/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140130.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, January 30, 2014, Vol. 18, No. 29 Headlines 333-345 GREEN: Court Issues Final Decree Closing Chapter 11 Case 710 LONG: Logan & Company Approved as Administrative Advisor 710 LONG: Says HealthBridge Doesn't Hold Intercompany Claims 710 LONG: NLRB Balks at Rejection of Expired CBA AFA FOODS: "Termination Date" in Cash Collateral Order Extended AIDA'S PARADISE: Court Enters Final Decree Closing Chapter 11 Case ALLIED SYSTEMS: Trustee Appoints 3-Member Retiree's Committee ALLIED SYSTEMS: Feb. 28 Hearing on Bid to Reject Employment Pacts ALTEGRITY INC: S&P Cuts CCR to 'CCC-' Over Likely Restructuring AMERICAN REALTY: Moody's Assigns (P)Ba1 Preferred Stock Rating ANAREN INC: S&P Assigns Prelim. 'B' CCR Following Leveraged Buyout AUTOMATED BUSINESS: Hires Dickinson Firm as ESOP Plan Counsel AUTOMATED BUSINESS: Zucker Spaeder Approved as Bankruptcy Counsel AUTOMATED BUSINESS: Files Schedules of Assets and Liabilities BAY CLUB PARTNERS: Case Summary & 20 Largest Unsecured Creditors BOWERY TOWER: Case Summary & 11 Largest Unsecured Creditors CATALENT PHARMA: IPO Plan No Impact on Moody's 'B2' CFR CCC INFORMATION: S&P Revises Outlook to Stable & Affirms 'B' CCR CHIQUITA BRANDS: Moody's Affirms B2 CFR & Alters Outlook to Stable CJS ENTERPRISES: Case Summary & 5 Largest Unsecured Creditors E.H. MITCHELL: Taps Richard Martinez as Special Counsel EFUSION SERVICES: Hires Powell Theune as Counsel EL FARMER: Court Dismisses Chapter 11 Case ENDICOTT INTERCONNECT: Can Employ Davidson Fox as Accountants EXIDE TECHNOLOGIES: Panel Can Retain Geosyntec as Consultants FISKER AUTOMOTIVE: Can Tap Kirkland & Ellis as Attorneys FISKER AUTOMOTIVE: Can Hire Pachulski Stang as Co-Counsel FLETCHER INTERNATIONAL: Trustee Files Report Dated Jan. 13 FOREST LABORATORIES: S&P Rates $1.8-Bil. Sr. Unsecured Notes 'BB+' GPI CUSTOM: Case Summary & 20 Largest Unsecured Creditors GPI MANUFACTURING: Case Summary & 20 Largest Unsecured Creditors HEALTH MANAGEMENT: S&P Withdraws 'BB-' Ratings After Acquisition HIBU INC: Chapter 15 Case Summary HUDSON'S BAY: Real Estate Sale No Impact on Moody's B1 Rating INC RESEARCH: Moody's Hikes CFR to B2 & Unsec. Notes Rating to Ba3 KIDD PROPERTIES: Case Summary & 2 Largest Unsecured Creditors LAFAYETTE YARD: Court Okays Panel's Hiring of CBIZ NY as Advisor LAFAYETTE YARD: Court OKs Hiring of Lowenstein Sandler as Counsel LANSING TRADE: Moody's Assigns B1 CFR & Rates $175MM Notes B3 LEARFIELD COMMUNICATIONS: S&P Affirms 'B' CCR Over Loan Add-on LIVERY BUILDING: Case Summary & 4 Largest Unsecured Creditors MARTIN MARIETTA: Moody's Places Ba1 CFR Under Review for Downgrade MATERIAL MANAGEMENT: Case Summary & 20 Top Unsecured Creditors MFM INDUSTRIES: May Hire Mediator Over Palmer Dispute MI PUEBLO: US Trustee Balks at Hiring of GA Keen Realty MOOG INC.: Moody's Withdraws Ba2 CFR Following Rated Debt Payment MOONLIGHT APARTMENTS: Case Summary & 5 Top Unsecured Creditors NTELOS INC: S&P Retains 'B' Term Loan B Rating After $188MM Add-on OCWEN FINANCIAL: Moody's Affirms 'B1' CFR & Sr. Secured Ratings PETTERS COMPANY: Ch.11 Trustee Hires Rassers NV as Dutch Counsel PFS HOLDING: Moody's Affirms B2 CFR & Rates 1st Lien Term Loan B2 PHOENIX DEVELOPMENT: Case Dismissal Hearing Continued to Feb. 20 RED SPRINGS: Case Summary & 3 Largest Unsecured Creditors SFX ENTERTAINMENT: Moody's Assigns 'Caa1' CFR; Outlook Stable SOUTHERN OAKS: Secured Creditors Ask for Changes to Confirmed Plan ST. JOSEPH'S HOSP: S&P Cuts Revenue Bonds Rating to 'BB' SUNGARD DATA: Moody's Affirms B2 CFR & Ba3 Secured Debt Rating TEXAS INDUSTRIES: Moody's Places Caa1 CFR Under Review for Upgrade TUNICA-BILOXI: S&P Cuts ICR to 'B-' on Weak Operating Performance WEBALO INC: Case Summary & 20 Largest Unsecured Creditors WESTERN FUNDING: Committee Wants Trustee to Take Over Management YRC WORLDWIDE: Moody's Rates $700MM 1st Lien Term Loan '(P)Ba3' ********* 333-345 GREEN: Court Issues Final Decree Closing Chapter 11 Case ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York on Jan. 2, 2014, entered a final decree closing the Chapter 11 case of 333-345 Green LLC. The Debtor has said it has consummated its First Amended Plan of Reorganization. As reported in the Troubled Company Reporter on May 28, 2013, the Debtor on May 13, 2013, obtained confirmation of its First Amended Plan dated April 5. The Court ruled that the Plan provides adequate and proper means for its implementation via conveyance of title to and the transfer of the property to Team Greene or its designee free and clear of all liens, claims, encumbrances and other interests. The Plan provides for the satisfaction of default claims associated with each executory contract and unexpired lease to be assumed. All Plan objections that have not been withdrawn or resolved prior to the entry of the order are overruled. About 333-345 Green LLC 333-345 Green LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 13-40085) in Brooklyn on Jan. 8, 2013. The Debtor, which is engaged in the development and management of real property, disclosed total assets of $16.0 million and liabilities of $26.9 million in its schedules. The property in 333-345 Greene Avenue, in Brooklyn, is valued at $16 million and secures a $25.2 million debt. Team Greene is the owner and record holder of the existing first mortgage and related loan documents with the Debtor. Marc A. Pergament, Esq., at Weinberg Gross & Pergament, LLP, in Garden City, N.Y., serves as counsel to the Debtor. 710 LONG: Logan & Company Approved as Administrative Advisor ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Jersey authorized 710 Long Ridge Road Operating Company II, LLC, et al., to employ Logan & Company, Inc., as administrative advisor. As reported in the Troubled Company Reporter on Oct. 28, 2013, Logan & Company serves as the Debtors' noticing and claims agent in the Debtors' Chapter 11 cases. As administrative advisor, Logan & Company is expected to: (a) assist the Debtors in managing the claims reconciliations and objection process, noting for review by the Debtors those proofs of claim subject to possible procedural objections, those that are inconsistent with the Schedules, and those that supersede scheduled liabilities, entering the Debtors' objection determination in the claims database, and preparing exhibits for the Debtors' omnibus claims objections; (b) provide balloting and solicitation services to the Debtors for any plan of reorganization and liquidation filed by the Debtors, which may include the following services: - assist in the production of solicitation materials and ballots; - receive, date-stamping, numbering, and inspecting ballots for conformity to voting procedures in accordance with Logan & Company's usual practice, tabulating ballots, and providing computerized balloting database services; - prepare voting reports by plan class, creditor or shareholder, and amount for review by the Debtors and their counsel; and - generate and filing an official ballot certification and testifying, if necessary, in support of the balloting, solicitation, and tabulation results; (c) manage any distributions pursuant to a confirmed plan; (d) provide the Debtors with consulting and computer software support regarding the reporting and information management requirements of the bankruptcy administration process as it relates to its Section 327 Services; (e) educate and train the Debtors in the use of support software and providing Logan & Company's standard reports as well as consulting and programming support for Debtors- requested reports, program modifications, database modification, and other features in accordance with the Logan Agreement; and (f) perform other administrative services as may be requested by the Debtors that are not otherwise allowed under the Section 156(c) Retention Order. Logan & Company will also be reimbursed for reasonable out-of- pocket expenses incurred. Kathleen M. Logan, president of Logan & Company, 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 710 Long Ridge Road Operating Company II 710 Long Ridge Road Operating Company II, LLC and four affiliates own sub-acute and long-term nursing care facilities for the elderly in Connecticut. The facilities, which are managed by HealthBridge Management LLC, are Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. 710 Long Ridge Road Operating Company II and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 13-13653 to 13- 13657) on Feb. 24, 2013, to modify their collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU. The Debtors owe $18.9 million to M&T Bank and $7.99 million on loans from the U.S. Department of Housing and Urban Development Federal Housing Administration. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serve as counsel to the Debtors. Logan & Company, Inc. is the claims and notice agent. Alvarez & Marsal Healthcare Industry Group, LLC, is the financial advisor. Porzio, Bromberg & Newman, P.C., represents the Official Committee of Unsecured Creditors. The Committee tapped to retain EisnerAmper LLP as accountant. 710 LONG: Says HealthBridge Doesn't Hold Intercompany Claims ------------------------------------------------------------ 710 Long Ridge Road Operating Company II, LLC, et al., notified the U.S. Bankruptcy Court for the District of New Jersey that they will: 1. prepare and file a non-material modification to the First Amended Chapter 11 Plan that, among other things, will address the fact that HealthBridge Management LLC does not hold any Class 7 Intercompany Claims against the Debtors; and 2. file amended schedules of assets and liabilities to remove HealthBridge as a creditor and to properly reflect the increased claims held by Care Realty against the Debtors. The Debtors related that in connection with confirmation of the First Amended Plan, on Dec. 18, 2013, the National Labor Relations Board served the Debtors, among others, with subpoenas for Rule 2004 Examination. In connection with preparing responses to the subpoenas, the Debtors discovered that they had inadvertently recorded claims being held by HealthBridge against the Debtors when, in fact, those claims were held by Care Realty LLC. The Debtors have filed papers with the Bankruptcy Court seeking to reject the continuing economic terms of the expired collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU (Union) pursuant to 11 U.S.C. Section 1113. The Debtors have said that in their Section 1113(c) Motion and in the First Amended Disclosure Statement, they unintentionally disclosed that HealthBridge held $5,744,246 in claims against the Debtors when, in fact, those claims were properly held by Care Realty. In addition, the First Amended Plan and First Amended Disclosure Statement mistakenly reflected that HealthBridge held a Class 7 Intercompany Claim that would be waived, as part of the "new value" being contributed in exchange for the Class 8 Equity Interests retaining their Equity Interests in the Debtors. On Dec. 5, 2013, the Court issued an order authorizing the Debtors to (i) enter into a letter agreement in connection with the anticipated exit financing; and (ii) incur and pay related fees and expenses as administrative expenses. About 710 Long Ridge Road Operating Company II 710 Long Ridge Road Operating Company II, LLC and four affiliates own sub-acute and long-term nursing care facilities for the elderly in Connecticut. The facilities, which are managed by HealthBridge Management LLC, are Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. 710 Long Ridge Road Operating Company II and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 13-13653 to 13- 13657) on Feb. 24, 2013, to modify their collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU. The Debtors owe $18.9 million to M&T Bank and $7.99 million on loans from the U.S. Department of Housing and Urban Development Federal Housing Administration. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serve as counsel to the Debtors. Logan & Company, Inc. is the claims and notice agent. Alvarez & Marsal Healthcare Industry Group, LLC, is the financial advisor. Porzio, Bromberg & Newman, P.C., represents the Official Committee of Unsecured Creditors. The Committee tapped to retain EisnerAmper LLP as accountant. 710 LONG: NLRB Balks at Rejection of Expired CBA ------------------------------------------------ The National Labor Relations Board has opposed the motion of 710 Long Ridge Road Operating Company II LLC to reject the continuing economic terms of the expired collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU (Union). The NLRB said the Debtors would not have needed relief under Section 1113 of the Bankruptcy Code if they had complied with the NLRA duty to lawfully bargain with the Union about desired changes. That is, federal labor law would have then permitted changes after contract expiration, even if the Union continued to object. In their motion, the Debtors seek to: i) reject the continuing economic terms of the expired collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU; and ii) extend the revised interim modifications to the Debtors' collective bargaining agreements pursuant to Section 1113(e) of the Bankruptcy Code. NLRB stated that the proceeding arose out of an extensive course of allegedly unlawful conduct by Debtors (a group of five nursing homes under common ownership) and related corporate entities. The Union previously had a collective bargaining agreement with the Debtors which was effective from Dec. 31, 2004, through March 16, 2011. Since the expiration of the contract, employees have worked without a contract (with the exception of certain periods of time when employees were striking or locked out). Meanwhile, Susan J. Cameron, Esq., at Levy Ratner, P.C., on behalf of the Union, filed objections to the Debtor's motion for an order extending the revised interim modifications to the Debtors' collective bargaining agreements with the Union. The Union maintains its position that the Court must deny the relief requested because it lacks the power to grant such relief in the Debtors' cases. About 710 Long Ridge Road Operating Company II 710 Long Ridge Road Operating Company II, LLC and four affiliates own sub-acute and long-term nursing care facilities for the elderly in Connecticut. The facilities, which are managed by HealthBridge Management LLC, are Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. 710 Long Ridge Road Operating Company II and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 13-13653 to 13- 13657) on Feb. 24, 2013, to modify their collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU. The Debtors owe $18.9 million to M&T Bank and $7.99 million on loans from the U.S. Department of Housing and Urban Development Federal Housing Administration. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serve as counsel to the Debtors. Logan & Company, Inc. is the claims and notice agent. Alvarez & Marsal Healthcare Industry Group, LLC, is the financial advisor. Porzio, Bromberg & Newman, P.C., represents the Official Committee of Unsecured Creditors. The Committee tapped to retain EisnerAmper LLP as accountant. AFA FOODS: "Termination Date" in Cash Collateral Order Extended --------------------------------------------------------------- AFA Foods Inc. filed a notice with the Bankruptcy Court disclosing that that the Second Lien Agent and the Debtors have agreed to a further extension of the so-called "Termination Date" under the Interim Cash Collateral Order through and including March 5, 2014. On September 19, 2012, the Court entered the Interim Order (I) Authorizing the Debtors to Use Cash Collateral of the Second Lien Secured Parties and (II) Providing Adequate Protection to the Second Lien Secured Parties. Counsel to Debtors can be reached at: Laura Davis Jones, Esq. Timothy P. Cairns, Esq. Peter J. Keane, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 E-mail: ljones@pszjlaw.com tcairns@pszjlaw.com pkeane@pszjlaw.com - and - Jeffrey B. Ellman, Esq. Brett J. Berlin, Esq. JONES DAY 1480 Peachtree Street, N.E. Suite 800 Atlanta, Georgia 30309 Tel: (404) 581-3939 Fax: (404) 581-8330 E-mail: jbellman@jonesday.com bjberlin@jonesday.com About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the largest processors of ground beef products in the United States. AFA had seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings (BLBT) affected sales. Judge Mary Walrath presides over the case. Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware; Tobias S. Keller, Esq., at Jones Day, in San Francisco; and Jeffrey B. Ellman, Esq., and Brett J. Berlin, Esq., at Jones Day, in Atlanta, Georgia, represent the Debtors. FTI Consulting Inc. serves as the Debtors' financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, the Debtors' books and records on a consolidated basis, reflected approximately $219 million in assets and $197 million in liabilities. AFA Foods, Inc., disclosed $615,859,574 in assets and $544,499,689 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' cases. The Committee has obtained approval to hire McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon LLP serves as co-counsel. The Committee also obtained approval to retain J.H. Cohn LLP as its financial advisor. AFA, in its Chapter 11 case, sold plants and paid off the first- lien lenders and the loan financing the Chapter 11 effort. Remaining assets are $14 million cash and the right to file lawsuits. General Electric Capital Corp. and Bank of America Corp. provided about $60 million in DIP financing. The loan was paid off in July 2012. In October 2012, the Bankruptcy Court denied a settlement that would have released Yucaipa Cos., the owner and junior lender to AFA Foods, from claims and lawsuits the creditors might otherwise bring, in exchange for cash to pay unsecured creditors' claims under a liquidating Chapter 11 plan. Under the deal, Yucaipa would receive $11.2 million from the $14 million, with the remainder earmarked for unsecured creditors. Asset recoveries above $14 million would be split with Yucaipa receiving 90% and creditors 10%. Proceeds from lawsuits would be divided roughly 50-50. AIDA'S PARADISE: Court Enters Final Decree Closing Chapter 11 Case ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida has entered a final decree closing the Chapter 11 case of Aida's Paradise, LLC. The Court said, in its order, that the Debtor's confirmed plan of reorganization has been substantially consummated. On May 24, 2013, the Court confirmed the Plan dated March 13, 2013, as amended. The Plan As reported in the Troubled Company Reporter on April 16, 2013, the Court has conditionally approved the Second Amended Disclosure Statement for the Debtor's Second Amended Plan dated March 21, 2013. According to the disclosure statement, on the Effective Date, Holders of Allowed Administrative Claims will be paid in full. Holders of Allowed Unsecured Priority Tax Claims (except ad valorem tax claims) will be paid, with interest, over a period of 5 years. The Holder of the Class 1 Secured Claim, TD Bank, will retain its lien on the I-Drive Properties, and will receive payments of principal and interest thru and including Oct. 9, 2015, as set forth in the Plan. The Holder of the Class 2 Allowed Secured Property Tax Claim will retain its lien on the I-Drive Properties and be paid in full, with interest, over a period of 5 years. Holders of Allowed general Unsecured Claims in Class 3, which includes the deficiency claim of TD Bank in the amount of $3,272,294.44, will be paid a pro rata portion of the Class Flow Note. Interests in Class 4 will retain their interest in the Debtor in exchange for New Value and, as such are Unimpaired. The Debtor estimates the Class 4 Holders will contribute approximately $5,000 per month through the life of the Plan to meet Plan Payment obligations. The Plan contemplates that the Debtor's current cash flow from the rental income derived from the I-Drive Properties, anticipated rental income for a new Restaurant tenant, and ongoing equity contributions from the Principals, will be sufficient to make payments to all Allowed Classes of Claims. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/aida'sparadise.doc199.pdf About Aida's Paradise Based in Maitland, Florida, Aida's Paradise LLC owns roughly three acres of developed real property on International Drive in Orlando, Florida. It leases various parcels of the I-Drive Property to three tenants: Volcano Island Mini Golf, Dunkin Donuts (aka Jennifer's Donuts), and CBS Outdoor (which operates an electronic billboard on site). Aida's Paradise filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 12-00189) on Jan. 6, 2012. Chief Karen S. Jennemann presides over the case. R. Scott Shuker, Esq., at Latham Shuker Eden & Beaudine LLP, serves as the Debtor's counsel. Terry J. Soifer and Consulting CFO, Inc., serves as its financial advisor. The petition was signed by Dr. Adil R. Elias, manager. In its amended schedules, the Debtor disclosed assets of $15,015,435 and liabilities of $9,643,768. Judge Jennemann on May 23, 2013, approved Aida's Paradise's Second Amended Chapter 11 Plan of Reorganization and approved the accompanying disclosure statement. The Plan, as amended, contemplates that the Debtor will continue to manage and lease to tenants its I-Drive properties, and will continue to try to secure a new restaurant tenant. The Debtor is required to maintain all insurance coverage as required under all of the loan documents with TD Bank, including sufficient hazard insurance on its personal property in the amount of the full replacement value of such property, and will secure the hazard insurance coverage, which will name TD Bank as the mortgage holder. ALLIED SYSTEMS: Trustee Appoints 3-Member Retiree's Committee ------------------------------------------------------------- Roberta A. DeAngelis, U.S. Trustee for Region 3, on Jan. 8, 2014, appointed three creditors to serve on the Committee of Retirees in the Chapter 11 case of Allied Systems Holdings, Inc. The committee consists of: 1. Suzanne Winslow 180 Seaview Ct., Unit 411 Marco Island, FL 34145 Tel: (239) 393-0156 2. Lawrence L. Lodato P.O. Box 992 Lake Hopatcong, NJ 07849 Tel: (973) 601-3797 Fax: (973) 668-1879 3. Ruth E. Brogan P.O. Box 864 Waskom, TX 75692 Tel: (903) 687-2179 About Allied Systems Holdings, Inc. BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. first filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. Yucaipa Cos. has 55 percent of the senior debt and took the position it had the right to control actions the indenture trustee would take on behalf of debt holders. The state court ruled in March 2013 that the loan documents didn't allow Yucaipa to vote. In March 2013, the bankruptcy court also gave the official creditors' committee authority to sue Yucaipa. The suit includes claims that the debt held by Yucaipa should be treated as equity or subordinated so everyone else is paid before the Los Angeles- based owner. The judge allowed Black Diamond to participate in the lawsuit against Yucaipa and Allied directors. ALLIED SYSTEMS: Feb. 28 Hearing on Bid to Reject Employment Pacts ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on Feb. 28, 2014, at 10:00 a.m., to consider Allied Systems Holdings, Inc., et al.'s motion to: i) reject certain employment agreements, effective nunc pro tunc to Dec. 31, 2013; and ii) establish a bar date for the filing of rejection damages claims with respect to those agreements. The Debtors have determined that the employment agreements will be burdensome to their estates. The Debtors, in their motion, stated that at the time of the sale to Jack Cooper Transport Co., certain Allied employees were parties to employment agreements with certain Debtors. These employment agreements were not assumed by Jack Cooper as part of the sale, however, Jack Cooper offered employment to certain employee parties. Furthermore, Allied has arranged to enter into contracts with certain employee parties whereby they will be contract workers after Dec. 31, 2013. Each employment agreement provided for, among other things: 1. the Allied Employer can terminate the employment of the employee party thereto at any time without cause and further contemplates that the employee can voluntarily terminate his or her employment at any time; and 2. post-termination rights and obligations, which vary depending on the nature and cause of the termination of employment. About Allied Systems Holdings, Inc. BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. first filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. Yucaipa Cos. has 55 percent of the senior debt and took the position it had the right to control actions the indenture trustee would take on behalf of debt holders. The state court ruled in March 2013 that the loan documents didn't allow Yucaipa to vote. In March 2013, the bankruptcy court also gave the official creditors' committee authority to sue Yucaipa. The suit includes claims that the debt held by Yucaipa should be treated as equity or subordinated so everyone else is paid before the Los Angeles- based owner. The judge allowed Black Diamond to participate in the lawsuit against Yucaipa and Allied directors. ALTEGRITY INC: S&P Cuts CCR to 'CCC-' Over Likely Restructuring --------------------------------------------------------------- Standard & Poor's Ratings Services lowered the corporate credit rating on Falls Church, Va.-based Altegrity Inc. to 'CCC-' from 'CCC+'. The outlook is negative. At the same time, S&P lowered the issue ratings on the company's senior secured credit facilities to 'CCC' from 'B-', one notch above the corporate credit rating. The recovery ratings remain '2', which indicate S&P's expectation for substantial recovery (70% to 90%) for senior secured creditors in the event of a payment default or bankruptcy. S&P also lowered the issue ratings on the company's $210 million senior unsecured notes due 2015, $290 million senior unsecured notes due 2015, and $150 million senior subordinated notes due 2016 to 'C' from 'CCC-', two notches below the corporate credit rating. The recovery ratings remain '6', which indicate S&P's expectation for negligible recovery (0% to 10%) for unsecured creditors in the event of a payment default or bankruptcy. "The downgrade reflects our assessment that a debt restructuring appears inevitable within six months, absent unanticipated significantly favorable changes in the company's circumstances," said Standard & Poor's credit analyst. "The hiring of Evercore to provide the company with advice on strategic options to address the upcoming debt maturities reinforces our view. We believe company actions could include a selective default or a Chapter 11 bankruptcy filing." Standard & Poor's financial risk assessment of Altegrity is "highly leveraged," given its view that the company's capital structure is unsustainable. S&P's business risk assessment is "vulnerable," given continued dependence on spending from the U.S. government, which accounts for nearly 40% of its revenue, and weak performance from the commercial businesses in 2013. AMERICAN REALTY: Moody's Assigns (P)Ba1 Preferred Stock Rating -------------------------------------------------------------- Moody's Investors Service confirmed American Realty Capital Properties, Inc.'s (ARCP) issuer rating of Baa3 and rated its unsecured debt shelf (P)Baa3. The outlook was revised to stable from review direction uncertain. This rating action concludes Moody's review after ARCP announced its acquisition of Cole Real Estate Investments, Inc. in October 2013. The stable outlook reflects Moody's expectation that ARCP's recent acquisitions will be integrated successfully, while the REIT continues to improve its credit metrics and maintain adequate liquidity. The stable outlook also reflects more prudent growth going forward. The following ratings were assigned with a stable outlook: American Realty Capital Properties, Inc. -- Unsecured debt shelf (P)Baa3 -- Subordinate debt shelf (P)Ba1 -- Preferred stock shelf (P)Ba1 The following rating was confirmed with a stable outlook: American Realty Capital Properties, Inc. -- Issuer rating Baa3. Ratings Rationale Moody's views ARCP's liquidity and funding as moderate, which reflects the company's assumption of debt from recent mergers and acquisitions. ARCP's $2.7 billion unsecured credit facility has an accordion to $3.0 billion and is due February 2017 with a one-year extension option. Moody's notes that the facility will be largely drawn to fund the Cole transaction and other acquisitions in the company's pipeline. The company's debt maturity schedule is well- laddered and near-term debt obligations are manageable, considering the availability on the company's revolver. The largest debt maturity is in 2017 with $1.9 billion coming due. While ARCP has a sizeable unencumbered pool, it has declined with recent transactions and secured debt levels will increase significantly -- a credit negative. ARCP maintains an aggressive capital structure with effective leverage (debt plus preferred stock/gross assets) at 3Q13 of 49% and net debt/EBITDA of 7.7x. Moody's notes that leverage will increase following the closing of the Cole transaction. Secured debt levels are manageable at 8% (3Q13), but will be closer to 20% following the Cole closing. ARCP is a REIT that has been growing very aggressively and will own 3,732 net-lease properties totaling 102 million SF after the Cole merger and other acquisitions under contract. The portfolio post-Cole merger will be located in 49 states plus Puerto Rico and Washington, DC, increase from 180 to 1,071 tenants, and be diversified by sector as follows: 49% single-tenant retail, 24% single-tenant office, 15% distribution facilities and 12% multi- tenant retail. At 3Q13, 70% of the tenants are investment grade, but this will decline to 49% post-Cole. ARCP's assets are still geographically diverse post-Cole with Texas representing the largest percentage of annualized rent at 13% and Florida at 6%. The largest industry concentrations after Cole will be pharmacy (7.5% of annualized rent), quick service restaurant (7.2%), casual dining (6.5%), supermarket (4.6%), family dining (4.3%), and discount retail (4.1%). The REIT's portfolio is fully-occupied (100% leased at 3Q13; 99% after Cole) with a weighted average remaining lease term of 11 years post-Cole owing to long-term triple-net leases, high tenant retention rates, and a well- laddered lease expiration schedule. ARCP's current rating and outlook reflects Moody's expectation that the REIT will grow in a disciplined manner, post the Cole mergers. ARCP's EBITDA growth over the past two years was driven by acquisitions. EBITDA margin was 68% at 3Q13, which we expect will grow as acquisitions are integrated into the portfolio. Fixed charge coverage is currently 2.4x, but is expected to improve to over 3x. Near-term lease rollovers will be manageable (1.6% of rent in 2014) with no major lease rollover until 2017 at 6.3% of rent. A rating upgrade would be predicated upon effective leverage closer to 45%; Net debt/EBITDA closer to 6x; and secured leverage in the low teens. A downgrade could result should effective leverage increase above 60%; Net debt/EBITDA trend over 8x; secured leverage rise above its current levels; fixed charge coverage below 2.5x; or a significant change in core investment strategy, levered acquisitions, or missteps in the integration of its recent aggressive acquisitions. Moody's last rating action for American Realty Capital Properties, Inc. was on October 23, 2013 when Moody's placed ARCP's Baa3 issuer rating on review direction uncertain. American Realty Capital Properties, Inc. (NASDAQ: ARCP) is a REIT that is engaged in the ownership and acquisition of single- tenant/free standing and multi-tenant real estate properties. As of September 30, 2013, ARCP had total book assets of $3.2 billion and total shareholder equity of $1.5 billion. ANAREN INC: S&P Assigns Prelim. 'B' CCR Following Leveraged Buyout ------------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned a preliminary 'B' corporate credit rating to East Syracuse, N.Y.-based Anaren Inc. The outlook is stable. S&P also assigned its preliminary 'B+' issue-level rating and preliminary '2' recovery rating to the company's proposed $165 million senior secured first-lien credit facility, which consists of a $145 million senior secured first-lien term loan due 2021 and a $20 million revolving credit facility due 2019. The preliminary '2' recovery rating indicates S&P's expectations for substantial (70%-90%) recovery in the event of payment default. S&P also assigned its preliminary '6' issue-level rating and preliminary 'CCC+' recovery rating to the proposed $70 million senior secured second-lien term loan due 2021. The preliminary '6' recovery rating indicates S&P's expectations for negligible (0%-10%) recovery in the event of payment default. "The ratings on Anaren reflect the company's 'weak' business risk profile (as defined by our criteria), incorporating the company's limited scale, customer and end-market concentration, and highly leveraged financial profile, reflecting pro forma leverage in the mid-6x area and our view that the company's purchase by a financial sponsor is likely to preclude sustained deleveraging over the longer term," said Standard & Poor's credit analyst David Tsui. S&P views the industry risk as "moderately high" and the country risk as "low". Anaren is a provider of microelectronics and electric components serving the space and defense and wireless end markets. The outlook is stable, reflecting S&P's expectation that involvement in high-priority military radar and communication modernization contracts along with growing investment in 4G cellular networks will support moderate revenue and EBITDA growth over the next 12 months. Ratings upside is limited by Anaren's highly leveraged financial profile and an ownership structure that is likely to preclude sustained deleveraging. S&P could lower the rating if delays and reduced orders on key defense contracts or slow adoption of 4G infrastructure outside the U.S. lead to EBITDA declines and sustained leverage over 7x. AUTOMATED BUSINESS: Hires Dickinson Firm as ESOP Plan Counsel ------------------------------------------------------------- Automated Business Power, Inc. and Automated Business Power Holding Company ask for authorization from the U.S. Bankruptcy Court for the District of Maryland to employ Dickinson Wright and Michael R. Holzman as Special ESOP Plan Counsel for the Debtors. The Debtors contemplate that those services to be rendered by the Dickinson Firm will include: (a) advising the Debtors, and the professionals employed by the Debtors, in connection with all legal and regulatory compliance issues which arise in connection with the ESOP Plan; (b) preparing on behalf of the Debtors, reports and other papers necessary in connection with the ESOP Plan; and (c) performing all other necessary legal services and provide all other necessary legal advice to the Debtors and the professionals employed by the Debtors in connection with the ESOP Plan. Dickinson Firm's billing rates currently range from $300 to $550 per hour, depending upon the legal professional's experience and qualifications. The hourly rates are subject to periodic increases in the normal course of the Dickinson Firm's business. Dickinson Firm will also be reimbursed for reasonable out-of- pocket expenses incurred. The Dickinson Firm holds a prepetition claim against the Debtor in the amount of $2,347.50 for services rendered in connection with the ESOP. In 2008, all of the issued and outstanding shares of Holding Co. were purchased by Automated Business Power Holding Co. Employee Stock Ownership Trust (the "Trust") which forms a part of the Automated Business Power Holding Co. Stock Ownership Plan (the Trust and the Plan are referred to as the "ESOP Plan"). Michael R. Holzman, member of Dickinson Firm, 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. Dickinson Firm can be reached at: Michael R. Holzman, Esq. DICKINSON FIRM International Square 1875 Eye St. N.W., Suite 1200 Washington, D.C. 20006 Tel: (202) 659-6931 Fax: (202) 659-1559 E-mail: MHolzman@dickinsonwright.com About Automated Business Power Military supplier Automated Business Power, Inc., and Automated Business Power Holding Co filed their Chapter 11 petitions (Bankr. D. Md. Case Nos. 13-27123 and 13-27125) on Oct. 8, 2013. Automated Business Power has been engaged in the design and production of advanced filed deployable uninterruptible power supplies, AC-to-DC power supplier, DC-to-DC converters, uninterruptible power systems, Power/Voice/Data cases, speakers, speaker/voice systems and ancillary equipment tactical transceivers, power amplifiers, SATCOM, and other communications equipment. The petitions were signed by Daniel Akman as president. The Debtors estimated assets of at least $50 million and liabilities of at least $10 million. The Debtor is represented by Nelson C. Cohen, Esq., at Zuckerman Spaeder LLP, in Washington, D.C. PNC Bank is represented by James M. Smith, Esq., and Lisa Bittle Tancredi, Esq., at Gebhardt & Smith LLP. On Nov. 4, 2013, Judy A. Robbins, U.S. Trustee for Region 4, notified the Bankruptcy Court that she has not appointed an unsecured creditors' committee in the Chapter 11 case because the number of persons eligible and willing to serve on such a committee is presently insufficient to form a committee. The U.S. Trustee will appoint an unsecured creditors' committee upon the request of an adequate number of eligible unsecured creditors. AUTOMATED BUSINESS: Zucker Spaeder Approved as Bankruptcy Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland authorized Automated Business Power Inc., to employ Nelson C. Cohen, Esq., and Zuckerman Spaeder LLP as counsel. As reported in the Troubled Company Reporter on Dec. 26, 2013, Law360 reported that PNC Bank NA filed an objection the retention of Zuckerman Spaeder LLP as counsel, saying the firm was improperly hired by one of the company's largest creditors. The bank alleged that the law firm would be paid using a loan from Eyal Halevy, a Florida resident who's listed as the company's president in some older General Services Administration and district court documents. PNC Bank, as administrative agent and lender, has even renewed its objection to the employment application for Zuckerman Spaeder, stating that the applicants are not are "disinterested persons" as defined in Section 101(13) of the Bankruptcy Code. The Bank also related that it previously objected to the applications so that more information could be obtained about the alleged $135,000 prepetition loan from Eyal Halevey that would be used to pay the applicants' retainers. About Automated Business Power Military supplier Automated Business Power, Inc., and Automated Business Power Holding Co filed their Chapter 11 petitions (Bankr. D. Md. Case Nos. 13-27123 and 13-27125) on Oct. 8, 2013. Automated Business Power has been engaged in the design and production of advanced filed deployable uninterruptible power supplies, AC-to-DC power supplier, DC-to-DC converters, uninterruptible power systems, Power/Voice/Data cases, speakers, speaker/voice systems and ancillary equipment tactical transceivers, power amplifiers, SATCOM, and other communications equipment. The petitions were signed by Daniel Akman as president. The Debtors estimated assets of at least $50 million and liabilities of at least $10 million. The Debtor is represented by Nelson C. Cohen, Esq., at Zuckerman Spaeder LLP, in Washington, D.C. PNC Bank is represented by James M. Smith, Esq., and Lisa Bittle Tancredi, Esq., at Gebhardt & Smith LLP. On Nov. 4, 2013, Judy A. Robbins, U.S. Trustee for Region 4, notified the Bankruptcy Court that she has not appointed an unsecured creditors' committee in the Chapter 11 case because the number of persons eligible and willing to serve on such a committee is presently insufficient to form a committee. The U.S. Trustee will appoint an unsecured creditors' committee upon the request of an adequate number of eligible unsecured creditors. AUTOMATED BUSINESS: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Automated Business Power Inc., has filed with the U.S. Bankruptcy Court for the District of Maryland its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $6,625,904 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $29,440,691 E. Creditors Holding Unsecured Priority Claims $50,745 F. Creditors Holding Unsecured Non-priority Claims $13,832,278 ----------- ----------- TOTAL $6,625,904 $43,323,714 A copy of the schedules is available for free at http://bankrupt.com/misc/AUTOMATEDBUSINESSsal.pdf About Automated Business Power Military supplier Automated Business Power, Inc., and Automated Business Power Holding Co filed their Chapter 11 petitions (Bankr. D. Md. Case Nos. 13-27123 and 13-27125) on Oct. 8, 2013. Automated Business Power has been engaged in the design and production of advanced filed deployable uninterruptible power supplies, AC-to-DC power supplier, DC-to-DC converters, uninterruptible power systems, Power/Voice/Data cases, speakers, speaker/voice systems and ancillary equipment tactical transceivers, power amplifiers, SATCOM, and other communications equipment. The petitions were signed by Daniel Akman as president. The Debtors estimated assets of at least $50 million and liabilities of at least $10 million. The Debtor is represented by Nelson C. Cohen, Esq., at Zuckerman Spaeder LLP, in Washington, D.C. PNC Bank is represented by James M. Smith, Esq., and Lisa Bittle Tancredi, Esq., at Gebhardt & Smith LLP. On Nov. 4, 2013, Judy A. Robbins, U.S. Trustee for Region 4, notified the Bankruptcy Court that she has not appointed an unsecured creditors' committee in the Chapter 11 case because the number of persons eligible and willing to serve on such a committee is presently insufficient to form a committee. The U.S. Trustee will appoint an unsecured creditors' committee upon the request of an adequate number of eligible unsecured creditors. BAY CLUB PARTNERS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Bay Club Partners-472, LLC dba Midtown on Main Apartments 3827 SW Hall Blvd. Beaverton, OR 97005 Case No.: 14-30394 Type of Business: The Debtor was formed to renovate and operate residential property in Arizona known as Midtown on Main Street. The Property has approximately 470 rental units and offers residents amenities including a fitness center, spa, clubhouse, three swimming pools, a covered play area, assigned parking, and 24-hour emergency maintenance services. Chapter 11 Petition Date: January 28, 2014 Court: United States Bankruptcy Court District of Oregon Judge: Hon. Randall L. Dunn Debtor's Counsel: Albert N Kennedy, Esq. Ava L Schoen, Esq. TONKON TORP LLP 888 SW 5th Ave #1600 Portland, OR 97204 Tel: (503) 802-2013 Email: al.kennedy@tonkon.com ava.schoen@tonkon.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The petition was signed by David Butler, on behalf of Bay Club Management, LLC, as manager of Debtor. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SMD Remodeling LLC Trade creditor $55,879 HD Supply Facilities Trade creditor $30,992 IDT Landscaping LLC Trade creditor $24,568 J.R. McDade Co. Inc. Trade creditor $21,620 AZ Partsmaster Trade creditor $16,790 AZ Brite Carpet Care Trade creditor $8,653 Maintenance Supply Trade creditor $8,460 Wildcat Fire Protection Trade creditor $8,261 Level One LLC Trade creditor $7,947 Apartment Interior Supply Trade creditor $7,808 P & J's Painting Inc Trade creditor $7,256 Rainforest Plumbing & Air Trade creditor $6,316 Valley Protective Services Trade creditor $5,905 Sherwin Williams Co. Trade creditor $5,193 Burns Pest Elimination Inc Trade creditor $4,979 Maria Gonzales Trade creditor $4,795 Apartments Resurfacing Trade creditor $4,514 Leslies Poolmart, Inc. Trade creditor $3,657 Koglmeier Law Group, PLC. Legal services $3,479 AAA Landlord Services, Inc. Trade creditor $3,357 BOWERY TOWER: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Bowery Tower, LLC 816 56th Street Brooklyn, NY 11220 Case No.: 14-40340 Chapter 11 Petition Date: January 28, 2014 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Hon. Carla E. Craig Debtor's Counsel: Avrum J Rosen, Esq. THE LAW OFFICES OF AVRUM J ROSEN, PLLC 38 New Street Huntington, NY Tel: 631-423-8527 Fax: 631-423-4536 Email: ajrlaw@aol.com Estimated Assets: $8.75 million Estimated Liabilities: $14.72 million The petition was signed Miriam Chan, managing member. A list of the Debtor's 11 largest unsecured creditors is available for free at http://bankrupt.com/misc/nyeb14-40340.pdf CATALENT PHARMA: IPO Plan No Impact on Moody's 'B2' CFR ------------------------------------------------------- Moody's Investors Service said that Catalent Pharma Solutions, Inc.'s announced plan for an initial public offerings (IPO) is credit positive. However, Catalent's ratings including its B2 Corporate Family Rating and negative rating outlook are unaffected by the announcement. Based in Somerset, New Jersey, Catalent is a leading provider of advanced dose form and packaging technologies, and development, manufacturing and packaging services for pharmaceutical, biotechnology, and consumer healthcare companies. The company reported revenue of approximately $1.8 billion for the twelve months ended September 30, 2013. Catalent is a privately held company, owned by affiliates of The Blackstone Group. CCC INFORMATION: S&P Revises Outlook to Stable & Affirms 'B' CCR ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised the outlook on Chicago-based CCC Information Services Inc. to stable from negative and affirmed its 'B' corporate credit rating on the company. S&P also affirmed its 'B+' issue-level rating with a recovery of '2' on the company's $50 million senior secured revolving credit facility and $466 million first-lien term loan. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of payment default. "The rating on CCC reflects the company's 'weak' business risk profile, characterized by its narrow product focus within a mature niche market and what we view as a 'highly leveraged' financial risk profile," said Standard & Poor's credit analyst Katarzyna Nolan. The company's significant base of recurring revenues, high barriers to entry, and solid operating margins partly offset these factors. S&P views the industry risk as "intermediate" and the country risk as "very low." The stable outlook reflects CCC's stable free cash flow generation, resulting from its recurring and predictable revenue base. Rating upside is limited in the near-to-intermediate term given the company's highly leveraged financial profile and S&P's expectation that its ownership structure will preclude any substantial leverage reduction. S&P would lower the corporate credit rating to 'B-' if intensified competition, debt finance acquisitions, or shareholder returns result in leverage sustained above the mid-7x area. CHIQUITA BRANDS: Moody's Affirms B2 CFR & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service changed the rating outlook for Chiquita Brands International Inc. to stable from negative while affirming all ratings of the company, including its B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating (PDR). Moody's also affirmed the company's SGL-3 liquidity rating. The change in the outlook to stable reflects Moody's expectation for continued improvement in Chiquita's credit metrics, which have recently benefitted from margin improvement largely as a result of cost saving initiatives. According to Moody's Analyst Brian Silver, "The stabilization of Chiquita's outlook reflects the company's improving cost structure, which will strengthen the resilience of the company's credit metrics during periods of inevitable top-line volatility inherent to agricultural commodities." Silver continues, "We expect Chiquita's profitability and cash flows to continue to improve over time, driven by better farming and logistics in bananas and higher factory throughput rates in salads". The following ratings have been affirmed at Chiquita Brands International, Inc.: Corporate Family Rating at B2; Probability of Default Rating at B2-PD; and Speculative Grade Liquidity Rating of SGL-3 The following ratings have been affirmed at Chiquita Brands LLC (with point estimate change): $425 million senior secured notes due 2021 to B1 (LGD3, 37%) from B1 (LGD3, 40%) The outlook is stable. Ratings Rationale The B2 CFR incorporates Chiquita's high though improving financial leverage profile, ongoing business volatility and uncertainty with respect to potentially material litigation exposure. Further, the rating is constrained by Chiquita's vulnerability to sharp performance fluctuations due to the commodity-like nature of its banana and value-added salad products as well as external factors including fuel prices, weather, crop infestation, currency exchange rates and local government policies. The rating favorably reflects Chiquita's geographic diversification and well- established brands, namely Chiquita and Fresh Express. In addition, the rating incorporates the company's adequate liquidity profile, supported by the presence of an ABL and expectations for positive free cash flow generation during the next twelve months. The SGL-3 speculative grade liquidity rating reflects Moody's expectation that Chiquita will maintain an adequate liquidity profile over the next twelve months, supported by positive free cash flow generation, healthy levels of balance sheet cash, and access to its $150 million ABL (subject to borrowing base limitations). Aggregate cash and ABL availability is likely to exceed $100 million over the next twelve months to support operations and provide liquidity cushion. At September 30, 2013 Chiquita had approximately $160 million of liquidity comprised of $72 million of balance sheet cash and $88 million of ABL availability (borrowing base availability of $112 million less $24 million of L/C's). Although Moody's expects limited reliance on the ABL, we believe the credit facility is small in relation to the size of the company. The stable outlook reflects Moody's expectation for continued improvement in credit metrics, largely as a result of cost saving initiatives undertaken during the last 18 months, and that leverage will improve to below 6.0 times in the near term. The company continues to face headwinds including challenges to raw product sourcing in salads and European banana volume pressure (due to prioritization of price over volume). However, we anticipate the company will grow its salad volumes in 2014 assuming the company can maintain the increased run rate levels achieved by the addition of new business wins in fiscal year 2013. We further expect that banana market pricing will exhibit typical seasonal volatility patterns during the next 12 months, but that the company will continue to weigh the benefits of pricing at the expense of volumes without sacrificing profitability. The stable outlook also assumes that any outcome from pending litigation will be manageable and will not involve any material near-term cash outflows. The ratings could be upgraded if Chiquita is able to sustain leverage, as measured by Moody's adjusted debt-to-EBITDA, below 4.0 times while maintaining at least an adequate liquidity profile. In addition, Moody's would expect interest coverage, as measured by Moody's adjusted EBITA-to-interest, to approach 2.0 times. Alternatively, the ratings could be downgraded if Chiquita fails to maintain roughly $100 million of liquidity, including cash and ABL availability, given the inherent volatility of its operations. The ratings could also be downgraded if Chiquita's performance deteriorates and Moody's adjusted debt-to-EBITDA is sustained above 6.0 times for several quarters, or if EBITA-to- interest falls below 0.5 times. In addition, if there were to be a material litigation-related event the ratings could be downgraded or placed on review for downgrade. The principal methodology used in this rating was the Global Protein and Agriculture Industry Methodology published in May 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. Chiquita Brands International, Inc, based in Charlotte, North Carolina, is a leading international marketer and distributor of bananas and other fresh produce in over 70 countries and a producer of packaged salads under the Fresh Express brand name primarily in the United States. Total sales for the twelve month period ended September 30, 2013 were nearly $3.05 billion. CJS ENTERPRISES: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: CJS Enterprises, LLC 995 Camp Trail Rd. Quakertown, PA 18951 Case No.: 14-10635 Chapter 11 Petition Date: January 28, 2014 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Hon. Judge Eric L. Frank Debtor's Counsel: Anthony A. Frigo, Esq. THE LAW OFFICES OF ANTHONY A. FRIGO Suite 230, One West Main Street Norristown, PA 19401 Tel: (610) 272-8644 Email: anthonyfrigo@msn.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Christian Sakelson, owner. A list of the Debtor's five largest unsecured creditors is available for free at http://bankrupt.com/misc/paeb14-10635.pdf E.H. MITCHELL: Taps Richard Martinez as Special Counsel ------------------------------------------------------- E.H. Mitchell & Company LLC seeks authorization from the U.S. Bankruptcy Court for the Eastern District of Louisiana to employ Richard W. Martinez as special counsel. Mr. Martinez will represent the Debtor in Adversary Proceeding No. 13-01106, either in this court or the state court venue, and in the formulation of the Debtor's plan and its confirmation as well as other matters which might arise out of or be related to the areas of his retention. The Debtor will pay Mr. Martinez $350 per hour, plus reimbursement of expenses, for legal services, subject to application and approval of the Court prior to payment. Mr. Martinez 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. Mr. Martinez can be reached at: Richard W. Martinez, Esq. 650 Poydras Street, Suite 1430 New Orleans, LA 70130 Tel: (504) 586-1996 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. EFUSION SERVICES: Hires Powell Theune as Counsel ------------------------------------------------ eFusion Services LLC seeks authorization from the U.S. Bankruptcy Court for the District of Colorado to employ Powell Theune PC as counsel, effective Dec. 20, 2013. The Debtor requires Powell Theune to: (a) provide the Debtor with legal counsel with respect to its powers and duties as Debtor and Debtor-in-possession; (b) prepare on behalf of the Debtor the necessary applications, complaints, answers, motions, reports and other legal papers, and representing the Debtor in negotiations and at all hearings in this case and related proceedings; (c) assist the Debtor in the preparation and confirmation of a Chapter 11 disclosure statements and plans, if appropriate; and (d) perform other legal services for Debtor, which may be necessary herein. Powell Theune will be paid at these hourly rates: Philipp C. Theune $275 Paralegals $125 Powell Theune will also be reimbursed for reasonable out-of-pocket expenses incurred. On Dec. 11, 2013, Powell Theune received a retainer in the amount of $7,480, paid by the Debtor, the bulk of which has been used on pre-petition fees and costs. The balance remains in Powell Theune's COLTAF account. Philipp C. Theune, Esq., attorney of Powell Theune, 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. Powell Theune can be reached at: Philipp C. Theune, Esq. POWELL THEUNE PC 6595 West 14th Ave., Suite 100 Lakewood, CO 80206 Tel: (303) 832-1150 Fax: (303) 845-6934 E-mail: ptheune@PowellTheune.com eFusion Services LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Colo. Case No. 13-30740) on Dec. 20, 2013. The petition was signed by Paul Lufkin, Manager of eFusion Management LLC. The Debtor disclosed total assets of $35 million and total liabilities of $28.6 million. The Hon. Michael E. Romero presides over the case. EL FARMER: Court Dismisses Chapter 11 Case ------------------------------------------ The U.S. Bankruptcy Court last month approved a motion filed by PR Asset Portfolio 2013-1 Intl. LLC to dismiss the chapter 11 case of El Farmer, Inc. The order is dated Dec. 5, 2013. El Farmer, Inc., filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-09687) in Old San Juan, Puerto Rico on Dec. 7, 2012. The Debtor scheduled $18.3 million in assets and $12.0 million in liabilities, including $11.0 million owed to secured creditor Banco Popular De Puerto Rico. The Debtor owns farm lands in Isabela, Puerto Rico. Modesto Bigas Mendez, Esq., at Bigas & Bigas, in Ponce, P.R., represents the Debtor as counsel. ENDICOTT INTERCONNECT: Can Employ Davidson Fox as Accountants ------------------------------------------------------------- David W. Van Rossum, the chief restructuring officer of Endicott Interconnect Technologies, Inc. and El Transportation Company, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the Northern District of New York to employ Davidson Fox & Company, LLP as the Debtors' accountants, nunc pro tunc to July 10, 2013. Davidson Fox's services will include: (a) preparation of the 2012 federal tax return with supporting schedules; (b) preparation of any 2012 state income tax returns, as requested; (c) preparation of any bookkeeping entries that Davidson Fox finds necessary in connection with the preparation of the income tax returns; (d) preparation and posting of any adjusting entries; (e) assistance with the ongoing Internal Revenue Service examination, specifically working with management, shareholders, outside counsel and any additional consultants as required; and (f) providing advice concerning accounting, tax planning and business matters. Davidson Fox will be paid at these hourly rates: Mark Wasser $435 Jesse Wheeler $420 Robert Davis $405 Tera Stanton $240 Jamie Atkinson $240 Jennifer Stone $225 Steven Gleixner $217.50 Patricia Wells $217.50 Benjamin Larson $195 Jacqueline McDonnell $195 Lisa Leard $180 Jenny Yang $172.50 Prior to the petition date, Davidson Fox provided accounting and consultation services to the Debtors in connection with, among other things, filing of the Debtors' tax returns. As of the July 10, 2013 petition date, the Debtors owed Davidson Fox the sum of $150,960 for services rendered during the pre-petition period. Davidson Fox has agreed to waive the $150,960 pre-petition claim. Davidson Fox has requested a post-petition retainer in the amount of $37,750, which retainer will cover the fees and expenses associated with the preparation of the Debtors' 2012 tax returns. In addition, Davidson Fox has requested an additional $20,000 post-petition retainer to cover the fees and expenses associated with the Internal Revenue Service examinations. Davidson Fox will also be reimbursed for reasonable out-of-pocket expenses incurred. Mark A. Wasser, Esq., partner of Davidson Fox, 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 Endicott Interconnect Endicott Interconnect Technologies, Inc., and its affiliates filed a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 13-bk-61156) in Utica, New York, on July 10, 2013, to sell the business before cash runs out by the end of September. David W. Van Rossum is the Debtors' sole officer. Bond, Schoeneck & King, PLLC, is counsel to the Debtor. Based in Endicott, New York, and formed in 2002, EIT is the successor to the microelectronics division of IBM Corp. The products are used in aerospace, defense and medication applications, among others. The Company sought Chapter 11 bankruptcy protection after suffering $100 million in operating losses in the last four years. In addition to $16 million in secured claims, trade suppliers are owed $34 million. There is another $32 million owing for loans made by shareholders. The Company said the book value of property is $36 million. An official committee of unsecured creditors has been appointed in the case with Avnet Electronics Marketing, Arrow Electronics, Inc., Acbel Polytech, Inc., Cadence Design Systems, Inc., Orbotech, Inc., Tyco Electronics, and High Performance Copper Foil, Inc. as members. The committee is represented by Arent Fox LLP. The official creditors' committee said there could be $20.8 million in claims to bring against insiders. In August, the judge authorized the committee to conduct an investigation of the insiders. EXIDE TECHNOLOGIES: Panel Can Retain Geosyntec as Consultants ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Exide Technologies Inc. sought and obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Geosyntec Consultants as environmental consultants to the Committee. The Committee requires Geosyntec Consultants to: (a) assist the Committee in evaluating potential environmental exposure at various of the Debtor's current and former plant sites; (b) assist the Committee in understanding and evaluating potential future capital expenditures necessary to comply with regulatory requirements; (c) assist the Committee in understanding and evaluating possible exposure to claims stemming from Exide's operations; and (d) provide other services as requested by the Committee. Geosyntec Consultants will be paid at these hourly rates: Michael Berman $270 Michael McKibben $270 Jeffrey Leed $270 Professional $122-$215 Associate $240 Principal $270 Other Staff $52-$135 Geosyntec Consultants will also be reimbursed for reasonable out- of-pocket expenses incurred. Michael Berman, principal of Geosyntec Consultants, 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 Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002 and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. Exide's international operations were not included in the filing and have continued their business operations without supervision from the U.S. courts. When it filed for bankruptcy, the Debtor disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. In its formal schedules filed with the Court in August 2013, Exide listed $1,704,327,521 (plus undetermined amounts) in total assets; and $988,700,577 (plus undetermined amounts) in total liabilities. For the 2013 case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick and Company Inc. as public relations consultant and GCG as claims agent. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co counsel. Zolfo Cooper, LLC serves as its bankruptcy consultants and financial advisors. FISKER AUTOMOTIVE: Can Tap Kirkland & Ellis as Attorneys -------------------------------------------------------- Fisker Automotive Holdings, Inc. and its debtor-affiliates sought and obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to employ Kirkland & Ellis LLP as attorneys, nunc pro tunc to the Nov. 22, 2013 petition date. The Debtors require Kirkland & Ellis to, among other things: (a) advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their businesses and properties; (b) advise and consult on the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; and (c) attend meetings and negotiate with representatives of creditors and other parties in interest. Kirkland & Ellis will be paid at these hourly rates: James H.M. Sprayregen $1,195 Anup Sathy $1,095 Ryan Preston Dahl $775 Partners $665-$1,225 Of Counsel $415-$1,195 Associates $450-$835 Paraprofessionals $170-$355 On March 21, 2013, the Debtors paid $900,000 to Kirkland & Ellis as a classic retainer and the Debtors subsequently made additional classic retainer payments to Kirkland & Ellis. Kirkland & Ellis will also be reimbursed for reasonable out-of- pocket expenses incurred. Anup Sathy, partner of Kirkland & Ellis, 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 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 Hire Pachulski Stang as Co-Counsel --------------------------------------------------------- Fisker Automotive Holdings, Inc. and its debtor-affiliates sought and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ Pachulski Stang Ziehl & Jones LLP as co-counsel, nunc pro tunc to the Nov. 22, 2013 petition date. The Debtors require Pachulski Stang, among other things, to: (a) provide legal advice with respect to the Debtors? powers and duties as debtors in possession in the continued operation of their businesses and management of their property; (b) prepare on behalf of the Debtors any necessary applications, motions, answers, orders, reports, and other legal papers; and (c) appear in Court on behalf of the Debtors. Pachulski Stang will be paid at these hourly rates: Laura Davis Jones $975 James E. O?Neill $695 Peter J. Keane $425 Monica A. Molitor $295 Pachulski Stang will also be reimbursed for reasonable out-of- pocket expenses incurred. Pachulski Stang received payments from the Debtors during the year prior to the petition date in the amount of $117,426 including the Debtors' aggregate filing fees for these cases, in connection with its prepetition representation of the Debtors. Pachulski Stang is current as of the petition date, but has not yet completed a final reconciliation of its prepetition fees and expenses. Upon final reconciliation of the amount actually expended prepetition, any balance remaining from the prepetition payments to the Firm will be credited to the Debtors and utilized as Pachulski Stang?s retainer to apply to post-petition fees and expenses pursuant to the compensation procedures approved by this Court in accordance with the Bankruptcy Code. Laura Davis Jones, partner of Pachulski Stang, 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 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: Trustee Files Report Dated Jan. 13 ---------------------------------------------------------- Richard J. Davis, the Chapter 11 trustee for Fletcher International, Ltd., filed on Jan. 13, 2014, a supplement to his Report and Disclosure Statement dated Nov. 25, 2013. Mr. Davis made the amendments in light of (i) informal comments from parties-in-interest and written objections from two insiders whose conduct is criticized in the Report and who take issue with portions of the report, and (ii) extensive discussions with the Arbitrage, Leveraged and Alpha JOLs, the MBTA. As set forth in the report, the Trustee has already liquidated the Debtor's liquid assets, and, other than a potential recovery on a dispute involving a warrant issued by UCBI, the primary expected source of recovery to FILB's creditors will likely be from litigation against these insiders and service providers. A copy of the Report dated Jan. 13, 2014, is available for free at http://bankrupt.com/misc/Fletcher_Report_DS_Jan2014.pdf A copy of the memorandum of law in support of the motion for approval of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Fletcher_Memo_Law_DS_Jan2014.pdf As reported in the Jan. 29, 2014 edition of the TCR, Judge Robert E. Gerber on Jan. 17 approved the Disclosure Statement explaining Fletcher's liquidating plan, after determining that the Plan outline 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 be submitted on or before that day. The Chapter 11 Trustee is required to file his response to any confirmation objection by no later than Feb. 28. The confirmation hearing will be held March 4, 2014, at 9:45 a.m. (EST). The Liquidating Plan The Chapter 11 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%, which 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. FOREST LABORATORIES: S&P Rates $1.8-Bil. Sr. Unsecured Notes 'BB+' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB+' issue-level rating to Forest Laboratories Inc.'s $1.8 billion senior unsecured notes due 2019 and 2021. S&P assigned a recovery rating of '4' to the senior unsecured notes, reflecting its expectation of average (30% to 50%) recovery in the event of payment default, and revised its existing unsecured recovery rating to '4' from '3'. The revised recovery rating reflects the higher level of unsecured debt following this debt issuance. The company will use proceeds from the unsecured notes (which were issued as $1.05 billion due Feb. 1, 2019, and $750 million due Feb. 15, 2021) to partly fund the $2.9 billion acquisition of Aptalis Pharma Inc. The new debt will result in pro forma leverage of roughly 3.5x at March 31, 2014, but S&P expects product growth, some synergies, and the benefits of a cost reduction program will result in leverage declining to about 2.1x by March 31, 2015. As a result, the acquisition does not alter our view that the company's financial risk profile is "intermediate". The acquisition of Aptalis, which also has a "weak" business risk profile because of its narrow focus in gastrointestinal and cystic fibrosis treatments, will add some product and therapeutic diversity but not enough to meaningfully change therapeutic concentration; integration risks will also persist over the next year. As a result, S&P do not expect to revise its assessment of business risk to fair from weak. RATINGS LIST Forest Laboratories Inc. Corporate credit rating BB+/Stable/-- Issue Rating Unchanged; Recovery Rating Revised To From Forest Laboratories Inc. Senior unsecured BB+ BB+ Recovery rating 4 3 New Rating Forest Laboratories Inc. $1.05 bil 4.375% sr nts BB+ due 2019 Recovery rating 4 $750 mil 4.875% sr nts BB+ due 2021 Recovery rating 4 GPI CUSTOM: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: GPI Custom Gunworks, LLC dba GPI 9127 Philips Highway Jacksonville, FL 32256 Case No.: 14-00371 Chapter 11 Petition Date: January 28, 2014 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Taylor J King, Esq. LAW OFFICES OF MICKLER & MICKLER 5452 Arlington Expressway Jacksonville, FL 32211 Tel: 904-725-0822 Fax: 904-725-0855 Email: court@planlaw.com Total Assets: $216,250 Total Liabilities: $1.39 million The petition was signed by Lee Firpo, manager. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb14-00371.pdf GPI MANUFACTURING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: GPI Manufacturing, LLC dba GPI 9127 Philips Highway Jacksonville, FL 32256 Case No.: 14-00369 Chapter 11 Petition Date: January 28, 2014 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Taylor J King, Esq. LAW OFFICES OF MICKLER & MICKLER 5452 Arlington Expressway Jacksonville, FL 32211 Tel: 904-725-0822 Fax: 904-725-0855 Email: court@planlaw.com Total Assets: $215,686 Total Liabilities: $1.23 million The petition was signed by Lee Firpo, managing member. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb14-00369.pdf HEALTH MANAGEMENT: S&P Withdraws 'BB-' Ratings After Acquisition ---------------------------------------------------------------- Standard & Poor's Ratings Services said it removed its 'BB-' issue-level ratings on Health Management Associates Inc.'s $500 million senior secured revolver, $1 billion senior secured term loan A, $1.2 billion senior secured term loan B, and $400 million senior secured notes from CreditWatch developing. S&P also removed the 'B-' issue-level rating on the company's $1 billion senior unsecured notes from CreditWatch positive. S&P subsequently withdrew all of its ratings on the company, including its 'B+' corporate credit rating, following the closing of Community Health Systems Inc.'s acquisition of Health Management Associates Inc. Health Management Associates Inc.'s bank facilities have been repaid as a result of the merger, and the majority of its debt has been successfully tendered. HIBU INC: Chapter 15 Case Summary --------------------------------- Chapter 15 Petitioner: Christian Henry Wells Chapter 15 Debtors: Debtor Case No. ------ -------- hibu Inc. 14-70323 aka Yellowbook Inc. aka Yellow Book Sales & Distribution Company, Inc. aka Yellow Book USA, Inc. 210 RXR Plaza Uniondale, NY 11556 hibu Holdings (USA) Inc. hibu of Pennsylvania, Inc. hibuTel Inc. 14-70328 aka YPTel Inc. c/o CT Corporation 520 Pike Street, Suite 985 Seattle, WA 98101 Znode Inc. 14-70329 aka Znode LLC aka Swiftjobs Corporation 8415 Pulsar Place, Suite 200 Columbus, OH 43240 hibu (USA) LLC 14-70324 aka YB (USA) LLC c/o CT Corporation 1209 Orange Street Wilmington, DE 19801 Type of Business: Print and digital directory and digital services provider. Chapter 15 Petition Date: January 28, 2014 Court: United States Bankruptcy Court Eastern District of New York (Central Islip) Judge: Hon. Robert E. Grossman Chapter 15 Petitioner's James H Sprayregen, Esq. Counsel: KIRKLAND & ELLIS LLP 300 N.LaSalle Street Chicago, IL 60654 Tel: 312-862-2481 Fax: 312-862-2200 Email: james.sprayregen@kirkland.com Hibu Inc. Estimated Assets: more than $1 billion Hibu Inc. Estimated Debts: more than $1 billion Hibu (USA) Estimated Assets: more than $1 billion Hibu (USA) Estiamted Debts: more than $1 billion hibuTel Inc. Estimated Assets: $50 million to $100 million hibuTel Inc. Estimated Debts: more than $1 billion Znode, Inc. Estimated Assets: $10 million to $50 million Znode, Inc. Estimated Debts: more than $1 billion HUDSON'S BAY: Real Estate Sale No Impact on Moody's B1 Rating ------------------------------------------------------------- Moody's Investors Service said that Hudson's Bay Company's announcement that it has agreed to a sale/leaseback of its downtown Toronto flagship retail complex and the Simpson's Tower located at 401 Bay Street to an affiliate of The Cadillac Fairview Corporation Limited for a purchase price of CAD $650 million is considered a possible credit positive for the company, depending on the extent of debt paydown with the proceeds. There is no impact at the current time on the company's B1 Corporate Family Rating or the stable rating outlook. Hudson's Bay Company (HBC), headquartered in Toronto, Canada, operates Hudson's Bay, Canada's largest department store with 90 full-line locations and one outlet store as well as thebay.com. In the United States, In the United States, HBC operates Saks Fifth Avenue, which operates 41 full-line stores, five international licensed stores, saks.com, 72 Saks Fifth Avenue OFF 5TH stores and saksoff5th.com. HBC also operates Lord & Taylor, a department store chain with 49 full-line store locations throughout the northeastern United States, in two major cities in the Midwest and in Boca Raton, Florida. INC RESEARCH: Moody's Hikes CFR to B2 & Unsec. Notes Rating to Ba3 ------------------------------------------------------------------ Moody's Investors Service upgraded the ratings of INC Research, LLC ("INC"), including the Corporate Family Rating to B2 from B3 and the Probability of Default Rating to B2-PD from B3-PD. The ratings on the senior secured credit facility and unsecured notes were also upgraded by one notch to Ba3 and Caa1, respectively. The outlook is stable. The upgrade of the ratings reflects INC's improved operating trends and liquidity. Moody's expects that adjusted leverage will continue to decline in 2014 to the mid-5.0x range as the company benefits from strong industry growth trends as well as better business execution. The company's extensive restructuring programs that were implemented following the Kendle acquisition in 2011 are largely concluded, leading to an improved cost structure. In addition, Moody's expects that lower severance and restructuring costs in 2014 will contribute to improved free cash flow over the next 12 months. The upgrade also reflects the improvement in liquidity characterized by the expectation for sustained positive free cash flow, cash in excess of $60 million and ample headroom under its covenants. The following ratings were upgraded: INC Research, LLC Corporate Family Rating, to B2 from B3; Probability of Default Rating, to B2-PD from B3-PD; $75 million senior secured revolving credit facility, to Ba3 (LGD 2, 23%) from B1 (LGD2, 24%) $300 million senior secured term loan, to Ba3 (LGD 2, 23%) from B1 (LGD2, 24%) $300 million senior unsecured notes, to Caa1 (LGD5, 79%) from Caa2 (LGD5, 79%) The outlook is stable. Ratings Rationale The B2 Corporate Family Rating reflects INC's size relative to several much larger competitors within the highly competitive CRO industry, as well as Moody's expectation for high (though improving) leverage and free cash flow that is modest relative to debt. The ratings are also constrained by project cancellation risk that is inherent in the CRO industry, which can lead to volatility in revenue and cash flow. The ratings are supported by solid recent business wins, strong industry-wide growth trends and the benefits of multiple restructuring efforts, which Moody's expects will to drive growth in INC's EBITDA and cash flow over the next 12-18 months. The ratings are also supported by Moody's expectation for good liquidity and industry-wide valuation multiples which support good recovery for creditors. If the company is able to sustain strong net new business wins and maintain profitability margins such that Moody's expects leverage to decline below 4.0 times, and free cash flow to debt to be sustained above 10%, Moody's could upgrade the ratings. The ratings could be downgraded if leverage is expected to increase above 6.0 times or if free cash flow to debt is expected to be sustained below 2%. Weak net new business, elevated project cancellations or sustained declines in profit margins could also lead to a ratings downgrade. Further, any material weakening of liquidity, or material acquisitions or shareholder dividends could also lead to a downgrade. INC Research, LLC ("INC"), is a leading global contract research organization ("CRO"), providing outsourced contract research for pharmaceutical and biotechnology companies. INC's main area of focus is late-stage clinical trials. The company is privately held by Avista Capital Partners and Ontario Teachers' Pension Plan. Net service revenues for the twelve months ended September 30 2013 approximated $630 million. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. KIDD PROPERTIES: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Kidd Properties, LLC 101 Reedham Way Raleigh, NC 27615 Case No.: 14-00505 Chapter 11 Petition Date: January 27, 2014 Court: United States Bankruptcy Court Eastern District of North Carolina (Raleigh Division) Judge: Hon. Randy D. Doub Debtor's Counsel: Gerald A Jeutter, Jr., Esq. GERALD A. JEUTTER, JR., ATTORNEY AT LAW PA PO Box 12585 Raleigh, NC 27605-2585 Tel: 919 334-6631 Fax: 919 833-9793 Email: jeb@jeutterlaw.com Total Assets: $1.63 million Total Liabilities: $1.27 million The petition was signed by Daniel Kidd, member/manager. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/nceb14-00505.pdf LAFAYETTE YARD: Court Okays Panel's Hiring of CBIZ NY as Advisor ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Lafayette Yard Community Development Corporation sought and obtained authorization from the U.S. Bankruptcy Court for the District of New Jersey to retain CBIZ Accounting, Tax & Advisory of New York, LLC ("CBIZ NY") as financial advisor the Committee, effective Nov. 5, 2013. The Committee requires CBIZ NY to: (a) assist the Committee in its evaluation of the Debtor's post-petition cash flow and other projections and budgets prepared by the Debtor or its financial advisor; (b) monitor the Debtor's activities regarding cash expenditures and general business operations subsequent to the filing of the petition under Chapter 11; (c) assist the Committee in its review of monthly operating reports submitted by the Debtor or its financial advisor; (d) manage or assist with any investigation into the pre- petition acts, conduct, transfers property, liabilities and financial condition of the Debtor, its management, or creditors, including the operation of the Debtor's businesses; (e) provide financial analysis related to any proposed DIP financing, including advising the Committee concerning such matters; (f) analyze transactions with vendors, insiders, related and affiliated entities, subsequent and prior to the date of the filing of the petition under Chapter 11; (g) assist the Committee or its counsel in any litigation proceedings against insiders and other potential adversaries; (h) review the Debtor's financial advisor's list of prospective purchasers, and suggest additional prospective purchasers; (i) assist the Committee in its review of the financial aspects of any proposed sale agreement or evaluating any plan of reorganization/liquidation. If applicable, assist the Committee in negotiating, evaluating and quantifying any competing offers; (j) attend meetings with representatives of the Committee and its counsel. Prepare presentations to the Committee that provides analyses and updates on diligence performed; and (k) perform any other services that may be necessary in CBIZ NY's role as financial advisor to the Committee or that may be requested by Committee counsel or the Committee. CBIZ NY will be paid at these hourly rates: Directors and Managing Directors $410-$695 Managers and Senior Managers $315-$410 Senior Associates and Staff $100-$350 CBIZ NY will also be reimbursed for reasonable out-of-pocket expenses incurred. Charles M. Berk, managing director of CBIZ NY, 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. CBIZ NY can be reached at: Charles M. Berk CBIZ ACCOUNTING, TAX AND ADVISORY OF NEW YORK, LLC 1065 Avenue of the Americas New York, NY 10018 Tel: (212) 790-5883 Fax: (212) 790-5909 E-mail: cberk@cbiz.com About Lafayette Yard Community Development Corporation Lafayette Yard Community Development Corporation, owner of the Lafayette Yard Hotel & Conference Center, previously called the Trenton Marriott, sought protection under Chapter 11 of the Bankruptcy Code on Sept. 23, 2013 (Case No. 13-30752, Bankr. D.N.J.). The Debtor is represented by Gregory G. Johnson, Esq., at Wong Fleming, Attorneys At Law, in Princeton, New Jersey; and Robert L. Rattet, Esq., Dawn Kirby, Esq., and Julie Cvek Curley, Esq., at Delbello Donnellan Weingarten Wise & Wiederkehr, LLP, in White Plains, New York. LAFAYETTE YARD: Court OKs Hiring of Lowenstein Sandler as Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Lafayette Yard Community Development Corporation sought and obtained permission from the U.S. Bankruptcy Court for the District of New Jersey to retain Lowenstein Sandler LLP as counsel to the Committee, effective Nov. 1, 2013. The Committee requires Lowenstein Sandler to: (a) provide legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under 11 U.S.C. Section 1102; (b) provide legal advice as necessary with respect to any sale of the Debtor's assets and the process for approving or disapproving any such sale; (c) assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's business, potential claims, and any other matters relevant to the Chapter 11 Case, including the sale of the Debtor's assets and the formulation of a plan of reorganization or liquidation; (d) participate in the formulation of a Plan; (e) provide legal advice as necessary with respect to any disclosure statement and Plan filed in the Chapter 11 case and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; (f) prepare applications, motions, complaints, answers, orders, agreements and other legal papers on behalf of the Committee, as necessary; (g) appear in Court to present necessary motions, applications, and pleadings, and otherwise protecting the interests of those represented by the Committee; (h) assist the Committee in requesting the appointment of a trustee or examiner should such action be necessary; and (i) perform such other legal services as may be required and that are in the best interests of the Committee and the Debtor's general unsecured creditors. Lowenstein Sandler will be paid at these hourly rates: Partners of the Firm $500-$985 Senior Counsel and Counsel $385-$685 Associates $275-$480 Paralegals and Assistants $160-$270 Lowenstein Sandler will also be reimbursed for reasonable out-of- pocket expenses incurred. Mary E. Seymour, member of Lowenstein Sandler, 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. Lowenstein Sandler can be reached at: Mary E. Seymour, Esq. LOWENSTEIN SANDLER LLP 65 Livingston Avenue Roseland, NJ 07068 Tel: (973) 597-2500 Fax: (973) 597-2400 About Lafayette Yard Community Development Corporation Lafayette Yard Community Development Corporation, owner of the Lafayette Yard Hotel & Conference Center, previously called the Trenton Marriott, sought protection under Chapter 11 of the Bankruptcy Code on Sept. 23, 2013 (Case No. 13-30752, Bankr. D.N.J.). The Debtor is represented by Gregory G. Johnson, Esq., at Wong Fleming, Attorneys At Law, in Princeton, New Jersey; and Robert L. Rattet, Esq., Dawn Kirby, Esq., and Julie Cvek Curley, Esq., at Delbello Donnellan Weingarten Wise & Wiederkehr, LLP, in White Plains, New York. LANSING TRADE: Moody's Assigns B1 CFR & Rates $175MM Notes B3 ------------------------------------------------------------- Moody's Investors Service assigned a B1 Corporate Family Rating (CFR) and a B1-PD Probability of Default Rating to Lansing Trade Group LLC (Lansing). Moody's also assigned a B3 rating to the proposed $175 million senior unsecured notes due 2021. The proceeds of the notes will be used to repay existing term loan debt used to finance the partial redemption of shares owned by Andersons Agriculture Group L.P., $15 million of subordinated notes, and revolver borrowings. The ratings outlook is stable. The following summarizes the ratings activity: Lansing Trading Group, LLC Ratings Assigned Corporate Family Rating - B1 Probability of Default Rating - B1-PD $175mm sr unsecured notes due 2021 - B3 (LGD6, 91%) Outlook - stable. Ratings Rationale Lansing's B1 Corporate Family Rating (CFR) reflects the company's size, market position and significant reliance on merchandising in one region (primarily North America) for the majority of its earnings. It has modest market shares compared to several larger and better capitalized competitors that are represented globally and benefit from vertically integrated commodity processing operations. The company's modest size (fixed assets of less than $100 million), thin EBITDA margins compared to other commodity merchandising and processing companies, and reliance on trading a limited number of agricultural commodities for the majority of its earnings are limiting factors. Lansing's relatively small asset base has grown through acquisitions, and Moody's expects the company to increase its asset base through further acquisitions, which may negatively impact leverage metrics. The CFR is supported by currently low leverage and solid cash flow metrics. Lansing benefits from its diverse customer base and long- term relationships with customers, which include large consumer product companies, and an adequate liquidity profile. Moody's believes Lansing's financial policy and risk management are supportive of the rating. Its proprietary trading is largely confined to a subsidiary with limited capital with no recourse to the borrower. The rating outlook is stable. The rating could be upgraded if the company were able to more than triple its fixed assets, while maintaining a leverage ratio (net debt / EBITDA) of less than 3.0x. The rating could be downgraded if the company meaningfully increased its leverage (net debt/EBITDA) to 4.5x on a sustained basis, if liquidity deteriorated or if retained cash flow/Debt declines toward 10%. The principal methodology used in this rating was the Global Commodity Merchandising and Processing Companies 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. Lansing Trade Group, LLC , headquartered in Overland Park, Kansas, is a commodity merchandising company specializing in grain, feed ingredients and energy products. The company operates through four segments: North American Agriculture, International Agriculture, Energy and Proprietary. The company generates the majority of its revenue in North America. Lansing is owned by Andersons Agriculture Group, L.P., Macquarie Americas Corp and employees. Revenue for the twelve months ended September 30, 2013, totaled $9.4 billion and the company shipped 24 million metric tons of agricultural and energy commodities. LEARFIELD COMMUNICATIONS: S&P Affirms 'B' CCR Over Loan Add-on -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Plano, Texas-based Learfield Communications Holdings Inc., which manages the multimedia rights of universities with popular sports programs. The outlook is stable. At the same time, S&P is affirming the rating on Learfield's upsized first-lien credit facility (consisting of a $30 million revolver due 2018 and a $275 million term loan due 2020) at 'B+', with a recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. In addition, S&P is affirming the rating on Learfield's upsized second-lien credit facility (consisting of a $110 million term loan due 2021) at 'CCC+', with a recovery rating of '6', indicating S&P's expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default. Learfield plans to use the proceeds from the $85 million add-on ($60 million to first-lien and $25 million to the second-lien) to finance the acquisition of the sports marketing firm and to pay for transaction fees and expenses. The 'B' corporate credit rating on Learfield reflects S&P's assessment of the company's business risk profile as "weak" and S&P's assessment of the company's financial risk profile as "highly leveraged," per our criteria. "Our assessment of Learfield's business risk profile as weak reflects the company's limited revenue diversification, limited potential for additional contract growth as Learfield and its competitors already have agreements with the majority of university sports programs that are sizeable enough for such agreements, and our forecast for limited future profitability growth. The acquisition will provide for property diversification through the addition of universities across new and existing athletic conferences. Future profitability will likely be driven by increasing sponsorship revenue at the universities with which both entities are already contracted. We believe a modest amount of revenue stability from sponsorship agreements at college sports arenas as well as long-term agreements with universities that provide expense visibility somewhat temper the risks. Other positive factors that temper the risks to Learfield's business profile are its high market share within the industry and high barriers to entry, given the majority of eligible universities are currently contracted by Learfield and its primary competitor. Learfield's strong relationships with universities and their past success in attracting sponsors also mitigate the above risks," S&P said. "Our assessment of Learfield's financial risk profile as highly leveraged reflects our expectation for adjusted leverage (adjusted for the present value of future minimum payments under non- cancelable event agreements and operating leases) to remain above 6x and for adjusted interest coverage to remain in the low-2x area, through 2015. We are forecasting modest EBITDA growth and minimal debt reduction during that time. Further, our assessment incorporates our understanding that Learfield has already booked its budgeted net sponsorship revenues for fiscal 2014 (Learfield's fiscal year ends June 30). It is also our understanding that the company has already booked a good portion of their estimated net sponsorship revenue for fiscal 2015, which provides strong visibility into revenue and performance over the near term," S&P added. LIVERY BUILDING: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Livery Building, LLC 246 Culver Street PO Box 194 Saugatuck, MI 49453 Case No.: 14-00381 Chapter 11 Petition Date: January 27, 2014 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Hon. Jeffrey R. Hughes Debtor's Counsel: Cody H. Knight, Esq. RAYMAN & KNIGHT 141 East Michigan Ave, Ste 301 Kalamazoo, MI 49007 Tel: (269) 345-5156 Email: courtmail@raymanstone.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Ellen J. Heyer, manager. A list of the Debtor's four largest unsecured creditors is available for free at http://bankrupt.com/misc/miwb14-00381.pdf MARTIN MARIETTA: Moody's Places Ba1 CFR Under Review for Downgrade ------------------------------------------------------------------ Moody's Investors Service placed Martin Marietta Materials' ratings under review for downgrade, including its Ba1 corporate family rating, Ba1-PD probability of default rating, and Ba1 ratings on its various issues of senior unsecured notes. The company's speculative grade liquidity rating is SGL-3 and its commercial paper rating is Not-Prime. The rating action was prompted by the announcement of Martin Marietta Materials and Texas Industries entering into a definitive merger agreement to combine into an aggregates and heavy building materials company. The following ratings actions were taken: Issuer: Martin Marietta Materials, Inc.: Ba1 corporate family rating, placed under review for downgrade; Ba1-PD probability of default rating, placed under review for downgrade; Ba1 (LGD4- 57%) rating on senior unsecured notes, placed under review for downgrade; Speculative grade liquidity rating is SGL-3; Commercial paper rating is Not-Prime. Ratings Rationale The transaction is valued at $2.7 billion, including about $0.7 billion of Texas Industries debt to be assumed. The merger will be financed through a stock-for-stock transaction, where Texas Industries' shareholders will receive 0.7 of Martin Marietta's shares for each share of Texas Industries they own. This exchange ratio represents a 13% premium for Texas Industries' shareholders over an average exchange ratio of both companies' 90-day stock price history. Upon consummation of the transaction, Martin Marietta's shareholders will own approximately 69% of the combined company, and Texas Industries shareholders will own approximately 31%. The combined company will operate under Martin Marietta Materials name and will be led by Martin Marietta's current management team. In our view, the combined company will benefit from an extended geographic footprint and distribution network, differentiation of the product offering as well as from an enhanced vertical integration in certain markets and the resulting potential efficiencies associated with it. However, we also recognize that the transaction will result in an elevated Moody's adjusted debt- to-EBITDA leverage of approximately 4.5x based on the LTM numbers of both companies before taking into consideration any potential synergies. Additionally, this transaction exposes Martin Marietta to higher volatility inherent to the cement and ready-mixed concrete business compared to the aggregates products. The review will focus on the integration plans of the two companies and the associated risks, the proposed financing and the resulting capital structure of the combined company along with its liquidity profile, potential synergies and operating efficiencies to be realized, as well as the economic conditions and industry fundamentals of the building materials industry. The review will also evaluate financial and business strategies of the combined company and its leverage targets. The principal methodology used in this rating was the Global Building Materials Industry published in July 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Raleigh, North Carolina, Martin Marietta Materials, Inc. ("Martin Marietta") is one of the leading United States producers of aggregates for infrastructure, commercial, agricultural and residential construction. Aggregates account for nearly 90% of the company's revenues. The company also manufactures magnesia-based chemical products, and dolomitic lime in its Specialty Products segment. In the LTM period ending September 30, 2013 Martin Marietta generated approximately $2.1 billion in revenues. MATERIAL MANAGEMENT: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Material Management Inc. Po Box 2241 Dorado, PR 00646 Case No.: 14-00478 Chapter 11 Petition Date: January 28, 2014 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Judge: Hon. Enrique S. Lamoutte Inclan Debtor's Counsel: Jorge R Davila, Esq. JORGE R. DAVILA LAW OFFICE Suite 2A, Condominio Eldorado Calle Trigo 563 Miramar San Juan, PR 00907 Email: davilalaw@yahoo.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Roy J. Barrie, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/prb-14-00478.pdf MFM INDUSTRIES: May Hire Mediator Over Palmer Dispute ----------------------------------------------------- MFM Delaware, Inc., MFM industries, Inc., the Official Committee of Unsecured Creditors, and Palmer Resources LLC sought and obtained permission from the U.S. Bankruptcy Court to employ a mediator in this bankruptcy case. The Debtors and Palmer will bear equally the costs and expenses incurred by the Mediator in connection with the mediation. The Mediator is appointed regarding all issue that remain in dispute between the Mediation Parties, including, without limitation, the following: (a) the amount, validity, and characterization of any and all claims held by Palmer against the Debtors and all defenses against such claims held by the Debtors; (b) the extent and validity of any security interest asserted by Palmer in the Debtors' property; and (c) all potential causes of action held by the Debtors against Palmer. About MFM Industries Cat litter maker MFM Delaware, Inc., and affiliate MFM Industries, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11359 and 13-11360) on May 28, 2013. Founded in 1964 as a clay-based absorbents supplier, MFM is supplier of cat litter in the U.S. The Company produces 100,000 tons of cat litter a year, representing 1 percent of the total market. Its private label market share is 20 percent. The company's cat litter products are comprised of a blend of fuller's earth clay, sodium bentonite and scenting properties. Clay is supplied from a leased clay mine in Ocala, Florida, and is transported five miles away to the company's manufacturing plant in Reddick, Florida. Direct Capital Partners, LLC, acquired a majority stake in the Company in 1997. Frederick B. Rosner, Esq., at Rossner Law Group LLC, serves as the Debtors' bankruptcy counsel, and Pharus Securities, LLC, serves as investment banker. The Official Committee of Unsecured Creditors is represented by Michael J. Barrie, Esq. at Benesch, Friedlander, Coiplan & Aronoff LLP as its counsel; and Gavin/Solmonese LLC as its financial advisor. MI PUEBLO: US Trustee Balks at Hiring of GA Keen Realty ------------------------------------------------------- The United States Trustee for Region 17 filed an objection to Mi Pueblo San Jose, Inc.'s application to employ GA Keen Realty Advisors, LLC as its real estate advisor. The U.S. Trustee said it has no objection per se to the employment of GA Keen. However, some of the terms of the employment are objectionable. 1. Pursuant to the Retention Agreement, the Debtor agrees to reimburse GA Keen for all of its out-of-pocket expenses, which include "the fees and reasonable expenses of counsel." The U.S. Trustee does not understand why GA Keen will need counsel, nor why GA Keen should be entitled to be reimbursed for fees and expenses. Accordingly, the U.S. Trustee objects to these expenses. 2. Additionally, any and all expenses should be incurred and paid only in accordance with the Court's Guidelines. 3. GA Keen is to be paid "without the need for further application to or order of the Bankruptcy Court." There appears to be no oversight by any party, including the Committee, with respect to the payment of the fees and expenses. At a minimum, the U.S. Trustee said, GA Keen's invoices should be subject to the same rules as other professionals under the Knudsen Order previously entered by the Court the Debtor's case. 4. The Debtor proposes to indemnify GA Keen. The U.S. Trustee said the indemnity is inconsistent with the practices of the Court and should not be approved. The indemnity exposes the estate to unknown, and potentially unlimited liability. Indeed, no other professional in the case has received indemnification from the estate as a condition of employment, and GA Keen should not be an exception. GA Keen is in line to be handsomely compensated for its efforts, and should be held fully accountable for its actions and work product. 5. The U.S. Trustee defers to the Debtor, the Committee and the Bank with respect to the reasonableness of the economic terms of the Retention Letter. Hearing on the engagement is set for Jan. 30, 2014. Trial Attorney can be reached at: John S. Wesolowski, Esq. Office of the United States Trustee U.S. Department of Justice 280 S. First Street, Suite 268 San Jose, CA 95113-0002 Tel: (408) 535-5525 ext. 231 E-mail: john.wesolowski@usdoj.gov 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. MOOG INC.: Moody's Withdraws Ba2 CFR Following Rated Debt Payment ----------------------------------------------------------------- Moody's Investors Service is withdrawing the credit ratings of Moog Inc. including its Ba2 corporate family rating, SGL-2 speculative grade liquidity rating and stable outlook following the repayment of the company's rated debt with revolver borrowings. Ratings to be withdrawn: Corporate Family Rating, Ba2 Probability of Default Rating, Ba2-PD Speculative Grade Liquidity Rating, SGL-2 Stable outlook to be withdrawn Ratings Rationale Moody's is withdrawing all of Moog's debt ratings due to the repayment of the company's rated debt including its 7.25% senior subordinated notes due 2018. The company maintains a $900 million revolving credit facility (unrated) due March 2018. Moog, Inc., headquartered in East Aurora, NY, is a designer and manufacturer of high performance precision motion control products and systems for aerospace and industrial markets. The company operates within five segments: Aircraft Controls, Space and Defense Controls, Industrial Systems, Components, and Medical Devices. Moog reported last twelve months ended December 28, 2013 revenues of approximately $2.6 billion. MOONLIGHT APARTMENTS: Case Summary & 5 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Moonlight Apartments, LLC 11184 Antioch Road, Suite 341 Overland Park, KS 66210 Case No.: 14-20172 Chapter 11 Petition Date: January 28, 2014 Court: United States Bankruptcy Court District of Kansas (Kansas City) Judge: Hon. Robert D. Berger Debtor's Counsel: Nancy S. Jochens, Esq. JOCHENS LAW OFFICE, INC. 1001 E. 101st Terrace, Suite 200 Kansas City, MO 64131 Tel: 816-994-6959 Fax: 816-994-6951 Email: Nancy@jochenslaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The petition was signed by James L. Wasko, managing member. List of Debtor's five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Monaco, Sanders, et al. Legal fees $22,500 Marsh & Company Accounting fees $6,000 Adamson & Assoc., Inc. Appraisal fees $2,500 KPG Capital, LLC Loan $323,000 Two North Twentieth St, Suite 1100 Birmingham, AL 35203 (209-647-1000) Morrow & Associates Trade debt $6,000 NTELOS INC: S&P Retains 'B' Term Loan B Rating After $188MM Add-on ------------------------------------------------------------------ Standard & Poor's Ratings Services said its 'B' issue rating and '4' recovery rating on NTELOS Inc.'s term loan B due 2019 remain the same following the approximately $188 million upsize to the issue. The '4' recovery rating indicates S&P's expectation for average (30% to 50%) recovery of principal in the event of a default. NTELOS Inc. is a subsidiary of Waynesboro, Va.-based regional wireless carrier NTELOS Holdings Corp. (NTELOS). NTELOS had earlier planned to upsize the term loan B by about $148 million, all for refinancing. S&P now expects the additional term loan to refinance the $148 million term loan A due 2015 with the approximate $35 million of net proceeds for general corporate purposes. Ratings on NTELOS, including the 'B' corporate credit rating, are not affected by the refinancing. NTELOS reported about $495 million of debt, essentially all term loans, at Sept. 30, 2013. The outlook remains developing, reflecting uncertainty as to whether NTELOS can extend the Strategic Network Alliance agreement with Sprint beyond July 31, 2015. This refinancing is a favorable development since all term loan debt would mature in 2019 (assuming all of term loan A is refinanced), well beyond the expiration of the current Sprint contract. However, if that contract is not renewed with favorable terms or otherwise replaced, NTELOS's credit measures would weaken materially and lead to a rating downgrade. Conversely, if NTELOS is able to extend the Sprint agreement under terms that provide billable wholesale revenues that approximate the current effective minimum Sprint payments of around $9 million per month (about two-thirds of current Sprint wholesale revenues), we would consider a rating upgrade. RATINGS LIST NTELOS Holdings Corp. NTELOS Inc. Corporate Credit Rating B/Developing/-- NTELOS Inc. $538 million term loan B due 2019 Senior Secured B Recovery Rating 4 OCWEN FINANCIAL: Moody's Affirms 'B1' CFR & Sr. Secured Ratings --------------------------------------------------------------- Moody's Investors Service affirmed Ocwen Financial Corporation's corporate family and senior secured ratings at B1. The outlook for all ratings are stable. Ratings Rationale Ocwen's ratings reflect the company's extraordinarily rapid growth balanced by the company's solid capital and leverage metrics for a B1 rated financial services company. In addition, the ratings reflect the company's solid track record as a non-prime residential mortgage servicer along with its record of integrating servicer acquisitions. The ratings are constrained by the fact that a large percent of new servicing volume is obtained through opportunistic bulk acquisitions and that the company is a monoline financial services company concentrating on the residential mortgage servicing market. Management also has a history of exploring new ancillary business opportunities, creating potential distractions from its focus on the core servicing franchise. On January 28, 2014, Ocwen announced their intention to issue a new $2.2 billion 7-year senior secured term loan. The new facility will refinance their existing $1.3 billion senior secured term loan as well as finance the acquisition of servicing rights on $39 billion of residential mortgage loans from Wells Fargo. The company is currently the fourth largest US residential mortgage servicer with a market share of approximately 5% of the US servicing market. Upon completion of the company's announced acquisitions, Ocwen's servicing portfolio will total just over $500 billion. The rating outlook is stable. The company's extraordinarily rapid growth poses operational integration risks. The stable outlook reflects Moody's expectation that Ocwen will be able to successfully integrate its recent as well as future acquisitions and continue to maintain its solid servicing and financial performance. Given the high rate of recent growth, an upgrade is unlikely at this time. Negative ratings pressure could result if the company's servicing performance or financial fundamentals weaken. Particular focus will be on: (a) the rate of amortization of the term loan (b) call center metrics, (c) delinquency rates of the servicing portfolio, and (d) cash reconciliation statistics. PETTERS COMPANY: Ch.11 Trustee Hires Rassers NV as Dutch Counsel ---------------------------------------------------------------- Douglas A. Kelley, the Chapter 11 Trustee for Petters Company Inc. and its debtor-affiliates, seeks permission from the Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota to employ Rassers NV as counsel, effective Dec. 1, 2013. Rassers NV will advise the Chapter 11 Trustee with respect to Dutch Law, legal strategies and to represent the Trustee with respect to any claims of the Bankruptcy Estates against individuals or entities in The Netherlands, including any resulting litigation, and related matters. Rassers NV will be paid at these hourly rates: John Velenturf, Partner EUR 345 Nicole van den Heuvel, Sr. Associate EUR 345 Associate EUR 200 Paralegal EUR 160 Rassers NV will also be reimbursed for reasonable out-of-pocket expenses incurred. Mr. Kelley requests that applications for the approval and allowance of compensation and reimbursement expenses of Rassers NV be heard on periodic intervals in these cases and that he be authorized to pay invoices from Rassers NV with available funds, subject to holdback of 20% of the invoiced fees as provided in Instruction 9 of the Court's published instructions for filing a Chapter 11 case. John Velenturf, partner of Rassers NV, 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. Rassers NV can be reached at: John Velenturf, Esq. RASSERS NV Sophiastraat 22-28, 4811 EM Breda Postbus 3404 4800 DK Breda Tel: 0031 (0)76 5136 136 Fax: 0031 (0)76 5222 552 E-mail: velenturf@rassers.nl About Petters Company, Inc. Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Fruth, Jamison & Elsass, PLLC, represents Douglas Kelley, the duly appointed Chapter 11 Trustee of Petters Company, Inc., et al. The trustee tapped Haynes and Boone, LLP as special counsel, and Martin J. McKinley as his financial advisor. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. PFS HOLDING: Moody's Affirms B2 CFR & Rates 1st Lien Term Loan B2 ----------------------------------------------------------------- Moody's Investors Service affirmed PFS Holding Corporation's B2 Corporate Family Rating ("CFR") following the company's announcement that it will upsize the proposed $260 million first lien term loan to $280 million and reduce its proposed $130 million second lien term loan by a commensurate $20 million. As a result of the revised transaction structure, Moody's changed the rating on the first lien term loan to B2 from B1, reflecting the reduced amount of subordinate debt below it in the capital structure. The Caa1 rating on the second lien term loan is unchanged. The following ratings are affirmed: PFS Holding Corporation - Corporate Family rating at B2; - Probability of Default Rating at B2-PD; - $110 million second lien term loan due 2022 at Caa1 (LGD 5, 89%); The following rating is changed: - $280 million senior secured first lien term loan expiring in January 2021 at B2 (LGD 3, 45%); The rating outlook is stable. RATINGS RATIONALE PFS's B2 Corporate Family Rating ("CFR") reflects the company's highly leveraged capital structure, narrow margins, and aggressive growth via acquisitions. These factors are partially offset by the company's national distribution platform as the largest pet food and supply distributor in the US and good customer and vendor diversity. The rating also reflects the benefit of good growth prospects for the pet product industry overall. The company's liquidity is very good, and will be supported by modest free cash flow in addition to the company's revolving credit facility. The stable outlook reflects Moody's expectation for continued strength in the pet food and supply category and the competitive advantage PFS enjoys as the largest domestic distributor in a fragmented industry. The stable outlook also reflects Moody's expectation that PFS will generate enough free cash flow which will support modest deleveraging over the next 12 to 18 months. PFS's ratings could be upgraded if the company is able to strengthen its credit metrics such that debt to EBITDA is below 4.5 times on a sustained basis while improving its free cash flow. Other factors that could contribute to an upgrade include expanding its geographic footprint and improving EBIT margins above 5% on a sustained basis. Alternatively, a downgrade could occur if operating performance were to deteriorate such that leverage exceeds 7 times on a sustained basis. A downgrade may also occur if liquidity were to weaken as a result of cash usage in owner-friendly transactions or large debt-funded acquisitions. The principal methodology used in this rating was the Global Distribution & Supply Chain Services published in November 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Easton, Pennsylvania-based PFS Holding Corporation (along with its operating subsidiary Phillips Pet Food & Supplies), is a leading pet food and pet supply distributor in the U.S., servicing independent pet retail stores (85% of revenues), online retailers (8% of sales) and other channels such as veterinarians, groomers, and other specialty outlets (5% of sales). For the twelve months ended September 30, 2013 the company posted pro forma revenues in excess of $800 million. PHOENIX DEVELOPMENT: Case Dismissal Hearing Continued to Feb. 20 ---------------------------------------------------------------- The Bankruptcy Court continued until Feb. 20, 2014, at 9:30 a.m., at Athens Courthouse, the hearing to consider Phoenix Development and Land Investment LLC's motion to voluntarily dismiss its Chapter 11 case, as well as a motion to convert the case to one under Chapter 7 of the Bankruptcy Code. At the hearing, the Court will also consider the response to the oppositions filed by creditor SCBT N.A., dba CBT, a Division of SCBT, and the Debtor. As reported in the Troubled Company Reporter on Sept. 5, 2013, the Debtor asked the Court not to convert its Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code. The Debtor asserts there are no funds in the bankruptcy estate to pay legal fees. As previously reported by the TCR on Aug. 14, 2013, SCBT N.A., dba CBT, a Division of SCBT, sought conversion of the Debtor's case stating the Debtor has no way to reorganize. According to SCBT, converting the case to Chapter 7 would provide for a bankruptcy trustee that could litigate the claims and, assuming any recoveries, distribute them to creditors. In response to the Motion to Convert, the Debtor asserts that SCBT lacks standing in the case and it does not owe any debt to SCBT. The Debtor says none of the creditors with undisputed allowed claims are objecting to dismissal or supporting conversion. Moreover, litigation is currently pending in a state court involving the Board of Regents. There is a pending Motion for Summary Judgment filed by the Board of Regents against the Debtor. The Debtor maintains that conversion to Chapter 7 would most likely result in summary judgment on its claim against the Board of Regents. About Phoenix Development Phoenix Development and Land Investment, LLC, filed a Chapter 11 bankruptcy petition (Bankr. M.D. Ga. Case No. 13-30596) in Athens, Georgia, on May 6, 2013. The Watkinsville, Georgia-based company disclosed total assets of $31.7 million and liabilities of $4.31 million in its schedules. The petition was signed by Conway Broun as manager. Ernest V. Harris, Esq., at Harris & Liken, LLP, serves as the Debtor's counsel. Byron C. Starcher, Esq., at Nelson, Mullins, Riley & Scarborough, LLP, represents SCB&T, N.A., as counsel. The Debtor owns a 45-acre property on Milledge Avenue and Whitehall Road, in Athens, valued at $5.5 million and pledged as collateral to a $4 million debt to SCB&T, NA. The Debtor's declared assets include at least $22 million in claims against insurance companies and the Board of Regents of Georgia. RED SPRINGS: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Red Springs LLC 2855 S. Haven Road Annapolis, MD 21401 Case No.: 14-11234 Chapter 11 Petition Date: January 28, 2014 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Hon. James F. Schneider Debtor's Counsel: Tate Russack, Esq. RUSSACK ASSOCIATES, LLC 100 Severn Ave, Ste 101 Annapolis, MD 21403 Tel: 410-505-4150 Fax: 410-510-1390 Email: tate@russacklaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by George Purcell, member. A list of the Debtor's three largest unsecured creditors is available for free at http://bankrupt.com/misc/mdb14-11234.pdf SFX ENTERTAINMENT: Moody's Assigns 'Caa1' CFR; Outlook Stable ------------------------------------------------------------- Moody's Investors Service assigned a Caa1 corporate family rating to SFX Entertainment, Inc. (SFX) in conjunction with the company launching a $230 million debt financing comprised of a $30 million revolving facility, which was rated B1, and a $200 million second- lien secured notes issue, which was rated Caa1. As part of the same action, SFX was also assigned a Caa1-PD probability of default rating, a speculative grade liquidity rating of SGL-3 (indicating adequate liquidity), and a stable ratings outlook. This is the first time Moody's has rated SFX. The following summarizes Moody's ratings and the rating actions for SFX: Issuer: SFX Entertainment, Inc. Corporate Family Rating: Assigned Caa1 Probability of Default Rating: Assigned Caa1-PD Outlook: Assigned Stable First Lien Secured Revolving Credit Facility: Assigned B1 (LGD1, 3%) Second Lien Secured Notes: Assigned Caa1 (LGD3, 49%) Ratings Rationale SFX's Caa1 corporate family rating (CFR) stems primarily from the equity-like risks to which lenders are exposed, given the speculative nature of the company's future cash flow at this early stage of its acquisition-driven development. Forecasting future cash flow is complicated by the fact that acquired companies have not yet operated as a unified whole and, even in the absence of integration risks, significant period to period variability in acquired company cash flows is common. In addition, integration costs, including capital expenditures, are likely to be significant, and the risks of mis-steps are amplified given the very large number of companies that have been acquired in such a short period of time. While the upside from geographic replication of successful properties, from marketing partnerships and from the elimination of duplicate costs, is potentially significant, given the substantial purchase multiples observed thus far, it is not clear that SFX can create value sufficient to repay its debts in a timely manner. Rating Outlook The outlook is stable because SFX has sufficient liquidity to fund operating losses, capital expenditures and acquisitions. What Could Change the Rating UP The Caa1 CFR might be upgraded if we were to develop good visibility and confidence in SFX's future cash flow, coupled with adequate liquidity and roughly breakeven free cash flow. What Could Change the Rating DOWN Until SFX's business model stabilizes, liquidity arrangements will have a significant influence on its rating. In the event liquidity is constrained and the probability of default increases, downwards rating pressure will result. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Corporate Profile Headquartered in New York, New York, SFX Entertainment, Inc., (SFX) is a leading producer of live events and media and entertainment content focused exclusively on electronic music culture (EMC). SOUTHERN OAKS: Secured Creditors Ask for Changes to Confirmed Plan ------------------------------------------------------------------ Southern Oaks of Oklahoma, LLC, will ask the bankruptcy court at a hearing on Feb. 11, 2014, at 2:30 p.m. to approve modifications to the Chapter 11 plan that the court confirmed last year. Southern Oaks won approval of its bankruptcy-exit plan in October 2013. But Southern Oaks and its secured creditors want the court to enter an Order modifying the Amended Plan dated May 15, 2013, particularly the terms and treatment of Classes 5, 6, 8 and 9 to eliminate the early maturity date on the tenth anniversary of the Effective Date and the resulting balloon payment created thereby, and for the maturity date of those Classes of claims to be at the completion of the amortized loan. Pursuant to the Plan, the treatment of the claims of the Secured Creditors in Classes 5, 6, 8 and 9 generally provided for a modification of the loans to monthly payments calculated on a 30-year amortization with interest at 5%. Specifically, the treatment provided: "The maturity date shall be the tenth anniversary of the Effective Date." Following confirmation, the Reorganized Debtor has worked to resolve claim objections and to obtain agreed orders with the institutional secured creditors on claim objections and/or determinations of the claim amounts (after post petition interest and adequate protection payments) as of the Effective Date and the resulting monthly payments under the Plan. The secured creditors in Classes 5, 6, 8 and 9 of the Plan have requested this modification to eliminate the early maturity on the tenth anniversary of the Effective Date of the Plan, which resulted in a balloon payment, and for the loan to be fully amortized over the 30-year term. The Reorganized Debtor has agreed to work with the Secured Creditors to modify the Plan treatment to remove the early maturity on the tenth anniversary of the Effective Date of the Plan. The effect of this modification is that the monthly payments of the respective loans will continue for the full amortization period. The Plan provides that general unsecured creditors will receive a distribution of 100% of their allowed claims, with interest in 60 equal monthly installments or as earlier paid in full. Payments and distributions under the Plan will be funded by (i) rents, issues and profits of the property of the Debtor; (ii) rents, issues and profits of property of the members or affiliates of the Debtor; (iii) sales of property or refinancing of debt before maturity; and contributions by the members of the Debtor. The Plan has not yet been substantially consummated. Secured Creditors The Secured Creditor and their respective claims are: * Class 5 includes 3 secured claims of Ocwen Loan Servicing, LLC (formerly filed and held by OneWest Bank, FSB): Claim No. Property Address Amount as Filed --------- ---------------- --------------- 25 709 Red Oak Terrace $97.465 Edmond OK 73003 26 8301 Willow Creek Blvd. $115,327 Oklahoma City, OK 73162 30 6308 S. Broadway Drive $86,258 Oklahoma City, OK 73139 * Class 6 includes the following secured claim filed and held by Seterus, Inc: Claim No. Property Address Amount as Filed --------- ---------------- --------------- 28 2143 N.W. 50th Street $72,918 Oklahoma City, OK 73112 * Class 5 includes 3 secured claims of Ocwen Loan Servicing, * Class 8 includes these 4 secured claims of Seterus, Inc. (filed and formerly held by SunTrust Mortgage, Inc.): Claim No. Property Address Amount as Filed --------- ---------------- --------------- 17 2501 Kathy CT $86,522 Oklahoma City, OK 73120 18 7713 Embassy Terrace $73,293 Oklahoma City, OK 73169 19 1816 Zion Place $96,023 Edmond, OK 73003 29 12713 Meadows $84,112 Oklahoma City, OK 73120 * Class 9 includes this secured claim of SETERUS, Inc. (as assignee of Federal National Mortgage Association, as assignee of Suntrust Mortgage, Inc.: Claim No. Property Address Amount as Filed --------- ---------------- --------------- 16 2625 N.W. 25th Street Oklahoma $114,653 City OK 73107 The Secured Creditors are the only creditors impacted by the proposed modification. They acknowledge that no additional disclosure pursuant to 11 U.S.C. Sec. 1125 or otherwise is needed and waive any notice or disclosure for the modification. About Southern Oaks Southern Oaks of Oklahoma, LLC, owns a 126-unit apartment complex in south Oklahoma City, 115 single family residences, 10 residential duplexes and 4 commercial properties in the Oklahoma City Metro area and a 100 unit apartment complex in Pryor, Oklahoma. The Company operates the non-apartment properties by and through an affiliate property management company, Houses For Rent of OKC, LLC, who advertises, leases, collects rents, pays expenses, provides equipment, labor and materials for maintenance, repairs and make-ready services. The Company filed for Chapter 11 bankruptcy (Bankr. W.D. Okla. Case No. 12-10356) on Jan. 31, 2012. Judge Niles L. Jackson presides over the case. Ruston C. Welch, at Welch Law Firm, P.C., represents the Debtor as counsel. It scheduled $14,788,414 in assets and $15,352,022 in liabilities. The petition was signed by Stacy Murry, manager of MBR. Affiliates that filed separate Chapter 11 petitions are Charlemagne of Oklahoma, LLC (Bankr. W.D. Okla. Case No. 10-13382) on July 2, 2010; and Brookshire Place, LLC (Bankr. W.D. Okla. Case No. 11-10717) on Feb. 23, 2011. On Jan. 12 and 27, 2012, the Debtor's ownership and operation of the Properties was consolidated by the merger of various affiliate entities with the Debtor being the surviving entity. Those entities are Southern Oaks Of Oklahoma, LLC; Quail 12, LLC; Quail 13, LLC; 1609 N.W. 47th, LLC; 2233 S.W. 29th, LLC; 400 S.W. 28th, LLC; South Robinson, LLC; 9 on S.E. 27th, LLC; Southside 10, LLC; QCB 08, LLC; and Prairie Village of Oklahoma, LLC. ST. JOSEPH'S HOSP: S&P Cuts Revenue Bonds Rating to 'BB' -------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Onondaga Civic Development Corp., N.Y.'s series 2012 tax-exempt revenue bonds, issued for St. Joseph's Hospital Health Center (SJH), one notch to 'BB' from 'BB+'. The outlook is stable. The downgrade reflects Standard & Poor's assessment of the unexpected sizable increase in debt to fund the installation of a new technology system and the construction of a cogeneration plant. It is Standard & Poor's view that the additional debt will likely place a considerable amount of pressure on SJH's already weak balance sheet metrics, leaving it with very limited financial flexibility. The rating service, however, believes the center's recent improvement in operating performance, affiliation with CHE/Trinity, and growing market share somewhat offset these weaknesses and support the current rating. "We would base a lower rating on SJH's inability to maintain operations at current levels while successfully installing the new information technology system and any decrease in unrestricted reserves from current levels. We believe a higher rating over the outlook period is unlikely due to, what we consider, SJH's very weak balance sheet and history of uneven operating results," said Standard & Poor's credit analyst Margaret McNamara. "We would base a higher rating beyond the outlook period on considerable balance sheet improvement and the center's demonstrated ability to maintain margins in excess of 1% and annual debt service coverage of greater than 1.8x." The stable outlook reflects Standard & Poor's opinion of the hospital's healthy market share, growing volume, and improved operating trend. SUNGARD DATA: Moody's Affirms B2 CFR & Ba3 Secured Debt Rating -------------------------------------------------------------- Moody's Investors Service affirmed all SunGard Data Systems Inc.'s debt ratings, including the B2 corporate family rating (CFR), Ba3 secured debt, and Caa1 unsecured and subordinated notes ratings, following the company's announced plans to spin off its Availability Services (AS) business. At closing of the proposed transaction, depending on the final debt capital structure, the senior unsecured rating may be raised by one notch. The rating outlook remains stable. Ratings Rationale Moody's expects that total adjusted debt to EBITDA will be over 6.5 times upon close for the remaining SunGard company, based on plans to raise up to $1.5 billion of debt at AS in connection with the spin off and to use the proceeds to reduce existing SunGard debt. While pro forma leverage will be high for the B2 rating category, Moody's believes that SunGard will be committed to steadily reducing debt over time using its sizable free cash flows (FCF), which Moody's estimates will be $250 to $300 million annually. The prospects for a continuing high amount of FCF comes from SunGard's solid market position as a leading provider of financial institution processing services and its strong business profile, as represented by low customer concentration, diverse product and service line offerings, and broad geographic reach. The expectation of steady FCF will be enhanced with the spin-off of the more capital intensive and declining Availability Services business. In addition, Moody's expects that SunGard will benefit from regulatory reforms, which has increased compliance and risk management needs. The B2 CFR considers SunGard's historically high leverage levels (above 5 times adjusted debt to EBITDA since the LBO in 2005) despite consistent and high levels of free cash flow generation and the sale of assets. Without the capital expenditures needs of the AS business, SunGard could be modestly acquisitive to further expand and diversify its revenue base while seeking growth opportunities. However, Moody's believes the risk of higher leverage will be mitigated by the majority owners' intentions to maximize SunGard's equity value in preparation for exiting their investment. The stable outlook reflects Moody's expectation of low single digit revenue growth in 2014 in line with global GDP growth. While IT growth catalysts exist within the financial services sector with heightened regulatory requirements, Moody's anticipates that capital spending with banks will still remain cautious over the next year. Moody's expects modest improvement to SunGard's financial leverage (to below 6 times adjusted debt to EBITDA in 2015) from the portion of annual free cash flow not used for acquisitions. The stable outlook also assumes SunGard will not make dividend payments to its private equity sponsors. Consistent revenue and profitability growth (in the mid single digits) with adjusted debt to EBITDA less than 5 times on a sustained basis could result in a higher rating. The rating could be lowered if revenue or operating profitability were to decline such that the company's ratio of adjusted debt to EBITDA were to exceed 6.5 times or free cash flow were to fall below $175 million on a sustained basis. Further, there would be pressure on the B2 CFR if there is any evidence that further deleveraging would not continue due either to a shift back to more shareholder friendly financial policies or a weakening in profits. Ratings affirmed: Corporate Family Rating -- B2 Probability of Default Rating -- B2-PD Speculative Grade Liquidity Rating -- SGL-1 Senior Secured Revolving Credit Facility -- Ba3 (LGD 2, 27%) Senior Secured Term Loan -- Ba3 (LGD 2, 27%) Senior Unsecured Notes -- Caa1 (LGD 5, 78%) Senior Subordinated Notes -- Caa1 (LGD 6, 93%) Rating outlook of stable. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. With nearly $3 billion of projected annual revenues (excluding the Availability Services business), SunGard Data Systems Inc. is a provider of software and IT services, and is owned by a consortium of private equity investors (including Bain, Blackstone, KKR, Silver Lake, Texas Pacific Group, GS Partners, and Providence Equity). TEXAS INDUSTRIES: Moody's Places Caa1 CFR Under Review for Upgrade ------------------------------------------------------------------ Moody's Investors Service placed Texas Industries' ratings under review for upgrade, including Caa1 corporate family rating, Caa1- PD probability of default rating, and Caa2 rating on its senior unsecured notes. The company's speculative grade liquidity rating is SGL-3. The rating action was prompted by the announcement of Martin Marietta Materials and Texas Industries entering into a definitive merger agreement to combine into an aggregates and heavy building materials company. The following ratings actions were taken: Issuer: Texas Industries, Inc.: Caa1 corporate family rating, placed under review for upgrade; Caa1-PD probability of default rating, placed under review for upgrade; Caa2 (LGD4-64%) rating on senior unsecured notes, placed under review for upgrade; Speculative grade liquidity rating is SGL-3. RATINGS RATIONALE The transaction is valued at $2.7 billion, including about $0.7 billion of Texas Industries debt to be assumed. The merger will be financed through a stock-for-stock transaction, where Texas Industries' shareholders will receive 0.7 of Martin Marietta's shares for each share of Texas Industries they own. This exchange ratio represents a 13% premium for Texas Industries' shareholders over an average exchange ratio of both companies' 90-day stock price history. Upon consummation of the transaction, Martin Marietta's shareholders will own approximately 69% of the combined company, and Texas Industries shareholders will own approximately 31%. The combined company will operate under Martin Marietta Materials brand and will be led by Martin Marietta's current management team. Texas Industries ratings are being placed under the review for upgrade given that upon consummation of the merger, its capital structure, including leverage metrics, will likely improve as a result of the combined company. In our view, the combined company will benefit from an extended geographic footprint and distribution network, differentiation of the product offering as well as from an enhanced vertical integration in certain markets and the resulting potential efficiencies associated with it. We also recognize that the transaction will result in a Moody's adjusted debt-to-EBITDA leverage of approximately 4.5x based on the LTM numbers of both companies before taking into consideration any potential synergies. Additionally, this transaction exposes Martin Marietta to higher volatility inherent to the cement and ready-mixed concrete business compared to the aggregates products. The review will focus on the integration plans of the two companies and the associated risks, the proposed financing and the resulting capital structure of the combined company along with its liquidity profile, potential synergies and operating efficiencies to be realized, as well as the economic conditions and industry fundamentals of the building materials industry. The review will also evaluate financial and business strategies of the combined company and its leverage targets. The principal methodology used in this rating was the Global Building Materials Industry published in July 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Texas Industries, Inc, headquartered in Dallas, Texas manufactures cement, aggregates and ready-mixed concrete. The company's products are used in public works, commercial, industrial, institutional and residential construction sectors, and energy markets. Texas Industries shipped 4.4 million tons of cement, 14.8 million tons of natural aggregates, 1.0 million cubic yards of lightweight aggregates, and 2.8 million cubic yards of ready-mix concrete during its fiscal year ending May 31, 2013. Texas Industries typically generates approximately 80% of its revenues in Texas and 20% in California. The company reported revenues of $797 million in the last twelve months ending November 30, 2013. TUNICA-BILOXI: S&P Cuts ICR to 'B-' on Weak Operating Performance ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Marksville, La.-based gaming operator Tunica-Biloxi Gaming Authority (TBGA), including S&P's issuer credit rating to 'B-' from 'B+'. The rating outlook is negative. The downgrade to 'B-' reflects a meaningful anticipated EBITDA decline in 2013 largely resulting from increased competition that was more severe than S&P's prior forecast, heightening refinancing risk in 2015, in its view. As a result of anticipated operating deterioration, S&P reassessed TBGA's financial risk profile as "highly leveraged," from "aggressive," reflecting S&P's expectation that leverage will remain above 5x and funds from operation (FFO) to debt will remain in the high-single-digit percent area. In addition, S&P expects that EBITDA coverage of fixed charges (defined as interest expense and our expectation for maintenance capital expenditures and minimum distributions to the Tunica-Biloxi Tribe of Louisiana (the Tribe)) will remain at about 1x through 2014. The ability to assess a Tribe's financial policy and financial position, and particularly its ability and willingness to reduce distributions from the casino in times of financial stress, factor into S&P's ratings. For TBGA, S&P currently assess financial policy as negative, given only limited transparency with respect to the Tribe's financial position and the level of flexibility within its budget. While the Tribe has demonstrated a willingness and ability to reduce distributions over time (distributions have declined in step with declines in free cash flow over the past few years), at this point, S&P is unable to assess the viability of a continued and sustained reduction in distributions over the intermediate term. S&P's assessment of TBGA's business risk profile as "weak" reflects its narrow business position as an operator of a single casino (the Paragon Casino Resort), as well as a highly competitive operating environment. S&P's assessment of TBGA's financial risk profile as "highly leveraged" reflects its expectation for total leverage to remain over 5x, and for FFO to debt to remain under 12% through 2014. Further, S&P's assessment also reflects its expectation for EBITDA coverage of fixed charges (defined as interest expense and its assumption for maintenance capital expenditures and minimum distributions to the Tribe) to remain at about 1x through 2014. WEBALO INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Webalo, Inc. 11835 West Olympic Boulevard, Suite 700E Los Angeles, CA 90064 Case No.: 14-11467 Chapter 11 Petition Date: January 27, 2014 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Hon. Julia W. Brand Debtor's Counsel: David S Kupetz, Esq. SULMEYER KUPETZ 333 S Hope St 35th Fl Los Angeles, CA 90071 Tel: 213-626-2311 Email: dkupetz@sulmeyerlaw.com - and - Marcus Tompkins, Esq. SULMEYER KUPETZ 333 S Hope St 35th Fl Los Angeles, CA 90071 Tel: 213-626-2311 Fax: 213-629-4520 Email: mtompkins@sulmeyerlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Peter Price, chief executive officer. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb14-11467.pdf WESTERN FUNDING: Committee Wants Trustee to Take Over Management ---------------------------------------------------------------- The Official Committee of Unsecured Creditors formed in the Chapter 11 cases of Western Funding Inc. and its affiliates asks the bankruptcy court to order the appointment a Chapter 11 trustee to replace the management of the Debtors. The U.S. Trustee has earlier filed a motion for the appointment of a Chapter 11 trustee and joins in the motion to have a trustee based upon the Debtors' conduct in this case as evidenced by the pleadings filed by the Debtors. The Committee claims that appointment a trustee is in the interests of creditors on these grounds: (a) Within one-year prior to the Petition Date, the insiders of the Debtors (CEO Frederick Cooper and COO Katherine Cooper) received in excess of $2 million in transfers, according to the petition and schedules. These transfers only reach back one year prior to the Petition Date, and therefore, there are likely additional transfers within the time prior to the one year period which would also be available under 11 U.S.C. Sec. 544 and 548. While the Committee acknowledges that it has not determined whether such transfers are avoidable, the Committee does not believe the Debtors can legitimately review these transfers and claims to determine whether a complaint should be filed against insiders for the avoidance of transfers. (b) The Debtors entered into a letter of intent with Carfinco Financial Group Inc on Nov. 1, 2013, which had no meaningful "fiduciary out" and in addition, while in possession of a more favorable offer from Westlake (who was ultimately the successful bidder and who as a result of its offer being an asset purchase did not require the costly plan of reorganization which the Debtors had already commenced on extremely shortened time) causing an undue substantial expense to the estate including, without limitation, a break-up fee and expense reimbursement of $815,000. The Carfinco letter of intent was filed with the Court and it is undisputed by the Debtors that they had the Westlake offer in their possession and did not present it to BMO Harris Bank N.A. prior to BMO's acceptance of the Carfinco LOI and motion for approval of break-up fee and expense reimbursement; (c) The Debtors sought to sell the Las Vegas real property with Carfinco serving as its stalking horse for the amount of $500,000, an amount substantially less than the appraised value of this property, demonstrating a lack of reasonable business judgment and undue deference to Carfinco at the expense of the estate. In connection with this motion, the Debtors also sought to keep the appraisal on this property confidential. These facts are established by the Vegas property bid procedures motion and related pleadings related to sealing the appraisal; (d) The Debtors' Plan proposed to keep all actions against the insiders and not transfer them to the liquidating trust without paying the estate for their value, attempting to effectively provide insiders with a release and discharge of claims against them personally. In addition, the insiders were to be released from claims against them. The Plan is on file and evidence of these actions to not pay the value of these assets and shield insiders is the Plan proposal itself; (e) A Plan Supplement filed by the Debtors and distributed to creditors that provides that Fred and Katherine Cooper were to be officers of the Reorganized Debtors; however, the Debtor denied that such relationship existed shortly before this time as evidenced by Fred Cooper's testimony at the Sec. 341 meeting held on Nov. 7, 2013; and the Debtors later represented that creditors essentially should not rely on the Supplement sent to them which provides that Fred and Katherine Cooper were to be officers of the Reorganized Debtors because no "firm" agreement had been reached regarding employment; (f) The Debtors originally represented to the Court that a substantial sum of money would come to the estate after the sale of the assets to Westlake. However, after the closing of the sale, the Committee has learned that there will be essentially little to noting going to the estate; (g) The Debtors' Plan, as amended Jan. 2, 2014, is a liquidating plan that proposes to retain both a liquidating trustee and plan administrator. The Committee does not believe both a liquidating trustee and plan administrator are needed and that such a proposal simply creates undue expense for the estate. In addition, the Committee anticipates that the Debtors may not be able to confirm such plan due to the inability to get the required votes to accept it. The Committee is represented by: Jeanette E. McPherson, Esq. SCHWARTZER & MCPHERSON LAW FIRM 2850 s. Jones Boulevard, Suite 1 Las Vegas, NV 89146-5308 Debtor's Response to UST The U.S. Trustee cites two separate grounds for the appointment of a Chapter 11 trustee: (a) Alleged self-dealing by management" and (b) Acrimony between the Debtor's management and creditors. In response, the Debtors clarified that existing management never had, obtained, or was promised any position or employment with Carfinco by virtue of Carfinco being designated as the stalking horse bidder, and thus there was never any position to disclose or to influence the process. The Debtors noted that the Plan Supplement listed only the possibility, out of an abundance of caution, that the Debtors' existing management may possibly serve in an officer role in the reorganized entity if Carfinco were the unsuccessful bidder. Zachariah Larson, Esq., at Larson & Zirzow, LLC, counsel to the Debtors, contends that the U.S. Trustee's argument -- that management shielded themselves from avoidance actions under the plan they proposed and thus were involved in self-dealing -- is incorrect. The Debtors say that it is a "common and well- recognized practice" that a buyer of an operating business in bankruptcy may seek to purchase or resolve various avoidance actions to protect its purchased assets and to allow it to operate the business going forward and unimpeded by avoidance actions against existing vendors and other parties. The Debtors further point out that shortly after the sale of a significant portion of their assets, and given that much of the remaining asset sales should be concluded in the next month or less, the Debtors have taken the responsible step of seeking to conclude the Chapter 11 cases by filing a simple and unobjectionable liquidating plan seeking to preserve all remaining assets and litigation claims and place them into a liquidating trust to be administered by a neutral liquidating trustee for the benefit of unsecured creditors. Court Hearings The Committee and U.S. Trustee's request for a Chapter 11 trustee was slated for hearing on Jan. 24. That hearing was continued to Jan. 27. As of Jan. 28, the bankruptcy judge has not issued a ruling on the motion. According to the docket, there's a status conference scheduled for Feb. 10, 2014 at 1:30 p.m. in the courtroom of Bankruptcy Judge Laurel E. Davis, Courtroom #3, Foley Federal Building, 300 Las Vegas Boulevard South, Las Vegas, Nevada. About Western Funding Inc. Las Vegas car-loan maker Western Funding Inc. filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 13-17588) on Sept. 4, 2013, after its own lender said the company broke borrowing promises made last year. Matthew C. Zirzow, Esq., at Larson & Zirzow, LLC, in Las Vegas, Nevada, represents the Debtor. Jeanette E. McPherson, Esq., at Schwartzer & McPherson Law Firm represents the Official Committee of Unsecured Creditors. In its schedules, Western Funding disclosed $48,513,558 in total assets and $44,443,913 in total liabilities. Western Funding is jointly administered with Western Funding Inc. of Nevada, and Global Track GPS, LLC. Western Funding Inc. is the lead case. As reported by the TCR on Nov. 22, 2013, the Debtors filed a proposed Chapter 11 plan that contemplates the transfer of equity interests to Carfinco Financial Group, Inc., absent higher and better offers at a court-sanctioned auction. YRC WORLDWIDE: Moody's Rates $700MM 1st Lien Term Loan '(P)Ba3' --------------------------------------------------------------- Moody's Investors Service has assigned a (P)Ba3 rating to the $700 million first lien term loan that YRC Worldwide Inc. ("YRCW") plans to arrange as part of a refinancing of its capital structure. This refinancing is expected to include the exchange or conversion of Series B Convertible Notes into equity. Pursuant to its normal practice, Moody's is likely to recognize a limited default upon the exchange or conversion of these Series B Convertible Notes when this exchange or conversion occurs. Pending the completion of the refinancing, YRCW's Corporate Family Rating ("CFR") is affirmed at Caa3. Moody's has revised the outlook to positive from negative, as a successful completion of YRCW's refinancing has become very likely, following yesterday's announcement that union members voted in favor of a revised proposal to amend and extend its collective bargaining agreement. Ratings Rationale YRCW's CFR of Caa3 reflects the company's pre-refinancing credit profile, which is marked by weak credit metrics and near-term liquidity pressure from an aggregate amount of debt maturing in 2014 and 2015 of approximately $400 million and $670 million, respectively. YRCW intends to refinance its capital structure primarily through (i) a new $700 million first lien term loan, (ii) a new $450 million first lien ABL credit facility, and (iii) the equivalent of approximately $300 million of new equity. Simultaneously, YRCW is in the process of amending and extending its collective bargaining agreement with the International Brotherhood of Teamsters ("IBT"). Following an unsuccessful union vote on its original proposal earlier this month, YRCW announced yesterday that union members voted in favor of a revised proposal. The refinancing includes the exchange or conversion of approximately $50 million principal amount of the company's Series B Convertible Notes into equity. Moody's is likely to recognize a limited default as a result of this transaction, as it considers the delivery of stock to note holders a diminished financial obligation relative to the original obligation, and the exchange has the effect of allowing the issuer to avoid a payment default. In recognition of the material improvements to YRCW's capital structure that will follow a successful closing of its intended refinancing, as well as the potential savings resulting from the new IBT agreement, Moody's expects to upgrade the CFR and PDR for YRCW to B3 and B3-PD when the transaction closes. Moody's also expects to upgrade the company's speculative grade liquidity rating ('SGL') at that same time. The expected CFR upon completion of the transaction will continue to take into account YRCW's elevated debt levels, despite an anticipated debt reduction of approximately $250 million. In calculating YRCW's debt levels, Moody's takes into account its standard adjustments for operating leases and pension liabilities. Moody's estimates that the debt adjustment associated with YRCW's pension liabilities will represent almost half of YRCW's total debt. The expected CFR also takes into consideration YRCW's improved ability to generate cash flows following the refinancing, as the company benefits from materially reduced interest expenses and cost savings from the implementation of the new IBT agreement. Importantly, this would allow the company to increase its capital expenditures, which have been constrained in recent years due to its weak financial condition. The expected improvements in YRCW's liquidity profile derived from extending all material debt maturities and achieving positive free cash flow, further support the expected rating post-refinancing. The assignment of the (P)Ba3 rating to the new $700 million first lien term loan is derived from the anticipated improvement in the CFR post-refinancing. If the transaction is closed as anticipated, the CFR will be raised to B3 and the Ba3 rating on the term loan will be affirmed with the (P) designation removed. The rating differential between the (P)Ba3 instrument rating and the expected CFR for YRCW is caused by the relatively high proportion of unsecured debt in YRCW's total debt structure, which tends to affect positively the instrument ratings for secured debt in Moody's Loss Given Default analysis. Assignments: Issuer: YRC Worldwide Inc. Senior Secured Bank Credit Facility, Assigned (P)Ba3 (LGD2, 16%) Affirmations: Issuer: YRC Worldwide Inc. Corporate Family Rating, Affirmed Caa3 Probability of Default Rating, Affirmed Caa3-PD Speculative Grade Liquidity Rating, Affirmed SGL-4 Senior Unsecured Conv./Exch. Bond/Debenture Aug 8, 2023, Affirmed Ca (LGD5, 71%) Outlook Actions: Issuer: YRC Worldwide Inc. Outlook, Changed To Positive From Negative The principal methodology used in this rating was the Global Surface Transportation and Logistics Companies published in April 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. YRC Worldwide Inc. is a provider of transportation services and has one of the largest less-than-truckload ("LTL") transportation networks in North America. The company operates through two segments: YRC Freight, which focuses on longer haul LTL shipments, and YRC Regional, which focuses on more regional, next-day and time-sensitive services. ********* 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. 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