/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/131223.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 23, 2013, Vol. 17, No. 355 Headlines 710 LONG RIDGE: Set Jan. 30 Confirmation ADAMIS PHARMACEUTICALS: Selling Common Shares at $5.95 Apiece ALL AMERICAN RESTORATIVE: Voluntary Chapter 11 Case Summary ALLIED IRISH: Appoints Chief Financial Officer ALLIED SYSTEMS: Dexter Hofing Okayed as Pension Plan Consultant ALLY FINANCIAL: Moody's Raises Corp. Family Rating to 'Ba3' ANIMAL KINGDOM BREWSTER: Voluntary Chapter 11 Case Summary ARKANSAS CITY PUBLIC: Moody's Cuts Revenue Bonds Rating to 'Ba1' ATLANTIC CLUB: Caesars Agrees to Acquire Non-Gaming Assets BARD COLLEGE: Moody's Lowers Rating to 'Ba1'; Outlook Negative BEACH 21ST STREET: Property to Be Sold at Auction Jan. 24 BLITZ USA: Gas-Can Maker Sets Jan. 27 Confirmation Hearing CAMBRIDGE HEART: Asset Auction Scheduled for Dec. 24 CAREGIVER MANAGEMENT: Case Summary & 20 Top Unsecured Creditors CASEY ANTHONY: Receives Discharge of Most of Her Debts CASH STORE: Responds to Ontario Payday Loan Regulations CLUB AT SHENANDOAH: Court Okays Auction of Assets COLLEGE WAY: Case Summary & 3 Largest Unsecured Creditors COLOR STAR: Section 341(a) Meeting of Creditors Set for Jan. 17 CONSTAR INTERNATIONAL: Owes $123MM, Mostly From Prior Bankruptcy CONSTAR INTERNATIONAL: Case Summary & 30 Top Unsecured Creditors DETROIT, MI: Manager and Mayor-Elect Agree to Share Power DIAMOND RESORTS: Moody's Affirms B3 CFR & Secured Notes Rating DIGITAL DOMAIN: Exclusivity to Expire on March 5 DOLPHIN BAY: Case Summary & 20 Largest Unsecured Creditors DUMA ENERGY: Delays Form 10-Q for October 31 Quarter DUTCH GOLD: Responds to Questions on Briskly Trading DYNASIL CORP: Remains in Default of Certain Financial Covenants ECOSPHERE TECHNOLOGIES: Six Directors Elected at Annual Meeting EDISON MISSION: Disclosure Statement Approved ELAN CORP: S&P Raises Corporate Credit Rating From 'B+' ENDEAVOUR INTERNATIONAL: Unit Sells $25MM of Production Payment FIESTA RESTAURANT: S&P Withdraws 'B' Corporate Credit Rating FISKER AUTOMOTIVE: Wants $3.8M in WARN Claims Deemed Worthless FOX & HOUND: Section 341(a) Meeting Set for Jan. 24 FREESEAS INC: Regains Compliance with NASDAQ Min. Bid Price Rule FREGO & ASSOCIATES: Voluntary Chapter 11 Case Summary FRESH & EASY: Real Estate and Leases Sold on Dec. 19 FRIENDFINDER NETWORKS: Amends Application to Issue 2018 Notes FRIENDSHIP DAIRIES: Jan. 9 Hearing on Dismissal or Conversion Bid GENELINK INC: Amends 2012 10-K in Response to SEC Comments GETTY IMAGES: Bank Debt Trades at 7% Off GMX RESOURCES: DIP Maturity Date Extended to Feb. 2014 GOLDEN TRIANGLE: Case Summary & 20 Largest Unsecured Creditors GYMBOREE CORP: Bank Debt Trades at 6% Off HEALTH NET: A.M. Best Affirms 'bb' Issuer Credit Ratings HERTZ CORP: DBRS Confirms 'BB' Issuer Rating HJK HOSPITALITY: Voluntary Chapter 11 Case Summary IAP WORLDWIDE: S&P Cuts CCR to CC On Potential Debt Restructuring INT'L FOREIGN EXCHANGE: Files Schedules of Assets and Liabilities INT'L FOREIGN EXCHANGE: Withers Bergman Approved as Tax Counsel JELD-WEN INC: S&P Revises Outlook to Stable & Affirms 'B' CCR KEYWELL LLC: Creditors Sue Officers and Directors LAS VEGAS SANDS: Fitch Affirms 'BB+' Issuer Default Rating LAWRENCEVILLE HOUSING: S&P Lowers Rating on Revenue Bonds to 'CCC' LEHMAN BROTHERS: Asks Court to Enforce Stay Against Picbengro LEHMAN BROTHERS: Asks Court to Allow IRS to Amend Claims LEHMAN BROTHERS: Opposes Black Diamond Bid for Access to Docs LEHMAN BROTHERS: EFETnet Defends Bid to File Late Claim LEHMAN BROTHERS: LBI Trustee, Bank of Tokyo Settle Claim LEHMAN BROTHERS: Allows Wells Fargo to Pursue Bay Shore Property LEHMAN BROTHERS: FHFA Dispute Goes to District Court LIGHTSQUARED INC: Harbinger Asks Court to Approve Revised Plan LIGHTSQUARED INC: Cancels Auction for One Dot Six Unit LILY GROUP: Committee Balks at Use of Carve Out to Pay Retainer LILY GROUP: Has Access to Cash Collateral Until Dec. 31 LITTLEFIELD, TX: S&P Raises LongTerm Rating From 'BB' LOEHMANN'S HOLDINGS: Has Interim OK to Use Cash Collateral LOEHMANN'S HOLDINGS: Jan. 3 Going-Out-of-Business Auction Set LOEHMANN'S HOLDINGS: Has Until Jan. 28 to File Schedules LOEHMANN'S HOLDINGS: Employs Epiq as Claims & Noticing Agent LOUDOUN HEIGHTS: Section 341(a) Meeting Scheduled for Jan. 15 M*MODAL INC: Bank Debt Trades at 15% Off MICROVISION INC: Receives Nasdaq Listing Deficiency Notice MONTREAL MAINE: Fortress to Bid at Jan. 21 Auction NEOMEDIA TECHNOLOGIES: Confirms Termination of Scanbuy's License NEW ORLEANS SEWERAGE: Moody's Affirms Ba2 Revenue Bonds Rating NEXSTAR BROADCASTING: TV Stations Deal No Impact on Moody's B2 CFR NNN 3500: Stipulation to Stay District Court Proceedings Approved NNN PARKWAY CORPORATE: Can Access Cash Collateral Until Jan. 7 NORTH AMERICAN BREWERIES: Moody's Cuts CFR & Loan Rating to Caa1 OIL STATES: S&P Retains 'BB+' Corp. Credit Rating on Watch Neg OVERSEAS SHIPHOLDING: IRS Files $265.9 Million Tax Claim OVERSEAS SHIPHOLDING: Plan Exclusivity Extended Through Feb. 28 OVERSEAS SHIPHOLDING: ADR Procedures Approved PATRIOT COAL: Halts Duty to File SEC Disclosures POTLATCH CORP: S&P Affirms 'BB+' Rating & Removes From CreditWatch PROTECTIVE LIFE: Fitch Affirms BB+ Rating on Sub. Debt Classes PTC ALLIANCE: Moody's Affirms 'B2' CFR; Alters Outlook to Negative RAIN CII: Moody's Slashes CFR & Sr. Secured Debt Ratings to B2 RG STEEL: Seeks Approval to Sell Assets to Siemens for $400,000 RURAL/METRO CORP: Exclusive Period Extension Approved SECURUS TECHNOLOGIES: Moody's Affirms 'B3' Corp. Family Rating SELCO INDUSTRIES: Case Summary & 27 Largest Unsecured Creditors SPX CORP: Fitch Affirms 'BB+' Issuer Default Rating THOMAS PROPERTIES: Stockholders OK Merger with Parkway Properties TLC HEALTH: Section 341(a) Meeting Scheduled for Jan. 13 TOWER GROUP: A.M. Best Lowers Finc'l. Strength Rating to 'B(Fair)' TOYS 'R' US: S&P Lowers Corp. Credit Rating to 'B-' TUSCANY INT'L: Fitch Affirms & Withdraws 'B-' Currency IDRs TXU CORP: Bank Debt Trades at 30% Off UNIVERSITY GENERAL: Hosts Conference Call to Provide Updates VALASSIS COMMS: Harland Clarke Sale No Impact on Moody's CFR VELATEL GLOBAL: Amends Loan Agreement with AQT VELTI PLC: Sale of Mobile Marketing Business Gets Court Approval VERMILLION INC: Elects James LaFrance as Chairman VISUALANT INC: Awarded Sixth Patent for its ChromaID Technology WELLS ENTERPRISES: Moody's Cuts CFR to 'B2', Stable Outlook WILD HORSE: Case Summary & 8 Largest Unsecured Creditors WPCS INTERNATIONAL: To Acquire BTX Trader * Sanctions on Lawyer Are Limited Under Section 329 * CFPB Slams Ocwen With $2 Billion Homeowner Relief Settlement * US Bank Regulators Seek Stricter Tax Refund Rules * Senators Want to Create Ch. 14 Bankruptcy for Failed Banks * BOND PRICING: For Week From Dec. 16 to 20, 2013 ********* 710 LONG RIDGE: Set Jan. 30 Confirmation ---------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that five Connecticut nursing homes managed by HealthBridge Management LLC scheduled a Jan. 30 confirmation hearing after the bankruptcy judge in Newark, New Jersey, approved a disclosure statement explaining a reorganization plan originally filed in October. According to the report, in return for covering future operating deficits, the owners will retain the equity under the Chapter 11 plan. Mortgages will be revised and paid in full, eventually. Continuing trade suppliers, with more than $3 million in claims, would have 75 percent of their debts paid over 12 months. The nursing homes filed for Chapter 11 relief in February after the National Labor Relations Board, a Connecticut federal district court and the U.S. Court of Appeals refused to let the facilities impose new wages unilaterally. The nursing homes are in bankruptcy a second time. The first reorganization was completed in late 2004. About 710 Long Ridge Road Operating Company II 710 Long Ridge Road Operating Company II, LLC and four affiliates own sub-acute and long-term nursing care facilities for the elderly in Connecticut. The facilities, which are managed by HealthBridge Management LLC, are Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. 710 Long Ridge Road Operating Company II and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 13-13653 to 13- 13657) on Feb. 24, 2013, to modify their collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU. The Debtors owe $18.9 million to M&T Bank and $7.99 million on loans from the U.S. Department of Housing and Urban Development Federal Housing Administration. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serve as counsel to the Debtors. Logan & Company, Inc. is the claims and notice agent. Alvarez & Marsal Healthcare Industry Group, LLC, is the financial advisor. Porzio, Bromberg & Newman, P.C., represents the Official Committee of Unsecured Creditors. The Committee tapped to retain EisnerAmper LLP as accountant. ADAMIS PHARMACEUTICALS: Selling Common Shares at $5.95 Apiece ------------------------------------------------------------- Adamis Pharmaceuticals Corporation announced the pricing of an underwritten public offering of 3,720,000 shares of common stock at an offering price of $5.95 per share. The gross proceeds to Adamis from this offering are expected to be approximately $22,134,000, before deducting underwriting discounts and commissions and other estimated offering expenses. All of the shares in the offering are being sold by Adamis. The offering is expected to close on Dec. 18, 2013, subject to customary closing conditions. In connection with the offering, Adamis has completed a 1-for-17 reverse stock split of its common stock which is effective as of Dec. 13, 2013. The common stock began trading, on a split-adjusted basis, on The NASDAQ Capital Market under the symbol "ADMP" on Dec. 13, 2013. In connection with its listing on The NASDAQ Capital Market, the company's common stock will cease trading on the OTC QB. CRT Capital Group, LLC, is acting as sole book-running manager for the offering, and Newport Coast Securities, Inc., is acting as co- manager of the offering. Adamis has granted the representative of the underwriters a 30-day option to purchase up to a maximum of 558,000 additional shares of common stock from Adamis to cover over-allotments, if any. Adamis intends to use approximately $7 million of the net proceeds from the offering to make the final payment to acquire the assets relating to the Taper dry powder inhaler technology pursuant to an agreement that the company entered into earlier this year. An additional approximately $7.2 million of the net proceeds are also expected to be used to pay in full all amounts owed under unconverted convertible promissory notes that were issued in a private placement financing transaction in June 2013. Remaining net proceeds are expected to be used to fund the filing and launch of the Epinephrine PFS product candidate, fund clinical trials, and for working capital and general corporate purposes, including payment of outstanding obligations and indebtedness. A registration statement on Form S-1 relating to the shares of common stock offered by the company was filed with the Securities and Exchange Commission and is effective. A preliminary prospectus relating to the offering has been filed with the SEC and is available on the SEC's Web site at http://www.sec.gov. Copies of the final prospectus relating to the offering, when available, may be obtained from CRT Capital Group LLC, 262 Harbor Drive, Stamford, CT 06902, or from the above-mentioned SEC Web site. The Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware, pursuant to which, effective 4:00 p.m. Eastern Standard Time on Dec. 12, 2013, the Company effected a one-for- seventeen reverse split of its issued and outstanding common stock, and reduced the number of authorized shares of common stock from 200,000,000 to 100,000000. A complete copy of the Form 8-K disclosure is available at: http://is.gd/oRx9FJ About Adamis San Diego, Calif.-based Adamis Pharmaceuticals Corporation (OTC QB: ADMP) is a biopharmaceutical company engaged in the development and commercialization of specialty pharmaceutical and biotechnology products in the therapeutic areas of respiratory disease, allergy, oncology and immunology. The Company's independent registered public accounting firm has included a "going concern" explanatory paragraph in its report on the Company's financial statements for the years ended March 31, 2013, and 2012, indicating that the Company has incurred recurring losses from operations and has limited working capital to pursue its business alternatives, and that 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 $3.52 million in total assets, $8.45 million in total liabilities and a $4.93 million total stockholders' deficit. Bankruptcy Warning "Our management intends to address any shortfall of working capital by attempting to secure additional funding through equity or debt financings, sales or out-licensing of intellectual property assets, seeking partnerships with other pharmaceutical companies or third parties to co-develop and fund research and development efforts, or similar transactions. However, there can be no assurance that we will be able to obtain any sources of funding. If we are unsuccessful in securing funding from any of these sources, we will defer, reduce or eliminate certain planned expenditures. There is no assurance that any of the above options will be implemented on a timely basis or that we will be able to obtain additional financing on acceptable terms, if at all. If adequate funds are not available on acceptable terms, we could be required to delay development or commercialization of some or all of our products, to license to third parties the rights to commercialize certain products that we would otherwise seek to develop or commercialize internally, or to reduce resources devoted to product development. In addition, one or more licensors of patents and intellectual property rights that we have in-licensed could seek to terminate our license agreements, if our lack of funding made us unable to comply with the provisions of those agreements. If we did not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that could result in our stockholders losing some or all of their investment in us. Any failure to dispel any continuing doubts about our ability to continue as a going concern could adversely affect our ability to enter into collaborative relationships with business partners, make it more difficult to obtain required financing on favorable terms or at all, negatively affect the market price of our common stock and could otherwise have a material adverse effect on our business, financial condition and results of operations," the Company said in its quarterly report for the period ended Sept. 30, 2013. ALL AMERICAN RESTORATIVE: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: All American Restorative Care of Washington, Inc. 601 E Polk Street Washington, IA 52353 Case No.: 13-48425 Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Hon. Carol A. Doyle Debtor's Counsel: Keevan D. Morgan, Esq. MORGAN & BLEY, LTD. 900 W. Jackson Blvd. Chicago, IL 60607 Tel: 312 243-0006 Ext. 29 Fax: 312 243-0009 Email: kmorgan@morganandbleylimited.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Jerry Rhoads, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. ALLIED IRISH: Appoints Chief Financial Officer ---------------------------------------------- Allied Irish Banks p.l.c. announced the appointment of Mark Bourke as the Group's new chief financial officer effective from the second quarter of 2014. He will also take up the post of executive director on the Board of AIB Group. Mr. Bourke joins AIB from IFG Group p.l.c., a financial services firm that provides pension and investment administration and advisory services in the UK and Ireland. He is currently group chief executive at IFG and was appointed to that role in 2006 having joined IFG as Group Finance Director in 2000. He held the positions of CEO and Group Finance Director at the company simultaneously from 2006 until 2010. Mr. Bourke began his career at Price Waterhouse Coopers (PWC) in 1989 where, in 2000, he was made a partner in the firm specialising in international taxation. He is a member of the Institute of Chartered Accountants Ireland (ICAI) and Institute of Taxation in Ireland (AITI) and he was educated at University College Dublin and Dublin City University. AIB CEO David Duffy said, "I am extremely pleased to welcome Mark to AIB. He brings with him a wealth of experience in international financial services and I am sure that he will make a valuable contribution to the future strategic direction of the bank." 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. ALLIED SYSTEMS: Dexter Hofing Okayed as Pension Plan Consultant --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a supplemental order authorizing Troutman Sanders LLP to retain Dexter Hofing LLC as consultant for Allied Systems Holdings, Inc., et al. As reported in the Troubled Company Reporter on Dec. 10, 2013, the Debtors supplemented their application to employ Troutman Sanders to disclose and seek approval of the employment of Dexter Hofing LLC as consultant. The Debtors on June 28, 2012, filed the original application to employ Troutman as co-counsel. The Court approved the application on July 23, 2012. By the supplemental application, Dexter Hofing will act as consultant in connection with withdrawal liability and other multiemployer pension plan issues related to the Debtors. The Debtors are participants in a number of multiemployer pension plans (MPPs) that have asserted or are expected to assert substantial withdrawal liability claims against the Debtors' estates. The Debtors believe that the consulting services proposed to be provided by Dexter Hofing are necessary to enable the Debtors to execute faithfully their duties, and to enable Troutman to faithfully execute its duties as co-counsel to the Debtors. The Debtors, Troutman and Dexter Hofing have negotiated an engagement letter. Subject to the Court's approval, Dexter Hofing will be paid their customary hourly rates that are in effect: a. James Dexter - $650 per hour; b. Mitchell Hofing - $550 per hour; c. Seth Porciello - $300 per hour. The Debtors will also reimburse Dexter Hofing for reasonable out- of-pocket expenses. To the best of the Debtors' knowledge, Dexter Hofing is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. first filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. Yucaipa Cos. has 55 percent of the senior debt and took the position it had the right to control actions the indenture trustee would take on behalf of debt holders. The state court ruled in March 2013 that the loan documents didn't allow Yucaipa to vote. In March 2013, the bankruptcy court also gave the official creditors' committee authority to sue Yucaipa. The suit includes claims that the debt held by Yucaipa should be treated as equity or subordinated so everyone else is paid before the Los Angeles- based owner. The judge allowed Black Diamond to participate in the lawsuit against Yucaipa and Allied directors. ALLY FINANCIAL: Moody's Raises Corp. Family Rating to 'Ba3' ----------------------------------------------------------- Moody's Investors Service upgraded the corporate family rating (CFR) of Ally Financial Inc. to Ba3 from B1 and confirmed its other long-term and short-term ratings, including its senior unsecured rating of B1. The outlook for the ratings is stable. Ratings Rationale: The upgrade of Ally's corporate family rating follows the U.S. Bankruptcy Court's approval of ResCap LLC's (unrated) Chapter 11 plan, which releases Ally from mortgage-related creditor claims originating from its ownership of ResCap. The upgrade also reflects the improved quality of Ally's capital after the firm privately placed $1.3 billion in new common shares and repurchased $5.6 billion of mandatorily convertible preferred stock (MCP) from the US Treasury. Ally's prospects for strengthening financial performance by reducing funding and operating costs also support the upgrade. The confirmation of Ally's senior unsecured rating at B1, one notch lower than Ally's CFR, reflects the structural subordination of Ally holding company creditors to those of growing subsidiary Ally Bank. The Bankruptcy Court's decision makes official the deal that Ally struck in May to obtain ResCap creditor liability releases in consideration for a $2.1 billion payment. Ally reached separate agreements with the FHFA and FDIC settling all pending litigation and claims relating to ResCap's sale of poorly performing residential mortgage loans to Fannie Mae, Freddie Mac and FDIC- insured banks. Moody's expects that resolution of these contingent obligations will broaden Ally's appeal to fixed-income and equity investors. This could give new impetus to the US Treasury's efforts to sell its shares in Ally, thereby providing the means to repay the remaining amounts Ally owes to the US government for support, totaling $17.2 billion, it received during the financial crisis. Ally has paid the US Treasury $12.2 billion to date. Repayment of government support that leads to improved access to long-term capital would be positive for the firm's credit profile. Ally has taken a number of steps to strengthen capital and streamline operations. In November, Ally privately placed $1.3 billion of common shares and used the proceeds to repurchase $5.6 billion of MCP held by the US Treasury, thereby improving the quality of the firm's capital. The repurchase also eliminated the MCP's 9% dividend, increasing Ally's ability to retain earnings and reducing its total cost of capital. Over the past year, Ally has sold non-core international auto finance operations to General Motors Company (Ba1 stable), resulting in a return of capital to support the MCP repurchase and support its US auto finance operations. Taken together, the transactions raise Ally's pro forma Tier 1 common ratio to 9.5% from 7.9% at September 30. In late November, the Federal Reserve approved Ally's Comprehensive Capital Analysis and Review (CCAR) plan, reflecting the firm's stronger capital position. Operating performance in Ally's core auto finance business has also improved over the past several quarters. Liability management actions and transition to deposit funding have lowered Ally's cost of funds and expanded its net interest margin. Although Ally is well positioned in its sector as the top lender to GM and Chrysler dealers and car buyers, the company faces growing competition from increasingly aggressive bank and non-bank lenders eager to increase their presence in the auto finance sector. To preserve average asset yields, Ally has grown used car lending, leasing and lower credit-tier volumes, which represents an expansion of its risk appetite toward pre-financial crisis levels. An unexpected deterioration in the firm's asset quality performance would constrain its ratings. Ally's senior unsecured rating of B1 is one notch lower than its CFR, reflecting the structural subordination of parent creditors to the creditors and depositors of subsidiary Ally Bank (unrated). Ally has continued to grow and strengthen Ally Bank, which at September 30 comprised over 60% of Ally's consolidated total assets and 44% of its funded liabilities. Ally Bank has achieved good brand recognition, established a relatively stable online deposit base, and expanded its suite of product offerings. Growth of the bank has diversified and lowered the cost of Ally's funding, but the transition of earning assets into the bank results in parent senior creditors having weaker earning asset coverage than the bank's depositors. As partial offset, Ally has reduced parent company leverage while maintaining a strong liquidity profile. Ally's rating could be upgraded if the company sustainably strengthens operating profitability while maintaining strong franchise positioning in dealer and retail auto finance and makes further strides repaying government support. Ratings could be downgraded if Ally reports a material deterioration in asset quality performance and profitability, or a materially weakened capital or liquidity profile. Ally Financial Inc. is a provider of automotive financial services with $151 billion in total assets at June 30, 2013. Ally Bank, with total assets of $92 billion, offers a variety of savings and checking account products. Upgraded: Ally Financial Inc.: Corporate family rating, to Ba3 from B1 Confirmed: Ally Financial Inc.: Issuer rating, B1 Senior unsecured, B1 Senior unsecured Medium-Term Note program, (P)B1 Senior unsecured shelf, (P)B1 Subordinate debt, B2 Preferred stock, a range of Caa1(hyb) to B3(hyb) GMAC Capital Trust I: Preferred Stock, B3(hyb) GMAC International Finance B.V.: Senior Unsecured, B1 Senior unsecured Medium-Term Note program, a range of (P)NP to (P)B1 ANIMAL KINGDOM BREWSTER: Voluntary Chapter 11 Case Summary ---------------------------------------------------------- Debtor: Animal Kingdom Brewster, Inc. dba Animal Kingdom USA 100-A Independent Way Brewster, NY 10509 Case No.: 13-37754 Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court Southern District of New York (Poughkeepsie) Judge: Hon. Cecelia G. Morris Debtor's Counsel: Dwight Yellen, Esq. BALLON STOLL BADER & NADLER, P.C. 729 Seventh Avenue, 17th Floor New York, NY 10019 Tel: (212) 575-7900 Fax: (212) 764-5060 Email: dyellen@ballonstoll.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Patrick A. Yates, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. ARKANSAS CITY PUBLIC: Moody's Cuts Revenue Bonds Rating to 'Ba1' ---------------------------------------------------------------- Moody's Investors Service has downgraded to Ba1 from Baa3 the rating on Arkansas City Public Building Commission's, KS revenue bonds. The Ba1 rating applies to $22.8 million in outstanding debt. The bonds are secured by unconditional lease payments from the City of Arkansas City that are not subject to appropriation. The city plans to make payments from the net revenues of the South Central Kansas Medical Center per a Pledge of Revenues Agreement. Summary Ratings Rationale: The downgrade to Ba1 reflects the city's narrow General Fund reserve level that receives support from the city's utility system, enterprise risk from a city supported hospital with strained operating revenues and a narrow cash reserve position, and an elevated direct debt burden with a slow principal amortization. The rating also takes into account the dedicated sales tax for hospital operations which will sunset in 2019. The negative outlook reflects Moody's expectation that hospital management will be challenged to improve reserves to a healthy level in the medium term and could become a burden on the city's General Fund. Strengths: -- Sufficient reserve levels in the city's utility funds -- Dedicated sales tax for hospital operations authorized through 2019 -- Stable local economy with increasing assessed values Challenges: -- Narrow General Fund reserve level -- Expiration of the dedicated sales tax prior to the bonds maturity -- Strained hospital operations due to increased debt burden -- Elevated debt burden due to hospital related debt Outlook: The negative outlook reflects the city's very narrow financial operations with high exposure to a weak municipal hospital that is facing increased financial pressures over the next few years. What Could Make The Rating Go Up: -- Increased financial reserves in the General Fund with stable to declining reliance on Utility Fund transfers -- Significant improvement in the hospital's net revenues -- Substantial growth in the city's tax base What Could Make the Rating Go Down: -- Further deterioration of the hospital's financial position -- Decreases in the city reserve levels -- Declines in the city's tax base ATLANTIC CLUB: Caesars Agrees to Acquire Non-Gaming Assets ---------------------------------------------------------- Caesars Entertainment Corporation on Dec. 21 confirmed that its subsidiary, Caesars Entertainment Operating Company, Inc., has agreed to acquire the non-gaming assets of the Atlantic Club, including the real property, in a bankruptcy auction, pending approval of the bankruptcy court. The Atlantic Club's gaming assets are being acquired by another buyer. The current owner of the Atlantic Club indicated it plans to close the facility January 13, 2014. Caesars expects to close on the purchase of the property thereafter. Caesars does not intend to resume gaming or hotel operations at the facility, and is evaluating options for the use of the assets, some of which may be used in the company's other Atlantic City properties. 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. BARD COLLEGE: Moody's Lowers Rating to 'Ba1'; Outlook Negative -------------------------------------------------------------- Moody's Investors Service has downgraded Bard College's rating to Ba1 from Baa1 and revised the outlook to negative. This concludes the review of the college's rating that began on September 11, 2013. The downgrade is driven by the college's exceedingly thin liquidity with full draw on operating lines of credit, material decline in cash and investments outside of sizeable investments held in trust, weakening cash flow, and elevated risks associated with its operating model given the expansion of the expense base. The negative outlook considers the possibility that the college's liquidity will not materially improve, that it could breach loan covenants, and that the reliance on lines of credit to finance operations and capital needs in advance of the receipt of pledge payments will grow. Summary Rating Rationale: The downgrade to Ba1 reflects razor thin liquidity and weakening cash flow from operations combined with an entrepreneurial operating model that continues to grow the college's expense base and exposure to philanthropy. Bard's continued reliance on operating lines of credit to support operations underscores the college's growing dependence on cash gifts and pledges to fund its expanding operations, a willingness to fund operations and projects prior to payment on pledges, and the uncertainty of the timing of the receipt of pledge payments. The Ba1 rating also factors the college's high leverage and ongoing capital needs and incorporates limited documentation and transparency of policies, practices, and long-term planning. Superior but concentrated donor support that is a crucial part of ongoing operations, a strong market position with an increasingly global brand, and recent actions that could bolster sources of liquidity support the rating at the Ba1 level. The negative outlook reflects the heightened financial vulnerability of the college while liquidity remains so thin. It also reflects its vulnerability to disruption in donor support each year, with gifts providing over 40% of annual operating revenues. The college's success in achieving current plans to grow quasi-endowment in tandem with reduced draws on operating lines would be considered credit positive. Challenges: - Bard operates with extremely thin liquidity and heavy reliance on operating lines of credit to bridge the receipt of pledges, making it vulnerable to lack of market access. At June 30, 2013, monthly liquidity of $7.1 million reflected a very low 3.9% of total cash and investments, equal to 14 days of operations. As of the same date draws on lines of credit totaled $15.6 million (increased to $17.6 million as of October 31, 2013), and without those draws, liquidity would have been negative. - The college is highly leveraged with $185 million of debt, equivalent to annual operating revenues. This debt includes various lines of credit subject to annual renewal. - Operating performance has weakened, and the college's limited annual operating cash flow in 2013 was insufficient to fully cover debt service requirements. - The college's significant reliance on gifts to support annual operations (42% of operating revenues in FY 2013) makes it especially vulnerable to donor preferences and market conditions. - Investments, excluding the Bard Endowment Trust (BET) held at the Iris Foundation, are highly concentrated with nearly 70% with three managers (each over 20%). - Weak documentation and transparency including investment and liquidity policies, long-term plans, and ability to access alternate sources of liquidity could make it difficult to carry out operational and governance decisions. - The lack of succession planning for the long-standing President and CFO could pose operational challenges upon retirement or departure of either given the President's ascribed association with the college and ability to garner board and donor support, and the decentralized management structure of Bard's various schools and programs in the U.S. and overseas. Strengths: - Bard maintains a strong student market position among nationally selective liberal arts college, with total enrollment projected to increase. In fall 2013, the college accepted 35% of applicants, of which 24% enrolled, and net tuition per student ($25,284 in FY 2013) continues to grow. - The college has diverse locations and programs for high school, undergraduate and graduate students. The recent merger with the Longy School of Music in 2012 enhances Bard's programmatic niche in fine arts and the acquisition of a liberal arts college in Berlin, Bard College Berlin, in 2011 expands its brand internationally. - Fundraising has been unusually strong at the college relative to its size, with gift revenue averaging $71.9 million from FY 2011-2013. The college has, to date, successfully relied on significant and concentrated donor support for annual operations. - Bard has an agreement with the Iris Foundation to borrow against the BET held by the foundation on behalf of the college. This is an additional, but untested, potential source of liquidity. Outlook: - The negative outlook reflects the possibility that liquidity will remain thin, operations will continue to rely significantly on donor support each year, without which financial resources remain stagnant or decline. The college's success in achieving current plans to grow quasi-endowment in tandem with reduced draws on operating lines would be considered credit positive and mitigate current challenges to liquidity. What Could Make the Rating Go Down: A downgrade could result if there is: no material and sustained improvement in the college's liquidity, including progress towards its plan to grow quasi-endowment; continued need to draw significantly on operating lines of credit during the year to support operations in advance of the receipt of donor pledges; a sustained reduction in gifts; further narrowing of headroom against loan covenants or covenant breaches; further weakening of annual operating performance; disruption in market access; or increased leverage. What Could Make the Rating Go Up: A change of the outlook to stable could result from a material and sustained increase in liquidity and significant reduction of the college's reliance on operating lines of credit in advance of the receipt of pledges. A rating upgrade is unlikely over the near- term, but could result from a material reduction in the reliance on donor gifts to support current year operations, stronger liquidity with a greater proportion of endowment unrestricted, improved documentation and transparency around policies and practices to guide. BEACH 21ST STREET: Property to Be Sold at Auction Jan. 24 --------------------------------------------------------- Pursuant to an Amended Judgment of Foreclosure and Sale entered on November 10, 2010, Allan S. Botter, Esq. PHILLIPS LYTLE LLP 1400 First Federal Plaza Rochester, NY 14614 as referee, will sell at public auction at the Queens County Supreme Court house, 88-11 Sutphin Blvd., in Courtroom #25, Jamaica, NY on Jan. 24, 2014, at 10:00 a.m. the property located at Block 15705 and Lot 6 on the Queens County Tax Assessment Map, known as 21-12 Cornaga Avenue, Far Rockaway, NY. The property is owned by Beach 21st Street Realty LLC. NYCTL 2008-A Trust and The Bank of New York Mellon, as Collateral Agent and Custodian, assert a lien of $16,688.46 plus interest & costs. The premises will be sold subject to provisions of filed judgment and terms of sale. BLITZ USA: Gas-Can Maker Sets Jan. 27 Confirmation Hearing ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Blitz U.S.A. Inc., a maker of gasoline cans, got approval on Dec. 19 for disclosure materials explaining the Chapter 11 plan to deal with personal injury-suits over allegedly defective products, as well as other claims. According to the report, Blitz, based in Miami, Oklahoma, filed for Chapter 11 protection in November 2011, naming Wal-Mart Stores Inc. as its largest customer and a co-defendant in many of the personal-injury suits. While the bankruptcy filing didn't put a stop to the suits against Wal-Mart, the Chapter 11 plan will give the world's largest retailer relief from the claims. The plan, coming up for approval at a Jan. 27 confirmation hearing in U.S. Bankruptcy Court in Delaware, sets up a trust with responsibility for the injury suits. Wal-Mart and insurance providers for Blitz made a settlement where they will contribute $161.3 million to the trust, in return for relief from liability. The trust is funded with another $6.5 million from an affiliate. According to the disclosure statement, unsecured creditors collectively having about $30 million in claims will recover nothing to 85 percent, depending on the bankrupt company responsible for the claim. The disclosure statement doesn't tell injury claimants exactly how much they will recover from the trust, although it does explain the process. At the outset of bankruptcy, Blitz owed $41 million on a secured term loan and revolving credit with Bank of Oklahoma. There was also $22 million owing on unsecured subordinated notes. The company estimated it owed lawyers $3.5 million for defending product-liability lawsuits. About Blitz U.S.A. Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of plastic gasoline cans. The company, controlled by Kinderhook Capital Fund II LP, filed for bankruptcy protection to stanch a hemorrhage resulting from 36 product-liability lawsuits. Parent Blitz Acquisition Holdings, Inc., and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru 11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over the case. Blitz USA disclosed $36,194,434 in assets and $41,428,577 in liabilities in its schedules. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. Young Conaway Stargatt & Taylor LLP represents Debtors LAM 2011 Holdings, LLC and Blitz Holdings, Inc. The Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and Kurtzman Carson Consultants LLC serves as notice and claims agent. SSG Capital Advisors LLC serves as investment banker. Lowenstein Sandler PC from Roseland, New Jersey, as well as Womble Carlyle Sandridge & Rice, LLP, of Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. The Chapter 11 case is financed with a $5 million secured loan from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in Tulsa. In April 2012, Hopkins Manufacturing Corp. acquired the assets of Blitz USA's unit, F3 Brands LLC, a major manufacturer of oil drains, drain pans, lifting aids and automotive ramps. Blitz USA said in court documents the sale netted the Debtors $14.6 million, which was applied against secured debt. Blitz announced in June it would abandon its efforts to reorganize and instead to shut down operations by the end of July. In September, the Troubled Company Reporter, citing Sheila Stogsdill at Tulsa World, reported that the Bankruptcy Court approved a $9.5 million offer from Toronto, Canada-based Scepter Corporation to purchase Blitz USA, according to Philip Monckton, Scepter's vice president of sales and marketing. Scepter bought land, equipment and other assets. Scepter supplies about 20% of the USA market with gas cans. The report said the sale was to become final on Sept. 28, 2012. CAMBRIDGE HEART: Asset Auction Scheduled for Dec. 24 ----------------------------------------------------- Notice of Public UCC sale of certain assets of Cambridge Heart, Inc. (Debtor) being sold by the Secured Party Collateral Agents LLC, the Debtor's portion of the collateral consisting of Accounts Receivable, Inventory, Furniture, Fixtures and Equipment and Intellectual Property regarding the Debtor's interest in the Micro-volt T-Wave Alternans technology as embodied in the Heartwave II system and certain derivatives thereof. Includes any and all trademarks and copyrights related to the Heartwave II and CH2000 product lines. A public auction will be held on Dec. 24, 2013 at 11:00 a.m. at Mannion Auctions, LLC, 305 Broadway, Suite 200, NY, NY. For more information relating to the public sale see legal notice ad as published in NY Post on December 6 & 13, 2013 or contact Eliezer Drew, Counsel to the Secured Party at (212) 697-9500, email: eli@gruskomittman.com Bill Mannion, Licensed Auctioneer, NYC DCA # 796322. About Cambridge Heart Tewksbury, Mass.-based Cambridge Heart, Inc., is engaged in the research, development and commercialization of products for the non-invasive diagnosis of cardiac disease. In its report on the financial statements for the year ended Dec. 31, 2011, McGladrey & Pullen, LLP, in Boston, Massachusetts, expressed substantial doubt about Cambridge Heart's ability to continue as a going concern. The independent auditors noted that of the Company's recurring losses, inability to generate positive cash flows from operations, and liquidity uncertainties from operations. The Company reported a net loss of $5.40 million in 2011, compared with a net loss of $5.17 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.25 million in total assets, $5.51 million in total liabilities, $12.74 million in convertible preferred stock, and a $17 million total stockholders' deficit. CAREGIVER MANAGEMENT: Case Summary & 20 Top Unsecured Creditors --------------------------------------------------------------- Debtor: Caregiver Management Systems, Inc. dba All American Care of Muscatine 2 Westwind Court Lake Zurich, IL 60047 Case No.: 13-48419 Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Hon. Benjamin A. Goldgar Debtor's Counsel: Konstantine T. Sparagis, Esq. LAW OFFICES OF KONSTANTINE SPARAGIS PC 900 W. Jackson Blvd., Ste. 4E Chicago, IL 60607 Tel: 312 753-6956 Fax: 866-333-1840 Email: gsparagi@yahoo.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Jerry Rhoads, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-48419.pdf CASEY ANTHONY: Receives Discharge of Most of Her Debts ------------------------------------------------------ The Associated Press reported that a bankruptcy judge has ruled that Casey Anthony won't have to pay most of her debts, discharging what she owes except for those related to student loans or criminal fines, if she has them. According to the report, Judge K. Rodney May signed the order on Dec. 18 for Anthony, who filed for bankruptcy in Florida earlier this year, claiming about $1,000 in assets and $792,000 in liabilities. Court papers list Anthony as unemployed, with no recent income. Most of her liabilities are legal bills. Anthony was acquitted of murder in 2011 in the death her 2-year- old daughter, Caylee, and has been in hiding since then, the report related. In November, the federal bankruptcy judge approved a settlement between Anthony and a Texas search group that helped look for Caylee whose remains were found in December 2008, about six months after she had gone missing in Orlando, the report said. Casey Anthony waited a month to report the toddler missing and was arrested in October 2008, the report further related. The nationally televised trial lasted for six weeks and ended in her acquittal on the murder charge, but she was convicted on charges of lying to law enforcement. CASH STORE: Responds to Ontario Payday Loan Regulations ------------------------------------------------------- The Cash Store Financial Services Inc. on Dec. 20 responded to Ontario Regulation 351/13 that was filed by the Government of Ontario on December 17, 2013. Cash Store Financial is reviewing the regulations in detail, but understands that Regulation 351/13, made under the Payday Loans Act, 2008, prescribes certain categories of credit such that the Act will apply to certain line of credit products offered through the Company's The Cash Store Inc. and Instaloans Inc. retail banners. The new regulations are scheduled to come into force on February 15, 2014. Cash Store Financial intends to comply with any regulatory requirements and intends to apply for a license under the new regulations. In February 2013, Cash Store Financial introduced its Line of Credit products in Ontario. Consumers were given a chance to improve their financial circumstance by providing a pathway to traditional credit forms and gradual access to lower cost credit products. This was done through a risk-tiered and graduated suite of Line of Credit products that over time, provided lower-cost, more flexible loans that ultimately result in access to credit- scored products. Thousands of Canadians have already advanced up the ladder, meaning they are paying substantially lower fees than allowed under the Payday Loans Act. The Company is assessing the impact the new regulations will have on certain of its products. About Cash Store Financial Headquartered in Edmonton, Alberta, The Cash Store Financial is the only lender and broker of short-term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store Financial operates 512 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 25 branches in the United Kingdom. Cash Store Financial is a Canadian corporation that is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States. Cash Store Financial employs approximately 1,900 associates. * * * As reported in the Feb. 8, 2013 edition of the TCR, Standard & Poor's Ratings Services lowered its issuer credit rating on Cash Store Financial (CSF) to 'CCC+' from 'B-'. The outlook is negative. "The downgrades follow a proposal by the payday loan registrar in Ontario to revoke CSF's payday lending licenses and CSF's announcement that it has discontinued its payday loan product in the region," said Standard & Poor's credit analyst Igor Koyfman. The company's businesses in Ontario, which account for approximately one-third of its store count, will begin offering a new line of credit product to its customers. S&P believes this is to offset the loss of its payday lending product; however, this is a relatively new product, and S&P believes that it will be challenging for the company to replace its lost earnings from the payday loan product. S&P also believes that the registrar's proposal could lead to similar actions in other territories. As reported by the TCR on May 22, 2013, Moody's Investors Service downgraded the Corporate Family Rating and senior unsecured debt rating of Cash Store Financial Services to Caa1 from B3 and assigned a negative outlook. According to Moody's, CSFS remains unprofitable on both the pretax and net income lines and prospects for return to profitability are unclear. CLUB AT SHENANDOAH: Court Okays Auction of Assets ------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized The Club at Shenandoah Springs Village, Inc., to sell its assets. As reported in the Troubled Company Reporter on Dec. 12, 2013, the Debtor proposed an auction and sale hearing on Jan. 14, 2014, at Courtroom 303 of the U.S. Bankruptcy Court, Central District of California, Riverside Division, 3420 12th Street, Riverside, California. Bid deadline is set for 3:00 p.m. three business days prior to the auction. Joshua D. Wayser, Esq., at Katten Muchin Rosenman LLP, on behalf of General Electric Capital Corp., had asked the Court to deny the Debtor's request for an auction and require the Debtor to finalize the transaction with Arroyo Vista Partners. GECC noted that the Debtor asked the Court on Nov. 21, 2013, to approve (i) bidding procedures in connection with proposed sale of substantially all assets of estate, and (i) break-up fee. According to GECC, the case has been pending for one year and for the past seven months the Debtor has promised creditors would be paid in full. Yet, rather than consummate a sale that "will pay all creditors in full," the Debtor has requested the Court to approve bidding procedures and an auction, further delaying and possibly jeopardizing creditor recoveries. GECC noted that the Debtor in November entered into an asset purchase agreement with Arroyo Vista Partners as stalking horse buyer, by which Arroyo offered to purchase the assets for $18,750,000. The agreement also provides for the breakup fee and approval of Arroyo's stalking horse offer by Dec. 24. About The Club At Shenandoah Springs Village The Club At Shenandoah Springs Village, Inc., owns The Club At Shenandoah Springs Village, a golf and leisure resort in Thousand Palms, a desert region of central California. It filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-36723) on Dec. 3, 2012. The Debtor estimated both assets and liabilities of between $10 million and $50 million. Judge Mark D. Houle presides over the case. Daniel A. Lev, Esq., and Steven Worth, Esq., at SulmeyerKupetz, in Los Angeles, Calif., represent the Debtor as counsel. COLLEGE WAY: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------- Debtor: College Way Commercial Plaza, LLC 10015 19th Ave E. Tacoma, WA 98445 Case No.: 13-47724 Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Hon. Brian D Lynch Debtor's Counsel: Masafumi Iwama, Esq. IWAMA LAW FIRM 333 5th Ave S Kent, WA 98032 Tel: 253-520-7671 Email: matt@iwamalaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The petition was signed by Sherwood B Korssjoen, member and manager. List of Debtor's three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Condie & Adams, PLLC Legal Fees $4,965 Montgomery Purdue Blankenship Legal Fees $8,000 Paul Franks Architecture Architectural $2,445 services COLOR STAR: Section 341(a) Meeting of Creditors Set for Jan. 17 --------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Color Star Growers of Colorado, Inc., and its debtor affiliates will be held on Jan. 17, 2014, at 11:30 a.m. at Southfork Hotel 341 meeting. Creditors have until April 17, 2014, to submit their proofs of claim. For governmental agencies, the bar date will be on June 13, 2014. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Color Star Growers of Colorado, Inc., and two affiliates sought Chapter 11 protection (Bankr. E.D. Tex. Case Nos. 13-42959 to 13-42961) on Dec. 15, 2013, in Sherman, Texas. The petitions were signed by Brad Walker, chief restructuring officer. The Debtors estimated assets of at least $10 million and liabilities of at least $50 million. Evan R. Baker, Esq., at Gardere Wynne Sewell LLP, serves as the Debtors' counsel. CONSTAR INTERNATIONAL: Owes $123MM, Mostly From Prior Bankruptcy ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Constar International Holdings LLC, a maker of blow- molded plastic drink containers, will largely deal with secured debt in its third bankruptcy filing that was created on leaving Chapter 11 a second time in May 2011. According to the report, the Philadelphia-based company blamed the third bankruptcy, filed on Dec. 19, in part on the loss of business from PepsiCo Inc., one of its main customers. Bankruptcy was hastened because suppliers weren't providing resin, and the business was near closing down. Over the first 10 months this year, the company had a net loss of $16.7 million, on top of a $39.2 million net loss in 2012. Constar has seven plants in the U.S. and two in Europe. This year, 58 percent of its revenue came from the U.S. Wells Fargo Capital Finance NA is agent for revolving-credit lenders owed $20 million. The $15 million second-lien facility and the $88 million third-lien loan were created at the conclusion of the prior bankruptcy. Constar is working on an agreement to finance the business pending a sale for $68.5 million to Amcor Rigid Plastics USA Inc., or to another buyer making a better offer at auction. Constar asked the bankruptcy judge to schedule the auction in less than one month. 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. The new petition listed assets worth less than $100 million against $123 million on three layers of secured debt. CONSTAR INTERNATIONAL: Case Summary & 30 Top Unsecured Creditors ---------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 cases: Debtor Case No. ------ -------- Constar International Holdings LLC 13-13281 1100 Northbrook Drive Trevose, PA 19053 Constar Group Holdings, Inc. 13-13282 1100 Northbrook Drive Trevose, PA 19053 Constar Group, Inc. 13-13284 Constar, Inc. 13-13288 Constar International U.K. Limited 13-13290 Constar International LLC 13-13285 Constar Foreign Holdings, Inc. 13-13289 BFF Inc. 13-13286 Constar Intermediate Holdings, Inc. 13-13283 DT, Inc. 13-13287 Type of Business: Maker of plastic bottles Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Christopher S. Sontchi Debtors' Counsel: Sean T. Greecher, Esq. YOUNG, CONAWAY, STARGATT & TAYLOR Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 Email: bankfilings@ycst.com - and - Maris J. Kandestin, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 Email: bankfilings@ycst.com Debtors' LINCOLN PARTNERS ADVISORS LLC Financial Advisor: Debtors' Claims PRIME CLERK LLC & Noticing Agent: Estimated Assets: $50 million to $100 million Estimated Debts: $100 million to $500 million The petitions were signed by Louis Imbrogno, chief executive officer and president. Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DAK Americas Trade Payable $7,968,275 5925 Carnegie Boulevard Suite 500 Charlotte, NC 28209 Phone: 800-227-6335 DAK Resinas Americas Mexico Trade Payable $7,681,546 SA De CV Carretera Predio Buena Vista de Torres KM29 S/N, Cosoleaquaque C.P., Veracruz 96340, Mexico Britvic Soft Drinks Ltd Trade Payable $5,436,909 Roding Road London Industrial Park, Beckton Londong, E6 4LF, United Kingdon Lotte Chemical UK Ltd Trade Payable $2,332,612 Davies Offices Wilton Site Redcar, North Yorkshire, TS10 4XZ, United Kingdom Starpet Inc. Trade Payable $654,594 Po Box 32101 Charlotte, NC 28232-2101 E.ON Utilities $591,228 Po Box 8610 Nottingham, Nottinghamshire, NG19AH, United Kingdon QLog Ltd. 5th Floor Towers Pointwheelhouse Trade Payable $580,519 Road, Rugeley, Staffordshire, WS15 1UN, United Kingdom AON Consulting (Pension) Pension $551,986 Po Box 905188 Contribution Charlotte, NC 28290-5188 Ineos Sales (UK) Ltd Trade Payable $404,307 Department 7202 PO Box 21, Boness Rd Grangemouth, Stirlingshire, FK3 9XH United Kingdom Baltimore Gas Utilities $358,460 PO Box 64844 Baltimore, MD 21264-4844 Colormatrix Corp. Trade Payable $354,720 680 North Rocky River Drive Berea, OH 44017-1628 Green GRP Logistics Ltd. Trade Payable $319,405 c/o Bibby Factors Yorkshire Ltd. Woodland House, Woodland Park Bradford Road, Chain Bar Cleckheaton, West Yorkshire, BD19 6BW, United Kingdom Platinum Equity Trade Payable $287,027 DBA Data2Logistics 4310 Metro Pkwy Fort Myers, FL 33916 Sidel Inc. Trade Payable $220,441 Independence Administrators Employee Benefits $213,781 Fulton County Tax Commissioner Taxes Payable $199,150 MPI Labels Trade Payable $196,407 Morssinkhof Plastics Zeewolde BV Trade Payable $194,243 Encore Staffing Trade Payable $187,512 Willis Limited Insurance Payable $186,527 Georgia Power Utilities $184,091 BRE/Industrial Portfolio Ho Lease Payable $156,489 Oneneck IT Trade Payable $155,783 Printpack Inc. Trade Payable $148,249 Colormatrix Europe Ltd. Trade Payable $146,685 Southestern Container Trade Payable $135,737 R & D Tool Trade Payable $133,046 Mitsubishi Gas Trade Payable $129,514 Eclipse Professional Services Trade Payable $128,851 Integrys Energy Solutions, Inc. Utilities $118,204 DETROIT, MI: Manager and Mayor-Elect Agree to Share Power --------------------------------------------------------- Joseph Lichterman, writing for Reuters, reported that Detroit Mayor-elect Mike Duggan will run most of the city's day-to-day business and emergency manager Kevyn Orr will focus on the city's emergence from bankruptcy as part of a power-sharing arrangement the two men announced on Dec. 19. According to the report, the deal marks a departure from the circumstance under outgoing Mayor Dave Bing, whose powers were greatly constrained after Governor Rick Snyder, a Republican, appointed Orr as Detroit's emergency manager in March. Michigan's emergency manager law gives Orr wide latitude to make decisions about city operations, and Bing felt that Orr gave him little room to act, the report said. Duggan, a former hospital executive, was elected in November in part because of his background as a turnaround specialist, the report related. The arrangement between Orr and Duggan, which was signed after six weeks of negotiations, does not outline specific responsibilities, the report further related. Instead, it relies on what the two men describe as seven guiding principles. 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. DIAMOND RESORTS: Moody's Affirms B3 CFR & Secured Notes Rating -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Diamond Resorts Corporation (DRC) including its B3 Corporate Family Rating (CFR) and B3 senior secured note rating. Moody's also changed the company's Probability of Default Rating (PDR) to B3-PD from B2-PD. In addition, Moody's moved the rating outlook to positive from negative. "The change in outlook to positive from negative was driven in large part by the significant improvement in vacation interest sales and a meaningful reduction in outstanding debt that has resulted in stronger debt protection metrics" stated Bill Fahy, Moody's Senior Credit Officer. During the year-to-date period ending September 30, 2013, Diamond Resorts was able to drive an increase in its number of tours and sales price per transaction to drive higher earnings. This is due in part to a change in selling strategy that focuses on selling larger point packages. In addition, Diamond Resorts International, Inc. (DRII) used proceeds from its initial public offering to reduce debt at DRC. Improved operating performance and lower debt levels resulted in debt to EBITDA of about 5.4 times and EBIT to interest of around 1.2 times for the twelve month period ending September 30, 2013. The B3-PD Probability of Default Rating, the same level as the CFR, reflects the utilization of a family recovery rate of 50% which is customary for a bond and bank capital structure. DRC entered into a $25 million revolving credit facility in the third quarter of 2013. A family recovery rate of 35% was used previously in the all bond capital structure. Ratings Rationale: The B3 CFR considers DRC's relatively high leverage and modest coverage , as well as its modest scale in terms of revenues, narrow business focus, and risks common to the timeshare business. These risks include the need to extend credit to purchasers of vacation ownership intervals and a dependence on the receivable securitization market so that capital can be recycled and made available to support future sales activity. Positive rating consideration is given to the favorable working capital characteristics and relatively stable cash flow characteristics of DRC's hospitality and management services business which represented about 25% of the DRC's consolidated revenue for the nine months ended September 30, 2013. The company's hospitality and management services business is based on contracts that are structured on a cost-plus basis and typically paid in advance. The positive outlook reflects Diamonds significant improvement in operating performance and meaningful debt reduction that has resulted stronger debt protection metrics and Moody's view that earnings should gradually improve over time despite soft consumer spending. Factors that could result in an upgrade include sustaining the improvement in operating performance, particularly VOI sales and management services, and lower debt levels that have strengthened credit metrics. Specifically, a higher rating would require debt to EBITDA at or below 6.0 times and EBIT to interest towards 1.5 times on a sustained basis. A higher rating would also require good liquidity. Ratings could be lowered if a steady decline in the number or value of closed transactions or tours resulted in a sustained deterioration in earnings and cash flows. Specifically, the ratings could downgraded if leverage on a debt to EBITDA basis migrates towards 6.5 times or EBIT coverage of gross interest does not exceed 1.1 times. The ratings could also be downgraded if liquidity were to deteriorate for any reason. Diamond Resorts Corporation (DRC) is a vacation ownership company that specializes in the timeshare business as well as the hospitality and management services business. The company has revenues of about $540 million. DIGITAL DOMAIN: Exclusivity to Expire on March 5 ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Digital Domain Media Group Inc. must file a liquidating Chapter 11 plan by March 5, or any creditor can submit a proposal. According to the report, the company said last month that "certain critical parties" weren't in agreement on a liquidating Chapter 11 plan. This week, the bankruptcy court granted Digital Domain's request to extend until March 5 its exclusive right to file a plan. The fourth extension was the last, because Congress only permits exclusivity to run 18 months after the commencement of a Chapter 11 case. About Digital Domain Port St. Lucie, Florida-based Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/-- engaged in the creation of original content animation feature films, and development of computer-generated imagery for feature films and trans-media advertising primarily in the United States. Digital Domain Media Group, Inc. and 13 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11, 2012, to sell its business for $15 million to Searchlight Capital Partners LP, subject to higher and better offers. The Company disclosed assets of $205 million and liabilities totaling $214 million. The Debtors also have sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. An official committee of unsecured creditors appointed in the case is represented by lawyers at Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP. At a bankruptcy auction, the principal part of the business was purchased by a joint venture between Galloping Horse America LLC, an affiliate of Beijing Galloping Horse Co., and an affiliate of Reliance Capital Ltd., based in Mumbai. The $36.7 million total value of the contact includes $3.6 million to cure defaults on contracts and $2.9 million in reimbursement of payroll costs. As the result of a settlement negotiated by the unsecured creditors' committee with secured lenders, there will be some recovery for the committee's constituency. DOLPHIN BAY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Dolphin Bay Developers, Inc. 348 S. Ocean Blvd. Delray Beach, FL 33483 Case No.: 13-40027 Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Hon. Paul G Hyman Jr. Debtor's Counsel: Philip J Landau, Esq. 2385 N.W. Executive Center Dr # 300 Boca Raton, FL 33431 Tel: (561) 443-0800 Email: plandau@sfl-pa.com Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The petition was signed by David Ross, president. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ----------- Atlantic Avenue Chiropractic Rental Security $1,500 Deposit Bags By Eileen Rental Security $18,000 Deposit First American Multi Services Rental Security $1,500 Deposit Fit to the Core Pilates Rental Security $800 Deposit Garden of Vegan Rental Security $1,200 Deposit Glisten Salon Rental Security $1,050 Deposit Harmony Hair Studio Rental Security $800 Deposit Internal Revenue Service Unknown Internal Revenue Service Unknown Kimberlys Pet Grooming Rental Security $700 Deposit Lattner Foundation Rental Security $2,200 Deposit Life Skills Rental Security $750 Deposit My Computer Guy Rental Security $1,100 Deposit New Choices Case $1,250 Scrub and Tan Rental Security $700 Deposit Silberstein Architects Rental Security $820 Deposit Smoke Inn Rental Security $5,000 Deposit Smoke Inn Last month rent $4,000 Statewide Insurance Rental Security $1,300 Deposit Wellspring Massage Rental Security $1,100 Deposit DUMA ENERGY: Delays Form 10-Q for October 31 Quarter ---------------------------------------------------- Duma Energy Corp. 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 period ended Oct. 31, 2013. The Company said management was unable to obtain certain of the business information necessary to complete the preparation of the Company's Form 10-Q for the quarter and the review of the report by the Company's auditors in time for filing. That information is required in order to prepare a complete filing. As a result of this delay, the Company was unable to file its quarterly report on Form 10-Q within the prescribed time period without unreasonable effort or expense. The Company expects to file within the extension period. 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. DUTCH GOLD: Responds to Questions on Briskly Trading ---------------------------------------------------- The Board of Directors of Dutch Gold Resources, Inc., has authorized the release of a letter to shareholders as follows: December 17, 2013 To our Shareholders: Recent activity in our share trading has produced many questions over the last two weeks. The purpose of this letter is to provide some answers to most of the relevant questions that have come to us, whether by telephone or email. This letter is written to provide information, and not as a substitute for other reporting. What is the status of the Company? DGRI is a currently Nevada domicled corporation that has been active in the acquisition and development of gold mining properties. During the past twelve months, the Company has been unable to raise funds from traditional sources, and has relied on loans from officers of the Company. The mission has been to protect, to the extent possible, the assets of the Company, and to evaluate ways to unlock and leverage any value into less capital-intensive activities. Currently we maintain an interest in the Basin Gulch property and the Jungo property, but have no current plans to independently develop either. We attempted to fund our proposed Nicaragua project through a joint venture, however, financing never came to pass and we have abandoned any attempts to develop those properties. During the year, the management team has shrunk, as a result of financing issues, as has been previously reported. Currently, Mr. Lance Rosmarin serves as a director as Mr. Daniel Hollis, who also serves as CEO and principal accounting officer. Why has the stock begun trading briskly? The Company is unaware of any relationships or events that would result in the recent uptick in activity. What are the problems that have prevented the Company financing itself this year? Our primary obstacles have been our business model, our existing debt, and our capital structure. Typically the mining business is capital intensive, with significant time lags between initial outlays and subsequent cash flows. We attempted to mitigate this issue by looking at shorter- term projects, which, by definition, tend to be smaller projects. During the last eighteen months, capital for smaller projects and for smaller-miners has dried up. Sophisticated mining investors have been able to mitigate theirs risk by moving upstream in terms of size. The capital markets for small miners have imploded, making financing for companies like DGRI extremely problematic. Anyone who has looked at our balance sheet has seen that the Company carries a large amount of debt. While we were able to raise funds during 2009-2012, our debts expanded at a rate that was unsustainable. Most of this debt was in the form of convertible loans that have had a material adverse impact on the number of outstanding shares of the Company. At this point, it has become difficult for a new investor to come in behind so much convertible debt and so many shares outstanding. What does the Company do going forward? In order to begin to rebuild shareholder value, we must rationalize our capital structure and clean up our balance sheet. Most importantly, we must change our business model to one that can generate near term cash flow and requires only modest amounts of capital. Over the last six months, management has been in active discussions to evaluate companies in sectors that it believes match the criteria of potential for growth and low capital entry costs. We believe the best strategic alternatives for the Company exists in digital education, digital marketing, and financial product consulting and distribution. In the coming weeks we will talk more about each of these sectors and discuss what we believe to the best options for the Company. What steps does the Company take from here? We have a three-part strategy. First, we must evaluate the various businesses that we have discussed and make a decision on the sector that we will enter and the entity that we will use as a platform. The Company is engaged in ongoing negotiations, which may, or may not, come to fruition in the near term. Simultaneously we will work to rationalize our capital structure, while attempting to reconcile our balance sheet issues. In so doing, it is our intention to catch up our filings with the Securities & Exchange Commission as quickly as financing allows. The Company acknowledges and appreciates the contribution of the Officers who have served Dutch Gold. We hope to attract high caliber management as we reposition the Company in the coming months. Sincerely, DUTCH GOLD RESOURCES, INC. Dan Hollis Daniel Hollis, CEO About Dutch Gold Based in Atlanta, Ga., Dutch Gold Resources, Inc. (OTC: DGRI) -- http://www.dutchgoldresources.com/-- is a junior gold miner focused on developing its existing mining properties in North America and acquiring and developing new mines that can enter into production in 12 to 24 months. After auditing the 2011 results, Hancock Askew & Co., LLP, in Norcross, Georgia, noted that the Company has limited liquidity and has incurred recurring losses from operations and other conditions exist which raise substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of $4.58 million on $0 of sales in 2011, compared with a net loss of $3.69 million on $0 of revenue in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.65 million in total assets, $7.17 million in total liabilities and a $2.23 million total stockholders' deficit. DYNASIL CORP: Remains in Default of Certain Financial Covenants --------------------------------------------------------------- Dynasil Corporation of America on Dec. 20 announced financial results for fiscal year ended September 30, 2013 and the filing of its Annual Report on Form 10-K. Revenues for the fiscal year ended September 30, 2013 were $42.8 million. This represents a decrease of $5.1 million or 10.6% over revenues for the fiscal year ended September 30, 2012 of $47.9 million. Gross profit for fiscal 2013 totaled $18.1 million, or 42.3% of net revenue, compared with $19.5 million, or 40.7% of revenue for fiscal 2012. Gross profit margin improved primarily as a result of higher gross margins in the Contract Research segment partially offset by a decrease in the Instruments segment. Selling, general and administrative expenses decreased $1.5 million to $19.4 million or 45.4% of sales in fiscal year 2013, from $20.9 million or 43.7% of sales for fiscal year 2012. SG&A expenses decreased primarily as a result of the substantial completion of the engineering costs associated with the product refreshes in our Instruments segment. The Instruments segment had the greatest decrease in SG&A costs, decreasing $1.6 million to $3.5 million in 2013 compared to $5.1 million in 2012. This segment had two main product lines: a hand- held lead paint analyzer and a medical gamma probe used primarily in breast cancer treatment. The Company began a product refresh on both product lines in 2012 to enhance them with new features and functionality to maintain their market positions. The Company spent $1.3 million in fiscal year 2012 on research and development on the products and significant additional amounts on sales and marketing efforts in advance of the new product launches. In fiscal year 2013, these costs and other SG&A costs were substantially reduced while awaiting regulatory approval. The Company's updated medical probe, the Navigator 2.0, was approved for sale in May of 2013. However, as a result of the delays associated with both product line updates and an internal review of strategic alternatives for the lead paint analyzer product, the Company performed an interim impairment test of the Instrument segment and recorded an impairment of goodwill and intangibles totaling $6.8 million in the quarter ending March 31, 2013. "As reported previously, we are making important steps in right- sizing our business, reducing outstanding indebtedness, and eliminating cost. With the spin out of our tissue sealant technology to the newly-formed subsidiary, Xcede Technologies, Inc. in October and the divestiture of our XRF product line in November, we continue to make significant improvements to our cash flows and our balance sheet," said Peter Sulick, Chairman and CEO of Dynasil. "Going forward, we are focused on improving our liquidity and pursuing strategic initiatives that best position the company for future profitable growth." Including the goodwill impairment charge, net loss for the 12 months ended September 30, 2013 was $8.7 million, or $0.59 per share, compared with a loss of $4.3 million, or $0.29 per share, in fiscal 2012. Liquidity On December 31, 2012, the Company disclosed it was in default of certain financial covenants set forth in the terms of its outstanding indebtedness with respect to its fiscal year ended September 30, 2012. The Company continued to be in default throughout its fiscal year ended September 30, 2013 and currently remain in default. As a result, the Company's lenders have the ability to require immediate payment of all indebtedness under our loan agreements. While the lenders have not exercised this right, their ability to require immediate payment has caused all of our outstanding indebtedness to be accelerated to current classification in our consolidated financial statements. The Company has made all principal and interest payments due to its senior lender through the date of this filing. In addition to making the required principal payments of approximately $1.9 million during fiscal year 2013, the Company also repaid an additional $300,000 of principal in connection with the contribution of its tissue sealant intellectual property to Xcede Technologies, Inc., a joint venture with Mayo Clinic formed on or about October 1, 2013 to spin out and separately fund the development of the tissue sealant technology. Xcede has initiated financing efforts and has received funding from internal sources and outside investors. The Company has accrued but not remitted monthly interest payments to its subordinated lender since February 2013 and does not expect to resume interest payments to its subordinated lender until it resolves its default with the senior lender. Subsequent to fiscal year-end, the Company also repaid approximately $1.25 million of principal to its senior lender from the proceeds received from the sale of its lead paint business included in the Instruments segment. Management is continuing to pursue potential other sales transactions which, if consummated, would result in additional principal payments to the bank and also expects to continue discussions with its lenders to address the financial covenant situation. Because of the continuing default of the financial covenants and the possibility of an acceleration of the indebtedness by the lenders, the Company has classified all its outstanding indebtedness as a current liability in the accompanying consolidated balance sheets. Given the Company's results and the uncertainty created by the defaults under the outstanding indebtedness, the Company's independent registered public accounting firm has included a "going concern" explanatory paragraph in its audit opinion for the year ended September 30, 2013. About Dynasil Watertown, Mass.-based Dynasil Corporation of America (NASDAQ: DYSL) -- http://www.dynasil.com/-- develops and manufactures detection and analysis technology, precision instruments and optical components for the homeland security, medical and industrial markets. McGladrey LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012, citing default with the financial covenants under the Company's outstanding loan agreements and a loss from operations which factors raise substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of $4.30 million for the year ended Sept. 30, 2012, as compared with net income of $1.35 million during the prior fiscal year. The Company's balance sheet at June 30, 2013, showed $27.74 million in total assets, $16.82 million in total liabilities and $10.92 million in total stockholders' equity. Bankruptcy Warning "If our lenders were to accelerate our debt payments, our assets may not be sufficient to fully repay the debt and we may not be able to obtain capital from other sources at favorable terms or at all. If additional funding is required, this funding may not be available on favorable terms, if at all, or without potentially very substantial dilution to our stockholders . If we do not raise the necessary funds, we may need to curtail or cease our operations, sell certain assets and/or file for bankruptcy, which would have a material adverse effect on our financial condition and results of operations," the Company said in its quarterly report for the period ended June 30, 2013. ECOSPHERE TECHNOLOGIES: Six Directors Elected at Annual Meeting --------------------------------------------------------------- Ecosphere Technologies, Inc., held its 2013 annual shareholders on Dec. 13, 2013, during which the shareholders: (1) elected Dennis McGuire, Dean Becker, David Brooks, Michael Donn, Sr., Jimmac Lofton and Charles Vinick as directors; and (2) ratified the Company's independent registered public accounting firm for 2013. About Ecosphere Technologies Stuart, Florida-based Ecosphere Technologies (OTC BB: ESPH) -- http://www.ecospheretech.com/-- is a water engineering, technology licensing and environmental services company that designs, develops and manufactures wastewater treatment solutions for industrial markets. Ecosphere, through its majority-owned subsidiary Ecosphere Energy Services, LLC, provides energy exploration companies with an onsite, chemical free method to kill bacteria and reduce scaling during fracturing and flowback operations. Ecosphere disclosed net income of $1.05 million on $31.13 million of total revenues for the year ended Dec. 31, 2012, as compared with a net loss of $5.86 million on $21.08 million of total revenues for the year ended Dec. 31, 2011. The Company's balance sheet at Sept. 30, 2013, showed $21.95 million in total assets, $2.35 million in total liabilities, $3.69 million in redeemable convertible cumulative preferred stock, and $15.90 million in equity. Salberg & Company, P.A., in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has seen a recent significant decline in its working capital primarily relating to delays in receiving additional purchase orders and related funding from a significant customer. This matter raises substantial doubt about the Company's ability to continue as a going concern. EDISON MISSION: Disclosure Statement Approved --------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved Edison Mission Energy's Disclosure Statement related to the Company's Joint Chapter 11 Plan of Reorganization. As previously reported, "The Plan provides for a sale...substantially all of EME's assets, including its direct and indirect equity interests in the Debtor Subsidiaries and the Non- Debtor Subsidiaries..., 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. More specifically, the Plan, which will effectuate the NRG Transaction, contemplates the following distributions to Holders of Claims and Interests, among other recoveries: Holders of Allowed Other Priority Claims against EME and Allowed Other Priority Claims against Debtor Subsidiaries shall receive payment in full, in Cash; Holders of Allowed Secured Claims against EME, Allowed Secured Claims against Debtor Subsidiaries, and Allowed Secured Claims against Homer City Debtors shall receive (a) payment in full, in Cash, or (b) such other treatment such that the Holder shall be rendered Unimpaired; Holders of Allowed General Unsecured Claims against Debtor Subsidiaries shall receive payment of principal in full in Cash; Holders of Allowed General Unsecured Claims against EME (Assumed Liabilities), Allowed General Unsecured Claims against EME (Not Assumed Liabilities), and Allowed Joint-Liability General Unsecured Claims shall receive (a) a Pro Rata distribution of the Net Sale Proceeds, and (b) a Pro Rata distribution of the New Interests; and Holders of Allowed Claims against the Homer City Debtors shall be paid in absolute priority from the Homer City Wind Down Proceeds for the applicable Homer City Debtor." 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. ELAN CORP: S&P Raises Corporate Credit Rating From 'B+' ------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Elan Corp. PLC to 'BBB' from 'B+' (to be equal with Perrigo Co. Ltd.) and removed it from CreditWatch, where S&P placed it on July 29, 2013. This action follows close of Perrigo's (BBB/Negative/--) acquisition of Elan Corp. PLC on Dec. 18, 2013. At the same time, S&P is withdrawing the rating on Elan Corp. because following the acquisition close, Elan Corp. is now fully owned by Perrigo. ENDEAVOUR INTERNATIONAL: Unit Sells $25MM of Production Payment --------------------------------------------------------------- Endeavour Energy UK Limited, a wholly-owned subsidiary of Endeavour International Corporation, entered into a Deed of Grant of Production Payment with Sand Waves S.A., an unaffiliated third party entity in which the Company has no interest or control, providing for a production payment over a portion of the sales proceeds from the Company's production from the Rochelle field located in the UK sector of the North Sea. The Investors are required to look solely to the proceeds from the sale of production from the Rochelle field for satisfaction and discharge of all amounts due under the Monetary Production Payment. The Monetary Production Payment provides for the sale by EEUK of a production payment for a purchase price of $25 million with an expected implied cost of 9.75 percent. Obligations under the Monetary Production Payment will cease upon the earlier of the repayment of amounts outstanding under the Monetary Production Payment or production from the Rochelle license permanently ceasing. The Monetary Production Payment is scheduled to be repaid over a two year period. The Company's obligations under the Monetary Production Payment are secured by first priority liens over its interests in the license and related joint operating agreements and sales proceeds accounts. The Company's obligations are also secured by second priority liens over certain of its other licenses, joint operating agreements and assets. Those second priority liens are subordinated to the security granted to the holders of its revolving credit facility dated April 12, 2012, pursuant to an intercreditor agreement. About Endeavour International Houston-based Endeavour International Corporation (NYSE: END) (LSE: ENDV) is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the United States. For the year ended Dec. 31, 2012, the Company incurred a net loss of $126.22 million as compared with a net loss of $130.99 million during the prior year. The Company's balance sheet at Sept. 30, 2013, showed $1.50 billion in total assets, $1.41 billion in total liabilities, $43.70 million in series C convertible preferred stock, and $46.24 million in total stockholders' equity. * * * As reported by the TCR on March 5, 2013, Moody's Investors Service downgraded Endeavour International Corporation's Corporate Family Rating to Caa3 from Caa1. Endeavour's Caa3 CFR reflects its weak liquidity, small production and proved reserve scale, geographic concentration and the uncertainties regarding its future performance given the inherent execution risks related to its offshore North Sea operations for a company of its size. In the Feb. 22, 2013, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Houston, Texas-based Endeavour International Corp. (Endeavour) to 'CCC+' from 'B-'. The rating action reflects S&P's expectation that Endeavour could have insufficient liquidity to meet its needs due to the delay in production from its Rochelle development. FIESTA RESTAURANT: S&P Withdraws 'B' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its ratings, including its 'B' corporate credit rating on Addison, Texas-based restaurant operator Fiesta Restaurant Group Inc. This follows the company's repayment of its $200 million 8.875% senior secured second-lien notes due 2016 in full. S&P do not rate the company's new $150 million senior secured credit facility. S&P believes Fiesta's moderately lower debt following the refinancing could help improve the company's credit metrics. FISKER AUTOMOTIVE: Wants $3.8M in WARN Claims Deemed Worthless -------------------------------------------------------------- Law360 reported that electric-car maker Fisker Automotive Holdings Inc. urged a Delaware bankruptcy judge to rule that nearly $3.8 million in claims filed by former employees have no value, saying the "meritless" claims could sink the company's Chapter 11 plan. According to the report, Fisker contends that claims brought by former employees under the U.S. Worker Adjustment and Retraining Notification Act should not be allowed, and seeks an order estimating their value at zero dollars. 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. FOX & HOUND: Section 341(a) Meeting Set for Jan. 24 --------------------------------------------------- A meeting of creditors in the bankruptcy cases of F & H Acquisition Corp. and its debtor affiliates will be held on Jan. 24, 2014, at 10:00 a.m. at the J. Caleb Boggs Federal Building, 844 King Street, 2nd Floor, Room 2112, Wilmington, DE. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. F & H Acquisition Corp. and its affiliates filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-13220 to 13-13261) on Dec. 15, 2013. James Zielke signed the petitions as CFO and president. The Debtors estimated assets and debts of at least $100 million. Young, Conaway, Stargatt & Taylor, LLP, serves as the Debtors' local counsel. Olshan Frome Wolosky LLP acts as the Debtors' general counsel. Imperial Capital LLC is the Debtors' financial advisor. FREESEAS INC: Regains Compliance with NASDAQ Min. Bid Price Rule ---------------------------------------------------------------- The NASDAQ Stock Market notified FreeSeas Inc. on Dec. 16, 2013, that the Company had regained compliance with Listing Rule 5550(a)(2), which requires a minimum bid price of $1.00 for continued listing on the NASDAQ Stock Market and that the matter is now closed. The Company previously received notice from NASDAQ that it was not in compliance with the Minimum Bid Price Rule for continued listing on NASDAQ, as the bid price of the Company's common stock closed below the minimum $1.00 per share for the 30 consecutive business days. About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. Freeseas disclosed a net loss of US$30.88 million in 2012, a net loss of US$88.19 million in 2011, and a net loss of US$21.82 million in 2010. As of Sept. 30, 2013, the Company had $107.35 million in total assets, $106.63 million in total liabilities, all current, and $711,000 in total shareholders' equity. RBSM LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. It has also failed to make required payments to Deutsche Bank Nederland as agreed to in its Sept. 7, 2012, amended and restated facility agreement and received notices of default from First Business Bank. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. FREGO & ASSOCIATES: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Frego & Associates - The Bankruptcy Law Office, PLC dba The Bankruptcy Law Office, PLC dba A-1 Bankruptcy c/o James P. Frego, II 2349 Windmill Way Saline, MI 48176 Case No.: 13-62691 Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Hon. Walter Shapero.Detroit Debtor's Counsel: John C. Lange, Esq. GOLD, LANGE & MAJOROS, PC 24901 Northwestern Hwy., Suite 444 Southfield, MI 48075 Tel: (248) 350-8220 Email: jlange@glmpc.com - and - Hannah Mufson McCollum, Esq. 24901 Northwestern Hwy., Suite 444 Southfield, MI 48075 Tel: 248-350-8220 Email: hmccollum@glmpc.com Total Assets: $2.02 million Total Liabilities: $1.41 million The petition was signed by James P. Frego, II, managing member. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. FRESH & EASY: Real Estate and Leases Sold on Dec. 19 ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that supermarket chain Fresh & Easy Neighborhood Market Inc., now named Old FENM Inc. after most of the business was sold, received formal court approval on Dec. 19 to sell 53 parcels of real property and leases at stores not picked up by Ron Burkle's Yucaipa Cos., the buyer of the bulk of the operation. According to the report, auctions were canceled because there were no competing bids. The real estate in California, Arizona and Nevada is being purchased by EM-80 UAV Darkco LLC for $41.5 million in cash. Alamo Group LLC bought so-called lease- designation rights for $1.5 million. Fresh & Easy is yet to conduct an auction after three attempts. Yucaipa, which bought about 150 markets plus a production facility in Riverside, California, likewise met no competing offers. About Fresh & Easy Neighborhood Fresh & Easy Neighborhood Market Inc., and its affiliate filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-12569 and 13-12570) on Sept. 30, 2013. The petitions were signed by James Dibbo, chief financial officer. Judge Kevin J. Carey presides over the case. Fresh & Easy owes $738 million to Cheshunt, England-based Tesco, the U.K.'s biggest retailer. Fresh & Easy never made a profit and lost an average of $22 million a month in the 12 months ended in February, according to court papers. Jones Day serves as lead bankruptcy counsel. Richards, Layton & Finger, P.A., serves as local Delaware counsel. Alvarez & Marsal North America, LLC, serves as financial advisors, and Alvarez & Marsal Securities, LLC, serves as investment banker. Prime Clerk LLC acts as the Debtors' claims and noticing agent. Gordon Brothers Group, LLC, and Tiger Capital Group, LLC, serves as the Debtors' consultant. The Debtors estimated assets of at least $100 million and liabilities of at least $500 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five creditors to serve in the Official Committee of Unsecured Creditors in the Chapter 11 cases of Fresh & Easy Neighborhood Market Inc., et al. Pachulski Stang Ziehi & Jones LLP serves as counsel to the Committee. FTI Consulting, Inc. serves as its financial advisor. The Debtors closed, on or about Nov. 26, 2013, the sale of about 150 supermarkets plus a production facility in Riverside, Califorinia, to Ron Buckle's Yucaipa Cos. Pursuant to the sale terms, the bankruptcy company changed its name, and the name of the case, to Old FENM Inc. FRIENDFINDER NETWORKS: Amends Application to Issue 2018 Notes ------------------------------------------------------------- FriendFinder Networks Inc. and Interactive Network, Inc. filed with the Securities and Exchange Commission last week Amendment No. 2 to Form T-3 "FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE TRUST INDENTURE ACT OF 1939". FriendFinder proposes to issue $234,286,908.16 aggregate principal amount, plus any additional principal, of 14.0% Senior Secured Notes due 2018 issuable as interest payable on the existing 14.0% Senior Secured Notes due 2013. Under Amendment No. 2, FriendFinder filed: -- a Notice of Filing of Amended Exhibits to Plan Supplement with respect to the Second Amended Joint Plan of Reorganization of PMGI Holdings Inc., et al., Debtors, and amended exhibits thereto, available at http://is.gd/1oKWvpand -- a copy of the Modified Second Amended Joint Plan of Reorganization of PMGI Holdings Inc. et al. under Chapter 11 of the Bankruptcy Code, available at http://is.gd/HyRS2k FriendFinder on Dec. 16 won confirmation of its plan of reorganization from the Bankruptcy Court in Delaware, paving the way for the Company to emerge from bankruptcy by year-end. With respect to claims of stakeholders, the Plan contemplates: -- on or as soon as practicable after the Bankruptcy Court confirms the Plan (the "Effective Date"), the First Lien Notes will be cancelled and the Company will distribute to holders of First Lien Notes as of the Effective Date (a) an equal principal amount (including applicable pre-payment penalties) of New First Lien Notes (the "New Notes") with substantially the same terms as the old First Lien Notes, excluding certain interest and unpaid fees and costs, (b) cash, in the amount of any accrued and unpaid interest at the applicable non-default rate, and (c) additional cash in the amount of any incremental accrued and unpaid interest at the applicable default rate, to the extent excess cash is available under the terms of the Plan. The Company currently anticipates it will have sufficient cash on hand at the Effective Date to make the payments set forth in (b) and (c) above. -- on the Effective Date, the Second Lien Notes will be cancelled and at such time as each holder of the Second Lien Notes surrenders its cancelled Second Lien Note certificate to the Company along with an executed copy of the Stockholders' Agreement, each such holder shall receive a pro rata share of (a) 100% of the newly issued shares of common stock, par value $0.001 per share, of Reorganized FFN, and (b) cash, in an amount not to exceed $3 million, subject to cash payments to the holders of First Lien Notes in accordance with the Plan. -- assuming all holders of Allowed Second Lien Noteholder Claims properly surrender their Second Lien Note certificates, and execute the Stockholders' Agreement, the reorganized Company will issue approximately 702,000 shares of New Common Stock under the Plan. No additional shares of New Common Stock will be reserved for future issuance in respect of any other claims or interests. Notwithstanding the foregoing, shares of New Common Stock may be reserved pursuant to a Management Incentive Plan that will be implemented by the Company after the Effective Date to provide equity incentives to the reorganized Company's management. -- all existing shares of FFN capital stock, all options and warrants to acquire shares of FFN capital stock, and all securities convertible into shares of FFN capital stock will be extinguished on the Effective Date and holders of such securities shall not receive any property or consideration under the Plan. -- on or as soon as practicable after the Effective Date, each holder of an allowed administrative expense claim, priority claim, priority tax claim, or general unsecured claim, will receive cash equal to the full allowed amount of its claim or otherwise receive treatment consistent with applicable provisions of the Bankruptcy Code. -- generally, all executory contracts and unexpired leases shall be assumed pursuant to the Plan, except for (1) the Consulting Agreement, dated October 5, 2012, between Marc H. Bell and FFN, (2) the Consulting Agreement dated October 5, 2012, between Daniel C. Staton and FFN, and (3) those certain rejected contracts listed in the Amended Plan Supplement, which was filed by the Debtors with the Bankruptcy Court in connection with the Plan on December 13, 2013. -- the release by the Company of any and all claims or causes of action, known or unknown, relating to any pre-petition date acts or omissions, except for willful misconduct or fraud, committed by the officers, directors and employees of the Company and certain of the Company's representatives, the Consenting Noteholders, and their related trustees and their representatives, and Messrs. Bell and Staton, and their affiliates and representatives. The Plan also contains voluntary releases of the above parties from certain creditors of the Company. About FriendFinder Networks FriendFinder Networks and affiliates, including lead debtor PMGI Holdings Inc., sought bankruptcy protection (Bankr. D. Del. Lead Case No. 13-12404) on Sept. 17, 2013, estimating assets of $465.3 million and debt totaling $662 million. The Debtors are represented by Nancy A. Mitchell. Esq., Matthew L. Hinker, Esq., and Paul T. Martin, Esq., at Greenberg Traurig, LLP, in New York, as lead bankruptcy counsel; and Dennis A. Meloro, Esq., in Wilmington, Delaware, as local Delaware counsel. Akerman Senterfitt serves as the Debtors' special and conflicts counsel. The Debtors' financial advisor is SSG Capital Advisors LLC. BMC Group, Inc., is the Debtors' claims and noticing agent. FRIENDSHIP DAIRIES: Jan. 9 Hearing on Dismissal or Conversion Bid ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas will convene a hearing on Jan. 9, 2014, at 1:30 p.m., to consider the request of AgStar Financial Services, FLCA, to dismiss Friendship Dairies' case, or in the alternative, convert the Chapter 11 case to one under Chapter 7 of the Bankruptcy Code. AgStar is the loan servicer and attorney in fact for McFinney Agri-Finance LLC. According to John O'Brien, Esq., at Snell & Wilmer L.L.P., AgStar's first motion filed on June 24, 2013, has been placed under advisement. Mr. O'Brien added that while the first motion to convert has been pending additional facts have arisen to establish that the case must be converted without further delay. AgStar filed another motion early this month. Mr. O'Brien noted that the Debtor's operation has resulted in substantial and continuing loss to or diminution of the estate and there is no reasonable likelihood of rehabilitation. Furthermore, AgStar believes that the Debtor's actions rise to the level of gross mismanagement of the estate warranting dismissal. About Friendship Dairies Friendship Dairies, a general partnership, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The Debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C., serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. GENELINK INC: Amends 2012 10-K in Response to SEC Comments ---------------------------------------------------------- GeneLink, Inc., filed an amendment to its annual report on Form 10-K for the year ended Dec. 31, 2012, originally filed with the U.S. Securities and Exchange Commission on April 1, 2014, in response to comment letters received from the SEC. The purposes of the amendment were: 1) to provide the name of the Company's auditor, Hancock Askew &Co., LLP, which was inadvertently left off the prior audit report. There is not a change in the audit report except for the signature of that firm. 2) to provide additional information in Footnote 6. related to the fair value of equity instruments. 3) to provide additional information in Footnote 11. related to detail analysis of the gain on sale of subsidiary. 4) to add additional information to management's discussion and analysis of the financial statements including a detailed variance analysis for Cost of Goods Sold, Operating Losses, Net Losses, and a detailed explanation of the Valuation of intangible and other long-lived assets. A copy of the Amended Form 10-K is available for free at: http://is.gd/PEfdPX About Genelink Based in Orlando, Fla., GeneLink, Inc., is a solution provider in the genetically customized nutritional and personal care marketplace. Genelink disclosed a net loss of $3.05 million on $2.13 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $3.83 million on $4.68 million of revenue during the prior year. The Company's balance sheet at Sept. 30, 2013, showed $1.28 million in total assets, $4.49 million in total liabilities, and stockholders' deficit of $3.2 million. Hancock Askew & Co., LLP, in Savannah, GA, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company incurred significant net losses in 2012 and 2011, has a working capital deficit and a significant accumulated deficit. These items raise substantial doubt as to the Company's ability to continue as a going concern. GETTY IMAGES: Bank Debt Trades at 7% Off ---------------------------------------- Participations in a syndicated loan under which Getty Images Inc. is a borrower traded in the secondary market at 92.64 cents-on- the-dollar during the week ended Friday, December 20, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents an increase of 0.34 percentage points from the previous week, The Journal relates. Getty Images Inc. pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 14, 2019, and carries Moody's B2 rating and Standard & Poor's B rating. The loan is one of the biggest gainers and losers among 205 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. * * * As reported in the Troubled Company Reporter on Sept. 5, 2013, Moody's Investors Service placed the ratings of Getty Images on review for downgrade based on weaker than expected results through 2Q2013 and Moody's revised expectations for the next 12 months. According to Moody's, Corporate Family Rating of Issuer: Getty Images, Inc. and Abe Investment Holdings, Inc., currently B2, is placed on review for possible downgrade. GMX RESOURCES: DIP Maturity Date Extended to Feb. 2014 ------------------------------------------------------ GMX Resources Inc., certain lenders, and Cantor Fitzgerald Securities, as DIP Agent, entered into Amendment No. 2 to the DIP Credit Agreement, which modifies certain covenants in the DIP Credit Agreement to allow for the formation of certain subsidiaries as contemplated by the Debtors' proposed plan of reorganization, and to allow those subsidiaries to meet or satisfy any qualification or bonding requirements under applicable law or regulation (not to exceed $750,000 in the aggregate). Specifically, the Debtors may (a) form and organize (i) GMXR GP Sub LLC, as a Delaware limited liability company, and (ii) GMXR Limited Partnership, as a Delaware limited partnership of which GMXR GP Sub LLC will be the initial sole general partner and GMX Resources Inc. will be the initial sole limited partner, prior to but in contemplation of the occurrence of the Effective Date of the Proposed Plan, and (b) to make any Investments, not to exceed $750,000, in the new Subsidiaries necessary or reasonably required to qualify the new Subsidiaries under applicable law or regulation to conduct business as contemplated by the Proposed Plan as of the Effective Date of the Proposed Plan. In addition, DIP Amendment No. 2 extends the Maturity Date (as defined in the DIP Credit Agreement) to Feb. 17, 2014. On April 3, 2013, the Bankruptcy Court approved an Interim Order authorizing the Company to enter into a Superpriority Debtor in Possession Credit and Guaranty Agreement, dated as of April 3, 2013, among the Company, as Borrower, Diamond Blue Drilling Co. and Endeavor Pipeline Inc., as Guarantors, the lenders party thereto, as lenders, and Cantor Fitzgerald Securities, as DIP Agent. Pursuant to the terms of the DIP Credit Agreement, the Lenders agreed, to lend up to $50,000,000 in term loans. The Bankruptcy Court entered a final order approving the DIP Credit Agreement on May 6, 2013. On Sept. 30, 2013, the Debtors, the lenders party thereto, and Cantor Fitzgerald Securities, as DIP Agent, entered into Amendment No. 1 to the DIP Credit Agreement. DIP Amendment No. 1 contains certain immaterial modifications to the DIP Credit Agreement, and therefore was not previously filed. A copy of Amendment No. 1 to Superpriority Debtor in Possession Credit and Guaranty Agreement, dated as of September 30, 2013, among GMX Resources Inc., as Borrower, Diamond Blue Drilling Co. and Endeavor Pipeline Inc., as Guarantors, the lenders party thereto, as lenders and Cantor Fitzgerald Securities, as DIP Agent, is available at http://is.gd/0iMXJc A copy of Amendment No. 2 to Superpriority Debtor in Possession Credit and Guaranty Agreement, dated as of December 11, 2013, among GMX Resources Inc., as Borrower, Diamond Blue Drilling Co. and Endeavor Pipeline Inc., as Guarantors, the lenders party thereto, as lenders and Cantor Fitzgerald Securities, as DIP Agent, is available at http://is.gd/COMRpE Members of the DIP lending consortium, based on Amendment No. 2, are: * CANTOR FITZGERALD SECURITIES, as DIP Agent and as Lender * CHATHAM ASSET HIGH YIELD MASTER FUND, LTD., as Lender By Chatham Asset Management, LLC, not in its individual capacity, but solely as Investment Advisor * CHATHAM EUREKA FUND, L.P., as Lender By Chatham Asset Management, LLC, not in its individual capacity, but solely as Investment Advisor * GSO Credit-A Partners LP, as Lender By GSO Capital Partners LP, not in its individual capacity, but solely as Investment Manager * GSO PALMETTO OPPORTUNISTIC INVESTMENT PARTNER LP, as Lender By GSO Capital Partners LP, not in its individual capacity, but solely as Investment Manager * GSO SPECIAL SITUATIONS FUND LP, as Lender By GSO Capital Partners LP, not in its individual capacity, but solely as Investment Manager * GSO SPECIAL SITUATIONS OVERSEAS MASTER FUND LTD., as Lender By GSO Capital Partners LP, not in its individual capacity, but solely as Investment Manager * WB GENERAL LTD., as Lender * ZELL CREDIT OPPORTUNITIES MASTER FUND, L.P., as Lender By Chai Trust Company, LLC, General Partner * OMEGA CAPITAL PARTNERS, L.P. OMEGA CAPITAL INVESTORS, L.P. OMEGA EQUITY INVESTORS, L.P. OMEGA CHARITABLE PARTNERSHIP, L.P. OMEGA OVERSEAS PARTNERS, LTD. BETA EQUITIES, INC. GS&CO. PROFIT SHARING MASTER TRUST, each as Lender By Omega Advisors, Inc., as investment manager for certain funds and accounts it manages and not in its individual corporate capacity About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. GMX filed a Chapter 11 petition in its hometown (Bankr. W.D. Okla. Case No. 13-11456) on April 1, 2013, so secured lenders can buy the business in exchange for $324.3 million in first-lien notes. GMX listed assets for $281.1 million and liabilities totaling $458.5 million. GMX missed a payment due in March 2013 on $51.5 million in second- lien notes. Other principal liabilities include $48.3 million in unsecured convertible senior notes. The DIP financing provided by senior noteholders requires court approval of a sale within 75 days following approval of sale procedures. The lenders and principal senior noteholders include Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors Inc. and Whitebox Advisors LLC. David Zdunkewicz, Esq., Timothy A. Davidson II, Esq., and Joseph Rovira, Esq., at ANDREWS KURTH LLP, serves as the Debtors' counsel. Special Local Counsel, Conflicts Counsel and Litigation Counsel for the Debtors are William H. Hoch, Esq., and Christopher M. Staine, Esq., at CROWE & DUNLEVY, P.C. Counsel to Backstop Lenders under DIP Financing and Steering Committee of Holders of Senior Secured Notes are Brian Hermann, Esq., and Sarah Harnett, Esq., at PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP. Counsel to the Unsecured Creditors Committee is Jason Brookner, Esq., at LOOPER REED & MCGRAW P.C. Looper Reed is substituted as counsel for the Official Committee of Unsecured Creditors in place of Winston & Strawn LLP, effective as of April 25, 2013. The Committee tapped Conway MacKenzie, Inc., as financial advisor. On Dec. 4, 2013, the Bankruptcy Court approved the Company's First Amended Disclosure Statement to accompany the First Amended Joint Plan of Reorganization of GMX Resources Inc. and its Debtor Subsidiaries under Chapter 11 of the Bankruptcy Code. A copy of the Disclosure Statement is available at http://is.gd/XGTsMr The Court has set Jan. 21, 2014 at 1:30 p.m. central time, as the date and time for hearing on confirmation of the Plan and to consider any objections to the Plan. GOLDEN TRIANGLE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Golden Triangle Properties, Inc. dba Hanna Paint & Hardware 4343 N Andrews Ave Fort Lauderdale, FL 33309 Case No.: 13-40050 Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Hon. John K Olson Debtor's Counsel: Susan D. Lasky, Esq SUSAN D LASKY, PA 915 Middle River Dr, Suite 420 Fort Lauderdale, FL 33304 Tel: (954) 400-7474 Fax: (954) 206-0628 Email: ECF@suelasky.com Total Assets: $1.12 million Total Liabilities: $2.61 million The petition was signed by Corey Golden, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flsb13-40050.pdf GYMBOREE CORP: Bank Debt Trades at 6% Off ----------------------------------------- Participations in a syndicated loan under which Gymboree Corp is a borrower traded in the secondary market at 93.69 cents-on-the- dollar during the week ended Friday, December 20, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 3.47 percentage points from the previous week, The Journal relates. Gymboree Corp pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on Feb. 23, 2018. The bank debt carries Moody's B2 and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 204 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Headquartered in San Francisco, California, The Gymboree Corporation is a leading retailer of infant and toddler apparel. The company designs and distributes infant and toddler apparel through its stores which operates under the "Gymboree", "Gymboree Outlet", "Janie and Jack" and "Crazy 8" brands in the United States, Canada and Australia. Revenues are approximately $1.2 billion. The company is owned by affiliates of Bain Capital Partners LLC. As reported in the Troubled Company Reporter on Dec. 20, 2013, 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. HEALTH NET: A.M. Best Affirms 'bb' Issuer Credit Ratings -------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and the issuer credit ratings (ICR) of "bbb" of Health Net of California, Inc., Health Net Life Insurance Company, Health Net Health Plan of Oregon, Inc. and Health Net of Arizona, Inc. A.M. Best also has affirmed the ICR of "bb" and the debt rating of "bb" on the $400 million 6.375% senior unsecured notes due 2017 of the parent company, Health Net, Inc. (Health Net) (headquartered in Woodland Hills, CA) [NYSE: HNT]. The outlook for all ratings is stable. The rating affirmations for Health Net and its insurance subsidiaries reflect a better operating performance on a consolidated basis, a re-positioning of the commercial book of business and improved balance sheet strength at the holding company as well as financial flexibility. Health Net's strategy is to make health care more affordable, grow its business overall and enhance stakeholder value. Health Net's insurance subsidiaries are known for their expertise in managing Medicare, Medicaid, commercial and a number of ancillary products and services, including behavioral health, dental and vision insurance and administrative services. In addition, Health Net Federal Services, a wholly owned subsidiary of Health Net, serves the families of active duty personnel and retirees through the TRICARE North Region contract. The company also has worked to extend existing contracts and has made efforts to secure its place in the Patient Protection and Affordable Care Act of 2010's business environment. Over the past year, Health Net repositioned its commercial business by focusing on pricing discipline and offering its tailored network products. Consolidated operating performance has improved despite significant cost pressures. Accreted earnings and changes to the invested asset mix have improved balance sheet strength and financial flexibility. Health Net strengthened its California Medicaid business with a new settlement agreement with California's Department of Health Care Services, and results improved due to better performance by the company's senior and persons with disabilities members. Medicare Advantage operating results also improved due to lower health care costs. The company has made progress as a participant in the Dual-Eligible demonstration, which could lead to higher market share in this line of business, and has stabilized other government contracts. Offsetting rating factors include Health Net's exposure to a significant level of business concentration risk and lower investment income returns at the subsidiaries. Owing to the high participation rate in the government business sector, the Health Net organization is exposed to business concentration risks as the organization relies heavily on large blocks of government business to attain revenue development goals and to achieve forecasted earnings. Investment income at Health Net's insurance subsidiaries has decreased noticeably, mainly as a consequence of the low interest rate environment as well as the routine distribution of dividends, which essentially lowers invested asset balances at the subsidiary level. The organization's investment portfolio is designed for risk aversion as most of these assets are held in investment grade securities, and a significant percentage is held in cash and cash equivalents. Key rating factors that could lead to positive rating actions are successful execution of the now defined operating strategy and improvements in the risk-adjusted capital measures at the subsidiaries. Key rating factors that could lead to negative rating actions are declines in risk-adjusted capital at the insurance subsidiaries and high leverage ratios caused by accelerated revenue development or under-reserving for certain capitated lines of business and risk-based products. HERTZ CORP: DBRS Confirms 'BB' Issuer Rating -------------------------------------------- DBRS Inc. has confirmed the ratings of Hertz Corporation, including its Issuer Rating of BB. The trend on all ratings has been revised to Stable from Negative. The rating actions follow a detailed review of the Company's operating results, financial fundamentals, and future prospects. The confirmation of the ratings and change in trend to Stable reflects DBRS's view that Hertz has made substantial progress in the integration of Dollar Thrifty Automotive Group, Inc. (DTAG), including the conversion of counter, reservations and e-commerce systems, as well as back-office IT platforms. DBRS notes that the last major integration item is the conversion of DTAG's fleet management system to the Hertz system, which DBRS expects to be successfully completed in 2014. Importantly, the rating action considers that the expected synergies of the acquisition are beginning to be captured, positively impacting financial performance. Through expanding the presence of the Thrifty brand in Europe and adding Dollar and Thrifty to Hertz's existing partnership agreements, Hertz has realized $100 million of revenue synergies in 9M13, and expects total revenue synergies of $300 million over the three-year period to year-end 2015. Cost synergies realized in the nine months to September 30, 2013 were $95 million of an expected $300 million in cost savings over a three-year period to the end of 2015. While cash flow leverage (total debt, including fleet debt, to last twelve month EBITDA) at 4.2x remains moderately higher than the pro-forma leverage of 4.0x at the closing of the DTAG acquisition, given the improved earnings and cash flow generation of the Company, DBRS considers the level of leverage as acceptable at the current rating level. Nevertheless, a return of leverage to pre- acquisition levels would be viewed favorably. The rating confirmation also reflects Hertz's strong franchise and leading global market position in the daily vehicle rental business, solid fleet management, well-managed liquidity and funding profile, and improving earnings profile. To this end, for the nine months ending September 30, 2013, Hertz had generated pre-tax income of $685.7 million compared to $529.7 million a year ago. Earnings have benefited from the Company's investment in business lines whose revenues are less cyclical in nature than the commercial on-airport business. Amongst the investments is the expansion of Hertz's off-airport business, increasing its presence in the leisure travel segment through the DTAG acquisition, entering the market for fleet management through its Donlen acquisition, and bolt-on acquisitions in the Company's equipment rental subsidiary, Hertz Equipment Rental Corporation (HERC), that increase its market presence in less cyclical industries. Moreover, the trend considers DBRS's view that industry fundamentals will remain favorable through 2014 supported by rationale pricing, good fleet discipline, a modest increase in travel volumes, and still solid residual values for used vehicles as demand continues to outstrip supply. Ratings could be positively impacted by continued strengthening in earnings to levels more consistent with the strength of the franchise. Further, deleveraging of the balance sheet and maintaining access to funding at reasonable costs would also be viewed positively. Conversely, a sustained reduction in revenues and cash flow generation as a result of a weakening in the franchise, or a noteworthy decline in industry fundamentals could result in downward ratings pressure. Ratings could also be negatively impacted, if leverage was to increase materially or a sizeable loss was generated from the disposition of risk vehicles. HJK HOSPITALITY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: HJK Hospitality, Inc. 1103 Riverside Drive Brownwood, TX 76801 Case No.: 13-60141 Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court Northern District of Texas (San Angelo) Judge: Hon. Robert L. Jones Debtor's Counsel: Joyce W. Lindauer, Esq. JOYCE W. LINDAUER, ATTORNEY AT LAW 8140 Walnut Hill Ln. Ste. 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 Email: courts@joycelindauer.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Harmeet S. Dhillon, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. IAP WORLDWIDE: S&P Cuts CCR to CC On Potential Debt Restructuring ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Cape Canaveral, Fla.-based technical and logistics services provider IAP Worldwide Services Inc. (IAP) to 'CC' from 'CCC'. The outlook is negative. "The downgrade reflects our view that IAP will likely engage in a distressed exchange that we would consider a de facto restructuring," said credit analyst Nishit Madlani. IAP's operating performance has been weak and S&P understands that the company has not been able to meet its financial covenants. S&P do not expect these covenants to be amended without a restructuring of the company's debt. S&P expects IAP will remain subject to declining government defense spending, and S&P believes management's ability to diversify into adjacent services will take time and is unlikely to benefit IAP in the near term. Significant delays in new awards and cancellations in key projects (linked to sequestration) could persist into 2014. The negative rating outlook reflects the likelihood that S&P will lower the corporate credit rating to 'SD' (selective default) if IAP completes an exchange offer or similar restructuring that S&P would classify as distressed or if it misses an interest payment. * * * Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that S&P previously downgraded in August. At the time, it said IAP has a "very aggressive financial policy since 2005 that promotes the owners' interests above those of other stakeholders." Cape Canaveral, Florida-based IAP is controlled by Cerberus Capital Management LP, although Cerberus doesn't have a majority of the board, according to S&P. INT'L FOREIGN EXCHANGE: Files Schedules of Assets and Liabilities ----------------------------------------------------------------- International Foreign Exchange Concepts, L.P., a debtor-affiliate of International Foreign Exchange Concepts Holdings, Inc. filed with the Bankruptcy Code its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $67,833,917 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $690,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $50,664,154 ----------- ----------- TOTAL $67,833,917 $51,354,154 A copy of the schedules is available for free at http://bankrupt.com/misc/INTERNATIONALFOREIGNLPsal.pdf As reported in the Troubled Company Reporter on Dec. 9, 2013, International Foreign Exchange Concepts Holdings disclosed $1,621,636 in assets and $79,165,548 in liabilities as of the Chapter 11 filing. About International Foreign Exchange International Foreign Exchange Concepts Holdings, Inc., and International Foreign Exchange Concepts, L.P., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 13-13380) on Oct. 17, 2013. Judge Robert Gerber oversees the case. Counsel to the Debtors is Henry P. Baer, Jr., Esq., at Finn Dixon & Herling LLP, in Stamford, Connecticut. The Debtors' restructuring advisors is CDG Group. The Debtors' special counsel is Withers Bergman LLP. The Debtors' notice, claims, solicitation and balloting agent is Logan & Company, Inc. Counsel to AMF-FXC Finance LLC, the DIP lender, is Michael L. Cook, Esq., and Christopher Harrison, Esq., at Schulte Roth & Zabel LLP, in New York. INT'L FOREIGN EXCHANGE: Withers Bergman Approved as Tax Counsel --------------------------------------------------------------- The Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York authorized International Foreign Exchange Concepts Holdings, Inc., et al., to employ Withers Bergman LLP, as their special corporate, regulatory and tax counsel. As reported in the Troubled Company Reporter on Nov. 27, 2013, Jefirey A. Blomberg, Esq., attested that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm will provide these services: a. provide general assistance to the Debtors with respect to historic transactions, including: -- asset and liability analyses, the 2006 and 2010 unsecured revenue share transactions with AMF-FXC Finance, LLC; -- employment agreements and non-compete agreements which involve one or more of the Debtors, and -- previous transactions with John Taylor; and b. analysis of tax attributes and obligations of the Debtors, including: -- determination of realization of cancellation of indebtedness income, if any; -- determination of whether any cancellation of indebtedness income may be excluded from income under Section 108 of the Internal Revenue Code (as amended, the "IRC"): -- determination of extent of the Debtors' insolvency for tax purposes; -- determination of amount of the Debtors' tax attributes subject to reduction pursuant to IRC Sections 108 and 1017; -- determination of the Debtors' net operating losses and carry forwards, if any; -- determination of allocation of tax items among the Debtors' partners, members and stockholders; -- determination of pre-petition and post-petition tax items; -- determination of pre-petition and post-petition tax filing requirements; and -- advising the Debtors on application of stay of collection to any pending or post-petition tax collection activities. The firm's hourly rates are: Professionals Rates ------------- ----- Partners $625/hour to $825/hour Counsel/Associates $375/hour to $745/hour Senior Paralegals $315/hour From Sept. 4, 2013, through Oct. 11, 2013, the Debtors paid Withers retainers in the aggregate amount of $110,000, which retainers were and will be applied on account of fees for professional services and actual out of pocket costs and expenses incurred in representing the Debtors in the contemplation of and in connection with these Chapter 11 cases. While Withers holds a substantial claim against the Debtors for work completed prior to the Petition Date (as set forth in the Debtors' respective lists of 20 largest creditors. Withers is currently owed over $90,000 from by the Debtors. However, the Debtors said in court papers indicate the firm does not represent or hold any interest adverse to the Debtors or their estates with respect to the matters for which it would be retained. About International Foreign Exchange International Foreign Exchange Concepts Holdings, Inc., and International Foreign Exchange Concepts, L.P., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 13-13380) on Oct. 17, 2013. Judge Robert Gerber oversees the case. Counsel to the Debtors is Henry P. Baer, Jr., Esq., at Finn Dixon & Herling LLP, in Stamford, Connecticut. The Debtors' restructuring advisors is CDG Group. The Debtors' special counsel is Withers Bergman LLP. The Debtors' notice, claims, solicitation and balloting agent is Logan & Company, Inc. Counsel to AMF-FXC Finance LLC, the DIP lender, is Michael L. Cook, Esq., and Christopher Harrison, Esq., at Schulte Roth & Zabel LLP, in New York. International Foreign Exchange Concepts, L.P. disclosed $67,833,917 in assets and $51,354,154 in liabilities as of the Chapter 11 filing. JELD-WEN INC: S&P Revises Outlook to Stable & Affirms 'B' CCR ------------------------------------------------------------- Standard & Poor's Ratings Services said it revised the outlook on its corporate credit rating on JELD-WEN inc. to stable from positive and affirmed all its ratings on the company, including its 'B' corporate credit rating. The outlook revision to stable from positive reflects JELD-WEN's weaker-than-expected EBITDA performance for 2013, due to temporary higher operating costs associated with a strong increase in sales and production in the company's U.S. businesses. In the second and third quarters of 2013, JELD-WEN experienced a nearly 25% increase in U.S. sales due primarily to stronger demand from homebuilders (as well as increased demand from home improvement centers) for windows and doors. However, JELD-WEN incurred higher-than-expected labor costs, overtime, and scrap expense as it ramped up production to meet this increase in demand. In addition, S&P understands that finding, training, and retaining new labor proved more difficult than originally anticipated. S&P notes that other manufacturers in the building materials sector also experienced this trend. S&P expects that these additional expenses, along with some unfavorable sales mix trends (a higher percentage of lower margin products sold) will cause EBITDA to be down about 10% in 2013 compared with the previous year. This is well below S&P's expectations. (Note: JELD-WEN is privately held and does not publicly disclose financial information.) "Despite high leverage, we expect that EBITDA will comfortably cover interest expense over the next 12 months and that liquidity will remain adequate," said Standard & Poor's credit analyst Thomas Nadramia. Although S&P considers a downgrade over the next 12 months to be unlikely, it could lower the ratings if the U.S. housing recovery stalls and the company's liquidity position experienced significant deterioration or reduced cushion under bank loan covenants resulting in a "less than adequate" or "weak" liquidity assessment. S&P could raise the rating within 12 months if leverage were less than 5x EBIDTA (including adjustments) and it expected leverage to remain below 5x, in accordance with its view of an "aggressive" or better financial risk profile and in accordance with S&P's methodology for companies owned by financial sponsors. This could occur if new home construction and remodeling exceeded S&P's current forecast and Europe began to recover from recession, causing the company's EBITDA to meaningfully outperform its base- case projections. KEYWELL LLC: Creditors Sue Officers and Directors ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Keywell LLC creditors' committee sued company shareholders, officers and directors seeking the recovery of $63.7 million in allegedly improper dividends, among other things. According to the report, the committee's complaint lays out what it calls "improper self-dealing" going back six years that sapped the company of "desperate needed resources." The committee also seeks to subordinate loans owing to company insiders. About Keywell L.L.C. Keywell L.L.C. filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 13-37603) on Sept. 24, 2013. Mark Lozier signed the petition as president and CEO. The Debtor estimated assets and debts of at least $10 million. Judge Eugene R. Wedoff presides over the case. Adelman & Gettleman Ltd. serves as the Debtor's counsel. Patzik, Frank & Samotny Ltd. serves as the Debtor's as special counsel. Eureka Capital Markets, LLC, serves as the Debtor's investment banker, while Conway MacKenzie, Inc., serves as its financial advisors. The Lenders are represented by Steven B. Towbin, Esq. -- stowbin@shawfishman.com -- and Gordon E. Gouveia, Esq. -- ggouveia@shawfishman.com -- at Shaw Fishman Glantz & Towbin LLC, in Chicago, Illinois. LAS VEGAS SANDS: Fitch Affirms 'BB+' Issuer Default Rating ---------------------------------------------------------- Fitch Ratings affirms the Las Vegas Sands Corp's (LVS Corp) Issuer Default Rating (IDR) at 'BB+' and maintains the Rating Outlook at Positive following the company's announcement that it will no longer be pursuing its proposed integrated resort development in Spain. Fitch also affirms the company's credit facilities at its U.S., Macao and Singapore subsidiaries at 'BBB-'. Key Rating Drivers: LVS's cancelation of its plan in Spain reinforces Fitch's Positive Outlook on the company's IDR and increases the likelihood of the company's being upgraded to investment grade within the next 12-24 months. The risks associated with the project included its large scope and Spain being an untested market for largescale casino resorts amidst a weak economic environment in Europe. The company was considering spending up to $36 billion to develop the project over multiple phases. The risks were amplified by a chance that the project could have overlapped with other largescale projects in Asia, the timing of which is uncertain and hinges on the legalization and licensing processes in the relevant jurisdictions (e.g. Japan, Korea, etc.). The Spain project was seen by Fitch as one of the more significant impediments to an upgrade to investment grade when Fitch affirmed LVS's IDR at 'BB+' and revised the Rating Outlook to Positive earlier this month. The critical factor Fitch will be monitoring when considering an upgrade in the IDR to 'BBB-' will be LVS continuing to establish a long-term track record of maintaining prudent financial policies with respect to maintaining low leverage while returning cash to shareholders and developing its next project in Macao. Fitch will be looking for the company to maintain ample financial flexibility with respect to liquidity and/or low leverage in anticipation of potential new development opportunities such as Japan and/or Korea. With consolidated gross/net leverage at less than 3x/2x and a free cash flow (FCF; after regular dividends) run-rate in excess of $1 billion, Fitch believes that LVS's credit profile has the flexibility for maintaining an investment grade IDR even in a scenario of taking on multiple largescale projects at the same time and/or, to a point, ramping up shareholder value initiatives further. Financial ratios have been aided by strong performance in Macao and lack of meaningful growth capex. Macao property EBITDA for the LTM period ending Sept. 30, 2013 grew by 49% to $2.7 billion, well exceeding Fitch's initial base case for 2013 of $2 billion. Growth capex has been moderating as LVS has been winding down work on Sands Cotai Central and the construction on the $2.7 billion Parisian capex spending is in the early stages of ramping up. For 2014, Fitch expects Macao growth to moderate (15% growth in EBITDA per Fitch's base case) and the construction of the Parisian to ramp up ($1.8 billion of total capex for 2014 projected by the company). Therefore, the next 12 months could be a better gauge of LVS's financial policy with respect to balancing shareholder- friendly activity with maintaining low leverage. Fitch's sensitivity analysis, which incorporates run-rate annual dividends and share buybacks at $2.2 billion and $900 million, respectively, allows for ample financial flexibility to accommodate the aforementioned development uncertainty. If the company increases leverage due to a ramp-up of shareholder- friendly activity, there will be less cushion relative to Fitch's sensitivity analysis and could preclude an upgrade. Besides having only a short track record of maintaining a strong balance sheet, and lacking public financial policy guidance, governance related concerns include lack of a corporate level CFO and the FCPA investigations conducted by Department of Justice and Securities and Exchange Commission. Rating Sensitivities: Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Maintaining leverage below 4x on a gross basis and 3x on a net basis for an extended period with some cushion relative to potential new development opportunities; --Keeping to its articulated financial policies including contributing at least 25% equity towards projects; -- Favorable resolution of inquiries and lawsuits related to governance matters discussed above. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Leverage exceeding 5x on a gross basis and 4x on a net basis for an extended period, likely driven by pursuing multiple largescale projects at once; -- Deviating from to its articulated financial policies including contributing at least 25% equity towards projects; ---Loss of a license/concession as a result of inquiries related to governance matters discussed above. The one-notch uplift on the LVS LLC secured credit facility could be reconsidered if the company does not maintain ownership of international assets, and standalone leverage remained high at the U.S. restricted group. Fitch affirms the following ratings: Las Vegas Sands Corp. -- IDR at 'BB+', Outlook Positive. Las Vegas Sands LLC -- IDR at 'BB+', Outlook Positive; -- US$1.25 billion secured revolving credit facility at 'BBB-'; -- US$2.25 billion secured term loan B at 'BBB-'. Sands China Ltd. (Sands China) -- IDR at 'BB+', Outlook Positive. VML US Finance LLC (VML US) -- IDR at 'BB+', Outlook Positive; -- US$500 million Macao secured revolving credit facility at 'BBB-'; -- US$3.2 billion Macao secured term loan at 'BBB-'. Marina Bay Sands Pte. Ltd. (MBS) -- IDR at 'BB+', Outlook Positive; -- SGD 500 million Singapore secured revolving credit facility at 'BBB-'; -- SGD 4.6 billion Singapore secured term loan at 'BBB-'. LAWRENCEVILLE HOUSING: S&P Lowers Rating on Revenue Bonds to 'CCC' ------------------------------------------------------------------ Standard & Poor's Ratings Services has lowered its long-term rating on Lawrenceville Housing Authority, Ga.'s series 1997 multifamily housing revenue bonds, issued for the Knollwood Park Apartments project, by 16 notches to 'CCC' from 'AA+'. The outlook is negative. The bonds are secured by a Fannie Mae pass- through certificate. "The lowering of the rating reflects our view of the project's inability to pay full and timely debt service on the bonds, up to and including the remarketing date of June 1, 2015," said Standard & Poor's credit analyst Santos Souffront. The lowered rating reflects Standard & Poor's view of: -- The 99.04% asset-to-liability ratio as of Dec. 12, 2013; and -- The revenues from mortgage debt service payments and investment earnings that are insufficient to pay full and timely debt service on the bonds plus fees up to and including the remarketing date. The aforementioned credit weaknesses are partially mitigated by Standard & Poor's view of: -- The investments held pursuant to a guaranteed investment contract with Financial Guaranty Insurance Co. guaranteed by General Electric Capital Corp.; and -- The strong credit quality of the Fannie Mae pass-through certificate. "The negative outlook reflects our view of total assets that are insufficient to meet required parity levels, and our anticipation of their further deterioration," Mr. Souffront added. "We also expect debt service coverage to be inadequate on the remarketing date. However, if parity returns to at least 100%, and there are sufficient funds available on the remarketing date, we could raise the rating." LEHMAN BROTHERS: Asks Court to Enforce Stay Against Picbengro ------------------------------------------------------------- Lehman Brothers Holdings Inc. asked Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to enforce the so-called automatic stay against Picbengro, LLC. The move came after Picbengro sued Holdings and Lehman Commercial Paper Inc. in the Superior Court of the State of California. The complaint alleges claims against the Lehman units tied to the 2004 acquisition and continued management of a company, which indirectly owns The Culver Studios located in California. Picbengro, which owns 10% of that company, accused the Lehman units of breach of fiduciary duty in forming and managing certain companies in The Culver Studios' ownership structure. Attorney for Lehman, Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, said Picbengro violated the automatic stay when it sued Lehman for pre-bankruptcy claims. "The automatic stay bars any attempts to assert prepetition claims against LBHI or LCPI, including the commencement of a lawsuit in state court, such as the Picbengro action," Ms. Marcus said in a court filing. Under Section 362 of the Bankruptcy Code, the filing of a bankruptcy case triggers an injunction against the continuance of an action by any creditor against the debtor or its property. The automatic stay gives the debtor protection from its creditors subject to the oversight of the bankruptcy judge. Ms. Marcus asked the bankruptcy judge to enjoin Picbengro from asserting its pre-bankruptcy claims, and force the company to either dismiss or amend its complaint to remove those claims against Lehman. A court hearing is scheduled for January 29. Objections are due by January 13. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: Asks Court to Allow IRS to Amend Claims -------------------------------------------------------- Lehman Brothers Holdings Inc. asked the U.S. Bankruptcy Court in Manhattan to authorize the Department of the Treasury-Internal Revenue Service to file amended proofs of claim. The agency previously filed eight claims, which assert more than $2.3 billion against Lehman and its subsidiaries. On Dec. 10, 2013, the agency amended the original claims as a result of an earlier agreement it signed with Lehman, which limits the reserves that would have to be maintained for those claims. The amended claims to be filed by the agency only seek payment of not more than $510 million, which would reduce reserves maintained for the claims by as much as $1.8 billion, according to court filings. A list of the original and amended claims is available without charge at http://is.gd/4ZvTg1 About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: Opposes Black Diamond Bid for Access to Docs ------------------------------------------------------------- Lehman Brothers Holdings Inc. is blocking efforts by Black Diamond Offshore Ltd. and Double Black Diamond Offshore Ltd. to win court approval to access documents related to two ISDA master agreements with the company's affiliates. Garrett Fail, Esq., at Weil Gotshal & Manges LLP, in New York, said the claimants seek "discretionary authority to take extensive discovery to advance the allowance of two proofs of claim as to which no objection is pending." "Black Diamond's request for discovery is not ripe," the Lehman lawyer said in a court filing. "Discovery by a creditor in connection with a claim that is not subject to an objection is premature." The claimants want a turnover of all documents reflecting derivative transactions completed pursuant to the agreements, and documents related to the guarantees drafted or issued by Lehman in connection with the agreements. The ISDA master agreements were terminated early after Lehman filed for bankruptcy protection in 2008, according to the claimants which are owed more than $15.8 million pursuant to the guarantees. Black Diamond and DBDO are represented by: Angela J. Somers, Esq. Reid Collins & Tsai LLP One Penn Plaza, 49th Floor New York, NY 10119 Tel: (212) 344-5200 Fax: (212) 344-5299 Email: asomers@rctlegal.com About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: EFETnet Defends Bid to File Late Claim ------------------------------------------------------- EFETnet B.V. defended its request to file a claim against Lehman Brothers Commodity Services Inc. or to have its previously filed claim against Lehman Brothers Inc. reclassified as a claim against LBCS. Lehman asked the U.S. Bankruptcy Court in Manhattan to deny the claimant's request, saying it was properly served with a notice of the deadline for filing claims contrary to its allegation that it did not receive a notice from LBCS. Eric Moser, Esq. -- emoser@r3mlaw.com -- at Rich Michaelson Magaliff Moser LLP, in New York, said in a court filing that EFETnet "received and timely returned a preformatted proof of claim form" from LBI. "Having received and complied with the notice of bar date in the LBI case, EFETnet's confusion about the need to file a separate proof of claim in the LBCS case is readily understandable," Mr. Moser said, adding that the "resulting neglect in appreciating the need for filing a separate claim against LBCS should therefore be excused." Mr. Moser further argued that allowing the claim won't prejudice the Lehman units due to its "exceedingly small size." EFETnet in 2009 filed a $49,155 claim against LBI based on two unpaid invoices issued to LBCS for use of its proprietary software. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: LBI Trustee, Bank of Tokyo Settle Claim -------------------------------------------------------- The trustee of Lehman Brothers Holdings Inc.'s brokerage signed an agreement to settle the JPY2.67 billion claim of the Bank of Tokyo-Mitsubishi UFJ, Ltd. Under the agreement, the bank can assert a general unsecured claim against the brokerage in the amount of $25.05 million. The deal is formalized in a six-page stipulation, which is available for free at http://is.gd/rdcBUP Hughes Hubbard & Reed LLP, the trustee's legal counsel, was slated to present the agreement to Judge James Peck for signature on Dec. 20. Objections were due Dec. 19. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: Allows Wells Fargo to Pursue Bay Shore Property ---------------------------------------------------------------- Lehman Brothers Holdings Inc. signed an agreement that allows Wells Fargo Bank, N.A., to exercise its legal rights against a real property in Bay Shore, New York. Wells Fargo in September 2012 commenced a foreclosure action in New York Supreme Court, seeking judgment invalidating Lehman's interest in the property. The case, however, was halted by the so-called automatic stay, an injunction that halts actions by creditors against a company in bankruptcy protection. Weil Gotshal & Manges LLP, Lehman's legal counsel, will present the agreement to Judge James Peck for signature on Dec. 27, 2013. Objections are due by Dec. 26. A full-text copy of the agreement is available without charge at http://is.gd/YsMluz Wells Fargo is represented by: David Dunn, Esq. Brian Grieco, Esq. Hogan Lovells US LLP 875 Third Avenue New York, NY 10022 Tel: (212) 918-3000 Fax: (212) 918-3100 E-mail: david.dunn@hoganlovells.com brian.grieco@hoganlovells.com About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: FHFA Dispute Goes to District Court ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a dispute over whether Lehman Brothers Holdings Inc. must pay $1.2 billion in cash to the Federal Housing Finance Agency raises legal questions that are to be decided in federal district court, a judge said. According to the report, U.S. District Judge Lorna G. Schofield in Manhattan ruled on Dec. 17 that she would consider the matter after U.S. Bankruptcy Judge James Peck first reports what he thinks. Judge Peck, however, won't be around to offer his two cents because he is retiring. A provision in the 2008 Housing and Economy Recovery Act gives the FHFA the right to set aside any transfers intended to hinder, delay or defraud Freddie Mac. In its capacity as conservator for Freddie Mac, the agency filed a $1.2 billion claim in Lehman's bankruptcy and sought payment in full, not treatment as an unsecured creditor entitled to only a fraction of the claim. Lehman and the agency reached an interim settlement in the process of confirming the defunct New York-based bank's Chapter 11 plan. The settlement set aside $1.2 billion in cash pending the outcome of the classification dispute. The trust under Lehman's Chapter 11 plan asked the bankruptcy court in September to classify the FHFA as a general unsecured creditor, not a priority creditor entitled to full payment. The agency asked Judge Schofield to remove the dispute from bankruptcy court and decide it herself. Judge Schofield ruled that the matter requires removal from bankruptcy court because it involves non-bankruptcy federal law, specifically the Recovery Act. Still, she asked Judge Peck to submit an initial report and recommendation because he's familiar with the case and is an expert on challenges to priority. After Judge Peck supplies his report and recommendation, Judge Schofield will make her own independent decision, unencumbered by the bankruptcy judge's conclusions of fact or law. As it turns out, though, Judge Peck won't be around to issue the report. Last week he announced he will retire from the bench at the end of January. The Lehman case will be reassigned to U.S. Bankruptcy Judge Shelley C. Chapman. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LIGHTSQUARED INC: Harbinger Asks Court to Approve Revised Plan -------------------------------------------------------------- Harbinger Capital Partners, LLC, has filed a motion seeking court approval of latest revisions to the Chapter 11 plan it proposed for LightSquared. In the court filing, the investment firm asked U.S. Bankruptcy Judge Shelley Chapman to approve "immaterial" revisions to the plan without the need for further solicitation of votes. The latest plan proposes only two modifications. It provides that upon satisfaction of certain conditions, proceeds from additional financing will satisfy a portion, if not all, of the claims asserted by lenders or administrative agent under a 2010 credit agreement through the distribution of cash rather than new notes. The revised plan also provides for the subordination of the claims asserted by Dish Network Corp. Chairman Charles Ergen and several other parties. David Friedman, Esq., at Kasowitz Benson Torres & Friedman LLP, in New York, said there is no need for further solicitation of votes since the revisions "do not adversely affect any holder of a claim or equity interest" in LightSquared. "Each and every stakeholder under the modified Harbinger plan is receiving either exactly the same, or better, treatment as compared with the Harbinger plan," Mr. Friedman said, referring to the original plan filed in August. A copy of the revised plan is available without charge at http://is.gd/6QjvJb Unlike the two rival plans filed by LightSquared and a group of lenders, the plan proposed by Philip Falcone's investment firm calls for the restructuring of the wireless-satellite company without a sale. LightSquared and its affiliates that are also in bankruptcy protection will continue to exist after the effective date of the plan as separate entities, and will maintain their pre-bankruptcy organizational structure. Judge Chapman will hold a hearing on Dec. 23 to consider approval of the proposed revisions. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LIGHTSQUARED INC: Cancels Auction for One Dot Six Unit ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that LightSquared Inc. filed a notice in bankruptcy court canceling the Dec. 19 auction for the One Dot Six unit. According to the report, previously, the company's special board committee canceled what would have been an auction for LightSquared's main assets. The developer of a satellite-based wireless communications system said in the court filing that it was pursuing an "alternative transaction" regarding One Dot Six, the same explanation given when the main auction as canceled. There are four reorganization plans whose proponents are vying to take over the business. A confirmation hearing is scheduled for Jan. 9 where the bankruptcy judge in New York will decide which one is worthy of approval. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LILY GROUP: Committee Balks at Use of Carve Out to Pay Retainer --------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of Lily Group, Inc., objected to the Debtor's motion to employ Tucker Hester Baker & Krebs, LLC, as counsel and authorize application of retainer. The Committee objected to the proposed use of the carve out as a retainer for the payment of the Debtors' counsel because the Committee had not been formed nor had it engaged proposed counsel when the carve out was negotiated. The Committee does not object to the Debtor's retention of Tucker Hester as counsel. Faegre Baker Daniels LLP, the Committee's counsel, has had informal discussions with both THBK and counsel to LC Energy Holdings LLC regarding the carve out and its use and believes there is agreement that the Committee counsel's fees may be paid from the carve out, subject to reaching an agreement on any pro rata application between the Debtor's and Committee's counsel and subject to any further approval by the Court. To preserve its rights to seek payment of its counsel from the carve out as may be agreed or ordered, the Committee filed this limited objection to the application. As reported in the Troubled Company Reporter on Oct. 28, 2013, Tucker Hester will, among other things: (a) give legal advice to the Debtor with respect to its powers and duties as debtor-in-possession and management of its property; (b) take necessary action to avoid the attachment of any lien against the Debtor's property threatened by secured creditors holding liens; (c) prepare on behalf of the Debtor as debtor-in-possession necessary petitions, answers, orders, reports, and other legal papers; and (d) perform all other legal services for the Debtor as debtor- in-possession which may be necessary, inclusive of the preparation of petitions and orders respecting the sale or release of equipment not found to be necessary in the management of its property, to file petitions and orders for the borrowing of funds; and it is necessary for the Debtor to employ counsel for such professional services. Tucker Hester professionals will be paid at these hourly rates: Attorneys Rate --------- ---- William J. Tucker $425 Joseph W. Hammes $400 John K. McDavid $350 Christopher E. Baker $350 Jeffrey M. Hester $325 Niccole R. Sadowski $300 Courtney E. Chilcote $250 Bradley J. Buchheit $250 Daniel A. Tucker $250 Paralegals Rate ---------- ---- Kathy Shamblin $125 Tracy Wilkerson $125 Christine Ball $125 Michelle Murray $125 Rachel Bell $125 Tricia Hignight $125 Donna Adams $125 Selena Watson $125 Tammy Hudelson $125 Becca Taylor $125 Marsha Hetser $125 John J. Allman $250 Tucker Hester will also be reimbursed for reasonable out-of-pocket expenses incurred. Tucker Hester will receive an initial retainer in the sum of $50,000 out of cash collateral and the DIP financing post-filing. David R. Krebs, member of Tucker Hester, 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 Lily Group Inc. Lily Group Inc., the developer of an open-pit coal mine in Green County, Indiana, filed a petition for Chapter 11 reorganization (Bankr. S.D. Ind. Case No. 13-81073) on Sept. 23 in Terre Haute, listing assets and debt both exceeding $10 million. The Debtor is represented by Courtney Elaine Chilcote, Esq., and David R. Krebs, Esq., at Tucker, Hester, Baker & Krebs, LLC, in Indianapolis, Indiana. U.S. Trustee Nancy J. Gargula appointed four members to the official committee of unsecured creditors in the Chapter 11 cases of Lily Group Inc. Faegre Baker Daniels LLP represents the Committee. LILY GROUP: Has Access to Cash Collateral Until Dec. 31 ------------------------------------------------------- The Hon. Frank J. Otte of the U.S. Bankruptcy Court for the Southern District of Indiana issued a third interim order authorizing Lily Group, Inc. to (i) use cash collateral pledged to LC Energy Holdings LLC, as assignee of Platinum Partners Credit Opportunities Master Fund LP; and (B) enter into Debtor-In- Possession financing agreement. The Debtor is authorized to use cash collateral until Dec. 31, 2013, unless extended by further Court order or upon the agreement of Holdings and the Debtor. As of Aug. 26, 2013, Holdings alleges the Debtor owed the sum of $18,000,879 under the terms of the loan documents. To continue the operation of its business during the Chapter 11 reorganization process, the Debtor represented it must utilize cash collateral pledged to Holdings and borrow additional funds from Holdings to pay postpetition obligations incurred by Debtor in the ordinary course of its business. Holdings indicated a willingness to loan funds to the Debtor, and the Debtor represented that it is presently unable to obtain, in the ordinary course of business or otherwise, unsecured credit allowable under Section 503(b)(1) of the Code as an administrative expense. About Lily Group Inc. Lily Group Inc., the developer of an open-pit coal mine in Green County, Indiana, filed a petition for Chapter 11 reorganization (Bankr. S.D. Ind. Case No. 13-81073) on Sept. 23 in Terre Haute, listing assets and debt both exceeding $10 million. The Debtor is represented by Courtney Elaine Chilcote, Esq., and David R. Krebs, Esq., at Tucker, Hester, Baker & Krebs, LLC, in Indianapolis, Indiana. U.S. Trustee Nancy J. Gargula appointed four members to the official committee of unsecured creditors in the Chapter 11 cases of Lily Group Inc. Faegre Baker Daniels LLP represents the Committee. LITTLEFIELD, TX: S&P Raises LongTerm Rating From 'BB' ----------------------------------------------------- Standard & Poor's Ratings Services raised its long-term rating and underlying rating (SPUR) to 'BBB-' from 'BB' on the City of Littlefield, Texas' outstanding general obligation (GO) debt. The outlook is stable. "The raised rating is based on the city's implementation of several revenue enhancement measures and expenditure cuts that have continued to improve its financial position and ability to meet its long-term debt obligations, as well as our recently released local GO criteria," said Standard & Poor's credit analyst Lauren Spalten. The ratings reflect S&P's assessment of the following factors for the city: -- A very weak economy, -- Strong budgetary flexibility, -- Weak budgetary performance, -- Adequate liquidity, -- Adequate management conditions, and -- A very weak debt and contingent liabilities profile. LOEHMANN'S HOLDINGS: Has Interim OK to Use Cash Collateral ---------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York issued two separate orders giving Loehmann's Holdings Inc., et al., interim authority to use the Cash Collateral of Wells Fargo Bank, National Association, as administrative agent and collateral agent to the March 2011 Prepetition Credit Facility and the Cash Collateral of the lenders under the Second and Third Credit Agreements. The use of the First Priority Cash Collateral will terminate until expiration of the Remedies Notice Period or Jan. 13, 2014. The Debtors' use of the Wells Fargo Cash Collateral until the payment in full of the Wells Fargo Revolving Credit Claims. The use of the Junior Priority Cash Collateral will terminate until either the indefeasible payment in full of (A) the outstanding obligations owed to the First Lien Secured Creditor and (B) all First Lien Adequate Protection Obligations or Jan. 17, 2014. The Debtors' use of the Junior Priority Secured Creditors' Cash Collateral may also termination upon expiration of the Remedies Notice Period or the dismissal of any of the Chapter 11 Cases or conversion of the Chapter 11 Cases to a Chapter 7 case, or the appointment of a Chapter 11 trustee or examiner. As adequate protection, the First Priority Prepetition Lender will be granted replacement liens, which will be subject, during the interim period, to a carve out for (a) any quarterly or other fees payable to the U.S. Trustee and (b) the reasonable fees and expenses incurred by any trustee appointed by the Court, not to exceed $25,000 in the aggregate. The Second Lien Replacement Liens and the Third Lien Replacement Liens will be subject to a carve-out for (a) any quarterly or other fees payable to the U.S. Trustee; (b) the reasonable fees and expenses incurred by a Chapter 7 trustee, the carve-outs not to exceed $100,000. DSW Leased Business Division LLC, aka Affiliated Business Group, objected to the language included in Cash Collateral Order and suggested that the replacement liens granted to the Prepetition Lenders will not attach to any property that is being held by the Debtors. DSW also objected to the Cash Collateral Motion because it does not clearly acknowledge or protect DSW's ownership interest in and to the merchandise that are being held by the Debtor on consignment at the covered stores. Michael R. Dal Lago, Esq. -- mdallago@hahnlaw.com -- and Nancy A. Valentine, Esq. -- navalentine@hahnlaw.com -- at HAHN LOESER & PARKS LLP, in Naples, Florida; and Leslie Berkoff, Esq. -- lberkoff@moritthock.com -- at MORITT HOCK & HAMROFF LLP, in Garden City, New York. The hearing to consider final approval of the Debtors' request for use of the Secured Creditors' Cash Collateral is scheduled for Jan. 16, 2014, at 2:00 p.m. (ET). Objections must be filed on or before Jan. 9. A full-text copy of the First Priority Interim Cash Collateral Order, together with the 13-week cash flow budget, is available at http://bankrupt.com/misc/LOEHMANNcashcol64.pdf A full-text copy of the Junior Priority Interim Cash Collateral Order, together with the 13-week cash flow budget, is available at http://bankrupt.com/misc/LOEHMANNcashcol65.pdf About Loehmann's Discount retailer Loehmann's Holdings Inc., and two affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-14050) on Dec. 15, 2013. This is Loehmann's third bankruptcy filing, but this time it will be a liquidation with going-out-of-business sales. The first bankruptcy was a 14-month Chapter 11 reorganization completed in September 2000. At the time the chain had 44 stores in 17 states. The second bankruptcy culminated in a reorganization plan implemented in March 2011. It was acquired by Istithmar in July 2006 in a $300 million transaction. Loehmann's, based in the Bronx borough of New York City, operated 39 stores in 11 states as of the 2013 bankruptcy filing. In the new Chapter 11 case, Loehmann's disclosed assets and debt both totaling $96.7 million. The debt includes $4.3 million on a first-lien credit agreement with Wells Fargo Bank NA as agent, not including about $9 million in letters of credit. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, serves as counsel to the Debtors; Canaccord Genuity Inc. is the investment banker; Clear Thinking Group LLC is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims and notice agent. LOEHMANN'S HOLDINGS: Jan. 3 Going-Out-of-Business Auction Set ------------------------------------------------------------- Loehmann's Holdings Inc., et al., obtained interim approval from Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to a sale process where a joint venture composed of SB Capital Group, LLC, Tiger Capital Group, LLC, and A&G Realty Partners, LLC, will liquidate the assets, absent higher and better offers and an auction to be conducted on Jan. 3, 2014. The Stalking Horse Bidder's bid sets a "floor" on bids for the Assets by providing a purchase price of: (i) $19 million in cash subject to certain adjustments; (ii) 25% of any net proceeds received or realized by the Stalking Horse Bidder in respect of any sale or other disposition of Additional Agent Merchandise; (iii) 75% of the portion of proceeds of the sale of certain Consignment Goods; (iv) 25% of net proceeds received or realized by the Stalking Horse Bidder in respect of any Disposition of Intellectual Property and Real Property Leases; and (v) assumption of the other Assumed Liabilities. The deadline for submitting a Qualified Bid will be Dec. 31, 2013, at 12:00 p.m. (noon)(prevailing Eastern Time). If a bidder other than the Stalking Horse Bidder's bid is deemed the best bid during the auction, the Stalking Horse Bidder will be paid a break-up fee in the amount of $250,000 and reimburse expenses not to exceed $200,000, plus the costs and expenses of acquiring signage and other advertising and promotional material in connection with the sales. The Court will consider approval of the sale to the successful bidder and consummation of the sales on Jan. 7, 2014, at 2:00 p.m. (prevailing Eastern Time). About Loehmann's Discount retailer Loehmann's Holdings Inc., and two affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-14050) on Dec. 15, 2013. This is Loehmann's third bankruptcy filing, but this time it will be a liquidation with going-out-of-business sales. The first bankruptcy was a 14-month Chapter 11 reorganization completed in September 2000. At the time the chain had 44 stores in 17 states. The second bankruptcy culminated in a reorganization plan implemented in March 2011. It was acquired by Istithmar in July 2006 in a $300 million transaction. Loehmann's, based in the Bronx borough of New York City, operated 39 stores in 11 states as of the 2013 bankruptcy filing. In the new Chapter 11 case, Loehmann's disclosed assets and debt both totaling $96.7 million. The debt includes $4.3 million on a first-lien credit agreement with Wells Fargo Bank NA as agent, not including about $9 million in letters of credit. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, serves as counsel to the Debtors; Canaccord Genuity Inc. is the investment banker; Clear Thinking Group LLC is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims and notice agent. LOEHMANN'S HOLDINGS: Has Until Jan. 28 to File Schedules -------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York extended the time within which Loehmann's Holdings Inc. and its debtor affiliates must file their schedules of assets and liabilities and statements of financial affairs until Jan. 28, 2014. About Loehmann's Discount retailer Loehmann's Holdings Inc., and two affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-14050) on Dec. 15, 2013. This is Loehmann's third bankruptcy filing, but this time it will be a liquidation with going-out-of-business sales. The first bankruptcy was a 14-month Chapter 11 reorganization completed in September 2000. At the time the chain had 44 stores in 17 states. The second bankruptcy culminated in a reorganization plan implemented in March 2011. It was acquired by Istithmar in July 2006 in a $300 million transaction. Loehmann's, based in the Bronx borough of New York City, operated 39 stores in 11 states as of the 2013 bankruptcy filing. In the new Chapter 11 case, Loehmann's disclosed assets and debt both totaling $96.7 million. The debt includes $4.3 million on a first-lien credit agreement with Wells Fargo Bank NA as agent, not including about $9 million in letters of credit. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, serves as counsel to the Debtors; Canaccord Genuity Inc. is the investment banker; Clear Thinking Group LLC is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims and notice agent. LOEHMANN'S HOLDINGS: Employs Epiq as Claims & Noticing Agent ------------------------------------------------------------ Loehmann's Holdings Inc. and its debtor affiliates sought and obtained authority from Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to employ Epiq Bankruptcy Solutions, LLC, as claims and noticing agent. About Loehmann's Discount retailer Loehmann's Holdings Inc., and two affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-14050) on Dec. 15, 2013. This is Loehmann's third bankruptcy filing, but this time it will be a liquidation with going-out-of-business sales. The first bankruptcy was a 14-month Chapter 11 reorganization completed in September 2000. At the time the chain had 44 stores in 17 states. The second bankruptcy culminated in a reorganization plan implemented in March 2011. It was acquired by Istithmar in July 2006 in a $300 million transaction. Loehmann's, based in the Bronx borough of New York City, operated 39 stores in 11 states as of the 2013 bankruptcy filing. In the new Chapter 11 case, Loehmann's disclosed assets and debt both totaling $96.7 million. The debt includes $4.3 million on a first-lien credit agreement with Wells Fargo Bank NA as agent, not including about $9 million in letters of credit. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, serves as counsel to the Debtors; Canaccord Genuity Inc. is the investment banker; Clear Thinking Group LLC is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims and notice agent. LOUDOUN HEIGHTS: Section 341(a) Meeting Scheduled for Jan. 15 ------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Loudoun Heights, LLC, will be held on Jan. 15, 2014, at 01:00 p.m. at Office of the U.S. Trustee (Chapter 11), 115 South Union Street, Suite 208, Alexandria, Virginia. Creditors have until April 15, 2014, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Loudoun Heights, LLC, filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 13-15588) on Dec. 16, 2013. The Debtor disclosed total assets of $13.10 million and total debts of $4.84 million. The petition was signed by Joe Bane as sole manager. Frank Bredimus, Esq., at Law Office of Frank Bredimus, serves as the Debtor's counsel. Judge Brian F. Kenney presides over the case. M*MODAL INC: Bank Debt Trades at 15% Off ---------------------------------------- Participations in a syndicated loan under which M*Modal Inc. is a borrower traded in the secondary market at 85.40 cents-on-the- dollar during the week ended Friday, December 20, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents an increase of 0.23 percentage points from the previous week, The Journal relates. M*Modal Inc. pays 550 basis points above LIBOR to borrow under the facility. The bank loan matures on Aug. 20, 2019 and carries Moody's B2 rating and Standard & Poor's B rating. The loan is one of the biggest gainers and losers among 205 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. MICROVISION INC: Receives Nasdaq Listing Deficiency Notice ---------------------------------------------------------- MicroVision, Inc. on Dec. 20 disclosed that it received a notice on December 17, 2013 from The Nasdaq Stock Market advising the company that for 30 consecutive business days preceding the date of the notice the company was not in compliance with the $50,000,000 minimum market value of listed securities required for continued listing on The Nasdaq Global Market pursuant to Nasdaq's listing requirements. In accordance with Nasdaq's listing rules, the company has 180 calendar days, or until June 16, 2014, to regain compliance with this requirement. This notification is simply a notice of deficiency, not of imminent delisting, and has no current effect on the listing or trading of MicroVision's common stock on The Nasdaq Global Market. During the 180-day compliance period, MicroVision can regain compliance if the market value of its listed securities closes at $50,000,000 or more for a minimum of 10 consecutive business days. The company could also regain compliance with Nasdaq's continued listing requirements by reporting stockholders' equity of $10 million or more. If the company does not regain compliance by June 16, 2014, Nasdaq will notify the company that its securities are subject to delisting. The company's key objectives are to secure customer commitments under the company's Image by PicoP(R) licensing business model, to strengthen its supply chain to enable customers to bring products to market and to aggressively manage cash used in operations. The company believes the best way to regain compliance is to successfully execute on its strategy. About MicroVision MicroVision 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. MicroVision's patented display technology helps OEMs break down display boundaries and offer enhanced visibility to mobile experiences. Nearly two decades of research has led MicroVision to become an independently recognized leader in the development of intellectual property. MicroVision's IP portfolio has been recognized by the Patent Board as a top 50 IP portfolio among global industrial companies and is also included in the Ocean Tomo 300 Patent Index. The company is based in Redmond, Wash. MONTREAL MAINE: Fortress to Bid at Jan. 21 Auction -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that an affiliate of Fortress Investment Group LLC will make the opening bid of $14.25 million when Montreal Maine & Atlantic Railway Ltd. goes up for auction on Jan. 21. According to the report, the bankruptcy court in Bangor, Maine, yesterday approved sale procedures, with competing bids due Jan. 17 and a sale-approval hearing on Jan. 23. The auction and sale approval are on the schedule recommended by the railroad's trustee Robert J. Keach and his investment banker Peter Kaufman from Gordian Group LLC. "We have every reason to expect a robust auction," Keach said in an e-mailed statement. Buyers can bid separately for the U.S. and Canadian assets. The trustee and his Canadian counterpart will decide if the best offer comes from selling the assets together or separately. Montreal Maine's runaway train killed 47 after derailing and burning in Lac-Megantic, Quebec in July. Bankruptcies followed in August in Canada and the U.S. The U.S. side of the bankruptcy has a trustee, as required when railroads are in reorganization. The Hermon, Maine-based railroad operates 510 route-miles (820 kilometers) in Maine, Vermont and Quebec. The official lists of property and debt show assets with a value of $46.1 million and liabilities totaling $54.4 million, including $38.4 million in secured claims. The railroad didn't estimate injury, death and damage claims. In addition to $28 million owing to the U.S. Federal Railroad Administration, Wheeling & Lake Erie Railway Co. is owed $6 million, secured by accounts receivable. Trade suppliers are owed $3.5 million, according to a court filing. 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. NEOMEDIA TECHNOLOGIES: Confirms Termination of Scanbuy's License ---------------------------------------------------------------- NeoMedia Technologies, Inc., issued a letter to Scanbuy, Inc., in regards to the Settlement and License Agreement originally entered into between the Company and Scanbuy on Oct. 16, 2009. The Agreement was filed with the U.S. Securities and Exchange Commission on Oct. 20, 2009. The letter confirms the Company's Sept. 17, 2013, termination of Scanbuy's license to the Company's patents due to a material breach of the Agreement by Scanbuy. About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. After auditing the 2011 results, Kingery & Crouse, P.A, in Tampa, FL, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has ongoing requirements for additional capital investment. NeoMedia reported a net loss of $19.38 million in 2012 and a net loss of $849,000 in 2011. The Company's balance sheet at Sept. 30, 2013, showed $5.62 million in total assets, $118.32 million in total liabilities, all current, $4.81 million in series C convertible preferred stock, $348,000 in series D convertible preferred stock and a stockholders' deficit of $117.86 million. NEW ORLEANS SEWERAGE: Moody's Affirms Ba2 Revenue Bonds Rating -------------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 rating to Sewerage and Water Board of New Orleans' (LA) outstanding Water Revenue Bonds affecting $30 million. The outlook for the bonds has changed from negative to positive. Summary Rating Rationale: The bonds are secured by a gross pledge of revenues received from the imposition of water rates. The rating and positive outlook signal modest improvement in the system's financial position which is a direct result of significant rate increases that were established at the end of fiscal 2012, as well as forgiveness of the system's Special Community Disaster Loan. The rating also reflects the system's modestly growing customer base, manageable debt profile with plans for borrowing in fiscal 2014 and 2015, and adequate debt service coverage. The rating continues to reflect weak financial metrics and liquidity as rate increases have yet to have a significant impact on the system's unrestricted reserve position. Strengths: -- Significant rate increases -- Continued modest growth in customer base -- Board of Liquidation oversight -- Forgiveness of Special Community Disaster Loan Challenges: -- Weak balance sheet performance -- Weak liquidity position -- Plans for additional borrowing Outlook: The positive outlook reflects improvement in the system's financial position which is a direct result of significant multi- year rate increases that were established at the end of fiscal 2012, as well as forgiveness of the system's Special Community Disaster Loan. Future credit reviews will examine the impact the rate increases will have on the system's financial plan objectives, including building reserves and debt service coverage. What Could Make the Rating Go UP: -- Trend of improved financial performance which builds reserves -- Continued stable growth and diversification of customer base -- Improved debt service coverage absent one-time revenues What Could Make the Rating Go DOWN: -- Prolonged weak financial performance and narrow liquidity -- Significant increase in debt profile -- Inability to boost current reserve position NEXSTAR BROADCASTING: TV Stations Deal No Impact on Moody's B2 CFR ------------------------------------------------------------------ Moody's says the announced plan of Nexstar Broadcasting Group, Inc. to acquire six television stations in two markets for $37.5 million does not impact the B2 corporate family rating or positive outlook of Nexstar Broadcasting, Inc. (Nexstar). Moody's does not believe the acquisition will meaningfully impact credit metrics, and it would enhance scale and geographic diversification. Moody's expects the company to fund the transaction with a combination of internally generated cash and debt. Based on the small purchase price relative to Nexstar's total debt of approximately $1.3 billion and the purchase price multiple of 5.9 times, Moody's does not believe it will significantly alter the company's leverage. Moody's estimates leverage at 5.2 times debt- to-EBITDA on a two year average basis through September 30 and pro forma for all announced transactions. Furthermore, through refinancing activity, Nexstar has reduced its weighted average cost of debt to approximately 5% from the mid 6% range in the first half of 2013 and over 7% the prior year. As such, interest expense does not increase commensurately with the incremental debt incurred to fund acquisitions, so the EBITDA gained from stations acquired boosts free cash flow. The acquisition expands the company's scale and improves geographic diversification, with the addition of six television stations in two markets, both of which are new markets, and Moody's expects cost and revenue synergies to contribute to EBITDA growth. Moody's will evaluate the impact of any new financing on ratings for existing debt as details of the likely long term financing structure become more clear. Based in Irving, Texas, Nexstar owns, operates, programs or provides sales and other services to 72 television stations and 13 related digital multicast signals reaching 41 markets or approximately 12.1% of all U.S. television households, and its last twelve months revenue through September 30 was $480 million. Pro-forma for the completion of all announced transactions and reflecting the dissolution of JOA in Rochester NY at year end, Nexstar's portfolio will increase to 108 television stations in 56 markets reaching approximately 16% of all U.S. television households with estimated two year average revenue of about $600 million. NNN 3500: Stipulation to Stay District Court Proceedings Approved ----------------------------------------------------------------- The Bankruptcy Court approved a stipulation regarding the stay of District Court proceedings in the Chapter 11 cases of NNN 3500 MAPLE 26, LLC, et al. The stipulation entered between the Debtors and U.S. Bank National Association -- as trustee, successor-in-interest to Bank of America, N.A., as trustee for the Registered Holders of Wachovia Bank Commercial Mortgage Trust, CommercialMortgage Pass-Through Certificates, Series 2006-C23, by and through CWCapital Asset Management LLC, solely in its capacity as special servicer -- outlined the scope of automatic stay filed by U.S. Bank. Pursuant to the stipulation: 1. The District Court Action is stayed unless and until the Court enters an order granting relief from the automatic stay with respect to the Debtor, New Debtors or the Non-Debtor Defendants to allow the District Court Action to proceed, or the automatic stay otherwise terminates as to the Debtor and the New Debtors. 2. The Trust may seek relief from the automatic stay or the stay granted in the order with respect to any or all of the Debtor, the New Debtors or the Non-Debtor Defendants at any time. 3. The stay imposed will be effective immediately upon entry of an order approving the stipulation. About NNN 3500 Maple 26 NNN 3500 Maple 26, LLC, based in Costa Mesa, Calif., filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 12-23718) on Nov. 30, 2012. Judge Scott C. Clarkson presided over the case. In its schedules, the Debtor disclosed $45,563,241 in total assets and $46,658,593 in total liabilities. On Jan. 23, 2013, the Bankruptcy Court entered an order transferring venue of the bankruptcy case to the U.S. Bankruptcy Court for the Northern District of Texas (Case No. 13-30402). Judge Harlin DeWayne Hale presides over the case. Darvy M. Cohan, Esq., with offices at La Jolla, Calif., and Michelle V. Larson, Esq., at Andrews Kurth LLP, in Dallas, represent the Debtor as counsel. NNN 3500 MAPLE 26 LLC, et al., submitted to the U.S. Bankruptcy Court for the Northern District of Texas a Disclosure Statement and Joint Plan of Reorganization dated Nov. 7, 2013. The Plan proposes to pay in full all creditors. The Reorganized Debtors will assume the liability for and obligation to perform and make all distributions or payments on account of all Allowed Claims. NNN PARKWAY CORPORATE: Can Access Cash Collateral Until Jan. 7 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation continuing the interim hearing on the motion of NNN Parkway Corporate Plaza 3 LLC to (i) use cash collateral; and (ii) continue existing cash management system. The stipulation was entered between NNN Parkway Corporate Plaza 3, LLC, and U.S. Bank National Association -- as Trustee, successor- in-interest to Bank of America, N.A., as Trustee, successor to Wells Fargo Bank, N.A., as Trustee for the Registered Holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass- Through Certificates, Series 2006-C23, by and through CWCapital Asset Management LLC, solely in its capacity as Special Servicer. Pursuant to the stipulation: 1. the interim hearing on the cash collateral motion and the cash management motion will be continued until Jan. 7, 2014, at 10:30 a.m., or the earliest available date that is convenient for the Court. 2. The deadlines for opposition and replies on the motions will be seven days prior to the continued hearing Date scheduled for Jan. 7. In a separate order, the Court also approved a stipulation between the same parties on the Debtor's use of cash collateral until the date of the continued hearing. The senior lienholder consents to use of rents generated by the property, collected by the property manager, deposited into the Restricted Account or held in any reserve accounts solely to pay property-level operating expenses necessary to operate the property during the operative period. As reported in the Troubled Company Reporter on Nov. 26, 2013, the Debtor proposes to provide as adequate protection replacement lien in postpetition assets, subject to a carve-out, use of the Cash Collateral limited to a budget, and adequate protection payment in the amount of monthly interest owed under the 2005 Loan Documents to CW Capital Asset Management, the special servicer to the 2005 Loan. The Debtor asked that the replacement liens be subject and junior to: (i) the payment of professional fees and expenses allowed under Sections 330 and 331 of the Bankruptcy Code of professionals engaged by the Debtor and any official committees whose engagement has been approved by this Court, but not to exceed $250,000 in the aggregate; and (ii) the fees of the Office of the United States Trustee pursuant to 28 U.S.C. Section 1930. U.S. Bank National Association -- the trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2006-C23 -- objects to the Debtor's Cash Collateral Motion, complaining that the Debtor filed its bankruptcy case to (i) compel the Trust to fund certain tenant improvement costs that the TIC Investors are unwilling to pay, and (ii) force the Trust and the non-debtor TIC Investors to accept a change in the ownership structure of the property and a modification of the Loan Documents and TIC Agreement. "The Debtor's use of bankruptcy to orchestrate a hostile takeover of the ownership interests of the 24 non-debtor owners of the Property, and to compel the use of Rents to fund leasehold expenses that are the responsibility of the owners, is manifestly improper, and should be rejected by the Court," U.S. Bank further complains. About NNN Parkway NNN Parkway Corporate Plaza 3, which owns 17.25% tenant-in-common interest in four parcels in the real property commonly referred to as Parkway Corporate Plaza, in Roseville, California, sought protection under Chapter 11 of the Bankruptcy Code on Nov. 14, 2013 (Case No. 13-19322, Bankr. C.D. Calif.). The Debtor is represented by Scott H.McNutt, Esq., Michael C. Abel, Esq., and Thomas B. Rupp, Esq., at McNutt Law Group LLP, in San Francisco, California; and Robert A. Hessling, Esq., and Matthew F. Kennedy, Esq., at ROBERT A. HESSLING, APC, in Torrance, California. U.S. Bank is represented by Keith C. Owens, Esq. -- kowens@venable.com -- and Jennifer L. Nassiri, Esq. -- jlnassiri@venable.com -- at Venable LLP, in Los Angeles, California. NORTH AMERICAN BREWERIES: Moody's Cuts CFR & Loan Rating to Caa1 ---------------------------------------------------------------- Moody's downgraded North American Breweries' ("NAB") CFR to Caa1 from B2, PDR to Caa1-PD from B2-PD and Senior Secured Term Loan to Caa1 (LGD4-55%) from B2 (LGD5-54%). The downgrade follows another weak quarter that exacerbated already weak financial metrics and liquidity and required an equity cure from its parent, Cerveceria Costa Rica S.A. (CCR S.A., not rated) to keep it in compliance with its financial covenants. Ratings Rationale: NAB's Caa1 CFR reflects its high financial leverage, weak liquidity, small scale, declining revenue and limited geographic diversity relative to large global brewers. Leverage has increased to 7.4 times as of September 30th, significantly higher than its mid four times pro-forma leverage following the acquisition by Florida Ice & Farm Company ("FIFCO"), as volumes have declined for a number of quarters. Furthermore, significant acquisition activity over the past few years has led to the creation of the portfolio as it exists so the longer term track record of managing the brands remains to be seen. The company's liquidity is very weak. NAB required an equity cure to remain in compliance with its 6.0 times maximum total leverage ratio covenant at 9/30/13 and the covenant steps down to 5.75 times at 12/2013 and 5.5 times at 3/31/2014. Moody's estimates that NAB's cushion will remain tight and that the tight cushion will restrict NAB's ability to fully use its revolving credit facility without an improvement in EBITDA or another equity injection. Internal liquidity remains weak and is insufficient to cover all of NAB's cash needs. NAB's strengths include the support from new owner CCR S.A. , which provided the equity cure at the end of the third quarter, less than one year after acquiring NAB. Moody's considers CCR's ownership and willingness to provide support as a credit positive, although not enough to provide a notch of ratings lift. The company also has a portfolio of brands that have long-term growth potential including Magic Hat and Labatt. Furthermore, some of NAB's struggles since the acquisition are one time in nature such as unusually cold weather in the Northeastern United States, the NHL lockout, and a quality issue at a production facility for its Pyramid brand. The company has aggressively cut costs and Capex to manage through the situation, and plans new innovation and more marketing spend next year to help reverse the negative trends experienced in 2013. But the success of these initiatives is as of yet unknown. The negative outlook reflects uncertainties around the company's turnaround plan, as well as Moody's expectation that liquidity will continue to be tight, leverage will remain high and free cash flow will likely be negative in 2014. The rating could be lowered if NAB's liquidity profile continues to weaken, operating margins decline or free cash flow deteriorates further. An upgrade would require improved liquidity, stabilization of operating profits, volume and revenue and debt to EBITDA that declines to below 6.0 times. The following ratings were lowered - Corporate Family Rating to Caa1 from B2 - $175 million Senior Secured Term Loan due 2018 to Caa1 (LGD 4, 55%) from B2 (LGD 4, 54%) - Probability of Default Rating from to Caa1-PD from B2-PD Headquartered in Rochester, NY, North American Breweries Holdings, LLC is an independent brewer of beer and other malt beverage products. Its portfolio of brands include Labatt brands in the US, Magic Hat, Pyramid, Genessee, Original Honey Brown Lager, Seagram's Escapes and Mac Tarnahans. NAB also performs contract brewing on behalf of other companies. The company is owned by Cerveceria Costa Rica S.A. ("CCR"), a subsidiary of Florida Ice and Farm Company ("FIFCO") a publicly traded holding company based in Costa Rica with interests in beer and other beverages as well as food, retail and other businesses. OIL STATES: S&P Retains 'BB+' Corp. Credit Rating on Watch Neg -------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB+' corporate credit and other ratings on Houston-based Oil States International Inc. remain on CreditWatch with negative implications. S&P placed the ratings on CreditWatch on Aug. 19, 2013. The ratings on Oil States remain on CreditWatch with negative implications due to the potential for a downgrade upon completion of the spin-off of the company's accommodations business into a separate entity. The company believes that it can execute the proposed spin-off through a tax-free distribution to its shareholders during or before the summer of 2014. The accommodations business currently generates about half of the company's EBITDA. S&P believes that the separation of Oil States' accommodations business would have a negative impact on the company's creditworthiness given the diminution of business diversity and our assessment of the company's other business segments. In addition, the capital structure of the future stand-alone company remains uncertain at this point. "We will resolve the CreditWatch listing after we conduct a full assessment of the creditworthiness of the stand-alone Oil States. In resolving the CreditWatch listing, we will evaluate key issues, including Oil States' business risk profile, its capital structure after the transaction, and its financial policy. We would expect to either lower or affirm the ratings upon completion of our review at around the close of the spin-off transaction," said Standard & Poor's credit analyst Christine Besset. OVERSEAS SHIPHOLDING: IRS Files $265.9 Million Tax Claim -------------------------------------------------------- Overseas Shipholding Group, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission that on Dec. 19, 2013, the Internal Revenue Service filed with the Bankruptcy Court- appointed claims agent claim number 1654, an amended proof of claim, a priority claim against OSG for corporate income tax and interest for the years 2004, 2005, 2009, 2010 and 2011, in the amount of $264,277,962.29. The Amended Proof of Claim amends claim number 82, in the amount of $463,013,177.63. The Amended Proof of Claim reflects the result of extensive discussions between representatives of OSG and the IRS concerning the calculation of OSG's tax liability and follows OSG's agreement (subject to Bankruptcy Court approval) on Dec. 13, 2013 with a notice of proposed adjustment issued by the IRS, which provides that OSG will include additional taxable income under Section 956 of the Internal Revenue Code in respect of 2010 and 2011. On Dec. 19, 2013, the IRS additionally filed with the Bankruptcy Court-appointed claims agent claim number 1653, an amended administrative claim, an administrative claim against OSG for corporate income tax, interest and penalties for 2012, in the amount of $1,659,739.94. The Amended Administrative Claim amends claim number 1650, in the amount of $1,654,764.80. About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. Overseas Shipholding Group Inc. creditors' committee and an ad hoc group of unsecured Noteholders have both developed term sheets for reorganization plans. According to the committee, the noteholders' proposal would include a "multi-party rights offering" along with third-party financing. OVERSEAS SHIPHOLDING: Plan Exclusivity Extended Through Feb. 28 --------------------------------------------------------------- Overseas Shipholding Group, Inc., continues to have exclusive control of its restructuring after Bankruptcy Judge Peter J. Walsh extended OSG's exclusive period to file a Chapter 11 reorganization plan through and including Feb. 28, 2014, and its exclusive periods to solicit votes on the Plan through and including April 29. OSG requested an extension of the exclusivity periods through the approved dates. Judge Walsh said that, to the extend OSG seeks an extension of the exclusivity periods, it must file and serve the request on or before Feb. 24, and the request will be heard at an omnibus hearing to be scheduled for March 7. The Official Committee of Unsecured Creditors filed a limited objection to the extension request, joined by U.S. Bank N.A., as administrative agent. The unsecured creditors urged the judge to limit the extension to no more than two months, saying they intend to file their own plan if OSG hasn't submitted one by then. Wilmington Trust N.A., the indenture trustee, issued a statement I support of the extension request. The creditors' committee and an ad hoc group of unsecured Noteholders have both developed term sheets for reorganization plans. According to the committee, the noteholders' proposal would include a "multi-party rights offering" along with third- party financing. About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. OVERSEAS SHIPHOLDING: ADR Procedures Approved --------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved Overseas Shipholding Group's motion for entry of an order authorizing implementation of alternative dispute resolution (ADR) procedures. As previously reported, "The first stage of the ADR Procedures will be the following offer exchange procedures (the 'Offer Exchange Procedures')....At any time following the entry of the Order, the Debtors may designate a Designated Claim for resolution through the ADR Procedures by serving upon the alleged holder of the Designated Claim (the 'Designated Claimant')....The ADR Notice may also include an offer by the Debtors to settle the Designated Claim (a 'Settlement Offer'). The ADR Notice also will require the Designated Claimant to sign and return the ADR Notice along with the Designated Claimant's Permitted Response....Upon the failure to timely return the ADR Notice or to include a Permitted Response, the Debtors will file with the Court a notice of default and proposed order disallowing and expunging the claim....The only permitted responses to an ADR Notice (collectively, the 'Permitted Responses') are (i) complete responses to the Information Requests, (ii) acceptance of the Settlement Offer (if any), or (iii) rejection of the Settlement Offer (if any) coupled with a Counteroffer." The motion continues, "If the ADR Procedures are not approved, the Debtors could incur significant expense, distraction, and drain on the attention of the Debtors' personnel and suffer significant delays that would slow down the Debtors' reorganization process. The ADR Procedures provide Designated Claimants with the necessary incentive to come to the bargaining table and offer the Debtors the opportunity to settle claims either through the Offer Exchange Procedures or Mediation with the assistance of a neutral outside party and without time-consuming and costly litigation. The ADR Procedures are also designed to not unduly prejudice the Designated Claimants and protect their rights. Accordingly, the Debtors submit that the ADR Procedures are an efficient and equitable way to resolve the remaining claims and should be approved." About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. PATRIOT COAL: Halts Duty to File SEC Disclosures ------------------------------------------------ Patriot Coal Corporation filed with the Securities and Exchange Commission a Form 15 "CERTIFICATION AND NOTICE OF TERMINATION OF REGISTRATION UNDER SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR SUSPENSION OF DUTY TO FILE REPORTS UNDER SECTIONS 13 AND 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934." The document, signed by John E. Lushefski, the company's Senior Vice President & Chief Financial Officer, indicates that there is no longer any holder of the company's Common Stock, par value $0.01 per share; Preferred Share Purchase Rights; or 8.250% Senior Notes due 2018. On Dec. 18, Patriot Coal announced its emergence from the 18-month restructuring process with "a strong balance sheet, competitive cost structure, and streamlined operating profile focused on market opportunities that create value." Patriot completed the final steps in its Chapter 11 restructuring on December 18 by closing $545 million in exit financing, with portions of the exit financing led by Barclays Bank PLC and Deutsche Bank Securities Inc., and completing its rights offerings, receiving $250 million of junior capital from Knighthead Capital Management, LLC and other participating unsecured creditors. The Company also filed notice of the effectiveness of the Plan of Reorganization with the U.S. Bankruptcy Court for the Eastern District of Missouri. Upon the effectiveness of the Plan, all previously issued and outstanding shares of Patriot common stock were cancelled, as were all other previously issued and outstanding equity interests and bonds. Patriot issued shares of a new class of common stock to unsecured creditors as provided in the Plan. Additionally, the Company issued notes and warrants pursuant to the rights offerings. Patriot expects to make initial distributions to unsecured claim holders in the first quarter of 2014. As a result of the effectiveness of the Plan, Patriot is a private company and is no longer subject to the reporting requirements of the U.S. Securities and Exchange Commission. On Dec. 6, 2011, Patriot Coal filed a registration statement on Form S-8 (No. 333-178339). The Registration Statement registered a total of 7,000,000 shares of Common Stock and Preferred Share Purchase Right. On Wednesday, Patriot Coal filed a Post-Effective Amendment No. 1 to deregister all of the Securities and interests that remain unissued as of this date. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP serves as lead restructuring counsel. Bryan Cave LLP serves as local counsel to the Debtors. Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. Patriot Coal Corp., et al., filed with the U.S. Bankruptcy Court for the Eastern District of Missouri a First Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 9, 2013, and a Second Amended Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement on Oct. 26, 2013. POTLATCH CORP: S&P Affirms 'BB+' Rating & Removes From CreditWatch ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its 'BB+' ratings, including its corporate credit rating, on Spokane, Wash.- based Potlatch Corp. S&P removed all the ratings from CreditWatch where they were placed with positive implications on Nov. 26, 2013. The outlook is stable. S&P's ratings affirmation and outlook under the revised criteria are based on its view that the smaller size of Potlatch's EBITDA relative to its investment-grade forest and paper products peers is a limiting factor to a higher rating at this time. S&P's affirmation and stable outlook also reflect its expectations that recovering housing markets and Potlatch's strong liquidity provide it the flexibility to pursue modest timberlands acquisitions and an increase in its dividend such that forecast debt to EBITDA is 3x or lower, after adjusting for surplus cash. "The stable outlook reflects our view that recovering housing markets and Potlatch's strong liquidity provide it the flexibility to pursue modest acquisitions and an increase in its dividend such that forecast debt to EBITDA is 3x or lower, after adjusting for surplus cash," said Standard & Poor's credit analyst Tobias Crabtree. An upgrade would most likely follow from a meaningful expansion of Potlatch's timberlands portfolio toward a size more comparable to peers such as Plum Creek, Weyerhaeuser, or Rayonier. S&P would also raise its rating on a change in financial policies such that leverage dropped and was sustained below 2x EBITDA. S&P do not ascribe a high probability to either scenario over the next 12 to 24 months. S&P views a downgrade, at this time, to be highly unlikely over the next 12 to 18 months given the anticipated recovery in housing markets and Potlatch's "strong" liquidity. Still, S&P could lower the ratings if Potlatch's leverage were above 4x and FFO to debt in the mid-teens area on a sustained basis. For this to occur, 2014-2015 EBITDA would have to decline more than 40% from S&P's current forecast or the company's financial policy become more aggressive with respect to dividends, share repurchases, or debt- financed timberland purchases. PROTECTIVE LIFE: Fitch Affirms BB+ Rating on Sub. Debt Classes -------------------------------------------------------------- Fitch Ratings has affirmed Protective Life Corp.'s (NYSE: PL) Issuer Default Rating (IDR) at 'BBB+' and senior debt ratings at 'BBB'. At the same time, Fitch has affirmed the 'A' Insurer Financial Strength (IFS) ratings of PL's primary life insurance subsidiaries. The Rating Outlook is Stable. Key Rating Drivers: PL's ratings continue to reflect the group's diversified operating profile, strong operating performance, solid debt service capability and sound risk-adjusted capitalization. The company's financial leverage ratio is in line with rating expectations, but total leverage is high driven by reserve financing. Fitch views PL's operating results as good and in line with expectations for the rating. PL's operating return on equity based on Fitch's calculation is expected to be about 11% for the full year 2013 compared to 10% in 2012. Results in the first nine months of 2013 were driven by improvement in the Annuities, Stable Value, and Asset Protection segments, partially offset by less favorable mortality in the Life Marketing and Acquisitions segments. The acquisition of MONY Life Ins. Co. and business of MONY Life of America closed Oct. 1 and is expected to add about $20 million to full-year 2013 earnings before financing costs. Fitch views PL's debt service capability as strong. Fitch expects GAAP interest coverage in 2013 to be in the 10x range, which is above rating expectations. Cash interest coverage, which considers maximum statutory dividend capacity and committed cash at the holding company relative to adjusted interest expense, is very strong at about 10x. Protective estimates the NAIC risk-based capital (RBC) ratio of Protective Life Insurance Company, the group's primary operating company, was about 550% as of Sept. 30, 2013, compared with 510% at year-end 2012. The RBC is expected to be in the 400% range for full-year 2013, reflecting the close of the $1 billion MONY acquisition in the fourth quarter. PL's financial leverage ratio (FLR) is in line with rating expectations at 28% at Sept. 30, 2013, compared to 29% at year-end 2012. Fitch notes, however, that the FLR excludes reserve funding arrangements, which are included in Fitch's total financings and commitments (TFC) ratio. Fitch views PL's TFC as high relative to peers at 1.7x as of Sept. 30, 2013, but generally views PL's reserve financing activities as well-managed. Key concerns include macroeconomic headwinds from low interest rates and the weak economic recovery. These conditions are expected to constrain PL's ability to improve earnings over the near term and could have a material negative effect on the company's earnings and capital in a severe, albeit unexpected, scenario. Rating Sensitivities: The key rating triggers that could result in an upgrade include GAAP interest coverage above 9x, operating return on equity (ROE) sustained in the 11% to 12% range; financial leverage below 25%, and TFC below 1.0x. The key rating triggers that could result in a downgrade include: financial leverage above 30%; reported RBC below 300%, a downturn or weak growth in earnings, or a material reinsurance loss. Ratings could also be pressured if interest coverage falls below 5x or the TFC rises above 2.0x on a sustained basis. Fitch has affirmed the following ratings with a Stable Rating Outlook: Protective Life Corporation -- IDR at 'BBB+'; -- $150 million in senior notes due 2014 at 'BBB'; -- $150 million in senior notes due 2018 at 'BBB'; -- $400 million of 7.38% senior notes due 2019 at 'BBB'; -- $300 million of 8.45% senior notes due 2039 at 'BBB'; -- $100 million of 8.00% senior retail notes due 2024 at 'BBB'; -- $288 million of 6.25% subordinated debt due 2042' at 'BB+'; -- $150 million of 6.00% subordinated debt due 2042 at 'BB+'; -- $103 million of 6.13% trust-preferreds issued through PLC Capital Trust V due 2034 at 'BB+'. Protective Life Insurance Company Protective Life and Annuity Insurance Company West Coast Life Insurance Company MONY Life Insurance Co. -- IFS at 'A'. Protective Life Secured Trust -- Medium-term notes at 'A'. PTC ALLIANCE: Moody's Affirms 'B2' CFR; Alters Outlook to Negative ------------------------------------------------------------------ Moody's Investors Service changed PTC Alliance Holdings Corporation's ("PTC") outlook to negative from stable and affirmed the B2 corporate family rating and B2-PD probability of default rating. At the same time, Moody's affirmed the B3 rating on PTC's senior secured term loan. Ratings Rationale: The change in PTC's outlook reflects its weaker than expected operating results, deteriorating credit metrics and Moody's expectation that the company will have a diminished liquidity profile due to its planned investments in oil country tubular goods (OCTG) production capacity. The company's B2 corporate family rating also reflects its small size relative to other rated steel companies, its high customer concentration, its exposure to steel price volatility and cyclical end markets. These factors are somewhat balanced by the company's relatively robust margins and returns versus other specialty steel producers, its leading position in niche markets and its strong blue chip customer base. PTC's operating results have been very weak in 2013 driven by reduced shipments to service centers, original equipment manufacturers and the automotive sector along with lower product prices. The company's revenues have declined by about 20% and adjusted EBITDA by about 40% during the nine months ended September 2013. As a result, PTC's credit metrics have deteriorated substantially with its leverage ratio (Debt/EBITDA) rising to 3.2x and its interest coverage ratio (EBIT/Interest Expense) declining to 2.4x. These metrics are not expected to improve materially over the next 12 to 18 months due to the company's planned $65 million investment in OCTG capacity and Moody's expectation that operating results will improve modestly, but remain well below the level achieved in 2011 and 2012. PTC's leverage ratio is expected to decline modestly to about 3.0x and its interest coverage is expected to remain stable at about 2.4x in 2014. The company's liquidity is adequate with about $10 million of cash and $55 million of availability on its ABL revolver. However, PTC's liquidity is expected to become substantially tighter in 2014 as it invests about $50M in its tubular products expansion and could decline to a level that Moody's considers weak. In addition, the company's expansion into OCTG products may be challenging considering the current and expected supply and demand dynamics of the industry. OCTG prices deteriorated for about 18 straight months beginning in early 2012 due to a declining natural gas rig count combined with elevated OCTG imports. Imports have accounted for about 50% of domestic consumption in 2012 and 2013. Prices have stabilized recently and a there is likely to be a favorable final outcome from the trade case filed against nine nations that export OCTG products to the United States. The International Trade Commission determined in a unanimous vote in August 2013 that there is a reasonable indication that the domestic OCTG industry is being materially injured by imports. A positive outcome from the trade case could have a material positive impact on domestic OCTG pricing and demand since imports from the countries identified in this trade case account for about 50% of total domestic imports. However, Moody's believes it is likely that this benefit will be somewhat short lived unless demand in the industry picks up significantly over the next few years. There are plans for domestic OCTG capacity additions of about 3 million tons by the end of 2016 in a market that is currently estimated at approximately 7 million tons. PTC's outlook could return to stable if the company's liquidity remains adequate and operating results improve more significantly than expected over the next 12 to 18 months resulting in modestly improved credit metrics. This would include the leverage ratio declining below 3.0x and the interest coverage ratio rising to about 3.0x. An upgrade in the near-term is unlikely given that PTC's scale remains a limitation and recent operating results have been weak. However, the ratings could experience upward pressure if the company is able to grow organically, sustain its current margins, generate positive free cash flow, and execute well on its expansion strategy. Improved credit metrics such as a leverage ratio below 3.0x and EBIT-to-interest expense trending above 4.0x could put upward pressure on the rating. Negative rating pressure could develop if deteriorating operating results, debt-financed acquisitions, capital investments, shareholder distributions or other factors result in the company's leverage ratio exceeding 4.0x or EBIT-to-interest expense remaining below 2.5x. An adverse change in the company's liquidity position could also weigh on the rating. PTC Alliance Holdings Corporation, headquartered in Wexford, PA, is a leading manufacturer of welded and cold drawn mechanical steel tubing and tubular shapes, fabricated parts, precision components and chrome-plated rod. PTC's major end markets include construction and agricultural equipment, automotive and heavy truck components and industrial machinery. PTC generated $311 million in revenue for the 12 month period ended Sept. 30, 2013. RAIN CII: Moody's Slashes CFR & Sr. Secured Debt Ratings to B2 -------------------------------------------------------------- Moody's Investors Service downgraded Rain CII Carbon's (RCC) corporate family rating to B2 from B1 and probability of default ratings to B2-PD from B1-PD. At the same time Moody's downgraded to B2 from B1 the senior secured debt ratings on RCC and CII Carbon Corp's (as co-issuers) 8% senior secured notes due 2018, and downgraded to B2 from B1 the ratings on RCC and CII Carbon Corp's ( as co-issuers, assumed the debt obligations of Rain Escrow Corp upon completion of the acquisition of Ruetgers) 8.25% senior secured notes and the 8.5% senior secured notes due 2021. The rating outlook is stable. Downgrades: Issuer: Rain CII Carbon LLC Probability of Default Rating, Downgraded to B2-PD from B1-PD Corporate Family Rating, Downgraded to B2 from B1 Senior Secured Regular Bond/Debenture Dec 1, 2018, Downgraded to B2, LGD3, 46% from B1 Issuer: Rain Escrow Corporation Senior Secured Regular Bond/Debenture Jan 15, 2021, Downgraded to B2, LGD3, 46% from B1 Senior Secured Regular Bond/Debenture Jan 15, 2021, Downgraded to B2, LGD3, 46% from B1 Outlook Actions: Issuer: Rain CII Carbon LLC Outlook, Remains Stable Issuer: Rain Escrow Corporation Outlook, Changed To No Outlook From Stable Ratings Rationale: The downgrade of RCC's corporate family rating to B2 reflects Moody's view that the company's operating performance will continue to fall behind Moody's original assumption at the time of the acquisition of Ruetgers over the next 12 to 18 months as conditions in the aluminum market , the preponderance of revenue exposure, remain challenged. Although the company's aluminum smelter customer base tends to be at less risk of closure, they continue to operate, they continue to be impacted from a volume and price perspective. When the weaker earnings performance is taken into consideration with RCC's high acquisition debt balances, profit margins and debt protection metrics are expected to continue weaker than those appropriate for a B1 rating. Moody's recognizes that 2013 is a transformative year for RCC as a result of its EUR702 million (approximately $915 million) January 2013 acquisition of Ruetgers N.V. (Ruetgers) in a transaction that was substantially debt-financed. However, consolidated earnings during the first three quarters of 2013 were affected by declining unit prices of calcined petroleum coke (CPC), higher raw material costs, and slower than expected revenue growth from Ruetgers, a producer of coal tar pitch (CTP), basic aromatics and carbon chemicals. These challenging industry conditions are expected to continue through through 2014 although the cogeneration facility from Lake Charles will add some incremental earnings to the company. Moody's expects 2014 performance to be no better than 2013 and key metrics such as EBIT/Interest and Debt/ EBITDA to trend in the 1.2x and 5.0x (from Moody's estimate of roughly 5.4x at year-end 2013) respectively over the next 12 to 18 months. Both CPC and CTP have been impacted by the still-weak and slowly recovering aluminum market and particularly by the decelerating pace of global aluminum production in recent periods. Furthermore, the time horizon for RCC to realize the benefits of the Ruetgers acquisition has likely been delayed beyond Moody's initial forecasts due to the protracted recovery of industrial demand in Europe, Ruetgers' largest end market. Against these headwinds, RCC's margins could be somewhat buoyed by the recent ramp-up of the Lake Charles Energy Project (Lake Charles), which produces renewable energy for internal use and sale to third parties. Over the medium term, the closure of RCC's Moundsville plant (effective January 2014) will benefit the company's cost profile as this plant has operated at less than 50% since 2008. While the closure of Moundsville will ultimately contribute to cost savings, this is viewed as a more medium term event. In the near term continued difficult conditions in the aluminum industry are expected to result in flat year to year performance at best. Moody's baseline assumptions contemplate no meaningful improvement in global aluminum market conditions over the next 12 to 18 months, while economic growth in Europe is expected to remain muted. Consequently, Moody's predicts only modest improvement in RCC's operating performance and credit metrics during the forecast period even with the added earnings flowing from Lake Charles. The stable outlook reflects Moody's belief that the deterioration in conditions in the markets served by RCC have bottomed and that performance will evidence improving trends over the next 12 to 18 months. In addition, the company's liquidity position and lack of material debt maturities over this time frame provide further support to the outlook. RCC's ratings could experience downward pressure if the fundamentals of its business were to further dramatically deteriorate or key suppliers or off-takers were to move their business or curtail operations. In addition, the rating could be negatively impacted if leverage, as measured by the debt/EBITDA ratio, is sustained above 5.0x, (cash flow from operations minus dividends)/debt is sustained at less than 12%, or liquidity deteriorates. Given the relatively modest size of the company, its exposure to commodity-like products, dependency on the aluminum industry as an end market, recent weak performance and ongoing integration of Ruetgers, upward rating movement is unlikely over the next 12- 18 months. However, the rating or outlook could be favorably impacted should the company successfully execute and realize the benefits of the integration of Ruetgers and maintain stable operating performance. Specifically, the ability to sustain leverage (as measured by debt/EBITDA) of less than 4.0 times, EBIT/interest above 2.5x and (cash flow from operations minus dividends)/debt of at least 15% could lead to upward rating momentum. Rain CII Carbon LLC (RCC) is a wholly owned subsidiary of Rain Industries Limited (RIL), an Indian domiciled company. RCC and its sister subsidiary Rain CII Carbon (Vizag) Limited (RCCVL), an Indian domiciled calcining company, rank among the top five calciners globally with consolidated CPC capacity of approximately 2.4 million metric tons, RCC accounting for roughly 1.9 million metric tons. RCC sells calcined petroleum coke (CPC) for two principal end uses: the production of aluminum and the production of titanium dioxide, although the majority of sales are to the aluminum industry. RCC also sells steam and electricity from waste heat generated during the calcining process. Through its Ruetgers N.V. (Ruetgers) subsidiary, the company also engages in coal tar distilling and the production of coal tar pitch (CTP), along with co-products such as naphthalene oil, aromatic oils and other carbon chemicals. RCC currently has approximately 1.1 million metric tons of coal tar distillation capacity. For the twelve months ending September 30, 2013, RCC generated approximately $1.3 billion of revenues. RG STEEL: Seeks Approval to Sell Assets to Siemens for $400,000 --------------------------------------------------------------- RG Steel Sparrows Point, LLC, seeks approval from U.S. Bankruptcy Judge Kevin Carey to sell certain assets to Siemens Industry, Inc. The assets to be sold include equipment and related spare parts stored in Siemens' Sparrows Point facility. Siemens asserts a lien against those assets securing certain amounts owing from RG Steel for services it provided to the steel maker. The consideration for the sale is $400,000, which will be paid with a credit bid by Siemens and shall reduce its pre-bankruptcy claim against RG Steel to the extent secured by the lien. Siemens will also reimburse the steel maker for expenses incurred in connection with the proposed sale. The deadline for filing objections to the proposed sale is Dec. 26. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owned Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012. Bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion. As of the bankruptcy filing, the Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. Kramer Levin Naftalis & Frankel LLP represents the Official Committee of Unsecured Creditors. Huron Consulting Services LLC serves as the Committee's financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. CJ Betters Enterprises Inc. paid $16 million for the Ohio plant. RURAL/METRO CORP: Exclusive Period Extension Approved ----------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved Rural/Metro's motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including January 31, 2014 and April 1, 2014, respectively. As previously reported, "A hearing to consider the Debtors' proposed plan of reorganization has been scheduled for December 17, 2013; however, the Debtors' Exclusive Filing Period is currently set to expire on December 2, 2013. Therefore, in an abundance of caution, the Debtors' request that the Court extend the Exclusive Periods in order to preserve the Debtors' exclusivity through confirmation and effectiveness and to maximize the likelihood of emergence in the near term with minimum distractions....Termination of the Debtors' Exclusive Periods would adversely impact the Debtors' efforts to realize a successful reorganization and the progress of these chapter 11 cases. If this Court were to deny the Debtors' request for an extension of the Exclusive Periods, any party in interest would then be free to propose a plan for each of the sixty-six Debtors. Such a ruling would foster a chaotic environment with no central focus, and may cause substantial harm to the Debtors' efforts to effect their reorganization. At this point in the cases, the Debtors are soliciting votes on a plan that is supported by all major creditor constituencies and believe they will receive the necessary votes for approval at the hearing on December 17, 2013. Accordingly, the Debtors should be granted sufficient time to complete their own plan process and their Exclusive Periods should be extended." About Rural/Metro Corp Headquartered in Scottsdale, Arizona, Rural/Metro Corporation -- http://www.ruralmetro.com-- is a national provider of 911- emergency and non-emergency interfacility ambulance services and private fire protection services, operating in 21 states and nearly 700 communities. Rural/Metro was acquired in 2011 in a leveraged buyout by Warburg Pincus LLC as part of a transaction valued at $676.5 million. Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-11952) on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District of Delaware. Debt includes $318.5 million on a secured term loan and $109 million on a revolving credit with Credit Suisse AG serving as agent. There is $312.2 million owing on two issues of 10.125 percent senior unsecured notes. The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq., Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, serve as the Debtors' local Delaware counsel. Alvarez & Marsal Healthcare Industry Group, LLC, and FTI Consulting, Inc., are the Debtors' financial advisors, while Lazard Freres & Co. L.L.C. is their investment banker. Donlin, Recano & Company, Inc., is the Debtors' claims and noticing agent. The U.S. Trustee has appointed a three-member official committee of unsecured creditors in the Chapter 11 case. The Debtors have arranged $75 million of DIP financing from a group of prepetition lenders led by Credit Suisse AG. An interim order has allowed the Debtors to access $40 million of the DIP facility. The Debtors have filed a reorganization plan largely worked out before the Chapter 11 filing in early August. Existing shareholders receive nothing in the plan. The Company's debt includes $318.5 million on a secured term loan and $109 million on a revolving credit with Credit Suisse AG serving as agent. There is $312.2 million owing on two issues of 10.125 percent senior unsecured notes. Interested parties can also contact Rural/Metro's claims agent, Donlin, Recano & Company, Inc. directly by calling Rural/Metro's restructuring hotline at 212-771-1128. Willkie Farr & Gallagher LLP and Young Conaway Stargatt & Taylor, LLP are serving as legal counsel, Lazard Freres & Co. L.L.C. is serving as investment banker, and Alvarez & Marsal and FTI Consulting, Inc. are serving as financial advisors to Rural/Metro. SECURUS TECHNOLOGIES: Moody's Affirms 'B3' Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service has affirmed the B3 corporate family rating (CFR) and B3-PD probability of default rating (PDR) of Securus Technologies Holdings, Inc. following the company's announcement to acquire Satellite Tracking of People ("STOP"). The company plans to use a modest amount of cash on hand and the proceeds from an incremental $60 million senior secured 1st lien term loan and $25 million senior secured 2nd lien term loan-add on to finance the acquisition. The outlook is stable. Affirmations: Issuer: Securus Technologies Holdings, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured Bank Credit Facility, Affirmed B2 Senior Secured Bank Credit Facility, Affirmed Caa2, Downgraded to a range of LGD5, 88 % from a range of LGD5, 87 % Outlook Actions: Outlook, Remains Stable Rating Rationale: Securus' B3 corporate family rating reflects its small scale, high leverage and narrow business focus relative to other rated telecommunications companies. The ratings are supported by the company's sophisticated, proprietary technology platform and its multi-year contracts with over 2,200 correctional facilities in the US and Canada. The ratings are also supported by improvements in operating margin and cash flow which have been achieved through cost containment and lower bad debt expense. These initiatives were critical in the company's turnaround, as providing communications services to corrections facilities is a low margin business characterized by competitive bidding for new and existing contracts and high commission payments to prison operators. The rating also incorporates the company's private equity ownership and its historical use of leverage to maximize equity returns as well as the growing regulatory threat posed by potential FCC price caps which could disrupt the industry structure. Moody's believes that there is limited growth opportunity within the prison phone market segment and future cash flow generation will be primarily dependent upon cost saving measures and the company's ability to win business from competitors. However, adjacent areas such as monitoring services, data analytics and telemedicine offer a path to continued revenue growth for Securus. Because of this, Securus has expanded into areas like jail management systems and GPS offender monitoring services with the recent acquisition of Archonix and STOP to gradually diversify its revenue stream away from the traditional prison phone business. Moody's anticipates that Securus will have good liquidity over the next 12 months, supported by the company's modest free cash flow generation and approximately $20 million of revolver capacity. The company had approximately $0.1 million of cash on hand at the end of Q3 2013. Moody's expects the company to generate approximately $15 million to $20 million of free cash flow in 2014 given its low capital intensity. The stable outlook reflects Moody's view that Securus will continue to generate organic revenue growth in the low single digit percentage range and improve EBITDA margin through cost reduction which will result in falling leverage. Moody's could upgrade the ratings if Securus maintains good liquidity and positive free cash flow and grows EBITDA such that leverage is on track to fall below 5x. Moody's could lower Securus' ratings if leverage exceeds 6.5x (Moody's adjusted) and free cash flow turns negative, both on a sustained basis. Based in Dallas, TX, Securus Technologies Holdings, Inc. is one of the largest providers of inmate telecommunication services to correctional facilities, with a presence in 45 states, Washington D.C., and Canada. The company generated approximately $363 million of revenue for the twelve months ending September 30, 2013. SELCO INDUSTRIES: Case Summary & 27 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Selco Industries, Inc. 1590 Albon Rd. #1 Holland, OH 43528 Case No.: 13-35142 Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court Northern District of Ohio (Toledo) Judge: Hon. Mary Ann Whipple Debtor's Counsel: Patricia A Kovacs, Esq. PATRICIA A. KOVACS, ATTORNEY AT LAW P.O. Box 257 Curtice, OH 43412 Tel: (419) 787-2666 Email: patricia.a.kovacs@gmail.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Seldon Hill, authorized individual. A list of the Debtor's 27 largest unsecured creditors is available for free at http://bankrupt.com/misc/ohnb13-35142.pdf SPX CORP: Fitch Affirms 'BB+' Issuer Default Rating --------------------------------------------------- Fitch Ratings has affirmed SPX Corporation's Issuer Default Rating (IDR) and senior secured credit facilities at 'BB+'. The Rating Outlook is Negative. The ratings cover approximately $1.7 billion of outstanding debt. Key Rating Drivers: SPX's current leverage (debt to EBITDA) is high for the ratings, driven by a weaker than expected operating performance and a meaningful decline of EBITDA as a result of the divestiture of the Service Solutions business, completed in December 2012. SPX's leverage was approximately 3.9x for the last 12 months (LTM) ended Sept. 28, 2013, unchanged over the past two years. The company's leverage is significantly higher than its gross debt/EBITDA target of 1.5x to 2.5x as defined in its bank agreement (the ratio is understated when compared to Fitch's calculation). While the company occasionally exceeded its leverage target over the past decade, SPX's inability to de-lever following the acquisition of ClydeUnion in 2011 is somewhat unusual and is driven by unexpected challenges associated with ClydeUnion's integration, slowdown in product demand due to downturns in Europe and global economic markets, and the sale of Service Solutions in 2012. High leverage was somewhat mitigated by a significant increase in liquidity following the sale of Service Solutions and Fitch's expectation of cash deployment toward either acquisitions or debt reduction. Fitch's expects SPX's leverage will decline to approximately 2.8x at the end of 2014 driven by improvements in operating performance and the expected repayment of $500 million senior unsecured notes. On Dec. 4, 2013, the company announced a plan to sell its 44.5% joint venture interest in EGS Electric Group LLC (EGS) to Emerson Electric Co. for $571 million (approximately $350 million net of taxes) in the first quarter of 2014. In addition, SPX plans to increase the size of its Term Loan A by $100 million and use the funds along with the proceeds from the EGS sale to repay $500 million senior unsecured notes due in December 2014. Following the repayment of the senior unsecured notes, company leverage should be within its debt/EBITDA target as defined in the bank agreement. In addition to debt reduction, SPX plans to repurchase $500 million worth of shares throughout 2014. The Negative Outlook reflects company's high leverage for its ratings. Fitch could revise the Outlook upon the completion of the anticipated reduction in leverage and the realization of stronger operating margins in 2014 following recent restructuring initiatives. SPX engaged in significant restructuring initiatives within all reporting segments during 2013 and Fitch expects the company to achieve meaningful operating performance improvements in 2014. SPX's sizable cash balance, expected divestiture proceeds and healthy cash generation should enable the company to complete the announced debt reduction and share repurchases while maintaining adequate liquidity, but failure to follow through on the intended debt reduction would leave leverage high for the ratings. The ratings are supported by solid operating cash generation; good product and geographic diversification; management's track record in successfully integrating acquisitions; sizable revenues from the higher-margin aftermarket business; and solid backlog. During 2013, SPX addressed Fitch's concern of the underfunded status of its U.S. pension plan liabilities by making a $250 million voluntary contribution; transferring its U.S. Qualified monthly pension payment obligations for current retirees to Massachusetts Mutual Life Insurance Company; and offering a voluntary lump sum payment option to eligible plan participants. These actions are expected to reduce the company's U.S. qualified pension obligations by approximately 75%. Fitch expects SPX's remaining pension liabilities to be fully funded by the end of 2013 and future cash contributions to be insignificant. Fitch is concerned with the continued weakness in the global economy and slower than anticipated spending in SPX's various end markets and insignificant improvement in its relatively weak operating margins in 2012. This concern is somewhat mitigated by Fitch's expectation that margins will improve in 2014 due to stronger backlog and improvements in operations. Fitch's other concerns include SPX's cash deployment strategies, which focus on share repurchases and acquisitions, and the company's willingness to maintain higher leverage than its stated leverage range for a prolonged period of time. SPX has maintained strong liquidity of approximately $1 billion over the past several years. At Sept. 28, 2013, the company's liquidity of $1.03 billion consisted of $491 million in cash and $539 million of availability under its revolving credit facilities. SPX's strong liquidity is supported by solid cash generation. Fitch expects the company's liquidity to fluctuate in the range of $700 million to $900 million for the next several years. The expected liquidity range takes into account previously discussed plans to complete a sizable share repurchase program and reduce gross debt in 2014. The company continued experiencing significant margin headwinds throughout 2013 and 2012 due to non-profitable ClydeUnion legacy backlog, declining organic sales, and cost pressures in Europe. Despite the challenges Fitch expects SPX to generate about a 10% EBITDA margin, a marginal year-over-year improvement. SPX's margin was 8.9% for the LTM ended Sept. 28, 2013, up from 8.6% for the same period ended Sept. 30, 2012. Fitch expects SPX's EBITDA margin to improve in 2014 driven by better-quality backlog and the completion of cost reduction initiatives. Fitch expects SPX to generate EBITDA above $450 million (as defined by Fitch) in 2014. Fitch expects the company to report negative free cash flow (FCF) in 2013, mainly driven by the $250 million voluntary cash contribution towards its U.S. pension plans. SPX also reported negative FCF in 2012, primarily due to a significant investment in net working capital in connection with the ClydeUnion acquisition. Fitch expects SPX will generate positive FCF in the range of $150 million to $200 million annually over the next several years. SPX has historically deployed its cash towards acquisitions, capital expenditures, dividends and occasional share repurchases; however, the company significantly increased share repurchases over the past two years, repurchasing $245 million and $249 million, respectively, in 2012 and during the first nine months of 2013. The company announced a plan to repurchase an additional $500 million worth of shares by the end of 2014 in connection with the aforementioned anticipated sale of EGS. Fitch expects SPX will continue managing cash deployment to maintain its publically stated long-term gross debt/EBITDA target and will maintain a relatively flat dividend pay-out ratio and capital expenditure profile in 2014, with possible small bolt-on acquisitions. Fitch expects that SPX's actions to reduce its pension liabilities in 2013, rising interest rates, and expected strong asset returns in 2013 will bring the remaining U.S. pension plans to fully funded status by the end of 2013. Fitch expects future cash contributions towards U.S. pension plans to be immaterial going forward. As of Dec. 31, 2012, SPX's foreign pension benefit obligations totaled $323 million (86% funded). SPX also reported $148 million underfunded OPEB obligations. The company expects to make annual benefit payments in the range of $12 million to $15 million. In connection with ClydeUnion acquisition in 2011, SPX assumed participation in a multi-employer benefit plan; however contributions to this plan are not considered material. Rating Sensitivities: The anticipated repayment of $500 million senior unsecured notes in 2014 will significantly reduce company's leverage; however, Fitch estimates it will remain slightly higher than the company's targeted range of 1.5x to 2.5x. Fitch may consider revising the current Outlook to Stable from Negative following the completion of the debt reduction; however, Fitch does not anticipate taking other positive rating actions over the next several years due to concerns related to recent revenue pressures in the company's various end markets and weaker than anticipated operating results. Fitch may consider a negative rating action should the company increase its target leverage, or engage in unexpected sizable debt-funded cash deployment towards shareholders in the form of a special dividend or additional share repurchases. Fitch has affirmed the following ratings: -- IDR at 'BB+'; -- Senior secured bank facilities at 'BB+'; -- Senior unsecured debt at 'BB'. The Rating Outlook is Negative. The senior unsecured notes are rated one-notch below senior secured facilities due to their subordinate position to the latter. THOMAS PROPERTIES: Stockholders OK Merger with Parkway Properties ----------------------------------------------------------------- At the special meeting of Thomas Properties stockholders held on Dec. 17, 2013, the stockholders voted overwhelmingly to approve the proposed merger with Parkway Properties, Inc., pursuant to the definitive merger agreement dated Sept. 4, 2013. Approximately 99 percent of the votes cast at the special meeting of stockholders voted in favor of the approval and adoption of the merger agreement, which represented approximately 87 percent of the total outstanding shares of Thomas Properties' common stock and limited voting stock, as of the Nov. 11, 2013, record date for the special meeting. Subject to the satisfaction or waiver of the remaining conditions to closing, the merger is expected to close on Dec. 19, 2013. Assuming completion of the merger, shares of Thomas Properties common stock are expected to be delisted after the close of trading on Dec. 19, 2013. As a result of the merger, each share of Thomas Properties common stock will be converted into 0.3822 newly issued shares of Parkway common stock. In addition, each share of Thomas Properties limited voting stock will be converted into 0.3822 newly issued shares of Parkway limited voting stock. Shares of Parkway common stock will continue to trade under the existing ticker symbol "PKY" on the New York Stock Exchange. Also at the Meeting, the stockholders approved, on an advisory (non-binding) basis, the compensation payable to certain executive officers of the Company in connection with the Merger. About Thomas Properties Group Thomas Properties Group, Inc., is a full-service real estate company that owns, acquires, develops and manages primarily office, as well as mixed-use and residential properties on a nationwide basis. The company's primary areas of focus are the acquisition and ownership of premier properties, both on a consolidated basis and through its strategic joint ventures, property development and redevelopment, and property management and leasing activities. For more information about Thomas Properties Group, Inc., please visit www.tpgre.com. The Company's balance sheet at Sept. 30, 2013, showed $1.12 billion in total assets, $773.33 million in total liabilities and $355.92 million in total equity. * * * This concludes the Troubled Company Reporter's coverage of Thomas Properties Group until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. TLC HEALTH: Section 341(a) Meeting Scheduled for Jan. 13 -------------------------------------------------------- A meeting of creditors in the bankruptcy case of TLC Health Network will be held on Jan. 13, 2014, at 1:00 p.m. at Buffalo UST - Olympic Towers. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. TLC Health Network filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 13-13294) on Dec. 16, 2013. The petition was signed by Timothy Cooper as Chairman of the Board. The Debtor estimated assets of at least $10 million and debts of at least $1 million. Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C., serves as the Debtor's counsel. The case is assigned to the Hon. Carl L. Bucki. TOWER GROUP: A.M. Best Lowers Finc'l. Strength Rating to 'B(Fair)' ------------------------------------------------------------------ A.M. Best Co. has downgraded the financial strength rating (FSR) to B(Fair) from B++(Good) and issuer credit ratings (ICR) to "bb" from "bbb" of the pooled and reinsured members of the Tower US Pool. Concurrently, A.M. Best has downgraded the ICR and the debt rating on $150 million 5.00% senior convertible notes, due 2014, to "b-" from "bb" of the intermediate holding company, Tower Group, Inc. A.M. Best also has downgraded the FSR to B(Fair) from B++(Good) and ICR to "bb" from "bbb" of CastlePoint Reinsurance Company, Ltd. (Bermuda). Additionally, A.M. Best has downgraded the ICR to "b-" from "bb" of the ultimate parent, Tower Group International, Ltd. (Bermuda) (Tower) [NASDAQ: TWGP]. All companies are headquartered in New York, NY, unless otherwise specified. All ratings remain under review with negative implications. These rating actions take into consideration Tower's most recent announcement on December 17th which noted management's plans to sell its minority share of Canopius Group Limited for $69.7 million, its intention to use these proceeds to pay in full $70 million of outstanding credit on its existing credit facility and its need to further strengthen prior year loss reserves in the third quarter in a range between $75 million and $105 million, primarily in workers' compensation, commercial multi-peril liability, other liability and commercial auto liability lines of business. In addition, these rating actions contemplate combined U.S. statutory surplus, net of cessions to its Bermuda affiliate, to decrease from $374 million at June 30, 2013 to approximately $315 million to $335 million at September 30, 2013. This announcement comes on the heels of delayed filings, Tower's second quarter 2013 earnings, a prior year reserve charge of $364 million (net of reinsurance) and a goodwill impairment of $214 million. These rating actions consider the aggregate magnitude of the charges taken during second and third quarters, as well as the material adverse impact on Tower's risk-adjusted capitalization, financial leverage, liquidity and coverage ratios. The downgrade to vulnerable rating status and the continuation of negative implications is necessitated by the group's dimmed business and earnings prospects going forward and A.M. Best's ongoing concerns around further adverse loss reserve development as its impact on future cash flows, liquidity and risk-adjusted capitalization. Cash and liquidity is likely to be further constrained by Tower's $150 million senior note which is due to mature in September of 2014. The FSR has been downgraded to B (Fair) from B++ (Good) and the ICRs to "bb" from "bbb" for the following pooled and reinsured members of Tower US Pool: -- CastlePoint Insurance Company -- CastlePoint National Insurance Company -- Tower Insurance Company of New York -- Tower National Insurance Company -- Preserver Insurance Company -- North East Insurance Company -- Hermitage Insurance Company -- CastlePoint Florida Insurance Company -- Kodiak Insurance Company -- York Insurance Company of Maine -- Massachusetts Homeland Insurance Company TOYS 'R' US: S&P Lowers Corp. Credit Rating to 'B-' --------------------------------------------------- Standard & Poor's Ratings Services said it lowered its ratings on specialty toys and juvenile products retailer Toys "R" Us Inc., including its corporate credit rating to 'B-' from 'B'. The outlook is stable. The recovery ratings on the debt issues at Toys "R" Us Inc. and its subsidiaries are unchanged. "The rating on Wayne, N.J.-based specialty toys and juvenile products retailer Toys "R" Us Inc. (Toys) reflects our assessment that the company's business risk profile remains "weak" and its financial risk profile remains "highly leveraged". S&P thinks the company's recent weak results stem from an evolving competitive landscape that is unlikely to improve," said credit analyst Ana Lai. "We think Toys needs to take substantial strategic actions to deal with an otherwise declining sales trend." The stable outlook incorporates continued sales and margin pressure in fourth-quarter 2013 and a modest revenue decline in 2014. However, S&P expects Toys to maintain adequate liquidity while remaining at least cash flow neutral in 2014. S&P do not expect any meaningful improvement in operating performance until the next holiday season in fourth-quarter 2014 given the seasonality of Toys' operations. S&P assumes new senior leadership will take steps to improve the company's competitiveness. Downside scenario A lower rating could be driven by narrowing liquidity sources because of much weaker than expected performance in 2014 resulting in negative operating cash flow, and higher borrowings to fund operating needs. This could occur if sales decline 5% while gross margin narrows 50 bps in fiscal 2014. Upside scenario A higher rating is not likely in the next year, but could result from better than expected sales trends or profit expansion from a recovery of gross margin or sales through successful merchandising initiatives, or improvement in its cost structure mitigating sales declines. * * * Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the new S&P rating is one step below the downgrade issued in June by Moody's Investors Service. For the first three quarters, sales of $7.28 billion were down 6.4 percent from the same period in 2012. The 2013 quarters' net loss of $829 million was more than four times larger than the loss in the comparable period in 2012. As of Nov. 2, the balance sheet was upside down with liabilities of $9.59 billion exceeding assets by $339 million. The Wayne, New Jersey-based retailer was the target of a leveraged buyout in 2005, giving ownership to KKR & Co., Vornado Realty Trust and Bain Capital Partners LLC, according to Moody's. TUSCANY INT'L: Fitch Affirms & Withdraws 'B-' Currency IDRs ----------------------------------------------------------- Fitch Ratings affirms its 'B-' ratings on foreign and local currency Issuer Default Ratings (IDRs) of Tuscany International Drilling Inc. The Rating Outlook is Negative. Fitch has simultaneously withdrawn the ratings. Key Rating Drivers: Affirm and Withdraw: Fitch has simultaneously affirmed and withdrawn its ratings due to lack of market interest. The affirmation reflects Tuscany's limited liquidity position and its difficulties lowering leverage levels to be in line with Fitch's expectations due to drilling rigs coming out of contract as well as a contained number of unexpected contract cancellations. These events have hindered the company's ability to generate cash flow from operations as a large number of drilling rigs remain idle. Tuscany's ratings reflect the company's experienced management team and a technologically advanced asset fleet, which is either new or has been recently refurbished, and gives the company a competitive advantage. The ratings also incorporate a degree of counterparty credit risk in its diversified customer base, a relatively small rig fleet, and exposure to the cyclical and competitive onshore drilling industry. TXU CORP: Bank Debt Trades at 30% Off ------------------------------------- Participations in a syndicated loan under which TXU Corp is a borrower traded in the secondary market at 70.50 cents-on-the- dollar during the week ended Friday, December 20, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a decrease of 0.83 percentage points from the previous week, The Journal relates. TXU Corp. pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2014 and carries Moody's Caa3 rating and Standard & Poor's CCC- rating. The loan is one of the biggest gainers and losers among 205 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. UNIVERSITY GENERAL: Hosts Conference Call to Provide Updates ------------------------------------------------------------ University General Health System, Inc., held a conference call on Thursday, Dec. 19, 2013, to review the Company's status regarding its Form 10-Q filings and to update investors regarding 2013 performance expectations. The Company also announced that it will host an "Investor and Analyst Day" for shareholders and potential investors at its corporate headquarters in Houston, Texas, on Monday, Feb. 3, 2014. Participants at the "Investor and Analyst Day" event will be provided with updates from various corporate executives and will have an opportunity to tour the Company's flagship University General Hospital and a number of its Hospital Outpatient Department ("HOPD") facilities during the course of the day. A dinner for participants will follow the day's activities. Further details will be provided in a subsequent news release. About University General University General Health System, Inc., located in Houston, Texas, is a diversified, integrated multi-specialty health care provider that delivers concierge physician- and patient-oriented services. UGHS currently operates one hospital and two ambulatory surgical centers in the Houston area. It also owns a revenue management company, a hospitality service provider and facility management company, three senior living facilities and manages six senior living facilities. University General incurred a net loss attributable to common shareholders of $3.97 million on $113.22 million of total revenues for the year ended Dec. 31, 2012, as compared with a net loss attributable to common shareholders of $2.57 million on $71.17 million of total revenues during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $174.84 million in total assets, $161.55 million in total liabilities, $2.56 million in series C, convertible preferred stock, and $10.71 million in total equity. Moss, Krusick & Associates, LLC, in Winter Park, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has negative working capital and relative low levels of cash and cash equivalents. These conditions raise substantial doubt about its ability to continue as a going concern. VALASSIS COMMS: Harland Clarke Sale No Impact on Moody's CFR ------------------------------------------------------------ Moody's Investors Service said Valassis Communications, Inc.'s Ba2 Corporate Family Rating (CFR) and stable outlook are not immediately impacted by the recent announcement that the company has entered into a definitive merger agreement to be acquired by Harland Clarke Holdings Corp. (B2 stable). Under the terms of the agreement, Harland Clarke will acquire all of the outstanding shares of Valassis for $34.04 per share in cash, reflecting a transaction value of around $1.84 billion. Under a scenario where Valassis' debt is entirely repaid, Moody's would subsequently withdraw the CFR and debt instrument ratings. To the extent any of the Ba3-rated 6.625% senior notes due 2021 (the "2021 Notes") remain outstanding after closing, Moody's would withdraw Valassis' CFR and revise the rating on the 2021 Notes based on where they will eventually reside relative to other debt classes in Harland Clarke's debt capital structure. Valassis Communications, Inc., headquartered in Livonia, Michigan, provides promotional and advertising products including Shared Mail, Neighborhood Targeting, Free Standing Inserts or FSI, and International, Digital Media, & Services (coupon clearing, consulting and analytic services). Harland Clarke Holdings Corp., headquartered in San Antonio, TX, is a provider of: (i) check and check-related products, direct marketing services and customized business and home office products to financial services, retail and software providers as well as consumers and small business; and (ii) data collection, testing products, scanning equipment and tracking services to educational, commercial, healthcare and government entities through its Scantron segment. VELATEL GLOBAL: Amends Loan Agreement with AQT ---------------------------------------------- VelaTel Global Communications, Inc., entered into an Amended Loan Agreement with AQT, LLC. The material terms of the Amended AQT Loan Agreement are as follows: (i) The parties had entered into a previous loan agreement under which AQT loaned the Company US$600,000 [this amount was originally expressed in US dollars] with a maturity date of Jan. 27, 2014. Under the Amended AQT Loan Agreement, the Maturity Date is extended to April 2, 2014, and the Adjusted Original Principal Amount is changed to HK$4,929,000 [US$636,000], which includes an extension fee plus interest accrued through the Effective Date. (ii) AQT loaned the Company the additional sum of HK$9,780,500 [US$1,262,000], which the Company paid towards the Loan Agreement with Xin Hua. AQT has the option but not the obligation to loan the Company the additional sum of HK$18,740,637.45 [US$2,418,100] on or before the date required for the Company to pay the remaining balance due under the Xin Hua Loan Agreement, in which case that amount will be added to the Principal Amount. (iii) The Company promises to repay the Adjusted Original Principal Amount plus the First Xin Hua Installment totalling HK$14,709,500 [US$ 1,898,000], together with interest at 10 percent per annum accruing on the outstanding balance from the Effective Date. (iv) At AQT's election in its sole discretion, VelaTel will be granted up to four extensions of the Maturity Date for consecutive increments of three months each upon a cash payment of 3 percent of the Principal Balance per extension. After the Maturity Date or any other default, interest will accrue at the rate of 20 percent per annum. (v) Upon payment of the total amount due under the Xin Hua Loan Agreement, the Company will grant AQT the following rights, subject to the following restrictions, related to the capital stock of the Company's subsidiary, China Motion Telecom (HK) Ltd.: (1) AQT will receive a security interest in 100 percent of the China Motion Stock, through either (a) assignment of the Share Charge and Option Deed previously granted to Xin Hua, or (b) new and substantially identical instruments in AQT's name. (2) AQT will have the right to receive repayment of any or all of the Total Amount Due in the form of China Motion Stock, valued for purposes of repayment at HK$49,827,585 [US$6,437,100]. China Motion Stock issued or transferred to AQT will be subject to full anti-dilution protection. (3) Both the AQT Security and the AQT Option are subject to the option granted under the Cooperation Agreement between the Company and StarHub Mobile Pte, Ltd. to acquire up to 25 percent of the China Motion Stock (disclosed as Exhibit 10.1 to Form 8-K filed on Dec. 2, 2013). If StarHub exercises its option, StarHub's payment will be made directly to AQT and will, for shares released from the AQT Security, reduce the Total Loan Amount in the same ratio that 10 percent of the enterprise value of China Motion bears to the Total Loan Amount. If the total amount paid by StarHub exceeds the Total Loan Amount, the excess will be payable to VelaTel. (4) In no event will the combined percentage of China Motion Stock transferred by VelaTel pursuant to (1) the AQT Option and (2) the StarHub Cooperation Agreement exceed 49 percent. AQT will have the option to release pursuant to the AQT Security and/or to transfer pursuant to the AQT Option in any combination that fulfills this requirement. (5) Until all amounts due under the Xin Hua Loan Agreement are paid, any rights in the China Motion Stock granted pursuant to the Amended AQT Loan Agreement are subordinate to the rights of Xin Hua under the Share Charge and the Option Deed, and the rights of AQT will be null and void upon the occurrence of a default under the Xin Hua Loan Agreement by which Xin Hua exercises his option under the Option Deed. (vi) The Amended AQT Loan Agreement is governed under California law, calls for resolution of disputes in the state and federal courts of California, and provides for recovery of attorney fees by the prevailing party in the event of any litigation. A copy of the AQT Loan Agreement is available for free at: http://is.gd/b5V2Y1 About VelaTel Global VelaTel acquires spectrum assets through acquisition or joint venture relationships, and provides capital, engineering, architectural and construction services related to the build-out of wireless broadband telecommunications networks, which it then operates by offering services attractive to residential, enterprise and government subscribers. VelaTel currently focuses on emerging markets where internet penetration rate is low relative to the capacity of incumbent operators to provide comparable cutting edge services, or where the entry cost to acquire spectrum is low relative to projected subscribers. VelaTel currently has project operations in People's Republic of China, Croatia, Montenegro and Peru. Additional target markets include countries in Latin America, the Caribbean, Southeast Asia and Eastern Europe. VelaTel's administrative headquarters are in Carlsbad, California. See http://www.velatel.com/ Velatel Global incurred a net loss of $45.60 million on $1.87 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $21.79 million on $0 of revenue for the year ended Dec. 31, 2011. The Company's balance sheet at Sept. 30, 2013, showed $2.56 million in total assets, $51.68 million in total liabilities and a $49.12 million total deficiency. Kabani & Company, Inc., in Los Angeles, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company's viability is dependent upon its ability to obtain future financing and the success of its future operations. The Company has incurred a net loss of $45,601,292 for the year ended Dec. 31, 2012, cumulative losses of $298,347,524 since inception, a negative working capital of $34,972,850 and a stockholders' deficiency of $36,566,868. These factors raise substantial doubt as to the Company's ability to continue as a going concern. VELTI PLC: Sale of Mobile Marketing Business Gets Court Approval ---------------------------------------------------------------- Velti plc on Dec. 20 disclosed that the Company received Court approval of the sale of its mobile marketing business to affiliates of GSO Capital Partners LP, the credit division of Blackstone. The sale is expected to close shortly. The transaction includes the sale of business lines operated by Velti Inc. and Air2Web Inc. in the U.S., Air2Web India, Velti DR Limited and Mobile Interactive Group, Ltd. in the U.K., and Velti Netherlands B.V. in the Netherlands. All operations included in the sale agreement are continuing as normal throughout the sale process and customers of the acquired businesses can expect to receive best-in-class service and support through the closing and beyond. As previously announced, the Company is operating its U.S. operations as debtors-in-possession under the protection of the U.S. bankruptcy laws, while the Company's operations in the U.K., Greece, China, Brazil, India, Russia, the United Arab Emirates, and other jurisdictions outside the U.S. are continuing normal business operations. Upon closing of the transaction, the mobile marketing businesses sold to GSO will no longer be operating under U.S. bankruptcy protection. About Velti Inc. Velti Inc., a provider of technology for marketing on mobile devices, sought Chapter 11 protection (Bankr. D. Del. Case No. 13-12878) on Nov. 4, 2013. Velti Inc., a San Francisco-based unit of Velti Plc, listed assets of as much US$50 million and debt of as much as US$100 million. Its Air2Web Inc. unit, based in Atlanta, also sought creditor protection. The parent, Dublin, Ireland-based Velti Plc, which trades on the Nasdaq Stock Market, isn't part of the bankruptcy process. Operations in the U.K., Greece, India, China, Brazil, Russia, the United Arab Emirates and elsewhere outside the U.S. didn't seek protection and business there will continue as usual. The Debtors are represented by attorneys Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Matthew M. Murphy, Esq., and Chun I. Jang, Esq., at DLA Piper LLP (US), in Chicago, Illinois. The Debtors have also tapped Jefferies LLC as investment banker, Sitrick Brincko Group LLC, as corporate communications consultants, and BMC Group, Inc., as claims and noticing agent. U.S. Bank, National Association, as administrative agent for GSO Credit-A Partners, LP, GSO Palmetto Opportunistic Investment Partners LP and GSO Coastline Partners LP, extended US$25 million of postpetition financing to the Debtors. The DIP Lenders, which are also the Prepetition Lenders, are represented by Sandy Qusba, Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP, in New York. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. The Committee has tapped McGuireWoods LLP as lead counsel and Morris, Nichols, Arsht & Tunnell LLP as Delaware co-counsel. Asgaard Capital LLC serves as financial advisor to the Committee. Capstone Advisory Group LLC serves as consultant. VERMILLION INC: Elects James LaFrance as Chairman ------------------------------------------------- James T. LaFrance has been appointed a member of Vermillion, Inc.'s board and was elected chairman of the board on Dec. 12, 2013. Pursuant to the equity financing transaction announced on May 9, 2013, LaFrance was nominated by Jack W. Schuler, Vermillion's largest private shareholder. "We value the executive leadership expertise in the diagnostic industry Jim brings as our board chairman," commented Tom McLain, Vermillion's president and CEO. "His experience and proven ability to develop IVD strategies, launch diagnostic products and direct go-to-market strategies at GE Healthcare, Ventana and Bayer Diagnostics fit well with our operational focus to drive broader adoption of our OVA1 test." LaFrance has almost 30 years of diagnostic industry experience. Most recently, he was head of digital pathology and acting CEO of Omnyx, LLC, for GE Healthcare. Prior to that, he held a series of commercial, strategic marketing and business development leadership roles at Ventana Medical Systems (now Roche Tissue Diagnostics), including general manager of their North American and International commercial organizations. Prior to Ventana, LaFrance served in leadership roles in strategic marketing and business development at Bayer Diagnostics. He was a member of the board at Mitomics, Inc., from 2010 to 2011. He earned a Bachelor of Arts degree in Economics from the University of Connecticut and an MBA from the University of Notre Dame. LaFrance succeeds Bruce A. Huebner who is retiring from the board. Dr. William Wallen has also retired from the board. "The board of directors and management team at Vermillion thank Bruce and Bill for their contributions to the company's success," said McLain. "I want to acknowledge Bill Wallen for his technical guidance in support of OVA1 and the development of our next generation diagnostic tests. Bruce Huebner led a significant period of transition at the company as interim CEO and chairman of the board. His contributions of marketing and sales expertise have helped redefine Vermillion's commercial strategy. We wish them both well in their future endeavors." Following these changes the total number of board directors is six, all serving independently. SVP of Sales and Marketing and CCO Appointments Vermillion has appointed Marian E. Sacco as senior vice president of sales and marketing and chief commercial officer. Ms. Sacco is a proven leader in launching and building markets for innovative diagnostics to address key issues in improving women's health. She has more than 25 years of experience in product development, worldwide marketing, operations and sales management in both private and public companies. Her focus on women's health began at Centocor Diagnostics where her achievements include the U.S. launch of CA125 used to monitor ovarian cancer recurrence. More recently, she successfully led the commercial effort to build the global product market and laboratory service business for novel tests to manage pregnancy risks and infertility diagnostics as senior vice president, sales and marketing at Adeza BioMedical (acquired by Cytyc Corporation for more than $450 million, now part of Hologic). "We are excited to add Marian's experience, energy and expertise in women's health and oncology to our team, as Vermillion expands its leadership role in commercializing OVA1 and future diagnostic tests," said Tom McLain, Vermillion's president and chief executive officer. "Marian has worked with us as a consultant in developing our commercial strategy. In this new role, she will draw on her proven track record in developing and executing sales and marketing strategies to expand awareness with physicians, patients and healthcare providers and drive increased use of OVA1." Immediately prior to joining Vermillion, Ms. Sacco worked with numerous women's healthcare companies as a strategy and commercialization consultant. Her clients included both product and laboratory service companies focused on new, novel tests and technologies in genetics, pregnancy, reproductive health and oncology. While at Adeza, Ms. Sacco oversaw both the strategic and day-to- day leadership of a global sales and marketing organization of more than 120 people. Over a 10-year period, her organization grew annual revenues from $1 million to $60 million and built the market for a unique test to aid in the management of preterm births. By working with clinical thought leaders, gynecologists, nurses and health plans, she and her team successfully demonstrated that this test was clinically relevant, evidence based and cost effective and improved patient outcomes. This effort led to the introduction of new patient care guidelines in leading healthcare institutions, a critical step in building adoption, utilization and reimbursement. Prior to Adeza, Ms. Sacco worked in senior commercial management roles at Behring Diagnostics, Chiron Diagnostics, and Ciba Corning Diagnostics. During this period, she developed and implemented novel oncology strategies including the launch of "companion diagnostics" in partnership with pharmaceutical business units. Early in her career at Centocor Diagnostics, she managed U.S. sales, marketing and customer service for innovative cancer tests including launches of CA125, as well as CA15-3 for breast cancer monitoring. Ms. Sacco holds a Master's degree in Radiopharmaceutical Science from Northeastern University and a Bachelors of Science degree in Chemistry/Biology from Marietta College. Pursuant to the terms of an employment agreement between the Company and Ms. Sacco, effective as of Dec. 16, 2013, the Company will pay Ms. Sacco an annual base salary of $225,000. Additional information is available for free at: http://is.gd/mCqjVe Annual Meeting Results Vermillion reported the voting results from its annual meeting of its stockholders held Dec. 12, 2013. The stockholders: * approved the reappointment of Peter S. Roddy as director; * approved in an advisory vote the compensation of the Company's named executive officers; * ratified the appointment of BDO USA, LLP, as the Company's independent registered public accounting firm for the year ending Dec. 31, 2013; * approved an amendment to the company's 2010 Stock Incentive Plan to increase the number of shares authorized for issuance by 2.3 million and other related modifications; and * did not approve an amendment to the Company's Certificate of Incorporation and Bylaws that would declassify the board o f directors. "We are pleased that four of the five stockholder proposals passed by wide margins," commented Tom McLain, Vermillion's president and CEO. "The proposal to declassify the board of directors is considered "non-routine" and required 66.7% of all outstanding shares to vote for its adoption. While it was approved by more than 95% of the shares voted on this proposal, these votes represented only 58.4% of our total outstanding shares. The board believes declassification will enhance corporate governance and is important for our shareholders, so we plan to reintroduce this proposal at a later date." A copy of the Form 8-K is available for free at: http://is.gd/relOeN About Vermillion Vermillion, Inc., is dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in oncology, hematology, cardiology and women's health. The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del. Case No. 09-11091). Vermillion's legal advisor in connection with its successful reorganization efforts wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged from bankruptcy in January 2010. The Plan called for the Company to pay all claims in full and equity holders to retain control of the Company. Vermillion incurred a net loss of $7.14 million in 2012, as compared with a net loss of $17.79 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $15.08 million in total assets, $4.84 million in total liabilities, and stockholders' equity of $10.25 million. BDO USA, LLP, in Austin, Texas, 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, all of which raise substantial doubt about the Company's ability to continue as a going concern. VISUALANT INC: Awarded Sixth Patent for its ChromaID Technology --------------------------------------------------------------- Visualant, Inc., received its sixth patent on its ChromaID technology. The latest patent further validates the Company's vision to introduce more efficient authentication, identification and diagnostic methods into the marketplace, and comes shortly after Visualant announced its strategic relationship with Intellectual Ventures. Future devices embedded with ChromaID technology can read and record natural chromatic markers by structuring light onto a substance, through a liquid or gas, or off a surface. Once scanned, the technology captures the reflected light using a simple Photodiode array and creates a unique ChromaID profile. The ChromaID profile can be matched against existing databases to identify, detect, or diagnosis markers invisible to the human eye. The patent issued by the United States Office of Patents and Trademarks is US Patent No. 8,583,394 and is entitled "Method, Apparatus and Article To Facilitate Distributed Evaluation of Object Using Electromagnetic Energy." Ron Erickson, Visualant founder and CEO, stated, "We rigorously pursue strong protection for our intellectual property. We are very pleased to receive this, our sixth patent. I want to especially acknowledge our Visualant scientific team led by our CTO, Dr. Richard Mander along with Dr. Tom Furness and Dr. Brian Schowengerdt. We have more patents pending and expect more patents to be issued as we build the intellectual property foundation for Visualant's business and move into the marketplace with diverse applications of our ChromaID technology. This is a process we are accelerating through our new strategic relationship with Intellectual Ventures." About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant incurred a net loss of $2.72 million for the year ended Sept. 30, 2012, compared with a net loss of $2.39 million for the same period during the prior year. The Company's balance sheet at June 30, 2013, showed $5.59 million in total assets, $7.32 million in total liabilities, $46,609 in noncontrolling interest and a $1.78 million total stockholders' deficit. PMB Helin Donovan, LLP, in Nov. 10, 2012, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has sustained a net loss from operations and has an accumulated deficit since inception which raise substantial doubt about the Company's ability to continue as a going concern. WELLS ENTERPRISES: Moody's Cuts CFR to 'B2', Stable Outlook ----------------------------------------------------------- Moody's Investors Service downgraded Wells Enterprises, Inc.'s Corporate Family Rating ("CFR") to B2 from B1 and its Probability of Default Rating to B2-PD from B1-PD. The downgrade reflects revenue pressure in Well's higher margin branded offerings from a challenging competitive environment in the ice cream and frozen treat category and market share erosion. These factors are contributing to weakened credit metrics and minimal free cash flow. Concurrently, Moody's downgraded the $235 million senior secured notes due 2020 to B3 from B2. The rating outlook is stable. The following ratings were downgraded: Wells Enterprises, Inc. -- Corporate Family Rating to B2 from B1 -- Probability of Default Rating to B2-PD from B1-PD -- $235 million senior secured notes due 2020 to B3 (LGD 4, 63%) from B2 (LGD 4, 60%) The rating outlook is stable. Ratings Rationale: Wells' B2 CFR reflects the company's narrow profit margins, smaller scale and diversity relative to the two market leaders, concentration in the US and its sole focus on ice cream and frozen novelties. The rating also reflects pressure on Wells' revenue in its higher margin branded offerings, declining profit margins, minimal projected free cash flow, and high 5.0x debt-to-EBITDA leverage (incorporating Moody's standard adjustments). Moody's expects that cost reductions (mainly from reduced headcount, lower marketing spending and delayed growth initiatives) will lead to low single digit earnings growth over the next 12-18 months and credit metric improvement. Wells' earnings are nevertheless vulnerable to continued industry declines as consumers shift to healthier foods, commodity cost increases, shifts in shelf space and pricing among its concentrated distributors, and actions by its larger and more diversified competitors. The rating more favorably reflects the company's well known licensed brands such as Weight Watchers, Cadbury and Yoplait and its solid position as a private label ice cream manufacturer. The company's presence in branded products as well as private label, coupled with the scale and breadth of its manufacturing operations, enable Wells to maximize penetration of distribution channels spanning a broad range of retail, foodservice, and club operators. The stable rating outlook reflects Moody's expectation that the company will maintain a good liquidity position, that cost reduction efforts will provide some credit metric improvement, and that company actions to rationalize pricing, win new customers, and improve shelf space will partially alleviate revenue pressure. Wells' ratings could be downgraded if operating performance continues to deteroriate, if liquidity becomes constrained, or if free cash flow is negative. Moody's would also consider a rating downgrade if leverage is sustained above 5.0 times. Wells' ratings could be upgraded if the company is able to profitably grow revenue and improve operating margins above 6.0% on a sustained basis. Wells would also need to maintain a meaningful level of positive free cash flow and good liquidity to be considered for an upgrade. Wells, headquartered in Le Mars, Iowa, is the third largest ice cream manufacturer in the U.S. producing a range of packaged ice cream and frozen novelty products. For the twelve months ended September 28, 2013, Wells posted revenues of approximately $987 million. WILD HORSE: Case Summary & 8 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Wild Horse of Old Military Road, LLC 545 Veterans Blvd Metairie 80333 Old Military Rd. Case No.: 13-13471 Chapter 11 Petition Date: December 19, 2013 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Hon. Jerry A. Brown Debtor's Counsel: Jan Marie Hayden, Esq. BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C. 201 St. Charles Ave, Suite 3600 New Orleans, LA 70170 Tel: (504) 566-8645 Email: jhayden@bakerdonelson.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by George A. Cella, III, manager. A list of the Debtor's eight largest unsecured creditors is available for free at http://bankrupt.com/misc/laeb13-13471.pdf WPCS INTERNATIONAL: To Acquire BTX Trader ----------------------------------------- WPCS International Incorporated has entered into various agreements to acquire BTX Trader LLC (BTX), an early stage technology company currently engaged in the development of a proprietary trading platform for the emerging bitcoin industry. The BTX acquisition is expected to add a new line of business to the Company's existing operations. To acquire BTX, the Company entered into a securities purchase agreement with certain investors in which WPCS sold 2,348 shares of a newly designated Series E Preferred Stock and warrants to purchase up to 1,500,000 shares of its common stock, for 100 percent of the membership interests of BTX. Each share of Preferred Stock has a stated value of $1,000 and is convertible into shares of the Company's common stock equal to the stated value (and all accrued but unpaid dividends) divided by the conversion price of $3.50 per share. The Preferred Stock accrues dividends at a rate of 12 percent per annum, payable quarterly in arrears. The Warrants have an exercise price of $5.00 per share. Neither the Preferred Stocks nor the Warrants are convertible or exercisable, respectively, until the Company obtains its stockholders' approval for (i) the increase in the number of shares of common stock authorized for issuance to 75 million; and (ii) the issuance of all of the securities issuable pursuant to the Purchase Agreement. Bitcoin is a digital or virtual currency that uses peer-to-peer technology to facilitate instant payments. Bitcoin is a type of alternative currency known as a cryptocurrency, which uses cryptography for security, making it difficult to counterfeit. Bitcoin issuance and transactions are carried out collectively by the network, with no central authority, and allows users to make secure, verified transfers. BTX has developed and is currently beta testing its trading system to offer bitcoin traders advanced charting, trading blotters, and trading integration across five of the major bitcoin exchanges, which will allow users to see liquidity, route orders, and identify arbitrage opportunities across all platforms, and to control trading risks with access to stop loss orders. Sebastian Giordano, interim chief executive officer, commented, "We are very excited about bitcoin and the prospect offered by BTX to enter a very fast-growing market. We believe that the software platform being developed by BTX will support the opportunities to advance bitcoin as an asset class, currency, money transfer mechanism, and important alternative in the financial markets space. As one of the first publicly traded companies to make an early entrance into the bitcoin space, we believe this transaction is consistent with ongoing efforts to provide the Company with an opportunity to deliver improved shareholder value in the future." Additional information is available for free at: http://is.gd/OJEYBz 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. As of July 31, 2013, WPCS International had $18.73 million in total assets, $24.45 million in total liabilities and a $5.72 million total deficit. * Sanctions on Lawyer Are Limited Under Section 329 --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a lawyer who didn't disclose property given to him by a bankrupt client has, at least for now, avoided the most costly sanctions imposed on him by the bankruptcy judge, thanks to a Dec. 16 opinion from the U.S. Court of Appeals in New Orleans. According to the report, an individual's bankruptcies were dismissed twice. The lawyer never disclosed that the bankrupt gave him deeds to property encumbered by mortgages to help cover fees. The appeals court said that the bankrupt later was convicted of child molestation and sentenced to life in prison. At foreclosure sales, the lawyer purchased both properties, paying about $100,000. Later, a creditor discovered the undisclosed transfers. Invoking Section 329 of the Bankruptcy Code, which requires disclosure of what a lawyer receives, the bankruptcy judge directed the lawyer to give back $12,000 in cash he was paid as a fee and convey the two properties to the trustee, without giving the lawyer credit for the $100,000 he spent and later costs of improvements. U.S. Circuit Judge Stephen A. Higginson reversed and sent the case back to the bankruptcy court. Judge Higginson said that sanctions under Section 329 are limited to what the client gives the lawyer as compensation. The $100,000 and the cost of later expenses weren't part of what the client paid. Judge Higginson told the lower court to decide what the property was worth when it was transferred and what it was worth at the time of disgorgement. After remand, the lawyer still might lose everything. Judge Higginson said the $100,000 "may have been appropriate" as a sanction. The lower court was directed to compare the sanction amount "to the sanctioned party's conduct." The case is Baker v. Cage (In re Whitley), 12-41125, U.S. Court of Appeals for the Fifth Circuit (New Orleans). * CFPB Slams Ocwen With $2 Billion Homeowner Relief Settlement -------------------------------------------------------------- Alyssa Gerace, writing for Reverse Mortgage Daily, reported that the Consumer Financial Protection Bureau has ordered Ocwen Financial Corporation to provide $2 billion in principal forgiveness relief to homeowners throughout the next three years as part of a larger settlement agreement. According to the report, the mortgage servicer announced on Dec. 19 a settlement agreement with the CFPB and state officials resolving allegations it mistreated consumers and committed "systemic misconduct at every stage of the mortgage servicing process," according to the Bureau. Ocwen, the parent company of Liberty Home Equity Solutions, has been accused of failing to record borrowers' mortgage payments in a timely manner, and improperly forcing them to purchase costly homeowners insurance policies, the report said. No reverse mortgage borrowers will be included in the settlement, however, officials told RMD. "Deceptions and shortcuts in mortgage servicing will not be tolerated," said CFPB Director Richard Cordray in a statement, the report related. "Ocwen took advantage of borrowers at every stage of the process. Today's action sends a clear message that we will be vigilant about making sure that consumers are treated with the respect, dignity, and fairness they deserve." Terms of the agreement include a commitment by Ocwen to service loans in accordance with specified servicing guidelines and to be subject to oversight by an independent national monitor for three years, the report further related. * US Bank Regulators Seek Stricter Tax Refund Rules --------------------------------------------------- Law360 reported that U.S. regulators proposed new rules that would force bank holding companies to clarify the legal relationship to their subsidiaries, a change the government said would help clear up tax disputes that have arisen during bankruptcy proceedings. According to the report, the new rules would require financial institutions and their corporate parents to state explicitly which entity is entitled to funds stemming from a tax refund, the Federal Deposit Insurance Corporation said. The regulations would require banks to tighten language they are allowed to use in tax allocation agreements, the report added. * Senators Want to Create Ch. 14 Bankruptcy for Failed Banks ------------------------------------------------------------ Law360 reported that Sens. John Cornyn, R-Texas, and Pat Toomey, R-Pa., introduced legislation that would eliminate a section of the Dodd-Frank Act and establish a "Chapter 14" bankruptcy in order to prevent "too big to fail" banks from being bailed out with taxpayer funds. According to the report, the bill, called the Taxpayer Protection and Responsible Resolution Act, would create a new Chapter 14 bankruptcy for certain financial corporations and repeal Title II of the Dodd-Frank Act, also known as the orderly liquidation authority provision. * BOND PRICING: For Week From Dec. 16 to 20, 2013 ------------------------------------------------- Company Ticker Coupon Bid Price Maturity Date ------- ------ ------ --------- ------------- AES Eastern Energy LP AES 9.670 4.125 1/2/2029 AES Eastern Energy LP AES 9.000 1.750 1/2/2017 AGY Holding Corp AGYH 11.000 89.625 11/15/2014 Buffalo Thunder Development Authority BUFLO 9.375 37.750 12/15/2014 California Baptist Foundation CALBAP 5.600 8.000 10/1/2014 Cengage Learning Acquisitions Inc TLACQ 10.500 18.000 1/15/2015 Cengage Learning Acquisitions Inc TLACQ 12.000 13.625 6/30/2019 Cengage Learning Acquisitions Inc TLACQ 10.500 18.000 1/15/2015 Champion Enterprises Inc CHB 2.750 0.375 11/1/2037 Energy Conversion Devices Inc ENER 3.000 7.875 6/15/2013 Energy Future Competitive Holdings Co LLC TXU 8.175 10.125 1/30/2037 Energy Future Holdings Corp TXU 5.550 30.000 11/15/2014 GMX Resources Inc GMXR 9.000 0.500 3/2/2018 Iglesia Cristiana La Nueva Jerusalem Inc ICLNJ 6.700 2.000 2/5/2013 James River Coal Co JRCC 7.875 29.458 4/1/2019 James River Coal Co JRCC 4.500 34.000 12/1/2015 James River Coal Co JRCC 10.000 27.125 6/1/2018 James River Coal Co JRCC 10.000 52.500 6/1/2018 James River Coal Co JRCC 3.125 21.000 3/15/2018 LBI Media Inc LBIMED 8.500 30.000 8/1/2017 Lehman Brothers Holdings Inc LEH 1.000 18.875 8/17/2014 Lehman Brothers Holdings Inc LEH 1.000 18.875 8/17/2014 Lehman Brothers Inc LEH 7.500 16.125 8/1/2026 MF Global Holdings Ltd MF 1.875 47.550 2/1/2016 Mashantucket Western Pequot Tribe MASHTU 6.500 16.250 7/1/2036 NII Capital Corp NIHD 10.000 54.500 8/15/2016 Platinum Energy Solutions Inc PLATEN 14.250 63.375 3/1/2015 Powerwave Technologies Inc PWAV 1.875 0.125 11/15/2024 Powerwave Technologies Inc PWAV 1.875 0.125 11/15/2024 Pulse Electronics Corp PULS 7.000 75.433 12/15/2014 Residential Capital LLC RESCAP 6.875 35.875 6/30/2015 Savient Pharmaceuticals Inc SVNT 4.750 1.200 2/1/2018 School Specialty Inc/Old SCHS 3.750 36.125 11/30/2026 Scotia Pacific Co LLC MXM 6.550 0.875 1/20/2007 Sorenson Communications Inc SRNCOM 10.500 74.125 2/1/2015 Sorenson Communications Inc SRNCOM 10.500 74.125 2/1/2015 THQ Inc THQI 5.000 25.688 8/15/2014 TMST Inc THMR 8.000 16.125 5/15/2013 Terrestar Networks Inc TSTR 6.500 10.000 6/15/2014 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 7.000 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15.000 28.250 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 7.100 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.500 6.625 11/1/2016 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15.000 28.740 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 6.750 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.500 6.250 11/1/2016 USEC Inc USU 3.000 32.000 10/1/2014 Verso Paper Holdings LLC / Verso Paper Inc VRS 11.375 46.875 8/1/2016 Verso Paper Holdings LLC / Verso Paper Inc VRS 8.750 31.232 2/1/2019 WCI Communities Inc/Old WCI 4.000 0.625 8/5/2023 Western Express Inc WSTEXP 12.500 62.250 4/15/2015 Western Express Inc WSTEXP 12.500 62.250 4/15/2015 YRC Worldwide Inc YRCW 6.000 93.723 2/15/2014 ********* 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 ***