/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/131220.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, December 20, 2013, Vol. 17, No. 352 Headlines 250 AZ: Says Reorganization Plan Is Confirmable 261 EAST: Says Hermes Capital Not Entitled to Vote 261 EAST: Settlement Agreement With MB Financial Approved 22ND CENTURY: Warrant Exchange Cancels 93% of Warrant Liability 56 WALKER LLC: Recovery Depends on Wexford/HPC, INN Claims ACI WORLDWIDE: S&P Raises CCR to 'BB' & Removes Rating from Watch ADAYANA INC: McGladrey LLP Approved to Prepare Tax Returns AGFEED INDUSTRIES: Files Full-Payment Plan & Disclosure Statement ALLIED IRISH: EBA Recapitalization Exercise 2013 ALLSTATE CORP: Fitch Assigns 'BB+' Preferred Stock Rating AMERICAN AMEX: Court Approves Ch. 11 Plan, Sale to Braich AMERICAN MADE TIRES: Voluntary Chapter 11 Case Summary ANGLO IRISH: Receives Ch. 15 Protection With Opinion Coming Later APOLLO MEDICAL: Delays Form 10-Q for Oct. 31 Quarter AURORA DIAGNOSTICS: Taps Evercore, Kirkland for Advice B&G FOODS: S&P Raises Rating to 'BB-' & Removes From CreditWatch BALENTINE LP: Beacon to Conduct Foreclosure Sale on Jan. 8 BERGENFIELD SENIOR HOUSING: To Seek Plan Confirmation Jan. 14 BIOLIFE SOLUTIONS: Inks Note Conversion Agreements with Investors BORNEO RESOURCE: Executes Debt Restructuring Agreement BROWN PUBLISHING: Dist. Court Wants Briefings in KLG Appeal BUCKINGHAM SRC: Triangle Buys Flux Producer in Debt Swap BUFFALO GROVE DOMINICK'S: Shoppers Line Up for Liquidation Sale CAP*ROCK: Failed Bidder Settles Suit for $2.5 Million CASA CASUARINA: Has Until Dec. 28 to Propose Chapter 11 Plan CIRCLE STAR: Posts $72,000 Net Income in Oct. 31 Quarter COMIDA MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors CONAGRA FOODS: Lead Paint Ruling No Impact on Fitch's Rating CONSTAR INTERNATIONAL: In Ch. 11 for 3rd Time, to Sell to Amcor COYOTE MOON: Files for Chapter 11 in California CYANCO INTERMEDIATE: Moody's Retains Ratings Over Upsized Loan D & L ENERGY: Court Declined to Extend Exclusivity DELTA AIR: S&P Raises CCR to 'BB-', Off Watch Positive DEMCO INC: May Borrow $1MM From Nat'l Environmental Safety DESIGNLINE CORP: Trustee Has Until Jan. 3 to Decide on Leases DETROIT, MI: Seeks to Pay UBS, BofA $230 Million to End Swaps DETROIT, MI: As Bond Insurers Drop Objections, Ch. 9 Progresses DETROIT, MI: Bankruptcy Judge Suspends Hearing on Swaps Deal DETROIT, MI: Christie's Values Art at Up to $867 Million DTS8 COFFEE: Incurs $94,000 Net Loss in Oct. 31 Quarter DUMA ENERGY: Scaturro Pasquale 13.9% Owner as of Dec. 9 DUNE ENERGY: Strategic Value Held 25.1% Equity Stake at June 28 EDISON MISSION: Second Modified Plan Filed ELCOM HOTEL: Homeowners' Association Buys One Bal Harbor Resort ENCYCLE/TEXAS: Former Asarco Unit to Be Auctioned Off Jan. 17 EQUINIX INC: Moody's Affirms 'Ba3' CFR & Alters Outlook to Stable ESSENTIAL POWER: Moody's Lowers 1st Lien Debt Rating to 'Ba3' FAIRMONT GENERAL: Ombudsman Hires Greenberg Traurig as Counsel FAIRMONT GENERAL: Ombudsman Hires SAK Management as Advisor FIRSTMED EMC: Six Companies File for Liquidation FINJAN HOLDINGS: Unit Sues Proofpoint Over Infringement Claims FIRST DATA: Offering $725 Million of Senior Subordinated Notes FIRTH RIXSON: Moody's Affirms B3 CFR & Alters Outlook to Negative FISKER AUTOMOTIVE: Judge Approves Additional Financing FLORIDA GAMING: Bankruptcy Sale Procedures Approved FOCUS RED MANGO: Osbornes Tied to Operator Facing Bankruptcy FRONTIER COMMUNICATIONS: Fitch Lowers IDR & LT Debt Ratings to BB FRONTIER COMMUNICATIONS: Moody's Reviews 'Ba2' CFR for Downgrade FURNITURE BRANDS: Exclusive Periods Extension Sought GENESIS DEVELOPMENTS: Case Summary & 7 Unsecured Creditors GHORI NO. 1 CAB: District Court Won't Stay Ch.7 Conversion Order GREEN FIELD ENERGY: KEIP & KERP Seal Approval Sought GYMBOREE CORP: Moody's Lowers CFR to 'Caa1'; Outlook Stable HARRISBURG, PA: State Sells Parking Bonds to Aid Recovery Plan HOLT DEVELOPMENT: Hearing on Cash Use Continued Until Jan. 14 HOLT DEVELOPMENT: Jan. 14 Hearing on Bank's Bid for Stay Relief IMG WORLDWIDE: S&P Puts 'B' CCR on Watch Negative Over Sale Deal INTERPUBLIC GROUP: S&P Retains 'BB+' Sr. Unsecured Notes Rating IPC INTERNATIONAL: Has Until March 7 to Propose Chapter 11 Plan IQOR HOLDINGS: S&P Puts 'B' CCR on CreditWatch Developing KENAN ADVANTAGE: Moody's Rates New USD Tranche D Term Loan 'Ba2' LABORATORY PARTNERS: HHS Fears MedLab Sale May Run Afoul Of HIPAA LEE'S FORD: Has Access to Cash Collateral Until Jan. 10 LEE'S FORD: Secured Creditors Balk at $500,000 Loan From CTB LINN ENERGY: Moody's Raises Corp. Family Rating to 'B1' LONE PINE: Completes Disposition of Non-Operated Assets LUMEA INC: Green Planet to File Unaudited Financial Statements MATTESON, IL: Moody's Cuts Gen. Obligation Debt Rating to 'B1' McEWEN.65 LLC: Voluntary Chapter 11 Case Summary MCGRAW-HILL SCHOOL: Loan Increase No Impact on Moody's Ratings MICHAELS STORE: Moody's Rates $260MM Sr. Subordinated Notes 'Caa1' MICROVISION INC: Offering $25 Million of Securities MGM RESORTS: Offering $500 Million of Senior Notes Due 2014 MGM RESORTS: Fitch Rates Proposed $500MM Unsecured Notes 'B+' MONTREAL MAINE: Fortress Unit to Be Lead Bidder at Jan. 21 Auction NAVISTAR INTERNATIONAL: To Release Fiscal Q4 Results Today NEW YORK CITY OPERA: Can't Pay Back Workers, Ticketholders NRG ENERGY: Fitch Affirms and Withdraws Issuer Default Ratings NUVILEX INC: Incurs $5.6 Million Net Loss in Oct. 31 Quarter OCZ TECHNOLOGY: Hercules Gets $9MM in Loan Repayment Proceeds OPTOMETRY MANAGEMENT: Case Summary & 20 Top Unsecured Creditors ORCHARD SUPPLY: Shoots Down IRS Objection to Chapter 11 Plan OSHKOSH CORP: S&P Raises CCR to 'BB+'; Outlook Stable PACIFIC GOLD: Limits Note Conversions to $1,000 Per Week PARKSIDE MINSHENG: Voluntary Chapter 11 Case Summary PEM THISTLE LANDING: Files for Chapter 11 in Delaware PEREGRINE FINANCIAL: Futures Customers to Receive $41 Million PERSONAL COMMUNICATIONS: Has Until March 17 to Decide on Leases PLEASANTVILLE MECHANICAL: Case Summary & Top Unsecured Creditors PREFERRED PROPPANTS: Moody's Cuts CFR to 'Caa3'; Outlook Negative PRESBYTERIAN HOMES: S&P Withdraws 'B+' Rating on Revenue Bonds QUALITY STORES: Benefits Trade Group Defends FICA Tax Refund QUICKSILVER RESOURCES: 2011 Filing Omitted Schedules RESIDENTIAL CAPITAL: Strikes Deals Resolving Borrower Claims RIH ACQUISITIONS: Atlantic Club Casino Wins Approval for Bonuses RIH ACQUISITIONS: Bidding Continues at Chapter 11 Auction ROSETTA GENOMICS: Executive Officers Plan to Sell Securities SB PARTNERS: Reports $272,800 Net Loss in First Quarter SEAWORLD PARKS: S&P Raises CCR to 'BB' & Removes Rating From Watch SEALED AIR: Moody's Rates New $524.5MM Secured Term Loan 'Ba1' SEQUENOM INC: Amends Stock Options of Dr. Ronald Lindsay SHILO INN, TWIN FALLS: Plan Outline Hearing Continued to Jan. 23 SHS SERVICES: Sears Canada Supplier Goes Into Receivership SOUTHERN TITLE: Sent to Liquidation by Insurance Commission SPECIALTY PRODUCTS: Judge Could Rethink Asbestos Deadline ST. FRANCIS HOSPITAL: Files for Chapter 11 for Sale STEWARD HEALTH: S&P Lowers Rating to 'B-'; Outlook Stable STRATUS MEDIA: Five Directors Quit Amid Change of Focus SUBURBAN PROPANE: Moody's Affirms 'Ba2' CFR; Outlook to Stable T-MOBILE USA: Moody's Rates $1 Billion Sr. Unsecured Notes 'Ba3' T3 MOTION: Adam Benowitz 10.3% Owner as of Dec. 13 TOWER GROUP: Fitch Comments on Adverse Reserve Development TWIN RIVER: Moody's Puts All Ratings on Review for Downgrade UNITED AMERICAN: Shareholders Elect Seven Directors USEC INC: Agrees with Noteholder Group to Pursue Restructuring VIGGLE INC: Acquires Wetpaint for $30 Million WARNER SPRINGS: District Court Dismisses Debt Acquisition Appeal WINECARE STORAGE: Converted to Chapter 7 Liquidation WOLF MOUNTAIN: Files List of 20 Largest Unsecured Creditors WOLF MOUNTAIN: Employs Anna W. Drake as General Counsel WPCS INTERNATIONAL: Incurs $473,000 Net Loss in Second Quarter Z TRIM HOLDINGS: Enters Into Strategic Alliance Agreement * Charitable Contributions Over 15% Are All Recoverable * Lender Has the Burden of Proof on Lien Validity * Credit Suisse Sued by N.J. Over $10 Billion in Mortgages * Fed Said to Delay Bank Leverage Cap Until Basel Completed * First-Year Law School Enrollment Drops to 36-Year Low * Moody's Says B3 Neg. & Lower CFR List Remains in Narrow Range * McGlinchey Stafford Earns Regional Rankings in Bankruptcy Law * Oswalt Law Group Ariz. Trial Attorneys Launch New Firm Web Site * Gropper, Peck to Retire From New York Bench * BOOK REVIEW: A Legal History of Money in the United States, 1774-1970 ********* 250 AZ: Says Reorganization Plan Is Confirmable ----------------------------------------------- 250 AZ, LLC, debunked secured creditor RREF II DFC Acquisition, LLC's claims that the Debtor's Chapter 11 Plan of Reorganization is unconfirmable on its face. The Debtor did indicate though that there will be changes to the Plan documents to address objections. RREF has asked the Court to deny approval of the disclosure statement explaining the Debtor's First Amended Plan because the Plan cannot be confirmed under 11 U.S.C. Sec. 1129. Dennis M. Breen, III, Esq., at Breen, Olson & Trenton, LLP, counsel for the Debtor, said RREF's objections should be overruled: 1. According to RREF, the Plan requires partial releases of RREF's collateral contrary to the deeds of trust securing its debt. The Debtor may not obtain partial releases of RREF's collateral without RREF's consent. An exhibit to the Plan lists a sale of a portion of the collateral property located at 3390 W. Ina Road, Tucson, Arizona, in year 3 and a subsequent sale of the collateral property located at 3391 W. Ina Road, Tucson, Arizona, in year 4. The listed sale price for each property is less than RREF's filed claim. This treatment violates 11 U.S.C. Sec. 1129(b)(2)(A)(i)(I), according to RREF. The Debtor says that having multiple options does not make the Plan unconfirmable. According to the Debtor, the projected sale in year 3, and another projected sale in year 4, is illustrated only as a "plausible option". If RREF chooses not to agree to the sales, the Debtor will adopt other financing arrangements at that time and allow RREF to continue to receive the proposed payments pursuant to the Plan. 2. RREF says the Plan provides treatment of its secured claim based upon the Debtor's appraisal rather than the higher figure tentatively found by the Court after conducting an evidentiary hearing on valuation. The Plan fails to adopt the valuation ultimately found by the Court in its upcoming order on valuation of RREF's collateral and thus violates 1129(b)(2)(A)(i)(II), says RREF. In response, the Debtor seeks to clarify that it is adopting the value found by the Court during the evidentiary hearing on valuation. Accordingly, Exhibit "I" will be updated to reflect the value found by this Court in an upcoming order, rather than the estimated $3,500,000 set forth in the proposed Plan. The actual amount determined by the court was $3,567,500. 3. RREF notes that the Plan indicates that no interest payments will be made on the secured claim during the first year. The failure to pay interest results in a failure to provide a note which has a present value equal to the amount of the secured claim and thus this treatment violates 1129(b)(2)(A)(i)(II), according to RREF. According to the Debtor, payments will be made during the first year as illustrated in Exhibit "E", the language of the Plan, Section 3.12.3.2 and the Disclosure Statement Section 5.12.3.2 will be adjusted accordingly to clearly indicate such. Another Creditor Objects Aside from RREF, Susan S. Courtney, a secured creditor, also claims the Plan cannot be confirmed. Ms. Courtney says the proposed payment of pre-petition delinquent property taxes over the term of the Plan with interest at the statutory rate of 16% -- rather than such taxes being paid in full on the effective date of the Plan -- is impermissible. The Chapter 11 Plan As reported in the Nov. 13, 2013 edition of the TCR, the Debtor filed a Chapter 11 plan that proposes to pay the allowed secured claim of the first mortgage holder on each rental property and on the development parcels. Unsecured creditors will each claim pro rata share of funds allocated for the class (a minimum of $10,000 per year over a five-year period). A full-text copy of the First Amended Disclosure Statement dated Nov. 4, 2013, is available for free at: http://bankrupt.com/misc/250_AZ_1ds.pdf About 250 AZ, LLC 250 AZ, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 13-00851) in Tucson, Arizona, on Jan. 22, 2013. In its schedules, the Debtor disclosed $25 million in assets and $70.8 million in liabilities. 250 AZ owns an 84.70818% tenant in common interest in a 29-story office building located at 250 East Fifth Street, in Cincinnati, Ohio. The Debtor is represented by Dennis M. Breen, III, Esq., and John E. Olson, Esq. at Breen Olson & Trenton, LLP as counsel. The U.S. Trustee said an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against the company have expressed interest in serving on a committee. 261 EAST: Says Hermes Capital Not Entitled to Vote -------------------------------------------------- The Bankruptcy Court will convene a hearing on Jan. 15, 2014, at 9:45 a.m., to consider the request of 261 East 78 Realty Corporation for an order (1)expunging or disallowing the claim of Hermes Capital, LLC, in its entirety or reclassifying the Hermes Claim, if allowed, as a general, non-priority unsecured claim and (2) estimating the Hermes Claim at $0 for voting purposes in connection with the Debtor's First Amended Plan of Reorganization such that the Hermes Claim will not be entitled to vote on the Plan. The Debtor explained that in order for Hermes to have any secured claim under either (a) the Subordination Agreement or (b) Section 506(a) of the Bankruptcy Code, the Debtor's property would have to have a current value in excess of $17,674,827, the allowed amount of MB's secured claim as of the Petition Date. About 261 East 261 East 78 Realty Corp. owns real property located at 261 East 78th Street, in New York. The premises consist of seven commercial units, three of which are currently occupied. 261 East 78 Realty filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-15624) on Dec. 6, 2011. The case was assigned to Judge Robert E. Gerber. The Chapter 11 filing was precipitated by the commencement of foreclosure proceedings on the premises. The Debtor scheduled $20.2 million in assets and $18.8 million in liabilities. The petition was signed by Lee Moncho, president. Jonathan S. Pasternak, Esq., at DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, in White Plains, N.Y., represents the Debtor as counsel. Matthew W. Olsen, Esq., at Katten Muchin Rosenman LLP, in New York, N.Y., represents MB Financial Bank, N.A., as counsel. 261 EAST: Settlement Agreement With MB Financial Approved --------------------------------------------------------- The Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York on Nov. 27, 2013, approved a settlement agreement between 261 East 78 Realty Corporation, and MB Financial Bank, N.A. Pursuant to the MB Settlement Agreement, the Debtor has a limited in time right to satisfy the $10.7 million to $11 million secured portion MB's claim of more than $17 million in the aggregate, while MB was also allowed therein an unsecured claim in the Debtor's estate for $6,974,827. The Settlement Agreement As reported in the Troubled Company Reporter on Nov. 29, 2013, according to papers filed with the Court, MB has filed in the Debtor's Chapter 11 case a secured claim in the amount of $17,674,827 plus continuing default rate interest, advances, costs and legal fees thereon. On Jan. 2, 2013, the Debtor filed Adversary Proceeding No. 13- 01000 against MB, alleging various claims against MB arising out of alleged lender liability related acts (the "Lender Liability Action"). MB initially moved to dismiss the complaint, after which the Debtor amended its complaint. On July 17, 2013, MB filed an answer to the amended complaint, essentially denying all of the allegations contained therein. The matter was set down for discovery and is currently in the discovery stage. The Debtor submits that approval of the MB Settlement Agreement is in its best interest since the agreement materially reduces MB's secured claim against the Property, waives its rights to distribution on its almost $7 million deficiency unsecured claim and allows the Debtor a realistic opportunity to confirm a plan which will result in distributions to all of the Debtor's creditors. Absent the settlement, MB's secured claim, if allowed in full, would materially diminish if not wholly eliminate any return to the Debtor's creditors or its estate or, at a minimum, the estate will incur additional risk, cost, time delay and expense of prosecuting the Lender Liability Action. The MB Settlement Agreement further provides that in the event a final, non-appealable order confirming the First Amended Plan is not entered within 90 days after the execution of the MB Settlement Agreement, upon five-days' notice served on the Debtor and creditors and filed with the Court, MB Financial will be entitled to relief from the automatic stay, without further order of the Bankruptcy Court, to resume the Foreclosure Action. Accordingly, by the motion, the Debtor seeks conditional relief from the automatic stay in favor of MB to effectuate the terms of the MB Settlement Agreement. A summary of the terms of the MB Settlement Agreement is available at http://bankrupt.com/misc/261east.doc147.pdf The Court also ordered that objections filed by Hermes Capital, LLC have been overruled. In a response to the objection of Hermes, MB Financial said that Hermes ignored the central purpose and benefit of the settlement agreement -- the resolution of all pending litigation between the Debtor and MB Financial and the agreement to fix MB Financial's allowed secured claim in the amount of $10.7 or $11 million. MB Financial added that without the settlement agreement, the Debtor will be forced to continued the lender liability adversary proceeding and contested Chapter 11 plan process at a great expense to the estate and with no guarantee of success. The Debtor, in its response to Hermes objection, stated that Hermes appears to not even be a lawful creditor of the Debtor. Hermes objected to the settlement agreement, arguing that the deal was premised entirely upon the exclusive options written entirely and solely in favor of the Debtor and its professionals with regard to the satisfaction of the first mortgage obligations owed to MB. About 261 East 261 East 78 Realty Corp. owns real property located at 261 East 78th Street, in New York. The premises consist of seven commercial units, three of which are currently occupied. 261 East 78 Realty filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-15624) on Dec. 6, 2011. The case was assigned to Judge Robert E. Gerber. The Chapter 11 filing was precipitated by the commencement of foreclosure proceedings on the premises. The Debtor scheduled $20.2 million in assets and $18.8 million in liabilities. The petition was signed by Lee Moncho, president. Jonathan S. Pasternak, Esq., at DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, in White Plains, N.Y., represents the Debtor as counsel. Matthew W. Olsen, Esq., at Katten Muchin Rosenman LLP, in New York, N.Y., represents MB Financial Bank, N.A., as counsel. 22ND CENTURY: Warrant Exchange Cancels 93% of Warrant Liability --------------------------------------------------------------- 22nd Century Group, Inc., said its warrant exchange was a huge success greatly exceeding management's expectations. The warrant exchange reduced 22nd Century Group's "derivative warrant liability" by 93 percent and generated gross proceeds of approximately $3.6 million for the Company. As reported last month, the primary purpose of the warrant exchange was to reduce 22nd Century Group's "derivative warrant liability" through the exercise or amendment of the Company's outstanding warrants in order for the Company to have sufficient stockholders' equity to up-list its common stock to a national securities exchange - such as NASDAQ or NYSE. Many institutional investors and retail brokers looking to build a position in 22nd Century Group stock cannot buy OTC Bulletin Board stocks. As of Dec. 13, 2013, 22nd Century Group had total assets of approximately $12 million, which includes approximately $6.2 million in cash, and only $700 thousand in current liabilities. The Company's only long-term liability is its "derivative warrant liability," which due to the warrant exchange has been reduced from $18.6 million to approximately $1.2 million. 22nd Century Group's $6.2 million cash balance reflects $3.2 million the Company has already invested and paid in full for the equipment at its manufacturing facility. As reported in early December, the Company's management believes that having its own factory will create tremendous shareholder value since costs will be reduced and control, production and exports of its differentiated tobacco products will be greatly facilitated. John Brodfuehrer, 22nd Century's Group's CFO, stated, "We now have approximately $10 million of net stockholders' equity, which is more than sufficient to qualify for an up-listing to a national securities exchange." 22nd Century Group currently has 56,691,897 shares of common stock issued and outstanding, including the approximate 5.5 million shares the Company issued as a result of the warrant exchange. Approximately 5.3 million shares of common stock issued during the warrant exchange were from the exercise of warrants on a cash basis. These shares cannot be sold for 6 months pursuant to Rule 144. The Company currently has approximately 10.6 million warrant shares outstanding. Of these, 6.25 million have a purchase price of $1.96 to $2.40 and 4.1 million are owned by the Company's management. The Company's Series-A warrant holder, which is an institutional investor, has only 225,798 warrant shares remaining, as compared to approximately 3.67 million warrant shares as of Sept. 30, 2013. There are no Series-B or Series-C warrants outstanding. Joseph Pandolfino, Founder and CEO of 22nd Century's Group stated, "We are now well positioned to up-list to a national securities exchange; the only qualification remaining is our share price which we expect to appreciate over the next 60 days since many catalysts are on the horizon as we continue to execute our business plan." Chardan Capital Markets, LLC, acted as the financial advisor for 22nd Century Group's warrant exchange. About 22nd Century Clarence, New York-based 22nd Century Group, Inc., through its wholly-owned subsidiary, 22nd Century Ltd, is a plant biotechnology company using technology that allows for the level of nicotine and other nicotinic alkaloids (e.g., nornicotine, anatabine and anabasine) in tobacco plants to be decreased or increased through genetic engineering and plant breeding. 22nd Century incurred a net loss of $6.73 million in 2012, as compared with a net loss of $1.34 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $3.84 million in total assets, $20.84 million in total liabilities and a $17 million total shareholders' deficit. Freed Maxick CPAs, P.C., in Buffalo, New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that 22nd Century has suffered recurring losses from operations and as of Dec. 31, 2012, has negative working capital of $3.3 million and a shareholders' deficit of $6.1 million. Additional capital will be required during 2013 in order to satisfy existing current obligations and finance working capital needs as well as additional losses from operations that are expected in 2013. 56 WALKER LLC: Recovery Depends on Wexford/HPC, INN Claims ---------------------------------------------------------- 56 Walker LLC, owner of a 6-story building at the Tribeca West Historic District section of lower Manhattan, has a liquidating Chapter 11 plan that contemplates the sale of the property to Project 56 Walker LLC as there were no other qualified bidders for the property. The Debtor filed its proposed Second Amended Liquidating Chapter 11 Plan on Dec. 9, 2013. The Debtor filed its First Disclosure Statement on Dec. 10, 2013. The Debtor has signed a deal to sell the assets to Project 56 Walker for $18 million, absent higher and better offers. The Debtor implemented bidding procedures and served notice of the auction but no other qualified bids were received by the deadline. The Debtor is simultaneously seeking approval of the sale of the property and confirmation of the Plan. Closing of the sale will be contemporaneous with the occurrence of the effective date of the Plan. The Plan will be funded with (a) the net proceeds from the sale of the property, after the payment of all costs of closing, including but not necessarily limited to, broker's commission, other typical and customary closing costs, certain administrative claims, and (b) all remaining cash, if any, on hand at the time of distribution. "The Purchase and Sale Agreement currently pending approval by the Court is for $18 million dollars which is an amount sufficient to satisfy all Allowed Administrative, Priority and Secured Claims based upon the Debtor's estimates of Allowed Claims, with a potentially significant, if not 100%, distribution to unsecured creditors and a return to equity. However, depending on the amount of Allowed Claims, as finally determined by the Bankruptcy Court or as agreed by the Debtor and its creditors, the net proceeds of sale of the Property may not be sufficient to satisfy all Allowed Claims in full, according to the Disclosure Statement. Claims and Interests Under the Plan: -- Administrative claims of professionals, including the fees of DDWWW, estimated at $200,000 and the broker's commission, expected at $1.08 million, as well as the receiver's fees, will be paid in full -- MB Financial's secured claim, if allowed, will be paid in full in cash and will accrue interest pursuant to the loan documents. In the event the allowed secured claim is greater than the "distribution fund", MB Financial will not be entitled to post-Petition Date interest and any claim by MB Financial for post-Petition Date legal fees, to the extent allowed, will be treated as an unsecured claim. MB Financial's secured claim has been filed for $15 million but continues to increase as a result of interest accruals, legal fees and protective advances. -- The allowed secured claim of Wexford/ HPC, if any, will be paid in full to the extent allowed after payment of MB Financial's secured claim. The Debtor avers that the claim should be disallowed because Wexcford/ HPC has failed to timely file a claim. If late filing is allowed, the Debtor believes the acclaims should be $0 as a result of the Debtor's significant lender liability claims against Wexford/ HPC. The Debtor believes Wexford/ HPC would assert a $1.5 million claim. -- The allowed secured claims of the holders of liens, including holders of valid unexpired mechanics' liens and judgment liens, expected to be $1 million, will be paid in full with interest after payment of MB Financial's and Wexfor/HPC's secured claims, if allowed. -- The allowed unsecured claims will receive a pro rata portion of the remaining proceeds of the distribution fund, if any, up to 100% of the allowed claims plus post-Petition Date interest at the federal judgment rate, after payment of administrative claims and secured claims. The unsecured claims are estimated at $4.88 million (which includes an anticipated compromised rejected damage claim (not yet filed) of INN World Report in the estimated compromised amount of $1.2 million and a disputed $1.78 million claim asserted by creditor J.P. Lombardi Architects). -- Guy Morris (currently an individual Chapter 11 debtor and debtor-in-possession in a bankruptcy case pending in Colorado Bankruptcy Court (Case No. 13-11238)), holder of the equity interest in the Debtor, will receive the remaining proceeds of the distribution fund. The Debtor is rejecting an unexpired long term lease agreement with INN World Report. The Debtor has been diligently negotiating with INN in order to ensure the vacatur of the property by INN in advance of the sale. Initially INN indicated that it intended to file a $3.9 million rejection damage claim. The Debtor is optimistic that it will be able to negotiate the peaceful surrender of the leased premises in exchange for a substantially lower rejection damage claim which it estimates at approximately $1.2 million. A copy of the First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/56_Walker_1stAm_Plan_Outline.pdf About 56 Walker LLC 56 Walker LLC, the owner of a six-story building at 56 Walker Street in the Tribeca section of Manhattan, returned to Chapter 11 (Bankr. S.D.N.Y. Case No. 13-11571) on May 13, 2013, this time aiming for a $23 million sale to pay off about $14 million in mortgages and $2 million in unsecured debt. The Debtor scheduled assets of $23,000,000 and liabilities of $15,996,104. Judge Shelley Chapman was initially assigned to the case but the case was transferred to Judge Allan L. Gropper. Erica Feynman Aisner, Esq., at Delbello Donnellan Weingarten Wise & Wiederkehr, LLP, serves as the Debtor's counsel. The previous Chapter 11 case began in September 2011 and was dismissed in August 2012 when the bankruptcy judge refused to approve a settlement. ACI WORLDWIDE: S&P Raises CCR to 'BB' & Removes Rating from Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on Naples, Fla.-based ACI Worldwide Inc. to 'BB' from 'BB-' and removed the rating from CreditWatch, where it had placed it with positive implications on Nov. 26, 2013. The outlook is stable. At the same time, S&P raised its issue-level rating on the company's $300 million senior unsecured notes due 2020 to 'BB' from 'BB-' and removed it from CreditWatch. The '3' recovery rating remains unchanged and indicates S&P's expectation for meaningful recovery (50% to 70%) in the event of payment default. "We base our upgrade primarily on our reassessment of ACI's surplus cash, which, when netted against its adjusted debt balance, results in leverage in the low-3x area at Sept. 30, 2013, pro forma for acquisitions," said Standard & Poor's credit analyst Christian Frank. The ratings reflect the company's "intermediate" financial risk profile, which indicates S&P's view that leverage is likely to fall below 3x during the next few quarters, based on EBITDA growth. The ratings also incorporate S&P's assessment of its financial policy as "negative", reflecting its view that there is event risk for acquisitions not captured in S&P's base-case scenario, which could result in leverage in the 3x to 4x range. S&P views the company's business risk profile as "fair" because of its modest market position in the global payments industry. The stable outlook reflects S&P's expectation that the embedded nature of ACI's products within its customers' operations and high recurring revenue are likely to result in stable operating performance over the next 12 months. S&P could lower the rating if large acquisitions or shareholder returns cause leverage to be sustained above the 4x area. Although unlikely over the next 12 months, S&P could raise the rating if the company moderates its financial policy such that it expects leverage to be maintained below 3x. ADAYANA INC: McGladrey LLP Approved to Prepare Tax Returns ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana authorized Adayana, Inc., to employ McGladrey LLP as tax professional nunc pro tunc to Nov. 18, 2013. The Court also approved the Debtor's proposed interim compensation procedures. As reported in the Troubled Company Reporter on Nov. 26, 2013, McGladrey LLP is expected to prepare the Debtor's federal income tax and resident state income tax returns, plus additional tax returns, if any. Based upon McGladrey LLP's previous experience in providing tax advisory services to the Debtors and their companies, McGladrey LLP estimates that the costs of their services will be roughly $25,000 to $35,000 for preparation of fiscal year 2013 federal, state and local tax returns and $45,000 to $60,000 for work to be performed in 2014, due to various tax issues related to the bankruptcy. McGladrey LLP will also be reimbursed for reasonable out-of-pocket expenses incurred. Prior to the Debtor's petition date, McGladrey LLP provided tax, assurance and advisory services to the Debtor and its companies. McGladrey LLP was owed a balance of approximately $10,000 for prior tax and accounting work performed by McGladrey in 2013. The balance has been written-off by McGladrey LLP. Therefore, there are no outstanding obligations between the Debtor and McGladrey. The Debtor and McGladrey requested that the Court adopt certain interim compensation procedures to ease the financial strain of quarterly or a single fee application places on the Debtor and the expense of filing interim fee applications. Those proposed procedures are as follows: (a) from time to time, McGladrey LLP will provide the Debtor with a statement McGladrey LLP's services and expenses incurred during the previous period (a "Fee Statement"). The Debtor will have seven days after receiving the Fee Statement to give McGladrey LLP any notice of objection to the fees and expenses contained in such Fee Statement. If the Debtor does not object to the Fee Statement, McGladrey LLP will file the Fee Statement and serve the Fee Statement on the Debtor's service list; (b) after the filing of the Fee Statement, the Debtor will be authorized to pay from the cash from operations 80% of the fees and 100% of the expenses set forth in the Fee Statement on an interim basis and subject to final allowance by the Court; (c) McGladrey LLP may file periodic interim fee applications in accordance with Section 331 of the Bankruptcy Code which will incorporate any Fee Statement filed prior to such application, including those to which there may have been an objection, for which McGladrey LLP may seek interim payment and allowance of the 20% of fees incurred but not yet paid (the "Holdback Amount"); and (d) nothing in the proposed interim compensation procedures shall affect the rights of any party-in-interest to object to an interim or final fee application filed by McGladrey LLP. Lawrence Keyler, partner of McGladrey LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About Adayana, Inc. Adayana, Inc., is a holding company, incorporated under the laws of the state of Minnesota. Its primary assets are its equity ownership interests in two separate operating companies, ABG, an Adayana Company, and Vertex Solutions, Inc., one of which is headquartered in Indianapolis, and the other in Virginia. Both operating companies are in the "human capital" business, providing an array of technology-based consulting and training services. Adayana valued the subsidiaries' stock at $8 to $12 million as of March 31, 2013. It also owns personal property with book value of $949,280. Adayana, along with its two subsidiaries, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 13-10919) on Oct. 14, 2013. The Debtor disclosed $12,021,283 in assets and $14,872,941 in liabilities as of the Chapter 11 filing. The Debtors are represented by Michael P. O'Neil, Esq., at Taft Stettinius & Hollister LLP, in Indianapolis, Indiana. Nancy J. Gargula, the U.S. Trustee for Region 10, was unable to appoint an official committee in the Debtors' case. AGFEED INDUSTRIES: Files Full-Payment Plan & Disclosure Statement ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AgFeed Industries Inc., a hog producer in the U.S. and China before the assets were sold, filed a proposed Chapter 11 plan on Dec. 18 showing all creditors as being paid in full, with interest. According to the report, when creditors are fully paid, the surplus will go to shareholders. The plan was accompanied by disclosure materials discussing in part what the U.S. Trustee called "massive fraud" in the company's Chinese operations that went undetected for years. According to the U.S. Trustee, managers of the subsidiary in China created multiple sets of accounting books while reporting fictitious sales and receivables. The draft disclosure statement so far doesn't include a liquidation analysis and there are blanks where creditors later will be told the total amount of their claims and cash balance after the sales. The plan will create a trust to prosecute lawsuits and collect remaining assets. About AgFeed Industries AgFeed Industries, Inc., has 21 farms and five feed mills in China producing more than 250,000 hogs annually. In the U.S., the business included 10 sow farms in three states and two feed mills producing more than one million hogs a year. AgFeed's revenue in 2012 was $244 million. AgFeed and its affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-11761) on July 15, 2013, with a deal to sell most of its subsidiaries to The Maschhoffs, LLC, for cash proceeds of $79 million, absent higher and better offers. The Debtors estimated assets of at least $100 million and debts of at least $50 million. Keith A. Maib signed the petition as chief restructuring officer. Hon. Brendan Linehan Shannon presides over the case. Donald J. Bowman, Jr., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtors' counsel. BDA Advisors Inc. acts as the Debtors' financial advisor. The Debtors' claims and noticing agent is BMC Group, Inc. The U.S. Trustee has appointed a five-member official committee of unsecured creditors to the Chapter 11 cases. The Creditors' Committee tapped Lowenstein Sandler as lead bankruptcy counsel and Greenberg Traurig, LLP, as co-counsel. CohnReznick LLP serves as the Creditors' Committee's financial advisor. An official committee of equity security holders was also appointed to the Chapter 11 cases. The Equity Committee tapped Sugar Felsenthal Grais & Hammer LLP and Elliott Greenleaf as co-counsel. ALLIED IRISH: EBA Recapitalization Exercise 2013 ------------------------------------------------ Allied Irish Banks, p.l.c., notes of the Dec. 16 announcements made by the European Banking Authority (EBA) and the Central Bank of Ireland (CBI) regarding the information of the EU-wide Transparency Exercise 2013 and fulfilment of the EBA Board of Supervisors decision. To view the published results including the EBA disclosure templates for AIB, see http://www.aib.ie/investorrelations 2013 EU-wide Transparency Exercise In May 2013 the EBA adjusted the timeline of the next EU-wide stress test so to conduct the exercise in 2014 once the asset quality reviews are completed. However, to ensure transparency and comparability over the years, the EBA's Board of Supervisors decided to provide, in the second half of 2013, appropriate disclosure on the actual exposures of the EU banking sector. In its October meeting the BoS agreed on the form and scope of the transparency exercise to be conducted in November/December 2013 to assure a sufficient and appropriate level of information for market participants. The sample of the exercise includes 64 banks and for each of them the following set of information was collected for disclosure: i. Composition of capital ii. Composition of RWA by risk type iii. Exposures to sovereigns (central, regional and local governments) in EEA (direct and indirect exposures by maturity buckets and country) iv. Credit risk exposures (defaulted and non-defaulted) and RWAs by country with breakdowns for Institutions, Commercial RE, Retail & Corporate; displayed by regulatory approach (A-IRB, F-IRB, STA) v. LTV per portfolio, value adjustments and provisions vi. Market risk and securitisation exposures AIB has c.521 billion ordinary shares, 99.8 percent of which are held by the National Pensions Reserve Fund Commission (NPRFC), mainly following the issue of 500 billion ordinary shares to the NPRFC at EUR0.01 per share in July 2011. This statement should be considered in parallel with AIB's Half Yearly Financial Report for 2013 and Interim Management Statement of 14 November 2013, copies of which including full disclosures and notes to the financial statements can be found at the following link www.aibgroup.com/investorrelations About Allied Irish Banks Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. The Company reported a loss of EUR2.29 billion in 2011, a loss of EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009. Allied Irish's consolidated statement of financial position for the year ended Dec. 31, 2011, showed EUR136.65 billion in total assets, EUR122.18 billion in total liabilities and EUR14.46 billion in shareholders' equity. Allied Irish's balance sheet at June 30, 2012, showed EUR129.85 billion in total assets, EUR116.59 billion in total liabilities and EUR13.26 billion in total shareholders' equity. ALLSTATE CORP: Fitch Assigns 'BB+' Preferred Stock Rating --------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Allstate's issuance of preferred stock. At the same time, Fitch affirmed the 'A-' Issuer Default Rating (IDR) of The Allstate Corporation (Allstate) as well as the 'A+' Insurer Financial Strength (IFS) ratings of Allstate Insurance Co. and its property/casualty subsidiaries, and the 'A-' IFS ratings of Allstate Life Insurance Co. and the other life subsidiaries (Allstate Financial). The Rating Outlook is Stable. A full list of ratings follows at the end of this release. Key Rating Drivers: Allstate's market position as a top tier personal lines writer, good property/liability underwriting performance and progress on the restructuring of the life insurance operations all support the current ratings. Favorably, capitalization at the operating subsidiaries improved modestly and Allstate's recapitalization during 2013 incrementally lowered financial leverage. Balanced against these strengths are elevated levels of risky assets at the life operation and challenges associated with undertaking a strategic shift in the life operations. In December, Allstate will issue $135 million of 6.625% fixed rate perpetual non-cumulative preferred stock as part of its recapitalization plan. Proceeds from the issuance will go toward general corporate purposes. Based on its rating criteria, Fitch has assigned 100% equity credit to the preferred stock and has added one notch to the rating relative to standard notching to reflect more aggressive loss absorption features. Similar to previously issued preferred stock, the security has no stated maturity, dividends are non-cumulative, and the company has the option to defer them at their discretion. In addition, the security has a mandatory deferral feature that requires deferral if certain capital ratios or operating results are breached. Fitch believes the mandatory deferral could be triggered before there is significant stress in the organization. Therefore, it deems the features as having more aggressive loss absorption. Pro forma financial leverage ratio as of Sept. 30, 2013 was 23.6% and remained appropriate for the current rating category relative to Fitch's median guideline of 28%. This ratio reflects the equity credit assigned to the new and existing preferred stock as well as excludes unrealized investment gains on fixed income securities from shareholders' equity. Allstate has the second leading market position in both private passenger auto and homeowners insurance with an approximate market share of 10% measured by premium written. State Farm Mutual Automobile Insurance Co. remains the largest with market share near 20%. Underwriting results for Allstate's property/liability business were favorable with a GAAP combined ratio of 93.1% for the first nine months of 2013 relative to 95.5% for the full year 2012. Fitch believes this ratio may deteriorate somewhat in the fourth quarter due to Midwest storm losses. Personal standard auto accounts for approximately two-thirds of property/liability written premiums and reported a combined ratio of 96.6% for the first nine months of 2013, which was relatively steady from the comparable period in 2012. Nearly one-quarter of Allstate's property/liability written premium comes from the homeowners line of business. Underwriting results for the homeowners line continue to be positive, reporting a combined ratio of 82.4% for the first nine months of 2013. A relatively benign catastrophe year through the first nine months and favorable pricing 2013 explain the improvement in the homeowners' combined ratio from 86.3% in the comparable period in 2012. Allstate's year-to-date catastrophe losses were 5.5% of earned premiums, which was well below the company's 10-year average annual catastrophe loss of 9.7% of earned premiums. Combined statutory surplus at Allstate's P/C operations was $17.1 billion at Sept. 30, 2013. Surplus continues to grow at a modest pace but remains below pre-financial crisis levels of $19.1 billion reported at year-end 2006. Net leverage excluding life company capital was 4.0x, which is somewhat better than the guideline for the current rating category. Allstate's score on Fitch's proprietary capital model, Prism, was 'Strong' which represents an improvement from 'Adequate' and coincides with the current rating category. Allstate Financial reported a modest net loss of $24 million for the first nine months of 2013, down from $541 million of net income for the full year 2012. A $644 million loss on the disposition of Lincoln Benefit Life (LBL), which remains on Rating Watch Negative pending close of the sale transaction, was primarily responsible for the change. Allstate's life insurance operations reported risky assets of 163% of total adjusted capital as of Sept. 30, 2013 compared to Fitch's median guideline of 130% for the 'BBB' category. Below investment grade bonds and Schedule BA and 'Other' assets were responsible for the elevated ratio. Gross unrealized losses have improved significantly over the last couple years and no longer represent a material concern. The rating on Allstate's life operations reflects Fitch's assessment of its limited strategic importance within the Allstate enterprise and view that the 'standalone' IFS rating is in the 'BBB' category. The ratings of the life operations continue to benefit from the Capital Support Agreement from Allstate Insurance Co. and its access to the holding company credit facility. The life operations focus on traditional underwritten products and de-emphasize spread-based products, which improve its risk profile. Increased earnings at Allstate Financial could eventually improve its strategic importance within the Allstate enterprise, but Fitch believes it will take time for a significant increase in earnings to occur. Fitch's rating rationale anticipates a continuation of Allstate's practice of maintaining liquid assets at the holding company level to fund at least one year of interest expense, preferred dividends and common dividends as well as upcoming debt maturities. Allstate had $2.8 billion in holding company assets at Sept. 30, 2013 that could be liquidated within three months, relative to forecasted annual interest expense, preferred and common dividends of approximately $860 million and 2014 debt maturities of $1 billion. Rating Sensitivities: Key rating triggers for Allstate that could lead to an upgrade include: -- Sustainable capital position measured by net leverage excluding life company capital below 3.8x and a score approaching 'Very Strong' on Fitch's proprietary capital model, Prism; -- Reduced volatility in earnings from catastrophe losses and better operating results consistent with companies in the 'AA' rating category; -- Standalone ratings for Allstate's life subsidiaries could increase if their consolidated statutory Risky Assets/TAC ratio approaching 100% and they are able to sustain a GAAP based Return on Assets ratio over 80 basis points. Key rating triggers for Allstate that could lead to a downgrade include: -- A prolonged decline in underwriting profitability that is inconsistent with industry averages or is driven by an effort to grow market share during soft pricing conditions; -- Substantial adverse reserve development that is inconsistent with industry trends; -- Significant deterioration in capital strength as measured by Fitch's capital model, NAIC risk-based capital and statutory net leverage. Specifically, if net leverage excluding life company capital approached 4.8x it would place downward pressure on ratings; -- Significant increases in financial leverage ratio to greater than 30%; -- Unexpected and adverse surrender activity on liabilities in the life insurance operations; -- Liquid assets at the holding company less than one year's interest expense and common dividends. Fitch has assigned the following ratings: -- 6.625% preferred stock 'BB+' Fitch affirms the following ratings for Allstate and subsidiaries: The Allstate Corporation -- Long-term IDR at 'A-'. The following junior subordinated debt at 'BBB-': -- 6.125% $259 million debenture due May 15, 2067; -- 5.10% $500 million subordinated debenture due Jan. 15, 2053; -- 5.75% $800 million subordinated debenture due Aug. 15, 2053; -- 6.5% $500 million debenture due May 15, 2067. The following senior unsecured debt at 'BBB+': -- 6.2% $300 million debenture due May 16, 2014; -- 5% $650 million note due Aug. 15, 2014; -- 6.75% $176 million debenture due May 15, 2018; -- 7.45% $317 million debenture due May 16, 2019; -- 3.15% $500 million debenture due Dec. 15, 2023; -- 6.125% $159 million note due Dec. 15, 2032; -- 5.35% $323 million note due June 1, 2033; -- 5.55% $555 million note due May 9, 2035; -- 5.95% $386 million note due April 1, 2036; -- 6.9% $165 million debenture due May 15, 2038; -- 5.2% $72 million note due Jan. 15, 2042 -- 4.5% $500 million note due June 15, 2043. -- Preferred stock 'BB+'; -- Commercial paper at 'F1'; -- Short-term IDR at 'F1'. Allstate Life Global Funding Trusts Program -- $85 million medium-term notes due Nov. 25, 2016 at 'A-'. Allstate Insurance Company Allstate County Mutual Insurance Co. Allstate Indemnity Co. Allstate Property & Casualty Insurance Co. Allstate Texas Lloyd's Allstate Vehicle and Property Insurance Co. Encompass Home and Auto Insurance Co. Encompass Independent Insurance Co. Encompass Insurance Company of America Encompass Insurance Company of Massachusetts Encompass Property and Casualty Co. -- IFS at 'A+'. Allstate Life Insurance Co. Allstate Life Insurance Co. of NY American Heritage Life Insurance Co. -- IFS at 'A-'. Fitch maintains the following rating on Rating Watch Negative: Lincoln Benefit Life Insurance Co. -- IFS 'A-' on Rating Watch Negative. AMERICAN AMEX: Court Approves Ch. 11 Plan, Sale to Braich --------------------------------------------------------- American Amex, Inc., early this month won confirmation of its sale-based Chapter 11 plan. Bankruptcy Judge Randall L. Dunn on Dec. 4, 2013, entered an order confirming the Debtor's Second Amended Plan of Reorganization dated Oct. 11, 2013, after noting that requisite classes of creditors have voted in favor of confirmation, and all objections have been resolved. At the behest of Sable Palm Development, the confirmation order includes language incorporating the terms of the stipulation, Dkt. No. 16 in Sable Palm Development v. American Amex Inc., et al. Adv. Case #13-03233, Bank. D. Or. Judge Dunn has approved the stipulation. Sable Palm Development and the Debtor agreed to: (1) the amount and allowance of Sable Palm's claim; (2) include language in the Plan's confirmation order that, should the sale contemplated in the Plan not close, secured creditors will be allowed to credit bid their debt in connection with the alternative dispositions of assets identified in the Plan; and (3) include language in the Plan's confirmation order that preserves Sable Palm Development's right to pursue claims. The Plan order also notes that creditor Fred Quimby has submitted documentation that is not an objection to confirmation of the Plan, but may be an attempt to assert a proof of claim in the Chapter 11 case, which will be resolved after confirmation of the Plan. The Chapter 11 Plan Under the Plan, all creditors are receiving full payment from the proceeds from the sale of the Debtor's Buffalo Mine. The Debtor has agreement with Erwin Singh Braich, Trustee of the Peregrine Trust, whereby Braich would purchase the entire mine property. Should Braich not close, then the property would be sold to the highest bidder. The Debtor believes the sale of the Buffalo Mine should fetch at least $27 million, which is more than enough to pay all claims scheduled and/or filed. A copy of the Second Amended Disclosure Statement dated Oct. 11, 2013, is available at: http://bankrupt.com/misc/AMERICAN_AMEX_2ds-1.pdf Sale of Buffalo Mine The bankruptcy judge's confirmation order also approved the sale of the Buffalo Mine property. The order notes that the Debtor has other potential offers to purchase the property being sold for the same or a higher amount, and believes that the fair market value of the property, based on the offers and discussions with proposed purchasers, is $27 million, more or less. Should the proposed purchaser not close, the Debtor is authorized to offer the property to another qualified backup bidder on the same terms and conditions or better, and close the sale thereafter as soon as practicable. Should there be no qualified backup bidders on such terms or better, then the Debtor may re-notice the sale hereafter to another party. Under any alternative disposition of the property, creditors with secured claims may credit bid some or all of their secured claim(s); provided, however, that the balance of any additional amounts bid must be paid on the same terms applicable to other bidders without secured claims. A copy of the Plan Confirmation Order is available for free at: http://bankrupt.com/misc/American_Amex_Plan_Order.pdf About American Amex American Amex, Inc., filed for Chapter 11 protection petition (Bankr. D. Ore. Case No. 12-30656) on Feb. 1, 2012. The Law Offices of D. Blair Clark PLLC has been tapped as counsel. In its amended schedules, the Debtor disclosed $34,000,000 in total assets and $10,490,026 in total liabilities. According to the Debtor, it is the legal owner of a mine in Grant County, Oregon, known historically as the "Buffalo Mine." AMERICAN MADE TIRES: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: American Made Tires Inc. 31-64 21st Street #110 Astoria, NY 11106 Case No.: 13-47510 Chapter 11 Petition Date: December 18, 2013 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Hon. Elizabeth S. Stong Debtor's Counsel: Peter Mammis, Esq. MAMMIS LAW FIRM INC. 488 Madison Avenue, Suite 1100 New York, NY 10022 Tel: 212-486-9494 Fax: 212-486-0701 Email: pmammis@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Steven Georgilis, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. ANGLO IRISH: Receives Ch. 15 Protection With Opinion Coming Later ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Irish Bank Resolution Corp. Ltd. was granted court protection in the U.S. by Bankruptcy Judge Christopher Sontchi, who said he will file an opinion later explaining why he dismissed objections to the Chapter 15 petition. According to the report, IBRC was formed to complete the liquidation of Ireland's Anglo Irish Bank Corp. and Irish Nationwide Building Society. To halt lawsuits pending in the U.S., it filed a Chapter 15 petition in August. A month later, Judge Sontchi gave a temporary halt to lawsuits in the U.S. In his ruling on Dec. 18, Judge Sontchi concluded that Ireland is home to the so-called foreign-main bankruptcy proceeding. The finding automatically invokes an injunction halting creditor actions in the U.S. and enabling the U.S. court to assist the main bankruptcy court in Ireland. There were objections to the Chapter 15 petition on several grounds that Judge Sontchi will address in his upcoming opinion. Objections were lodged by borrowers who didn't want their lawsuits halted. The objections go to the question of whether IBRC, created under a special-purpose Irish law, qualifies for Chapter 15 protection. IBRC's principal asset as of June 2012 was a loan portfolio valued at about 25 billion euros ($33.2 billion). Total liabilities in June 2012 were about 50 billion euros, according to a court filing. About Anglo Irish Anglo Irish Bank was an Irish bank headquartered in Dublin from 1964 to 2011. It went into wind-down mode after nationalization in 2009. In July 2011, Anglo Irish merged with the Irish Nationwide Building Society, with the new company being named the Irish Bank Resolution Corporation (IBRC). Standard & Poor's Ratings Services said that it lowered its long- and short-term counterparty credit ratings on Irish Bank Resolution Corp. Ltd. (IBRC) to 'D/D' from 'B-/C'. S&P also lowered the senior unsecured ratings to 'D' from 'B-'. S&P then withdrew the counterparty credit ratings, the senior unsecured ratings, and the preferred stock ratings on IBRC. At the same time, S&P affirmed its 'BBB+' issue rating on three government- guaranteed debt issues. The rating actions follow the Feb. 6, 2013, announcement that the Irish government has liquidated IBRC. The former Irish bank sought protection from creditors under Chapter 15 of the U.S. Bankruptcy Code on Aug. 26, 2013 (Bankr. D. Del., Case No. 13-12159). The former bank's Foreign Representatives are Kieran Wallace and Eamonn Richardson. Its U.S. bankruptcy counsel are Mark D. Collins, Esq., and Jason M. Madron, Esq., at RICHARDS, LAYTON & FINGER, P.A., in Wilmington, Delaware. APOLLO MEDICAL: Delays Form 10-Q for Oct. 31 Quarter ---------------------------------------------------- Apollo Medical Holdings, Inc., filed with the U.S. Securities and Exchange Commission a Notification of Late Filing on Form 12b-25 with respect to its quarterly report on Form 10-Q for the quarter ended Oct. 31, 2013. The Company said the compilation, dissemination and review of the information required to be presented in the Company's Quarterly Report on Form 10-Q has imposed time constraints that have rendered timely filing of the Form 10-Q impracticable without undue hardship and expense to the Company. The Company expects to file that report no later than five days after its original prescribed due date. About Apollo Medical Glendale, Calif.-based Apollo Medical Holdings, Inc., provides hospitalist services in the Greater Los Angeles, California area. Hospitalist medicine is organized around the admission and care of patients in an inpatient facility such as a hospital or skilled nursing facility and is focused on providing, managing and coordinating the care of hospitalized patients. Kabani & Company, Inc., in Los Angeles, California, issued a "going concern qualification on the consolidated financial statements for the fiscal year ended Jan. 31, 2013. The independent auditors noted that the Company had a loss from operations of $2,078,487 for the year ended Jan. 31, 2013, and had an accumulated deficit of $11,022,272 as of Jan. 31, 2013. These factors raise substantial doubt about the Company's ability to continue as a going concern. Apollo Medical reported a net loss of $8.90 million on $7.77 million of net revenues for the year ended Jan. 31, 2013, as compared with a net loss of $720,346 on $5.11 million of net revenues for the year ended Jan. 31, 2012. The Company's balance sheet at July 31, 2013, showed $3.13 million in total assets, $4.40 million in total liabilities, and a $1.26 million total stockholders' deficit. AURORA DIAGNOSTICS: Taps Evercore, Kirkland for Advice ------------------------------------------------------ Emily Glazer, writing for The Wall Street Journal, reports that Aurora Diagnostics Holdings LLC, a closely held health-care company that provides diagnostic and information services to physicians, hospital systems and researchers, has tapped bankers at Evercore Partners and is in talks with restructuring lawyers at Kirkland & Ellis LLP, people familiar with the matter said, to help it face challenges posed by reductions in Medicare reimbursements and a high debt load. Aurora Diagnostics has worked with both Evercore and Kirkland on other corporate and financing matters and isn't for sale, one of the people said, according to the report. Moreover, bankruptcy isn't imminent, as the company, which is owned by investment firm Summit Partners, examines opportunities for an out-of-court restructuring, these people added. WSJ notes Aurora joins a string of debt-laden health-care companies snagged by cuts in reimbursement rates from government insurers. Medical-equipment provider Rotech Healthcare Inc. cited such cuts when it filed for Chapter 11 bankruptcy protection in April, as did OnCure Holdings Inc., an operator of radiation centers, which filed for bankruptcy protection in June and later sold its assets. Aurora carries about $330 million in debt, according to its most recent quarterly filing with the Securities and Exchange Commission. Cuts to Medicare reimbursement rates implemented by the Affordable Care Act have made the company's debt load unsustainable, one of the people familiar with the matter said, according to WSJ. Aurora operates about 20 laboratory locations in 12 U.S. states that partner with medical professionals, according to its website. Its more than 150 licensed physicians focus on the diagnostics needs of doctors such as dermatologists, gastroenterologists, general surgeons and more than 65 community hospitals. About Aurora Diagnostics Headquartered in Palm Beach Gardens, Florida, Aurora Diagnostics Holdings, LLC, through its subsidiaries, provides physician-based general anatomic and clinical pathology, dermatopathology, molecular diagnostic services and other esoteric testing services to physicians, hospitals, clinical laboratories and surgery centers. The company recognized approximately $260 million in revenue for the 12 months ended June 30, 2013. The company is majority owned by equity sponsors KRG Capital Partners and Summit Partners. As reported by the Troubled Company Reporter on Sept. 27, 2013, Moody's Investors Service downgraded Aurora's Corporate Family Rating to Caa2 from B3 and Probability of Default Rating to Caa2- PD from B3-PD. Moody's also lowered the debt ratings of Aurora Diagnostics Holdings, LLC's and Aurora Diagnostics, LLC (collectively Aurora). Concurrently, Moody's downgraded Aurora's Speculative Grade Liquidity Rating to SGL-4 from SGL-3. The outlook for the ratings remains negative. The downgrade of the ratings reflects Moody's expectation that the company will see continued difficulty in mitigating a significant decline in revenue and EBITDA. This stems from a reduction in Medicare reimbursement due to a decrease in rates and sequestration, continued challenging volume growth trends and threats of additional reimbursement reductions. This will negatively impact the company's credit metrics, constrain Aurora's ability to repay debt and pressure the company's liquidity position. Moody's also has concerns about the sustainability of the company's capital structure given its significant debt load and related interest burden. As reported by the TCR on Oct. 21, 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Aurora to 'CCC+' from 'B-'. S&P also lowered its rating on subsidiary Aurora Diagnostics LLC's senior secured debt to 'B' (two notches above the corporate credit rating) from 'B+', and its rating on Aurora Diagnostics Holdings LLC's senior unsecured debt to 'CCC-' (two notches below the corporate credit rating) from 'CCC'. S&P's '1' recovery rating on the senior secured debt and '6' recovery rating on the senior unsecured debt remain unchanged. The '1' recovery rating indicates S&P's expectation for very high (90% to 100%) recovery of principal and its '6' recovery rating indicates its expectation for negligible (0 to 10%) recovery of principal, both in the event of payment default. "We downgraded the company because we believe 2014 Medicare payment rates, signaled by recent proposals from the Centers for Medicare & Medicaid Services, are likely to be more onerous than we previously expected," said Standard & Poor's credit analyst Gail Hessol. "In addition, we doubt Aurora's ability to stem erosion of its competitive position and we expect limited benefits from Aurora's cost reduction efforts. Therefore, we expect its EBITDA and discretionary cash flow to decline significantly in 2014, compared with 2013." The negative rating outlook on Aurora reflects the possibility it will violate its loan covenant or exhaust its borrowing capacity in 2014. B&G FOODS: S&P Raises Rating to 'BB-' & Removes From CreditWatch ---------------------------------------------------------------- B&G Foods Rating Raised To 'BB-' On Revised Criteria; Outlook Stable Standard & Poor's Ratings Services raised its ratings on Parsippany, N.J.-based B&G Foods Inc. to 'BB-' from 'B+'. All related issue-level ratings on the company's debt were also raised by one notch in conjunction with the upgrade. The ratings were removed from CreditWatch, where S&P placed them with positive implications on Nov. 26, 2013. The rating outlook is stable. Recovery ratings on the company's debt issues remain unchanged. "We base our upgrade on our reassessment of the impact of absolute profitability and volatility of earnings on B&G's business risk profile as per the revised Corporate Ratings criteria," said Standard & Poor's credit analyst Bea Chiem. The stable outlook reflects S&P's expectation that B&G will sustain EBITDA margins in the mid-20% area, adequate liquidity, and credit metrics consistent with indicative ratios for an aggressive financial risk profile, including adjusted debt to EBITDA between 4x and 5x and funds from operations to debt of 12% to 20%, given its acquisitive history. BALENTINE LP: Beacon to Conduct Foreclosure Sale on Jan. 8 ---------------------------------------------------------- Beacon Default Management, Inc. -- the trustee under a Deed of Trust, Assignment of Rents and Security Agreement executed by Balentine, L.P. -- will sell at public auction to the highest bidder, for cash, or cashier's check made payable to Beacon Default Management, the real property situated in the County of Alameda, California, on Jan. 8, 2014, at 12:00 p.m., at the Fallon Street emergency exit to the Alameda County Courthouse, 1225 Fallon Street, Oakland, California 94612. The property is being sold for the purpose of paying the obligations secured by the Deed of Trust, including fees and expenses of sale. The total amount of the unpaid principal balance, interest thereon, together with reasonably estimated costs, expenses and advances at the time of the initial publication of the Notice of Trustee's Sale is $19,529,718. The Beneficiary under the Deed of Trust has elected to conduct a unified foreclosure sale pursuant to the provisions of California Commercial Code Section 9604(a)(1)(B) and to include in the non- judicial foreclosure of the estate all of the personal property and fixtures. The Trustee may be the reached at: Erica Itskovich Beacon Default Management, Inc. 15206 Ventura Boulevard, Suite 216 Sherman Oaks, CA 91403 Telephone: (818) 501-9800 http://www.beacondefault.com/ NOTICE TO POTENTIAL BIDDERS: If you are considering bidding on this property lien, you should understand that there are risks involved in bidding at a trustee auction. You will be bidding on a lien, not on the property itself. Placing the highest bid at a trustee auction does not automatically entitle you to free and clear ownership of the property. You should also be aware that the lien being auctioned off may be a junior lien. If you are the highest bidder at the auction, you are or may be responsible for paying off all liens senior to the lien being auctioned off, before you can receive clear title to the property. You are encouraged to investigate the existence, priority, and size of outstanding liens that may exist on this property by contacting the county recorder's office or a title insurance company, either of which may charge you a fee for this information. If you consult either of these resources, you should be aware that the same lender may hold more than one mortgage or deed of trust on the property. BERGENFIELD SENIOR HOUSING: To Seek Plan Confirmation Jan. 14 ------------------------------------------------------------- Bergenfield Senior Housing, LLC, has won approval to begin sending plan solicitation packages to creditors and has scheduled a Jan. 14 hearing for confirmation of its liquidating plan. Judge Morris Stern on Dec. 10 approved the disclosure statement explaining the Debtor's Second Amended Chapter 11 Plan of Liquidation and authorized the Debtor to move forward with the plan-approval process based on this timeline: -- The Debtor will cause the mailing of the solicitation packages to voting creditors not later than Dec. 17, 2013; -- To be counted, all ballots must be properly executed and delivered by Jan. 10, 2014; -- All objections to confirmation of the Plan will be filed with the Court not later than Jan. 10, 2014; -- The Debtor may file a consolidated reply to Plan objections by Jan. 13, 2014, at 12 p.m. -- The Debtor will file the voting report not later than one business day prior to the confirmation hearing. -- The hearing to consider confirmation of the Plan will commence on Jan. 14, 2014, at 10:30 a.m. (prevailing Eastern Time). The Debtor on Dec. 12, 2013, filed a revised Disclosure Statement to incorporate the dates with respect to the solicitation of votes and confirmation of the Plan. A copy of the document is available for free at http://bankrupt.com/misc/Bergenfield_DS_121213.pdf The purpose of the Plan is to liquidate, collect and maximize the cash value of the assets of the Debtor and make distributions on account of allowed claims against the Debtor's estate. The Plan is premised on the satisfaction of Claims through distribution of the proceeds raised from the sale and liquidation of the Debtor's assets, claims and causes of action. Secured creditors Boiling Springs Savings Bank (allowed claim estimated at $12.6 million), and Nicholas and Rosemarie Rotonda ($1.5 claim in one class; $600,000 in another) are entitled to vote on the Plan. General unsecured creditors estimated to have claims totaling $1.92 million are also entitled to vote. Under the Plan: * BSSB will receive full payment of principal plus interest at 3% per annum. BSSB is impaired because it will be receiving less than 100% of what it claims it is entitled to under the loan agreement. BSSB has expressed its intention to object to confirmation of the Plan if the Plan is not modified to provide full payment of interest accruing at 6%. * Nicholas and Rosemarie Rotonda will receive cash up to the full allowed amount of their secured claims from the proceeds of the sale. * General unsecured creditors will each receive pro rata share of the proceeds of the liquidation of any further assets of the Debtor, including causes of action. * Holders of equity interests won't receive anything and are deemed to reject the Plan. About Bergenfield Senior Housing Bergenfield Senior Housing, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 13-19703) in Newark, New Jersey, on May 2, 2013. Nicholas Rotonda signed the petition as member/manager. Judge Morris Stern presides over the case. Aaron Solomon Applebaum, Esq., and Barry D. Kleban, Esq., at McElroy, Deutsch, Mulvaney & Carpenter, LLP, represent the Debtor as counsel. In its schedules, the Debtor disclosed $14,061,100 in assets and $19,957,026 in liabilities as of the Petition Date. The Bergenfield, New Jersey-based debtor is a single asset real estate under 11 U.S.C. Sec. 101(51B) and said total assets and debts exceed $10 million. The Debtor operates and wholly owns a 90-unit residential apartment building located at 47 Legion Drive, Bergenfield, New Jersey. The Debtor's primary secured creditor is Boiling Springs Savings Bank. The Debtor is indebted to Boiling Springs on account of two promissory notes, both of which are secured by mortgages on the Property. Boiling Springs' first-position mortgage secures indebtedness in the total amount of $12.02 million and the second- position mortgage secures indebtedness of $575,000. BIOLIFE SOLUTIONS: Inks Note Conversion Agreements with Investors ----------------------------------------------------------------- BioLife Solutions, Inc., entered into note conversion agreements with each of Thomas Girschweiler and Walter Villiger. Mr. Girschweiler is a director of the Company and holds approximately 20 percent of the Company's issued and outstanding common stock as of Dec. 16, 2013. Mr. Villiger holds approximately 27 percent of the Company's issued and outstanding common stock as of Dec. 16, 2013. On Jan. 11, 2008, the Company issued to each of the Investors a promissory note in the original principal amount of $2,500,000, which was subsequently amended Oct. 20, 2008, Dec. 16, 2009, Nov. 16, 2010, Aug. 10, 2011, and May 30, 2012, in connection with that certain Secured Multi-Draw Term Loan Facility Agreement dated as of Jan. 11, 2008, by and among the Company and the Investors, which was subsequently amended Oct. 20, 2008, Dec. 16, 2009, Nov. 16, 2010, Aug. 10, 2011, and May 30, 2012. As of Dec. 16, 2013, the aggregate outstanding principal balance on the Notes was approximately $10,600,000. The Notes are due and payable, together with accrued interest, on the earlier of (i) Jan. 11, 2016, or (ii) an Event of Default. Pursuant to the Agreements, the conversion of the Notes will be effected on substantially similar terms and in connection with the Company's next offer and sale of its equity for cash. The entire outstanding indebtedness of the Notes, including all accrued and unpaid interest through the date of conversion, will convert into substantially identical securities of the Company issued in the Qualified Financing, at a conversion price equal to the per security offering price in the Qualified Financing in consideration for the cancellation by the Investors of the entire principal amount of indebtedness and accrued interest thereon, and the release of all related security interests. To Offer $10 Million Securities Biolife Solutions filed a Form S-1 registration statement relating to the offering of [__] units, each unit consisting of [___] shares of common stock, $0.001 par value and [__] common stock warrants at a public offering price of $ [__] per unit. The proposed maximum aggregate offering price is $10 million. The Company's common stock is currently quoted on the OTCQB, under the symbol "BLFS". The Company has applied to list its common stock on the Nasdaq Capital Market under the symbol "BLFS". As of Dec. 13, 2013, the last reported sale price of the Company's common stock was $0.59 per share on the OTCQB. The Company does not intend to apply for listing of the warrants on any securities exchange or other trading system. The Company has retained Ladenburg Thalmann & Co. Inc. to act as the Company's exclusive placement agent in connection with this offering until the expiration date of the offering. A copy of the Form S-1 prospectus is available for free at: http://is.gd/7UIg16 About BioLife Solutions Bothell, Washington-based BioLife Solutions, Inc., develops and markets patented hypothermic storage and cryo-preservation solutions for cells, tissues, and organs, and provides contracted research and development and consulting services related to optimization of biopreservation processes and protocols. BioLife Solutions disclosed a net loss of $1.65 million in 2012, as compared with a net loss of $1.95 million in 2011. As of Sept. 30, 2013, the Company had $3.20 million in total assets, $16.06 million in total liabilities and a $12.85 million total shareholders' deficiency. BORNEO RESOURCE: Executes Debt Restructuring Agreement ------------------------------------------------------ Borneo Resource Investments Ltd., a mining company that mines gold and develops producing gold mines as well as coal mining properties in Indonesia, on Dec. 19 disclosed that it has, through its subsidiary PT Puncak Kalabat, executed a Debt Restructuring Agreement with the seller of the "Talawaan Property," a producing gold mine. Borneo had acquired Talawaan for a purchase price of $5,000,000 and owed an aggregate balance of $4,650,000 as of December 17, 2013. Per the Debt Restructuring Agreement executed on December 17, 2013 the parties have agreed to reduce the balance to be paid by $2,500,000 from $4,650,000 to $2,150,000, in exchange for 100,000 shares of Borneo stock and a non-interest bearing promissory note. For September 30, 2013, the Company had reported current liabilities of $7.1 million, including the amount owed for the purchase of Talawaan and a total stockholders' deficit of $595,052. On a proforma basis, applying the debt restructuring to the September 30, 2013 balance sheet, the Company would have reported current liabilities of $4.6 million and a total stockholders' equity of $1.9 million. Borneo started gold production at Talawaan in June of 2013 and completed its first full quarter of production at the property in the third quarter of 2013, putting the Company into profitability for that quarter. "This Debt Restructuring Agreement is a result of our strengthening relationship with the seller and other leaders in the region. Following our acquisition of Talawaan, we have acquired two additional gold properties and we are currently evaluating other opportunities as well. The seller lowered the amount owed for Talawaan in exchange for equity, a continuing business relationship, and to obtain a promissory note with a fixed payment schedule. We believe the seller of Talawaan is pleased to become a shareholder of Borneo and we look forward to doing more business with him and other property holders in the region," commented Borneo CEO Nils Ollquist. "With this transaction we improve our balance sheet and strengthen our financial position. This will be very important as we pursue additional funding opportunities and work towards a listing on a national securities exchange in the United States," Mr. Ollquist concluded. About Borneo Resource Investments Ltd. Borneo Resource Investments Ltd. (otcqb:BRNE) is a mining company that mines gold and develops producing gold mines as well as coal mining properties in the Republic of Indonesia. Borneo's current assets include three gold properties, two of which are producing gold. Cash flow-producing investments in gold properties help fund Borneo's operations and investments in gold, while the Company develops high value, longer-term investments in thermal "coal concessions," which are properties that can be mined for coal. Borneo currently has one coal concession in the Borneo region of Indonesia. Indonesia was the 8th largest gold producing nation in 2012 and the world's largest exporter of coal, with $25 billion exported in 2012. BROWN PUBLISHING: Dist. Court Wants Briefings in KLG Appeal ----------------------------------------------------------- District Judge Arthur D. Spatt reserved its decision on the appeal by KLG Gates LLP from the orders of the U.S. Bankruptcy Court, Eastern District of New York (Eisenberg, J.), entered on April 29, 2013 and July 8, 2013, disqualifying KLG as counsel to (a) the Brown Publishing Company and Brown Media Holdings Company; and (b) the Brown Publishing Company Liquidating Trust; and ordering KLG to disgorge $100,000 of previously approved and paid fees. The Bankruptcy Court disqualified KLG based on its conclusions that (a) an implied pre-petition attorney-client relationship existed between KLG and certain of the Debtors' managers and (b) KLG's 2010 Statement pursuant to Federal Rule of Bankruptcy Procedure 2014 failed to adequately inform the Court of its relationship with those managers, creditors of the Debtors, and other parties in interest. That ruling was reported in the May 1, 2013 edition of the Troubled Company Reporter. Roy E. Brown, former CEO, shareholder, and director of each of the debtors, and one of the primary defendants in the adversary proceedings, has made various motions, with the ultimate objectives being (1) to disqualify K&L Gates as counsel to the liquidating trust, and (2) to force K&L Gates to disgorge all legal fees it has been paid in the case. Mr. Brown asserted that a conflict of interest arose, due to the fact that, pre-petition, K&L Gates, rather than acting exclusively for the benefit of its "official" clients, the Debtors, was really acting for the benefit of Roy Brown and other insiders, to help them to obtain the Debtors' assets in bankruptcy; and that K&L Gates failed to fully disclose the nature of its representation of PNC Bank, the successor administrative and collateral agent for the First Lien Lenders, and Wilmington Trust, the successor administrative and collateral agent for the Second Lien Lenders. KLG and the liquidating trust have vigorously opposed Mr. Brown's motions. Judge Spatt said that at this time, and in the absence of briefing by parties on this issue, the Court is not prepared to make any findings as to KLG's appellate standing. "For this reason, within twenty days of the date of this order, the Court directs KLG to submit a supplemental brief not in excess of ten pages addressing, in light of the above-mentioned cases, its standing before this Court. Brown will then have twenty days to submit an opposition brief not in excess of ten pages, followed by ten days for KLG, if it chooses, to submit a reply brief, not in excess of five pages," Judge Spatt said. A copy of Judge Spatt's Dec. 18, 2013 Memorandum of Decision and Order is available at http://is.gd/6Gxvu5from Leagle.com. The appeal is KLG GATES LLP, Appellant, v. ROY E. BROWN, Appellee, No. 13-cv-4972 (ADS) (E.D.N.Y). Anthony C. Acampora, Esq., at Silverman, Acampora LLP, in Jericho, represents KLG. Daniel L. Abrams, Esq., at the Law Office of Daniel L. Abrams, PLLC, represents Mr. Brown. About Brown Publishing The Brown Publishing Company, Brown Media Holdings Company and their subsidiaries filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Lead Case No. 10-73295) on April 30, 2010 and May 1, 2010. BPC estimated $10 million to $50 million in assets and debts in its Chapter 11 petition. Edward M. Fox, Esq., and Eric T. Moser, Esq., at K&L Gates LLP, served as counsel for the Debtors. BPC is a privately held community news and information corporation, organized under the laws of the State of Ohio that, prior to the sale of its assets, had been one of the largest newspaper publishers in Ohio, and also operated publications in Illinois, South Carolina, Texas and Utah. Roy E. Brown, former CEO, shareholder, and director of each of the debtors, and other insiders of the Debtors formed Brown Media Corporation to acquire the assets and serve as stalking horse bidder. BMC offered a stalking horse bid of $15.3 million cash plus additional consideration. The auction commenced July 19, 2010 and lasted into the early morning hours of July 20. With the exception of certain assets of the Debtors located in Van Wert, Ada and Putnam, Ohio that were sold to Delphos Herald, Inc., BMC was the successful bidder with respect to substantially all of the Debtors's remaining assets after making the highest and best offer for $22.4 million cash plus additional consideration. PNC Bank, N.A., a secured creditor of the Debtors, was the next successful bidder after BMC. BMC, however, lost financing and failed to close on the sale. The insiders had obtained a commitment from Guggenheim Corporate Funding, LLC and/or one of its affiliates for financing. Subsequently, the Court approved the asset purchase agreements for the sale of the Debtors' assets to PNC's assignee, Ohio Community Media LLC, and to ISIS Ventures Partners LLC pursuant to orders dated Sept. 3, 2010. ISIS formed Dan's Papers Holdings LLC to purchase the assets of one of the Debtors, Dan's Papers, for $1,750,000. PNC agreed to pay $21,750,000 for substantially all of the Debtors remaining assets. The total purchase price tendered for the Debtors' assets, including cash and debt forgiveness, was about $27.09 million. On June 16, 2011, the Court entered an order confirming the Debtors' chapter 11 plan which provided that any remaining assets of the Debtors' bankruptcy estate that were not sold pursuant to the Auction Sale, including all claims and causes of action, would vest in a trust. BUCKINGHAM SRC: Triangle Buys Flux Producer in Debt Swap -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Buckingham SRC Inc., calling itself the only U.S. producer of magnesium flux, received authority on Dec. 18 from the bankruptcy court in Cleveland to sell the business to secured lender Triangle Capital Corp. in exchange for $10.45 million in debt. According to the report, there were no other bids, so an auction was canceled. The company, which filed a petition for Chapter 11 protection in late October, blamed financial problems on equipment "in dire need of repair" and a "devastating" electrical failure in May that curtailed production. Debt includes about $375,000 on a revolving credit and $1.9 million on a term loan owing to Triangle. In addition, the company owes Triangle $6.2 million on a subordinate term loan. There is a $2.1 million note payable to the former owner of the business. Trade payables are $718,000, according to a court filing. Tangible assets were on the books for $3 million, the company said. Buckingham SRC Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 13-bk-17583) on Oct. 28, 2013. The case is assigned to Judge Jessica E. Price Smith. The Debtor is represented by Christopher W. Peer, Esq., at HAHN LOESER AND PARKS LLP, in Cleveland, Ohio. BUFFALO GROVE DOMINICK'S: Shoppers Line Up for Liquidation Sale --------------------------------------------------------------- Emily Stone at the Buffalo Grove Patch reports that the 50 percent off most everything sale at the two closing Buffalo Grove Dominick's brought people out before dawn on Dec. 13, store personnel said. The Lake Cook Road store had similar crowds first thing in the morning. The report relates that almost everything in the store is half off, except for liquor, fresh produce, meat, milk, eggs and a few other items. The report notes that the sale runs until the stores are cleaned out. There is no special sale at the Half Day Road store, which is going to become a Mariano's, the report adds. CAP*ROCK: Failed Bidder Settles Suit for $2.5 Million ----------------------------------------------------- LUBBOCKONLINE.COM reports that an Albuquerque, N.M. winemaker who defaulted more than two years ago on a bid to buy the Cap*Rock Wine Co. out of bankruptcy has agreed to pay $2.5 million to settle a lawsuit in the case. The settlement ? a little more than half the $3.9 million Laurent L. Gruet was ordered to pay after his $6.5 million bid for the Woodrow Road winery fell through in 2011 ? is the last major step toward closing out the Lubbock winery's bankruptcy and liquidation, which is approaching its fourth anniversary, according to lubbockonline.com. Concluding the bankruptcy would have no effect on the winery's current owners. The report notes that U.S. Bankruptcy Judge Robert L. Jones agreed, Dec. 12, to the proposed settlement between Laurent L. Gruet and the bankruptcy estate, which likely will be finalized when it is presented to a federal bankruptcy judge in Albuquerque. The report relates that bankruptcy trustee Max Tarbox said the winery's major creditors did not object to the settlement. According to court documents, PlainsCapital Bank is the largest creditor in the bankruptcy and is owed about $4 million, the report says. In April 2012, the report recalls that Judge Jones ordered Gruet to pay $3.9 million plus attorney's fees and interest to cover the losses incurred after the winemaker bid $6.5 million to buy the Woodrow Road winery, but failed to come up with the money to close the deal. The report notes that a second auction was held and San Antonio- based fast food franchise magnate Jim Bodenstedt bought the winery for $2.5 million and gave it to his wife, Cathy, to operate. The Bodenstedts have since sold the winery, the report relays. The report discloses that Mr. Tarbox retained the law firm of Mullin, Hoard, Brown to pursue the case in litigation that led to New Mexico and Gruet's native France. Ultimately liens were filed against Laurent Gruet's shares of the family's winery operations in Albuquerque and vineyard and winery interests in France, the report notes. At the recent hearing, Judge Jones asked Mr. Tarbox how confident he was that Gruet would make the payments in the settlement, the report relates. Mr. Tarbox replied that he expects the money to come quickly from Gruet's business connections in France because "they don't want me to become part owner of any of their companies," the report relays. The winery's previous Lubbock partner, Don Roark, filed a Chapter 11 reorganization petition on Dec. 23, 2009, which led to a control fight with the winery's New York-based venture capital partner, Oxbridge Capital Group. Both sides eventually dropped the fight, and the bankruptcy was converted to a Chapter 7 liquidation case. CASA CASUARINA: Has Until Dec. 28 to Propose Chapter 11 Plan ------------------------------------------------------------ The Hon. Laurel M. Isicoff of the U.S. Bankruptcy Court for the Southern District of Florida extended Casa Casuarina LLC's exclusive periods to file a Chapter 11 until Dec. 28, 2013, and solicit acceptances for that Plan until Feb. 6, 2014. As reported in the Troubled Company Reporter on Nov. 5, 2013, the Debtor explained that an extension is needed because: 1. The deadline to file proofs of claim is set for shortly after the expiration of the Debtor's exclusive period. 2. In the short time this case has been pending, the Debtor has negotiated a resolution to the appointment of a trustee, settled a dispute with a major creditor, and marketed and sold an extremely high-profile asset. Obviously, it is clear that the Debtor has made progress toward reorganization. 3. The Debtor has satisfied, and will continue to satisfy, each of its post-petition obligations in the ordinary course. 4. Given the net proceeds generated by the sale, the Debtor's prospect for reorganization is strong. 5. As noted in its schedules, many of the potential claims remain unresolved. The extension of the exclusivity period will enable the Debtor to make adequate disclosures necessary in the negotiation and solicitation of the Plan. About Casa Casuarina Casa Casuarina, LLC, owner of Gianni Versace's former South Beach mansion on Ocean Drive in Miami Beach, Florida, 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 least $10 million. Joe M. Grant, Esq., at Marwill Socarras Grant, P.L., serves as the Debtor's counsel. 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 for bankruptcy, Mr. Stettin had reached agreement to settle his claim to partial ownership. In its schedules, the Debtor disclosed $79,005,976.66 in total assets and $32,506,799.29 in total liabilities as of the Petition Date. CIRCLE STAR: Posts $72,000 Net Income in Oct. 31 Quarter -------------------------------------------------------- Circle Star Energy Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $71,988 on $444,288 of total revenues for the three months ended Oct. 31, 2013, as compared with a net loss of $5.87 million on $211,454 of total revenues for the same period a year ago. For the six months ended Oct. 31, 2013, the Company reported a net loss of $477,298 on $743,176 of total revenues as compared with a net loss of $7.80 million on $362,058 of total revenues for the same period during the prior year. The Company's balance sheet at Oct. 31, 2013, showed $3.33 million in total assets, $5.54 million in total liabilities and a $2.21 million total stockholders' deficit. "At October 31, 2013, we had cash and cash equivalents of $84,391 and a working capital deficit of $5,279,080. For the six months ended October 31, 2013, we had a net loss of $477,298 and an operating loss of $336,832 and cash provided by operations amounted to $50,019. As of October 31, 2013 our 10% convertible notes payable due February 8, 2013 in the principal amount of $2,750,000 had matured, and the principal and accrued interest remain outstanding, which notes are currently in default and in litigation. "Given that we have not achieved profitable operations to date, our cash requirements are subject to numerous contingencies and risks beyond our control, including operational and development risks, competition from well-funded competitors, and our ability to manage growth. We can offer no assurance that the Company will generate cash flow sufficient to achieve profitable operations or that our expenses will not exceed our projections. Accordingly, there is substantial doubt as to our ability to continue as a going concern for a reasonable period of time," the Company said in the Quarterly Report. A copy of the Form 10-Q is available for free at: http://is.gd/fcMHFL About Circle Star Fort Worth, Tex.-based Circle Star Energy Corp. (OTC BB: CRCL) owns a variety of non-operated working interests and overriding royalty interests in approximately 73 producing wells in Texas. The interests range from less than 1% up to approximately 5% in each well. The wells are located in the following areas: Permian Basin, Eagle Ford Shale, Pearsall Field, Giddings Field & the Woodbine Field. The wells are operated by Apache (Permian), Chesapeake (Eagle Ford Shale), CML (Giddings, Pearsall & Permian), Leexus (Giddings) and Woodbine Acquisitions (Woodbine). As of April 30, 2013, the Company had approximately 430 net leased acres in Texas. The Company also operates 2 wells in Kansas. The Company owns a 25% working interest (approximately 20% net revenue interest) before payout and a 43.75% working interest (approximately 35% net revenue interest) after payout in both wells which are located in Trego County. As of July, 31, 2013, the Company had approximately 9,838 net leased acres in Kansas. Approximately 1,480 are located in Trego County and approximately 8,358 are located in Sheridan County. There are multiple potential pay zones of interest with the primary zones of interest being the Arbuckle, Marmaton & Lansing-Kansas City ranging from approximately 3,200 feet to approximately 4,300 feet in depth. COMIDA MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Comida Management, LLC dba Mi Amigos Mexican Grill 6465 E. Southern Avenue Mesa, AZ 85206 Case No.: 13-21573 Chapter 11 Petition Date: December 18, 2013 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Hon. Sarah Sharer Curley Debtor's Counsel: William R. Richardson, Esq. RICHARDSON & RICHARDSON, P.C. 1745 S. Alma School RD., #100 Mesa, AZ 85210-3010 Tel: 480-464-0600 Fax: 480-464-0602 Email: wrichlaw@aol.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by David N. Candland, managing member. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/azb13-21573.pdf CONAGRA FOODS: Lead Paint Ruling No Impact on Fitch's Rating ------------------------------------------------------------ According to Fitch Ratings, there is no immediate change to ConAgra Foods, Inc.'s ratings following the Superior Court of California's Dec. 16, 2013 proposed statement of decision in a lead paint case against ConAgra Grocery Products Company (ConAgra Grocery), a wholly owned subsidiary of ConAgra. The proposed decision orders the creation of a $1.1 billion California abatement fund to replace or contain lead paint in homes. The liability is joint and several against Sherwin-Williams Co. ('A-'/Stable), NL Industries and ConAgra Grocery. ConAgra's proportional share is currently unknown. Fitch will monitor future rulings and take appropriate rating actions if it becomes clear that any future payout would have a material adverse effect on the company's leverage, financial condition, results of operations or liquidity. ConAgra has never manufactured or sold paint. ConAgra Grocery was included in the case due to its linkage to a former subsidiary of Beatrice Company that manufactured lead paint until the 1950s. That paint company was dissolved in 1968, 45 years ago and 22 years prior to ConAgra's acquisition of Beatrice. ConAgra does not believe it inherited any liabilities of the dissolved entity. ConAgra plans to appeal this decision and vigorously defend itself in this case and any lead paint related litigation. Several states have rendered favorable decisions in other lead paint related litigation. The appeals process is likely to be lengthy and last several years. ConAgra does not believe an appeal bond is legally required in this case. However, if necessary Fitch believes ConAgra can post an appeal bond without putting strain on its current ratings. The ratings factor in ConAgra's commitment to prioritize its free cash flow (FCF) to repay a total of $1.5 billion of debt through fiscal 2015. The ratings and Stable Outlook also factor in progress toward ConAgra's anticipated improvement in Consumer Foods' operating performance in the second half of fiscal 2014. ConAgra maintains adequate liquidity, including an undrawn $1.5 billion revolving credit facility (RCF) that provides backup to its commercial paper (CP) program. The company had $280 million CP outstanding and $194 million cash at Aug. 25, 2013. Subsequent to the end of the quarter, ConAgra extended its RCF by two years to Sept. 14, 2018. At Aug. 25 2013, ConAgra had $900 million outstanding on its term loan which matures Jan. 29, 2018. The company intends to pay off the balance by the end of fiscal 2015 and currently does not have amortization payments due to prepayments completed. ConAgra would be in default under its credit agreements if it incurs final judgments, after all appeals have been exhausted, in excess of $35 million (excluding amounts covered by insurance and coverage has not been denied) outstanding for more than 30 days from its date of entry and not discharged in full or stayed. The credit facilities have a 75% maximum debt-to-capital covenant for four quarters beginning Jan. 29, 2013, declining to 65% over time. ConAgra plans to refinance its $500 million 5.875% notes due in April 2014. Additional maturities include $250 million 1.35% notes due in September 2015. ConAgra's and its subsidiary, Ralcorp Holdings, Inc.'s (Ralcorp) ratings are as follows: ConAgra Foods, Inc. -- Long-term Issuer Default Rating (IDR) at 'BBB-'; -- Senior unsecured notes at 'BBB-'; -- Bank credit facility at 'BBB-'; -- Subordinated notes at 'BB+'; -- Short-term IDR at 'F3'; -- Commercial paper at 'F3'. Ralcorp Holdings, Inc. -- Long-term IDR at 'BBB-'; -- Senior unsecured notes at 'BBB-'. The Rating Outlook is Stable. CONSTAR INTERNATIONAL: In Ch. 11 for 3rd Time, to Sell to Amcor --------------------------------------------------------------- Constar International Holdings LLC disclosed that it has entered into a stalking horse asset purchase agreement with Amcor Rigid Plastics USA under which the Company has agreed to sell substantially all of its domestic business to Amcor. In order to complete the transaction, Constar, along with certain subsidiaries, filed for Chapter 11 bankruptcy protection in the District of Delaware on December 19, 2013. The transaction with Amcor is being undertaken pursuant to Section 363 of the US Bankruptcy Code and is subject to higher and better offers and approval of the Bankruptcy Court, as well as other customary closing conditions. The transaction is expected to close during the first quarter of 2014. Constar continues to operate and serve its blue-chip customer base and all employees are being paid in the ordinary course of business. "The transaction with Amcor will allow Constar and its employees to continue to provide valuable products and services to our customers and expand our offering and capabilities by leveraging the financial and other resources of Amcor. We are very excited for our employees and customers and believe this transaction creates a stable and extremely viable long term partner for our customers and vendors," said Louis S. Imbrogno, Jr., interim CEO of Constar. Constar also continues to operate and serve its customers in Europe. Constar is currently evaluating the sale of its European operations to one or more third parties and will make further announcements in the future as that process unfolds. Inquiries related to potential purchase of the European business or the auction process for the US assets should be directed to Michael Son of Lincoln International LLC, the Company's investment banker and financial advisor at either 213-283-3707 or mson@lincolninternational.com About Constar International Privately-held Constar International Holdings and nine affiliated debtors filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-13281) on Dec. 19, 2013. The company, which manufactures plastic containers, is represented by Robert S. Brady of Young, Conaway, Stargatt & Taylor. This is Constar International's third bankruptcy. Constar first filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08- 13432) in December 2008, with a pre-negotiated Chapter 11 Plan and emerged from bankruptcy in May 2009. Constar and its affiliates returned to Chapter 11 protection (Bankr. D. Del. Case No. 11- 10109) on Jan. 11, 2011, with a pre-negotiated Chapter 11 plan and emerged from bankruptcy in June 2011. COYOTE MOON: Files for Chapter 11 in California ----------------------------------------------- Coyote Moon L.P. filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 13-30080) in Riverside, California, on Dec. 17, 2013, without stating a reason. San Bernardino, California-based Coyote Moon L.P. estimated at least $10 million in assets and between $1 million and $10 million in liabilities. The Debtor is a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101 (51B). According to the docket, the formal schedules of assets and liabilities and the statement of financial affairs are due Dec. 31, 2013. The Law Offices of Stephen R. Wade, in Claremont, California, serves as counsel. CYANCO INTERMEDIATE: Moody's Retains Ratings Over Upsized Loan -------------------------------------------------------------- Moody's Investors Service said that the $10 million increase in Cyanco Intermediate Corp.'s (B2, negative) add-on term loan to $60 million from $50 million will not affect the firm's Corporate Family Rating (CFR) or debt ratings. Cyanco, headquartered in Reno, Nevada, is a producer of a single product, sodium cyanide, sold to the gold mining industry to extract gold from ore. It has two manufacturing sites, one in Winnemucca, Nevada that services customers in the US, Canada and Mexico and a plant in Houston, Texas (started in 2012) that services US and export markets. It is owned by funds managed by Oaktree Capital Management, and had revenues of $268 million for the LTM ended September 30, 2013. D & L ENERGY: Court Declined to Extend Exclusivity -------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ohio denied the second request of D & L Energy, Inc., and Petroflow, Inc., to extend their exclusivity period to file a chapter 11 plan and solicit acceptances for that plan. As reported in the Troubled Company Reporter on Dec. 3, 2013, the Debtors requested that the Court extend their exclusive period to file a Chapter 11 plan until Feb. 10, 2014, and the exclusive period to solicit acceptances of that plan until April 11, without prejudice to their right to seek further extensions. Kathryn A. Belfance, Esq., at Roderick Linton Belfance LLP, explained that the Debtors in September 2013 filed two motions seeking approval to sell substantially all of its assets and approving sale procedures with respect to the sale. Since that date, the Debtors have focused substantially all of its efforts working diligently and expeditiously to market and ready its assets for a sale in November 2013. According to Ms. Belfance, one aspect of readying and preserving the Debtors' assets for sale was reviewing each of the oil and gas leases in order to file omnibus motions with respect to the leases seeking a determination that said leases do not fall within the scope of 11 U.S.C. Sec. 365, or alternatively, seeking to assume the same prior to the deadline set forth in Sec. 365(d)(4). Due to the sheer volume of leases in which Debtor is lessee, the effort of reviewing and categorizing each of the leases required a significant amount of Debtors' resources. The Debtors believed that the auction for substantially all of assets will generate sufficient proceeds to satisfy its creditors in full. While the Debtors continue to work diligently and expeditiously towards an orderly reorganization, they presently require additional time to explore its restructuring alternatives. Contingencies Ms. Belfance also noted that "cause" exists to extend exclusivity because the Debtors need additional time to resolve various contingencies before it can finalize any viable plan. The Debtors require additional time to evaluate the proofs of claim that have been timely filed, along with any claims or cure amounts that arise while the Debtors attempt to assume, if necessary, any contracts and unexpired leases, including oil and gas leases which cover 5,200 parcels of real estate. In light of the size and complexity of the Chapter 11 cases, the discussions with the creditors committee, and the ongoing efforts to quantify the Debtors' total liabilities, additional time is needed for the Debtor to develop and negotiate a plan and to prepare a disclosure statement, Ms. Belfance told the Court. About D & L Energy D & L Energy, Inc., based in Youngstown, Ohio, was formed by David DeChristofaro, Ben Lupo, and James Beshara in 1986 to be a conventional oil and gas well operator and producer, primarily targeting oil and gas reserves in the Clinton Sandstone formation throughout Northeast Ohio and Northwest Pennsylvania. D&L currently has three (3) shareholders, Ben Lupo (80.76% shareholder), Susan Faith (15% shareholder), and Holly Serensky Lupo (4.24% shareholder). Nicholas C. Paparodis is the acting CEO and President of D&L. Kathy Kaniclides is the acting Secretary and Treasurer of D&L. Currently, Serensky Lupo is the sole director of D&L. Petroflow, Inc., is an Ohio corporation which is a wholly owned subsidiary of D&L. Originally intended to operate as the "drilling arm" of D&L, Petroflow ceased all operations prior to the filing of these bankruptcy matters. Petroflow has no current income, no bank accounts, and no employees. Paparodis is the president, CEO and sole director of Petroflow. D&L and Petroflow filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Lead Case No. 13-40813) on April 16, 2013. Judge Kay Woods oversees the case. The Debtor disclosed in its amended schedules, $40,615,677 in assets and $6,187,217 in liabilities as of the Chapter 11 filing. Brian T. Angeloni, Esq., Kathryn A. Belfance, Esq., Steven Heimberger, Esq., and Todd A. Mazzola, Esq., at Roderick Linton Belfance, LLP, serve as the Debtors' counsel, and Walter Haverfield, LLP, is the environmental counsel. SS&G Parkland Consulting, LLC, serves as financial advisor and investment banker. Sherri Lynn Dahl, Esq., and Peter R. Morrison, Esq., at Squire Sanders (US) LLP, have been tapped as counsel to the official committee of unsecured creditors. BBP Partners LLC serves as the panel's financial advisors. Resource Land Holdings emerged as the winning bidder for the substantially all of the Debtor's assets. Resource Land offered to buy the assets for $20.4 million. DELTA AIR: S&P Raises CCR to 'BB-', Off Watch Positive ------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Atlanta, Ga.-based Delta Air Lines Inc. (Delta) to 'BB-' from 'B+'. The outlook is stable. At the same time, S&P raised its issue-level ratings on Delta's term loan and revolving credit facility--which are secured by its Atlantic routes, gates, and slots--to 'BB+' from 'BB'; S&P raised its issue-level ratings on Delta's term loan and revolving credit facility -- which are secured by its Pacific routes, gates, and slots -- to 'BB' from 'BB-'; and S&P raised its ratings on most of the company's enhanced equipment trust certificates (EETCs) by one notch. The only EETCs that we did not upgrade are Delta's 2007-1A and 2007-1B certificates, for which the somewhat reduced collateral coverage offset the effect of the higher corporate credit rating. In addition, S&P removed all ratings from CreditWatch, where it placed them with positive implications on Nov. 26, 2013. S&P based its upgrade on its assessment of Delta's business risk as "fair" under its revised criteria, which incorporates the company's "strong" competitive position, and S&P's assessment of industry risk as "high" and country risk as "low." The company is the third-largest U.S. airline, with hubs or major operations in Atlanta, New York (both LaGuardia and JFK airports), Detroit, and Minneapolis. It also has a strong presence in the Pacific and to Europe (through its alliance with AirFrance/KLM). In June 2013, Delta bought a 49% stake in Virgin Atlantic (the second-largest airline at London's Heathrow airport), which S&P expects will strengthen the company's European presence; the companies begin their joint venture on Jan. 1, 2014. In Latin America, Delta is expanding its partnerships with GOL (in Brazil) and Aeromexico. The "strong" competitive position also incorporates S&P's assessment of the company's above-average profitability based on its above-average return on capital and EBITDA margin. S&P's assessment of Delta's financial risk profile as "aggressive" is based on its expectation of rising revenues, improved margins, and continued debt reduction. Based on S&P's revised criteria for ratios and adjustments, it nets unrestricted cash in excess of Delta's credit agreement covenant minimum against debt, which modestly boosts its credit ratios relative to our previous calculation. The revised criteria also provide that the full amount of operating lease rentals (not just the interest component) is added to adjusted EBITDA, which improves debt/EBITDA. For the 12 months ended Sept. 30, 2013, Delta's funds from operations (FFO) to debt was 16% and debt/EBITDA was 4.2x. "With our expectation of continued strong operating performance, due to the airline industry's generally favorable revenue environment and relatively stable fuel prices, and with continued debt reduction, we anticipate the company's credit metrics will continue to improve," said credit analyst Betsy Snyder. S&P's base case assumes: -- Revenue growth of around 5% in 2014 and 7% in 2015 based on increased traffic and higher pricing due to Delta's growing alliances and increased presence in the New York market, which should increase premium higher-yielding traffic; -- Oil prices remaining relatively stable through 2015; -- Increasing operating margins in both 2014 and 2015; and -- Continued debt reduction. Based on these assumptions, S&P arrives at the following credit measures for 2013 and 2014: -- FFO to debt of around 20%; -- Debt/EBITDA of around 3.8x in 2013, declining to 3x in 2014; and -- Continued positive free cash flow. The combination of a "fair" business risk profile and an "aggressive" financial risk profile result in an initial analytical outcome (the "anchor") of 'bb-'. Modifiers to the rating were all neutral, resulting in the 'BB-' corporate credit rating. Standard & Poor's expects Delta will continue to generate solid earnings and cash flow, with gradually improving credit metrics through 2014, despite ongoing share repurchases. S&P do not expect to raise its ratings on Delta over the next year, but could do so if debt reduction and rising cash flow increase FFO to debt to the low-20% area for a sustained period. S&P do not expect to lower its ratings on Delta over the next year, but could do so if adverse industry conditions, such as slower-than-expected economic growth or a prolonged spike in fuel prices, decreases Delta's FFO to debt to the low-teens percent area for a sustained period. DEMCO INC: May Borrow $1MM From Nat'l Environmental Safety ---------------------------------------------------------- The Bankruptcy Court authorized on Dec. 11, 2013, DEMCO Inc., to enter into a further debtor-in-possession financing agreement with National Environmental Safety Company, Inc. As reported in the Troubled Company Reporter on Dec. 10, 2013, Daniel F. Brown, Esq., at Andreozzi, Bluestein, Weber, Brown, LLP, on behalf of the Debtor, requested for authorization to obtain DIP financing of up to $1,000,000 from National Environmental, pursuant to the proposed Replacement Promissory Grid Note and the Restated Security Agreement. As reported in the TCR on March 27, 2013, the Debtor won Court permission to borrow up to $500,000 from National Environmental, and grant the DIP lender a first priority lien on all new accounts and new general intangibles arising from work performed using the DIP financing, as well as a first priority lien on all personal property acquired by or earned by the Debtor via purchase or lease using the proceeds of the DIP financing or using proceeds of all new contract rights and accounts. Through the new motion, Mr. Brown said that the increased amount of financing will assist the Debtor to begin to perform additional new projects. At the present time, National Environmental is proposing to lend to the Debtor, solely at National Environmental's discretion, up to $1,000,000, on a demand basis, with interest at a rate of 10 percent per annum, secured by all new accounts and new general intangibles arising after the March 22, 2013 date of Court approval of the Debtor's initial DIP Financing, as well as a first priority lien on all personal property acquired by the Debtor via purchase or lease using the proceeds of such financing or using proceeds of all new contract rights and accounts. About Demco Inc. Demco, Inc., aka Decommissioning & Environmental Management Company, is a specialty trade contractor based in West Seneca, New York, which provides demolition services, nuclear work, environmental clean-up, disaster response and a variety of other services throughout the United States and, on a project-by-project basis, internationally. Some of Demco's better known demolition projects in the past have included the Rocky Flats Nuclear Power Plant, Yankee Stadium, the Orange Bowl, Buffalo Memorial Auditorium, and the Sunflower Army Ammunition Plant. Demco filed for Chapter 11 protection (Bankr. W.D.N.Y. Case No. 12-12465) on Aug. 6, 2012. Bankruptcy Judge Michael J. Kaplan presides over the case. Daniel F. Brown, Esq., at Andreozzi, Bluestein, Fickess, Muhlbauer Weber, Brown, LLP, represents the Debtor in its restructuring effort. Freed Maxick CPAs, P.C. serves as its accountants, and Horizons Consulting, LLC, serves as its tax consultants. The Debtor estimated assets and debts at $10 million to $50 million. The petition was signed by Michael J. Morin, controller. Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three creditors to serve on the Official Committee of Unsecured Creditors. First Niagara Bank, the cash collateral lender, is represented by William F. Savino, Esq., at Damon Morey. DESIGNLINE CORP: Trustee Has Until Jan. 3 to Decide on Leases ------------------------------------------------------------- The Hon. J. Craig Whitley of the U.S. Bankruptcy Court for the Western District of North Carolina extended until Jan. 3, 2014, the time for Elaine T. Rudisill, the chapter 11 trustee for Designline Corporation, et al., to assume or reject the leases with CK Nevada Boulevard, LLC and EOS Industrial at Crossroads, LLC. The trustee and the Official Committee of Unsecured Creditors, in their joint motion, stated that the trustee is still trying to determine whether the leases will be assumed and potentially assigned, or whether the leases will be rejected. About DesignLine DesignLine Corporation is a manufacturer of coach, electric and range-extended electric (hybrid) buses founded in Ashburton, New Zealand in 1985. It was acquired by American interests in 2006, and DesignLine Corporations' headquarters was relocated to Charlotte, North Carolina. DesignLine Corporation is no longer affiliated with the DesignLine operations in New Zealand, which was placed in liquidation in 2011. DesignLine Corporation and DesignLine USA LLC originally sought Chapter 11 protection with the U.S. Bankruptcy Court for the District of Delaware (Lead Case Nos. 13-12089 and 13-12090), on Aug. 15, 2013. Katie Goodman signed the petitions as chief restructuring officer. The Debtors estimated assets and debts of at least $10 million. On Sept. 5, 2013, the case was transferred to the U.S. Bankruptcy Court for the Western District of North Carolina (Case Nos. 13-31943 and 13-31944). Mark D. Collins, Esq., and Michael Joseph Merchant, Esq., at Richards, Layton & Finger, P.A.; and Terri L. Gardner, Esq., at Nelson Mullins Riley & Scarborough, LLP, serve as the Debtors' bankruptcy counsel. The Debtors' financial advisor is GGG Partners LLC. The Court approved on Nov. 1, 2013, the sale of substantially all of the assets of DesignLine Corp. to Wonderland Investment Group, Inc., whose bid of $1.6 million for the assets prevailed over six other qualified bidders at the auction on Oct. 28, 2013. A five-member unsecured creditors panel has been appointed in the Debtors' cases. Moon Wright & Houston PLLC and Benesch, Friedlander, Coplan & Aronoff LLP are co-counsel to the Committee. The Committee tapped to retain CBIZ MHM, LLC as their financial advisor. DETROIT, MI: Seeks to Pay UBS, BofA $230 Million to End Swaps ------------------------------------------------------------- Steven Church and Steven Raphael, writing for Bloomberg News, reported that Detroit, the biggest U.S. city to file for bankruptcy, is seeking a permission to pay UBS AG and Bank of America Corp. $230 million to cancel payments on swaps that threaten the city's revenue from casino taxes. According to the report, a three-day trial began on Dec. 17 before U.S. Bankruptcy Judge Steven Rhodes in Detroit on the city's request to make the payment as part of a deal to cancel interest- rate swap contracts that have cost it about $4 million a month since July 2009. To pay for the settlement, the city wants Judge Rhodes to let it borrow $350 million. Buying out the swaps will keep the casino taxes, one of Detroit's best sources of money, from going to the banks, Corinne Ball, a lawyer for the city, told Judge Rhodes, the report related. "Cash is the lifeline for the city," she said, the report cited. Creditors led by bond insurer Syncora Guarantee Inc. oppose the settlement, saying it costs too much, the report further related. The city hasn't proved it would lose if it sued to cancel the contracts instead of settling with the banks, Syncora said. About City of 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: As Bond Insurers Drop Objections, Ch. 9 Progresses --------------------------------------------------------------- Reuters reported that Detroit's path through bankruptcy began to take shape on Dec. 17, with a second bond insurance firm ready to drop its objections to a controversial city financing plan, joining another bond insurer, bondholders and a committee of retired city workers in reaching agreements with the city. But other objectors remain, including bond insurers Syncora Guarantee Inc. and Financial Guaranty Insurance Co, which are continuing an effort to derail an expensive interest-rate swaps deal at a discount. According to the report, the two companies insured the swaps and $1.45 billion of pension debt associated with the swaps. Detroit needs the swaps deal in order to obtain a $350 million loan, some of which would be used to improve city services. A few holders of $375 million of Detroit's pension debt also said they were dropping their objection to the swaps deal after reaching an agreement with the city that would not prevent them from pursuing future claims, the report related. The various agreements are emerging against the backdrop of a scheduled three-day hearing in bankruptcy court, the report said. At the hearing, Detroit began defending a key complex transaction in which the city would terminate a crippling interest-rate swap deal while securing a $350 million loan, known as debtor-in- possession financing. Bond insurers have argued that the swaps deal gives an advantage to the city's counterparties in the swaps contracts, at the expense of other creditors, the report added. About City of 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: Bankruptcy Judge Suspends Hearing on Swaps Deal ------------------------------------------------------------ Joseph Lichterman, writing for Reuters, reported that the judge overseeing Detroit's bankruptcy case suspended a hearing on a $350 million accord to end interest-rate swaps and provide working capital for the city, instead urging the city to renegotiate the deal. According to the report, the hearing was scheduled to continue through Thursday, but U.S. Bankruptcy Court Judge Steven Rhodes asked Detroit to use the time scheduled for court instead to seek better terms from the swaps counterparties. The current deal has the city paying 75 percent of what it owes those firms, UBS AG and Bank of America Corp's Merrill Lynch Capital Services. Judge Rhodes ordered the parties back to court on Dec. 20 at 10 a.m. (1500 GMT) to discuss the status of the negotiations, the report related. He said the hearing would be continued at a later date. "I would encourage that as strongly as I can," Judge Rhodes said, regarding the city's efforts to negotiate a better deal. Thomas Cullen, an attorney at Jones Day who is representing Detroit, said the city would see if "there is a number, a sweetening of the deal, that would make it go away," the report further related. Though he said he was doubtful it was possible. About City of 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: Christie's Values Art at Up to $867 Million -------------------------------------------------------- Reuters reported that the value of the collection at the Detroit Institute of Arts falls within a range from $454 million up to $867 million, auction house Christie's said in its final report to the city's state-appointed emergency manager Kevyn Orr. According to the report, the appraisal only covered works owned by the city of Detroit, which account for only around 5 percent of the museum's 66,000 works. The appraisal is marginally above a preliminary estimate from Christie's, which gave a maximum value of $866 million to the works owned by the city. Emergency manager Orr filed for Chapter 9 bankruptcy protection for Detroit in July and is seeking ways to pay off creditors and fund basic services once the city emerges from bankruptcy. About City of 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. DTS8 COFFEE: Incurs $94,000 Net Loss in Oct. 31 Quarter ------------------------------------------------------- DTS8 Coffee Company, Ltd., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $94,471 on $70,880 of sales for the three months ended Oct. 31, 2013, as compared with a net loss of $109,779 on $63,621 of sales for the same period a year ago. For the six months ended Oct. 31, 2013, the Company reported a net loss of $158,513 on $142,235 of sales as compared with a net loss of $183,522 on $119,793 of sales for the same period during the prior year. As of Oct. 31, 2013, the Company had $4.63 million in total assets, $934,659 in total liabilities, all current, and $3.69 million in total shareholders' equity. "The Company has incurred material losses from operations. At October 31, 2013, the Company had an accumulated deficit in addition to limited cash, limited revenue and unprofitable operations. For the period ended October 31, 2013, the Company sustained net losses. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time," the Company said in the Report. A copy of the Form 10-Q is available for free at: http://is.gd/nsQ7NV About DTS8 Coffee DTS8 Coffee Company, Ltd. (previously Berkeley Coffee & Tea, Inc.) was incorporated in the State of Nevada on March 27, 2009. Effective Jan. 22, 2013, the Company changed its name from Berkeley Coffee & Tea, Inc., to DTS8 Coffee Company, Ltd. On April 30, 2012, the Company acquired 100 percent of the issued and outstanding capital stock of DTS8 Holdings Co., Ltd., a corporation organized and existing since June 2008 under the laws of Hong Kong and which owns DTS8 Coffee (Shanghai) Co., Ltd. DTS8 Holdings, through its subsidiary DTS8 Coffee, is a gourmet coffee roasting company established in June 2008. DTS8 Coffee's office and roasting factory is located in Shanghai, China. DTS8 Coffee is in the business of roasting, marketing and selling gourmet roasted coffee to its customers in Shanghai, and other parts of China. It sells gourmet roasted coffee under the "DTS8 Coffee" label through distribution channels that reach consumers at restaurants, multi-location coffee shops, and offices. Malone & Bailey, PC, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2013. The independent auditors noted that the Company has suffered recurring losses from operations, which raises substantial doubt about its ability to continue as a going concern. DUMA ENERGY: Scaturro Pasquale 13.9% Owner as of Dec. 9 ------------------------------------------------------- In a Schedule 13D filed with the U.S. Securities and Exchange Commission, Scaturro Pasquale V. disclosed that as of Dec. 9, 2013, he beneficially owned 8,709,413 shares of common stock of Duma Energy Corp representing 13.9 percent of the shares outstanding. Mr. Scaturro acquired 8,709,413 shares of the Issuer's common stock at the closing of the Share Exchange Agreement whereby Duma Energy Corp acquired Hydrocarb Corporation. A copy of the regulatory filing is available for free at: http://is.gd/FI2rvp About Duma Energy Corpus Christi, Tex.-based Duma Energy Corp. -- http://www.duma.com/-- formerly Strategic American Oil Corporation, is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers, and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. Duma Energy incurred a net loss of $40.47 million on $7.07 million of revenues for the year ended July 31, 2013, as compared with a net loss of $4.57 million on $7.16 million of revenues during the prior year. As of July 31, 2013, the Company had $26.27 million in total assets, $16.91 million in total liabilities and $9.36 million in total stockholders' equity. DUNE ENERGY: Strategic Value Held 25.1% Equity Stake at June 28 --------------------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Strategic Value Partners, LLC, and its affiliates disclosed that as of June 28, 2013, they beneficially owned 17,917,244 shares of common stock of Dune Energy, Inc., representing 25.1 percent of the shares outstanding. Strategic Value previously reported beneficial ownership of 16,283,642 common shares as of May 8, 2013. A copy of the regulatory filing is available for free http://is.gd/baVKI8 About Dune Energy Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/ -- is an independent energy company based in Houston, Texas. Since May 2004, the Company has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. The Company's properties cover over 90,000 gross acres across 27 producing oil and natural gas fields. For the nine months ended Sept. 30, 2013, the Company reported a net loss of $34.91 million on $43.57 million of total revenues as compared with a net loss of $4.10 million on $39.94 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2013, showed $252.02 million in total assets, $117.49 million in total liabilities and $134.52 million in total stockholders' equity. EDISON MISSION: Second Modified Plan Filed ------------------------------------------ BankruptcyData reported that Edison Mission Energy filed with the U.S. Bankruptcy Court a Second Modified Joint Chapter 11 Plan of Reorganization and Second Amended Disclosure Statement. According to the Disclosure Statement, "The Plan provides for a sale (the 'NRG Transaction') of substantially all of EME's assets, including its direct and indirect equity interests in the Debtor Subsidiaries and the Non-Debtor Subsidiaries (other than any Homer City Debtor and any subsidiary of any Homer City Debtor), to NRG Energy Holdings Inc. ('Purchaser' or 'NRG'), a subsidiary of NRG Energy, Inc. ('Parent,' together with Purchaser, the 'Purchaser Parties'), a Fortune 500 company and the largest competitive power generation company in the U.S., with approximately 47,000 MW of fossil, nuclear, solar, and wind generation capacity. In exchange for this transfer, Purchaser will provide EME's estate with the Sale Proceeds of $2,635 million (comprised of $2,285 million payable in cash and $350 million payable in Parent Common Stock) to be distributed by the Debtors in accordance with the Plan and assume certain liabilities of the Debtors, including the leveraged leases for Debtor Midwest Generation, LLC's Powerton and Joliet facilities. The Debtors, the Purchaser Parties, the Committee, the Supporting Noteholders, and the PoJo Parties entered into the Plan Sponsor Agreement, which was approved by the Bankruptcy Court on October 24, 2013, to implement the NRG Transaction pursuant to the Plan." The Plan further contemplates that, as a general matter, holders of intercompany claims against EME, intercompany claims against subsidiary Debtors, subordinated claims against EME, subordinated claims against subsidiary Debtors and subordinated claims against Homer City Debtors shall receive no distribution on account of their claims. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. In its schedules, Edison Mission Energy disclosed total assets of assets of $5,721,559,170 and total liabilities of $6,202,215,094 as of the Petition Date. The Debtors other than Camino Energy Company are represented by David R. Seligman, Esq., at Kirkland & Ellis LLP; and James H.M. Sprayragen, Esq., at Kirkland & Ellis LLP. Counsel to Debtor Camino Energy Company is David A. Agay, Esq., at McDonald Hopkins LLC. Perella Weinberg Partners is acting as the Debtors' financial advisor and McKinsey & Company Recovery and Transformation Services is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case and is represented by Ira S. Dizengoff, Esq., Stephen M. Baldini, Esq., Arik Preis, Esq., and Robert J. Boller, Esq., at Akin Gump Strauss Hauer & Feld LLP in New York; James Savin, Esq., and Kevin M. Eide, Esq., at Akin Gump Strauss Hauer & Feld LLP in Washington, DC; and David M. Neff, Esq., and Brian Audette, Esq., at Perkins Coie LLP. The Committee also has tapped Blackstone Advisory Partners as investment banker and FTI Consulting as financial advisor. EME said it doesn't plan to emerge from Chapter 11 until December 2014 to receive benefits from a tax-sharing agreement with parent Edison International Inc. In November 2013, Edison Mission Energy filed a reorganization plan to carry out a sale of its business to NRG Energy Inc. NRG, based in Princeton, New Jersey, will pay $2.64 billion, including $2.29 in cash billion and $350 million in stock. The plan calls for secured creditors and unsecured creditors of the operating companies to be paid in full. Unsecured creditors of Santa Ana, California-based EME will split what remains of the purchase price and the NRG stock. EME's subordinated creditors receive nothing under the plan. The hearing to approve the disclosure statement will take place Dec. 18. ELCOM HOTEL: Homeowners' Association Buys One Bal Harbor Resort --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the sale of the One Bal Harbor Resort & Spa in Bal Harbor, Florida shows how the highest bid isn't always the one to win approval from the bankruptcy court. According to the report, the project went into Chapter 11 in January with an eye to sell. The property includes a hotel, resort, spa, and restaurant, with 185 condominium units and 124 hotel condominium units. The bankrupt company owns nine of the hotel condominium units. The property had been taken over by a receiver. At an auction this month, there were three bidders, including the residential homeowners' association, whose final bid was $13.4 million. A third party came out with the highest bid, $13.5 million. The project's owner concluded that the homeowners' bid was the best bid because it obviated litigation and related disputes. The bankruptcy judge went along with that business judgment and approved the sale to the association on Dec. 18. About Elcom Hotel Elcom Hotel & Spa LLC and Elcom Condominium LLC sought Chapter 11 protection (Bankr. S.D. Fla. Case Nos. 13-10029 and 13-10031) on Jan. 2, 2013, with plans to sell their hotel and condominium property. Elcom Condominium owns nine of the hotel condominium units at the One Bal Harbor Resort & Spa. The resort is located on five acres of land in Bal Harbor, Florida. The building and improvements consist of 185 luxury residential condominium units and 124 hotel condominium units. Elcom Hotel owns the hotel lot. Elcom Hotel disclosed $10,378,304 in assets and $20,010,226 in liabilities as of the Chapter 11 filing. The Debtor owes OBH Funding, LLC, $1.8 million on a mortgage and F9 Properties, LLC, formerly known as ANO, LLC, $9 million on a mezzanine loan secured by a lien on the ownership interests in the project's owner. OBH Funding and ANO are owned by Thomas D. Sullivan, the manager of the Debtors. Corali Lopexz-Castro, Esq., of Kozyak Tropin & Throckmorton, P.A., represent the Debtors as bankruptcy counsel. Duane Morris LLP is the special litigation, real estate, and hospitality counsel. Algon Capital, LLC, d/b/a Algon Group's Troy Taylor is the Debtors' chief restructuring officer. Barry E. Mukamal and Marcum, LLP serve as accountants and financial advisors. The Barthet Firm is the special litigation collections counsel. Elcom Hotel & Spa, LLC, and Elcom Condominium, LLC, late last week submitted a revised disclosure statement filed in conjunction with its proposed liquidating plan. The revised disclosure statement indicates that unsecured creditors are still divided into two classes under the Plan. The Plan contemplates that holders of general unsecured claims (expected to total $14 million to $79.1 million) will have a recovery of 0% to 18%, which will be funded from the pro rata distribution of "net free cash" and proceeds of causes of action and remaining assets. Holders of general unsecured vendor claims (estimated at $500,000 to $971,000) -- those vendors who have unsecured claims who agree to continue do business with the Debtors -- will have a recovery of 50%, which will be funded from the 50% distribution from "net free cash." ENCYCLE/TEXAS: Former Asarco Unit to Be Auctioned Off Jan. 17 ------------------------------------------------------------- The U.S. Bankruptcy Court in Corpus Christi, Texas, approved guidelines to govern the sale of Encycle/Texas Inc.'s assets. The Chapter 7 Trustee, Mike Boudloche, sought approval of the bidding procedures. The sale will include at least 63.94 acres located at 5500 Up River Rd., in Corpus Christi. The Court may conduct an auction starting at 10:30 a.m. Central Time on Jan. 17, 2014. Bids are due Jan. 15. According to the notice of auction and sale hearing, a proposed purchaser is under contract. The purchaser is represented by Trey Wood, Esq. -- trey.wood@bgllp.com -- at Bracewell & Guilliani LLP in Houston. About Encycle/Texas Encycle/Texas, Inc., operated a large hydrometallurgical processing complex that chemically recovers the metals in waste and by-product materials that are received from a variety of manufacturing companies nationwide. The Debtor filed for chapter 11 protection on Aug. 26, 2005 (Bankr. S.D. Tex. Case No. 05-21304), estimating assets of $50,000 to $100,000 and debts of $10 million to $50 million. Encycle/Texas was a subsidiary of bankrupt ASARCO LLC (Bankr. S.D. Tex. Case No. 05-21207). ASARCO sought joint administration of Encycle/Texas' chapter 11 case with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation. Mike Boudloche, the Chapter 7 Trustee, is represented by Michael Schmidt, Esq., in Corpus Christi. EQUINIX INC: Moody's Affirms 'Ba3' CFR & Alters Outlook to Stable ----------------------------------------------------------------- Moody's Investors Service has changed the outlook of Equinix, Inc. to stable from positive, primarily due to the company's plans for higher shareholder returns in the form of dividends and share repurchase activity. The outlook change is based upon Moody's expectation that free cash flow will remain negative over the next several years, primarily due to the company's high capital intensity and expected dividends, both prior to and following REIT conversion. The cash demands associated with REIT conversion, along with Equinix's recently annonced share repurchase program could also result leverage remaining around 4x for the near to mid term. Moody's expects Equinix will raise additional debt over the next several years to finance its cash shortfall such that leverage could remain relatively flat. At the same time, Moody's has changed Equinix's Speculative Grade Liquidity Rating (SGL) to SGL-2 from SGL-1 as Moody's expects a large portion of the company's existing cash balance will be used to fund share repurchases and the required payments prior to REIT conversion. As part of the rating action, Moody's has also affirmed all other existing ratings, including Equinix's Ba3 corporate family rating (CFR). Ratings: Issuer: Equinix, Inc. Outlook, Changed To Stable From Positive Speculative Grade Liquidity Rating, Changed to SGL-2 from SGL-1 Corporate Family Rating, Affirmed Ba3 Probability of Default Rating, Affirmed Ba3-PD Senior Unsecured Regular Bond/Debenture Apr 1, 2020, Affirmed Ba3 (LGD4, 55%) Senior Unsecured Regular Bond/Debenture Apr 1, 2023, Affirmed Ba3 (LGD4, 55%) Senior Unsecured Regular Bond/Debenture Jul 15, 2021, Affirmed Ba3 (LGD4, 55%) Rating Rationale: Equinix's Ba3 Corporate Family Rating reflects the company's position as the leading global independent data center operator offering carrier-neutral data center and interconnection services to large enterprises, content distributors and global Internet companies. The rating also incorporates the company's stable base of contracted recurring revenues, its strategic real estate holdings in key communications hubs and the favorable near-term growth trends for data center services across the world. These positive factors are offset by significant industry risks, intensifying competition and relatively high capital intensity which will likely result in negative free cash flow over the next two to three years. The rating also reflects Moody's concerns that the company's cash flow profile will come under pressure with the high dividend associated with REIT conversion such that it will need to raise additional debt to finance its dividend and capital investment program. Moody's expects Equinix to have good liquidity over the next twelve months. The company had approximately $1.2 billion in cash or equivalents at September 30, 2013 and an undrawn $550 million revolving credit facility. The company's free cash flow is expected to be negative 2014 driven by its high capital investment program along with the required payments associated with the potential REIT conversion process at the end of 2014. The company also has a $500 million share repurchase program which Moody's expects the company will complete by year end 2014. Moody's could raise Equinix' ratings if the company generates positive free cash flow and Moody's adjusted leverage trends below 4x, both on a sustainable basis. The ratings could be lowered if liquidity were to become strained, if industry pricing were to deteriorate due to competitive pressure or leverage were to approach 5x (Moody's adjusted). Headquartered in Redwood City, CA, Equinix, Inc. ("Equinix" or the "company") is the largest publicly traded carrier-neutral data center hosting provider in the world with operation in 31 markets across the Americas, EMEA and Asia-Pacific. ESSENTIAL POWER: Moody's Lowers 1st Lien Debt Rating to 'Ba3' ------------------------------------------------------------- Moody's Investors Service downgraded Essential Power LLC's 1st Lien Senior Secured Facilities to Ba3 from Ba2 and downgraded the 2nd Lien Secured Notes to B1 and Ba3. Ratings have been placed under review for possible further downgrade. Ratings Rationale: The rating action reflects Essential Power's tightening financial metrics due to the substantial loss crystallized from Heat Rate Call Options (HRCOs) at the Newington plant, and the subsequent shift in the plant's operating profile effectively to fully merchant as the HRCOs have been crystallized with offsetting positions. The rating action also takes into account continued New England gas supply challenges, the Borrower's decreasing liquidity profile and the tightening covenant cushion in light of the HRCO settlements through 2016. Capacity prices in both the PJM and NE- ISO markets have been on a downward trend causing further pressure on Essential Power's future revenues. Essential Power is 100% owned by a fund managed by IFM Investors an Australian-based investment management company with US$15 billion of global infrastructure investments under management. Moody's notes that, including the initial acquisition, IFM has made a significant equity investment in Essential Power. Moody's rating action incorporates a view that IFM will continue to provide support to the Borrower. While the form and amount of this support is not known at this stage, Moody's anticipates that it will be sufficient to cover Essential Power's crystallized liability on the Newington HRCO settlement, and potentially ensure covenant compliance over the coming quarters. The rating on the 2nd lien debt is also lowered by one notch to B1 from Ba3 owing to the reasons outlined above, including the expectations for weak financial metrics and increased reliance on merchant cash flows following the crystallization of the HRCOs at Newington. The current one notch rating differential between the 1st and the 2nd debt is reflective of the terms of the cashflow waterfall in the credit documents that provides for 2nd lien interest to be paid after the 1st lien interest and 1st lien mandatory principal amortization, but before the 1st lien cash flow sweep as well as the recognition that a cross default exists between the 1st and 2nd lien debt facilities. The ratings for Essential Power's 1st and 2nd lien debt remain under review for possible downgrade. Over the course of the review period, Moody's intends to gain greater clarity around the company's strategy to execute replacement hedges over the 2014 budget and intermediate term multi-year period as the portfolio's future earnings stream shifts from a highly contracted and hedged cash flow profile to one characterized by greater exposure to merchant energy markets at its two largest plants. Importantly, the review will evaluate the degree and component parts of needed sponsor support from IFM to the Borrower. If the sponsor support is determined not to be sufficient to stabilize credit quality or if the future earnings stream prospects remain weak, the possibility of a multi-notch rating change for both 1st lien and 2nd lien facilities emerges. Moreover, irrespective of the level of support from IFM, the current notching between the 1st and 2nd lien facilities will be analyzed and could widen depending upon Moody's view of the recovery prospects for 2nd lien debt. The last rating action was on July 18, 2012, when the Ba2 rating was assigned to Essential Power's issuance of $665 million Senior Secured Credit Facilities. Essential Power, LLC is a wholesale power generation and marketing company. It is a special purpose entity formed by Industry Funds Management Pty Ltd. to acquire and hold a portfolio of five power generation assets totaling 1,721 MW located in the ISO-New England and PJM power markets. The portfolio was acquired from Consolidated Edison Development, Inc in 2008. IFM is an investment management company based in Australia specializing in the management of private investment products across infrastructure, listed equities, private equity and debt. It is ultimately owned by 30 major Australian pension funds. IFM has approximately US$50 billion under management across a range of investment products, including US$15 billion of global infrastructure investments under management. FAIRMONT GENERAL: Ombudsman Hires Greenberg Traurig as Counsel -------------------------------------------------------------- Suzanne Koenig, the Chapter 11 patient care ombudsman of Fairmont General Hospital, Inc. and Fairmont Physicians, Inc., seeks authorization from the U.S. Bankruptcy Court for the Northern District of West Virginia to employ Greenberg Traurig, LLP, as her counsel, nunc pro tunc to Nov. 14, 2013. The Ombudsman requires Greenberg Traurig to: (a) represent the Ombudsman in any proceeding or hearing in the Bankruptcy Court, and in any action in other courts where the rights of the patients may be litigated or affected as a result of these cases; (b) advise the Ombudsman concerning the requirements of the Bankruptcy Code and Bankruptcy Rules and the requirements of the Office of the U.S. Trustee relating to the discharge of her duties under section 333 of the Bankruptcy Code; (c) advise and represent the Ombudsman concerning any potential health law related issues; and (d) perform other legal services as may be required under the circumstances of these cases in accordance with the Ombudsman's powers and duties as set forth in the Bankruptcy Code, including assisting the Ombudsman with reports to the Court, fee applications or other matters. Greenberg Traurig will be paid at these hourly rates: Shareholders $350-$900 Of Counsel $250-$900 Associates $270-$720 Legal Assistants/Paralegals $115-$320 Greenberg Traurig will also be reimbursed for reasonable out-of- pocket expenses incurred. Nancy A. Peterman, Esq., shareholder of Greenberg Traurig, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Greenberg Traurig can be reached at: Nancy A. Peterman, Esq. GREENBERG TRAURIG, LLP 77 West Wacker Drive, Suite 3100 Chicago, IL 60601 Tel: (312) 456-8400 Fax: (312) 456-8435 About Fairmont General Fairmont General Hospital Inc. and Fairmont Physicians, Inc., which operate a 207-bed acute-care facility in Fairmont, West Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 13-01054) on Sept. 3, 2013, listing between $10 million and $50 million in both assets and debts. The fourth-largest employer in Marion County, West Virginia, filed for bankruptcy as it looks to partner with another hospital or health system. The Debtors are represented by Rayford K. Adams, III, Esq., and Casey H. Howard, Esq., at Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina; David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors' financial analyst is Gleason & Associates, P.C. The Debtors' claims and noticing agent is Epiq Bankruptcy Solutions. UMB Bank is represented by Nathan F. Coco, Esq., and Suzanne Jett Trowbridge, Esq., at McDermott Will & Emery LLP. The Committee of Unsecured Creditors is represented by Andrew Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. and Kirk B. Burkley, Esq., Bernstein Burkley, P.C. Janet Smith Holbrook, Esq., at Huddleston Bolen LLP, represents the Committee as local counsel. FAIRMONT GENERAL: Ombudsman Hires SAK Management as Advisor ----------------------------------------------------------- Suzanne Koenig, the Chapter 11 patient care ombudsman of Fairmont General Hospital, Inc. and Fairmont Physicians, Inc., asks for permission from the U.S. Bankruptcy Court for the Northern District of West Virginia to employ her firm, SAK Management Services, LLC, as her medical operations advisor, nunc pro tunc to Nov. 14, 2013. The Ombudsman requires SAK Management to: (a) conduct interviews of patients and facility staff as required; (b) review license and governmental permits; (c) review adequacy of staffing, supplies and equipment; (d) review safetly standards; (e) review facility maintenance issues or reports; (f) review patient, family, staff or employee complaints; (g) review risk management reports; (h) review litigation relating to the Debtors; (i) review patient records; (j) review any possible sale or restructuring of the Debtors and how it impacts patients; (k) review other information, as applicable to the Debtors and these cases including without limitation, EMTALA violations, lists of death and hospital codes, in patient and out patient surgery schedules, surgery cancellations, patient satisfaction survey results, regulatory or JCAHO reports, utilization review reports, discharged and transferred patient reports, staff recruitment plan and nurse/patient/acuity staffing plans; (l) review various financial information, including, without limitation, current financial statements, cash projections, accounts receivable reports and accounts payable reports; and (m) assist the Ombudsman with other services as may be required under the circumstances of these Cases, including any diligence or investigation required for the reports to be submitted by the Ombudsman. SAK Management will be paid at these hourly rates: Suzanne Koenig $450 Joyce Ciyou $400 Bruce Harris $400 Elizabeht Ciyou-Allee $375 Shannon Hauser $375 Helen Colon $250 Other professionals will render services to the Ombudsman as needed. Generally SAK Management's hourly rates range between $175 and $450. SAK Management will also be reimbursed for reasonable out-of- pocket expenses incurred. Suzanne Koenig, president of SAK Management, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. SAK Management can be reached at: Suzanne Koenig SAK MANAGEMENT SERVICES, LLC One Northfield Plaza, Suite 480 Northfield, IL 60093 Tel: (847) 446-8400 Fax: (847) 446-8432 E-mail: skoenig@sakmgmt.com About Fairmont General Fairmont General Hospital Inc. and Fairmont Physicians, Inc., which operate a 207-bed acute-care facility in Fairmont, West Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 13-01054) on Sept. 3, 2013, listing between $10 million and $50 million in both assets and debts. The fourth-largest employer in Marion County, West Virginia, filed for bankruptcy as it looks to partner with another hospital or health system. The Debtors are represented by Rayford K. Adams, III, Esq., and Casey H. Howard, Esq., at Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina; David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors' financial analyst is Gleason & Associates, P.C. The Debtors' claims and noticing agent is Epiq Bankruptcy Solutions. UMB Bank is represented by Nathan F. Coco, Esq., and Suzanne Jett Trowbridge, Esq., at McDermott Will & Emery LLP. The Committee of Unsecured Creditors is represented by Andrew Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. and Kirk B. Burkley, Esq., Bernstein Burkley, P.C. Janet Smith Holbrook, Esq., at Huddleston Bolen LLP, represents the Committee as local counsel. FIRSTMED EMC: Six Companies File for Liquidation ------------------------------------------------ Wayne Faulkner at the Star News Online reports that six companies associated with the shuttered FirstMed EMC have filed for liquidation under federal bankruptcy laws. The petitions, filed in U.S. Bankruptcy Court for Eastern North Carolina, list 1,000 to 5,000 creditors owed $10 million to $50 million, according to Star News Online. The companies' assets were listed as $1 million to $10 million. The companies are: -- Eastern Ambulette & Ambulance Service Inc., -- Coastline Care, -- Eastern Shore Acquisition Corp., -- Eastern Shore Ambulance, -- MarMac Tranportation Services, and -- TransMed, doing business as TransMed of Georgetown LLC. All have an address of 379 Front St., where FirstMed has its headquarters. The report notes that FirstMed Inc., a private medical transportation company, abruptly closed its doors Dec. 6 and terminated its employees. Then, on Dec. 10, a FirstMed employee filed a class-action suit against the company seeking 60 days' worth of wages and other compensation for about 2,000 employees who lost their jobs, the report relates. The suit, filed in U.S. District Court for Eastern North Carolina, says that FirstMed violated the federal WARN act in not giving advance written notice to employees of their terminations, the report says. WARN, which stands for the Worker Adjustment and Retraining Notification Act, requires employers under certain circumstances to provide 60 days' notice of covered plant closings and mass layoffs. Though the law is a federal one, the notice would be filed with the N.C. Department of Commerce. The Chapter 7 filings by the companies "in a sense are a good thing," said Jack A. Raisner of Outten & Golden in New York City and attorney for plaintiff Branden Engle in the class-action case, the report adds. FINJAN HOLDINGS: Unit Sues Proofpoint Over Infringement Claims -------------------------------------------------------------- Finjan Holdings, Inc.'s subsidiary, Finjan, Inc., has filed a patent infringement lawsuit against Proofpoint, Inc., and its subsidiary Armorize Technologies, Inc., alleging infringement of Finjan patents relating to endpoint, web, and network security technologies. The complaint, filed Monday Dec. 16, 2013, in the U.S. District Court for the Northern District of California, alleges that Proofpoint's products and services infringe upon eight of Finjan's patents. In the complaint, Finjan is seeking undisclosed damages from Proofpoint and Armorize. "As the result of extensive R&D, Finjan has been awarded a considerable patent portfolio covering core inventions in behavior-based intrusion prevention and detection technologies commonly deployed across the endpoint, web and networking markets," commented the Company's President, Phil Hartstein. "Finjan is committed to protecting its proprietary inventions through active enforcement of patent rights, where necessary. This action against Proofpoint is intended to highlight our commitment to protect our intellectual property and particularly, against an unlicensed company in direct competition with our existing licensing partners." Recognized internationally as a pioneer and leader in web and network security, Finjan's decades-long investment in innovation is captured in its patent portfolio, centered around software and hardware technologies capable of proactively detecting previously unknown and emerging threats on a real-time, behavior-based basis. Finjan has successfully licensed its patents to five major software and technology companies around the world. About Finjan Finjan, formerly known as Converted Organics, is a leading online security and technology company which owns a portfolio of patents, related to software that proactively detects malicious code and thereby protects end-users from identity and data theft, spyware, malware, phishing, trojans and other online threats. Founded in 1997, Finjan is one of the first companies to develop and patent technology and software that is capable of detecting previously unknown and emerging threats on a real-time, behavior-based basis, in contrast to signature-based methods of intercepting only known threats to computers, which were previously standard in the online security industry. Converted Organics disclosed a net loss of $8.42 million in 2012, as compared with a net loss of $17.98 million in 2011. Finjan Holdings's balance sheet at Sept. 30, 2013, showed $30.35 million in total assets, $927,000 in total liabilities and $29.42 million in total stockholders' equity. Moody, Famiglietti & Andronico, LLP, in Tewksbury, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring losses and negative cash flows from operations and an accumulated deficit that raises substantial doubt about the Company's ability to continue as a going concern. FIRST DATA: Offering $725 Million of Senior Subordinated Notes -------------------------------------------------------------- First Data Corporation intends to offer $725 million aggregate principal amount of its 11.75 percent senior subordinated notes due 2021, subject to market conditions. The notes will be issued at 103.5 percent. First Data intends to use the proceeds from the offering, together with cash on hand, to redeem a portion of its outstanding 11.25 percent senior subordinated notes due 2016 and to pay related fees and expenses. The Notes are expected to be treated as a single series with, and will have the same terms as those of, $750 million aggregate principal amount of the existing 11.75 percent senior subordinated notes due 2021 previously issued by First Data on May 30, 2013, and $1 billion aggregate principal amount of the existing 11.75 percent senior subordinated notes due 2021 previously issued by First Data on Nov. 19, 2013, except that the Notes will be subject to a separate registration rights agreement and will be issued initially under CUSIP numbers different from the existing 11.75 percent notes that are exchanged in a registered exchange offer First Data intends to effect. The Notes have not been registered under the Securities Act of 1933, as amended, and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. About First Data Based in Atlanta, Georgia, First Data Corporation provides commerce and payment solutions for financial institutions, merchants, and other organizations worldwide. The Company's balance sheet at Sept. 30, 2013, showed $36.84 billion in total assets, $34.97 billion in total liabilities, $67.9 million in redeemable noncontrolling interest and $1.79 billion in total equity. * * * The Company's carries a 'B3' corporate family rating, with a stable outlook, from Moody's Investors Service, a 'B' corporate credit rating, with stable outlook, from Standard & Poor's, and a 'B' long-term issuer default rating from Fitch Ratings. FIRTH RIXSON: Moody's Affirms B3 CFR & Alters Outlook to Negative ----------------------------------------------------------------- Moody's Investors Service affirmed the B3 Corporate Family Rating (CFR) and all other ratings, of JFB Firth Rixson, Inc. and changed the rating outlook to negative from stable. The affirmation anticipates the completion of a bank credit facility amendment whereby the scheduled test thresholds of the maximum leverage ratio covenant would rise. With the added covenant headroom, Firth Rixson should possess better maneuvering room to complete the large capital expenditure program the company is undertaking. Notwithstanding the additional covenant headroom, the negative outlook reflects Moody's expectation that the soft demand environment that constrained the company's operating performance during 2013 will continue into 2014. As a result free cash flow generation will likely be negative during the near term. In addition, debt balances will continue to increase due to accretion under pay-in-kind ("PIK") interest provisions of the company's mezzanine and HoldCo debts. Because of these factors, credit metrics may not improve in the coming year which could expose the company to risk of a rating downgrade. The following ratings were affirmed: Corporate Family, B3 Probability of Default, B3-PD $120 million senior secured revolver due March 2017, Ba3 (LGD2, to 22% from 21%) $420 million senior secured term loan due June 2017, Ba3 (LGD2, to 22% from 21%) GBP180 million senior secured term loan due June 2017 Ba3 (LGD2, to 22% from 21%) Rating Outlook, to Negative from Stable Ratings Rationale: The B3 CFR reflects Firth Rixson's high financial leverage (Moody's estimates FY2013 debt/EBITDA at slightly less than 8x before lease adjustments, including the HoldCo PIK notes), execution risk associated with planned expansion capital spending, and the long lead-times before these projects may fully realize earnings/cash flow potential. Until the high capital spending period concludes in FY2015 available liquidity will likely trend lower. The B3 also considers the company's longstanding relationship with the aircraft engine Original Equipment Manufacturers ("OEMs") and its good presence in the engine parts aftermarket. These strengths are balanced against some oversupply within the industry and decisions by some customers to defer maintenance. These factors have weakened end market fundamentals of late. Although delayed parts acceptance and qualifications of new engine programs has weighed on the company's financial performance in FY2013 and may continue to present headwinds, revenue and earnings opportunities from these numerous programs are meaningful and hold much long-term potential. As well, with the gradual U.S. and European economic improvement that Moody's expects over 2014 and 2015, the company's industrial and other capital goods based end markets should expand. The negative rating outlook incorporates the challenging combination of high financial leverage, the internal cash flow deficit expected, limited liquidity, and Moody's expectation for only gradual improvement in end market demand for the company's products over the near-term. Although the likelihood of a financial covenant breach will diminish with the amendment, utilization of the revolving credit facility could become high if performance does not improve in FY2014. A ratings downgrade could occur if the ability to maintain headroom under the financial covenant thresholds weakens, if the likelihood of a free cash flow generative operational position by early 2015 seems low, or if debt/EBITDA exceeds 7x. A ratings upgrade, currently unanticipated, would depend upon expectation of debt/EBITDA closer to 5x and expectation of free cash flow to debt of 5% or higher and a good liquidity profile. The rating outlook may be stabilized with expectation of free cash flow generation near term and debt/EBITDA in the mid 6x range. Firth Rixson, headquartered in East Hartford, CT, is a global supplier of highly engineered rings, forgings and specialist medal products primarily to aerospace engine manufacturers. The company also manufacturers forged and metal products for manufacturers in power generation, oil and gas, mining, defense, automotive and railway markets. The company is majority-owned by Oak Hill Capital Partners. Sales for the fiscal year ended September 30, 2013 were roughly $1 billion. FISKER AUTOMOTIVE: Judge Approves Additional Financing ------------------------------------------------------ The Associated Press reported that a Delaware judge has approved additional bankruptcy financing for Fisker Automotive as the failed electric vehicle continues to make its way through a Chapter 11 sale process. According to the report, the judge has signed a second interim order authorizing an additional $2.7 million in bankruptcy loans from Hybrid Technologies LLC, Fisker's primary secured lender. That's on top of about $1.7 million in debtor financing from Hybrid that the court previously approved. The money will be used for working capital and bankruptcy expenses as attorneys for Fisker seek court approval of a sale of the company's remaining assets to Hybrid, the report said. Fisker filed for bankruptcy protection last month, three and a half years after receiving a $529 million loan commitment from the U.S. Department of Energy, the report related. Hybrid, owned by Hong Kong billionaire Richard Li, recently paid $25 million for DOE's outstanding loan balance, resulting in a loss to federal taxpayers of $139 million. Hybrid plans to use a $75 million credit bid based on the secured loan it holds to take ownership of Anaheim, Calif.-based Fisker. Delaware taxpayers are on the hook for about $20 million in loans and grants provided to Fisker in hopes of resurrecting vehicle production at a shuttered General Motors plant in Wilmington, the report said. Gov. Jack Markell and Vice President Joe Biden were among those on hand when Fisker announced with great fanfare in 2009 that it would build vehicles at the former GM plant. About Fisker Automotive Fisker Automotive Holdings, Inc., developer of the Karma plug-in hybrid electric sedan, filed a petition for Chapter 11 protection (Bankr. D. Del. Case No. 13-13087) on Nov. 22, 2013, with plans to sell the business to Hybrid Tech Holdings, LLC. Fisker estimated assets of more than $100 million and listed debt of $500 million in its bankruptcy petition. The assets include an assembly plant purchased for $21 million from General Motors Corp. The plant never operated. The cars were assembled in Finland. Fisker now has 21 employees. Fisker received a $529 million loan from the Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program and drew down about $192 million before the department froze the loan after Fisker failed to hit several development targets. The company defaulted on its loan in April 2013. The Debtors have tapped James H.M. Sprayregen, P.C., Esq., Anyp Sathy, P.C., Esq., and Ryan Preston Dahl, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, as co-counsel; Laura Davis Jones, Esq., James E. O'Neill, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co- counsel; Beilinson Advisory Group as restructuring advisors; and Rust Consulting/Omni Bankruptcy, as notice and claims agent and administrative advisor. The Debtors disclosed that they have entered into an asset purchase agreement with Hybrid for the sale of substantially all of its assets. Hybrid is represented by Tobias Keller, Esq., and Peter Benvenutti, Esq., at Keller & Benvenutti LLP, in San Francisco, California. FLORIDA GAMING: Bankruptcy Sale Procedures Approved --------------------------------------------------- Law360 reported that with an agreement in place for operator Silvermark LLC to serve as a stalking horse bidder, a Florida bankruptcy judge worked through a few final issues before approving sale procedures for a planned March 2014 auction of Casino Miami Jai-Alai. According to the report, the Dec. 18 confirmation hearing came close to not happening. U.S. Bankruptcy Judge Robert A. Mark gave the parties a 24-hour extension on a previously set deadline for the stalking horse deal. 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 disclosed 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. FOCUS RED MANGO: Osbornes Tied to Operator Facing Bankruptcy ------------------------------------------------------------ Russell Hubbard at OMAHA.COM reports that an Omaha operator of Red Mango frozen yogurt shops has filed for bankruptcy and liquidation, after closing some locations around town in the fall. Focus Red Mango, whose investors include former U.S. Rep. and Nebraska football coaching legend Tom Osborne, filed for Chapter 7 liquidation in U.S. Bankruptcy Court in Omaha. The petition cites debts of as much as $500,000 and assets of not more than $50,000. "Debtor estimates that, after any exempt property is excluded and administrative expenses paid, there will be no funds available for distribution to unsecured creditors," the petition reads, signed by Focus Red Mango Managing Member Bret Cain, the report notes. Among Focus Red Mango shareholders, officers and directors, Tom Osborne and wife Nancy are listed as 10 percent owners; Cain is listed as 80 percent owner, with each of the several other owners listed as owning 2.5 percent. The Osbornes are also listed as a creditor, owed an amount cited as "unknown" in the petition, the report relates. According to the report, the largest creditor listed in the filing is Omaha-based American National Bank, owed about $335,000. Also listed are many business debts owed to vendors such as utility companies and pest control services. One of the largest is Virginia-based Performance Food Group, owed about $38,000, the report relates. The bankruptcy filing says that the three Focus Red Mango store managers earning $2,600 per month have been paid and that no amounts are owed to them, the report says. Focus Red Mango operated three Omaha-area shops, two of which are shuttered. The shop at One Pacific Place is open under the ownership of a new franchise operator, Dallas-based Red Mango said. FRONTIER COMMUNICATIONS: Fitch Lowers IDR & LT Debt Ratings to BB ----------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating (IDR) and long-term debt ratings of Frontier Communications Corporation (Frontier) (NYSE: FTR) as follows: -- IDR to 'BB' from 'BB+'; -- Senior unsecured $750 million revolving credit facility due 2016 to 'BB' from 'BB+'; -- Senior unsecured notes and debentures to 'BB' from 'BB+'. The Rating Outlook is revised to Stable from Negative. In addition, Fitch has revised the ratings of other Frontier subsidiaries as listed at the end of this release. Key Rating Drivers: The downgrade follows a review of Frontier's rating following the announcement of the definitive agreement to acquire certain wireline assets in the state of Connecticut from AT&T, Inc. for $2 billion in cash. Fitch believes the positive aspects of the transaction include the increased scale of Frontier on a post- transaction basis, including improved free cash flow (FCF, defined as net cash provided by operating activities less capital spending and dividends). The assets being acquired will not require material additional capital spending given past network upgrades by AT&T. However, the transaction will be mostly funded by increased debt, leading to an approximate 0.4x increase in Frontier's net leverage. In Fitch's view, Frontier's net leverage was weak for the previous 'BB+' rating category, and that following the acquisition, Frontier's net leverage is expected to be in the range of 3.7x to 3.8x and will remain elevated over the next couple of years. The expected range is more reflective of a 'BB' rating. Ongoing Competitive Pressures: Through three quarters of 2013, business and residential customer revenue declines have moderated sequentially and are approaching stability, although potential headwinds from competitive pressures and technological substitution remain in place. Revenues have also been affected by the net effect of reforms to intercarrier compensation. A key issue for Frontier over time will be to maintain and attract customers. Manageable Maturities: Excluding the transaction financing, Frontier is not expected to need to access the capital markets to refinance maturing debt through at least 2016. Existing maturities of approximately $863 million over 2014-2016 can be managed with cash expected to be on the balance sheet plus FCF. Liquidity Solid: Supporting the rating is Frontier's ample liquidity, which is derived from its cash balances and its $750 million revolving credit facility. At Sept. 30, 2013, Frontier had $661 million in cash. Fitch expects FCF to be in the $275 million to $325 million range in 2013. Although lower EBITDA, higher interest expense and higher cash taxes will reduce FCF relative to 2012, the effect is nearly offset by lower capital spending and the elimination of integration- and acquisition-related expenses. Frontier's expectations for 2013 capital spending range from $625 million to $675 million for its normal construction program plus the tail end of broadband expansion spending, with the mid-point down from the $748 million spent in 2012. The company has been spending capital on fiber-to-the-cell-tower projects, but expects this spending to wind down in 2013. In 2013, cash taxes are expected to rise to $125 million to $150 million, up from a nominal $5 million in 2012. Credit Facility and Debt Maturities: The $750 million senior unsecured credit facility is in place until November 2016. The facility is available for general corporate purposes but may not be used to fund dividend payments. The main financial covenant in the revolving credit facility requires the maintenance of a net debt-to-EBITDA level of 4.5x or less during the entire period. Net debt is defined as total debt less cash exceeding $50 million. Frontier has approximately $258 million due in 2014, $259 million due in 2015, and $345 million due in 2016. Rating Sensitivities: Considerations for a Positive Rating Action: -- Given Fitch's leverage expectations over the next two to three years, a positive action is not anticipated. Considerations for a Negative Rating Action: -- If net leverage equals or exceeds 4.0x, a Negative rating action could take place. Fitch has downgraded the following ratings and revised the Outlook to Stable from Negative: Frontier North Inc. -- IDR to 'BB' from 'BB+'; -- $200 million unsecured notes due 2028 to 'BB+' from 'BBB-'. Frontier West Virginia -- IDR to 'BB' from 'BB+'; -- $50 million private placement notes due 2029 to 'BB+' from 'BBB-'. FRONTIER COMMUNICATIONS: Moody's Reviews 'Ba2' CFR for Downgrade ---------------------------------------------------------------- Moody's Investors Service has placed the ratings of Frontier Communications Corporation on review for downgrade following the company's announcement that it has agreed to acquire AT&T Inc's local wireline business in the state of Connecticut for approximately $2 billion. The review for downgrade is based upon Moody's view that the acquisition represents a departure from Frontier's prior stated conservative financial policy and discipline which, in Moody's view, was centered around debt reduction. Moody's expects the transaction to be largely debt- financed, which could stress Frontier's credit metrics beyond the limits of its current Ba2 rating. The transaction is expected to close at the end of 2014 and Moody's anticipates concluding the review within that timeframe. Ratings Rationale: Moody's review will focus on Frontier's willingness and ability to reduce financial leverage towards 3.5x (Moody's adjusted), integration risks of the acquistion and its liquidity profile given the increased interest burden and expected higher cash taxes. Moody's will also assess the company's competitive position which could be undermined if the company reduces its capital investment rate below that of its wireline peers to maintain its shareholder friendly capital allocation stance. Frontier's Ba2 corporate family rating reflects its large scale of operations, its strong and predictable cash flows and management's stated commitment to de-lever its balance sheet, demonstrated by its dividend reduction and modest debt reduction thus far in 2013. These factors are offset by the company's challenged competitive position versus cable operators, its declining revenues and the possibility that the company may not have the flexibility or discipline to continue to adequately invest in network modernization. Moody's believes that the separation of the Connecticut assets from their AT&T parent could result in a higher cost structure despite Frontier's forecast of significant cost benefits. Moody's expects the transaction to be largely debt-financed which could cause leverage to stay elevated for an extended period of time. Although the deal will result in higher leverage, the acquisition of AT&T's wireline business in Connecticut will result in increased scale and add an asset with high broadband penetration to Frontier's coverage area. Frontier Communications Company is an Incumbent Local Exchange Carrier ("ILEC") headquartered in Stamford, CT. Following the Company's merger with a company spun out of Verizon Communications' northern and western operations (Spinco) in a reverse Morris Trust transaction, Frontier became the fifth largest wireline telecommunications company in the US. FURNITURE BRANDS: Exclusive Periods Extension Sought ---------------------------------------------------- BankruptcyData reported that Furniture Brands International filed with the U.S. Bankruptcy Court a motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including July 7, 2014 and September 8, 2014, respectively. The motion explains, "The Debtors' chapter 11 cases are sufficiently large and complex to warrant the requested extension of the Exclusive Periods. The Debtors operated their businesses on a global basis....The Debtors are also developing and implementing their strategy for the liquidation of certain residual assets excluded from the Sale to maximize the value of these estates. Although the Debtors are addressing these issues expeditiously, they will require additional time to complete and implement their chapter 11 exit strategy. The requested extension is reasonable given the Debtors' progress to date and the current posture of these chapter 11 cases. Since the commencement of these chapter 11 cases, the Debtors, their management, and their advisors have been diligently working towards consummating a Sale of substantially all of their business. The Debtors are now focusing their efforts on resolving numerous cure objections asserted in connection with the Sale, investigating additional sources of recovery for creditors, and transitioning their operations to the Purchasers. These efforts are made even more challenging in light of the fact that substantially all of the Debtors employees accepted employment with the Purchasers upon closing of the Sale. At this stage, the Debtors believe that an extension of the Exclusive Periods will allow the Debtors to negotiate and develop a consensual chapter 11 plan, while continuing to devote the necessary resources towards maximizing the value of the Debtors' estates. The Debtors' current progress towards resolving the issues facing the estates and consummating the Sale justifies the requested extension of the Exclusive Periods... The Debtors do not believe that the extension will pressure creditors to accede to a plan that is unsatisfactory to them. Under these circumstances, granting an extension of the Exclusive Periods will not give the Debtors unfair bargaining leverage over creditor constituencies." The Court scheduled a Jan. 7, 2014 hearing to consider this motion. About Furniture Brands Furniture Brands International (NYSE:FBN) -- http://www.furniturebrands.com-- engaged in the designing, manufacturing, sourcing and retailing home furnishings. Furniture Brands markets products through a wide range of channels, including company owned Thomasville retail stores and through interior designers, multi-line/ independent retailers and mass merchant stores. Its brands include Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith and LaBarge. The balance sheet at June 29, 2013, showed $546.73 million in total assets against $550.13 million in total liabilities. On Sept. 9, 2013, Furniture Brands International, Inc. and 18 affiliated companies sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12329). Attorneys at Paul Hastings LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. Alvarez and Marsal North America, LLC, is the restructuring advisors. Miller Buckfire & Co., LLC is the investment Banker. Epiq Systems Inc. dba Epiq Bankruptcy Solutions is the claims and notice agent. The official creditor's committee is comprised of the Pension Benefit Guaranty Corp., Milberg Factors Inc. and five suppliers. The Committee tapped Blank Rome LLP as co-counsel, Hahn & Hessen LLP as lead counsel, BDO Consulting as financial advisor, and Houlihan Lokey Capital, Inc., as investment banker. In November 2013, Furniture Brands won bankruptcy court approval to sell the business to KPS Capital Partners LP for $280 million. Private-equity investor KPS formed a new company named Heritage Home Group LLC to operate the business. GENESIS DEVELOPMENTS: Case Summary & 7 Unsecured Creditors ---------------------------------------------------------- Debtor: Genesis Developments, LLC PO Box 418 Somers, MT 59932 Case No.: 13-61623 Chapter 11 Petition Date: December 18, 2013 Court: United States Bankruptcy Court U.S. Bankruptcy Court, District of Montana (Butte) Judge: Hon. Ralph B. Kirscher Debtor's Counsel: Jon R Binney, Esq. BINNEY LAW FIRM, PC P.O. Box 2253 Missoula, MT 59806 Tel: 406 541-8020 Email: jon@binneylaw.com Total Assets: $5.45 million Total Liabilities: $3.65 million The petition was signed by David J. Clark, member. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/mtb13-61623.pdf GHORI NO. 1 CAB: District Court Won't Stay Ch.7 Conversion Order ---------------------------------------------------------------- District Judge Joan B. Gottschall in Chicago denied the request of Ghori No. 1 Cab Corporation, INF Cab Corporation, and Uboo Cab Corporation for an emergency stay of enforcement of the bankruptcy court's order converting their Chapter 11 cases to Chapter 7, pursuant to Federal Rule of Bankruptcy Procedure 8005. The three cases were then substantively consolidated into one. On November 6, 2013, the bankruptcy court entered an order converting that case to chapter 7. Debtors then filed a motion to reconsider that order, which the bankruptcy court denied. Debtors now move this court The case before the district court is, MOHAMMED GHORI, GHORI NO. 1 CAB CORPORATION, INF CAB CORPORATION, AND UBOO CAB CORPORATION, Appellants, v. GHORI NO. 1 CAB CORPORATION c/o CH. 7 TRUSTEE FRANCES GECKER LLP, OFFICE OF U.S. TRUSTEE, RASOOL KHAN, TRANSIT FUNDING ASSOCIATION, LLC, et al., Appellees, Case No. 13 C 8544 (N.D. Ill.). A copy of the Court's Dec. 17, 2013 Memorandum Opinion and Order is available at http://is.gd/csi8aXfrom Leagle.com. Ghori No. 1 Cab Corporation, INF Cab Corporation, and Uboo Cab Corporation filed petitions for chapter 11 bankruptcy (Bankr. N.D. Ill. Case Nos. 13-08275, 13-08276 and 13-08278) on March 1, 2013. Each of the debtors listed under $1 million in both assets and debts. Forrest L. Ingram, Esq., at Forrest L. Ingram, P.C., serves as the Debtors' counsel. A copy of Ghori No. 1 Cab's petition is available at http://bankrupt.com/misc/ilnb13-08275.pdf A copy of INF Cab's petition is available at http://bankrupt.com/misc/ilnb13-08276.pdf A copy of Uboo Cab's petition is available at http://bankrupt.com/misc/ilnb13-08278.pdf GREEN FIELD ENERGY: KEIP & KERP Seal Approval Sought ---------------------------------------------------- BankruptcyData reported that Green Field Energy Services filed with the U.S. Bankruptcy Court a motion to file under seal its motion for entry of an order approving its (i) key employee incentive plan (KEIP) and (ii) key employee retention plan (KERP). The motion explains, "Sufficient cause exists for the Court to grant the motion in order to protect the Debtors' confidential commercial information. The unredacted KEIP/KERP motion contains specific sales target upon which incentive payments are based. Given that the Debtors are currently in the process of receiving bids and marketing the sale of their assets, releasing this information would offer potential buyers an unfair advantage in negotiations and would impair the value of the estates....The KEIP/KERP motion also contains detailed incentive compensation information for each KEIP Participant and KERP Participant along with each such Participant's base salary or data from which compensation could be determined (collectively with the sales and liquidity targets, the 'Confidential Information'). Protecting this wage information is crucial to the Debtors since its disclosure could be very damaging to the Debtors' business. Making this information public would give the Debtors' competitors an unfair advantage because they could use it to target specific employees with offers of employment having greater compensation and payments than those offered in the KEIP or KERP. The loss of KEIP participants or KERP participants to the Debtors' competitors at this challenging time would impair the Debtors' business operations and would negatively affect the Sale Processes." The Court scheduled a Jan. 7, 2014 hearing to consider the seal motion. About Green Field Energy Green Field Energy Services, Inc., is an independent oilfield services company that provides a wide range of services to oil and natural gas drilling and production companies to help develop and enhance the production of hydrocarbons. The Company's services include hydraulic fracturing, cementing, coiled tubing, pressure pumping, acidizing and other pumping services. Green Field Energy and two affiliates filed Chapter 11 petitions in Delaware on Oct. 27, 2013, after defaulting on an $80 million credit provided by an affiliate of Royal Dutch Shell Plc (Case No. 13-bk-12783, Bankr. D. Del.). The Debtors are represented by Michael R. Nestor, Esq., and Kara Hammon Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware; and Josef S. Athanas, Esq., Caroline A. Reckler, Esq., Sarah E. Barr, Esq., and Matthew L. Warren, Esq., at Latham & Watkins LLP, in Chicago, Illinois. The Debtors' investment banker is Carl Marks Advisory Group LLC. Thomas E. Hill, from Alvarez & Marsal North America, LLC, serves as the Debtors' chief restructuring officer. Roberta A. Deangelis, The U.S. Trustee for Region 3, appointed six members to the official committee of unsecured creditors in the Chapter 11 cases of Green Field Energy Services, Inc., et al. Green Field's bankruptcy is being financed with a $30 million loan from BG Credit Partners LLC and ICON Capital LLC. GYMBOREE CORP: Moody's Lowers CFR to 'Caa1'; Outlook Stable ----------------------------------------------------------- Moody's Investors Service lowered The Gymboree Corporation Corporate Family Rating to Caa1 from B3. The rating outlook is stable. The company's SGL-2 Speculative Grade Liquidity was affirmed. Actions on rated debt are detailed below. The downgrade considers the company's continued weak execution evidenced by continued soft comparable store sales and declining operating margins. Adjusted EBITDA (as reported by the company) fell more than 25% in the third quarter of fiscal 2013 compared to the same quarter in 2012 and the company now projects a nearly 30% decline in Adjusted EBITDA (at the mid-point of its range) for the fourth fiscal quarter ending February 1, 2014. Moody's now expects the company to end the current fiscal year with debt/EBITDA near 9 times and interest coverage (EBITA/interest) below one times. The company is seeing sustained pressure on sales and operating margins as the company faces challenges in a highly promotional category as well as addressing ongoing inventory challenges. The stable rating outlook reflects that notwithstanding its current operating challenges and high debt burden, Gymboree maintains its good overall liquidity profile with access to a significant asset based revolver that Moody's expects will remain undrawn except for short term working capital requirements and that the company has no debt maturity until the 2017 maturity of its asset based revolver and the 2018 debt maturities of its term loan and unsecured bonds. The stable rating outlook also reflects Moody's expectations that the company will generate essentially break even operating cash flow thus it is not expected the company will need to utilize its revolver to fund negative cash flow. The following ratings were downgraded: Corporate Family Rating to Caa1 from B3 Probability of Default Rating to Caa1-PD from B3-PD $767 million secured term loan due February 2018 to B3 ((LGD 3, 41%) from B2 (LGD 3, 39%) $347 million senior unsecured notes due December 2018 to Caa3 (LGD 5, 86%) from Caa2 (LGD 5, 85%) The following rating was affirmed: Speculated Grade Liquidity rating of SGL-2 Ratings Rationale: Gymboree's Caa1 Corporate Family Rating reflects the company's high debt burden, with debt/EBITDA expected to approach 9 times by the end of fiscal 2012 and interest coverage below 1 time. The rating also reflects the company's weak execution, with profit margins falling each year since the LBO of the company in 2010 by affiliates of Bain Capital. The ratings reflect Gymboree's good liquidity profile with access to a $225 million asset based revolver and limited funded debt maturities until February 2018. The ratings reflect the meaningful scale in the fragmented toddler apparel sector, with over 1300 stores across the Gymboree, Gymboree Outlet, Janie & Jack, and Crazy 8 brands. Ratings could be upgraded if the company were to demonstrate improved execution for its brands as a whole, which would be evidenced by flat to positive same store sales growth, indicating traction with its core customer, and improved operating margins, which would reflect improved inventory initiatives and lower markdown expenses. Quantitatively, ratings could be upgraded if debt/EBITDA approached 7 times and interest coverage approached 1.25 times while maintaining a good liquidity profile. Ratings could be lowered if the company's good liquidity profile were to erode, for example, if the company were to rely more heavily on its asset based revolver to fund cash flow deficits, or if the probability of a default were to otherwise increase. Headquartered in San Francisco, California, The Gymboree Corporation ("Gymboree") is a leading retailer of infant and toddler apparel. The company designs and distributes infant and toddler apparel through its stores which operates under the "Gymboree", "Gymboree Outlet", "Janie and Jack" and "Crazy 8" brands in the United States, Canada and Australia. Revenues are approximately $1.3 billion. The company is owned by affiliates of Bain Capital Partners LLC. * * * According to Bloomberg News, on Dec. 18, the notes last traded for 92.725 cents on the dollar, to yield 11.073 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Gymboree, based in San Francisco, was acquired by Bain in November 2010 in a $1.67 billion transaction. As a result of the acquisition, Standard & Poor's previously said the company has a "hefty debt levels and thin cash flow protection measures." HARRISBURG, PA: State Sells Parking Bonds to Aid Recovery Plan -------------------------------------------------------------- Hilary Russ, writing for Reuters, reported that Pennsylvania sold nearly $289 million of parking revenue bonds on Dec. 17 -- a critical component of the recovery plan for its cash-strapped capital city Harrisburg. According to the report, the deal, from the Pennsylvania Economic Development Financing Authority, included three series. The largest was about $119 million of bonds with a triple-B underlying rating, insured by Assured Guaranty Municipal Corp, that sold with a top yield of 5.45 percent on bonds maturing in 2044 with a 5.25 percent coupon during institutional pricing, according to preliminary pricing. That is 131 basis points above top-rated municipal bonds on Municipal Market Data's benchmark triple-A scale, MMD analysts said, the report related. But the large penalty is in line with yields on other triple-B rated muni debt. The bonds were sold through lead manager Guggenheim Securities, the report said. Two series of junior lien parking revenue bonds, for about $99 million and $70 million, also priced. Harrisburg's recovery plan, approved by a court and crafted by the city's state-appointed receiver William Lynch, calls for the city to lease up to 10 public parking garages and four or five public parking lots, and for a franchise agreement for about 1,250 metered spaces, the report further related. About Harrisburg, Pennsylvania The city of Harrisburg, in Pennsylvania, is coping with debt related to a failed revamp of an incinerator. The city is $65 million in default on $242 million owing on bonds sold to finance an incinerator that converts trash to energy. The Harrisburg city council voted 4-3 on Oct. 11, 2011, to authorize the filing of a Chapter 9 municipal bankruptcy (Bankr. M.D. Pa. Case No. 11-06938). The city claims to be insolvent, unable to pay its debt and in imminent danger of having tax revenue seized by holders of defaulted bonds. Judge Mary D. France presided over the Chapter 9 case. Mark D. Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's counsel. The petition estimated $100 million to $500 million in assets and debts. Susan Wilson, the city's chairperson on Budget and Finance, signed the petition. Harrisburg said in court papers it is in imminent jeopardy through six pending legal actions by creditors with respect to a number of outstanding bond issues relating to the Harrisburg Materials, Energy, Recycling and Recovery Facilities, which processes waste into steam and electrical energy. The owner and operator of the incinerator is The Harrisburg Authority, which is unable to pay the bond issues. The city is the primary guarantor under each bond issue. The lawsuits were filed by Dauphin County, where Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and Covanta Harrisburg Inc. The Commonwealth of Pennsylvania, the County of Dauphin, and Harrisburg city mayor Linda D. Thompson and other creditors and interested parties objected to the Chapter 9 petition. The state later adopted a new law allowing the governor to appoint a receiver. Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg, P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor. In November 2011, the Bankruptcy Judge dismissed the Chapter 9 case because (1) the City Council did not have the authority under the Optional Third Class City Charter Law and the Third Class City Code to commence a bankruptcy case on behalf of Harrisburg and (2) the City was not specifically authorized under state law to be a debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2). Dismissal of the Chapter 9 petition was upheld in a U.S. District Court. That same month, the state governor appointed David Unkovic as receiver for Harrisburg. Mr. Unkovic is represented by the Municipal Recovery & Restructuring group of McKenna Long & Aldridge LLP, led by Keith Mason, Esq., co-chair of the group. Mr. Unkovic resigned as receiver March 30, 2012. Mr. Unkovic was replaced by William Lynch as receiver. HOLT DEVELOPMENT: Hearing on Cash Use Continued Until Jan. 14 ------------------------------------------------------------- The Hon. Randall S. Mashburn of the U.S. Bankruptcy Court for the Middle District of Tennessee approved an agreed order rescheduling hearings on Holt Development Co. LLC's request for (i) authority to use cash collateral; (ii) approval of Disclosure Statement; and (iii) extension of Heritage Bank's deadline to object to the Disclosure Statement. Pursuant to the agreement, among other things: a) the Dec. 17, 2013 hearing on the Debtor's use of the cash collateral of Heritage Bank is continued until Jan. 14, 2014; b) the Dec. 17 hearing on the approval of the Disclosure Statement accompanying the Debtor's proposed Plan of Reorganization is continued until Jan. 14, 2014; and c) the deadline within which Heritage may file objections, if any, to the Disclosure Statement is continued from Dec. 5, to Jan. 6. The parties have agreed that the Debtor be allowed and authorized to continue to use Heritage's cash collateral, subject to the same reporting and budgeting requirements described in the First Agreed cash collateral order entered Sept. 19, 2013, up to and including Jan. 14. As reported in the Troubled Company Reporter on Sept. 17, 2013, a 10% variance on any line item expenditure in the budget will be allowed. To secure the use of cash collateral, Heritage will have and is granted valid and perfected Replacement Liens in and upon all of the existing and future assets and properties of Debtor, whether acquired prior to, concurrently with or after the filing of the petition commencing Debtor's Chapter 11 case, to the same extent that the lender's prepetition liens and security interests secured the indebtedness and encumbered the lender collateral and/or the cash collateral. About Holt Development 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. In its schedules, the Debtor disclosed $12,577,049 in assets and $10,342,933 in liabilities as of the Petition Date. The Debtor is in the business of developing improved and unimproved properties in Pleasant View, Cheatham County, Tennessee. HOLT DEVELOPMENT: Jan. 14 Hearing on Bank's Bid for Stay Relief --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee, in an agreed order, continued until Jan. 14, 2014, at 8:30 a.m., the hearing on Heritage Bank's motion for relief from stay. As reported in the Troubled Company Reporter on Dec. 3, 2013, the Debtor responded to Heritage Bank's motion for relief from stay. Holt said that, contrary to Heritage's allegations, the Debtor by definition is in compliance with the applicable statute and the Court order entered on Aug. 9, 2013. Further, the Debtor asserted that the statements made by Heritage in its motion were merely legal arguments which must be considered at confirmation of a reorganization plan. The Debtor owed a total of $8,702,572 to Heritage pursuant to four outstanding loans. The loans are secured by certain property consist of rent-producing, improved property and unimproved, non- income producing property. Heritage said it has not received any payments on the debt since March 2013. About Holt Development 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. In its schedules, the Debtor disclosed $12,577,049 in assets and $10,342,933 in liabilities as of the Petition Date. The Debtor is in the business of developing improved and unimproved properties in Pleasant View, Cheatham County, Tennessee. IMG WORLDWIDE: S&P Puts 'B' CCR on Watch Negative Over Sale Deal ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B' corporate credit rating, on IMG Worldwide Holdings Inc. on CreditWatch with negative implications. The CreditWatch listing follows entertainment agency William Morris Endeavor Entertainment's announcement that it and private equity firm Silver Lake have reached an agreement to purchase IMG. The transaction is subject to customary closing conditions. The terms of the deal, including the purchase price, were not announced. However, numerous credible press reports cite a purchase price of $2.3 billion to $2.4 billion. As a result, the CreditWatch listing reflects S&P's expectations that financing for the acquisition could include additional debt at the combined entity, given the significant reported purchase price, and integration risks that are customary in acquisitions of this size. Given that S&P expects total lease-adjusted debt to EBITDA to be in the 6x area in 2014, which is highly leveraged under S&P's criteria, a moderate amount of additional leverage could result in a lower rating. The CreditWatch listing reflects S&P's expectations that financing for the acquisition could include additional debt at the combined entity given the significant reported purchase price. It also reflects integration risks that are customary in acquisitions of this size. S&P will resolve the CreditWatch listing following its review of the combined company's capital structure and business integration plans. INTERPUBLIC GROUP: S&P Retains 'BB+' Sr. Unsecured Notes Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on New York-based ad agency holding company Interpublic Group of Cos. Inc. (IPG) remain unchanged following the company's amendment to its $1 billion revolving credit facility. The company extended the maturity on the facility to December 2018 from May 2016. S&P's issue-level rating on this debt remains 'BB+', with a recovery rating of '3', indicating its expectation for meaningful recovery for lenders in the event of a payment default. S&P's 'BB+' corporate credit rating on IPG incorporates IPG's position as the fourth largest (prior to the pending merger of Omnicom Group Inc. And Publicis Groupe S.A.) ad agency holding company by revenue, with a broad business mix across advertising and marketing services disciplines and geographies. The advertising industry is somewhat cyclical, and subject to clients switching to competitors or scaling back spending on short notice. IPG's business risk profile is "satisfactory" based on the company's broad business mix of traditional advertising and marketing services and the increased client relationship opportunities that the holding company structure provides compared with stand-alone agencies. S&P views IPG's financial risk profile as "significant" because of its adjusted leverage between 3x-4x and lower discretionary cash flow generation compared with peers, notwithstanding its strong liquidity. RATINGS LIST Interpublic Group of Cos. Inc. Corporate Credit Ratings BB+/Stable/-- Ratings Unchanged Interpublic Group of Cos. Inc. Senior Unsecured $1B revolver due December 2018 BB+ Recovery Rating 3 IPC INTERNATIONAL: Has Until March 7 to Propose Chapter 11 Plan --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware, at the hearing held Dec. 12, 2013, extended IPC International Corporation, et al.'s exclusive periods to file a chapter 11 plan until March 7, 2014, and solicit acceptances for that plan until May 6. The Debtors filed their request for an extension before the exclusive periods were set to expire on Dec. 7, 2013. The Debtors explained they are in the process of marketing and selling substantially all of their assets. In this relation, the Debtors are unable to fully evaluate whether it will have sufficient funds to propose and confirm a plan of liquidation. 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, 2013, 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. The loan requires quick sale. IPC International Corp., a provider of security services for 350 shopping malls, won authorization from the bankruptcy court to sell the business for $25.4 million to Universal Protection Services LLC. The Debtor disclosed $21,959,100 in assets and $31,056,575 in liabilities as of the Chapter 11 filing. IQOR HOLDINGS: S&P Puts 'B' CCR on CreditWatch Developing --------------------------------------------------------- Standard & Poor's Ratings Services said it placed all the ratings on iQor Holdings and its subsidiaries, including the 'B' corporate credit rating, on CreditWatch with developing implications following the company's announcement that it has agreed to acquire the aftermarket services division of Jabil Circuit Inc. for $725 million. "We currently view iQor's business risk as 'weak,' given the fragmented nature of the accounts receivables collection and customer care businesses and the company's relatively low profitability, with EBITDA margins in the mid-teens," said Standard & Poor's credit analyst Catherine Cosentino. S&P will evaluate the new business risk for iQor, including potential scale benefits from having a larger revenue base and the competitive environment of the technology support services business, which will account for about two-thirds of its revenues. S&P will also evaluate the transaction's impact on the company's financial risk profile, which S&P previously viewed as "aggressive". The company said it will fund the transaction with a mix of additional iQor debt and an equity infusion from its private ownership group. Jabil will retain an equity stake in the business following completion of the transaction, which the company expects to complete by the end of the first quarter of 2014. The developing status of the CreditWatch indicates that S&P could raise or lower the ratings depending upon its reevaluation of iQor's business risk and financial risk profiles. S&P expects to complete its CreditWatch review within 90 days. KENAN ADVANTAGE: Moody's Rates New USD Tranche D Term Loan 'Ba2' ---------------------------------------------------------------- Moody's Investors Service has affirmed the B1 Corporate Family Rating ("CFR") for Kenan Advantage Group, Inc. ("Kenan") and maintained its negative outlook, following certain modifications to Kenan's senior secured credit facility. At the same time, Moody's has assigned a Ba3 rating to a new USD Tranche D Term Loan that is part of Kenan's modified senior secured credit facility. Moody's has also affirmed the Ba3 rating for the senior secured credit facility and the B3 rating for Kenan's senior unsecured notes due 2018. The rating action takes into account that the modifications do not materially alter the total amount of debt, nor the relative amounts of senior secured and senior unsecured debt in Kenan's capital structure. Ratings Rationale: Kenan has made certain modifications to its senior secured credit facility which is being amended in connection with Kenan's financing of its acquisition of RTL-Westcan Group. The principal modifications include: (i) a new USD Tranche D Term Loan of $76 million; (ii) an increase of the CAD Tranche C Term Loan to $135 million, from $100 million; and (iii) a decrease in the Term Loan B to $314 million, from $430 million. The maturity, amortization and yield of the new USD Tranche D Term Loan will be identical to the existing Term Loan B. As the modifications do not materially alter the total amount of debt outstanding, nor the relative amounts of senior secured and senior unsecured debt in Kenan's capital structure, the modifications do not affect Kenan's CFR and instrument ratings. Kenan's negative outlook reflects the company's weakened credit metrics which do not allow for any potential performance shortfalls. The outlook also considers the possibility that financial leverage remains at elevated levels as a result of further acquisitions. Ratings could be revised downward if Kenan would not be able to strengthen its credit profile to a level that is more appropriate for the B1 rating category. Specifically, ratings could be lowered if Debt to EBITDA would exceed 5.0x on a sustained basis, if EBIT to Interest would continue to be below 1.5x, or if availability under the revolving credit facility were to diminish due to high usage or covenant restrictions. Since debt is not likely to be reduced materially during the next few years, ratings are not expected to be upgraded over the near term. However, over the longer term, ratings could be adjusted upward, if the company could demonstrate improving margins and leverage through earnings growth or reduction of debt through the use of free cash flow. Debt to EBITDA would need to be sustained below 4.0x and EBIT to Interest would need to exceed 3.0x to warrant an upgrade of the CFR. Assignments: Issuer: Kenan Advantage Group, Inc. Senior Secured Bank Credit Facility - Tranche D USD Term Loan, Assigned Ba3 (LGD3, 30%) Affirmations: Issuer: Kenan Advantage Group, Inc. Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Senior Secured Bank Credit Facility, June 11, 2016, Affirmed Ba3 (LGD3, 30%) Senior Unsecured Regular Bond/Debenture Dec 15, 2018, Affirmed B3 (LGD5, 84%) Outlook Actions: Issuer: Kenan Advantage Group, Inc. Outlook, Remains Negative LABORATORY PARTNERS: HHS Fears MedLab Sale May Run Afoul Of HIPAA ----------------------------------------------------------------- Law360 reported that the U.S. Department of Health and Human Services took issue with bankrupt Laboratory Partners Inc.'s plan to auction a portion of its operating assets, arguing the sale may include private patient information in violation of the Health Insurance Portability and Accountability Act. According to the report, in a protective objection before the Delaware bankruptcy court, the feds argued that the plan by Laboratory Partners, also known as MedLab, to sell its unit that performs laboratory testing services for long-term care facilities includes customer lists as consideration. Laboratory Partners Inc., a Cincinnati-based provider of lab and pathology services, filed a petition for Chapter 11 protection on Oct. 25 in Delaware. The case is In re Laboratory Partners Inc., 13-bk-12769, U.S. Bankruptcy Court, District of Delaware (Wilmington). LEE'S FORD: Has Access to Cash Collateral Until Jan. 10 ------------------------------------------------------- For the 20th time, Judge Tracey N. Wise has entered an interim order authorizing Lee's Ford Dock Inc. and its debtor-affiliates' continued use of cash collateral. The latest order allows the Debtors to use cash collateral until Jan. 10, 2014, in accordance with a budget. As with the prior interim orders, Branch Banking & Trust Company will continue receiving monthly adequate protection payments of $15,000. If the Debtors and secured creditors are unable to reach an agreement as to the terms of a final order on or before Jan. 10, then they may tender further interim orders; provided that if no such interim orders are tendered on or before Jan. 10, this matter will come on for final hearing on Thursday, Jan. 16, at 10:00 a.m. (ET), or as soon thereafter as counsel may be heard, before the United States Bankruptcy Court for the Eastern District of Kentucky, 100 East Vine Street, Third Floor, Lexington, Kentucky. Counsel to the parties can be reached at: DELCOTTO LAW GROUP PLLC Amelia Martin Adams, Esq. Laura Day DelCotto, Esq. 200 North Upper Street Lexington, KY 40507 Telephone: (859) 231-5800 Facsimile: (859) 281-1179 E-mail: aadams@dlgfirm.com ldelcotto@dlgfirm.com COUNSEL FOR DEBTORS - and - FROST BROWN TODD LLC Martin B. Tucker, Esq. 250 W. Main Street, Suite 2800 Lexington, KY 40507-1749 Telephone: (859) 231-0000 Facsimile: (859) 231-0011 E-mail: mtucker@fbtlaw.com COUNSEL FOR BB&T About Lee's Ford Lee's Ford Dock Inc., Hamilton Brokerage LLC, Hamilton Capital LLC, Lee's Ford Hotels LLC, Lee's Ford Woods LLC, and Top Shelf Marine Sales Inc., filed for Chapter 11 bankruptcy (Bankr. E.D. Ky. Case Nos. 12-60818 to 12-60823) on July 4, 2008. The petition was signed by James D. Hamilton, president. The Debtors collectively operate as "Lee's Ford Resort & Marina" - - http://www.leesfordmarina.com/-- which consists of a boat dock, lodging facilities, the Harbor Restaurant & Tavern, a retail store, and a boat brokerage business and Web site located at http://www.buyaboat.neton Lake Cumberland in Nancy, Kentucky. Hamilton Brokerage LLC and Hamilton Capital LLC are not actively involved in the Debtors' operations, but are holding companies set up as part of the structure of the original purchase transactions which began in 2003. The Debtors' revenues were adversely impacted by the lowering of the water level of Lake Cumberland in January 2007 to allow for repairs to Wolf Creek Dam. The Debtors were forced to incur extraordinary costs to relocate the Dock and related facilities in accordance with the new water level. The Debtors disclosed $21,225,899 in assets and $13,339,745 in liabilities as of the Chapter 11 filing. Attorneys at DelCotto Law Group PLLC, in Lexington, Ky., serve as the Debtors' counsel. Smith, Currie & Hancock LLP serves as special counsel to advise and assist the Debtor in connection with its pursuit of claims against the U.S. Army Corps of Engineers. Venters Law Office serves as special counsel to advise and assist the Debtor in connection with the prosecution and defense of general litigation matters, including the collection of unpaid boat slip rental fees, and any other specific matters in connection therewith. The U.S. Trustee has said an official committee has not been appointed in the bankruptcy case of Lee's Ford Dock Inc. because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. LEE'S FORD: Secured Creditors Balk at $500,000 Loan From CTB ------------------------------------------------------------ Lee's Ford Dock, Inc., et al.'s request to obtain $500,000 in DIP financing is being challenged by creditors Branch Banking & Trust Company, the United States Small Business Administration, and the United States Army Corps of Engineers. The Debtors are seeking approval to obtain first-priority secured postpetition financing in the form of a $500,000 revolving line of credit from Community Trust Bank, Inc. BB&T, the primary prepetition secured lender of the Debtors, in connection with the Debtors' operations of a marina on Lake Cumberland in Kentucky, says the Debtors' motion violates Section 364(d) of the Bankruptcy Code. BB&T says the Debtors should pursue alternate forms of credit and should provide proof that secured creditors are adequately protected. The United States Small Business Administration, which holds a secured claim in the amount of $4.12 million, says, among other things, that the Debtors have not demonstrated that they have made an adequate search for better financing options. The Army Corps filed a joinder to BB&T's and SBA's objections to the DIP Financing. Asserting that the request for DIP financing is not based on the Debtors' sound and reasonable business judgment, BB&T notes that the Debtors have continued to experience financial difficulties and cash-flow problems. It adds that Debtors will have to incur costs to relocate the Debtors' docks and related operations once the water level at Lake Cumberland is raised in the spring of 2014. The dock move will cost the Debtors? approximately $700,000. BB&T recounts that the Debtors, throughout the Chapter 11 cases, have consistently claimed that the January 2007 lowering of water levels of Lake Cumberland by the Army Corps contributed significantly to the Debtors' financial difficulties. But BB&T points out that the Debtors only formally asserted an administrative claim against the Army Corps in January 2013, more than 5 years after the alleged loss was incurred and while in the middle of its reorganization efforts. "Despite all of the 'hard' realities facing the Debtors in the form of continuing financial difficulties, cash-flow concerns and the impending dock move, and not to mention the administrative burden (both financially and temporally), the Debtors appear to have made a decision in the middle of their reorganization cases, and after significant progress had been made towards possible confirmation of the Debtors' plan, to divert the attention and efforts of the Debtors away from pursuing confirmation of their already-drafted plan and, instead, pursue the Administrative Claim," BB&T's counsel, Martin B. Tucker, Esq., at Frost Brown Todd LLC tells the Court. BB&T and the SBA are also questioning the Debtors' efforts in attempting to obtain a line of credit from other lender(s) and on terms that would not require that the line of credit prime the liens of BB&T and the SBA. BB&T notes that the Debtors assets (e.g. real estate; leasehold interest) are valued at over $15.0 million. Conversely, the Debtors only have approximately $9.5 million in debts with BB&T and the SBA secured by those assets -- thus the Debtors' claim there is equity in their assets of $5.5 million. "It would seem that an entity that has alleged equity in its assets of approximately $5.5 million would, based on BB&T's understanding of the lending market, be able to secure a similar line of credit from a lender that would not require that its proposed liens would prime the existing liens of BB&T and the SBA," Mr. Tucker avers. The SBA and Army Corps are represented by: KERRY B. HARVEY UNITED STATES ATTORNEY Valorie D. Smith Assistant United States Attorney 260 West Vine St., Suite 300 Lexington, KY 40507-1612 Tel: (859) 685-4843 E-mail: Valorie.d.smith@usdoj.gov Brielle N. Bovee Special Assistant United States Attorney 260 West Vine St., Suite 300 Lexington, KY 40507-1612 Tel: (859) 685-4829 E-mail: Brielle.Bovee@us.doj.gov DIP Financing Lee's Ford Dock, Inc., et al., are seeking to obtain first- priority secured postpetition financing in the form of a $500,000 revolving line of credit from Community Trust Bank, Inc. In exchange for its agreement to provide the DIP Loan to Lee's Ford Dock, the DIP Lender requires that the remaining Debtors, the Hamilton Revocable Trust (which is the sole member of Hamilton Capital and Hamilton Brokerage), and James D. Hamilton (the Trustee of the Trust), individually, all guarantee the DIP Loan. Further, the liens of the DIP Lender on the DIP Loan Collateral will be first-priority priming liens, superior to any and all prior liens of Branch Banking and Trust Company and the U.S. Small Business Administration on the DIP Loan Collateral. The DIP Loan will bear interest at the Wall Street Journal Prime Rate, adjusted daily, with a floor of 5.75%. Interest on the outstanding balance of the DIP Loan will be due monthly, and all outstanding principal and interest will be due at maturity, which is twelve months from the issuance of the DIP Loan. The non- refundable origination fee for obtaining the DIP Loan is $5,000. Other fees and costs relating to the DIP Loan are estimated to be $18,000, for total fees and costs associated with obtaining the DIP Loan of approximately $23,000. According to papers filed with the Court on August 22, based on the appraisals obtained in July 2013 by the DIP Lender, the Debtors' assets have a total value of $15,755,000. "The prepetition amounts of the secured claims of BB&T and the SBA total approximately $9.26 million. Thus, even with the addition of the $500,000 DIP Loan, there is equity of more than $5.9 million in the Debtors' assets. The Debtors submit that this substantial equity cushion provides BB&T and the SBA with the adequate protection required by 11 U.S.C. Section 364(d)(1)(B)." "To the extent approved in subsequent cash collateral budgets, the Debtors will continue paying BB&T adequate protection payments of $15,000 per month until the Plan is confirmed, as they have throughout these bankruptcy cases, which provides additional adequate protection," the Debtors tell the Court. "The Debtors' timely payments of these monthly adequate protection amounts towards BB&T's senior lien will continue to adequately protect the interests of the SBA's junior lien." About Lee's Ford Lee's Ford Dock Inc., Hamilton Brokerage LLC, Hamilton Capital LLC, Lee's Ford Hotels LLC, Lee's Ford Woods LLC, and Top Shelf Marine Sales Inc., filed for Chapter 11 bankruptcy (Bankr. E.D. Ky. Case Nos. 12-60818 to 12-60823) on July 4, 2008. The petition was signed by James D. Hamilton, president. The Debtors collectively operate as "Lee's Ford Resort & Marina" -- http://www.leesfordmarina.com/-- which consists of a boat dock, lodging facilities, the Harbor Restaurant & Tavern, a retail store, and a boat brokerage business and Web site located at http://www.buyaboat.neton Lake Cumberland in Nancy, Kentucky. Hamilton Brokerage LLC and Hamilton Capital LLC are not actively involved in the Debtors' operations, but are holding companies set up as part of the structure of the original purchase transactions which began in 2003. The Debtors' revenues were adversely impacted by the lowering of the water level of Lake Cumberland in January 2007 to allow for repairs to Wolf Creek Dam. The Debtors were forced to incur extraordinary costs to relocate the Dock and related facilities in accordance with the new water level. The Debtors disclosed $21,225,899 in assets and $13,339,745 in liabilities as of the Chapter 11 filing. Attorneys at DelCotto Law Group PLLC, in Lexington, Ky., serve as the Debtors' counsel. Smith, Currie & Hancock LLP serves as special counsel to advise and assist the Debtor in connection with its pursuit of claims against the U.S. Army Corps of Engineers. Venters Law Office serves as special counsel to advise and assist the Debtor in connection with the prosecution and defense of general litigation matters, including the collection of unpaid boat slip rental fees, and any other specific matters in connection therewith. The U.S. Trustee has said an official committee has not been appointed in the bankruptcy case of Lee's Ford Dock Inc. because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. LINN ENERGY: Moody's Raises Corp. Family Rating to 'B1' ------------------------------------------------------- Moody's Investors Service upgraded the senior unsecured notes ratings of Linn Energy, LLC (LINE) to B1 from B2, the Corporate Family Rating (CFR) to Ba3 from B1 and Probability of Default Rating (PDR) to Ba3-PD from B1-PD. Moody's also affirmed LINE's SGL-3 Speculative Grade Liquidity Rating. At the same time, Moody's confirmed the senior unsecured notes ratings of Berry Petroleum Company (Berry) at B1 and withdrew the CFR and SGL Ratings at Berry. This concludes the review for downgrade on Berry's notes initiated on February 22, 2013. These rating actions follow the completion of LINE's acquisition of Berry on December 16, 2013. The outlooks at LINE and Berry are stable. "Moody's upgrade of LINE's notes to B1 reflects the close of the Berry transaction," stated Michael Somogyi -- Moody's Vice President and Senior Analyst. "Berry's assets add to LINE's large reserve base and production scale across a diverse set of basins while accelerating LINE's shift towards a more liquids focused asset base." Under terms of the merger agreement, LinnCo (LNCO unrated) acquired Berry in an exchange of 1.68 common shares for each common share of Berry outstanding as of December 16, 2013. Including assumed debt, the total transaction value is approximately $4.9 billion. Effective with the close of the transaction, Berry's common stock will no longer trade on the NYSE. Berry becomes an indirect wholly-owned subsidiary of LINE with the name Berry Petroleum Company, LLC. The completion of this transaction triggers the change of control provision in the indentures governing Berry's existing notes that entitles holders of the notes to receive 101% of par for the notes plus accrued and unpaid interest. Berry's notes not tendered under the change of control provisions will remain outstanding following the completion of the transaction. Moody's will evaluate the level of financial disclosure available in order to maintain a rating on Berry's notes going forward. Issuer: Linn Energy, LLC Corporate Family Rating (CFR), upgraded to Ba3 from B1 Probability of Default Rating (PDR), upgraded to Ba3-PD from B1-PD Senior Unsecured Notes, upgraded to B1 (LGD-5, 73%) from B2 (LGD-5, 70%) Speculative Grade Liquidity Rating (SGL), affirmed SGL-3 Outlook stable Issuer: Berry Petroleum Company Corporate Family Rating (CFR), withdrawn Probablity of Default Rating (PDR), withdrawn Senior Unsecured Notes, confirmed at B1 (LGD-5, 79%) Speculative Grade Liquidity Rating (SGL), withdrawn Outlook stable Ratings Rationale: LINE's Ba3 CFR reflects its large reserve base and production scale across a diverse set of basins. The acquisition of Berry increases LINE's total proved reserve base by 37% to approximately 1,107 million barrels of oil equivalent (mmBOE), increases LINE's proved developed (PD) reserve by 29% to approximately 686 mmBOE, and raises production volumes by over 30% to approximately 178,000 BOE per day while shifting LINE's production mix to over 50% liquids compared to approximately 45% at September 30, 2013. The Ba3 CFR is restrained by LINE's high leverage profile on an average daily production basis and PD reserve basis. Net against a pro forma debt balance of approximately $8.8 billion, LINE's leverage on average daily production volumes remains above $45,000 per BOE and leverage on PD reserves remains over $12 per BOE. The Ba3 CFR also incorporates LINE's high level of distribution and the structural risks inherent in the MLP business model characterized by an 'acquire and exploit' growth strategy focused on maintaining production volumes in low-risk, legacy fields, while growing cash distributions paid out to unit holders. These ongoing distributions against a depleting reserve base result in the reliance on acquisitions and organic development opportunities to grow the business. LINE's senior unsecured notes are rated B1, one notch below the Ba3 CFR, reflecting the contractual subordination of the notes relative to the company's secured bank credit facility and high level of payables. LINE has access to a $4.0 billion committed bank credit facility with a $4.5 billion borrowing base and $500 million senior secured term loan facility. Both the revolver and term loan are scheduled to mature in April 2018 and are secured by substantially all of its oil and gas properties. Berry's senior unsecured notes are rated B1 reflecting the contractual subordination of notes relative to the company's fully drawn $1.2 billion senior secured committed bank credit facility. In connection with the merger, Berry converted into a limited liability company, and LNCO contributed Berry to LINE in exchange for LINE units. Berry's notes are not guaranteed by LINE. The change of control provisions in the indentures governing Berry's senior notes were triggered by the completion of the merger. Berry notes not tendered under the change of control provisions will remain outstanding following the completion of the transaction. The SGL-3 Speculative Grade Liquidity Rating reflects LINE's adequate liquidity profile. LINE amended and restated its revolving credit facility in April 2013. In connection with the amendment, LINE received an increase in the maximum commitment amount from $3.0 billion to $4.0 billion. The borrowing base under the credit facility remained unchanged at $4.5 billion. In addition, LINE extended the maturity to five years to April 2018. LINE has leverage and liquidity covenants, both of which have adequate headroom. The outlook is stable. To move the rating up, LINE would need debt/average daily production to approach $30,000 per BOE and leverage on PD reserves to approach $10 per BOE. The leveraged full cycle ratio (LFCR) would need to be sustained above 2.0x to allow adequate returns on capital to support distributions and access to capital markets. Additional debt financed acquisitions that would increase Debt/average daily production above $50,000 per BOE or debt/PD reserves exceeding $13 per BOE for a sustained period could precipitate a downgrade. Weaker LFCR levels could also lead to a downgrade. Moody's has withdrawn the rating for its own business reasons. LINN Energy, based in Houston, Texas, operates portfolio of assets located in California, Permian, Mid-Continent, Michigan and Williston (Bakken) Basins. Berry Petroleum Company, headquartered in Denver, Colorado, is an independent oil and gas producer with reserves and producing assets concentrated in California, Permian Basin and the Rockies/Uinta Basin. The combined company will be based in Houston. LONE PINE: Completes Disposition of Non-Operated Assets ------------------------------------------------------- Lone Pine Resources Inc. on Dec. 19 announced the disposition of certain non-operated, minority working interest assets and an update regarding its undeveloped land continuation efforts at Pointed Mountain in the Liard Basin. Non-Operated Asset Disposition The Company's wholly-owned subsidiary, Lone Pine Resources Canada Ltd., has completed the disposition of certain non-operated, minority working interest, oil producing properties located in the Loon area of Northern Alberta for total gross cash proceeds of $7.8 million, subject to normal course closing adjustments. The assets sold had average sales volumes during the last six months of approximately 80 barrels of oil equivalent per day. The transaction closed on December 18, 2013 and Lone Pine used the net proceeds of the sale to reduce indebtedness outstanding under its existing senior secured credit facility. Undeveloped Land Continuation at Pointed Mountain in the Liard Basin In connection with its previously-announced land continuation efforts in the Pointed Mountain area of the Liard Basin in the Northwest Territories, and further to its receipt of a commercial discovery declaration from the National Energy Board for natural gas resources contained in the Upper and Lower Besa River shale intervals, Lone Pine has obtained 21-year lease renewals from the Minister of Aboriginal Affairs and Northern Development in accordance with section 62 of the Canada Oil and Gas Lease Regulations. Lone Pine now holds a 100% operated working interest in approximately 53,000 acres at Pointed Mountain in the Liard Basin under leases with terms to 2033. About Lone Pine Resources Calgary, Canada-based Lone Pine Resources Inc. is an independent oil and gas exploration, development and production company with operations in Canada. The Company's reserves, producing properties and exploration prospects are located in the provinces of Alberta, British Columbia and Quebec, and in the Northwest Territories. The Company is incorporated under the laws of the State of Delaware. Lone Pine entered bankruptcy protection in Canada on Sept. 25, 2013, under the Companies' Creditors Arrangement Act and received an initial protection order from an Alberta court the same day. Lone Pine Resources simultaneously filed for Chapter 15 protection in Delaware in the United States (Bankr. D. Del. Case No. 13- 12487) to seek recognition of the CCAA proceedings. Lone Pine, LPR Canada and all other subsidiaries of the Company are parties to the CCAA and Chapter 15 proceedings. Lone Pine is being advised by RBC Capital Markets, Bennett Jones LLP, Vinson & Elkins LLP and Richards Layton & Finger P.A. in connection with the restructuring, with Wachtell, Lipton, Rosen & Katz LLP providing independent advice to the Company's board of directors. The Supporting Noteholders are being advised by Goodmans LLP and Stroock & Stroock & Lavan LLP. LUMEA INC: Green Planet to File Unaudited Financial Statements -------------------------------------------------------------- Green Planet Group, Inc. disclosed that on December 19, 2013, the Company will file with the OTC Pink Limited Information Tier unaudited financial statements for Fiscal Years ended March 31, 2012 and 2013 as well as its 2014 second fiscal quarter (9/30/13). After ceasing all operations of GNPG's temporary staffing company, Lumea Inc., and its four operating subsidiaries as of August 2012 the financial statements for the fiscal year (2013) include revenues from Lumea Inc. through that period. The financial data through the second quarter of this year (fiscal 2014) only reflect revenues from the XenTx Lubricants, Inc. the Company's fuel additive and lubrication subsidiary. Green Planet Group Chief Executive Officer Edmond Lonergan noted, "Comparing past fiscal years' financial statements is difficult because of filing the initial Chapter 11's for two Lumea subsidiaries in fiscal year 2011 and then having those two subsidiaries voluntarily released from bankruptcy in June 2012 (FY 2013). Accounting for these changes excludes some revenues in one year which are then included in the following year." Mr. Lonergan further stated, "Filing these updated financials represents the second step in our reorganization effort currently underway. The Company's objective is to re-commit itself to our original goal of becoming a world leader in the development and deployment of green technologies. A third announcement that will have a significant positive impact on Green Planet's financial situation and help propel it to becoming a successful and prosperous corporation is forth coming." About Green Planet The Company is comprised of five wholly-owned subsidiaries: one operating company and four development companies. XenTx Lubricants, Inc. produces lubricants and additives for gasoline and diesel engines. Arizona Independent Power Company is a development stage company holding rights to the Verde Pumped Storage Project. AAQIS, Inc. is developing a hydrogen generator which greatly reduces hydrocarbon emissions while improving fuel efficiency in internal combustion engines. Green Mining Technologies, Inc. is developing green technologies for the mining of precious metals. The Company's Healing the Earth subsidiary is developing a new "fast track" growing system capable of growing vast amounts of fresh, organic food. About Lumea Lumea Staffing, Inc., and Lumea Staffing of CA, Inc., filed Chapter 11 petitions (Bankr. D. Ariz. Case Nos. 11-23582 and 11-23585) on Aug. 17, 2011. Dean M. Dinner, Esq., at Nussbaum Gillis & Dinner, P.C., in Scottsdale, Arizona, serves as the Debtors' counsel. The Debtors each estimated assets of up to $500,000 and debts of up to $50 million. MATTESON, IL: Moody's Cuts Gen. Obligation Debt Rating to 'B1' -------------------------------------------------------------- Moody's Investors Service has downgraded the rating on the Village of Matteson, IL's outstanding general obligation (GO) debt to B1 from Ba1. Concurrently, Moody's has downgraded the rating on the village's outstanding general obligation limited tax (GOLT) debt certificates to B3 from Ba2. The outlook remains negative. Summary Ratings Rationale: The B1 GO rating reflects the village's rapidly deteriorating financial position that includes ongoing annual operating deficits and over reliance on inter-fund borrowing. The rating also reflects the village's elevated debt profile, limited revenue raising flexibility, and significant tax base declines. The distinction between the village's B1 GO rating and B3 GOLT rating reflects the weaker security on the GOLT debt certificates, which do not benefit from a dedicated property tax levy. The rating distinction also reflects the elevated risk inherent in the debt service structure of the certificates, which will significantly increase annual debt service costs and pressure the village's financial operations in the medium term. Strengths: -- Above average resident income levels reflect proximity to employment opportunities throughout the Chicago (A3 negative) metropolitan area Challenges: -- Significant declines in tax base valuation -- Rapidly deteriorating deficit General Fund balance requires reliance on inter-fund borrowing for general operations -- Limited revenue raising flexibility -- Very high debt burden that will increase due to accreted interest Outlook: The outlook on the Village of Matteson's ratings is negative, reflecting Moody's belief that the village's liquidity position will continue to remain under pressure as a result of extremely narrow financial operations and a reliance on inter-fund borrowings to fund general operations. Additionally, the outlook reflects Moody's expectation that the village will be challenged to improve reserve levels given its growing debt obligations. What Could Change The Rating Up: -- Return to structurally balanced operations combined with significantly improvement in General Fund reserves and liquidity What Could Change the Rating Down: -- Further declines in General Fund reserves -- Erosion of the village's tax base and demographic profile -- Increases in debt levels McEWEN.65 LLC: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: McEWEN.65, LLC 1397 Huffines Ridge Drive Franklin, TN 37067 Case No.: 13-10706 Chapter 11 Petition Date: December 18, 2013 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Hon. Marian F. Harrison Debtor's Counsel: Craig Vernon Gabbert, Jr., Esq. HARWELL HOWARD HYNE GABBERT & MANNER PC 333 Commerce Street, Suite 1500 Nashville, TN 37201 Tel: 615-256-0500 Fax: 615-251-1059 Email: cvg@h3gm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The Debtor did not file a list of its largest unsecured creditors when it filed the petition. MCGRAW-HILL SCHOOL: Loan Increase No Impact on Moody's Ratings -------------------------------------------------------------- Moody's Investors Service says the $50 million increase in McGraw- Hill School Education Holdings, LLC ("MHSE") senior secured term loan issuance to $250 million from $200 million has no immediate impact on debt ratings. Net proceeds from the upsized issuance along with $200 million of balance sheet cash are expected to fund a special dividend of approximately $445 million and transaction related fees. The loss given default point estimates on the senior secured term loan were updated to reflect the new debt mix but all debt ratings remain unchanged. The rating outlook remains stable. Issuer: McGraw-Hill School Education Holdings, LLC UPSIZED $250 million Senior Secured Term Loan: Unchanged B2, LGD4 -- 65% (from LGD4 -- 67%) Ratings Rationale: The funded debt balance will increase to $250 million from $200 million resulting in initial debt-to-EBITDA increasing to an estimated 2.7x LTM December 2013 from 2.3x (incorporating Moody's standard adjustments, changes in deferred revenues, and cash plate capital expenditures as a reduction in EBITDA, 1.3x net debt-to- EBITDA). Despite the increase in leverage, MHSE's B1 CFR is supported by the likelihood of maintaining credit metrics at current levels or better through 2014 with good liquidity including free cash flow-to-debt ratios greater than 20%. McGraw-Hill School Education Holdings, LLC, headquartered in Columbus, OH, is a leading provider of digital, print and hybrid instructional materials, as well as assessment products and services, for the K-12 market. A subsidiary of a publishing company that was formed in 1909, MHSE is one of the three largest U.S. education publishers focusing on the K-12 market with roughly $750 million of revenue for the 12 months ended September 30, 2013. MHSE has shared services arrangements with its larger sister company, McGraw-Hill Global Education Holdings, LLC, a global provider of learning materials targeting the higher education market. MHSE and MHGE were acquired by funds affiliated with Apollo Global Management, LLC in March 2013 for a combined $2.4 billion purchase price and are both wholly-owned subsidiaries of MHE US Holdings, LLC. MHSE (allocated 20% or $476 million of the combined purchase price) does not guarantee or provide any collateral to financings of MHGE (allocated 80% of the combined purchase price) and MHGE will not guarantee or provide collateral to the financing of MHSE. MICHAELS STORE: Moody's Rates $260MM Sr. Subordinated Notes 'Caa1' ------------------------------------------------------------------ Moody's Investors Service, assigned a Caa1 rating to Michael's Stores, Inc.'s proposed $260 million senior subordinated notes due 2020. All other ratings remain unchanged, including the B2 Corporate Family Rating and the B2-PD Probability of Default Rating located at Michaels' parent company, Michaels FinCo Holdings, LLC. The ratings outlook is stable. Proceeds from the proposed notes combined with cash will be used to fully redeem Michaels' outstanding 11.375% senior subordinated notes due 2016. The transaction is a credit positive as it is leverage neutral, will likely result in significantly lower cash interest expense and extend the company's debt maturity profile. Subsequent to the transaction, the company's nearest debt maturity will be in 2017, when its revolving credit facility expires. The following ratings have been assigned: Michaels Stores, Inc. -- $260 million senior subordinated notes due 2020, at Caa1 ( LGD5, 85%) The following ratings remain unchanged (LGD point estimates revised): Michaels FinCo Holdings, LLC -- Corporate Family Rating at B2 -- Probability of Default Rating at B2-PD -- Senior unsecured PIK Toggle notes due 2018 at Caa1 (LGD 6, 92%) from (LGD 6, 93%) -- Speculative Grade Liquidity rating at SGL-2 Michaels Stores, Inc. -- Senior secured term loan due 2020 at Ba3 (LGD 2, 26%) -- Senior unsecured notes due 2018 at B3 (LGD 4, 66% ) from (LGD 4, 67% ) -- 11.375% senior subordinated notes due 2016 at Caa1 (LGD 5, 86%), to be withdrawn upon completion of the transaction Ratings Rationale: Michaels' B2 Corporate Family Rating reflects the company's high leverage, with lease-adjusted debt/EBITDA near 6.5 times and interest coverage near two times. The rating reflects the aggressive financial policies of its financial sponsor owners, evidenced by the July, 2013 debt financed distribution using proceeds from an $800 million note offering. Michaels has a strong market position in the arts and craft segments, as evidenced in its high operating margins and a track record of driving higher sales. While the arts and craft segment has generally stable demand, the company does participate in some segments that are more sensitive to economic conditions, such as seasonal decor and custom framing. The rating also takes into consideration the company's good liquidity position, with no near dated debt maturities, no financial maintenance covenants in its debt arrangements and access to a sizable asset-based revolver to fund seasonal working capital requirements. The Ba3 rating for Michaels' secured term loan is two notches higher than the B2 Corporate Family Rating reflecting its security interest in certain assets of the company and the significant level of junior capital in Michaels' capital structure. The secured term loan rating also takes into consideration the relatively stronger position of the unrated $650 million asset based revolver, which has a first lien over the company's most liquid assets including inventory. The B3 rating on the $1 billion of senior unsecured notes reflects their junior ranking relative to the meaningful amount of secured debt in the company's capital structure. The Caa1 ratings for the senior subordinated notes and the PIK Toggle notes issued by Michaels Finance Holdings LLC reflect their junior ranking in the company's overall capital structure. The stable rating outlook reflects Moody's expectation that the company will maintain modest growth in revenues and sustain its high operating margins, reflecting its leadership position in the arts and craft segment. Ratings could be upgraded over time if the company continues to generate positive revenue growth with operating margins sustained in the low teens. Quantitatively, ratings could be upgraded if the company made a sustained commitment to reduce leverage with debt/EBITDA sustained below 5.25 times and EBITA/interest expense was sustained above 2.25 times while maintaining good overall liquidity. Ratings could be lowered if the company were to see a sustained reversal of recent positive trends in sales or if operating margins were to erode, indicating that the company's competitive profile was weakening. Ratings could also be lowered if the company's financial policies became more aggressive. Quantitatively, ratings could be lowered if debt/EBITDA was above 6.5 times. Michaels Stores, Inc. ("Michaels"), a wholly owned subsidiary of Michaels FinCo Holdings, LLC ("Michaels Holdings") is the largest dedicated arts and crafts specialty retailer in North America. The company operated 1,137 Michaels stores in 49 states and Canada and 122 Aaron Brothers stores as of November 2, 2013. The company primarily sells general and children's crafts, home d�cor and seasonal items, framing and scrapbooking products. Total sales are in excess of $4.5 billion. The company is controlled by affiliates of Bain Capital Partners, LLC and The Blackstone Group, L.P. who acquired Michaels in 2006. MICROVISION INC: Offering $25 Million of Securities --------------------------------------------------- Microvision, Inc., filed a Form S-3 registration statement with the U.S. Securities and Exchange Commission relating to the offering of $25,000,000 worth of common stock, preferred stock and warrants. The Company will provide specific terms of these securities and offerings in supplements to this prospectus. The Company's common stock is traded on The NASDAQ Global Market under the symbol "MVIS." On Dec. 12, 2013, the closing price of the Company's common stock on The NASDAQ Global Market was $1.13 per share. A copy of the Form S-3 is available for free at: http://is.gd/aef2hq About Microvision Inc. Headquartered in Redmond, Washington, MicroVision, Inc. (NASDAQ: MVIS) is the creator of PicoP(R) display technology, an ultra- miniature laser projection solution for mobile consumer electronics, automotive head-up displays and other applications. The Company reported a net loss of $7.09 million on $3.67 million of total revenue for the six months ended June 30, 2013, compared with a net loss of $14.77 million on $3.03 million of total revenue for the corresponding period of 2012. The Company's balance sheet at Sept. 30, 2013, showed $12.01 million in total assets, $12.20 million in total liabilities and a $190,000 total shareholders' deficit. MGM RESORTS: Offering $500 Million of Senior Notes Due 2014 ----------------------------------------------------------- MGM Resorts International is offering $500,000,000 aggregate principal amount of 5.250 percent Senior Notes due 2020. Interest on the Notes is due every March 31 and September 30, with first interest payment on Sept. 30, 2014. Joint Book-Running Managers: Deutsche Bank Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated Barclays Capital Inc. J.P. Morgan Securities LLC. Co-Managers: BNP Paribas Securities Corp. Citigroup Global Markets Inc. Credit Agricole Securities (USA) Inc. RBS Securities Inc. SMBC Nikko Securities America, Inc. Morgan Stanley & Co. LLC Scotia Capital (USA) Inc. UBS Securities LLC A copy of the free writing prospectus is available at: http://is.gd/3z7DmK About MGM Resorts MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50 percent investments in four other properties in Nevada, Illinois and Macau. MGM Resorts reported a net loss attributable to the Company of $1.76 billion in 2012 as compared with net income attributable to the Company of $3.11 billion in 2011. As of Sept. 30, 2013, the Company had $25.65 billion in total assets, $17.83 billion in total liabilities and $7.82 billion in total stockholders' equity. Bankruptcy Warning "We have a significant amount of indebtedness maturing in 2015 and thereafter. Our ability to timely refinance and replace such indebtedness will depend upon the foregoing as well as on continued and sustained improvements in financial markets. If we are unable to refinance our indebtedness on a timely basis, we might be forced to seek alternate forms of financing, dispose of certain assets or minimize capital expenditures and other investments. There is no assurance that any of these alternatives would be available to us, if at all, on satisfactory terms, on terms that would not be disadvantageous to us, or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements." "Our ability to comply with these provisions may be affected by events beyond our control. The breach of any such covenants or obligations not otherwise waived or cured could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross defaults under other agreements governing our long-term indebtedness. Any default under our senior credit facility or the indentures governing our other debt could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our debt, and could force us to seek protection under the bankruptcy laws," the Company said in its annual report for the year ended Dec. 31, 2012. * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. In March 2012, S&P revised the outlook to positive from stable. "The revision of our rating outlook to positive reflects strong performance in 2011 and our expectation that MGM will continue to benefit from the improving performance trends on the Las Vegas Strip," S&P said. In March 2012, Moody's Investors Service affirmed its B2 corporate family rating and probability of default rating. The affirmation of MGM's B2 Corporate Family Rating reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 which will help improve MGM's leverage and coverage metrics, albeit modestly. Additionally, the company's declaration of a $400 million dividend ($204 million to MGM) from its 51% owned Macau joint venture due to be paid shortly will also improve the company's liquidity profile. The ratings also consider MGM's recent bank amendment that resulted in about 50% of its $3.5 billion senior credit facility being extended one year from 2014 to 2015. As reported by the TCR on Oct. 15, 2012, Fitch Ratings has affirmed MGM Resorts International's (MGM) Issuer Default Rating (IDR) at 'B-' and MGM Grand Paradise, S.A.'s (MGM Grand Paradise) IDR at 'B+'. MGM RESORTS: Fitch Rates Proposed $500MM Unsecured Notes 'B+' ------------------------------------------------------------- Fitch Ratings assigns a 'B+/RR3' rating to $500 million in MGM Resorts International's (MGM) proposed senior unsecured notes due 2020 and upgrades MGM's existing senior unsecured notes to 'B+/RR3' from 'B/RR4'. In addition, Fitch affirms MGM's Issuer Default Rating (IDR) at 'B' and MGM's senior secured credit facility at 'BB/RR1. Fitch also affirms MGM Grand Paradise S.A.'s (MGM Grand Paradise) and MGM China Holdings, Ltd's (MGM China; co- borrower) IDRs at 'BB-' and the Macau credit facility at 'BB+'. Ratings reflect moderate linkage between MGM and its financially stronger Macau subsidiaries. The Rating Outlook is Positive. Unsecured Notes Upgrade Rationale: The upgrade of MGM's unsecured notes reflects improved recovery prospects for the notes supported by MGM's substantial equity in MGM China and to lesser extent CityCenter and Fitch's expectation that MGM will continue to deleverage its balance sheet. The upgrade to 'B+/RR3' also recognizes the limit on secured debt vis- a-vis the notes' 15% consolidated net tangible asset (CNTA) test and the prospect of $1.5 billion in pari passu notes converting into equity in April 2015. (The conversion of the notes is not factored into Fitch's recovery model.) IDR Key Rating Drivers: The Positive Outlook on MGM's IDR continues to be supported by the company's improving financial profile and Fitch's favorable outlook for Macau and the Las Vegas Strip. MGM's financial profile is much improved since the recession and has benefitted substantially from the company's exposure to Macau and Las Vegas and the company's ability to refinance high-coupon debt with less costly debt as highlighted by the refinancing of the secured notes late 2012. Fitch's base case leverage metrics for MGM through the projection horizon could support a 'B+' IDR; however, the financial profile remains somewhat tenuous when taking into account the risks associated with the company's potential development pipeline and that the projected improvement in the leverage metrics heavily relies on the assumption that the 4.25% convertible notes convert into equity in 2015. Fitch calculates MGM's consolidated gross leverage (adjusted for income attributable to minority interest and distributions from non-consolidated subsidiary distributions) for LTM period ending Sept. 30, 2013 at 7.1x. In Fitch's base case, leverage declines to around 6x at year-end 2016 as the continued improvement in operating trends, partial year of MGM's Cotai casino EBITDA and the conversion of MGM's $1.5 billion in 4.25% convertible notes more than offset borrowings for the company's potential projects in Maryland and Massachusetts and its project in Macau. MGM's consolidated liquidity is solid with available liquidity as of Sept. 30, 2013 of roughly $3.6 billion and discretionary FCF (gross of project capex and net of dividends to minority MGM China owners) at about $500 million for the LTM period. The domestic group's liquidity is also strong with available liquidity of approximately $1.3 billion and discretionary FCF forecasted by Fitch for 2014 of roughly $250 million. An upgrade remains likely within the next 12 - 24 months when there will be more clarity on MGM's development plans in Maryland and Massachusetts. Fitch will view more favorably project financing with limited equity contributions by MGM and limited recourse to the domestic restricted group. Although the lack of these attributes would not necessarily prevent an upgrade. Other rating drivers Fitch will be monitoring with respect to the upgrade include the operating trends on the Las Vegas Strip and Macau; MGM's possible pursuit of a license in Japan; and MGM's posture with respect to shareholder friendly behavior. Fitch believes that MGM will remain focused in the near-term on improving its balance sheet aside from pursuing the existing development pipeline and possibly bidding for a license in Japan. Examples of shareholder friendly actions over the next two to three years could include taking anti-dilutive measures in conjunction with the 4.25% convertible notes being converted into equity or issuing debt to buy the other half of CityCenter from Dubai World or engage in other M&A related activity. Development Pipeline Manageable but Related Uncertainty Pressures Ratings: MGM's only authorized large scale development project is its $2.6 billion Cotai casino resort that is due to open early 2016. MGM spent $183 million on the project through Sept. 30, 2013 and in Macau has $1.45 billion undrawn revolver along with approximately $775 million in excess cash. The run-rate discretionary FCF in Macau is in excess of $700 million per year. Therefore, MGM China will have capacity to make dividends in excess of $600 million per year through the development cycle, which is consistent with the dividends paid over the past one to two years (roughly $420 million in 2012 and $650 million for the LTM period ending Sept. 30, 2013). MGM receives 51% of dividends paid by MGM China. In the U.S., MGM's covenants and liquidity allow for flexibility with respect to funding the potential projects in Maryland and Massachusetts. MGM has about $1.3 billion in liquidity in its U.S. restricted group, which includes its $1.1 billion available on its $1.2 billion revolver. The credit agreement permits $1 billion of additional unsecured borrowings and investments are subject to the Available Amount, which includes Macau dividends, along with other baskets. MGM can also use its unused capacity under its $500 million maximum capital expenditures covenant towards investments. MGM remains the only applicant for the western region Massachusetts license and could be the favorite to win the license in Prince's George's County, Maryland (there are two other bidders). Maryland's gaming regulator is scheduled to announce the winner on Dec. 20, 2013 and Massachusetts gaming commission plans to award a license for the state's western region by April 2014. The Maryland casino is budgeted at $925 million and will have other equity partners. Radio One, Inc., a media company, will invest $40 million into the Maryland project and MGM stated that it is seeking additional minority investment. In Massachusetts, MGM will own 99% of the $800 million project with a private local investor (Paul Picknelly) owning 1%. Assuming the projects are project financed and 65% debt funded, equity commitment from MGM after accounting for investment by Radio One is approximately $560 million, which MGM could potentially fund solely using MGM China dividends. Fitch views these projects favorably in the long-term but in the near-term the equity contributions by MGM into these projects will inhibit its ability to paydown the debt at its main restricted group. The company will also likely bid on a license in Japan if that jurisdiction passes an integrated resort bill in 2014; however, license winners may not be known until 2015 or 2016. $1.45 Billion In Convertible Notes Could Convert In 2015: The 4.25% convertible notes, with $1.45 billion outstanding and an April 2015 maturity, represent MGM's most meaningful approaching maturity. MGM's 4.25% convertible notes with $1.45 billion outstanding represents nearly 40% of the upcoming maturities over the next three years and equates to more than 1x of the domestic group's leverage. The notes' conversion option is now in the money (stock trades at around $22 vs. $18.58 conversion price) and the notes can be converted three days from maturity, which is April 15, 2015. At the time of issuance, MGM entered into capped call options covering $1.15 billion of the notes' face value with the strike price set at the conversion price and the cap set at $21.85. MGM paid $81 million for the capped call options in April 2010 when the stock was trading at around $14. Fitch estimates that the options' intrinsic value is roughly $200 million based on the capped call price. However, the increase in the value is offset by the fact that it would take roughly $1.35 billion to repurchase the shares if the convertibles were converted. The Restricted Payment definition in MGM's credit agreement excludes the exercise by MGM of the rights under derivative securities underlying the convertible debt. Therefore, Fitch believes MGM's covenants would permit company to issue new debt and use the proceeds to repurchase the converted shares associated with the capped calls purchased. However, Fitch's base case does not assume a repurchase of the converted shares. This assumption is based on the company's publicly articulated emphasis on deleveraging and the potential for the conversion of the notes reinforces the Positive Outlook. Positive Outlook Underpinned by Favorable Market Exposure: Macau represents 34% of MGM's consolidated LTM property EBITDA for period ending Sept. 30, 2013 and Las Vegas Strip 53% with the Mississippi and Detroit making up most of the balance. MGM is capacity constrained in Macau but managed to outperform the market in 2013 with gross gaming revenue growing 19.8% year-to-date through November (based on sell-side research) compared to 18.7% for the entire market. The company achieved this in part by shifting capacity towards VIP while getting better yield on its mass tables by focusing more on the premium end of the business. In 2014, Fitch expects growth to be more driven by the mass market for MGM as the VIP capacity initiatives begin to anniversary (opened a VIP floor in Sept. 2012 and introduced new junkets in April 2013). Macau gaming revenue growth for 2013 has outperformed Fitch's expectations. Fitch expects growth to moderate somewhat in 2014 but projects growth to remain robust (12% forecasted for the market). Growth will be supported by the growing Chinese economy (Fitch projects 7% annual GDP growth in 2014 - 2015); the improved infrastructure in and around Macau (e.g. new ferry terminal connecting to Cotai opening mid-2014); and the development on Hengqin Island adjacent to Macau. Fitch expects MGM to capture its fair share of the revenue growth since most other operators (with possible exception of Las Vegas Sands) face similar capacity constraint issues in 2014. Fitch remains constructive on the Las Vegas Strip outlook, especially relative to other domestic markets. Fitch projects that the market will manage low-to-mid single-digit RevPAR and gaming revenue growth over the next two to three years. Fitch expects MGM to outperform the market on the RevPAR front given the company's exposure to convention business, which Fitch expects to be strong in 2014. Around 2016 - 2017, Genting Group could open Resorts World Las Vegas, a higher end Asian-themed integrated casino resort. This will add 3,500 rooms into the market and likely dampen Las Vegas' RevPAR momentum when it opens. Genting Group's property will likely compete with MGM for the high-end baccarat segment, but may also introduce more mid-tier Asian players into the market. Citycenter Now Viewed as a Positive Credit Driver for MGM: Fitch now views CityCenter Holdings, LLC ('B' IDR; CityCenter) as an asset for MGM, which is change from when the Las Vegas Strip complex opened in late 2009. After two refinancings, sale of the bulk of the condo inventory and strong ramp up in core operations the 50/50 JV with Dubai World is now generating solid FCF and has a relatively strong balance sheet with leverage pro forma for recent refinancing at roughly 6x. CityCenter is also in position that it can potentially start upstreaming cash to its JV partners (subject to covenants of the credit agreement) through regular dividends and/or by selling Crystals, its retail component. Fitch estimates run-rate FCF for CityCenter in the $150 million - $200 million range and Crystals selling for $530 million - $750 million applying 5% - 7% cap rate to the LTM EBITDA. There is some uncertainty with respect to MGM accessing cash at CityCenter in the near-term as the JV agreement with Dubai World stipulates that Dubai World receives the first $494 million in distributions from CityCenter. MGM estimates its remaining net obligation with respect to its CityCenter completion guarantee at $82 million, which is manageable, and stated in its third-quarter filing that is not reasonably possible that the liabilities will exceed this amount. The $82 million net liability is $143 million in remaining settlement obligations related to the Pernini lawsuit estimated by MGM; plus related legal fees and minus $72 million in condo proceeds held at CityCenter that MGM is allowed to use to offset its completion guarantee. Liquidity and FCF are Much Improved; Maturities Manageble: Liquidity and FCF are solid and can support a higher IDR although few large maturities remain in 2015 - 2016. Pro forma for the refinancing of the 5.875% notes due 2014, maturities include $2.3 billion ($875 million without the convertible notes) in 2015 and $1.5 billion in 2016. The convertible notes have a good likelihood of converting as the stock is trading close to 20% above the conversion price. MGM's unsecured notes are not callable, which may explain the heavy near-term maturities relative to other gaming companies. Fitch expects the refinancings over the next three years to be accretive to cash flow since the coupon rates on the bonds coming due are in the 6.625%-10% range (excluding the 4.25% convertible notes) compared to 5.25% pricing for the new 6.5 year bonds (will be issued at par). Available liquidity is solid. MGM has approximately $3.6 billion of liquidity when including Macau and $1.3 billion just in the U.S. About $2.5 billion of the total liquidity is made up of $1.45 billion in revolver availability in Macau and $1.1 billion of revolver availability in the U.S. Fitch forecasts 2014 FCF for the domestic group excluding dividends from unrestricted subsidiaries and project capex of about $250 million. This forecast includes estimated EBITDA net of cash-based corporate expenses of $1.29 billion (LTM EBITDA is $1.22 billion); $785 million in cash based interest expense (LTM cash based interest expense is about $920 million); and $250 million capex ($274 million in capex for the LTM period). Possible cash uses not included in the FCF forecast could be development capex in the U.S (e.g. casino projects in Maryland and Massachusetts and the arena in Las Vegas) or the remaining CityCenter completion guarantee obligations. FCF forecast also does not include Macau dividends, which Fitch estimates at $600 million for 2014 (MGM would get $306 million of that). MGM Ownership Pressures Macau Ratings: MGM Grand Paradise's and MGM China's 'BB-' IDRs take into account moderate linkage between MGM and the Macau subsidiaries, which potentially would have higher stand-alone IDRs. The linkage takes into account MGM Grand Paradise's liberal covenants with relaxed limitations on additional debt and capacity for unlimited restricted payments if leverage is less than 3.5x. The two notch differentiation reflects the maximum extent to which MGM Grand Paradise could support MGM, which is bound by the former's credit facility covenants. The moderate linkage also takes into account MGM's 51% control of MGM China. There is a significant overlap between MGM China's (MGM Grand Paradise's publicly listed holding company) and MGM's boards, with six out of 12 MGM China board members (including Pansy Ho, who holds $300 million in MGM convertible bonds) having economic interest in MGM. Also factored into the linkage is MGM Macau's dependence on MGM for branding and other services. As part of the MGM China IPO, MGM Grand Paradise entered into a brand licensing fee agreement with an entity 50/50 owned by MGM and Pansy Ho (MGM Branding and Development Holdings, Ltd) whereby MGM Grand Paradise pays 1.75% of gross revenue (subject to caps) to the entity for the privilege of using the "walking lion" and related trademarks. There is also a marketing agreement with MGM, whereby MGM gets a 2.7% - 3.0% of theoretical hold from referred patrons. Recovery Rating Analysis: MGM's equity in MGM China (51% owned by MGM) now accounts for $2.8 billion of the total $9.9 billion enterprise value Fitch calculates for MGM's recovery analysis. The $2.8 billion equity value incorporates a 10% stress on the LTM EBITDA and applies a 9x EV/EBITDA multiple to come up with $2.8 billion in equity value held by MGM. These assumptions are conservative when compared to the $6.8 billion value implied by the market cap of the Hong Kong listed MGM China. In the second-quarter 2013 MGM used cash on hand, some of which came from Macau dividends, to meet a $462 million maturity of senior unsecured notes. Over the long-term Fitch expects MGM to continue to use FCF and Macau dividends to reduce the amount of unsecured notes outstanding although it is possible that MGM could fund part of its domestic development pipeline partially with corporate level unsecured debt. Fitch calculates the recovery for MGM's unsecured notes at 53%, which is at the low end of the 51% - 70% range for 'RR3' recovery rating. The estimated recovery includes conservative assumptions including 7x - 8x EV/EBITDA multiples for MGM's Las Vegas assets and LTM EBITDA generally being stressed by 25%. The multiples range is below 9x sale multiple Treasure Island, a mid-scale property, sold for in early 2009 and the EBITDA stresses are consistent with the stress seen during the 2007 - 2009 recession. For the purpose of calculating recovery Fitch assumes full draw on MGM's $1.2 billion revolver ($80 million outstanding as of Sept. 30, 2013) and assumes 10% of EV (excluding equity value in non- wholly owned properties) for administrative claims. MGM's $4 billion credit facility, for which Fitch estimates full recovery, is secured by New York-New York and Gold Strike Tunica. The credit facility also has a lien of up to $3.35 billion on the Bellagio, MGM Grand and Mirage. MGM Grand Detroit is a co-borrower on the credit facility and secures $450 million outstanding on the term loan B. Rating Sensitivities: Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Consolidated leverage (Fitch calculation is described above) remaining at or below 7x; -- Domestic EBITDA keeping pace with the step-ups in the minimum EBITDA covenant, which steps up by $50 million roughly every six months until peaking at $1.4 billion in early 2017 (as of Sept. 30, 2013 the company reported covenant EBITDA was $1.26 billion relative to a $1.05 billion threshold); -- Domestic group generating discretionary FCF (excluding Macau dividends) of at least $200 million although there is flexibility for FCF to be below that at times of heavier 'maintenance' capex (e.g. New York-New York outdoor space; Delano re-branding at Mandalay Bay, etc.); -- More clarity with respect to the U.S. development pipeline with more limited capital commitment from the U.S. restricted group being viewed more favorably and/or -- Conversion of the 4.25% notes with MGM allowing most or all of the new shares to remain outstanding (i.e. no or limited share repurchase) or publicly articulated commitment by the company not to buyback associated shares. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Consolidated leverage adjusted for Macau minority interest migrating above 8.5x for an extended period of time; -- Greater uncertainty with respect to MGM's ability to refinance near-term maturities; and/or -- Domestic group generating discretionary FCF remaining roughly breakeven. Fitch takes the following rating actions: MGM Resorts International -- IDR affirmed at 'B', Rating Outlook Positive -- Senior secured credit facility affirmed at 'BB/RR1'; -- Senior unsecured notes upgraded to 'B+/RR3' from 'B/RR4; -- Convertible senior notes due 2015 upgraded to 'B+/RR3' from 'B/RR4'. MGM China Holdings, Ltd and MGM Grand Paradise S. A. (co- borrowers) -- IDRs affirmed at 'BB-', Rating Outlook Positive; -- Senior secured credit facility affirmed at 'BB+' (includes $1.45 billion revolver and $550 million term loan). MONTREAL MAINE: Fortress Unit to Be Lead Bidder at Jan. 21 Auction ------------------------------------------------------------------ Jacqueline Palank, writing for The Wall Street Journal, reports that Chief Judge Louis H. Kornreich of the U.S. Bankruptcy Court in Bangor, Maine, designated an affiliate of Fortress Investment Group -- Railway Acquisition Holdings LLC -- as so-called "stalking horse" for the Jan. 21 auction of the Montreal, Maine & Atlantic Railway Ltd., according to an audio recording of the hearing on Dec. 18. The Fortress affiliate is offering $14.25 million for the railway. According to WSJ, would-be buyers must offer at least $15.7 million to be in the running against the Fortress affiliate, whose bid encompasses most of the assets of Montreal, Maine & Atlantic, from its more than 500 miles of track in Maine, Vermont and Quebec to its locomotives and railcars. WSJ says the railway will also consider bids for pieces of the company, however. Court papers show all bids are due Jan. 17. The report notes that in approving the sale, Judge Kornreich overruled an objection from Eastern Maine Railway Co., a creditor and customer that called for more disclosure about each potential bidder's prior railroad experience and their ability to operate the Montreal, Maine & Atlantic in the public interest. The report also says Chapter 11 trustee Robert Keach said "at least a dozen" would-be bidders are currently kicking the tires. The report notes any sale of the railroad will be subject to the approval of U.S. and Canadian courts at a Jan. 23 joint hearing, and regulators from both countries will also weigh in. 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. Gordian Group, LLC, serves as the Chapter 11 Trustee's investment banker. U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the U.S. case. The Maine law firm of Verrill Dana served as counsel to MM&A. It now serves as counsel to the Chapter 11 Trustee. Justice Martin Castonguay oversees the case in Canada. The Canadian Transportation Agency suspended the carrier's operating certificate after the accident, due to insufficient liability coverage. The town of Lac-Megantic, Quebec, is seeking financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. An unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims, is represented by George W. Kurr, Jr., Esq., at GROSS, MINSKY & MOGUL, P.A.; Daniel C. Cohn, Esq., at MURTHA CULLINA LLP; Peter J. Flowers, Esq., at MEYERS & FLOWERS, LLC; Jason C. Webster, Esq., at THE WEBSTER LAW FIRM; and Mitchell A. Toups, Esq., at Weller, Green, Toups & Terrell LLP. NAVISTAR INTERNATIONAL: To Release Fiscal Q4 Results Today ---------------------------------------------------------- Navistar International Corporation will present via live web cast its fiscal 2013 fourth quarter financial results on Friday, December 20th. A live web cast is scheduled at approximately 9:00 a.m. Eastern. Speakers on the web cast will include Troy Clarke, president and chief executive officer, Jack Allen, executive vice president and chief operating officer, Walter Borst, executive vice president and chief financial officer, and other company leaders. The web cast can be accessed through a link on the investor relations page of Company's Web site at: http://www.navistar.com/navistar/investors/webcasts Investors are advised to log on to the Web site at least 15 minutes prior to the start of the web cast to allow sufficient time for downloading any necessary software. The web cast will be available for replay at the same address approximately three hours following its conclusion, and will remain available for a period of 10 days. About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The Company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Navistar incurred a net loss attributable to the Company of $3.01 billion for the year ended Oct. 31, 2012, compared with net income attributable to the Company of $1.72 billion during the prior year. The Company's balance sheet at July 31, 2013, the Company had $8.24 billion in total assets, $12.17 billion in total liabilities and a $3.93 billion total stockholders' deficit. * * * In the Aug. 3, 2012, edition of the TCR, Moody's Investors Service lowered Navistar International Corporation's Corporate Family Rating (CFR), Probability of Default Rating (PDR), and senior note rating to B2 from B1. The downgrade of Navistar's ratings reflects the significant challenges the company will face during the next eighteen months in re-establishing the profitability and competitiveness of its US and Canadian truck operations in light of the failure to achieve EPA certification of its EGR emissions technology, the significant reductions in military revenues and substantially higher engine warranty reserves. As reported by the TCR on Oct. 9, 2013, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Illinois-based truckmaker Navistar International Corp. (NAV) to 'CCC+' from 'B-'. "The rating downgrades reflect our increased skepticism regarding NAV's prospects for achieving the market shares it needs for a successful business turnaround," said credit analyst Sol Samson. As reported by the TCR on Jan. 24, 2013, Fitch Ratings has affirmed the Issuer Default Ratings (IDR) for Navistar International Corporation and Navistar Financial Corporation at 'CCC' and removed the Negative Outlook on the ratings. The removal reflects Fitch's view that immediate concerns about liquidity have lessened, although liquidity remains an important rating consideration as NAV implements its selective catalytic reduction (SCR) engine strategy. Other rating concerns are already incorporated in the 'CCC' rating. NEW YORK CITY OPERA: Can't Pay Back Workers, Ticketholders ---------------------------------------------------------- Law360 reported that New York City Opera Inc. will not be able to pay back customers who bought show tickets in advance or make severance payments to its last remaining employees after a bankruptcy judge said Wednesday that the company must follow bankruptcy procedure and establish a plan first. According to the report, U.S. Bankruptcy Judge Sean H. Lane expressed sympathy for the opera company's desire to pay the employees who remained until the bitter end and customers who provided its business. About New York City Opera New York City Opera, Inc., sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 13-13240) on Oct. 3, 2013, estimating between $1 million and $10 million in both assets and debts. The petition was signed by George Steel, general manager and artistic director. Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP, serves as the opera's counsel. Ewenstein Young & Roth LLP serves as special counsel. NRG ENERGY: Fitch Affirms and Withdraws Issuer Default Ratings -------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of NRG Energy, Inc. (NRG) at 'B+' and GenOn Energy, Inc. (GenOn) at 'B-'. Fitch has also affirmed the IDRs of GenOn Americas Generation, LLC (GAG) and GenOn Mid-Atlantic, LLC's (GMA) at 'B'. GAG and GMA are intermediate holding company subsidiaries of GenOn. The Rating Outlook is Stable for NRG and the GenOn entities. Fitch is simultaneously withdrawing all the ratings for NRG, GenOn and GenOn's subsidiaries. The level of information available through public disclosures is insufficient for Fitch to support a rating for these entities. NRG's debt structure has become complex over the last year driven by a series of corporate transactions and increased use of non-recourse debt to finance renewable and other conventional fuel projects. The acquisition of GenOn in 2012 and the recently announced proposed acquisition of Edison Mission Energy (EME) are structured such that the target becomes an excluded project subsidiary of NRG. NRG management provides forward-looking public disclosure on a consolidated basis, which is inadequate to perform a rating analysis for GenOn and its subsidiaries. At the same time, consolidated credit metrics cannot be used to rate NRG's debt, in Fitch's view, since non-recourse debt comprises approximately 50% of the total consolidated debt. Key Rating Drivers: The IDRs of NRG and GenOn are based on the respective standalone credit profiles based on Fitch's assumption that there is a weak linkage between the entities. As an excluded project subsidiary of NRG, GenOn exhibits no specific, tangible legal ties with the parent. GenOn and its subsidiaries do not guarantee NRG's debt, nor do any downstream guarantees flow from NRG to GenOn or its subsidiaries. There are no cross-default provisions between NRG's debt and the debt at GenOn entities and GenOn's debt is excluded from covenant calculation of NRG's debt. Operational ties are limited by a shared services agreement between NRG and GenOn. The absence of common treasury and an arm's length bilateral credit agreement between NRG and GenOn further limits the level of operational integration between the two entities. Fitch does deem GenOn to hold strategic importance for NRG. Any demonstrated tangible support by NRG towards GenOn, such as equity infusion or intercompany loans could be deemed a sign of a tighter rating linkage. NRG's major corporate transaction this year has been the formation and initial public offering of NRG Yield Inc. (NRG Yield). NRG retains a 65.5% economic and voting interest in NRG Yield. The assets that have been dropped down into NRG Yield are renewable and natural gas fueled projects, whose economics are well supported by long-term power purchase agreements. NRG Yield holds the right of first refusal for six additional contracted assets currently owned by NRG. To sustain its credit profile at the current rating level, Fitch would expect NRG management to offset the loss of a stable, well-contracted stream of cash flows with commensurate reduction in parental leverage. Fitch does note that an emphasis on high distributions as well as a growing stream of distributions at NRG Yield could create challenges for both the company and its parent over the long term by having to ensure that assets are available to drop down into NRG Yield. This could, in turn, cause NRG and/or NRG Yield to pursue an aggressive acquisition-led strategy if organic growth proves to be a challenge. In this vein, Fitch notes that the proposed acquisition of EME could put pressure on NRG's credit metrics given the acquisition price and the upfront partial debt funding unless the proceeds from the drop down of contracted assets into NRG Yield are used for parent debt reduction. NRG's ratings are supported by a stronger post-merger business profile, successful execution of an integrated wholesale/retail model in Texas, a strong liquidity position, and the company's historically conservative hedging strategy, which has enabled it to generate strong free cash flow despite a persistently weak commodity environment. GenOn's generation portfolio lends geographic diversity, size and scale benefits to NRG's fleet. GenOn's northeast and western generation assets provide physical backup to NRG's retail aspirations in these markets, thereby lowering costs to compete. The IDRs of GenOn, GAG and GMA primarily reflect a tepid power price environment, compressed dark spreads, expiring above market hedges, and deactivations and planned retirements of a portion of its coal fleet. Fitch expects the consolidated credit profile for NRG to be modestly weaker through 2015. GenOn's financial profile weakens in 2015 with the loss of above-market hedges and lower capacity payments. On a consolidated basis, Fitch anticipates NRG's funds flow from operations (FFO)-to-debt to be in the 12%-13% range and Debt/adjusted EBITDA to be in approximately 5.75x-6.00x range by 2015, which is weak compared to Fitch's guideline metrics of 15% FFO-to-debt and 5.0x Debt/adjusted EBITDA for a high-risk 'B+' rated issuer. Fitch expects GenOn's FFO-to-debt to be in the 7%- 10% range and Debt/adjusted EBITDA to be approximately 7.0x by 2015. Liquidity at NRG remains strong. As of Sept. 30, 2013, NRG had $3.7 billion of liquidity, which reflects cash and cash equivalents of $2.4 billion and revolver availability of $1.2 billion. Fitch expects NRG to generate upwards of $1 billion in free cash flow in 2014-2015. These estimates do not reflect the cash proceeds received from NRG Yield in return for assets to be dropped down. In this context, management's future capital allocation policies will be a key rating driver for NRG. GenOn had $825 million of unrestricted cash and cash equivalents as of Sept. 30, 2013, with an additional $198 million available under the $500 million intercompany revolver from NRG. The Stable Outlooks for NRG, GenOn, GAG and GMA reflect strong liquidity to withstand a sustained period of depressed natural gas prices, manageable debt maturities, and greater diversity in generation portfolio. Recovery Analysis: The individual security issue ratings at NRG, GenOn, GAG and GMA are 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 of NRG, GenOn, GAG and GMA using a net present value analysis. Fitch uses the plant valuation provided by its third-party power market consultant, Wood Mackenzie, as an input as well as Fitch's own gas price deck and other assumptions. The generation asset net present values (NPVs) vary significantly based on future gas price assumptions and other variables, such as the discount rate and heat rate forecasts in the deregulated markets, where the power generation assets are based. Fitch calculates the value of NRG's retail business by applying a 5.0x multiple to EBITDA expectations of $500 million. Rating Sensitivity: Tough operating environment: Power prices continue to be depressed and show only a modest recovery in tandem with natural gas prices in Fitch's base case for most regions where NRG and GenOn and its subsidiaries operate. The only exception is Texas, where reserve margins continue to fall and regulators continue to debate structural changes that may lead to stronger price signals to incentivize new generation. Worsening gas basis in PJM and potential for tougher environmental rules in Maryland could render additional coal plants uneconomic in GenOn's fleet. Competition continues to be intense in the retail electricity markets and margins are under pressure. A meaningful worsening of the current operating environment could adversely affect the credit profile of NRG, GenOn, GAG and GMA. Aggressive growth strategy: Fitch views the creation and partial spin-off of NRG Yield and recently proposed EME acquisition as signs of the aggressive growth strategy being pursued by management. The pricing of future drop downs of contracted assets into NRG Yield and use of the proceeds remains uncertain. Without a commensurate parent debt reduction, the proposed drop down of highly contracted assets into NRG Yield would be detrimental to NRG's credit quality. Capital allocation strategy: Capital allocation decisions by management will be key rating drivers for NRG. Large shareholder- friendly actions without commensurate debt reduction could lead to negative rating actions. An aggressive growth strategy focused on expansion of merchant generation assets would also be a cause for concern. Fitch has affirmed and withdrawn the following ratings: NRG Energy, Inc. -- Long-term IDR at 'B+'; -- Senior secured term loan B at 'BB+/RR1'; -- Senior secured revolving credit facility at 'BB+/RR1'; -- Senior unsecured notes at 'BB/RR2'; -- Convertible preferred stock at 'B-/RR6'. GenOn Energy, Inc. -- Long-term IDR at 'B-'; -- Senior unsecured notes at 'B+/RR2'; -- Short-term IDR at 'B'. GenOn Americas Generation, LLC -- Long-term IDR at 'B'; -- Senior unsecured notes at 'BB-/RR2'. GenOn Mid-Atlantic, LLC -- Long-term IDR at 'B'; -- Pass-through certificates at 'BB-/RR2'. The Rating Outlook is Stable. NUVILEX INC: Incurs $5.6 Million Net Loss in Oct. 31 Quarter ------------------------------------------------------------ Nuvilex, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $5.65 million on $0 of product sales for the three months ended Oct. 31, 2013, as compared with a net loss of $382,816 on $6,287 of product sales for the same period a year ago. For the six months ended Oct. 31, 2013, the Company reported a net loss of $10.32 million on $0 of product sales as compared with a net loss of $893,333 on $12,913 of product sales for the same period a year ago. The Company's balance sheet at Oct. 31, 2013, showed $4.59 million in total assets, $990,967 in total liabilities and $3.60 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/V9vwHk About Nuvilex Inc. Silver Spring, Md.-based Nuvilex, Inc.'s current strategy is to focus on developing and marketing products designed to improve the health and well-being of those who use them. Nuvilex incurred a net loss of $1.59 million on $12,160 of product sales for the 12 months ended April 30, 2013, as compared with a net loss of $1.89 million on $66,558 of total revenue during the prior year. Robison, Hill & Co., in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2013. The independent auditors noted that the Company has suffered recurring losses from operations which raises substantial doubt about its ability to continue as a going concern. OCZ TECHNOLOGY: Hercules Gets $9MM in Loan Repayment Proceeds ------------------------------------------------------------- Hercules Technology Growth Capital, Inc., a specialty finance company focused on providing senior secured loans to venture capital-backed companies in technology-related markets, including technology, biotechnology, life science, and energy and renewables technology industries, at all stages of development, on Dec. 19 announced its quarter-to-date Q4 2013 portfolio update. In December 2013, Hercules portfolio company OCZ Technology Group, Inc. entered Chapter 11 bankruptcy proceedings and entered into an Asset Purchase Agreement with Toshiba, Inc. As of December 19, 2013, Hercules has already received approximately $9.0 million in proceeds as loan repayment from the Company's original loan of $10.0 million, excluding fees and interest, and the Company's remaining exposure to this company is approximately $1.0 million, excluding fees and interest. About OCZ San Jose, Calif.-based OCZ Technology Group, Inc. (Nasdaq: OCZ) designs, manufactures, and distributes high-performance solid- state storage solutions and premium computer components. OCZ and two affiliates on Dec. 2, 2013, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-13126) with a deal to sell all assets under 11 U.S.C. Sec. 363 to Toshiba Corporation for $35 million. As of the bankruptcy filing, the Debtors had funded indebtedness of $29.3 million and general unsecured trade obligations of $31.4 million. Young Conaway Stargatt & Taylor represents the Debtors as counsel. Mayer Brown LLP serves as the Debtors' special counsel. Deutsche Bank is the Debtors' investment banker. The Hon. Peter J. Walsh presides over the case. OPTOMETRY MANAGEMENT: Case Summary & 20 Top Unsecured Creditors --------------------------------------------------------------- Debtor: Optometry Management Services, P.A. aka OMS aka Academy Eye Center dba Vision Source aka Academy Eye Centers fka Academy Eye Center Optometry PA 216 Glenbrook Spring New London, NC 28127 Case No.: 13-51549 Chapter 11 Petition Date: December 18, 2013 Court: United States Bankruptcy Court Middle District of North Carolina (Winston-Salem) Judge: Hon. Lena M. James Debtor's Counsel: Dirk W. Siegmund, Esq. IVEY, MCCLELLAN, GATTON, & TALCOTT, LLP Suite 500, 100 S. Elm St. P. O. Box 3324 Greensboro, NC 27402-3324 Tel: 336-274-4658 Fax: 336-274-4540 Email: dws@imgt-law.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Danford E. Raynor, Jr., president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/ncmb13-51549.pdf ORCHARD SUPPLY: Shoots Down IRS Objection to Chapter 11 Plan ------------------------------------------------------------ Law360 reported that Orchard Supply Hardware Stores Corp. fired back against the Internal Revenue Service's objection to its Chapter 11 reorganization plan, saying the fact it hadn't yet filed its 2013 tax return didn't mean it couldn't pay $8 million in back taxes. According to the report, in a brief filed with the Bankruptcy Court of Delaware, Orchard Supply gave a general outline of its upcoming past-due tax filings, saying the information should be enough to prove its ability to pay the IRS and the court should therefore approve the plan. About Orchard Supply San Jose, Calif.-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, 2013, 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. The Company changed its name to OSH 1 Liquidating Corporation and reduced the size and simplified the structure of the Board of Directors effective as of Aug. 20, 2013. OSHKOSH CORP: S&P Raises CCR to 'BB+'; Outlook Stable ----------------------------------------------------- Standard & Poor's Ratings Services said that it raised its ratings on Oshkosh, Wis.-based Oshkosh Corp., including the corporate credit rating to 'BB+' from 'BB'. The rating outlook is stable. "The upgrade reflects Oshkosh's good overall operating performance, including its improved profitability, and disciplined financial policy, which includes targeted reported debt to EBITDA of 1x-2x," said Standard & Poor's credit analyst Dan Picciotto. S&P believes this financial policy supports an "intermediate" financial risk profile after accounting for the company's potential cash flow and leverage volatility. S&P assess the company's business risk profile as "fair," which reflects its market-leading positions in most end-markets and good scale and scope, but also S&P's view that its profitability is volatile and relatively low for a company in the capital goods sector, despite recent improvement. The rating outlook is stable. "We believe Oshkosh will maintain credit measures that are consistent with an 'intermediate' financial risk profile, given the risks associated with its highly cyclical nondefense businesses and our expectation that its defense business will become a smaller portion of the overall company," said Mr. Picciotto. S&P could raise the rating if it had an improved view of Oshkosh's business risk profile while continuing to view the financial risk profile as "intermediate." This could occur if Oshkosh wins large defense contracts that supplement this segment and improve S&P's view of the overall enterprise's scale, scope, and diversity while maintaining its current financial policy. In the absence of growth in the defense platform, S&P would likely need to see further growth (possibly through acquisition), improved profitability, and sustained market leadership in existing nondefense markets that lead S&P to believe the division would be more resilient to future downturns in order to improve its view of the business risk profile. S&P could lower the rating if it expects that the company's credit measures will deteriorate significantly in a downturn to levels consistent with a "significant" financial risk profile. For instance, if S&P's expected debt to EBITDA to deteriorate to more than 3x or FFO to debt to less than 30% on a sustained basis, it could lower the rating. PACIFIC GOLD: Limits Note Conversions to $1,000 Per Week -------------------------------------------------------- Pacific Gold Corp. entered into a modification of one of its outstanding notes that it has with Asher Enterprises, Inc., as of Nov. 26, 2013. The current principal amount of the note is approximately $44,200, reflecting conversions of approximately $5,800 during the month on November, 2013. The modification provides for a limitation on the amount of principal that may be converted each week to a maximum of $1,000 until April 10, 2014, at which time the full amount of the note principal and interest then outstanding will be due and payable in cash. If the Company fails to pay the amount due on April 10, 2014, then the note will revert to its original terms and the conversions may be as determined by the note holder. Additionally, if there is a breach of the amendment by the Company, the limitation on conversions terminates. The Company has agreed to take steps to promptly authorize additional shares should there be projected insufficient shares to permit conversion of the note in the future. There are issued and outstanding 121,467,727 shares of common stock as of Dec. 16, 2013. About Pacific Gold Las Vegas, Nev.-based Pacific Gold Corp. is engaged in the identification, acquisition, and development of prospects believed to have gold mineralization. Pacific Gold through its subsidiaries currently owns claims, property and leases in Nevada and Colorado. Pacific Gold disclosed a net loss of $16.62 million in 2012, as compared with a net loss of $1.38 million in 2011. As of June 30, 2013, the Company had $1.39 million in total assets, $4.30 million in total liabilities and a $2.91 million total stockholders' deficit. Silberstein Ungar, PLLC, in Bingham Farms, Michigan, 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 losses from operations, has negative working capital and is in need of additional capital to grow its operations so that it can become profitable. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2013, showed $2.02 million in total assets, $4.07 million in total liabilities, and stockholders' deficit of $2.05 million. PARKSIDE MINSHENG: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Parkside Minsheng Corp 2789 Rafferty RD Hemet, CA 92545 Case No.: 13-30155 Chapter 11 Petition Date: December 18, 2013 Court: United States Bankruptcy Court Central District Of California (Riverside) Judge: Hon. Meredith A. Jury Debtor's Counsel: Alice Lin, Esq. LAW OFFICES OF ALICE LIN 21700 E Copley Dr Ste 170 Diamond Bar, CA 91765 Tel: 909-861-4402 Email: alicelin.esq@gmail.com Total Assets: $5.93 million Total Liabilities: $1.34 million The petition was signed by Minsheng Zhang, CEO. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. PEM THISTLE LANDING: Files for Chapter 11 in Delaware ----------------------------------------------------- PEM Thistle Landing TIC 23, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Del. Case No. 13-13273) in Delaware on Dec. 17, 2013. The Debtor estimated at least $10 million in assets and liabilities. The Debtor is a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B) and its principal asset is located at 4801 East Thistle Landing Drive, in Phoenix, Arizona. Kathleen Mellor and Richard Mellor own 100% of the outstanding membership interests in the Debtor. Ms. Mellor, as director, signed the bankruptcy petition. The docket and the petition states that Kevin Scott Mann, Esq., at Cross & Simon, LLC, in Wilmington, Delaware, serves as local counsel. The board resolution authorizing the bankruptcy filing says that the Debtor is authorized to hire the law firm of Freeborn & Peters LLP as general bankruptcy counsel. Judge Kevin Gross presides over the case. According to the docket, DOF IV Reit Holdings, LLC, has filed a notice of appearance. PEREGRINE FINANCIAL: Futures Customers to Receive $41 Million ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that futures customers of Peregrine Financial Group Inc. will receive a second distribution by year-end amounting to about $41 million. According to the report, a bankruptcy judge in Chicago on Dec. 18 authorized Peregrine's Chapter 7 trustee to make another distribution, bringing the total payout so far to 37 percent for so-called 4d customers with commodity futures and options accounts. For customers with so-called 30.7 accounts who traded in futures or options on foreign exchanges, the total recovery rises to 85 percent. The trustee, Ira Bodenstein, is handing out about $41 million of the $68.7 million he has on hand. He must withhold $27.9 million to cover payment for customers whose claims as yet aren't resolved. The first distribution, authorized in March, was 30 percent for 4d customers and 40 percent for 30.7 customers. Mr. Bodenstein's lawyer previously said that customers with 30.7 claims ultimately should be paid in full. About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. PERSONAL COMMUNICATIONS: Has Until March 17 to Decide on Leases --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York extended Personal Communications Devices, LLC, et al.'s time to assume or reject unexpired leases of nonresidential real property located at (i) 1516 Motor Parkway, Hauppauge, Suffolk County, New York; and (ii) 80 Arkay Drive, Hauppauge, Suffolk County, New York, to and including the earlier of March 17, 2014, or the date on which an order confirming a plan of liquidation is entered by the Court. As reported in the Troubled Company Reporter on Dec. 4, 2013, according to the Debtors, Quality One, the buyer for the Debtors' assets, continues to evaluate whether it will maintain operations at the Leased Facilities and, if so, whether it will do so under the existing Leases. Preserving those Leases while Quality One evaluates its needs and the suitability of the Leased Facilities is necessary to enable the Debtors to fulfill their obligations under the TSA and to enable an orderly transition of the Debtors' assets and employees to Quality One. The Debtors added that Quality One and the resources the parties will need to complete the steps to effectively transfer the Debtors' assets to Quality One. Because the Debtors' domestic operations and warehouse capacity was primarily located at 80 Arkay Drive and the Hauppauge Warehouse respectively, the Debtors and Quality One identified maintenance of the Leases as necessary to the transition process. About PCD 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. The Debtor disclosed $247,952,684 in assets and $284,985,134 in liabilities as of the Chapter 11 filing. 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, smart phones, 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. PCD filed for bankruptcy with a deal to sell the operations to Quality One Wireless LLC for $105 million, absent a higher bid at auction. Bankruptcy Judge Alan S. Trust oversees the case. 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. The petitions were signed by Raymond F. Kunzmann as chief financial officer. 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. The Committee retained FTI Consulting, Inc., as financial advisor, and Perkins Coie LLP as counsel. PLEASANTVILLE MECHANICAL: Case Summary & Top Unsecured Creditors ---------------------------------------------------------------- Debtor entities filing separate Chapter 11 cases: Debtor Case No. ------ -------- Pleasantville Mechanical, Inc. 13-37356 dba One Hour Heating & Air Conditioning 200 Cambria Ave Pleasantville, NJ 08232 Beverage and Refrigeration Services 13-37354 dba Rich Services 206 West Parkway Drive Egg Harbor Township, NJ 08234 Egsue, Inc. 13-37353 dba JEM Associates, Inc. 206 West Parkway Drive Egg Harbor Township, NJ 08234 Chapter 11 Petition Date: December 18, 2013 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Hon. Gloria M. Burns Debtors' Counsel: Carol L. Knowlton, Esq. TEICH GROH 691 State Highway 33 Trenton, NJ 08619 Tel: (609) 890-1500 Email: cknowlton@teichgroh.com Total Debtor Total Assets Liabilities ------ ------------ ------------ Pleasantville Mechanical, Inc. $228,200 $4,747,054 Egsue, Inc. $1,051,907 $4,823,522 Beverage and Refrigeration $2,122,717 $6,163,118 The petitions were signed by John Egnor, president. A list of Pleasantville's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb13-37356.pdf A list of Egsue, Inc.'s 16 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb-37353.pdf A list of Beverage and Refrigeration's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/njb13-37354.pdf PREFERRED PROPPANTS: Moody's Cuts CFR to 'Caa3'; Outlook Negative ----------------------------------------------------------------- Moody's Investors Service has lowered the corporate family rating (CFR) and the senior secured credit facility rating of Preferred Proppants to Caa3 from Caa1. The probability of default rating (PDR) was also lowered to Ca-PD/LD from Caa2-PD. This rating action is a result of Preferred Proppants' failure to make quarterly principal and interest payments due September 30, 2013, to its credit facility lenders, which is considered a default under Moody's definition, despite the fact that Preferred Proppants has been operating under a forbearance agreement with its lenders. As a result of the missed payments, Moody's has also added a limited default (LD) designation to the company's PDR. The ratings outlook was changed to negative. The following ratings actions were taken: Corporate Family Rating downgraded to Caa3 from Caa1; Probability of Default downgraded to Ca-PD/LD from Caa2-PD; Senior Secured Credit Facilities due 2016 downgraded to Caa3 (LGD3, 31%) from Caa1 (LGD3,31%); Outlook changed to negative from rating under review. Ratings Rationale: The ratings downgrade reflects Preferred Proppants' failure to make quarterly principal and interest payments due September 30, 2013, to its bank facility lenders and the uncertainty related to its ultimate credit profile. The company has been engaged in on- going negotiations with its lenders since September 2013 when it hired restructuring advisors. The company has also been exploring a potential sale of assets. The Caa3 ratings reflect Moody's expectation for the potential recovery for Preferred Proppants' lenders. The negative outlook reflects the uncertainty related to the ultimate recovery rate. It also reflects downward pressure on Preferred Proppants operating results which have been weak since the second half of 2012 due to competitive pressure in the frac sand industry, its lack of high quality sand reserves and a less developed logistical network relative to its major competitors. Moody's does not foresee these pressures moderating over the near term, and this pressure, along with management's distraction in resolving its capital structure, could ultimately diminish the value of Preferred Proppants' enterprise. Preferred Proppants, LLC headquartered in Radnor, PA, is a producer and distributor of frac sand and proppant materials used predominately in oil and gas drilling. The company generated approximately $399 million in revenue for trailing 12-month period ended September 30, 2013. PRESBYTERIAN HOMES: S&P Withdraws 'B+' Rating on Revenue Bonds -------------------------------------------------------------- Standard & Poor's Ratings Services corrected by withdrawing its 'B+' long-term rating on Presbyterian Homes, Ill.'s series 2003A, 2005A, and 2005B revenue bonds. QUALITY STORES: Benefits Trade Group Defends FICA Tax Refund ------------------------------------------------------------ Law360 reported that severance payments made to employees whose jobs were involuntarily terminated due to their employer's bankruptcy are not taxable under the Federal Insurance Contributions Act, the American Benefits Council told the U.S. Supreme Court. According to the report, bankrupt Quality Stores Inc. says it deserves a $1 million tax refund because supplemental unemployment compensation benefits, called SUB payments, are not considered wages under the Revenue Code, citing its long string of victories on the issue that have led to the high court battle. In the U.S. Supreme Court case closely watched by tax attorneys, Quality Stores took opening shots at the Internal Revenue Service, saying the bankrupt company deserved a $1 million tax refund because severance payments to involuntarily terminated workers aren't taxable under federal law. The agricultural retailer argues in a brief filed that supplemental unemployment compensation benefits, called SUB payments, are not considered wages under the Revenue Code, citing its long string of victories on the issue that have led to the high. About Quality Stores Based in Muskegon, Michigan, Quality Stores Inc. is a specialty retailer of farm and agriculture-related merchandise. On Oct. 22, 2001, the Company was sent to bankruptcy after a group of holders of the 10-5/8% senior notes filed an involuntary petition before the U.S. Bankruptcy Court for the Western District of Michigan, in Grand Rapids. Under laws relating to an involuntary bankruptcy filing, the Company is permitted to operate its business in the ordinary course, unless the Court orders otherwise. QUICKSILVER RESOURCES: 2011 Filing Omitted Schedules ---------------------------------------------------- Quicksilver Resources Inc. amended its Form 8-K Report which was originally filed on Dec. 27, 2011, with the U.S. Securities and Exchange Commission to provide certain omitted schedules to the Contribution Agreement dated Dec. 23, 2011, among Quicksilver Resources Canada Inc., Fortune Creek Gathering and Processing Partnership and 0927530 B.C. Unlimited Liability Company filed as Exhibit 10.1 to the December 2011 Form 8-K. Confidential treatment has been requested for certain portions of those schedules. Omitted portions have been filed separately with the Commission. No other changes have been made to the December 2011 Form 8-K. A copy of the Contribution Agreement is available at: http://is.gd/SrW3zz About Quicksilver Quicksilver Resources Inc. is an exploration and production company engaged in the development and production of long-lived natural gas and oil properties onshore North America. Based in Fort Worth, Texas, the company is widely recognized as a leader in the development and production from unconventional reservoirs including shale gas, and coal bed methane. Following more than 30 years of operating as a private company, Quicksilver became public in 1999 and is listed on the New York Stock Exchange under the ticker symbol KWK. The company has U.S. offices in Fort Worth, Texas; Glen Rose, Texas; Steamboat Springs, Colorado; Craig, Colorado and Cut Bank, Montana. The Company's Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta. As of Sept. 30, 2013, the Company had $1.33 billion in total assets, $2.29 billion in total liabilities and a $964.51 million total stockholders' deficit. * * * As reported by the TCR on June 17, 2013, Moody's Investors Service downgraded Quicksilver Resources Inc.'s Corporate Family Rating to Caa1 from B3. "This rating action is reflective of Quicksilver's revised recapitalization plan," stated Michael Somogyi, Moody's Vice President and Senior Analyst. "Quicksilver's inability to complete its recapitalization plan as proposed elevates near-term refinancing risk given its weak operating profile and raises concerns over the sustainability of the company's capital structure." In the June 27, 2013, edition of the TCR, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Fort Worth, Texas-based Quicksilver Resources Inc. to 'CCC+' from 'B-'. "We lowered our corporate credit rating on Quicksilver Resources because we do not believe the company will be able to remedy its unsustainable leverage," said Standard & Poor's credit analyst Carin Dehne-Kiley. RESIDENTIAL CAPITAL: Strikes Deals Resolving Borrower Claims ------------------------------------------------------------ Law360 reported that attorneys for Residential Capital LLC on Dec. 16 announced four settlements worth a combined $1.1 million resolving putative borrower class actions that were pursuing claims of a combined $247 million against the defunct mortgage servicer's bankruptcy estate. According to the report, the deals will allow ResCap and its affiliates to avoid litigating the allegations connected to their prepetition mortgage loan servicing and origination practices. The attorneys are seeking approval for the agreements from U.S. Bankruptcy Judge Martin Glenn, who confirmed ResCap's liquidation plan last week. The class action is Timothy R Peel et al v. Brooksamerica Mortgage Corporation et al, Case No. 8:11-cv-00079 (C.D. Cal.) before Judge Josephine Staton Tucker. 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. Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11 Plan co-proposed by Residential Capital and the Official Committee of Unsecured Creditors. RIH ACQUISITIONS: Atlantic Club Casino Wins Approval for Bonuses ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Atlantic Club Casino Hotel in Atlantic City, New Jersey, got its bonus program for executives approved after resolving objections from the official creditors' committee. According to the report, although the program still could pay a maximum of $2.1 million, the smallest bonus pool will be $250,000 if the sale price is $25 million. Previously, bonuses would have been $875,000 at the initial threshold. A hearing is scheduled on Dec. 19 to approve sale of the project to the winning bidder at this week's auction. About RIH Acquisitions RIH Acquisitions NJ LLC, doing business as the Atlantic Club Casino Hotel in Atlantic City, New Jersey, filed a Chapter 11 petition (Bankr. D.N.J. Case No. 13-34483) on Nov. 6, 2013, in Camden, New Jersey, designed to sell the property in the near term. The Debtors are represented by Michael D. Sirota, Esq., and Warren A. Ustaine, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, New Jersey; and Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher LLP, in New York. Duane Morris, LLP, serves as the Debtors' special gaming regulatory counsel. Imperial Capital, LLC, serves as financial advisor and investment banker to the Debtors, while Mercer (US) Inc. serves as compensation consultant. Kurtzman Carson Consultants LLC is the Debtors' claims and noticing agent. Northlight Financial LLC, as DIP Lender, is represented by Harlan W. Robins, Esq., at Dickinson Wright PLLC, in Columbus, Ohio; Kristi A. Katsma, Esq., at Dickinson Wright PLLC, in Detroit, Michigan; and Bruce Buechler, Esq., and Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP, in Roseland, New Jersey. RIH ACQUISITIONS: Bidding Continues at Chapter 11 Auction --------------------------------------------------------- Daily Bankruptcy Review reported that a bankruptcy auction for Atlantic Club Casino Hotel is entering its second day, a lawyer for the Atlantic City boardwalk-gambling operation confirmed on Dec. 18. According to the report, asked if a winner had emerged from the competition that began on Dec. 17, or if the auction was set to continue, Cole Schotz Meisel Forman & Leonard PA's Michael Sirota answered in an email, "Continue." About RIH Acquisitions RIH Acquisitions NJ LLC, doing business as the Atlantic Club Casino Hotel in Atlantic City, New Jersey, filed a Chapter 11 petition (Bankr. D.N.J. Case No. 13-34483) on Nov. 6, 2013, in Camden, New Jersey, designed to sell the property in the near term. The Debtors are represented by Michael D. Sirota, Esq., and Warren A. Ustaine, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, New Jersey; and Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher LLP, in New York. Duane Morris, LLP, serves as the Debtors' special gaming regulatory counsel. Imperial Capital, LLC, serves as financial advisor and investment banker to the Debtors, while Mercer (US) Inc. serves as compensation consultant. Kurtzman Carson Consultants LLC is the Debtors' claims and noticing agent. Northlight Financial LLC, as DIP Lender, is represented by Harlan W. Robins, Esq., at Dickinson Wright PLLC, in Columbus, Ohio; Kristi A. Katsma, Esq., at Dickinson Wright PLLC, in Detroit, Michigan; and Bruce Buechler, Esq., and Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP, in Roseland, New Jersey. ROSETTA GENOMICS: Executive Officers Plan to Sell Securities ------------------------------------------------------------ Certain executive officers of Rosetta Genomics Ltd. filed Form 144 notices of proposed sales of securities pursuant to Rule 144 under the Securities Act of 1933 in connection with the sale of ordinary shares of the Company solely to satisfy tax obligations in connection with the vesting of restricted stock units (RSU) in accordance with the terms of the respective RSU agreements, according to the Company's Form 6-K filed with the U.S. Securities and Exchange Commission on Dec. 16, 2013. 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. As of June 30, 2013, the Company had $30.28 million in total assets, $2.34 million in total liabilities and $27.93 million in total shareholders' equity. 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." SB PARTNERS: Reports $272,800 Net Loss in First Quarter ------------------------------------------------------- SB Partners filed with the U.S. Securities and Exchange Commission on Dec. 16, 2013, its quarterly report on Form 10-Q disclosing a net loss of $272,785 on $623,087 of total revenues for the three months ended March 31, 2013, as compared with a net loss of $280,521 on $639,952 of total revenues for the same period a year ago. As of March 31, 2013, the Company had $17.65 million in total assets, $21.72 million in total liabilities and a $4.06 million total partners' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/BDacwb About SB Partners Milford, Conn.-based SB Partners is a New York limited partnership engaged in acquiring, operating and holding for investment a varying portfolio of real estate interests. As of June 30, 2010, the partnership owns an industrial flex property in Maple Grove, Minnesota and warehouse distribution centers in Lino Lakes, Minnesota and Naperville, Illinois. SB Partners incurred a net loss of $1.10 million in 2012 as compared with a net loss of $1.02 million in 2011. SEAWORLD PARKS: S&P Raises CCR to 'BB' & Removes Rating From Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Orlando, Fla.-based SeaWorld Parks & Entertainment Inc. to 'BB' from 'B+'. S&P removed the ratings from CreditWatch, where they were placed with positive implications on Nov. 27, 2013. The outlook is stable. At the same time, S&P raised its issue-level rating on the company's approximately $1.6 billion senior secured credit facility to 'BB+' from 'BB-'. The recovery rating on this debt remains '2', indicating S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. The upgrade follows the recent completion of a secondary offering in which affiliates of The Blackstone Group L.P. sold 18 million shares of SeaWorld common stock, which reduces Blackstone's ownership in the company to approximately 43% from 63%. As a result of the secondary share offering, S&P is revising upward its financial policy assessment on SeaWorld and raising its financial risk assessment to "significant" from "highly leveraged." Although Blackstone maintains sufficient ownership to be able to influence SeaWorld's financial policy, S&P believes the company's financial policy will remain consistent with a significant financial risk assessment and that Blackstone will likely continue to reduce its ownership interest and effectively relinquish control over the medium term. The significant financial risk assessment also reflects S&P's expectation that SeaWorld will sustain adjusted debt to EBITDA under 4x and FFO to debt of about 20% or higher over the next few years. S&P's assessment of SeaWorld's business risk profile as satisfactory reflects low expected profit volatility over the economic cycle compared with other rated leisure companies, high barriers to entry in the theme park industry, and S&P's belief the company will maintain adjusted EBITDA margin of about 30% or higher. SeaWorld's EBITDA concentration in a few of its parks and the capital intensity of the theme park business partly offset these factors. SEALED AIR: Moody's Rates New $524.5MM Secured Term Loan 'Ba1' -------------------------------------------------------------- Moody's Investors Service assigned Ba1 ratings to the proposed senior secured term loan B of Sealed Air Corp. The company's Ba3 Corporate Family and Ba3-PD Probability of Default remain unchanged. The ratings out is stable. The proceeds of the new term loan B due 2018 were used to refinance the outstanding balances on the existing term loan B due October 3, 2018. Moody's assigned the following ratings: Sealed Air Corp. -- Assigned new $524.5 million senior secured Term Loan B due October 2018, Ba1 (LGD 2, 16%) Sealed Air B.V. -- Assigned new EUR127.5 million senior secured Term Loan B due October 2018, Ba1 (LGD 2, 16%) The following rating actions are unchanged: -- $609.5 million senior secured Term Loan B due October 2018 ( $524.5 million outstanding), Ba1 (LGD 2, 16%) (to be withdrawn) -- EUR150 million senior secured Term Loan B due October 2018 (EUR127.5 million outstanding), Ba1 (LGD 2, 16%) (to be withdrawn ) Sealed Air Corp. Ba3 corporate family rating Ba3-PD probability of default SGL-2 speculative grade rating The rating outlook is stable. The ratings are subject to the receipt and review of the final documentation. Ratings Rationale: The Ba3 corporate family rating reflects the company's scale (as measured by revenue), wide geographic exposure and low customer concentration of sales. Sealed Air has a track record of successful innovation and continues to invest in R&D. The company is also an industry leader in certain segments. The company's customer base is highly diverse, with no single customer representing more than 10% of its 2012 net sales. Sealed Air has maintained long-term relationships with many of its top customers and has a significant base of equipment installed on the customers' premises. Approximately 50% of sales are from food and food processing related end markets. The company also has sufficient liquidity. The rating is restrained by weakness in certain credit metrics, a disparate product line and the concentration of sales in cyclical and event risk prone segments. The rating is also restrained by the significant competition in the fragmented market, some commoditized products, the mixed contract and cost pass through position, and uncertainty of the timing of the asbestos related liability and related tax refunds. Despite an overlap in customers and distribution channels, Sealed Air's product lines are substantially unrelated. Sealed Air has a significant exposure to cyclical and event risk prone end markets (protective packaging and meat). All of the company's segments operate in competitive and fragmented markets and will need to continue to develop new products and innovate in order to maintain their competitive advantage as many innovations eventually may be copied. The ratings could be downgraded if there is deterioration in credit metrics or the operating and competitive environment. Sealed Air will also need to maintain adequate liquidity including sufficient cash on hand to cover the asbestos related liability and daily cash needs, sufficient availability under the revolver, and adequate cushion under financial covenants. Specifically, the rating could be downgraded if debt to EBITDA remains above 5.3 times, EBITA interest coverage remains below 2.2 times, free cash flow to debt remains below the mid-single digits, and/or the EBITA margin declines below 10.5%. The ratings could be upgraded if Sealed Air sustainably improves credit metrics within the context of a stable operating and competitive environment. Sealed Air will also need to maintain adequate liquidity including sufficient cash on hand to cover daily cash needs and a significant portion of the asbestos related liability, sufficient availability under the revolver, and adequate cushion under financial covenants. Specifically, the ratings could be upgraded if debt to EBITDA declines below 4.6 times (including the asbestos related liability), EBITA interest coverage rises above 3.2 times, free cash flow to debt increases above 8%, and/or the EBITA margin rises above 14%. SEQUENOM INC: Amends Stock Options of Dr. Ronald Lindsay -------------------------------------------------------- The Board of Directors of Sequenom, Inc., approved an amendment to each stock option held by Dr. Ronald Lindsay to provide that each stock option will be exercisable for a period of three years following Dr. Lindsay's cessation of service as a member of the Board. The amendment to Dr. Lindsay's stock options became effective immediately, and results in the stock options held by Dr. Lindsay having the same post-service exercise period that stock options granted other non-employee directors of the Company have. Additionally, on Dec. 12, 2013, under the Company's non-employee director compensation program, the Board approved a stock option grant to Dr. Lindsay, effective Jan. 2, 2014, to purchase 10,000 shares of the Company's common stock at an exercise price equal to the closing price of the Company's common stock on the date of grant, and which will vest and become exercisable upon the earlier of the first anniversary of the grant date or the date of the Company's next Annual Meeting of Stockholders. Dr. Lindsay joined the Board as a non-employee director in 2003. In September 2009, at the Company's request, Dr. Lindsay accepted the position of interim senior vice president of Research and Development. His employment in this position followed the Company's termination of the employment of its senior vice president of Research and Development due to the public release of information concerning product development that included inadequately substantiated claims, inconsistencies and errors. Dr. Lindsay subsequently served as the Company's executive vice president of Research and Development from August 2010 until December 2012, when he became the Company's executive vice president, Strategic Planning. He continued to serve as a member of the Board during the period of his employment. Dr. Lindsay, the Company's executive vice president, Strategic Planning, would retire from employment with the Company as of Dec. 31, 2013, but will continue to serve as a member of the Company's Board of Directors following his retirement. About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. Sequenom disclosed a net loss of $117.02 million in 2012, a net loss of $74.13 million in 2011 and a net loss of $120.84 million in 2010. The Company's balance sheet at Sept. 30, 2013, showed $164.82 million in total assets, $195.85 million in total liabilities and a $31.02 million total stockholders' deficit. SHILO INN, TWIN FALLS: Plan Outline Hearing Continued to Jan. 23 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation between Shilo Inn, Twin Falls, LLC, et al., and California Bank & Trust continuing hearings and deadlines on: (1) the Debtors' Disclosure Statement; and (2) California Bank's motion for relief from stay. The hearing for the approval of the Disclosure Statement and CBT's motion for relief from stay has been scheduled for Dec. 19, 2013, at 1:30 p.m. However, pursuant to the stipulation: 1. the hearing to approve the Debtors' Disclosure Statement is continued to Jan. 23, 2014, at 1:30 p.m.; 2. the hearing on CBT's motion is continued to Jan. 23, at 1:30 p.m.; and 3. the briefing schedule and deadlines for filing oppositions, objections, responses, and replies to the Disclosure Statement motion and RFS motion are continued and set in accordance with Local Bankruptcy Rule 9013-1. Motion for Relief of Stay As reported in the Troubled Company Reporter on Oct. 28, 2013, California Bank & Trust, assignee of holder of deed of trust, asks the U.S. Bankruptcy Court for the Central District of California for relief from the automatic stay as to these properties: 1. Shilo Inn, Rose Garden, LLC's real property located at 1506 NE 2nd Avenue, Portland, Oregon; 2. Shilo Inn, Moses Lake, Inc.'s real property located at 1819 E. Kittleson Road, Moses Lake, Washington; 3. Shilo Inn, Seaside East, LLC's real property located at 900 S. Holladay Drive, Seaside, Oregon; 4. Shilo Inn, Nampa Blvd, LLC's real property located at 617 Northside Boulevard, Nampa, Idaho; and 5. Shilo Inn, Boise Airport, LLC's real property located at 4111 S. Broadway Avenue, at Boise, Idaho. According to CBT, cause exist to lift the stay because the bank's interest in the collateral is not protected by an adequate equity cushion, and the Debtor has no equity in the property, and the property is not necessary to an effective reorganization. The Plan As reported in the TCR on Sept. 5, 2013, the Debtors filed with the Court a Joint Plan of Reorganization and Disclosure Statement dated Aug. 29, 2013. Under the Plan, the Debtors propose to pay all claims in full, unless otherwise agreed with the claimholder, with unsecured claims to be paid over a three-month period from the Plan Effective Date. Non-insider general unsecured creditors can expect to have their claims paid in full in this manner: -- The first payment will be made on the effective date of the Plan, which is anticipated to be on Jan. 2, 2014, in the aggregate amount of $64,596; -- The Reorganized Debtors will make two additional payments, each in the amount of $64,596 in months two and three following the Effective Date, for a total payout to non- insider general unsecured creditors in the amount of $193,788, which the Debtors believe constitutes 100% payment, excluding interest. The Debtors included cash flow projections in its Plan proposal to show that it will have sufficient cash on hand on the Plan Effective Date to make the payment required. A copy of the Plan and Disclosure Statement dated Aug. 29 is available for free at: http://bankrupt.com/misc/SHILOINN_PlanDSAug29.PDF About Shilo Inn, Twin Falls Shilo Inn, Twin Falls, LLC, and six affiliates filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-21601) on May 1, 2013. Judge Richard M. Neiter presides over the case. Shilo Inn, Twin Falls, estimated assets of at least $10 million and debts of at least $1 million. Shilo Inn, Twin Falls; Shilo Inn, Nampa Blvd, LLC; Shilo Inn, Newberg, LLC; Shilo Inn, Seaside East, LLC, Shilo Inn, Moses Lake, Inc.; and Shilo Inn, Rose Garden, LLC each operates and owns a hotel. California Bank and Trust is the primary, senior secured lender for each of the Debtors. The Debtors sought Chapter 11 protection after CBT on May 1, 2013, filed for receiverships in district court. David B. Golubchick, Esq., Kurt Ramlo, Esq., and J.P. Fritz, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, in Los Angeles, represent the Debtors in their restructuring effort. The Debtors' Joint Plan of Reorganization dated Aug. 29, 2013, provides for payment of all claims in full, unless otherwise agreed with the claimholder, with unsecured claims to be paid over a three-month period from the Plan Effective Date. SHS SERVICES: Sears Canada Supplier Goes Into Receivership ---------------------------------------------------------- Sears Canada Inc. (TSX: SCC) confirmed that SHS Services Management Inc., an Installation Services Org. (ISO) company that is an independent third party provider of home installed products and services licensed under the Sears Home Services banner, is in receivership. Effective immediately, all offers of services provided by SHS are ceasing, and Sears is working with the Receiver, Pricewaterhouse Coopers Inc. (PWC), on a viable business option for the future for the home services business. Sears will ensure that all Sears Home Services warranties are honored. Sears Canada's top priority is to customers, and the Company is working with PWC to make sure that customer service requirements are met. Enquiries for previously engaged home services can be made by contacting Sears at 1-800-4-MY-HOME. Sears Canada -- http://www.sears.ca/-- is a multi-channel retailer with a network that includes 181 corporate stores, 241 hometown dealer stores, over 1,400 catalogue and online merchandise pick-up locations, 101 Sears Travel offices and a nationwide repair and service network. The Company also publishes Canada's most extensive general merchandise catalogue and offers shopping online at. SOUTHERN TITLE: Sent to Liquidation by Insurance Commission ----------------------------------------------------------- The Times Dispatch reports that Southern Title Insurance Corp. is headed for liquidation, state documents show. The State Corporation Commission's move to liquidate the company comes after a Richmond circuit judge placed Southern Title in receivership in December 2011 and named the SCC as the receiver. The company had ceased writing policies in September of that year, according to timesdispatch.com. Two months ago, the report recalls that the SCC filed notice that it planned to enter an order declaring Southern Title insolvent following a hearing at 10:00 a.m. Feb. 4 at the commission's headquarters in Richmond. In an April financial statement, Southern Title said its liabilities exceeded its assets by $30.4 million, the report notes. The report relates that Title Insurance protects a policyholder from real estate property title defects due to issues that were not known at the time of purchase, such as liens, judgments, unpaid taxes or fraud. Southern Title, according to the report, experienced financial difficulties because of agent misappropriations of funds in Texas between 2004 and 2006 and the rise in title insurance claims from that alleged misuse of funds, the SCC said in 2011. "[T]heft that leaves insurance companies financially impaired and policyholders unprotected, although unusual, isn't unheard of," the report quoted Steven Walt, a bankruptcy law expert and professor at the University of Virginia School of Law, as saying. Southern Title's pending dissolution has national implications because the company did business in about 20 states. The report relays that the SCC planned to notify policyholders, claimants and creditors of the liquidation hearing by Dec. 6. Notices of objection to the proceedings and related deadlines must be filed with the SCC by Jan. 6. Southern Title has about $10 million in unearned premiums. Under Virginia law, Walt explained, to the extent those funds are not used to obtain reinsurance, the reserve will go toward the expenses of administering the receivership. The remaining reserve funds are to be distributed equally to cover losses sustained by policyholders, and those who filed a claim before the deadline will be paid first, the report says. "The application for liquidation requests a claim bar date of Aug. 4, 2014," the report quoted Katha Treanor, an SCC spokeswoman, as saying. "If a claim is filed after the bar date, it will not be paid, she added, the report notes. Southern Title Insurance Corp. is a Richmond-based insurer that wrote title insurance coverage. SPECIALTY PRODUCTS: Judge Could Rethink Asbestos Deadline --------------------------------------------------------- Law360 reported that a Delaware bankruptcy judge indicated on Dec. 17 that he may reconsider his ruling ordering a deadline be set for asbestos-related injury claims in the Specialty Products Holding Corp. case, and said he intends to see dual solicitations for a Chapter 11 plan from both the asbestos claimants committee and the debtor. According to the report, U.S. Bankruptcy Judge Peter J. Walsh scheduled a hearing for Jan. 7, during which counsel representing the potentially thousands of people who may have suffered some injury or illness connected to a compound produced by asbestos may argue for the reconsideration of his ruling. About Specialty Products Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-11780) on May 31, 2010. Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary I. Shapiro, Esq., at Richards Layton & Finger, serve as co- counsel. Logan and Company is the Company's claims and notice agent. The Company estimated its assets and debts at $100 million to $500 million. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100 million to $500 million. On May 20, 2013, the Bankruptcy Court entered an order estimating the amount of the Debtors' asbestos liabilities, and a related memorandum opinion in support of the estimation order. The Bankruptcy Court estimated the current and future asbestos claims associated with Bondex International, Inc. and Specialty Products Holding at approximately $1.17 billion. The estimation hearing represents one step in the legal process in helping to determine the amount of potential funding for a 524(g) asbestos trust. ST. FRANCIS HOSPITAL: Files for Chapter 11 for Sale --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that St. Francis Hospital in Poughkeepsie, New York, filed a Chapter 11 petition on Dec. 17 and will sell the facility for $24.2 million to Health Quest Systems Inc., perhaps in early January. According to the report, the 333-bed acute-care facility, founded in 1914, said problems with a newly installed computer system caused a loss of income. The hospital said it also faces low rates and "increasingly rigorous" billing processes required by Medicare and Medicaid, the two largest sources of revenue. Last year, revenue of some $150 million resulted in a $7.7 million operating loss. The balance sheet as of July 31 showed assets of $154.9 million against debt totaling $137.7 million. The hospital wants the bankruptcy judge to require other potential buyers to submit expressions of interest by Jan. 3. If there are none, the hospital wants the court to hold a hearing on Jan. 10 to approve the sale to Health Quest. If there is other interest, formal bids would be required by Feb. 10, should the judge go along with the proposed schedule. The auction would take place on Feb. 13. The case is In re St. Francis Hospital, 13-bk-37725, U.S. Bankruptcy Court, Southern District of New York (Manhattan). STEWARD HEALTH: S&P Lowers Rating to 'B-'; Outlook Stable --------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its rating on U.S.-based community health care service provider Steward Health Care System LLC to 'B-' from 'B'. The rating outlook is stable. S&P also lowered all related issue-level ratings on the company's debt by one notch in conjunction with the downgrade. S&P removed the ratings from CreditWatch, where it placed them with negative implications on Nov. 26, 2013. "We based our downgrade on our application of our revised corporate criteria. Our assessment of Steward's business risk profile remains "vulnerable" and our assessment on the company's financial risk profile remains "highly leveraged", which under the revised corporate criteria leads to an anchor score of 'b-'," said credit analyst David Peknay. "Further, the company's management and governance score remains "weak" and our liquidity assessment is "less than adequate". While the management and governance score and the liquidity assessment do not have an impact on the 'b-' anchor score, our view of the company's management and governance and liquidity limits any favorable ratings impact when comparing the company with peers." The stable outlook is based on S&P's expectation that volumes will decline in the first half 2014, but recover in the second half. It also assumes that margins will only decline modestly because of cost reduction initiatives. Furthermore, it assumes that discretionary cash flow deficits will be significantly reduced in 2014. S&P also expects the company's sources of liquidity to cover the company's uses. Downside Scenario S&P could lower the rating if it anticipates that uses of liquidity will exceed sources of liquidity or S&P projects that the company's margin of compliance with financial covenants will drop below 5%. This could occur if volumes do not rebound in the second half as S&P expects, resulting in low-single-digit revenue declines and the company's EBITDA margin falling 50 bps or more. Upside Scenario Although less likely, S&P could raise the rating if the company improved its scale, scope, and diversity, such that S&P could consider upwardly revising the business risk score. However, this would likely entail a transformative event. Furthermore, this would require the company to convincingly establish a track record of positive cash flow. This would likely entail the company's revenue growing by a low- to mid-single-digit rate, the company's margins increasing by 100 bps, and investments in growth subsiding. STRATUS MEDIA: Five Directors Quit Amid Change of Focus ------------------------------------------------------- Seymour Siegel, Glenn Golenberg, Randall Cross, Michael Dunleavy, Sr., and Jack Schneider resigned as directors of Stratus Media Group, Inc., effective Dec. 9, 2013. The resignations were not pursuant to any disagreement with the Company, but were tendered in connection with the change of the focus of the Company as a life sciences company as a result of the recent acquisition of Canterbury Laboratories, LLC and Hygeia Therapeutics, Inc. As previously disclosed, Sol J. Barer, Ph.D., Issac Blech, Yael Schwartz, Ph.D., and Nelson Stacks have recently been elected to the board of directors, and the Company expects to add additional members with backgrounds in the life sciences areas. About Stratus Media Santa Barbara, Calif.-based Stratus Media Group, Inc., is an owner, operator and marketer of live sports and entertainment events. Subject to the availability of capital, the Company intends to aggregate a large number of complementary live sports and entertainment events across North America and internationally. Stratus Media disclosed a net loss of $6.84 million on $374,542 of total revenues for the year ended Dec. 31, 2012, as compared with a net loss of $23.63 million on $570,476 of total revenues for the year ended Dec. 31, 2011. The Company's balance sheet at Sept. 30, 2013, showed $3.23 million in total assets, $9.57 million in total liabilities, all current, and a $6.33 million total shareholders' deficit. Goldman Kurland and Mohidin LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that Stratus Media has suffered recurring losses and has negative cash flow from operations which conditions raise substantial doubt as to the ability of the Company to continue as a going concern. SUBURBAN PROPANE: Moody's Affirms 'Ba2' CFR; Outlook to Stable -------------------------------------------------------------- Moody's changed Suburban Propane Partners, L.P.'s outlook to stable from negative and affirmed its Ba2 Corporate Family Rating (CFR), Ba2-PD Probability of Default Rating (PDR), and Ba3 senior unsecured notes rating. In a related action, Moody's changed Suburban's Speculative Grade Liquidity (SGL) rating to SGL-2 from SGL-3. "The stable outlook reflects improved leverage and ongoing integration of Inergy L.P.'s propane business by Suburban Propane," commented Arvinder Saluja, Moody's Analyst. "Suburban exited fiscal 2013 with leverage that continues to trend lower after being markedly elevated from the debt-financed Inergy acquisition." Issuer: Suburban Propane Partners, L.P. Affirmations: Corporate Family Rating, Affirmed Ba2 Probability of Default Rating, Affirmed Ba2-PD Senior Unsecured Notes, Affirmed Ba3, LGD4, 64% Upgrades: Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Outlook Actions: Outlook, Changed to Stable from Negative Ratings Rationale: The stabilization of Suburban's outlook follows significant improvement in the company's leverage profile in 2013. The integration efforts related to the Inergy, L.P. (Inergy) acquisition that closed in August 2012 continue to translate into planned cost savings and synergies. Suburban has been able to reduce its leverage from over 7x at the end of fiscal 2012 to around 4x at the end of fiscal 2013, a range much more appropriate for a Ba2 propane company. Moody's expects the leverage to gradually improve by at least another half a turn in 2014 as Suburban benefits from improved scale and synergies as it further integrates Inergy operations and from a more normal winter weather pattern. Moody's notes that some of the leverage improvement has been aided by Suburban's post-acquisition secondary public offerings of its equity for combined proceeds of over $400 million, substantially all of which was used toward debt reduction. The Ba2 CFR is supported by Suburban's significant scale and market position in propane industry, its strong track record of successful cost reduction efforts augmented by the synergies achieved with the Inergy acquisition, and management's historical preference for conservative financial policies. The rating is tempered by characteristics of the propane sector which include a high degree of sensitivity to unpredictable external factors such as weather, a trend of secularly declining volumes, the highly competitive and fragmented nature of the sector, and growth opportunities that are mostly limited to acquisitions as opposed to organic growth. The SGL-2 rating reflects good liquidity. Suburban ended fiscal year 2013 with over $107 million in cash and $253 million in availability under its $400 million revolving credit facility. Covenants under the facility include a minimum interest coverage ratio of 2.25x, stepping up to 2.5x effective the third quarter of 2014, and maximum consolidated leverage of 4.75x. The maximum consolidated leverage steps up to 5.0x during an acquisition period to grant financing flexibility. Moody's believes Suburban will be in compliance with these covenants through 2014. Apart from the credit facility that matures in 2017, there are no other debt maturities until 2018. The Ba3 senior unsecured notes rating reflects the size of the senior secured revolver's priority claim relative to the unsecured notes results in a one notch differential from the CFR under Moody's Loss Given Default Methodology. An upgrade is unlikely in the near to medium term. However, Moody's could consider an upgrade if debt/EBITDA approaches 2.5x, liquidity remains good, and future acquisitions are both accretive and mainly equity funded. The rating could be downgraded if it appears that debt/EBITDA will rise above 4.5x for a sustainable period. Higher leverage could be tolerated temporarily in the event of an acquisition that materially improves Suburban's business profile and if the company has a clear plan to bring leverage below 4x in a reasonable timeframe. T-MOBILE USA: Moody's Rates $1 Billion Sr. Unsecured Notes 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned Ba3 ratings to T-Mobile USA, Inc.'s $1 billion 6.125% Senior Unsecured Notes due 2022 and $1 billion 6.5% Senior Unsecured Notes due 2024, the proceeds of which, along with the company's recent equity offering, are expected to be used for general corporate purposes, including capital investments, enhancing T-Mobile's financial flexibility and opportunistically acquiring additional spectrum in private party transactions and/or government auctions. The company's other ratings and stable outlook remain unchanged. Moody's has taken the following rating actions: T-Mobile USA, Inc. 6.125% Senior Unsecured Series Notes due 2022: Assigned Ba3 (LGD4, 52%) 6.5% Senior Unsecured Series Notes due 2024: Assigned Ba3 (LGD4, 52%) Ratings Rationale: T-Mobile's recent debt and equity raises provide the company with an estimated additional $3.8 billion of cash that will be used to support the growth of the company and its subscriber base, including accelerated capital spending and the possibility of future spectrum purchases. Moody's will continue to monitor how the company will utilize its new capital from its debt and equity raises. Also noteworthy, Deutsche Telekom's ("DT") lack of participation in the recent equity offering further reinforces Moody's belief that T-Mobile's implicit support provided by DT is minimal to non-existent as DT's ownership of T-Mobile will be diluted upon completion of the equity raise. "We acknowledge T-Mobile's recent surprisingly strong performance and will assess whether such operating trends are sustainable," said Moody's Senior Vice President, Dennis Saputo. In particular, Moody's is monitoring competitive responses to T-Mobile's strong subscriber gains and will evaluate industry impact. We realize that T-Mobile's network modernization, including the integration of MetroPCS, and 4G LTE deployment remain on track to support anticipated subscriber growth and rapidly rising bandwidth demand. "Nevertheless, we remain concerned about the ability of the third and fourth largest US wireless carriers to make significant sustainable inroads against Verizon Wireless and AT&T, which continue to dominate the US wireless industry," continued Saputo. Saputo concluded, "If T-Mobile can continue its strong performance while maintaining a prudent balance sheet as the company assembles the assets required to compete long-term against the US wireless industry leaders, positive rating pressure could develop." T-Mobile's Ba3 Corporate Family Rating ("CFR") reflects Moody's expectation for improved execution as a result of enhanced scale, an improved competitive device lineup, accelerated network investment and a new, aggressive pricing structure for smartphones. In addition, a strong liquidity profile and valuable spectrum assets also provide credit support. These strengths are offset by the company's fourth position in the highly competitive U.S. wireless industry, the capital intensity associated with building out its 4G LTE network and meeting rapidly rising bandwidth demand and a moderately leveraged balance sheet. T-Mobile's stable outlook reflects Moody's belief that the merger with MetroPCS will present strategic and operational synergies that will enable the combined company to stabilize its market share over time and eventually lead to margin expansion. T-Mobile's rating could be upgraded if the combined company returns to a strong growth trajectory by reducing churn and increasing subscriber counts. If total churn falls below 3%, EBITDA growth accelerates and free cash flow grows rapidly. Specifically, Moody's could raise the rating if leverage is likely to drop below 4.0x and free cash flow were to improve to the high single digits percentage of total debt (note that all cited financial metrics are referenced on a Moody's adjusted basis). Downward rating pressure could develop if the company's leverage approaches 4.5x and free cash flow drops below 2% of total debt. This could occur if EBITDA margins come under sustained pressure, declining to below 30%. In addition, deterioration in liquidity could pressure the rating downward. T3 MOTION: Adam Benowitz 10.3% Owner as of Dec. 13 -------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Adam Benowitz and his affiliates disclosed that as of Dec. 13, 2013, they beneficially owned 2,393,641 shares of common stock of T3 Motion, Inc., representing 10.3 percent of the shares outstanding. Mr. Benowitz previously reported beneficial ownership of 2,613,641 common shares or 11.2 percent equity stake as of Aug. 16, 2013. A copy of the regulatory filing is available for free at http://is.gd/dT3amR About T3 Motion Costa Mesa, Calif.-based T3 Motion, Inc., develops and manufactures T3 Series vehicles, which are electric three-wheel stand-up vehicles that are directly targeted to the public safety and private security markets. T3 Motion reported a net loss of $21.52 million on $4.51 million of net revenues for the year ended Dec. 31, 2012, as compared with a net loss of $5.50 million on $5.29 million of net revenues during the prior year. "The Company has incurred significant operating losses and has used substantial amounts of working capital in its operations since its inception (March 16, 2006). Further, at March 31, 2013, the Company had an accumulated deficit of $(76,980,775) and used cash in operations of $(1,614,252) for the three months ended March 31, 2013. These factors raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time," according to the Company's Form 10-Q for the period ended March 31, 2013. The Company's balance sheet at Sept. 30, 2013, showed $2.50 million in total assets, $11.32 million in total liabilities and a $8.81 million total stockholders' deficit. TOWER GROUP: Fitch Comments on Adverse Reserve Development ------------------------------------------------------------ Fitch Ratings comments that Tower Group International, Ltd.'s (TWGP) filing announcing that it will be taking additional adverse reserve development in the third quarter of 2013 (3Q'13) of approximately $75 million to $105 million in addition to the $364 million the company took in 2Q'13 is outside of previous rating expectations. The third quarter development relates to workers' compensation, commercial multi-peril liability, other liability, and commercial auto liability, which were the same lines experiencing unfavorable loss experience that led to TWGP's 2Q'13 charge. However, TWGP's announcement of the sale of its investment in Canopius Group Ltd.'s sale to Bregal Capital LLP for approximately $70 million and using the proceeds to fund payment of its outstanding $70 million bank line is a favorable development. The company's next maturing debt obligation is $150 million of 5% convertible senior notes due Sept. 15, 2014. The company continues to explore strategic alternatives with the services of an investment banker. Fitch plans on reviewing the ratings once the company files third quarter GAAP and statutory statements, which are anticipated to be released shortly. The ratings are listed below. Tower Group International, Ltd. --Issuer Default Rating (IDR) 'B', Rating Watch Negative. Tower Group, Inc. --IDR 'B', Rating Watch Negative; --5% senior convertible debt rating 'B-'. Tower Insurance Company of New York Tower National Insurance Company Preserver Insurance Company CastlePoint National Insurance Company York Insurance Company of Maine Hermitage Insurance Company CastlePoint Florida Insurance Company North East Insurance Company Massachusetts Homeland Insurance Company CastlePoint Insurance Company Kodiak Insurance Company --Insurer Financial Strength ratings 'BB', Rating Watch Negative. TWIN RIVER: Moody's Puts All Ratings on Review for Downgrade ------------------------------------------------------------ Moody's Investors Service placed all of the ratings of Twin River Management Group Inc. on review for possible downgrade following its announcement that it intends to acquire the Hard Rock Hotel & Casino in Biloxi, Mississippi from owner Leucadia National Corporation. The proposed purchase price is $250 million and closing is subject to approval by Hard Rock International (owner of the Hard Rock brand) and gaming regulators. The estimated completion date for the acquisition is June 2014. Ratings placed on review for possible downgrade: Corporate Family rating at B1 Probability of Default rating at B2-PD First lien term loan at B1 (LGD 3, 35%) Senior secured revolver at B1 (LGD 3, 35%) The company credit metrics may weaken as debt increases to finance the proposed acquisition. There is limited financial information available on the Hard Rock Biloxi, and Moody's is unable to estimate the pro-forma leverage of the combined entities at this time. However, the proposed acquisition will have a positive credit impact on Twin River (which owns one casino near Providence, Rhode Island) by expanding the company's geographic diversification prior to commencement of legalized gaming in nearby Massachusetts. Ratings Rationale: The review for possible downgrade will focus on the pro-forma capital structure post acquisition, reasonableness of the purchase price, the impact of legalized gaming in Massachusetts on Twin River's existing operations, and management's capital spending plans going forward. Twin River Management Group, Inc.'s owns and operates the Twin River casino located near Providence, Rhode Island. The Twin River casino operates approximately 4,500 video lottery terminals (VLTs) on behalf of the State of Rhode Island. Twin River is entitled to a 27.8% share of the VLT income. In addition, Twin River began operations of 66 table games in June 2013 that was recently increased to 80. The company is private and does not disclose public financials. The Hard Rock Hotel & Casino in Biloxi, Mississippi, is a subsidiary of Leucadia National Corp. The property consists of 53,800 square feet of gaming space, a hotel town with 325 rooms, five restaurants and a new hotel tower expected to open in February 2014 with 154 rooms. Leucadia does not report detailed financial information on its gaming operations. UNITED AMERICAN: Shareholders Elect Seven Directors --------------------------------------------------- United American Healthcare Corporation held its annual meeting of shareholders on Dec. 13, 2013, during which the shareholders: 1) elected John T. Woolley, Tom A. Goss, and Emmett S. Moten, Jr., to the Board of Directors for terms to expire at the 2015 annual meeting of shareholders; 2) elected Herbert J. Bellucci, Ronald E. Hall, Sr., Richard M. Brown, D.O., and William C. Brooks as directors for terms to expire at the 2016 annual meeting of shareholders, or until their respective successors are duly elected and qualified; 3) approved a change in the Company's state of incorporation from Michigan to Nevada; and 4) ratified the appointment of Bravos & Associates as the company's independent registered public accounting firm for fiscal 2014. About United American Chicago-based United American Healthcare, through its wholly owned subsidiary Pulse Systems, LLC, provides contract manufacturing services to the medical device industry, with a focus on precision laser-cutting capabilities and the processing of thin-wall tubular metal components, sub-assemblies and implants, primarily in the cardiovascular market. United American reported net income of $537,000 on $8.48 million of contract manufacturing revenue for the year ended June 30, 2013, as compared with a net loss of $1.86 million on $6.83 million of contract manufacturing revenue for the year ended June 30, 2012. The Company's balance sheet at June 30, 2013, showed $15.82 million in total assets, $12.77 million in total liabilities and $3.04 million in total shareholders' equity. Bravos & Associates, CPA's, in Bloomingdale, Illinois, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company had a working capital deficiency of $8.4 million. The Company's liabilities and working capital raise substantial doubt about its ability to continue as a going concern. USEC INC: Agrees with Noteholder Group to Pursue Restructuring -------------------------------------------------------------- USEC Inc. has reached an agreement with a majority of the holders of its senior convertible notes on the terms of a financial restructuring plan that will strengthen the Company's balance sheet, enhance its ability to sponsor the American Centrifuge project and improve its long-term business opportunities. Under the terms of the agreement, the company will replace approximately $530 million in convertible notes that are scheduled to mature in October 2014 with new debt and equity. "We are pleased to reach agreement with a significant number of our noteholders on a plan to improve our capital structure and enhance our ability to be a stronger sponsor of the American Centrifuge project," said John K. Welch, USEC president and chief executive officer. "We have said for many months that we are transitioning our business to focus on our core strengths, and today's announcement represents another important step in that process." Throughout the restructuring process, USEC expects to continue its operations and to meet its obligations to its stakeholders, including suppliers, partners, customers and employees. The Company also anticipates the continuation of research, development and demonstration activities for the American Centrifuge technology, as well as the transition activities at the Paducah Gaseous Diffusion Plant by United States Enrichment Corporation, which is the primary operating subsidiary of USEC Inc. Discussions continue with the Babcock & Wilcox Investment Company (B&W) and Toshiba Corporation regarding agreement to restructure their preferred convertible equity investment. The noteholders and USEC have made a proposal regarding restructuring the Toshiba and B&W investment and the parties are in discussions on those terms and documentation which must be completed prior to implementing the financial restructuring plan. As strategic investors, Toshiba and B&W remain supportive on deployment of the American Centrifuge Plant. The agreement with the noteholders, which includes the participation of financial institutions representing approximately 60 percent of the Company's debt, calls for the Company's $530 million debt to be replaced with a new debt issue totaling $200 million. The new debt issue would mature in five years and automatically extend an additional five years upon the occurrence of certain events. In addition, the restructuring plan contemplates that the existing equity will be replaced with new equity. The noteholders would receive 79 percent of the new equity as common stock. The plan calls for Toshiba and B&W to jointly obtain 16 percent of the new common stock, as well as $40 million in debt on the same terms as the noteholders, in exchange for their existing preferred equity investment. Existing stockholders would receive 5 percent of the new common stock. As noted above, the detailed terms for restructuring Toshiba and B&W's preferred equity investment are being negotiated. Once implemented, the new capital structure will increase USEC's financial flexibility and support the Company's continuing sponsorship of the American Centrifuge project. In order to implement the terms of the agreement, USEC Inc. expects to file a prearranged and voluntary Chapter 11 petition for relief in the United States Bankruptcy Court for the District of Delaware in the first quarter of 2014. It is anticipated that none of the Company's subsidiaries will be filing for relief. United States Enrichment Corporation is anticipated to be a plan proponent for a limited purpose, but will not be included in the Chapter 11 filing. Such a filing is not expected to have any effect on on-going operations, suppliers, deliveries to customers or the American Centrifuge research, development and demonstration program. USEC recently announced that its full production-scale cascade of 120 machines achieved 20 machine-years of operations at commercial plant specifications. During that performance run, USEC successfully completed three important milestones set by the Department of Energy (DOE) for the program. DOE's ongoing support for the project is a condition to implementing the Company's agreement with its noteholders. The Company is currently in ongoing discussions with DOE officials regarding the American Centrifuge project and the proposed restructuring. Under terms of the agreement, the current USEC Board of Directors would oversee the restructuring process until the effective date of the plan when a new board would take its place. The new directors will all be U.S. citizens, except and to the extent that mitigation measures acceptable to the Nuclear Regulatory Commission and DOE are in place. The Company expects B&W and Toshiba to continue to have representation on the board of directors. USEC's legal advisor for the restructuring is Latham & Watkins LLP, its financial advisor is Lazard, and its restructuring advisor is AlixPartners LLP. An ad hoc group of holders of USEC's senior convertible notes was advised by Akin Gump Strauss Hauer & Feld LLP and Houlihan Lokey. A copy of the Plan Support Agreement is available for free at: http://is.gd/4HZ1Le A copy of the Form 8-K is available for free at: http://is.gd/NrXuKx About USEC Inc. Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) -- http://www.usec.com/-- supplies enriched uranium fuel for commercial nuclear power plants. USEC disclosed a net loss of $1.20 billion in 2012 as compared with a net loss of $491.1 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $1.70 billion in total assets, $2.16 billion in total liabilities and a $462.1 million stockholders' deficit. PricewaterhouseCoopers LLP, in McLean, Virginia, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has reported net losses and a stockholders' deficit at Dec. 31, 2012, and is engaged with its advisors and certain stakeholders on alternatives for a possible restructuring of its balance sheet, which raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "A delisting of our common stock by the NYSE and the failure of our common stock to be listed on another national exchange could have significant adverse consequences. A delisting would likely have a negative effect on the price of our common stock and would impair stockholders' ability to sell or purchase our common stock. As of September 30, 2013, we had $530 million of convertible notes outstanding. Under the terms of our convertible notes, a "fundamental change" is triggered if our shares of common stock are not listed for trading on any of the NYSE, the American Stock Exchange (now NYSE-MKT), the NASDAQ Global Market or the NASDAQ Global Select Market, and the holders of the notes can require USEC to repurchase the notes at par for cash. We have no assurance that we would be eligible for listing on an alternate exchange in light of our market capitalization, stockholders' deficit and net losses. Our receipt of a NYSE continued listing standards notification described above did not trigger a fundamental change. In the event a fundamental change under the convertible notes is triggered, we do not have adequate cash to repurchase the notes. A failure by us to offer to repurchase the notes or to repurchase the notes after the occurrence of a fundamental change is an event of default under the indenture governing the notes. Accordingly, the exercise of remedies by holders of our convertible notes or the trustee of the notes as a result of a delisting would have a material adverse effect on our liquidity and financial condition and could require us to file for bankruptcy protection," the Company said in its quarterly report for the period ended Sept. 30, 2013. * * * USEC Inc. carries 'Caa1' corporate and probability of default ratings, with "developing" outlook, from Moody's. As reported by the TCR on Aug. 17, 2012, Standard & Poor's Ratings Services lowered its ratings on USEC Inc., including the corporate credit rating to 'CCC' from 'CCC+'. "The downgrade reflects our assessment of USEC's long-term viability after the company publicly stated that it will be difficult to continue enrichment operations at the Paducah Gaseous Diffusion Plant after a one-year multiparty agreement to extend operations expires in May 2013," said Standard & Poor's credit analyst Maurice S. Austin. VIGGLE INC: Acquires Wetpaint for $30 Million --------------------------------------------- Viggle has acquired Wetpaint, an entertainment media and technology company focused on television fans, for $30 million in cash and stock. Wetpaint has become a leading destination for TV viewers, and provides original content to over 12 million monthly unique users. Wetpaint provides a way for fans to stay connected with the stars and programs they love 24 hours a day, 365 days a year. In addition to its 12 million monthly unique users, Wetpaint boasts more than 90 million page views a month and combined social reach of over 7 million Facebook likes and followers on Twitter. It is a major source for deep, independent coverage of top TV shows, stars, entertainment news and fashion, producing premium content - more than 150 new articles, videos and galleries per day. While Wetpaint will continue to offer its unique insight and access to its loyal fans, the two companies will begin to share content and benefits immediately. In the coming months Wetpaint users will gain access to Viggle's rewards program, and Vigglers will see more and more unique and exclusive content focused on TV, TV stars, and fans of TV. "Wetpaint is the perfect complement to our business for users, TV network partners and advertisers," said Greg Consiglio, president and COO of Viggle. "This combined company brings together Viggle's proven promotion, entertainment rewards and monetization capabilities with Wetpaint's reach, social distribution technologies and best-in-class content. Wetpaint leverages the power of social media to ensure TV fans are getting the latest news and commentary about the shows they love, and now we are expanding that to include real-time updates before, during and after the show airs." Ben Elowitz, CEO of Wetpaint commented, "We are thrilled to join our loyal users with Viggle's avid fans, providing both with the continued opportunity to gain rewards by engaging in their passion -- entertainment -- while also giving marketers a more integrated, dynamic platform." For marketers, this acquisition creates significant opportunities to reach a passionate audience with targeted messages across an "always on" entertainment experience that now includes multiple touch points and platforms. Marketers already benefit from Viggle's extensive reward program, as well as in app advertising and that will now be extended through Wetpaint's online content and social media streams. Viggle and Wetpaint provide unprecedented access to devoted TV viewers. With 316 million confirmed check-ins since launch last year, and an average of 66 minutes per session, Viggle's more than 3.5 million registered users already provide a unique and highly targeted way for brands and networks to amplify their message or content. Viggle can reward users for checking into programming on nearly 200 networks, and dozens of brands are actively using Viggle to complement their TV ads. Wetpaint's 90 million page views a month focused on the same content provides a way for rands and networks to access those viewers all day, every day. Viggle and Wetpaint will share more details on the integration and the roll out of joint features, including music features, in the coming weeks. A copy of the Agreement and Plan of Merger is available at: http://is.gd/1ZaNfk Additional information is available for free at: http://is.gd/BpFuJl About Viggle New York City-based Viggle Inc. is a loyalty marketing company. The Company has developed a loyalty program for television that gives people real rewards for checking into the television shows they are watching on most mobile operating system. Viggle users can redeem their points in the app's rewards catalog for items such as movie tickets, music, or gift cards. Viggle incurred a net loss of $91.40 million on $13.90 million of revenues for the year ended June 30, 2013, as compared with a net loss of $96.51 million on $1.73 million of revenues during the prior year. The Company's balance sheet at Sept. 30, 2013, showed $16.06 million in total assets, $36.26 million in total liabilities, $36.83 million in series A convertible redeemable preferred stock, and a $57.04 million total stockholders' deficit. BDO USA, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company has suffered recurring losses from operations and at June 30, 2013, has deficiencies in working capital and equity that raise substantial doubt about its ability to continue as a going concern. WARNER SPRINGS: District Court Dismisses Debt Acquisition Appeal ---------------------------------------------------------------- District Judge William Q. Hayes dismissed the appellate proceedings, DEBT ACQUISITION COMPANY OF AMERICA V, LLC, Appellant, v. WARNER SPRINGS RANCHOWNERS ASSOCIATION, et al., Appellees, Civil No. 13cv1170-WQH-WVG (S.D. Cal.). Pacific Hospitality Group, Inc. -- the predecessor-in-interest to Warner Springs Ranch Resort LLC, the buyer of the assets of Warner Springs Ranch Association -- sought dismissal of the appeal, arguing that DACA failed to name WSRR, the buyer of the assets, in its appeal. WSRR is the party most affected by the appeal of the Sale Order, and thus an indispensable party to the appeal and the appeal should not proceed due to this fatal flaw. PHG also argued that the appeal must be dismissed because the appeal is both statutorily moot and equitably moot. Debt Acquisition Company of America V waived its right to appeal its post-auction objections to the bid procedures because it did not object to entry of the Consensual Bid Procedures Order. The issues on appeal asserted by DACA establish that DACA was not prejudiced by the Court's ruling. DACA contends the appeal is not statutorily moot, constitutionally moot, nor equitably moot. DACA contends that policy considerations favor appealability because state court partition laws do not contain mootness provisions, and applying the federal bankruptcy mootness provision to this case would encourage forum shopping. The Warner Springs Ranch Association was the majority owner of the tenancy-in-common interests controlling ownership of the historic Warner Springs Ranch Resort, located in San Diego County. Minority ownership interests were held by DACA; Pala Band of Mission Indians; and others. The Debtor experienced financial difficulties, and entered into an agreement to sell the Debtor's interest in the Ranch to Pala. After the sale to Pala failed to close, the Debtor filed a Chapter 11 bankruptcy petition. On May 4, 2012, the Debtor filed an adversary proceeding in the bankruptcy court seeking to sell the Ranch in its entirety (including the interests of DACA, Pala and all other co-owners) under 11 U.S.C. Sec. 363(h). On Dec. 18, 2012, DACA stipulated to the sale of its interest, stipulated that all statutory conditions set forth in 11 U.S.C. Sec. 363(h) had been satisfied, and stipulated that judgment may be entered authorizing the Debtor to sell its interest in the Ranch together with the interests of all co-owners. Pursuant to DACA's stipulation for entry of judgment, and the bankruptcy court entered judgment in the adversary proceeding, finding that all statutory conditions set forth in 11 U.S.C. Sec. 363(h) had been satisfied. On Dec. 20, 2012, the Debtor filed its motion to sell assets and approve bid procedures. On Feb. 28, 2013, the bankruptcy court approved the procedures. On March 6, 2013, the bankruptcy court conducted the sale auction. On April 12, 2013, the bankruptcy court confirmed the sale of the Ranch to Warner Springs Ranch Resort LLC, and identified Pala as the backup bidder should the sale to WSRR not close. The Sale Order stated: "The Purchaser is purchasing the Ranch in good faith and is a good faith purchaser of the Ranch within the meaning of Section 363(m) of the Bankruptcy Code and is, therefore, entitled to all the protections afforded by that provision." On April 17, 2013, DACA filed an appeal of the Sale Order. DACA did not seek a stay of enforcement of the Sale Order pending appeal. DACA named Pacific Hospitality Group, Inc., the predecessor-in-interest to WSRR, as party to the appeal. DACA did not name the purchaser, WSRR, as party to the appeal. On April 29, 2013, WSRR closed the sale, and as of the filing date of the Motion for Dismissal of Appeal, WSRR was the record owner of the Ranch. On May 3, 2013, PHG filed an election to have the appeal heard by the District Court. On Sept. 9, 2013, DACA filed the Appellant's opening brief in support of the appeal. On Oct. 15, 2013, PHG filed the Appellee's brief in opposition to the appeal. No other named appellees responded to the appeal. On Oct. 15, 2013, PHG filed the Motion for Dismissal of Appeal. On Nov. 4, 2013, DACA filed a reply brief in support of the appeal and an opposition to the Motion for Dismissal of Appeal. On Nov. 12, 2013, PHG filed a reply in support of the Motion for Dismissal of Appeal. On Dec. 12, 2013, the Court conducted oral argument on the Motion for Dismissal of Appeal and all other issues raised by the appeal. A copy of Judge Hayes' Dec. 17, 2013 Order is available at http://is.gd/ZpQNZJfrom Leagle.com. The case is DEBT ACQUISITION COMPANY OF AMERICA V, LLC, Appellant, v. WARNER SPRINGS RANCHOWNERS ASSOCIATION, et al., Appellees, Civil No. 13cv1170-WQH-WVG (S.D. Cal.). About Warner Springs Ranchowners Warner Springs Ranchowners Association, a California non-profit mutual benefit corporation, filed for Chapter 11 protection (Bankr. S.D. Cal. Case No. 12-03031) on March 1, 2012. Judge Louise DeCarl Adler presides over the case. Megan Ayedemo, Esq., and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the Debtor. The Debtor has hired Andersen Hilbert & Parker LLP as special counsel. Timothy P. Landis, P.H., serves as the Debtor's environmental consultant. The Debtor's schedules disclosed $14,079,894 in assets and $1,466,076 in liabilities as of the Chapter 11 filing. Warner Springs Ranchowners Association managed and co-owned 2,300 acres of unencumbered rural land known as the Warner Springs Ranch in San Diego County, California. The improvements on the Property include 250 cottage style hotel rooms, an 18 hole golf course, service/gasoline station, tennis courts, an aquatics center, an equestrian center, an airport, a spa, and two restaurants. Early in December 2013, the Bankruptcy Judge entered a tentative ruling confirming Warner Springs Ranchowners Association's Liquidating Plan. The Plan provides for (i) the creation of a liquidating trust that will administer and liquidate all of the Debtor's assets and (ii) the allocation and the distribution of the proceeds from the sale of all of the Debtor's assets to Holders of Allowed Claims and Co-Owners. The Debtor will be dissolved, its affairs wound-up and all assets transferred to the Liquidating Trust. An Oversight Committee will be formed to select the Liquidating Trustee and provide input, oversight and guidance to the Liquidating Trust. Under the Plan, all Holders of Allowed Claims will be paid in full and Co-Owners will receive one or more Distributions from the remaining proceeds from the liquidation of the Debtor's assets and the so-called UDI Proceeds. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/WARNER_SPRINGS_ds_amended.pdf Warner Springs Ranch Resorts LLC, assignee of Pacific Hospitality Group, Inc., the successful buyer of the Warner Springs Ranch property, objected to confirmation. It complained that the Plan does not provide an appropriate reserve for possible breach and damage claims in the estate. It is represented in the Debtor's case by Christopher Celentino, Esq., and Mikel R. Bistrow, Esq., at Foley & Lardner LLP. WINECARE STORAGE: Converted to Chapter 7 Liquidation ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that WineCare Storage LLC, one of the businesses in Manhattan disrupted by Hurricane Sandy in October 2012, is being taken over by a Chapter 7 trustee charged with returning wine collections to their owners. According to the report, the company was holding 27,000 cases of customers' wine when the hurricane hit and flooded the warehouse. Its computer system was destroyed, and the wine was later moved to another warehouse. Customers have complained about their inability to retrieve wine. In November, the company's bankruptcy lawyers from Schulte Roth & Zabel LLP filed papers asking the court for permission to withdraw from the case. The U.S. Trustee followed with a motion to convert the Chapter 11 case to a liquidation under Chapter 7, where a trustee is appointed automatically. The Justice Department's bankruptcy watchdog said the company ran up $168,500 in debt during bankruptcy and lacked cash to pay the bills. Unpaid expenses of the Chapter 11 don't include more than $500,000 in fees for Schulte Roth, according to the U.S. Trustee. In the papers to withdraw as counsel, Schulte Roth referred to the right of lawyers to quit if there are "irreconcilable differences" with a client. The nature of the disagreements isn't public because the papers were filed under seal. The bankruptcy judge converted the case to Chapter 7 on Dec. 17, specifically authorizing, although not commanding, the trustee to return wine to customers, including individuals and restaurants. WineCare Storage LLC filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-10268) in Manhattan on Jan. 29, 2013. The Debtor disclosed $238,000 in assets and debt of $1.1 million. Because the wine belongs to customers, it's not listed among the assets. Customers include individuals and restaurants. WOLF MOUNTAIN: Files List of 20 Largest Unsecured Creditors ----------------------------------------------------------- Wolf Mountain Products, L.L.C., filed with the U.S. Bankruptcy Court for the Distrit of Utah, Central Division, a list of creditors holding the 20 largest unsecured claims: Entity Nature of Claim Claim Amount ------ --------------- ------------ Daril Magleby - $196,181 32 N 1025 E Lindon, UT 84042 Gurney Trucking Inc. Transpo expense $87,728 PO Box 413045 Salt Lake City, UT 84114 Lambert Peat Moss, Inc. - $81,602 106 Lambert Rd. Riviere-Quelle Quebec Canada Thomas Petroleum - $77,607 PO Box 413045 Salt Lake City, UT Power Motive Corporation Equipment Lease $69,928 2239 Commercial Blvd. Colorado Springs, CO 80906 Southern CA Landscape Transpo Expenses $64,950 Supply 17520 Bridge Rd. Moreno Valley, CA 92555 Logistics Dynamics, Inc. - $58,062 1140 Wehrie Dr. Amherst, NY 14221 DDI Equipment - $54,189 4600 Highway 50 Whitewater, CO 81527 Jeff Liddiard Trucking - $46,000 290 N 200 W Junction, UT 84740 Dark Horse Trucking, Inc. Transpo Expense $43,433 691 W 920 S Spanish Fork, UT 84660 KNA Trucking - $40,413 222 S 1470 W Lindon, UT 84042 Power Equipment Company - $36,513 PO Box 28 Denver, CO 80201 Network FOB, Inc. - $36,015 PO Box 64007 Saint Paul, MN 55164 Cowan Systems Freight charges $34,785 4555 Hollins Ferry Rd. Halethorpe, MD 21227 Zions Credit Corp. Unliquidated $34,000 Legal Services UT ZB11 0877 PO Box 30709 Salt Lake City, UT 84130-0709 Sunterra Horticulture, Inc. Supplier $31,408 Box 760 Riverton, Manitoba ROC 2R0 Canada Ball DPF, LLC - $27,033 401 N Walnut St. Sherman, TX 75090 Okelberry Trucking, LLC - $20,800 PO Box 277 Spanish Fork, UT 84660 Wheeler Machinery Co. Acct Accomodation $20,306 PO Box 701047 Salt Lake City, UT BASF Corporation - $19,624 PO Box 121151 Dallas, TX 75312-1151 Wolf Mountain Products, L.L.C., filed a Chapter 11 petition (Bankr. D. Utah Case No. 13-33869) in Salt Lake City on Dec. 12, 2013. Bryce J. Burns signed the petition as manager. The Orem, Utah-based company estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Anna W. Drake, Esq., at the law firm of Anna W. Drake, P.C., in Salt Lake City, serves as the Debtor's counsel. Judge Joel T. Marker presides over the case. WOLF MOUNTAIN: Employs Anna W. Drake as General Counsel ------------------------------------------------------- Wolf Mountain Products, L.L.C., seeks authority from the U.S. Bankruptcy Court for the Distrit of Utah, Central Division, to employ Anna W. Drake, P.C., as general counsel to represent and assist the Debtor in connection with all matters arising in or related to the bankruptcy case. Anna W. Drake, Esq. -- annadrake@att.net -- the sole shareholder of the firm, currently charges the rate of $325 per hour for legal services rendered. Prior to the Petition Date, Ms. Drake received a $20,000 retainer from the Debtor. Ms. Drake assures the Court that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Wolf Mountain Products, L.L.C., filed a Chapter 11 petition (Bankr. D. Utah Case No. 13-33869) in Salt Lake City on Dec. 12, 2013. Bryce J. Burns signed the petition as manager. The Orem, Utah-based company estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Anna W. Drake, Esq., at the law firm of Anna W. Drake, P.C., in Salt Lake City, serves as the Debtor's counsel. Judge Joel T. Marker presides over the case. WPCS INTERNATIONAL: Incurs $473,000 Net Loss in Second Quarter -------------------------------------------------------------- WPCS International Incorporated filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $473,004 on $7.35 million of revenue for the three months ended Oct. 31, 2013, as compared with a net loss attributable to the Company of $493,386 on $7.95 million of revenue for the same period a year ago. For the six months ended Oct. 31, 2013, the Company reported a net loss attributable to the Company of $6.36 million on $15.18 million of revenue as compared with net income attributable to the Company of $500,315 on $19.24 million of revenue for the same period during the prior year. The Company's balance sheet at Oct. 31, 2013, showed $18.41 million in total assets, $13.87 million in total liabilities, and $4.54 million in total equity. Sebastian Giordano, interim CEO of WPCS, commented, "While we continue to consider and develop organic growth opportunities, we are also seeking opportunities to improve our balance sheet. Since coming on board, we have sought and implemented a number of opportunities for improvement, including: (i) the execution of an aggressive plan over the past several months to stabilize the operations, improve cash flows of the business through, amongst other things, operating cost reductions; (ii) the divestiture of underperforming operations, as evidenced by the sale of the Pride business described above, and the wind-down of the unprofitable Trenton Operations; and (iii) the restructuring of the Notes and Warrants which has enabled the Company to eliminate the former derivative liabilities and rebuild our stockholders' equity to regain compliance with the NASDAQ minimum stockholder equity requirements. As a result, we believe that all of these actions, as well as continuing efforts to improve the Company's performance and financial position, will contribute favorably to providing the Company with an opportunity to deliver improved shareholder value in the future." A copy of the Form 10-Q is available for free at: http://is.gd/HHNeFf About WPCS International WPCS -- http://www.wpcs.com-- is a design-build engineering company that focuses on the implementation requirements of communications infrastructure. The company provides its engineering capabilities including wireless communications, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. CohnReznick LLP, in Roseland, New Jersey, expressed substantial doubt about WPCS International's ability to continue as a going concern following the annual report for the year ended April 30, 2013. The independent auditors noted that the Company has incurred net losses and negative cash flows from operating activities, had a working capital deficiency as of and for the years ended April 30, 2013, and 2012, and has an accumulated deficit as of April 30, 2103. The Company reported a net loss of $6.8 million on $42.3 million of revenue in fiscal 2013, compared with a net loss of $20.6 million on $65.5 million in fiscal 2012. Z TRIM HOLDINGS: Enters Into Strategic Alliance Agreement --------------------------------------------------------- Z Trim Holdings, Inc., has entered into an agreement with a leading multi-national specialty food products company. Under the agreement, the firms will work cooperatively to explore opportunities for the development and commercialization of new applications for Z Trim's technology and cellulosic materials in the food industry, including using Z Trim's exclusive processes in conjunction with the specialty food products company's existing products portfolio. Pursuant to a non-disclosure agreement, and at their request, Z Trim has agreed not to disclose the company's name at this time. "We are confident that we can help to further enhance this company's already impressive line of value-added ingredients," said ZTHO CEO, Steve Cohen. "Both companies share a commitment to innovation, quality and sustainability. The unique combination of Z Trim's patented technology and this company's resources, expertise and integrated platform, is sure to produce a wide range of beneficial products for consumers and value for both companies and our respective shareholders." About Z Trim Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food ingredient company which provides custom product solutions that help answer the food industry's problems. Z Trim's revolutionary technology provides value-added ingredients across virtually all food industry categories. Z Trim's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. Z Trim Holdings disclosed a net loss of $9.58 million in 2012 following a net loss of $6.94 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $4.98 million in total assets, $1.02 million in total liabilities and $3.95 million in total stockholders' equity. M&K CPAS, PLLC, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company had a working capital deficit and reoccurring losses as of Dec. 31, 2012. These conditions raise substantial doubt about its ability to continue as a going concern. * Charitable Contributions Over 15% Are All Recoverable ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that when a bankrupt has contributed more than 15 percent of gross annual income to charity, the entire amount can be recovered as a fraudulent transfer, not just the amount exceeding 15 percent, the U.S. Court of Appeals in Denver ruled on Dec. 16. According to the report, a couple filed in Chapter 7 after making 25 charitable contributions to a church in the year before bankruptcy. In the aggregate, the gifts exceeded 15 percent of annual gross income. The trustee sued the church to recover the contributions as fraudulent transfers, because gifts by definition aren't made for reasonably equivalent value. The church raised a defense under Section 548(a)(1)(B) of the Bankruptcy Code, which protects contributions "that do not exceed 15 percent of the gross annual income." If contributions are larger, they are protected if the transfers were "consistent with the practices of the debtor in making charitable contributions," according to the statute. The bankruptcy judge and the Bankruptcy Appellate Panel both ruled that the trustee could only recover the amount in excess of 15 percent. U.S. Circuit Judge Terrence L. O'Brien on the Denver appeals court disagreed, ruling that the entire amount is recoverable. Judge O'Brien found the answer in the "plain language" of the statute. He said that the words "in any case in which" means the same as "if." By substituting "if" into the statute, it becomes clear, he said that everything is a fraudulent transfer, not just the amount above 15 percent. Judge O'Brien reached the same result as a bankruptcy judge in Louisiana in 1999. The case is Wadsworth v. Word of Life Christian Center (In re McGough), 12-1142, U.S. Court of Appeals for the 10th Circuit (Denver). * Lender Has the Burden of Proof on Lien Validity ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals for the Sixth Circuit in Cincinnati made law on two questions where there's no authority from circuit or district courts anywhere in the country. According to the report, the Cincinnati court, in a Dec. 17 opinion by U.S. Circuit Judge Ronald Lee Gilman, ruled that a creditor has the burden of proof establishing the validity of a security interest when filing a motion to vacate the automatic stay. The lender pointed to the plain language of Section 362(g)(2) of the Bankruptcy Code putting the burden of proof on the trustee for everything aside from showing equity in the property. Although the argument had "some surface appeal," Judge Gilman said, showing the existence of equity requires proving validity of the lien. Thus, proving up the lien is a burden on the lender. The second question involved the two-year statute of limitations on bringing actions to void liens. By the time the motion came on for hearing to modify the stay, the trustee's two-year window had lapsed for filing suit to void a lien under the so-called strong-arm powers. Judge Gilman said the invalidity of a lien could be used defensively on a lift-stay motion even though time ran out for the trustee to void the lien. On both issues, Judge Gilman followed decisions by a majority of bankruptcy courts. No district or circuit courts had opined on the two questions, Judge Gilman said. The case is Grant Konvalinka & Harrison PC v. Still (In re McKenzie), 12-6374, U.S. Court of Appeals for the Sixth Circuit (Cincinnati). * Credit Suisse Sued by N.J. Over $10 Billion in Mortgages ---------------------------------------------------------- David Voreacos, writing for Bloomberg News, reported that Credit Suisse Group AG was sued by New Jersey over claims the bank misrepresented the risk to investors in more than $10 billion in residential mortgage-backed securities. According to the report, the state claims Credit Suisse Securities (USA) LLC and two affiliates misled investors about defects in securities issued in 2006 and 2007. The bank didn't disclose that loans failed to meet underwriting standards and originators had "poor track records characterized by alarming levels of defaults and delinquencies," New Jersey claimed. Such red flags showed the securities "posed a high risk of delinquency and default, which could -- and ultimately did -- inflict enormous losses on the investors," according to the complaint, filed in state court in Trenton, the report related. Acting Attorney General John J. Hoffman announced the case on Dec. 19. Credit Suisse, the second-biggest Swiss bank, faces a similar lawsuit from New York Attorney General Eric Schneiderman, who claimed last year that the bank misled investors about its review of mortgages underlying securities, the report said. The Zurich- based bank has asked a judge to dismiss the case. "This complaint is without merit," Drew Benson, a Credit Suisse spokesman, said in an e-mail, the report cited. "It recycles baseless claims and uses inaccurate and exaggerated figures. We look forward to presenting our defense in court." The case is Hoffman v. Credit Suisse, Superior Court of New Jersey, Mercer County (Trenton.) * Fed Said to Delay Bank Leverage Cap Until Basel Completed ----------------------------------------------------------- Jesse Hamilton, writing for Bloomberg News, reported that the Federal Reserve has decided to delay imposing limits on leverage at eight of the biggest U.S. financial institutions until a global agreement is completed, according to two people briefed on the discussions. According to the report, Fed officials want to wait for a finished rule from the Basel Committee on Banking Supervision before completing their own requirement for how much capital U.S. banks must hold as a percentage of all assets on their books, said the people, speaking on condition of anonymity because the process isn't public. The international accord is shaping up as weaker in some respects than the U.S. plan. The Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency had favored finishing a U.S. rule by year's end, said one of the people, the report related. The Fed's wait-and-see position is aligned with groups representing the banking industry, who have argued for a delay on grounds that the regulations should be consistent. After the Dec. 10 adoption of the Volcker Rule that restricts banks from trading with their own money, the leverage ratio is one of the most significant unfinished U.S. initiatives to reduce risks that led to the 2008 global credit crisis, the report said. In July, the three U.S. regulatory agencies issued a preliminary rule that would set higher caps for eight of the largest U.S. banks including JPMorgan Chase & Co. and Bank of America Corp. than those proposed by Basel, the report said. It would require a capital-to-assets ratio of 5 percent for holding companies and 6 percent for their banking units, above the 3 percent overall leverage ratio in the Basel plan. * First-Year Law School Enrollment Drops to 36-Year Low ------------------------------------------------------- Michael McDonald, writing for Bloomberg News, reported that enrollment of first-year students at U.S. law schools this academic year fell 11 percent to 39,675, the lowest since 1977, according to a report released by the American Bar Association. Bloomberg related that the drop from 44,481 last year largely reflects concerns about the job market, even amid signs that legal employment conditions are beginning to turn around, said James R. Silkenat, president of the association, which was founded in 1878. Prospective law students are also concerned about the cost and growing levels of debt associated with three years of graduate school, he said. "On balance the employment picture appears to be getting better but the applications haven't caught up to the news yet," said Silkenat, who is based in New York, the report cited. The ABA is working on a project to find ways to lower the cost of law school, he said. The National Association for Law Placement said in June that employment for 2012 graduates fell to 84.7 percent from 85.6 the previous year, the fifth straight decline, the report noted. The employment rate, the lowest since 1994, has fallen from a 24-year high of 91.9 percent in 2007, according to yesterday's report. The ABA also found that two-thirds of law schools reported declines in first-year enrollment this academic year while 63 schools saw enrollment go up, the report said. Statistics on the ABA's website show that the number of first-year students is the lowest level since 1977. * Moody's Says B3 Neg. & Lower CFR List Remains in Narrow Range --------------------------------------------------------------- The number of companies on its B3 Negative and Lower Corporate Ratings List fluctuated within a narrow range in 2013, Moody's Investors Service says in a new report, "Calm Credit Conditions Will Continue." And the stability of the list this year is consistent with the current low default rate and for a low default forecast for 2014. "During 2013, the number of low-rated companies remained between a post-recession low of 146 and a high of 160," says Senior Vice President, David Keisman. "Credit conditions have remained stable for speculative-grade companies during a year of low interest rates, ample market liquidity and slow but steady growth in corporate profits and US GDP." But while the stronger US companies on the list have left through upgrades, a core group of companies in the Caa rating category on average saw no rating yearly movement between Dec. 1, 2009 and Dec. 1, 2013, despite the overall improvement in the economy. "A solid economic rebound next year could improve business prospects for companies at the Caa rating level, but they would also be the most vulnerable if the economic recovery or financial markets were to stumble," Keisman says. The number of companies on the B3 Negative and Lower Corporate Ratings List rose to 156 as of 1 December from 148 a quarter earlier. The list spiked slightly in June after the US Federal Reserve indicated it might begin tapering its monetary stimulus. The rise was almost completely unwound three months later. In addition to the B3 Negative and Lower Corporate Ratings List, other proprietary indicators such as Moody's Liquidity-Stress Index and Covenant Stress Index suggest continued stable credit conditions and a low default rate for high-yield companies in 2014. Moody's forecasts the default rate will be 2.7% a year from now, compared with 2.4% in November. Higher interest rates could raise borrowing costs for some companies, but improved economic conditions are likely to drive stronger revenue and cash flow, Moody's says. Further, companies have taken advantage of low rates and investors' strong appetite for higher-yielding instruments in the past few years to push out debt maturities, reduce borrowing costs and fortify their balance sheets, leaving them well positioned for a higher-rate environment. * McGlinchey Stafford Earns Regional Rankings in Bankruptcy Law --------------------------------------------------------------- McGlinchey Stafford has been ranked in the 2014 "Best Law Firms" list by U.S. News & World Report and Best Lawyers(R) in 44 areas. The firm earned National rankings for its work in two related areas: Financial Services Regulation Law, and Banking & Finance Litigation. This recognition is the most recent in a series of accolades received in 2013 by McGlinchey Stafford's financial services practice and its attorneys. The firm also earned 42 Regional rankings. "We are honored to receive this level of recognition from our clients and peers," said Bennet Koren, head of the firm's national financial services regulatory group. "Client service is our number one priority, and we are thrilled to receive this kind of feedback." Over the past few years, the firm's financial services practice groups have seen tremendous growth, adding two offices in Florida and an office in California, as well as dozens of talented lawyers across the firm's offices in seven states. The firm handles regulatory and compliance matters, and litigation and governmental investigations, for scores of financial institutions of all types and sizes. "Steady growth across our financial services practice, and expansion of our geographical platform, have equipped us to provide better nationwide client service in litigation and state and federal enforcement proceedings," commented Anthony Rollo, head of the firm's national banking and finance litigation group. In addition to McGlinchey Stafford's receipt of these National rankings, the firm also earned Regional rankings in the following areas: -- Appellate Law -- Banking and Finance Law -- Bankruptcy and Creditor Debtor Rights/Insolvency and Reorganization Law -- Commercial Litigation -- Corporate Law -- Elder Law -- Employee Benefits (ERISA) Law -- Environmental Law -- Financial Services Regulation -- Gaming Law -- Government Relations -- Labor Law -- Litigation (Banking & Finance, Bankruptcy, Environmental, Mass Tort/Class Actions, Mergers & Acquisitions, Municipal, Product Liability, Personal Injury, Real Estate, Regulatory Enforcement, Tax, Trusts & Estates) -- Non-Profit/Charities Law -- Patent Law -- Real Estate Law -- Tax Law -- Trademark Law -- Trusts & Estates Law Firms included in the 2014 "Best Law Firms" list are recognized for professional excellence with persistently impressive ratings from clients and peers. Achieving a ranking signals a unique combination of quality law practice and breadth of legal expertise. About McGlinchey Stafford McGlinchey Stafford -- http://www.mcglinchey.com-- is a full- service law firm providing counsel to business clients nationwide. Guiding clients wherever business and law intersect, McGlinchey Stafford's 180 attorneys are based in ten offices in California, Florida, Louisiana, Mississippi, New York, Ohio and Texas. * Oswalt Law Group Ariz. Trial Attorneys Launch New Firm Web Site ----------------------------------------------------------------- The Oswalt Law Group is a team of Arizona trial lawyers who have been providing clients with legal representation for several years in cases involving DUI defense, criminal defense and bankruptcy law. The firm represents people across Arizona and it hereby announces that it has launched a completely new law firm Web site that will provide people with the preliminary information that they need in order to understand the necessity of contacting the firm to discuss their immediate legal needs. The Web site can be found at the URL of http://www.oswaltlawyers.com Visitors to the Web site are invited to learn more about the law firm's overall philosophy and the attorneys who are members of the firm as well as to ascertain its office locations in Phoenix and in Tempe. In addition, visitors can find basic information regarding the different types of cases that the firm handles on behalf of clients across Arizona. For instance, visitors will find information regarding several different DUI charges in Arizona, several different types of crimes and criminal defense matters on both the state and federal levels including misdemeanor and felony charges and information regarding different types of bankruptcy. None of the information on these pages is meant to provide legal advice to prospective clients, but it will provide those who review it with the perspective that many people suffer through these problems. In addition to the information regarding the different legal matters that the firm handles, visitors will be able to log onto the law firm's blog. The blog will provide visitors with ongoing news and legal developments in Arizona and across the United States that relate to the types of legal help that the law firm provides. Finally, visitors will be provided with an opportunity to fill out a simple contact form on every page on the Web site that will be sent to the firm's personnel for review. Those inquiries that warrant a prompt response will be dealt with and initial legal consultations will be scheduled. About The Oswalt Law Group The Oswalt Law Group has been serving the public as Arizona trial attorneys for several years and it handles cases involving bankruptcy law, criminal law, DUI law and other matters. The firm serves communities across the state including Phoenix, Tucson, Avondale, Chandler, El Mirage, Glendale, Goodyear, Laveen, Paradise Valley, Peoria, Scottsdale, Sun City and Tolleson. * Gropper, Peck to Retire From New York Bench --------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Allan L. Gropper and James M. Peck, both bankruptcy judges in Manhattan, will retire next year. According to the report, Judge Gropper, 69, was named to the bench in 2000 when he was a partner at New York-based White & Case LLP. He will step down on Oct. 3, according to a statement from Chief Judge Cecelia G. Morris. Judge Peck, 68, was appointed in 2006 and will end his service on Jan. 31, according to the statement. He was a partner at Schulte Roth & Zabel LLP in New York until his elevation to the bench. The New York bankruptcy court is second only to Delaware's in handling large corporate bankruptcies. Judge Gropper will be remembered for the opinion he wrote this month tagging Kerr-McGee Corp. for committing a fraudulent transfer in spinning off Tronox Inc. in March 2006. Before he retires, the judge will fix the amount of damages somewhere between $5.15 billion and $14.2 billion. Judge Peck presided over the bankruptcy of Lehman Brothers Holdings Inc., the biggest case of its kind. In one of his most controversial decisions, he concluded in the case that a so-called flip clause in swap agreement isn't enforceable in bankruptcy. Neither Judge Gropper's Kerr-McGee opinion nor Judge Peck's swap ruling has been tested yet on appeal. Being a bankruptcy judge in New York is "an incredible privilege," Judge Peck said in an interview, the report cited. "It's the best job in our field." Both vacancies will be filled, according to Judge Morris. The deadline for applications is Feb. 14. The Southern District of New York, which includes the Manhattan court, has 10 bankruptcy judges. Bankruptcy judges are appointed by the circuit court and serve 14- year terms. They are paid $181,332 a year. * BOOK REVIEW: A Legal History of Money in the United States, 1774-1970 ------------------------------------------------------------- Author: James Willard Hurst Publisher: Beard Books Paperback: US$34.95 Review by Gail Owens Hoelscher Order your personal copy today and one for a colleague at http://is.gd/x8Gesf This book chronicles the legal elements of the history of the system of money in the United States from 1774 to 1970. It originated as a series of lectures given by James Hurst at the University of Nebraska in 1973. Mr. Hurst is quick to say that he , as a historian of the law, took care in this book not to make his own judgments on matters outside the law. Rather, he conducted an exhaustive literature review of economics, economic history, and banking to recount the development of law over the operations of money. He attempted to "borrow the opinions of qualified specialists outside the law in order to provide a meaningful context in which to appraise what the law has done or failed to do." Mr. Hurst define money, for the purposes of this books, as "a distinct institutional instrument employed primarily in allocating scarce economic resources, mainly through government and market processes," and not shorthand for economic, social, or political power held through command of economic assets." From the beginning, public and legal policy in the U.S. centered on the definition of legitimate uses of both law affecting money, and allocation of power over money among official agencies, both federal and state. The foundations of monetary policy were laid between 1774 and 1788. Initially, individual state legislatures and the Continental Congress issued paper currency in the form of bills of credit. The Constitutional Convention later determined that ultimate control of the money supply should be at the federal level. Other issues were not clearly defined and were left to be determined by events. The author describes how law was used to create and maintain a system of money capable of servicing the flow of resource allocations in an economy of broadly dispersed public and private decision making. Law defined standard money units and made those units acceptable for use in conducting transactions. Over time, adjustment of the money supply was recognized as a legitimate concern of law. Private banks were delegated expansive monetary action powers throughout the 1900s and private markets for gold and silver were allowed to affect the money supply until 1933-34. Although the Federal Reserve Act was not aimed clearly at managing money for goals of major economic adjustment, it set precedents by devaluing the dollar and restricting the use of gold. Mr. Hurst devotes a large part of his book to key issues of monetary policy involving the distribution of power over money between the nation and the states, between legal and market processes, and among major agencies of the government. Until about 1860, all major branches of government shared in making monetary policy, with states playing a large role. Between 1908 and 1970, monetary policy became firmly centralized at the national level, and separation or powers questions arose between the Federal Reserve Board, the White House (The Council of Economic Advisors), and the Treasury. The book was an enormous undertaking and its research exhaustive. It includes 18 pages of sources cited and 90 pages of footnotes. Each era of American legal history is treated comprehensively. The book makes fascinating reading for those interested in the cause and effect relationship between legal processes and economic processes and t hose concerned with public administration and the separation of powers. James Willard Hurst (1910-1997) is widely regarded as the grandfather of American legal history. He graduated from Harvard Law School in 1935 and taught at the University of Wisconsin-Madison for 44 years. ********* 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 ***