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/raid1/www/Hosts/bankrupt/TCR_Public/140207.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 7, 2014, Vol. 18, No. 37 Headlines 22ND CENTURY: Widens Net Loss to $26.1 Million in 2013 AERCAP HOLDINGS: Fitch Expects to Equalize IDR at BB+ on ILFC Deal APPLIED MINERALS: Chemical Industry Veteran Appointed to Board APTEAN INC: S&P Assigns 'B' CCR & Rates $340MM Secured Loan 'B+' ASSOCIATED BANC-CORP: Fitch Hikes Preferred Stock Rating to 'B+' BANK OF UNION: Oklahoma Bank Is Second in U.S. to Fail This Year BERRY PLASTICS: Posts $6 Million Net Income in Fiscal Q1 BIOLIFE SOLUTIONS: Effecting a 1-for-14 Reverse Stock Split BLITZ USA: Delaware Court Approves Plan, Establishment of Trusts BONDS.COM GROUP: Exploring Strategic Alternatives BOWERY TOWER: Files to Stop Imminent Foreclosure CARAUSTAR INDUSTRIES: S&P Affirms 'B+' CCR; Outlook Stable CASA GRANDE: Arizona Hospital in Chapter 11 to Sell to Banner CASA GRANDE: Has Stipulation for Use of Cash Collateral CASA GRANDE: Section 341(a) Meeting Set on March 13 CATHAY GENERAL: Fitch Affirms 'BB+' Long-Term Rating CELL THERAPEUTICS: Had $51.5MM Net Financial Standing at Dec. 31 CEREPLAST INC: Receives Notice of Sale of Collateral CHAMPION INDUSTRIES: Sr. VP Robert Pruett Resigns CIRCLE STAR: Sells Share of Unit Royalty for $2 Million CITY NATIONAL: Fitch Affirms 'BB' Preferred Stock Rating COLOR STAR: Committee Objects to Continued Cash Collateral Use CONSTAR INTERNATIONAL: Schedules Filing Deadline Moved to Feb. 19 COTTONWOOD ESTATES: Claims Bar Date Set for March 7 CULLEN/FROST BANKERS: Fitch Affirms 'BB+' Preferred Stock Rating DETROIT, MI: Schuette Opposes Pension Cuts EAST WEST CAPITAL: Fitch Affirms 'BB-' Preferred Secs. Rating EDGENET INC: Hearing on Further Cash Collateral Use on Feb. 11 EDISON MISSION: Creditors Agree That Retirees Panel Unnecessary EMPIRE DIE: Claims Bar Date Set for Feb. 28 EQUIPMENT ACQUISITION: 5th Cir. Upholds IRS Immunity EXIDE TECHNOLOGIES: Can Tap Schnader Harrison as Special Counsel FIRST HORIZON: Fitch Affirms 'B+' Preferred Stock Rating FIRST NAT'L BANK OF OMAHA: Fitch Affirms 'BB+' Sub. Debt Rating FIRST NIAGARA: Fitch Affirms 'BB+' Subordinated Debt Rating FIRST REPUBLIC: Fitch Hikes Preferred Stock Rating to 'BB' FREEDOM INDUSTRIES: Secures $3 Million Interim Loan FRIEDE GOLDMAN: 5th Cir. Revives Insurers' Suit v. Holloway FULTON CAPITAL: Fitch Affirms 'BB' Preferred Stock Rating GOLDKING HOLDINGS: Wants Until May 27 to File Reorganization Plan GOLDKING HOLDINGS: Wants More Time to Decide on Leases GOLDKING HOLDINGS: Proposes March 5 Auction for Assets GREEN FIELD ENERGY: Feb. 27 Hearing to Approve Restructuring Pact GREEN FIELD ENERGY: Wants Lease Decision Extension Until May 27 GROEB FARMS: Committee Wants Chapter 11 Case Open Until August HAWAII OUTDOOR: Cash Collateral Hearing Continued Until March 17 HAYES LEMMERZ: Union Fails in Bid to Dismiss "Laber" Suit HOYT TRANSPORTATION: Taps Greenberg Traurig as Litigation Counsel HOYT TRANSPORTATION: May Close Acquisition of Atlantic's Assets IGPS COMPANY: Court Reclassifies Perkins Coie Claim as Unsecured INTERNATIONAL LEASE: Fitch Expects to Equalize IDR at 'BB+' JACOB P. SURMA: Court Says Plan "Patently Unconfirmable" KEYWELL LLC: Has Until March 31 to Decide on U.S. Steel Lease KEYWELL LLC: Has Until April 15 to Propose Chapter 11 Plan LABORATORY PARTNERS: Wants Plan Exclusivity Extended to April 23 LAFAYETTE YARD: Trenton Wants Retention Plan Denied LAFAYETTE YARD: Court Approves Stipulation With Veolia Energy LAGUNA BRISAS: Court Okays Auction of Best Western Hotel LOUDOUN HEIGHTS: Hires Frank Bredimus as Bankruptcy Counsel LOUDOUN HEIGHTS: Taps Richard Gallagher as Accountant MICHAEL ROSEBAR: Facing Sanctions After No-Show in Rule 2004 Exam MIDTOWN SCOUTS: Has Until March 14 to Propose Reorganization Plan MOSS FAMILY: Hearing on Cash Collateral Use Moved to June 17 MOUNTAIN PROVINCE: Provides Gahcho Kue Project Update MT. LAUREL LODGING: Court Approves Perkins Coie as Bankr. Counsel MUNDY RANCH: PBGC Calls Shareholder Deal "Sub Rosa" Plan NEWPAGE HOLDINGS: Verso Tenders Come Up Short in Acquisition NORTEL NETWORKS: E&Y to Be Paid At Least $3.9MM for 2014 Work NPS PHARMACEUTICALS: BlackRock Stake at 6.7% as of Dec. 31 OPTIMUMBANK HOLDINGS: Independent Director Resigns ORCKIT COMMUNICATIONS: Noteholders Submit Arrangement Proposal PERSONAL COMMUNICATIONS: Panel Wins Okay to Retain Cousins Chipman PERSONAL COMMUNICATIONS: Parties Balk at Approval of Plan Outline PORTER BANCORP: Incurs $1.02-Mil. Net Loss in Fourth Quarter QUALITY DISTRIBUTION: BlackRock Stake at 5.6% as of Dec. 31 QUANTUM CORP: BlackRock Stake at 5.8% as of Dec. 31 QUANTUM FUEL: Hudson Bay Stake Down to 3.8% RADIOSHACK CORP: BlackRock Stake at 6.2% as of Dec. 31 RITZ CAMERA: Court Narrows Claims in Avoidance Suit v. Canon SEQUENOM INC: BlackRock Stake at 7.6% as of Dec. 31 SHUANEY IRREVOCABLE: U.S. Trustee Wants Case Converted to Ch.7 SILVERADO STREET: Section 341(a) Meeting Set on March 4 SIMPLY WHEELZ: Postal Service Fails to Deliver Some Mails SINCLAIR BROADCAST: BlackRock Has 6.1% of Class A Shares SOUTHERN MONTANA ELECTRIC: May Use Cash Collateral Until Feb. 28 SOUTHERN MONTANA: Fergus & Beartooth Asks for Ch. 7 Conversion SPANISH BROADCASTING: BlackRock Stake at 5.1% as of Dec. 31 SR REAL ESTATE: Has Until April 18 to File Chapter 11 Plan ST. FRANCIS' HOSPITAL: Competing Offers Due Feb. 10 STACY'S INC: Committee Objects to Plan Outline, Hearing on Feb. 12 SYNOVUS FINANCIAL: Fitch Affirms 'B' Short-Term IDR Rating TFC FINANCIAL: Fitch Affirms 'B' Preferred Stock Rating TLC HEALTH: Ombudsman Hires Gleichenhaus Marchese as Counsel TRILITO INC: Asks Court to Dismiss Chapter 11 Case TRILITO INC: Section 341(a) Meeting Slated for Feb. 14 TUOMEY HEALTHCARE: S&P Revises Outlook on 'CCC' Rating to Neg. VARITALK INC: Appeals Court Directs Trial in Malpractice Suit WEBALO INC: Mobile-Phone App Developer Files in Los Angeles WEBSTER FINANCIAL: Fitch Affirms 'B+' Preferred Stock Rating WEST CORP: Posts $50.3 Million Net Income in Fourth Quarter WESTMORELAND COAL: Exec. Chairman Has Base Salary of $750,000 WINTRUST FINANCIAL: Fitch Affirms 'B+' Preferred Stock Rating WJO INC: Chapter 11 Trustee Hires Sklar Law as Special Counsel WORLD IMPORTS: Claim Bar Date Set for March 3 WPCS INTERNATIONAL: Appoints Marcum LLP as New Accountants WPCS INTERNATIONAL: Hudson Bay Stake at 9.9% as of Dec. 31 * Supreme Court Turns Away Bankruptcy-Equity Case * BOOK REVIEW: Jacob Fugger the Rich: Merchant and Banker of Augsburg, 1459-1525 ********* 22ND CENTURY: Widens Net Loss to $26.1 Million in 2013 ------------------------------------------------------ 22nd Century Group, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $26.15 million on $7.27 million of revenue for the year ended Dec. 31, 2013, as compared with a net loss of $6.73 million on $18,775 of revenue for the year ended Dec. 31, 2012. The Company incurred a net loss of $1.34 million in 2011. As of Dec. 31, 2013, the Company had $12.28 million in total assets, $4.76 million in total liabilities and $7.52 million in total shareholders' equity. Freed Maxick CPAs, P.C., in Buffalo, New York, did not issue a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The accounting firm previously expressed substantial doubt about the Company's ability to continue as a going concern in their audit report on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that 22nd Century has suffered recurring losses from operations and as of Dec. 31, 2012, has negative working capital of $3.3 million and a shareholders' deficit of $6.1 million. Additional capital will be required during 2013 in order to satisfy existing current obligations and finance working capital needs as well as additional losses from operations that are expected in 2013, the report added. A copy of the Form 10-K is available for free at: http://is.gd/7q9Nrm About 22nd Century Clarence, New York-based 22nd Century Group, Inc., through its wholly-owned subsidiary, 22nd Century Ltd, is a plant biotechnology company using technology that allows for the level of nicotine and other nicotinic alkaloids (e.g., nornicotine, anatabine and anabasine) in tobacco plants to be decreased or increased through genetic engineering and plant breeding. AERCAP HOLDINGS: Fitch Expects to Equalize IDR at BB+ on ILFC Deal ------------------------------------------------------------------ The expected closing of AerCap Holdings NV's (AerCap) acquisition of International Lease Finance Corp. (ILFC) in the second quarter will mark an important and positive turning point for the aircraft leasing industry, according to Fitch Ratings. On completion of the acquisition, a long period of lessor ownership uncertainty will come to an end, and strong public market acceptance of the deal is a credit positive for the entire industry. The sale of ILFC by AIG represents the last transfer of a large fleet of leased aircraft (more than 900), following RBS's sale of its leased aircraft fleet in 2012 and CIT's re-emergence from bankruptcy. "Once the AerCap deal closes, we believe material consolidation in the industry will be complete, with two large players (AerCap and GECAS) controlling close to half of all lessor-owned aircraft globally. However, there may still be M&A opportunities for the smaller players," Fitch said. Smaller lessors may feel increased pressure to sell or combine with another player to achieve the critical mass necessary to compete effectively in a more consolidated industry. "We believe scale plays an important role in driving lessors' financial performance, particularly given the need to shift leased aircraft out of underperforming regional markets. Returns to scale tend to diminish, however, with reduced benefits appearing once lessor fleets reach 200-300 aircraft," Fitch said. Following AIG's exit from the business, the strategic uncertainty surrounding ILFC's ultimate buyer will be resolved after more than five years. "We think this is an important step for the industry, ending ownership uncertainty and transferring assets to a pure- play lessor. Additionally, the mark-to-market of ILFC's fleet could lead to improved support for aircraft valuations since risks of any further aircraft impairments will be reduced in the transaction. We expect AerCap to continue pursuing an active aircraft trading strategy, which will support activity in the secondary market," Fitch said. Over time, the increase in AerCap's market capitalization should lead to improved access to equity markets for other aircraft lessors. "This could lead more lessors to contemplate public equity offerings. Air Lease Corp. has been the only aircraft lessor to IPO since 2007, but we expect more activity as private equity sponsors continue to look for exit opportunities. Increased liquidity and trading volume, supported by strong equity market performance over the last 18 months, should lead to a better funding environment with strong public participation, a positive for credit," Fitch said. AerCap's Issuer Default Rating (IDR) is currently on Rating Watch Negative, while ILFC's IDR is on Rating Watch Positive. Upon consummation of the acquisition, Fitch expects to equalize the IDRs of the two companies at 'BB+'. APPLIED MINERALS: Chemical Industry Veteran Appointed to Board -------------------------------------------------------------- Applied Minerals, Inc., appointed Robert Betz, a veteran chemical industry executive with 40 years of experience, to its Board of Directors. From 2000 through his retirement in 2002, Mr. Betz was the president of Cognis Corp., the North American division of Cognis GmbH, a $4 billion worldwide supplier of specialty chemicals and nutritional ingredients spun off from Henkel AG & Company. From 1989 through 2000 Mr. Betz held a number of management positions at Henkel including executive VP and president of its Emery Group, a leading manufacturer of oleochemicals, and president of its Chemicals Group for North America. From 1979 through 1989, Mr. Betz worked in a number of manufacturing and operations capacities for the Emery Division of National Distillers and Chemicals Corp., eventually rising to president of the division. Mr. Betz began his career in the specialty chemicals industry by joining Emery Industries in 1963. Between 1963 and 1979 he worked for the company as Market Development Representative, Manager of Corporate Planning, Vice President of Operations - Emery (Canada), Manager of Corporate Development, and General Manager of Business Groups. Emery Industries was sold to National Distillers and Chemicals Corp. in 1979. Since 2003, Mr. Betz has been the owner of Personal Care Ingredients, LLC, a privately owned marketer of natural products to the personal care industry. Mr. Betz also serves as a director for Bio-Botanica, a manufacturer of natural extracts, and The Plaza Group, a marketer of petrochemicals. Mr. Betz holds a B.S. in Chemical Engineering and an M.B.A. from the University of Cincinnati. He's also attended the Program for Management Development at Harvard University. "We are very pleased to welcome Bob to the Applied Minerals Board," said John F. Levy, Chairman of the Board. "Bob not only has deep experience in the specialty chemical business but also has proven success as a senior executive at a number of firms. His significant industry knowledge and management expertise will be very valuable to the Board and the Company." "I am excited to join the board of a company with such great potential and one that has assembled such a talented team of professionals," said Robert Betz. "I look forward to working with the Company as it commercializes its unique line of halloysite and iron oxide products." About Applied Minerals New York City-based Applied Minerals, Inc. (OTC BB: AMNL) is a leading global producer of halloysite clay used in the development of advanced polymer, catalytic, environmental remediation, and controlled release applications. The Company operates the Dragon Mine located in Juab County, Utah, the only commercial source of halloysite clay in the western hemisphere. Halloysite is an aluminosilicate clay that forms naturally occurring nanotubes. Applied Minerals incurred a net loss of $9.73 million in 2012 as compared with a net loss of $7.43 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $16.90 million in total assets, $13.25 million in total liabilities and $3.64 million in total stockholders' equity. Bankruptcy Warning "The Company has had to rely mainly on cash flow generated from the sale of stock and convertible debt to fund its operations. If the Company is unable to fund its operations through the commercialization of its minerals at the Dragon Mine, it may have to file bankruptcy, as there is no assurance of the foregoing," the company said in its annual report for the year ended Dec. 31, 2012. APTEAN INC: S&P Assigns 'B' CCR & Rates $340MM Secured Loan 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to Atlanta-based Aptean Inc. The outlook is stable. At the same time, S&P assigned a 'B+' issue-level rating with a recovery rating of '2' to the company's proposed $25 million revolving credit facility and $315 million senior secured first- lien credit term loan B. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery of principal in the event of a default. S&P also assigned a 'CCC+' issue-level rating with a '6' recovery rating to the proposed $100 million senior secured second-lien term loan B. The '6' recovery rating indicates S&P's expectation for negligible (0% to 10%) recovery of principal in the event of a default. "The ratings reflect our view of Aptean's 'weak' business risk profile and 'highly leveraged' financial risk profile (as defined by our criteria)," said Standard & Poor's credit analyst Martha Toll-Reed. S&P's business risk assessment incorporates the company's limited operational scale and modest competitive position compared with larger competitors with significantly more resources in the highly competitive, global enterprise software industry. These factors are partially offset by the company's significant base of contractually recurring revenues, increased focus on customer retention, and improved operating profitability. Aptean is a global provider of enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM), and other enterprise software solutions. S&P views the company's financial risk profile as "highly leveraged" as a result of its high debt leverage, with pro forma 2014 debt to EBITDA of about 8x (including our treatment of preferred stock as debt), and an aggressive financial policy. S&P views the industry risk as "intermediate" and the country risk as "very low". The stable outlook reflects S&P's expectation that high levels of recurring revenue with strong customer renewal rates, and new software sales in Aptean's strategic growth areas, will stabilize revenue and generate consistent EBITDA margins over the near-to- intermediate term. The current rating does not incorporate material debt-financed acquisitions or dividends. S&P could lower the rating if a deterioration in customer retention or lack of new software sales leads to a material decline in revenues and EBITDA. S&P could also lower the rating if earnings weakness or aggressive financial policies lead to less-than-adequate liquidity, including less than 15% headroom under the incurrence-based revolver covenant. S&P views an upgrade as unlikely in the next 12-24 months, given pro-forma leverage of about 8x, and S&P's expectation that Aptean's current ownership structure will preclude sustained deleveraging. ASSOCIATED BANC-CORP: Fitch Hikes Preferred Stock Rating to 'B+' ---------------------------------------------------------------- Fitch Ratings has upgraded Associated Banc-Corp.'s (ASBC) ratings to 'BBB'/'F2' from 'BBB-'/'F3'. The Rating Outlook was revised to Stable from Positive. KEY RATING DRIVERS - IDRS, VRs, and SENIOR DEBT The upgrade reflects Fitch's view that management has taken meaningful steps over recent periods to de-risk the bank's balance sheet and has positioned the bank to generate reasonable returns relative to its risk profile going forward. The Stable Outlook reflects Fitch's view that the company's ratings are fairly constrained at 'BBB' given its relatively weaker core earnings power when compared to higher rated peers as well as the expectation that capital will continue to be managed at levels comparable with similarly rated peers. Fitch observes that at 4Q'13 ASBC had non-performing assets (NPAs) of 2.1%, below the mid-tier regional peer group average and well below other 'BBB-' rated banks. Management has reduced the dollar volume of NPAs by 20% over the last year, all while keeping net charge-offs (NCOs) below 35bps on average each quarter. Asset quality improvement has coincided with the maintenance of strong capital levels, even with the bank increasing its quarterly dividend and level of share buybacks. ASBC had Basel III T1C of around 11% at 4Q'13, much higher than regulatory minimums. Management has indicated that it will manage the level down to between 8% and 9.5% through additional share buybacks, organic loan growth and/or an acquisition. Fitch's expectation that the company will manage capital appropriately and at levels commensurate with growth is reflected in the rating action as well as the Outlook Stable. Ratings are constrained to their current level over the long term given Fitch's expectations that core earnings power will continue to be tepid in the current low-rate, low-growth environment. Associated's pre-provision net review to average assets (PPNR/AA) has averaged under 1.2% over the last five quarters, primarily challenged by a compressing net interest margin (NIM; down 15bps year over year to 3.13%) and higher overhead costs related to updating technology and branches. While the company has been taking steps to cut overhead, mainly by consolidating branches, its efficiency ratio has remained elevated in the high 60%'s, considerably higher than similarly rated peers. Bottom line results have been aided by reserve releases which were nearly 10% of pre-tax income during 2013. Fitch believes support from asset quality improvement will dwindle and ASBC's return on assets (ROA) will fluctuate between 70-75bps from quarter to quarter going forward. Fitch expects that the company will gain reasonable efficiencies in future quarters that could add to the bottom line. This expectation is reflected in the bank's 'BBB' rating and Stable Outlook. RATING SENSITIVITIES - IDRS, VRs, and SENIOR DEBT As indicate above, Fitch expects ASBC's ratings to be constrained at their current level and sees little upward rating movement over the long term. ASBC has reported moderate growth in oil and gas (O&G) and power and utility (P&U) lending. Given growth in this sector and ASBC's upper Midwestern footprint, the company's ratings remain sensitive to credit quality in the portfolio. C&I lending, in general, has become an increasingly competitive asset class. Deterioration in the underlying asset quality of the O&G and/or P&U books would likely pressure ASBC's Rating Outlook. Moreover, excessive growth in this portfolio relative to the overall portfolio and capital could have an adverse impact on the company's rating over time. Fitch will monitor the pace at which ASBC's capital is managed down and could take negative rating action or revise the bank's Outlook to Negative should management take actions outside of what it has publically stated that result in capital levels below their targets. ASBC has also indicated that it is interested in doing a reasonably sized acquisition in the near- to intermediate-term. Fitch would likely review ASBC's ratings in conjunction with such a transaction to assess its potential impact on the bank's capital levels post-merger, the potential costs (and cost savings), as well as the new management team of the combined entity. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by ASBC and its subsidiaries are all notched down from ASBC's Viability Rating (VR) of 'bbb' in accordance with Fitch's assessment of each instrument's respective non-performance and relative Loss Severity risk profiles, which vary considerably. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES ASBC's subordinated debt and other hybrid capital ratings are is sensitive to changes in ASBC's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS Associated Bank, NA is a wholly owned subsidiary of ASBC. Associated Bank, NA's ratings are aligned with ASBC reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES Associated Bank, NA's ratings are sensitive to changes to ASBC's VR or any changes to Fitch's view of structural subordination between a bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR ASBC's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR ASBC's Support Rating and Support Rating Floor are sensitive to Fitch's assumption of ability to procure extraordinary support in case of need. Fitch reviewed ASBC's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc- Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN),Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch has upgraded the following ratings with a Stable Outlook: Associated Banc-Corp. -- Long-term Issuer Default Rating (IDR) to 'BBB' from 'BBB-'; -- Senior unsecured debt to 'BBB' from 'BBB-'; -- Viability rating to 'bbb' from 'bbb-'; -- Subordinated debt to 'BBB-' from 'BB+'; -- Preferred stock to 'B+' from 'B'; -- Short-term IDR to 'F2' from 'F3'; -- Commercial paper to 'F2' from 'F3'. Associated Bank, NA -- Long-term IDR to 'BBB' from 'BBB-'; -- Viability rating to 'bbb' from 'bbb-'; -- Long-term deposits to 'BBB+' from 'BBB'; -- Long-term senior debt to 'BBB' from 'BBB-'; -- Short-term IDR to 'F2' from 'F3'. Associated Trust Company, NA --Long-term IDR to 'BBB' from 'BBB-'; --Viability to 'bbb' from 'bbb-'; --Short-term IDR to 'F2' from 'F3'. Fitch has affirmed the following ratings: Associated Banc-Corp. -- Support at '5'; -- Support floor at 'NF'. Associated Bank, NA -- Support at '5'; -- Support floor at 'NF'; -- Short-term deposits at 'F2'. Associated Trust Company, NA -- Support at '5'; -- Support floor at 'NF'. BANK OF UNION: Oklahoma Bank Is Second in U.S. to Fail This Year ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Bank of Union in El Reno, Oklahoma, is the year's second bank failure. According to the report, the bank was taken over on Jan. 24 by regulators, and its two branches were transferred to BancFirst of Oklahoma City. Bank of Union had $328.8 million of deposits in September, and the failure was estimated to cost the Federal Deposit Insurance Corp. $70 million, the report related. In 2013, there were 24 bank failures, about half the number from the year before and the fewest since 2007, when there were three, the report pointed out. Failed banks last year had a combined $6 billion in assets. In terms of number of bank takeovers, 2010 had the most since 1992 with 157 failures, the report said. Measured by assets, the most was $371 billion in 2008 when there were 25 failures. BERRY PLASTICS: Posts $6 Million Net Income in Fiscal Q1 -------------------------------------------------------- Berry Plastics Group, Inc., reported net income of $6 million on $1.14 billion of sales for the quarterly period ended Dec. 28, 2013, as compared with a net loss of $10 million on $1.07 billion of net sales for the quarterly period ended Dec. 29, 2012. As of Dec. 28, 2013, the Company had $5.26 billion in total assets, $5.44 billion in total liabilities and a $183 million stockholders' deficit. "Despite the continued pressure from increasing raw material costs coupled with subdued consumer and customer demand, we finished the quarter in line with our expectations and with our previously announced full fiscal year guidance, while generating solid free cash flow," said Jon Rich, chairman and CEO of Berry Plastics. "The actions we have taken over the past year, and up through the recent quarter, have been consistent with our strategic goals to increase shareholder value," said Rich. "We continued to invest in research and development, marketing and capital equipment to support our organic growth strategy. We made a very important step in expanding our international footprint through our acquisition of a controlling interest in Qingdao P&B Co., Ltd., and also completed a synergistic, bolt-on acquisition through the addition of Graphic Packaging's Flexible Plastics and Film business." A copy of the press release is available for free at: http://is.gd/4CjASP About Berry Plastics Berry Plastics Corporation manufactures and markets plastic packaging products, plastic film products, specialty adhesives and coated products. At Jan. 2, 2010, the Company had more than 80 production and manufacturing facilities, primarily located in the United States. Berry is a wholly-owned subsidiary of Berry Plastics Group, Inc. Berry Group is primarily owned by affiliates of Apollo Management, L.P., and Graham Partners. Berry, through its wholly owned subsidiaries operates five reporting segments: Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings and Specialty Films. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. On Dec. 3, 2009, Berry Plastics obtained control of 100 percent of the capital stock of Pliant upon Pliant's emergence from reorganization pursuant to a proceeding under Chapter 11 for a purchase price of $602.7 million. Pliant is a leading manufacturer of value-added films and flexible packaging for food, personal care, medical, agricultural and industrial applications. The acquired business is primarily operated in Berry's Specialty Films reporting segment. * * * As reported by the TCR on Feb. 1, 2013, Moody's Investors Service upgraded the corporate family rating of Berry Plastics to B2 from B3 and the probability of default rating to B2-PD from B3-PD. The upgrade of the corporate family rating to B2 from B3 reflects the improvement in pro-forma credit metrics and management's publicly stated goal to pursue a less aggressive, more balanced financial profile. In November 2011, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on Berry and its holding company parent, Berry Plastics Group Inc. "The ratings on Berry reflect the risks associated with the company's highly leveraged financial profile and acquisition- driven growth strategy as well as its fair business risk profile," said Standard & Poor's credit analyst Cynthia Werneth. In November 2011, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on Berry and its holding company parent, Berry Plastics Group Inc. "The ratings on Berry reflect the risks associated with the company's highly leveraged financial profile and acquisition- driven growth strategy as well as its fair business risk profile," said Standard & Poor's credit analyst Cynthia Werneth. BIOLIFE SOLUTIONS: Effecting a 1-for-14 Reverse Stock Split ----------------------------------------------------------- The Board of Directors of BioLife Solutions, Inc., determined to set the reverse stock split ratio at one-for-fourteen (1:14) and approved the final form of Certificate of Amendment to the Certificate of Incorporation to effectuate the Reverse Stock Split. The Certificate of Amendment was filed with the Secretary of State of the State of Delaware on Jan. 24, 2014, and the Reverse Stock Split became effective in accordance with the terms of the Certificate of Amendment at 3:01 a.m. Eastern Standard Time on Jan. 29, 2014. At the Effective Time, every fourteen shares of Common Stock issued and outstanding were automatically combined into one share of issued and outstanding Common Stock, without any change in the par value per share. No fractional shares will be issued as a result of the Reverse Stock Split. Stockholders who otherwise would be entitled to receive a fractional share in connection with the Reverse Stock Split will have that fractional share rounded up to the nearest whole share. American Stock Transfer and Trust Company, LLC, is acting as exchange agent for the Reverse Stock Split and will send instructions to stockholders of record who hold stock certificates regarding the exchange of certificates for Common Stock. Stockholders who hold their shares in brokerage accounts or "street name" are not required to take any action to effect the exchange of their shares following the Reverse Stock Split. On Jan. 29, 2014, the Common Stock commenced quoting on the OTCQB on a Reverse Stock Split-adjusted basis. The Common Stock will be reported for 20 business days under the temporary ticker symbol "BLFSD," with the "D" added to signify that the reverse stock split has occurred. After 20 business days, the symbol will revert to the original symbol of "BLFS." In connection with the Reverse Stock Split, the Company's CUSIP number was changed to 09062W204. The stockholders of BioLife Solutions had authorized the Board of Directors of the Company to, in its discretion, amend the Company's Amended and Restated Certificate of Incorporation to effect a reverse split of the Company's common stock, par value $0.001, at a ratio of between one-for-four (1:4) to one-for- sixteen (1:16), with that ratio to be determined by the Board. About BioLife Solutions Bothell, Washington-based BioLife Solutions, Inc., develops and markets patented hypothermic storage and cryo-preservation solutions for cells, tissues, and organs, and provides contracted research and development and consulting services related to optimization of biopreservation processes and protocols. BioLife Solutions disclosed a net loss of $1.65 million in 2012, as compared with a net loss of $1.95 million in 2011. As of Sept. 30, 2013, the Company had $3.20 million in total assets, $16.06 million in total liabilities and a $12.85 million total shareholders' deficiency. BLITZ USA: Delaware Court Approves Plan, Establishment of Trusts ---------------------------------------------------------------- Blitz USA Inc., and its affiliated debtors are now poised to exit Chapter 11 protection. The Bankruptcy Court in Wilmington, Delaware, on Jan. 30, 2014, entered Findings of Fact, Conclusions of Law and Order Confirming Debtors' and Official Committee of Unsecured Creditors' First Amended Joint Plan of Liquidation. The Plan contemplates the separate substantive consolidation of the USA Debtors and the BAH Debtors. The USA Debtors are comprised of: (1) Blitz Acquisition, LLC; (2) Blitz U.S.A., Inc.; (3) MiamiOK, LLC (f/k/a F3 Brands, LLC); and (4) Blitz RE Holdings, LLC. The BAH Debtors are comprised of: (1) Blitz Acquisition Holdings, Inc.; and (2) LAM 2011 Holdings, LLC. The Plan establishes two trusts pursuant to section 105 of the Bankruptcy Code: (i) a Blitz Personal Injury Trust that is responsible for administration and payment of Blitz Personal Injury Trust Claims; and (ii) a Blitz Liquidating Trust for the benefit of Administrative Claims and General Unsecured Claims of the USA Debtors. As for the BAH Debtors, the Plan contemplates the appointment of the BAH Plan Administrator who will have the responsibility of liquidating all assets of the BAH Debtors and making distributions to holders of Allowed Claims against the BAH Debtors (other than the holders of Blitz Personal Injury Trust Claims). The Blitz Personal Injury Trust will be funded with roughly $162 million in funds contributed by Wal-Mart and the Participating Insurers, along with certain assigned insurance policies. Specifically, Wal-Mart will conitrbute roughly $23.8 million (plus waiving its rights to payment under the Participating Insurer Policies and Assigned Blitz Insurance Policies) and the Participating Insurers will contribute roughly $137.5 million. The Blitz Liquidating Trust funded by the BAH Released Parties and Wal-Mart to liquidate and make distributions for administrative claims and general unsecured claims. The Liquidating Trust is funded through (i) payment of $6.25 million by the BAH Released Parties, and (ii) Wal-Mart's release of account payables in the amount of $1.54 million that are secured by Wal-Mart's right of setoff. The Plan further provides for the contribution of the Assigned Insurance Policies to the Blitz Liquidating Trust as a source of recovery for Pre-2007 Blitz Personal Injury Claims. According to Blitz, the Plan is the result of many months of good faith, arm's-length negotiations and encompasses a delicate balance of important competing interests. Both Chief Judge Kevin Gross and the Honorable Richard Cohen (Ret.) were heavily involved in supervising the negotiation process among the Debtors' constituents that ultimately resulted in the Plan. The trust structure and Channeling Injunction underlying the Plan was the focal point of negotiations and the impetus behind the funding contributions from Wal-Mart, the Participating Insurers and the BAH Released Parties. Upon the Effective Date, the Debtors will have resolved all outstanding issues surrounding the Participating Insurer Policies and will liquidate these assets (in conjunction with the substantial contributions from Wal-Mart and the BAH Released Parties) to provide meaningful recoveries for creditors. Blitz said the orderly and equitable resolution of Claims afforded by these funding contributions cannot be effectuated without the Releases and Channeling Injunction contemplated by the Plan. The Bankruptcy Court approved the Disclosure Statement explaining the Plan at a hearing on Dec. 18, allowing the Plan proponents to solicit plan votes. Kurtzman Carson Consultants LLC, the Debtors' balloting agent, on Jan. 23 submitted a "Certification of P. Joseph Morrow IV with Respect to the Tabulation of Votes on the Debtors' and Official Committee of Unsecured Creditors' First Amended Joint Plan of Liquidation", indicating that the Proponents received overwhelming acceptances from the Voting Classes. These classes were entitled to vote on the Plan: Class 3(a) General Unsecured Claims against the USA Debtors; Class 3(b) General Unsecured Claims against the BAH Debtors; Class 4(a) Blitz Personal Injury Trust Claims against the USA Debtors; and Class 4(b) Blitz Personal Injury Trust Claims against the BAH Debtors. A copy of the DISCLOSURE STATEMENT FOR DEBTORS' AND OFFICIAL COMMITTEE OF UNSECURED CREDITORS' FIRST AMENDED JOINT PLAN OF LIQUIDATION, dated Dec. 18, is available at no extra charge at: http://bankrupt.com/misc/BLITZUSAds_1plan.pdf The Proponents received four objections to the Plan from: (i) Carrie Larkin, Individually and as next friend of Rayne Newby, a minor, and Billy Way Newby; (ii) Michael J. Bauman, Jr., Michael Bauman, Sr., and Donna (Bauman) Greer; (iii) Estate of Joseph M. Cataldi and Lori Cataldi in her capacity as guardian, parent and natural guardian for minors Michael Cataldi and Brianna Cataldi; and (iv) the Office of the United States Trustee. The Newby Claimants argue, among other things, that the Releases and Channeling Injunction as to Wal-Mart are improper, the Plan is not in the best interest of creditors and the Insurance Settlement should not be approved. The Bauman Claimant -- See http://is.gd/sUFY3K-- generally argues that the Plan violates Michael J. Bauman, Jr.'s constitutional rights of due process and equal protection. The Cataldi Claimants argue that, in the event they are precluded from filing their claims, the third-party Releases are improper. The U.S. Trustee -- see http://is.gd/7Kw8rP-- argues that the exculpation provision in the Plan is overbroad and that Proponents must meet their burden to obtain the Releases as to the non-Debtor Protected Parties. The Debtors defended their Plan in an 81-page MEMORANDUM OF LAW AND OMNIBUS REPLY IN SUPPORT OF THE DEBTORS' AND OFFICIAL COMMITTEE OF UNSECURED CREDITORS' FIRST AMENDED JOINT PLAN OF LIQUIDATION, filed Jan. 24, a copy of which is available at no extra charge at: http://bankrupt.com/misc/BLITZUSAplanresponse.pdf Wal-Mart also filed a MEMORANDUM OF LAW IN SUPPORT OF THE DEBTORS' AND OFFICIAL COMMITTEE OF UNSECURED CREDITORS' FIRST AMENDED JOINT PLAN OF LIQUIDATION, dated Jan. 24, a copy of which is available at no extra charge at: http://bankrupt.com/misc/BLITZUSAplanresponse2.pdf In accordance with the confirmed the Plan, other than (a) Administrative Expense Claims for which the Bankruptcy Court established a previous Bar Date, including 503(b)(9) Claims and Administrative Expense Claims arising during the period commencing on the Petition Date and continuing through and including July 13, 2012, which were subject to a Bar Date of July 13, 2012, and (b) Fees of Bankruptcy Professionals, any and all requests for payment or proofs of Administrative Expense Claims must be filed with the Bankruptcy Court no later than the first Business Day that is at least 45 days after the Effective Date, unless otherwise ordered by the Bankruptcy Court. Objections to any Administrative Expense Claims must be filed by the first Business Day that is 75 days after the Effective Date, which objection date may be extended by application to the Bankruptcy Court. If the rejection of a contract or lease pursuant to any provision of the Plan results in a Claim by the non-Debtor party or parties to such contract or lease, that Claim will be forever barred and shall not be enforceable against the Estates, the Blitz Liquidating Trust, the Blitz Personal Injury Trust, their successors or properties, unless a Proof of Claim is filed and served on Blitz Liquidating Trustee or the BAH Plan Administrator, as applicable, within 30 days of the notice of entry of the Confirmation Order. All materials required by the Personal Injury POC form (including medical records and expert reports) and any materials to be considered in support of a Special Circumstances claim must be sent electronically by the holders of Blitz Personal Injury Claims to the Blitz Personal Injury Trust, at: blitzclaim@litigationkc.com dhaltiwanger@rpwb.com and adr@richardcohen.net so as to be received on or before Feb. 28, 2014 by 5:00 p.m. Central Standard Time. Materials received after this time will not be considered by the Blitz Personal Injury Trust. Counsel to Blitz Acquisition, LLC, Blitz RE Holdings, LLC, Blitz U.S.A., Inc. and MiamiOK LLC (f/k/a F3 Brands LLC), are: Daniel J. DeFranceschi, Esq. Michael J. Merchant, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 Counsel for LAM 2011 Holdings, LLC and Blitz Acquisition Holdings, Inc., are: Sean M. Beach, Esq. John Dorsey, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Counsel to the Official Committee of Unsecured Creditors are: Francis A. Monaco, Jr., Esq. Kevin J. Mangan, Esq. WOMBLE CARLYLE SANDRIDGE & RICE, LLP 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801 Telephone: (302) 252-4320 Facsimile: (302) 252-4330 - and - Jeffrey D. Prol, Esq. Mary E. Seymour, Esq. LOWENSTEIN SANDLER LLP 65 Livingston Avenue Roseland, NJ 07068 Telephone: (973) 597-2500 Facsimile: (973) 597-2400 Counsel for Wal-Mart are: Laurie Selber Silverstein, Esq. Jeremy W. Ryan, Esq. R. Stephen McNeill, Esq. Ryan M. Murphy, Esq. POTTER ANDERSON & CORROON LLP 1313 N. Market Street, 6th Floor Wilmington, DE 19801 Tel: 302-984-6000 Counsel for the Bauman Claimants are: JONES WARD PLC Lawrence L. Jones II, Esq. Marion E. Taylor Building 312 South Fourth Street, Sixth Floor Louisville, KY 40202 Tel: (502) 882-6000 Fax: (502) 587-2007 E-mail: larry@jonesward.com Local Counsel for the Bauman Claimants are: Xiaojuan Carrie Huang, Esq. 3513 Concord Pike, Suite 3100 Wilmington, DE 19803 Tel: (302) 478-2900 Fax: (302) 613-2528 E-mail: huang@xhlegal.com About Blitz U.S.A. Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of plastic gasoline cans. The company, controlled by Kinderhook Capital Fund II LP, filed for bankruptcy protection to stanch a hemorrhage resulting from 36 product-liability lawsuits. Parent Blitz Acquisition Holdings, Inc., and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru 11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over the case. Blitz USA disclosed $36,194,434 in assets and $41,428,577 in liabilities in its schedules. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. Young Conaway Stargatt & Taylor LLP represents Debtors LAM 2011 Holdings, LLC and Blitz Holdings, Inc. The Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and Kurtzman Carson Consultants LLC serves as notice and claims agent. SSG Capital Advisors LLC serves as investment banker. Lowenstein Sandler PC from Roseland, New Jersey, as well as Womble Carlyle Sandridge & Rice, LLP, of Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. The Chapter 11 case is financed with a $5 million secured loan from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in Tulsa. In April 2012, Hopkins Manufacturing Corp. acquired the assets of Blitz USA's unit, F3 Brands LLC, a major manufacturer of oil drains, drain pans, lifting aids and automotive ramps. Blitz USA said in court documents the sale netted the Debtors $14.6 million, which was applied against secured debt. Blitz announced in June 2012 it would abandon its efforts to reorganize and instead to shut down operations by the end of July. In September that year, the Troubled Company Reporter, citing Sheila Stogsdill at Tulsa World, reported that the Bankruptcy Court approved a $9.5 million offer from Toronto, Canada-based Scepter Corporation to purchase Blitz USA, according to Philip Monckton, Scepter's vice president of sales and marketing. Scepter bought land, equipment and other assets. Scepter supplies about 20% of the USA market with gas cans. The report said the sale was to become final on Sept. 28, 2012. BONDS.COM GROUP: Exploring Strategic Alternatives ------------------------------------------------- Bonds.com Group, Inc.'s board of directors is exploring and evaluating strategic alternatives for the Company, including a possible strategic investment, merger or sale of the Company. The Board of Directors has established a Special Committee consisting entirely of independent directors to provide focus, assistance and direct oversight of this process and has retained a financial advisor. The Company has not set a timetable for completion of the evaluation process or made a decision to pursue any particular transaction, and there can be no assurance that any transaction will be pursued or completed. George O'Krepkie, president of the Company, said: "As we begin this next phase of development, we are encouraged by prospects offered by potential partners for better serving our clients. We continue to conduct our business daily to meet client expectations and needs." About Bonds.com Group Based in Boca Raton, Florida, Bonds.com Group, Inc. (OTC BB: BDCG) -- http://www.bonds.com/-- through its subsidiary Bonds.com, Inc., serves institutional fixed income investors by providing a comprehensive zero subscription fee online trading platform. The Company designed the BondStation and BondStationPro platforms to provide liquidity and competitive pricing to the fragmented Over- The-Counter Fixed Income marketplace. The Company differentiates itself by offering through Bonds.com, Inc., an inventory of more than 35,000 fixed income securities from more than 175 competing sources. Asset classes currently offered on BondStation and BondStationPro, the Company's fixed income trading platforms, include municipal bonds, corporate bonds, agency bonds, certificates of deposit, emerging market debt, structured products and U.S. Treasuries. Bonds.com Group disclosed a net loss of $6.98 million in 2012, as compared with a net loss of $14.45 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $6.05 million in total assets, $4.09 million in total liabilities and $1.95 million in total stockholders' equity. EisnerAmper LLP, in New york, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring losses and negative cash flows from operations, and a working capital deficiency and a stockholders' deficiency that raise substantial doubt about its ability to continue as a going concern. BOWERY TOWER: Files to Stop Imminent Foreclosure ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Bowery Tower LLC, owner of the property at 78 Bowery in Manhattan, went into a Chapter 11 reorganization (Bankr. E.D.N.Y. Case No. 14-40340) on Jan. 28 in Brooklyn, New York, to halt what the owner called "imminent foreclosure." According to the report, the property, between Canal Street and Hester Street, is worth $8.75 million, according to the petition. Debt totals $14.73 million, including $8.7 million owing to the holder of the mortgage. CARAUSTAR INDUSTRIES: S&P Affirms 'B+' CCR; Outlook Stable ---------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B+' corporate credit rating on Austell, Ga.-based Caraustar Industries Inc. The outlook is stable. At the same time, S&P affirmed its 'BB' issue-level rating on the company's existing $50 million asset-based revolving credit facility and its 'B+' rating on its secured bank term. The term loan currently has a $333 million principal balance and will be increased to $413 million via a $80 million add-on. The incremental loan proceeds will be used to fund a dividend to its owners, including financial sponsor H.I.G. Capital LLC. S&P's recovery rating on the $50 million revolving credit facility is '1', indicating its expectation of very high recovery (90% to 100%) on that facility in the event of a default. S&P has revised the recovery rating on the $413 million term loan to '4' from '3', indicating its expectation of average (30% to 50%) recovery for lenders in the event of a payment default. "The stable rating outlook reflects our expectation that credit measures will be in the range of an aggressive financial risk profile with debt to EBITDA of 4x to 5x, FFO to debt of 15% to 20%, and interest coverage of more than 3x. We expect Caraustar will maintain strong liquidity," said said Standard & Poor's credit analyst Thomas Nadramia. S&P could lower the rating if Caraustar's financial sponsor engaged in additional debt-financed dividend activity, such that leverage exceeded 5x, or if Caraustar experienced a decline in volumes due to retraction in economic activity, or if input costs rose suddenly such that total leverage exceeded 5x on a sustained basis. Based on S&P's forecast, this could occur if 2014 sales growth turned negative in conjunction with a 200-basis-point decline in margins. S&P views an upgrade as unlikely due to ownership by a financial sponsor, which limits its financial risk assessment to "aggressive" under its criteria. Specifically, S&P would expect leverage will be maintained in the 4x to 5x range even in the event there are additional debt-financed dividends. CASA GRANDE: Arizona Hospital in Chapter 11 to Sell to Banner ------------------------------------------------------------- Casa Grande Community Hospital d/b/a Casa Grande Regional Medical Center, and its debtor-affiliates have sought bankruptcy protection to sell their 177-bed hospital in Casa Grande, Arizona to a Phoenix-based non-profit health system for $87 million. According to court filings, changes in reimbursements from Arizona's Medicaid program, Arizona Health Care Cost Containment System, resulted in a decline in the Debtors' revenue in excess of $10 million annually. The decline in revenue threatened the Debtors ability to service its $65 million of bond obligations while providing the same level of high quality services. After pursuing several restructuring options, the Debtors filed for bankruptcy to confirm a plan of reorganization that will effectuate the sale of substantially all of the Debtors' assets to Banner Health, a non-profit health system headquartered in Phoenix, Arizona that operates 24 hospitals and health care facilities in Alaska, Arizona, California, Colorado, Nebraska, Nevada and Wyoming. In the sale transaction, Banner will pay the Debtors up to $87 million to pay allowed claims, or such lesser amount needed to pay all such claims in full, through the Plan. The Debtors add that confirmation of the Plan will also continue CGRMC's commitment to providing quality health care to the Casa Grande community and surrounding areas in a caring and compassionate environment its creditors, its employees and the community the Debtors serve. First Day Motions The Debtors on the petition date filed motions to pay prepetition obligations to employees, maintain their cash management system and use their prepetition lenders' cash collateral. The Debtors also seek joint administration of their Chapter 11 cases. The Debtors are seeking expedited consideration of the first day pleadings. The Debtors said that the first-day motions are intended to facilitate a smooth transition into Chapter 11 with as little disruption as possible for patients and medical personnel and to lay the ground work for an orderly confirmation process, and to position the Debtors' operations for an orderly transition to Banner Health. About Regional Care Services Regional Care Services Corp., Casa Grande Community Hospital d/b/a Casa Grande Regional Medical Center, Regional Care Physician's Group, Inc., and Casa Grande Regional Retirement Community sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 14-01383) in Tucson, Arizona, on Feb. 4, 2014. The Debtors, one of the largest employers in Pinal County, operate an award winning, full service non-profit community hospital serving more than 65,000 patients each year from the largely rural communities of Casa Grande, Sacaton, Eloy, Florence and surrounding communities. CGRMC is a 177-licensed bed, general acute care hospital located in Casa Grande, Arizona. RCSC is the sole member and sponsor of CGRMC, RCPG and CGRRC. As of the Petition Date, CGRRC's management consists of Rona Curphy as President, Cherie McGlynn as Chairman, David Fitzgibbons as Vice Chairman, and John Robert McEvoy as Secretary/Treasurer. Michael W. McGrath, Esq., at Mesch Clark & Rothschild, in Tucson, serves as counsel to the Debtor. The meeting of creditors under Sec. 341(a) of the Bankruptcy Code is slated for March 13, 2014 at 1:30 p.m. Casa Grande estimated $50 million to $100 million in assets and liabilities. According to the docket, the schedules of assets and liabilities and the statements of financial affairs are due Feb. 18, 2014. CASA GRANDE: Has Stipulation for Use of Cash Collateral ------------------------------------------------------- Casa Grande Community Hospital d/b/a Casa Grande Regional Medical Center and its debtor-affiliates ask the bankruptcy court to approve a stipulation with bondholders allowing the use of cash collateral. Without immediate access to cash collateral, the Debtors say their ability to operate, provide medical services to the public, and preserve the value of their businesses will be immediately and irreparably jeopardized, resulting in significant harm to the Debtors' estates and creditors. Casa Grande is obligated in the aggregate principal amount of approximately $63.8 million pursuant to bond financing documents, under which Wells Fargo Bank, National Association, serves as trustee. To the extent of any diminution in the value of the trustee's prepetition collateral, including the cash collateral, the trustee will receive adequate protection in the form of replacement liens, and a "super-priority" administrative expense claim pursuant to Section 507(b) of the Bankruptcy Code. Pursuant to the bond financing documents, certain accounts were established and are held in trust by the trustee for the benefit of the holders of the bonds, including, without limitation, (i) a certain "revenue fund", (ii) a certain "interest account", (iii) a certain "principal account", and (iv) a certain "bond reserve account". The trustee believes that these trustee-held funds are not property of the Debtors' estates. The Debtors are not seeking authority to use the trustee-held funds pursuant to the motion or interim order. About Regional Care Services Regional Care Services Corp., Casa Grande Community Hospital d/b/a Casa Grande Regional Medical Center, Regional Care Physician's Group, Inc., and Casa Grande Regional Retirement Community sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 14-bk-01383) in Tucson, Arizona, on Feb. 4, 2014, to sell all assets to Phoenix-based Banner Health for up to $87 million. The Debtors, one of the largest employers in Pinal County, operate an award winning, full service non-profit community hospital serving more than 65,000 patients each year from the largely rural communities of Casa Grande, Sacaton, Eloy, Florence and surrounding communities. CGRMC is a 177-licensed bed, general acute care hospital located in Casa Grande, Arizona. RCSC is the sole member and sponsor of CGRMC, RCPG and CGRRC. Michael W. McGrath, Esq., at Mesch Clark & Rothschild, in Tucson, serves as counsel to the Debtor. CASA GRANDE: Section 341(a) Meeting Set on March 13 --------------------------------------------------- A meeting of creditors in the bankruptcy case of Casa Grande Community Hospital and its debtor affiliates will be held on March 13, 2014, at U.S. Trustee Meeting Room, James A. Walsh Court, 38 S Scott Ave, St 140, Tucson, AZ (341-TUC). This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Casa Grande Community Hospital and its debtor affiliates filed separate Chapter 11 bankruptcy petitions (Bankr. D. Ariz. Case Nos. 14-01383 to 14-01386) on Feb. 4, 2014. Casa Grande estimated assets of $50 million to $100 million and debts of $50 million to $100 million. Mesch Clark & Rothschild, P.C., and Brownstein Hyatt Farber Schreck, LLP, serve as the Debtors' counsel. CATHAY GENERAL: Fitch Affirms 'BB+' Long-Term Rating ---------------------------------------------------- Fitch Ratings has affirmed Cathay General Bancorp's (CATY) ratings at 'BB+'/'B'. The Rating Outlook is Stable. The rating affirmation and Stable Outlook reflect improving asset quality, solid earnings and elevated capital levels. These strengths are balanced by CATY's liquidity profile, which is relatively weaker than the majority of the mid-tier banks and higher levels of longer duration mortgages on balance sheet. KEY RATING DRIVERS - IDRS, VRs, and SENIOR DEBT CATY's ratings rank near the bottom of the mid-tier bank peer group primarily due to its relatively weaker liquidity profile. CATY is more reliant on both wholesale borrowings and high-cost time deposits than its peers. CATY's wholesale borrowings include structured repurchase agreements with a weighted average cost of over 3.8%. However, Fitch expects the majority of the structured repurchase agreements to mature or be unwound by the end of 2015 and be replaced by lower cost wholesale funding sources. Fitch notes improved liquidity profiles throughout the banking sector due to lack of loan growth, quantitative easing and excess cash on corporate and personal balance sheets. CATY, like most banks, has benefited from the robust levels of liquidity in the banking system as measured by declining net non-core funding, non- interest bearing deposit growth and improving funding costs. These trends could generate positive momentum over the medium term if CATY can continue to maintain its improving liquidity risk profile even as systemic liquidity reverts to its mean. CATY's core earnings are solid and rank in the middle of the peer group on a pre-tax, pre-provision basis. Earnings in 2013 have benefitted from negative provisions. Fitch believes CATY has the potential to conduct further reserve releases in the near term. Over the medium term, Fitch believes core profitability improvement could be realized at a relatively faster rate than its peer banks once its high cost repos mature. Asset quality continues to improve with NPAs and NCOs declining. However, NPA levels remain in the top half of the group. Fitch expects continued reduction of NPAs, while credit costs remain low in the near term. Reserve levels are strong, especially given recent loss history. CATY is a $10.8 billion bank holding company headquartered in Los Angeles. The company has a solid presence in the niche Asian American demographics. Its primary operations are located in California; however, the company has branches in New York, Texas, Massachusetts, Washington, Illinois, New Jersey and Hong Kong. RATING SENSITIVITIES - IDRS, VRs, and SENIOR DEBT Fitch believes CATY's ratings could move higher if the company demonstrates the ability to maintain an improved liquidity risk profile while maintaining a solid earnings profile. Although not anticipated, a reversal of asset quality trends could result in negative ratings pressure. Over the medium term, interest rate risk could be a negative ratings driver. CATY has kept some 30- year mortgages on-balance sheet. Continued proliferation of long duration assets could pressure ratings. Currently loans and securities at Cathay Bank with a 15-year maturity or longer represent over 15% of assets compared to an industry peer average of 4.69%. KEY RATING DRIVERS - HYBRID SECURITIES CATY's preferred stock is rated five notches below its VR to reflect loss severity and an assessment of increment non- performance risk. RATING SENSITIVITIES - HYBRID SECURITIES CATY's Preferred stock rating is sensitive to changes in CATY's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS Cathay Bank is a wholly owned subsidiary of CATY. Cathay Bank's ratings are aligned with CATY reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES Cathay Bank's ratings are sensitive to changes to CATY's VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR CATY's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR CATY's Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch reviewed CATY's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc- Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN),Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings: Cathay General Bancorp -- Long-term at 'BB+'; -- Short-term IDR at 'B'; -- Viability Rating at 'bb+'; -- Preferred stock at 'B-'; -- Support Floor at 'NF' -- Support affirmed at '5'. Cathay Bank -- Long-term IDR at 'BB+'; -- Long-term deposit at 'BBB-'; -- Short-term IDR at 'B' -- Short-term deposit at 'F3'; -- Viability Rating at 'bb+'; -- Support Floor at 'NF'; -- Support at '5'. CELL THERAPEUTICS: Had $51.5MM Net Financial Standing at Dec. 31 ---------------------------------------------------------------- Cell Therapeutics, Inc., disclosed that the total estimated and unaudited net financial standing of the Company as of Dec. 31, 2013, was $51.5 million. The total estimated and unaudited net financial standing of CTI Consolidated Group as of Dec. 31, 2013, was $52.3 million. CTI Parent Company trade payables outstanding for greater than 30 days were approximately $2 million as of Dec. 31, 2013. CTI Consolidated Group trade payables outstanding for greater than 30 days were approximately $2.5 million as of Dec. 31, 2013. During December 2013, there were solicitations for payment only within the ordinary course of business and there were no injunctions or suspensions of supply relationships that affected the course of normal business. As of Dec. 31, 2013, there were no amounts due of a financial or tax nature, or amounts due to social security institutions or to employees. During the month of December 2013, the Company's common stock, no par value, outstanding increased by 20,844 shares. Consequently, the number of issued and outstanding shares of Common Stock as of Dec. 31, 2013, was 145,508,767. A copy of the Report is available for free at: http://is.gd/Q1krYT Phase 2 Trial of pacritinib Cell Therapeutics announced the initiation of an international cooperative group Phase 2 clinical trial of pacritinib in adult patients with relapsed acute myeloid leukemia (AML) with mutations of the FLT3 gene. Mutation of the FLT3 gene is found in approximately one-third of AML patients and is an independent risk factor for poor prognosis. Pacritinib is an oral JAK2/FLT3 inhibitor that has demonstrated encouraging activity in preclinical models of AML with mutated FLT3 gene, including additional FLT3 mutations that confer resistance to other targeted FLT3 agents. The trial is being conducted by the AML Working Group of the National Cancer Research Institute Haematological Oncology Study Group in Acute Myeloid Leukema (AML) and high risk Myelodysplastic Syndrome (MDS) under the sponsorship of Cardiff University and supported by Cancer Research UK. The trial management group is lead by Professor Alan K. Burnett, Head of Haematology in the Department of Medical Genetics, Haematology and Pathology at the School of Medicine at Cardiff University. "Mutation of the FLT3 gene in AML is associated with a high relapse rate and a poor prognosis with standard therapy; therefore, novel agents capable of inhibiting the activation of this gene are of great interest in the AML field," said Professor Burnett. "Pacritinib is a specific, potent inhibitor of the common FLT3 mutation and certain other generally drug resistant mutations. Because pacritinib also inhibits JAK2, which is independently associated with resistance to FLT3 inhibition and a poor prognosis in AML, this is an attractive agent to test in patients with relapsed FLT3 mutated AML who have limited options for beneficial therapy." This Phase 2 trial is part of a larger ongoing study in AML, referred to as the AML17 trial, which includes multiple arms evaluating first line regimens for AML. Patients with the FLT3 mutation, who are enrolled in this study and relapse following standard therapy, will be offered therapy with pacritinib. Approximately 80 patients at sites in England and Wales will be enrolled and, if an encouraging response rate is observed, a pacritinib arm may be adopted in the first line therapy study. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. The Company's balance sheet at Sept. 30, 2013, showed $47.23 million in total assets, $33.39 million in total liabilities, $13.46 million in common stock purchase warrants, and $387,000 in total shareholders' equity. Going Concern The Company's independent registered public accounting firm included an explanatory paragraph in its reports on the Company's consolidated financial statements for each of the years ended Dec. 31, 2007, through Dec. 31, 2011, regarding their substantial doubt as to the Company's ability to continue as a going concern. Although the Company's independent registered public accounting firm removed this going concern explanatory paragraph in its report on the Company's Dec. 31, 2012, consolidated financial statements, the Company expects to continue to need to raise additional financing to fund its operations and satisfy obligations as they become due. "The inclusion of a going concern explanatory paragraph in future years may negatively impact the trading price of our common stock and make it more difficult, time consuming or expensive to obtain necessary financing, and we cannot guarantee that we will not receive such an explanatory paragraph in the future," the Company said in its quarterly report for the period ended Sept. 30, 2013. The Company added that it may not be able to maintain its listings on The NASDAQ Capital Market and the Mercato Telematico Azionario stock market in Italy, or the MTA, or trading on these exchanges may otherwise be halted or suspended, which may make it more difficult for investors to sell shares of the Company's common stock. Bankruptcy Warning "We have acquired or licensed intellectual property from third parties, including patent applications relating to intellectual property for pacritinib, PIXUVRI, tosedostat, and brostallicin. We have also licensed the intellectual property for our drug delivery technology relating to Opaxio which uses polymers that are linked to drugs, known as polymer-drug conjugates. Some of our product development programs depend on our ability to maintain rights under these licenses. Each licensor has the power to terminate its agreement with us if we fail to meet our obligations under these licenses. We may not be able to meet our obligations under these licenses. If we default under any license agreement, we may lose our right to market and sell any products based on the licensed technology and may be forced to cease operations, liquidate our assets and possibly seek bankruptcy protection. Bankruptcy may result in the termination of agreements pursuant to which we license certain intellectual property rights," the Company said in its Form 10-Q for the period ended Sept. 30, 2013. CEREPLAST INC: Receives Notice of Sale of Collateral ---------------------------------------------------- Cereplast, Inc., received a notice of public sale of collateral set for Feb. 11, 2014, pursuant to Horizon Technology Finance's rights to cure the default under the Company's Venture Loan and Security Agreement dated Dec. 21, 2010. As of Jan. 30, 2014, an aggregate amount of $2,800,000 of the loan remains outstanding. The Company is currently exploring options to cure the default and protect its assets. About Cereplast El Segundo, Calif.-based Cereplast, Inc., has developed and is commercializing proprietary bio-based resins through two complementary product families: Cereplast Compostables(R) resins which are compostable, renewable, ecologically sound substitutes for petroleum-based plastics, and Cereplast Sustainables(TM) resins (including the Cereplast Hybrid Resins product line), which replaces up to 90% of the petroleum-based content of traditional plastics with materials from renewable resources. Cereplast disclosed a net loss of $30.16 million in 2012, as compared with a net loss of $14 million in 2011. HJ Associates & Consultants, LLP, in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered significant recurring losses, has a significant accumulated deficit, and has insufficient working capital to fund planned operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2013, showed $14.30 million in total assets, $36.72 million in total liabilities and a $22.42 million total shareholders' deficit. Going Concern/Bankruptcy Warning "We have incurred a net loss of $34.0 million for the nine months ended September 30, 2013, and $30.2 million for the year ended December 31, 2012, and have an accumulated deficit of $121.1 million as of September 30, 2013. Based on our operating plan, our existing working capital will not be sufficient to meet the cash requirements to fund our planned operating expenses, capital expenditures and working capital requirements through December 31, 2013 without additional sources of cash. This raises substantial doubt about our ability to continue as a going concern. "Our plan to address the shortfall of working capital is to generate additional cash through a combination of refinancing existing credit facilities, incremental product sales and raising additional capital through debt and equity financings. We are confident that we will be able to deliver on our plans, however, there are no assurances that we will be able to obtain any sources of financing on acceptable terms, or at all. "If we cannot obtain sufficient additional financing in the short- term, we may be forced to curtail or cease operations or file for bankruptcy," the Company said in the quartery report for the period ended Spet. 30, 2013. CHAMPION INDUSTRIES: Sr. VP Robert Pruett Resigns ------------------------------------------------- Robert L. Pruett resigned as senior vice president of Champion Industries, Inc, on Jan. 30, 2014. Mr. Pruett intends to remain with the Company in an advisory role. About Champion Industries Champion Industries, Inc., is engaged in the commercial printing and office products and furniture supply business in regional markets east of the Mississippi River. The Company also publishes The Herald-Dispatch daily newspaper in Huntington, West Virginia with a total daily and Sunday circulation of approximately 23,000 and 28,000. Arnett Foster Toothman PLLC, in Charleston, West Virginia, expressed substantial doubt about Champion Industries' ability to continue as a going concern following the fiscal 2012 annual results. The independent auditors noted that the Company has suffered recurring losses from operations and has been unable to obtain a longer term financing solution with its lenders. The Company reported a net loss of $22.9 million in fiscal year ended Oct. 31, 2012, compared with a net loss of $4.0 million in fiscal 2011. As of July 31, 2013, the Company had $26.51 million in total assets, $33.35 million in total liabilities and a $6.83 million total shareholders' deficit. CIRCLE STAR: Sells Share of Unit Royalty for $2 Million ------------------------------------------------------- Circle Star Energy Corp. sold all of its share of royalty and overriding interests in certain properties held by the Company's wholly-owned subsidiary, JHE Holdings, LLC, for a total of $2,000,000 in cash to three parties unrelated to the Company: GOC Madison, LLC, AshTan Royalties, LLC, and WABR, LLC. The properties were located in Madison, Grimes, Dimmit and Fayette Counties, Texas. The Company is using most of the proceeds from the sale to reduce its debt and accounts payable. About Circle Star Fort Worth, Tex.-based Circle Star Energy Corp. (OTC BB: CRCL) owns a variety of non-operated working interests and overriding royalty interests in approximately 73 producing wells in Texas. The interests range from less than 1% up to approximately 5% in each well. The wells are located in the following areas: Permian Basin, Eagle Ford Shale, Pearsall Field, Giddings Field & the Woodbine Field. The wells are operated by Apache (Permian), Chesapeake (Eagle Ford Shale), CML (Giddings, Pearsall & Permian), Leexus (Giddings) and Woodbine Acquisitions (Woodbine). As of April 30, 2013, the Company had approximately 430 net leased acres in Texas. The Company also operates 2 wells in Kansas. The Company owns a 25% working interest (approximately 20% net revenue interest) before payout and a 43.75% working interest (approximately 35% net revenue interest) after payout in both wells which are located in Trego County. As of July, 31, 2013, the Company had approximately 9,838 net leased acres in Kansas. Approximately 1,480 are located in Trego County and approximately 8,358 are located in Sheridan County. There are multiple potential pay zones of interest with the primary zones of interest being the Arbuckle, Marmaton & Lansing-Kansas City ranging from approximately 3,200 feet to approximately 4,300 feet in depth. Circle Star incurred a net loss of $10.81 million for the year ended April 30, 2013, following a net loss of $11.07 million during the prior year. The Company's balance sheet at Oct. 31, 2013, showed $3.33 million in total assets, $5.54 million in total liabilities and a $2.21 million total stockholders' deficit. "At October 31, 2013, we had cash and cash equivalents of $84,391 and a working capital deficit of $5,279,080. For the six months ended October 31, 2013, we had a net loss of $477,298 and an operating loss of $336,832 and cash provided by operations amounted to $50,019. As of October 31, 2013 our 10% convertible notes payable due February 8, 2013 in the principal amount of $2,750,000 had matured, and the principal and accrued interest remain outstanding, which notes are currently in default and in litigation," the Company said in its quarterly report for the period ended Oct. 31, 2013. "Given that we have not achieved profitable operations to date, our cash requirements are subject to numerous contingencies and risks beyond our control, including operational and development risks, competition from well-funded competitors, and our ability to manage growth. We can offer no assurance that the Company will generate cash flow sufficient to achieve profitable operations or that our expenses will not exceed our projections. Accordingly, there is substantial doubt as to our ability to continue as a going concern for a reasonable period of time," the Company said in the Quarterly Report. CITY NATIONAL: Fitch Affirms 'BB' Preferred Stock Rating -------------------------------------------------------- Fitch Ratings affirms City National Bancorp (CYN) ratings at 'A- '/'F1'. The Rating Outlook remains Stable. The Stable Outlook incorporates assumptions that that asset quality will remain strong, earnings will face headwinds and capital levels will remain relatively stable. KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT CYN's rating ranks in the top quartile of the mid-tier banks group. The ratings reflect the company's strong franchise, relatively stable credit metrics through the cycle, good liquidity and capacity to improve earnings in a rising rate environment. These strengths are balanced against CYN's capital levels, which consistently rank in the bottom quartile relative to the mid-tier peer group. CYN's value proposition to its customers is its focus on relationship banking and expertise in specialty lending. This somewhat niche strategy has created significant franchise value for the company. CYN's franchise value translates into one of the lowest deposit costs amongst the entire mid-tier bank group. Although the low rate environment has eroded CYN's comparative funding advantage in the near term, Fitch's rating incorporates the expectation that higher rates will be relatively more beneficial to CYN than its mid-tier peers over the medium term. CYN's asset quality metrics remain solid. The company generated a net recovery for 2012 and 2013. This prolonged period of net recoveries is unique to CYN. Fitch views the net recoveries as an indicator of conservative marks on its problem assets and solid credit risk management practices. RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT While Fitch views CYN's capital levels as adequate, continued reductions to capital could result in negative ratings pressure. CYN's capital levels rank amongst the lowest relative to the mid- tier peer group. Although, capital levels are low on a relative basis, Fitch believes capital levels are adequate for its current rating. Conversely, if CYN managed its capital levels at higher levels, positive ratings momentum could build. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES CYN's preferred stock is notched below its Viability Rating (VR) to reflect loss severity and an assessment of increment non- performance risk. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES CYN's preferred stock rating is sensitive to changes in CYN's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS City National Bank is a wholly owned subsidiary of CYN. City National Bank's ratings are aligned with CYN reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES City National Bank's ratings are sensitive to changes to CYN's VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR CYN's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES- SUPPORT RATING AND SUPPORT RATING FLOOR CYN's Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch reviewed CYN's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc-Corp. (ASBC), BOK Financial Corp. (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN), Cullen/Frost Bankers, Inc. (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp. (SNV), TCF Financial Corp. (TCB), UMB Financial Corporation (UMB), Webster Financial Corp. (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings with a Stable Outlook: City National Corporation -- Long-term IDR at 'A-'; -- Short-Term IDR at 'F1'; -- Viability Rating at 'a-'; -- Senior Unsecured at 'A-' -- Preferred Stock at 'BB' -- Support Floor 'NF' -- Support '5'. City National Bank -- Long-term IDR at 'A-'; -- Long-term Deposit at 'A'; -- Short-Term IDR at 'F1'; -- Short-Term Deposits at 'F1'; -- Viability Rating at 'a-'; -- Subordinated debt at 'BBB+'; -- Market linked deposits at 'Aemr'; -- Support Floor at 'NF'; -- Support at '5'. COLOR STAR: Committee Objects to Continued Cash Collateral Use -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Color Star Growers of Colorado, Inc., Vast, Inc., and Color Star, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Texas an objection to the Debtors' motion for court authorization to continue using cash collateral. As reported by the Troubled Company Reporter on Jan. 6, 2014, Judge Brenda T. Rhoades gave the Debtors authority to use until Jan. 7, 2014, the collateral securing their prepetition indebtedness to pay necessary operating expenses. The Debtors intend to use approximately $2.5 million during the interim period to continue their operations and to continue planting crops for spring 2014. The Committee said in a filing dated Jan. 22, 2014, that it supports the Debtors' continued use of cash collateral on reasonable terms and the provision to lender Regions Bank of appropriate forms of adequate protection under the circumstances. "Such terms, however, should not be permitted to unnecessarily limit other creditors' basic protections under the Bankruptcy Code. The Committee asserts that due to the fact that the First Interim Order is only interim in nature and entered prior to the appointment of the Committee, that its provisions are not binding on the Committee or other parties-in-interest prior to a final hearing and entry of a final order. The Lender has asserted repeatedly that all provisions of the First Interim Order are final and binding on all parties in interest. In particular, the Lender asserts that certain provisions in the First Interim Order provide it an automatic adequate protection claim. Such a claim would attach to assets not currently the collateral of the Lender," Raymond J. Urbanik, Esq., at Munsch Hardt Kopf & Harr, P.C., the attorney for the Committee, said. On Jan. 8, 2014, the Court held a second interim hearing on the motion for cash collateral use. Since that hearing, the parties have been unable to agree on the wording of the terms of a second interim cash collateral order. On Jan. 28, 2014, the Committee filed a supplemental objection to the Debtors' motion for authorization to use cash collateral, saying that despite that the First Interim Order was requested and obtained on an emergency basis, the First Interim Order was not served on estate parties and parties in interest until Jan. 7, 2014, one day after the budget period encompassed under the First Interim Order had already expired. "Notwithstanding that the First Interim Order was entered on an emergency, interim basis, the prepetition lenders, recognizing that they may not be entitled on a final basis to certain of the relief set forth in the First Interim Order, have taken the position that this Court cannot revisit and reconsider on a final basis the provisions of the First Interim Order, at least through Jan. 6, 2014, the period covered under the First Interim Order," Mr. Urbanik stated in the Jan. 28 court filing. Color Star Growers of Colorado, Inc., and two affiliates sought Chapter 11 protection (Bankr. E.D. Tex. Case Nos. 13-42959 to 13-42961) on Dec. 15, 2013, in Sherman, Texas. The petitions were signed by Brad Walker, chief restructuring officer. The Debtors estimated assets of at least $10 million and liabilities of at least $50 million. Marcus A. Helt, Esq., and Evan R. Baker, Esq., at Gardere Wynne Sewell LLP, serve as the Debtors' counsel. SSG Advisors, LLC provides investment banking services, and UpShot Services LLC serves as claims, noticing and balloting agent. The Official Committee of Unsecured Creditors appointed in the Debtors' cases retained Gavin/Solmonese, LLC as financial advisors; and Raymond J. Urbanik, Esq., Deborah M. Perry, Esq., Thomas Berghman, Esq., and Isaac J. Brown, Esq., at Munsch Hardt Kopf & Harr, PC as attorneys. CONSTAR INTERNATIONAL: Schedules Filing Deadline Moved to Feb. 19 ----------------------------------------------------------------- At the behest of Constar International Holdings, the U.S. Bankruptcy Court extended the Debtors' time to file their schedules of assets and liabilities until Feb. 19, 2014. The Debtor held a Sec. 341 meeting on Jan. 28, 2014, which has been continued to a date yet to be determined. Privately held Constar International Holdings and nine affiliated debtors filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-13281) on Dec. 19, 2013. Constar, which manufactures plastic containers, is represented by Michael J. Sage, Esq., Brian E. Greer, Esq., Stephen M. Wolpert, Esq., and Janet Bollinger Doherty, Esq., at Dechert LLP; and Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP. Prime Clerk LLC serves as the Debtors' claims and noticing agent, and administrative advisor. Lincoln Partners Advisors LLC serves as the Debtors' financial advisor. Judge Christopher S. Sontchi oversees the 2013 case. This is Constar International's third bankruptcy. Constar first filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13432) in December 2008, with a pre-negotiated Chapter 11 Plan and emerged from bankruptcy in May 2009. Constar and its affiliates returned to Chapter 11 protection (Bankr. D. Del. Case No. 11-10109) on Jan. 11, 2011, with a pre-negotiated Chapter 11 plan and emerged from bankruptcy in June 2011. The new petition listed assets worth less than $100 million against $123 million on three layers of secured debt. Attorneys at Brown Rudnick LLP represent the official committee of unsecured creditors. Counsel to Wells Fargo Capital Finance, LLC, the revolving loan agent, is Andrew M. Kramer, Esq., at Otterbourg P.C. COTTONWOOD ESTATES: Claims Bar Date Set for March 7 --------------------------------------------------- Creditors are required to file proofs of claim in the Chapter 11 case of Cottonwood Estates Development, LLC, by March 7, 2014. Meanwhile, the U.S. Trustee was slated to convene a meeting of creditors pursuant to 11 U.S.C. 341(a) in the Debtor's Chapter 11 case on Feb. 6, 2014. Cottonwood Estates Development, LLC filed a Chapter 11 petition (Bankr. D. Utah Case No. 13-34298) on Dec. 30, 2013, in Salt Lake City, Utah. James W. Anderson, Esq., at Miller Guymon, PC, in Salt Lake City, serves as counsel to the Debtor. The Debtor estimated up to $50 million in both assets and debts. CULLEN/FROST BANKERS: Fitch Affirms 'BB+' Preferred Stock Rating ---------------------------------------------------------------- Fitch Ratings has affirmed Cullen/Frost Bankers, Inc.'s (CFR) ratings at 'A'/'F1'. The Rating Outlook remains Stable. The Stable Outlook incorporates assumptions that CFR will continue to report consistent solid performance, irrespective of the operating environment. KEY RATING DRIVERS - IDRS, VRs, and SENIOR DEBT Fitch affirmed Cullen/Frost ratings reflecting the company's solid and consistent earnings performance, strong funding and capital profiles, and nominal credit costs through the cycle. CFR has demonstrated consistent earnings through the cycle, and although reported earnings are below pre-crisis levels, they remain above peer averages. As is typical for CFR, liquidity remains very strong. With a loan-to-deposit ratio below 50%, the company has ample low cost funding to support loan growth. Fitch expects that this ratio will increase when the economy improves and CFR takes advantage of more attractive lending opportunities, but that it will always remain below industry averages. Capital remains appropriate in light of CFR's risk profile, and net charge-offs continue to remain low. Fitch continues to highlight CFR's portfolio of state and municipal bond securities, which represents approximately 17% of assets. Most of these securities are guaranteed by the Texas Permanent School Fund (TPSF), which is rated 'AAA' by Fitch. While these bonds have historically performed well, CFR does have a concentration with one guarantor, albeit highly rated. RATING SENSITIVITIES - IDRS, VRs, and SENIOR DEBT Fitch views an upgrade from CFR's current ratings as unlikely as CFR is one of the highest rated mid-tier regional banks. Conversely, a downgrade could occur if there is material deterioration in asset quality, earnings or capital, though given CFR's consistency and track record through the most recent crisis, this is also viewed as unlikely. CFR's ratings are also supported by its long-tenured stable management team. The company's ratings could be vulnerable if there were significant changes in executive management that could ultimately lead to changes in the bank's consistent and conservative strategy, a key underpinning to the ratings. Fitch views a downgrade or nonperformance of the TPSF as remote, but one that would have meaningful consequences for CFR. Lastly, a material downturn in the energy industry could pressure CFR's ratings given its exposure to oil and gas lending. CFR has conservative underwriting policies and practices in place which help to mitigate any losses associated with a large oil price correction. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES CFR's subordinated debt and preferred stock are rated one and five notches below CFR's VR, respectively. The notching reflects loss severity and an assessment of increment non-performance risk. RATING SENSITIVITIES - SUBORDINATED DEBT and OTHER HYBRID SECURITIES CFR's subordinated debt and preferred stock ratings are sensitive to changes in CFR's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS Frost Bank is a wholly owned subsidiary of CFR. Frost Bank's ratings are aligned with CFR reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES Frost Bank's ratings are sensitive to changes to CFR's VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR CFR's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR CFR's Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch reviewed CFR's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc-Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN), Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMBF), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings with a Stable Outlook: Cullen/Frost Bankers, Inc. -- Long-Term IDR at 'A'; -- Short-Term IDR at 'F1'; -- Viability Rating at 'a'; -- Preferred Stock at 'BB+' -- Subordinated Notes at 'A-'; -- Support Floor 'NF' -- Support '5'. Frost National Bank -- Long-Term IDR at 'A'; -- Long-Term Deposit at 'A+'; -- Short-Term IDR at 'F1'; -- Short-Term Deposit at 'F1'; -- Viability Rating at 'a'; -- Support Floor 'NF' --Support '5'. Cullen/Frost Capital Trust II -- Trust Preferred Stock at 'BBB-'. DETROIT, MI: Schuette Opposes Pension Cuts ------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Michigan Attorney General Bill Schuette said the state constitution bars Detroit from cutting pensions owed to municipal workers, a position at odds with the one taken by the city's emergency manager and a bankruptcy judge. According to the report, Schuette nevertheless agreed with the city and the judge that Detroit is eligible for creditor protection under the U.S. Bankruptcy Code's Chapter 9, which covers municipalities. U.S. Bankruptcy Judge Steven Rhodes in December held that Detroit is eligible for Chapter 9 protection and that the Michigan Constitution gives municipal pensions the status of contracts that can be altered in bankruptcy, the report related. Schuette, a Republican, filed a brief Jan. 27 urging the U.S. Court of Appeals in Cincinnati to hear a challenge to the ruling. "Even in bankruptcy, the city must obey this fundamental state law in exercising governmental power," Schuette said in his 22-page brief, the report cited. The constitutional provision in question says a municipal pension is "a contractual obligation" which "shall not be diminished or impaired." The constitution modified prior law, which deemed public pensions "gratuitous allowances that could be revoked at will," Schuette said, the report further cited. About City of Detroit, Michigan The City of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The City's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's financial advisor. Daniel M. McDermott, U.S. Trustee for Region 9, on Dec. 23, 2013, appointed five creditors to serve on the Official Committee of Unsecured Creditors. EAST WEST CAPITAL: Fitch Affirms 'BB-' Preferred Secs. Rating ------------------------------------------------------------- Fitch Ratings has affirmed East West Bancorp's (EWBC) ratings at 'BBB'/'F2'. The Rating Outlook remains Stable. The affirmation reflects solid earnings, improved asset quality, and reduction of the construction portfolio. These strengths are balanced against rapid loan growth, and a relatively higher risk investment portfolio from a credit perspective. KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT EWBC has a solid franchise, which is focused on serving Asian American communities. The niche strategy gives the company good pricing power on its consumer lending products. Deposit pricing and the level of non-interest bearing deposits are relatively weaker than many of its mid-tier regional banking peers. However, Fitch believes EWBC's total funding costs will improve as legacy term repurchase agreements expire over the medium to longer term. Asset Quality trends continue to improve for the company. Fitch believes reduced construction and development exposure is primarily aiding the improvement in problem asset and NCOs. EWBC's construction and development loan (C&LD) portfolio, which has declined by over 70% since its peak, was the largest driver of credit losses through the cycle. As such, Fitch views the reduced exposure to higher risk C&LD loans favorably. Despite improving asset quality, Fitch remains cautious on EWBC's commercial loan growth. The portfolio has grown significantly in the past two years. Although not currently expected, material deterioration in the commercial loan portfolio could warrant a review of EWBC's ratings. Earnings are a rating strength for EWBC. Earnings rank in the top quartile of the mid-tier bank peer group. While Fitch expects return on average assets (ROA) to decline in the near term due to the impact of yield accretion, Fitch believes EWBC will continue to rank in the top quartile of the peer group over the medium term due to EWBC's solid franchise strength. RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT Positive rating momentum could occur with a moderation in loan growth, combined with the maintenance of solid asset quality, above average earnings, and appropriate capital levels. An upgrade under this scenario would assume the risk appetite remains relatively unchanged, and EWBC does not veer from its historical lending competencies. Conversely, a material increase in leveraged loans or signs of deterioration in the commercial loan book could limit positive ratings momentum, and significant enough deterioration could pressure the ratings. Additionally, a material increase in reliance on wholesale funding could also adversely impact ratings. KEY RATING DRIVERS - HYBRID SECURITIES EWBC's trust preferred issuances are notched below its VR to reflect loss severity and an assessment of increment non- performance risk. RATING SENSITIVITIES - HYBRID SECURITIES EWBC's trust preferred stock ratings are sensitive to changes in EWBC's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS East West Bank is a wholly owned subsidiary of EWBC. East West Bank's ratings are aligned with EWBC reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES East West Bank's ratings are sensitive to changes to EWBC's VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR EWBC's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR EWBS' Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch reviewed EWBC's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc- Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN),Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings: East West Bancorp, Inc. -- Long-term IDR at 'BBB'; Outlook Stable -- Short-term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Support at '5'; -- Support Floor at 'NF'. East West Bank -- Long-term IDR at 'BBB'; Outlook Stable -- Long-term deposits at 'BBB+'; -- Short-term IDR at 'F2'; -- Short-term deposits at 'F2'; -- Viability Rating at 'bbb'; -- Support at '5'; -- Support Floor at 'NF'. East West Capital Statutory Trust III, East West Capital Trust IV, V, VI, VII, VIII & IX -- Trust preferred securities at 'BB-'. EDGENET INC: Hearing on Further Cash Collateral Use on Feb. 11 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has set for Feb. 11, 2014, at 11:00 a.m. Eastern Time the hearing to consider the motion of Edgenet, Inc., and Edgenet Holding Corp., to use cash collateral. On Jan. 24, 2014, the Court entered an interim order authorizing the Debtors to use up to $3.5 million in cash collateral until Feb. 11, 2014. As reported by the Troubled Company Reporter on Jan. 17, 2014, the Debtors said in their cash collateral motion that, to implement their proposed sale process and continue to retain and inspire confidence from their business partners, access to liquidity is critical. As of the bankruptcy filing, the Debtors owed Liberty Partners Lenders, L.L.C., approximately $85 million, comprised of $53 million in principal indebtedness and $32 million in unpaid interest through Dec. 31, 2013. The Debtors also owe $18 million on account of notes issued in connection with the purchase of the equity interests of predecessor EdgeNet Inc. in 2004. The Debtors will provide the lender with certain adequate protection, including, among other things, (a) administrative claims; and (b) to the extent of diminution in the value of the prepetition collateral, additional and replacement security interests and liens in and upon all real or personal assets of the Debtors' estates. About Edgenet Inc. Edgenet, Inc., and Edgenet Holding Corp. are providers of cloud- based content and applications that enable companies to sell more products and services with greater ease across multiple channels and devices. Edgenet has three business locations: Waukesha, WI, Brentwood, TN, and its main office in Atlanta, GA. The Company has 80 employees. Edgenet Inc. and Edgenet Holding filed for Chapter 11 bankruptcy protection in Delaware (Lead Case No. 14-10066) on Jan. 14, 2014. Edgenet Inc. estimated assets of at least $10 million and liabilities of $100 million to $500 million. Raymond Howard Lemisch, Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington, Delaware, serves as counsel to the Debtors; Glass Ratner Advisory & Capital Group LLC is the financial advisor; JMP Securities, LLC, is the investment banker, and Phase Eleven Consultants, LLC, is the claims and noticing agent. EDISON MISSION: Creditors Agree That Retirees Panel Unnecessary --------------------------------------------------------------- The Official Committee of Unsecured Creditors and Ad Hoc Committee of Senior Noteholders of Edison Mission Energy and its debtor- affiliates told the U.S. Bankruptcy Court for the Northern District of Illinois they support the Debtors' consolidated (i) reply in the motion to terminate retiree benefits and (ii) objection to motion to appoint an official retiree committee. The Committees also adopt the Debtors' argument that a retiree committee is not required in the Chapter 11 cases. Further, the Committees say any benefits of the appointment of a retiree Committee at this late stage -- less than a month before the confirmation hearing -- are outweighed by the harm to the Debtors' estates and their creditors caused by: a) the costs of a retiree committee, b) the potential for delay of the confirmation of the Debtors' proposed chapter 11 plan of reorganization, which is supported by the Committee and every other significant creditor constituency in these cases, and c) the threat to the substantial recoveries offered under the plan that may result from any delay of confirmation. Last month, the Debtors filed their Motion for an Order (A) Authorizing Termination of Retiree Benefits and (B) Granting Related Relief (the "Motion to Terminate Benefits"), seeking to permanently eliminate the retiree benefits of 276 Affected Retirees (and over a hundred other retirees). Affected Retirees filed an Objection to the Debtors' Motion. In the Motion to Terminate Benefits, the Debtors argue why Section 1114 of the Bankruptcy Code should not apply in this case. In their Objection, the Affected Retirees argue why Section 1114 must apply and further requested that the Court form a Retiree Committee. The Affected Retirees submit that it is paramount for the U.S. Trustee to appoint a Retiree Committee as soon as possible given the need to prepare for termination arguments as well as to represent the Affected Retirees' interests with respect to plan confirmation and other important events that may affect retiree benefits. The Affected Retirees suggest that a Retiree Committee should reflect, to the extent possible, former employees who worked in different positions while employed by the Debtors and EIX and who will recognize the interests of retirees both over and under age 65 (i.e. Medicare eligible retirees). To effectuate the formation of a Retiree Committee as expeditiously as possible, the Affected Retirees suggest that the U.S. Trustee appoint John Meeks (former EME Human Resources Director), Gary Griffin, Robert Edgell, Kay Howard, Russell Koelsch, Mark Murray and Suzanne Wood (or a smaller group of 5 or 3 of them). At the U.S. Trustee's request, contact information for these and all other retirees who have expressed an interest in serving on the Retiree Committee will be transmitted to the U.S. Trustee's office. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. In its schedules, Edison Mission Energy disclosed total assets of assets of $5,721,559,170 and total liabilities of $6,202,215,094 as of the Petition Date. The Debtors, other than Camino Energy Company, are also represented by James H.M. Sprayregen, P.C., Sarah Hiltz Seewer, Esq., and Seth A. Gastwirth, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois; and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in New York. Debtor Camino Energy Company is represented by David A. Agay, Esq., and Joshua Gadharf, Esq., at McDonald Hopkins LLC, in Chicago, Illinois. Perella Weinberg Partners is acting as the Debtors' financial advisor and McKinsey & Company Recovery and Transformation Services is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case and is represented by Ira S. Dizengoff, Esq., Stephen M. Baldini, Esq., Arik Preis, Esq., and Robert J. Boller, Esq., at Akin Gump Strauss Hauer & Feld LLP in New York; James Savin, Esq., and Kevin M. Eide, Esq., at Akin Gump Strauss Hauer & Feld LLP in Washington, DC; and David M. Neff, Esq., and Brian Audette, Esq., at Perkins Coie LLP. The Committee also has tapped Blackstone Advisory Partners as investment banker and FTI Consulting as financial advisor. EME's Second Amended Joint Plan of Reorganization is up for approval at a Feb. 19, 2014 confirmation hearing, and provides for the sale of all or substantially all of Debtors MWG, EME, and Midwest Generation EME, LLC, will be sold to NRG Energy, Inc. EMPIRE DIE: Claims Bar Date Set for Feb. 28 ------------------------------------------- The deadline for creditors to file proofs of claim in the bankruptcy case of Empire Die Casting Co., Inc. is Feb. 28, 2014. Government entities, however, may file proofs of claim by March 14, 2014. Macedonia, Ohio-based Empire Die Casting Co., Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 13-52996) on Oct. 16, 2013. The case is before Judge Marilyn Shea-Stonum. The Debtor is represented by Marc B. Merklin, Esq., and Kate M. Bradley, Esq., at Brouse McDowell, LPA, in Akron, Ohio. FirstMerit Bank, N.A. is represented by Scott N. Opincar, Esq., at McDonald Hopkins LLC, in Cleveland, Ohio. The Debtor estimated assets of $10 million to $50 million and liabilities of $1 million to $10 million. The petition was signed by Robert Hopkins, president. EQUIPMENT ACQUISITION: 5th Cir. Upholds IRS Immunity ---------------------------------------------------- The United States Court of Appeals for the Seventh Circuit on Tuesday held that Equipment Acquisition Resources, Inc., acting with state-law avoidance powers of an unsecured creditor, does not have a viable cause of action against the United States to avoid tax payments. Accordingly, the Seventh Circuit reversed the judgment of the district court and remanded the matter, with instructions to dismiss EAR's complaint insofar as it relied on Sec. 544 of the Bankruptcy Code. The Seventh Circuit noted that the appellate case concerns whether a bankruptcy trustee can bring an action under Sec. 544(b)(1) of the Bankruptcy Code to recoup a debtor's federal tax payment. Section 544(b)(1) allows a trustee to step into the shoes of an actual creditor who could have avoided the transfer outside bankruptcy using a state-law cause of action. The federal government's sovereign immunity prevents creditors from suing the IRS using state law. However, another section of the Bankruptcy Code, Sec. 106(a)(1), abrogates the government's sovereign immunity "with respect to" Sec. 544. The trustee's ability to recover federal tax payments thus hinges on the interplay between Sec. 544 and Sec. 106. The lower courts, relying on Sec. 106(a)(1), have concluded that a debtor in possession could use Sec. 544(b)(1) to bring an Illinois fraudulent transfer action against the IRS. "But we find that [Sec.] 106(a)(1) does not displace the actual- creditor requirement in [Sec.] 544(b)(1). Ordinarily, a creditor cannot bring an Illinois fraudulent-transfer claim against the IRS; therefore, under [Sec.] 544(b)(1), neither can the debtor in possession. We reverse in favor of the United States," the Seventh Circuit said. "We are confident that by continuing to enforce the actual creditor requirement in Sec. 544(b) as written, we do no disservice to the Code's abrogation-of-immunity provision," the appeals court added. Equipment Acquisition Resources, Inc., an Illinois subchapter S corporation, filed for Chapter 11 bankruptcy in October 2009. In the years before its petition, EAR made nine federal income tax payments to the IRS on behalf of its shareholders. (Subchapter S corporations do not pay taxes on corporate income; instead, the tax liability is passed through to the corporation's shareholders.) EAR made eight of these payments in the two years preceding its petition. The ninth payment was just outside this period. Once in Chapter 11, EAR, acting as debtor in possession, filed an adversary complaint against the United States seeking to recover all nine payments as fraudulent transfers. EAR sought to recover the eight most recent payments under 11 U.S.C. Sec. 548(a)(1), which provides a cause of action for the recovery of transfers made within two years of the filing. It sought to recover the ninth under 11 U.S.C. Sec. 544(b), the provision that enables a trustee to bring a state-law fraudulent-transfer action. Illinois, like most states, has adopted the Uniform Fraudulent Transfer Act, which has a four-year statute of limitations. 740 Ill. Comp. Stat. Ann. 160/5(a)(2), 160/10. EAR asserted that the Bankruptcy Code's abrogation of the government's sovereign immunity "with respect to" both Sec. 548 and Sec.544 precluded the IRS from claiming immunity as a defense to either theory of recovery. The parties reached a settlement. The United States agreed to disgorge the eight payments that EAR could recover using Sec. 548, but contested EAR's ability to recover the ninth payment under Sec. 544(b). Because the federal government's sovereign immunity ordinarily prevents a creditor from bringing an Illinois fraudulent-transfer action against the IRS, the government argued, the ninth tax payment was not "voidable under applicable law by a creditor holding an unsecured claim." The parties thus agreed that the United States would disgorge the ninth payment only if it could not prevail in its motion to dismiss the Sec. 544(b) count in EAR's complaint. The bankruptcy court rejected the government's theory, finding that Sec. 106(a)(1) communicated Congress's intent to abolish the federal government's immunity from suit under the listed bankruptcy causes of action, including Sec. 544. This general waiver, the court reasoned, showed that "Congress intended to include those state law causes of action available under [Sec.] 544(b)(1)." The court grounded its conclusion in "[t]he plain, unambiguous language of [Sec.] 106, the deliberate inclusion of [Sec.] 544 in [Sec.] 106(a), and the policy consideration favoring recovery for the benefit of all creditors." The United States appealed to the district court, which affirmed. The district court framed the dispute as "whether [Sec.] 544(b), which explicitly limits a trustee's ability to avoid a transfer, overrides [Sec.] 106(a)'s abrogation of sovereign immunity." It agreed with the bankruptcy court that [Sec.] 106's "complete abolishment" of the government's sovereign immunity in bankruptcy carried the day. "It simply does not matter how a sovereign immunity defense is invoked against EAR's claim," the district court held, because "106(a)(1) simply eliminates the obstacle wherever it appears 'with respect to' [Sec.] 544." The United States appealed. The appellate case is USA v. Equipment Acquisition Resource, Case No. 13-1480 (7th Cir.). A copy of the Seventh Circuit's Feb. 4 decision is available at http://is.gd/tfIt2mfrom Leagle.com. About Equipment Acquisition Palatine, Illinois-based Equipment Acquisition Resources, Inc., operated in the semiconductor equipment sales and servicing industry. It was designed to operate as a refurbisher of special machinery, a manufacturer of high-end technology parts, and a process developer for the manufacture of high-technology parts. The bulk of EAR's stated revenue derived from refurbishing and selling high-tech machinery; it was set up to purchase high-tech equipment near the end of its useful life at prices that were low relative to the cost of new units, and then refurbish using a propriety process the equipment for sale to end-users at substantial gross margins. EaR engaged in a massive fraud from 2005 to 2009. That fraud included, but was not limited to, selling semiconductor equipment at inflated prices, leasing the equipment back, misrepresenting the value of the equipment, and pledging certain pieces of equipment multiple times to various creditors to secure financing. It owned 2,000 pieces of semiconductor manufacturing equipment. First Premier Capital LLC, claiming to be owed $20 million, alleged that the scheme has cost creditors up to $175 million. EAR filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 09-39937) on Oct. 23, 2009. Barry A. Chatz, Esq., at Arnstein & Lehr LLP, served as the Company's counsel. The Company estimated $10 million to $50 million in assets and $100 million to $500 million in liabilities in its petition. Unsecured creditors were owed about $102 million. EXIDE TECHNOLOGIES: Can Tap Schnader Harrison as Special Counsel ---------------------------------------------------------------- Exide Technologies sought and obtained permission from the U.S. Bankruptcy Court to employ Schnader Harrison Segal & Lewis LLP as special counsel. Phillip A. Damaska attests that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm's rates are: Professional Rates ------------ ----- Partners $275 - $1,000 Associates $220 - $460 Paraprofessionals $150 - $285 The firm can be reached at: Richard A. Barkasy, Esq. Fred W. Hoensch, Esq. 824 N. Market Street, Suite 800 Wilmington, DE 19801 Tel: (302) 888-4554 Fax: (302) 888-1696 E-mail: rbarkasy@schnader.com E-mail: fhoensch@schnader.com 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. FIRST HORIZON: Fitch Affirms 'B+' Preferred Stock Rating -------------------------------------------------------- Fitch Ratings affirms the ratings for First Horizon National Corp. (FHN) at 'BBB-'/'F3'. The rating Outlook remains Stable. KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT The affirmation of the IDR reflects Fitch's view that FHN is solidly placed in the 'BBB-' rating category due to its strong franchise in the Southeast, its core business lines' abilities to generate reasonable capital and absorb potential litigation risks, and management's efforts to wind down the nonstrategic loan portfolio while minimizing losses. Fitch believes FHN's ratings are constrained to their current level over the long-term given legal overhang associated with the company's former legacy business strategy as well as its tepid consolidated earnings performance. Furthermore, Fitch believes that FHN's asset quality will continue to lag higher-rated peers given the sticky nature of its nonperforming assets. Capital remains adequate relative to similarly rated banks and above management's long-term capital targets. At 3Q'13, FHN had an estimated Basel III capital equity tier 1 (CET1) of between 9.7% and 9.8% compared to management's goal of between 8.0% and 9.0%. In order to build capital levels, management announced that it would be re-evaluating its share repurchase program. Fitch's expectation that FHN will be able to maintain capital at reasonable levels relative to its risk profile is incorporated in the affirmation and maintenance of the Stable Outlook. FHN's core business lines have maintained adequate performance relative to similarly rated peers. The company's core business lines generate a ROA of between 80 and 100 bps any given quarter, in line with Fitch's expectations and at levels that generate reasonable capital. Fitch anticipates that core business lines will continue to be profitable but at depressed levels going forward given the sustained low, short-term rate environment and is embedded in FHN's current rating of 'BBB-'. Further, performance on a consolidated basis will continue to substantially lag higher rated peers due to the additional costs associated with the company's former legacy business strategy. Asset quality, while improving, continues to weigh on FHN's rating and overall risk profile. NPAs have been reduced to under 3.5% but will remain elevated given their nature. Fitch notes that accruing TDRs, which make up over 40% of the company's NPAs, primarily consist of stickier consumer-related restructured loans that will most likely weigh down asset quality metrics over the long-term. RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT Fitch believes FHN's ratings are reasonably situated at 'BBB-' given core business results and franchise strength. However, Fitch notes that FHN is still subject to elevated legal risk related to prior mortgage practices. Outside of loans sold to the GSEs, FHN is being investigated by the U.S. Department of Justice (DOJ) (on behalf of the Housing and Urban Development [HUD]) relating to the underwriting of FHA loans. Furthermore, FHN originated and securitized $27 billion of PLS between 2005 and 2008, and although the company has not received any repurchase requests to date, it is currently subject to five securitization-related lawsuits and three indemnification claims. The outcome and timing of these lawsuits, as well as any lawsuits FHN could be named apart of in the future, is presently unclear and thus not explicitly incorporated in FHN's ratings. Fitch will continue to monitor and assess FHN's legal risk. To the extent that the company continues to need to take outsized charges that result in material capital deterioration, negative rating action could be taken. Given continued expectations that core earnings will be in line with similarly rated peers, upward rating movement is unlikely over the near to mid-term. However, over the long-term, to the extent that FHN is able to maintain capital at adequate levels, reasonably manage legal risk and improve earnings performance, positive rating action could be taken. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by FHN, and its subsidiaries are all notched down from FHN's VR of 'bbb-' in accordance with Fitch's assessment of each instrument's respective non-performance and relative Loss Severity risk profiles, which vary considerably. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES FHN's subordinated debt and other hybrid capital ratings are is sensitive to changes in FHN's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS First Tennessee Bank, NA is a wholly owned subsidiary of FHN. First Tennessee Bank, NA's ratings are aligned with FHN's reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES First Tennessee Bank, NA's ratings are sensitive to changes to FHN's VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR FHN's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES- SUPPORT RATING AND SUPPORT RATING FLOOR FHN's Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch Ratings reviewed FHN's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc-Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN),Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch affirms the following ratings: First Horizon National Corporation --Long-term IDR at 'BBB-'; Outlook Stable; --Viability at 'bbb-''; --Short-term IDR at 'F3'; --Senior at 'BBB-'; --Preferred stock at 'B'; --Support at '5'; --Support Floor at 'NF'. First Tennessee Bank, N.A. --Long-term IDR at 'BBB-'; Outlook Stable; --Viability at 'bbb-'; --Short-term IDR at 'F3'; --Long-term deposits at 'BBB'; --Short-term deposits at 'F3'; --Short-term debt at 'F3'; --Subordinated debt at 'BB+'; --Preferred stock at 'B'; --Support at '5'; --Support Floor at 'NF'. First Tennessee Capital II --Preferred stock at 'B+'. FIRST NAT'L BANK OF OMAHA: Fitch Affirms 'BB+' Sub. Debt Rating --------------------------------------------------------------- Fitch Ratings affirms First National of Nebraska, Inc.'s (FNNI) ratings at 'BBB-'/'F3'. The Rating Outlook remains Stable. KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT The affirmation of FNNI's rating and maintenance of the Stable Outlook reflect the company's stable operating performance, improvement in asset quality, and steady capital levels. FNNI's earnings and profitability have continued to improve over the last year as its margin has held firm and efficiencies continue to be found. The company's ability to maintain its margin in the sustained low rate environment is primarily due to high single-digit loan growth over the past year. Credit card balances are up 10% due to stronger penetration in consumer and agricultural lending is up nearly 20% year-over-year (YoY) helping drive a higher level of interest income and stronger top line. Meanwhile, Fitch observes that the company has continued to reasonably manage costs, leading to modest improvement in efficiencies. FNNI's loan portfolio has experienced positive credit trends as both past due loans and non-accruals loans were down significantly YoY. Absolute levels of nonperforming assets (NPAs) have decreased another 20% YoY while net charge offs (NCOs) have also continued to fall, down to 1.5% of gross loans through the third quarter of 2013 (3Q'13) from 1.8% a year prior. Fitch expects asset quality improvements to level off over the near-to-medium term as card performance across the industry has reached its peak. This expectation is reflected in the affirmation as well as the Outlook Stable. Capital levels continue to be managed appropriately relative to the company's overall risk profile and rating category. FNNI's risk based Tier 1 ratio fell 60 basis points (bps) to 12.5% over the last year. Fitch observes capital ratio deterioration is primarily due to an 11% increase in risk weighted assets driven by the aforementioned loan growth. In the past, holding company liquidity had been a negative ratings driver. Fitch notes that the holding company's financial profile is adequate and in line with expectations given its level of cash and other contingent sources of liquidity. RATING SENSITIVITIES - IDRS, VRs, and SENIOR DEBT Further upward movement of the company's ratings are considered limited in the near term. Over the long-term, sustained improvement in in asset quality, and earnings, coupled with capital levels commensurate with higher rated peers could result in further movement of the rating. Factors that could negatively weigh on FNNI's ratings include stagnant operating performance, a reversal of the currently positive credit trends, as well as any significant shareholder capital distributions. The latter could put pressure on FNNI's ratings, if capital build significantly slows or even cause the company's capital ratios to decline on an absolute basis. KEY RATING DRIVERS - SUBORDINATED DEBT and OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by FNNI, and its subsidiaries are all notched down from FNNI's Viability Rating (VR) of 'bbb-' in accordance with Fitch's assessment of each instrument's respective non-performance and relative Loss Severity risk profiles, which vary considerably. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES FNNI's subordinated debt and other hybrid capital ratings are is sensitive to changes in FNNI's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS First National Bank of Omaha (FNBO) is a wholly owned subsidiary of FNNI. FNBO's ratings are aligned with FNNI reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES FNBO's ratings are sensitive to changes to FNNI's VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES- SUPPORT RATING AND SUPPORT RATING FLOOR Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch Ratings reviewed FNNI's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc-Corp. (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN), Cullen/Frost Bankers, Inc. (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp. (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp. (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp. (SNV), TCF Financial Corp. (TCB), UMB Financial Corporation (UMB), Webster Financial Corp. (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings with a Stable Outlook: First National of Nebraska, Inc. -- Long-term IDR at 'BBB-'; -- Viability at 'bbb-'. -- Short-term IDR at 'F3'; -- Support Ratings at '5'; -- Support Rating Floor at 'NF'. First National Bank of Omaha -- Long-term IDR at 'BBB-'; -- Viability at 'bbb-'; -- Long-term deposits at 'BBB'; -- Short-term deposits as 'F2'; -- Short-term IDR at 'F3'; -- Subordinated debt at 'BB+'; -- Support Ratings at '5'; -- Support Rating Floor at 'NF'. FIRST NIAGARA: Fitch Affirms 'BB+' Subordinated Debt Rating ----------------------------------------------------------- Fitch Ratings has affirmed the ratings for First Niagara Financial Group, Inc.'s (FNFG) at 'BBB-'/'F3' and revised the Rating Outlook to Stable from Negative. KEY RATING DRIVERS - IDRS, VRs, and SENIOR DEBT FNFG's ratings are supported by its consistent performance during a difficult operating environment and credit performance that remains solid. Also incorporated in current ratings is the company's below peer-average capital position (across different measures), which may limit financial flexibility. Current ratings level reflect the company's risk profile given the bank's exposure to credit investment securities such as CLO holdings and the change in the loan portfolio mix to more commercially-oriented loans. The loan portfolio includes exposure to highly leveraged transactions, asset-based lending, credit cards, and indirect auto, all of which are fairly new lending products. Further, Fitch notes that FNFG has experienced significant loan growth over the last few years organically and through acquisitions. The Outlook has been revised to Stable from Negative. Despite the significant loan growth in recent years and entry into new lending products, to-date, asset quality is solid. Further, during the credit downturn, FNFG's NCOs and NPAs (which includes troubled debt restructuring and acquired loans) were much lower than mid- tier peers and similarly rated banks. For 3Q'13, NCOs and NPAs totalled 0.25% and 1.09% compared to the mid-tier peer average of 0.31% and 2.73%, respectively. Although reserve coverage is considered weaker than peers at less than 1.00% of total loans, Fitch notes that the current loan book includes a 2.5% credit mark on its acquired portfolio and the loan loss reserve on originated loans totals 1.21% of gross loans. Given economic uncertainties, credit losses may increase from historical standards. However, Fitch believes future credit losses will be manageable. In Fitch's view, current capital position is lean providing limited flexibility should challenges arise given significant loan growth through acquisitions and the modest increase in risk profile of the company. FNFG's capital position is much lower than similarly-rated peers and most of Fitch's U.S. rated financial institutions from a tangible common equity (TCE) position and a regulatory capital standpoint. FNFG's Tier 1 Common Ratio, TCE and Tier 1 RBC totalled 7.86%, 6.02%, and 9.56% for 4Q'13, respectively. Positively, the company's core operating performance continues to deliver good results and should help build up its capital position over time. RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT Fitch would view favorably an improvement in the company's capital position or profitability to peer averages, absent any negative asset quality trends. Although considered unlikely, a downgrade would be possible should FNFG announce an acquisition in the near term, manage its capital more aggressively, or experience a substantial decline from current levels. Further, a decline in credit quality trends worse than mid-tier peer averages could also lead to a review of current ratings. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by FNFG and its subsidiaries are all notched down from FNFG's Viability Rating (VR) of 'bbb-' in accordance with Fitch's assessment of each instrument's respective non-performance and relative Loss Severity risk profiles, which vary considerably. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES FNFG's subordinated debt is sensitive to changes in FNFG's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS First Niagara Bank and First Niagara Commercial Bank are wholly owned subsidiaries of FNFG, and their ratings are aligned with FNFG reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES FNFG's subsidiaries' ratings are sensitive to changes to FNFG's VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES- SUPPORT RATING AND SUPPORT RATING FLOOR Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch reviewed FNFG's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc- Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN),Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings and revised the Outlook to Stable: First Niagara Financial Group, Inc -- Long-term Issuer Default Rating at 'BBB-'; -- Short-Term IDR at 'F3'; -- Viability rating at 'bbb-'; -- Senior Unsecured at 'BBB-'; -- Preferred stock at 'B'; -- Subordinated debt at 'BB+'; -- Support at '5'; -- Support Floor at 'NF'. First Niagara Bank, NA -- Long-term deposits at 'BBB'; -- Long-term IDR at 'BBB-'; -- Viability at 'bbb-' -- Short-term deposits at 'F3'; -- Short-Term IDR at 'F3'. -- Support at '5'; -- Support Floor at 'NF'. The following ratings on First Niagara Commercial Bank were affirmed and withdrawn as the entity merged with and into First Niagara Bank, NA. First Niagara Commercial Bank -- Long-term deposits at 'BBB'; -- Long-term IDR at 'BBB-'; -- Viability at 'bbb-'; -- Short-term deposits at 'F3'; -- Short-Term IDR at 'F3'; -- Support at '5'; -- Support Floor at 'NF'. FIRST REPUBLIC: Fitch Hikes Preferred Stock Rating to 'BB' ---------------------------------------------------------- Fitch Ratings has upgraded First Republic Bank's (FRC's) ratings to 'A-'/'F1' from 'BBB+'/'F2'. The Rating Outlook was revised to Stable from Positive. The rating upgrade reflects the company's strong franchise, superior asset quality through the cycle, and stable operating performance. These strengths are balanced against FRC's geographically concentrated businesses and liquidity risk profile. FRC's Stable Outlook reflects Fitch's expectation that asset quality remains strong, liquidity does not materially weaken and earnings will face headwinds in the near term. KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT FRC is heavily focused on relationship banking. FRC uses residential mortgage lending, largely to the luxury and high-end housing segment, as a feeder to its private banking and wealth management activities. This business model has produced stable operating results and solid asset quality metrics through credit cycles. FRC's primary ratings strength is asset quality. FRC has the lowest NPA levels amongst the entire mid-tier bank group, which is not unusual for the company. Fitch views FRC's strong asset quality as a product of solid core management team, good underwriting practices, high-net worth clientele and strong local markets. Although, Fitch expects FRC's credit quality to remain relatively unchanged in the near term, we remain cautious on the rapidly rising home values in FRC's home location in San Francisco. FRC's loan to deposit ratio remains elevated and ranks in the highest quartile amongst the mid-tier banks. While Fitch views FRC's loan to deposit ratio as a credit negative, the agency's view is balanced by FRC's relational banking strategy which tends to generate sticky deposits. Capital levels are relatively flat year over year. Fitch expects FRC's capital levels to remain relatively unchanged as the bank is still technically considered a de novo bank and is subject to elevated capital requirements. RATING SENSITIVITIES - IDRS, VRs, and SENIOR DEBT Ratings upgrade is unlikely given FRC's geographic concentration to California and its liquidity profile. Conversely, negative rating pressure could build if liquidity risk increases significantly or if its key markets such as San Francisco experience significant economic weakness. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES FRC'S preferred stock notched below its VR to reflect loss severity and an assessment of increment non-performance risk. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES FRC's Preferred stock rating is sensitive to changes in FRC's VR. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR FRC's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES- SUPPORT RATING AND SUPPORT RATING FLOOR FRC's Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch Ratings reviewed FRC's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc-Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN),Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch has upgraded and revised the Outlooks to Stable for the following ratings: First Republic Bank -- Long-term IDR to 'A-' from 'BBB+'; Outlook Stable -- Short-term IDR to 'F1' from 'F2'; -- Viability Rating to 'a-' from 'bbb+'; -- Long-term deposit to 'A' from 'A-'; -- Short-Term deposits to 'F1' from 'F2'; -- Preferred stock to 'BB' from 'BB-'; Fitch has affirmed the following ratings: First Republic Bank -- Support Floor 'NF'; -- Support '5'. FREEDOM INDUSTRIES: Secures $3 Million Interim Loan --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Freedom Industries Inc., whose leaky chemical tank polluted drinking water in West Virginia, has interim approval for a $3 million loan to pay expenses approved by the lender. According to the report, at a final financing hearing on Feb. 11, Freedom will be seeking approval of the entire $5 million loan package. The financing won't hinder the government's pursuit of cleanup claims, the report said. About Freedom Industries Freedom Industries Inc., the company connected to a chemical spill that tainted the water supply in West Virginia, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan. 17, 2014. The case is assigned to Judge Ronald G. Pearson. The Debtor is represented by Mark E Freedlander, Esq., at McGuire Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson, Esq., at Barth & Thompson, in Charleston, West Virginia. The Debtor estimated assets and debt of $1 million to $10 million. The petition was signed by Gary Southern, president. FRIEDE GOLDMAN: 5th Cir. Revives Insurers' Suit v. Holloway ----------------------------------------------------------- The United States Court of Appeals for the Fifth Circuit reinstated a fraud action filed by Liberty Mutual Insurance Company and Employers Insurance of Wausau in 1998 against Jerroll Lavon Holloway, also known as J.L. Holloway, his companies, including Friede Goldman International, Inc., and Ham Marine, Inc., and several other parties, including Stewart Sneed Hewes, Inc. to recover workers' compensation premiums. The District Court in August 2012 dismissed the Fraud Litigation, which had been stayed pending completion of a settlement. The Fifth Circuit also reversed the District Court's grant of summary judgment in favor of Holloway in a lawsuit by the insurers to enforce a personal guaranty made by Holloway in the fraud settlement agreement. The appellate cases are LIBERTY MUTUAL INSURANCE COMPANY; EMPLOYERS INSURANCE OF WAUSAU, a Mutual Company, Plaintiffs- Appellants, v. JERROLL LAVON HOLLOWAY, also known as J.L. Holloway, Defendant-Appellee; and LIBERTY MUTUAL INSURANCE COMPANY, and EMPLOYERS INSURANCE OF WAUSAU, a Mutual Company, Plaintiffs-Appellants, v. J. L. HOLLOWAY, RON W. SCHNOOR, CARL M. CRAWFORD, KIM ADKINS, W. EDWARD TREHERN, Defendants-Appellees, No. 12-60762, c/w No. 12-60777 (5th Cir.). A copy of the Fifth Circuit's Feb. 4, 2014 decisiion is available at http://is.gd/yibHFofrom Leagle.com. Litigation began in 1998, when Liberty Mutual and Employers Insurance brought suit against Holloway et al. for fraud, RICO, conspiracy, and common law claims related to the defendants' misrepresentation of their risk in order to pay Liberty lower premiums for workers' compensation insurance. The Fraud Litigation was settled in 2001 pursuant to a Settlement Agreement that required the defendants, through Friede Goldman, to pay $4.5 million to the insurers in three payments of $2 million, $1.25 million, and $1.25 million. Holloway personally guaranteed the third payment of $1.25 million in the event that Friede Goldman was unable to make the payment. The Settlement Agreement provided for dismissal of the action upon full and final payment of $4.5 million. If, for any reason, full and final payment was not made, the insurers were entitled to retain settlement proceeds already paid and return the case to the active docket. The district court issued an administrative stay in the Fraud Litigation pending successful completion of the Settlement Agreement. Friede Goldman made the first two payments and soon after filed for Chapter 11 bankruptcy in April 2001. Friede Goldman was the parent company of many of the defendant companies in the Fraud Litigation. Friede Goldman sought permission from the bankruptcy court to make the third and final payment to the insurers, but the bankruptcy judge denied the request. Instead, the bankruptcy judge encouraged the Chapter 11 Trustee to file a lawsuit against the insurers to reclaim the first two settlement payments, totaling $3.25 million, on the grounds that they were "preference" payments under 11 U.S.C. Sec. 547(b). The Trustee proceeded to file that suit to recover the payments. While the bankruptcy proceedings were ongoing, the insurers requested the third and final payment of $1.25 million from Holloway in accordance with his personal guaranty. After first refusing to pay, Holloway eventually agreed to pay the $1.25 million, but only in exchange for the full and final release of all defendants in the Fraud Litigation. The insurers refused to grant the release because the bankruptcy preference litigation was still pending, and they did not yet know whether they would retain the entire $3.25 million paid in the first two payments. Holloway declined to pay the remaining $1.25 million without the releases. As a result, the insurers filed a lawsuit against Holloway to enforce his personal guaranty, claiming Holloway had breached the agreement by refusing to honor his agreement to pay. The Complaint in the Guaranty Litigation contained multiple counts: counts I and II sought the $1.25 million payment for the insurers under the terms of the contract, and counts III and IV alleged tort claims. The insurers filed a motion for partial summary judgment as to counts I and II, which the district court denied based on the pending bankruptcy preference litigation. Meanwhile, the insurers settled the preference suit with the Chapter 11 Trustee. The insurers agreed to return $1.9 million of the $3.25 million they had been paid by Friede Goldman, keeping only $1.35 million. After settling the preference litigation, the insurers contacted other defendants in the Fraud Litigation in an effort to recoup their lost funds. Ultimately, the insurers received a $500,000 payment from BancorpSouth, who succeeded Stewart Sneed Hughes, Inc. as a defendant, in exchange for a full release of liability and dismissal of all claims against it. BancorpSouth's role in this case is limited to a $500,000 settlement agreement it reached with the insurers. In the Guaranty Litigation, the insurers offered Holloway a full release and dismissal of claims against him in exchange for the third and final $1.25 million payment he had personally guaranteed. Holloway again refused to pay, contending that in light of the $500,000 payment the insurers received from BancorpSouth, his personal obligation was reduced by the amount of that payment to $750,000. The insurers, on the other hand, denied that any such credit should be applied to Holloway's obligation. Holloway filed a motion for summary judgment arguing his right to the $500,000 credit, and the insurers re-urged their original partial motion for summary judgment seeking the full $1.25 million from Holloway, which the district court had previously denied while the preference litigation was still pending. While these motions were pending in the Guaranty Litigation, the district court entered an order in the Fraud Litigation directing that Holloway's motion to enforce settlement be "subsumed" in the district court's disposition of the cross motions for summary judgment pending in the Guaranty Litigation. On Sept. 20, 2010, the district court granted Holloway's Motion for Summary Judgment in the Guaranty Litigation, deciding that Holloway owed the insurers the reduced total of $750,000. The district court also ruled that the insurers could not establish the elements necessary to recover any of the money they lost on account of the $1.9 million they returned to the Trustee in the preference litigation, despite the fact that the insurers would not receive the full $4.5 million agreed to in the original Settlement Agreement. The district court did not assess prejudgment interest on this award, and entered a subsequent Final Judgment in which it assessed costs against the insurers. On Aug. 21, 2012, the district court issued an Order dismissing the Fraud Litigation, incorporating by reference its September 2010 Memorandum Opinion and Order in the Guaranty Litigation. The insurers timely appealed the district court's order on summary judgment and its subsequent Final Judgment in the Guaranty Litigation. The insurers also appeal the district court's decision to "subsume" the Fraud Litigation into the Guaranty Litigation, and the court's dismissal of the insurers' insurance fraud suit. Headquartered in Gulfport, Mississippi, Friede Goldman Halter, Inc., was a world leader in the design and manufacture of equipment for the maritime and offshore energy industries. Friede Goldman and its debtor-affiliates filed for Chapter 11 protection on April 19, 2001 (Bankr. D. Miss. Case No. 01-52173). When the Debtors filed for chapter 11 protection, they listed assets totaling $802 million and liabilities totaling $704 million. The Bankruptcy Court confirmed the Debtors' Fourth Amended Joint Plan or Reorganization on Dec. 30, 2003. The Plan became effective on Jan. 13, 2004. A Liquidating Trust was created to liquidate the Debtors' assets, make distributions, and wind down the Debtors affairs. Oakridge Consulting, Inc., and Ocean Ridge Capital Advisors, L.L.C., were appointed as Liquidation Trustees. Douglas S. Draper, Esq., Leslie A. Collins, Esq., and Greta M. Brouphy, Esq., at Heller, Draper, Hayden, Patrick & Horn, LLC, represent the Liquidation Trustees. FULTON CAPITAL: Fitch Affirms 'BB' Preferred Stock Rating --------------------------------------------------------- Fitch Ratings-New York-05 February 2014: Fitch Ratings has affirmed the ratings for Fulton Financial Corp (FULT) at 'BBB+'/'F2'. The rating Outlook remains Stable. The Stable Outlook incorporates assumptions that asset quality will continue to show improvements, earnings will face headwinds and capital levels will remain relatively stable. KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT The rating affirmation and Stable Outlook reflects operating performance, problem asset levels and franchise strength in line with similarly rated peers. While FULT's credit costs have declined and are considered low on an absolute basis, net charge offs are amongst the highest of the mid-tier group. Fitch expects FULTs credit costs to remain low but continue to rank in the top half of the mid-tier group in the near term. Fitch believes that exposure to nonperforming commercial real estate, which has a resolution period longer than that retail loans, has caused net charge offs to remain relatively higher than its peers. Additionally, exposure to the weak economy in New Jersey has also resulted in relatively higher credit costs. FULT's operating performance is solid and ranks in the top half of the mid-tier peer group. Fitch believes ROA will continue to perform at cyclical lows during the low rate environment. That said, Fitch has incorporated the expectation of earnings improvement once the interest rate environment improves. RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT FULT is solidly situated at its current rating level. While near term ratings improvement is unlikely, FULT would gain positive ratings momentum should the company improve franchise strength demonstrated by both funding costs and profitability consistently ranking amongst the top quartile of the mid-tier banks. Similarly, negative ratings changes are not anticipated. However, should asset quality trends decline significantly, negative ratings pressure could build. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES FULT's subordinated debt and preferred stock are rated one and five notches below FULT's VR respectively. The notching reflects loss severity and an assessment of increment non-performance risk. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES FULT's subordinated and preferred stock ratings are sensitive to changes to FULT's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS FULT's subsidiary ratings are aligned with FULT, which reflects Fitch's view that the bank subsidiaries are core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES FULT's are sensitive to changes to FULTS's VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR FULT's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES- SUPPORT RATING AND SUPPORT RATING FLOOR FULT's Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch Ratings reviewed FULT's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc-Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN),Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings with a Stable Outlook: Fulton Financial Corporation -- Long-term IDR at 'BBB+'; Outlook Stable; -- Short-term IDR at 'F2'; -- Viability Rating at 'bbb+'; -- Subordinated debt at 'BBB'; -- Support affirmed at '5'; -- Support Floor at 'NF'. Fulton Bank, N.A. -- Long-term IDR at 'BBB+'; Outlook Stable; -- Long-term deposits at 'A-'; -- Short-term IDR at 'F2'; -- Short-term deposits at 'F2'; -- Viability Rating at 'bbb+'; -- Support '5'; -- Support Floor at 'NF'. The Columbia Bank -- Long-term IDR at 'BBB+'; Outlook Stable; -- Long-term deposits at 'A-'; -- Short-term IDR at 'F2'; -- Short-term deposits at 'F2'; -- Viability Rating at 'bbb+'; -- Support '5'; -- Support Floor at 'NF'. Lafayette Ambassador Bank -- Long-term IDR at 'BBB+'; Outlook Stable; -- Long-term deposits at 'A-'; -- Short-term IDR at 'F2'; -- Short-term deposits at 'F2'; -- Viability Rating at 'bbb+'; -- Support '5'; -- Support Floor at 'NF'. Fulton Bank of New Jersey -- Long-term IDR at 'BBB+'; Outlook Stable ; -- Long-term deposits at 'A-'; -- Short-term IDR at 'F2'; -- Short-term deposits at 'F2'; -- Viability Rating at 'bbb+'; -- Support '5'; -- Support Floor at 'NF'. Fulton Capital Trust I -- Preferred stock at 'BB'. GOLDKING HOLDINGS: Wants Until May 27 to File Reorganization Plan ----------------------------------------------------------------- Goldking Holdings, LLC, et al., ask the U.S. Bankruptcy Court for the Southern District of Texas to extend their exclusive periods to file a plan or plans of reorganization until May 27, and to solicit acceptances for the plan or plans until July 27. Goldking has requested an expedited hearing on its request. The Debtors seek a hearing for Feb. 18, at 2:00 p.m. Absent an extension, the Debtors' exclusive filing period will expire Feb. 27, and the time period to solicit acceptances of that plan will expire April 28. About Goldking Holdings Goldking Holdings LLC, an oil-and-gas exploration company based in Houston, Texas, sought bankruptcy protection (Bankr. D. Del. Case No. 13-12820) in Wilmington, Delaware, on Oct. 30, 2013, from creditors with plans to sell virtually all its assets. Goldking Onshore Operating, LLC, and Goldking Resources, LLC, also sought creditor protection. The cases were assigned to Delaware Judge Brendan Linehan Shannon. On Nov. 20, 2013, Judge Shannon granted the request of Goldking's former CEO Leonard C. Tallerine Jr. to move the Chapter 11 case to Houston (Bankr. S.D. Tex. Case No. 13-37200). Mr. Tallerine owns a nearly 6% stake in the company through an entity called Goldking LT Capital Corp. The Debtors are represented by Scott W. Everett, Esq., and Christopher L. Castillo, Esq., at Haynes and Boone, LLP. Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, serves as the Debtors' co-counsel. The Debtors' notice, claims, solicitation and balloting agent is Epiq Bankruptcy Solutions, LLC. Lantana Oil & Gas Partners was initially hired as the Debtors' financial advisors. In December 2013, the Debtors won Court approval to employ E-Spectrum Advisors LLC, led by its CEO Coy Gallatin, as asset sale advisor. Goldking Holdings disclosed $16,170 in assets and $11,484,881 in liabilities as of the Chapter 11 filing. Judy A. Robbins, the U.S. Trustee was unable to appoint a committee of unsecured creditors. GOLDKING HOLDINGS: Wants More Time to Decide on Leases ------------------------------------------------------ Goldking Holdings, LLC, and its debtor-affiliates ask the Hon. David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas to extending the time for the Debtors to assume or reject unexpired leases of nonresidential real property to and including the date of confirmation of a plan of reorganization. The deadline by which the Debtors must assume or reject the unexpired leases will expire on Feb. 27, 2014. Patrick L. Hughes, Esq., at Haynes And Boone, LLP, the attorney for the Debtor, said in a court filing dated Jan. 22, 2014, "It remains unclear under applicable law which executory agreements may comprise 'nonresidential real property leases' subject to this deadline. But absent prompt consideration of the motion and an extension before this deadline, the Debtors may be forced to make a premature decision on matters that should await the sale results and an expected early plan confirmation process, or possible risk forfeiting rights under certain leases that constitute a significant portion of its total assets, which may, in turn, seriously jeopardize their chance at a successful reorganization." In connection with their business operations, the Debtors own the right to explore and produce oil and gas from certain lands in Louisiana and Texas, by virtue of oil and gas leases with both government entities and private landowners in these states. In addition, the Debtors are a party to one or more other nonresidential real property leases. The Debtors do not concede that any of the mineral leases relating to the exploration and production of oil and gas to which it is a party comprise executor contracts or unexpired leases of nonresidential real property. The Debtors reference and include the oil, gas and mineral leases and all of their other executory contracts associated with the exploration and production of oil and gas out of an abundance of caution, to the extent they might be construed to be unexpired leases of nonresidential real property which would be otherwise deemed terminated before there is a sale of substantially all of the oil and gas assets, as contemplated, and otherwise a plan confirmed in the case. Since the Petition Date, the Debtors have been primarily concerned with matters relating to (i) the first day matters filed, (ii) disputes over the transfer of venue from Delaware to Texas, (iii) stabilization of business operations, (iv) postpetition financing and operational issues, and (v) preparing and now undertaking the oil and gas properties for a marketing and sale process. The Debtors have not yet had an opportunity to identify or make final determinations regarding the assumption or rejection of its leases, and particularly its nonresidential real property leases, which could possibly include among them arguments that these include leases and agreements associated with the Debtors' oil and gas properties, Mr. Hughes said. The Debtors intend to file a disclosure statement and plan of reorganization on a timetable consistent with their obligations under the milestones provide for in their applicable postpetition financing agreements. Under the current milestones, the Debtors must have, among other things, confirmed a plan of reorganization or liquidation on terms acceptable to its postpetition lender by April 28, 2014. About Goldking Holdings Goldking Holdings LLC, an oil-and-gas exploration company based in Houston, sought bankruptcy protection (Bankr. D. Del. Case No. 13-12820) in Wilmington, Delaware, on Oct. 30, 2013, from creditors with plans to sell virtually all its assets. Goldking Onshore Operating, LLC, and Goldking Resources, LLC, also sought creditor protection. The cases were initially assigned to Delaware Judge Brendan Linehan Shannon. On Nov. 20, 2013, Judge Shannon granted the request of Goldking's former CEO Leonard C. Tallerine Jr. to move the Chapter 11 case to Houston, Texas (Bankr. S.D. Tex. Case No. 13-37200). Mr. Tallerine owns a nearly 6% stake in the company through an entity called Goldking LT Capital Corp. The Debtors are represented by Scott W. Everett, Esq., and Christopher L. Castillo, Esq., at Haynes And Boone, LLP. Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, serves as the Debtors' co-counsel. Lantana Oil & Gas Partners serves as the Debtors' financial advisors. The Debtors' notice, claims, solicitation and balloting agent is Epiq Bankruptcy Solutions, LLC. In December 2013, the Debtors won Court approval to employ E-Spectrum Advisors LLC, led by its CEO Coy Gallatin, as asset sale advisor. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. GOLDKING HOLDINGS: Proposes March 5 Auction for Assets ------------------------------------------------------ Goldking Holdings, LLC, and its debtor-affiliates ask the Hon. David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas to approve proposed bidding procedures for the sale of all or substantially all of their assets, free and clear of all liens, claims, encumbrances, and other interests other than those permitted by the purchase and sale agreement. Wayzata Opportunities Fund II, L.P., agreed to fund the Debtors' post-petition financing needs through a secured debtor-in- possession financing facility, which the Court approved on an final basis by order dated Dec. 10, 2013. The Final DIP Order requires the Debtors to satisfy certain milestones, including obtaining entry of the bidding procedures order by 120 days after the Petition Date, entry of the sale order 60 days after entry of the bidding procedures order, and consummation of the sale by 180 days after the Petition Date. The Lender will be considered a qualifying bidder and in determining whether the potential bidders constitute qualified bidders, the Debtors may consider a combination of bids for the assets. The bidding procedures require a potential bidder to, among other things: (i) commit to close the transactions contemplated by the modified purchase and sale agreement by March 26, 2014, absent a mutually agreed extension thereof; (ii) not request for any break- up fee, termination fee, expense reimbursement or similar type of fee or payment; (iii) provide a cash purchase deposit in an amount equal to 10% of the purchase price provided for in the modified purchase and sale agreement; and (iv) provide for liquidated damages in the event of the qualifying bidder's breach of, or failure to perform under, the modified purchase and sale agreement equal to the amount of the Deposit. Bids must be submitted to (i) the Debtors; (ii) counsel to the Debtors, Haynes and Boone, LLP (Attn: Patrick L. Hughes and Christopher Castillo); (iii) the investment advisor for the Debtors, E-Spectrum Advisors LLC, 5850 San Felipe Street, Suite 500, Houston, Texas 77057 (Attn: Coy Gallatin), and (iv) counsel to the Lender, Porter Hedges LLP, 1000 Main Street, 36th Floor, Houston, Texas 77002 (Attn: John F. Higgins and Whitney Ables) by Feb. 26, 2014 at 5:00 p.m. (CST). In the event that the Debtors timely receive one or more qualifying bids, the Debtors will conduct an auction on March 5, 2014, beginning at 10:00 a.m. (CST). Two days prior to the auction date, the Debtors, in consultation with the Lender, will determine which of the qualifying bids is the highest or best bid, for purposes of constituting the opening bid of the auction. Auction Bidders may submit successive bids in increments of at least $100,000 higher than the Baseline Auction Bid and thereafter the then-highest and best bid. The prevailing bid and any second-highest bid will constitute an irrevocable offer and be binding on the prevailing bidder and the second-highest bidder, respectively, from the time the bid is submitted until the earliest of (a) 2 business days after the sale has closed, or (b) 21 days after entry of the sale order. Each qualifying bid that is not the prevailing bid or the second- highest bid will be deemed withdrawn and terminated at the conclusion of the sale hearing scheduled for March 7, 2014, at 10:00 a.m. (CST). In the event that the prevailing bidder fails to close the sale prior to March 26, 2014, the Debtors will be authorized, but not directed, to close the Sale to the second-highest bidder. About Goldking Holdings Goldking Holdings LLC, an oil-and-gas exploration company based in Houston, sought bankruptcy protection (Bankr. D. Del. Case No. 13-12820) in Wilmington, Delaware, on Oct. 30, 2013, from creditors with plans to sell virtually all its assets. Goldking Onshore Operating, LLC, and Goldking Resources, LLC, also sought creditor protection. The cases were initially assigned to Delaware Judge Brendan Linehan Shannon. On Nov. 20, 2013, Judge Shannon granted the request of Goldking's former CEO Leonard C. Tallerine Jr. to move the Chapter 11 case to Houston, Texas (Bankr. S.D. Tex. Case No. 13-37200). Mr. Tallerine owns a nearly 6% stake in the company through an entity called Goldking LT Capital Corp. The Debtors are represented by Scott W. Everett, Esq., and Christopher L. Castillo, Esq., at Haynes And Boone, LLP. Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, serves as the Debtors' co-counsel. Lantana Oil & Gas Partners serves as the Debtors' financial advisors. The Debtors' notice, claims, solicitation and balloting agent is Epiq Bankruptcy Solutions, LLC. In December 2013, the Debtors won Court approval to employ E-Spectrum Advisors LLC, led by its CEO Coy Gallatin, as asset sale advisor. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. GREEN FIELD ENERGY: Feb. 27 Hearing to Approve Restructuring Pact ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware rescheduled until Feb. 27, 2014, at 11:00 a.m., the hearing to consider approval of the restructuring support agreement with the so-called Moreno Entities, Turbine Powered Technology LLC, SWEPI LP, and Consenting Noteholders. The Debtors filed the RSA motion on Dec. 31, 2013. The RSA is a settlement of various claims and causes of action and the treatment of the Debtors' outstanding debt, liabilities, and equity interests between the Debtors, the Moreno Entities, Turbine Powered Technology, SWEPI, LP and Consenting Noteholders. Each of the RSA Parties has asserted causes of action against some or all of the other RSA Parties. The terms of the RSA provides that "the restructuring is to be realized through a chapter 11 plan of reorganization that is consistent with the term sheet . . . and otherwise reasonably acceptable to the Debtors, the Moreno Entities, Shell, TPT and the Consenting Noteholders." The Chapter 11 Plan will contain releases of certain of those causes of action. All such issues may be litigated, if necessary, in connection with the confirmation of the Chapter 11 Plan. The Consenting Noteholders are holders of at least 66.7% of the aggregate principal amount of the 13% Senior Secured Notes Due 2016 issued in the original aggregate principal amount of $250,000,000 under the Indenture dated as of Nov. 15, 2011, among Debtor Green Field Energy Services, Inc., and Wilmington Trust, National Association, as trustee and collateral agent. Roberta A. DeAngelis, the U.S. Trustee for Region 3, asked the Court to postpone ruling on the restructuring support agreement (a) until after the examiner has issued his report; and (b) the Debtors' disclosure statement/plan process has begun. According to the U.S. Trustee, the examiner will file, by March 4, 2014, a report regarding "whether the estates hold valuable claims or causes of action against any of the parties that would receive a release if the Chapter 11 Plan described in the RSA is confirmed, and whether the value being contributed by the parties to the RSA . . . justifies granting such releases." The examiner's report will be helpful to the Court and other parties- in-interest in their consideration of the RSA motion. The hearing on the RSA motion was previously scheduled for Feb. 4. On Jan. 24, Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice, LLP, on behalf of the Official Committee of Unsecured Creditors filed under seal its objection to the RSA motion. National Oilwell Varco, L.P., joined in the objection of the Committee. About Green Field Energy Green Field Energy Services, Inc., is an independent oilfield services company that provides a wide range of services to oil and natural gas drilling and production companies to help develop and enhance the production of hydrocarbons. The Company's services include hydraulic fracturing, cementing, coiled tubing, pressure pumping, acidizing and other pumping services. Green Field Energy and two affiliates filed Chapter 11 petitions in Delaware on Oct. 27, 2013, after defaulting on an $80 million credit provided by an affiliate of Royal Dutch Shell Plc (Bankr. D. Del. Case No. 13-12783). The Debtors are represented by Josef S. Athanas, Esq., Caroline A. Reckler, Esq., Sarah E. Barr, Esq., and Matthew L. Warren, Esq., at Latham & Watkins LLP, in Chicago, Illinois; and Michael R. Nestor, Esq., and Kara Hammon Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware. The Debtors' investment banker is Carl Marks Advisory Group LLC. Thomas E. Hill, from Alvarez & Marsal North America, LLC, serves as the Debtors' chief restructuring officer. In its schedules, Green Field disclosed $306,960,039 in total assets and $447,199,869 in total liabilities. The official committee of unsecured creditors appointed in the case has retained Robert J. Stark, Esq., Howard L. Siegel, Esq., and Sunni P. Beville, Esq., at Brown Rudnick LLP as co-counsel; Steven K. Kortanek, Esq., Kevin J. Mangan, Esq., and Morgan Seward, Esq., at Womble Carlyle Sandridge & Rice, LLP as Delaware co-counsel; and Conway MacKenzie, Inc. as financial advisor. Green Field's bankruptcy is being financed with a $30 million loan from BG Credit Partners LLC and ICON Capital LLC. Steven A. Felsenthal, the court-appointed examiner tapped to employ Stutzman, Bromberg, Esserman & Plifka as his counsel. GREEN FIELD ENERGY: Wants Lease Decision Extension Until May 27 --------------------------------------------------------------- Green Field Energy Services, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend through and including May 27, 2014, the deadline to assume or reject all unexpired leases of nonresidential real property not previously sought to be rejected by the Debtors. The original 120-day period to assume or reject the Leases currently expires on Feb. 24, 2014. "The numerous business and legal issues facing the Debtors are at least as complex as those facing debtors in bankruptcy cases of similar size. Despite these issues, the Debtors promptly moved to reject certain real property leases after the commencement of the Chapter 11 cases. However, given the other issues that have had to be addressed in these Chapter 11 cases to date, the Debtors have not been able to finalize their analysis and conclusions regarding assumption and rejection of the Leases," Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, the attorney for the Debtors, said in a court filing dated Jan. 14, 2013. According to Ms. Hammond, the Leases are important assets of the Debtors' estates. The Debtors are currently marketing their assets and soliciting/receiving bids for their assets, including the Leases. Ms. Hammond stated in the filing that it is anticipated that many of the Leases would be assumed and assigned in connection with the sale process, making them a significant aspect of the Debtors' efforts to maximize value in the Chapter 11 cases. Not extending the Assumption/Rejection Period will either force the Debtors to prematurely assume substantial long-term liabilities under the Leases, creating significant potential administrative expense claims, or cause the Debtors to forfeit benefits associated with certain Leases, thereby hindering their ability to maximize the value of their estates through the sale process or otherwise, Ms. Hammond said. About Green Field Energy Services Green Field Energy Services, Inc., is an independent oilfield services company that provides a wide range of services to oil and natural gas drilling and production companies to help develop and enhance the production of hydrocarbons. The Company's services include hydraulic fracturing, cementing, coiled tubing, pressure pumping, acidizing and other pumping services. Green Field Energy and two affiliates filed Chapter 11 petitions in Delaware on Oct. 27, 2013, after defaulting on an $80 million credit provided by an affiliate of Royal Dutch Shell Plc (Case No. 13-bk-12783, Bankr. D. Del.). The Debtors are represented by Michael R. Nestor, Esq., and Kara Hammon Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware; and Josef S. Athanas, Esq., Caroline A. Reckler, Esq., Sarah E. Barr, Esq., and Matthew L. Warren, Esq., at Latham & Watkins LLP, in Chicago, Illinois. The Debtors' investment banker is Carl Marks Advisory Group LLC. Thomas E. Hill, from Alvarez & Marsal North America, LLC, serves as the Debtors' chief restructuring officer. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed six members to the official committee of unsecured creditors in the Chapter 11 cases of Green Field Energy Services, Inc., et al. Green Field's bankruptcy is being financed with a $30 million loan from BG Credit Partners LLC and ICON Capital LLC. GROEB FARMS: Committee Wants Chapter 11 Case Open Until August -------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of Groeb Farms, Inc., has asked the Bankruptcy Court to keep the Debtor's bankruptcy case open for an additional 210 days from the Feb. 18, 2014, to Aug. 1, 2014, to: -- allow adequate time for the claims objection deadline under the Plan to pass; and -- provide parties-in-interest with time to extend the claims objection deadline if necessary. According to the Committee, the notice of confirmation was entered on Dec. 20, 2013. Pursuant to the notice, the Debtors have proposed that the bankruptcy case be closed within 60 days of the notice, or by Feb. 18. Pursuant to the Second Amended Plan of Reorganization of the Debtor, the claims objection deadline is 180 days after the Effective Date of the Plan or such other date as may be set by Court Order. The Committee believes the effective date occurred on Dec. 31. The Debtors also notified the Court that the effective date of the Plan occurred on Dec. 31. The Court also ordered that unless otherwise provided by the Plan or confirmation order, the deadline to file final requests for payment of fee claims is Feb. 14, which is the first business day that is 45 days after the Effective Date. The Troubled Company Reporter, citing a report by Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported on Dec. 26, 2013, that the Debtor persuaded the bankruptcy judge to sign a confirmation order approving a plan worked out before Chapter 11 filing in early October. An affiliate of private-equity firm Peak Rock Capital will become the controlling owner in exchange for $7 million of the $27 million in financing it provided for the Chapter 11 effort. Holders of $7 million in senior subordinated notes will receive new subordinated debt and warrants. Trade suppliers with $14.5 million in claims will receive 110 percent of their claims for continuing to do business. Other unsecured creditors owed $4 million will receive distributions from a litigation trust resulting from lawsuit recoveries. About Groeb Farms Headquartered in Onsted, Michigan, Groeb Farms is one of the largest honey packers in the nation. For more than 30 years, the company has provided the finest, top quality, wholesome and safe honey and related food products to industrial and retail customers as well as the American consumer. The Company sought protection under Chapter 11 of the Bankruptcy Code on Oct. 1, 2013 (Case No. 13-58200, Bankr. E.D. Mich.). Judge Walter Shapero is overseeing the case. The Debtor is represented by Judy A. O'Neill, Esq., and John A. Simon, Esq., at Foley & Lardner LLP, in Detroit, Michigan. Conway MacKenzie, Inc., serves as financial advisor, while Houlihan Lokey Capital, Inc., investment banker and also as financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims, noticing, and balloting agent. Groeb Farms tapped Deloitte Tax LLP as tax advisor. The Court approved Deloitte's hiring in December. Daniel M. McDermott, United States Trustee for Region 9, has appointed five creditors to serve on the Official Committee of Unsecured Creditors. The Creditors' Committee members are: Bees Brothers, LLC, Little Bee Impex, Delta Food International Inc., Buoye Honey, and Citrofrut SA de CV. HC Capital Holdings 0909A, LLC, an affiliate of Honey Financing Company, LLC, extended $27 million senior secured super-priority revolving credit facility to the Debtors. The DIP Lender is represented by Leonard Klingbaum, Esq., at Kirkland & Ellis LLP, in New York. HAWAII OUTDOOR: Cash Collateral Hearing Continued Until March 17 ---------------------------------------------------------------- The Bankruptcy Court, according to minutes of hearing held Jan. 21, 2014, authorized David C. Farmer, the Chapter 11 trustee for Hawaii Outdoor Tours, Inc., to continue using cash collateral. The minutes also stated that First-Citizens Bank consented to the use of cash collateral because a sale of the Debtor's assets will close shortly. The parties are ordered to submit another stipulation for consideration. Further hearing on the matter is scheduled for March 17 at 9:30 a.m. As reported in the Troubled Company Reporter on Oct. 9, 2013, the Chapter 11 trustee won authority to use cash collateral to continue operating the property located at 93 Banyan Drive, Hilo, Hawaii, which includes the hotel known as Naniloa Volcanoes Resort and a nine-hole golf course known as the Naniloa Volcanoes Gold Club. As adequate protection for the Trustee's use of collateral, First- Citizens Bank is granted a Senior Replacement Lien in all of the Borrower Accounts created from and after the Petition Date and all of the Debtor's right, title and interest in, to and under the Pre-Petition Collateral. The Chapter 11 trustee also granted, assigned and pledged to the Department of Taxation, State of Hawaii a second priority replacement lien and security interest, junior to the Senior Replacement Lien of First-Citizens Bank in all of the Borrower Accounts created from and after the Petition Date and all of the Debtor's right, title and interest in, to and under the Pre- Petition Collateral. The trustee and First-Citizens Bank have agreed to provide postpetition financing of a reserve account held by the Trustee at First Hawaiian Bank. First-Citizens Bank will cause the sum of $100,000 to be wire transferred to the Reserve Account. The Reserve Account funds will be used solely in the event that the Trustee does not have sufficient cash to fund: (i) payroll, (ii) payroll taxes, (iii) State of Hawaii general excise tax, and/or (iv) State of Hawaii transient accommodation taxes. The complete terms and conditions of the postpetition financing of the Reserve Account can be found on pages 32 to 34 of the Tenth Interim Cash Collateral Order, a copy of which is available at: http://bankrupt.com/misc/hawaiioutdoor.doc407.pdf About Hawaii Outdoor Tours Hawaii Outdoor Tours, Inc., operator of the Naniloa Volcanoes Resort in Hilo, Hawaii, filed a Chapter 11 petition (Bankr. D. Haw. Case No. 12-02279) in Honolulu on Nov. 20, 2012. Naniloa Volcanoes is a 382-room hotel with a nine-hole golf course. The 64-acre property is subject to a 65-year lease, commencing Feb. 1, 2006, and provides for a total ground rent for the first 10 years of $500,000 annually. The Debtor used a $10 million loan from First Regional Bank and $10 million of its own cash to invest in the property. First-Citizens Bank & Trust Company, which acquired the First Regional note from the Federal Deposit Insurance Corp., commenced foreclosure proceedings in August. First-Citizens Bank asserts a claim of $9.95 million. The Debtor believes that the value of the hotel property exceeds the amount of the First-Citizens Bank note. Just the bricks and mortar alone was valued in excess of $35 million by First Regional's appraiser and the insurance company. Bankruptcy Judge Robert J. Faris oversees the case. Ramon J. Ferrer, Esq., represents the Debtor as counsel. In its schedules, the Debtor disclosed $52,492,891 in assets and $11,756,697 in liabilities. The petition was signed by CEO Kenneth Fujiyama. Ted N. Petitt, Esq., represents secured creditor First-Citizens Bank as counsel. Cynthia M. Johiro, Esq., represents the State of Hawaii Department of Taxation as counsel. Timothy J. Hogan, Esq., represents David C. Farmer, the Chapter 11 Trustee, as counsel. Christopher J. Muzzi, Esq., at Tsugawa Biehl Lau & Muzzi, LLLC, represents the Official Committee of Unsecured Creditors as counsel. The Bankruptcy Court, in the minutes of the hearing held Nov. 12, 2013, authorized the Chapter 11 trustee to sell hotel, assets and assignments to the highest bidder. Ken Direction Corporation, the parent company of Hawaii Outdoor Tours, Inc., filed with the U.S. Bankruptcy Court for the District of Hawaii on Nov. 5, 2013, a disclosure statement explaining its proposed plan of reorganization for the Debtor, dated Nov. 4, 2013. According to the Disclosure Statement, the source of about $14,000,000 in new funds will be the proceeds from the sale of real estate owned by HPAC, LLC, an affiliated company of the Proponent, to Shalom Amar Revocable Trust 2000 by way of a 1031 exchange. HAYES LEMMERZ: Union Fails in Bid to Dismiss "Laber" Suit --------------------------------------------------------- In 2006, Donald Laber and Douglas Whack terminated their employment with HLI Commercial Highway, Inc., a subsidiary of Hayes Lemmerz International, Inc., by taking advantage of a one- time voluntary separation agreement entered into between HLI and defendants United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers Intl. Union and Local 21. The memorandum agreement, and the subsequent agreement entered into between HLI and the international, provided that bargaining unit employees with sufficient seniority were entitled to elect to voluntarily terminate their employment with HLI in exchange for three categories of benefits: "a cash award based upon seniority; a cash award aimed at bridging the gap for medical expenses until the employee becomes Medicare eligible; and extended healthcare benefits." To take advantage of the agreement, qualifying bargaining unit employees were required to register their election and submit the appropriate paperwork by Oct. 31, 2006. Laber and Whack were third-party beneficiaries to this agreement, for they elected to voluntarily separate their employment in exchange for the specific benefits provided therein. According to the complaint, the "Memorandum agreement is a contract separate and apart from" the CBA. (Compl. at 8.) The Memorandum agreement, itself, provides that it was the product of negotiations between HLI and the local that "afforded both parties full and complete opportunities to exchange and discuss proposals regarding [the] one-time" voluntary separation opportunity. (Memorandum agreement at 18). Upon executing the memorandum agreement, the parties to it "acknowledge[d] that they clearly, expressly, unequivocally, and totally waive[d] any rights to bargain over the terms set forth herein." (Id.) In 2009, and subsequent to Laber and Whack's respective decisions to voluntarily separate, Hayes Lemmerz sought protection under Chapter 11 of the United States Bankruptcy Code. During the course of the bankruptcy, Hayes Lemmerz and the international union entered into an agreement "for the purpose of negotiating a modification of 'retiree benefits,' as defined in Section 1114(a) of the Bankruptcy Code. The bankruptcy agreement made no reference to Laber and Whack's rights arising under the memorandum agreement, and Hayes Lemmerz did not list Laber and Whack as creditors of the bankruptcy estate in sufficient time to permit them to file a proof of claim. Nonetheless, the bankruptcy agreement had the effect of modifying the medical benefits of all retirees of Hayes Lemmerz and its affiliates, including those who had exercised their rights under the memorandum agreement. On Feb. 25, 2013, Laber and Whack sued in the Summit County Court of Common Pleas. The complaint contained two claims, one for breach of contract and a second claim for tortious interference with contractual and business relations, with the memorandum agreement serving as the foundation for both claims. The complaint purports to rest on state common law, and is free of any reference to federal law. On March 25, 2013, the defendants removed the action to District Court for the Northern District of Ohio on the basis of federal question jurisdiction under 28 U.S.C. Sections 1441 and 1446. Noting that the complaint alleges a breach of an agreement between a union and an employer, the defendants contend that Laber and Whack's claims are governed by Sec. 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185, "which provides federal jurisdiction over suits for 'violation of contracts between an employer and a labor organization.'". Presently before the Court is Laber and Whack's motion to remand the matter to state court. The Defendants oppose the motion, and plaintiffs have filed a reply. Also before the Court is defendants' motion to dismiss the complaint for failure to state a claim. In a Jan. 31, 2014 Memorandum Opinion and Order available at http://is.gd/eY9Sysfrom Leagle.com, District Judge Sara Lioi ruled that the plaintiffs' motion to remand is denied, the plaintiffs' state law claims are preempted by federal law, and the defendants' motion to dismiss is denied as moot. The plaintiffs are afforded 14 days to file a motion for leave to amend their complaint, along with a proposed amended complaint. If plaintiffs do not timely file a conforming amended complaint, the Court will dismiss the action. The case is, DONALD LABER, et al., Plaintiffs, v. UNITED STEEL, PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, et al., Defendants, Case No. 5:13CV640 (N.D. Ohio). About Hayes Lemmerz Originally founded in 1908, Hayes Lemmerz International, Inc. (NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. The Company is also a supplier of automotive powertrain components. The Company has global operations with 23 facilities, including business, sales offices and manufacturing facilities, located in 12 countries around the world. The Company sells products to every major North American, Asian and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world. The Company and certain affiliates filed for bankruptcy on May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching agreements with lenders holding a majority of the Company's secured debt. The Company's principal bankruptcy attorneys are Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co., LLC, serves as the Company's financial advisors. AlixPartners, LLP, serves as the Company's restructuring advisors. The Garden City Group, Inc., serves as the Debtors' claims and notice agent. As of January 31, 2009, the Debtors had total assets of $1,336,600,000 and total debts of $1,405,200,000. This is the Company's second trip to the bankruptcy court, dubbed a Chapter 22, which was precipitated by an unprecedented slowdown in industry demand and a tightening of credit markets. HOYT TRANSPORTATION: Taps Greenberg Traurig as Litigation Counsel ----------------------------------------------------------------- Hoyt Transportation Corp. seeks permission from the Hon. Nancy Hershey Lord of the U.S. Bankruptcy Court for the Eastern District of New York to employ Greenberg Traurig, LLP as special litigation counsel. Greenberg Traurig has been representing the Debtor and its co- plaintiff, Careful Bus Service, Inc., in connection with a hybrid Article 78 and Declaratory Judgment action pending before the Hon. Peter Moulton in the New York Supreme Court under Index No. 100741/2013 (the "Litigation"). In light of the prior services rendered by Greenberg Traurig, and its familiarity with the Litigation, the Debtor desires to continue the retention of Greenberg Traurig as special counsel. Greenberg Traurig will be paid at these hourly rates: Michel A. Berlin $643.50 Diana M. Dellamere $297 Daniel Friedman $292.50 Jerrold F. Goldberg $769.50 Robert M. Harding $792 Jeffrey D. Mamorsky $796.50 John L. Mascialino $500 Daniel R. Milstein $526.50 Adam W. Silverman $210 William C. Silverman $666 Steven Sinatra $666 Greenberg Traurig will also be reimbursed for reasonable out-of- pocket expenses incurred. The Debtor and Careful Bus agreed that Careful Bus would be responsible for no more than $35,000 in Greenberg Traurig's fees and expenses and that the Debtor would be responsible for the balance, in recognition that the Debtor's claims against the City was substantially larger than Careful Bus'. Upon information and belief, Careful Bus has been invoiced for the $35,000 for which it is responsible. Greenberg Traurig subsequently received $19,000 of such invoiced amount directly from Careful Bus. Greenberg previously represented the Debtor in connection with the Debtor's prior contract with the City, and provided counsel relating to the Debtor's pension liability and union issues. As of filing of the Chapter 11 case, the Debtor owed fees to Greenberg in connection with that representation as well as for the Litigation. Although, Greenberg Traurig is a pre-petition creditor of the Debtor, the Debtor is advised by Greenberg Traurig that it represents and holds no interest adverse to the Debtor. John Mascialino, shareholder of Greenberg Traurig, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Greenberg Traurig can be reached at: John Mascialino, Esq. GREENBERG TRAURIG LLP MetLife Building 200 Park Avenue New York, NY 10166 Tel: (212) 801-9355 E-mail: mascialinoj@gtlaw.com About Hoyt Transportation Brooklyn, New York-based Hoyt Transportation Corp. filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 13-44299) on July 13, 2013, estimating at least $10 million in assets and liabilities. The Debtor is represented by Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein LLP. Brooklyn-based Hoyt specializes in transportation for children with disabilities. Hoyt operated 350 buses until the contract with the Department of Education expired. HOYT TRANSPORTATION: May Close Acquisition of Atlantic's Assets --------------------------------------------------------------- The Hon. Nancy Hershey Lord of the U.S. Bankruptcy Court for the Eastern District of New York has authorized Hoyt Transportation Corp. to close and consummate the acquisition of the assets of Atlantic Queens Bus Corp. and select routes and buses of Atlantic Express affiliate Amboy Bus Corp. On Dec. 18, 2013, the Debtor filed a motion seeking final approval of bids to purchase the assets of Atlantic Queens and other select routes, buses. The Debtor became active in the bidding procedures relating to the Atlantic Express Chapter 11 cases in Manhattan, and previously sought the permission of the Court to participate in the auction. As reported by the Troubled Company Reporter on Dec. 17, 2013, the Court authorized the Debtor to bid at the bankruptcy auction sale involving the assets of Atlantic Express et al. The Debtor was allowed to make a bid for certain of the assets of Atlantic Express, including providing a $500,000 deposit, and offering to assume liabilities. The Debtor then formulated a set of bids, and on Dec. 11, 2013, the Debtor received news that its total bid of $3.092 million to acquire Atlantic Queens' operating assets was deemed the reserve bid. The Debtor became the successful bidder at the auction held on Dec. 13, 2013, for, inter alia, an additional 59 special education routes plus 21 summer school routes buses pursuant to a second set of bids. The additional routes relate to Amboy, and augment the work garnered from the Atlantic Queens bid, bringing the Debtor close to its pre-bankruptcy operating level. The Debtor seized on the opportunity presented to it by the unexpected bankruptcy of Atlantic Express and bid on: (i) Atlantic Queens' 149 regular school year special ed routes and 148 Ramp wagons; and (ii) Amboy Bus' 59 select regular school year special ed routes, 21 summer school special ed routes, and 20 additional mini-wagons (2101), for a total bid of $3.77 million. Consistent with the Bid Participation Order, all of the monies to close the transaction are being funded by the Debtor's principals. The sum of $3.22 million, representing the balance of the purchase price, has been deposited into the escrow account. Atlantic Express is holding in escrow the prior $500,000 deposit, which was also funded by the Debtor's principals. The Debtor said in its Dec. 18, 2013 court filing that it has been agreed, in theory, by counsel for Atlantic Express, Local 1181, and the New York City Department of Education that a reserve of $575,000 will be established from the Debtor's bid in order to address back-pay claims. The Debtor is acquiring all of the assets free and clear of all claims, liens, taxes and encumbrances. About Metro Affiliates Staten Island, New York-based Metro Affiliates, Inc., and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code on Nov. 4, 2013 (Bankr. S.D.N.Y. Case No. 13-13591). The case is assigned to Judge Sean Lane. Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L. Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Washington, D.C., represent the Debtors. Silverman Shin & Byrne PLLC serves as special counsel. Rothschild Inc. serves as the Debtors' investment banker, while Kurtzman Carson Consultants LLC serves as their claims and noticing agent. Wells Fargo Bank, National Association, as agent for a consortium of DIP lenders, is represented by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York. The Bank of New York Mellon as indenture trustee and collateral agent for prepetition noteholders, is represented by James Gadsden, Esq., at Carter, Ledyard & Milburn LLP, in New York. Certain Noteholders are represented by Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, in New York. This is Metro Affiliates' third trip to Chapter 11. The Company, together with its subsidiaries, previously sought protection under Chapter 11 of the Bankruptcy Code on Aug. 16, 2002 (In re Metro Affiliates, Inc., Case No. 02-42560 (PCB), Bankr. S.D.N.Y.). A plan in the second Chapter 11 case was confirmed in September 2003. The first bankruptcy was in 1994. About Hoyt Transportation Brooklyn, New York-based Hoyt Transportation Corp. filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 13-44299) on July 13, 2013, estimating at least $10 million in assets and liabilities. The Debtor is represented by Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein LLP. Brooklyn-based Hoyt specializes in transportation for children with disabilities. Hoyt operated 350 buses until the contract with the Department of Education expired. IGPS COMPANY: Court Reclassifies Perkins Coie Claim as Unsecured ---------------------------------------------------------------- Bankruptcy Judge Kevin Gross sustained the objection of the Liquidation Trustee to the Proof of Claim filed by Perkins Coie LLP in the Chapter 11 case of Pallet Company LLC, fka iGPS Company yLLC. Perkins Coie filed a proof of claim asserting a claim for $301,000 secured by a charging lien based on prepetition legal services. The Trustee objects to the claim, arguing that Perkins Coie lacks a perfected charging lien. iGPS retained Perkins Coie in December 2011 to pursue actions against certain parties for misappropriating and destroying more than 45,000 of the Debtor's pallets. Pursuant to the engagement letter, the Debtor retained Perkins Coie on an hourly basis rather than a contingency fee agreement. Perkins Coie filed two lawsuits on the Debtor's behalf: iGPS Company, LLC v. Pallet World Inc. in a Michigan State Court and iGPS Company, LLC v. Southwest Forest Products, Inc. in an Arizona State Court. In April 2013, while the Actions remained pending, Perkins Coie filed notices of lien, asserting a charging lien in Michigan and Arizona based on the Actions. iGPS sought Chapter 11 protection in June 2013. On its Schedules of Assets and Liabilities and its Statement of Financial Affairs, the Debtor listed the Actions as contingent and unliquidated claims, pending as of the Petition Date. The Debtor listed Perkins Coie as a creditor holding a $286,942 unsecured, nonpriority claim. On June 5, 2013, the Debtor filed a motion seeking to sell all of its assets, including the Actions, free and clear of liens. The Debtor also moved to employ Perkins Coie as an ordinary course professional to continue to provide legal services relating to the Actions. Despite receiving notice of Sale Motion, Perkins Coie did not file an objection or otherwise respond the Sale Motion. Perkins Coie did file a declaration of ordinary course professional, disclosing that the Debtor owed Perkins Coie approximately $319,200.37 for prepetition services "the payment of which is subject to limitations contained in the Bankruptcy Code." Perkins Coie further disclosed that its only interest adverse to the Debtors was its claim for attorney's liens relating to the Actions. During the course of the bankruptcy case, the Debtor paid Perkins Coie $31,915.44 for fees relating to "legal advice regarding environmental and legislation matters; management of pallet theft litigation." On July 29, 2013, the Court approved the sale of substantially all of the Debtor's assets to iGPS Logistics LLC. According to Judge Gross, Perkins Coie's representation of the Debtors did not result in a judgment in the Actions prior to the Sale. As a result, there is no judgment to which the asserted charging liens can attach. Perkins Coie accordingly cannot establish that it holds a secured claim. The Court, thus, reclassifies Perkins Coie's claim as a nonpriority general unsecured claim. A copy of the Court's Feb. 4, 2014 Memorandum Opinion is available at http://is.gd/cTJZ5ufrom Leagle.com. About iGPS Co. iGPS Company LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 13-11459) on June 4, 2013, to sell its assets to a group led by Balmoral Funds LLC, absent higher and better offers. iGPS Company -- http://www.igps.net-- is the first and only plastic pallet pooling rental and leasing company in the U.S. It offers plastic pallets with embedded radio frequency identification (RFID) tags. Founded in 2006, the company is headquartered in Orlando, Florida, and has a sales and innovation center in Bentonville, Arkansas. The Debtor estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. According to the board resolution authorizing the bankruptcy, Pegasus IGPS LLC owns 12.55% of the company; iGPS Co-Investment LLC owns 18.75%; Kia VIII (iGPS Sub), LLC owns 30.74%; and KIA VIII iGPS Blocker, LLC, owns 12.27%. John H. Strock, Esq., and L. John Bird, Esq., at Fox Rothschild LLP, in Wilmington, Delaware; and John K. Cunningham, Esq., Richard S. Kebrdle, Esq., Kevin M. McGill, Esq., Fan B. He, Esq., at White & Case LLP, in Miami, Florida, also represent the Debtor. The Plan filed in the Debtor's case proposes to transfer to a liquidation trust all of the remaining assets of the Debtor. Under the Plan, Priority Claims (Class 1) and Non-Lender Secured Claims (Class 2) are unimpaired and will recover 100% of the allowed claim amount. Unsecured Claims (Class 3) are impaired and will receive its pro rata share of the available proceeds. Equity Interests (Class 4) are also impaired and will be canceled on the effective date. The Official Committee of Unsecured Creditors is represented by the law firm of McKenna Long & Aldridge LLP, as its counsel, and Cole, Schotz, Meisel, Forman & Leonard, P.A., as its Delaware counsel. The Committee tapped to retain Emerald Capital Advisors as its financial advisors. iGPS received court approval in July to sell the business largely in exchange for secured debt and filed the liquidating plan based on a settlement negotiated between the lenders and the unsecured creditors' committee. iGPS Logistics LLC, an entity established by the lenders, bought the business for $2.5 million cash and a commitment to pay all priority tax claims and claims by workers fired without required notice. The lenders agreed to waive their claims. The buyers are Balmoral Funds LLC, One Equity Partners LLC, and Jeff and Robert Liebesman. They purchased the $148.8 million working-capital loan shortly before bankruptcy. In September 2013, the Court authorized the Debtor to change its name to "Pallet Company LLC." The Debtor's Second Amended Chapter 11 Plan, which was co-proposed by the Official Committee of Unsecured Creditors, was confirmed on Nov. 14, 2013, and declared effective Nov. 27, 2013. Creditors were projected to recoupo 28% to 35% on $13.8 million in unsecured claims. INTERNATIONAL LEASE: Fitch Expects to Equalize IDR at 'BB+' ----------------------------------------------------------- The expected closing of AerCap Holdings NV's (AerCap) acquisition of International Lease Finance Corp. (ILFC) in the second quarter will mark an important and positive turning point for the aircraft leasing industry, according to Fitch Ratings. On completion of the acquisition, a long period of lessor ownership uncertainty will come to an end, and strong public market acceptance of the deal is a credit positive for the entire industry. The sale of ILFC by AIG represents the last transfer of a large fleet of leased aircraft (more than 900), following RBS's sale of its leased aircraft fleet in 2012 and CIT's re-emergence from bankruptcy. "Once the AerCap deal closes, we believe material consolidation in the industry will be complete, with two large players (AerCap and GECAS) controlling close to half of all lessor-owned aircraft globally. However, there may still be M&A opportunities for the smaller players," Fitch said. Smaller lessors may feel increased pressure to sell or combine with another player to achieve the critical mass necessary to compete effectively in a more consolidated industry. "We believe scale plays an important role in driving lessors' financial performance, particularly given the need to shift leased aircraft out of underperforming regional markets. Returns to scale tend to diminish, however, with reduced benefits appearing once lessor fleets reach 200-300 aircraft," Fitch said. Following AIG's exit from the business, the strategic uncertainty surrounding ILFC's ultimate buyer will be resolved after more than five years. "We think this is an important step for the industry, ending ownership uncertainty and transferring assets to a pure- play lessor. Additionally, the mark-to-market of ILFC's fleet could lead to improved support for aircraft valuations since risks of any further aircraft impairments will be reduced in the transaction. We expect AerCap to continue pursuing an active aircraft trading strategy, which will support activity in the secondary market," Fitch said. Over time, the increase in AerCap's market capitalization should lead to improved access to equity markets for other aircraft lessors. "This could lead more lessors to contemplate public equity offerings. Air Lease Corp. has been the only aircraft lessor to IPO since 2007, but we expect more activity as private equity sponsors continue to look for exit opportunities. Increased liquidity and trading volume, supported by strong equity market performance over the last 18 months, should lead to a better funding environment with strong public participation, a positive for credit," Fitch said. AerCap's Issuer Default Rating (IDR) is currently on Rating Watch Negative, while ILFC's IDR is on Rating Watch Positive. Upon consummation of the acquisition, Fitch expects to equalize the IDRs of the two companies at 'BB+'. JACOB P. SURMA: Court Says Plan "Patently Unconfirmable" -------------------------------------------------------- Bankruptcy Judge Michael B. Kaplan declined to approve the disclosure statement explaining the First Modified Chapter 11 Plan of Jacob P. Surma. SunTrust Mortgage, Inc., objected to the Plan and Disclosure Statement, which hinge on the use and allocation of previously assigned rents. In a Feb. 4, 2014 Opinion available at http://is.gd/KWDxxlfrom Leagle.com, Judge Kaplan held that the Debtor may not use or allocate the rents under his Plan and, thus, the Court denies approval of the Disclosure Statement. The Court says the Plan is patently unconfirmable. Jacob P. Surma, Jr., owns a multifamily home located at 904 Bergh Street, Asbury Park, New Jersey, which Property is encumbered by two mortgages held by SunTrust -- a first mortgage in the original amount of $375,200, and a second mortgage in the amount of $93,800. He resides in one of three separate apartments in the Property and rents out the other units. Mr. Surma filed for Chapter 13 bankruptcy relief (Case No. 10- 25598-MBK), on May 21, 2010, to stay a May 24, 2010 sheriff's sale. On May 12, 2011, the First Chapter 13 was dismissed, prior to confirmation, for lack of prosecution and failure to file an amended plan. Upon dismissal of the First Chapter 13, SunTrust continued with the foreclosure action and a sheriff's sale on the property was scheduled for Sept. 26, 2011. Mr. Surma filed another Chapter 13 bankruptcy case (Case No. 11-37991-MBK) on Sept. 26, 2011. In the Debtor's Chapter 13 plan, filed in the Second Chapter 13 case, he proposed to use his regular income from work, as well as the $2,500 in monthly rental income, to satisfy SunTrust's secured claim by stripping off the second mortgage and amortizing the allowed bifurcated secured claim on a 30-year amortization schedule; the Chapter 13 plan further provided for a proposed a balloon payment of the balance of SunTrust's claim in the 59th month of the Plan. The Chapter 13 Trustee filed a Motion to Dismiss the Second Chapter 13 on Aug. 30, 2012, which the Court granted on Oct. 17, 2012, prompting the Debtor to file a Motion to Vacate the Dismissal, Reinstate the Case, and Convert the Case to a Chapter 11. The Chapter 11 case is Case No. 11-37991 (MBK). Attorney for Jacob P. Surma, Jr., is: David E. Shaver, Esq. BROEGE, NEUMANN, FISHER, & SHAVER, LLC 25 Abe Voorhees Drive Manasquan, NJ 08736 Attorney for SunTrust Mortgage, Inc. is: William M.E. Powers, III, Esq. POWERS KIRN, LLC. 728 Marne Highway, P.O. Box 848 Moorestown, NJ 08057 KEYWELL LLC: Has Until March 31 to Decide on U.S. Steel Lease ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, according to Keywell, L.L.C.'s case docket, (i) extended until March 31, 2014, the Debtor's time to assume or reject an unexpired lease of non-residential real property, with the Debtor as lessee and United States Steel Corporation, a Delaware corporation, as lessor; and (ii) set May 1, as the deadline to file a proof of claim arising out of the rejection of the ground lease. The Court also authorized the Debtor to reject the lease upon written notice to U.S. Steel. Keywell said the extension will prevent the Debtor from defaulting on its obligations under an asset purchase agreement. About Keywell L.L.C. Keywell L.L.C., a supplier of scrap titanium and stainless steel, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 13-37603) on Sept. 24, 2013. Mark Lozier signed the petition as president and CEO. Keywell LLC first filed schedules disclosing $22,515,017 in total assets, and $35,025,633 in total liabilities. In amended schedules, Keywell disclosed $22,546,386 in total assets and $39,361,793 in total liabilities. Judge Eugene R. Wedoff presides over the case. Howard L. Adelman, Esq., Chad H. Gettleman, Esq., Henry B. Merens, Esq., Brad A. Berish, Esq., Mark A. Carter, Esq., Adam P. Silverman, Esq., and Nathan Q. Rugg, Esq., at Adelman & Gettleman Ltd. serve as the Debtor's counsel. Alan B. Patzik, Esq., Steven M. Prebish, Esq., and David J. Schwartz, Esq., at Patzik, Frank & Samotny Ltd. serve as the Debtor's special counsel. Eureka Capital Markets, LLC, serves as the Debtor's investment banker, while Conway MacKenzie, Inc., serves as its financial advisors. The Debtor's lenders are represented by Steven B. Towbin, Esq., and Gordon E. Gouveia, Esq., at Shaw Fishman Glantz & Towbin LLC, in Chicago, Illinois. The United States Trustee for Region 11 appointed an Official Committee of Unsecured Creditors. The panel has hired David A. Agay, Esq., Sean D. Malloy, Esq., Scott N. Opincar, Esq., Joshua A. Gadharf, Esq., and T. Daniel Reynolds, Esq., at McDonald Hopkins LLC as counsel. Alvarez & Marsal North America, LLC, serves as financial advisors to the Committee. In December 2013, the Bankruptcy Court formally approved the sale of the Debtor's assets to KW Metals Acquisition LLC for $15.8 million. The original offer was from Cronimet Holdings Inc. for $12.5 million cash. KEYWELL LLC: Has Until April 15 to Propose Chapter 11 Plan ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois extended Keywell L.L.C. exclusive periods to file a Chapter 11 Plan until April 15, 2014, and solicit acceptances for that Plan until June 16. The Debtor requested for an extension of the plan exclusivity period until April 1, and the exclusive solicitation period until June 2. About Keywell L.L.C. Keywell L.L.C., a supplier of scrap titanium and stainless steel, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 13-37603) on Sept. 24, 2013. Mark Lozier signed the petition as president and CEO. Keywell LLC first filed schedules disclosing $22,515,017 in total assets, and $35,025,633 in total liabilities. In amended schedules, Keywell disclosed $22,546,386 in total assets and $39,361,793 in total liabilities. Judge Eugene R. Wedoff presides over the case. Howard L. Adelman, Esq., Chad H. Gettleman, Esq., Henry B. Merens, Esq., Brad A. Berish, Esq., Mark A. Carter, Esq., Adam P. Silverman, Esq., and Nathan Q. Rugg, Esq., at Adelman & Gettleman Ltd. serve as the Debtor's counsel. Alan B. Patzik, Esq., Steven M. Prebish, Esq., and David J. Schwartz, Esq., at Patzik, Frank & Samotny Ltd. serve as the Debtor's special counsel. Eureka Capital Markets, LLC, serves as the Debtor's investment banker, while Conway MacKenzie, Inc., serves as its financial advisors. The Debtor's lenders are represented by Steven B. Towbin, Esq., and Gordon E. Gouveia, Esq., at Shaw Fishman Glantz & Towbin LLC, in Chicago, Illinois. The United States Trustee for Region 11 appointed an Official Committee of Unsecured Creditors. The panel has hired David A. Agay, Esq., Sean D. Malloy, Esq., Scott N. Opincar, Esq., Joshua A. Gadharf, Esq., and T. Daniel Reynolds, Esq., at McDonald Hopkins LLC as counsel. Alvarez & Marsal North America, LLC, serves as financial advisors to the Committee. In December 2013, the Bankruptcy Court formally approved the sale of the Debtor's assets to KW Metals Acquisition LLC for $15.8 million. The original offer was from Cronimet Holdings Inc. for $12.5 million cash. LABORATORY PARTNERS: Wants Plan Exclusivity Extended to April 23 ---------------------------------------------------------------- Laboratory Partners Inc. filed a motion with the U.S. Bankruptcy Court seeking to extend the period during which the Debtors have the exclusive right to file a chapter 11 plan by 60 days through and including April 23, 2014, and the period during which the Debtors have the exclusive right to solicit acceptances of the Plan through and including June 23, 2014. The Debtors said the extension of the Exclusivity Periods will add certainty and stability as the Debtors continue working towards a sale of their assets. To date, the Debtors have focused their efforts on transitioning into bankruptcy and pursuing the sale process, as necessitated by the circumstances of these cases. In addition, the Debtors and their professionals have spent a considerable amount of time during the early stages of these cases addressing numerous issues involving employees, suppliers, utility providers, landlords and governmental agencies. Notwithstanding, the Debtors have made progress in these chapter 11 cases to date. Notably, since the Petition Date, the Debtors have, among other things: (a) obtained debtor-in-possession financing, (b) commenced the process to sell substantially all of their assets, (c) prepared and filed schedules and statements for each of the Debtors, (d) established and noticed many creditors and other parties in interest of the General Bar Date, and (e) continued to provide laboratory services without interruption thereby preserving going concern value. As a result of focusing on these issues, the Debtors have not yet analyzed in significant detail all issues related to a potential plan filing. Although the Debtors are hopeful that a plan could be filed and solicited prior to the expiration of the current Exclusive Periods, there is presently no certainty that this will occur. The Debtors intend to use the extended Exclusive Periods to: (a) complete the Sales; (b) strategize regarding the potential wind down of the Debtors' remaining operations; (c) proceed with the claims administration process; and (d) develop an appropriate strategy for the future of these cases. As such, the Debtors submit that creditors will not be prejudiced by an extension of the Exclusive Periods. About Laboratory Partners Laboratory Partners Inc., a Cincinnati-based provider of lab and pathology services, filed a petition for Chapter 11 protection on Oct. 25 in Delaware. The case is In re Laboratory Partners Inc., 13-bk-12769, U.S. Bankruptcy Court, District of Delaware (Wilmington). Judge Peter J. Walsh presides over the case. Laboratory Partners is represented by Morris, Nichols, Arsht & Tunnell LLP's Robert Dehney, Esq., and Erin R. Fay, Esq. -- rdehney@mnat.com and efay@mnat.com -- and Pillsbury Winthrop Shaw Pittman LLP's Leo T. Crowley, Esq. -- leo.crowley@pillsburylaw.com -- and Margot P. Erlich, Esq. and Jonathan J. Russo, Esq. BMC Group Inc. serves as claims and administrative agent. The Official Committee of Unsecured Creditors has retained Otterbourg P.C., as Lead Co-Counsel; Klehr Harrison Harvey Branzburg LLP as Delaware Counsel; and Carl Marks Advisory Group LLC, as financial advisors. LAFAYETTE YARD: Trenton Wants Retention Plan Denied --------------------------------------------------- The City of Trenton, NJ, objected to Lafayette Yard Community Development Corporation's proposed key employee retention plan stating that the Debtor failed to meet its burden of proof demonstrating why Joyce Kersey -- the voluntary chairwoman of the Debtor's board of directors and, therefore, an insider -- must receive any compensation under the retention plan. Trenton also said the Debtor failed to set forth any extraordinary circumstances warranting nunc pro tunc approval for the Debtor to convert its voluntary chairwoman into a paid employee with compensation dating back to the Petition Date. As reported in the Troubled Company Reporter on Jan. 31, 2014, the Official Committee of Unsecured Creditors and Roberta A. DeAngelis, U.S. Trustee for Region 3, lodged objections to the Debtor's proposed key employee retention plan. The Committee said the Debtor failed to establish the basis to support the payment of a $40,000 stipend to the volunteer chairperson of the Debtor's Board of trustees, who is an insider of the Debtor. Moreover, the Debtor fails to provide any justification to provide the proposed stipend retroactively to the Petition Date. The U.S. Trustee said the Debtor has not met its burden of proof to support the approval of the retention plan that provides for compensation to Ms. Kersey. The U.S. Trustee added that the KERP Motion avoids the strict standard of Section 503(c)(1) of the Bankruptcy Code by asserting that Ms. Kersey is not an insider of the Debtor under the definition set forth in Section 101(31)(B) of the Bankruptcy Code. The Committee also adopted and incorporated arguments by the Office of the U.S. Trustee. Valerie A. Hamilton, Esq., at Sills Cummis & Gross P.C., and William W. Kannel, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky And Popeo, P.C., on behalf of Wells Fargo Bank, National Association, as indenture trustee for the hotel bonds, also objected to the retention program, stating that the plan must reflect the economic and procedural status of the proceedings. Wells Fargo also related that any relief on the KERP Motion must also reflect that the Debtor first proposed to compensate Mrs. Kersey at the Nov. 25, 2013 auction in the case, reflect the services of the professionals that are assisting the Debtor, and be scaled to reflect the actual and documented number of hours Mrs. Kersey has reasonably expended on the Debtor's behalf. The Debtor, in its motion, related that Ms. Kersey has literally worked seven days a week, unpaid to date, to ensure that the Debtor's hotel was sold for a maximum dollar, and supervised every single expense incurred by the Debtor, to ensure that there were no unwarranted, unearned payments, and that the Debtor's sale proceeds were maximized in a fair manner to the Debtor's creditors. Since the Debtor sold the Hotel and is no longer an operating entity, it has disengaged the services of its management company. The Debtor, as a not-for-profit public entity, does not have any employees and its board consists of unpaid volunteers. Ms. Kersey has been chosen, and has accepted the task, of being the sold executive to complete the wind-down of the Debtor's affairs. Under the KERP, Ms. Kersey would be compensated $50 per hour for her time committed throughout the case, up to $40,000. At a rate of $50 per hour, 40 hours a week, for 22 weeks, the total estimated compensation due to Ms. Kersey would total just over the $40,000, at $44,000. Edison Broadcasting LLC acquired the Lafayette Yard Hotel & Conference Center for $6 million, after a competing bid at a Nov. 25 auction pushed Edison to raise its initial $5.53 million offer. The bid of VBCE LLC in the amount of $5,665,000 was declared the next highest and best bid. Although there were only two bidders at auction, the owner had said that a dozen "interested parties have recently expressed an interest in buying the hotel." The Bankruptcy Court approved the sale at a Nov. 26 hearing. Net proceeds from the sale was $5.94 million. Following its Chapter 11 filing, the hotel had to be sold because financing to operate the property would have run out by year-end. About Lafayette Yard 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 (Bankr. D.N.J. Case No. 13-30752) on Sept. 23, 2013. The hotel went into bankruptcy when the city of Trenton and the state declined to continue covering losses. The 197-room hotel opened in 2002 and needs renovation, according to court papers. Situated on 3.7 acres, it's owned by not-for- profit Lafayette Yard Community Development Corp. There is $29.9 million in long-term debt, including $14.4 million in tax-exempt bonds. 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 Development Corporation $432,633 in assets and $33,583,834 in liabilities as of the Chapter 11 filing. The U.S. Trustee has selected three creditors to serve on the Official Committee of Unsecured Creditors. LAFAYETTE YARD: Court Approves Stipulation With Veolia Energy ------------------------------------------------------------- The Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey signed off on a stipulation and order entered among Lafayette Yard Community Development Corporation, Edison Holdings NJ LLC, the buyer of the Debtor's assets, and Veolia Energy Trenton, L.P. The stipulation resolves the motion of Lafayette Yard to compel compliance with an energy services agreement. The Debtor and Veolia are parties to an energy services agreement dated Nov. 15, 2001, as amended, whereby Veolia operates a combined heat and power plant and district energy system in Trenton, NJ; and has sold to the Debtor hot water and chilled water for the Debtor's operation of its hotel facilities located in Trenton. The terms of the stipulation are: 1. Pursuant to the ESA, the Debtor owes Veolia $242,393 inclusive of accrued finance charges, as of the Petition Date; and 2. Veolia will be authorized to apply the $75,000 utility deposit to pay, in part, the prepetition claim, following which application the prepetition claim will continue to be an allowed claim against the Debtor and its Chapter 11 estate in the amount of $167,393. A copy of the lease stipulation is available for free at: http://bankrupt.com/misc/LAFAYETTEYARDleaseextstipulation.pdf The motion to compel is deemed withdrawn. On Dec. 12, 2013, the Debtor filed its motion for order extending the time to assume or reject contract with Veolia and compelling compliance under the contract pending the assumption or rejection. The Debtor requested that the Court (i) extend its time to assume or reject a certain energy services contract with Veolia and compel Veolia's compliance under the contract pending the assumption or rejection, and (ii) for an order scheduling a hearing on shortened notice on the motion. About Lafayette Yard 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 (Bankr. D.N.J. Case No. 13-30752) on Sept. 23, 2013. The hotel went into bankruptcy when the city of Trenton and the state declined to continue covering losses. The 197-room hotel opened in 2002 and needs renovation, according to court papers. Situated on 3.7 acres, it's owned by not-for- profit Lafayette Yard Community Development Corp. There is $29.9 million in long-term debt, including $14.4 million in tax-exempt bonds. 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 Development Corporation $432,633 in assets and $33,583,834 in liabilities as of the Chapter 11 filing. The U.S. Trustee has selected three creditors to serve on the Official Committee of Unsecured Creditors. LAGUNA BRISAS: Court Okays Auction of Best Western Hotel -------------------------------------------------------- The Hon. Erithe Smith of the U.S. Bankruptcy Court for the Central District of California has approved the bidding procedures to govern the sale of its leasehold interest in a certain property commonly known as the Best Western Plus Hotel and Spa located at 1600 S. Coast Highway Laguna Beach, California. The hotel is wholly owned by its two managing members, Dae In "Andy" Kim and his wife Jane Kim. As reported by the Troubled Company Reporter on Nov. 5, 2013, the Debtor stated that the sale is part of a global settlement with the creditors with liens against its hotel. A copy of the sale motion is available for free at: http://bankrupt.com/misc/LAGUNABRISAS_sale.pdf About Laguna Brisas Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Chapman of Rim Hospitality, since Oct. 3, 2011. Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy" Kim -- represents the Debtor as special counsel. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. The Debtor has filed a Plan to be funded from income the Debtor receives from the operation of the Hotel. The management of the Debtor will continue to be Andy Kim, as it was prior to the appointment of the Receiver. By the effective date of the Plan, the Receiver will turn over the Debtor's assets to the Debtor. The Debtor, through the management company, Matrix Hospital Group LLC, will act as the disbursing agent for the purpose of making the distributions provided for under the Plan. Creditor Wells Fargo Bank, N.A., is represented by Hamid R. Rafatjoo, Esq., at Venable LLP, as counsel. LOUDOUN HEIGHTS: Hires Frank Bredimus as Bankruptcy Counsel ----------------------------------------------------------- Loudoun Heights, LLC, won approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Frank Bredimus as bankruptcy counsel. The Debtor requires Frank Bredimus to: (a) advise the Debtor with respect to its rights, powers and duties in this case; (b) advise and assist the Debtor in the preparation of its petition, schedules, and statement of financial affairs; (c) assist and advise the Debtor in connection with the administration of this case; (d) analyze the claims of the creditors in this case, and negotiate with such creditors; (e) investigate the acts, conduct, assets, rights, liabilities and financial condition of the Debtor and the Debtor's business; (f) advise and negotiate with respect to the sale of any or all assets of the Debtor; (g) investigate, file and prosecute litigation on behalf of the Debtor; (h) propose a plan of reorganization; (i) appear and represent the Debtor at hearings, conferences, and other proceedings; (j) prepare and review motions, applications orders, and other filings filed with the Court; (k) institute or continue any appropriate proceedings to recover assets of the estate; and (l) perform any and all such other legal services as may be required that are in the best interest of the Debtor or its creditors. Frank Bredimus will be paid at these hourly rates: Principal (Frank Bredimus) $350 Paralegal Services $100 Frank Bredimus will also be reimbursed for reasonable out-of- pocket expenses incurred. Mr. Bredimus 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. Frank Bredimus can be reached at: Frank Bredimus, Esq. THE LAW OFFICE OF FRANK BREDIMUS P.O. Box 535 Hamilton, VA 20159 Tel: (571) 344-2278 Fax: (540) 751-1008 E-mail: fbredimus@aol.com Loudoun Heights, LLC, filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 13-15588) on Dec. 16, 2013. The Debtor disclosed total assets of $13.10 million and total debts of $4.84 million. The petition was signed by Joe Bane as sole manager. Frank Bredimus, Esq., at Law Office of Frank Bredimus, serves as the Debtor's counsel. Judge Brian F. Kenney presides over the case. LOUDOUN HEIGHTS: Taps Richard Gallagher as Accountant ----------------------------------------------------- Loudoun Heights LLC sought and obtained approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Richard Gallagher of Accounting Services of Leesburg, Inc. to provide accounting services to the Debtor. The Debtor requires the services Mr. Gallagher to determine if tax returns are required and to prepare the same if necessary in order to satisfy the estate's obligations as to such tax returns. Mr. Gallagher has agreed to provide a Schedule of Billing Rates for the Court's review upon the filing of an Application for Compensation. Mr. Gallagher, principal of Accounting Services of Leesburg, Inc., 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. Gallagher can be reached at: Richard Gallagher ACCOUNTING SERVICES OF LEESBURG, INC. 15 North King Street, Suite 201A Leesburg, VA 20176 Tel: (703) 777-1040 Loudoun Heights, LLC, filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 13-15588) on Dec. 16, 2013. The Debtor disclosed total assets of $13.10 million and total debts of $4.84 million. The petition was signed by Joe Bane as sole manager. Frank Bredimus, Esq., at Law Office of Frank Bredimus, serves as the Debtor's counsel. Judge Brian F. Kenney presides over the case. MICHAEL ROSEBAR: Facing Sanctions After No-Show in Rule 2004 Exam ----------------------------------------------------------------- In the Chapter 11 case of Michael Lawrence Rosebar, the Bankruptcy Court on Nov. 25, 2013, ordered that an examination by creditor David Brooks of the debtor take place at Stinson Morrison Hecker LLP on Dec. 2 unless the parties agreed in writing to a different date, with the debtor to produce certain documents before the examination. The parties agreed in writing to move the examination to Dec. 4 at 1:00 p.m. The debtor is represented by his attorney, William C. Johnson, Jr. Both counsel and the debtor (on advice of Mr. Johnson) failed to appear at the scheduled time, and Brooks has filed a Motion Seeking Sanctions for Debtor's Failure to Obey Court Order to Produce Documents and Attend Rule 2004 Examination seeking to recover from Mr. Johnson the expenses he incurred because of the debtor's failure to appear. "The Motion will be granted," said Bankruptcy Judge S. Martin Teel, Jr., in a Feb. 3 Memorandum Decision available at http://is.gd/C0L09Jfrom Leagle.com. "David Brooks is entitled to entry of an order directing that he recover of William C. Johnson, Jr., the $160 court reporter expense he incurred for the examination on December 4, 2013, when the debtor failed to appear, and any reasonable attorney's fees he incurred in obtaining advice as to how to proceed in light of the failure." Judge Teel said an order will be issued to address the procedures for fixing the amount of reasonable attorney's fees Brooks is entitled to recover. Michael Lawrence Rosebar filed a Chapter 11 petition (Bankr. D.D.C. Case No. 13-00535) in 2013. MIDTOWN SCOUTS: Has Until March 14 to Propose Reorganization Plan ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas extended Midtown Scouts Square Property, LP, et al.'s exclusive periods to file a plan of reorganization until March 14, 2014. The Court also ordered that if the Debtors file a plan by the March 14 deadline, or timely files a motion to seek further extensions, the exclusive period is automatically extended for an additional 60 days to allow the Debtors to solicit and obtain acceptance of their plan. As reported in the Troubled Company Reporter on Jan. 7, 2014, the Debtors sought a further extension of their exclusive plan filing period through March 14, and their exclusive solicitation period through April 14. The Debtors reasoned that an estimation motion involving the claim of Richey Family Limited Partnership, L.E. Richey, Todd Richey, and Bank of Houston must be resolved first before they can file and confirm a plan. The Debtors maintain the claims alleged by the Richeys in the litigation are potentially substantial and allowance of the same could significantly impact any plan they may file, including whether the Richeys have an equity interest in the Debtors. Because the Court may not enter a ruling on the estimation motion and related claim objection prior to the expiration of the exclusivity period, and the Debtors will require at least several weeks to evaluate the financial impact of Court's ruling on the Estimation Motion, the Debtors will not be able to file a meaningful Chapter 11 Plan prior to the expiration of the current exclusivity period, said T. Josh Judd, Esq., of Hoover Slovacek LLP, in Houston, Texas, as counsel to the Debtors. About Midtown Scouts Square Midtown Scouts Square Property, LP, and affiliate Midtown Scouts Square, LLC, own two commercial properties located in Midtown Houston, Texas. The first property is a mixed use 36,000-square- foot two-storey office/restaurant building originally constructed in 1975, while the second property is a 104,000-square foot eight-storey parking garage with ground floor retail space, both in Bagby Street, in Houston. The two entities sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 13-32920) on May 9, 2013. The petitions were signed by Erich Mundinger as president of general partner. Judge Karen K. Brown presides over the case. In its schedules, MSS Property disclosed $17,408,328 in assets and $16,666,325 in liabilities. Edward L. Rothberg, Esq. at Hoover Slovacek, LLP, serves as the Debtor's counsel. Hawash Meade Gaston Neese & Cicack, LLP, serves as special litigation counsel. The U.S. Trustee has not appointed an official committee of unsecured creditors in the Debtors' bankruptcy cases. MOSS FAMILY: Hearing on Cash Collateral Use Moved to June 17 ------------------------------------------------------------ The Hon. Harry C. Dees, Jr. of the U.S. Bankruptcy Court for the Northern District of Indiana has rescheduled to June 17, 2014, at 1:30 p.m., South Bend time, the hearing on Moss Family Limited Partnership, and Beachwalk, L.P.'s motion to use Bank of America's cash collateral. The hearing was previously set for June 10, 2014. Prior to filing for bankruptcy court protection, Moss Family entered into promissory note dated Oct. 11, 2005, with the Bank's predecessor, America's Wholesale Lender, relating to a loan in the original principal amount of $376,000 and a commercial promissory note from the Debtor in favor of the Bank's predecessor, City Savings Bank, dated March 10, 2004, in the principal amount of $432,000. The Bank asserts a lien on a particular real estate owned by the Debtor which belong to the Debtor by virtue of a real estate mortgage dated Oct. 11, 2005, and a mortgage dated March 10, 2004, both of which were entered into prepetition. The collateral that the mortgages are secured by consists of: (i) 221 Childers Lane, Michigan City; and (ii) 325 Childers Lane, Michigan City. The approximate resale value of the Bank's collateral is $1.03 million. The Debtor believes the value of the Bank's mortgage security interest in the collateral is estimated at $715,000. The Debtor sought on Jan. 23, 2012, court authorization to use the cash collateral which is the proceeds from lease or sale of the collateral to pay wages and to use in expenses for the continuing operation of the corporation and preservation of the collateral in the Chapter 11 proceeding. As adequate protection for the cash collateral use, the Debtor will offer a replacement lien on assets to the Bank and each secured creditor to the full extent of the value of that creditor's lien at the commencement of the case. About Moss Family Moss Family Limited Partnership and Beachwalk, L.P., filed Chapter 11 petitions (Bankr. N.D. Ind. Case Nos. 12-32540 and 12-32541) on July 17, 2012. Judge Harry C. Dees, Jr., presides over the case. Daniel Freeland, Esq., at Daniel L. Freeland & Associates, P.C., represents the Debtors. Moss Family disclosed $6,609,576 in assets and $6,299,851 in liabilities as of the Chapter 11 filing. MOUNTAIN PROVINCE: Provides Gahcho Kue Project Update ----------------------------------------------------- Mountain Province Diamonds Inc. provided an update on progress at the Gahcho Kue diamond project, a joint venture between De Beers Canada (51 percent) and Mountain Province Diamonds (49 percent). Site preparation The pioneer land use permit and quarry permit were issued in early December 2013, and the first blast in the quarry at Gahcho Kue took place on Dec. 13, 2013. The quarry is providing aggregate material for the foundations for site infrastructure, including the main camp, process plant, fuel tanks, roads and airstrip. This work is scheduled to be completed by end-2014. The main camp has been manufactured and is ready for trucking to Gahcho Kue next month. The main camp and airstrip are expected to be ready for use by mid-2014. Shareholders can view photographs of site activities at www.mountainprovince.com. There are currently approximately 90 people at site and this number is expected to increase through the balance of the year. At peak construction there will be approximately 700 people employed at Gahcho Kue. Work to date has been completed without any lost-time injuries. Detailed engineering design Detailed engineering design to front-end loading (FEL) level 3 was completed this month. Final detailed engineering under FEL 4 has commenced and will be completed by December 2014. Feasibility study update Preparation of the feasibility study update is continuing and the results are expected to be announced prior to the end of March 2014. The updated feasibility study will include an updated Reserve statement, updated capital and operating cost estimates, and updated project economics. Mountain Province has commissioned WWW International Diamond Consultants to provide an independent valuation of the Gahcho Kue diamonds for inclusion in the feasibility study. The previous feasibility study was based on April 2010 diamond prices, almost four years ago. The Company will provide further details on financing plans upon completion of the updated feasibility study. 2014 winter ice road Gahcho Kue is now a full participant in the partnership that manages the ice road and has equal access to the ice road. As a result of favourable winter conditions, the ice road is expected to open in early February, which will allow adequate time for all the planned deliveries to Gahcho Kue. Approximately 500 truckloads will be delivered to site before the end of March 2014. Permitting Processing of the Gahcho Kue full Land Use Permit and Class A Water License remains on schedule. These new permits are expected to be approved during H2 of 2014. Project schedule Regulatory restrictions imposed on the Joint Venture limited the material that can be trucked to site this winter. In particular, shipments of cement and steel have been delayed. The Joint Venture is currently exploring opportunities to mitigate the impact on the project schedule. In the event that appropriate mitigation measures are not found, mechanical completion of the process plant and cold commissioning will occur in Q2 2016, and first production in Q3 2016. Shareholders will be kept informed of developments. Tuzo deep drilling The Tuzo Deep resource update released in mid-2013 defined a resource at the Tuzo kimberlite to a depth of 560 meters, with the kimberlite remaining open to depth. The Joint Venture has commissioned a follow-up deep drilling program this winter to test the Tuzo kimberlite to a depth of at least 750 meters. Mobilization of the drill crews to site was completed on Jan. 10, 2014, and drilling of three vertical holes to depths of 750 meters will commence in February 2014. The 2,250 meter drill program is expected to be completed by May 2014. About Mountain Province Diamonds Headquartered in Toronto, Canada, Mountain Province Diamonds Inc. (TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/-- is a Canadian resource company in the process of permitting and developing a diamond deposit known as the "Gahcho Kue Project" located in the Northwest Territories of Canada. The Company's primary asset is its 49 percent interest in the Gahcho Kue Project. Mountain Province disclosed a net loss of C$3.33 million for the year ended Dec. 31, 2012, a net loss of C$11.53 million in 2011, and a net loss of C$14.53 million in 2010. The Company's balance sheet at Sept. 30, 2013, showed C$81.07 million in total assets, C$12.42 million in total liabilities and C$68.64 million in total shareholders' equity. MT. LAUREL LODGING: Court Approves Perkins Coie as Bankr. Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana authorized Mt. Laurel Lodging Associates LLP to employ Perkins Coie LLP as its bankruptcy counsel. As reported in Troubled Company Reporter on Nov. 14, 2013, Perkins Coie will be paid the following hourly rates: $270 to $1,040 per hour for its partners, $185 to $720 for its associates, and from $110 to $485 for paralegals. The following attorneys and paralegal are presently expected to have responsibility for providing services to the Debtor: David M. Neff, Esq. -- dneff@perkinscoie.com $695 Brian A. Audette, Esq. -- baudette@perkinscoie.com $550 David J. Gold, Esq. -- dgold@perkinscoie.com $420 Nancy Y. Saldinger, Paralegal $205 The firm will be reimbursed for any necessary out-of-pocket expenses. Mr. Neff, a partner at the law firm of Perkins Coie LLP, assured the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Prior to the Petition Date, the Debtor paid Perkins Coie an advance payment retainer in the amount of $106,250 plus the filing fee of $1,213. Prior to the Petition Date, the Debtor paid Perkins $43,571 for restructuring advice and work in connection with the Chapter 11 case. About Mt. Laurel Lodging Mt. Laurel Lodging Associates, LLP, and its six affiliates sought protection under Chapter 11 of the Bankruptcy Code on Nov. 4, 2013 (Case No. 13-bk-11697, Bankr. S.D. Ind.). The case is assigned to Judge Robyn L. Moberly. The petition lists the assets and debt as both exceeding $10 million on the Mount Laurel property. The Debtors are represented by Brian A Audette, Esq., and David M Neff, Esq., at PERKINS COIE LLP, in Chicago, Illinois; and Andrew T. Kight, Esq., and Michael P. O'Neil, Esq., at TAFT STETTINIUS & HOLLISTER LLP, in Indianapolis, Indiana. The National Republic Bank of Chicago, a secured creditor, is represented by James E. Carlberg, Esq., and James P. Moloy, Esq., at Bose McKinney & Evans LLP, in Indianapolis, Indiana; and Timothy P. Duggan, Esq., at Stark & Stark, P.C., in Lawrenceville, New Jersey. MUNDY RANCH: PBGC Calls Shareholder Deal "Sub Rosa" Plan -------------------------------------------------------- Pension Benefit Guaranty Corporation objects to the request for approval of a compromise of controversy under Bankruptcy Rule 9019(a) filed by Mundy Ranch Inc. before the U.S. Bankruptcy Court for the District of New Mexico. The Debtor seeks approval of a mutual settlement agreement and release in full by and among James Mundy and other shareholders of the Debtor, which provides for a distribution of the Debtor's assets to current shareholders and requires that distribution to be incorporated into the Debtor's plan of reorganization. According to the PBGC, to the extent that the Debtor seeks to carry out the terms of the settlement agreement prior to confirmation of a reorganization plan, the settlement agreement is an impermissible sub rosa plan and, because the Debtor has not resolved the PBGC's significant claim, the proposed settlement violates the absolute priority rule under 11 U.S.C. Section 1129(b)(2)(B), says M. Katherine Burgess, Esq., attorney of the PGBC. Valley National Bank, and Comeau, Maldegen, Templeman & Indall, LLP, also object to the Debtor's settlement agreement because the Debtor has offered no explanation as to why the settlement agreement is generally in the best interest of the estate. Settlement Agreement The settlement agreement provides that the Debtor will form a new wholly owned subsidiary called Mundy Brothers Inc. The Debtor will then convey to Mundy Brothers certain of the Debtor's real property free and clear of all liens and encumbrances. All the current individual shareholders, with the exception of James Mundy, will then exchange all of their stock in Mundy Ranch for all of Mundy Ranch's stock in Mundy Brothers. In exchange, the parties to the settlement agreement will provide full and mutual releases. Under the terms of the settlement agreement, the Debtor is required to file an amended plan of reorganization encompassing the terms and conditions of the settlement agreement. About Mundy Ranch Mundy Ranch Inc. -- http://www.mundyranch.com/-- is a family- owned corporation organized under the laws of the State of New Mexico with its principal place of business in Rio Arriba County, New Mexico. Mundy Ranch sells undeveloped parcels of real property in northern New Mexico which together occupy approximately 6,000 acres of land. The majority of the land consists of an undivided 5,500 acre parcel, which is also called Mundy Ranch. Mundy Ranch scheduled the Mundy Ranch Parcel as having a value of $17,000,000, with secured claims against the Mundy Ranch Parcel in the amount of $2,095,000. Mundy Ranch generates substantially all of its revenue from developing and selling parcels of land. It generates a small amount of revenue by selling Christmas trees. Mundy Ranch, Inc., filed a Chapter 11 petition (Bankr. D. N.M. Case No. 12-13015) in Albuquerque, New Mexico. The Law Office of George Dave Giddens, PC, in Albuquerque, serves as counsel to the Debtor. The Debtor estimated assets of $10 million to $50 million and debts of up to $10 million. NEWPAGE HOLDINGS: Verso Tenders Come Up Short in Acquisition ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that holders of Verso Paper Corp. junior notes may end up blocking the paper maker from buying NewPage Holdings Corp. in a $1.4 billion transaction. According to the report, before NewPage exited bankruptcy in 2012, Memphis, Tennessee-based Verso made an unsuccessful attempt at acquiring its competitor. The two companies in January announced a transaction through which they would combine. Shareholders of Miamisburg, Ohio-based NewPage would receive $250 million in cash and $650 million in Verso first-lien notes, plus 20 percent to 25 percent of Verso's equity. The deal required a successful tender offer for Verso's 8.75 percent second-lien notes due in 2019 and the 11.375 percent senior subordinated notes due in 2016, the report related. Verso said that there's a "large disparity" between the tender offer and what noteholders are asking, the report further related. As a result, the number of tenders by the Jan. 27 early tender date is "substantially less" than that the merger agreement requires, Verso said. The tender offer expires on Feb. 10, unless extended or modified, the report noted. About NewPage Corp Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. NewPage originally engaged Dewey & LeBoeuf LLP as general bankruptcy counsel. In May 2012, Dewey dissolved and commenced its own Chapter 11 case. Dewey's restructuring group led by Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage sought to hire Proskauer as replacement counsel. NewPage is also represented by Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, NewPage disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. An affiliate, Newpage Wisconsin System Inc., disclosed $509,180,203 in liabilities in its schedules. NewPage successfully completed its financial restructuring and has officially emerged from Chapter 11 bankruptcy protection pursuant to its Modified Fourth Amended Chapter 11 Plan, confirmed on Dec. 14, 2012, by the U.S. Bankruptcy Court for the District of Delaware in Wilmington. NORTEL NETWORKS: E&Y to Be Paid At Least $3.9MM for 2014 Work ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered an order modifying Nortel Networks Inc., et al.'s engagement of Ernst & Young LLP nunc pro tunc Dec. 30, 2013. The ninth amendment to the firm's statement of work, provides for, among other things, the fee structure and other compensation, including without limitation a fixed fee of $3,900,000 for the 2014 EY Core services and $4,200,000 in the event EY LLP provides the Debtors advice to address certain structural tax efficiencies. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation and its various affiliated entities provided next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel did business in more than 150 countries around the world. Nortel Networks Limited was the principal direct operating subsidiary of Nortel Networks Corporation. On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent Nortel Networks Corporation, NNI's direct corporate parent Nortel Networks Limited and certain of their Canadian affiliates commenced a proceeding with the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (Canada) seeking relief from their creditors. Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. That same day, the Monitor sought recognition of the CCAA Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No. 09-10164) under Chapter 15 of the U.S. Bankruptcy Code. That same day, NNI and certain of its affiliated U.S. entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10138). In addition, the High Court of England and Wales placed 19 of NNI's European affiliates into administration under the control of individuals from Ernst & Young LLP. Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world. On May 28, 2009, at the request of administrators, the Commercial Court of Versailles, France, ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in U.S. Bankruptcy Court for recognition of the English Proceedings as foreign main proceedings under Chapter 15. U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors' general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The United States Trustee appointed an Official Committee of Unsecured Creditors in respect of the U.S. Debtors. An ad hoc group of bondholders also was organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. An Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Since the commencement of the various insolvency proceedings, Nortel has sold its business units and other assets to various purchasers. Nortel has collected roughly $9 billion for distribution to creditors. Of the total, $4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. Judge Gross and the court in Canada scheduled trials in 2014 on how to divide proceeds among creditors in the U.S., Canada, and Europe. NPS PHARMACEUTICALS: BlackRock Stake at 6.7% as of Dec. 31 ---------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that as of Dec. 31, 2013, it beneficially owned 6,792,181 shares of common stock of NPS Pharmaceuticals Inc. representing 6.7 percent of the shares outstanding. BlackRock previously reported beneficial ownership of 5,319,682 common shares or 6.14 percent equity stake as of Dec. 31, 2012. A copy of the regulatory filing is available for free at http://is.gd/W2FYch About NPS Pharmaceuticals Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing new treatment options for patients with rare gastrointestinal and endocrine disorders. NPS has been in the red since 2009. It posted a net loss of $18.73 million in 2012, a net loss of $36.26 million in 2011, a net loss of $31.44 million in 2010, and a net loss of $17.86 million in 2009. The Company's balance sheet at Sept. 30, 2013, showed $277.01 million in total assets, $185.18 million in total liabilities and $91.83 million in total stockholders' equity. OPTIMUMBANK HOLDINGS: Independent Director Resigns -------------------------------------------------- OptimumBank Holdings, Inc., the parent company of OptimumBank, announced the resignation of Seth Gillman from the Board of Directors, effective Jan. 25, 2014, a position he has held since September, 2011. Mr. Gillman's resignation was not the result of any disagreement with the Company regarding its operations, policies or practices. At the time of his resignation, Mr. Gillman served on the Company's Executive, Audit and Compensation Committees. The Board of Directors has appointed Sam Borek, a current director of the Company, to replace Mr. Gillman as a member of these committees. "We thank Seth for his past leadership and commitment to OptimumBank and we wish him success in his future endeavors. He has been an excellent Board member for OptimumBank and OptimumBank Holdings, investing his valuable time, money, talent, passion and wisdom to help make OptimumBank become successful," said Sam Borek, OPHC and Bank Vice Chairman of the Board. Mr. Borek, a founding director of OptimumBank, will replace Mr. Gillman as the independent director assigned to the Executive, Audit and Compensation Committees. Moishe Gubin, OptimumBank Chairman of the Board commented, "I believe that with our prospective new board members, currently awaiting regulatory approval, we will have an even stronger directorate heading into 2014, and looking forward to having a profitable year." About OptimumBank Holdings OptimumBank Holdings, Inc., headquartered in Fort Lauderdale, Fla., is a one-bank holding company and owns 100 percent of OptimumBank, a state (Florida)-chartered commercial bank. The Company offers a wide array of lending and retail banking products to individuals and businesses in Broward, Miami-Dade and Palm Beach Counties through its executive offices and three branch offices in Broward County, Florida. Optimumbank Holdings disclosed a net loss of $4.69 million in 2012, as compared with a net loss of $3.74 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $127.81 million in total assets, $125.67 million in total liabilities and $2.14 million in total stockholders' equity. Regulatory Matters Effective April 16, 2010, the Bank consented to the issuance of a Consent Order by the Federal Deposit Insurance Corporation and the the Florida Office of Financial Regulation, also effective as of April 16, 2010. The Consent Order represents an agreement among the Bank, the FDIC and the OFR as to areas of the Bank's operations that warrant improvement and presents a plan for making those improvements. The Consent Order imposes no fines or penalties on the Bank. The Consent Order will remain in effect and enforceable until it is modified, terminated, suspended, or set aside by the FDIC and the OFR. ORCKIT COMMUNICATIONS: Noteholders Submit Arrangement Proposal -------------------------------------------------------------- The trustees of Orckit Communications Ltd.'s Series A notes and Series B notes published in Israel a proposed arrangement under Section 350 of the Israeli Companies Law, 1999, among the Company and the Note holders, which was formulated by a joint committee of the representatives of the Note holders. In a meeting held on Jan. 30, 2014, the Company's Board of Directors discussed the Proposed Arrangement and instructed the Company's management to provide comments and counter-proposals in advance of the Note holder meeting scheduled to be held on Feb. 4, 2014. Set forth below are the highlights of the Proposed Arrangement: * The Note holders would be issued ordinary shares constituting 100 percent of the Company's share capital, on a fully diluted basis; * The Notes would be exchanged for a new series of notes; * The New Notes would be secured, on a non-recourse basis, by the accounts receivable, intellectual property, license fees and litigation proceeds of the Company; * The New Notes would accrue interest at 9.5 percent per year and would mature on Dec. 31, 2017; * The New Notes would be entitled to early redemption payments on a quarterly basis out of the funds generated by the secured assets and 40 percent of any debt or equity proceeds raised by the Company; * Any cash of the Company in excess of $1 million at the closing of the Proposed Arrangement would be paid to the Note holders; * All the Company's directors and officers would be replaced with directors and officers designated by the Note holders; * A mechanism would be established to ensure the continued support of the existing customers of the Company; * The Note holders would waive any claims against the Company, its directors and employees, and the trustees and representatives of the Note holders for actions and omissions since the Company's July 2012 arrangement; * The waiver for the benefit the Company, its directors and managers would be contingent upon the following, among other things: (i) Mr. Izhak Tamir's undertaking to act as a consultant to the Company, for no compensation, and use his best efforts to maximize the proceeds to the Company from the secured assets and ensure a smooth transition to the new management; and (ii) the waiver by each beneficiary of the waiver of all amounts owing to him by the Company as result of the termination of his employment or otherwise and his undertaking not to compete with the Company's business; * The Company and its directors and employees would waive any claims against the Note holders and their trustees, representatives and advisors, and the Company's directors and employees would waive any claims against the Company; and * The organizational documents of the Company would be amended to require shareholder approval by a super majority to change the scope of activity of the Company. The Proposed Arrangement is only a proposal presented to the Company. The Company said that nothing in this report should be construed as an indication that the Company will accept the Proposed Arrangement, that an agreement will reached on alternative terms and conditions, or that any arrangement will ultimately be implemented. Under applicable law, any arrangement requires various approvals, including various stakeholders of the Company, the Tel Aviv District Court and the Tel Aviv Stock Exchange. About Orckit Tel-Aviv, Israel-based Orckit Communications Ltd. (TASE: ORCT) engages in the design, development, manufacture and marketing of advanced telecom equipment to telecommunication service providers in metropolitan areas. The Company's products are transport telecommunication equipment targeting high capacity packetized metropolitan networks. Orckit disclosed a net loss of $6.46 million on $11.19 million of revenues for the year ended Dec. 31, 2012, as compared with a net loss of $17.38 million on $15.58 million of revenues for the year ended Dec. 31, 2011. The Company's balance sheet at Sept. 30, 2013, showed $12.44 million in total assets, $24.03 million in total liabilities and a $11.59 million total capital deficiency. Kesselman & Kesselman, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has a capital deficiency, recurring losses, negative cash flows from operating activities and has significant future commitments to repay its convertible subordinated notes. These facts raise substantial doubt as to the Company's ability to continue as a going concern. PERSONAL COMMUNICATIONS: Panel Wins Okay to Retain Cousins Chipman ------------------------------------------------------------------ The Hon. Alan S. Trust of the U.S. Bankruptcy Court of the Eastern District of New York has authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of Personal Communications Devices, LLC, et al., to retain Cousins Chipman & Brown, LLP as conflicts counsel. As reported in the Troubled Company Reporter on Nov. 29, 2013, the professional services Cousins Chipman has provided -- and will provide -- include, but are not limited to: (a) providing legal advice to the Committee with respect to legal disputes in which conflicts of interest prevent representation by the Committee's lead bankruptcy counsel; and (b) negotiating, drafting, and pursuing all litigation and documentation necessary in conjunction with such legal disputes. Cousins Chipman will be paid at these hourly rates: Partners $450 - $645 Associates $265 - $450 Paralegals $180 - $225 Adam D. Cole, Esq., will take principal responsibility for matters that arise in these chapter 11 cases that require Cousins Chipman's participation. Cousins Chipman has agreed to discount Mr. Cole's hourly rate from $625 per hour to $495 per hour. Cousins Chipman will also be reimbursed for reasonable out-of- pocket expenses incurred. Mr. Cole, a partner of Cousins Chipman, 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 PCD Personal Communications Devices LLC and an affiliate, Personal Communications Devices Holdings, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case No. 13-74303) on Aug. 19, 2013, in Central Islip, N.Y. The Debtor disclosed $247,952,684 in assets and $284,985,134 in liabilities as of the Chapter 11 filing. PCD -- http://www.pcdphones.com-- was in the business of providing carriers and manufacturers an array of product life cycle management services that includes planning and development; inventory; technical testing; quality control; forward and reverse logistics; sell-in and sell-thru, marketing & warranty support. PCD sold its assets to Quality One Wireless LLC for $105 million in October 2013. The bankruptcy auction was cancelled as no competing offers were submitted. Bankruptcy Judge Alan S. Trust oversees the case. Attorneys at Goodwin Procter, LLP and Togut, Segal & Segal, LLP serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. BG Strategic Advisors, LLC, is the financial advisor. Richter Consulting, Inc., is the investment banker. Q1W is advised by Raymond James and Associates, Inc. and Munsch Hardt Kopf & Harr, P.C. A three-member official committee of unsecured creditors was appointed in the Chapter 11 case. The Committee retained FTI Consulting, Inc., as financial advisor, and Perkins Coie LLP as counsel. PERSONAL COMMUNICATIONS: Parties Balk at Approval of Plan Outline ----------------------------------------------------------------- Parties-in-interest have objected to the adequacy of information in the Disclosure Statement explaining Personal Communications Devices, LLC, et al.'s Plan of Liquidation. Mark A. Salzberg, Esq., Patton Boggs LLP, and J. Maxwell Tucker, Esq., on behalf of PineBridge Vantage Partners, L.P., et al., filed a limited objection, stating that PineBridge anticipates that all of its comments to the disclosure statement will be resolved consensually. Adam J. Goldberg, Esq., at Latham & Watkins LLP, on behalf of creditor and party-in-interest DLJ Investment Partners, L.P., et al., submitted a limited objection to reserve all of its rights with respect to the disclosure statement, including to supplement the limited objection. Philip Christopher, in its objection, stated that the Debtors decided to attack and malign Mr. Christopher with recycled and baseless allegations. PCD sold its business in mid-October to competitor Quality One Wireless LLC for $105 million. As reported in the Troubled Company Reporter on Jan. 16, 2014, the Plan provides for the creation of a liquidating trust that will administer, liquidate and distribute all remaining property of the Debtors, including certain causes of action. The sale fully paid off $105 million in secured debt either in cash or from the buyer giving second-lien creditors a note for the debt. Under the Plan, unsecured creditors will receive pro rata share of proceeds remaining after payment of allowed administrative, allowed priority and allowed miscellaneous secured claims. The disclosure statement contains blank spaces with respect to the estimated recovery for unsecured creditors. Holders of equity interests won't receive anything. A copy of the Disclosure Statement dated Dec. 24, 2013 is available for free at: http://bankrupt.com/misc/PCD_Liquidating_Plan_Outline.pdf The Debtor has proposed to proceed with the plan approval process under this timeline: Date Event ---- ----- Jan. 21, 2014 Disclosure Statement Objection Deadline Jan. 27, 2014 Disclosure Statement Hearing Jan. 27, 2014 Voting Record Date The later of Feb. 3, 2014 or the date that is 5 days after the entry of the Solicitation Procedures Order Solicitation Mailing Deadline Feb. 14, 2014 Deadline for Debtors to Object to Claims For Voting Purposes Feb. 24, 2014 Deadline for Filing Rule 3018(a) Motion Mar. 3, 2014 Voting Deadline Mar. 3, 2014 Confirmation Objection Deadline Mar. 10, 2014 Confirmation Hearing About PCD Personal Communications Devices LLC and an affiliate, Personal Communications Devices Holdings, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case No. 13-74303) on Aug. 19, 2013, in Central Islip, N.Y. The Debtor disclosed $247,952,684 in assets and $284,985,134 in liabilities as of the Chapter 11 filing. PCD -- http://www.pcdphones.com-- was in the business of providing carriers and manufacturers an array of product life cycle management services that includes planning and development; inventory; technical testing; quality control; forward and reverse logistics; sell-in and sell-thru, marketing & warranty support. PCD sold its assets to Quality One Wireless LLC for $105 million in October 2013. The bankruptcy auction was cancelled as no competing offers were submitted. Bankruptcy Judge Alan S. Trust oversees the case. Attorneys at Goodwin Procter, LLP and Togut, Segal & Segal, LLP serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. BG Strategic Advisors, LLC, is the financial advisor. Richter Consulting, Inc., is the investment banker. Q1W is advised by Raymond James and Associates, Inc. and Munsch Hardt Kopf & Harr, P.C. A three-member official committee of unsecured creditors was appointed in the Chapter 11 case. The Committee retained FTI Consulting, Inc., as financial advisor, and Perkins Coie LLP as counsel. PORTER BANCORP: Incurs $1.02-Mil. Net Loss in Fourth Quarter ------------------------------------------------------------ Porter Bancorp, Inc., reported a net loss attributable to common shareholders of $1.02 million on $10.25 million of interest income for the three months ended Dec. 31, 2013, as compared with a net loss attributable to common shareholders of $6.99 million on $13.17 million of interest income for the same period during the prior year. For the 12 months ended Dec. 31, 2013, the Company incurred a net loss attributable to common shareholders of $3.39 million on $43.22 million of interest income as compared with a net loss attributable to common shareholders of $33.43 million on $57.72 million of interest income for the same period a year ago. The Company's balance sheet at Dec. 31, 2013, showed $1.07 billion in total assets, $1.04 billion in total liabilities and $35.93 million in stockholders' equity. A copy of the press release is available for free at: http://is.gd/s2kOMc Named Best Places to Work in Kentucky PBI Bank, Inc., was recently named as one of the Best Places to Work in Kentucky for 2014 in the medium-sized companies category. The awards program was created in 2005 and is a project of the Kentucky Chamber of Commerce, the Kentucky Society for Human Resource Management (KYSHRM) and Best Companies Group. This statewide survey and awards program was designed to identify, recognize and honor the best places of employment in Kentucky, benefiting the state's economy, its workforce and businesses. To be considered for participation, companies had to fulfill the following eligibility requirements: Have at least 15 employees working in Kentucky; Be a for-profit or not-for-profit business or government entity; Be a publicly or privately-held business; Have a facility in the state of Kentucky; and Must be in business a minimum of one year. Companies from across the state entered the two-part process to determine the Best Places to Work in Kentucky. The first part consisted of evaluating each nominated company's workplace policies, practices, and demographics. This part of the process was worth approximately 25 percent of the total evaluation. The second part consisted of an employee survey to measure the employee experience, which was worth approximately 75 percent of the total evaluation. The combined scores determined the top companies and the final ranking. Best Companies Group managed the overall registration and survey process in Kentucky, analyzed the data and used their expertise to determine the final rankings. "PBI Bank is honored to receive this distinction of being named one of the best employers in the state," said John T. Taylor, PBI Bank president and CEO. "The success of our bank is dependent on our most important asset, our employees, and we are committed to providing an engaging workplace where integrity, teamwork and service excellence is recognized and rewarded." PBI Bank will be recognized and honored at the Best Places to Work in Kentucky 10th Annual Awards Dinner on Thursday, April 24, 2014, at Heritage Hall in the Lexington Convention Center. The final rankings will be announced at the event. A magazine recognizing the winners and their final rankings will be released for statewide distribution at that time. For more information on the Best Places to Work in Kentucky program, visit http://BestPlacesToWorkKY.comor contact Jackie Miller at (877) 455-2159. About Porter Bancorp Porter Bancorp, Inc., is a bank holding company headquartered in Louisville, Kentucky. Through its wholly-owned subsidiary PBI Bank, the Company operates 18 full-service banking offices in 12 counties in Kentucky. Crowe Horwath, LLP, in Louisville, Kentucky, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred substantial losses in 2012, 2011 and 2010, largely as a result of asset impairments. In addition, the Company's bank subsidiary is not in compliance with a regulatory enforcement order issued by its primary federal regulator requiring, among other things, increased minimum regulatory capital ratios. Additional significant asset impairments or continued failure to comply with the regulatory enforcement order may result in additional adverse regulatory action. These events raise substantial doubt about the Company's ability to continue as a going concern. QUALITY DISTRIBUTION: BlackRock Stake at 5.6% as of Dec. 31 ----------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that as of Dec. 31, 2013, it beneficially owned 1,512,662 shares of common stock of Quality Disribution Inc. representing 5.6 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/DP0XIk About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30 percent of the common stock of Quality Distribution, Inc. Quality Distribution reported net income of $50.07 million for the year ended Dec. 31, 2012, as compared with net income of $23.43 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $465.05 million in total assets, $503.19 million in total liabilities and a $38.13 million total shareholders' deficit. Bankruptcy Warning According to the Company's annual report for the period ended Dec. 31, 2012, the Company had consolidated indebtedness and capital lease obligations, including current maturities, of $418.8 million as of Dec. 31, 2012. The Company must make regular payments under the ABL Facility and its capital leases and semi- annual interest payments under its 2018 Notes. The Company's 2018 Notes issued in the quarter ended Dec. 31, 2010, carry high fixed rates of interest. In addition, interest on amounts borrowed under the Company's ABL Facility is variable and will increase as market rates of interest increase. The Company does not presently hedge against the risk of rising interest rates. The Company's higher interest expense may reduce its future profitability. The Company's future higher interest expense and future redemption obligations could have other important consequences with respect to the Company's ability to manage its business successfully, including the following: * it may make it more difficult for the Company to satisfy its obligations for its indebtedness, and any failure to comply with these obligations could result in an event of default; * it will reduce the availability of the Company's cash flow to fund working capital, capital expenditures and other business activities; * it increases the Company's vulnerability to adverse economic and industry conditions; * it limits the Company's flexibility in planning for, or reacting to, changes in the Company's business and the industry in which the Company operates; * it may make the Company more vulnerable to further downturns in its business or the economy; and * it limits the Company's ability to exploit business opportunities. The ABL Facility matures August 2016. However, the maturity date of the ABL Facility may be accelerated if the Company defaults on its obligations. "If the maturity of the ABL Facility and/or such other debt is accelerated, we may not have sufficient cash on hand to repay the ABL Facility and/or such other debt or be able to refinance the ABL Facility and/or such other debt on acceptable terms, or at all. The failure to repay or refinance the ABL Facility and/or such other debt at maturity would have a material adverse effect on our business and financial condition, would cause substantial liquidity problems and may result in the bankruptcy of us and/or our subsidiaries. Any actual or potential bankruptcy or liquidity crisis may materially harm our relationships with our customers, suppliers and independent affiliates." * * * As reported in the TCR on June 28, 2013, Moody's Investors Service upgraded Quality Distribution, LLC's Corporate Family Rating to B2 from B3 and Probability of Default Rating to B2-PD from B3-PD. The upgrade of Quality's CFR to B2 was largely driven by the expectation that credit metrics will improve over the next twelve to eighteen months, through a combination of EBITDA growth and debt paydowns, to levels consistent with the B2 rating level. The company is in the process of integrating the bolt-on acquisitions made in its Energy Logistics business sector since 2011. QUANTUM CORP: BlackRock Stake at 5.8% as of Dec. 31 --------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that as of Dec. 31, 2013, it beneficially owned 14,410,082 shares of common stock of Quantum Corp. representing 5.8 percent of the shares outstanding. BlackRock previously reported beneficial ownership of 12,926,180 common shares or 5.37 percent equity stake at Dec. 31, 2012. A copy of the regulatory filing is available for free at http://is.gd/nquCoN About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. For the 12 months ended March 31, 2013, the Company incurred a net loss of $52.41 million on $587.57 million of total revenue, as compared with a net loss of $8.81 million on $652.37 million of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2013, showed $347.79 million in total assets, $428.58 million in total liabilities and a $80.79 million total stockholders' deficit. QUANTUM FUEL: Hudson Bay Stake Down to 3.8% ------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Hudson Bay Capital Management, L.P., and Sander Gerber disclosed that as of Dec. 31, 2013, they beneficially owned 738,325 shares of common stock issuable upon exercise of warrants of Quantum Fuel Systems Technologies Worldwide, Inc., representing 3.86 percent of the shares outstanding. The reporting persons previously held warrants to purchase up to 2,874,291 shares of common stock as reported by the TCR on Feb. 12, 2013. A copy of the regulatory filing is available for free at http://is.gd/HFnRmH About Quantum Fuel Lake Forest, Cal.-based Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced vehicle propulsion systems, fuel storage technologies, and alternative fuel vehicles. Quantum's portfolio of technologies includes electronic and software controls, hybrid electric drive systems, natural gas and hydrogen storage and metering systems and other alternative fuel technologies and solutions that enable fuel efficient, low emission, natural gas, hybrid, plug-in hybrid electric and fuel cell vehicles. Quantum Fuel disclosed a net loss attributable to stockholders of $30.91 million in 2012 and a net loss attributable to common stockholders of $38.49 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $60.64 million in total assets, $50.27 million in total liabilities and $10.36 million in total stockholders' equity. Haskell & White LLP, in Irvine, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company does not have sufficient existing sources of liquidity to operate its business and service its debt obligations for a period of at least twelve months. These conditions, along with the Company's working capital deficit and recurring operating losses, raise substantial doubt about the Company's ability to continue as a going concern. RADIOSHACK CORP: BlackRock Stake at 6.2% as of Dec. 31 ------------------------------------------------------ In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that as of Dec. 31, 2013, it beneficially owned 6,245,829 shares of common stock of Radioshack Corp. representing 6.2 percent of the shares outstanding. As reported by the TCR on Feb. 13, 2013, BlackRock beneficially owned 5,564,638 common shares of the Company as of Dec. 31, 2012. A copy of the regulatory filing is available for free at http://is.gd/Iz5ooD About Radioshack Corporation RadioShack (NYSE: RSH) -- -- http://www.radioshackcorporation.com -- is a national retailer of innovative mobile technology products and services, as well as products related to personal and home technology and power supply needs. RadioShack's retail network includes more than 4,300 company-operated stores in the United States, 270 company-operated stores in Mexico, and approximately 1,000 dealer and other outlets worldwide. Radioshack disclosed a net loss of $139.4 million in 2012, as compared with net income of $72.2 million in 2011. The Company's balance sheet at Sept. 30, 2013, showed $1.60 billion in total assets, $1.21 billion in total liabilities and $394 million in total stockholders' equity. * * * As reported by the TCR on Dec. 26, 2013, Standard & Poor's Ratings Services raised the corporate credit rating on the Fort Worth, Texas-based RadioShack Corp. to 'CCC+' from 'CCC'. "The upgrade reflects an improved liquidity position with a recent financing that increased funded debt by $125 million and increased the company's revolving credit borrowing capacity, which improved the company's liquidity by approximately $200 million," said credit analyst Charles Pinson-Rose. In the Dec. 30, 2013, edition of the TCR, Fitch Ratings has affirmed its 'CCC' Long-term Issuer Default Rating (IDR) on RadioShack Corporation. The IDR reflects the significant decline in RadioShack's profitability and cash flow, which has become progressively more pronounced over the past two years. As reported by the TCR on March 6, 2013, Moody's Investors Service downgraded RadioShack Corporation's corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3- PD. RadioShack's Caa1 Corporate Family Rating reflects Moody's opinion that the overall business strategy of the company to reverse the decline in profitability has not gained any traction. RITZ CAMERA: Court Narrows Claims in Avoidance Suit v. Canon ------------------------------------------------------------ Bankruptcy Judge Kevin Gross narrowed the claims in the adversary proceeding filed by Ritz Camera & Image, L.L.C., on Nov. 14, 2012, against Canon U.S.A., Inc. The lawsuit seeks avoidance and recovery of fraudulent and preferential transfers. Following the conversion to Chapter 7 and the appointment of Alfred T. Giuliano as Chapter 7 trustee, on June 25, 2013, the Trustee filed the Amended Complaint, adding nine claims, including claims for unconscionability, economic duress, unjust enrichment, and declaratory relief. Canon seeks dismissal of Counts One, Two, and Nine Through Twelve of the Amended Complaint. The Court denied Canon's Motion as to Counts 1 and 2, and granted the Motion as to Counts 9, 10, 11, and 12. Between August 26, 2011 and June 10, 2012, the Debtors made seven payments to Canon totaling $3,170,338 pursuant to a settlement agreement. In the Amended Complaint, the Trustee alleges that Canon used its superior bargaining position and the Debtors' need to sell Canon products to force the Debtors to agree to the terms of the Settlement Agreement. The Trustee further alleges that the terms of the contract are so outside of community business practices that they shock the conscience and that the Debtors had no reasonable alternative to entering into the Settlement Agreement. Additionally, the Trustee argues that the Settlement Agreement resulted from Canon's wrongful misrepresentations regarding the outstanding grievances and potential claims and any payments under the Settlement Agreement unjustly enrich Canon. The case is, In re RITZ CAMERA & IMAGE, L.L.C. Plaintiff, v. CANON U.S.A., INC., Defendant, Adv. Proc. No. 12-50986(KG) (Bankr. D. Del.). A copy of Judge Gross' Feb. 4, 2014 Memorandum Opinion is available at http://is.gd/TP8YmCfrom Leagle.com. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sold digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. When it filed for bankruptcy, Ritz Camera intended to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz disclosed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. Ritz Camera disclosed $43,692,961 in assets and $49,147,316 in liabilities as of the Chapter 11 filing. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig was appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. Crystal Finance, the DIP lender, is represented by Morgan, Lewis & Bockius and Young Conaway Stargatt & Taylor LLP. Roberta A. DeAngelis, U.S. Trustee for Region 3, pursuant to Section 1102(a)(1) of the Bankruptcy Code, appointed six persons to Official Committee of Unsecured Creditors. After filing to sell their assets, Judge Kevin Gross converted the Chapter 11 cases proceedings under Chapter 7 of the Bankruptcy Code effective on January 15, 2013. SEQUENOM INC: BlackRock Stake at 7.6% as of Dec. 31 --------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that as of Dec. 31, 2013, it beneficially owned 8,817,018 shares of common stock of Sequenom Inc. representing 7.6 percent of the shares outstanding. BlackRock previously owned 7,128,418 common shares or 6.21 percent equity stake as of Dec. 31, 2012. A copy of the regulatory filing is available at http://is.gd/aPhnsm About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. Sequenom disclosed a net loss of $117.02 million in 2012, a net loss of $74.13 million in 2011 and a net loss of $120.84 million in 2010. The Company's balance sheet at Sept. 30, 2013, showed $164.82 million in total assets, $195.85 million in total liabilities and a $31.02 million total stockholders' deficit. SHUANEY IRREVOCABLE: U.S. Trustee Wants Case Converted to Ch.7 -------------------------------------------------------------- Guy G. Gebhardt, Acting United States Trustee for Region 21, has asked the U.S. Bankruptcy Court to convert the chapter 11 case of Shuaney Irrevocable Trust to a liquidation in chapter 7. At a hearing held on Dec. 20, 2013, on the motion to dismiss filed by Beach Community Bank, the Court granted the motion subject to payment of quarterly fees to the United States Trustee. Subsequent to the Dec. 20, 2013 hearing, despite several efforts to obtain payment of the fees for the fourth quarter of 2013 by the U.S. Trustee, the fees remain unpaid, and no order dismissing the case has been entered. According to the U.S. Trustee, the Debtor represents it has no funds to pay the fees other than the funds on deposit in which Beach Community Bank may hold a security interest, and it further appears that Beach Community Bank is not willing to allow the Debtor to use funds that may be subject to its security interest to pay the quarterly fees. Based on reported disbursements for the fourth quarter of 2013 of $2,652,500, it appears the correct fee for the fourth quarter of 2013 would be $9,750, not the $325 paid by the Debtor. This results in a balance owed of $9,425.00 for the fourth quarter, plus whatever fees continue to accrue until entry of an order of dismissal or conversion. Beach Community Bank has now filed a motion for relief from the automatic stay which is set for hearing on Feb. 7, 2014. The bank said there is a dispute between the Debtor and the U.S. Trustee over whether additional fees are owed to the U.S. Trustee. The U.S. Trustee, however, said there is no "dispute" with the Debtor, there is only a failure to pay the fees. The U.S. Trustee suggests it may be more appropriate to convert the Debtor's case to one under chapter 7 so a chapter 7 trustee may be appointed who can determine whether there are funds of the Debtor that can be used to pay the U.S. Trustee quarterly fees and other costs of administration of this case, including claims of creditors. The Debtor has filed a response to the U.S. Trustee's motion. The Debtor agreed that it is unable to pay the balance of the U.S. Trustee fees due for the fourth quarter 2013 because it has no assets from which to pay the fees and is prohibited from using the funds in its bank accounts because it is cash collateral. As a result, in the absence of consent from Beach Community Bank to use its cash collateral, the only viable alternatives are for the court to grant dismissal of the case without requiring the Debtor to pay the quarterly fees as a condition of dismissal, or to convert the case to chapter 7. The Court has already determined at the hearing on Dec. 20, 2013, that the dismissal of the case is in the best interest of the creditors. The fact that the quarterly fees have not been paid, does not change the fact that dismissal is in the best interest of creditors. The Debtor said its failure to pay the balance of the outstanding fourth quarter payment due to the U.S. Trustee does not preclude the Court from granting the Debtor's request for a voluntary dismissal of the case. The Debtor is requesting that its inability to pay the fees not form the basis for holding the case open or form the basis for converting the case to a Chapter 7 where conversion has previously been determined by the court to not be in the best interest of the creditors. The Debtor request that the court enter the order dismissing the case as previously ruled at the hearing on Dec. 20, 2013, and to also modify its prior requirement that the U.S. Trustee fees must be paid before dismissal can occur. Hearing on the motion is set for Feb. 7, 2014, at 10:45 a.m. via Telephone Conference. Assistant U.S. Trustee can be reached at: Charles F. Edwards 110 East Park Avenue, #128 Tallahassee, FL 32301 Tel: 850-942-1661 Fax: 850-942-1669 E-mail: charles.edwards@usdoj.gov The Debtor's counsel can be reached at: J Steven Ford, Esq. Wilson, Harrell, Farrington, Ford, Wilson, Spain, & Parsons, P.A. 307 S. Palafox Street Pensacola, FL 32502 Tel: (850) 438-1111 Fax: (850) 432-8500 E-mail: jsf@whsf-law.com About Shuaney Irrevocable Trust Shuaney Irrevocable Trust, in Fort Walton Beach, Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-31887) on Dec. 1, 2011. The Debtor scheduled $20,996,723 in assets and $19,625,890 in debts. The Law Office of Mark Freund serves as counsel to the Debtor. Judge William S. Shulman presides over the case. The U.S. Trustee for Region 21 was unable to appoint an Official Committee of Unsecured Creditors of Shuaney Irrevocable Trust. SILVERADO STREET: Section 341(a) Meeting Set on March 4 ------------------------------------------------------- A meeting of creditors in the bankruptcy case of Silverado Street, LLC, will be held on March 4, 2014, at 10:00 a.m. at 402 W. Broadway, Emerald Plaza Building, Suite 660 (B), Hearing Room B, San Diego, CA 92101. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Silverado Street, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Cal. Case No. 14-00574) on Jan. 30, 2014, in San Diego, California. The company said in its schedules that it has $22 million to $47 million in total assets and $11 million in liabilities in total liabilities. The Debtor is represented by Golmore, Wood, Vinnard & Magness, in Fresno, as counsel. The company's property -- Lots 18 and 19 in Block 74 of Villa Tract, La Jolla Park, in San Diego County -- is valued at $12 million and secures debt in the aggregate amount of $11 million owed to Chase Mortgage, FHR Realty Advisors and Georgiou Trust. The company also claims to have mineral rights and oil leases valued at $2 million. The company's remaining asset is on account of notes/deeds of trust judgments that the Debtor estimates to be valued at $10 million to $35 million. SIMPLY WHEELZ: Postal Service Fails to Deliver Some Mails --------------------------------------------------------- Simply Wheelz LLC, doing business as Advantage Rent a Car, notified the Bankruptcy Court on Jan. 24 of a list of addresses which the United States Postal Service determined to be undeliverable. The Debtor related that dischargeability of a debt may be affected if a creditor fails to receive certain notices. A copy of the list is available for free at: http://bankrupt.com/misc/SIMPLYWHEELZaddresschange.pdf About Simply Wheelz LLC Simply Wheelz LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 13-03332) on Nov. 5, 2013. The case is assigned to Judge Edward Ellingon. The Debtor disclosed $413,502,259 in assets and $322,230,695 in liabilities as of the Chapter 11 filing. The Debtors are represented by Christopher R. Maddux, Esq., and Stephen W. Rosenblatt, Esq., at Butler Snow O'Mara Stevens & Cannada, in Ridgeland, Mississippi. SINCLAIR BROADCAST: BlackRock Has 6.1% of Class A Shares -------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that as of Dec. 31, 2013, it beneficially owned 4,494,452 shares of Class A common stock of Sinclair Broadcast Group Inc. representing 6.1 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/l9D6jv About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22 percent of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. The Company's balance sheet at Sept. 30, 2013, showed $3.61 billion in total assets, $3.20 billion in total liabilities and $416.23 million in total equity. "Any insolvency or bankruptcy proceeding relating to Cunningham, one of our LMA partners, would cause a default and potential acceleration under the Bank Credit Agreement and could, potentially, result in Cunningham's rejection of our seven LMAs with Cunningham, which would negatively affect our financial condition and results of operations," the Company said in its annual report for the period ended Dec. 31, 2012. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Sinclair to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. In September 2010, Moody's raised its ratings for Sinclair Broadcast and subsidiary Sinclair Television Group, including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. SOUTHERN MONTANA ELECTRIC: May Use Cash Collateral Until Feb. 28 ---------------------------------------------------------------- The Hon. Ralph B. Kirscher of the U.S. Bankruptcy Court for the District of Montana has approved the stipulation between Southern Montana Electric Generation and Transmission Cooperative, Inc., and certain holders consisting of The Prudential Insurance Company of America, Universal Prudential Arizona Reinsurance Company, Prudential Investment Management, Inc., as successor in interest to Forethought Life Insurance Company, and Modern Woodmen of America, extending for the fifth time the final court order authorizing the use of cash collateral until Feb. 28, 2014. On May 2, 2012, the Court entered a final order authorizing the cash collateral use, which was extended four times, with the last extension approved on Aug. 14, 2013. On Dec. 31, 2013, the parties sought the Court's approval of a stipulation further extending the final cash collateral order, saying that the immediate approval of the Stipulation and the modification sought to be effected to the final order are necessary because the Debtor continues to have an immediate and critical need to use the cash collateral to operate the business and potentially to effectuate a reorganization of the Debtor's business, which use will be in accordance with the terms of the Stipulation and the final order. The parties agree that without the use of the cash collateral, the Debtor risks having insufficient liquidity to be able to continue to operate the Debtor's business and potentially pursue reorganization efforts. By the stipulation, the parties agree that, among other things, the reference in paragraph 5(a)(i) of the final order is modified on a prospective basis to provide for a date of Feb. 28, 2014. The Noteholders are represented by: Jonathan B. Alter, Esq. BINGHAM MCCUTCHEN LLP One State Street Hartford, CT 06103 Tel: (860) 240-2969 Fax: (860) 240-2800 E-mail: jonathan.alter@bingham.com - and - Steven M. Johnson, Esq. CHURCH, HARRIS, JOHNSON & WILLIAMS, P.C. 114 Third Street South P.O. Box 1645 Great Falls, MT 59403 Tel: (406) 761-3000 E-mail: sjohnson@chjw.com About Southern Montana Electric Based in Billings, Montana, Southern Montana Electric Generation and Transmission Cooperative, Inc., was formed to serve five other electric cooperatives. The city of Great Falls later joined as the sixth member. Including the city, the co-op serves a population of 122,000. In addition to Great Falls, the service area includes suburbs of Billings, Montana. Southern Montana filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. Timothy Gregori signed the petition as general manager. Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in Billings, Montana, serves as the Debtor's counsel. After filing for reorganization in October, the co-op agreed to a request for appointment of a Chapter 11 trustee. Lee A. Freeman was appointed as the Chapter 11 trustee in December 2011. He is represented by Joseph V. Womack, Esq., at Waller & Womack, and John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M. Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett, P.C. Harold V. Dye, Esq., at Dye & Moe, P.L.L.P., in Missoula, Montana, represents the Unsecured Creditors' Committee as counsel. SOUTHERN MONTANA: Fergus & Beartooth Asks for Ch. 7 Conversion -------------------------------------------------------------- Fergus Electric Cooperative, Inc., and Beartooth Electric Cooperative, Inc., asked the Hon. Ralph B. Kirscher of the U.S. Bankruptcy Court for the District of Montana to convert the Chapter 11 case of Southern Montana Electric Generation and Transmission Cooperative, Inc., to one under Chapter 7 of the U.S. Bankruptcy Code. "To date, no plan has been confirmed. While the Court 'reluctantly' approved the former trustee's disclosure statement, that has become dated and movants are informed that Southern -- the heir apparent to the trustee's plan and disclosure statement - - intends to move to strike it and the trustee's plan. Thus, there is effectively no approved disclosure statement. While the noteholders and trustee did not diligently seek or obtain plan approval in the past 2 years, they and their professionals have billed the estate for over $6 million and the noteholders have received tens of millions in adequate protection payments. Meanwhile, Southern loses money," Fergus and Beartooth said in a filing dated Dec. 27, 2013. According to the operating reports, and excluding the non- recurring settlement payments from YVEC and Great Falls, in the period May through November 2013, inclusive, the Debtor has experienced: net losses of $6.7 million; and net cash flow of negative $9.8 million. "During the same period, and even counting one of the $2.5 million settlement payments (the other is built into the starting cash balance on May 31), the Debtor's cash balance has decreased by over $5 million," Fergus and Beartooth stated. Fergus and Beartooth claimed that any plan of reorganization, whether the noteholders' or the trustee's, is doomed because, among other things: (i) it necessarily depends upon assumption of two distinct but related non-assumable contracts, the membership contracts and their wholesale power contracts with the Debtor; (ii)even if assumable in the abstract, assumption would impermissibly modify them. The contracts, Fergus and Beartooth said, are not assumable. The trustee and, more recently, the noteholders, have proposed plans which would repay the noteholders by forcing the Debtor to remain in business over the wishes of its members, charging rates determined, not by the Debtor's board, but by someone else. On Jan. 15, 2014, the Court approved the stipulation between noteholders Prudential Insurance Company of America, Universal Prudential Arizona Reinsurance Company, Prudential Investment Management, Inc., as successor in interest to Forethought Life Insurance Company, and Modern Woodmen of America, the Debtor, and members Beartooth, Fergus, Mid-Yellowstone Valley Electric Cooperative, Inc., and Tongue River Electric Cooperative, Inc., for temporary stay of litigation and for additional extension of the deadline from Jan. 17, to Feb. 3, 2014, to respond to motion to convert the case to Chapter 7. The parties agreed to refrain from taking adverse action against one another until Feb. 3, 2014, in order to facilitate ongoing settlement discussions among the parties. On Feb. 3, 2014, the parties further sought to extend the deadline and to continue to stay all litigation by filing with the Court another stipulation. The parties consented to the Court vacating without date the Feb. 3, 2014 deadline for all parties to respond to the conversion motion, and vacating without date the Feb. 25, 2014 hearing set before the Court on that motion in order to facilitate continuing settlement discussions among the parties with the understanding that the members may later renotice a new hearing date and request a new deadline for filing objections to the conversion motion. The Court approved the stipulation on Feb. 4, 2014. The Court required the parties to file by March 11, 2014, a report on the status of ongoing negotiations and at that time, if the matter is not resolved, request a deadline to respond to the pending conversion motion. Fergus is represented by: Robert K. Baldwin, Esq. Trent M. Gardner, Esq. GOETZ, BALDWIN & GEDDES, P.C. 35 North Grand P.O. Box 6580 Bozeman, MT 59771-6580 Tel: (406) 587-0618 Fax: (406) 587-5144 E-mail: rbaldwin@goetzlawfirm.com tgardner@goetzlawfirm.com - and - John P. Paul, Esq. LAW OFFICE OF JOHN P. PAUL, PLLC 410 Central Avenue, Suite 519 P.O. Box 533 Great Falls, MT 59403 Tel: (406) 761-4422 Fax: (406) 761-2009 E-mail: johnpaul@qwestoffice.net Beartooth is represented by: Laurence R. Martin, Esq. Martin S. Smith, Esq. FELT, MARTIN, FRAZIER & WELDON, P.C. 208 North Broadway, Suite 313 P.O. Box 2558 Billings, Montana 59103 Tel: (406) 248-7646 Fax: (406) 248-5485 E-mail: lmartin@feltmartinlaw.com msmith@feltmartinlaw.com Tongue River is represented by: Jeffrey A. Hunnes, Esq. GUTHALS, HUNNES, & REUSS, P.C. P.O. Box 1977 Billings, Montana 59103-1977 Tel: (406) 245-3071 E-mail: jhunnes@ghrlawfirm.com Gary Ryder, Esq. Treasure Co. Attorney's Office P.O. Box 72 Hysham, Montana 59038 Tel: (406) 342-5546 E-mail: gryder@rangeweb.net About Southern Montana Electric Based in Billings, Montana, Southern Montana Electric Generation and Transmission Cooperative, Inc., was formed to serve five other electric cooperatives. The city of Great Falls later joined as the sixth member. Including the city, the co-op serves a population of 122,000. In addition to Great Falls, the service area includes suburbs of Billings, Montana. Southern Montana filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. Timothy Gregori signed the petition as general manager. Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in Billings, Montana, serves as the Debtor's counsel. After filing for reorganization in October, the co-op agreed to a request for appointment of a Chapter 11 trustee. Lee A. Freeman was appointed as the Chapter 11 trustee in December 2011. He is represented by Joseph V. Womack, Esq., at Waller & Womack, and John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M. Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett, P.C. Harold V. Dye, Esq., at Dye & Moe, P.L.L.P., in Missoula, Montana, represents the Unsecured Creditors' Committee as counsel. SPANISH BROADCASTING: BlackRock Stake at 5.1% as of Dec. 31 ----------------------------------------------------------- BlackRock, Inc., disclosed in an amended Schedule 13G filed with the U.S. Securities and Exchange Commission that as of Dec. 31, 2013, it beneficially owned 214,462 shares of common stock of Spanish Broadcasting System Inc. representing 5.1 percent of the shares outstanding. BlackRock previously held 215,459 common shares or 5.17 percent equity stake as of Dec. 31, 2012. A copy of the regulatory filing is available for free at: http://is.gd/zOhy4o About Spanish Broadcasting Headquartered in Coconut Grove, Florida, Spanish Broadcasting System, Inc. -- http://www.spanishbroadcasting.com/-- owns and operates 21 radio stations targeting the Hispanic audience. The Company also owns and operates Mega TV, a television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico. Its revenue for the twelve months ended Sept. 30, 2010, was approximately $140 million. Spanish Broadcasting reported a net loss available to common stockholders of $11.21 million in 2012, as compared with net income available to common stockholders of $13.77 million during the prior year. The Company's balance sheet at Sept. 30, 2013, showed $473.79 million in total assets, $435.94 million in total liabilities, $92.34 million in cumulative exchangeable redeemable preferred stock and a $54.50 million total stockholders' deficit. Bankruptcy Warning "We have experienced a decline in the level of business activity of our advertisers, which has, and could continue to have, an adverse effect on our revenues and profit margins. In addition, some of our advertisers and clients could experience serious cash flow problems due to the slow economic recovery. As a result, they may attempt to renegotiate or cancel orders with us or alter payment terms. Our advertisers may be forced to reduce their production, shut down their operations or file for bankruptcy protection, which could have a material adverse effect on our business. Any further deterioration in the U.S. economy, any worsening of conditions in the credit markets, or even the fear of such a development, could intensify the adverse effects of these difficult market conditions on our results of operations," the Company said in its annual report for the year ended Dec. 31, 2012. * * * In November 2010, Moody's Investors Service upgraded the corporate family and probability of default ratings for Spanish Broadcasting System, Inc., to 'Caa1' from 'Caa3' based on improved free cash flow prospects due to better than anticipated cost cutting and the expiration of an unprofitable interest rate swap agreement. Moody's said Spanish Broadcasting's 'Caa1' corporate family rating incorporates its weak capital structure, operational pressure in the still cyclically weak economic climate, generally narrow growth prospects (though Spanish language is the strongest growth prospect) given the maturity and competitive pressures in the radio industry, and the June 2012 maturity of its term loan magnify this challenge. In July 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Miami, Fla.-based Spanish Broadcasting System Inc. to 'B-' from 'CCC+', based on continued improvement in the company's liquidity position. "The rating action reflects S&P's expectation that, despite very high leverage, SBS will have adequate liquidity over the intermediate term to meet debt maturities, potential swap settlements, and operating needs until its term loan matures on June 11, 2012," said Standard & Poor's credit analyst Michael Altberg. As reported by the TCR on Dec. 4, 2012, Standard & Poor's Ratings Services revised its rating outlook on Miami, Fla.-based Spanish Broadcasting System Inc. (SBS) to negative from stable. "We also affirmed our existing ratings on the company, including the 'B-' corporate credit rating," S&P said. SR REAL ESTATE: Has Until April 18 to File Chapter 11 Plan ---------------------------------------------------------- The Hon. Christopher B. Latham of the U.S. Bankruptcy Court for the Southern District of California extended the exclusive periods of SR Real Estate Holdings LLC to: a) file a Chapter 11 plan to April 18, 2014, and b) solicit acceptances of that plan until June 18, 2014. As reported by the Troubled Company Reporter on Dec. 26, 2013, the Debtor said it is seeking an extension of the Exclusive Periods for the purpose of conserving resources while the Court resolves two case-critical motions. Had the Debtor filed its plan prior to a ruling on the motions under submission, both the Debtor and the opposing parties would have been forced to expend significant sums in a confirmation battle prior to knowing whether the case was viable. The TCR noted that, had the Debtor filed its Plan, the opposing parties would have objected to proceeding with a heated confirmation battle without a ruling on the motions under submission -- yet they also oppose extending exclusivity notwithstanding the current status of the case. Through the Motion, the Debtor seeks an extension of the Exclusive Periods merely to preserve its exclusivity pending the rulings from the Court. About SR Real Estate Holdings SR Real Estate Holdings, LLC, owner of 14 parcels of real property totaling 6,400 acres straddling Santa Cruz and Santa Clara counties, filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-54471) in San Jose, California, on Aug. 20, 2013. Judge Hon. Peter W. Bowie oversees the case. Victor A. Vilaplana, Esq., and Matthew J. Riopelle, Esq., at Foley and Lardner, have been tapped as proposed counsel to the Debtor. The Debtor disclosed $15,016,593 in assets and $548,907,938 in liabilities as of the Chapter 11 filing. This is the third bankruptcy filed with respect to the property. The prior owner, Sargent Ranch, LLC, filed Chapter 11 cases in January 2010 (Bankr. S.D. Cal. Case No. 10-00046-PB) and November 2011 (Bankr. S.D. Cal. Case No. 11-18853). The second bankruptcy case was dismissed in February 2012. ST. FRANCIS' HOSPITAL: Competing Offers Due Feb. 10 --------------------------------------------------- St. Francis' Hospital, Poughkeepsie, New York, and its debtor- affiliates will continue to accept competing offers for their assets until Feb. 10, 2014. St. Francis intends to sell its 333-bed acute-care facility, which was founded in 1914, in a deal valued at $24.2 million to Health Quest Systems Inc., absent higher and better offers. An auction will be held Feb. 13 if a rival offer is submitted. St. Francis struck a deal to sell substantially all of their assets to Health Quest at the time of the bankruptcy filing. According to the assets purchase agreement, payment will be in the form of: (a) the assumption of liabilities, and (b) additional consideration in the form of one of the following, at buyer's option: (i) Cash totaling $18.62 million; or, (ii) Exchanged bond obligations with either (a) an applicable interest rate of 4.00% with a beginning principal amount of $22.15 million; or (b) with an applicable interest rate of 5.25% with a beginning principal amount of $19.15 million. According to the court-approved sale rules, potential bidders must submit a timely and compliant expression of interest so as to be received by no later than Jan. 10, 2014, at 5:00 p.m. (Eastern prevailing time). If no party submits an expression of interest, the Debtors will seek approval of the sale to Health Quest at a sale hearing on Jan. 21. If there is at least one timely compliant expression of interest, (i) there will be a Feb. 10, 2014 deadline to submit bid packages; (ii) there will be an auction on Feb. 13, 2013, if at least one qualified bid is received; and (iii) the sale hearing will be conducted on Feb. 18. According to a Notice of Intended Auction Sale, if a qualified bid provides for payment in full of additional consideration in cash, the amount of the purchase price in that bid must provide for cash that is at least in the amount of $18.62 million plus $1.2 million. To the extent Health Quest, as stalking horse bidder elects to tender additional consideration in exchanged bond obligations, the Debtors have been informed by the Bond Trustee that it intends to elect a 5.25% interest rate. With the Bond Trustee's election, the beginning principal amount of the exchanged bond obligations will be $19.15 million plus $1.2 million. Competing bids also must provide for the satisfaction of all cure obligations for Assumed Contracts and Assumed Leases in an amount not less than $500,000. According to court filings, Westchester Medical Center has submitted a bid for St. Francis' facility. Craig Wolf of the Poughkeepsie Journal reported that Michael Israel, CEO of Westchester Medical, confirmed evening of Feb. 5 that the board of the Valhalla-based institution passed a resolution giving him the go-ahead to submit a bid for St. Francis. Mr. Israel declined to say how much Westchester Medical will bid. The Hudson Valley Reporter in January reported that St. Francis Hospital was notified by the New York City-based Catholic Health Care System, doing business as ArchCare, that it is interested in acquiring the hospital's home-care operations and will look for a partner to potentially acquire the rest of the hospital's assets. A member of the New York State Assembly, 105th Assembly District, has expressed his support of Westchester's bid. According to assemblyman Keiran Michael Lalor, Westchester's bid would preserve healthcare options for the people of Dutchess County, and prevent economically devastating layoffs, "in a way the Health Quest's bid would not." He noted that Health Quest already owns Northern Dutchess Hospital, Putnam Hospital and Vassar Brothers Hospital, which is located less than a mile from St. Francis. He pointed out that, "Were Health Quest to purchase Saint Francis, it would essentially have a monopoly on hospital services in Dutchess and Putnam Counties." Donald Murphy, St. Francis' CEO from 1976 to 2000, also supported a deal with Westchester, saying it would be in the best interest of the hospital and community it serves. As reported by the Troubled Company Reporter in January, the APA with Health Quest contemplates payment of a Break-Up Fee of $1.2 million and Expense Reimbursement Fee of $1.2 million, as well, in the event St. Francis closes a deal with another entity. The Official Committee of Unsecured Creditors appointed in the Debtors' chapter 11 cases believes that the proposed Break-Up Fee amount and Expense Reimbursement Fee amount are excessive and intends on objecting to their approval. The Debtors and the Stalking Horse both support the amount of the Break-Up Fee and Expense Reimbursement. Meanwhile, the U.S. Trustee for Region 2 is slated to hold a meeting of St. Francis' creditors pursuant to Sec. 341 of the Bankruptcy Code today, Feb. 7, 2014, 1:00 p.m. Eastern. About St. Francis' Hospital St. Francis' Hospital, Poughkeepsie, New York, and four affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 13-37725) on Dec. 17, 2013. The case is assigned to Judge Cecelia G. Morris. Daniel W. Sklar, Esq., and Christopher M. Desiderio, Esq., at Nixon Peabody LLP, serve as the Debtors' counsel. The financial adviser is CohnReznick Advisory Group; and the investment banker is Deloitte Corporate Finance LLC. BMC Group is the claims and notice agent. The U.S. Trustee has appointed five members to the Official Committee of Unsecured Creditors. STACY'S INC: Committee Objects to Plan Outline, Hearing on Feb. 12 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of South Carolina has set for Feb. 12, 2014, at 1:00 p.m. the hearing on the disclosure statement accompanying the plan of reorganization of Stacy's Inc. As reported by the Troubled Company Reporter on Jan. 16, 2014, the Debtor was slated to seek approval of the disclosure statement at a hearing on Jan. 29, 2014 at 2:00 p.m. The Plan, filed Dec. 12, 2013, provides for and ratifies the distribution of the cash assets of the estate primarily to Bank of the West, with a carve- out to the unsecured creditors and payment of administrative priority claims. On Jan. 22, 2014, the Official Committee of Unsecured Creditors and BOTW filed objections to the disclosure statement. According to Reid E. Dyer, Esq., at Moore & Van Allen, PLLC, the attorney for the Committee, his client and the Debtor are currently in discussions regarding the administration of the bankruptcy estate's assets post-confirmation. "The Committee anticipates that these discussions with the Debtor will result in amendments to the Plan, which are not reflected in the Disclosure Statement. Thus, the Committee brings this limited objection based on the fact that the current Disclosure Statement does not reflect anticipated changes to the Plan with respect to the post- confirmation administration of the estate and submits that the Disclosure Statement should be amended to reflect the same," Mr. Dyer stated in the Jan. 22 court filing. The Disclosure Statement mentions the dispute between the Debtor and BOTW regarding the use of cash collateral in the Debtor's operating account, and Exhibit H outlines how it intends to use this remaining cash to pay administrative claims, including but not limited to certain income tax obligations. "As more fully explained in its objection to the Debtor's motion to use this cash collateral, BOTW strongly objects to Debtor's contentions that BOTW does not have a lien on this cash collateral, or in the alternative, that BOTW is adequately protected by the Debtor's use of this cash collateral. BOTW again renews its objection to the Debtor's use of BOTW's cash collateral as outlined in Exhibit H to the Disclosure Statement (or in any other fashion)," Robert C. Byrd, Esq., at Parker Poe Adams & Bernstein LLP, the attorney for BOTW, said in the Jan. 22 court filing. According to Mr. Byrd, the Disclosure Statement fails to acknowledge that the Debtor may be unable to use this cash collateral and what effect, if any, that this would have on the Debtor's ability to fulfill its plan obligations. The hearing on the Debtor's motion to use cash collateral was originally scheduled for Jan. 23, 2014, but has been continued until Feb. 12, 2014. "If the Disclosure Statement is approved before the cash collateral issues are decided, hypothetical investors will not have all material information needed in order to make an informed decision," Mr. Byrd said. Mr. Byrd can be reached at: PARKER POE ADAMS & BERNSTEIN LLP 200 Meeting Street, Suite 301 Charleston, SC 29401 Tel: (843) 727-2650 Fax: (843) 727-2680 E-mail: bobbybyrd@parkerpoe.com About Stacy's Inc. Stacy's Inc., a commercial greenhouse in York, South Carolina, filed a Chapter 11 petition on June 21 (Bankr. D. S.C. Case No. 13-03600) in Spartanburg, South Carolina, with a deal to sell the business for $17 million to Metrolina Greenhouses, absent higher and better offers. Stacy's -- http://www.stacysgreenhouses.com/-- had 16 acres of greenhouses on three farms aggregating 260 acres in York, South Carolina. The Debtor scheduled $26.4 million in total assets and $31.4 million in liabilities as of the bankruptcy filing. The secured lender is Bank of the West, owed $22.1 million secured by liens on the assets. Stacy's in August 2013 sold the business to Metrolina Greenhouses for $15.2 million after no competing bids were entered at a bankruptcy auction. The Debtor has tapped Barton Law Firm, P.A, as bankruptcy counsel; Ouzts, Ouzts & Varn, P.A., as its financial advisor; SSG Advisors, LLC, as its investment banker; and Faulkner and Thompson, P.A., to provide limited accounting services. The Official Committee of Unsecured Creditors appointed in the case has tapped Moore & Van Allen, PLLC, as counsel. SYNOVUS FINANCIAL: Fitch Affirms 'B' Short-Term IDR Rating ---------------------------------------------------------- Fitch Ratings has affirmed Synovus Financial Corp.'s (SNV) ratings at 'BB'/'B'. The Rating Outlook remains Positive. The Positive Rating Outlook reflects Fitch's view that SNV's IDR's could be upgraded from current levels. KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT SNV's ratings remain at the low end of the mid-tier peer group reflecting a still-elevated level of NPAs and relatively tepid earnings performance. SNV's Rating Outlook remains Positive reflecting its improving overall risk profile combined with solid capital levels and recovering asset quality. SNV reports the highest TCE level in the mid-tier regional peer group as well as some of the best year-over-year improvements in asset quality. Fitch calculates SNV's NPAs at 5.4% at 4Q'13, an improvement of over 2% year-over-year but still elevated when compared to higher- rated banks. The volume of NPAs has fallen more than 20% over the same time period. Fitch notes that nearly half of SNV's remaining NPAs are accruing troubled debt restructurings (TDRs) of which 60% are to C&I or investment property borrowers that are able to generate cash flow for repayment as opposed to vacant land borrowers that are likely repaying out of pocket. Fitch expects these TDR characteristics to produce lower levels of loss content than those banks with a high level of consumer-related TDRs that typically perform relatively worse post-modification than commercial TDRs. Fitch also expects the company's level of NCOs to continue to fall throughout 2014 along with nonperforming loan inflows that have averaged under $70 million over the last three quarters. Given SNV's elevated risk profile relative to others in the peer group, Fitch expects capital to be managed at relatively higher levels. Fitch notes that SNV's Fitch Core Capital ratio has increased to 7.7%, or 240 bps, year over year, and is in line with the mid-tier regional peer group average, primarily through the retention of earnings and balance sheet shrinkage. Fitch anticipates that if upcoming stress test results show an ability to do so, SNV will likely begin bumping up its dividend over the near- to mid-term from the current quarterly rate of $0.01/share that it has been paying since 2009. However, Fitch expects any significant dividend increase to coincide with stronger earnings performance. Fitch notes that earnings performance (current and expected) remains relatively weaker than higher rated banks. While SNV has remained consistently profitable since mid-2011, the bank's ROA has remained in the 45-55 bps range. Fitch expects this level of earnings to just marginally improve in 2014 as credit costs reductions are off-set by continued net interest margin compression. RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT Fitch has maintained SNV's Positive Rating Outlook reflecting its view that over the near to mid-term, SNV's financial and credit profile will continue to improve. Fitch believes that SNV's improvement in fundamental asset quality performance, a primary rating driver, will be a long-term process, as existing NPAs are likely stickier than those that have been worked out of to this point. However, to the extent that Fitch observes continued asset quality improvement that brings asset quality in line with higher rated peers, additional positive rating action are likely. Fitch expects SNV's earnings power to be fairly tepid relative to higher rated peers over the next 18 to 24 months driven by relatively higher credit costs. Once Fitch observes earnings performance consistently in line with those banks in higher rating categories, Fitch would likely take positive rating action. Although unexpected, to the extent that earnings remain depressed and Fitch foresees little uplift over the long term, SNV's Outlook could be revised to Stable from Positive. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Upon further review of its rating criteria for subordinated and hybrid securities and not as the result of any type of credit or financial performance deterioration on the part of SNV, Fitch has downgraded SNV's noncumulative preferred stock issued in 3Q'13 to 'B-' from 'B' to correct an error by Fitch in the application of Fitch's criteria when the rating was assigned in 3Q'13. Fitch notes this strictly serves to properly align the instrument's characteristics to the appropriate notching in Fitch's criteria and is not the result of any type of deterioration in SNV's credit profile. As noted above, the Rating Outlook for SNV remains Positive given Fitch's expectations for continued improvement in the company's financial condition and performance. Subordinated debt and other hybrid capital issued by SNV and its subsidiaries are all notched down from SNV's Viability Rating (VR) of 'bb' in accordance with Fitch's assessment of each instrument's respective non-performance and relative Loss Severity risk profiles, which vary considerably. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES SNV's subordinated debt and other hybrid capital ratings are is sensitive to changes in SNV's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS Synovus Bank is a wholly owned subsidiary of SNV. Synovus Bank's ratings are aligned with SNV reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES Synovus Bank's ratings are sensitive to changes to SNV's VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR SNV's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES- SUPPORT RATING AND SUPPORT RATING FLOOR SNV's Support Rating and Support Rating Floor are sensitive to Fitch's assumption as to capacity to procure extraordinary support in case of need. Fitch reviewed SNV's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc-Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN), Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings with a Positive Outlook: Synovus Financial Corp. -- Long-term Issuer Default Rating (IDR) at 'BB'; -- Senior unsecured debt at 'BB'; -- Viability at 'bb'; -- Subordinated debt at 'BB-'; -- Short-term IDR at 'B'; -- Support Ratings at '5'; -- Support Rating Floor at 'NF'. Synovus Bank -- Long-term IDR at 'BB'; -- Viability at 'bb'; -- Long-term deposits at 'BB+'; -- Short-term IDR at 'B'; -- Support Ratings at '5'; -- Support Rating Floor at 'NF'. Fitch has downgraded the following rating to correct an error by Fitch in the application of Fitch's criteria when the rating was assigned in 3Q'13: Synovus Financial Corp. -- Preferred Stock to 'B-' from 'B'. TFC FINANCIAL: Fitch Affirms 'B' Preferred Stock Rating ------------------------------------------------------- Fitch Ratings has affirmed TCF Financial Corporation's (TCB) ratings at 'BBB-'/'F3'. The Rating Outlook remains Negative. KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT TCB's ratings remain toward the bottom of the peer group, reflecting its relatively higher risk profile across many financial metrics as well as a larger risk appetite relative to the peer group. The Negative Outlook reflects Fitch's continued concerns relating to the company's level of loan growth in its national auto lending portfolio that has yet to fully season and as well as continued double-digit growth in inventory finance. TCB's weak asset quality continues to be a primary ratings driver. Even with NPA levels dropping 11% year-over-year, the bank's ratio of NPAs to total loans (inclusive to accruing TDRs) remains an outlier in the mid-tier regional peer group at 6.18% as of 4Q13 (down from 7.14% a year prior). NPA reduction over the last year has been aided through various workout strategies such as a bulk asset sale in 1Q13 in which the company sold multiple pieces of OREO as well as 2nd lien TDRs that were adversely impacted by regulatory guidance in 3Q12. Fitch notes that year-over-year asset quality improvement is in line with TCB's peer group. Fitch expects NPAs to remain elevated in both absolute and relative terms given TCB's high level of consumer-related accruing TDRs. At 4Q13, consumer-related accruing TDRs, which tend to be much stickier than commercial-related TDRs, made up over 52% of total Fitch-calculated NPAs. This expectation is incorporated in the current rating and the affirmation. Fitch notes that TCB has 20% of reserves against consumer real estate-related TDRs, a level Fitch current believes is reasonable when considering marks taken on recent TDR bulk loan sales in the industry. TCB continues to put focus on growth in its national lending loan portfolio. Auto loans on balance sheet have grown to $1.2bn from $553 million a year ago. Average balances of inventory finance are up 10% year-over-year. The company's national lending portfolio now makes up around 40% of its overall portfolio. While losses relating to auto and inventory finance have been in line with industry standards over recent periods, these portfolios have yet to fully season or go through a full credit cycle. Looking ahead, Fitch will seek evidence that risk management systems and controls have grown commensurately with the overall portfolio. Fitch has highlighted home equity reset risk as an emerging risk for the industry as many home equity lines of credit will reset to fully amortizing loans over the next several years. Although TCB has the highest percentage of HELOCs to capital, near-term payment shock concerns are mitigated for TCB given the nature of its HELOC portfolio. Fitch notes that 90% of these lines do not mature or begin amortization until 2021, affording TCB ample time to modify these loans or take various measures to help borrowers at maturity or conversion. Given TCB's balance sheet structure (loan-to-deposit ratio of 110%) and overall business strategy of lending in higher-yielding asset classes, Fitch expects the company to generate a relatively higher level of PPNR and ROA compared to peers. While TCB's earnings remain in-line with peer averages, risk-adjusted earnings, measured by net income to risk-weighted assets (RWA) are in the bottom quartile of the peer group, thus constraining the bank's rating at its current level. Earnings have historically been supported by a low-cost deposit base which generated a relatively higher level of noninterest income than peers. While deposit pricing through the industry has converged to historic lows bringing TCB's cost of deposits in-line with peer averages, Fitch would expect the company's earnings to benefit relatively more in a rising rate scenario given the likely sticky nature of its low-balance, high volume deposit base. This expectation is reflected in the rating affirmation. Similar to earnings, Fitch believes that TCB's current business strategy requires higher-than average capital levels. The company has not increased its dividend nor has it done share buy backs similar to most in the mid-tier regional peer group. Therefore, even with year-over-year net loan growth of 3%, the company's Total tier 1 Risk Based capital ratio has increased 32 bps to 11.4%. Fitch's expectation that the company will continue to retain capital to keep pace with loan growth is incorporated into the rating actions. RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT Fitch will continue to monitor credit risk in TCB's growing national lending platform in relation to those that contend in similar lending spaces. If Fitch observes a relative divergence of credit costs in these portfolios that point toward lax underwriting or monitoring, negative rating action is possible. Further, if current trends of asset quality within TCB's legacy book reverse, negative pressure could be placed on the bank's ratings. Should operating results fall behind peer averages consistently on a risk-adjusted and non-risk-adjusted basis without a material shift in strategy or due to elevated credit costs, ratings could be pressured over the long term. Fitch believes TCB's ratings are constrained from upward movement in the near term given growth strategies and relative asset quality. Over the long term, if asset quality metrics in the legacy book come more in line with higher rated peers and credit quality in the national lending portfolio remains in line with industry averages, leading to positive operating results, TCB's ratings or Outlook could be positively impacted. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by TCB and its subsidiaries are all notched down from TCB's VR of 'bbb-' in accordance with Fitch's assessment of each instrument's respective non-performance and relative Loss Severity risk profiles, which vary considerably. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES TCB's subordinated debt and other hybrid capital ratings are is sensitive to changes in TCB's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS TCF National Bank, NA is a wholly owned subsidiary of TCB. TCF National Bank's ratings are aligned with TCB reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES TCF National Bank's ratings are sensitive to changes to TCB's VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR TCF's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES- SUPPORT RATING AND SUPPORT RATING FLOOR TCB's Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch reviewed TCB's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc-Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN),Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings with a Negative Outlook: TCF Financial Corp. -- Long-term IDR at 'BBB-'; -- Viability at 'bbb-'. -- Preferred stock at 'B'; -- Short-term IDR at 'F3'; -- Support Ratings at '5'; -- Support Rating Floor at 'NF'. TCF National Bank -- Long-term IDR at 'BBB-'; -- Viability at 'bbb-'; -- Long-term deposits at 'BBB'; -- Subordinated Debt at 'BB+'; -- Short-term IDR at 'F3'; -- Short-term Deposits at 'F3'; -- Support Ratings at '5'; -- Support Rating Floor at 'NF'. TLC HEALTH: Ombudsman Hires Gleichenhaus Marchese as Counsel ------------------------------------------------------------ Linda Scharf, the Patient Care Ombudsman ("PCO") of TLC Health Network, asks for authorization from the Hon. Carl L. Bucki of the U.S. Bankruptcy court for the Western District of New York to employ Gleichenhaus, Marchese & Weishaar, PC as general counsel for the Ombudsman, effective Jan. 15, 2014. Gleichenhaus Marchese will provide legal services as needed throughout the tenure of Ms. Scharf's Ombudsman appointment and representing and assisting the PCO in carrying out her duty as a patient care ombudsman. Gleichenhaus Marchese will be paid at these hourly rates: Robert B. Gleichenhaus $200 Michael A. Weishaar $200 Paralegals and legal secretaries $80 Gleichenhaus Marchese will also be reimbursed for reasonable out- of-pocket expenses incurred. Michael A. Weishaar, partner of Gleichenhaus Marchese, 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. Gleichenhaus Marchese can be reached at: Michael A. Weishaar, Esq. GLEICHENHAUS, MARCHESE & WEISHAAR, PC 930 Convention Tower, 43 Court Street Buffalo, NY 14202 Tel: (716) 845-6446 Fax: (716) 845-6475 E-mail: weishaaresq@gmail.com TLC Health Network filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 13-13294) on Dec. 16, 2013. The petition was signed by Timothy Cooper as Chairman of the Board. The Debtor estimated assets of at least $10 million and debts of at least $1 million. Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C., serves as the Debtor's counsel. The case is assigned to the Hon. Carl L. Bucki. TRILITO INC: Asks Court to Dismiss Chapter 11 Case -------------------------------------------------- Trilito Inc. asks the U.S. Bankruptcy Court for the District of Puerto Rico to dismiss its Chapter 11 Bankruptcy Case. The Debtor tells the Court that it had tried to negotiate with the holder of an embargo a settlement with no results. To avoid an auction by the junior judgment lienholder the voluntary petition was filed. After filing, the Debtor tried to negotiate with the creditor, hoping it would realize that being in a junior rank, the completion of the foreclosure would not result in collection on its debt, again with negative results, the Debtor notes. According to the Debtor, as the matter relates to the settlement of this debt, it will be best handled outside the Chapter 11 proceeding, directly with the creditor for which there is no need to continue the proceedings. The Debtor adds it considers Chapter 7 liquidation impracticable, as there are no unencumbered assets, thus liquidation through Chapter 7 would not yield dividends to unsecured creditors. About Trilito San Juan, Puerto Rico-based Trilito, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated $10 million to $50 million in total assets and liabilities. ScotiaBank has a $25.9 million claim, of which $25.6 million is secured by a first mortgage on the Debtor's property. The case is assigned to U.S. Bankruptcy Judge Mildred Caban Flores. Carlos Rodriguez Quesada, Esq., in San Juan, Puerto Rico, represents the Debtor. The Debtor has proposed to pay counsel $250 per hour for the engagement. TRILITO INC: Section 341(a) Meeting Slated for Feb. 14 ------------------------------------------------------ The U.S. Trustee for Region 21 will convene a meeting of creditors of Trilito Inc. on Feb. 14, 2014, at 10:00 a.m., at 341 meeting room, Ochoa Building, 500 Tanca Street, First Floor in San Juan, Puerto Rico. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. All proofs of claim must be filed by Feb. 15, 2014, and governmental proof of claim is due July 15, 2014. About Trilito San Juan, Puerto Rico-based Trilito, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated $10 million to $50 million in total assets and liabilities. ScotiaBank has a $25.9 million claim, of which $25.6 million is secured by a first mortgage on the Debtor's property. The case is assigned to U.S. Bankruptcy Judge Mildred Caban Flores. Carlos Rodriguez Quesada, Esq., in San Juan, Puerto Rico, represents the Debtor. The Debtor has proposed to pay counsel $250 per hour for the engagement. TUOMEY HEALTHCARE: S&P Revises Outlook on 'CCC' Rating to Neg. -------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on its 'CCC' rating on South Carolina Jobs Economic Development Authority's series 2006 revenue bonds, issued for Tuomey Healthcare System, to negative from developing. The negative outlook reflects Standard & Poor's view of Tuomey's legal risk tied to a lawsuit with the federal government and decreasing financial profile. At the same time, Standard & Poor's affirmed its 'CCC' rating on the authority's debt, issued for the system. "We believe reserves could decrease further, leaving the health system with very limited financial flexibility. We also recognize that operating performance is very weak and that there is a possibility Tuomey could file bankruptcy should it deplete cash reserves," said Standard & Poor's credit analyst Margaret McNamara. "We could lower the rating if Tuomey were to file for bankruptcy or if it were to default on principal and interest payments. Although not expected over the next year, we could raise the rating over a longer period if Tuomey's lawsuit were to shift in its favor and if financial performance were to begin to show a positive trend." On Oct. 2, 2013, Standard & Poor's lowered the rating on Tuomey's debt to 'CCC' and assigned a developing outlook after the courts denied Tuomey's request for an appeal and granted the federal government's request to impose up to $277 million of damages. Since then, the courts have required Tuomey to set aside $50 million in escrow during the appeals process. The government is now asking Tuomey to set aside an additional $20 million, a request Tuomey has appealed. Standard & Poor's understands Tuomey would be at risk of violating several bond covenants if the courts grant the government's request. While the rating service understands Tuomey is continuing to work toward a settlement, significant uncertainty remains as to whether the parties will reach an agreement that Tuomey finds acceptable. VARITALK INC: Appeals Court Directs Trial in Malpractice Suit ------------------------------------------------------------- The Court of Appeals of California, Second District, Division Four, reversed a lower court ruling that granted summary judgment in favor of Marc E. Hankin and Hankin Patent Law, APC, in a legal malpractice lawsuit filed against them by Steven Drimmer. The Appeals Court said Hankin failed to show that there is no triable issue as to any material fact and that he is entitled to judgment as a matter of law. As a result, the trial court erred in granting summary judgment. Hankin represented Drimmer, Fred Lowe, Derek Goldberg, and Varitalk, Inc. in a patent infringement filed in September 2007 by Mark Baker and others. On May 4, 2009, the day before the infringement action was set for trial, Varitalk filed for Chapter 11 bankruptcy protection, temporarily staying the infringement action. The bankruptcy court granted relief from the stay to allow the infringement action to proceed on October 5, 2009. On Nov. 6, 2009, Hankin filed a motion to withdraw as counsel of record. In his declaration, Hankin said a conflict of interest had arisen among his clients, and that he had filed a claim against Varitalk for unpaid legal fees. Thus, Hankin said he could no longer represent Varitalk or any of the individual defendants. Drimmer did not oppose the motion to withdraw. On December 4, 2009, the trial court granted Hankin's motion and ordered that Hankin was "permitted to withdraw as Counsel of Record on behalf of each of the Individual Defendants." Drimmer sued for legal malpractice and breach of fiduciary duty against Hankin and others on Dec. 3, 2010. The operative second amended complaint, filed September 28, 2011, alleged that Hankin failed to exercise reasonable care by "[failing to disclose that] their simultaneous representation of [Drimmer], on the one hand, and Varitalk, Lowe and Goldberg, on the other, constituted a conflict of interest since each of the parties represented by them had different and conflicting objectives, rights and liabilities," "failing to adequately defend and represent [Drimmer] in the Varitalk Action," "failing to pursue [Drimmer's] claims against prior patent counsel," "failing to advise [Drimmer] that rejection of reasonable settlement demands made to the Varitalk Parties in the Varitalk Action could expose [Drimmer] to substantial liability," "failing to advise [Drimmer] that such settlement would have resolved the claims against [Drimmer] at no expense to him," and "placing the interests of Varitalk and the other represented parties ahead of [Drimmer]." As a result of Hankin's actions, Drimmer "was forced to retain independent counsel, at his own expense, to litigate and settle the claims against him in the Varitalk Action." Hankin moved for summary judgment, claiming Drimmer's malpractice action was time-barred. Hankin conceded that the one-year statute of limitations applicable to attorney malpractice actions was tolled while he represented Drimmer, but urged that he ceased representing Drimmer at least a month before the district court granted his motion to withdraw on Dec. 4, 2009. Drimmer opposed the summary judgment motion, claiming the one-year limitations period was tolled until the court granted Hankin's motion to withdraw as trial counsel on Dec. 4, 2009. He contended that although he hired George Belfield, Esq., in November 2009 to evaluate the infringement action, he did not retain Belfield to represent him in that action until Jan. 11, 2010. The trial court granted Hankin's motion for summary judgment on Dec. 7, 2012, concluding that Drimmer's causes of action for legal malpractice and breach of fiduciary duty were barred by the one- year statute of limitations. The trial court found that Hankin's representation of Drimmer ended as a matter of law when Drimmer retained Belfield in November 2009. A copy of the Appeals Court's Feb. 4 decision is available at http://is.gd/r3l2dFfrom Leagle.com. WEBALO INC: Mobile-Phone App Developer Files in Los Angeles ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Webalo Inc., a developer of technology to make data and enterprise applications compatible with mobile devices, filed a petition for Chapter 11 protection (Bankr. C.D. Cal. Case No. 14-bk-11467) on Jan. 27 in Los Angeles, where it is based. According to the report, the company was first financed with $18.6 million in equity and then with $9 million in debt. Webalo said it's "just entering the revenue generation stage," having produced $150,000 in sales during 2013, resulting in a $4.7 million operating loss, the report related. The company said it intends to draw new funds from existing investors to finance the bankruptcy and emerge from Chapter 11, the report further related. WEBSTER FINANCIAL: Fitch Affirms 'B+' Preferred Stock Rating ------------------------------------------------------------ Fitch Ratings has affirmed Webster Financial Corp's (WBS) ratings at 'BBB'/'F2'. The Rating Outlook remains Stable. WBS' ratings reflect its operating performance, franchise strength and liquidity profile in line with its rating category. However, capital levels remain in the bottom quartile relative to the peer group. The Stable Outlook reflects Fitch's view that WBS' risk profile will remain relatively unchanged in the near term KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT WBS' NPAs rank in the top quartile of the mid-tier group at over 3.5% but are largely driven by Webster's conservative approach to trouble debt restructure (TDR) identification. Over 50% of the bank's nonperforming assets are TDRs. As a result, Fitch expects WBS' NPA levels to continue to rank in the top quartile of the mid-tier bank group since TDRs retain their classification for the life of the loan. WBS' earnings are solid and finished 2013 above the mid-tier median level. Solid earnings are driven by relatively stronger operating leverage than its peers. In addition, WBS's earnings profile is also aided by a relatively higher yielding securities portfolio. The portfolio yield is over 80bps higher than the midtier group median. Over 25% of WBS' securities portfolio is invested in higher yielding, non-government guaranteed securities. Fitch expects WBS's earnings to remain above the peer median as it net interest margin has been relatively more stable than its peers. RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT While Fitch views WBS' capital levels as adequate, continued reductions to capital could result in negative ratings pressure. Conversely, if WBS managed its capital levels at higher levels, positive ratings moment could build. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES WBS' preferred stock is rated five notches below its VR to reflect loss severity and an assessment of increment non-performance risk. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES WBS' preferred stock rating is sensitive to changes in WBS' VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS Webster Bank, NA is a wholly owned subsidiary of WBS. Webster Bank, NA's ratings are aligned with WBS, reflecting Fitch's view that the bank subsidiary is core to the franchise. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES Webster Bank, NA ratings are sensitive to changes to WBS' VR or any changes to Fitch's view of structural subordination between bank subsidiary and holding company. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR WBS' Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES- SUPPORT RATING AND SUPPORT RATING FLOOR WBS' Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch reviewed WBS' ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc-Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN),Cullen/Frost Bankers, Inc (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings with a Stable Outlook: Webster Financial Corporation -- Long-term IDR at 'BBB'; Outlook Stable; -- Senior unsecured at 'BBB'; -- Viability Rating at 'bbb'; -- Preferred Stock at 'B+'; -- Short-term IDR at 'F2'; -- Support at '5'; -- Support Floor at 'NF'. Webster Bank, NA -- Long-term IDR at 'BBB'; Outlook Stable; -- Long-term deposits at 'BBB+'; -- Viability Rating at 'bbb'; -- Short-term IDR at 'F2'; -- Short-term Deposits at 'F2'; --Support at '5'; -- Support Floor at 'NF'. WEST CORP: Posts $50.3 Million Net Income in Fourth Quarter ----------------------------------------------------------- West Corporation reported net income of $50.33 million on $687.57 million of revenue for the three months ended Dec. 31, 2013, as compared with net income of $32.70 million on $680.17 million of revenue for the same period a year ago. For the 12 months ended Dec. 31, 2013, the Company reported net income of $143.20 million on $2.68 billion of revenue as compared with net income of $125.54 million on $2.63 billion of revenue during the prior year. As of Dec. 31, 2013, the Company had $3.48 billion in total assets, $4.22 billion in total liabilities and a $740.17 million stockholders' deficit. "West Corporation finished 2013 with its 27th consecutive year of revenue growth, record adjusted EBITDA and record cash flows from operations," said Tom Barker, CEO. "The strong profitability and cash flow generation of the Company reinforces the strength of our business model and provides us with the flexibility to return capital to our shareholders and fund our growth initiatives." At December 31, 2013, West Corporation had cash and cash equivalents totaling $230 million and working capital of $363.9 million. "West Corporation finished the year with a stronger balance sheet and improved profitability. During 2013, we reduced our interest expense by $36 million and improved our leverage from 5.34x to 4.62x," said Paul Mendlik, CFO. "In January 2014, we completed a repricing amendment to our senior secured credit agreement which will decrease our annual cash interest expense by approximately $12 million. We will continue to evaluate opportunities to further reduce our debt and interest expense during 2014." A copy of the press release is available for free at: http://is.gd/p78eDE Board Member Elected The Board of Directors of the Company elected Michael A. Huber as a member of the Board. Mr. Huber replaces Steven G. Felsher who resigned effective Jan. 29, 2014. Mr. Felsher's decision to resign did not involve any disagreement with the Company, the Company's management or the Board. Mr. Huber is president and a managing principal of Quadrangle Group LLC and was designated to serve as a director by funds affiliated with Quadrangle in accordance with the terms of the Company's Stockholder Agreement. On Jan. 29, 2014, the Board appointed Mr. Huber to serve as a member of the Audit Committee of the Board. Mr. Huber replaces Mr. Felsher on the Audit Committee. Prior to the completion of the Company's initial public offering, affiliates of Thomas H. Lee Partners, L.P. and Quadrangle provided management and advisory services pursuant to a management agreement dated Oct. 24, 2006, executed by the Company in connection with its 2006 recapitalization. Upon completion of the IPO, the Management Agreement was terminated in accordance with its terms. Pursuant to the terms of the Management Agreement and a management letter agreement the Company entered into with affiliates of the Former Sponsors, dated March 8, 2013, the total fees for services and expenses in the year ended Dec. 31, 2013, paid to Quadrangle thereunder aggregated approximately $4.3 million. About West Corporation Founded in 1986 and headquartered in Omaha, Nebraska, West Corporation -- http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West Corporation has a team of 41,000 employees based in North America, Europe and Asia. Bankruptcy Warning "If we cannot make scheduled payments on our debt, we will be in default, and as a result: * our debt holders could declare all outstanding principal and interest to be due and payable; * the lenders under our Senior Secured Credit Facilities could terminate their commitments to lend us money and foreclose against the assets securing our borrowings; and * we could be forced into bankruptcy or liquidation," the Company said in its quarterly report for the period ended Sept. 30, 2013. WESTMORELAND COAL: Exec. Chairman Has Base Salary of $750,000 ------------------------------------------------------------- The Compensation and Benefits Committee recommended to the Board a compensation package for Mr. Keith Alessi as executive chairman, which the Board approved. The compensation package for Mr. Alessi will be $750,000 base salary, 100 percent of base salary for AIP target, and 150 percent of base salary for LTIP target. The Board of Westmoreland Coal Company appointed Mr. Alessi an officer of the Company with the title of executive chairman on Jan. 17, 2014. Mr. Alessi, age 59, has held several different positions with Westmoreland since 2007, including president, chief executive officer and other various interim roles. Beginning in April 2013, Mr. Alessi assumed the executive chairman position on the Board concentrating on strategic issues, acquisitions and capital opportunities. In order to take full advantage of Mr. Alessi's depth of experience, he has shifted to an employee role in Edmonton, Alberta, to facilitate an efficient transition of the Sherritt business into Westmoreland. For the bulk of the past seven years, Mr. Alessi has led the Company as its president and CEO, including guiding the Company's acquisition of the Kemmerer Mine from Chevron in 2012. Prior to joining the Company, Mr. Alessi had served as a senior executive officer for over 30 years at a number of public companies. Mr. Alessi currently serves as a member of the board of directors of MWI Veterinary Supply, Inc., and has served as a director on numerous public company boards over the past 30 years. Mr. Alessi has a MBA from the University of Michigan and a BS from Wayne State University. He is also a Certified Public Accountant. There are no arrangements or understandings between Mr. Alessi and any other persons pursuant to which he was selected as Executive Chairman. About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. Westmoreland Coal incurred a net loss of $13.66 million in 2012, a net loss of $36.87 million in 2011, and a net loss of $3.17 million in 2010. The Company's balance sheet at Sept. 30, 2013, showed $939.83 million in total assets, $1.22 billion in total liabilities and a $280.31 million total deficit. * * * As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Englewood, Co.-based Westmoreland Coal Co. (WLB). to 'B-' from 'CCC+'. "The upgrade reflects our view that WLB is less vulnerable to default after successfully negotiating less restrictive covenant requirements for an unrated $110 million term loan due 2018," said credit analyst Gayle Bowerman. "Our assessment of WLB's business risk profile as 'vulnerable' and financial risk profile as 'highly leveraged' are unchanged. We also revised our liquidity score to 'adequate' based on the covenant relief and additional liquidity provided under the company's new $20 million asset-based loan (ABL) facility from 'less than adequate'." Westmoreland Coal carries a Caa1 corporate family rating from Moody's Investors Service. WINTRUST FINANCIAL: Fitch Affirms 'B+' Preferred Stock Rating ------------------------------------------------------------- Fitch Ratings affirms Wintrust Financial Corp.'s (WTFC) ratings at 'BBB'/'F2'. The Rating Outlook remains Stable. KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT WTFC's ratings were affirmed at 'BBB' reflecting its consistent and conservative management through the credit cycle leading to superior asset quality performance relative to similarly rated and similarly sized institutions. Further, Fitch believes WTFC's loan portfolio structure provides the company unique credit diversification relative to peers, especially when considering the loss history of its premium finance loan portfolio. Fitch recognizes WTFC's relatively strong asset quality compared to similarly rated peers and believes it is a reflection of management's credit risk management philosophy. Nonperforming assets (NPAs) have remained somewhat elevated relative to historical norms at 1.72% as of the fourth quarter of 2013 (4Q'13) but have dropped 61 basis points (bps) year-over-year and compare favourably to similarly rated peers. Fitch also views the company's premium finance loan book as generally positive given its relative size to the overall loan portfolio and the low credit losses generated out of it. Fitch believes that WTFC is constrained at its current rating given the company's fairly tepid earnings performance relative to higher rated peers. The company's year-to-date (YTD) 2013 return on assets (ROA) of 79 bps is lower than similarly rated institutions but is also taken in the context of WTFC's overall risk profile. Fitch believes that going forward earnings will continue to be challenged by the expected prolonged period of low interest rates coupled with the company's short-term balance sheet. At year-end 2012, 70% of WTFC's loans were either variable or repriced within 12 months. However, Fitch expects this to be advantageous when interest rates do begin to rise. RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT Negative trends in earnings or a reversal in current AQ trends leading to earnings and capital deterioration could lead to negative rating action. Further, if the company growth (either through acquisition or organic) were to exceed Fitch's comfort level and capital levels fell materially below their current levels, ratings could be adversely impacted. While Fitch sees little upside to the company's rating in the near term, if earnings performance improves and comes in line with higher rated peers while AQ trends maintain their positive course and risk management practices remain conservative, Fitch could take positive rating action. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by WTFC, and its subsidiaries are all notched down from WTFC's Viability Rating (VR) of 'bbb' in accordance with Fitch's assessment of each instrument's respective non-performance and relative Loss Severity risk profiles, which vary considerably. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES WTFC's subordinated debt and other hybrid capital ratings are sensitive to changes in WTFC's VR. Rating sensitivities for the VR are listed above. SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS The below ratings factor in a high probability of support from the parent to its subsidiary. This reflects the fact that performing parent banks have very rarely allowed subsidiaries to default. It also considers the high level of integration, brand, management, financial and reputational incentives to avoid subsidiary defaults. SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES All 15 subsidiary banks' ratings are linked together and equalized due to cross-collateralization conditions found in Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). Consequently, any movement in the parent's VR would equally impact all related subsidiary banks. Rating sensitivities for the VR are listed above. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR WTFC's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. KEY RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR WTFC's Support Rating and Support Rating Floor are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Fitch Ratings reviewed WTFC's ratings as part of the mid-tier regional bank review. The 19 banks in the review include: Associated Banc-Corp (ASBC), BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National Bancorp (CYN), Cullen/Frost Bankers, Inc. (CFR), East West Bancorp, Inc. (EWBC), First Horizon National Corp. (FHN), First National of Nebraska, Inc. (FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC), First Merit (FMER), Fulton Financial Corp. (FULT), Hancock Holding Company (HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp. (SNV), TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial Corp. (WBS), Wintrust (WTFC). Fitch has affirmed the following ratings with a Stable Outlook: Wintrust Financial Corporation -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Subordinated Debt at 'BBB-'; -- Preferred Stock at 'B+'; -- Support at '5'; -- Support Rating Floor at 'NF'. Lake Forest Bank and Trust Company -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating at 'NF'. Hinsdale Bank and Trust Company -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. North Shore Community Bank and Trust Company -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. Libertyville Bank and Trust Company -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. Barrington Bank and Trust Company, NA -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. Crystal Lake Bank and Trust Company, NA -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. Northbrook Bank and Trust Company -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. Schaumburg Bank and Trust Company, NA -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. Village Bank and Trust -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. Beverly Bank and Trust Company, NA -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. Town Bank -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. Wheaton Bank and Trust -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. State Bank of the Lakes -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. Old Plank Trail Community Bank, NA -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. St. Charles Bank and Trust Company -- Long-Term IDR at 'BBB'; -- Short-Term IDR at 'F2'; -- Viability Rating at 'bbb'; -- Long-Term Deposits at 'BBB+'; -- Short-Term Deposits at 'F2'; -- Support at '5'; -- Support Rating Floor at 'NF'. WJO INC: Chapter 11 Trustee Hires Sklar Law as Special Counsel -------------------------------------------------------------- Alfred T. Giuliano, the Chapter 11 Trustee of WJO, Inc., sought and obtained permission from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Sklar Law, LLC as special counsel to collect unpaid obligations. The Debtor's estate is owed monies on account of medical treatments that the Debtor provided to certain patients. The Trustee proposes to pay Sklar Law on a contingency fee basis of 25% of any recovery plus costs: (a) upon receipt of each recovery, Sklar Law shall immediately forward the monies to the Trustee; (b) if Bankruptcy Court approval of the recovery/settlement is not required, the Trustee may pay Sklar Law the Contingency Fee upon clearance of the funds; and (c) if Bankruptcy Court approval of the recovery/settlement is required, the Trustee may pay Sklar Law the Contingency Fee only after a final Bankruptcy Court Order approving said recovery/settlement. Mr. Giuliano 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. Roberta A. DeAngelis, the U.S. Trustee for Region 3, filed -- then withdrew -- an objection stating that Sklar Law should not be retained as Sec. 327(e) counsel but must qualify under Sec. 327(a). Sklar Law can be reached at: SKLAR LAW, LLC 1200 Laurel Oak Road - Suite 102 Voorhees, NJ 08043 Tel: (856) 258-4050 Fax: (856) 258-6941 About WJO Inc. Bristol, Pennsylvania-based WJO, Inc., operates six family practices located in Newtown, Bristol, Bensalem, Bustleton, South Philadelphia, and Bethlehem, Pennsylvania and consists of Board Certified Osteopathic Physicians specializing in Family Medicine. Prior to the petition date, and to allow the Company to restructure effectively, HyperOx Inc., HyperOx I, LP, HyperOx III, LP, and East Coast TMR, Inc., were merged into WJO. WJO filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-19894) on Nov. 15, 2010. The Debtor disclosed $19,923,802 in assets and $6,805,255 in liabilities as of the Chapter 11 filing. Holly Elizabeth Smith, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., serve as the Debtor's bankruptcy counsel. Pond Lehocky Stern Giordano serves as the Debtor's special counsel to represent it in worker's compensation proceedings pertaining to the Therapeutic Magnetic Resonance treatments. Patrick Yun serves as the Debtor's financial advisor. Attorneys at Keifer & Tsarouhis LLP serve as counsel to the official committee of unsecured creditors. ParenteBeard LLC serves as the Committee's accountant and financial advisor. The United States Trustee has appointed David Knowlton as patient care ombudsman in the case. The Ombudsman is represented in the case by Karen Lee Turner, Esq., at Eckert Seamans Cherin & Mellott, LLC, as counsel. Tristate Capital Bank, the cash collateral lender, is represented in the case by lawyers at Benesch Friedlander Coplan & Aronoff LLP. On July 3, 2012, Roberta A. DeAngelis, U.S. Trustee for Region 3, obtained permission from the Hon. Jean K. Fitzsimon of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to appoint Alfred T. Giuliano as Chapter 11 trustee of the bankruptcy estate of WJO, Inc. Maschmeyer Karalis P.C. serves as the Chapter 11 Trustee's general bankruptcy counsel. WORLD IMPORTS: Claim Bar Date Set for March 3 --------------------------------------------- Deadline to file proofs of claim in the bankruptcy case of World Imports, Ltd. is set for March 3, 2014. Government Proof of Claim due by Feb. 28, 2014. World Imports, Ltd., filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 13-15929) on July 3, 2013, in Philadelphia. Debtor- affiliates World Imports South, LLC (Bankr. E.D. Pa. Case No. 13-15933), 11000 LLC (Bankr. E.D. Pa. Case No. 13-15934, and World Imports Chicago, LLC (Bankr. E.D. Pa. Case No. 13-15935) filed separate petitions for Chapter 11 relief. The cases are jointly administered under Case No. 13-15929. John E. Kaskey, Esq., at Braverman Kaskey, P.C., in Philadelphia, serves as counsel to the Debtors. World Imports, Ltd., estimated assets and debts of $10 million to $50 million. World Imports South, LLC, estimated assets of $1 million to $10 million. WPCS INTERNATIONAL: Appoints Marcum LLP as New Accountants ---------------------------------------------------------- WPCS International Incorporated has appointed Marcum LLP as its new independent registered public accounting firm. The decision to engage Marcum was made by the Company's Audit Committee, acting on behalf of the Company's Board of Directors. According to Audit Committee Chairman Kevin Coyle, "While the Company's former auditors, CohnReznick LLP resigned on December 20, 2013, the Company had no unresolved disagreements with them during the two most recent fiscal years or through the date of their resignation, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. Upon being notified of their decision, we immediately commenced the process to identify and interview prospective, highly qualified firms and, as a result, we have determined that Marcum would be best suited for WPCS." The Company also pointed, in large part, to Marcum's experience and reputation given: * More than 60 years of experience serving middle market companies; * More than 1,200 professionals, ranking the firm among the top 20 nationwide; * Ninth (9th) largest SEC auditing practice in the nation, with over 100 publicly-traded clients, including those that trade on the NYSE, AMEX and NASDAQ; * Twenty (20) offices with a broad scope of national and international resources; * Four (4) offices in China, with over 75 U.S. trained CPAs; and * Significant experience with both construction and technology organizations. Sebastian Giordano, Interim CEO, added that, "Given the Company's evolving business needs, especially with our recent bitcoin- related acquisition, we are very pleased to engage Marcum as our new independent auditors." About WPCS International WPCS -- http://www.wpcs.com-- is a design-build engineering company that focuses on the implementation requirements of communications infrastructure. The company provides its engineering capabilities including wireless communications, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. CohnReznick LLP, in Roseland, New Jersey, expressed substantial doubt about WPCS International's ability to continue as a going concern following the annual report for the year ended April 30, 2013. The independent auditors noted that the Company has incurred net losses and negative cash flows from operating activities, had a working capital deficiency as of and for the years ended April 30, 2013, and 2012, and has an accumulated deficit as of April 30, 2013. The Company reported a net loss of $6.8 million on $42.3 million of revenue in fiscal 2013, compared with a net loss of $20.6 million on $65.5 million in fiscal 2012. The Company's balance sheet at Oct. 31, 2013, showed $18.41 million in total assets, $13.87 million in total liabilities, and $4.54 million in total equity. WPCS INTERNATIONAL: Hudson Bay Stake at 9.9% as of Dec. 31 ---------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Hudson Bay Capital Management, L.P., and Sander Gerber disclosed that as of Dec. 31, 2013, they beneficially owned 426,290 shares of common stock of WPCS International Incorporated representing 9.99 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/yuyx4i About WPCS International WPCS -- http://www.wpcs.com-- is a design-build engineering company that focuses on the implementation requirements of communications infrastructure. The company provides its engineering capabilities including wireless communications, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. CohnReznick LLP, in Roseland, New Jersey, expressed substantial doubt about WPCS International's ability to continue as a going concern following the annual report for the year ended April 30, 2013. The independent auditors noted that the Company has incurred net losses and negative cash flows from operating activities, had a working capital deficiency as of and for the years ended April 30, 2013, and 2012, and has an accumulated deficit as of April 30, 2013. The Company reported a net loss of $6.8 million on $42.3 million of revenue in fiscal 2013, compared with a net loss of $20.6 million on $65.5 million in fiscal 2012. The Company's balance sheet at Oct. 31, 2013, showed $18.41 million in total assets, $13.87 million in total liabilities, and $4.54 million in total equity. * Supreme Court Turns Away Bankruptcy-Equity Case ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Mayer Brown LLP, the Chicago-based law firm, won't be making law before the U.S. Supreme Court about the equity powers of bankruptcy courts. According to the report, the firm was handed a victory by the U.S. Court of Appeals in Chicago, which upheld the dismissal of a lawsuit based on a theory known as judicial estoppel, which bars taking inconsistent positions in court. The main creditor in the bankruptcy sought an appeal in the Supreme Court, which denied the request. The Chicago court said that judicial estoppel is "more flexible" than equitable principles known as claim or issue preclusion and is designed for the "preservation of the judicial process," the report related. The Mayer Brown case in the Supreme Court is Spehar Capital LLC v. Mayer Brown Rowe & Maw LLP, 13-619, U.S. Supreme Court (Washington). The appeal in Chicago is Grochocinski v. Mayer Brown Rowe & Maw LLP, 10-2057, U.S. Court of Appeals for the Seventh Circuit (Chicago). The district court case is Grochocinski v. Mayer Brown Rowe & Maw LLP, 06-5486, U.S. District Court, Northern District Illinois (Chicago). * BOOK REVIEW: Jacob Fugger the Rich: Merchant and Banker of Augsburg, 1459-1525 ------------------------------------------------------------ Author: Jacob Streider Publisher: Beard Books Hardcover: 227 pages List Price: $34.95 Review by Gail Owens Hoelscher Buy a copy for yourself and one for a colleague on-line at http://is.gd/UAP0Zb Quick, can you work out how much $75 million in sixteenth century dollars would be worth today? Well, move over Croesus, Gates, Rockefeller, and Getty, because that's what Jacob Fugger was worth. Jacob Fugger was the chief embodiment of early German capitalistic enterprise and rose to a great position of power in European economic life. Jacob Fugger the Rich is more than just a fascinating biography of a powerful and successful businessman, however. It is an economic history of a golden age in German commercial history that began in the fifteenth century. When the book was first published, in 1931, The Boston Transcript said that the author "has not tried to make an exhaustive biography of his subject but rather has aimed to let the story of Jacob Fugger the Rich illustrate the early sixteenth century development of economic history in which he was a leader." Jacob Fugger's family was one of the foremost family in Augsburg when he was born in 1459. They got their start by importing raw cotton, by mule, from Mediterranean ports. They later moved into silk and herbs and, for a long while, controlled much of Europe's pepper market. Jacob Fugger diversified into copper mining in Hungary and transported the product to English Channel and North Sea ports in his own ships. A stroke of luck led to increased mining opportunities. Fugger lent money to the Holy Roman Emperor Maximilian I to help fund a war with France and Italy. Mining concessions were put up as collateral. The war dragged on, the Emperor defaulted, and Fugger found himself with a European monopoly on copper. Fugger used his extensive business network in service of the Pope. His branches all over Europe collected payments due the Vatican and issued letters of credit that were taken to Rome by papal agents. Fugger is credited with creating the first business newsletter. He collected news of evolving business climate as well as current events from his agents all across Europe and distributed them to all his branches. Fugger's endeavors wee not universally applauded. The sin of usury was still hotly debated, and Fugger committed it wholesale. He was sued over his monopoly on copper. He was involved in some messy bribes in bringing Charles V to the throne. And, his lucrative role as banker in the sale of indulgences, those chits that absolve the buyer of sin, raised the ire of Martin Luther himself. Luther referred to Fugger specifically in his Open Letter to the Christian Nobility of the German nation Concerning the Reform of the Christian Estate just before being excommunicated in 1521. Fugger went on, however, to fund Charles V's war on Protestanism and became even richer. Fugger built many churches and buildings in Augsburg. He was generous to the poor and designed the world's first housing project. These buildings and lovely gardens, called the Fuggerei, are still in use today. A New York Times reviewer said that Jacob Fugger the Rich, a book "concerned with the most famous, most capable, and most interesting of all [the members of the Fugger family] will be as interesting for the general reader as for the special student of business history." This observation is just as true today as in 1931, when first made. Jacob Streider was a professor of economic history at the University of Munich. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com by e-mail. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to the nation's bankruptcy courts. The list includes links to freely downloadable of these small-dollar petitions in Acrobat PDF documents. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2014. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***