 upholding the bankruptcy court's conclusion that the firm wasn't entitled to fees paid by the lender. He cited case law under Section 506(c) requiring that the services "directly benefit" the lender. Because a different buyer eventually purchased the property, Judge Vanaskie said that finding a potential buyer and signing a contract weren't "necessary to the preservation or disposition" of the property. The case is In re Towne Inc., 12-3069, U.S. Court of Appeals for the Third Circuit (Philadelphia). A copy of the Third Circuit's ruling is available at http://is.gd/gzoi8Cfrom Leagle.com. Towne Inc. and DMD Towne Inc. were in business of operating BMW automotive dealerships. Towne and DMD Towne filed voluntary Chapter 11 bankruptcy petitions on February 5, 2009 and April 6, 2009, respectively. For procedural efficiency, the Court administratively consolidated the two cases (Bankr. D.N.J. Lead Case No. 09-12804). Lawrence Morrison, Esq., in New York, served as counsel to the Debtors. Towne Inc. estimated $1 million to $10 million in both assets and debts. TRAINOR GLASS: Court Approves Epiq as Balloting & Claims Agent -------------------------------------------------------------- Trainor Glass Company obtained authority from the U.S. Bankruptcy Court to enter into an agreement with Epiq Bankruptcy Systems, LLC. The Debtor is also authorized to pay the retainer to Epiq and to make all other payments under the Epiq Agreement without further Court order. The firm will, among other things, provide these services: a. provide balloting services in connection with the solicitation process of any chapter 11 plan for which a disclosure statement has been approved by the court; b. post-filing date collection; and c. claims management services. The firm's rates are: Title Rates ----- ----- Clerical/ Administrative Support $35 - $50 Case Manager $60 - $95 IT/Programming $80 - $150 Senior Case Manager $100 - $140 Consultant $120 - $170 Senior Consultant $175 - $225 Sr. Managing Consultant/VP/Director $230 - $270 Communications Counselor $230 - $295 Executive Vice President $325 About Trainor Glass Trainor Glass Company, doing business as Trainor Modular Walls, Trainor Solar, and Trainor Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 12-09458) on March 9, 2012. Trainor was founded in 1953 by Robert J. Trainor Sr. to pursue a residential glass business in Chicago, Illinois. Trainor's business model was focused on quality fabrication, design, engineering, and installation of glass products and framing systems in virtually every architectural application, including (a) new construction, (b) green-building solutions, (c) building rehabilitation, (d) storefronts and entrances, (e) tenant interiors, and (f) custom-specialty work. The Hon. Carol A. Doyle oversees the Chapter 11 case. David A. Golin, Esq., Michael L. Gesas, Esq., and Kevin H. Morse, Esq., at Arnstein & Lehr LLP, serve as the Debtor's counsel. High Ridge Partners, Inc., serves as its financial consultant. The Debtor has tapped Cole, Martin & Co., Ltd., to render certain auditing services related to the Debtor's 401(k) and profit sharing plan. The Debtor scheduled $14,276,745 in assets and $64,840,672 in liabilities. A three-member official committee of unsecured creditors has been appointed in the case. The committee retained Sugar Felsenthal Grais & Hammer LLP as counsel. TRIBUNE CO: Court Tosses Emerson Tucker's Claims ------------------------------------------------ Bankruptcy Judge Kevin J. Carey sustained Tribune Company's objection to two proofs of claim filed by Emerson Tucker. Claim Nos. 6477 and 6462 are disallowed and expunged in their entirety. Mr. Tucker filed claim numbers 6447 and 6462 against Debtor Chicago Tribune Company alleging damages arising out of a pro se action filed by Mr. Tucker in United States District Court for the District of New Jersey on May 2, 2008. Mr. Tucker's claims against CTC and other media defendants alleged that the Media Defendants acted in concert with one another and conspired with the New York Police Department to defame, libel, and slander him by calling him a "serial killer" following his arrest. The Debtors objected to the Tucker Claims because, among other reasons, the claims against the Media Defendants (including CTC) were dismissed by the opinion of the District Court dated Feb. 23, 2010. A copy of the Court's Sept. 6, 2013 Memorandum Order is available at http://is.gd/or8LrBfrom Leagle.com. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors listed $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP served as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP served as the Committee's financial advisor. Landis Rath Moelis & Company served as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represented the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending four years of reorganization. The reorganization allowed a group of banks and hedge funds, including Oaktree Capital Management and JPMorgan Chase & Co., to take over the media company. UNIVERSAL HEALTH CARE: AMC Files List of Top Unsecured Creditors ---------------------------------------------------------------- American Managed Care, LLC submitted a list that identifies its top 20 unsecured creditors. American Managed is an affiliate of Universal Health Care Group, Inc. The companies' bankruptcy cases are jointly administered. Creditors with the three largest claims are: Entity Nature of Claim Claim Amount ------ --------------- ------------ Receivable Management $294,000 Servic c/o Registered Agent CT Corporation System 1200 South Pine Island Road Plantation, FL 33324 CDW Direct LLC $132,175 c/o Registered Agent Corporation Service Company 1210 Hays Street Tallahassee, FL 32301-2525 Health Data Vision, Inc. $131,125 1405 N. San Fernando Blvd. Suite 302 Burabank, CA 91504 A copy of the creditors' list is available for free at: http://bankrupt.com/misc/UNIVERSALHEALTHCARE_creditors_amended.pdf About Universal Health Care Universal Health Care Group, Inc., owns an insurance company and three health-maintenance organizations that provide managed care services for government sponsored health care programs, focusing on Medicare and Medicaid. Universal Health was founded in 2002 by Dr. A.K. Desai and grew its operations of offering Medicare plans to more than 37,000 members to over 20 states. Universal Health filed a Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida regulators moved to put two of the company's subsidiaries in receivership. Universal Health Care estimated assets of up to $100 million and debt of less than $50 million in court filings in Tampa, Florida. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, serves as counsel to the Debtor. In April 2013, Soneet R. Kapila was appointed Chapter 11 trustee for Universal Health Care Group, Inc. The trustee has hired Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A. as his special counsel to render general bankruptcy services; Kapila & Company as his financial advisors and accountants; Theresa Van Vliet, Esq., and the law firm of Genovese Jobless & Battista, P.A. as special counsel; Dennis S. Jennis, Esq., and Jennis & Bowen, P.L., as special conflicts counsel; Mark Hall as healthcare consultant; and E-Hounds, Inc. as forensic imaging consultant. US AIRWAYS: PBGC Incorrectly Nixed Pilot Benefits, DC Circ. Hears ----------------------------------------------------------------- Law360 reported that a group of retired U.S. Airways Inc. pilots asked the D.C. Circuit on Sept. 10 to restore benefits terminated by the Pension Benefit Guaranty Corp. after the airline went bankrupt in 2002, saying the court should give less deference to the agency's decision-making when it is acting as a trustee. According to the report, the pilots' attorney, Anthony F. Shelley, said the PBGC was not necessarily entitled to deference under the U.S. Supreme Court's guidance on when to accede to an agency's interpretation of a statute that it administers. Tempe, Ariz.-based US Airways Group, Inc. (NYSE: LCC) is a holding company whose primary business activity is the operation of a major network air carrier through its wholly owned subsidiaries US Airways, Piedmont Airlines, Inc., PSA Airlines, Inc., Material Services Company, Inc., and Airways Assurance Limited. The Company operates the fifth largest airline in the United States as measured by domestic revenue passenger miles and available seat miles. In February 2013, US Airways Group announced its intention to merge with AMR, the parent company of American Airlines, Inc. Under the terms of the Merger Agreement, US Airways Group will become a wholly owned subsidiary of AMR and the merged company will be operated under the single brand name of American Airlines. The Merger is to be effected pursuant to a plan of reorganization in AMR's currently pending cases under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Merger is conditioned on the approval by the Bankruptcy Court, regulatory approvals, approval by US Airways Group shareholders, other customary closing conditions, and confirmation and consummation of the plan of reorganization. VALEANT PHARMACEUTICALS: S&P Rates $1.28 Million Term Loan 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' issue-level rating to Laval-based pharmaceutical company Valeant Pharmaceuticals International Inc.'s proposed $1.287 million term loan B (tranche D-2) and $990 million term loan B (tranche C-2). S&P assigned a recovery rating of '2', reflecting its expectation for substantial (70%-90%) recovery of principal in the event of a payment default. The terms for the tranche D-2 and C-2 loans, which mature on Feb. 13, 2019, and Dec. 11, 2019, respectively, are substantially unchanged except for the lower expected interest rates. Valeant's 'BB-' corporate credit rating reflects S&P's view that the company' financial risk profile is "highly leveraged" following the recent acquisition of Bausch & Lomb (B&L), despite S&P's belief that the business risk has improved with the broader business that B&L provided. S&P considers Valeant's business to be "satisfactory" primarily because of the addition of B&L (which had a satisfactory business risk profile on standalone basis) to Valeant's already diversified business. The highly leveraged financial risk profile reflects a financial policy that is more aggressive than S&P previously factored into the rating, Valeant's capacity, but not willingness, to repay debt, and S&P's belief that additional acquisitions will disrupt the trajectory of deleveraging. Leverage, pro forma for B&L, is 5.7x (excluding synergies), contributing to S&P's assessment of Valeant's financial risk as highly leveraged. RATINGS LIST Valeant Pharmaceuticals International Inc. Corporate Credit Rating BB-/Stable/-- New Ratings Valeant Pharmaceuticals International Inc. $1.287 million term loan B (tranche D-2) BB Recovery Rating 2 $990 million term loan B (tranche C-2) BB Recovery Rating 2 VIRGINIA BROADBAND: Committee Fails in Bid to Dismiss Case ---------------------------------------------------------- Bankruptcy Judge Rebecca B. Connelly denied the request of the official committee of unsecured creditors in the Chapter 11 case of Virginia Broadband, LLC, to dismiss the case. The Committee's motion to dismiss rests entirely on the allegedly flawed authorization for the petition due to a member's individual bankruptcy filing. Judge Connelly said that member's economic and non-economic interest in VABB became property of his estate under section 541(c)(1) despite VA. CODE ANN. Sec. 13.1-1040.1(6)(a) and revested in him upon the dismissal of his case pursuant to Bankruptcy Code section 349(b)(3). The Committee's motion, filed seven months after the petition date, alleges that a majority of VABB's Board did not authorize the filing of a chapter 11 petition. According to the Committee, the lack of authorization compels dismissal of the chapter 11 case. VABB filed an answer and memorandum in opposition to the Committee's motion along with an amended memorandum in opposition. Four separate creditors filed pleadings in opposition to the motion, and two appeared by counsel at the hearing and urged the Court to deny the motion. The Court heard the Committee's motion on June 17, 2013 and took the matter under advisement. Pursuant to 11 U.S.C. Sec. 1112(b)(3), the Court was to prepare and issue a decision on the Committee's motion within 15 days of hearing the motion. Shortly after the hearing, however, the parties contacted the Court and requested the Court reserve judgment to allow them an opportunity to reach a compromise. During a telephone conference call on Aug. 12, 2013, the parties informed the Court that a compromise would not be forthcoming and asked that the Court issue an opinion. The parties agreed to allow the Court 30 days to issue its decision. Warren P. Manuel, Hunter Chapman, III, Larry Chang, and Richard Smith served as managers on VABB's Board of Managers. Mr. Chapman was one of the larger equity holders on the Board with a 28.2317% stake in VABB. On Aug. 23, 2012, Mr. Chapman filed a chapter 13 petition in the Bankruptcy Court for the Eastern District of Virginia. Four days later, a group of VABB's members executed a Consent in Lieu of Member's Meeting. The August Consent removed Messrs. Chang and Smith from management and appointed Robert Sullivan and Thomas Huggins as managers of VABB. On that same day, the Board, based on the votes of Messrs. Sullivan, Huggins, and Chapman, removed Mr. Manuel from his positions as Chief Operating Officer, Chief Executive Officer, and Chairman of the Board. On Sept. 12, 2012, Chapman's chapter 13 bankruptcy was dismissed by order of the court. Over the course of Oct. 27th and 28th of 2012, a group of VABB's members executed a second Consent in Lieu of Member's Meeting. The October Consent ratified the August Consent and all actions taken by the Board in reliance of the August Consent. The October Consent was made retroactively effective as of Aug. 27, 2012. After the October Consent was issued, Mr. Huggins resigned from his role as manager of VABB. On Nov. 1, 2012, Messrs. Sullivan and Chapman, representing two- thirds of the Board, authorized VABB to file a chapter 11 petition with the Bankruptcy Court. According to Judge Connelly, as of Sept. 12, 2012, Mr. Chapman had all the rights and interests in VABB that he held prior to the filing of his individual bankruptcy case on Aug. 23, 2012, including the right to vote as a member of VABB and serve as a manager on the Board. Therefore, Mr. Chapman's vote in favor of the October Consent was valid and helped to form a majority coalition ratifying the August Consent and any action taken by the Board in reliance on such. In taking such action, the October Consent had the effect of ratifying the removal of Chang and Smith from the Board and appointing Sullivan and Huggins to the Board. After Huggins subsequent resignation, the Board consisted of Messrs. Sullivan, Manuel, and Chapman. On Nov. 1, 2012, Messrs. Sullivan and Chapman, forming a majority coalition of the Board, validly authorized a petition for chapter 11 relief on behalf of VABB. As such, no cause exists to find that the filing by VABB was invalid, Judge Connelly said. A copy of the Court's Sept. 9, 2013 Memorandum Opinion is available at http://is.gd/RnOUDzfrom Leagle.com. Virginia Broadband, LLC, in Culpeper, Virginia, filed for Chapter 11 bankruptcy (Bankr. W.D. Va. Case No. 12-62535) on Nov. 5, 2012, in Lynchburg. Judge William E. Anderson was first assigned to the case. Richard C. Maxwell, Esq. -- rmaxwell@woodsrogers.com -- at Woods Rogers PLC, serves as counsel to the Debtor. In its petition, VABB estimated $1 million to $10 million in assets and debts. A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/vawb12-62535.pdf The petition was signed by Robert M. Sullivan, president. VERITY CORP: Edward Jakos Appointed as Director ----------------------------------------------- Edward J. Jakos, CPA, was appointed as a member of the Board of Directors of Verity Corp. effective Sept. 6, 2013. Mr. Jakos joined Verity Farms, LLC, in 2012 as operations manager and was appointed chief financial officer in May 2013. From 2005 to 2012, Mr. Jakos was a senior accountant with CNA Surety. From 2000 to 2005, Mr. Jakos worked as an accountant for Great West Casualty Company. From 1986 through 2005, Mr. Jakos held various positions in financial and accounting matters. Mr. Jakos received a BS in Forestry from North Carolina State University. There is no understanding or arrangement between Mr. Jakos and any other person pursuant to which Mr. Jakos was selected as a director of the Corporation. Mr. Jakos does not have any family relationship with any director, executive officer or person nominated or chosen by us to become a director or executive officer. About Verity Sioux Falls, South Dakota-based Verity Corp., formerly AquaLiv Technologies, Inc., is the parent of Verity Farms II, Inc., Aistiva Corporation (formerly AquaLiv, Inc.). Verity Farms II is dedicated to providing consumers with safe, high-quality and nutritious food sources through sustainable crop and livestock production. Aistiva's technology alters the behavior of organisms, including plants and humans, without chemical interaction. Aistiva's platform technology influences biological processes naturally and without chemical interaction. To date, Aistiva has released products in the industries of water treatment, skincare, and agriculture. Bongiovanni & Associates, C.P.A.'s, in Cornelius, North Carolina, expressed substantial doubt about AquaLiv's ability to continue as a going concern following their audit of the Company's financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has incurred recurring losses from operations, has a liquidity problem, and requires funds for its operational activities. The Company's balance sheet at June 30, 2013, showed $4.69 million in total assets, $7.06 million in total liabilities and a $2.36 million total stockholders' deficit. VPR CORP: Names Stalking-Horse Bidders for Oil and Gas Wells ------------------------------------------------------------ Marie Beaudette, writing for DBR Small Cap, reported that oil and gas driller VPR Corp. has named lead bidders for its 53 wells in Oklahoma and New Mexico, which are slated to hit the auction block later this month. About VPR Operating VPR Operating, LLC, and three related entities sought Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 13-10599) in Austin on March 29, 2013. Brian John Smith, Esq., at Patton Boggs LLP, serves as the Debtor's counsel. Judge Craig A. Gargotta presides over the case. The Debtor disclosed $13,400,000 in assets and $11,119,045 in liabilities as of the Chapter 11 filing. Privately owned VPR is an oil and gas company focused on acquiring and developing assets in the domestic onshore basins of the United States. It has 53 producing wells, which generate revenue of approximately $375,000 per month on average after royalty payments. VPR was founded in 2008, and maintains producing oil and gas properties in Oklahoma and New Mexico. The U.S. Trustee appointed five entities to an official committee of creditors. Kell C. Mercer, Esq., at Brown McCarroll, L.L.P. represents the Official Committee of Creditors. W.R. GRACE: Facing 430 Property Damage Claims as of June 30 ----------------------------------------------------------- Approximately 430 asbestos-related property damage claims remain outstanding against W.R. Grace & Co., according to the Company's Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended June 30, 2013. Grace is a defendant in property damage and personal injury lawsuits relating to previously sold asbestos-containing products. As of April 2, 2001 ("Filing Date"), Grace was a defendant in 65,656 asbestos-related lawsuits, 17 involving claims for property damage (one of which has since been dismissed), and the remainder involving 129,191 claims for personal injury. Due to the Filing, holders of asbestos-related claims are stayed from continuing to prosecute pending litigation and from commencing new lawsuits against the Debtors. Grace's obligations with respect to present and future asbestos claims will be determined through the Chapter 11 process. The plaintiffs in asbestos property damage lawsuits generally seek to have the defendants pay for the cost of removing, containing or repairing the asbestos-containing materials in the affected buildings. Various factors can affect the merit and value of PD Claims, including legal defenses, product identification, the amount and type of product involved, the age, type, size and use of the building, the legal status of the claimant, the jurisdictional history of prior cases, the court in which the case is pending, and the difficulty of asbestos abatement, if necessary. Out of 380 asbestos property damage cases (which involved thousands of buildings) filed prior to the Filing Date, 16 remain unresolved. Eight cases relate to ZAI and eight relate to a number of former asbestos-containing products (two of which also are alleged to involve ZAI). Approximately 4,400 additional PD claims were filed prior to the March 31, 2003, claims bar date established by the Bankruptcy Court. (The March 31, 2003, claims bar date did not apply to ZAI claims.) Grace objected to virtually all PD claims on a number of legal and factual bases. As of June 30, 2013, approximately 430 PD Claims subject to the March 31, 2003, claims bar date remain outstanding. The Bankruptcy Court has approved settlement agreements covering approximately 410 of such claims for an aggregate allowed amount of $151.7 million. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. Grace employs approximately 6,500 people in over 40 countries and had 2012 net sales of $3.2 billion. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. Roger Frankel serves as legal representative for victims of asbestos exposure who may file claims against W.R. Grace. Mr. Frankel, a partner at Orrick Herrington & Sutcliffe LLP, replaces David Austern, who was appointed to that role in 2004. Mr. Frankel has served as legal counsel for Mr. Austern who passed away in May 2013. The FCR is represented by Orrick Herrington & Sutcliffe LLP as counsel; Phillips Goldman & Spence, P.A., as Delaware co-counsel; and Lincoln Partners Advisors LLC as financial adviser. Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). W.R. GRACE: To End Silica SOL FCC Catalyst Production ----------------------------------------------------- W.R. Grace & Co. said that during the third quarter of this year, it will close its 35,000 metric ton per year silica sol based fluidized catalytic cracking (FCC) catalyst manufacturing operation in Lake Charles, LA. Grace introduced silica sol catalysts in the late 1970s. Since then, its industry-leading research, technical service, and flexible manufacturing systems have introduced a number of new and improved catalyst technology platforms customized to support the varying needs of its refining industry customers around the globe. "We believe the silica sol catalyst technology has reached the end of its life cycle," said Shawn Abrams, President, Grace Catalysts Technologies. "Other technologies in our portfolio are meeting the demands of modern day refiners far more effectively." Grace is the world's largest producer of FCC catalysts and additives and has developed a broad portfolio of products manufactured at locations in the US, Canada, Germany, and China. Nearly 40 percent of transportation fuels worldwide are processed with Grace catalysts. In 2012, Grace announced plans to build a state-of-the-art FCC catalyst plant in Abu Dhabi, to meet growing demand in the Middle East. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. Grace employs approximately 6,500 people in over 40 countries and had 2012 net sales of $3.2 billion. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. Roger Frankel serves as legal representative for victims of asbestos exposure who may file claims against W.R. Grace. Mr. Frankel, a partner at Orrick Herrington & Sutcliffe LLP, replaces David Austern, who was appointed to that role in 2004. Mr. Frankel has served as legal counsel for Mr. Austern who passed away in May 2013. The FCR is represented by Orrick Herrington & Sutcliffe LLP as counsel; Phillips Goldman & Spence, P.A., as Delaware co-counsel; and Lincoln Partners Advisors LLC as financial adviser. Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). W.R. GRACE: Files Post-Confirmation Report for 2nd Quarter ---------------------------------------------------------- W.R. Grace & Co. and its debtor affiliates filed a post- confirmation quarterly summary report for the quarter ended June 30, 2013. Grace reported that at the end of the quarter, it had $1,137,692,995 in cash and disbursements totaling $1,747,199,599, composed of $413,361 for administrative claims of bankruptcy professionals and $1,746,786,238 for disbursements made in the ordinary course. A full-text copy of the Post-Confirmation Report for the quarter ended June 30, 2013, is available for free at: http://bankrupt.com/misc/gracejune2013pcr.pdf About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. Grace employs approximately 6,500 people in over 40 countries and had 2012 net sales of $3.2 billion. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. Roger Frankel serves as legal representative for victims of asbestos exposure who may file claims against W.R. Grace. Mr. Frankel, a partner at Orrick Herrington & Sutcliffe LLP, replaces David Austern, who was appointed to that role in 2004. Mr. Frankel has served as legal counsel for Mr. Austern who passed away in May 2013. The FCR is represented by Orrick Herrington & Sutcliffe LLP as counsel; Phillips Goldman & Spence, P.A., as Delaware co-counsel; and Lincoln Partners Advisors LLC as financial adviser. Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). WENDY'S INT'L: Moody's Rates $225MM Loan 'B1' & Hikes CFR to 'B1' ----------------------------------------------------------------- Moody's Investors Service upgraded Wendy's International, Inc.'s Corporate Family Rating to B1 from B2 and Probability of Default Rating to B1-PD from B2-PD. In addition, Moody's assigned a B1 rating to Wendy's proposed $225 million term loan add-on and affirmed the B1 rating on its secured bank facility. Moody's also upgraded Wendy's $100 million senior unsecured note rating to B3 from Caa1. The ratings outlook is stable. Ratings Rationale: Proceeds from the proposed $225 million term loan add-on will be used to refinance Wendy's $225 million 6.2% unsecured notes due June 15, 2014. Upon successful completion of the refinancing the rating on the $225 million 6.2% unsecured notes will be withdrawn. There will be no additional material changes to the credit facility such as covenants, maturities or various basket levels. "The upgrade of Wendy's CFR to B1 from B2 reflects the company's steady operating performance and earnings that have resulted in credit metrics and liquidity that warrant the higher ratings" stated Bill Fahy, Moody's Senior Credit Officer. "The upgrade also reflects Moody's expectation that Wendy's successfully executes the proposed transaction as planned and refinances the $225 million 6.2% unsecured notes in the very near term" stated Fahy. The B1 Corporate Family Rating reflects Wendy's strong brand awareness, relatively strong credit metrics, meaningful scale and good liquidity. The ratings also consider Wendy's significant capital expenditure requirements to reimage restaurants as well as Moody's view that soft consumer spending and high level of promotions and discounting by competitors will continue to pressure earnings. Ratings raised are: Corporate Family Rating to B1 from B2 Probability of Default Rating to B1-PD from B2-PD $100 million 7% senior unsecured notes due 12/15/2025 raised to B3 (LGD6, 96%) from Caa1 (LGD 6, 92%) Rating assigned are: $225 million senior secured term loan add-on, rated B1 (LGD 3, 48%) Ratings affirmed and LGD point estimates adjusted are: $200 million revolving credit facility, due 5/15/18 at B1 (LGD 3, 48% from LGD 3, 39%) $350 million senior secured term loan A, due 5/15/18 at B1 (LGD 3, 48% from LGD 3, 39%) $770 million senior secured term loan B, due 5/15/19 at B1 (LGD 3, 48% from LGD 3, 39%) Rating affirmed and to be withdrawn are; $225 million 6.2% senior unsecured notes due 6/15/2014 at Caa1 (LGD 6, 92%) The stable outlook incorporates Moody's view that Wendy's debt protection measures should gradually improve over the next twelve to eighteen months despite persistently soft consumer spending as it continues to introduce new products, focuses on reducing costs and begins to realize the benefits from a more asset-lite business model and re-imaged restaurants. The outlook also reflects Moody's expectation that Wendy's financial policy, particularly towards dividends and share purchases remains appropriate for the B1 CFR and results in the company maintaining good liquidity. A ratings upgrade would require a sustained improvement in operating performance, driven in part by positive traffic and average check that results in stronger earnings, operating margins and debt protection metrics. Specifically, debt to EBITDA below 4.25 times and EBITA coverage of interest approaching 3.0 times. A higher rating would also require maintaining good liquidity. Factors that could result in a downgrade would include an inability to successfully execute the proposed transaction as planned and re-finance the $225 million unsecured notes in the near term. Negative ratings pressure could also result from a decline in operating performance that results in a sustained deterioration in earnings and a weakening of debt protection metrics. Specifically, a downgrade could occur if debt to EBITDA were sustained above 5.0 times or EBITA coverage of interest fell below 2.0 times on a sustained basis. A more aggressive financial policy towards dividends and share repurchases or deterioration in liquidity for any reason could also result in negative ratings pressure. Wendy's International, Inc., a wholly owned subsidiary of The Wendy's Company, owns, operates and franchises approximately 6,542 quick-service hamburger restaurants. Annual revenues are approximately $2.5 billion. The principal methodology used in this rating was the Global Restaurant Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. WILLIAMS LOVE: Oregon Court Affirms Ruling on Brann Dispute ----------------------------------------------------------- Chief District Judge Ann Aiken in Oregon affirmed a bankruptcy court decision in the Chapter 11 case of Williams, Love, O'Leary & Powers, P.C. overruling Heather Brann's objection to the postpetition interest rate applicable to her allowed contract claims. Williams, Love, O'Leary & Powers, P.C. is a law firm specializing in medical and pharmaceutical products liability and mass tort litigation. WLOP represented over one hundred clients in products liability cases involving medical devices known as pain pumps. Ms. Brann is an attorney licensed to practice law in Oregon who entered into a contractual agreement with WLOP to provide legal services in pain pump cases. Ms. Brann's agreement provided that WLOP would pay Ms. Brann hourly rates for her services, along with enhanced hourly rates if WLOP obtained favorable settlements or judgments in a certain number of cases. On December 31, 2010, WLOP terminated Ms. Brann's agreement pursuant to its terms. At that time, WLOP had paid Ms. Brann the full amount of her hourly fees; however, WLOP maintained that it did not have sufficient funds to pay Ms. Brann her enhanced fees. In June 2011, Ms. Brann filed suit against WLOP to recover these fees. In August 2011, WLOP filed a voluntary bankruptcy proceeding under Chapter 11, and Ms. Brann submitted claims for her enhanced hourly fees. She asserted that they were secured claims; in a related adversary proceeding, the Bankruptcy Court ruled that they were unsecured, and this court affirmed that ruling. Subsequently, the Bankruptcy Court allowed Ms. Brann's claims in an amount determined by the court, including pre-petition interest at the rate specified in her agreement with WLOP (the contractual rate). On August 8, 2012, WLOP submitted its Third Amended Plan of Reorganization, which provided for payment of unsecured creditors in full, with post-petition interest at the federal judgment rate. Ms. Brann objected and claimed that post-petition interest on her claims should be paid according to the contractual rate. The Bankruptcy Court overruled Ms. Brann's objection and confirmed WLOP's plan. Ms. Brann then filed an appeal. The appellate case is HEATHER A. BRANN, Appellant, v. WILLIAMS, LOVE, O'LEARY & POWERS, P.C., and STERLING SAVINGS BANK, Appellees, Civ. No. 3:12-cv-02049-AA (D. Ore.). A copy of the District Court's Sept. 3, 2013 Opinion and Order is available at http://is.gd/x1O7o5from Leagle.com. About Williams Love O'Leary & Powers Williams, Love, O'Leary & Powers, P.C. is a law firm specializing in the areas of medical and pharmaceutical products liability and mass tort litigation. Based in Portland, Oregon, Williams Love, fdba Williams, Dailey & O'Leary, P.C., dba WLOP and WDO.com, filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 11-37021) on Aug. 14, 2011. Judge Elizabeth L. Perris presides over the case. The Debtor disclosed $8,602,955 in assets and $6,734,830 in liabilities as of the Chapter 11 filing. The petition was signed by Michael L. Williams, its president. Albert N. Kennedy, Esq., and Michael W. Fletcher, Esq., at Tonkon Torp LLP, in Portland, Oregon, represent the Debtor as counsel. In September 2012, Judge Perris said she would confirm the third amended Chapter 11 plan of Williams Love. Sterling Savings Bank voted in favor of the Debtor's plan. According to a statement posted at The Lund Report's thelundreport.org, attorney Mike Williams said March 14, 2013, his Portland law firm has successfully emerged from its Chapter 11 bankruptcy. The firm's plan of reorganization was confirmed and became effective late last year. The case was expected to be formally closed in April. Williams reported all of the law firm's creditors have been paid in full with interest, and the firm is back on solid financial ground. WVSV HOLDINGS: Sept. 30 Hearing on Adequacy of Plan Outline ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona will convene a hearing on Sept. 30, 2013, at 1:45 p.m., to consider adequacy of information in the Disclosure Statement explaining the proposed Chapter 11 Plan as proposed by WVSV Holdings, L.L.C., and 10K, LLC, a secured creditor. Objections, if any, are due Sept. 23. As reported in the Troubled Company Reporter on Sept. 2, 2013, the proponents revised the plan of reorganization and accompanying disclosure statements. Under the Debtor-proposed Plan, funding to pay creditors will be from cash on hand; proceeds from the sale of any of the Debtor's property; DIP Loan proceeds; and infusions of equity, if necessary. The Debtor believes that it will have sufficient cash on hand to meet all the Plan's obligations. The Debtor's best projections are this figure will be no less than $300,000 (for attorneys' fees), and perhaps as much as $800,000 -- if the January 15, 2013 payment is factored, as well as additional expenses. 10K's Plan proposes two options: Option A -- The Plan will be funded by the Bankruptcy Estate's sale of 855 acres of Tract A to 10K for the purchase price of $8,551,000; and Option B -- 10K's Class 2 judgment claim, Class 4 secured claim, Class 6 litigation claim, and Class 7 administrative claim against the Bankruptcy Estate will be deemed satisfied by the transfer to 10K of all of the Bankruptcy Estate's right, title, and interests, both legal and equitable, in and to all real property, personal property, and contract rights. The Debtor-proposed Plan will impair the secured claim of KPHV, LLC, which will release its lien for payment at the rate of $200 per acre sold. All unpaid principal and interest at the rate of 12% per annum will be due and payable on or before March 20, 2015. The 10K Amended Creditor's Plan will not impair KPHV's secured claim and will pay the allowed amount of the claim in full from cash on hand of the bankruptcy estate. 10K LLC's judgment claim is unimpaired and will be paid in full under the Debtor-sponsored Plan although the Debtor disputes the asserted amount of the claim, which is $284,179. Under 10K's Plan, its judgment claim will be deemed satisfied by a credit against the purchase price to be paid by 10K as part of the sale. 10K, LLC's secured claim is also unimpaired and will be paid in full under the Debtor-sponsored Plan. 10K also asserts an unsecured claim in the amount of $417,000,000. The Debtor denies liability on this claim. General unsecured claims under the Debtor-sponsored Plan are impaired and will receive 100% of its allowed general unsecured claim. Payments to general unsecured claims will be made in four equal semi-annual payments, the first of which will commence 60 days after the Effective Date. Interest will accrue on these claims at the federal judgment interest rate. A full-text copy of the Disclosure Statement explaining the Debtor's Amended Plan, dated Aug. 27, 2013, is available for free at http://bankrupt.com/misc/WVSVdebtords0827.pdf A full-text copy of the Disclosure Statement, explaining the 10K Creditor's Amended Plan, dated Aug. 27, 2013, is available for free at http://bankrupt.com/misc/WVSV10kds0827.pdf The Debtor is represented by the Law Offices of MICHAEL W. CARMEL, LTD., in Phoenix, Arizona. 10K is represented by Michael McGrath, Esq., and David J. Hindman, Esq., at MESCH, CLARK & ROTHSCHILD, P.C., in Tucson, Arizona; and Daniel Dowd, Esq., and Daniel Durchslag, Esq., at COHEN KENNEDY DOWD & QUIGLEY, P.C., in Phoenix, Arizona. About WVSV Holdings W.V.S.V. Holdings LLC, the owner of about 13,000 acres of vacant land in Buckeye, Arizona, filed a petition for Chapter 11 protection (Bankr. D. Ariz. Case No. 12-10598) on May 14, 2012, in Phoenix. The Debtor claims that the three tracts of land planned for "future development" are worth $120 million and secure $57.3 million in debt. The Debtor scheduled $120.04 million in assets and $57.35 million in liabilities. West Valley Ventures, LLC, owns 75% of the Debtor, and Breycliffe, LLC, owns the remaining 25%. Judge Redfield T. Baum, Sr., presides over the case. Michael W. Carmel, Esq., serves as the Debtor's counsel. The petition was signed by Lee Allen Johnson, manager of West Valley Ventures, manager. The U.S. Trustee has not appointed an official committee of unsecured creditors in the Debtor's case because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint the committee should interest develop among the creditors. Under the Plan filed in the Debtor's case, each holder of general unsecured claims will receive 100% of its allowed general unsecured claim. Payments will be made in four equal semi-annual payments. * Executive Benefits Case Addresses Stern Rights Waiver ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors seldom relish being sued in bankruptcy court, and if the U.S. Supreme Court agrees with Executive Benefits Insurance Agency, bankruptcy judges will be stripped of the power to make even preliminary rulings in some disputes arising under state law. The Supreme Court decided this year to hear an appeal on the question of whether someone in bankruptcy court can waive the right to have certain state-law claims decided on a final basis by a life-tenured federal district judge. The report recounts that in June 2011, the high court said in Stern v. Marshall that bankruptcy judges, who aren't appointed for life, can make final decisions only in disputes arising under federal law. If the dispute involves state law and the creditor didn't file a claim in bankruptcy court, the bankruptcy judge at most may be able to write a recommended decision. When the matter goes before the district court, the district judge owes no deference to the bankruptcy judge's findings of fact or conclusions of law. The Executive Benefits case will directly address whether the right for a final decision from a district judge can be waived, either explicitly or inadvertently. The federal appeals court in San Francisco ruled in December that it can. An appeals court in Cincinnati ruled in October that so-called Stern rights cannot be waived, creating a circuit split to be resolved by the Supreme Court. Executive Benefits filed its brief this week, saying waiver is antithetical to the separation-of-powers doctrine in the U.S. Constitution. A bankruptcy trustee, who takes the opposite position, will file a brief in November. The case may not be argued until early next year. In the Executive Benefits case, the bankruptcy judge entered a final judgment for about $400,000 against the insurance company on a state-law fraudulent-transfer claim. That ruling was upheld on appeal in district court. The U.S. Court of Appeals in San Francisco affirmed, ruling the insurance company waived the right to a final judgment by a life-tenured federal district judge. Executive Benefits said the right to a final ruling in district court is engrafted in the Constitution and therefore can't be waived explicitly or inadvertently. According to the insurance company, it's akin to subject-matter jurisdiction, which parties can't bestow on courts by consent. On certain non-core issues, bankruptcy judges can make recommended rulings. Executive Benefits takes the position that on a core matter such as fraudulent transfer the bankruptcy judge can't even make recommendations because there's no basis for it in the statute. The insurance company cited the federal Magistrates Act, which permits parties to consent to a final judgment by a nonlife- tenured magistrate judge. Under those circumstances, the statute explicitly allows for consent to the exercise of a district court's power. Even such explicit consent isn't allowed in bankruptcy cases because the statute has no consent mechanism. The insurance company said the Supreme Court has never "explicitly" ruled on the constitutionality of the Magistrates Act. If the Supreme Court decides that Stern rights can be waived, life will go on in bankruptcy court pretty much as before. If waiver is impossible, the implications and complications will be felt for years to come. The high court case is Executive Benefits Insurance Agency v. Arkison, 12-01200, U.S. Supreme Court. The circuit case is Executive Benefits Insurance Agency v. Arkison (In re Bellingham Insurance Agency Inc.), 11-35162, U.S. Court of Appeals for the Ninth Circuit (San Francisco). * Reference Not Withdrawn on Post-Petition Contract --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to a Sept. 4 decision by a district court in Richmond, Virginia, a lawsuit over a postpetition contract with a Chapter 11 debtor doesn't lay the foundation for removing the suit from bankruptcy court. The case involved a company in Chapter 11 that hired a debt- collection agency to collect receivables. The liquidating trustee sued the debt collector in bankruptcy court for damages resulting from the use of prohibited collection techniques. The debt collector filed a motion asking U.S. District Judge James R. Spencer to remove the suit from bankruptcy court. Judge Spencer refused. According to the report, Judge Spencer first confronted the question of whether the suit was core or noncore. He recited how three circuit courts answered the question, all in cases decided before the U.S. Supreme Court's Stern v. Marshall opinion two years ago. In view of Stern, Judge Spencer was more persuaded by the appeals court in New Orleans, which ruled that a breach of contract lawsuit is non-core even though based on a post-petition contract. He declined to follow the courts of appeal in Boston and New York, which saw similar suits as core. There was jurisdiction in bankruptcy court because the suit was related to the bankruptcy. Judge Spencer ruled there was no right to a jury trial. Even though the suit was non-core, Judge Spencer said an objection to a final ruling by the bankruptcy judge could be waived. By waiting nine months to file a removal motion and by having previously filed a motion to dismiss in bankruptcy court, Judge Spender found waiver. Judge Spencer said that signing a post- petition contract by itself might be waiver, citing other courts finding waiver on that basis alone. The report notes that the opinion doesn't deal with the question of whether socalled Stern objections can be waived. The case is Corliss Moore & Associates LLC v. Credit Control Services Inc., 13-cv-00115, U.S. District Court, Eastern District of Virginia (Richmond). * Turnover and Fraudulent Transfer Not Inconsistent --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that, according to the U.S. Appeals Court in Philadelphia, a bankruptcy trustee is at liberty to file a turnover action and a separate fraudulent transfer lawsuit, and obtain judgments in both based on the same facts. The case is Carroll v. Prosser (In re Prosser), 12-02864, U.S. Court of Appeals for the Third Circuit (Philadelphia). * Bankrupt's Domicile Determines Residence on Diversity -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. District Judge Wilma A. Lewis in the U.S. Virgin Islands answered the question -- when a trustee sues in federal district court based on diversity of jurisdiction, is it the residence of the trustee or the domicile of the bankrupt that determines if there is diversity? According to the report, Judge Lewis held that the bankrupt's residence controls. Judge Lewis cited a 1906 decision from the U.S. Supreme Court in Bush v. Elliott for ruling that the bankrupt's residence controls in determining diversity. She acknowledged that some courts no longer follow Bush because it was decided under the prior Bankruptcy Act that was repealed by the Bankruptcy Code in 1978. Judge Lewis decided that Bush remains good law. The case is FirstBank Puerto Rico v. AMJ Inc., 11-00063, U.S. District Court of the Virgin Islands (St. Croix). * Filling Out Chapter 13 Petition Isn't Ghost Writing ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to the U.S. Court of Appeals in Atlanta, preparing and filing a Chapter 13 petition by filling in the printed form with answers supplied by the client doesn't amount to "ghost writing." Circuit Judge Charles R. Wilson said in his Aug. 29 opinion that filling in a petition is unlike ghost writing a brief, which can be an ethical violation. He said that filling in the blanks doesn't amount to drafting a petition. The case is Torrens v. Hood (In re Hood), 12-15925, U.S. Court of Appeals for the Eleventh Circuit (Atlanta). * S&P Capital Publishes 10 Warning Signs of Municipal Bankruptcy ---------------------------------------------------------------- In the wake of Detroit's bankruptcy, S&P Capital IQ has published a list of ten warning signs that could indicate if a city or county is at risk of defaulting on its general obligation bonds. "Detroit experienced the vast majority of these warning signs," said Bob Durante, leader of the Americas Solutions and Services Team for S&P Capital IQ Risk Solutions. "If a city or county experiences even half of these, we would consider them an at risk candidate, and deeper and more frequent surveillance would be conducted." Top 10 Warning Signals To Determine Bankruptcy Candidates Management Credit Risk Factors:1. Late budget adoption, or late receipt of audited financial statements2. High degree of senior administrative turnover3. Government showing lack of willingness to support the debt Economic Credit Risk Factors:4. Unemployment rate over 10% 5. Income level that is less than 75% of U.S. average6. Tax base market value that is less than $50,000 per capita Debt Credit Risk Factors:7. Total debt service that represents more than 25% of expenditures8. Unaddressed exposures to large unfunded pension or OPEB obligations Financial Credit Risk Factors:9. Limited capacity or willingness to cut expenditures 10. Overall general fund balance of less than 1% of expenditures, or general fund deficit From the management credit risk perspective, Mr. Durante said that the city government of Detroit suffered from an inability and unwillingness to pay their debt. He added that from the economic perspective, Detroit had an average unemployment rate 24 months before filing for bankruptcy of 18.7%, which was higher than the rates for other bankrupt cities such as San Bernardino and Vallejo, CA, Harrisburg, PA, and Bridgeport, CT. Mr. Durante said that generally speaking if the municipality or county's debt service is more than 25% of total governmental funds expenditures, the debt burden would be considered a weak credit risk factor. He added that off-balance-sheet items such as pension funds, other post-employment benefit obligations (OPEB), and contingent liabilities should also be examined closely. Detroit joined Prichard, AL, Vallejo, CA, Central Falls, RI and Harrisburg, PA in filing for bankruptcy due to an inability to pay either their pension fund obligations or their exposure to significant pension liabilities. "Detroit's economic strength has been in serious decline for the past decade," said Mr. Durante. "The city's depleted economic base, massive debt burden, and below average financial management were the key drivers of its very weak credit profile. These ten warning signs, which are part of our methodology, are designed to help find the next Detroit before it files for bankruptcy." To view a video of Mr. Durante discussing these warning signs, click on the following link. http://www.youtube.com/watch?v=4s_oNM4-r9s An article by Mr. Durante, "How Detroit Went Bankrupt, And The 10 Key Warning Signals To Determine Who's Next," will appear in the November issue of The RMA Journal. About S&P Capital IQ S&P Capital IQ -- http://www.spcapitaliq.com-- is a business line of McGraw Hill Financial. It is a provider of multi-asset class and real time data, research and analytics to institutional investors, investment and commercial banks, investment advisors and wealth managers, corporations and universities around the world. Evaluated pricing is prepared by Standard & Poor's Securities Evaluations, Inc., a part of S&P Capital IQ and a registered investment adviser with the U.S. Securities and Exchange Commission. S&P Capital IQ provides a broad suite of capabilities designed to help track performance, generate alpha, and identify new trading and investment ideas, and perform risk analysis and mitigation strategies. Through leading desktop solutions such as the S&P Capital IQ, Global Credit Portal, and MarketScope Advisor desktops; enterprise solutions such as S&P Capital IQ Valuations; and research offerings, including Leveraged Commentary & Data, Global Markets Intelligence, and company and funds research, S&P Capital IQ sharpens financial intelligence into the wisdom today's investors need. * Yelp Inc. Sues McMillan Law Group for Fake Positive Reviews ------------------------------------------------------------- Joyce E. Cutler, writing for Bloomberg Law, reported that Yelp, Inc. sued a San Diego bankruptcy law boutique Aug. 20 alleging that the firm used the online consumer-review website to post fake glowing reviews and testimonials about itself in violation of California consumer protection laws (Yelp, Inc. v. McMillan Law Group Inc., Cal. Super. Ct., S.F., No. CGC13-533654, filed 8/20/13). According to the report, the complaint, filed in the California Superior Court for San Francisco County, alleges that McMillan Law Group sent Yelp positive reviews of the firm purportedly written by bankruptcy clients but actually originated by employees of the firm. Yelp alleges that this deceived consumers and violates the state's unfair business practices act, California Business and Professions Code Section 17200, as well as Section 17500, the state false advertising law. YELP VS. FIRM "Online reviews are a great resource for consumers to learn about local businesses and professionals. Unfortunately, however, some businesses try to game the system by stacking the deck in their favor with planted or fake reviews. The McMillan Law Group?run by Julian McMillan?is one such business," the complaint asserts, the report related. San Francisco-based Yelp prohibits deceptive and bogus reviews through its terms of service, and the company alleges that it has developed sophisticated technologies to detect and remove such content, the report said. Yelp said it aggressively investigates businesses that post or purchase fake reviews, and works diligently to warn consumers about them. "The McMillan Law Group's efforts to mislead consumers are particularly brazen and disappointing given they have targeted some of the most vulnerable consumers of all?individuals who may be facing bankruptcy and who are looking for potential legal representation," the complaint says, the report further related. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Cuisine Investment Group LLC Bankr. D. Ariz. Case No. 13-15290 Chapter 11 Petition filed September 3, 2013 Filed as Pro Se In re Noi Phanucharas Bankr. C.D. Cal. Case No. 13-17441 Chapter 11 Petition filed September 3, 2013 In re Tylie, Inc. dba Tylie Malibu Bankr. C.D. Cal. Case No. 13-32131 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/cacb13-32131.pdf represented by: Shane M. Popp, Esq. THE LAW OFFICE OF SHANE M. POPP E-mail: smp@smplogicsystems.com In re Garrett Riller, Sr. Bankr. N.D. Cal. Case No. 13-45007 Chapter 11 Petition filed September 3, 2013 In re Beatriz Martinez Bankr. N.D. Cal. Case No. 13-54716 Chapter 11 Petition filed September 3, 2013 In re Green Cove Springs Industrial Properties, LLC Bankr. M.D. Fla. Case No. 13-05357 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/flmb13-05357p.pdf See http://bankrupt.com/misc/flmb13-05357c.pdf represented by: Jason A. Burgess, Esq. THE LAW OFFICES OF JASON A. BURGESS, LLC E-mail: jason@jasonaburgess.com In re Jeffs Excavating, Inc. Bankr. M.D. Fla. Case No. 13-05358 Chapter 11 Petition filed September 3, 2013 In re Assurance Trust Services Inc. Bankr. M.D. Fla. Case No. 13-10964 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/flmb13-10964.pdf represented by: Brett Norvig, Esq. THE LAW OFFICE OF BRETT M. NORVIG, P.A. E-mail: bnorvig@gmail.com In re Paul Houillon Bankr. N.D. Ill. Case No. 13-35123 Chapter 11 Petition filed September 3, 2013 In re M&D Holding Co. Bankr. M.D. La. Case No. 13-11219 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/lamb13-11219.pdf represented by: John Marston Fowler, Esq. FOWLER LAW FIRM E-mail: marston@jmfowlerlaw.com In re Danny Newman Bankr. W.D. La. Case No. 13-12245 Chapter 11 Petition filed September 3, 2013 In re Hamlin-Ranes Investment, Inc. dba Country Food & Beverage Bankr. M.D. Mich. Case No. 13-07003 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/miwb13-07003p.pdf See http://bankrupt.com/misc/miwb13-07003c.pdf represented by: Kerry D. Hettinger, Esq. KERRY HETTINGER, PLC E-mail: khett57@hotmail.com In re The One Productions LLC Bankr. D. Nev. Case No. 13-51752 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/nvb13-51752.pdf represented by: Tory M. Pankopf, Esq. TORY M. PANKOPF LTD. E-mail: tory@pankopfuslaw.com In re Mays & Jeune, Inc. Bankr. N.D.N.Y. Case No. 13-12195 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/nynb13-12195.pdf represented by: Francis J. Brennan, Esq. NOLAN & HELLER, LLP E-mail: fbrennan@nolanandheller.com In re North Pittsburgh Powerhouse, Inc. dba Women Only Workouts Bankr. W.D. Pa. Case No. 13-23747 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/pawb13-23747.pdf represented by: Kenneth Steidl, Esq. STEIDL & STEINBERG E-mail: julie.steidl@steidl-steinberg.com In re Todd Hertzberg Bankr. W.D. Pa. Case No. 13-23753 Chapter 11 Petition filed September 3, 2013 In re Jack Homitz Bankr. W.D. Pa. Case No. 13-23757 Chapter 11 Petition filed September 3, 2013 In re Raquel Rodriguez Duran Bankr. D.P.R. Case No. 13-07304 Chapter 11 Petition filed September 3, 2013 In re Stephen Meade Bankr. M.D. Tenn. Case No. 13-7737 Chapter 11 Petition filed September 3, 2013 In re Hitech Salvage & Demolition, LLC Bankr. E.D. Tex. Case No. 13-10473 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/txeb13-10473.pdf represented by: Frank J. Maida, Esq. MAIDA LAW FIRM E-mail: maidalawfirm@gt.rr.com In re JMH Investments, Inc. Bankr. N.D. Tex. Case No. 13-44084 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/txnb13-44084.pdf represented by: Howard Marc Spector, Esq. SPECTOR & JOHNSON, PLLC E-mail: hspector@spectorjohnson.com In re Talavera Apartments, Ltd. Bankr. S.D. Tex. Case No. 13-35515 Chapter 11 Petition filed September 3, 2013 See http://bankrupt.com/misc/txsb13-35515.pdf represented by: Barbara Mincey Rogers, Esq. ROGERS & ANDERSON, PLLC E-mail: brogers@ralaw.net In re Rodolfo Valtierra Bankr. W.D. Tex. Case No. 13-31460 Chapter 11 Petition filed September 3, 2013 In re LaVesta Locklin Bankr. C.D. Cal. Case No. 13-24951 Chapter 11 Petition filed September 4, 2013 In re Brian Hurley Bankr. N.D. Cal. Case No. 13-54739 Chapter 11 Petition filed September 4, 2013 In re 48-54 Hartford Avenue LLC Bankr. D. Conn. Case No. 13-51396 Chapter 11 Petition filed September 4, 2013 See http://bankrupt.com/misc/ctb13-51396.pdf Filed pro se In re 56 Hartford Avenue, LLC Bankr. D. Conn. Case No. 13-51394 Chapter 11 Petition filed September 4, 2013 See http://bankrupt.com/misc/ctb13-51394.pdf Filed pro se In re 58-62 Hartford Avenue LLC Bankr. D. Conn. Case No. 13-51397 Chapter 11 Petition filed September 4, 2013 See http://bankrupt.com/misc/ctb13-51397.pdf Filed pro se In re Yagoda Transport, Inc. Bankr. N.D. Ill. Case No. 13-35247 Chapter 11 Petition filed September 4, 2013 See http://bankrupt.com/misc/ilnb13-35247.pdf represented by: Patrick G. Somers, Esq. Somers Law Group, P.C. E-mail: psomers@somerslaw.net In re Reliable Human Services, Inc. Bankr. D. Minn. Case No. 13-44330 Chapter 11 Petition filed September 4, 2013 See http://bankrupt.com/misc/mnb13-44330.pdf represented by: Steven B Nosek, Esq. E-mail: snosek@noseklawfirm.com In re William Hensarling Bankr. S.D. Miss. Case No. 13-51725 Chapter 11 Petition filed September 4, 2013 In re KEJ, LLC Bankr. D. Nev. Case No. 13-17603 Chapter 11 Petition filed September 4, 2013 See http://bankrupt.com/misc/nvb13-17603p.pdf See http://bankrupt.com/misc/nvb13-17603c.pdf represented by: Amanda M. Perach, Esq. McDonald Carano Wilson E-mail: aperach@mcdonaldcarano.com In re George Randolph Bankr. D. S.C. Case No. 13-5204 Chapter 11 Petition filed September 4, 2013 In re Mahbobeh Shariati Bankr. E.D. Va. Case No. 13-14059 Chapter 11 Petition filed September 4, 2013 In re Robert Wells Bankr. E.D. Ark. Case No. 13-14951 Chapter 11 Petition filed September 5, 2013 In re Daniel Brock Bankr. E.D. Calif. Case No. 13-32258 Chapter 11 Petition filed September 5, 2013 In re Michael Mclychok Bankr. D. Hawaii Case No. 13-01492 Chapter 11 Petition filed September 5, 2013 In re Michael Brown Bankr. E.D. Ky. Case No. 13-52181 Chapter 11 Petition filed September 5, 2013 In re Calvin Williams Bankr. E.D. La. Case No. 13-51047 Chapter 11 Petition filed September 5, 2013 In re Stephen Lunsford Bankr. S.D. Miss. Case No. 13-51732 Chapter 11 Petition filed September 5, 2013 In re Transporte Supremo, LLC aka Transportes Supremo, LLC aka Transporte Supremo, LLC Bankr. D. Ariz. Case No. 13-15527 Chapter 11 Petition filed September 6, 2013 See http://bankrupt.com/misc/azb13-15527.pdf represented by: Jonathan Frutkin, Esq. Carolyn R. Tatkin, Esq. The Frutkin Law Firm, PLC E-mail: jfrutkin@frutkinlaw.com tatkin@frutkinlaw.com In re Alba Rodriguez Bankr. C.D. Cal. Case No. 13-32340 Chapter 11 Petition filed September 6, 2013 In re Juan Meave Bankr. C.D. Cal. Case No. 13-32341 Chapter 11 Petition filed September 6, 2013 In re Victor Parshin Bankr. E.D. Calif. Case No. 13-31754 Chapter 11 Petition filed September 6, 2013 In re Patrick Partners, LLC Bankr. N.D. Cal. Case No. 13-32006 Chapter 11 Petition filed September 6, 2013 See http://bankrupt.com/misc/canb13-32006.pdf Filed pro se In re Creative Payment Processing, Inc. Bankr. D. Del. Case No. 13-12298 Chapter 11 Petition filed September 6, 2013 See http://bankrupt.com/misc/deb13-12298.pdf represented by: Michael G. Busenkell, Esq. Gellert Scali Busenkell & Brown, LLC E-mail: mbusenkell@gsbblaw.com In re Kyung Lee Bankr. M.D. Fla. Case No. 13-11926 Chapter 11 Petition filed September 6, 2013 In re Culinary Expressions, LLC dba Mozaik Bankr. N.D. Fla. Case No. 13-40557 Chapter 11 Petition filed September 6, 2013 See http://bankrupt.com/misc/flnb13-40557.pdf represented by: Jerry L. Rumph, Esq. Hayward & Grant, P.A. E-mail: jerryrumph@haywardgrant.com In re Jerry Morgan Bankr. D. Nebr. Case No. 13-81896 Chapter 11 Petition filed September 6, 2013 In re Jamiju, LLC Bankr. D. N.J. Case No. 13-29618 Chapter 11 Petition filed September 6, 2013 See http://bankrupt.com/misc/njb13-29618.pdf represented by: John J. Scura, III, Esq. Scura, Mealey, Wigfield & Heyer E-mail: jscura@scuramealey.com In re Clyde Case Bankr. E.D. N.C. Case No. 13-5638 Chapter 11 Petition filed September 6, 2013 In re Jason Pate Bankr. E.D. N.C. Case No. 13-5654 Chapter 11 Petition filed September 6, 2013 In re Kluttz Piano Co. Bankr. M.D. N.C. Case No. 13-51108 Chapter 11 Petition filed September 6, 2013 See http://bankrupt.com/misc/ncmb13-51108.pdf represented by: Brian Hayes, Esq. Ferguson, Scarbrough, Hayes, Hawkins & DeMay, PA E-mail: bphafd@fspa.net In re Dr. Gary E Burkhart, DMD LLC Bankr. M.D. Pa. Case No. 13-04584 Chapter 11 Petition filed September 6, 2013 See http://bankrupt.com/misc/pamb13-4584.pdf represented by: Philip W. Stock, Esq. E-mail: pwstock@ptd.net In re G. E. Burkhart, LLC Bankr. M.D. Pa. Case No. 13-04583 Chapter 11 Petition filed September 6, 2013 See http://bankrupt.com/misc/pamb13-4583.pdf represented by: Philip W. Stock, Esq. E-mail: pwstock@ptd.net In re John Ridella Bankr. W.D. Pa. Case No. 13-70649 Chapter 11 Petition filed September 6, 2013 In re Adam Brock Bankr. M.D. Tenn. Case No. 13-7823 Chapter 11 Petition filed September 6, 2013 In re Superior Enterprises, Inc. Bankr. W.D. Tenn. Case No. 13-12373 Chapter 11 Petition filed September 6, 2013 See http://bankrupt.com/misc/tnwb13-12373.pdf represented by: Robert B. Vandiver, Jr., Esq. E-mail: bankruptcy@robvandiver.com In re Texas Palm Trees & Plants, Inc. Bankr. N.D. Tex. Case No. 13-34646 Chapter 11 Petition filed September 6, 2013 See http://bankrupt.com/misc/txnb13-34646.pdf represented by: Joyce W. Lindauer, Esq. E-mail: courts@joycelindauer.com In re Thomas Goodwin Bankr. S.D. Tex. Case No. 13-80379 Chapter 11 Petition filed September 6, 2013 In re 739 N. Mariposa, LLC Bankr. C.D. Cal. Case No. 13-32424 Chapter 11 Petition filed September 7, 2013 See http://bankrupt.com/misc/cacb13-32424.pdf represented by: Leonard J. Cravens, Esq. E-mail: cravenslaw@dslextreme.com ********* 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 ***