/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140129.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 29, 2014, Vol. 18, No. 28 Headlines 11 BURTIS AVENUE: Case Summary & 13 Largest Unsecured Creditors 12 BURTIS AVENUE: Case Summary & 5 Largest Unsecured Creditors ADAYANA INC: Court Extends Cash Collateral Use Until Feb. 13 AFFINIA GROUP: S&P Affirms 'B' Corporate Credit Rating AMERICAN AIRLINES: Enters Into Bargaining Agreement with AFA AMERICAN AIRLINES: New Co. Sees Revenue Opportunities From Merger APPLEILLINOIS LLC: Applebee's Not Entitled to Attorneys' Fees ARROW ALUMINUM: U.S. Trustee Wants Chapter 11 Case Dismissed ATHABASCA OIL: S&P Alters Outlook to Negative & Affirms 'CCC+' CCR BERNARD L MADOFF: Ex-Aide Knew of Scheme to Pay His Son, Jury Told CDC CORP: AIG to Pay $6M to Settle Suit Over D&O Coverage CHUKCHANSI ECONOMIC: Moody's Withdrews 'Ca' Corp. Family Rating CYBRDI INC: Has $160,405 Net Loss in Third Quarter D.E.I. SYSTEMS: Dist. Court Cites Safe Harbor Provision in Ruling DEJOUR ENERGY: NYSE MKT Accepts Listing Compliance Plan DOTS LLC: Schedules Filing Date Extended Until Feb. 21 DOTS LLC: Can Employ Donlin Recano as Claims & Noticing Agent DOTS LLC: Section 341(a) Meeting Set on February 26 DUANE MICHAEL: KFC of Coeur D'Alene Wins Approval of Exit Plan DW INVESTMENTS: Foreclosure Sale Set for March 13 E. H. MITCHELL: Files Schedules of Assets and Liabilities E. H. MITCHELL: U.S. Trustee Appoints 3-Member Creditors Panel ECREATIVEWORKS INC: Case Summary & 20 Largest Unsecured Creditors EDISON MISSION: Retirees Seek Appointment of Official Committee ELIZABETH ARDEN: Moody's Assigns B1 Rating on $100MM Add-on Notes ELIZABETH ARDEN: S&P Affirms BB- Notes Rating After $100MM Add-on EXCEL MARITIME: Court Confirms Amended Joint Chapter 11 Plan FAIRBANKS SELF STORAGE: Foreclosure Sale Set for March 13 FIRSTPLUS FINANCIAL: Lucchese Assoc. Wants More Wiretap Evidence FISKER AUTOMOTIVE: Court OKs Beilinson as Restructuring Advisor FISKER AUTOMOTIVE: Can Borrow up to $13.1 Million in DIP Loans FLETCHER INTERNATIONAL: Court Approves Disclosure Statement FLETCHER LEISURE: Obtains Permanent Stay vs. All US Proceedings FLETCHER LEISURE: U.S. Court Approves Sale of All Assets FLINTKOTE CO: Court OKs Dr. Timothy Wyant as Claims Consultant FLORIDA GAMING: Committee Seeks to Limit Lender's Credit Bid FLOWER FACTORY: Trust Wins Judgment Against Magic Creations FOREST LABORATORIES: Moody's Rates New Senior Notes 'Ba1' GMG CAPITAL: Loses Exclusivity; VC Fund May File Own Plan HARLAND CLARKE: Moody's Says Upsized Loan No Impact on 'B2' CFR HUNTER DEFENSE: Moody's Lowers CFR to 'Caa2'; Outlook Stable J.C. PENNEY: Amends Poison Pill Plan JAMESPORT DEVELOPMENT: Section 341(a) Meeting Set on Feb. 21 JENSEN-BYRD: Foreclosure Auction Set for March 12 JOHN C. HILL: Has Access to Cash Collateral Through Feb. 25 LANSING TRADE: S&P Assigns 'B+' CCR & Rates $175MM Notes 'B+' LAWRENCE WILEY: Deere Credit's $96,000 Admin. Claim Rejected LIFECARE HOLDINGS: Court Grants Dismissal of Ch. 11 Cases LILY GROUP: IPL, LC Energy Object to Sale, Breakup Fee LLS AMERICA: Trustee Wins $10,200 Judgment Against Wares MARTIFER SOLAR: Seeks Authority to Tap $5.0-Mil. in DIP Loans MARTIFER SOLAR: Seeks to Use Cathay Bank's Cash Collateral MI PUEBLO: Court Issues 11th Interim Cash Collateral Order MI PUEBLO: Jan. 30 Hearing on Bid to Extend Lease Decision Period MI PUEBLO: Piper Jaffray Defends Compensation Structure MONTREAL MAINE: Court Okays Sale of All Assets to Fortress Unit MONTREAL MAINE: Baker Newman Okayed as Ch. 11 Trustee's Accountant MONTREAL MAINE: Court Denies WD Claimants' Bid to Disband Panel MSI CORP: Parente Beard Approved to Handle Financial Records NORTH LAS VEGAS, NV: Moody's Cuts Debt Rating to Ba3; Outlook Neg OCZ TECHNOLOGY: Meeting to Form Creditors' Panel on Feb. 5 ORMET CORP: Seeks Termination of Evercore's Engagement PATTERSON PARK: Fitch Affirms BB+ Rating on $13.5-Mil. Bonds PEROXYCHEM LLC: Moody's Gives B3 CFR, Rates $155MM Secured Debt B2 POWELL STEEL: Judge Dismisses Chapter 11 Case RADIO ONE: Moody's Hikes CFR to B3 & Rates 335MM Sub. Notes Caa2 RADIO ONE: S&P Rates $335MM Sr. Subordinated Notes 'CCC' RESIDENTIAL CAPITAL: "Jenkins" Wrongful Foreclosure Suit Dismissed RESIDENTIAL CAPITAL: "Pruitt" Wrongful Foreclosure Suit Dismissed SIMPLY WHEELZ: Sells Rent-A-Car Reservations to Dollar SOUND SHORE: GECC Wants to Compel Decision on Lease SOUND SHORE: Allscripts to Provide Post-Closing Services SOUND SHORE: Seeks Extension of Plan Filing Deadline to April 24 SOUND SHORE: Court OKs Agreement Modifying Asset Purchase Pact SOUNDVIEW ELITE: Court Denies Request to Dismiss Chapter 11 Cases SOUNDVIEW ELITE: SPV and Limited Debtors to Have Ch.11 Trustee SOUTH LAKES DAIRY: Blakeley Firm Wins $86,600 in Fees SR REAL ESTATE: Lenders Object to Bid to Vacate SARE Order STANFORD GROUP: Receiver Asks High Court to Clarify Standing STAR DYNAMICS: Can Employ Allen Kuehnle as Bankruptcy Attorneys STAR DYNAMICS: May Hire Womble Carlyle as Special Counsel STAR DYNAMICS: Files Schedules of Assets and Liabilities STEPHEN ENGLAND: Ohio Appeals Court Flips Ruling in Adams Suit STEPHEN YELVERTON: Settlement Order Won't Be Stayed Pending Appeal T-L BRYWOOD: Feb. 27 Hearing on Continued Cash Collateral Use TAMINCO GLOBAL: S&P Assigns 'BB-' Rating to Sr. Secured Facilities THELEN LLP: Trustee, Robinson & Cole Settle Clawback Suit VAUGHAN COMPANY: Suit vs. Dr. Eberhard Goes to Trial VAUGHAN COMPANY: Suit vs. Craig Fenton et al. Goes to Trial VELTI INC: Changes Name and Case Caption Following Sale XG TECHNOLOGY: Posts $15.93-Mil. Net Loss in Q3 Ended Sept. 30 XL-ID SOLUTIONS: Majority of Creditors Approve Proposal Under BIA XTREME POWER: Section 341(a) Meeting Scheduled for Feb. 26 * Cohen Wanted Trades Hidden From SAC Employees * SAC's Counsel Testifies at Trial in Unexpected Move by Defense * Hedge Funds Sniff for Even Bigger Payouts From Banks * Hedge Funds Assets Increase 17 Percent to Record $2.63 Trillion * New Medicare Funding Cuts to Spur Provider Closures & Job Loss * Marks Paneth Appoints Vivian Martinez as New Real Estate Partner * Matthew Boxer Rejoins Lowenstein Sandler as Partner * Ronald Artinian Nominated as FII's "Trustee of the Year" * Stutman Treister's John Shaffer Jumps to Quinn Emanuel * Upcoming Meetings, Conferences and Seminars ********* 11 BURTIS AVENUE: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: 11 Burtis Avenue, LLC 117 Turtleback Road New Canaan, CT 06840 Case No.: 14-50101 Chapter 11 Petition Date: January 24, 2014 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Hon. Alan H.W. Shiff Debtor's Counsel: Douglas S. Skalka, Esq. NEUBERT, PEPE, AND MONTEITH, P.C. 195 Church Street, 13th Floor New Haven, CT 06510 Tel: (203) 821-2000 Fax: 203-821-2009 Email: dskalka@npmlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert J. Cuda, member. A list of the Debtor's 13 largest unsecured creditors is available for free at http://bankrupt.com/misc/ctb14-50101.pdf 12 BURTIS AVENUE: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: 12 Burtis Avenue, LLC 117 Turtleback Road New Canaan, CT 06840 Case No.: 14-50102 Chapter 11 Petition Date: January 24, 2014 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Hon. Alan H.W. Shiff Debtor's Counsel: Douglas S. Skalka, Esq. NEUBERT, PEPE, AND MONTEITH, P.C. 195 Church Street, 13th Floor New Haven, CT 06510 Tel: (203) 821-2000 Fax: 203-821-2009 Email: dskalka@npmlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert J. Cuda, member. A list of the Debtor's five largest unsecured creditors is available for free at http://bankrupt.com/misc/ctb14-50102.pdf ADAYANA INC: Court Extends Cash Collateral Use Until Feb. 13 ------------------------------------------------------------ The Hon. Robyn L. Moberly of the U.S. Bankruptcy Court for the Southern District of Indiana entered an order extending the termination date for Adayana, Inc.'s use of cash collateral until Feb. 13, 2014. As reported by the Troubled Company Reporter on Dec. 19, 2013, the Court approved the agreed order modifying the termination date in the final order dated Nov. 12, 2013, authorizing the Debtor to use cash collateral, and incur postpetition debt, until Jan. 14, 2014. The extension would allow the Debtor to close the sale of substantially all of its assets to AVX Learning LLC and preserve the value of the Debtor's assets as a going concern pending such closing. Under the terms of the Final DIP Order, the termination date for the postpetition financing was Dec. 15, 2013. However, that date could be extended by agreement of AVX and a Court order. In a filing dated Jan. 14, 2014, the Debtor requested, and AVX has agreed, to extend the Termination Date for a period of 30 days from Jan. 14, 2014, through and including Feb. 13, 2014. This extension should allow the Debtor to wind up its affairs and avoid any unpaid administrative expenses. In the second agreed entry modifying the termination date, the Debtor and AVX noted that the Debtor's postpetition financing, which was approved and authorized in the Court's final order, expired on Dec. 15, 2013, but was extended to Jan. 14, 2014. The sale of substantially all of the Debtor's assets to AVX closed on Jan. 10, 2014. However, the wind up of the Debtor's affairs wasn't scheduled to be done by Jan. 14, 2014. The Debtor and AVX sought to extend the final DIP order's termination date as to the use of cash collateral for an additional 30 days from Jan. 14, through and including Feb. 13. This extension of the termination date is for the Debtor's continuing use of cash collateral in accordance with the budget, and won't result in any further advances under the postpetition credit agreement, Michael P. O'Neil, Esq., at Taft Stettinius & Hollister LLP, the attorney for the Debtor, said. The final maturity date of the postpetition credit agreement will be deemed to have occurred on Jan. 14, 2014. AVX is represented by: Jeremy M. Downs, Esq. GOLDBERG KOHN LTD. 55 East Monroe Street, Suite 3300 Chicago, IL 60603 Tel: (312) 201-4000 Fax: (312) 332-2196 E-mail: jeremy.downs@goldbergkohn.com About Adayana, Inc. Adayana, Inc., is a holding company, incorporated under the laws of the state of Minnesota. Its primary assets are its equity ownership interests in two separate operating companies, ABG, an Adayana Company, and Vertex Solutions, Inc., one of which is headquartered in Indianapolis, and the other in Virginia. Both operating companies are in the "human capital" business, providing an array of technology-based consulting and training services. Adayana valued the subsidiaries' stock at $8 million to $12 million as of March 31, 2013. It also owns personal property with book value of $949,280. Adayana, along with its two subsidiaries, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 13-10919) on Oct. 14, 2013. The Debtors are represented by Michael P. O'Neil, Esq., at Taft Stettinius & Hollister LLP, in Indianapolis, Indiana. Nancy J. Gargula, the United States Trustee for Region 10, said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Adayana, Inc. AFFINIA GROUP: S&P Affirms 'B' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its 'B' corporate credit rating on Affinia Group Intermediate Holdings Inc. At the same time, S&P affirmed its issue-level ratings on the debt issued by the company's subsidiary, Affinia Group Inc. "The affirmations reflect our view that the proposed divestiture and expected debt paydown will have a neutral effect on Affinia's debt leverage and will not impair our assessment of the company's business risk profile," said Standard & Poor's credit analyst Nancy Messer. "The affirmations also reflect our expectation that Affinia's EBITDA margins will continue to improve through concerted efforts to lower selling, general, and administrative expense, as well as through shifting the manufacturing footprint into low cost regions from higher-cost Western countries." Affinia is an aftermarket participant in the global automotive industry and the parent of the borrower Affinia Group Inc. The company plans to use the transaction proceeds, which it estimates to be $150 million, to lower outstanding debt. Affinia's debt leverage, by S&P's calculation, remains very high since it exceeded 6x for the 12 months ended Sept. 30, 2013. Still, the net proceeds from the proposed transaction will allow the company to maintain debt leverage of about 6.3x (adjusted for factoring and operating leases). Liquidity remains "adequate," in S&P's view, because the company will have availability (constrained by a lower borrowing base following the divestiture and by letters of credit) of at least $70 million on its undrawn $175 million revolver and about $85 million of cash on hand following the transaction. S&P also expects Affinia to generate about $40 million of free operating cash flow in 2014. The proposed chassis division divestiture is consistent with the company's business strategy, which is focused on geographically expanding its filtration business. Affinia's light-vehicle filters are typically nondiscretionary purchases. However, they are highly correlated to vehicle miles driven, which in the U.S. have fallen from their mid-2008 peak because of the drop in consumer confidence, the high unemployment rate, and the relatively high gasoline prices. While this divestiture will reduce the diversity of Affinia's product portfolio, the chassis division, (which includes steering, suspension, and driveline components), represent a relatively small part of the company's total business (totaling about 13% of sales in 2012). The outlook is stable. S&P believes the company's ongoing restructuring should produce a sustainable EBITDA margin of 12% or better by 2015. S&P estimates that the company can generate $40 million in annual free operating cash flow, on average, in 2014 and 2015. Debt leverage should remain near 6.0x, or less, and FOCF to total debt will likely remain below 5%. S&P could lower the rating if Affinia cannot generate a significant amount FOCF in the year ahead to maintain adequate liquidity. S&P could also lower the rating if the company finances acquisitions or a dividend to the sponsor with debt, which could lead to leverage consistently above our expectation of 6.0x and lower financial flexibility to deal with potential cyclical downturns in the economy. For example, S&P estimates that if EBITDA margins fall about 100 basis points from the levels in 2013, with no reduction in debt, its rating expectations for positive free operating cash flow might not be achieved. Although unlikely, S&P could raise its rating on Affinia if debt to EBITDA improves significantly to less than 5x, FOCF to debt exceeds 5%, and S&P believes these improved ratios can be sustained. Still, S&P believes the company is unlikely to achieve better credit ratios in the year ahead because of relatively weak U.S. aftermarket demand and the company's aggressive use of debt to maximize shareholder returns. AMERICAN AIRLINES: Enters Into Bargaining Agreement with AFA ------------------------------------------------------------ The Association of Flight Attendants on Jan. 27 disclosed that the unions representing each pre-merger Flight Attendant group at the new American Airlines reached an unprecedented agreement with Company management last week on bargaining for a joint contract. The Association of Flight Attendants-CWA represents the pre-merger US Airways workgroup while the Association of Professional Flight Attendants represents the pre-merger American workgroup. "Flight Attendants at the new American Airlines deserve a contract which reflects our contributions in making this merger possible," said Roger Holmin, MEC President, AFA. "We look forward to joining with our flying partners at American and fighting for the contract we deserve." "Flight Attendants have proven once again that hard work and cooperation pay big dividends," said APFA President Laura Glading. "Throughout American's bankruptcy and this merger, Flight Attendants worked together to blaze our own trail. At the end of the trail is the joint contract that represents how hard we've worked and how successful the new American will be. Today, that end is in sight." The final agreement is based on the deal AFA and APFA reached in December. The unions will be negotiating with the Company to finally achieve the great contract we deserve. Under the accelerated timeline in the agreement, all of the Flight Attendants at the new American will be reaping the merger's benefits by February 2015 at the latest -- an unprecedented timetable in airline mergers. The agreement between AFA and APFA also provides that pre-merger US Airways Flight Attendants will become APFA members. Therefore, that agreement will need to be ratified by a vote of the pre- merger US Airways Flight Attendants. In that same balloting, those Flight Attendants also will be voting to approve the negotiations procedures that AFA, APFA and the Company have agreed upon. Balloting will begin within 10 days and conclude within 40 days. Following ratification, negotiations with management will follow an expedited timeline and the combined Flight Attendant group will have a new joint agreement within a year. The Association of Flight Attendants -- http://www.afacwa.org-- is the world's largest Flight Attendant union. Focused 100 percent on Flight Attendant issues, AFA has been the leader in advancing the Flight Attendant profession for 68 years. Serving as the voice for Flight Attendants in the workplace, in the aviation industry, in the media and on Capitol Hill, AFA has transformed the Flight Attendant profession by raising wages, benefits and working conditions. Nearly 60,000 Flight Attendants come together to form AFA, part of the 700,000-member strong Communications Workers of America (CWA), AFL-CIO. About American Airlines AMR Corp. and its subsidiaries including American Airlines filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost- cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so- called U.S. legacy airlines to seek court protection from creditors. It was the third largest airline in the United States at the time of the bankruptcy filing. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. In November 2013, AMR and the U.S. Justice Department a settlement of the anti-trust suit. The settlements require the airlines to shed 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. AMR stepped out of Chapter 11 protection after its $17 billion merger with US Airways was formally completed on Dec. 9, 2013. AMERICAN AIRLINES: New Co. Sees Revenue Opportunities From Merger ----------------------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reported that American Airlines Group Inc. has identified $400 million in new annual revenue it expects to gain from changing its schedule, President Scott Kirby said on Jan. 28, as the carrier reported its first quarterly result since its combination with US Airways last month. According to the report, Mr. Kirby said the revenue would come from reorganizing flights in and out of three former American hubs -- Miami, Dallas and Chicago -- in the coming year or so. He said "there is a list of probably 100 items" between the two companies that could yield additional revenue, and expressed confidence the company can beat its financial targets this year. The new American, whose Dec. 9 merger made it the world's largest airline by traffic, said it had a net loss of $2 billion in the December quarter, including $2.4 billion of special charges, the report said. That compared with a net profit of $262 million, including $350 million of special credits, the year before. The latest and year-earlier fourth-quarter results, formulated under Generally Accepted Accounting Principles, cover the old American Airlines, but add in 22 days of US Airways results in the 2013 quarter, the report related. The new company said a more meaningful gauge is to combine both carriers' results for the full quarter in both years. By that pro forma measure, and excluding the special charges and credits, the two reported profit of $436 million, compared with a year-earlier loss of $42 million, the report further related. The adjusted result in the latest quarter was 59 cents a diluted share, four pennies better than Wall Street had expected. About American Airlines AMR Corp. and its subsidiaries including American Airlines filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost- cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so- called U.S. legacy airlines to seek court protection from creditors. It was the third largest airline in the United States at the time of the bankruptcy filing. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. In November 2013, AMR and the U.S. Justice Department a settlement of the anti-trust suit. The settlements require the airlines to shed 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. AMR stepped out of Chapter 11 protection after its $17 billion merger with US Airways was formally completed on Dec. 9, 2013. APPLEILLINOIS LLC: Applebee's Not Entitled to Attorneys' Fees ------------------------------------------------------------- Bankruptcy Judge Tracey N. Wise in Covington, Kentucky, ruled that Applebee's International, Inc., is not entitled to recover attorney fees in the amount of $278,269, from AppleIllinois, L.L.C., the operator of 33 Applebee's restaurants. Applebee's the fees constitute part of the cure amount due to it upon the Debtor's assumption and assignment of certain franchise agreements between the Franchisor and the Debtor. A copy of Judge Wise's Jan. 24, 2014 Memorandum Opinion and Order is available at http://is.gd/9IaP5ofrom Leagle.com. Crestview Hills, Kentucky-based AppleIllinois, L.L.C., the operator of 33 Applebee's restaurants, filed its chapter 11 petition (Bankr. E.D. Ky. Case No. 13-20723) on April 22, 2013. Through the bankruptcy, the Debtor sought to sell its restaurants via an auction process. An order establishing procedures to conduct the auction and procedures for assumption and assignment of executory contracts and unexpired leases was entered on May 9, 2013. The auction was held on June 5, 2013, and RMH Illinois, LLC, was identified as the successful bidder. RMH agreed to purchase 15 of the restaurants and intended to operate them as Applebee's restaurants. The second amended asset purchase agreement between the Debtor and RMH was approved by an order entered on June 14, 2013. The Debtor is represented by Ellen Arvin Kennedy, Esq. -- dsbankruptcy@dinslaw.com -- at Dinsmore & Shohl. In its petition, the Debtor estimated $1 million to $10 million in both assets and liabilities. A list of the Company's 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/kyeb13-20723.pdf The petition was signed by W. Curtis Smith, managing member. ARROW ALUMINUM: U.S. Trustee Wants Chapter 11 Case Dismissed ------------------------------------------------------------ Samuel K. Crocker, the U.S. Trustee for Region 8, asks the Bankruptcy Court to dismiss the Chapter 11 case of Arrow Aluminum Industries, Inc. On Jan. 7, 2014, the Court lifted the automatic stay to allow First Citizens National Bank to proceed with the repossession and liquidation of the majority of the Debtor's assets. The lifting of the stay will remain effective for a two year period even in the event of dismissal and re-filing of any subsequent bankruptcy proceeding by the Debtor. There is presently no stay in effect as to the real property pledged by the individual guarantors to FCNB and action by FCNB to foreclose the same, if taken, would not be in violation of any present orders of protection and stay of proceedings under Section 362 of the Bankruptcy Code. The stay is also lifted to allow FCNB to proceed to prosecute its state court action for eviction of the Debtor and return of possession of the commercial real estate located on Neal Street in Martin, Tennessee, which was previously foreclosed upon by FCNB. "Based on the foregoing, it does not appear the Debtor has the ability to propose a confirmable plan and the instant case should be dismissed," the U.S. Trustee asserts. A hearing on this matter will be held on Feb. 19, 2014, at 10:00 a.m. at Room 645, in Memphis, TN. About Arrow Aluminum Arrow Aluminum Industries, Inc., filed a Chapter 11 petition (Bankr. W.D. Tenn. Case No. 13-21470) in Memphis on Feb. 11, 2013. The petition was signed by William Ted Blackwell as president. The Debtor has scheduled assets of $126,246,137 and scheduled liabilities of $3,130,103. The Debtor is represented by Steven N. Douglass, Esq., at Harris Shelton Hanover Walsh, PLLC. This is the Debtor's third Chapter 11 case. The previous two cases were assigned Nos. 11-21215 and 12-13482. Both of the previous two Chapter 11 cases were dismissed without a Plan of Reorganization having been approved. The Debtor's Plan provides for Arrow's primary creditor, First Citizens National Bank, to receive a secured claim for the equipment and the insider principals obtaining reverse mortgages on their homes and properties to pay Citizens Bank. On Sept. 5, 2013, the Court entered an order approving the disclosure statement explaining the Debtor's Plan. ATHABASCA OIL: S&P Alters Outlook to Negative & Affirms 'CCC+' CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services said it revised its outlook on Calgary, Alta.-based oil and gas company Athabasca Oil Corp. (AOC) to negative from developing. At the same time, Standard & Poor's affirmed its 'CCC+' long-term corporate credit rating and 'B' issue-level rating on the company's US$550 million senior secured debt. The recovery rating on the debt is unchanged at '1', which indicates S&P's expectation of very high (90%-100%) recovery in its simulated default scenario. "When we assigned our 'CCC+' corporate credit rating, we expected the company would receive full regulatory approval for the Dover oil sands project by March 2013, and exercise the put option to sell its 40% stake to its joint-venture partner, Phoenix Energy Holdings Inc., for the contractually agreed proceeds of C$1.32 billion," said Standard & Poor's credit analyst Michelle Dathorne. The proceeds from this sale represented a material component in S&P's forecasted liquidity for the company and were to fund the majority of AOC's capital spending during its forecast period. S&P believes the delay in receiving final regulatory approval and completing the asset sale has materially weakened the company's 2014-2015 liquidity profile. "Although we continue to believe AOC will exercise the put option within 30 days of receiving final regulatory approval, as its option agreement with Phoenix Energy stipulates, the outlook revision reflects our uncertainty associated with the time to completion of this process," Ms. Dathorne added. The rating on AOC reflects Standard & Poor's view of the company's weakening liquidity profile, the company's inability to internally fund its stated conventional and oil sands growth objectives, its regionally focused upstream operations, it's very small (albeit increasing) production base, and the associated weak forecast cash flow generation. S&P believes that offsetting these weaknesses somewhat is the company's ability to sell portions of its vast undeveloped acreage, which could help to offset the cash flow shortfall between near-term funds from operations and the capital expenditures it will incur to continue developing its conventional and unconventional oil and gas assets. AOC focuses on developing conventional oil and gas and in-situ bitumen. It operates two business segments: the light oil and thermal oil divisions. The company's conventional oil and gas operations are concentrated in northwest Alberta, and its bitumen resources are in Dover, Dover West, Hangingstone, Birch, and Grosmont (which are all in the Athabasca oil sands fairway). The negative outlook reflects Standard & Poor's view that, based on the company's prospective competitive position and heavy reliance on the proceeds from pending asset sales to fund its near-term growth objectives, S&P believes AOC's credit profile could weaken within the next 12 months if it is not able to complete the sale of its 40% interest in the Dover oil sands project to Phoenix Energy. In S&P's opinion, the delay in monetizing this asset has materially weakened the company's liquidity position. S&P believes AOC's credit profile is vulnerable to near-term deterioration if the company does not receive the regulatory approval needed to sell its 40% interest in the Dover oil sands project in 2014. If AOC does not receive the necessary regulatory approval for its Dover oil sands project in 2014, S&P believes the company's liquidity position could further weaken. If it is not able to secure incremental liquidity in 2014, either through asset sales or incremental debt financing, S&P would lower the rating to 'CCC'. Alternatively, if AOC is able to strengthen its liquidity profile, either through the successful exercise of its Dover put option or other asset sales in 2014; S&P would revise the outlook to stable. With material additional funding, S&P believes the company's credit profile could normalize at the 'CCC+' rating. BERNARD L MADOFF: Ex-Aide Knew of Scheme to Pay His Son, Jury Told ------------------------------------------------------------------ Erik Larson, writing for Bloomberg News, reported that Bernard Madoff added the son of a "key" executive to his payroll even though he didn't work there, a jury was told in the trial of five ex-employees accused of aiding the con man's $17 billion Ponzi scheme. According to the report, Craig Kugel, who pleaded guilty in 2012 to a scheme that gave salaries and benefits to people who weren't Madoff employees, testified on Jan. 22 in Manhattan federal court that the son of Daniel Bonventre, the firm's operations chief, was listed as an employee so he could keep receiving company health insurance after graduating from college. At a meeting in 2007 between Kugel and Madoff's brother Peter Madoff, another executive at the firm, "Bernie Madoff walked in and interrupted me and said Daniel Bonventre had asked him how his son could" stay on the plan and that the elder Bonventre was a "key employee," Kugel said, the report related. "He said, ?We need to help him out and do something for his son.'" The trial is the first stemming from the world's biggest Ponzi scheme, which collapsed after Madoff's arrest on Dec. 11, 2008, the report said. Bonventre and four other former Madoff employees are accused of aiding the fraud for decades and getting rich in the process. Kugel is among six of their former colleagues who have pleaded guilty and are testifying against them. Madoff was hospitalized last month for a heart attack and has since returned to the federal prison in North Carolina where he is serving a 150-year sentence, CNBC reported on Jan. 23. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. The most recent distribution was in March 2013. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Picard is holding almost $4.4 billion he can't distribute on account of outstanding appeals and disputes. The largest holdback, almost $2.8 billion, results from disputed claims. CDC CORP: AIG to Pay $6M to Settle Suit Over D&O Coverage --------------------------------------------------------- Law360 reported that AIG Europe Ltd. agreed to pay $6 million to settle allegations that it refused to honor an insurance policy held by CDC Corp. covering nearly $9 million in settlement and defense costs CDC incurred in a lawsuit against its top executives. According to the report, CDC's liquidating trust brought an adversary suit against AIG in June, claiming it paid out $1.5 million defending a lawsuit accusing CDC officials of perpetrating a smear campaign against hedge fund Evolution Capital Management LLC, and another $7.4 million to settle the suit. About CDC Corp Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corp., doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at US$100 million to US$500 million as of the Chapter 11 filing. The Official Committee of Equity Security Holders of CDC Corp. is represented by Troutman Sanders. The Committee tapped Morgan Joseph TriArtisan LLC as its financial advisor. The stock of CDC Software Corp. was sold for $249.8 million to an affiliate of Vista Equity Holdings. The Debtor won a bankruptcy judge's approval of a Chapter 11 plan under which shareholders are slated to receive as much as $6.10 a share. On July 3, 2012, the Debtor and the Official Committee of Equity Security Holders filed their First Amended Joint Plan of Reorganization for CDC Corporation that provides for the sale of all of the Debtor's assets, for the benefit of the Debtor's creditors and equity interest holders. Under the Plan, the Debtor's chief restructuring officer, Marc Watson, will act as the disbursing agent and reserve from the sale proceeds sufficient funds to pay all Allowed Claims in full, plus interest, that remain unpaid. CHUKCHANSI ECONOMIC: Moody's Withdrews 'Ca' Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service withdrew its ratings on Chukchansi Economic Development Authority's ("Chukchansi" or "the Authority") including its Corporate Family Rating of Ca and Probability of Default Rating of D-PD. Ratings Rationale Moody's has withdrawn the rating because it believes it has insufficient or otherwise inadequate information to support the maintenance of the rating. Chukchansi has been unable to file audited financial statements for its fiscal year-ended December 31, 2012 because of ongoing governance disputes at the Tribal level. The following ratings were withdrawn: Corporate Family Rating at Ca Probability of Default Rating at D-PD $260 million senior notes due 2020 at Ca (LGD 4, 50%) CYBRDI INC: Has $160,405 Net Loss in Third Quarter -------------------------------------------------- Cybrdi, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $160,405 on $132,941 of total revenue for the three months ended Sept. 30, 2013, compared to a net loss of $134,843 on $129,032 of total revenue for the same period last year. The Company's balance sheet at Sept. 30, 2013, showed $10.84 million in total assets, $6.72 million in total liabilities, and stockholders' equity of $4.11 million. A copy of the Form 10-Q is available at: http://is.gd/lcUJNt Headquartered in Shaanxi, China, Cybrdi, Inc. manufactures human and animal tissue micro-array for scientific uses and research and development. The Company currently supplies its products to local research centers and overseas through US BioMax, Inc. D.E.I. SYSTEMS: Dist. Court Cites Safe Harbor Provision in Ruling ----------------------------------------------------------------- Utah District Judge Clark Waddoups ruled on motions for partial summary judgment filed by parties in the lawsuit, KENNETH A. RUSHTON, in his capacity as Trustee, Plaintiff, v. DAVID BEVAN, an individual; and BENEDICT BICHLER, an individual, Defendants, Case No. 2:11-cv-00343-CW (D. Utah). Mr. Rushton is the trustee in the Chapter 7 cases of D.E.I. Systems, Inc. aka Delta Fiberglass, aka Delta Equipment Industrial Systems, Inc., aka Delta Environmental, Inc. Defendants David Bevan and Benedict Bichler filed a Motion for Partial Summary Judgment, seeking dismissal of Plaintiff Kenneth A. Rushton's First and Second Claims for Relief as asserted in the Amended Complaint filed with the Bankruptcy Court on Jan. 12, 2012. In response, the Plaintiff filed a Motion to Strike and a Cross Motion for Partial Summary Judgment. In a Jan. 23, 2014 Memorandum Decision and Order available at http://is.gd/xz0p0Ofrom Leagle.com, the Court grants the Defendants' Motion for Partial Summary Judgment and denies the Plaintiff's Cross Motion for Partial Summary Judgment. Up until May 2004, the Defendants owned 100% of the outstanding stock of Delta Equipment Systems, Inc., doing business as DEI Systems, Inc. In May 2004, the Defendants entered into a "Purchase Agreement," consisting of a series of transactions whereby the Defendants sold 44.843% of their shares of DEI-UT to Environmental Services Group for the purchase price of $4,000,000 and DEI-UT redeemed an additional 43.946% of the Defendants' shares of DEI-UT for $3,920,000, with the Redemption Amount to be paid by DEI-UT at closing. Payment was to be made in cash, by certified check or wire transfer of immediately available funds to the account, or accounts, designated by the Defendants. At closing, Defendants delivered the redeemed shares to DEI-UT. To facilitate the Purchase Agreement, ESG made a secured loan to DEI-UT in the total amount of $7,520,000. This amount included the $3,920,000 Redemption Amount. ESG wired the $7,520,000 from its Union Bank of California account to a Wells Fargo Bank trust account belonging to Ray, Quinney & Nebeker, DEI-UT's attorneys. Under the terms of the Purchase Agreement, and pursuant to Bichler's instructions, $2,088,576 of the Redemption Amount funds was then wired from the Wells Fargo account to Bichler's account at Barnes Bank. Under the terms of the Purchase Agreement, and pursuant to instructions from Bevan, a check in the amount of $1,831,124 (also from the Redemption Amount funds) made payable to Bevan was drawn on the Wells Fargo Account. Finally, under the Purchase Agreement, DEI-UT merged into D.E.I. Systems, Inc. More than three years later, on September 7, 2007, D.E.I. filed for Chapter 11 bankruptcy protection. On April 15, 2008, D.E.I. converted its case to a proceeding under Chapter 7 and Mr. Rushton was appointed Trustee. On Feb. 25, 2009, the Plaintiff commenced adversary proceedings against the Defendants, alleging fraudulent transfer(s) to recover funds paid to them by DEI-UT, specifically the $2,088,576 paid to Bichler and the $1,831,124 paid to Bevan. In its ruling, the District Court held that, "because an application of the plain statutory language reveals that the payments made to Bevan and Bichler were both settlement payments made by or to a financial institution and transfers made by or to a financial institution in connection with a securities contract, the payments fall within the safe harbor provision of 11 U.S.C. [Sec.] 546(e). Additionally, because such an application does not produce an absurd or unreasonable result, the court need not look beyond the face of the statute in making its decision in this case." DEJOUR ENERGY: NYSE MKT Accepts Listing Compliance Plan ------------------------------------------------------- Dejour Energy Inc. on Jan. 27 disclosed that pursuant to a notice received on November 21, 2013 from the NYSE MKT staff indicating that because the Company: The Company was afforded the opportunity to submit a plan of compliance to the Exchange and on December 23, 2013, January 10, 2014 and January 23, 2014 presented that plan to the Exchange. On January 27, 2014, the Exchange notified the Company that it has accepted the Company's plan of compliance and granted the Company an extension until April 4, 2014 for Section 1003 (a) (iv) and May 22, 2015 for Section 1003 (a) (ii) (iii) to regain compliance with the continued listing standards. The Company will be subject to periodic review by Exchange Staff during the extension period. Failure to make progress consistent with the plan or to regain compliance with the continued listing standards by the end of the extension period could result in delisting from the NYSE MKT LLC. About Dejour Dejour Energy Inc. is an independent oil and natural gas exploration and production company operating projects in North America's Piceance Basin (approximately 80,000 net acres) and Peace River Arch regions (approximately 7,500 net acres). Dejour's seasoned management team has consistently been among early identifiers of premium energy assets, repeatedly timing investments and transactions to realize their value to shareholders' best advantage. Dejour maintains offices in Denver, USA, Calgary and Vancouver, Canada. The company is publicly traded on the New York Stock Exchange MKT (nyse mkt:DEJ) and Toronto Stock Exchange CA:DEJ 0. DOTS LLC: Schedules Filing Date Extended Until Feb. 21 ------------------------------------------------------ Judge Donald H. Steckroth of the U.S. Bankruptcy Court for the District of New Jersey extended Dots, LLC, et al.'s deadline to file their schedules of assets and liabilities and statements of financial affairs through Feb. 21, 2014. About DOTS LLC Dots is a retailer of fashionable clothing, accessories, and footwear for price-conscious women. Dots provides missy and plus size choices to fashion savvy 25 to 35 year old women at approximately 400 retail stores throughout the Midwest, East, and South United States. Dots' workforce includes 3,500 individuals in their stores, distribution center, and corporate headquarters. Dots, LLC, and its affiliates sought bankruptcy protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 14-11016) on Jan. 20, 2014, to sell some or all of their assets. Lowenstein Sandler LLP serves as counsel to the Debtors. PricewaterhouseCoopers LLP is financial advisor and investment banker. Donlin, Recano & Company, Inc., is the claims and notice agent. As of the Petition Date, the Debtors have outstanding secured debt owed to senior lender Salus Capital Partners, LLC, of which $14.5 million remains outstanding under a revolving facility and $16.1 million is owed under a term facility. The Debtors also have not less than $17 million outstanding under subordinated term loan agreements with Irving Place Capital Partners III L.P. ("IPC) and related entities. Moreover, the Debtors have aggregate unsecured debts of $47.0 million. Salus, the prepetition senior lender and the DIP lender, is represented by Morgan, Lewis & Bockius, LLP. The prepetition subordinated lenders are represented by Okin Hollander & DeLuca, LLP. The Company has arranged to borrow $36 million to keep operating as it reorganizes under court protection. DOTS LLC: Can Employ Donlin Recano as Claims & Noticing Agent ------------------------------------------------------------- Judge Donald H. Steckroth of the U.S. Bankruptcy Court for the District of New Jersey authorized Dots, LLC, et al., to appoint Donlin, Recano & Company, Inc., as claims and noticing agent. Professionals at Donlin Recano will charge at these hourly rates: Hourly Rates ------------ Senior Bankruptcy Consultant $185 Consultant $155 to $175 Case Manager $115 to $150 Technology/Programming Consultant $95 to $120 Analyst $70 to $110 Clerical $25 to $40 The firm will charge $0.09 per page for fax noticing and $0.02 per page for electronic noticing. For claims docketing and management services, the website development and hosting will be free of charge and creditor data storage will cost $0.09 per creditor per month. Donlin may apply its retainer of $15,000 to all prepetition invoices, which retainer will be replenished to the original retainer amount upon the request to the Debtors. About DOTS LLC Dots is a retailer of fashionable clothing, accessories, and footwear for price-conscious women. Dots provides missy and plus size choices to fashion savvy 25 to 35 year old women at approximately 400 retail stores throughout the Midwest, East, and South United States. Dots' workforce includes 3,500 individuals in their stores, distribution center, and corporate headquarters. Dots, LLC, and its affiliates sought bankruptcy protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 14-11016) on Jan. 20, 2014, to sell some or all of their assets. Lowenstein Sandler LLP serves as counsel to the Debtors. PricewaterhouseCoopers LLP is financial advisor and investment banker. Donlin, Recano & Company, Inc., is the claims and notice agent. As of the Petition Date, the Debtors have outstanding secured debt owed to senior lender Salus Capital Partners, LLC, of which $14.5 million remains outstanding under a revolving facility and $16.1 million is owed under a term facility. The Debtors also have not less than $17 million outstanding under subordinated term loan agreements with Irving Place Capital Partners III L.P. ("IPC) and related entities. Moreover, the Debtors have aggregate unsecured debts of $47.0 million. Salus, the prepetition senior lender and the DIP lender, is represented by Morgan, Lewis & Bockius, LLP. The prepetition subordinated lenders are represented by Okin Hollander & DeLuca, LLP. The Company has arranged to borrow $36 million to keep operating as it reorganizes under court protection. DOTS LLC: Section 341(a) Meeting Set on February 26 --------------------------------------------------- A meeting of creditors in the bankruptcy case of Dots, LLC, will be held on Feb. 26, 2014, at 9:00 a.m. at Suite 1401, One Newark Center. Creditors have until May 27, 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. About DOTS LLC Dots is a retailer of fashionable clothing, accessories, and footwear for price-conscious women. Dots provides missy and plus size choices to fashion savvy 25 to 35 year old women at approximately 400 retail stores throughout the Midwest, East, and South United States. Dots' workforce includes 3,500 individuals in their stores, distribution center, and corporate headquarters. Dots, LLC, and its affiliates sought bankruptcy protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 14-11016) on Jan. 20, 2014, to sell some or all of their assets. Lowenstein Sandler LLP serves as counsel to the Debtors. PricewaterhouseCoopers LLP is financial advisor and investment banker. Donlin, Recano & Company, Inc., is the claims and notice agent. As of the Petition Date, the Debtors have outstanding secured debt owed to senior lender Salus Capital Partners, LLC, of which $14.5 million remains outstanding under a revolving facility and $16.1 million is owed under a term facility. The Debtors also have not less than $17 million outstanding under subordinated term loan agreements with Irving Place Capital Partners III L.P. ("IPC) and related entities. Moreover, the Debtors have aggregate unsecured debts of $47.0 million. Salus, the prepetition senior lender and the DIP lender, is represented by Morgan, Lewis & Bockius, LLP. The prepetition subordinated lenders are represented by Okin Hollander & DeLuca, LLP. The Company has arranged to borrow $36 million to keep operating as it reorganizes under court protection. DUANE MICHAEL: KFC of Coeur D'Alene Wins Approval of Exit Plan -------------------------------------------------------------- Bankruptcy Judge Frederick P. Corbit confirmed the First Amended Plan of Reorganization of Duane Michael and Donna Jane Byrd, d/b/a KFC of Coeur D'Alene, Inc. According to Judge Corbit, it is proper that the Plan be confirmed, subject to the following: (a) Notwithstanding any provision of the Plan to the contrary, the treatment of the claims of Class 9 members on page 14, lines 1 - 17 is hereby replaced with the following: the claims of Class 9 members (collectively "Class 9"), including the claims asserted under proof of claim number 14, secured against the Commercial Property (Plan, Art. 1, def. # 9), Debtors' Business, and any and all collateral securing the claims of Class 9 (Plan, Art. 1, def. #14) are hereby fixed in the total sum of $800,000.00, with interest accruing at a rate of 7.35% per annum, payable at $5,943.48 per month for sixty (60) months (the "Secured Claim of Class 9 against Debtors"), with the first payment due on the first day of the first month following the Effective Date (Plan, Art. 1, def. #19), and each subsequent payment due on the first day of the month thereafter, at which time the remaining principal will become due as a balloon payment on the Secured Claim of Class 9 against Debtors in full satisfaction of the secured portion of the Secured Claim of Class 9 against Debtors. The remaining claims of Class 9 shall hold no collateral and shall be treated and paid as a Class 16 (Unsecured) Claim. Debtors may pay Class 9, its successors, or assigns, any remaining balance on the Secured Claim of Class 9 against Debtors in full at any time, less any amounts previously paid by Debtors to Class 9 on the Secured Claim of Class 9 against Debtors, its successors, or assigns, without penalty or interest. (b) KFC of Coeur d' Alene, Inc. and Class 9 have agreed to settle the Claims of Class 9 against Debtors and KFC of Coeur d' Alene, Inc. and the loan to KFC of Coeur d' Alene, Inc. by Class 9, guaranteed by Debtors including the claims set forth in proof of claim number 13, pursuant to a Settlement Agreement, which provides in part, that KFC of Coeur d' Alene, Inc. will pay the total sum of $22,500.00 in monthly installments of $625.00 over thirty six (36) months, with no interest (the "Settlement Amount"), with the first payment due on the first day of the first month following the Effective Date (Plan, Art. 1, def. #19). In addition, the Settlement Agreement provides that Class 9 does not release KFC of Coeur d' Alene, Inc. until the full Settlement Amount is paid, and upon the full payment of the Settlement Amount by KFC of Coeur d' Alene, Inc., Class 9 releases its lien on any and all property owned by KFC of Coeur d' Alene, Inc. and Class 9 forgives the remaining debt owed to Class 9 by KFC of Coeur d' Alene, Inc. (the "Remaining Debt"); provided however, that the Remaining Debt that was guaranteed by Debtors, shall be treated and paid as a Class 16 (Unsecured) Claim. Any payments made by KFC of Coeur d' Alene, Inc. to Class 9 shall reduce its Class 16 (Unsecured) Claim. KFC of Coeur d' Alene, Inc. may pay Class 9, its successors, or assigns, any remaining balance on the Settlement Amount in full at any time, less any amounts previously paid by KFC of Coeur d' Alene, Inc. to Class 9 on the Settlement Amount, its successors, or assigns, without penalty or interest. (c) Except as expressly modified by the Plan or this Confirmation Order, all terms and conditions of all agreements by and between Debtors and Class 9 shall remain in full force and effect. (d) Notwithstanding any provision of the Plan to the contrary, Debtors shall pay Disbursing Agent the sum of One Thousand One Hundred Dollars ($1,100.00) per month for a period of sixty (60) months, or such additional time period until the Allowed Claims of classes numbered 1 (admin) and 3 (IRS and State of Idaho) are paid in full, if the proceeds of sale from the property to be sold under the Plan is insufficient to satisfy in full the Allowed Claims of classes 1 (admin) and 3 (IRS and State of Idaho). The first payment shall be due within thirty (30) days of Confirmation. A copy of Judge Corbit's Jan. 22, 2014 Findings of Fact is available at http://is.gd/eBl2rpfrom Leagle.com. Duane Michael and Donna Jane Byrd, d/b/a KFC of Coeur D'Alene, Inc., filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 13-01081) in 2013. The Debtors are represented by: Kevin O'Rourke, Esq. SOUTHWELL & O'ROURKE, P.S. 421 W Riverside Ave, Suite 960 Spokane, WA 99201 Tel: 509-624-0159 Fax: 509-624-9231 Jed Morris, Esq. -- jmorris@lukins.com -- at Lukins & Annis, P.S., represent the members of Class 9 under the Debtors' Plan. DW INVESTMENTS: Foreclosure Sale Set for March 13 ------------------------------------------------- Fidelity Title Agency of Alaska, as substitute trustee for Yukon Title Company, Inc., has given notice of default under a deed of trust executed by DW Investments, LLC, Trustor, in favor of First National Bank Alaska, Beneficiary. The Trustee, by demand of the beneficiary, has elected to sell DW's real property to satisfy obligations owed to the bank at an auction sale to be held on March 13, 2014, at 101 Lacey Street, Fairbanks, Alaska. The sale will begin at 10:00 a.m. The property is located at 548 Second Street, Fairbanks, AK 99701. The balance due on the note issued in favor of the bank is the principal sum of $118,444.27 plus interest from Aug. 14, 2013 as provided in the Note plus any prepayment premium, late charges, attorneys' fees and costs of sale and other sums as provided in the deed of trust. During the auction, the beneficiary may enter a credit offset bid consisting of sums due it under the deed of trust security agreement and note. Title to the real property will be conveyed by trustee's quitclaim deed without warranties of title. To determine the current amount required to be paid to cure the default and reinstate the payment terms of the note, interested parties may call 777-3392 or send an e-mail to hgraham@fnbalaska.com. Provided, however, if notice of default has been recorded two or more times previously under the deed of trust described above and the default has been cured, the trustee may not elect to refuse payment and continue the sale. E. H. MITCHELL: Files Schedules of Assets and Liabilities --------------------------------------------------------- E. H. Mitchell & Company, L.L.C., has filed with the Bankruptcy Court for the Eastern District of Louisiana its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $300,000,000 B. Personal Property $27,297 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $854,148 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $427,000 ----------- ----------- TOTAL $300,027,297 $1,281,148 E. H. Mitchell & Company LLC sought protection under Chapter 11 of the Bankruptcy Code on Oct. 8, 2013, (Case No. 13-12786, Bankr. E.D. La.). The case is assigned to Judge Jerry A. Brown. The Debtor is represented by Robert L. Marrero, Esq., at Robert Marrero, LLC, in New Orleans, Louisiana. The petition was signed by Michael Furr, secretary/member. E. H. MITCHELL: U.S. Trustee Appoints 3-Member Creditors Panel -------------------------------------------------------------- Henry G. Hobbs, Jr., Acting United States Trustee for Region 5, has appointed three members to the official committee of unsecured creditors in the Chapter 11 cases of E. H. Mitchell & Company. The Creditors Committee members are: 1. Standard Gravel Company Attn: Spencer H. Green 20175 Highway 16 Franklinton, LA 70438 Tel: (985) 839-3442 Fax: (985) 839-3201 E-mail: sgreen@standardgravel.com 2. Ezkovich & Co., LLC Attn: Alan D. Ezkovich 650 Poydras St., Ste. 1220 New Orleans, LA 70130 Tel: (504) 593-9899 Fax: (504) 593-9048 E-mail: alan.ezkovich@ezkovichlaw.com 3. Rickert and Company, LLC, CPAs 106 Village Sq., Suite 3 Slidell, LA 70458 Tel: (985) 643-0842 Fax: (985) 643-0859 E. H. Mitchell & Company LLC sought protection under Chapter 11 of the Bankruptcy Code on Oct. 8, 2013, (Case No. 13-12786, Bankr. E.D. La.). The case is assigned to Judge Jerry A. Brown. The Debtor is represented by Robert L. Marrero, Esq., at Robert Marrero, LLC, in New Orleans, Louisiana. In its petition, the Debtor estimated its assets to range from $100 million to $500 million and liabilities to range to $1 million to $10 million. In its formal schedules, the Debtor disclosed $300,027,297 in total assets and $1,281,148 in total liabilities. The petition was signed by Michael Furr, secretary/member. ECREATIVEWORKS INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Ecreativeworks, Inc. 13220 County Rd 6 Ste 150 Plymouth, MN 55441 Case No.: 14-40279 Chapter 11 Petition Date: January 24, 2014 Court: United States Bankruptcy Court District of Minnesota (Minneapolis) Judge: Hon. Kathleen H Sanberg Debtor's Counsel: Thomas H Olive, Esq. OLIVE LAW FIRM 5270 W 84th St Suite 300 Bloomington, MN 55437 Tel: 952-831-0733 Email: tolive@oto-law.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Bret Olseth, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mnb14-40279.pdf EDISON MISSION: Retirees Seek Appointment of Official Committee --------------------------------------------------------------- Eugene Petrovits, Melody Johnson, Lonnie McBee, Robert Dietch, Gary Griffin, John Meeks, Karen Rose, H. David Gowhari, Nancy Lewis, Byna Sipos, James Henneforth, Kay Howard, Robert Driscoll, Donna Courregas, Suzanne Wood, Mario Bruasso, Leticia Davis, Michael McGarry, Richard Banister, Jeri Fender, James Schoonmaker, Mark Murray, Russell Koelsch and Robert Edgell on behalf of themselves and other similarly situated non-union retirees (the "Affected Retirees") of Edison Mission Energy et al., filed a motion with the U.S. Bankruptcy Court seeking an order appointing an Official Retiree Committee. On January 8, 2014, the Debtors filed their Motion for an Order (A) Authorizing Termination of Retiree Benefits and (B) Granting Related Relief (the "Motion to Terminate Benefits"), seeking to permanently eliminate the retiree benefits of 276 Affected Retirees (and over a hundred other retirees). On January 21, 2014, the Affected Retirees filed their Objection to the Debtors' Motion to Terminate Benefits. In the Motion to Terminate Benefits, the Debtors argue why Section 1114 of the Bankruptcy Code should not apply in this case. In their Objection, the Affected Retirees argue why Section 1114 must apply and further requested that the Court form a Retiree Committee. The Affected Retirees submit that it is paramount for the U.S. Trustee to appoint a Retiree Committee as soon as possible given the need to prepare for termination arguments as well as to represent the Affected Retirees' interests with respect to plan confirmation and other important events that may affect retiree benefits. The Affected Retirees suggest that a Retiree Committee should reflect, to the extent possible, former employees who worked in different positions while employed by the Debtors and EIX and who will recognize the interests of retirees both over and under age 65 (i.e. Medicare eligible retirees). To effectuate the formation of a Retiree Committee as expeditiously as possible, the Affected Retirees suggest that the U.S. Trustee appoint John Meeks (former EME Human Resources Director), Gary Griffin, Robert Edgell, Kay Howard, Russell Koelsch, Mark Murray and Suzanne Wood (or a smaller group of 5 or 3 of them). At the U.S. Trustee's request, contact information for these and all other retirees who have expressed an interest in serving on the Retiree Committee will be transmitted to the U.S. Trustee's office. Hearing on the motion is set by Feb. 4, 2014 at 9:30 a.m. in Courtroom 680 in the Everett McKinley Dirksen Building, 219 South Dearborn Street, Chicago, Illinois. Attorneys for the Affected Retirees can be reached at: Trent P. Cornell, Esq. Bryan E. Minier, Esq. David M. Serritella, Esq. PEDERSEN & HOUPT, P.C. 161 N. Clark, Suite 3100 Chicago, IL 60601 Tel: (312) 261-2100 Fax: (312) 261-1176 E-mail: tcornell@pedersenhoupt.com bminier@pedersenhoupt.com dserritella@pedersenhoupt.com 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 also represented by James H.M. Sprayregen, P.C., Sarah Hiltz Seewer, Esq., and Seth A. Gastwirth, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois; and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in New York. Debtor Camino Energy Company is represented by David A. Agay, Esq., and Joshua Gadharf, Esq., at McDonald Hopkins LLC, in Chicago, Illinois. 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's Second Amended Joint Plan of Reorganization is up for approval at a Feb. 19, 2014 confirmation hearing, and provides for the sale of all or substantially all of Debtors MWG, EME, and Midwest Generation EME, LLC, will be sold to NRG Energy, Inc. ELIZABETH ARDEN: Moody's Assigns B1 Rating on $100MM Add-on Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Elizabeth Arden, Inc.'s (RDEN) proposed $100 million add-on to its senior unsecured notes due 2021. RDEN intends to utilize the net proceeds to repay revolver drawings. Moody's also affirmed RDEN's Ba3 Corporate Family Rating (CFR) despite the recent sharp reduction in second quarter earnings guidance and Moody's expectation for revenue and earnings softness for the next several quarters. Moody's nevertheless anticipates the Elizabeth Arden brand repositioning including efforts to grow its skin care offerings, cost reductions, and the company's international growth initiatives will lead to modestly higher EBITDA and lower leverage in fiscal 2015. RDEN's good liquidity position also provides flexibility to execute its operational improvement initiatives. The rating outlook remains stable. The refinancing favorably extends the maturity profile and will free up revolver capacity to manage the company's highly seasonal cash flow. The estimated less than $5 million increase in annual cash interest expense is negative but manageable within the company's liquidity sources. The refinancing also minimally affects leverage since RDEN's revolver borrowings were projected to exceed $100 million over the next year and will now be partially replaced by the higher note amount. RDEN reduced debt following the recession, but the level of revolver borrowings increased in recent years due to roughly $145 million of fragrance and other acquisitions in 2011 and 2012 including Curve, Ed Hardy, True Religion and Justin Bieber. Moody's took the following specific actions on Elizabeth Arden, Inc. Assignments: Senior Unsecured Regular Bond/Debenture at B1, LGD5 - 70% Affirmations: Corporate Family Rating at Ba3 Probability of Default Rating at Ba3-PD Speculative Grade Liquidity Rating at SGL-2 Senior Unsecured Regular Bond/Debenture at B1, LGD5 - 70% (changed from LGD5 - 74%) Outlook, Remains Stable RATINGS RATIONALE RDEN's Ba3 CFR reflects the modest cash flow generated from its portfolio of well-known classic, celebrity and designer-branded fragrances and skin care products, greater reliance on discretionary spending than other beauty and cosmetic categories, modest scale, and high leverage. Moody's anticipates the company will gradually gain traction with its strategy to increase revenue in international markets where its fragrance market shares are lower than in the U.S. The company is also evolving its business mix with a focus on skin care to reduce reliance on fragrance, which is a higher-priced, more discretionary, and highly seasonal category relative to other beauty products. Such initiatives are occurring at a time when soft consumer demand is contributing to a highly promotional environment in the U.S. and other important company markets that continue to pressure earnings. Moody's expects investments in international expansion and marketing will also contribute to earnings pressure over the next several quarters. The company's newly appointed international general manager is rationalizing under-performing businesses, focusing on higher potential opportunities such as travel retail, and continuing the company's overall efforts to improve the cost structure and its weak mid-single digit EBIT margin. Moody's anticipates the company's growth and cost initiatives will gradually gain traction and contribute to modest earnings growth in FY 2015. RDEN's ratings are constrained by its heavy reliance on fragrance and small scale relative to the global market leaders, which are larger, more diversified and financially stronger competitors. RDEN's smaller scale results in weaker pricing, promotion and shelf space negotiating leverage with the large department, mass and drug stores on which the company relies for distribution. RDEN must continually reinvest and launch successful new products given its partial exposure to more transitory celebrity and designer brands. Brand licensing contributes to weaker margins and can lead to earnings pressure when sales do not meet the company's expectations as some contracts are structured with minimum sales and marketing commitments. RDEN is weakly positioned within the Ba3 category based on Moody's projection that debt-to-EBITDA leverage will increase to a 4.25x-4.5x range in FY 2014 due to the aforementioned earnings pressure. The projected decline in leverage to a 4.0x range or lower in FY 2015 would more comfortably position the company within the rating category. The affirmation of the company's SGL-2 speculative-grade liquidity rating reflects its modest cash balance ($45 million as of 9/30/13), projected free cash flow in a $10-$15 million range over the next 12 months, lack of near-term debt maturities, and ample unused capacity under its $300 million asset based revolving credit facility expiring in January 2016. The company is reliant on the revolver to cover its highly seasonal cash flow, and Moody's projects revolver borrowings will peak in a $125-$150 million range (pro forma for the proposed bond offering) in the fall of 2014 prior to the peak holiday sales period. Moody's expects RDEN will remain above the minimum availability thresholds in the revolver to avoid triggering the minimum 1.1x fixed charge coverage ratio (FCCR) maintenance covenant. Moody's also projects the company's FCCR will remain above 1.1x. The stable rating outlook reflects Moody's view that the company will maintain a good liquidity position and generate modestly positive cash flow, providing flexibility to manage in the promotional environment. Moody's also anticipates in the stable rating outlook that RDEN's leverage will decline in FY 2015 as earnings improve modestly. RDEN's ratings could be downgraded if earnings weaken due to ongoing softness in consumer demand, continued competitive promotional activity, market share erosion, or an inability to rebound from the difficult 2013 holiday season such that debt-to- EBITDA (excluding seasonal borrowings) exceeds 4.5x. Debt-financed share repurchases or acquisitions or a deterioration of liquidity could also result in a downgrade. RDEN's ratings are unlikely to be upgraded unless the company improves its scale and product diversity such that earnings and free cash flow are stronger and more stable. The company would need to sustain an EBIT margin above 10%, debt-to-EBITDA leverage below 2.5x (excluding seasonal borrowings), and positive free cash. A strong liquidity position is also necessary for an upgrade. The principal methodology used in this rating was Global Packaged Goods published in June 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. RDEN, headquartered in Miami, FL, is a global beauty products company with a broad portfolio of prestige fragrance, skin care and cosmetic brands. RDEN markets more than 100 company brands and distributes an additional 300 brands. Revenue for the 12 months ended December 2013 is estimated to be approximately $1.3 billion. ELIZABETH ARDEN: S&P Affirms BB- Notes Rating After $100MM Add-on ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' issue-level rating and left the '4' recovery rating unchanged on Elizabeth Arden's 7.375% senior notes due 2021. The ratings are not immediately affected by the company's plans to issue $100 million of additional notes under the indenture of these existing notes. S&P expects the proceeds to pay down a portion of the company's outstanding balance under its revolving credit facility. S&P estimates this transaction is leverage neutral, and it estimates leverage to be about 3.8x at Sept. 30, 2013. S&P continues to view the company's business risk profile as "weak," reflecting the company's solid market position in fragrances through its portfolio of well-known brands, its sales concentration in the highly competitive fragrance category, and the seasonal nature of its core business. Because of a weaker than expected, highly promotion retail environment during the important holiday season, S&P expects the company's margins to decrease and for credit metrics to weaken over the next year. S&P projects credit metrics will remain in line with the indicative ratios for a "significant" financial risk profile, including leverage below 4x, over the next year. Standard & Poor's credit rating on Elizabeth Arden remains unchanged at 'BB-', with a stable outlook. RATINGS LIST Elizabeth Arden Inc. Corporate credit rating BB-/Stable/-- Issue rating affirmed; Recovery rating unchanged Elizabeth Arden Inc. $350M Senior unsecured due 2021 BB- Recovery rating 4 EXCEL MARITIME: Court Confirms Amended Joint Chapter 11 Plan ------------------------------------------------------------ Excel Maritime Carriers Ltd. on Jan. 27 disclosed that the United States Bankruptcy Court for the Southern District of New York confirmed the Amended Joint Chapter 11 Plan of Reorganization, which has the support of the Company's senior secured lenders and unsecured creditors. The Plan was unanimously accepted by Excel's two voting classes, with 100% of the class of secured lenders and approximately 92% of the class of impaired Excel general unsecured creditors, by value, voting in favor. Excel expects to emerge from Chapter 11 in mid-February 2014. Upon completion of the restructuring process, the Company's total prepetition debt of $920 million will be reduced to approximately $300 million. Gabriel Panayotides, Chairman of the Board, together with the other members of Excel's management team, will continue to lead the Company. Excel's operations have continued in the ordinary course throughout the restructuring process and it will continue providing high-quality and efficient seaborne transportation services moving forward. The Company would like to thank its advisors, Skadden, Arps, Slate, Meagher & Flom LLP and Miller Buckfire & Co. LLC, as well as the advisors of its creditors. Settlement Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York on Jan. 27, 2014, confirmed Excel Maritime's Amended Joint Chapter 11 Plan of Reorganization after determining that the Plan complies with all requirements for confirmation under the Bankruptcy Code. Judge Drain approved Ivory Shipping Inc.'s (x) settlement and release of all of its claims to and waiver of all of its rights in respect of certain escrow funds, and (y) contribution to Excel of at least $5 million and up to an additional $10 million in cash. The provisions of the Plan, including the Ivory Investment, will constitute a good-faith compromise and settlement of Adversary Case No. 13-08338. In exchange for the foregoing, Ivory will receive 1,739,231 shares of New Common Stock, representing up to 8.7% of the New Common Stock. Judge Drain also approved Robertson Maritime Investors, LLC's (i) waiver of all objections to confirmation of the Plan, (ii) waiver of any purported right to participate or share in any distributions to be made under the Plan, (iii) withdrawal of all of RMI's proofs of claims filed against the Debtors, (iv) acknowledgment that, on and after the Effective Date, the right of first offer contained in the Christine Shipco LLC Agreement will not be triggered in the case of a transfer of all or any part of the interest of a member of Christine Shipco to an affiliate of the transferring member, and (v) acknowledgement that Christine Holdings is the second member of Christine Shipco. The Jan. 23 version of the Plan provides for the following treatment of claims: * The Syndicate Credit Facility Secured Claims will be allowed in the aggregate amount of $579 million. Each holder of an Allowed Syndicate Credit Facility Secured Claim will receive its pro rata share of (a) the Amended and Restated Senior Secured Credit Facility, and (b) 16.7 million shares of New Common Stock, representing 83.3% of all New Common Stock to be issued under the Plan. * The aggregate amount of the Syndicate Credit Facility Deficiency Claims will be either $179.8 million, if the Adequate Protection Payment is made on or before Jan. 2, 2014, or $185,930,760, if the Adequate Protection Payment is not made by Excel on or before Jan. 2, 2014, and will be Allowed solely for voting purposes in the applicable amount in connection with the Plan and those claims will be included within the class of Impaired Excel General Unsecured Claims. Each Holder of an Allowed Impaired Excel General Unsecured Claim will receive (a) its Pro Rata share of 1.6 million shares of New Common Stock, representing 8.0% of the New Common Stock to be issued under the Plan, and (b) its Pro Rata share of the Tranche A Offered Shares and Tranche B Offered Shares subscribed for pursuant to the Holders' Co Investment Rights. * The claims held by holders of Excel's 1.875% unsecured convertible senior notes will be allowed on the Effective Date in the amount of $152,005,566, on account of unpaid principal and interest due and owing as of the Petition Date. * The Holder of Christine Shipco Facility Secured Guaranty Claim will have the claim reinstated on the Effective Date. Holders of Other Secured Claims and Unimpaired Subsidiary Debtor General Unsecured Claims will also have their claims reinstated on the Effective Date. * Holders of Impaired Subsidiary Debtor General Unsecured Claims will not receive or retain any property under the Plan. The fourth addendum to the Plan supplement provides that the initial boards of directors of Reorganized Excel and Holdco will be the following: (1) Ken Liang, Managing Director, Oaktree Capital Management, L.P. (2) Mahesh Balakrishnan, Senior Vice President, Oaktree Capital Management L.P. (3) Jennifer Box, Senior Vice President, Oaktree Capital Management L.P. (4) Gabriel Panayotides, Chief Executive Officer, Excel Maritime Carriers Ltd. (5) Apostolos Kontoyannis, Director, Excel Maritime Carriers Ltd. (6) Randee E. Day, President & CEO, Day & Partners, LLC (7) Danielle Leone, Director, Angelo, Gordon & Co. A full-text copy of the Amended Joint Plan dated Jan. 23, 2014, is available at http://bankrupt.com/misc/EXCELMARITIMEplan0123.pdf About Excel Maritime Based in Athens, Greece, Excel Maritime Carriers Ltd. -- http://www.excelmaritime.com/-- is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products. Excel owns a fleet of 40 vessels and, together with 7 Panamax vessels under bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of approximately 3.9 million DWT. Excel Class A common shares have been listed since Sept. 15, 2005, on the New York Stock Exchange (NYSE) under the symbol EXM and, prior to that date, were listed on the American Stock Exchange (AMEX) since 1998. The company blamed financial problems on low charter rates. The balance sheet for December 2011 had assets of $2.72 billion and liabilities totaling $1.16 billion. Excel owes $771 million to secured lenders with liens on almost all assets. There is $150 million owing on 1.875 percent unsecured convertible notes. Excel Maritime filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-23060) on July 1, 2013, in New York after signing an agreement where secured lenders owed $771 million support a reorganization plan filed alongside the petition. The Debtor disclosed $35,642,525 in assets and $1,034,314,519 in liabilities as of the Chapter 11 filing. Excel, which sought bankruptcy with a number of affiliates, has tapped Jay M. Goffman, Esq., Mark A. McDermott, Esq., Shana E. Elberg, Esq., and Suzanne D.T. Lovett, Esq,. at Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Miller Buckfire & Co. LLC, as investment banker; and Global Maritime Partners Inc., as financial advisor. A five-member official committee of unsecured creditors was appointed by the U.S. Trustee. The Creditors' Committee is represented by Michael S. Stamer, Esq., Sean E. O'Donnell, Esq., and Sunish Gulati, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York; and Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas. Jefferies LLC serves as the Committee's investment banker. John J. Monaghan, Esq. -- john.monaghan@hklaw.com -- at Holland & Knight LLP, serves as counsel to the Steering Committee. Roberston Maritime Investors LLC is represented by Hugh Ray, Esq., at McKool Smith. Oaktree Capital Management and certain of its affiliates are represented by Alan W. Kornberg, Esq., and Elizabeth R. McColm, Esq. -- akornberg@paulweiss.com and emccolm@paulweiss.com -- at Paul Weiss Rifkind Wharton & Garrison LLP. FAIRBANKS SELF STORAGE: Foreclosure Sale Set for March 13 --------------------------------------------------------- Fidelity Title Agency of Alaska, as substitute trustee for Yukon Title Company, Inc., has given notice of default under a deed of trust executed by Fairbanks Self Storage LLC, Trustor, in favor of First National Bank Alaska, Beneficiary. The Trustee, by demand of the beneficiary, has elected to sell Fairbanks Self Storage's real property to satisfy obligations owed to the bank, at an auction sale to be held March 13, 2014, at 101 Lacey Street, Fairbanks, Alaska. The sale will begin at 10:00 a.m. The property is located at 621 Second Street and 124 Hamilton Avenue, Fairbanks, AK 99701. The balance due on the note issued in favor of the bank is the principal sum of $198,871.88 plus interest from Aug. 14, 2013 as provided in the Note plus any prepayment premium, late charges, attorneys' fees and costs of sale and other sums as provided in the deed of trust. During the auction, the Beneficiary may enter a credit offset bid consisting of sums due it under the deed of trust security agreement and note. Title to the real property will be conveyed by trustee's quitclaim deed without warranties of title. To determine the current amount required to be paid to cure the default and reinstate the payment terms of the note, interested parties may call 777-3392 or send an e-mail to hgraham@fnbalaska.com. Provided, however, if notice of default has been recorded two or more times previously under the deed of trust and the default has been cured, the trustee may not elect to refuse payment and continue the sale. FIRSTPLUS FINANCIAL: Lucchese Assoc. Wants More Wiretap Evidence ---------------------------------------------------------------- Law360 reported that a reputed associate of the Lucchese crime family asked a New Jersey federal judge to compel prosecutors to play the entirety of their wiretap evidence, arguing the unabridged audio will convince jurors he's innocent of draining $12 million from a now-defunct Texas mortgage lender. According to the report, attorneys for Salvatore Pelullo filed a motion asking U.S. District Court Judge Robert B. Kugler to compel prosecutors to play to completion phone calls between Pelullo and his co-defendant Nicodemo Scarfo. The case is USA v. SCARFO et al., Case No. 1:11-cr-00740 (D.N.J.). About FirstPlus Financial Based in Beaumont, Texas, FirstPlus Financial Group, Inc. (Pink Sheets: FPFX) -- http://www.firstplusgroup.com/-- was a diversified company that provided commercial loan, consumer lending, residential and commercial restoration, facility (janitorial and maintenance) services, insurance adjusting services, construction management services and a facilities and restoration franchise business. The Company had three direct subsidiaries, Rutgers Investment Group, Inc., FirstPlus Development Company and FirstPlus Enterprises, Inc. In turn, FirstPlus Enterprises, Inc., had three of its own direct subsidiaries, FirstPlus Restoration Co., LLC, FirstPlus Facility Services Co., LLC and The Premier Group, LLC. FirstPlus Restoration and FirstPlus Facility jointly owned FirstPlus Restoration & Facility Services Company. Additionally, FirstPlus Development had one direct subsidiary FirstPlus Acquisitions-1, Inc. A subsidiary of FirstPlus Financial Group -- FirstPlus Financial Inc. -- filed for Chapter 11 bankruptcy in March 1999 before the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, amid turmoil in the asset-backed securitization markets and the lack of a reliable, committed secondary take-out source for high LTV loans. A modified third amended reorganization plan was confirmed in that case in April 2000. FirstPLUS Financial Group filed for Chapter 11 protection (Bankr. N.D. Tex. Case No. 09-33918) on June 23, 2009. Aaron Michael Kaufman, Esq., and George H. Tarpley, Esq., at Cox Smith Matthews Incorporated, served as counsel. The Debtor had total assets of $15,503,125 and total debts of $4,539,063 as of June 30, 2008. FirstPLUS Financial Group disclosed $1,264,637 in assets and $10,347,448 in liabilities as of the Chapter 11 filing. Matthew D. Orwig was appointed as the Chapter 11 trustee in the Debtor's cases. He is represented by Peter A. Franklin, Esq., and Erin K. Lovall, Esq., at Franklin Skierski Lovall Hayward LLP. Franklin Skierski was elevated to lead counsel from local counsel in the stead of Jo Christine Reed and SNR Denton US LLP, due to the maternity leave of Ms. Reed. Kurtzman Carson Consultants served as notice and balloting agent. FISKER AUTOMOTIVE: Court OKs Beilinson as Restructuring Advisor --------------------------------------------------------------- The Bankruptcy Court authorized Fisker Automotive Holdings, Inc., et al., to employ Beilinson Advisory Group, LLC, as their restructuring advisors, effective nunc pro tunc to the Petition Date and authorized the Debtors to retain Marc Beilinson as their chief restructuring officer. The CRO, together with any additional personnel, will: (a) prepare the Debtors to file Chapter 11, including compiling data and documents necessary to complete the bankruptcy petition process and to file "first day motions" with the court; (b) assist with procuring and negotiating the terms of a debtor in possession lending facility and a cash collateral motion; (c) direct and oversee the Debtors' sales process; (d) assist with developing and negotiating a Chapter 11 plan and disclosure statement; (e) assist and advise in the compilation of data and analyses necessary to meet any reporting requirements mandated by the Debtors' current or future lenders; (f) assist and advise in the compilation of data and analyses necessary to meet the financial reporting requirements mandated by the Bankruptcy Code and the U.S. Trustee's office; (g) coordinate resources engaged in developing, implementing and negotiating restructuring proposals or strategic alternatives; (h) coordinate corporate governance including meetings of, and reporting to, the Debtors' board of directors; (i) prepare for court hearings and the argument of motions, and provide expert testimony as required; and (j) perform other services, consistent with the role of Beilinson Advisory, as requested or directed by the Debtors' board of directors. In accordance with the Engagement Letter, the Debtors will pay BAG $150,000 per month and reimburse the firm for its out-of-pocket expenses. 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. 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. Bankruptcy Judge Kevin Gross presides over the case. The Debtors have tapped James H.M. Sprayregen, P.C., Esq., Anup 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. On November 5, 2013, the Official Committee of Unsecured Creditors was appointed. The members are: (a) David M. Cohen; (b) Sven Etzelsberger; (c) Kuster Automotive Door Systems GmbH; (d) Magna E-Car USA, LLC; (e) Supercars & More SRL; and (f) TK Holdings Inc. The Committee is represented by William R. Baldiga, Esq., and Sunni P. Beville, Esq., at Brown Rudnick LLP; and Mark Minuti, Esq., at Saul Ewing LLP. Fisker sought bankruptcy protection to pursue a private sale of its business to Hybrid Tech Holdings, LLC. The Committee, however, wants a sale public sale, and has identified Wanxiang America Corporation as stalking horse bidder. Hybrid was initially under contract to buy Fisker in exchange for $75 million of the $168.5 million government loan it acquired immediately before the Debtor's Chapter 11 filing. Hybrid later raised its offer by adding an additional $1 million cash and agreeing to share proceeds from the sale of a facility in Delaware it doesn't intend to operate. Hybrid also offered to pay real estate taxes on the Delaware plant. Hybrid also will waive $90 million in deficiency claims that otherwise would dilute unsecured creditors' recovery. Wanxiang, as stalking horse bidder, initially offered $25.8 million in cash. However, Wanxiang has said it has raised its offer by $10 million and is willing to go higher. After the hearings on Jan. 10 and 13, the Court directed a public auction, and capped Hybrid's credit bid to $25 million. In response, Hybrid raised its offer to $55 million. Hybrid is represented by Tobias Keller, Esq., and Peter Benvenutti, Esq., at Keller & Benvenutti LLP, in San Francisco, California. Wanxiang, which bought A123 Systems, Inc., a manufacturer of lithium-ion batteries used in electric vehicles such as the Fisker Karma, in a bankruptcy auction early in 2013 for $256.6 million, is represented in Fisker's case by Sidley Austin LLP's Bojan Guzina, Esq., and Andrew F. O'Neill, Esq.; and Young Conaway Stargatt & Taylor, LLP's Edmon L. Morton, Esq., Robert S. Brady, Esq., and Kenneth J. Enos, Esq. FISKER AUTOMOTIVE: Can Borrow up to $13.1 Million in DIP Loans -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered a final order authorizing Fisker Automotive Holdings, Inc., et al., to obtain up to $13.1 million of postpetition financing and use cash collateral. Approximately $6.8 million in DIP Loans were advanced to the Debtors pursuant to interim orders. The Court found that the Debtors require the DIP Loan and need to continue to use the prepetition collateral, including the Cash Collateral, in order to, among other things, preserve estate value and fund their Chapter 11 cases through the sale of their assets. All cash and cash equivalents of the Debtors, whenever or wherever acquired, and the proceeds of all collateral pledged to the DIP Lender, constitute csah collateral, as contemplated by Section 363 of the Bankruptcy Code. Subject to the Carve-Out in all respect, the DIP Obligations will be (a) entitled to superpriority claim status with priority over all administrative expense claims and unsecured claims an will be secured by all of the Debtors' rights in property of their estates. The Prepetition Lenders are entitled to adequate protection of their interests in the Prepetition Collateral, including the Cash Collateral, in an amount equal to the aggregate diminution in value of their interests in the Prepetition Collateral. As of the Petition Date, the Debtors were indebted to the Prepetition Lenders, without defense, counterclaim or offset of any kind, in the aggregate principal amount of not less than $168,485,144 to Hybrid Technology, LLC; $6,595,762 to Silicon Valley Bank; and $19,888,933 to Delaware Economic Development Authority in respect of the loans and other extensions of credit made pursuant to the Prepetition Documents, plus accrued and unpaid interest. A copy of the Final DIP Order is available for free at: http://bankrupt.com/misc/FISKER_DIPFinorder.pdf 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. 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. Bankruptcy Judge Kevin Gross presides over the case. The Debtors have tapped James H.M. Sprayregen, P.C., Esq., Anup 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. On November 5, 2013, the Official Committee of Unsecured Creditors was appointed. The members are: (a) David M. Cohen; (b) Sven Etzelsberger; (c) Kuster Automotive Door Systems GmbH; (d) Magna E-Car USA, LLC; (e) Supercars & More SRL; and (f) TK Holdings Inc. The Committee is represented by William R. Baldiga, Esq., and Sunni P. Beville, Esq., at Brown Rudnick LLP; and Mark Minuti, Esq., at Saul Ewing LLP. Fisker sought bankruptcy protection to pursue a private sale of its business to Hybrid Tech Holdings, LLC. The Committee, however, wants a sale public sale, and has identified Wanxiang America Corporation as stalking horse bidder. Hybrid was initially under contract to buy Fisker in exchange for $75 million of the $168.5 million government loan it acquired immediately before the Debtor's Chapter 11 filing. Hybrid later raised its offer by adding an additional $1 million cash and agreeing to share proceeds from the sale of a facility in Delaware it doesn't intend to operate. Hybrid also offered to pay real estate taxes on the Delaware plant. Hybrid also will waive $90 million in deficiency claims that otherwise would dilute unsecured creditors' recovery. Wanxiang, as stalking horse bidder, initially offered $25.8 million in cash. However, Wanxiang has said it has raised its offer by $10 million and is willing to go higher. After the hearings on Jan. 10 and 13, the Court directed a public auction, and capped Hybrid's credit bid to $25 million. In response, Hybrid raised its offer to $55 million. Hybrid is represented by Tobias Keller, Esq., and Peter Benvenutti, Esq., at Keller & Benvenutti LLP, in San Francisco, California. Wanxiang, which bought A123 Systems, Inc., a manufacturer of lithium-ion batteries used in electric vehicles such as the Fisker Karma, in a bankruptcy auction early in 2013 for $256.6 million, is represented in Fisker's case by Sidley Austin LLP's Bojan Guzina, Esq., and Andrew F. O'Neill, Esq.; and Young Conaway Stargatt & Taylor, LLP's Edmon L. Morton, Esq., Robert S. Brady, Esq., and Kenneth J. Enos, Esq. FLETCHER INTERNATIONAL: Court Approves Disclosure Statement ----------------------------------------------------------- Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York on Jan. 17, 2014, approved the disclosure statement explaining Fletcher International, Ltd.'s liquidating plan, after determining that the Plan disclosures contained "adequate information" as the term is defined by Section 1125(a) of the Bankruptcy Code. The deadline to vote to accept or reject the Plan is Feb. 18, 2014, at 5:00 p.m. (EST). Any objections to the confirmation of the Plan must also be submitted on or before that day. Richard J. Davis, the Chapter 11 Trustee for the Debtor, is required to file his response to any confirmation objection by no later than Feb. 28. The Confirmation Hearing will be held on March 4, 2014, at 9:45 a.m. (EST). The Trustee proposed a liquidating plan. The Trustee has already liquidated the limited amount of the Debtor's assets for which there is a ready market, and proposes to liquidate the Debtor's as -yet unliquidated assets and claims under the supervision of a plan administrator and advisory board. These claims and assets consist primarily of preference and fraudulent conveyance claims, claims relating to the liquidation of certain securities owned by the Debtor, and a few assets, which with one or two possible exceptions, are of limited, if any, value. These Liquidation Recoveries will be used first to satisfy administrative and priority claims and will then be distributed pro rata to the unsecured creditors and the investors in Classes 3 and 4. In addition, a key part of the Plan is the creation of a pool of certain litigation claims, also to be administered by the Plan Administrator and Advisory Board. The Pooled Claims -- principally fraud, breach of fiduciary duty, negligence and similar tort claims against Insiders and affiliates and certain service providers and professionals -- will be pooled together with similar claims belonging to the Debtor's feeder funds and certain of its ultimate investors. Net recoveries on the Pooled Claims will share in the percentages set out in the Investor Settlement. FILB's share is 26.8%; its share will be distributed as a Liquidation Recovery. Finally, the claims of Insiders and their affiliates will be subordinated or disallowed, and no distributions will be made on their account. A full-text copy of the Disclosure Statement dated Jan. 24 is available at http://bankrupt.com/misc/FLETCHERINTLds0124.pdf About Fletcher International Fletcher International, Ltd., filed a bare-bones Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-12796) on June 29, 2012, in Manhattan. The Bermuda exempted company estimated assets and debts of $10 million to $50 million. The bankruptcy documents were signed by its president and director, Floyd Saunders. David R. Hurst, Esq., at Young Conaway Stargatt & Taylor, LLP, in New York, serves as counsel and Appleby (Bermuda) Limited serves as special Bermuda counsel. The Debtor disclosed $52,163,709 in assets and $22,997,848 in liabilities as of the Chapter 11 filing. Fletcher International Ltd. is managed by the investment firm of Alphonse "Buddy" Fletcher Jr. Fletcher Asset Management was founded in 1991. During its initial four years, FAM operated as a broker dealer trading various debt and equity securities and making long-term equity investments. Then, in 1995, FAM began creating and managing a family of private investment funds. The Debtor is a master fund in the Fletcher Fund structure. As a master fund, it engages in proprietary trading of various financial instruments, including complex, long-term, illiquid investments. The Debtor is directly owned by Fletcher Income Arbitrage Fund and Fletcher International Inc., which own roughly 83% and 17% of the Debtor's common shares, respectively. Arbitrage's direct parent entities are Fletcher Fixed Income Alpha Fund and FIA Leveraged Fund, both of which are incorporated in the Cayman Islands and are subject to liquidation proceedings in that jurisdiction, and which own roughly 76% and 22% of Arbitrage's common stock, respectively. The Debtor currently has a single subsidiary, The Aesop Fund Ltd. After filing for Chapter 11 protection, Fletcher immediately started a lawsuit in bankruptcy court to stop the involuntary bankruptcy in Bermuda. Judge Gerber at least temporarily halted liquidators appointed in the Cayman Islands from moving ahead with proceedings in Bermuda. The lawsuit to halt the Bermuda liquidation is Fletcher International Ltd. v. Fletcher Income Arbitrage Fund, 12-01740, in the same court. Richard J. Davis, Chapter 11 trustee appointed in the case, has hired Michael Luskin, Esq., Lucia T. Chapman, Esq., and Stephanie E. Hornung, Esq., at Luskin, Stern & Eisler LLP as his counsel. The Chapter 11 trustee filed a proposed liquidating Plan in November 2013. The disclosure statement was approved on Jan. 17, 2014. FLETCHER LEISURE: Obtains Permanent Stay vs. All US Proceedings --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York entered an order recognizing the appointment of PricewaterhouseCoopers Inc., as receiver under Section 243 of Canada's Bankruptcy and Insolvency Act in a proceeding in the Superior Court for the District of Montreal, Province of Quebec. The Order also imposed a stay of all proceedings in the United States against PwC, 9266-4832 Quebec Inc., Fletcher Leisure Group Inc./Le Groupe Loisirs Fletcher Inc., and Fletcher Leisure Group Ltd.' businesses, property, or assets located in the United States, on a permanent basis. About Fletcher Leisure Fletcher Leisure Group Ltd., a Canadian manufacturer and distributor of golf and ski apparel, filed a petition in New York on Oct. 22 for Chapter 15 protection immediately after the Superior Court in Quebec appointed a receiver at the request of secured lender Salus Capital Partners LLC, owed C$11.6 million (US$11.3 million). Affiliates that separately filed Chapter 15 petitions are 9266-4832 Quebec Inc., and Fletcher Leisure Group Inc./Le Groupe de Loisirs Fletcher Inc. The case is In re Fletcher Leisure Group Ltd., 13-bk-13402, U.S. Bankruptcy Court, Southern District of New York (Manhattan). PricewaterhouseCoopers Inc., the Canadian Court-appointed receiver and duly authorized foreign representative for Fletcher Leisure et al., is represented by Daniel S. Lubell, Esq., and Eleni D. Theodosiou-Pisanelli, Esq., at Hughes Hubbard & Reed LLP, in New York. FLETCHER LEISURE: U.S. Court Approves Sale of All Assets -------------------------------------------------------- Judge Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order recognizing the Canadian Court's prior order approving the sale of substantially all of the assets of Fletcher Leisure Group Inc., et al., to Fame Jeans Inc., acting on behalf of a purchaser. The Canadian Orders are given full force and effect in the United States. PricewaterhouseCoopers Inc., as receiver, is authorized to distribute any and all proceeds resulting from the Sale among the Debtors' creditors. About Fletcher Leisure Fletcher Leisure Group Ltd., a Canadian manufacturer and distributor of golf and ski apparel, filed a petition in New York on Oct. 22 for Chapter 15 protection immediately after the Superior Court in Quebec appointed a receiver at the request of secured lender Salus Capital Partners LLC, owed C$11.6 million (US$11.3 million). Affiliates that separately filed Chapter 15 petitions are 9266-4832 Quebec Inc., and Fletcher Leisure Group Inc./Le Groupe de Loisirs Fletcher Inc. The case is In re Fletcher Leisure Group Ltd., 13-bk-13402, U.S. Bankruptcy Court, Southern District of New York (Manhattan). PricewaterhouseCoopers Inc., the Canadian Court-appointed receiver and duly authorized foreign representative for Fletcher Leisure et al., is represented by Daniel S. Lubell, Esq., and Eleni D. Theodosiou-Pisanelli, Esq., at Hughes Hubbard & Reed LLP, in New York. FLINTKOTE CO: Court OKs Dr. Timothy Wyant as Claims Consultant -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized James J. McMonagle, as the legal representative for future claimants, to retain Dr. Timothy Wyant as a claims evaluation consultant to the Futures Representative, nunc pro tunc to Dec. 10, 2013. On Nov. 16, 2011, the Debtors filed an amended joint plan of reorganization. A key feature of the Plan is the creation of a channeling injunction under Section 524(g) of the Bankruptcy Code. Through this channeling injunction, all current and future asbestos-related personal injury claims against the Debtors will be directed to a trust established for the purpose of resolving those claims pursuant to certain trust distribution procedures (TDP). Pursuant to the Plan, the Trust will be created and funded upon the Effective Date, which will occur upon certain conditions precedent having been satisfied or waived, including the condition that the Confirmation Order has been issued or affirmed by the District Court. On Dec. 21, 2012, the Court entered an order confirming the Plan. Both the Plan and the Confirmation Order authorize the Plan Proponents, which includes the Debtors and the Futures Representative, to commence efforts to implement the Trust upon the occurrence of the Effective Date. "Dr. Wyant's retention is necessary for the Futures Representative to represent the rights of Future Claimants and protect their interests during the Trust's startup phase. The Trust's startup efforts will include finalizing the TDP, including the Initial Payment Percentage that is described in the TDP and is intended to ensure the Trust will be in financial position to pay future asbestos-related claims over the life of the Trust," the Futures Representatives told the Court. Over the past 35 years, Dr. Wyant has served as a statistician and consultant in numerous matters. He has provided expert testimony or payment forecasts in six asbestos litigations and has provided claims forecasts to corporate defendants, claims resolution trusts, and investment firms tasked with evaluating the financial health of corporations facing extensive asbestos liability. Dr. Wyant will: (a) estimate the number and value of present and future asbestos personal injury claims; (b) develop claims procedures to be used in the development of financial models of payments and assets of a claims resolution trust; (c) assist with evaluation of the TDP and any modifications thereto; (d) provide advice and analysis with respect to the payment percentage to be established by the Trust and any modifications thereto; and (e) perform any and all other functions as are reasonably necessary to assist the Futures Representative in his efforts to effectively represent the interests of Future Claimants. Dr. Wyant's standard hourly rate is $450. This rate is subject to periodic adjustments to reflect economic and other conditions. Expenses for travel and consumables are billed at cost to the client. Charges are not accumulated or billed to the client for non-professional or clerical staff. Dr. Wyant will bill the Debtors for reimbursement of all of his reasonable and necessary out-of-pocket expenses incurred in connection with his employment. Dr. Wyant has informed the Futures Representative that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Futures Representative is represented by: James L. Patton, Jr., Esq. Edwin J. Harron, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, Delaware 198001 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 E-mail: jpatton@ycst.com eharron@ycst.com - and - Reginald W. Jackson, Esq. VORYS, SATER, SEYMOUR & PEASE LLP 52 East Gay Street Columbus, OH 43215 Telephone: (614) 464-6400 Facsimile: (614) 464-6350 E-mail: rwjackson@vorys.com About The Flintkote Company Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. Flintkote Mines Limited is a subsidiary of Flintkote Company and is engaged in the mining of base-precious metals. The Flintkote Company filed for Chapter 11 protection (Bankr. D. Del. Case No. 04-11300) on April 30, 2004. Flintkote Mines Limited filed for Chapter 11 relief (Bankr. D. Del. Case No. 04-12440) on Aug. 25, 2004. Kevin T. Lantry, Esq., Jeffrey E. Bjork, Esq., Dennis M. Twomey, Esq., Jeremy E. Rosenthal, Esq., and Christina M. Craige, Esq., at Sidley Austin, LLP, in Los Angeles; James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Del., represent the Debtors in their restructuring efforts. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, N.Y.; Peter Van N. Lockwood, Esq., Ronald E. Reinsel, Esq., at Caplin & Drysdale, Chartered, in Washington, D.C.; and Philip E. Milch, Esq., at Campbell & Levine, LLC, in Wilmington, Del., represent the Asbestos Claimants Committee as counsel. When Flintkote filed for protection from its creditors, it estimated more than $100 million each in assets and debts. When Flintkote Mines Limited filed for protection from its creditors, it estimated assets of $1 million to $50 million, and debts of more than $100 million. The Debtors' Chapter 11 cases have been re-assigned to Judge Mary F. Walrath in line with the retirement of former Bankruptcy Judge Judith Fitzgerald. FLORIDA GAMING: Committee Seeks to Limit Lender's Credit Bid ------------------------------------------------------------ The Official Joint Committee of Unsecured Creditors of Florida Gaming Centers, Inc., and Florida Gaming Corporation asks the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, to (i) limit the amount that ABC Funding, LLC, may credit bid in connection with the pending sale of substantially all of the assets of Centers and Corp., and (ii) establish certain protections for ABC in connection therewith. The Committee asserts that the Court should, at a minimum, exclude from ABC's potential credit bid those components of the ABC Claim which relate to (i) the amount of the asserted warrant claim (approximately $33.6 million), (ii) the prepayment premium (approximately $1.744 million), and (iii) the original issue discount (approximately $1.7 million). ABC asserts that it is due no less than $127,645,985. According to the Committee, the Debtors have already commenced an adversary proceeding against ABC, challenging the extent, validity, priority and enforceability of several aspects of the ABC Claim. The pending adversary proceeding and other motions relating to the ABC Claim are more than enough support for the Court to determine that the ABC Claim is the subject of a bona fide dispute, and for the Court to exercise its discretion under Section 363(k) of the Bankruptcy Code to limit or condition ABC's ability to credit bid, counsel for the Committee, Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., in Miami, Florida, asserts. The Committee recognizes that a situation could occur where ABC elects to credit bid at the sale of the Debtors' assets and the Court, limits ABC's credit bid right to approximately $90 million by excluding the Warrant Claim, the Prepayment Claim and the OID Claim -- but ABC ultimately prevails in the allowance of the ABC Claim, whether on appeal or otherwise, including the Warrant Claim, the Prepayment Penalty and the OID Claim. Mr. Battista says that based on the current stalking horse bid of $115 million from Silvermark, LLC, ABC would be able to credit bid approximately $90 million and then bid cash for the balance of its bid, which would exceed $29 million. If ABC succeeded in acquiring the Debtors' assets with the bid, but the litigation over the amount of the ABC Claim was still pending, then the Court could protect ABC's interests by escrowing the cash portion of the purchase price in excess of the credit bid amount or allowing ABC to post a letter of credit for the cash portion of the purchase price, Mr. Battista adds. The Committee asserts that the escrow or letter of credit mechanism would allow the auction and sale to proceed, would preserve the bona fide claims asserted against ABC and at the same time would protect ABC in the event it was successful on the allowance of the ABC Claim. Debtors Florida Gaming Centers, Inc., Florida Gaming Corporation, Tara Club Estates, Inc., and Freedom Holding, Inc., join in the Committee's motion. Corp. and Centers entered into an asset purchase agreement with Silvermark, on December 30, 2013, pursuant to which Silvermark agreed to acquire substantially all of Centers' assets for a cash purchase price of $115,000,000 and assumption of certain liabilities of approximately $17,500,000. The Committee is also represented by Glenn D. Moses, Esq., and Michael A. Friedman, Esq., at Genovese Joblove & Battista, P.A., in Miami, Florida, asserts. The Debtors are represented by Luis Salazar, Esq. -- Salazar@SalazarJackson.com -- and Aaron P. Honaker, Esq. -- Honaker@SalazarJackson.com -- at SALAZAR JACKSON, LLP, in Miami, Florida. About Florida Gaming Florida Gaming Centers Inc. filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 13-29597) in Miami on Aug. 19, 2013. Florida Gaming Centers operates a casino and jai-alai frontons in Miami. The Company disclosed debt of $138.3 million and assets of $180 million in its petition. Its parent, Florida Gaming Corp. (FGMG:US), and two other affiliates also sought court protection. Florida Gaming previously negotiated a sale of virtually all its assets to casino operator Silvermark LLC for $115 million in cash and $14 million in assumed liabilities. A provision in the financing agreement required Florida Gaming to make an additional payment to the lender -- ABC Funding -- if the assets are sold to third party. Jefferies LLC was hired to determine that amount, about $26.8 million, and valued the company at more than $180 million. Luis Salazar, Esq., Esq., at Salazar Jackson in Miami, represents Florida Gaming. ABC Funding, LLC, as Administrative Agent for a consortium of prepetition lenders, and the prepetition lenders are represented by Dennis Twomey, Esq., and Andrew F. O'Neill, Esq., at SIDLEY AUSTIN LLP, in Chicago, Illinois; and Drew M. Dillworth, Esq., and Marissa D. Kelley, Esq., at STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A., in Miami, Florida. The Prepetition Lenders are Summit Partners Subordinated Debt Fund IV-A, L.P., Summit Partners Subordinated Debt Fund IV-B, L.P., JPMorgan Chase Bank, N.A., Locust Street Funding LLC, Canyon Value Realization Fund, L.P., Canyon Value Realization Master Fund, L.P., Canyon Distressed Opportunity Master Fund, L.P., and Canyon-GRF Master Fund II, L.P. Counsel to the Official Joint Committee of Unsecured Creditors are Glenn D. Moses, Esq., and Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., in Miami, Florida. FLOWER FACTORY: Trust Wins Judgment Against Magic Creations ----------------------------------------------------------- The creditor trust of Flower Factory Inc., won summary judgment in its action to recover preferential payments made by the Debtor to Magic Creations Inc. Judge Russ Kendig said a question of fact remains as to the aggregate amount of the transfers. The Trust's affidavit indicates the transfers totaled $14,460.54 while the Defendant's has a total amount of $14,410.54. The court will enter judgment for the lesser amount and allow the parties to petition for further hearing as necessary, Judge Kendig said in a Jan. 23 Memorandum of Opinion available at http://is.gd/GFNxPn from Leagle.com. The Debtor and the Defendant have done business for approximately 20 years. The Debtor operated seven retail stores that sold party goods, craft supplies, and other merchandise to the public. The Defendant was a supplier of goods to the Debtor under purchase agreements executed by the parties. The action is, THE FLOWER FACTORY, INC., et al., CREDITOR TRUST, BY AND HIS CAPACITY AS CREDITOR TRUSTEE, Plaintiff, v. MAGIC CREATIONS, INC., Defendant, Adv. Proc. No. 13-6024 (Bankr. N.D. Ohio). North Canton, Ohio-based Flower Factory Inc. filed for Chapter 11 bankruptcy protection (Bank. N.D. Ohio. Case No. 11-60406) on Feb. 15, 2011. Judge Russ Kendig presides over the case. Marc Merklin, Esq., Brouse McDowell LPA, represents the Debtor. The Debtor estimated assets of between $1 million and $10 million, and debts of between $10 million and $50 million. FOREST LABORATORIES: Moody's Rates New Senior Notes 'Ba1' --------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to the senior notes of Forest Laboratories, Inc. The rating outlook remains stable. Proceeds are expected to be used together with cash on hand to fund the acquisition of Aptalis Pharma Inc. Rating assigned: Ba1 (LGD 4, 52%) Senior unsecured notes of $1.8 billion Ratings Rationale Forest's Ba1 rating reflects its good presence in the US pharmaceutical market, its long history of successful product approvals and commercial success, and the growth potential from a series of newly launched products. While its products treat specialty conditions and diseases, the products are broadly prescribed by primary care physicians. Forest recently launched a number of promising new products that have the potential for good revenue and cash flow, which is critical given the upcoming loss of Namenda exclusivity in January 2015. Forest will steadily convert this franchise to Namenda XR, which faces long-term patent protection, but conversion back to generics of the original version will pressure the franchise. The rate of commercial uptake of Forest's new products is difficult to predict, and creates execution risk, especially in light of accelerating pricing pressure in the US market driven by managed care formulary strategies. The acquisition of Aptalis will immediately add more than $300 million in EBITDA and expand Forest's revenue base by almost $700 million. It will also decrease its dependence on Namenda. The rating outlook is stable, incorporating Moody's expectation that debt/EBITDA will be sustained below 3.0 times even as EBITDA is reduced by the January 2015 Namenda patent expiration. Moody's could upgrade Forest's ratings if new product launches are successful, if the company retains a significant portion of the Namenda franchise in Namenda XR, and if business development activities, such as acquisitions and in licensing, are pursued in a manner that preserves solid credit ratios. Specific factors Moody's will consider include revenue growing in excess of $4 billion and debt/EBITDA sustained below 2.0 times. Conversely, factors that could result in a downgrade include debt/EBITDA sustained above 3.0 times, failure to achieve cost synergies or solid growth in new products, or debt-financed acquisitions or share repurchases. Although not expected, the addition of secured debt or guaranteed debt to Forest's capital structure could cause the rating on the unsecured notes to be downgraded. Headquartered in New York, NY, Forest Laboratories, Inc. ("Forest") is a mid-sized pharmaceutical company operating primarily in the United States. Net sales for the 12 months ended September 30, 2013 totaled $3.2 billion. The principal methodology used in this rating was the Global Pharmaceutical Industry published in December 2012. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. GMG CAPITAL: Loses Exclusivity; VC Fund May File Own Plan --------------------------------------------------------- Bankruptcy Judge Stuart M. Bernstein denied the request of GMG Capital Partners III, L.P. and GMG Capital Partners III Companion Fund, L.P., for an extension of their exclusive period to file a plan and solicit acceptances. GMG's principal creditors, Athenian Venture Partners I, L.P. and Athenian Venture Partners II, L.P., object to an extension. This is an atypical case in which GMG does not operate, and its sole business is managing a portfolio (through an affiliated management company) consisting of the stock in three technology companies, including Open Peak, Inc. GMG expects that Open Peak will increase significantly in value in the near future, but Athenian is less optimistic or at least unsure. The question posed by GMG's exclusivity motion is whether GMG should be permitted to impose its view of the future on Athenian and any other party in interest by preventing them from filing a plan that calls for a different exit strategy that may involve a quicker sale of the portfolio. According to Judge Bernstein, GMG has failed to sustain its burden of demonstrating cause to extend exclusivity, and accordingly, the Motion is denied. GMG is comprised of four affiliated venture capital investment funds. Their principal assets consist of investments in three portfolio companies: (a) Open Peak (b) Lancope, Inc., and (c) X-Factor Communications, LLC. Open Peak, in which GMG holds an approximate 5% equity position, appears to be the most valuable. GMG estimates that this interest will be worth not less than $25 million in the near future. In addition, the Debtors listed the aggregate value of their investments in Lancope and X-Factor Communications at approximately $3 million. Aside from office furniture, their only other assets consist of a claim for management fees in the aggregate approximate sum of $1.2 million. This receivable has been outstanding for more than 90 days. GMG earns no income and pays few expenses. Athenian is also a venture capital investment fund. At one time, GMG and Athenian were co-investors in a technology stock, but in 2005, Athenian sold its interest to GMG. In exchange, GMG executed and delivered a Limited Recourse Promissory Note, dated Aug. 18, 2005 in favor of Athenian in the aggregate sum of $6 million. Subject to certain conditions, the Note required GMG to make monthly payments of principal in the amount of $15,000, defined in the Note as the "Mandatory Payments." GMG failed to pay the Note in accordance with its terms, and Athenian sued GMG in Delaware state court. On June 21, 2013, Athenian recovered a judgment that ordered GMG to pay Athenian $15,000 by the last day of each month until the $6,000,000 Note was paid in full, and also awarded liquidated damages for past due Mandatory Payments in the amount of $960,000, pre-judgment interest in the amount of $157,646 and attorneys' fees, costs and expenses in the amount of $1,201,157. According to GMG's Schedules, Athenian holds a claim in the sum of $6,950,000 (listed as unliquidated), which is slightly more than 88% of GMG's total unsecured debt. Faced with Athenian's efforts to collect the Judgment by forcing the sale of the portfolio, the Debtors filed their chapter 11 cases on Sept. 10, 2013. Additional affiliates followed suit on Nov. 14, 2013, and the four Debtors' cases are being jointly administered. Aside from discovery skirmishes involving GMG and Athenian, little has occurred in these cases. The first batch of Debtors filed their schedules and statement of financial affairs late, and the Subsequent Debtors not at all. In addition, GMG has not filed an application to fix a deadline for filing claims. Exclusivity expired on January 8, 2014, and the Original Debtors made a timely motion to extend exclusivity on that day. The thrust of GMG's argument is that the value of its holdings, primarily in Open Peak, will increase dramatically in the near future, and accordingly, it is in the interest of the creditors and equity to hold onto those investments rather than liquidate them now. Open Peak has developed "corporate mobility software" which permits a corporate employee to use his workspace virtually on his personal smart phone at security and efficiency levels not otherwise found in the marketplace. The software is currently in trial phases with AT&T Wireless and Research in Motion end users at a number of the largest Fortune 500 companies, and Open Peak expects to sign with major international carriers. In addition, AT&T Wireless has recently invested $15 million in Open Peak. GMG's investments are currently illiquid but GMG expects 2014 to be "the pivotal year in which a sale, merger or initial public offering transaction (each, a "Transaction") will finally allow them to realize these investments." Conservatively speaking, Open Peak may have a transaction value of $500 million, but any effort to liquidate the investment prematurely before a Transaction would severely depress its value. Athenian argues that GMG is a non-operating company that has parked itself in bankruptcy as a stalling tactic. It hopes that its 10-year old speculative technology investments will pay off and realize value to its limited partners who are currently "out of the money." According to Judge Bernstein, "at bottom, this is a two party dispute, and each side appears to have a different view of the future. Presumably, the market knows what GMG knows, and will assess Open Peak's prospects and value the stock accordingly. Furthermore, Athenian owes fiduciary duties to its own partners, and is not likely to insist on a precipitous sale if it believes that the value of GMG's portfolio will increase in the near future and provide a greater distribution to creditors. Each side should be able to file their own plan and let the other creditors, the market, and if necessary, the Court, determine the value of the Open Peak stock in the context of a sale or a confirmation hearing. Accordingly, the motion to extend exclusivity is denied." A copy of the Court's Jan. 24, 2014 Memorandum Decision is available at http://is.gd/mTCfHjfrom Leagle.com. About GMG Capital Partners GMG Capital Partners III, L.P., and GMG Capital Partners III Companion Fund, L.P., sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 13-12937 and 13-12939) in Manhattan on Sept. 10, 2013. GMG Capital Partners III disclosed $21,696,757 in assets and $7,877,498 in liabilities as of the Chapter 11 filing. Michael S. Fox, Esq., and Jonathan T. Koevary, Esq., at Olshan Frome Wolosky LLP, serve as counsel to the Debtors. Athenian Venture Partners I, L.P. and Athenian Venture Partners II, L.P., are represented by Halperin Battaglia Raicht, LLP's Alan D. Halperin, Esq., and Carrie Essenfeld, Esq.; and Morris, Nichols, Arsht & Tunnell LLP's Derek C. Abbott, Esq., and Daniel B. Butz, Esq. HARLAND CLARKE: Moody's Says Upsized Loan No Impact on 'B2' CFR --------------------------------------------------------------- Moody's said Harland Clarke Holdings Corp.'s upsize of the term loan B3 from $500 million to $600 million and downsize of the senior unsecured notes from $590 million to $540 million will not impact its B2 Corporate Family Rating. The B1 ratings are unchanged on the term loan B2, B3, senior secured notes due 2018, and proposed senior secured notes due 2020, but the LGD point estimates change from LGD3 39% to 41%. The Caa1 rating on the proposed $540 million senior unsecured notes is unchanged but the point estimates change from LGD5 89% to LGD6 91% reflecting the increased amount of secured debt ahead of it in the capital structure. Ratings Rationale The principal methodology used in this rating was the Global Publishing Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Harland Clarke Holdings Corp., headquartered in San Antonio, TX, is a provider of 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 through its Scantron business, data collection, testing products, scanning equipment and tracking services to educational, commercial, healthcare and government entities. M&F Worldwide Corp. ("M&F") acquired check and related product provider Clarke American Corp. ("Clarke American") in December 2005 for $800 million and subsequently acquired the John H. Harland Company ("Harland") in May 2007 for $1.4 billion. M&F merged Clarke American and Harland to form Harland Clarke. M&F's remaining publicly traded shares were acquired by portfolio company, MacAndrews & Forbes Holdings Inc (MacAndrews) on December 21, 2011. MacAndrews is wholly owned by Ronald O. Perelman. Harland entered into an agreement to acquire Valassis Communications, Inc. ("Valassis") on December 17, 2013. Valassis is headquartered in Livonia, Michigan, provides promotional and advertising products including Shared Mail, Neighborhood Targeted, Free Standing Inserts, and International, Digital Media, & Services (coupon clearing, consulting and analytic services). Moody's expects revenue of combined companies to be over $3 billion over the next twelve months. HUNTER DEFENSE: Moody's Lowers CFR to 'Caa2'; Outlook Stable ------------------------------------------------------------ Moody's Investors Service has lowered the ratings of Hunter Defense Technologies, Inc., including its Corporate Family Rating ("CFR") to Caa2 from Caa1 due to the company's need to address upcoming debt maturities including its August 2014 first lien debt maturity. Concurrently, the first lien debt rating was lowered to Caa1 from B3 and the company's second lien debt was affirmed at Caa3. The ratings outlook was changed to stable from negative. Hunter Defense's CFR downgrade to Caa2 is largely driven by the increased refinancing risk associated with the company's entire debt structure coming due over the next twelve to thirteen months. In addition, the company's revenue decline largely stemming from operating in a sector affected by continued defense budget pressures also underlie the rating action. The following ratings were downgraded: Corporate Family Rating, to Caa2 from Caa1 Probability of Default Rating, to Caa2-PD from Caa1-PD $145 million outstanding first lien term loan (originally $200 million) due August 2014, to Caa1 (LGD-3, 36%) from B3 (LGD-3, 36%) The following rating was affirmed: $44 million outstanding second lien term loan (originally $80 million) due February 2015, at Caa3 (LGD-5, 83%) from Caa3 (LGD-5, 84%) Outlook, changed to stable from negative Ratings Rationale Hunter Defense's Caa2 corporate family rating reflects elevated refinancing risk due to the company's entire debt structure coming due with the first lien bank debt maturing in August 2014 followed by second lien debt maturing in February 2015. In addition, operating performance in the near term is not expected to improve meaningfully given the decline in the domestic defense budget. Hunter Defense's CFR also reflects the company's relatively small revenue scale and historically volatile nature of shelter sales. Performance volatility from quarter to quarter stems from the timing of orders and Department of Defense funding delays. However, the ratings also consider the ongoing long-term U.S. military demand for Hunter's technologically advanced mobile shelter systems and related products for military training purposes as well as ongoing military maintenance needs. Of note, the company continues to use positive cash generated from operations (largely from working capital changes) to voluntarily prepay debt. However, the CFR also incorporates that annual cash generation is not expected to be sufficient to repay debt maturities over the upcoming months. The company's liquidity profile is characterized as weak due to the need to address the debt maturities and minimal covenant headroom. The ratings consider that current liquidity sources are not expected to be sufficient to satisfy the coming maturity. The stable outlook is based on the expectation that the company will continue to generate positive free cash flow, over one times interest coverage and a focus on streamlining operating costs. Ratings could be lowered if the company is unable to successfully refinancing its near-term debt maturities. In addition, if revenue growth and margin improvement do not materialize, resulting in the failure to improve credit metrics and liquidity, a ratings downgrade would be considered. The ratings could be upgraded if the company addresses its upcoming debt maturities, grows revenues and profitability through 2014, improves liquidity by increasing free cash flow generation and expands headroom under financial covenants. The principal methodology used in this rating was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Hunter Defense Technologies, Inc., headquartered in Solon, OH, is a provider of tactical shelters, CBRN (chemical, biological, radiological, nuclear) filters and collective protective systems, and mobile power and temperature control equipment for the U.S. military and Homeland Security. Annual revenues approximate $250 million. Hunter Defense is majority owned by the private equity firm Metalmark Capital. J.C. PENNEY: Amends Poison Pill Plan ------------------------------------ Rachel Abrams, writing for The New York Times' DealBook, reported that J.C. Penney altered its poison pill plan on Jan. 28 as it seeks to defend itself against potential activist investors and preserve a tax benefit. According to the report, the company lowered the threshold for its poison pill plan to 4.9 percent from 10 percent. It also said it had extended the plan until Jan. 26, 2017. The provisions were originally set to expire this August. The threshold now requires investors to receive board approval to purchase more than 4.9 percent of the company's shares, the report said. Not doing so would activate the poison pill, which would flood the market with shares of the company and dilute investors' interest. Existing shareholders who currently hold 4.9 percent or more of the company's stock would be subject to the amendments only if they tried to buy additional shares. The new plan takes effect immediately and will be subject to a shareholder vote in May, the report related. Steven M. Davidoff, also writing for DealBook, pointed out in a separate report that J.C. Penney is subject to the occasional takeover rumor, but more important, it has lately been a hedge fund hotel. William A. Ackman's Pershing Square Capital Management came and noisily left. So did David Tepper's Appaloosa Management, though less noisily. But others like George Soros's fund and Richard Perry's Perry Corporation have arrived and stayed. Still, Perry has reduced its stake, and hedge funds' interest in the company has waned. The immediate conclusion of many in the media was that J.C. Penney's move was intended to prevent any more activist investors from accumulating a large position. But this, Mr. Davidoff said, may not be the case, and the reason lies in the tax reasons behind its action. J.C. Penney can justify the low trigger because of tax rules that are even more complex than normal, Mr. Davidoff pointed out. When a company accumulates losses, called net operating losses or NOLs, these have value. If the company returns to profitability, it can use them for up to 20 years to offset future gains and avoid paying tax. In some cases, the NOLs can actually be transferred to other parties. About J.C. Penney J.C. Penney Company, Inc. is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. * * * As reported in the Troubled Company Reporter on Oct. 4, 2013, Fitch Ratings has downgraded the Issuer Default Ratings (IDRs) on J.C. Penney Co., Inc. and J.C. Penney Corporation, Inc. to 'CCC' from 'B-'. JAMESPORT DEVELOPMENT: Section 341(a) Meeting Set on Feb. 21 ------------------------------------------------------------ A meeting of creditors in the bankruptcy case of Jamesport Development LLC will be held on Feb. 21, 2014, at 12:00 p.m. at Room 562, 560 Federal Plaza, CI, NY. 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. About Jamesport Development Calverton, New York-based Jamesport Development LLC filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 14-70202) on Jan. 21, 2014, in Central Islip, New York. The Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. The Debtor's Chapter 11 plan and disclosure statement are due May 21, 2014. The Debtor is represented by Salvatore LaMonica, Esq., at LaMonica Herbst and Maniscalco, in Wantagh, New York. The Hon. Robert E. Grossman oversees the case. JENSEN-BYRD: Foreclosure Auction Set for March 12 ------------------------------------------------- Alaska Pacific Bank, a judgment creditor, will sell the property of Jensen-Byrd Company at public auction, at the exterior door facing Fourth Street of the Dimond Courthouse for the Superior Court for the State of Alaska, First Judicial District, 123 4th Street, Juneau, Alaska 99801, on March 12, 2014 at 10:00 a.m. for cash. Proceeds of the sale will be applied against the $1,094,584 in debt owed to Alaska Pacific Bank, together with any additional interest, attorney fees, costs and expenses incurred. Interest continues to accrue for each day from and after June 10, 2013 at the contract rate of 6.0% per annum; plus all additional attorney fees, costs and expenses of the sale incurred by Alaska Pacific Bank. The property consists of Lots 12, 13 and 14 at Lucky Lands Subdivision, having a street address of 25 and 26 State Dock Road, Gustavus, Alaska 99826. Sale will be made without warranty, express or implied, regarding title, possession or encumbrances. The successful bidder at this sale will receive a certificate of sale to this property, subject to the one-year right of redemption authorized pursuant to Alaska Statutes 09.35.220-330. The property is sold "as is" and all bidders assume complete responsibility for determining to their own satisfaction the condition and value of the property, whether they have inspected it or not, and for determining the amount, nature and effect of any and all liens and encumbrances affecting the property, whether of record or not. Alaska Pacific Bank may bid by offset bid all or any part of the debt owed. All other bidders must be prepared to pay by cash, certified funds, or cashiers check for the amount of their bid and be able to demonstrate their compliance with this requirement before any bid is finally accepted. A Judgment and Order of Sale, was entered dated July 24, 2013, in the case, ALASKA PACIFIC BANK, a federally chartered savings bank, Plaintiffs, vs. TIMOTHY F. GIBSON, SR., also known as TIMOTHY F. GIBSON, ANNE I. GIBSON, JACOB E. GIBSON, BEAR -- TRACK MERCANTILE, a partnership, FIRST AMERICAN TITLE INSURANCE COMPANY, JENSEN-BYRD COMPANY, a Washington corporation, d/b/a JENSEN DISTRIBUTION SERVICES, and also persons in possession or claiming any right to possession and all other persons or parties unknown claiming a right, title, estate, lien, or interest in the real estate described in the complaint in this action, Defendants, Case No. 1JU-13-600 CI, pending before the Superior Court for the State of Alaska, First Judicial District at Juneau. Counsel to Alaska Pacific Bank is: Daniel G. Bruce, Esq. BAXTER BRUCE & SULLIVAN P.C. P.O. Box 32819 Juneau, Alaska 99803 Telephone: (907) 789-3166 or to Mr. Bruce's assistant Jeanette Fishel Telephone: (907) 790-7150 JOHN C. HILL: Has Access to Cash Collateral Through Feb. 25 ----------------------------------------------------------- Bankruptcy Judge John K. Olson in Fort Lauderdale signed off on an Agreed Second Interim Order, authorizing, on an interim basis, John C. Hill to use cash generated by the operation of his property (a) to continue to operate his property in the ordinary course, consistent with the cash collateral budget submitted to the Court, including but not limited to, payment of the Debtor's general operating expenses and Chapter 11 expenses, and (b) to make those payments the Debtor is authorized to make pursuant to Court orders. The Debtor currently owes $202,300, which includes interest or other charges in addition to the unpaid principal balance, to the secured lender. The Debtor acknowledges that the Loan is secured by valid, perfected, first priority lien on the Debtor's rental proceeds. The Secured Lender is currently reviewing a Loan Modification Application proposed by the Debtor. The Debtor will continue to provide adequate protection payments to the Secured Lender on a monthly basis in the amount of $628.48. The Court will conduct a Final Hearing on the Debtor's Use of Cash Collateral on Feb. 25, 2014 at 10:30 a.m. at the United States Bankruptcy Court, 299 E. Broward Blvd., Room 301, Fort Lauderdale, Florida 33301. A copy the Jan. 22, 2014 Agreed Second Interim Order is available at http://is.gd/gcnvngfrom Leagle.com. John C. Hill filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-18344) in 2013. Mr. Hill continues to operate his properties and manage his assets as debtor-in-possession. An official committee of unsecured creditors has not been appointed in the case and no trustee or examiner has been sought or appointed. LANSING TRADE: S&P Assigns 'B+' CCR & Rates $175MM Notes 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Overland Park, Kan.-based Lansing Trade Group LLC and to its finance subsidiary, Lansing Finance Company Inc. The outlook is stable. At the same time, S&P assigned its 'B+' issue-level rating to the company's proposed $175 million senior unsecured notes maturing 2021, with a recovery rating of '4', indicating S&P's expectations for average (30% to 50%) recovery in the event of a payment default. The ratings on Lansing reflect S&P's assessment of its "weak" business risk profile, given the company's regional concentration and narrow focus on grain merchandising and energy trading/services. The ratings also reflect an "aggressive" financial risk profile. "We estimate Lansing's pro forma debt-to-EBITDA ratio is about 3x, and FFO to debt is about 27%," said Standard & Poor's credit analyst Chris Johnson. "While we anticipate these ratios will moderately improve in fiscal 2014, they could weaken in weaker earning cycles or in the event of unforeseen trading losses." The stable outlook reflects Standard & Poor's belief that the company will maintain adequate liquidity and grow EBITDA by close to 10% in 2014, while maintaining credit measures near pro forma levels, including an FFO-to-debt ratio of more than 25% and an EBITDA interest coverage ratio of about 4x by fiscal year-end 2014. LAWRENCE WILEY: Deere Credit's $96,000 Admin. Claim Rejected ------------------------------------------------------------ Bankruptcy Judge John S. Dalis in Augusta, Georgia, denied the Motion for Allowance of Administrative Expenses filed by Deere Credit, Inc. in the confirmed chapter 11 case of Lawrence McConneol Wiley. Deere Credit's request was filed over a year after the order confirming the plan. Deere Credit seeks to recover $96,944.27 as a Sec. 503(b)(1)(A) administrative expense for the Debtor's postpetition pre-rejection retention of a leased 2008 Hitachi ZX650 Excavator. The Debtor opposes the Motion on the grounds that it is both untimely and filed in contravention of the terms of the confirmed plan. Mr. Wiley's plan was confirmed on March 3, 2012. "I find that Deere Credit's Motion is untimely, filed in contravention of the terms of the confirmed Plan, and no cause exists to allow the late-filed motion to allow this administrative expense. I, therefore, do not reach the question of extent to which the Debtor's sporadic use of the Excavator qualifies as an actual, necessary cost of preserving the estate," Judge Dalis said in a Jan. 24, 2014 Opinion and Order available at http://is.gd/AywLzzfrom Leagle.com. Lawrence McConneol Wiley filed a Chapter 11 bankruptcy petition (Bankr. S.D. Ga. Case No. 10-12007) in 2010. LIFECARE HOLDINGS: Court Grants Dismissal of Ch. 11 Cases --------------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware granted ICL Holding Company, Inc., et al.'s motion to dismiss their Chapter 11 cases. Judge Gross stated that with respect to ICL Holding Company, Inc., and Holdings CL, Inc., each of the Chapter 11 cases will be dismissed upon a certification of counsel that (a) the Committee has completed its claims reconciliation process with respect to that Debtor, (b) all U.S. Trustee fees attributable to that Debtor have been paid in full, and (c) all monthly operating reports for that Debtor have been filed. Judge Gross added that the Chapter 11 cases of ICL Holding and Holdings CL will be dismissed upon further certification of counsel that (d) no further action with respect to the appeals is pending and that no party to the appeals is entitled to file any further petition or appeal with respect thereto, (e) the escrows have been closed in accordance with their terms, and (f) the Court has entered orders with respect to final fee applications. About LifeCare LCI Holding Company, Inc., and its affiliates, doing business as LifeCare Hospitals, operate eight "hospital within hospital" facilities and 19 freestanding facilities in 10 states. The hospitals have about 1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle Group, which holds 93.4% of the stock following a $570 million acquisition in August 2005. LCI Holding Company, Inc., and its affiliates, including LifeCare Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to secured lenders. The Debtors are represented by Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware; Kenneth S. Ziman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; and Felicia Gerber Perlman, Esq., and Matthew N. Kriegel, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois. Rothschild Inc. is the financial advisor. Huron Management Services LLC will provide the Debtors an interim chief financial officer and certain additional personnel; and (ii) designate Stuart Walker as interim chief financial officer. The steering committee of lenders is represented by attorneys at Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent under the prepetition and postpetition secured credit facility is represented by Simpson Thacher & Barlett LLP. The Debtors disclosed assets of $422 million and liabilities totaling $575.9 million as of Sept. 30, 2012. As of the bankruptcy filing, total long-term obligations were $482.2 million consisting of, among other things, institutional loans and unsecured subordinated loans. A total of $353.4 million is owing under the prepetition secured credit facility. A total of $128.4 million is owing on senior subordinated notes. LifeCare Hospitals of Pittsburgh, LLC, a debtor-affiliate disclosed $24,028,730 in assets and $484,372,539 in liabilities as of the Chapter 11 filing. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP. FTI Consulting, Inc., serves as its financial advisor. LILY GROUP: IPL, LC Energy Object to Sale, Breakup Fee ------------------------------------------------------ Indianapolis Power & Light Company objected to Lily Group Inc.'s motion to sell substantially all of its assets. In particular, IPL objects to the Debtor's request to assume, or assume and assign certain agreements. IPL said the Debtor cannot assume, or assume and assign, the parties' own agreement without (i) either confirming and providing proof that a bond is in place, or, if not in place, obtaining the bond, and (ii) providing adequate assurance of future performance that the proposed assignee of the agreement can perform and meet all requirements under the agreement. Given the Debtor's past performance and numerous defaults under the agreement with respect to missing monthly coal delivery requirements, IPL said it has serious concerns that the Debtor and any buyer/assignee can meet the requirements under the agreement beginning March 1, 2014. LC Energy Holdings LLC, a secured creditor, also filed an objection to the sale. LC Energy noted that the Debtor seeks an order from the Court approving the use of an offer to purchase assets submitted by Redwine Management Company, Inc., to Ron Hutchcraft, as president of the Debtor, and to pay a $225,000 break-up fee if the coal estate is sold to another party. LC Energy objected to the payment of a break-up fee. On Jan. 10, 2014, the Hon. Frank J. Otte of the U.S. Bankruptcy Court for the Southern District of Indiana, in an amended order, approved bidding procedures for the sale of substantially all of Lily Group's assets. The Debtor related that at the bid procedures hearing, its counsel proposed changes to certain terms contained in the Bid Procedures Motion, specifically to the amount and timing of a bid deposit, the date by which written bids must be submitted, and certain conditions applicable to the selection of a winning bid. No party has objected to the changes proposed. The Court will consider approval of the sale to Redwine Management, the stalking horse bidder, or the winning bidder at a hearing Jan. 29, 2014, at 9:30 a.m. The initial bid from Redwine Management sets the floor for further offers for the assets, which will be sold at auction. Under the terms of its purchase agreement with Lily Group, Redwine Management is to receive a breakup fee of $225,000 should the company choose an offer from a rival bidder. Redwine Management is entitled to a refund of any payments made in connection with the deal. A minimum initial overbid of $325,000 is also required. Redwine Management is not willing to commit to hold open its offer to buy the assets unless the bankruptcy court approves the breakup fee and the overbid protections, Lily Group said in a court filing. LC Energy Defends Credit Bid Meanwhile, LC Energy Holdings LLC had asked the Court to deny the motion of the Official Committee of Unsecured Creditors to limit credit bidding in the sale of the Debtor's assets. LC Energy said the Committee's motion is filled with illogical leaps, unsupported conclusions, and general misstatements, with the goal of forcing Platinum Partners credit Opportunity Fund, LP, to either bargain to payoff lesser priority claims or suffer potentially significant additional damages. LC Energy is the successor, by assignment to Platinum. Platinum is owed the prepetition sum of $18,317,700 from Lily Group, and is further owed $675,000 from the Debtor for postpetition Debtor-in- Possession financing to preserve and protect the assets of the bankruptcy estate. The Committee had asked the Court to deny the ability of parties or any assignees asserting a security interest in the Debtor's assets from credit bidding at the auction. The Committee said that to allow any credit bidding when the actual amount of the allowed secured claim is unknown could result in a sale that is unable to be closed or that does not comply with the requirements or purposes of the Bankruptcy Code. 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, 2013, in Terre Haute, estimating 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. LLS AMERICA: Trustee Wins $10,200 Judgment Against Wares -------------------------------------------------------- Bankruptcy Judge Frederick P. Corbit issued a Report and Recommendation in the action, BRUCE P. KRIEGMAN, solely in his capacity as court-appointed Chapter 11 Trustee for LLS America, LLC, Plaintiff, v. DAVID AND LISA WARES, Defendants, Adv. Proc. No. 11-80163-FPC11 (Bankr. E.D. Wash.). According to the Report and Recommendation: -- the Defendants made investments in the Debtor's operations, totaling $161,232.60, and the Debtor in turn paid to the Defendants $171,473.47. -- The Plaintiff is entitled to Judgment against the Defendant for an amount of no less than the Defendants' total net profits (or "MIMO") in the amount of $10,240.87, representing the difference between the Defendants' receipt of $171,473.47 in payments from the Debtor and investments by the Defendants in the Debtor's operations of $161,232.60, plus post-judgment interest at the applicable federal rate. The Plaintiff reserves the right to obtain Judgment for the total amount of payments received by the Defendants (i.e., $171,473.37) subject to a trial on the issue of whether the Defendant invested in good faith. A copy of the Jan. 23, 2014 Report and Recommendation is available at http://is.gd/Uro0dCfrom Leagle.com. MARTIFER SOLAR: Seeks Authority to Tap $5.0-Mil. in DIP Loans ------------------------------------------------------------- Martifer Solar USA, Inc., and Martifer Aurora Solar, LLC, seek authority from the U.S. Bankruptcy Court for the District of Nevada to obtain postpetition financing from Martifer Solar, Inc., in the amount of $5.0 million. The initial advance amount is (x) $2.160 million, less (y) any emergency advances previously made. The Debtors say in court papers that they need to borrow approximately $2.0 million through the week ending April 14, 2014, in order to meet their operating expenses, make interest-only adequate protection payments to the Prepetition Lender, and fund expenses for the administration of the Chapter 11 cases. Each Loan will bear interest at a rate per annum of 9.0%. In the event an event of default has occurred and is continuing, the loans will bear interest at a rate per annum equal to the rate set forth above plus 3.0% from the date of occurrence of the event of default until the date the event of default is cured or waived. The DIP Lender is granted DIP Liens and DIP Superpriority Claim, subject to a carve-out for (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States, and (ii) an amount not exceeding $2.0 million in the aggregate. Cathay Bank, the Debtors' prepetition lender, opposes the Debtors' motion for approval of postpetition DIP financing from its insider parent corporation, which is not in bankruptcy. The Debtors, according to Cathay Bank, proposes to operate postpetition by hemorrhaging the Bank's cash collateral. "Staunching the red ink by loans from the insider parent via this proposed financing not only does not solve any of the Debtors' operational issues, but would seriously be detrimental to the Bank and its security interests," Cathay Bank asserts. Cathay Bank is represented by Michael Gerard Fletcher, Esq. -- mfletcher@frandzel.com -- and Reed S. Waddell, Esq. -- rwaddell@frandzel.com -- at FRANDZEL ROBINS BLOOM & CSATO, L.C., in Los Angeles, California; and Natalie M. Cox, Esq. -- ncox@klnevada.com -- and RANDOLPH L. HOWARD, ESQ. -- rhoward@klnevada.com -- at KOLESAR & LEATHAM, in Las Vegas, Nevada. About Martifer Solar Martifer Solar USA, Inc., said it faced a liquidity crisis caused in large measure by substantially delayed receipt of its liabilities. According to the Debtor, the delay of the receipt of the receivables has resulted in its largest secured creditor requiring the company to immediately pay off all outstanding indebtedness owed to the bank. The bank, the Debtor adds, has undertaken a course of action that substantially jeopardizes the company's continued operations and going concern value. As a result, Martifer filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 14-10357) in Las Vegas on Jan. 21, 2014. The Los Angeles, California-based company estimated $10 million to $50 million in assets and liabilities. According to the docket, the deadline to file claims is May 21, 2014. The meeting of creditors under 11 U.S.C. Sec. 341(a) is on Feb. 20, 2014. The Debtor has tapped Brett A. Axelrod, Esq., and Micaela Rustia Moore, Esq., at Fox Rothschild LLP, in Las Vegas, as counsel, and Armory Consulting Co. as restructuring and financial advisor. MARTIFER SOLAR: Seeks to Use Cathay Bank's Cash Collateral ---------------------------------------------------------- Martifer Solar USA, Inc., and Martifer Aurora Solar, LLC, seek authority from the U.S. Bankruptcy Court for the District of Nevada to use the cash collateral of their prepetition lender, Cathay Bank, in order to provide funding and liquidity for the ongoing operation of the Debtors' business and to fund the expenses of the Chapter 11 case. In November 2013, the Prepetition Lender originated a working-line of credit for the benefit of the Debtors, allowing them to draw up to a maximum principal amount of $12 million. The Cathay Loan is generally secured by Martifer USA's personal property and Aurora's personal property. As of the Petition Date, the outstanding balance of the Loan is approximately $6.4 million. According to court papers, the Debtors are in negotiations with the Prepetition Lender regarding the use of cash collateral but have not yet reached an agreement on the terms thereof. As adequate protection for any diminution in the value of the Prepetition Lender's interest, the Prepetition Lender will receive (a) adequate protection payments in an amount equal to the non- default contractual rate of interest applicable from time to time to amounts outstanding under the Prepetition Credit Agreement; (b) replacement liens; and (c) a superpriority claim, subject and junior only to the carve-out. The carve-out is equal to (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States, and (ii) an amount not exceeding $2.0 million in the aggregate. Cathay Bank is represented by Michael Gerard Fletcher, Esq. -- mfletcher@frandzel.com -- and Reed S. Waddell, Esq. -- rwaddell@frandzel.com -- at FRANDZEL ROBINS BLOOM & CSATO, L.C., in Los Angeles, California; and Natalie M. Cox, Esq. -- ncox@klnevada.com -- and RANDOLPH L. HOWARD, ESQ. -- rhoward@klnevada.com -- at KOLESAR & LEATHAM, in Las Vegas, Nevada. About Martifer Solar Martifer Solar USA, Inc., said it faced a liquidity crisis caused in large measure by substantially delayed receipt of its liabilities. According to the Debtor, the delay of the receipt of the receivables has resulted in its largest secured creditor requiring the company to immediately pay off all outstanding indebtedness owed to the bank. The bank, the Debtor adds, has undertaken a course of action that substantially jeopardizes the company's continued operations and going concern value. As a result, Martifer filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 14-10357) in Las Vegas on Jan. 21, 2014. The Los Angeles, California-based company estimated $10 million to $50 million in assets and liabilities. According to the docket, the deadline to file claims is May 21, 2014. The meeting of creditors under 11 U.S.C. Sec. 341(a) is on Feb. 20, 2014. The Debtor has tapped Brett A. Axelrod, Esq., and Micaela Rustia Moore, Esq., at Fox Rothschild LLP, in Las Vegas, as counsel, and Armory Consulting Co. as restructuring and financial advisor. MI PUEBLO: Court Issues 11th Interim Cash Collateral Order ---------------------------------------------------------- The Hon. Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the Northern District of California, according to Mi Pueblo San Jose, Inc.'s case docket, issued an 11th interim order authorizing the use of cash collateral in which secured creditor Wells Fargo Bank, N.A. asserts an interest. As reported in the Troubled Company Reporter on Dec. 30, 2013, the Debtor will make adequate protection payments to the Bank, consisting of the amount equal to the sum of (i) the monthly payment of principal and interest at the non-default rate that will be due and owing by the Debtor to the Bank pursuant to the Term Note dated May 15, 2012, in the original principal amount of $12.50 million, made by the Debtor to the order of the Bank, on that payment date; (ii) the monthly payment of interest at the non-default rate that will be due and owing by the Debtor to the Bank pursuant the revolving reducing note dated May 15, 2012, in the original principal amount of $12.50 million, made by the Debtor to the order of the Bank, on that payment date; and (iii) the monthly payment required to be paid by the Debtor to the Bank pursuant to the swap documents executed by the Debtor in favor of the Bank for Trade No. 9285392, on that payment date. As further adequate protection for the Debtor's use of cash collateral, the Bank has been granted a valid, non-avoidable, and fully perfected replacement lien in the replacement collateral, or all property of the same type as the prepetition collateral acquired by the Debtor on or after the Petition Date, to secure any diminution in value of any of the prepetition collateral. In addition to the continuation of the replacement lien, the Bank will continue to be entitled to an administrative expense claim with a superpriority status. About Mi Pueblo San Jose Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-53893) in San Jose, California, on July 22, 2013. An affiliate, Cha Cha Enterprises, LLC, sought Chapter 11 protection (Case No. 13-53894) on the same day. The cases are not jointly administered. In its amended schedules, Mi Pueblo disclosed $61,577,296 in assets and $68,735,285 in liabilities as of the Petition Date. Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's general reorganization counsel. The Law Offices of Wm. Thomas Lewis, sometimes doing business as Robertson & Lewis, is the Debtor's special counsel. Avant Advisory Partners, LLC serves as its financial advisors. Bustamante & Gagliasso, P.C. serves as its special counsel. The U.S. Trustee appointed seven members to the Official Committee of Unsecured Creditors. Protiviti Inc. serves as financial advisor. Stutman, Treister & Glatt P.C. serves as counsel to the Committee. MI PUEBLO: Jan. 30 Hearing on Bid to Extend Lease Decision Period ----------------------------------------------------------------- The Bankruptcy Court will convene a hearing on Jan. 30, 2014, at 2:15 p.m., to consider Mi Pueblo San Jose, Inc.'s requests to enter into stipulations with its lessors pursuant to Section 365(d)(4)(B)(ii) of the Bankruptcy Code to further extend the deadline to assume or reject nonresidential real property leases. The current deadline for the assumption or rejection of unexpired leases is Feb. 17, 2014. Mi Pueblo is analyzing its business operations as part of its reorganization process and believes it will need further time to evaluate its reorganization efforts and ultimately determine how Mi Pueblo plans to proceed Mi Pueblo currently is reaching out to its Lessors, and anticipates that those lessors soon will execute the stipulations allowing the requested extension of time. When stipulations are obtained for the current extension or future extensions, Mi Pueblo intends to immediately file the stipulations with the Court, accompanied by a proposed order approving such stipulation and extension of time. About Mi Pueblo San Jose Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-53893) in San Jose, California, on July 22, 2013. An affiliate, Cha Cha Enterprises, LLC, sought Chapter 11 protection (Case No. 13-53894) on the same day. The cases are not jointly administered. In its amended schedules, Mi Pueblo disclosed $61,577,296 in assets and $68,735,285 in liabilities as of the Petition Date. Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's general reorganization counsel. The Law Offices of Wm. Thomas Lewis, sometimes doing business as Robertson & Lewis, is the Debtor's special counsel. Avant Advisory Partners, LLC serves as its financial advisors. Bustamante & Gagliasso, P.C. serves as its special counsel. The U.S. Trustee appointed seven members to the Official Committee of Unsecured Creditors. Protiviti Inc. serves as financial advisor. Stutman, Treister & Glatt P.C. serves as counsel to the Committee. MI PUEBLO: Piper Jaffray Defends Compensation Structure ------------------------------------------------------- Piper Jaffray & Co., which is being tapped as Mi Pueblo San Jose Inc.'s investment banker, responded to objections filed against firm's employment and the Debtor's proposed payment of a $50,000 advance retainer to the firm. The U.S. Trustee, the Official Committee of Unsecured Creditors, and Wells Fargo Bank, N.A., has objected to the Debtor's application to employ Piper Jaffray as investment banker. Piper Jaffray asserts that the firm's compensation is based on the successful consummation of a deal, and Piper Jaffray is exposed to potential third party claims from disgruntled suitors, potential lenders, or other stakeholders given the nature of the investment banking services that Piper Jaffray intends to provide. As reported in the Troubled Company Reporter on Jan. 13, 2014, the Debtor proposed to retain Piper Jaffray as investment banker and exclusive agent for a period of at least 180 days to assist the Debtor in maximizing the value of its assets through a sale, financing, equity placement or other Transaction on the terms set forth in the Engagement Letter. The Firm's services will include, but are not limited to, the following: (a) consult with Mi Pueblo in planning and implementing the Transaction; (b) at Mi Pueblo's request, prepare in collaboration with Mi Pueblo a memorandum describing the Debtor, its history, the nature of its operations, such financial information as may be appropriate to reflect the Debtor's past performance and its projected growth and earnings capacity, the management structure and such other information as is customary or as Piper Jaffray considers appropriate in the circumstances; (c) make initial contacts with potential investors, lenders or purchasers approved by Mi Pueblo; (d) when appropriate, arrange and participate in visits to Mi Pueblo's facilities by potential investors or purchasers and otherwise making introductions and performing services as Piper Jaffray recommends to develop potential investors', lenders' or purchasers' interest in the business; (e) assist Mi Pueblo in negotiations with potential investors, lenders or purchasers as the Debtor reasonably requests; (f) if requested, provide expert testimony and support in a bankruptcy proceeding; (g) consult with Mi Pueblo in structuring any investment proposals; (h) assist Mi Pueblo in analyzing proposals received; (i) assist Mi Pueblo in preparing for due diligence conducted by potential investors, lenders or purchasers; and (j) assist Mi Pueblo in negotiating definitive documentation. As set forth in the Engagement Letter, the Debtor has agreed to compensate Piper Jaffray for its services under the following structure (the "Compensation Structure"): (a) a non-refundable retainer fee of $50,000 (the "Retainer Fee"), payable up-front, which Retainer Fee will be applied to reduce any Placement Fee or Sale Fee; and (b) in the event Mi Pueblo consummates a Debt Placement and Equity Placement (a "Placement") pursuant to an agreement or commitment entered into during the term of Piper Jaffray's engagement, a cash fee, payable at closing of the Placement (the "Placement Fee"), equal to: - 1.5% on all sales or issuances of senior secured facilities not structured as a unitranche facility; - 2.0% on all sales or issuances of senior secured facilities structured as a unitranche facility; - 2.5% on all sales or issuances of second lien facilities; - 3.5% on all sales or issuances of subordinated facilities; - 5.5% on the gross proceeds received by Mi Pueblo on all sales of Equity Securities; Payable by wire transfer of immediately available funds at each closing; provided that Piper Jaffray's total fee for services that include a Debt and Equity Placement will not be less than $750,000; (c) in the event of a Sale, pursuant to an agreement or commitment entered into during the term of our engagement, a cash fee, payable at closing of the Sale (the "Sale Fee"), equal to $1 million of the Aggregate Transaction Value up to $45 million and 2.5% of the Aggregate Transaction Value above $45 million; and (d) reimbursement of reasonable out-of-pocket expenses consistent with local Court guidelines, including, but not limited to, travel and reasonable allocation of database, printing, courier and communication costs, whether or not a Transaction occurs. Teri Stratton, managing director of Piper Jaffray, 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. In its objection, Wells Fargo says the Engagement Letter requires Mi Pueblo to use "commercially reasonable efforts" to permit the use of the Bank's cash collateral to pay for Piper Jaffray's fees and expenses. This phrase in the Engagement Letter is not defined and is ambiguous at best. In addition, the Bank will not consent to the use of its cash collateral to pay Piper Jaffray's out-of- pocket fees and expenses, especially since there is a source of funds in the Mi Pueblo bankruptcy estate to pay these out-of- pocket fees and expenses -- the $1,900,000 recently lent by Juvenal Chavez to the Debtor. The U.S. Trustee objects to the indemnification proposed to be accorded Piper Jaffray. The U.S. Trustee said the terms and scope of the indemnity is inconsistent with the practices of this Court and should not be approved. The indemnity provisions are unreasonable under the circumstances of this case. They expose the estate to unknown and potentially unlimited liability. The Unsecured Creditors Committee believes that any order authorizing the employment of Piper Jaffray as as investment banker should specifically provide for Piper Jaffray to report to, and to be responsible to, the Committee, as well as to the Debtor. In response to the Objections, Mi Pueblo believes the concerns raised by Wells Fargo have merit. Wells Fargo Bank has pointed out problems with the extension of items for which Piper Jaffray seeks compensation. Mi Pueblo agrees it will include a report to Wells Fargo in each of its weekly calls with the Bank and the Committee, as requested. The Debtor also notes that the Committee and Piper Jaffray may have already resolved their disputes over economic points. Mi Pueblo must however retain full authority to instruct Piper Jaffray in any negotiations and in communications with any counter-party over the approval of any and all transactions and have sole authority to direct Piper's actions. On the U.S. Trustee's objection, Mi Pueblo has been informed that Piper Jaffray has agreed to limit expenses to actual costs incurred. The only remaining objection is to the proposed indemnity. About Mi Pueblo San Jose Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-53893) in San Jose, California, on July 22, 2013. An affiliate, Cha Cha Enterprises, LLC, sought Chapter 11 protection (Case No. 13-53894) on the same day. The cases are not jointly administered. In its amended schedules, Mi Pueblo disclosed $61,577,296 in assets and $68,735,285 in liabilities as of the Petition Date. Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's general reorganization counsel. The Law Offices of Wm. Thomas Lewis, sometimes doing business as Robertson & Lewis, is the Debtor's special counsel. Avant Advisory Partners, LLC serves as its financial advisors. Bustamante & Gagliasso, P.C. serves as its special counsel. The U.S. Trustee appointed seven members to the Official Committee of Unsecured Creditors. Protiviti Inc. serves as financial advisor. Stutman, Treister & Glatt P.C. serves as counsel to the Committee. MONTREAL MAINE: Court Okays Sale of All Assets to Fortress Unit --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maine authorized Montreal Maine & Atlantic Railway, Ltd., et al., to sell of substantially all of their assets to Railroad Acquisition Holdings LLC, pursuant to an asset purchase agreement dated Dec. 12, 2013, as amended. As reported in the Troubled Company Reporter on Jan. 23, 2014, the unit of New York-based Fortress Investment Group came away as winner at the Jan. 21 auction of substantially all of the assets of the Debtors, according to various reports. Montreal Gazette reported that the Canadian and U.S. operations of MMA will to go the Fortress unit for $15.7 million. The Fortress unit, Railroad Acquisitions Holdings LLC, served as stalking horse bidder with an initial offer of $14.25 million. Robert Keach, Esq., the court-appointed Chapter 11 trustee for MM&A, has said the minimum bid was $15.7 million. The Court, in its order, also determined that each of the assumption and assignment objections is moot and is therefore overruled. Previously, CIT Group/Equipment Financing, Inc., Flex Leasing I, LLC, and Flex Leasing II, LLC objected to the Debtor's sale motion particularly on the purchaser's assumption and assignment of the CIT leases. CIT Lessors has requested that the purchaser provide adequate assurance of future performance, and defaults under the CIT Leases are cured. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. About Montreal Maine Montreal, Maine & Atlantic Railway Ltd., the railway company that operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec, sought bankruptcy protection in U.S. Bankruptcy Court in Bangor, Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson, P.A., has been named as chapter 11 trustee. His firm serves as his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq. Development Specialists, Inc., serves as the Chapter 11 trustee's 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, has sought financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. In the Canadian case, Andrew Adessky at Richter Consulting has been appointed CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by: Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. There's also an unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims. This group 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. After the U.S. Trustee formed the Official Committee, the ad hoc committee filed papers asking the U.S. Court to have the official committee disbanded. The ad hoc group said it represents 46 victims of the disaster. MONTREAL MAINE: Baker Newman Okayed as Ch. 11 Trustee's Accountant ------------------------------------------------------------------ The Bankruptcy Court authorized Robert J. Keach, Chapter 11 trustee for Montreal Maine & Atlantic Railway, Ltd., et al., to employ Baker Newman & Boyes, LLC as his accountant nunc pro tunc to Aug. 7, 2013. As reported by the Troubled Company Reporter on Dec. 17, 2013, the Chapter 11 trustee said Baker Newman will be providing audit services for, and preparing the corporate state and federal income tax filings of, the Debtor, as well preparing and coordinating the Canadian tax filings of Montreal Maine & Atlantic Canada Co., and providing additional and necessary accounting, tax, and advisory services, to the extent requested by the Trustee. As reported in the TCR on Jan. 13, 2014, William K. Harrington, the U.S. Trustee for Region 1, filed an objection to the trustee's application to employ Baker Newman, stating that he does not oppose the retention of Baker Newman, but submitted that Baker Newman's retention should be effective as of the date of the application, absent a showing that the untimeliness of the application was occasioned by extraordinary circumstances. The application seeks post facto approval of the Chapter 11 Trustee's retention of Baker Newman. The application was filed on Dec. 6, 2013, and seeks an order approving the retention effective as of Aug. 7, 2013. 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, led by Michael A. Fagone, Esq. Development Specialists, Inc., serves as the Chapter 11 trustee's 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, has sought financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. In the Canadian case, Andrew Adessky at Richter Consulting has been appointed CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by: Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. There's also an unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims. This group 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. After the U.S. Trustee formed the Official Committee, the ad hoc committee filed papers asking the U.S. Court to have the official committee disbanded. The ad hoc group said it represents 46 victims of the disaster. On Jan. 23, 2014, the Debtors won authorization to sell substantially all of their assets to Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, for $15.7 million. The Bankruptcy Courts in the U.S. and Canada approved the sale. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. MONTREAL MAINE: Court Denies WD Claimants' Bid to Disband Panel --------------------------------------------------------------- The Bankruptcy Court, in a proceeding memo, denied a motion to disband the Official Committee of Derailment Victims appointed in the Chapter 11 case of Montreal Maine & Atlantic Railway, Ltd. As reported in the Troubled Company Reporter on Jan. 10, 2014, the Official Committee of Derailment Victims objected to the request of the Unofficial Committee of Wrongful Death Claimants to disband the official committee. In its order directing the appointment of the Committee, the U.S. Bankruptcy Court had stated that the victims of the July 6, 2013 train derailment at Lac-Megantic have the right to be heard in the bankruptcy proceeding. According to the Official Committee, counsel for the Unofficial Committee is seeking to "strip victims of their official committee standing and deny them a voice to be heard" by asking the U.S. Court to believe that the Official Committee is "ill-positioned" and unable to function as it is currently constituted. To the contrary, the Official Committee argues, since its formation on Dec. 10, 2013, the Committee has convened several times, including an-in person meeting with proposed counsel prior to the Dec. 18, 2013 hearing before the U.S. Court, to discuss various issues regarding the progress of the bankruptcy case. The Official Committee said its current composition is the result of the U.S. Trustee's fulfillment of the Court's mandate to appoint a victims' committee to ensure adequate representation of the victims of the Derailment. The Committee members represent a broad spectrum of claims arising from the derailment: property damage claims; environmental remediation claims; and tort claims, among others. Any argument by counsel for the Unofficial Committee that the Official Committee does not adequately represent the victims of the Derailment is the result of counsel's own failed strategy. Counsel for the Unofficial Committee either failed to inform their clients -- consisting of representatives of the estates of 46 victims of the Derailment -- about the Committee formation meeting held on Nov. 22, 2013, or actively directed them to not participate. As such, they have no one but themselves to blame for what they complain about in the Motion, the Official Committee said. UST Also Defends Committee Appointment The TCR also reported that the United States Trustee filed objections to the Disbandment Motion. According to the U.S. Trustee, the Unofficial Committee styled the Motion as one to modify the Court's Oct. 18, 2013 order, which authorized the U.S. Trustee to appoint a committee of victims. The Movants allege they are entitled to this relief because the Official Committee, as constituted, is "fatally flawed." Despite its title, the U.S. Trustee argues, the Motion is an inappropriate attempt by the Movants to re-litigate their objection to the formation of a committee -- an objection that was overruled by the Court in October. Since that time, the Movants have formed an "unofficial committee" and have chosen not to participate in the official committee formation process -- despite being invited to do so. Instead of taking action consistent with their stated desire of non-participation, the U.S. Trustee said the Movants self- servingly argue that their affirmative decision not to participate creates a "fatal flaw" in the validly-appointed Committee's ability to represent the creditors who suffered loss as a result of the Derailment. This argument fails because the Committee, as currently constituted, adequately represents the interests of the Derailment Creditors. The U.S. Trustee also said the Movants have raised potentially legitimate issues as to the eligibility of one of the appointed members to serve on the Committee. However, the eligibility issue raised as to this individual does not materially impact the Committee's ability to properly carry-out its fiduciary duties and obligations. Following the entry of the Order, the U.S. Trustee engaged in an extensive process to solicit interest in service on the Committee from all of the various constituencies identified by this Court as needing representation in this case. In response, the U.S. Trustee received sufficient interest, despite Movants decision not to participate, to form a representative committee. After holding a formation meeting in Carrabassett Valley, Maine on Nov. 22, 2013, the U.S. Trustee appointed a four-member committee to represent the interest of all Derailment Creditors. The Movants have questioned the eligibility of one of the members of the Committee. However, no such challenge has been raised with respect to the remaining Committee members, the U.S. Trustee noted. These members, despite the nature of their individual claims, the U.S. Trustee explained, are fiduciaries charged with acting in the interest of all of the Derailment Creditors, even those creditors who chose not to participate in the formation process. The alleged "fatal flaws" cited by the Movants provide no factual justification for the relief requested. Furthermore, the Movants provide no legal justification for their request. Panel of Wrongful Death and PI Claimants Sought Meanwhile, the representatives of the probate estates of Marie Semie Alliance, Stephanie Bolduc, Yannick Bouchard, Marie Francve Boulet, Katherine Champagene, Marie-Noelle Faucher Michael Guertin, Jr., Stephanie Lapierre, Joannie Lapointe, Marianne Poulin, Martin Rodrique, Jeanne Pierre Roy, Kevin Roy, Melissa Roy, Andreee-Ann Sevigny, Jimmy Sirios, Elodie Turcotte and Joanie Turmel -- each of them killed in the massive explosion in Lac Meganic, Quebec on July 6, 2013, resulting from derailment of train operated by the Debtor -- have filed papers asking the U.S. Court to direct the Office of the U.S. Trustee to appoint a committee of wrongful death and personal injury claimants. The decedents were individuals who happened to be in a small-town cafe where they were incinerated by the Debtor's runaway train. Their estate representatives are, for the most part, family members or friends of the decedents, living in Canada. The representatives argued in court papers that the appointment of the Wrongful Death and Personal Injury Claimants Committee provide an effective voice of creditors to whom individual participation in the Chapter 11 case is impractical. They also argued that formation of an official committee to represent wrongful death and personal injury claimants will benefit the bankruptcy estate by solving otherwise difficult issues of due process. Formation of a committee of bodily injury claimants will greatly enhance the likelihood of a successful Chapter 11 case. They also said there is a strong support among wrongful death and personal injury claimants for an appointment of an official committee to represent them. 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, led by Michael A. Fagone, Esq. Development Specialists, Inc., serves as the Chapter 11 trustee's 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, has sought financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. In the Canadian case, Andrew Adessky at Richter Consulting has been appointed CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by: Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. There's also an unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims. This group 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. After the U.S. Trustee formed the Official Committee, the ad hoc committee filed papers asking the U.S. Court to have the official committee disbanded. The ad hoc group said it represents 46 victims of the disaster. On Jan. 23, 2014, the Debtors won authorization to sell substantially all of their assets to Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, for $15.7 million. The Bankruptcy Courts in the U.S. and Canada approved the sale. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. MSI CORP: Parente Beard Approved to Handle Financial Records ------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Pennsylvania authorized MSI Corporation to employ Parente Beard LLC as accountant. As reported Troubled Company Reporter on Dec. 30, 2013, Parente Beard is expected to render services in connection with the Chapter 11 case including, but not limited to, reviewing the Debtor's financial records and issuing reports thereon. These reports will be used, inter alia, to assist the Debtor in its reorganization efforts. Parente Beard will be paid at these hourly rates: Senior Accountants $285 Staff $140 Parente Beard will also be reimbursed for reasonable out-of-pocket expenses incurred. Thomas W. Walenchok, shareholder of Parente Beard, 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 MSI Corp. MSI Corporation filed a bare-bones Chapter 11 petition (Bankr. W.D. Pa. Case No. 13-22457) in Pittsburgh on June 7, 2013. Judge Jeffery A. Deller presides over the case. The Vandergrift, Pennsylvania-based company estimated at least $10 million in assets and less than $10 million in liabilities. Albert's Capital Services LLC is the Debtor's chief restructuring officer. Michael J. Roeschenthaler, Esq., and Scott E. Schuster, Esq., at McGuireWoods LLP, in Pittsburgh, serve as the Debtor's counsel. Geary & Loperfito, LLC serves as special counsel. No unsecured creditors was formed because no one responded to the U.S. Trustee's communication for service on the committee. NORTH LAS VEGAS, NV: Moody's Cuts Debt Rating to Ba3; Outlook Neg ----------------------------------------------------------------- Moody's Investors Service has downgraded the City of North Las Vegas, Nevada to Ba3 from Ba1. The rating outlook was revised to negative from stable. This rating action affects approximately $427.9 million of outstanding rated debt secured by the city's general obligation limited tax (GOLT) pledge. The bonds are secured by the city's full faith and credit pledge, subject to Nevada's statutory and constitutional limitations on overlapping levy rates for ad valorem taxes. Approximately two-thirds of outstanding GOLT debt is additionally secured, and fully supported, by resources of the city's water and sewer enterprises. Summary Rating Rationale The downgrade to Ba3 and negative outlook primarily reflect the city's substantial fiscal pressures over the near term. Importantly, on January 21, 2014 the District Court ruled to strike down the city's declarations of a state of emergency used to balance its budgets in FY2013 and FY2014. The city used state of emergency powers under statutes to help close budgetary imbalances, substantially by suspending scheduled wage increases and other benefits for public safety employees under collective bargaining agreements. Significant uncertainty remains over the city's budget condition for the near term as potential back pay and other monetary benefits could be owed to employees over a currently undefined timeline. Further, the city has limited operating flexibility and additional, politically difficult measures are needed to achieve a balanced budget. Nevertheless, the city expects to appeal the District Court's ruling to the State Supreme Court by the end of January 2014. Strengths -- Participation in the greater Las Vegas (Aa2 GOLT / stable) metro economy -- Modestly paced economic recovery benefitting operating tax revenues -- Still large tax base despite substantial declines Challenges -- District Court ruled that the city improperly used statutory state for emergency powers for budget relief -- Declining liquidity from water and sewer enterprises available to support the general fund -- Continued fiscal imbalance exacerbated by tax revenues still below pre-recession levels -- Outsized pension burden compared to most local governments What Could Make the Rating Go UP (remove negative outlook) -- Restoration of structural fiscal balance -- Appeal of District Court's ruling in favor of the city -- Successful substitution of outsized PILOT from utilities with other resources to support general operations What Could Make The Rating Go DOWN -- Continued deterioration of the city's fiscal position -- Adverse financial settlement for back pay and benefits following the District Court's ruling -- Available liquidity in water and sewer enterprises declines more quickly than anticipated OCZ TECHNOLOGY: Meeting to Form Creditors' Panel on Feb. 5 ---------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on February 5, 2014, at 10:00 a.m. in the bankruptcy case of OCZ Technology Group Inc., et al. The meeting will be held at: United States Trustee's Office One Newark Center, 1085 Raymond Blvd. 14th Floor, Room 1401 Newark, NJ 07102 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About OCZ San Jose, Calif.-based OCZ Technology Group, Inc. (Nasdaq: OCZ) designs, manufactures, and distributes high-performance solid- state storage solutions and premium computer components. OCZ and two affiliates on Dec. 2, 2013, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-13126) with a deal to sell all assets under 11 U.S.C. Sec. 363 to Toshiba Corporation for $35 million. ORMET CORP: Seeks Termination of Evercore's Engagement ------------------------------------------------------ Ormet Corp., et al., ask the U.S. Bankruptcy Court for the District of Delaware to approve a proposed settlement terminating, effective as of Dec. 31, 2013, Evercore Group L.L.C.'s engagement as the Debtors' financial and investment banker. According to the Debtors, their bankruptcy proceedings have not progressed in the manner envisioned when the cases were filed in February 2013. As a result of events that have occurred throughout the Chapter 11 cases, including the prepetition marketing efforts, the resultant stalking horse bid and bid procedures, the postpetition marketing, the approval of the Smelter Sale Order, the ultimate breakdown of the Smelter Sale, the consummation of the Burnside Sale, and the continuing efforts to market assets at the Hannibal Smelter, which have moved forward without the assistance of Evercore, the Debtors and Evercore have determined to consensually end Evercore's engagement by the Debtors. According to Erin Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, absent a mutual agreement, the Debtors may have been forced to take legal action to terminate Evercore's engagement, an effort that would have been costly and would not have ensured the benefits of the Settlement. The Settlement, according to Ms. Fay, is a product of the parties' mutual desire to fairly compensate Evercore for the work it has performed, while recognizing the fact that these proceedings have not resulted in a successful restructuring. The salient terms of the Settlement are as follows: (i) the Debtors will not be required to pay Evercore its monthly fee from or after the monthly fee that became due and payable on December 1, 2013; (ii) the Debtors will not be required to pay Evercore any Financing Fee as a result of the debtor in possession financing under which the Debtors are currently borrowers; (iii) no Restructuring Fee, Sale Fee or other fee will be due and payable with respect to the transactions contemplated by the Burnside Sale; and (iv) no Success Fee or other similar fee will be due and payable as a result of any future transaction regardless of whether the transaction is consummated within 9 months of the termination of the Engagement Letter with Evercore. A hearing on the request will be on Feb. 20, 2014, at 2:00 p.m. (ET). Objections are due Feb. 5. About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on Feb. 25, 2013, with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Affiliates that separately filed Chapter 11 petitions are Ormet Primary Aluminum Corporation; Ormet Aluminum Mill Products Corporation; Specialty Blanks Holding Corporation; and Ormet Railroad Corporation. Ormet emerged from a prior bankruptcy in April 2005. Lender Wayzata Investment Partners LLC is among existing owners. Others are UBS Willow Fund LLC and Fidelity Leverage Company Stock Fund. In the 2013 case, Ormet is represented in the case by Morris, Nichols, Arsht & Tunnell LLP's Erin R. Fay, Esq., Robert J. Dehney, Esq., Daniel B. Butz, Esq.; and Dinsmore & Shohl LLP's Kim Martin Lewis, Esq., Patrick D. Burns, Esq. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung and Paul Billyard serve as investment bankers to the Debtor. An official committee of unsecured creditors was appointed in the case in March 2013. The Committee is represented by Rafael X. Zahralddin, Esq., Shelley A. Kinsella, Esq., and Jonathan M. Stemerman, Esq., at Elliott Greenleaf; and Sharon Levine, Esq., S. Jason Teele, Esq., and Cassandra M. Porter, Esq., at Lowenstein Sandler LLP. PATTERSON PARK: Fitch Affirms BB+ Rating on $13.5-Mil. Bonds ------------------------------------------------------------ Fitch Ratings affirms the 'BB+' rating for $13.5 million outstanding series 2010A and B bonds issued by the Maryland Health and Higher Educational Facilities Authority (MHHEFA) on behalf of the Patterson Park Public Charter School (PPPCS). The Rating Outlook is Stable. The bonds are a general obligation of PPPCS, secured by a first mortgage on the school's facilities. A cash-funded debt service reserve (DSR) provides further security. FINANCIAL METRICS DRIVE RATING: Operating and liquidity metrics for PPPCS are considered speculative grade per Fitch's charter school rating criteria. PPPCS' operating results are anticipated to remain below or close to break-even on a GAAP basis going forward. EXPECTED ADEQUATE DEBT SERVICE COVERAGE: PPPCS has demonstrated consistent coverage of transaction maximum annual debt service (TMADS) at or above the covenanted 1.1x. Fiscal 2013 coverage was stronger at 1.37x. PPPCS benefits from strong demand and stable enrollment, which supports the school's primary revenue-driver, per pupil funding. Importantly, enrollment growth is not required to achieve sufficiency coverage of the TMADS obligation. LIMITED BALANCE SHEET FLEXIBILITY: PPPCS has low balance sheet ratios, which are consistent with the rating category. These limit flexibility to manage budget fluctuations, including union contracts for its instructional faculty. Though operations are expected to allow for modest growth in PPPCS' balance sheet metrics, flexibility will likely remain narrow. MARGIN DETERIORATION: A decline in PPPCS' operating margin that causes TMADS coverage to fall below 1.1x, or causes significant depletion of available funds (defined by Fitch as cash and investments not permanently restricted), would result in a negative rating action. STANDARD SECTOR CONCERNS: A limited financial cushion; substantial reliance on enrollment-driven, per pupil funding; and charter renewal risk are credit concerns common among all charter school transactions that, if pressured, could negatively impact the rating over time. PPPCS opened in 2005 in a former Catholic school located just north of Patterson Park in Baltimore, MD. PPPCS expanded its facilities in fall 2011. Since receiving an initial three-year charter in 2005, PPPCS has received two five-year charter renewals from Baltimore City Public Schools. The most recent five-year renewal was February 2013, which extends the charter to June, 2018. Enrollment in this PreK-8 charter school for fall 2013 was 673 students, up 4.2% from fall 2012 primarily due to a second Pre-K class. About 20% of students were K or PreK. The school is located in southeastern Baltimore and has a curriculum that emphasizes diversity and a thematic, experiential learning approach. The 'BB+' rating reflects slim balance sheet ratios, which are consistent with the rating category. Available funds (AF), defined by Fitch as cash and investments not permanently restricted, was $1.09 million at June 30, 2013, about the same nominal amount as in fiscal 2012. This represented a slim 13.9% of fiscal 2013 operating expenses and 8% of outstanding debt ($13.7 million). While AF provides some budgetary cushion, it is inadequate to fund debt service for any length of time. Operating margins on a full accrual basis have been break-even or slightly negative in recent years. After averaging 9.8% between fiscal 2008 and fiscal 2011, PPPCS' operating margin was essentially at break-even in fiscal 2013 (negative 0.3%), compared to negative 3.1% in fiscal 2012. The primary driver of the weaker operating performance was increased depreciation and interest expense beginning in fiscal 2012, associated with the series 2010 bond-financed facility expansion. The school reports that the fiscal 2014 budget is balanced, and budget results could be stronger than expected. Management does not fully budget for depreciation expense, but does budget to meet the 1.1x coverage covenant. As a result, performance is expected to remain below break-even for the near term. Importantly, PPPCS' budgets typically generate adequate coverage of the school's TMADS obligation. (TMADS is MADS excluding a planned double payment in the final amortization year.) TMADS for the series 2010 bonds is $941,000. The fixed rate debt service structure is level. PPPCS has generated average coverage of 1.1x over the past five fiscal years. Coverage increased to 1.37x in fiscal 2013, a budget year that management reports incorporated some program and expense reductions and higher than budgeted per- pupil funding. Fiscal 2012 TMADS coverage was lower at 1.1x. DEBT BURDEN: The TMADS obligation represented a high 12% of fiscal 2013 operating revenues. However, it remains more moderate than the 15% that Fitch considers to be the limit for investment grade charter schools. Bond covenants include a 1.1x minimum MADS coverage ratio and a requirement for cash and investments to be at least 7% of total operating expenses. Per the school's fiscal 2013 disclosure, both of these covenants were met. Bond documents also require funding a renewal and replacement fund up to $200,000 over time; at June 30, 2013, the R&R fund held $116,000. Like most charter schools, PPPCS is heavily reliant on per pupil funding to support its annual operating budget. In fiscal 2013, student-generated revenues provided about 92% of operating revenues. Given the concentrated revenue stream, maintaining stable enrollment and balance sheet reserves over time are important credit factors. PPPCS has gradually increased enrollment in recent years, well past the originally anticipated 585 students. Enrollment was 673 in fall 2013, up from 622 in fall 2011. Management indicates that about 44 additional K-8 students could be added under the existing charter cap. It allows enrollment of up to 675 K-8 students; PPPCS currently has 631 such students, providing some demand and budget flexibility. Actual per pupil funding for fiscal 2013 was higher than budgeted (approximately $9,192 per student versus $9,007). For the current fiscal 2014, funding increased 2.8% to $9,450. The fiscal 2015 funding level is not yet available. Fitch notes that PPPCS' operational flexibility is more limited than many charter schools because its instructional faculty, employed by BCPS, is unionized. PPPCS does not have teacher pension expense (that is a liability and expense of the city), but it must fund any Baltimore City Public School union contract increases. Management reports that a new contract was still under negotiation at the end of calendar 2013, and the school will budget to incorporate the results. As salaries and benefits typically comprise the majority of operating expenses, Fitch views this as a significant limitation. PPPCS' budgetary stability has historically benefited from strong demand. For fall 2013, PPPCS received 175 applications for 42 pre-kindergarten openings (expanded from 21 slots previously) and 218 applications for 93 kindergarten openings. Management reports that attrition was below 7% for the 2012/2013 academic year, and is expected to be similar for the current 2013/2014 year. The school does not carry or draw from wait lists during the academic year. Fitch views high retention favorably as it indicates satisfaction with the academic program and limits reliance on a potentially seasonal wait list. PEROXYCHEM LLC: Moody's Gives B3 CFR, Rates $155MM Secured Debt B2 ------------------------------------------------------------------ Moody's Investors Service assigned to PeroxyChem LLC a B3 Corporate Family Rating ("CFR") and B2 ratings to the company's $155 million senior secured credit facilities. Proceeds from the transaction will be used to fund the purchase of FMC Corporation's peroxygens business by One Equity Partners ("OEP") and pay related fees and expenses. The rating outlook is stable. "Pro forma credit measures are strong for the rating category and the sponsor equity contribution is high, but the company must overcome several near-term challenges that collectively limit the rating at present," said Ben Nelson, Moody's Assistant Vice President and lead analyst for PeroxyChem. The actions: Issuer: PeroxyChem LLC Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned Caa1-PD $20 million Senior Secured Revolving Credit Facility due 2019, Assigned B2 (LGD2 29%) $135 million Senior Secured Term Loan B due 2020, Assigned B2 (LGD2 29%) Outlook, Stable The assigned ratings are first-time ratings for PeroxyChem, subject to Moody's review of the final terms and conditions of the proposed transaction. PeroxyChem LLC will be the borrower under the proposed credit facilities. PeroxyChem LLC will be wholly- owned by PeroxyChem Holdings LP, the entity that will acquire the perxoygens business from FMC Corporation. Ratings Rationale The B3 Corporate Family Rating ("CFR") reflects the declining financial performance over the past two years, risks associated with a carve-out transaction, concentration on a few key product categories including hydrogen peroxide, concentration of profitability in a small number of applications and facilities, and specific risks associated with patent expirations (peracetic acid) and re-approval of import tariffs (persulfates). However, these risks are partially offset by unusually low leverage for the rating category, solid expected credit measures and discretionary cash flow generation, and adequate liquidity. Moody's also notes that the sponsor will make a sizeable cash equity contribution (35-40%) to help fund the transaction, and has experience in the chemical industry and with carve-out transactions more broadly. Moody's anticipates that spending associated with the carve-out transaction and operational turnaround will limit free cash flow generation through at least 2015. OEP will need to establish PeroxyChem as a standalone company including transitioning key corporate functions handled by FMC. The company will also need to stabilize and reverse recent declines in financial performance. PeroxyChem will also need to manage through an expected increase in intermediate term competitive activity following a food safety patent expiration in mid-2014 and binary uncertainty related to the coming trade ruling on protective duties on certain persulfates. Moody's believes that all of these items on a combined basis heighten business risk, warranting stronger credit metrics than similarly-rated peers until these items have been resolved. PeroxyChem will start out with strong pro forma credit measures for the rating category. Moody's expects the transaction will close with $135 million of secured debt on the balance sheet, which translates into adjusted pro-forma interest coverage near 4 times (EBITDA/Interest) and leverage in the high 3 times (Debt/EBITDA) for the twelve months ended September 30, 2013. These metrics include adjustments for the capitalization of operating leases that results in somewhat higher measured leverage compared to the expected credit agreement calculation of 3.4x. These metrics could improve modestly in the near-term and that retained cash flow will exceed 10% of debt. The rating assumes that margins will not deteriorate from current levels, investment spending will remain in the range of internally-generated cash flow, and the company will maintain a cushion of at least $20 million of available liquidity. Liquidity is adequate to support operations for at least the next four quarters. Moody's expects that a modest cash balance at closing and internally-generated cash flow will be sufficient to cover interest, taxes, one-time items, and maintenance capital expenditures with a cushion of discretionary cash flow in 2014. Free cash flow is less likely in 2014 unless the company pulls back on intended growth capital investments. An undrawn $20 million revolving credit facility provides an adequate secondary source of liquidity to cover any quarterly or unexpected shortfalls. The credit agreement is expected to contain two financial maintenance covenants: a minimum interest coverage ratio and maximum net leverage ratio. Moody's anticipates a modest cushion of compliance in the near-term with tests set at 25-30% of the company's long-term plan. Lenders will not have a direct security interest in assets held by foreign subsidiaries, which represent a potential source of liquidity in a distressed scenario. One business in particular, the silicates business in Spain, is not particularly aligned with the rest of the portfolio in Moody's view. The B2 ratings assigned to the proposed senior secured credit facilities, one notch above the assigned B3 CFR despite a single class debt structure, acknowledge the modest pro-forma leverage position at closing; customary financial maintenance covenants; and first priority security interests in the assets that generate the vast majority of earnings and cash flow. These factors support our expectation for above average recovery on these obligations in the event of a restructuring scenario and in turn, the one notch uplift from the CFR. The stable outlook assumes that the company will make progress toward standing up the business and improving profit margins, as well as maintain an adequate liquidity cushion. Moody's could upgrade the rating with meaningful progress toward transitioning the company to standalone entity in accordance with cost expectations, evidence of sustainable improvement in profitability, and maintenance of credit measures near current pro-forma levels. Moody's could downgrade the rating with expectations for degradation in profit margins, meaningfully negative free cash flow, or substantive deterioration in liquidity. The principal methodology used in this rating was the Global Chemical Industry Rating Methodology published in December 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. PeroxyChem LLC produces hydrogen peroxide, persulfates, peracetic acid, and silicates. These oxidation chemicals are sold into end markets such as pulp & paper, chemical processing, food safety, environmental, energy, and electronics. The company will be owned by One Equity Partners. Headquarted in Philadelphia, Pa., PeroxyChem generated about $300 million in revenues for the twelve months ended September 30, 2013. POWELL STEEL: Judge Dismisses Chapter 11 Case --------------------------------------------- Tim Mekeel, writing for Lancaster Online, reports that U.S. Bankruptcy Judge Magdeline D. Coleman on Thursday, Jan. 23, dismissed, without comment, the Chapter 11 case of Powell Steel Corp.'s bankruptcy reorganization case. Judge Coleman also ordered Powell Steel to pay $24,400 in "accrued but unpaid" court fees owed to the U.S. Trustee. Powell Steel is a steel fabricator and erector based in Pequea Township. When it filed for bankruptcy, Powell Steel reported total liabilities of $6.6 million, including nearly $400,000 owed to current and former employees, and $2.9 million in total assets. M&T Bank is owed $3.2 million. In its schedules, Powell Steel disclosed $2,898,040 in total assets and $7,210,743 in total liabilities. The report notes the U.S. Trustee asked Judge Coleman to convert the bankruptcy case to a liquidation or dismiss it, because the firm "appears to be unable to effectuate a plan of reorganization." Powell Steel told Coleman it preferred dismissal, because if the firm was liquidated, all of its assets would go to M&T, leaving nothing for other creditors. About Powell Steel Powell Steel Corporation, located in Lancaster, Pennsylvania, is a progressive structural steel fabricator and erector equipped with state-of-the-art fabrication and welding equipment. Powell has a 67,000 square foot facility capable of fabricating in excess of 300 tons of steel per week. Powell Steel filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 13-11275) in Philadelphia on Feb. 13, 2013. RADIO ONE: Moody's Hikes CFR to B3 & Rates 335MM Sub. Notes Caa2 ---------------------------------------------------------------- Moody's Investors Service upgraded Radio One, Inc.'s Corporate Family Rating to B3 from Caa1 and Probability of Default Rating to B3-PD from Caa1-PD reflecting good operating performance and improved credit metrics. Moody's also assigned Caa2 to the company's proposed $335 million senior subordinated notes. Proceeds of the notes plus cash will be used to repay the existing $327 million senior subordinated notes due 2016 and $16 million of tender premiums, accrued interest, fees, and expenses. In addition, Moody's upgraded the existing $25 million priority senior secured revolving credit facility to Ba3 from B1 and the $374 million senior secured term loan to B1 from B2. The outlook was changed to stable from positive and the SGL -- 3 Speculative Grade Liquidity (SGL) Rating was affirmed. The assigned ratings are subject to review of final documentation and no meaningful change in conditions of the transaction as advised to Moody's including the 7.0x total leverage ratio incurrence test (as defined) under the new indenture. Assigned: Issuer: Radio One, Inc. NEW $335 million Senior Subordinated Notes: Assigned Caa2, LGD5 -- 80% Upgraded: Issuer: Radio One, Inc. Corporate Family Rating: Upgraded to B3 from Caa1 Probability of Default Rating: Upgraded to B3-PD from Caa1-PD $25 million Priority Sr Secured Revolving Credit Facility due 2015: Upgraded to Ba3, LGD1 -- 1% from B1, LGD1 -- 1% $374 million Sr Secured Term Loan due 2016: Upgraded to B1, LGD2 -- 25% from B2, LGD2 -- 26% Affirmed: Issuer: Radio One, Inc. Speculative Grade Liquidity (SGL) Rating: Affirmed SGL -- 3 Outlook Actions: Issuer: Radio One, Inc. Outlook, Changed to Stable from Positive Affirmed but will be withdrawn upon completion of the tender offer or upon repayment: Issuer: Radio One, Inc. $327 million of 12.5% Senior Subordinated Notes due 2016: Caa2, LGD5 -- 81% Ratings Rationale Radio One's B3 corporate family rating (CFR) reflects high debt- to-EBITDA of roughly 7.1x estimated for the restricted group for the 12 months ended December 31, 2013 (including Moody's standard adjustments, plus TV One dividends, or 6.8x net debt-to-EBITDA) and our expectations that leverage will improve to less than 7.0x before mid-2014 with low to mid-single digit percentage free cash flow-to-debt ratios. The upgrade of the CFR reflects improved core broadcast operating performance along with increased dividends from TV One resulting in EBITDA growth of more than 25% for FY2013 and improved debt-to-EBITDA compared to 8.6x as of FYE2012. We believe the company will track overall performance for the radio broadcast industry with flat to low single digit percentage revenue growth supported by an increase in demand for political advertising particularly in the second half of 2014. An improving economic environment in key markets and dividends from TV One at or above current levels will result in debt-to-EBITDA leverage ratios improving and remaining below 7.0x over the next 12 months. The proposed refinancing of the 12.5% notes will reduce interest expense as well as improve free cash flow generation and coverage ratios. The new notes permit Radio One to increase its ownership in TV One, an unrestricted entity, subject to a 7.0x total leverage incurrence test (as defined) which is important to maintaining the B3 CFR. Ratings incorporate ongoing media fragmentation and the cyclical nature of radio advertising demand evidenced by the revenue declines suffered by radio broadcasters during the past recession and the sluggish growth following the downturn. Ratings are supported by the company's presence in attractive large markets and TV One's growing dividend capacity. An unexpected decline in EBITDA could result in a covenant breach and additional downward pressure on ratings. We expect the company to maintain an EBITDA cushion to financial covenants of at least 5% over the next 12 months, with the potential for deferred dividends from TV One increasing the cushion if necessary. Liquidity is adequate with expected cash balances for the restricted group of a minimum $15 million over the next 12 months, more than 90% of availability under its $25 million revolver facility, and no significant debt maturities until 2016. The stable outlook reflects our belief that radio operations will benefit from consistent advertising demand in key markets and that Interactive One will generate positive EBITDA over the next 12-18 months. In addition, the outlook incorporates the company being able to increase dividends from TV One above 2013 levels ($18.5 million YTD September 30, 2013), if desired. We expect leverage ratios will improve due to EBITDA growth combined with some debt reduction and liquidity will remain adequate with positive free cash flow as well as mid single digit percentage EBITDA cushion to financial covenants. The stable outlook does not incorporate leverage being sustained above current levels due to debt financed acquisitions or increased ownership in TV One. Ratings could be upgraded if debt-to-EBITDA leverage ratios are sustained below 6.0x (incorporating Moody's standard adjustments, plus TV One dividends) supported by good advertising demand and a supportive economic environment in key markets. Enhanced liquidity including mid single digit percentage free cash flow-to-debt ratios and increasing EBITDA cushion to financial maintenance covenants will also be required for an upgrade. Although not likely over the next 12 months, ratings could be downgraded if economic weakness or increased competition in one or more key markets results in debt-to-EBITDA leverage ratios remaining above 7.0x. Increased debt levels to fund discretionary items including share repurchases or an increase in ownership of TV One could negatively impact ratings, particularly if these actions impair liquidity or reduce the company's EBITDA cushion to financial covenants. The principal methodology used in this rating was the Global Broadcast and Advertising Related Industries Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Radio One Inc., headquartered in Silver Spring, MD, is an urban oriented multi-media company that operates or owns interests in radio broadcasting stations (51% of gross revenues as of LTM September 2013 generated by 54 stations in 16 markets), a 51.9% ownership in TV One, a cable television network (32% of revenues), an 80% ownership in Reach Media featuring the Tom Joyner Morning Show (12% of revenues), and ownership of Interactive One as well as other internet-based properties (5% of revenues), largely targeting the African-American audience. The Chairperson, Catherine L. Hughes, and President, Alfred C. Liggins III (Chairperson's son), hold approximately 93% of the outstanding voting power and 47% of economic interest of the common stock. The company reported sales of $443 million for the 12 months ended September 30, 2013. RADIO ONE: S&P Rates $335MM Sr. Subordinated Notes 'CCC' -------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned Lanham, Md.-based radio broadcaster Radio One Inc.'s $335 million senior subordinated notes due 2020 a 'CCC' issue-level rating, with a recovery rating of '6', reflecting S&P's expectation for negligible recovery for lenders in the event of a payment default. The company will use proceeds to refinance the $327 million senior subordinated notes due 2016 and for fees and expenses. S&P's 'B-' corporate credit rating and stable outlook reflect its expectation that Radio One will maintain an adequate margin of compliance with financial covenants and sufficient liquidity for near-term operating needs, despite high debt leverage. "We assess Radio One's business risk profile as "weak" because of its exposure to advertising cyclicality, the potential for longer- term structural declines in radio, and revenue concentration in a few markets. These factors more than offset the benefit of the company's 50.9% ownership in TV One. Radio One's credit metrics remain at levels consistent with a "highly leveraged" (in excess of 5x debt to EBITDA) financial risk profile because of the company's very high debt leverage and thin interest coverage. In 2014, we expect modest EBITDA growth resulting in leverage moderating to the mid- to high-6x area," S&P said. "We could lower the rating over the next 12 to 18 months if EBITDA declines at a low-single-digit percentage rate from trailing-12- month levels with no prospect of a turnaround. A decline at this rate would cause the company to be at risk of breaching its financial covenants. We also could lower the rating if discretionary cash flow swings negative, draining liquidity, or if interest coverage falls below 1x. This scenario could occur if there is a reversal in operating trends in the radio group resulting from weak ad demand and higher marketing and programming expenses to support station reformatting changes. At this time, we regard an upgrade as unlikely in light of high debt leverage and weak interest coverage. Given the roughly 20% reduction in annual interest cost savings from the refinancing, we could consider an upgrade if performance at the radio segment and Reach Media is better than our expectations, allowing the company to generate substantial discretionary cash flow and increase EBITDA coverage of total interest expense to the mid-1x area on a sustainable basis," S&P added. RATINGS LIST Radio One Inc. Corporate Credit Rating B-/Stable/-- New Rating Radio One Inc. Senior Subordinated $335M notes due 2020 CCC Recovery Rating 6 RESIDENTIAL CAPITAL: "Jenkins" Wrongful Foreclosure Suit Dismissed ------------------------------------------------------------------ Bankruptcy Judge Martin Glenn dismissed the wrongful foreclosure lawsuit, MARION L. JENKINS AND SHARON JENKINS, Plaintiffs, v. RESIDENTIAL FUNDING COMPANY, LLC, et. al., Defendants, Adv. Proc. No. 12-01935 (Bankr. S.D.N.Y.), at the behest of defendants Wells Fargo Bank, N.A., and U.S. Bank, National Association, as trustee. Residential Funding Company filed a joinder to the Motion to Dismiss. A copy of the Court's Jan. 24, 2014 Memorandum Opinion and Order is available at http://is.gd/OExAHBfrom Leagle.com. Jonathan Samon, Esq., at Hogan Lovells US LLP, represents Wells Fargo and U.S. Bank, as Trustee. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11 Plan co-proposed by Residential Capital and the Official Committee of Unsecured Creditors. RESIDENTIAL CAPITAL: "Pruitt" Wrongful Foreclosure Suit Dismissed ----------------------------------------------------------------- At the behest of Residential Capital LLC, Bankruptcy Judge Martin Glenn dismissed the wrongful foreclosure action, ALFREDIA PRUITT, Plaintiff, v. RESIDENTIAL CAPITAL, LLC, et al., Defendants, Adv. Proc. No. 13-01350 (MG)(Bankr. S.D.N.Y.). A copy of the Court's Jan. 23, 2014 Memorandum Opinion and Order is available at http://is.gd/hDiuvpfrom Leagle.com. The Complaint raises allegations that the Defendants wrongfully foreclosed upon her property because GMAC Mortgage, LLC, was not properly assigned the mortgage note and in violation of the automatic stay imposed by her chapter 13 bankruptcy filing. In addition to other relief, the Plaintiff seeks $20 million. On September 27, 2012, the Plaintiff filed Proof of Claim No. 835 in the Debtors' chapter 11 cases, asserting a claim against ResCap in the amount of $271,330, the stated basis of which was "mortgage note." About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11 Plan co-proposed by Residential Capital and the Official Committee of Unsecured Creditors. SIMPLY WHEELZ: Sells Rent-A-Car Reservations to Dollar ------------------------------------------------------ Judge Edward Ellington of the U.S. Bankruptcy Court for the Southern District of Mississippi granted Simply Wheelz LLC's motion to sell reservations at any closed location or a non- transferred location free and clear of all liens, claims, encumbrances and other interests. According to the Debtor, The Catalyst Capital Group Inc., which submitted the highest or otherwise best offer for certain of the Debtor's assets has not yet made a final decision on which locations may fall within the category of excluded assets, but the Debtor has been advised that there will be non-transferred locations. Furthermore, the Debtor, in conjunction with the Purchaser, is evaluating the operations at each of the presently existing operations to determine whether it is advisable to close any of these locations prior to the closing of the sale of the purchased assets to Catalyst Capital. The Debtor's counsel, Stephen W. Rosenblatt, Esq., at Butler Snow LLP, in Ridgeland, Mississippi, tells the Court that because the Debtor has already taken reservations at locations that may be Non-Transferred Locations or Closed Locations, it is in the best interest of those customers, as well as the Debtor, the bankruptcy estate, the on-line travel agencies through which these reservations may have been made, and all parties-in-interest, to have those reservations at the Non-Transferred Locations and the Closed Locations honored and filled by another rental car company if the Debtor or the Purchaser is not able to service and fulfill those reservations. To minimize inconvenience for its customers and to protect the relationships of the OTAs with their customers, the Debtor has negotiated a sale to Dollar Rent A Car of the reservations the Debtor or Catalyst Capital will not be able to fulfill at these Closed Locations or Non-Transferred Locations. Dollar will pay the Debtor $4.23 per Advantage Rent A Car reservation that the Debtor transmits to Dollar for the reservations at the Closed Locations or Non-Transferred Locations. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said Simply Wheelz, doing business as Advantage Rent A Car Inc., will close 30 of its locations following a review of its rental stores done as part of its sale to Catalyst Capital. The Debtor has decided to cease operations at 30 of its 70 locations effective Jan. 24, according to a statement that same day from its parent, Franchise Services of North America Inc., Mr. Rochelle related. About Simply Wheelz LLC Simply Wheelz LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 13-03332) on Nov. 5, 2013. The case is assigned to Judge Edward Ellingon. The Debtor disclosed $413,502,259 in assets and $322,230,695 in liabilities as of the Chapter 11 filing. The Debtors are represented by Christopher R. Maddux, Esq., and Stephen W. Rosenblatt, Esq., at Butler Snow O'Mara Stevens & Cannada, in Ridgeland, Mississippi. SOUND SHORE: GECC Wants to Compel Decision on Lease --------------------------------------------------- General Electric Capital Corp. asks the U.S. Bankruptcy Court for the Southern District of New York to compel Sound Shore Medical Center of Westchester and The Mount Vernon Hospital to (a) assume or reject certain unexpired leases entered into with GECC; and pay and perform all past due and future postpetition obligations. GECC proposed a Feb. 3, 2014 hearing on the request, at 10:00 a.m. Previously, the Court approved a stipulation extending time for the Debtors to assume and assign certain unexpired real property leases until Jan. 13. The stipulation was entered among the Debtors and buyer Montefiore New Rochelle Hospital (formerly known as Montefiore SS Operations, Inc.), Montefiore Mount Vernon Hospital (fka Montefiore MV Operations Inc.), Montefiore Schaffer Extended Care Center (fka Montefiore HA Operations, Inc.), Montefiore SS Holdings, LLC, Montefiore MV Holdings, LLC, and Montefiore HA Holdings, LLC and Lockwood Realty LLC (lease counterparty). Prior to the Petition Date, the lease counterparty, as landlord, and Services Corporation, as tenant, entered into a lease for real property located at 1600 East 233rd Street, Bronx, New York. The deadline for the Debtors to assume the lease under Section 365(d) of the Bankruptcy Code expired on Dec. 25, 2013. The lease counterparty agreed to extend the Debtors' time to assume or reject the lease until Jan. 13 to allow the parties adequate time to complete negotiations to finalize a new lease relating to the premises. As reported in the Troubled Company Reporter on Jan. 10, 2014, the Bankruptcy Court authorized the Debtors to assume and assign additional executory contracts and unexpired leases and fix cure amounts, in connection with the sale of assets to Montefiore. The Court also ordered that all objections and responses to the motion are resolved; and the buyers' promise to perform the obligations under the additional assigned contracts after the closing constitute adequate assurance of future performance under the additional assigned contracts. Meanwhile, Lara P. Emouna, Esq., at Gleich, Siegel & Farkas, LLP, on behalf of CW North Ridge Plaza LLC, asked the Court to condition the entry of an order authorizing the assumption and assignment of the lease. Specifically, CW North asked that the cure amount be no less than $25,732; and the purchaser must assume the lease and the obligations thereunder from the lease's inception, as if that entity were the original tenant named in the lease, not just from the closing date. About Sound Shore Medical Center Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home and related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on May 29, 2013, in White Plains, New York. The Debtors were the largest "safety net" providers for Southern Westchester County in New York. Affiliated with New York Medical College, Sound Shore is a not-for-profit 242-bed, community based- teaching hospital located in New Rochelle, New York. Mountain Vernon Hospital is a voluntary, not-for-profit 176-bed hospital located in Mount Vernon, New York. Howe Avenue Nursing Home is a 150-bed, comprehensive facility. The Debtors tapped Burton S. Weston, Esq., at Garfunkel Wild, P.C. as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors; and GCG Inc., as claims agent. Alston & Bird LLP represents the Official Committee of Unsecured Creditors. Deloitte Financial Advisory Services LLP serves as the Committee's as financial advisor. Sound Shore disclosed assets of $159.6 million and liabilities totaling $200 million. Liabilities include a $16.2 million revolving credit and a $5.8 million term loan with Midcap Financial LLC. There is $9 million in mortgages with Sun Life Assurance Co. of Canada (US) and $11.5 million owing to the New York State Dormitory Authority. Neubert, Pepe & Monteith, P.C., represents Daniel T. McMurray, the patient care ombudsman for Sound Shore. The Debtors filed for bankruptcy to sell their assets, including their hospital and nursing home operations, to the Montefiore health system. On Aug. 8, 2013, the Bankruptcy Court entered an order, as affirmed and ratified by a Supplemental Sale Order entered on Oct. 15, 2013, approving the sale to Montefiore New Rochelle Hospital, Inc., Schaffer Extended Care Center, Inc., Montefiore Mount Vernon Hospital, Inc. and certain related affiliates. In June 2013, Montefiore added $4.75 million to its purchase offer to speed up the sale. Montefiore raised its bid to $58.75 million plus furniture and equipment as part of a request for a private sale of the hospitals. On Nov. 6, 2013 at 12:01 a.m. the closing of the Sale occurred and the sale was effective. Montefiore is represented by Togut, Segal & Segal LLP. SOUND SHORE: Allscripts to Provide Post-Closing Services -------------------------------------------------------- Sound Shore Medical Center of Westchester, et al., entered into a stipulation dated Jan. 2 with the Official Committee of Unsecured Creditors, and Allscripts Healthcare LLC relating to a master agreement, pursuant to which Allscripts licenses to the Debtors' electronic medical records and billing system and provides the Debtors with support services in connection with the Allscripts Software. Sound Shore Health System, Inc., and Allscripts' predecessor, Eclipsys Corporation, entered into the Master Agreement prior to the Petition Date. The stipulation provides that, among other things, until such time as the Master Agreement is rejected (i) Allscripts agrees to provide the Doctors with post-closing services; and (ii) the Debtors and their estates agree to comply with all of their obligations under the Master Agreement. Allscripts asserts an aggregate claim, outstanding as of the Petition Date, amounting to $4,900,000. A copy of the stipulation is available at no extra charge at: http://bankrupt.com/misc/SOUNDSHOREstipulation.pdf About Sound Shore Medical Center Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home and related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on May 29, 2013, in White Plains, New York. The Debtors were the largest "safety net" providers for Southern Westchester County in New York. Affiliated with New York Medical College, Sound Shore is a not-for-profit 242-bed, community based- teaching hospital located in New Rochelle, New York. Mountain Vernon Hospital is a voluntary, not-for-profit 176-bed hospital located in Mount Vernon, New York. Howe Avenue Nursing Home is a 150-bed, comprehensive facility. The Debtors tapped Burton S. Weston, Esq., at Garfunkel Wild, P.C. as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors; and GCG Inc., as claims agent. Alston & Bird LLP represents the Official Committee of Unsecured Creditors. Deloitte Financial Advisory Services LLP serves as the Committee's as financial advisor. Sound Shore disclosed assets of $159.6 million and liabilities totaling $200 million. Liabilities include a $16.2 million revolving credit and a $5.8 million term loan with Midcap Financial LLC. There is $9 million in mortgages with Sun Life Assurance Co. of Canada (US) and $11.5 million owing to the New York State Dormitory Authority. Neubert, Pepe & Monteith, P.C., represents Daniel T. McMurray, the patient care ombudsman for Sound Shore. The Debtors filed for bankruptcy to sell their assets, including their hospital and nursing home operations, to the Montefiore health system. On Aug. 8, 2013, the Bankruptcy Court entered an order, as affirmed and ratified by a Supplemental Sale Order entered on Oct. 15, 2013, approving the sale to Montefiore New Rochelle Hospital, Inc., Schaffer Extended Care Center, Inc., Montefiore Mount Vernon Hospital, Inc. and certain related affiliates. In June 2013, Montefiore added $4.75 million to its purchase offer to speed up the sale. Montefiore raised its bid to $58.75 million plus furniture and equipment as part of a request for a private sale of the hospitals. On Nov. 6, 2013 at 12:01 a.m. the closing of the Sale occurred and the sale was effective. Montefiore is represented by Togut, Segal & Segal LLP. SOUND SHORE: Seeks Extension of Plan Filing Deadline to April 24 ---------------------------------------------------------------- Sound Shore Medical Center of Westchester and its debtor affiliates ask the Bankruptcy Court to extend their exclusive period to file a Chapter 11 plan through April 24, 2014, and exclusive period to solicit acceptances of that Plan through June 23, 2014. This is the Debtors' second request for an extension of the Exclusive Periods. According to the Debtors, they need additional time to effectively negotiate and file a plan of reorganization and develop a strategy for the successful confirmation of their Chapter 11 cases. "Given the enormous effort that was subsequently required and undertaken to promptly consummate the Sale, the initial extension has not afforded the Debtors with a meaningful opportunity to propose and file a Chapter 11 plan," says Burton S. Weston, Esq., at Garfunkel Wild, P.C., counsel to the Debtors. "While the Debtors' efforts thus far have been well conducted and led to substantial progress in these Chapter 11 Cases, including the expedient consummation of the sale of substantially all of their assets... the filing of a plan of reorganization would be premature at this time," he adds. The Debtors relate they remain focused on addressing and resolving emergent matters arising in connection with the closing of the Sale. Simultaneously, the Debtors add, they must attend to the ongoing administration of their estates and these cases and complying with their requirements under the Bankruptcy Code. The Debtors assert they are not seeking these extensions to artificially delay the conclusion of their Chapter 11 cases or for the purposes of coercing credit consent or for any other improper motive. The Debtors tell the Court they are largely paying all undisputed postpetition obligations as they come due in accordance with their agreements with their creditors. About Sound Shore Medical Center Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home and related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on May 29, 2013, in White Plains, New York. The Debtors were the largest "safety net" providers for Southern Westchester County in New York. Affiliated with New York Medical College, Sound Shore is a not-for-profit 242-bed, community based- teaching hospital located in New Rochelle, New York. Mountain Vernon Hospital is a voluntary, not-for-profit 176-bed hospital located in Mount Vernon, New York. Howe Avenue Nursing Home is a 150-bed, comprehensive facility. The Debtors tapped Burton S. Weston, Esq., at Garfunkel Wild, P.C. as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors; and GCG Inc., as claims agent. Alston & Bird LLP represents the Official Committee of Unsecured Creditors. Deloitte Financial Advisory Services LLP serves as the Committee's as financial advisor. Sound Shore disclosed assets of $159.6 million and liabilities totaling $200 million. Liabilities include a $16.2 million revolving credit and a $5.8 million term loan with Midcap Financial LLC. There is $9 million in mortgages with Sun Life Assurance Co. of Canada (US) and $11.5 million owing to the New York State Dormitory Authority. Neubert, Pepe & Monteith, P.C., represents Daniel T. McMurray, the patient care ombudsman for Sound Shore. The Debtors filed for bankruptcy to sell their assets, including their hospital and nursing home operations, to the Montefiore health system. On Aug. 8, 2013, the Bankruptcy Court entered an order, as affirmed and ratified by a Supplemental Sale Order entered on Oct. 15, 2013, approving the sale to Montefiore New Rochelle Hospital, Inc., Schaffer Extended Care Center, Inc., Montefiore Mount Vernon Hospital, Inc. and certain related affiliates. In June 2013, Montefiore added $4.75 million to its purchase offer to speed up the sale. Montefiore raised its bid to $58.75 million plus furniture and equipment as part of a request for a private sale of the hospitals. On Nov. 6, 2013 at 12:01 a.m. the closing of the Sale occurred and the sale was effective. Montefiore is represented by Togut, Segal & Segal LLP. SOUND SHORE: Court OKs Agreement Modifying Asset Purchase Pact -------------------------------------------------------------- The Bankruptcy Court approved a stipulation and agreement modifying the amended and restated asset purchase agreement dated as of May 29, 2013, to facilitate the closing of the sale of substantially all of the Debtors' assets. The Stipulation was entered by and among, Sound Shore Health System, Inc., Sound Shore Medical Center of Westchester, The Mount Vernon Hospital, Howe Avenue Nursing Home d/b/a Helen and Michael Schaffer Extended Care Center, NRHMC Services Corporation, The M.V.H. Corporation, and New Rochelle Sound Shore Housing, LLC (the "Sellers") and Montefiore New Rochelle Hospital (f/k/a Montefiore SS Operations, Inc.), Montefiore Mount Vernon Hospital (f/k/a Montefiore MV Operations, Inc.), Schaffer Extended Care Center (f/k/a Montefiore HA Operations, Inc.), Montefiore SS Holdings, LLC, Montefiore MV Holdings, LLC, and Montefiore HA Holdings, LLC (collectively the Buyer). On the Petition Date, the Debtors filed a motion seeking, inter alia, approval of the sale of substantially all of the Debtors' assets pursuant to the terms of that certain Asset Purchase Agreement dated as of May 29, 2013. By Order dated Aug. 8, 2013, and as supplemented by Order dated Oct. 15, 2013, the Bankruptcy Court approved the Sale to the Buyer. The APA and the Sale Order provide for, among other things, the transfer of the Acquired Assets, the assignment of the Assigned Contracts and the assumption of the Assumed Liabilities. The APA and the Sale Order further provide that the Buyer will not have any liability for the Excluded Liabilities, including Successor Liabilities. Section 2.5 of the APA provides, in part, as follows: "At the Closing and pursuant to Section 365 of the Bankruptcy Code, the Sellers shall assume and assign to Buyer, the Assigned Contracts. The cure amounts, if any, as determined by the Bankruptcy Court, necessary to cure all defaults and to pay all actual or pecuniary losses, if any, that have resulted from any defaults on the part of the Sellers under the Assigned Contracts shall be paid by the Buyer at Closing up to the maximum amount of three million dollars ($3,000,000), if any, and Sellers shall have no liability for any such cure amount." Section 10.1(w) of the APA provides that it will be a condition to the Buyer's obligation to consummate the transactions under the APA that the Cure Amounts for the Assigned Contracts not exceed seven million dollars ($7,000,000) in the aggregate. In connection with the closing of the transactions contemplated under the APA, the Buyer and the Debtors engaged in discussions with the United States, acting on behalf of the United States Department of Health and Human Services Centers for Medicare and Medicaid Services(CMS), regarding the assignment of the Debtors' Medicare provider agreements and provider numbers to the Buyer's operating entities as Assigned Contracts under the APA. CMS was unwilling to consent to the assignment of the Medicare Provider Agreements unless the Buyer agreed to assume successor liability for certain of the Debtors' pre-closing claims and conduct, whether known or unknown. As of Nov. 4, 2013, the Debtors believed they owed CMS $4,897,563 as a cure payment for assignment of the Medicare Provider Agreements. The Debtors estimate that they are due in excess of $7,000,000 from CMS as a credit in connection with the Medicare Provider Agreements. Following extensive negotiations, the Debtors, the Buyer and CMS entered into a Stipulation and Agreement Regarding Debtors' Assumption and Assignment of Medicare Provider Agreements and Provider Numbers for Sound Shore Medical Center of Westchester, The Mount Vernon Hospital and Howe Avenue Nursing Home d/b/a Helen and Michael Schaffer Extended Care Center, dated as of Nov. 5, 2013. The CMS Stipulation provides, among other things, for the assignment of the Medicare Provider Agreements and Provider Numbers to Buyer under the APA, the closing of cost reports prior to Dec. 31, 2012, the fixing and payment of certain pre-closing claims and the waiver of the Debtors' existing appeals relating to certain pre-closing claims for the year ending Dec. 31, 2012. Similar to the position of CMS with respect to the Medicare Provider Agreements, New York State Department of Health was unwilling to consent to the assignment of the Debtors' Medicaid provider agreements and provider numbers unless the Buyer agreed to assume successor liability for the Debtors' pre-closing Medicaid claims and conduct. As of Nov. 4, 2013, the Debtors believed they owed DOH $3,378,353 as a cure payment for assignment of the Medicaid Provider Agreements. The Debtors estimate that they are due not less than $1,982,580 from DOH as a credit on account of claims in connection with the Medicaid Provider Agreements. The Debtors estimated that they would not have sufficient liquidity to operate their businesses, including SSMC, MVH and SECC, on or after Nov. 7, 2013. The Sale would not close unless the Buyer agreed to waive the conditions in Sections 10.1(q) and (w) of the APA. Absent waiver of these conditions, the Buyer had the right to terminate the APA. Due to insufficient net sale proceeds at the Closing, the parties discussed post Closing appropriate protections for the Buyer in an amount up to $9,500,000 on account of the Amended Conditional Collateral Pledge Agreement made as of Nov. 6, 2013, by the Buyer to and for the benefit of MidCap Funding IV, LLC, consistent with and instead of the protections provided to the Buyer under Section 3.1(b) of the APA. Accordingly, the parties agree that the APA will be deemed modified. Pursuant to the Stipulation, the Buyer will be deemed to have waived all unsatisfied closing conditions set forth in Section 10.1 of the APA including, without limitation, Sections 10.1(q) and (w), and proceeded with the closing of the Sale, which was concluded and became effective as of 12:01 a.m. on Nov. 6, 2013. The Buyer will be deemed to have waived the successor liability protection provisions in the APA solely in favor of (a) CMS with respect to the Medicare Provider Agreements and Provider Numbers, as limited by the CMS Stipulation and (b) DOH with respect to the Medicaid Provider Agreements and Provider Numbers, subject to an aggregate cap of three million dollars ($3,000,000), as set forth in the DOH Stipulation. With respect to all other parties in interest, the Buyer will be afforded the protections of Section 363(f) as set forth in the APA and the Sale Order which will remain in full force and effect. The Buyer will pay the Cure Amounts, or cause to be escrowed, in the case of estimated Cure Amounts until such time as they become fixed and allowed Cure Amounts, payable to (a) CMS in connection with the assignment of the Medicare Provider Agreements, pursuant to the CMS Stipulation, in the amount of $4,897,563 which excludes approximately $924,424 on account of 2013 projected RAC claims, which the Debtors have determined are owed to CMS, or may potentially be owed to CMS as relating to the Projected RAC Claims or any additional pre-Closing Amounts relating to the Medicare Provider Agreements and not encompased in the Close Out Claims and (b) DOH in connection with the assignment of the Medicaid Provider Agreements, pursuant to the DOH Stipulation, in an amount to be determined amongst DOH, the Buyer and the Debtors. At the Closing, the Buyer delivered $3,378,353, the amount estimated as the DOH Cure Payment, to the Sellers' counsel to hold in escrow. Subject to final agreement and determination by the DOH, the Buyer and the Debtors, that amount will be removed from escrow and paid to DOH following execution of the DOH Stipulation. All estimated funds due Debtors from CMS that are paid to the Debtors in excess of $3,000,000 will be deemed payable to Buyer on account of, and not to exceed, the amount of that portion of the aggregate of the CMS Cure Payment and the DOH Cure Payment that exceeds $3,000,000. Excess Estimated Funds directly received by the Debtors up to an amount not to exceed the Cure Differential will immediately be paid over to Buyer in reduction or satisfaction of the Cure Differential. To the extent the Debtors Received Excess Funds are insufficient to satisfy the Cure Differential, Buyer will have an administrative expense claim entitled to super priority status under section 507(b) of the Bankruptcy Code for the unpaid portion of the Cure Differential solely to the extent of any Excess Estimated Funds received by MidCap in satisfaction of its senior secured claim, which administrative claim will be payable consistent with the Stipulation and Agreement. A full-text copy of the Stipulation is available for free at: http://bankrupt.com/misc/SOUNDSHOREsalestipulation.pdf About Sound Shore Medical Center Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home and related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on May 29, 2013, in White Plains, New York. The Debtors were the largest "safety net" providers for Southern Westchester County in New York. Affiliated with New York Medical College, Sound Shore is a not-for-profit 242-bed, community based- teaching hospital located in New Rochelle, New York. Mountain Vernon Hospital is a voluntary, not-for-profit 176-bed hospital located in Mount Vernon, New York. Howe Avenue Nursing Home is a 150-bed, comprehensive facility. The Debtors tapped Burton S. Weston, Esq., at Garfunkel Wild, P.C. as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors; and GCG Inc., as claims agent. Alston & Bird LLP represents the Official Committee of Unsecured Creditors. Deloitte Financial Advisory Services LLP serves as the Committee's as financial advisor. Sound Shore disclosed assets of $159.6 million and liabilities totaling $200 million. Liabilities include a $16.2 million revolving credit and a $5.8 million term loan with Midcap Financial LLC. There is $9 million in mortgages with Sun Life Assurance Co. of Canada (US) and $11.5 million owing to the New York State Dormitory Authority. Neubert, Pepe & Monteith, P.C., represents Daniel T. McMurray, the patient care ombudsman for Sound Shore. The Debtors filed for bankruptcy to sell their assets, including their hospital and nursing home operations, to the Montefiore health system. On Aug. 8, 2013, the Bankruptcy Court entered an order, as affirmed and ratified by a Supplemental Sale Order entered on Oct. 15, 2013, approving the sale to Montefiore New Rochelle Hospital, Inc., Schaffer Extended Care Center, Inc., Montefiore Mount Vernon Hospital, Inc. and certain related affiliates. In June 2013, Montefiore added $4.75 million to its purchase offer to speed up the sale. Montefiore raised its bid to $58.75 million plus furniture and equipment as part of a request for a private sale of the hospitals. On Nov. 6, 2013 at 12:01 a.m. the closing of the Sale occurred and the sale was effective. Montefiore is represented by Togut, Segal & Segal LLP. SOUNDVIEW ELITE: Court Denies Request to Dismiss Chapter 11 Cases ----------------------------------------------------------------- Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York issued a bench order dated Jan. 23, 2014, denying the motion filed by Peter Anderson and Matthew Wright, joint official liquidators of Soundview Elite, Ltd., Soundview Premium, Ltd., and Soundview Star, Ltd. Judge Gerber concluded that the Debtors' Chapter 11 cases were filed with sufficient corporate authority, as required under the articles of organization of the Debtors. Judge Gerber concluded that the Debtors' existing management should not continue in possession of the Debtors and approved the motion by the U.S. Trustee to appoint a Chapter 11 Trustee. The Judge also held that the U.S. automatic stay became effective immediately upon the filing of the Chapter 11 petition in the U.S. Judge Gerber granted the Debtors' requested declaration to that effect. With regards to the Debtors' motion to hold the JOLs and petitioning creditors in contempt, the Judge denied the request with respect to actions the JOLs and the petitioning creditors took on the day the JOLs were appointed. However, the motion is continued to the JOLs only, with respect to actions the JOLs took thereafter. Judge Gerber said the latter will enable him to gauge the extent to which the JOLs and their counsel now understand that they cannot engage in business as usual after the filing of a U.S. bankruptcy case. "I've concluded that these cases require one or more independent fiduciaries, and that the requirements for appointment of a chapter 11 trustee under U.S. law have been satisfied. Under certain circumstances ... appointment of JOLs in the Cayman Islands might fully satisfy the independent fiduciary need. But here I must conclude that the JOLs acting without a trustee in the U.S. could not satisfactorily meet the needs of this case,and that a chapter 11 trustee in the U.S. is necessary, either in addition to, or in place of, the JOLs," the Judge found. A full-text copy of the Bench Order is available for free at: http://bankrupt.com/misc/SOUNDVIEWELITEdismissaldecision.pdf About Soundview Elite Six mutual funds originally created by Citco Group of Cos., including Soundview Elite Ltd., filed petitions for Chapter 11 protection on Sept. 24, 2013, in Manhattan to avoid undergoing bankruptcy liquidation in the Cayman Islands, where they are incorporated. The funds are Soundview Elite (Bankr. S.D.N.Y. Case No. 13-13098) Soundview Premium, Ltd. (Case No. 13-13099); Soundview Star Ltd. (Case No. 13-13101); Elite Designated (Case No. 13-13102); Premium Designated (Case No. 13-13103); and Star Designated (Case No. 13-13104). The petitions were signed by Floyd Saunders as corporate secretary. SoundView Elite Ltd. and two similarly named funds were the target of a winding-up petitions in the Cayman Islands filed in August by Citco, which had sold its interest in the funds' manager years before. An investor, who was removed from the funds' board in June, filed a different winding-up petition in August, aimed at three funds created later to hold illiquid assets. Soundview Elite estimated assets and debts of at least $10 million. The funds said in a court filing their total cash assets of about $20 million are held in the U.S., where the funds are managed. Court papers list the funds' total assets as $52.8 million, against debt totaling $28 million. Porzio, Bromberg & Newman, PC, serves as the Debtors' counsel. CohnReznick LLP serves as financial advisor. Judge Robert E. Gerber presides over the case. Attorney for Peter Anderson and Matthew Wright, as Joint Official Liquidators of the Debtors, can be reached at: Gary S. Lee, Esq. MORRISON & FOERSTER LLP 1290 Avenue of the Americas New York, NY 10104 Tel: (212) 468-8000 Fax: (212) 468-7900 Tracy Hope Davis, U.S. Trustee for Region 2, and creditor Pasig Ltd. have asked the U.S. Bankruptcy Court to enter an order directing the appointment of a Chapter 11 trustee in the Debtors' cases. Creditors Richcourt Allweather Fund Inc, Optima Absolute Return Fund, Ltd., and America Alternative Investments Inc. have asked the U.S. Court to dismiss the Chapter 11 cases, or appoint one or more Chapter 11 or Chapter 7 trustee for the Debtors' estates. SOUNDVIEW ELITE: SPV and Limited Debtors to Have Ch.11 Trustee -------------------------------------------------------------- The six jointly administered chapter 11 cases of Soundview Elite, Ltd., Soundview Premium, Ltd., Soundview Star, Ltd. -- the "Limited Debtors" -- and Elite Designated, Premium Designated and Star Designated -- the "SPV Debtors" -- won't be dismissed but a Chapter 11 trustee will be appointed to oversee the Debtors' affairs in the U.S., Bankruptcy Judge Robert E. Gerber ruled in a bench decision dated Jan. 23 available at http://is.gd/fDJUICfrom Leagle.com. The Debtors are within the Fletcher Family of Funds, managed by Fletcher Asset Management, under the leadership of Alphonse Fletcher. Peter Anderson and Matthew Wright, the Joint Official Liquidators of the Limited Debtors, and America Alternative Investments Inc., Optima Absolute Return Fund Ltd., and Richcourt Allweather Fund Inc. -- the "BVI Petitioners" -- pursuant to section 1112(b) of the U.S. Bankruptcy Code, seek to dismiss the Debtors' cases in favor of a liquidation proceeding in the Cayman Islands -- or alternatively, pursuant to section 362(d) of the U.S. Bankruptcy Code, to grant relief from the stay to allow the Cayman insolvency proceeding to proceed. The United States Trustee seeks appointment of a chapter 11 trustee. The U.S. Trustee's motion was initially accompanied by a similar motion by Pasig, Ltd., a creditor and party-in-interest. But Pasig thereafter changed its position, and now supports dismissal or relief from the stay to allow the liquidation to be accomplished in the Cayman Islands by the JOLs. The U.S. Trustee's motion was filed after the U.S. court advised the parties that the court wanted them to brief the desirability of the appointment of a chapter 11 or chapter 7 trustee as an additional option. The Debtors, pursuant to Sections 362 and 105(a) of the Bankruptcy Code, seek entry of an order (a) declaring that section 362 applies to proscribe proceedings in the Cayman Islands; (b) finding the JOLs and petitioning creditors Citco Global Custody (N.A.) N.V., the BVI Petitioners, the Solon Group, and the latter's principal Deborah Hicks Midanek to have acted in contempt of the U.S. automatic stay, and (c) imposing sanctions upon them for having done so. In the Bench Decision, Judge Gerber ruled that: (1) The cases were filed with sufficient corporate authority, as required under the articles of organization of the six Debtors. (2) the cases should not be dismissed under section 1112(b), either for "bad faith" filing or for unenumerated cause, nor wholly abstain under section 305. (3) The Debtors' existing management should not continue in possession; one or more independent fiduciaries must be appointed for the Debtors in these cases. As a mixed question of fact and law, the U.S. Trustee and Pasig were plainly right when they argued that cause has been shown for the appointment of a trustee under each of sections 1104(a)(1) and (a)(2). (4) The U.S. automatic stay became effective immediately upon the filing of the chapter 11 petition in the U.S. The U.S. Court rejects the JOLs' principal argument to the contrary; the fact that the Cayman Islands Monetary Authority supported an insolvency petition commenced by parties acting in their private interests is insufficient to trigger the exception to the automatic stay under the "police power" exception of section 362(b)(4). Actions in the Cayman court thereafter -- including the appointment of the JOLs -- were, from the perspective of U.S. law, void. (5) The Debtors' motion to hold the JOLs and petitioning creditors in contempt, and award sanctions, is denied with respect to actions they took on the day the JOLs were appointed. The motion is continued, with respect to the JOLs only, with respect to actions the JOLs took thereafter. The latter will enable the U.S. Court to gauge the extent to which the JOLs and their counsel now understand that they cannot engage in business as usual after the filing of a U.S. bankruptcy case. (6) The U.S. Trustee is authorized to appoint a chapter 11 trustee in these cases -- not only for the three SPV Debtors that are not the subject of Cayman insolvency proceedings, but the three Limited Debtors that are the subject of Cayman proceedings as well. "I have no faith that the Debtors' current managers are capable of acting independently and in the best interests of the estates, or in objectively investigating themselves. Nor can I have confidence that stakeholders' best interests could be achieved without quick and nondebatable access to the U.S. legal system, in connection with investigation and, if appropriate, litigation that would be principally, if not totally, in the U.S. In the interests of stakeholders and the integrity of the bankruptcy process, an independent fiduciary must be appointed. While I can (and hereafter do) consider the alternative of allowing the JOLs alone to act, I find that cause has been shown to appoint a chapter 11 trustee," Judge Gerber said. Judge Gerber acknowledged that there is overlapping, and in some respects conflicting, jurisdiction of the U.S. and Cayman courts. In this regard, Judge Gerber said he will grant relief from the stay to allow the JOLs to stay in place and allow the existing Cayman proceeding to continue -- and, if necessary or desirable, to entertain one or more similar proceedings for the three Debtors not already the subject of the proceedings in that court -- subject to the entry of a satisfactory protocol governing the proceedings in the two nations. Judge Gerber also said, "it appears at this juncture to be desirable and in some respects essential to give the chapter 11 trustee responsibilities for U.S. investigation, issuance of U.S. subpoenas and U.S. document demands; any U.S. litigation that turns out to be warranted, and any acts that otherwise need to be accomplished within the U.S. But it's less obvious that the chapter 11 trustee would need to do anything else, and I have no particular preference with respect to anything else. Ultimately, it's best for the stakeholders to discuss with the fiduciaries what these estates' needs and concerns are, and what division of responsibilities most effectively meets them and in the most cost- effective manner." About Soundview Elite Six mutual funds originally created by Citco Group of Cos., including Soundview Elite Ltd., filed petitions for Chapter 11 protection on Sept. 24, 2013, in Manhattan to avoid undergoing bankruptcy liquidation in the Cayman Islands, where they are incorporated. The funds are Soundview Elite (Bankr. S.D.N.Y. Case No. 13-13098) Soundview Premium, Ltd. (Case No. 13-13099); Soundview Star Ltd. (Case No. 13-13101); Elite Designated (Case No. 13-13102); Premium Designated (Case No. 13-13103); and Star Designated (Case No. 13-13104). The petitions were signed by Floyd Saunders as corporate secretary. SoundView Elite Ltd. and two similarly named funds were the target of a winding-up petitions in the Cayman Islands filed in August by Citco, which had sold its interest in the funds' manager years before. An investor, who was removed from the funds' board in June, filed a different winding-up petition in August, aimed at three funds created later to hold illiquid assets. Soundview Elite estimated assets and debts of at least $10 million. The funds said in a court filing their total cash assets of about $20 million are held in the U.S., where the funds are managed. Court papers list the funds' total assets as $52.8 million, against debt totaling $28 million. Judge Robert E. Gerber presides over the U.S. cases. Warren J. Martin, Jr., Esq., Mark J. Politan, Esq., Terri Jane Freedman, Esq., and Rachel A. Segall, Esq., at Porzio, Bromberg & Newman, PC, serve as the Debtors' counsel. CohnReznick LLP serves as financial advisor. Peter Anderson and Matthew Wright, as Joint Official Liquidators of the Debtors, are represented in the U.S. proceedings by John A. Pintarelli, Esq., James J. Beha, II, Esq., William H. Hildbold, Esq., at Morrison & Foerster LLP. SOUTH LAKES DAIRY: Blakeley Firm Wins $86,600 in Fees ----------------------------------------------------- Bankruptcy Judge W. Richard Lee granted the third and final application for compensation and reimbursement of expenses filed by the law firm Blakeley & Blakeley LLP, which represented the official committee of unsecured creditors in the chapter 11 case of South Lakes Dairy Farm. The Debtor had objected to the Fee Application. Specifically, the court will allow Blakeley's compensation in the amount of $85,642.50 and reimbursement of expenses in the amount of $963.73, which together equals $86,606.23. Blakeley has voluntarily reduced its initial request for compensation ($88,247.50) by $2,605. Additionally, as offered by Blakeley, fees for defending the Final Application and for other services rendered for the Committee after September 22, 2013, have been waived. Taking into account the $41,123.01 already paid by the Debtor, it appears that Blakeley is entitled to an administrative claim in the amount of $45,483.22. Ronald A. Clifford, Esq., appeared on behalf of Blakeley & Blakeley LLP. Jacob L. Eaton, Esq., appeared on behalf of the Debtor. A copy of the Court's Jan. 22, 2014 Memorandum Decision is available at http://is.gd/aJ2pnZfrom Leagle.com. About South Lakes Dairy South Lakes Dairy Farm is a California partnership engaged in the dairy cattle and milking business. The partnership filed a bare- bones Chapter 11 petition (Bankr. E.D. Calif. Case No. 12-17458) in Fresno, California on Aug. 30, 2012. The Debtor said it has $1.97 million in accounts receivable charged to Dairy Farmers of America on account of milk proceeds, and that it has cattle worth $12.06 million. The farm owes $12.7 million to Wells Fargo Bank on a secured note. The Debtor disclosed, in an amended schedules, $25,281,583 in assets and $26,193,406 in liabilities as of the Chapter 11 filing. The Debtor disclosed $19.5 million in assets and $25.4 million in liabilities in a prior iteration of the schedules. Bankruptcy Judge W. Richard Lee presides over the case. Jacob L. Eaton, Esq., at Klein, DeNatale, Goldner, Cooper, Rosenlieb & Kimball, LLP, in Bakersfield, Calif., represents the Debtor as counsel. The Debtor tapped A&M Livestock Auction, Inc., to auction livestock. The U.S. Trustee for Region 17 appointed seven creditors to serve in the Official Committee of Unsecured Creditors. The creditors appointed to the Committee are Cal-By Products; Center for Race, Poverty and the Environment; Gillespie Ag Service; Pitigliano Farms; Seley & Company; Troost Hay Sales; and Western Milling, LLC. Ronald A. Clifford, Esq., at Blakley & Blakeley LLP, represents the Creditors Committee as counsel. On Oct. 1, 2013, the U.S. Bankruptcy Court for the Eastern District of California entered an order confirming South Lakes Dairy Farm's Plan of Reorganization dated Sept. 17, 2013. SR REAL ESTATE: Lenders Object to Bid to Vacate SARE Order ---------------------------------------------------------- Jeffrey J. Goodrich, Esq., at Goodrich & Associates, on behalf of the first priority lenders objected to SR Real Estate Holdings LLC's emergency motion to vacate or stay the Bankruptcy Court's order declaring the Debtor's estate as Single Asset Real Estate, stating that the Debtor undisputedly failed to timely request any extension of the 90-day deadline. The Debtor is seeking relief from the Nov. 10, 2013 order determining the Debtor's case as SARE. The first priority lenders said that, notwithstanding the Court's prior SARE determination in "a case involving the very same parties and the very same property," the Debtor's Voluntary Petition falsely claimed that the nature of the Debtor's business is other, rather than a "Single Asset Real Estate" case. Accordingly, the first priority lenders, lead by DACA 2010L, L.P. and Sargent Ranch Management Company, LLC, were forced to move the Court for a second SARE determination. About SR Real Estate Holdings SR Real Estate Holdings, LLC, owner of 14 parcels of real property totaling 6,400 acres straddling Santa Cruz and Santa Clara counties, filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-54471) in San Jose, California, on Aug. 20, 2013. Judge Hon. Peter W. Bowie oversees the case. Victor A. Vilaplana, Esq., and Matthew J. Riopelle, Esq., at Foley and Lardner, have been tapped as proposed counsel to the Debtor. The Debtor disclosed $15,016,593 in assets and $548,907,938 in liabilities as of the Chapter 11 filing. This is the third bankruptcy filed with respect to the property. The prior owner, Sargent Ranch, LLC, filed Chapter 11 cases in January 2010 (Bankr. S.D. Cal. Case No. 10-00046-PB) and November 2011 (Bankr. S.D. Cal. Case No. 11-18853). The second bankruptcy case was dismissed in February 2012. STANFORD GROUP: Receiver Asks High Court to Clarify Standing ------------------------------------------------------------ Law360 reported that court-appointed receiver for the estate of convicted fraudster Robert Allen Stanford urged the U.S. Supreme Court to weigh in on whether a federal receiver has standing to assert claims on behalf of the receivership's creditors, saying lower courts have long been mired in confusion over the issue. According to the report, Ralph S. Janvey, who is seeking to recover funds tied to Stanford's $7 billion Ponzi scheme, asked the high court in his petition for writ of certiorari to reverse the Fifth Circuit's August ruling. About Stanford Group The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States (U.S.) authorities in early 2009. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management served more than 70,000 clients in 140 countries. On Feb. 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The case in district court was Securities and Exchange Commission v. Securities Investor Protection Corp., 11-mc-00678, U.S. District Court, District of Columbia (Washington). The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money- laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. STAR DYNAMICS: Can Employ Allen Kuehnle as Bankruptcy Attorneys --------------------------------------------------------------- STAR Dynamics Corporation sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Ohio, Eastern Division, to employ Allen Kuehnle Stovall & Neuman LLP as attorneys. Thomas R. Allen, Esq. -- allen@aksnlaw.com -- and Richard K. Stovall, Esq. -- stovall@aksnlaw.com -- will serve as case attorneys for Debtor. Mr. Allen and Mr. Stovall's normal and customary hourly rates are $400 and $350. In addition, the following AKSN attorneys may perform professional services in this case: J. Matthew Fisher, Esq. -- fisher@akslaw.com $300 Daniel J. Hunter, Esq. -- hunter@aksnlaw.com $315 Rick L. Ashton, Esq. -- ashton@aksnlaw.com $250 Erin L. Pfefferle, Esq. -- pfefferle@aksnlaw.com $205 Jeffrey R. Corcoran, Esq. -- corcoran@aksnlaw.com $205 The Debtors will also reimburse the firm for any necessary out-of- pocket expenses. Mr. Stovall, a partner at AKSN, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. According to Mr. Stovall, AKSN's representation of the Debtor began on or about late November 2013. Since that time AKSN has received the following payments from Debtor as and for payments for services rendered and reimbursement of expenses: * December 9, 2013 - $100,000 * December 10, 2013 - $14,118 As of the Petition Date, in accordance with the terms of the Debtor's engagement of AKSN, the sum of $85,882 remained on deposit in AKSN's trust account as and for a retainer balance. STAR Dynamics Corp., a developer and provider of radar systems for the military, filed a Chapter 11 petition on Dec. 10, 2013, in Columbus, Ohio, in part to halt a lawsuit by BAE Systems Plc. The case is In re STAR Dynamics Corp., 13-59657, U.S. Bankruptcy Court, Southern District of Ohio (Columbus). STAR DYNAMICS: May Hire Womble Carlyle as Special Counsel --------------------------------------------------------- STAR Dynamics Corporation sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Ohio, Eastern Division, to employ Womble Carlyle Sandridge & Rice LLP as special counsel for the purpose of advising and representing the Debtor with respect to all litigation matters relative to BAE Systems Technology Solutions & Services Inc. and with respect to the completion of prepetition patent work. The following professionals are anticipated to provide services to the Debtor: Michael J. Sullivan, Esq. -- MSullivan@wcsr.com $545 Russell A. Williams, Esq. -- rwilliams@wcsr.com $330 Julie E. Adkins, Esq. -- jadkins@wcsr.com $270 Louis T. Isaf, Esq. -- lisaf@wcsr.com $650 Nanda K. Alapati, Esq. -- nalapati@wcsr.com $565 The firm will also be reimbursed for any necessary out-of-pocket expenses. Mr. Sullivan, a partner at Womble Carlyle Sandridge & Rice LLP, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. STAR Dynamics Corp., a developer and provider of radar systems for the military, filed a petition for Chapter 11 protection on Dec. 10 in Columbus, Ohio, in part to halt a lawsuit by BAE Systems Plc. The case is In re STAR Dynamics Corp., 13-59657, U.S. Bankruptcy Court, Southern District of Ohio (Columbus). STAR DYNAMICS: Files Schedules of Assets and Liabilities -------------------------------------------------------- Star Dynamics Corporation., filed with the Bankruptcy Court for the Southern District of Ohio its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $12,138,334 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $15,777,300 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $34,963,043 ----------- ----------- TOTAL $12,138,334 $50,740,343 STAR Dynamics Corp., a developer and provider of radar systems for the military, filed a petition for Chapter 11 protection on Dec. 10 in Columbus, Ohio, in part to halt a lawsuit by BAE Systems Plc. The case is In re STAR Dynamics Corp., 13-59657, U.S. Bankruptcy Court, Southern District of Ohio (Columbus). STEPHEN ENGLAND: Ohio Appeals Court Flips Ruling in Adams Suit -------------------------------------------------------------- The Court of Appeals of Ohio, Second District, Montgomery County, reversed a March 1, 2013 trial court judgment against Brian W. Adams on his complaint seeking to foreclose on residential real estate to satisfy a domesticated foreign judgment. "We reverse the trial court's judgment insofar as it precluded him from foreclosing and remand the cause for further proceedings," the Appeals Court said. According to the Appeals Court's opinion, this modern "Gordian Knot" involves the financial entanglements of Defendant Stephen England, a retired physician and his deceased wife, Katherine England and a piece of real estate located in Washington Township, Montgomery County, Ohio. Further complicating the matter is the introduction of a certificate of judgment that was recorded against this same piece of property by Plaintiff Wilson Adams after Adams obtained a default judgment against Dr. and Mrs. England in Arizona. Other threads intertwined in this matter and creating confusion are the issue of Defendant Stephen England's bankruptcy and the effect its discharge had upon his debts, the death of Dr. England's wife and the death of Wilson Adams. Stephen England filed a Chapter 11 bankruptcy case in the Federal Court for the Southern District of Ohio in 1994. The case is, BRIAN W. ADAMS, Plaintiff-Appellant/Cross-Appellee, v. BANKERS TRUST COMPANY, et al., Defendants-Appellees/Cross- Appellant, Appellate Nos. 25703, 25706 2014-Ohio-231, pending before the Court of Appeals of Ohio, Second District, Montgomery County. A copy of the Appeals Court's Jan. 24, 2014 decision is available at http://is.gd/Q8LP4Ffrom Leagle.com. Brian W. Adams is represented by: Joseph E. Rueth, Esq. Edward M. Smith, Esq. NOLAN, SPROWL & SMITH 500 Performance Place 109 North Main Street Dayton, Ohio 45402 Silhouettes, LTD., a defendant in the case, is represented by: Alan A. Biegel, Esq. ALAN A. BIEGEL CO., LPA 5975 Kentshire Drive Kettering, Ohio 45440 - and - Sue Seeberger, Esq. 5972 Kentshire Drive, Suite D Dayton, Ohio 45440, STEPHEN YELVERTON: Settlement Order Won't Be Stayed Pending Appeal ------------------------------------------------------------------ Bankruptcy Judge S. Martin Teel, Jr., denied Stephen Thomas Yelverton's "Motion to Stay the Effectiveness of the Bankruptcy Decisions Which Are Now on Appeal in Case No. 1:12-cv-1539," which seeks a stay pending appeal of orders relating to the approval of a settlement. Mr. Yelverton is a debtor in a case under chapter 7 of the Bankruptcy Code. Wendell W. Webster serves as Chapter 7 trustee of the estate. Mr. Yelverton's assets included his shares of stock in Yelverton Farms, Ltd., and claims he asserted in a civil action in the United States District Court for the Eastern District of North Carolina, and in adversary proceedings before the Bankruptcy Court, against Yelverton Farms, Phyllis Edmundson, Charles Edmundson, Deborah Marm and Walter Marm, Jr. Pursuant to orders issued in June and August 2012, the court approved a full and complete settlement and release of all claims asserted by or against the debtor and the defendants in connection with the debtor's ownership interest in Yelverton Farms. The settlement provides for the transfer of the debtor's stock to the defendants and the mutual release of all claims, in consideration of a cash payment to the bankruptcy estate in the amount of $110,000. On August 13, 2012, Mr. Yelverton appealed the orders relating to the approval of the settlement, and the appeal is Civil Action No. 12-1539 in the District Court. After the Bankruptcy Court entered the order approving the settlement on June 19, 2012, and after Mr. Yelverton filed a motion to vacate that order on July 3, 2012, he filed a series of amendments to his Schedule C (Property Claimed as Exempt) to claim that the litigation claims and the stock in Yelverton Farms are exempt. Mr. Webster objected to those claims of exemption, and the court sustained the objections except as to an exemption under 11 U.S.C. Sec. 522(d)(5) of $11,200. Mr. Yelverton appealed the orders disposing of the trustee's objections to the claimed exemptions, and the appeal is Civil Action No. 13-454 in the District Court. Mr. Yelverton seeks a stay of the orders approving the settlement (the subject of Civil Action No. 12-1539) pending the disposition of the appeal in Civil Action No. 13-454 in which he seeks a reversal of the Bankruptcy Court's orders sustaining Mr. Webster's objections to Mr. Yelverton's attempt to exempt the shares in Yelverton Farms and the claims against the defendants. Mr. Yelverton contends that the exemptions of those assets will be upheld on appeal and will be retroactively effective as of the commencement of the bankruptcy case, such that the assets are not property of the estate that could be the subject of a settlement. Judge Teel's ruling is outlined in a Jan. 23, 2014 Memorandum Decision and Order available at http://is.gd/OwmlSAfrom Leagle.com. Among others, Judge Teel said the bankruptcy case has been pending for a long time due in large part to Mr. Yelverton's pursuing frivolous claims and arguments in the bankruptcy court and on appeal. "Due to Yelverton's litigiousness, the $110,000 settlement will likely largely or exclusively be used to pay administrative claims incurred in the case. Staying consummation of the settlement would delay the trustee's receipt of the $110,000, and that in turn is prejudicial to the entities entitled to receive whatever estate funds will be available for distribution. This prejudice weighs against granting a stay pending appeal. Even if there were no such prejudice, or if the prejudice is minimal (because interest earned on the $110,000 at today's prevailing interest rates would be minimal), Yelverton has not made an adequate showing on the other factors to warrant granting a stay," Judge Teel said. Stephen T. Yelverton is the sole member of the Yelverton Law Firm, PLLC. He filed for Chapter 11 bankruptcy protection (Bankr. D. D.C. Case No. 09-00414) on May 14, 2009. Judge S. Martin Teel, Jr., on Aug. 20, 2010, denied confirmation of the Debtor's plan and converted the case to Chapter 7. T-L BRYWOOD: Feb. 27 Hearing on Continued Cash Collateral Use ------------------------------------------------------------- The Hon. J. Philip Klingeberger of the U.S. Bankruptcy Court for the Northern District of Indiana will convene a hearing on Feb. 27, 2014, at 9:30 a.m., to consider T-L Brywood LLC's motion to use cash collateral in which RCG-KC Brywood LLC, successor to The Private Bank and Trust Company, asserts an interest. The Court, in its order, stated that the parties had been unable to resolve the concerns which caused the creditor to file the so- called Record No. 283 motion for hearing, and that a final hearing with respect to the request is necessary. The parties also reported that they had arrived at an agreement concerning contingent interim use of cash collateral pending determination at the foregoing final hearing, which will be filed of record in the near future. The Debtor, on Jan. 7, filed a proposed order on interim cash collateral use. Additionally, the Court said the parties may pursue discovery with respect to matters to be addressed at the Feb. 27 hearing. As reported in the Troubled Company Reporter on Dec. 30, 2013, as adequate protection, the lender will be granted valid, perfected, enforceable security interests in and to the Debtor's post- petition assets, to the extent and priority of its alleged prepetition liens, to the extent of any diminution in the value of the assets. About T-L Brywood T-L Brywood LLC filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 12-09582) on March 12, 2012. The case was transferred to the U.S. Bankruptcy Court for the Northern District of Indiana (Case. 13-21804) on May 14, 2013. T-L Brywood owns and operates a commercial shopping center known as the "Brywood Centre" -- http://www.brywoodcentre.com/-- in Kansas City, Missouri. The Property encompasses roughly 25.6 acres and comprises 183,159 square feet of retail space that is occupied by 12 operating tenants. The occupancy rate for the Property is approximately 80%. The Debtor and lender The PrivateBank and Trust Company reached an impasse over the terms and conditions of another extension of a mortgage loan on the Property. As a result, the Debtor filed the Chapter 11 case to protect the Property from foreclosure while the Debtor formulates an exit strategy from the reorganization case. As of the Petition Date, no foreclosure relating to the Property had been filed by the Lender. Judge Donald R. Cassling oversees the case. The Debtor is represented by David K. Welch, Esq., Arthur G. Simon, Esq., and Jeffrey C. Dan. Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtor disclosed total assets of $16,666,257 and total liabilities of $13,970,622 in its schedules. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. PrivateBank is represented by William J. Connelly, Esq., at Hinshaw & Culbertson LLP. No committee of creditors was appointed by the U.S. Trustee. TAMINCO GLOBAL: S&P Assigns 'BB-' Rating to Sr. Secured Facilities ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB-' issue rating and '2' recovery rating to Taminco Global Chemical Corp.'s senior secured credit facilities consisting of a $200 million revolving credit facility, a $386.9 million senior secured term loan B, and a EUR185.6 million term loan B. The '2' recovery rating indicates S&P's expectation for substantial recovery (70% to 90%) in the event of a payment default. Ratings are based on preliminary terms and conditions. At the same time, S&P affirmed its existing ratings, including its 'B+' corporate credit rating, on the company. The outlook is stable. S&P affirmed its 'B-' issue rating and '6' recovery rating on the company's $400 million second-priority notes. The '6' recovery rating indicates S&P's expectation for negligible (0% to 10%) recovery for second-lien creditors in the event of a payment default. S&P will withdraw its 'BB-' issue rating and '2' recovery rating on the company's existing first-lien senior secured facility after the proposed transaction closes. "Our ratings on Taminco Global Chemical Corp. reflect our assessments of the company's 'highly leveraged' financial risk profile and its 'satisfactory' business risk profile as a market leading producer of alkylamines and alkylamine derivatives in a niche global market," said Standard & Poor's credit analyst Paul Kurias. "The stable outlook reflects our assessment that the EBITDA and operating cash flow the company generates after the acquisition will meaningfully offset the increase in debt incurred to fund it, so that leverage credit metrics do not materially change. We believe that improving economic conditions especially in Europe and the U.S., capacity additions, and growing end-market demand should support strong and sustainable profitability over the next several quarters. Importantly, we assume that management will support credit quality by maintaining a prudent approach to funding growth and shareholder rewards. Our ratings do not currently assume a decline in the financial sponsor's ownership to less than 40% over the next 12 months," S&P added. S&P could lower the ratings if additional debt-funded acquisitions or shareholder rewards weaken credit metrics meaningfully over the next year. S&P could lower ratings if management actions or unexpected earnings weakness such as a decline in EBITDA margins to levels below 18% and revenue contraction cause the ratio of total debt to EBITDA to exceed 6x without prospects for improvement over the next 12 months. The company's private-equity ownership and S&P's view of its financial policies currently constrain the ratings. S&P could reassess and raise the ratings if the sponsor's ownership declines to less than 40% and the company in S&P's view is committed to maintaining credit metrics appropriate for a higher rating. THELEN LLP: Trustee, Robinson & Cole Settle Clawback Suit --------------------------------------------------------- Law360 reported that a New York federal judge agreed to discontinue Thelen LLP trustee Yann Geron's clawback suit against Robinson & Cole LLP after the two notified the court that the dispute had been settled. According to the report, Howard P. Magaliff, counsel for Geron, wrote to District Judge William H. Pauley III on Monday to advise him that the two parties had settled the case "subject to documentation." Judge Pauley gave him and Christopher Major, defendant's counsel, 30 days to file the settlement agreement with the court. The case is Yann Geron v. Robinson & Cole LLP et al., Case No. 1:11-cv-08967 (S.D.N.Y.). About Thelen LLP Thelen LLP, formerly known as Thelen Reid Brown Raysman & Steiner -- http://thelen.com/-- is a bi-coastal American law firm in process of dissolution. It was formed as a product between two mergers between California and New York-based law firms, mostly recently in 2006. Its headcount peaked at roughly 600 attorneys in 2006, and had 500 early in 2008, with offices in eight cities in the United States, England and China. In October 2008, Thelen's remaining partners voted to dissolve the firm. As reported by the Troubled Company Reporter on Sept. 22, 2009, Thelen LLP filed for Chapter 7 protection. The filing was expected due to the timing of a writ of attachment filed by one of Thelen's landlords, entitling the landlord to $25 million of the Company's assets. The landlord won approval for that writ in June 2009, but Thelen could void the writ by filing for bankruptcy within 90 days of that court ruling. Thelen, according to AM Law Daily, has repaid most of its debt to its lending banks. VAUGHAN COMPANY: Suit vs. Dr. Eberhard Goes to Trial ---------------------------------------------------- Bankruptcy Judge Robert H. Jacobvitz granted, in part, and denied, in part, the "Motion for Partial Summary Judgment as the Timing and Amount of Transfers" filed by the Chapter 11 Trustee of the Vaughan Company Realtors in the lawsuit, JUDITH A. WAGNER, Chapter 11 Trustee of the bankruptcy estate of the Vaughan Company, Realtors, Plaintiff, v. KENNETH J. EBERHARD, et al, Defendants, Adv. Proc. No. 11-1226 (Bankr. D.N.M.). A copy of the Court's Jan. 23, 2014 Memorandum Opinion is available at http://is.gd/aBbWS1from Leagle.com. Kenneth Eberhard invested a total of $445,500 in VCR's promissory note program. Dr. Eberhard, through his IRA, received $177,902.30 from VCR within two years before the Petition Date and $369,469.29 from VCR within four years before the Petition Date. The Trustee has also established that Dr. Eberhard, through his IRA, received $280,767.79 more from VCR than he invested. The Court held that the Trustee has established her claims under 11 U.S.C. Sec. 548 and New Mexico's version of the Uniform Fraudulent Transfer Act, N.M.S.A. 1978 sections 56-10-18(A)(1) and (2). The Court, however, denied the Trustee's request for money judgment on those claims and will address any remaining defenses at trial. The Vaughan Company Realtors filed for Chapter 11 protection on Feb. 22, 2010 (Bankr. N.M. Case No. 10-10759). George D. Giddens, Jr., Esq., represents the Debtor in its restructuring efforts. The Company estimated both assets and debts of between $1 million and $10 million. Judith A. Wagner was appointed as Chapter 11 Trustee. Mr. Vaughan filed a separate Chapter 11 petition (Bankr. D. N.M. Case No. 10-10763) on Feb. 22, 2010. The case was converted to a chapter 7 proceeding on May 20, 2010. Yvette Gonzales is the duly appointed trustee of the Chapter 7 estate. VAUGHAN COMPANY: Suit vs. Craig Fenton et al. Goes to Trial ----------------------------------------------------------- Bankruptcy Judge Robert H. Jacobvitz granted, in part, and denied, in part, the motions for summary judgment filed by Judith Wagner, Chapter 11 Trustee of the bankruptcy estate of the Vaughan Company Realtors, in her lawsuit, JUDITH A. WAGNER, Chapter 11 Trustee Of the bankruptcy estate of the Vaughan Company, Realtors, Plaintiff, v. CRAIG FENTON, CHERIE FENTON, and NORMAN FENTON, Defendants, Adv. Proc. No. 12-1116 (Bankr. D. N.M.). The Court ruled that the Trustee has established her claims under 11 U.S.C. Sections 547 and 548 and New Mexico's version of the Uniform Fraudulent Transfer Act ("UFTA"), N.M.S.A. 1978 Sections 56-10-18(A)(1) and (2), against the Defendants, who were investors into VCR's promissory note program. The Court, however, declines the Trustee's request for money judgment until the Defendants' affirmative defenses have been examined at trial. Craig Fenton received $121,862.88 from VCR within two years before the Petition Date and $123,145.07 from VCR within four years before the Petition Date; Cherie Fenton received $63,994.72 from VCR within two years before the Petition Date and $77,229.12 from VCR within four years before the Petition Date; and Norman Fenton received $87,574.73 from VCR within two years before the Petition Date and $128,035.01 from VCR within four years before the Petition Date. A copy of the Court's Jan. 22, 2014 Memorandum Opinion is available at http://is.gd/rYFajHfrom Leagle.com. The Vaughan Company Realtors filed for Chapter 11 protection on Feb. 22, 2010 (Bankr. N.M. Case No. 10-10759). George D. Giddens, Jr., Esq., represents the Debtor in its restructuring efforts. The Company estimated both assets and debts of between $1 million and $10 million. Judith A. Wagner was appointed as Chapter 11 Trustee. Mr. Vaughan filed a separate Chapter 11 petition (Bankr. D. N.M. Case No. 10-10763) on Feb. 22, 2010. The case was converted to a chapter 7 proceeding on May 20, 2010. Yvette Gonzales is the duly appointed trustee of the Chapter 7 estate. VELTI INC: Changes Name and Case Caption Following Sale ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has authorized Velti Inc., et al., to change the name and case caption in relation to the sale of the Debtors' mobile marketing business unit (MMBU). The Debtors, the Official Committee of Unsecured Creditors, and GSO MMBU Acquisition LLC had conferred and agreed that after change in the Debtors' corporate names, the caption of the Debtors' jointly administered cases will be modified to reflect the changes to the names of the Debtors. The changes will reflect as: Debtors Changed Name ------- ------------ Air2Web, Inc. AW Liquidating Inc. Air2Web Interactive, Inc. AWI Liquidating Inc. Velti Inc. VI Liquidating Inc. Velti North America Holdings, Inc. VNAH Liquidating Inc. Velti US Holdings, Inc. VUSH Liquidating Inc. 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. The Company, a San Francisco-based unit of Velti Plc, listed assets of as much $50 million and debt of as much as $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. Velti Inc. disclosed $94,993,551 in assets and $175,089,448 in liabilities as of the Chapter 11 filing. 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 $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. XG TECHNOLOGY: Posts $15.93-Mil. Net Loss in Q3 Ended Sept. 30 -------------------------------------------------------------- xG Technology, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $15.93 million on $33,000 of revenues for the three months ended Sept. 30, 2013, compared to a net loss of $3.25 million for the same period in 2012. The Company's balance sheet at Sept. 30, 2013, showed $24.22 million in total assets, $8.22 million in total liabilities, and stockholders' equity of $16 million. "As of September 30, 2013, the Company had negative working capital of approximately $2,593,000 and an accumulated deficit of approximately $147,789,000. This and other factors raise substantial doubt about the Company?s ability to continue as a going concern," the Company stated in the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/aK6foQ Sarasota, Florida-based xG Technology, Inc. develops cognitive radio network system xMax(R) that aims to enhance wireless broadband communication for military, commercial and other purposes. XL-ID SOLUTIONS: Majority of Creditors Approve Proposal Under BIA ----------------------------------------------------------------- XL-ID Solutions Inc. (formerly known as Excellium Inc.), a Tier II issuer listed on the TSX Venture Exchange, on Jan. 27 disclosed that at the meeting of its creditors which took place on January 24, 2014, the statutory majority of creditors approved the proposal submitted by the Corporation pursuant to the Bankruptcy and Insolvency Act (Canada), in a proportion of 93,6% in number and 89,5% in value of the creditors who filed a proof of claim and voted on the proposal. XL-ID had submitted a proposal to its creditors on January 3, 2014 under BIA. Under the terms of the proposal, an amount of $275,000 will be made available to Raymond Chabot Inc., as Trustee, for distribution to creditors in the manner set forth in the proposal, less an amount not to exceed $75,000 to cover fees and expenses of the proposal. The proposal also provides for the reorganization of XL-ID's share capital pursuant to which its outstanding common shares will be cancelled for no consideration and XL-ID's majority shareholder and only secured creditor, General Financial Corporation, will remain as the sole shareholder. Following the approval of the proposal by its creditors, XL-ID will now seek a final order from the Superior Court of Quebec approving the proposal in the coming days. Following these steps, XL-ID will be delisted from the Exchange and will apply to cease to be a reporting issuer. XL-ID -- http://www.XL-ID.ca-- is a security company specialized in biometrics identity systems, proactive security management and in the integration of security products for the institutional and industrial markets. XL-ID is active in electronic identification, comprising background checks, biometric identification and management of large events and summits. XL-ID's common shares are listed on the Exchange under the trading symbol "XLM". XTREME POWER: Section 341(a) Meeting Scheduled for Feb. 26 ---------------------------------------------------------- A meeting of creditors in the bankruptcy case of Xtreme Power Inc. will be held on Feb. 26, 2014, at 10:00 a.m. at Austin Room 118. Creditors have until May 27, 2014, to submit their proofs of claim against the Debtor. 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. About Xtreme Power Xtreme Power focuses on the design, engineering, installation, and monitoring of integrated energy storage systems for power generators, grid operators and commercial and industrial end users, among others. Xtreme Power claims to be one of the world's leading grid-scale power control technology provider capable of integrating the full spectrum of energy generation sources and battery technologies. Xtreme Power Inc. and two affiliates filed Chapter 11 bankruptcy petitions (Bankr. W.D. Tex. Lead Case No. 14-10096) in Austin, Texas, on Jan. 22, 2014. Judge Christopher H. Mott presides over the case. The Debtors have tapped Jordan Hyden Womble & Culbreth & Holzer, P.C., as bankruptcy attorneys, Baker Botts L.L.P. as special counsel, Gordian Group, LLC, as investment banker and financial advisor. Xtreme Power Inc. estimated assets of at least $10 million and liabilities of at least $50 million. * Cohen Wanted Trades Hidden From SAC Employees ----------------------------------------------- Christopher M. Matthews, writing for The Wall Street Journal, reported that when SAC Capital Advisors LP began unloading a massive position in two pharmaceutical companies in July 2008, Steven A. Cohen didn't want anyone to know, including his own employees, the firm's top trader told jurors on Jan. 28. According to the report, the trader, Phillipp Villhauer, testified that SAC's billionaire founder directed him to limit the "visibility" of the trading as much as possible. Mr. Villhauer said he followed his boss's instructions to the letter, shielding a set of trades now at the heart of the insider-trading trial of former SAC portfolio manager Mathew Martoma from investors inside and outside the hedge fund. The effort to hide trades isn't illegal, the report said. In fact, it is common among institutional investors. But prosecutors say some of the methods used were "abnormal," and help support their allegations that Mr. Martoma's intentions were not "purely benign." "[S]imply because the means used to hide the sales of Elan internally were lawful and could serve valid ends . . . does not mean that such techniques could not simultaneously serve more nefarious ends, such as minimizing the risk that SAC Capital's trading would be flagged by a counterparty as suspicious," prosecutors wrote in a court filing last month, the report cited. On cross-examination by Mr. Martoma's lawyers, Mr. Villhauer testified that SAC frequently obscured its positions from other investors to avoid any "slippage" -- that is, preventing other entities from learning that SAC was selling large volumes, thereby causing prices to drop, the report further related. * SAC's Counsel Testifies at Trial in Unexpected Move by Defense ---------------------------------------------------------------- Alexandra Stevenson, writing for The New York Times' DealBook, reported that Peter Nussbaum, the general counsel of SAC Capital Advisors, took the witness stand on Jan. 28 in a bold and surprising move by the defense at the insider trading case of Mathew Martoma, a former SAC trader. According to the report, the move came after the government rested its case and after three weeks of testimony from 20 witnesses. The defense's case is expected to take considerably less time. By calling on Mr. Nussbaum, the most senior employee at SAC to testify in the insider trading case, the defense could open the door for prosecutors to more closely scrutinize compliance at the multibillion-dollar hedge fund, which the government last year accused of being a "veritable magnet for market cheaters," the report said. Mr. Martoma has been charged with undertaking one of the most lucrative insider trading schemes on record, and his case is at the heart of a decade of investigations into SAC, which resulted in the hedge fund pleading guilty to five counts of wire and securities fraud last November, the report related. SAC has agreed to pay a $1.2 billion penalty. It was Mr. Nussbaum who pleaded guilty on behalf of SAC. But Mr. Nussbaum, who has overseen all legal and compliance affairs at SAC for nearly 14 years, could also help to bolster the defense's case that Mr. Martoma did nothing wrong and that the big trades at the center of the case against him were influenced by SAC's founder, Steven A. Cohen, the report further related. * Hedge Funds Sniff for Even Bigger Payouts From Banks ------------------------------------------------------ Peter Eavis, writing for The New York Times' DealBook, reported that one of the biggest bets on Wall Street rests on a theory that also deeply unsettles Wall Street. According to the report, the provocative theory is that the big banks have not paid enough in recent legal settlements to make amends for their role in stoking the subprime housing boom and bust. Hedge funds, contending that the banks have so far underpaid, have bought subprime mortgage-backed bonds, which they hope will rise in value. That would happen if Wall Street banks ultimately pay out a lot more money to settle other, more stringent litigation tied to these bonds. And the hedge funds holding the bonds may often be behind these more demanding lawsuits. The notion that the big banks are getting off lightly in these settlements might seem stretched, the report related. After all, in recent months, several large banks have agreed to deals with government authorities and alliances of private investors that carry substantial penalties. The $13 billion that the Justice Department extracted from JPMorgan Chase last year was a record. Around the same time, JPMorgan entered into a $4.5 billion settlement with a range of prominent investment firms, BlackRock and Pimco among them, over allegations that it packaged mortgages into bonds before the financial crisis that didn't meet certain agreed-upon standards, the report said. But as large as those penalties appear, some hedge funds believe they may have been too small for the abuses that they say actually took place, the report related. After digging deep into the pools of loans that back the bonds, the hedge funds assert that, in the case of certain securities, the banks' missteps were more widespread than publicized. They argue that the big-name investment firms could have gotten more out of their JPMorgan settlement. To the hedge funds, it is as if an oil producer had to pay compensation only for the most obvious destruction caused by an oil spill, allowing it to escape its liability for large-scale damage that was not immediately obvious. * Hedge Funds Assets Increase 17 Percent to Record $2.63 Trillion ----------------------------------------------------------------- Chris Larson, writing for Bloomberg News, reported that hedge-fund assets increased by 17 percent last year, reaching a record $2.63 trillion, according to Hedge Fund Research Inc. Bloomberg related that global assets rose by $376 billion, including $63.7 billion in net inflows from investors and $312 billion in investment gains, the Chicago-based data provider said in a report on Jan. 22. The fourth quarter was the sixth in a row that the industry saw a growth in assets, it said. Investors poured $29.6 billion into event-driven strategies, which include activist-oriented hedge funds such as Daniel Loeb's Third Point LLC and Bill Ackman's Pershing Square Capital Management LP, the report said. Event-driven funds had an average return of 12 percent in 2013 compared with a 9.2 percent gain for all hedge funds, HFR said, the report added. The category is "likely to continue to see strong flows" through at least the first half of 2014, HFR President Ken Heinz said at a press briefing in London on Jan. 22. Long-short equity managers, who take bets on both rising and falling stocks, and global macro managers should see more favorable conditions this year, Heinz said, the report further related. Macro strategies invest in stocks, bonds, currencies and other instruments based on expected trends in global markets, and many were hampered in recent years by central banks' debt repurchases, known as quantitative easing. * New Medicare Funding Cuts to Spur Provider Closures & Job Loss ---------------------------------------------------------------- The Partnership for Quality Home Healthcare on Jan. 27 disclosed that the December jobs report from the Bureau of Labor Statistics (BLS) reflects the largest recorded loss of jobs experienced by the nation's home health community in more than a decade. In total, 3,700 jobs were lost in December 2013, in apparent anticipation of the unprecedented 14 percent cut to the Medicare home health benefit, which went into effect on January 1. Prior to the December 2013 decline in home heath jobs, this healthcare sector contributed a net increase in new jobs in 125 of 131 preceding months and experienced negative job growth only five other times since 2003. According to the BLS seasonally adjusted employment records ranging from January 2003 through December 2013, the December 2013 job loss was the largest single month job loss recorded in the past ten years. "There is widespread concern that this loss in jobs is just the beginning," stated Eric Berger, CEO of the Partnership for Quality Home Healthcare. "With home health facing an unprecedented 14 percent cut in Medicare funding over the next four years, significant additional job losses are expected. Indeed, if the Medicare home health rebasing cuts are not corrected, Avalere Health projects that a total of 500,000 home healthcare jobs could be lost. As a result, nearly 1.5 million seniors could lose access to the high-quality, cost-effective home health services they need, and taxpayer costs will therefore rise as medical services are instead delivered in more costly institutional settings." As part of its implementation of the Affordable Care Act (ACA), the Obama Administration finalized the Home Health Prospective Payment System (HHPPS) rule, which cuts Medicare home health funding by 3.5 percent annually over the next four years, amounting to an unprecedented total cut of 14 percent. In its final regulation, the Administration projected that this cut will drive "approximately 40 percent" of all home health agencies to net losses by 2017, resulting in job loss, agency consolidation and potential bankruptcy by thousands of providers. The Partnership for Quality Home Healthcare is urging the Obama Administration to fully examine the impact of the rebasing cut on patient access and jobs over all four years in which it is to be implemented. Home health leaders are also asking the Secretary of Health and Human Services to use her authority to reduce the severity of the cut. Approximately 10,000 Americans turn 65 each day, many of who will require complex medical care in their homes to manage chronic conditions, rehabilitative needs and post-acute care. To meet this growing need and ensure senior access to clinically advanced, cost-effective and patient preferred care, an adequate employee base of skilled professionals is critical. "As Americans live longer and seek to age in the dignity and safety of their homes, the home health sector could serve as an engine of new job creation. Judging from the jobs that have already been lost since the imposition of Obamacare's unprecedented cuts, however, such job growth may no longer be possible," added Berger. The Partnership for Quality Home Healthcare -- http://www.homehealth4america.org-- was established to assist government officials in ensuring access to skilled home healthcare services for seniors and disabled Americans. Representing community- and hospital-based home healthcare agencies across the United States, the Partnership is dedicated to developing innovative reforms to improve the quality, efficiency and integrity of home healthcare. * Marks Paneth Appoints Vivian Martinez as New Real Estate Partner ------------------------------------------------------------------ Marks Paneth LLP, a New York area accounting firm, on Jan. 27 disclosed that Vivian Martinez, CPA, 42, has been named a partner in the firm's Real Estate Group. Serving commercial and residential real estate organizations, including co-ops and low-income housing enterprises, Ms. Martinez advises clients on all facets of accounting and tax issues. In addition to supervising audit engagements, she counsels clients on a range of real estate transactions, including acquisitions and dispositions. She is a member of the firm's China Desk, a cross- disciplinary team of professionals who assist both US and Chinese businesses and individuals looking to work, invest, raise capital or do business in China and the US. "Through her deep understanding of challenging real estate tax issues, Vivian helps our sophisticated clients navigate an increasingly complex economic and tax environment," said William Jennings, Partner-in-Charge of Marks Paneth's Real Estate Group. Ms. Martinez holds a Bachelors of Science from Queens College of the City University of New York. A resident of Kings Park, New York, she is a member of the American Institute of Certified Public Accountants (AICPA), the New York State Society of CPAs and the Real Estate Committee, Nassau Chapter. She also serves on the board of the Asian Real Estate Professionals Association and is actively involved in the Long Island Real Estate Group (LIREG) and the Association of Women Accountants in Real Estate. For more information or a conversation with Ms. Martinez, please contact Katarina Wenk-Bodenmiller of Sommerfield Communications at (212) 255-8386 or Katarina@sommerfield.com About Marks Paneth LLP Marks Paneth LLP -- http://www.markspaneth.com-- is an accounting firm with over 500 people, of whom nearly 65 are partners and principals. The firm provides public and private businesses with a full range of auditing, accounting, tax, consulting, bankruptcy and restructuring services as well as litigation and corporate financial advisory services to domestic and international clients. The firm also specializes in providing tax advisory and consulting for high-net-worth individuals and their families, as well as a wide range of services for international, real estate, media, entertainment, nonprofit, professional and financial services, and energy clients. The firm has a strong track record supporting emerging growth companies, entrepreneurs, business owners and investors as they navigate the business life cycle. Its headquarters are in Manhattan. Additional offices are in Westchester, Long Island and the Cayman Islands. * Matthew Boxer Rejoins Lowenstein Sandler as Partner ------------------------------------------------------ Lowenstein Sandler LLP announced that Matthew Boxer will rejoin the firm as a partner and chair of its Corporate Investigations and Integrity practice. Mr. Boxer received universal praise for his thorough and fair investigatory work and leadership skills while serving as New Jersey's first State Comptroller from 2008 to 2014. At Lowenstein Sandler, Mr. Boxer will represent private clients and government agencies in government and internal investigations. Prior to entering government service, Mr. Boxer had been with Lowenstein Sandler from 1997 to 2001. During his six-year term as New Jersey State Comptroller, Mr. Boxer earned an unsurpassed reputation for integrity based on the effective, energetic and evenhanded manner in which he represented New Jersey taxpayers. During his term, the Office of the State Comptroller issued more than 50 reports on investigations of waste and fraud in New Jersey government, including reports concerning the state pension system, the school lunch program, the New Jersey Turnpike Authority and Hurricane Sandy clean-up. Marked by their professionalism and impartiality, Boxer's audits touched all levels of state, county, and local government and produced a body of work that recovered hundreds of millions of dollars for the citizens of New Jersey while preventing the outlay of hundreds of millions more in wasteful spending. "We are thrilled that Matt has chosen to return to our firm, bringing to our clients his deep experience with the investigatory process," said Gary M. Wingens, Lowenstein Sandler's chairman and managing partner. "Matt has earned an impeccable reputation for fair-mindedness and integrity through his impressive career in government and public service." Mr. Boxer, 43, was appointed as New Jersey's first independent state comptroller in January 2008 to conduct audits, investigations and performance reviews at all levels of New Jersey government, and served in the cabinets of two Governors. Prior to his appointment as state comptroller, Mr. Boxer directed the State Authorities Unit from 2006 to 2008, where he developed new regulations concerning ethics and procurement reform that led to greater transparency and efficiency at New Jersey's 58 independent state authorities. As a federal prosecutor from 2001 to 2006, Mr. Boxer served in the terrorism unit, the criminal division and the special prosecutions division of the U.S. Attorney's Office. While there, he oversaw the investigation and prosecution of numerous public officials on corruption charges. Among them were the "Monmouth 11," a group that included three sitting mayors, four sitting councilmen and a police commissioner, making it one of the largest single-day corruption takedowns in state history. Boxer began his career as a law clerk for New Jersey Supreme Court Justice Gary S. Stein and then for U.S. District Court Judge Jerome B. Simandle. He then spent four years as an attorney with Lowenstein Sandler, where he litigated criminal and complex civil cases with an emphasis on securities fraud. Mr. Boxer earned his J.D. from Columbia University and his B.A. from Princeton University. About Lowenstein Sandler Lowenstein Sandler is a provider of transactional, litigation, and bankruptcy and creditors' rights legal services to many of the country's top companies and funds. Close to 300 lawyers in our New York, New Jersey and California offices immerse themselves in our clients' industries in order to deeply understand their businesses. * Ronald Artinian Nominated as FII's "Trustee of the Year" ---------------------------------------------------------- CommonWealth REIT on Jan. 27 disclosed that one of its newly appointed Independent Trustees, Ronald Artinian, has been nominated as "Trustee of the Year" by Fund Industry Intelligence, a publication of Institutional Investor. In announcing this nomination, Fund Industry Intelligence cited Mr. Artinian's work as Lead Independent Trustee of The Reserve Primary Fund, among his other accomplishments. The Reserve Primary Fund, a money market fund with approximately $62 billion of assets, experienced a decline in net asset value to less than $1.00 per share as a result of the financial crisis and the Lehman Brothers bankruptcy in 2008. Mr. Artinian was subsequently appointed Lead Independent Trustee of the fund, and during his time there, the Independent Trustees replaced the existing external manager with a new manager to liquidate the fund. The Primary Reserve Fund has successfully returned more than 99% of investors' historical invested capital to date. Commenting on the news of Mr. Artinian's nomination as "Trustee of the Year," Adam Portnoy, Managing Trustee and President of CWH, made the following statement: "I speak for the entire CWH Board and management when I offer congratulations to Mr. Artinian on his nomination as ?Trustee of the Year' by Fund Industry Intelligence and Institutional Investor." "CWH has significantly enhanced its governance and it is proud that Mr. Artinian has recently joined the CWH Board as an Independent Trustee. The characteristics Mr. Artinian is being recognized for now are exactly the qualities the Nominating and Governance Committee identified in him when they invited him to join the CWH Board." "We believe our shareholders will support the CWH Board's commitment to deliver the sort of independent thinking and shareholder focus Mr. Artinian is being recognized for, rather than the hostile takeover attempt by the Related Companies, with the assistance of Corvex, to take control of CWH for its own benefit." CommonWealth REIT is a real estate investment trust that primarily owns office properties located throughout the United States. CWH is headquartered in Newton, MA. * Stutman Treister's John Shaffer Jumps to Quinn Emanuel -------------------------------------------------------- Quinn Emanuel announced that John Shaffer, one of the nation's leading restructuring experts, has joined the Los Angeles office as a partner. Mr. Shaffer joins the firm from Stutman, Treister & Glatt, where he was a senior shareholder focusing primarily on complex restructuring. His clients include debtors, creditors, and purchasers of assets in connection with the financial services, health care, real estate, and transportation industries. John Shaffer is widely recognized for his contributions to the development of bankruptcy law. Mr. Shaffer served on the Advisory Committees for the Federal Rules of Bankruptcy Procedure and the Ninth Circuit's Rules of Practice and Procedure. He also chaired the Judicial Conference's Joint Subcommittee on Chapter 11 Venue Issues. He currently chairs the National Bankruptcy Conference's Chapter 11 Committee, and he served as Secretary of the Conference and as a member of its Executive Committee. Mr. Shaffer is a Fellow of the American College of Bankruptcy, and was President of the Los Angeles Bankruptcy Forum and a member of the Board of Governors of the Financial Lawyers Conference. He has served on the National Conference of Bankruptcy Judge's Educational Committee and is a frequent speaker on bankruptcy-related topics. Mr. Shaffer may be reached at: John Shaffer, Esq. QUINN EMANUEL URQUHART & SULLIVAN, LLP 865 S. Figueroa St., 10th Floor Los Angeles, California 90017 Tel: +1 213-443-3000 Fax: +1 213-443-3100 Email: johnshaffer@quinnemanuel.com * Upcoming Meetings, Conferences and Seminars --------------------------------------------- The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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 by e-mail. 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 the nation's bankruptcy courts. The list includes links to freely downloadable of these small-dollar petitions in Acrobat PDF documents. 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. ********* 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, 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 2014. 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 ***