/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140319.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, March 19, 2014, Vol. 18, No. 77 Headlines 1040 MANAGEMENT: Landlord Lacks Standing to Pursue Contempt Bid 2279-2283 THIRD: Final Decree Entered Closing Reorganization Case 261 EAST: Plan Substantially Consummated; Wants Ch. 11 Case Closed ACTIVECARE INC: Incurs $5.1 Million Net Loss in Dec. 31 Qtr. ADAYANA INC: Changes Corporate Name to "Persist Liquidating" ADAYANA INC: Has Until April 24 to Decide on Unexpired Leases ADAYANA INC: Contract Option Period Extended Until April 14 ADVANCED MICRO: Amends Tender Offer Statement ALLY FINANCIAL: Adopts Amended Certificate of Incorporation AMAZING GRACE HOTELS: Voluntary Chapter 11 Case Summary AMERICAN AIRLINES: No Jury Trial in "Fjord" Antitrust Suit ARCHDIOCESE OF MILWAUKEE: Wins Appeal on Sexual-Abuse Claims ARCHDIOCESE OF MILWAUKEE: Tests Constitution on Transfers ASSUREDPARTNERS CAPITAL: S&P Assigns 'B' CCR; Outlook Stable ATP OIL: Court Expands James Latimer's Role as CRO BAYOU CIRCLE TRUST: Involuntary Chapter 11 Case Summary BERNARD L. MADOFF: Supreme Court Opinion No Help for Trustee BIANCHI ORCHARDS: Converting to Liquidation BOART LONGYEAR: Downgraded to B3 on Low Metal Prices CALUMET PHOTOGRAPHIC: Files For Ch. 7, To Close All Stores CEETOP INC: Files Copy of Hangzhou Softview Financial Statements CHICAGO, IL: S&P Says City Not Poised to Go the Way of Detroit CHINA PRECISION: Incurs $12.9 Million Net Loss in Dec. 31 Qtr. CIRCLE STAR: Jeffrey Johnson Stake at 12.5% as of March 6 COMMACK HOSPITALITY: Files for Bankruptcy With Turnaround Plan COMMERCIAL TRAVELERS: A.M. Best Hikes Fin. Strength Rating to B+ COMMUNITYONE BANCORP: Releases Copy of Investor Presentation CRC HEALTH: Moody's Rates $540MM Secured First Lien Debt 'B1' CSMG TECHNOLOGIES: Voluntary Chapter 11 Case Summary CUBIC ENERGY: Postss $9.9 Million Net Income in Dec. 31 Qtr. CUMULUS MEDIA: Crestview Director Designee to Retire DETROIT, MI: Retirees Find Exit Plan Divisive DETROIT, MI: 1983 Claimants' Bid for Committee Appointment Denied DOTS LLC: Reaches Deal with Secured Lenders, Creditors' Panel EASTMAN KODAK: EPA Approves Cleanup Trust Fund ECOSPHERE TECHNOLOGIES: Halliburton's Claims Dismissal Bid Denied EDENOR SA: General Shareholders' Meeting Set on April 29 EMERITO ESTRADA: Court Dismisses Chapter 11 Bankruptcy Case ENDEAVOUR INTERNATIONAL: Incurs $28.1 Million Loss in Q4 ENERGY FUTURE: Said to Arrange Bankruptcy Loans ENGLOBAL CORP: Reports $2.9 Million 2013 Net Loss EXIDE TECHNOLOGIES: Inks Deal with Union in Vernon Facility FIAT CHRYSLER: CEO Sets Internal Deadline of Oct. 1 for NY Listing FIRST CASH: Moody's Assigns Ba3 CFR & Rates Unsecured Notes Ba3 FIRST NATIONAL COMMUNITY: Grants 24,400 Shares to Executives FISKER AUTOMOTIVE: Panel Spars with Hybrid Over Bid to Probe Liens GENERAL MOTORS: DOT Lacked Information on Ignition Switch Problem GEOMET INC: Sherwood Stake at 31.1% as of Feb. 13 GLW EQUIPMENT: Equipment Lenders Win Stay Relief to Foreclose GRAPHIC PACKAGING: S&P Revises Outlook to Pos. & Affirms 'BB+' CCR GREEN FIELD ENERGY: Can Use Shell's Cash Collateral Until April 26 GREEN FIELD ENERGY: Assessment Tech Okayed as Tax Consultants HOPE 7 MONROE: DC Circ. Won't Reopen Condo Developer's Appeal HOUSTON REGIONAL: Comcast Not Mulling Buyout HOVNANIAN ENTERPRISES: Incurs $24.5MM Net Loss in First Quarter HRK INDUSTRIES: Plan Filing Deadline Extended to April 10 HUNTINGTON INGALLS: Moody's Changes Ba2 CFR Outlook to Positive IBAHN CORP: Guest-tek Wins Court Approval to Buy Assets for $13MM IGATE CORP: Moody's Hikes CFR to 'Ba3' & Rates $325MM Note 'B1' IGATE CORP: S&P Raises CCR to 'BB-' on Refinancing; Outlook Stable IGLESIA PUERTA: Amends Schedules of Assets and Liabilities IGLESIA PUERTA: Files Amended List of Top Unsecured Creditors INOFIN INC: Holland & Knight Wants Jury Trial In Malpractice Case INDEPENDENCE TAX II: Incurs $131K Net Loss in Dec. 31 Qtr. INTERTAPE POLYMER: S&P Raises CCR to 'BB-'; Outlook Stable INTERSTATE BANKERS: A.M. Best Lowers Fin. Strength Rating to 'C-' INSTITUTO MEDICO: March 20 Hearing on US Trustee's Dismissal Bid KINDRED HEALTHCARE: Moody's Rates Proposed $1BB Term Loan 'B1' KNOWLEDGE UNIVERSE: Add-on Term Debt No Impact on Moody's B3 CFR KNOWLEDGE UNIVERSE: S&P Retains Prelim. 'B' Rating After Upsize LAFAYETTE YARD: NJ City Says Wong Fleming Isn't Owed Fees for Work LANCELOT INVESTMENT: High Court Won't Revive Winston Claims LEHMAN BROTHERS: LBI Trustee Seeks to Disallow Frankel Claim LEHMAN BROTHERS: LBI Trustee Seeks to Disallow Gales' Claim LEHMAN BROTHERS: Former Employees Defend Claims LEHMAN BROTHERS: LBI Trustee Wants to Disallow $117MM in Claims LEHMAN BROTHERS: E&Y to Face Fees Claim, Appeals Court Rules LIGHTSQUARED INC: Amends KEIP to Drop Regulatory Objective LILY GROUP: Sale of Coal Mine Is Formally Approved LIVE TISSUE CONNECT: Voluntary Chapter 11 Case Summary LONGVIEW POWER: Kenneth Gibbs, Judge Lyons to Co-Mediate Disputes MARTIN BELZ: Peabody Hotel's Pres. Sets Hearing for Plan Approval MCDERMOTT INTERNATIONAL: S&P Revises Outlook & Affirms 'BB' CCR MERCURY DELIVERY: Can't Be Named as Defendant in FLSA Suit MILLENNIUM BANK: First Virginia Bank Failure in Over Three Years MT. GOX: Recognition Hearing Set for April 1 NAVISTAR INTERNATIONAL: Reports $248 Million First Quarter Loss NEOMEDIA TECHNOLOGIES: Burrington Stake at 9.9% as of Feb. 7 NEW CENTURY TRS: Bankruptcy Doesn't Bar Assignment of Note NEW LIFE: To Grant Adequate Protection to Regions Bank NEW LIFE: Committee Wins Nod for Bradley Arant as Counsel NII HOLDINGS: KPMG Replaces PricewaterhouseCoopers as Accountants NNN 3500 MAPLE 26: Court Won't Upset Plan Status Quo NNN PARKWAY CORPORATE: Judge Smith Dismisses Chapter 11 Case NORMANDY SCHOOL DISTRICT: Bankruptcy Looms Absent State Bailout OCTAVIAR ADMINISTRATION: Liquidators Sue Fortress on 2008 Collapse OSX BRASIL: Batista's Shipbuilder Reaches Deal With Bondholders PATERSON PARKING: Moody's Cuts Bond Rating to Ba1; Outlook Stable PETERSON GROUP: Trustee Sues Houston Firm Over Asset Transfer PETERSON GROUP: Trustee Sues Houston Firm Over Asset Transfer PETRON ENERGY: Authorized Shares Increased to 15 Billion PRIME PROPERTIES: March 19 Hearing on FTBK Plan Outline PROVIDENT COMMUNITY: To Suspend Filing of Reports with SEC QUIZNOS: Senior Lenders to Give Up $444MM Debt for All of Equity QUIZNOS: Obtains Court Approval of DIP Financing RADIOSHACK CORP: To Offer Execs. $1.5MM in Retention Bonuses REBELANES INC: Case Summary & 20 Largest Unsecured Creditors REPUBLIC OF TEXAS: Ch. 11 Exit Strategy Includes CHILLO Sales REVSTONE INDUSTRIES: BFG and Committee Balk at PBGC Settlement SAGAMORE PARTNERS: Default Interest Not Owing Under Sec. 1123(d) SBARRO LLC: Joint Disclosures & Plan Hearing Set for April 25 SBARRO LLC: Has Interim Authority to Obtain $10MM in DIP Loans SBARRO LLC: Obtains Interim Approval of Stock Transfer Procedures SBARRO LLC: Can Employ Prime Clerk as Claims & Noticing Agent SBARRO LLC: Landlord Objects to Action on 574 Fifth Ave. Lease SCOTT BRASS: High Court Won't Hear $4.5M Sun Capital Debt Appeal SHIVSHANKAR PARTNERSHIP: Case Summary & 20 Top Unsec. Creditors SUNGARD AVAILABILITY: S&P Assigns 'B+' CCR; Outlook Stable SURGICAL SPECIALTIES: Moody's B3 CFR on Review for Downgrade TOWER CAR WASH: Case Summary & 8 Largest Unsecured Creditors TUSCANY INT'L: Has 3-Member Official Equity Committee TUSCANY INT'L: Landis Rath to Represent Equity Panel TUSCANY INT'L: Claims Bar Date Set for April 7 UNIVERSAL BIOENERGY: Incurs $160,000 Net Loss in Dec. 31 Qtr. UNS ENERGY: Staves Off Pair of Bankruptcy Hoaxes UPPER VALLEY: UST Seeks Conversion or Ch.11 Trustee Appointment USEC INC: Bankruptcy Shakes Up Creditor Line VALLEJO, CA: Council Voted to Close $5.2MM Budget Gap VELTI INC: Files Ch. 11 Liquidating Plan after Sale to Blackstone VHGI HOLDINGS: Hires Street Capital for Possible Acquisition WACO TOWN SQUARE: District Judge Reinstates NSJS Lawsuit WAFERGEN BIO-SYSTEMS: Incurs $17.7 Million Loss in 2013 WEST TEXAS GUAR: March 20 Hearing on Bankruptcy, Trustee Bid YELLOWSTONE MOUNTAIN: Suit v. Thornton Byron Goes to Trial * 2nd Circ.'s Strict Ch. 15 Rule Will Drive Cases to Delaware * Voiding Mortgage Under State Law Is No Stern Problem * Mortgage Servicer's Ties Raise Regulatory Concern * North Carolina Is a Case Study in Jobless-Benefits Cut * Senate Lawmakers Unveil Bill to Eliminate Fannie, Freddie * TARP Funds Demolish Homes in Detroit to Lift Prices * Thin Film Market Expected to Grow to $10.25 Bil. by 2018 * LegalZoom's Referral Suit Against Bankruptcy Firm Stands * McCathern Merges with Braden, Hinchcliffe & Hawley * Parker Ibrahim's John Falzone Named to 2014 N.J. Super Lawyers ********* 1040 MANAGEMENT: Landlord Lacks Standing to Pursue Contempt Bid --------------------------------------------------------------- The chapter 7 trustees of the bankruptcy estates of Avraham Sofer and his business, 1040 Management, LLC obtained a preliminary injunction restraining Sofer, his agents, and employees, for a period of 45 days from (i) entering onto the parking lot located at 980 East 13th Street, Brooklyn, New York operated by the Debtors on premises leased from Adar 980 Realty LLC, the landlord; (ii) communicating with any of the customers of the Parking Facility about collecting money or parking on the lot; and (iii) collecting any money due and owing to the Debtors on account of the prepetition or post-petition operation of the Parking Facility. The Injunction also directed the turnover of all money and proceeds derived from the operation of the Parking Facility to the Trustees. The Landlord filed a motion pursuant to 11 U.S.C. Sections 105 and 362(k)1 to hold Sofer in civil contempt for operating the Parking Facility in violation of the automatic stay and the Injunction, and sought the reimbursement of damages incurred as a result of Sofer's alleged violations, consisting solely of the attorney's fees and costs incurred by the Landlord in filing and prosecuting the Contempt Motion. Although there is no doubt that Sofer violated the Sec. 362(a)(3) and the Injunction, Bankruptcy Judge Carla E. Craig said the Contempt Motion must be denied because the Landlord lacks standing to prosecute these claims. The cases are RICHARD J. MCCORD, Esq., Chapter 7, Trustee for the Estate of Avraham Sofer, Plaintiff, v. AVRAHAM SOFER, and his agents, representatives, and those acting in concert with him, Defendants; LORI LAPIN JONES, as Chapter 7 Trustee of the Estate of 1040 Management LLC, Plaintiff, v. AVRAHAM SOFER, and his agents, representatives, and those acting in concert with him, Defendants, Adv. Pro. No. 13-1498-CEC., 13-1497-CEC (Bankr. E.D.N.Y.). A copy of the Court's March 13, 2014 Decision is available at http://is.gd/XmlRrdfrom Leagle.com. Attorneys for Adar 980 Realty LLC: Abraham Neuhaus, Esq. NEUHAUS & YACOOB LLC 1222 Avenue M, Suite 207 Brooklyn, NY 11230 E-mail: an@neuyac.com Attorney for the Debtors: Jon A. Lefkowitz, Esq. 1222 Avenue M Suite 204 Brooklyn, NY 11230 Attorneys for Richard J. McCord, chapter 7 trustee of the estate of Avraham Sofer: Richard J. McCord, Esq. CERTILMAN BALIN ADLER & HYMAN 90 Merrick Avenue East Meadow, NY 11554 E-mail: rmccord@certilmanbalin.com Attorneys for Lori Lapin Jones, Chapter 7 trustee of the estate of 1040 Management, LLC: Jordan Pilevsky, Esq. LAMONICA HERBST & MANISCALCO LLP 3305 Jerusalem Avenue, Suite 201 Wantagh, NY 11793 E-mail: jp@lhmlawfirm.com 1040 Management filed a voluntary chapter 7 bankruptcy petition (Bankr. E.D.N.Y. Case No. 13-45283) on Aug. 28, 2013, and Lori Lapin Jones was appointed as chapter 7 trustee of the bankruptcy estate of 1040 Management. The schedules listed priority debt of $1,500 for sales tax, and unsecured debt of $101,300. The Landlord is scheduled as the largest unsecured creditor, holding a debt of $55,000, and Agneta Sofer, Sofer's wife, is scheduled as holding a debt of $46,000 for monies loaned. On August 29, 2013, the Landlord filed an emergency motion for relief from the stay to permit it to continue an eviction action with respect to the Parking Facility, which was returnable Oct. 9, 2013. Sofer and 1040 Management are co-tenants on the lease of the Parking Facility. 1040 Management opposed the Landlord's Lift Stay Motion, but the Business Trustee did not. On Oct. 9, 2013, after applying the factors set forth in In re Sonnax Industries, 907 F.2d 1280 (2d Cir. 1990), the Court overruled 1040 Management's opposition, and issued an order granting the 1040 Lift Stay Motion. The next day, on Oct. 10, 2013, Sofer filed a voluntary chapter 7 bankruptcy petition (Bankr. E.D.N.Y. Case No. 13-46127), and Richard J. McCord was appointed as chapter 7 trustee of Sofer's bankruptcy estate. Sofer's schedules list secured debts of $8,390 relating to leased vehicles, and unsecured debt of $201,663, of which $150,000 is owed to the Landlord. That same day, the Landlord filed an emergency motion for relief from the stay to permit it to continue the eviction action with respect to the Parking Facility. The Sofer Lift Stay Motion was returnable Nov. 5, 2013, and on Nov. 8 the Court issued an order granting that motion to the extent it sought to prosecute the eviction action against Sofer, but stayed the enforcement of any judgment of possession or money judgment obtained in that action pending further Court order. 2279-2283 THIRD: Final Decree Entered Closing Reorganization Case ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York entered a final decree closing the Chapter 11 case of 2279-2283 Third Avenue Associates, LLC. In a Feb. 4, 2014 application, Jonathan S. Pasternak, Esq., at DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, on behalf of the Debtor, said the Debtor has substantially consummated its Chapter 11 Plan dated June 26, 2013. The Debtor also said that it will reserve sufficient funds to pay the office of the U.S. Trustee the appropriate amount of any quarterly fees. The Troubled Company Reporter on Jan. 24, 2014, reported the confirmation of the plan of reorganization proposed by the Debtor. The restructuring plan contemplates the transfer of the property commonly known as 2279-2283 Third Avenue, in New York, to LSV-JCR 124th LLC, the senior lender, in full satisfaction of its allowed secured claims in the estimated amount of $14.5 million. Under the plan, the senior lender will fund the distributions to creditors, including payment of all outstanding real estate taxes and related administrative charges claimed by the City of New York (approx. $250,000), the fees of Third Avenue's attorney (approx. $50,000) and an approximate 13.5% distribution to holders of allowed unsecured claims ($100,000). The senior lender will also waive its deficiency unsecured claim of approximately $500,000. Class 3 (senior lender claim) and Class 4 (general unsecured claims) are impaired and entitled to vote on the plan. Class 5 (equity interests) will receive no distributions and is therefore deemed to have rejected the plan. Classes 1 and 2 are unimpaired and conclusively deemed to have accepted the plan. The Internal Revenue of Service, which asserts an unsecured general claim of $4,680, dropped its objection to confirmation of the Plan. About 2279-2273 Third Avenue 2279-2283 Third Avenue Associates LLC and 2279-2283 Third Avenue Development LLC sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 12-13092 and 12-13093) on July 17, 2012. Jonathan S. Pasternak, Esq., at DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, in White Plains, N.Y., represents the Debtors as counsel. Third Avenue Associates owns two contiguous multi residential buildings located at 2279-2283 Third Avenue, in New York. Third Avenue Development is the sole member of Associates. The Property is Associate's primary asset, while Development's membership interests in Associates is its sole asset. Debtor 2279-2283 Third Avenue disclosed $14,839,697 in assets and $16,973,992 in liabilities as of the Chapter 11 filing. The managing member of each of the Debtors is Michael Waldman. He is also the managing member of 3210 Riverdale Associates LLC and the managing member of the sole member of 3210 Riverdale Development LLC, other Chapter 11 proceedings currently pending before the SDNY Court under Case Nos. 12-11286 and 12-11109. Third Avenue Associates obtained financing from commerce bank of $14 million and Development obtained mezzanine financing from HSBC Capital (USA) Inc. in the amount of $6 million. HSBC refused to grant additional $700,000 in financing requested by the Debtor to fund build-outs required by the Internal Revenue Service. The Commerce note -- which was assigned to TD Bank and then to LSV-JCR 124th LLC -- was secured by a mortgage on the Properties, and the HSBC obligation is secured by a mortgage on Associates' membership interest owned by Development. The HSBC note matured in 2011 and HSBC called the loan into default and commenced foreclosure action. The state court entered an order appointing Steven Weiss as receiver of rents. THSBC has assigned its mezzanine note to LCP-GC LLC. On July 3, 2012, the Debtors and their two secured lenders, LSV- JCR 124th LLC and LCP-GC LLC entered into a settlement that requires the Debtors to transfer ownership of the buildings to the secured lenders through a Chapter 11 plan. Judge James Peck oversees the Chapter 11 cases. No trustee, examiner or official committee has been appointed in the cases. 261 EAST: Plan Substantially Consummated; Wants Ch. 11 Case Closed ------------------------------------------------------------------ Jonathan S. Pasternak, Esq., at Delbello Donnellan Weingarten Wise & Wiederkehr, LLP, on behalf of 261 East 78 Realty Corporation, asks the U.S. Bankruptcy Court for the Southern District of New York to enter a final decree closing the Debtor's Chapter 11 case. Mr. Pasternak said the Debtor has substantially consummated its Second Amended Plan of Reorganization. On March 11, 2014, DDWWW as disbursing agent for the Debtor, pursuant to the Plan, made complete distribution to allowed holders of Administrative, Class 1, 2, 3 and 4 Claims in accordance with the terms of the Plan. All other aspects of the Plan have been complied with and satisfied. In addition, all quarterly fees have been substantially paid in full, and only those fees having accrued on account of disbursements made under the Plan. As reported in the Troubled Company Reporter, Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York on Jan. 29, 2014, issued an order confirming the Debtor's Second Amended Chapter 11 Plan of Reorganization after determining that the Plan complies with the confirmation requirements laid out in the Bankruptcy Code. The Debtor filed a voting report, which reflected that Class 2 (MB Secured Claim), Class 3 (Hermes Secured Claim) and Class 4 (General Unsecured Claims) have each voted to accept the Plan. Class 1 (Other Priority Claims) is unimpaired under the Plan, not entitled to vote and are deemed to accept the Plan. Class 5 (Equity Interests) will not receive any distribution under the Plan on account of Interests in the Debtor and is deemed to have rejected the Plan. The Plan confirmation is subject to the terms and conditions of the settlement agreement with Hermes Capital, LLC. Under the terms of the Hermes settlement agreement, (a) DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, is authorized and directed to pay to Hermes the sum of $200,000, and (b) Perkins Coie LLP is authorized and directed to pay to Hermes the sum of $1,125,000, which sums said firms are holding in escrow pursuant to the terms of the Plan and the Hermes Settlement Agreement. About 261 East 261 East 78 Realty Corp. owns real property located at 261 East 78th Street, in New York. The premises consist of seven commercial units, three of which are currently occupied. 261 East 78 Realty filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-15624) on Dec. 6, 2011. The case was assigned to Judge Robert E. Gerber. The Chapter 11 filing was precipitated by the commencement of foreclosure proceedings on the premises. The Debtor scheduled $20.2 million in assets and $18.8 million in liabilities. The petition was signed by Lee Moncho, president. Jonathan S. Pasternak, Esq., at DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, in White Plains, N.Y., represents the Debtor as counsel. Matthew W. Olsen, Esq., at Katten Muchin Rosenman LLP, in New York, N.Y., represents MB Financial Bank, N.A., as counsel. Pursuant to the Plan Term Sheet, the Plan will be funded by amounts made available by (i) the Plan Funder, of which $1,500,000 will be deposited in the Plan Fund Account and $10,700,000 will be distributed to MB Financial Bank, N.A., on account of its Allowed Class 2 Claim or (ii) the net proceeds of a Public Sale of the Debtor's Property conducted pursuant to the Plan, of which $11,000,000 will be distributed to MB on account of its Allowed Class 2 Claim and the balance will be used to make payments due under the Plan. No trustee, examiner or creditors committee has been heretofore appointed in this proceeding. ACTIVECARE INC: Incurs $5.1 Million Net Loss in Dec. 31 Qtr. ------------------------------------------------------------ ActiveCare, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to common stockholders of $5.13 million on $2.42 million of total revenues for the three months ended Dec. 31, 2013, as compared with a net loss attributable to common stockholders of $3.64 million on $2.37 million of total revenues for the three months ended Dec. 31, 2012. The Company's balance sheet at Dec. 31, 2013, showed $11.99 million in total assets, $8.23 million in total liabilities and $3.76 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/IN3qTY About ActiveCare South West Valley City, Utah-based ActiveCare, Inc., is organized into three business segments based primarily on the nature of the Company's products. The Stains and Reagents segment is engaged in the business of manufacturing and marketing medical diagnostic stains, solutions and related equipment to hospitals and medical testing labs. The CareServices segment is engaged in the business of developing, distributing and marketing mobile health monitoring and concierge services to distributors and customers. The Chronic Illness Monitoring segment is primarily engaged in the monitoring of diabetic patients on a real time basis. The Company's business plan is to develop and market products for monitoring the health of and providing assistance to mobile and homebound seniors and the chronically ill, including those who may require a personal assistant to check on them during the day to ensure their safety and well being. ActiveCare incurred a net loss attributable to common stockholders of $25.95 million the year ended Sept. 30, 2013, as compared with a net loss attributable to common stockholders of $12.42 million for the year ended Sept. 30, 2012. Tanner LLC, in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2013. The independent auditors noted that the Company has incurred recurring losses, has negative cash flows from operating activities, has negative working capital, and has negative total equity. These conditions, among others, raise substantial doubt about its ability to continue as a going concern. ADAYANA INC: Changes Corporate Name to "Persist Liquidating" ------------------------------------------------------------ The Hon. Robyn L. Moberly of the U.S. Bankruptcy Court for the Southern District of Indiana granted Adayana Inc.'s request to change its corporate name to Persist Liquidating Corporation, stating that the sale of substantially all of its assets including the right to use "Adayana Inc." to AVX Learning LLC has been consummated. About Adayana, Inc. Adayana, Inc., is a holding company, incorporated under the laws of the state of Minnesota. Its primary assets are its equity ownership interests in two separate operating companies, ABG, an Adayana Company, and Vertex Solutions, Inc., one of which is headquartered in Indianapolis, and the other in Virginia. Both operating companies are in the "human capital" business, providing an array of technology-based consulting and training services. Adayana valued the subsidiaries' stock at $8 million to $12 million as of March 31, 2013. It also owns personal property with book value of $949,280. Adayana, along with its two subsidiaries, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 13-10919) on Oct. 14, 2013. The Debtors are represented by Michael P. O'Neil, Esq., at Taft Stettinius & Hollister LLP, in Indianapolis, Indiana. The United States Trustee for Region 10 has been unable to appoint an official committee under 11 U.S.C. Sec. 1102 in the case. ADAYANA INC: Has Until April 24 to Decide on Unexpired Leases ------------------------------------------------------------- The Hon. Robyn L. Moberly of the U.S. Bankruptcy Court for the Southern District of Indiana extended the time of Adayana Inc. to assume or reject unexpired leases of non-residential real property from Feb. 11, 2014, to April 14, 2014. The Debtor told Judge Moberly that AVX, the purchaser of its assets, is still in talks with the landlord CP Pyramids Associates LP as to whether AVX will exit the premises or enter into a new lease with the landlord for the real property commonly known as sixth, seventh and eight floors of Pyramids Building No. 3 in Indianapolis, Indiana, or if AVX will take an assignment of the Debtor's lease with the landlord for the property. According to the Debtor, the extension of time will allow the parties' discussions to be completed. The Debtor said it has funding available to pay for any rent incurred under the lease during the extension so no harm will come to the estate. The Debtor assured the Court that the landlord will not be harmed by the extension of time as any additional rent incurred will be paid by the Debtor. About Adayana, Inc. Adayana, Inc., is a holding company, incorporated under the laws of the state of Minnesota. Its primary assets are its equity ownership interests in two separate operating companies, ABG, an Adayana Company, and Vertex Solutions, Inc., one of which is headquartered in Indianapolis, and the other in Virginia. Both operating companies are in the "human capital" business, providing an array of technology-based consulting and training services. Adayana valued the subsidiaries' stock at $8 million to $12 million as of March 31, 2013. It also owns personal property with book value of $949,280. Adayana, along with its two subsidiaries, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 13-10919) on Oct. 14, 2013. The Debtors are represented by Michael P. O'Neil, Esq., at Taft Stettinius & Hollister LLP, in Indianapolis, Indiana. The United States Trustee for Region 10 has been unable to appoint an official committee under 11 U.S.C. Sec. 1102 in the case. The Debtor obtained Court approval to change its name to Persist Liquidating Corporation after selling its assets to AVX Learning LLC. ADAYANA INC: Contract Option Period Extended Until April 14 ----------------------------------------------------------- The Hon. Robyn L. Moberly of the U.S. Bankruptcy Court for the Southern District of Indiana extended until April 14, 2014, Adayana Inc., nka Persist Liquidating Corporation's "Executory Contract Option Period" contained in an asset purchase agreement with AVX Learning LLC. In its motion, the Debtor requested that the Court extend the period in which AVX must identify which of the Debtor's contracts AVX wishes to assume pursuant to the parties' asset purchase agreement. As reported in the Troubled Company Reporter on Feb. 18, 2014, Michael P. O'Neil, Esq., at Taft Stettinius & Hollister LLP, counsel of the Debtor, said the Debtor consummated the sale of substantially all of its assets to AVX on Jan. 10, 2014. According to the Debtor, AVX and CP Pyramids Associates LP, the Debtor's landlord, are continuing to discuss either entering into a new lease for the non-residential real property commonly known as the sixth, seventh and eight floors of Pyramids Building No. 3 in Indianapolis, Indiana, or assuming the Debtor's lease for the property. About Adayana, Inc. Adayana, Inc., is a holding company, incorporated under the laws of the state of Minnesota. Its primary assets are its equity ownership interests in two separate operating companies, ABG, an Adayana Company, and Vertex Solutions, Inc., one of which is headquartered in Indianapolis, and the other in Virginia. Both operating companies are in the "human capital" business, providing an array of technology-based consulting and training services. Adayana valued the subsidiaries' stock at $8 million to $12 million as of March 31, 2013. It also owns personal property with book value of $949,280. Adayana, along with its two subsidiaries, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 13-10919) on Oct. 14, 2013. The Debtors are represented by Michael P. O'Neil, Esq., at Taft Stettinius & Hollister LLP, in Indianapolis, Indiana. The United States Trustee for Region 10 has been unable to appoint an official committee under 11 U.S.C. Sec. 1102 in the case. The Debtor obtained Court approval to change its name to Persist Liquidating Corporation after selling its assets to AVX Learning LLC. ADVANCED MICRO: Amends Tender Offer Statement --------------------------------------------- Advanced Micro Devices, Inc., amended its tender offer statement on Schedule TO originally filed with the U.S. Securities and Exchange Commission on Feb. 20, 2014, as amended by Amendment No. 1 to Schedule TO filed with the SEC on Feb. 26, 2014, by the Company in connection with its offer to purchase for cash up to $425,000,000 aggregate principal amount of the Company's outstanding 6.00 percent Convertible Senior Notes due 2015. "We are making the Offer in order to repurchase up to the Maximum Tender Amount of the outstanding Notes as part of an overall plan to extend the maturity of a portion of our outstanding debt by repurchasing the Notes in this Offer, as well as a portion of the 8.125% Senior Notes due 2017, or the 8.125% Notes, in a concurrent tender offer, in each case using net proceeds we received from the New Notes Offering," the Company said in the amendment. A copy of the Amended Schedule TO is available for free at: http://is.gd/904xO6 About Advanced Micro Devices Sunnyvale, California-based Advanced Micro Devices, Inc., is a global semiconductor company. The Company's products include x86 microprocessors and graphics. Advanced Micro incurred a net loss of $83 million on $5.29 billion of net revenue for the year ended Dec. 28, 2013, as compared with a net loss of $1.18 billion on $5.42 billion of net revenue for the year ended Dec. 29, 2012. The Company's balance sheet at Dec. 28, 2013, showed $4.33 billion in total assets, $3.79 billion in total liabilities and $544 million in total stockholders' equity. * * * In August 2013, Standard & Poor's Ratings Services revised its outlook on Advanced Micro to negative from stable. At the same time, S&P affirmed its 'B' corporate credit and senior unsecured debt ratings on AMD. As reported by the TCR on Feb. 4, 2014, Fitch Ratings has affirmed the 'CCC' long-term Issuer Default Rating (IDR) for Advanced Micro Devices Inc. The rating reflects Fitch's expectations for negative near-term free cash flow (FCF) and limited top-line visibility, despite solid product momentum heading into 2014. In the Feb. 4, 2013, edition of the TCR, Moody's Investors Service lowered Advanced Micro Devices' corporate family rating to B2 from B1. The downgrade of the corporate family rating to B2 reflects AMD's prospects for weaker operating performance and liquidity profile over the next year as the company commences on a multi- quarter strategic reorientation of its business in the face of a challenging macro environment and a weak PC market. ALLY FINANCIAL: Adopts Amended Certificate of Incorporation ----------------------------------------------------------- The board of directors of Ally Financial Inc. adopted an amended and restated certificate of incorporation and amended and restated bylaws on March 13, 2014. The Amended and Restated Charter and the Amended and Restated Bylaws are conditioned upon, and become effective on or after the pricing of an initial public offering by Ally of shares of its common stock, par value $0.01 per share. The Amended and Restated Charter and the Amended and Restated Bylaws would replace in their entirety the previous provisions contained in Ally's pre-IPO certificate of incorporation and bylaws if an IPO occurs. Prior to implementing the Amended and Restated Charter and the Amended and Restated Bylaws, Ally submitted proposals for those actions to certain holders of Ally's Common Stock for consent and approval. In addition, Ally submitted proposed 2014 compensation plans, a voting agreement between Ally and the United States Department of the Treasury and a stockholders agreement among Ally, Treasury and FIM Holdings LLC to those holders for consent and approval. Stockholder consents were provided on March 14, 2014, by stockholders holding a majority of Ally's outstanding shares of Common Stock. The 2014 compensation plans will become effective upon the pricing of an IPO. The voting agreement provides that, effective upon the consummation of an IPO and until the termination of the voting agreement, Treasury will vote its shares of Ally's Common Stock at any meeting with respect to each matter on which common stockholders are entitled to vote, other than certain designated matters, in the same proportion as all other shares of the Common Stock are voted with respect to each such matter. Designated matters are: (i) the election and removal of directors; (ii) the approval of any merger, consolidation, statutory share exchange or similar transaction that requires the approval of Ally's stockholders; (iii) the approval of a sale of all or substantially all of Ally's assets or property; (iv) the approval of Ally's dissolution' (v) the approval of any issuance of Ally's securities on which common stockholders are entitled to vote; (vi) the approval of any amendment to Ally's Amended and Restated Charter or Amended and Restated Bylaws on which common stockholders are entitled to vote; and (vii) the approval of any other matters reasonably incidental to clauses (i) through (vi) as determined by Treasury. The rights, restrictions, and obligations under the voting agreement will terminate when Treasury beneficially owns less than 2 percent of the shares of Ally's Common Stock then issued and outstanding. The stockholders agreement will become effective upon the consummation of an IPO. The stockholders agreement provides that so long as (a) Treasury holds at least 20 percent of the shares of Ally's outstanding Common Stock, Treasury will have the right to designate two nominees to Ally's Board and (b) Treasury holds at least 9.9 percent of the shares of Ally's outstanding Common Stock, Treasury will have the right to designate one nominee to Ally's Board; provided that for Ally's 2014 annual meeting, Treasury agrees to select its nominees from among its existing designees. A copy of the Form 8-K filing is available for free at: http://is.gd/tGsSv1 About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The Company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3 percent stake. Private equity firm Cerberus Capital Management LP keeps 14.9 percent, while General Motors Co. owns 6.7 percent. As of Dec. 31, 2013, the Company had $151.16 billion in total assets, $136.95 billion in total liabilities and $14.20 billion in total equity. * * * As reported by the TCR on Dec. 16, 2013, Standard & Poor's Ratings Services said it raised its issuer credit rating on Ally Financial Inc. to 'BB' from 'B+'. "The upgrade reflects the company's release from potential legal and financial liabilities stemming from its ownership of ResCap," said Standard & Poor's credit analyst Tom Connell. In the Dec. 17, 2013, edition of the TCR, Fitch Ratings upgraded Ally Financial's long-term Issuer Default Rating (IDR) and senior unsecured debt rating to 'BB' from 'BB-'. The upgrade of Ally's ratings follows the approval of Residential Capital LLC's (ResCap's) bankruptcy plan by the Bankruptcy Court releasing Ally from all ResCap related claims, which combined with the recent mortgage settlements with the FHFA and the FDIC, essentially removes any mortgage-related contingent liability to Ally. As reported by the TCR on Dec. 23, 2013, Moody's Investors Service upgraded the corporate family rating (CFR) of Ally Financial Inc. to Ba3 from B1. The upgrade of Ally's corporate family rating follows the U.S. Bankruptcy Court's approval of ResCap LLC's (unrated) Chapter 11 plan, which releases Ally from mortgage- related creditor claims originating from its ownership of ResCap. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11 Plan co-proposed by Residential Capital and the Official Committee of Unsecured Creditors. AMAZING GRACE HOTELS: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Amazing Grace Hotels, LLC 3100 Glendale Avenue, Room 101 Toledo, OH 43614 Case No.: 14-30821 Chapter 11 Petition Date: March 17, 2014 Court: United States Bankruptcy Court Northern District of Ohio (Toledo) Judge: Hon. Mary Ann Whipple Debtor's Counsel: Robert N Bassel, Esq. ROBERT BASSEL, ATTORNEY P.O. Box T Clinton, MI 49236 Tel: (248) 677-1234 Fax: (248) 928-0656 Email: bbassel@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Grace Chojnowski-Kellogg, principal. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. AMERICAN AIRLINES: No Jury Trial in "Fjord" Antitrust Suit ---------------------------------------------------------- Bankruptcy Judge Sean H. Lane granted, in part, and denied, in part, the plaintiffs' motion to amend the complaint in the civil antitrust action, CAROLYN FJORD, et al., Plaintiffs, v. AMR CORPORATION, AMERICAN AIRLINES, US AIRWAYS GROUP INC. and US AIRWAYS, INC., Defendants, OFFICIAL COMMITTEE OF UNSECURED CREDITORS, As Intervenor, Adv. Proc. No. 13-01392 (SHL)(Bankr. S.D.N.Y.). The lawsuit challenges the merger between American Airlines and US Airways. The Plaintiffs proposes a number of changes. First, the Plaintiffs seek to add factual allegations, some that relate to events before consummation of the merger in December 2013 while others involve subsequent events. Second, the Motion addresses the Plaintiffs' proposed relief by seeking to: a) add a new claim for treble money damages under Section 4 of the Clayton Antitrust Act (15 U.S.C. Sec. 15(a)); b) add a request for a preliminary injunction requiring the defendants to hold their assets separate during the pendency of the case; and c) modify the language regarding the divestiture and associated declaratory relief sought under Section 16 of the Clayton Act (15 U.S.C. Sec. 26). The Plaintiffs also seek to add a demand for a jury trial. AMR and US Airways, and the Official Committee of Unsecured Creditors as intervenors, jointly oppose the Motion. While Defendants do not object to the proposed changes regarding new factual allegations and divestiture, they strenuously object to the remaining relief. The Defendants protest that the Plaintiffs have already waived their right to a jury trial, have failed to state a claim for damages, and are not entitled to the requested "hold separate" injunction. In a March 14, 2014 Memorandum of Decision, available at http://is.gd/sADglvfrom Leagle.com, Judge Lane held that the Court permits the uncontested amendments that assert new factual allegations and revise the proposed divestiture relief. But the Court denies the rest of the Motion. While the Court concludes that Plaintiffs have not waived their right to demand a jury, the proposed amended complaint fails to assert a sufficient basis for treble damages suffered by these individual plaintiffs. As the Plaintiffs' jury demand rests upon their proposed new treble damages claim, the request to add a jury demand must be denied as well. Finally, the Court considers the request for a "hold separate" injunction to have been withdrawn based on the statements of Plaintiffs' counsel at the hearing. Counsel for Defendants US Airways/ American Airlines Group: LATHAM & WATKINS LLP 505 Montgomery Street, Suite 2000 San Francisco, CA 94111-6538 Daniel M. Wall, Esq. Alfred C. Pfeiffer, Jr., Esq. Sadik Huseny, Esq. Counsel for Defendants and Reorganized Debtors AMR Corporation and American Airlines: WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 Stephen Karotkin, Esq. Alfredo R. Perez, Esq. Stephen A. Youngman, Esq. Richard Mullen, Esq. Counsel for Intervenor the Official Committee of Unsecured Creditors: SKADDEN, ARPS, SLATE, MEAGHER, & FLOM LLP Four Times Square New York, NY 10036 Jay M. Goffman, Esq. James A. Keyte, Esq. Kenneth B. Schwartz, Esq. - and - 155 North Wacker Drive Chicago, IL 60606 Albert L. Hogan III, Esq. John K. Lyons, Esq. Counsel for Clayton Plaintiffs: ALIOTO LAW FIRM One Sansome Street, 35th Floor San Francisco, CA 94104 Joseph M. Alioto, Esq. - and - MESSINA LAW FIRM, P.C. 961 Holmdel Road Holmdel, NJ 07733 Gil D. Messina, Esq. About American Airlines AMR Corp. and its subsidiaries including American Airlines filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost- cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. It was the third largest airline in the United States at the time of the bankruptcy filing. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Lawyers at Skadden, Arps, Slate, Meagher & Flom LLP, including John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. In November 2013, AMR and the U.S. Justice Department a settlement of the anti-trust suit. The settlements require the airlines to shed 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. AMR stepped out of Chapter 11 protection after its $17 billion merger with US Airways was formally completed on Dec. 9, 2013. ARCHDIOCESE OF MILWAUKEE: Wins Appeal on Sexual-Abuse Claims ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that using the the Archdiocese of Milwaukee as a backdrop, the U.S. Court of Appeals in Chicago wrote an opinion that reads like a treatise on when a settlement can be revoked years later on the grounds of fraudulent inducement. According to the report, although the opinion on Feb. 25 by U.S. Circuit Judge Diane Sykes will aid the archdiocese in reducing sexual-abuse claims and fashioning a plan to exit Chapter 11, the ruling may be less important than two upcoming decisions from the Seventh Circuit appeals court in Chicago. The case decided by the appeals court involved a claimant who settled his abuse claim in early 2007 for $100,000, the report said. The same claimant filed a claim in the bankruptcy, saying his 2007 settlement should be rescinded because it was procured by fraudulent inducement. He said the church's negotiator didn't answer truthfully when asked if there were other allegations of abuse against the same priest. The bankruptcy judge dismissed the claim without holding a trial and was upheld on a first appeal in federal district court, the report related. Judge Sykes reached the same result, although on different grounds as she said the pivotal question was whether the alleged misrepresentation was "objectively material." Although the Wisconsin Supreme Court hasn't written its own opinion on when a misrepresentation induces a settlement, she said the state's highest court has always followed the Restatement of Contracts, the leading treatise on contract law. The report said there is another and potentially more important case already pending in the Chicago appeals court involving a decision by the bankruptcy court saying that Wisconsin law precludes introducing evidence about occurrences in mediation. Should the church win that appeal as well, claimants who already settled will have even more difficulty in showing new and valid claims in bankruptcy, Mr. Rochelle noted. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. ARCHDIOCESE OF MILWAUKEE: Tests Constitution on Transfers --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Archdiocese of Milwaukee is testing whether a church can enjoy federal bankruptcy protection while at the same time invoking constitutional exemption from claims that it shielded assets from victims of clergy sex abuse through fraudulent transfers. The report recalled that U.S. District Judge Rudolph T. Randa in July said that a $55 million cemetery trust is exempted from creditors' claims by the federal Religious Freedom Restoration Act of 1993, or RFRA. The official creditors' committee had contended in a lawsuit that the money was taken from archdiocese property and put into the trust in the face of impending sexual-abuse claims. The $55 million would be the single-largest asset available for abuse victims. The committee appealed Judge Randa's decision to the federal circuit court in Chicago, saying Randa Judge should have transferred the case to another district judge because his parents, two sisters and several other relatives are buried in Milwaukee Catholic cemeteries. The church said RFRA bars the suit because it precludes any "substantial burden" on the exercise of religion by government. The archdiocese pointed to statutory language defining government as anyone "acting under color of law," which it said includes an official creditors' committee created under bankruptcy law and exercising fiduciary powers prescribed by statute, the report related. On the First Amendment issue, the church said the Bankruptcy Code must be subjected to "strict scrutiny" because it isn't "facially neutral and generally applicable," the report further related. The archdiocese identified provisions in bankruptcy law that are specifically applicable only to religious organizations. The appeal is Official Committee of Unsecured Creditors v. Listecki, 13-02881, U.S. Court of Appeals for the Seventh Circuit (Chicago). The lawsuit is Listecki v. Official Committee of Unsecured Creditors (In re Archdiocese of Milwaukee), 11-02459, U.S. Bankruptcy Court, Eastern District of Wisconsin (Milwaukee). About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. ASSUREDPARTNERS CAPITAL: S&P Assigns 'B' CCR; Outlook Stable ------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned Florida- based insurance services broker AssuredPartners Capital Inc. (Assured) its 'B' long-term corporate credit rating. The outlook is stable. At the same time, S&P assigned Assured's proposed $520 million first-lien credit facilities, which consist of a $420 million term loan due 2021 and $100 million revolver (undrawn at closing) due 2019, its debt rating of 'B' and recovery rating of '3'. S&P also assigned the proposed $135 million second-lien term loan due 2022 its debt rating of 'CCC+' and recovery rating of '6'. Assured intends to use the proceeds from the transaction to repay existing debt and related transaction fees, and to increase balance-sheet cash to finance future acquisitions. "The 'B' counterparty credit rating on Assured reflects its fair business risk profile (BRP) and very aggressive financial risk profile (FRP), as defined by our corporate criteria," said Standard & Poor's credit analyst Ying Chan. Assured is a U.S. regional insurance brokerage firm providing property casualty (p/c) and employee benefits products and services to middle-market businesses mainly across the U.S., with business concentrations in the Midwest, Northeast, and Florida. The company was established in 2011 by Chicago, IL-based private equity sponsors GTCR, and former industry executives, including the CEO and COO who held executive positions at insurance brokerage firm Brown & Brown. Since its inception, the company has grown by acquiring large operating platforms as well as smaller, bolt-on acquisitions. Assured is the 14th-largest broker in the U.S. based on 2012 revenues (Source: Business Insurance). The stable outlook reflects S&P's expectations that Assured's credit metrics will improve modestly mainly from earnings growth, leading to modest deleveraging during the next 12 months as reflected in a pro-forma debt-to-EBITDA leverage ratio near 6.5x by year-end 2014. S&P also expects slightly improved pricing to drive mid-single-digit organic growth and for acquisitions to add about $110 million-$120 million of pro forma annualized revenues in 2014. Margins should remain healthy in the 25%-28% range, benefiting marginally from improved operating efficiency. S&P could lower the ratings during the next 12 months if leverage deteriorates due to a more aggressive financial policy relative to its expectations with respect to debt-funded acquisitions, or if the company experiences a decline in earnings that will lead to higher leverage ratio. This would occur if leverage increases to more than 7.0x on a sustained basis. Although less likely in the next 12 months, S&P could raise the ratings on Assured if the company is able to reduce leverage to 5.0x or less on an ongoing basis. This could occur through a combination of earnings growth and debt pay-down beyond mandatory scheduled amortization. ATP OIL: Court Expands James Latimer's Role as CRO -------------------------------------------------- The Hon. Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas has expanded the role of James Latimer as chief restructuring officer of ATP Oil & Gas Corporation. Judge Isgur allowed Mr. Latimer to: i) propose a plan and supervise the drafting of a disclosure statement on behalf of the debtor-in-possession; and ii) direct counsel to file a motion to convert the case to one under Chapter 7 of the Bankruptcy Code. Judge Isgur has said he will convert the Chapter 11 case of ATP Oil to a case under Chapter 7 at a hearing to be conducted on March 27, 2014, at 1:30 p.m., unless parties-in-interest can show cause why conversion is not appropriate. Judge Isgur said the case has been on file for a sufficient time to allow the formulation of a plan of reorganization. According to the Troubled Company Reporter, the Debtor sought and obtained approval from the U.S. Bankruptcy Court to employ Blackhill Partners, LLC, and designate James R. Latimer, III as CRO to the Debtor. The firm's compensation package consists of: a. Fee Retainer: $75,000 b. Expense Retainer: $25,000 c. Professional Fees: no more than $125,000 will be paid in a given month; any fees incurred in excess of the Fee Cap will be paid in a subsequent month where the Fee Cap has not been met: i. Latimer's Rate: $550 per hour ii. Blackhill's managing directors and executive advisory team members: $400 to $475 per hour iii. Blackhill's vice presidents and senior staff members: $250 to $400 per hour d. Success Fee: $250,000 in the event that a Plan is confirmed and effective. All compensation for services rendered and reimbursement for expenses incurred during the Chapter 11 case will be paid after further application to and order of the Court. About ATP Oil Houston, Texas-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A seven-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. BAYOU CIRCLE TRUST: Involuntary Chapter 11 Case Summary ------------------------------------------------------- Alleged Debtor: The Bayou Circle Trust Dated October 6, 2011 PO Box 4037 Enterprise, FL 32725 Case Number: 14-02971 Involuntary Chapter 11 Petition Date: March 17, 2014 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Judge: Hon. Karen S. Jennemann Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Sam Zalloum $70,000 217 River Village Drive Debary, FL 32713 BERNARD L. MADOFF: Supreme Court Opinion No Help for Trustee ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports THE Bernard Madoff trustee, who will try to reinstate hundreds of lawsuits through an appeal to be argued March 5 in Manhattan, had his chances of success dealt a blow when the U.S. Supreme Court decided a case involving R. Allen Stanford's Ponzi scheme. According to the report, Madoff trustee Irving Picard is appealing a federal district court decision barring him from suing to recover transfers made more than two years before bankruptcy. Were Picard to succeed on appeal, he might eventually be able to pay defrauded customers in full. Customers' recoveries currently are in the 56 percent range. In the Supreme Court decision, called Chadbourne & Parke LLP v. Troice, the Supreme Court ruled in favor of defrauded customers, allowing them to sue firms and individuals who helped sell Stanford's fraudulent securities, the report said. At first blush, Troice seems to help the Madoff trustee because the high court allowed defrauded investors to sue. Looking at the Troice opinion in detail, though, it's at best unhelpful for Picard and customers who are suing third parties to recover their losses, Mr. Rochelle said. Mr. Rochelle pointed out that the issue in the Madoff case is the so-called safe harbor in Section 546 of the Bankruptcy Code, which bars some types of suits when they involve transactions in securities. Picard contends the safe harbor doesn't apply because Madoff never bought a single security with customers' money. Mr. Rochelle said Troice didn't deal with the safe harbor. Instead, it turned on the 1998 Securities Litigation Uniform Standards Act, or SLUSA. That statute bars class suits under state law based on a misrepresentation "made in connection with a prior sale of a covered security." A "covered security" is defined as a security traded on a national exchange. The Supreme Court decision is Chadbourne & Parke LLP v. Troice, 12-00079, U.S. Supreme Court (Washington). Picard's appeal is Picard v. Ida Fishman Revocable Trust (In re Bernard L. Madoff Investment Securities LLC), 12-02557, U.S. Court of Appeals for the Second Circuit (Manhattan). The Madoff appeal up for rehearing in the circuit court is Trezziova v. Kohn (In re Herald, Primeo, and Thema), 12-00156, U.S. Court of Appeals for the Second Circuit. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. The most recent distribution was in March 2013. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Picard is holding almost $4.4 billion he can't distribute on account of outstanding appeals and disputes. The largest holdback, almost $2.8 billion, results from disputed claims. BIANCHI ORCHARDS: Converting to Liquidation ------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Bianchi Orchard Systems Inc., the producer of harvesting equipment that filed a Chapter 11 reorganization petition on Jan. 29, submitted papers voluntarily converting the reorganization to liquidation in Chapter 7 where a trustee will be appointed to sell the assets. The case is In re Bianchi Orchard Systems Inc., 14-20795, U.S. Bankruptcy Court, Eastern District California (Sacramento). The case was assigned to Judge Christopher M. Klein. The petition listed assets of $6.1 million and liabilities totaling $6.5 million, including $2.67 million of secured debt. The Debtor's counsel is Walter R. Dahl, Esq., at DAHL LAW, ATTORNEYS AT LAW, in Sacramento, California. The petition was signed by Mahmood Dean, president. BOART LONGYEAR: Downgraded to B3 on Low Metal Prices ---------------------------------------------------- Boart Longyear Ltd., a provider of contract drilling services for the mining industry, was downgraded for the third time inside eight months by Moody's Investors Service when the corporate rating slipped another peg on Feb. 26 to B3, Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports. The new Moody's rating is one step below the downgrade issued in September by Standard & Poor's, Bloomberg said. The downgrades were caused by lower metal prices resulting in less drilling by mining companies. Rig utilization slipped to a new low of 30 percent in the last quarter of 2013, the Bloomberg report said, citing Moody's. CALUMET PHOTOGRAPHIC: Files For Ch. 7, To Close All Stores ---------------------------------------------------------- Jacqueline Palank, writing for The Wall Street Journal, reported that a longstanding photography retail chain with roots in Chicago filed for Chapter 7 bankruptcy with plans to close all of its U.S. stores. According to the report, Calumet Photographic Inc., which the Chicago Tribune said opened in 1939, announced its bankruptcy liquidation on Facebook ?with a heavy heart.? While the chain plans to close its 14 U.S. locations, it said it would keep its European stores open. The Journal noted that Calumet isn?t the first photography chain to turn to bankruptcy as consumers increasingly rely upon digital and mobile cameras. Major chain Ritz Camera & Image LLC sought Chapter 11 protection in 2009, where members of the founding family purchased the chain and vowed to revive it. But in 2012, the company was back in bankruptcy and forced to liquidate after failing to find a buyer to continue operating its stores. About Calumet Photographic Chicago, Illinois-based Calumet Photographic, Inc., filed a petition under Chapter 7 of the Bankruptcy Code on March 12, 2014, listing assets of $50 million to $100 million and debts of $10 million to $50 million. The Debtor is represented by Mark A. Berkoff, Esq., at Neal, Gerber & Eisenberg LLP, in Chicago, Illinois. Silverman Consulting serves as financial advisor. CEETOP INC: Files Copy of Hangzhou Softview Financial Statements ---------------------------------------------------------------- Ceetop, Inc., filed with the U.S. Securities and Exchange Commission a copy of the financial statements of Hangzhou Softview. Hangzhou Softview incurred a net loss of $17,203 on $28,202 of sales for the year ended Dec. 31, 2012, as compared with a net loss of $46,548 on $32,203 of sales for the year ended Dec. 31, 2011. As of Dec. 31, 2012, Hangzhou Softview had $184,767 in total assets, $134,312 in total liabilities and $50,455 in total stockholders' equity. Guizhou Ceetop Network and Technology Co. Ltd., the subsidiary of China Ceetop.com, Inc., (now known as Ceetop Inc.) on Sept. 18, 2013, entered into a Capital Investment and Share Expansion Agreement with Hangzhou Ruanjing Information Technology Co., Ltd. (also known as Hangzhou Softview Information Technology Company Limited). Pursuant to the Agreement, in exchange for 8,500,000 yuan, Guizhou acquired 42.5 percent of the equity in Hangzhou. A copy of the Report is available for free at: http://is.gd/qqx7wm About Ceetop Inc. Oregon-based Ceetop Inc., formerly known as China Ceetop.com, Inc., owned and operated the online retail platform before 2013. Due to excessive competition in online retail, the Company has transformed itself into an integrated supply chain services provider, and focuses on B to B supply chain management and related value-added services among enterprises. China Ceetop's balance sheet at June 30, 2013, showed $3.5 million in total assets, $4.0 million in total liabilities, and a stockholders' deficit of $463,482. Going Concern Uncertainty "For the year ended Dec. 31, 2012, our independent auditors, in their report on the financial statements, have indicated that the Company has experienced recurring losses from operations and may not have enough cash and working capital to fund its operations beyond the very near term, which raises substantial doubt about our ability to continue as a going concern. Management has made a similar note in the financial statements. As indicated herein, we must raise capital for the implementation of our business plan, and we will need additional capital for continuing our operations. We do not have sufficient revenues to pay our expenses of operations. Unless the Company is able to raise working capital, it is likely that the Company either will have to cease operations or substantially change its methods of operations or change its business plan," the Company said in its quarterly report for the period ended June 30, 2013. CHICAGO, IL: S&P Says City Not Poised to Go the Way of Detroit -------------------------------------------------------------- Karen Pierog, writing for Reuters, reported that Standard & Poor's Ratings Services posed the question that has been lingering in the minds of many in Chicago: Will significant budget pressures put the city on the same path that led Detroit into bankruptcy? The answer, contained in a report by the credit rating agency, is no. "We believe that Chicago's growing economy and taxing flexibility provide it with the resources to avoid a fate similar to Detroit's should it capitalize on this flexibility and remain on course," the report concluded, Reuters cited. S&P gave Detroit its lowest credit rating of D after the city defaulted on its general obligation bonds in October, the report recalled. Chicago's bond rating remains solidly investment grade at A-plus, albeit with a negative outlook. Chicago also has strong and stable management, while Detroit, which is currently being run by a state-appointed emergency manager, has suffered from "very weak" management over the years, according to the report, the report related. Illinois' largest city, in contrast to Michigan's, has a strong economic profile. CHINA PRECISION: Incurs $12.9 Million Net Loss in Dec. 31 Qtr. -------------------------------------------------------------- China Precision Steel, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $12.95 million on $11.86 million of sales revenues for the three months ended Dec. 31, 2013, as compared with a net loss of $10.88 million on $8.16 million of sales revenues for the same period last year. For the six months ended Dec. 31, 2013, the Company reported a net loss of $22.53 million on $23.63 million of sales revenues as compared with a net loss of $15.10 million on $14.12 million of sales revenues for the same period in 2012. The Company's balance sheet at Dec. 31, 2013, showed $111.63 million in total assets, $80.79 million in total liabilities, all current, and $30.84 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/fS3pG5 About China Precision China Precision Steel Inc. is a niche precision steel processing company principally engaged in the production and sale of high precision cold-rolled steel products and provides value added services such as heat treatment and cutting medium and high carbon hot-rolled steel strips. China Precision Steel's high precision, ultra-thin, high strength (7.5 mm to 0.05 mm) cold- rolled steel products are mainly used in the production of automotive components, food packaging materials, saw blades and textile needles. The Company primarily sells to manufacturers in the People's Republic of China as well as overseas markets such as Nigeria, Thailand, Indonesia and the Philippines. China Precision Steel was incorporated in 2002 and is headquartered in Sheung Wan, Hong Kong. China Precision reported a net loss of $68.93 million on $36.52 million of sales revenues for the year ended June 30, 2013, as compared with a net loss of $16.94 million on $142.97 million of sales revenues during the prior fiscal year. Moore Stephens, Certified Public Accountants, in Hong Kong, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company has suffered a very significant loss in the year ended June 30, 2013, and defaulted on interest and principal repayments of bank borrowings that raise substantial doubt about its ability to continue as a going concern. CIRCLE STAR: Jeffrey Johnson Stake at 12.5% as of March 6 --------------------------------------------------------- In a Schedule 13D filed with the U.S. Securities and Exchange Commission, Jeffrey Johnson disclosed that as of March 6, 2014, he beneficially owned 8,795,144 shares of common stock of Circle Star Energy Corp. representing 12.5 percent of the shares outstanding. A copy of the regulatory filing is available for free at: http://is.gd/tZIdtE 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 Jan. 31, 2014, showed $3.83 million in total assets, $4.35 million in total liabilities and a $519,544 total stockholders' deficit. "Given that we have not achieved income from operations to date, and have maturing debt obligations 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 for the period ended Jan. 31, 2014. COMMACK HOSPITALITY: Files for Bankruptcy With Turnaround Plan -------------------------------------------------------------- Michael Bathon, substituting for Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that Commack Hospitality LLC, which owns a Wingate hotel in Brentwood, New York, sought bankruptcy protection from creditors with a proposed restructuring plan to repay its secured lender over five years. The company said it was forced to seek bankruptcy protection after its former lender, General Electric Capital Commercial of Utah LLC, moved to foreclose when Commack entered into an agreement with the Long Island Women?s Empowerment Network to provide temporary shelter for homeless families, the report said, citing court filings. Commack?s five-year agreement with LIWEN provided it with about $160,000 in monthly cash flow, double the monthly debt service on the GECC loan, the report related, further citing court papers. GECC was denied a temporary restraining order seeking to bar the deal with LIWEN by the New York State Supreme Court and has since sold its debt to Stabilis Master Fund III LLC. Stabilis, which paid an undisclosed amount that was probably less than the $10.3 million outstanding on the loan, continued the foreclosure action and obtained the appointment of a ?rent receiver? that?s holding about $728,000 in lease payments from the LIWEN deal, the report further related. Under the reorganization proposal, Commack would pay Stabilis over five years with 4.5 percent interest from the proceeds of the lease payments from LIWEN, the report added. General unsecured creditors would recover about 50 percent on their debt. COMMERCIAL TRAVELERS: A.M. Best Hikes Fin. Strength Rating to B+ ---------------------------------------------------------------- A.M. Best Co. has upgraded the financial strength rating to B+ (Good) from B (Fair) and issuer credit rating to "bbb-" from "bb+" of Commercial Travelers Mutual Insurance Company (Commercial Travelers)(Utica, NY). Both ratings have been removed from under review with developing implications and assigned a positive outlook. The rating upgrades reflect Commercial Travelers' improved operating results and financial position as of year-end 2013. Much of this improvement is attributable to the support Commercial Travelers has received since it entered into an affiliation with National Guardian Life Insurance Company (National Guardian) (Madison, WI). The positive outlook anticipates the demutualization of Commercial Travelers and acquisition by National Guardian. This process is currently being pursued by National Guardian with the New York Department of Financial Services. National Guardian has demonstrated support for Commercial Travelers through the purchase of a $5 million surplus note issued by the company in order to bolster Commercial Travelers' risk- adjusted capital position. National Guardian also has entered into a coinsurance agreement for 50% of Commercial Travelers' student medical and accident business. In the fall of 2013, a large portion of Commercial Travelers' student plan renewals outside New York were written on National Guardian paper, mitigating the impact of new business strain. Moreover, cost- sharing and shared services agreements have been implemented to allow Commercial Travelers to operate more efficiently. When the acquisition of Commercial Travelers by National Guardian is completed, A.M. Best anticipates that additional financial and operational support will be available to support new business initiatives. Negative rating actions could occur if the demutualization and acquisition of Commercial Travelers by National Guardian is not completed. COMMUNITYONE BANCORP: Releases Copy of Investor Presentation ------------------------------------------------------------ Brian E. Simpson, chief executive officer and David L. Nielsen, chief financial officer of CommunityOne Bancorp are scheduled to provide certain investor presentations beginning on March 5, 2014. A copy of the slide presentation prepared for use by the Company for these presentations is available for free at: http://is.gd/T69sFT About CommunityOne CommunityOne Bancorp (formerly FNB United) is the North Carolina- based bank holding company for CommunityOne Bank, N.A. (community1.com), which offers a full range of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth and online banking services through 55 branches in 44 communities throughout the central, southern and western regions of the state. FNB United incurred a net loss of $40 million in 2012, a net loss of $137.31 in 2011, and a net loss of $131.82 million in 2010. The Company's balance sheet at Sept. 30, 2013, showed $2.03 billion in total assets, $1.95 billion in total liabilities and $80.80 million in total shareholders' equity. CRC HEALTH: Moody's Rates $540MM Secured First Lien Debt 'B1' ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to CRC Health Corporation's proposed senior secured first lien credit facilities, including a $65 million senior secured revolving credit facility and $475 million first lien term loan. Moody's also assigned a Caa1 rating to the company's proposed $300 million senior secured second lien term loan. At the same time, Moody's affirmed CRC's B3 Corporate Family Rating, and B3-PD Probability of Default Rating. The Speculative Grade Liquidity Rating was upgraded to SGL-2 from SGL-3. The rating outlook is stable. The proceeds from the proposed credit facilities will be used to repay all outstanding debt at CRC Health Corporation, retire a portion of the HoldCo PIK loan (not rated by Moody's) at CRC Health Group, the parent holding company, and pay transaction fees and expenses. Upon close of the transaction Moody's withdraw the ratings on the existing revolver, term loan, and senior subordinated notes. Following is a summary of Moody's rating actions: CRC Health Corporation: Rating assigned: $65 million senior secured revolving credit facility at B1 (LGD 2, 25%) $475 million senior secured first lien term loan at B1 (LGD 2, 25%) $300 million senior secured second lien term loan at Caa1 (LGD 5, 75%) Ratings affirmed: B3 Corporate Family Rating B3-PD Probability of Default Rating Ratings upgraded: Speculative Grade Liquidity Rating, to SGL-2 from SGL-3 Moody's will withdraw the following ratings upon close: B1 (LGD 2, 26%) senior secured revolving facility expiring 2015 B1 (LGD 2, 26%) senior secured term loans due 2015 Caa1 (LGD 5, 74%) senior subordinated notes due 2016 The ratings are subject to review of final documentation. Ratings Rationale CRC's B3 Corporate Family Rating reflects Moody's expectation that the company will continue to operate with very high financial leverage and modest interest coverage. The ratings also reflect the company's significant portion of revenue derived from private payors. In addition, the ratings reflect Moody's expectation that liquidity will remain good and further debt repayment will remain limited over the next 12 to 18 months. Moody's acknowledges the progress the company has made in reducing costs through its restructuring efforts. However, the company experienced a setback with the closing of its New Life Lodge facility that impacted CRC's revenue base and has delayed anticipated improvements in the company's credit profile. The rating benefits from the company's leading scale and strong market position within a highly fragmented industry. The upgrade of the Speculative Grade Liquidity Rating reflects Moody's expectation that the company will maintain a good liquidity profile following the refinancing transaction, including increased availability under the company's revolving credit facility and improved financial covenant profile. The stable outlook reflects Moody's expectation that the company will benefit over the near term from the reduction of its cost base while continuing to generate positive free cash flow. While Moody's expects debt reduction to remain limited over the next 12 to 18 months, the stable outlook incorporates Moody's expectation that CRC's organic growth will be partially driven by continued growth in patient volumes in addiction and recovery services. The ratings could be downgraded if the company experiences operational pressures resulting in declines in revenue and EBITDA, or if operating margins deteriorate. Moody's could also downgrade the rating if free cash flow turns negative on a sustained basis resulting in deterioration of the company's liquidity profile. In addition, the ratings could be lowered if the company engages in material debt-financed acquisitions or faces an adverse outcome related to legal or regulatory proceedings requiring a cash settlement. While an upgrade is unlikely in the near-term, Moody's would consider upgrading the ratings if the company generates positive growth in revenue and EBITDA such that adjusted debt to EBITDA is sustained below 6.0 times, and if positive free cash flow appears sustainable. The principal methodology used in this rating was the Global Healthcare Service Providers published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Cupertino, California, CRC Health Corporation ("CRC") is a wholly owned subsidiary of CRC Health Group, Inc. CRC provides treatment services to patients suffering from chronic addiction diseases, behavioral and eating disorders, weight management, and therapeutic programs for adolescents through services ranging from short-term intervention programs to longer- term residential treatment. CRC Health is owned by private equity sponsor Bain Capital Partners, LLC. In February 2014, CRC completed its acquisition of Habit Holdings, Inc. ("Habit"), a drug and alcohol treatment company which operates 22 opioid treatment programs within the Northeast and Mid Atlantic regions. Including approximately $43 million of additional revenue from the Habit acquisition, the company generated pro forma revenues from continuing operations of approximately $456 million during the year ended December 31, 2013. CSMG TECHNOLOGIES: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: CSMG Technologies, Inc. c/o Shackelford Melton McKinley & Norton 3333 Lee Parkway, Tenth Floor Dallas, TX 75219 Case No.: 14-31318 Chapter 11 Petition Date: March 17, 2014 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Barbara J. Houser Debtor's Counsel: Frances Anne Smith, Esq. SHACKELFORD, MELTON, MCKINLEY & NORTON LLP 3333 Lee Parkway, Tenth Floor Dallas, TX 75219 Tel: 214-780-1400 Fax: 214-780-1401 Email: fsmith@shacklaw.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Dr. Joseph Kutz, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. CUBIC ENERGY: Postss $9.9 Million Net Income in Dec. 31 Qtr. ------------------------------------------------------------ Cubic Energy, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $9.93 million on $5.04 million of total revenues for the three months ended Dec. 31, 2013, as compared with a net loss of $439,586 on $1.03 million of total revenues for the same period in 2012. For the six months ended Dec. 31, 2013, the Company reported net income of $7.32 million on $5.91 million of total revenues as compared with a net loss of $2.20 million on $2.04 million of total revenues for the same period during the prior year. The Company's balance sheet at Dec. 31, 2013, showed $140.69 million in total assets, $137.02 million in total liabilities and $3.66 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/yasdqF About Cubic Energy Cubic Energy, Inc., headquartered in Dallas, Texas, is an independent upstream energy company engaged in the development and production of, and exploration for, crude oil and natural gas. Its oil and gas assets and activities are concentrated in Louisiana. Cubic Energy incurred a net loss of $5.93 million for the year ended June 30, 2013, as compared with a net loss of $12.49 million for the year ended June 30, 2012, and a net loss of $10.28 million for the year ended June 30, 2011. CUMULUS MEDIA: Crestview Director Designee to Retire ---------------------------------------------------- Arthur J. Reimers, a member of the board of directors of Cumulus Media Inc., informed the Board that, due to his increasing other professional and philanthropic responsibilities, he would retire as a director when his current term of office expires at the Company's 2014 Annual Meeting of Stockholders, and will not stand for re-election. Pursuant to a stockholders' agreement entered into in September 2011 between, among others, the Company and Crestview Radio Investors, LLC, Mr. Reimers has served as one of Crestview's Board designees since that time. Crestview has indicated that it intends to advise the Company of a replacement designee prior to the filing of the Company's proxy statement for its 2014 Annual Meeting of Stockholders. About Cumulus Media Founded in 1998, Atlanta, Georgia-based Cumulus Media Inc. (NASDAQ: CMLS) -- http://www.cumulus.com/-- is an operator of radio stations, currently serving 110 metro markets with more than 525 stations. In the third quarter of 2011, Cumulus Media purchased Citadel Broadcasting, adding more than 200 stations and increasing its reach in 7 of the Top 10 US metros. Cumulus also acquired the Citadel/ABC Radio Network, which serves 4,000+ radio stations and 121 million listeners, in the transaction Cumulus Media said in its annual report for the year ended Dec. 31, 2011, that lenders under the 2011 Credit Facilities have taken security interests in substantially all of the Company's consolidated assets, and the Company has pledged the stock of certain of its subsidiaries to secure the debt under the 2011 Credit Facilities. If the lenders accelerate the repayment of borrowings, the Company may be forced to liquidate certain assets to repay all or part of such borrowings, and the Company cannot assure that sufficient assets will remain after it has paid all of the borrowings under those 2011 Credit Facilities. If the Company was unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness and the Company could be forced into bankruptcy or liquidation. Cumulus Media put AR Broadcasting Holdings Inc. and three other units to Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13674) in 2011 after struggling to pay off debts that topped $97 million as of June 30, 2011. Holdings estimated debts between $50 million and $100 million but said assets are worth less than $50 million. AR Broadcasting operated radio stations in Missouri and Texas. The Company's balance sheet at Sept. 30, 2013, showed $3.67 billion in total assets, $3.40 billion in total liabilities and $268.43 million in total stockholders' equity. For the year ended Dec. 31, 2013, the Company reported operating income of $196.08 million on $1.02 billion of net revenues as compared with operating income of $56.93 million on $1 billion of net revenues in 2012. * * * Standard & Poor's Ratings Services in October 2011 affirmed is 'B' corporate credit rating on Cumulus Media. "The ratings reflect continued economic weakness and higher post- acquisition leverage than we initially expected," said Standard & Poor's credit analyst Jeanne Shoesmith. "They also reflect the combined company's sizable presence in both large and midsize markets throughout the U.S." As reported by the TCR on April 3, 2013, Moody's Investors Service downgraded Cumulus Media, Inc.'s Corporate Family Rating to B2 from B1 and Probability of Default Rating to B2-PD from B1-PD. The downgrades reflect Moody's view that the pace of debt repayment and delevering will be slower than expected. Although EBITDA for 4Q2012 reflects growth over the same period in the prior year, results fell short of Moody's expectations. DETROIT, MI: Retirees Find Exit Plan Divisive --------------------------------------------- Corey Williams, writing for The Associated Press, wrote that Detroit retirees see the city's proposed pension cut plan as divisive, in an article available at http://is.gd/yT3YOrfrom Macon Telegraph's macon.com. The report noted that Detroit's bankruptcy restructuring plan would pay much less from pensions for former police and firefighters than from retired clerks and other former city workers. The report noted that the police and fire system's claims could be immediately reduced by 6%, while the General Services Retirement system could see cuts from 26% to 34%. Unsecured creditors like banks and bondholders would get about 20 cents on the dollar from the issuance of new bonds. Creditors have until June 30 to vote on the plan. The report noted that retiree group leaders have said they can't discuss talks on the plan because they are in mediation with Orr's team. DETROIT, MI: 1983 Claimants' Bid for Committee Appointment Denied ----------------------------------------------------------------- Judge Steven Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan denied a request filed by an undisclosed group of creditors who have claims against the City of Detroit under 42 U.S.C. Section 1983 for the appointment of an official committee to represent them in the City's Chapter 9 case. Judge Rhodes concluded that the mediation procedures currently in place adequately address the interests of the group of the creditors in the City's bankruptcy case. 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. DOTS LLC: Reaches Deal with Secured Lenders, Creditors' Panel ------------------------------------------------------------- Dots, LLC, et al., ask the U.S. Bankruptcy Court for the District of New Jersey to approve a compromise and settlement among the Debtors, the Official Committee of Unsecured Creditors, the DIP Secured Parties, and the Prepetition Secured Parties, which settlement will fully resolve numerous complex, disputed issues among the parties without the need for risky, expensive and time- consuming litigation. The settlement, among other things, provides that, upon the indefeasible payment in full in cash of the DIP Obligations and the Prepetition Senior Secured Obligations, the DIP Liens on Avoidance Actions, the Senior Adequate Protection Liens on Avoidance Actions, and the Junior Adequate Protection Liens on Avoidance Actions will be released. Following the release of the Avoidance Actions by the DIP Secured Parties and the Prepetition Secured Parties, the Avoidance Actions will remain property of the Debtors? estates with any proceeds derived from the pursuit of those actions available to pay claims. The Settlement Agreement provides for the establishment of a segregated account controlled by the Debtors and the Creditors' Committee funded by a portion of the Aggregate Net Sale Proceeds, upon final follows: (i) 1.5% of the amount of Aggregate Sale Net Proceeds less than or equal to $35 million; (ii) 2% of the amount of Aggregate Sale Net Proceeds greater than $35 million and less than or equal to $40 million; (iii) 4% of the amount of Aggregate Sale Net Proceeds greater than $40 million and less than or equal to $45 million; and (iv) 5% of the amount of Aggregate Sale Net Proceeds that is in excess of $45 million. The Aggregate Sale Net Proceeds will be applied in the following order: (i) first, to those obligations owed in accordance with the DIP Credit Agreement, excluding the exit fee; (ii) second, on a pari passu basis, (x) subject to the approval of the key employee incentive plan by the Bankruptcy Court, to the payment of obligations under the KEIP, and (y) to the payment of the amount included in the Budget under "Week X" for "Rent", which amount will be shared pro rata among the lessors holding allowed claims included in the Budget under "Week X" for "Rent" and the vendors holding allowed claims included in the Budget under "Week X" for "Merchandise Post-Petition;" (iii) third, on a pari passu basis, to the payment of all unpaid expenses in the categories set forth in the Budget. Upon approval of the settlement, the lien challenge period will be deemed to have ended and the challenge period termination date will be deemed to have occurred. The Debtors are represented by Kenneth A. Rosen, Esq., Wojciech F. Jung, Esq., Andrew Behlmann, Esq., and Keara Waldron, Esq., at LOWENSTEIN SANDLER LLP, in Roseland, New Jersey. About DOTS LLC Dots is a retailer of fashionable clothing, accessories, and footwear for price-conscious women. Dots provides missy and plus size choices to fashion savvy 25 to 35 year old women at approximately 400 retail stores throughout the Midwest, East, and South United States. Dots' workforce includes 3,500 individuals in their stores, distribution center, and corporate headquarters. Dots, LLC, and its affiliates sought bankruptcy protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 14-11016) on Jan. 20, 2014, to sell some or all of their assets. Lowenstein Sandler LLP serves as counsel to the Debtors. PricewaterhouseCoopers LLP is financial advisor and investment banker. Donlin, Recano & Company, Inc., is the claims and notice agent. As of the Petition Date, the Debtors have outstanding secured debt owed to senior lender Salus Capital Partners, LLC, of which $14.5 million remains outstanding under a revolving facility and $16.1 million is owed under a term facility. The Debtors also have not less than $17 million outstanding under subordinated term loan agreements with Irving Place Capital Partners III L.P. ("IPC") and related entities. Moreover, the Debtors have aggregate unsecured debts of $47.0 million. Salus, the prepetition senior lender and the DIP lender, is represented by Morgan, Lewis & Bockius, LLP. The prepetition subordinated lenders are represented by Okin Hollander & DeLuca, LLP. The Company has arranged to borrow $36 million to keep operating as it reorganizes under court protection. EASTMAN KODAK: EPA Approves Cleanup Trust Fund ---------------------------------------------- Steve Orr, writing for Democrat & Chronicle, reported that federal officials have signed off on the deal creating an independent trust to fund and oversee ongoing environmental cleanup at Eastman Business Park, officials announced. According to the report, the fund will contain $49 million provided by Eastman Kodak Co., with an additional $50 million in New York state money available if needed to pay for environmental study and remedial work at the sprawling business park in Rochester and Greece. Creation of the environmental trust was an element of Kodak's plan to emerge from Chapter 11 bankruptcy last year, the report recalled. The reorganization plan was approved by a U.S. Bankruptcy Court judge in August, but with an asterisk -- because the U.S. Environmental Protection Agency was not yet willing to okay the trust arrangement. After months of additional discussion, the agency has relented, according to announcements by Gov. Andrew Cuomo and U.S. Sen. Charles Schumer, D-N.Y., who helped broker part of the deal last year, the report related. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak had been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. U.S. Bankruptcy Judge Allan Gropper confirmed the plan on August 20, 2013. Kodak and its affiliated debtors officially emerged from bankruptcy protection on Sept. 3, 2013. Mark S. Burgess, Matt Doheny, John A. Janitz, George Karfunkel, Jason New and Derek Smith became members of Kodak's new board of directors as of Sept. 3, 2013. Existing directors James V. Continenza, William G. Parrett and Antonio M. Perez will continue their service as members of the new board. ECOSPHERE TECHNOLOGIES: Halliburton's Claims Dismissal Bid Denied ----------------------------------------------------------------- A panel of three arbitrators appointed by the American Arbitration Association to hear the matter of Ecosphere Technologies, Inc. v. Halliburton Energy Services, Inc. issued Order No. 8, in which the Panel, among other things, denied Halliburton's Dispositive Motion, wherein Halliburton had moved to end the arbitration on legal grounds, claiming that Ecosphere raised no issues of fact for the Panel to resolve at the Final Hearing, and that Ecosphere had no factual support for its claims. The Panel found that that the issues presented in Halliburton's "Dispositive Motion involve intertwined issues of disputed material fact and law more properly resolved by the full adversarial process contemplated for the March 2014 hearings in this matter"; therefore, "the Panel decline[d] at this time to dispose of any of the issues remaining in this arbitration." Therefore, the Final Hearing on Ecosphere's claims will occur in March 2014. A copy of Order No. 8 is available for free at: http://is.gd/ukSAMu About Ecosphere Technologies Stuart, Florida-based Ecosphere Technologies (OTC BB: ESPH) -- http://www.ecospheretech.com/-- is a water engineering, technology licensing and environmental services company that designs, develops and manufactures wastewater treatment solutions for industrial markets. Ecosphere, through its majority-owned subsidiary Ecosphere Energy Services, LLC, provides energy exploration companies with an onsite, chemical free method to kill bacteria and reduce scaling during fracturing and flowback operations. Ecosphere disclosed net income of $1.05 million on $31.13 million of total revenues for the year ended Dec. 31, 2012, as compared with a net loss of $5.86 million on $21.08 million of total revenues for the year ended Dec. 31, 2011. The Company's balance sheet at Sept. 30, 2013, showed $21.95 million in total assets, $2.35 million in total liabilities, $3.69 million in redeemable convertible cumulative preferred stock, and $15.90 million in equity. Salberg & Company, P.A., in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has seen a recent significant decline in its working capital primarily relating to delays in receiving additional purchase orders and related funding from a significant customer. This matter raises substantial doubt about the Company's ability to continue as a going concern. EDENOR SA: General Shareholders' Meeting Set on April 29 -------------------------------------------------------- The directors of Edenor S.A. held a meeting on March 7, 2014. The meeting was chaired by the Chairman, Ricardo Torres, who after verifying quorum, declared the meeting duly held and submitted to the consideration of the attending Directors. At the meeting, the Chairman explained the need to call a general ordinary shareholders' meeting to consider results for the fiscal year ended Dec. 31, 2013. The meeting is scheduled to be held on April 29, 2014, at Avenida del Libertador 6363, ground floor, City of Buenos Aires. An abstract of the Board Meeting is available for free at: http://is.gd/AJ6IKY About Edenor SA Headquartered in Buenos Aires, Argentina, Edenor S.A. (NYSE: EDN; Buenos Aires Stock Exchange: EDN) is the largest electricity distribution company in Argentina in terms of number of customers and electricity sold (both in GWh and Pesos). Through a concession, Edenor distributes electricity exclusively to the northwestern zone of the greater Buenos Aires metropolitan area and the northern part of the city of Buenos Aires. Edenor S.A. disclosed a loss of ARS1.01 billion on ARS3.72 billion of revenue from sales for the year ended Dec. 31, 2012, as compared with a net loss of ARS291.38 million on ARS2.80 billion of revenue from sales for the year ended Dec. 31, 2011. The Company's balance sheet at Sept. 30, 2013, showed ARS 7.72 billion in total assets, ARS 6.50 billion in total liabilities and ARS 1.21 billion in total equity. EMERITO ESTRADA: Court Dismisses Chapter 11 Bankruptcy Case ----------------------------------------------------------- The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for the District of Puerto Rico dismissed the Chapter 11 case of Emerito Estrada Rivera - Isuzu De PR, Inc., at the behest of secured creditor Tenerife Real Estate Holdings LLC. According to the Troubled Company Reporter on March 10, 2014, Tenerife asserted that the Debtor made no payments to creditors and provided no disclosure statement or a proposed plan despite requesting, and being granted, multiple extensions of time to do so. Tenerife added that the Debtor's action in failing to prosecute the Chapter 11 petition make it apparent that the bankruptcy filing was done in bad faith and to circumvent the rights of creditors who had commenced a foreclosure action against the Debtor. On Feb. 4, 2014, the Bankruptcy Court issued an order directing the Debtor to file a Disclosure Statement and Plan, and upon failure to do so, the case would be dismissed, as requested by Tenerife. On Feb. 24, the Court ordered the Debtor to file its reply within 14 days to Tenerife's motion requesting the Court to enter judgment dismissing the case, with prejudice. Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, LLC, on behalf of the Debtor, responded to Tenerife's motion stating that the only difference with the Debtor's consent to dismiss case is that Tenerife requested a judgment with prejudice. However, Tenerife failed to cite a single provision of the Bankruptcy Code or case law to justify such a remedy. The Court granted the Debtor's motion for an extension of the period to file its chapter 11 plan. The Debtor said it needed more time to finalize or perfect the lease agreements that will generate the funds need to fuel a plan of reorganization. Tenerife objected to the extension request, stating that the Debtor, despite being granted ample time to file the required disclosure statement and plan, has failed to do so to the detriment of the creditors. FDIC-R Seeks to Foreclose Creditor and party-in-interest Federal Deposit Insurance Corporation, as receiver of R-G Premier Bank, has filed papers with the Bankruptcy Court seeking relief from the automatic stay in the Chapter 11 case of Emerito Estrada Rivera-Isuzu De P.R., Inc., to foreclose upon its liens against the Santa Maria and Torremolinos properties pledged as collateral by EER-IPR. According to the FDIC's papers filed in January, R-G granted a line of credit in the principal amount of $2,100,000 to borrower, Juan Almeida-Leon, on April 11, 2007. The loan accrued interest at a fluctuating rate based upon the rate set by Citibank N.A. in the city of New York, N.Y., until complete payment of the debt. A further 2% in default interest was to be charged in case of default. The loan to Almeida went into default and on Dec. 18, 2012, FDIC-R filed a complaint for collection of the loan and execution of pledge and the mortgage notes against EER-IPR and Juan Almeida in the U.S. District Court for the District of Puerto Rico. The total amount owed to the FDIC-R under the loan agreement and note is $2,543,297 as of June 4, 2013. The debt is guaranteed by the mortgage notes issued by EER-IPR. FDIC-R asserts that its collateral is not being adequately protected, EER-IPR has no equity in the properties sought to be foreclosed, and the properties are not necessary to an effective reorganization. Thus, FDIC-R is entitled to relief from the stay pursuant to either Section 362(d)(1) or Section 362(d)(2). About Emerito Estrada Emerito Estrada Rivera Isuzu De PR Inc., a car dealer in Puerto Rico, filed a bare-bones Chapter 11 petition (Bankr. D.P.R. Case No. 13-04608) in Old San Juan, on June 4, 2013. Alexis Fuentes Hernandez, Esq., at Fuentes Law Offices, serves as counsel. The Debtor says its sole asset is a real property is worth $16.5 million. It has $8.68 million in liabilities, of which $8.1 million is secured. The Debtor disclosed $23,860,000 in assets and $16,285,186 in liabilities as of the Chapter 11 filing. ENDEAVOUR INTERNATIONAL: Incurs $28.1 Million Loss in Q4 -------------------------------------------------------- Endeavour International Corporation reported a net loss to common stockholders of $28.11 million on $116.92 million of revenues for the quarter ended Dec. 31, 2013, as compared with a net loss to common stockholders of $6.91 million on $97.61 million of revenues for the same period in 2012. For the year ended Dec. 31, 2013, the Company incurred a net loss to common stockholders of $97.30 million on $337.66 million of revenues as compared with a net loss to common stockholders of $128.04 million on $219.05 million of revenues in 2012. The Company's balance sheet at Dec. 31, 2013, showed $1.50 billion in total assets, $1.43 billion in total liabilities, $43.70 million in series C convertible preferred stock and $18.38 million in stockholders' equity. Fourth Quarter highlights include: * Achieved first production at the Rochelle field * Closed on the sale of a 50% interest in the Pennsylvania Marcellus * Completed an additional $25 million of Monetary Production Payment "With the Rochelle situation resolved, we will continue our focus on reducing cost of capital and deleveraging our balance sheet. The reorganization and consolidation of our UK offices completed last year, combined with the reduced cost of capital from our refinancing effort in January, result in over $30 million in annual cash savings," said William L. Transier, chairman, chief executive officer and president. "Now with our core assets online in the North Sea, we should expect improved production and cash flow on a comparative basis so we can move forward prudently in the exploitation of our portfolio for the benefit of our stakeholders." A copy of the press release is available for free at: http://is.gd/twpNoC About Endeavour International Houston-based Endeavour International Corporation (NYSE: END) (LSE: ENDV) is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the United States. * * * As reported by the TCR on March 5, 2013, Moody's Investors Service downgraded Endeavour International Corporation's Corporate Family Rating to Caa3 from Caa1. Endeavour's Caa3 CFR reflects its weak liquidity, small production and proved reserve scale, geographic concentration and the uncertainties regarding its future performance given the inherent execution risks related to its offshore North Sea operations for a company of its size. In the Feb. 22, 2013, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Houston, Texas-based Endeavour International Corp. (Endeavour) to 'CCC+' from 'B-'. The rating action reflects S&P's expectation that Endeavour could have insufficient liquidity to meet its needs due to the delay in production from its Rochelle development. ENERGY FUTURE: Said to Arrange Bankruptcy Loans ----------------------------------------------- Richard Bravo and Beth Jinks, writing for The Wall Street Journal, reported that Energy Future Holdings Corp. is near obtaining commitments from lenders for about $7.2 billion in loans for the power provider?s regulated businesses as part of a plan to speed a bankruptcy reorganization, according to two people with direct knowledge of the talks. The debtor-in-possession financing, typically used to fund operations during Chapter 11 proceedings, would include a $5.2 billion portion being provided by lenders including Citigroup Inc., Morgan Stanley, and Deutsche Bank AG, said the people, who asked not to be identified because the talks are private, according to the report. A second loan for as much as $2 billion would give the company the option of repaying existing second-lien debt at its Energy Future Intermediate Holding Co. division. The loans are part of talks by Energy Future, its private-equity owners and unsecured lenders to the parent and its Intermediate division to solidify a plan aimed at avoiding a free-for-all during Chapter 11 proceedings, the report related. The Dallas- based company, known as TXU Corp. when KKR & Co., TPG Capital and Goldman Sachs Capital Partners took it private in 2007 in the largest leveraged buyout ever, is seeking to restructure $45.6 billion of debt before month-end, when auditors may raise doubts about its ability to remain a going concern. Energy Future?s deregulated unit, Texas Competitive Electric Holdings, is separately arranging more than $4 billion of DIP financing for that business, the report further related, citing one of the people said. About Energy Future Holdings, fka TXU Corp. Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. Restructuring Talks With Creditors In April 2013, Energy Future and its affiliates confirmed in a regulatory filing that they are in restructuring talks with certain unaffiliated holders of first lien senior secured claims concerning the Companies' capital structure. Energy Future has retained Kirkland & Ellis LLP and Evercore Partners to advise the Companies with respect to the potential changes to the Companies' capital structure and to assist in the evaluation and implementation of other potential restructuring options. The Creditors have retained Paul, Weiss, Rifkind, Wharton & Garrison LLP and Millstein & Co., L.P. to advise the Creditors and to assist in the Creditors' evaluation of potential restructuring options involving the Companies. According to a Wall Street Journal report, people familiar with the matter said Apollo Global Management LLC, Oaktree Capital Management, Centerbridge Partners and GSO Capital Partners, the credit arm of buyout firm Blackstone Group LP, all hold large chunks of Energy Future's senior debt. Many of these firms belong to a group being advised by Jim Millstein, a restructuring expert who helped the U.S. government revamp American International Group Inc. The Journal said Apollo enlisted investment bank Moelis & Co. for additional advice to ensure it gets as much attention as possible on the case given its large debt holdings. ENGLOBAL CORP: Reports $2.9 Million 2013 Net Loss ------------------------------------------------- ENGlobal Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $2.98 million on $168.96 million of operating revenues for the year ended Dec. 28, 2013, as compared with a net loss of $33.60 million on $227.91 million of operating revenues for the year ended Dec. 29, 2012. For the quarter ended Dec. 28, 2013, the Company reported a net loss of $3.28 million on $25.25 million of operating revenues as compared with a net loss of $1.27 million on $52.11 million of operating revenues for the quarter ended Dec. 29, 2012. As of Dec. 28, 2013, the Company had $45.80 million in total assets, $23.31 million in total liabilities, all current, and $22.48 million in total stockholders' equity. Mark A. Hess, ENGlobal's chief financial officer, said: "During 2012 and 2013, we divested a large portion of our engineering operations and implemented a number of initiatives in order to restore profitability to our core operations. This is reflected in the decrease in our revenues, direct costs and SG&A expense year-over-year. While we are a smaller company, we are a more profitable one. Our remaining business is largely reflected in our fourth quarter 2013 results, which show an increase in our gross profit margins from approximately 10% to approximately 19% when comparing the 2012 and 2013 periods. The increase in gross profit was primarily a result of a changing mix of our business toward a higher percentage of upstream and automation activities, operating under high margin contracts, reducing the number of higher risk projects, and focusing on project execution. Our annualized fourth quarter 2013 SG&A expense was approximately $17 million, which is higher than we anticipate going forward yet significantly lower than fiscal year 2012. As a result of our increased margin and reduced expenses, our net income from continuing operations in the fourth quarter of 2013 was $362,000 as compared to a net loss from continuing operations of $2.5 million in the same period in 2012." "Going Concern" Qualification Removed Hein & Associates LLP, in Houston, Texas, did not issue a "going concern" qualification in their report on the consolidated financial statements for the year ended Dec. 28, 2013. As previously reported, Hein & Associates expressed substantial doubt about the Company's ability to continue as a going concern in their report on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered losses from operations and is in default of its debt agreements. "During 2012, the substantial losses we incurred and the resulting defaults under our credit facilities ... raised substantial doubt about our ability to continue as a going concern. While ENGlobal experienced a difficult 2012 and continued to face a number of challenges in 2013, we were able to divest our least attractive businesses and sell a portion of our core business for proceeds sufficient to pay off our debt (and cure all defaults), and are now focused on our remaining core business segments, EPCM and Automation. In this regard, we have reduced our expenses by reducing employee headcount, closing offices and creating an enhanced operational focus on cost controls," the Company said in the Annual Report. A copy of the Form 10-K is available for free at: http://is.gd/FWC1to About ENGlobal Houston-based ENGlobal Corporation (Nasdaq: ENG) is a provider of engineering and related project services primarily to the energy sector throughout the United States and internationally. ENGlobal operates through two business segments: Automation and Engineering. ENGlobal's Automation segment provides services related to the design, fabrication and implementation of advanced automation, control, instrumentation and process analytical systems. The Engineering segment provides consulting services for the development, management and execution of projects requiring professional engineering, construction management, and related support services. EXIDE TECHNOLOGIES: Inks Deal with Union in Vernon Facility ----------------------------------------------------------- Exide Technologies seek authority from the U.S. Bankruptcy Court for the District of Delaware to enter into a memorandum of agreement with United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied and Industrial Service Workers International Union ("USW"), AFL-CIO-CLC, on behalf of itself and its Local Union No. 675. To operate the Vernon Facility, Exide employs 137 employees, of which approximately 114 are bargaining unit employees represented by the Union. All of these Union members are employed by Exide pursuant to a collective bargaining agreement, dated February 21, 2010, with an expiration date of February 23, 2014. Prior to February 23, 2014, the Debtors and the USW engaged in good faith negotiations to extend the term of the USW CBA, resulting in the Agreement. The Agreement provides that the Parties will enter into a new collective bargaining agreement for a period of one-year through midnight February 22, 2015. The Agreement will consist of all terms and conditions of the USW CBA, including, among other things, promises by the Union not to strike, engage in a work stoppage, or interrupt or impede work and a promise by Exide not to lockout those workers, and provides a $0.25 wage increase for all bargaining unit employees from the first full pay week following the ratification through February 22, 2015. The Union?s members ratified the Agreement on February 19, 2014. The USW CBA will remain in full force and effect until the Court either approves or denies the Motion, but will not become effective until approved by the Court. The Debtor believes that it is sound business judgment to enter into the Agreement given the importance of the Vernon Facility to the Debtor's operations. The Vernon Facility recycles 20,000 to 40,000 batteries per day. Thus, the Debtor asserts, it is important to assure its Vernon employees are working pursuant to a binding agreement. The Debtor notes that its potential exposure to administrative expense claims for entry into the agreement is appropriately limited while the Union members' current rights are preserved. The Debtor further asserts that the agreement effectively keeps the status quo in place for the next year and provides its union employees with a slight raise. A hearing to consider the Debtor's request is scheduled for April 1, 2014, 10:00 AM (Eastern). The Debtor is represented by Anthony W. Clark, Esq., and Kristhy M. Peguero, Esq., at SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, in Wilmington, Delaware; Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, in New York; and James J. Mazza, Jr., Esq., at SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, in Chicago, Illinois. 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 disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. For the new 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. Schnader Harrison Segal & Lewis LLP was tapped as special counsel. 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. Geosyntec Consultants was tapped as environmental consultants to the Committee. Robert J. Keach of the law firm Bernstein Shur as fee examiner has been appointed as fee examiner. He has hired his own firm as counsel. FIAT CHRYSLER: CEO Sets Internal Deadline of Oct. 1 for NY Listing ------------------------------------------------------------------ Christina Rogers, writing for The Wall Street Journal, reported that Sergio Marchionne, chief executive for Fiat Chrysler Automobiles NV, said the company hopes to list on the New York Stock Exchange by October, a move that will further solidify the tie-up of the two auto makers following Fiat's acquisition earlier this year of its U.S. partner. "Everybody has an internal date of Oct. 1, but we're running against the clock," the report cited Mr. Marchionne as speaking to reporters on March 14. "It's a complicated process because of the listing requirements and so on," he said, noting that it could encounter delays. "If it slips 30, 60, 90 days, it's not a problem," he added. The New York listing would give the newly-combined company greater access to the U.S. capital markets as it embarks on a costly plan to overhaul chunks of its global portfolio and relaunch its luxury Alfa Romeo brand, the report related. Fiat stock trades in Milan. The move would also mirror the direction taken last year by Fiat's sister company, CNH Industrial, of which Mr. Marchionne is also chairman, the report further related. Mr. Marchionne is laying the groundwork for a five-year business plan that is expected to be announced in May and sets out a new timetable and strategy for the auto maker, nearly five years since Fiat rescued Chrysler from bankruptcy, the report added. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). The U.S. and Canadian governments provided Chrysler LLC with $4.5 billion to finance its bankruptcy case. In connection with the bankruptcy filing, Chrysler reached an agreement to sell all assets to an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC in June 2009, formally sold substantially all of its assets to the new company, named Chrysler Group LLC. In January 2014, the American car manufacturer officially became 100% Italian when Fiat Spa completed its deal to purchase the 40% it did not already own of Chrysler. Fiat has shared ownership of Chrysler with the health care fund of the United Automobile Workers unions since Chrysler emerged from bankruptcy in 209. * * * Standard & Poor's Ratings Services raised its ratings on U.S.- based auto manufacturer Chrysler Group LLC, including the corporate credit rating to 'BB-' from 'B+' in mid-January 2014. The outlook is stable. FIRST CASH: Moody's Assigns Ba3 CFR & Rates Unsecured Notes Ba3 --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the senior unsecured notes issuance of First Cash Financial Services, Inc. (FCFS). Moody's also assigned a Corporate Family Rating of Ba3. The rating outlook is stable. Ratings Rationale FCFS's ratings reflect the company's status as a significant player in the highly fragmented pawn store industry in the US and Mexico; the consistently strong demand for the company's products and services from the large and growing unbanked/underbanked population; good financial fundamentals in the form of consistently strong profitability and free cash flow generation, moderate leverage, and strong tangible equity position; and retail merchandise sales which represent a profitable adjunct to the company's pawn lending operations. Balancing these positive elements are a number of credit challenges, including geographic concentrations in both the US and Mexico, control risks endemic to the pawn business including prevention of fraud and transactions involving stolen goods, vulnerability to gold prices given that a significant portion of pawn collateral consists of gold jewelry, a risky regulatory environment particularly in the US, and rapid historic growth in store count in the Mexican market. FCFS's ratings could be upgraded if the company continues to downsize its presence in the payday loan business (which currently represents ~ 6% of total revenues), maintains its ratio of adjusted debt/ebitdar at less than 2.5 times on a sustained basis, and maintains a strong tangible equity position. Ratings could be downgraded if the company experiences a significant reduction in profitability, and/or increased leverage, causing a significant deterioration in interest coverage with adjusted ebitda/adjusted interest expense less than 5 times on a sustained basis. Based in Arlington, Texas, FCFS (ticker symbol "FCFS") is an operator of pawn stores, with a total of 906 stores in 12 U.S. states and 26 states in Mexico. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. FIRST NATIONAL COMMUNITY: Grants 24,400 Shares to Executives ------------------------------------------------------------ The Board of Directors of First National Community Bancorp, Inc., approved the recommendations of the Compensation Committee of the Board to make the following grants of common shares of the Company, subject to time-based vesting, under the Company's 2013 Long-term Incentive Compensation Plan to the Company's named executive officers: No. of Shares of Name Restricted Common Stock -------------- ----------------------- Steven R. Tokach 7,600 Gerard A. Champi 6,300 James M. Bone 5,300 Joseph J. Earyes 2,500 Mary Griffin Cummings 2,700 The grant date for each of the Restricted Stock Awards was March 1, 2014. For Steven R. Tokach, the time-based Restricted Stock Award vests in two equal annual installments on the anniversary of the grant date, subject to continued service. For the Restricted Stock Awards to each of the other named executive officers, each respective time-based Restricted Stock Award vests in three equal annual installments on the anniversary of the grant date, subject to continued service. Shares of restricted stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until those shares are vested. In the event of the death, disability or retirement of the recipient, or in the case of a change in control of the Company, the unvested portion of the Restricted Stock Award will vest on a pro rata basis with the percentage vesting to be determined by multiplying (i) the number of the shares of restricted stock that have not yet vested by (ii) the ratio of the number of months since the immediately preceding vesting date (or since the grant date, if the event occurs prior to the first vesting date) that the recipient has been employed or engaged to provide services to the total number of months left in the vesting period. To Hold "Say-on-Pay" Vote Every Year The Company amended its current report filed with the U.S. Securities and Exchange Commission to clarify the frequency with which the Company will hold an advisory vote on the compensation of the Company's executives. As the Company previously reported in the original report, the Company's shareholders voted at the Company's annual meeting of shareholders held on Dec. 23, 2013, on, among other matters, a proposal regarding the frequency of future non-binding shareholder advisory votes on the compensation of the Company's named executive officers. A substantial majority of votes cast at the 2013 Annual Meeting on the frequency proposal were cast in favor of holding an advisory vote on the compensation of executives every year, which was consistent with the Company's recommendation. In light of the foregoing, this Amendment is being filed to confirm that the Company will hold an advisory vote on the compensation of executives every year until the next required vote on the frequency of shareholder advisory votes on the compensation of executives. About First National Headquartered in Dunmore, Pa., First National Community Bancorp, Inc., is a Pennsylvania corporation, incorporated in 1997 and is registered as a bank holding company under the Bank Holding Company Act ("BHCA") of 1956, as amended. The Company became an active bank holding company on July 1, 1998, when it acquired ownership of First National Community Bank (the "Bank"). The Bank is a wholly-owned subsidiary of the Company. The Company's primary activity consists of owning and operating the Bank, which provides customary retail and commercial banking services to individuals and businesses. The Bank provides practically all of the Company's earnings as a result of its banking services. First National disclosed a net loss of $13.71 million on $37.02 million of total interest income for the year ended Dec. 31, 2012, as compared with a net loss of $335,000 on $42.93 million of total interest income in 2011. The Company's balance sheet at Sept. 30, 2013, showed $978.52 million in total assets, $945.72 million in total liabilities and $32.79 million in total shareholders' equity. Regulatory Matters The Bank is under a Consent Order from the Office of the Comptroller of the Currency dated Sept. 1, 2010. The Company is also subject to a Written Agreement with the Federal Reserve Bank of Philadelphia dated Nov. 24, 2010. The Bank, pursuant to a Stipulation and Consent to the Issuance of a Consent Order dated Sept. 1, 2010, without admitting or denying any wrongdoing, consented and agreed to the issuance of the Order by the OCC, the Bank's primary regulator. The Order requires the Bank to undertake certain actions within designated timeframes, and to operate in compliance with the provisions thereof during its term. The Order is based on the results of an examination of the Bank as of March 31, 2009. Since the examination, management has engaged in discussions with the OCC and has taken steps to improve the condition, policies and procedures of the Bank. Compliance with the Order is monitored by a committee of at least three directors, none of whom is an employee or controlling shareholder of the Bank or its affiliates or a family member of any such person. The Committee is required to submit written progress reports on a monthly basis to the OCC and the Agreement requires the Bank to make periodic reports and filings with the Federal Reserve Bank. The members of the Committee are John P. Moses, Joseph Coccia, Joseph J. Gentile and Thomas J. Melone. Banking regulations also limit the amount of dividends that may be paid without prior approval of the Bank's regulatory agency. At Dec. 31, 2012, the Company and the Bank are restricted from paying any dividends, without regulatory approval. FISKER AUTOMOTIVE: Panel Spars with Hybrid Over Bid to Probe Liens ------------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of Fisker Automotive Holdings, Inc., et al., is sparring with Hybrid Tech Holdings, LLC, over the Committee's desire to probe the liens held by Hybrid by virtue of Hybrid as the debtor-in-possession lender. The Committee said the Hybrid DIP Financing has matured, Hybrid has refused to advance additional funds to the Debtors, and has issued a formal notice of termination of that facility. The Debtors intend to obtain supplemental junior financing from Wanxiang to cover the ongoing administrative costs of the Chapter 11 cases pending closing of the sale and confirmation of a plan. In the Final Order approving the Hybrid DIP Financing, the Debtors bound themselves to certain stipulations in favor of Hybrid's prepetition loans and the liens allegedly securing the same. Therein, the Debtors also agreed and committed not to take actions whatsoever to challenge any of the Prepetition Hybrid Obligations or Prepetition Hybridg Liens but, rather, to deleate the investigation and litigation thereof to the Committee. Hybrid objected to the Committee's reques for expedited consideration of its standing motion, complaining that there is no need -- or benefit -- at this time for the Committee to usurp the Debtors' role as the estates' fiduciaries, particularly when the Wanxiang sale has not yet closed, and the Debtors maintain the exclusive right to propose a plan. Resolution of the perfection and allocation disputes will do nothing to advance meaningful distributions to creditors because many other issues remain to be resolved in connection with any plan, Hybrid further complained. The Debtors agreed with Hybrid and asked the Court to deny the Committee's request to expedite consideration of its Standing Motion as procedurally and substantialy defective. The Debtors asserted that parties-in-interest have a right to be heard with respect to significant strategic and legal issues related to the Chapter 11 estates. The Committee's motion runs contrary to fair process and unnecessarily rushes its request for standing on particular issues, the Debtors complained. The Debtors are represented by Laura Davis Jones, Esq., James E. O?Neill, Esq., and Peter J. Keane, Esq., at PACHULSKI STANG ZIEHL & JONES LLP, in Wilmington, Delaware; and James H.M. Sprayregen, P.C., Esq., Anup Sathy, P.C., Esq., and Ryan Preston Dahl, Esq., at KIRKLAND & ELLIS LLP, in Chicago, Illinois. The Committee is represented by Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington, Delaware; William R. Baldiga, Esq., at Brown Rudnick LLP, in New York; and Sunni P. Beville, Esq., and Nicolas M. Dunn, Esq., at at Brown Rudnick LLP, in Boston, Massachusetts. Hybrid is represented by Richard A. Barkasy, Esq., and Fred W. Hoensch, Esq., at SCHNADER HARRISON SEGAL & LEWIS LLP, in Wilmington, Delaware; Tobias S. Keller, Esq., and Peter J. Benvenutti, Esq., at KELLER & BENVENUTTI LLP, in San Francisco, California; Susheel Kirpalani, Esq., and James C. Tecce, Esq., at QUINN EMANUEL URQUHART & SULLIVAN, LLP, in New York; and K. John Shaffer, Esq., Eric D. Winston, Esq., and Matthew R. Scheck, Esq., at QUINN EMANUEL URQUHART & SULLIVAN, LLP, in Los Angeles, California. About Fisker Automotive Fisker Automotive Holdings, Inc., developer of the Karma plug-in hybrid electric sedan, filed a petition for Chapter 11 protection (Bankr. D. Del. Case No. 13-13087) on Nov. 22, 2013. Fisker estimated assets of more than $100 million and listed debt of $500 million in its bankruptcy petition. The assets include an assembly plant purchased for $21 million from General Motors Corp. The plant never operated. The cars were assembled in Finland. Fisker now has 21 employees. Fisker received a $529 million loan from the Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program and drew down about $192 million before the department froze the loan after Fisker failed to hit several development targets. The company defaulted on its loan in April 2013. Bankruptcy Judge Kevin Gross presides over the case. The Debtors have tapped James H.M. Sprayregen, P.C., Esq., Anup Sathy, P.C., Esq., and Ryan Preston Dahl, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, as co-counsel; Laura Davis Jones, Esq., James E. O'Neill, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel; Beilinson Advisory Group as restructuring advisors; and Rust Consulting/Omni Bankruptcy, as notice and claims agent and administrative advisor. On Nov. 5, 2013, the Official Committee of Unsecured Creditors was appointed. The members are: (a) David M. Cohen; (b) Sven Etzelsberger; (c) Kuster Automotive Door Systems GmbH; (d) Magna E-Car USA, LLC; (e) Supercars & More SRL; and (f) TK Holdings Inc. The Committee is represented by William R. Baldiga, Esq., and Sunni P. Beville, Esq., at Brown Rudnick LLP; and Mark Minuti, Esq., at Saul Ewing LLP. Emerald Capital Advisors Corp. is the financial advisors for the Committee. Fisker sought bankruptcy protection to pursue a private sale of its business to Hybrid Tech Holdings, LLC. The Committee, however, wants a sale public sale, and has identified Wanxiang America Corporation as stalking horse bidder. Hybrid was initially under contract to buy Fisker in exchange for $75 million of the $168.5 million government loan it acquired immediately before the Debtor's Chapter 11 filing. Hybrid later raised its offer by adding an additional $1 million cash and agreeing to share proceeds from the sale of a facility in Delaware it doesn't intend to operate. Hybrid also offered to pay real estate taxes on the Delaware plant. Hybrid also will waive $90 million in deficiency claims that otherwise would dilute unsecured creditors' recovery. Wanxiang, as stalking horse bidder, initially offered $25.8 million in cash. However, Wanxiang has said it has raised its offer by $10 million and is willing to go higher. After the hearings on Jan. 10 and 13, the Court directed a public auction, and capped Hybrid's credit bid to $25 million. In response, Hybrid raised its offer to $55 million. Hybrid is represented by Tobias Keller, Esq., and Peter Benvenutti, Esq., at Keller & Benvenutti LLP, in San Francisco, California. Wanxiang, which bought A123 Systems, Inc., a manufacturer of lithium-ion batteries used in electric vehicles such as the Fisker Karma, in a bankruptcy auction early in 2013 for $256.6 million, is represented in Fisker's case by Sidley Austin LLP's Bojan Guzina, Esq., and Andrew F. O'Neill, Esq.; and Young Conaway Stargatt & Taylor, LLP's Edmon L. Morton, Esq., Robert S. Brady, Esq., and Kenneth J. Enos, Esq. GENERAL MOTORS: DOT Lacked Information on Ignition Switch Problem ----------------------------------------------------------------- Jeff Bennett, writing for The Wall Street Journal, reported that U.S. Transportation Secretary Anthony Foxx said that regulators might have acted sooner to push for a recall of General Motors Co. cars equipped with faulty ignition switches, but lacked the information company officials had about problems with the vehicles. According to the report, Mr. Foxx, testifying before a Senate committee, said that the National Highway Traffic Safety Administration did three investigations of crashes involving some of the models among the 1.6 million cars GM recalled last month. "The results were inconclusive," he said. The first of those investigations was in 2005, the report said. GM disclosed that employees knew there were problems with the ignition-switch devices used on Saturn Ion cars as long ago as 2001 and received its first complaint of stalling from a Saturn Ion owner in 2003, the report related. The auto maker had said previously that it investigated problems with the Cobalt's ignition switch before the car was launched in 2004, and in 2005 told dealers to warn customers not to use heavy key rings?to prevent the ignition switches from slipping out of the "on" position, the report further related. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GEOMET INC: Sherwood Stake at 31.1% as of Feb. 13 ------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Sherwood Energy, LLC, disclosed it beneficially owned 27,028,146 shares of common stock issuable upon conversion of 3,513,659 shares of Series A Convertible Redeemable Preferred Stock as of Feb. 13, 2014. The shares represent 31.1 percent based on a total number of 86,820,987 shares of common stock issued and outstanding as of Feb. 13, 2014. A copy of the regulatory filing is available at http://is.gd/G1of6u About Geomet Inc. Houston, Texas-based GeoMet, Inc., is an independent energy company primarily engaged in the exploration for and development and production of natural gas from coal seams (coalbed methane) and non-conventional shallow gas. Its principal operations and producing properties are located in the Cahaba and Black Warrior Basins in Alabama and the central Appalachian Basin in Virginia and West Virginia. It also owns additional coalbed methane and oil and gas development rights, principally in Alabama, Virginia, West Virginia, and British Columbia. As of March 31, 2012, it owns a total of 192,000 net acres of coalbed methane and oil and gas development rights. For the year ended Dec. 31, 2012, the Company incurred a net loss of $149.95 million on $39.38 million of total revenues, as compared with net income of $2.81 million on $35.61 million of total revenues in 2011. The Company's balance sheet at Sept. 30, 2013, showed $58.35 million in total assets, $92.15 million in total liabilities, $41.19 million in mezzanine equity, and a $74.99 million total stockholders' deficit. Hein & Associates LLP, in Houston, Texas, issued a "going concern" qualification on the Company's consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses, has a working capital deficit of $4,659,296 at Dec. 31, 2012, and expects to reclassify approximately $129,000,000 of long-term debt to current liabilities on April 2, 2013. These conditions, among others, raise substantial doubt about its ability to continue as a going concern. GLW EQUIPMENT: Equipment Lenders Win Stay Relief to Foreclose ------------------------------------------------------------- The Hon. Michael E. Ridgeway of the U.S. Bankruptcy Court for the District of Minnesota issued separate orders lifting the automatic stay on certain properties of GLW Equipment Leasing, LLC, allowing the Debtor's lenders to foreclose their security interests. WFEFI's Interest On March 10, 2014, the Court lifted the automatic stay with respect to secured creditor Wells Fargo Equipment Finance, Inc., authorizing WFEFI to repossess, foreclose its security interest, and dispose of equipment collateral. WFEFI said the Debtor failed to perform its obligations in strict accordance with the terms of the stipulation for adequate protection dated Dec. 10, 2013. The Debtor defaulted on the stipulation by failing to make complete payment when due Jan. 21, 2014, and by failing to make any payment when due Feb. 21. The total amount in default is $5,401 for January 2014 and $40,018 for February 2014. All Wheels Financial On March 7, the Court lifted the stay with respect to All Wheels Financial, Inc., so it may repossess, foreclose its security interest, and dispose of equipment collateral. On March 6, All Wheels said the Debtor defaulted on a stipulation for adequate protection dated Dec. 9, 2013. As of March 6, no plan was filed by the Debtor and the February 2014 payment was not received by All Wheels. Accordingly, the Debtor has failed to timely cure the default. CAT Financial Also on March 7, the Court lifted the stay with respect to Caterpillar Financial Services Corporation. CAT Financial, asserted that based on the stipulation for adequate protection dated Dec. 9, 2013, the Debtor failed to file a disclosure statement and joint plan of reorganization by Jan. 31, 2014. As of March 6, the Debtor has failed to (a) make cash payments for the month of February 2014, (b) file a plan, and (c) execute a confession of judgment within 10 days after entry of the order approving the stipulation. Accordingly, the Debtor has failed to timely cure the defaults. GECC The automatic stay is also lifted with respect to General Electric Capital Corporation, authorizing GECC to repossess, foreclose its security interest, and dispose of the equipment collateral. On March 6, creditor GECC said the Debtor has defaulted under the terms of the stipulation for adequate protection dated Dec. 10, 2013. The Debtor has failed to make the agreed upon adequate protection payment due Feb. 21, 2014, in the amount of $51,081. Paccar Financial On Feb. 28, the Court lifted the stay with respect to Paccar Financial Corp., authorizing PFC to repossess, foreclose its security interest, and dispose of the equipment collateral. On Feb. 26, PFC said that the Debtor defaulted on a stipulation for adequate protection dated Dec. 9, 2013. The Debtor failed to file a plan of reorganization by Jan. 31, 2014, as required in the stipulation. As of Feb. 26, 2014, no plan was filed. Volvo Financial On Jan. 31, the Court lifted the stay with respect to Volvo Financial Services, a division of VFS US LLC, authorizing Volvo Financial to repossess, foreclose its security interest, and dispose of the equipment collateral. Volvo Financial said the Debtor defaulted on a stipulation for adequate protection dated Dec. 9, 2013. The Debtor failed to make the adequate protection payment due to Volvo Financial on Jan. 21, 2014. As of Jan. 28, 2014, the adequate protection payment still had not been received by Volvo Financial. Accordingly, the Debtor failed to timely cure the default. Pursuant to the stipulation, upon the occurrence of, and failure to cure, an event of default, the Debtor agreed the Court will enter an order terminating the automatic stay. About GLW Equipment Leasing GLW Equipment Leasing, LLC, a Minnesota limited liability company formed to own and manage a truck and trailer equipment lease portfolio, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-44202) in Minneapolis, Minnesota, on Aug. 27, 2013. The Debtor was formed on the same day the bankruptcy case was filed. Warren Cadwallader signed the petition as president. The Debtor estimated at least $10 million in assets and liabilities. Michael F. McGrath, Esq., at Will R. Tansey, Esq., and Michael D. Howard, Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey, P.A., Minneapolis, MN, serves as the Debtor's counsel. Judge Katherine A. Constantine oversaw the case. On Oct. 15, 2013, Judge Constantine transferred the case to Judge Michael E. Ridgway. GRAPHIC PACKAGING: S&P Revises Outlook to Pos. & Affirms 'BB+' CCR ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it has revised its rating outlook on Atlanta-based Graphic Packaging International Inc. to positive from stable and affirmed its 'BB+' corporate credit rating on the company. At the same time, S&P affirmed its 'BBB' issue-level rating on the company's senior secured debt. The recovery rating remains '1', which indicates S&P's expectation that lenders will receive very high recovery (90% to 100%) in the event of a default. S&P also affirmed its 'BB+' issue-level rating for the company's senior notes. The recovery rating remains '3', which indicates S&P's expectation that lenders will receive meaningful recovery (50% to 70%) in the event of a default. "We revised the rating outlook to positive to reflect our view that Graphic Packaging will likely continue to generate good free cash flow resulting in strengthening cash flow and leverage measures in 2014-2016," said Standard & Poor's credit analyst Tobias Crabtree. S&P expects that this could increase the company's financial flexibility to pursue growth initiatives and modest shareholder rewards concurrent with net leverage sustained below 3x. The outlook revision also reflects the meaningful reduction in the company's financial sponsor ownership. Less than 10% of equity ownership is currently held by what we consider to be a financial sponsor based on recent public filings. The positive outlook reflects S&P's expectation for Graphic Packaging's cash flow and leverage measures to strengthen in 2014- 2016 with leverage declining to 2.5x to 3x, compared with 3.7x at the end of 2013. An upgrade to investment grade could occur if Graphic Packaging's average leverage were to fall to the mid-2x area and FFO to debt to average between 30% and 45%. S&P believes this leverage level will provide the company the financial flexibility to fund modest acquisitions or increased shareholder rewards from internally generated cash flow. This could occur if net debt declines about 20% from the 2013 level to $2 billion along with annual EBITDA meeting or exceeding our base case forecast. S&P views that there exists at least a one-in-three chance that this could occur over the next 18 months. In addition, S&P would expect the company's financial policy, with regards to shareholder rewards and funding potential acquisitions, to be supportive of maintaining these measures. A revision in the outlook to stable could follow from weaker-than- expected free cash flow growth or a shift in financial policy by management toward debt-financed acquisitions and shareholder rewards resulting in debt to EBITDA exceeding 3x and FFO to debt below 30%. This could occur if forecast EBITDA were to be 20% or more below S&P's base case forecast coupled with a use of the majority of free cash flow to fund shareholder returns such that net debt remained near the 2013 level. GREEN FIELD ENERGY: Can Use Shell's Cash Collateral Until April 26 ------------------------------------------------------------------ The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware authorized Green Field Energy Services Inc. and its debtor-affiliates to access the cash collateral of Shell Western Exploration and Production Inc. until April 26, 2014, pursuant to a proposed budget. As reported in the Troubled Company Reporter on March 7, 2014, the Debtors said Shell Western asserts that (a) the Debtors' obligation under a deal called contract high pressure fracturing services dated Sept. 2, 2011, are secured by liens on certain of their equipment and motor vehicles, (b) the liens are valid and perfected, and (c) the proceeds of those assets constitutes Shell's "cash collateral". The Debtors told the Court the cash collateral will be used to pay expenses, which are related to their operations, administering their Chapter 11 case, successfully consummating the contemplated sale of certain of their assets, pursuing sale of their remaining assets, and seeking confirmation of their joint plan of liquidation. The Debtors said, without access to liquidity, their estates will suffer irreparable harm and they will not be able to maximize the value of their assets. The Debtors told the Court they have agreed to grant adequate protection to the indenture trustee, for the benefit of the noteholders, and ad hoc noteholder group, as applicable, to secure an amount equal to the aggregate postpetition diminution in value, if any. A full-text copy of the Debtors' proposed cash collateral budget is available for free at http://is.gd/r9lhxq 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-bk-12783). 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. In its schedules, Green Field disclosed $306,960,039 in total assets and $447,199,869 in total liabilities. 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. The Bankruptcy Court authorized the United States Trustee for Region 3 to appoint Steven A. Felsenthal, Esq., as examiner. GREEN FIELD ENERGY: Assessment Tech Okayed as Tax Consultants ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Green Field Energy Services, Inc. and its debtor-affiliates to employ Assessment Technologies, Ltd. as property tax consultant, nunc pro tunc to Jan. 24, 2014. As reported in the Troubled Company Reporter on March 11, 2014, Assessment Technologies' primary role will be to provide the Debtors with property tax compliance services and property tax consulting services with respect to appealing tax assessments and challenging tax claim amounts on certain business and property owned by the Debtors. The Debtors seek to retain Assessment Technologies to provide, among other things, the following ad valorem tax services in two phases: (a) Phase I (Pre-Petition Taxes - Tax year 2013 and Prior) - Tax Compliance/Research: reviewing (1) current/proposed tax assessment on the Properties; (2) supporting data, calculations, and assumptions produced by the appropriate appraisal/assessing authority, together with information provided by the Debtors and other professional sources; and (3) tax claims and current or pending litigation matters. - Tax Consulting: (1) analyzing the economic feasibility of attaining a reduced assessment/tax; (2) preparing all necessary appeals; and (3) at Assessment Technologies' discretion, representing the Debtors before the appropriate appraisal/assessing/collecting and value determination authorities, using all reasonable, appropriate, and available means to negotiate the lowest possible property value/assessment. Assessment Technologies' services provide for the continuation of the protest appeal beyond the administrative hearing into judicial appeals whether initiated by the Debtors or value/assessment authorities. The Debtors grant Assessment Technologies a limited power of attorney, if necessary, to act on the Debtors' behalf, at the sole discretion of Assessment Technologies, in accepting any valuation/assessment. (b) Phase II (Post-Petition Taxes - Tax Year 2014) - Tax Compliance: (1) serving as agent of record for all related issues with the tax office related to assessments and taxes on the Properties; and (2) preparing tax returns for the Properties owned by the Debtors. - Tax Consulting: (1) analyzing the economic feasibility of attaining a reduced assessment/tax; (2) preparing all necessary appeals; and (3) at Assessment Technologies' discretion, representing the Debtors before the appropriate appraisal/assessing/collecting and value determination authorities, using all reasonable, appropriate and available means to negotiate the lowest possible property value/assessment. Assessment Technologies' services provide for the continuation of the protest appeal beyond the administrative hearing into judicial appeals whether initiated by the Debtors or value/assessment authorities. The Debtors grant Assessment Technologies a limited power of attorney, if necessary, to act on the Debtors' behalf, at the sole discretion of Assessment Technologies, in accepting any valuation/assessment. Assessment Technologies will be paid at these hourly rates: Partners $550 Senior Consultants $425 Consultants $350 Professional Staff $250 Administrative $150 Research Staff $100 Assessment Technologies will also charge the Debtors 35% of all Tax Savings. Assessment Technologies will also be reimbursed for reasonable out-of-pocket expenses incurred. John Lammert, executive vice president of Assessment Technologies, 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. Assessment Technologies can be reached at: Johh Lammert ASSESSMENT TECHNOLOGIES, LTD. 121 Interpark Blvd. Ste 308 San Antonio, TX 78216 Tel: (800) 914-2732 Fax: (800) 431-4117 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-bk-12783). 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. In its schedules, Green Field disclosed $306,960,039 in total assets and $447,199,869 in total liabilities. 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. The Bankruptcy Court authorized the United States Trustee for Region 3 to appoint Steven A. Felsenthal, Esq., as examiner. HOPE 7 MONROE: DC Circ. Won't Reopen Condo Developer's Appeal ------------------------------------------------------------- Law360 reported that the D.C. Circuit refused to reopen a bankrupt condominium developer's bid to get out of a settlement with a creditor it accused of breaches of fiduciary duty under a $1.6 million loan, finding the developer hadn't established proper standing. According to the report, the D.C. Circuit said Hope 7 Monroe Street Limited Partnership hadn't established standing by showing that a successful appeal could result in a surplus in the disputed estate. The case is HOPE 7 MONROE STREET LIMITED PARTNERSHIP v. RIASO, LLC, Case No. 1:11-cv-01455 (D.D.C.) before Judge James E. Boasberg. The case was filed August 11, 2011. Hope 7 Monroe Street Limited Partnership, in Washington, DC, filed for Chapter 11 bankruptcy (Bankr. D. D.C. Case No. 09-00273) on April 2, 2009. Judge S. Martin Teel, Jr. presided over the case. Lucy R. Edwards, Esq., in Washington, DC, served as counsel to the Debtor. In its petition, Hope 7 estimated under $50,000 in assets and under $10 million in debts. The petition was signed by Lenan Cappel, a partner. HOUSTON REGIONAL: Comcast Not Mulling Buyout -------------------------------------------- David Barron, writing for The Houston Chronicle, reports that Comcast said Monday it will not enter a bid to purchase Comcast SportsNet Houston out of Chapter 11 bankruptcy. "Comcast initiated this bankruptcy proceeding in the belief that the Chapter 11 process would permit the network to reorganize, thus preserving the network's value and the jobs of many employees," Comcast said in a two-paragraph filing with the Bankruptcy Court. "Much has happened, however, in the nearly six months since this involuntary case was filed. In view of these developments, Comcast is no longer prepared to purchase the network. "Comcast remains open to considering any proposal by the debtor for reorganizing the network successfully in Chapter 11, including through an auction or through further efforts to obtain additional carriage." The Houston Chronicle said Comcast's statement came less than a week after Astros owner Jim Crane said he expected Comcast to make a bid for the portion of the network that it does not own. Mr. Crane said the Astros believed Comcast "is going to make an offer to either lend the network some more money to proceed or put an offer out to both teams." The Houston Chronicle also said the announcement throws more uncertainty into the 5-month-old saga over the future of the Astros-Rockets-Comcast partnership. The Astros own 46.5% of Houston Regional Sports Network, the parent company of CSN Houston, to 22.5% for Comcast and 31% for the Rockets. The report said Mr. Crane was not available for comment. A Rockets spokesman was not available for comment, and a Comcast spokesman said the company had no comment on its submission to the bankruptcy court. The report noted that Astros general counsel Giles Kibbe described the Comcast court filing as a tactical shift. "Comcast drove the network into bankruptcy for the stated purpose of preventing us from terminating our media rights agreement and to buy the network out of bankruptcy," Mr. Kibbe said in an email to the Houston Chronicle. "Now, after forcing the city, fans and teams through this ordeal for the last seven months, they're pulling out. Market conditions haven't changed. Comcast's tactics have." About Houston Regional Sports Network An involuntary Chapter 11 bankruptcy petition was filed against Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013. The involuntary filing was launched by three units of Comcast/NBC Universal and a television-related company. The petitioners are: Houston SportsNet Finance LLC, Comcast Sports Management Services LLC, National Digital Television Center LLC, and Comcast SportsNet California, LLC. The petitioning creditors have filed papers asking the Bankruptcy Judge to appoint an independent Chapter 11 trustee "to conduct a fair and open auction process for the Network's business assets on a going concern basis." Houston Regional Sports Network is a joint enterprise among affiliates of the Houston Astros baseball team, the Houston Rockets basketball team, and Houston SportsNet Holdings, LLC -- "Comcast Owner" -- an affiliate of Comcast Corporation. The Network has three limited partners -- Comcast Owner, Rockets Partner, L.P., and Astros HRSN LP Holdings LLC. The primary purpose of Houston Regional Sports Network is to create and operate a regional sports programming service that produces, exhibits, and distributes sports programming on a full-time basis, including live Astros and Rockets games within the league- permitted local territories. Counsel for the petitioning creditors are Howard M. Shapiro, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster, Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at Davis Polk & Wardwell LLP. Judge Marvin Isgur presides over the case. The Network was officially placed into Chapter 11 bankruptcy pursuant to a Feb. 7 Order for Relief. Harry Perrin, Esq., represents Astros owner Jim Crane. Alan Gover, Esq., represents the Rockets. The Astros are represented by Richard B. Drubel, Esq., Colleen A. Harrison, Esq., and Jonathan R. Voegele, Esq., at Boies, Schiller & Flexner LLP, in Hanover, NH; and Scott E. Gant, Esq., at Boies, Schiller & Flexner in Washington, DC. Comcast Corporation and NBCUniversal Media, LLC, are represented by Vincent P. Slusher, Esq., Eli Burriss, Esq., Andrew Mayo, Esq., and Andrew Zollinger, Esq., at DLA Piper; Arthur J. Burke, Esq., Timothy Graulich, Esq., and Dana M. Seshens, Esq., at Davis Polk & Wardwell LLP; and Howard M. Shapiro, Esq., and Craig Goldblatt, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP. Attorney for McLane Champions, LLC and R. Drayton McLane, Jr., are Wayne Fisher, Esq., at Fisher Boyd & Huguenard, LLP. HOVNANIAN ENTERPRISES: Incurs $24.5MM Net Loss in First Quarter --------------------------------------------------------------- Hovnanian Enterprises, Inc., reported a net loss of $24.52 million on $364.04 million of total revenues for the three months ended Jan. 31, 2014, as compared with a net loss of $11.30 million on $358.21 million of total revenues for the same period in 2013. The Company's balance sheet at Jan. 31, 2014, showed $1.78 billion in total assets, $2.24 billion in total liabilities and a $456.12 million total deficit. "While our first quarter is always the slowest seasonal period for net contracts, the strong recovery trajectory from the spring selling season of 2013 has softened on a year-over-year basis. Net contracts in the months of December, January and February have not met our expectations. In addition to the lull in sales momentum, both sales and deliveries were impacted by poor weather conditions and deliveries were further impacted by shortages in labor and certain materials in some markets that have extended cycle times," stated Ara K. Hovnanian, Chairman of the Board, president and chief executive officer. A copy of the press release is available for free at: http://is.gd/tARjRm About Hovnanian Enterprises Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV) -- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian, is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. Hovnanian Enterprises posted net income of $31.29 million on $1.85 billion of total revenues for the year ended Oct. 31, 2013, as compared with a net loss of $66.19 million on $1.48 billion of total revenues during the prior year. As of Oct. 31, 2013, the Company had $1.75 billion in total assets, $2.19 billion in total liabilities and a $432.79 million total deficit. * * * As reported by the Troubled Company Reporter on April 25, 2013, Standard & Poor's Ratings Services said it raised its corporate credit rating on Hovnanian Enterprises Inc. to 'B-' from 'CCC+'. "The upgrade reflects strengthening operating performance supported by the broader recovery in the housing market that, we believe, should support modest profitability in 2013," said Standard & Poor's credit analyst George Skoufis. In the Dec. 9, 2013, edition of the TCR, Fitch Ratings upgraded the Issuer Default Rating (IDR) of Hovnanian Enterprises to 'B-' from 'CCC'. The upgrade and the Stable Outlook reflects HOV's operating performance year-to-date (YTD), adequate liquidity position, and moderately better prospects for the housing sector during the remainder of this year and in 2014. As reported by the TCR on Jan. 9, 2014, Moody's Investors Service raised the Corporate Family Rating of Hovnanian Enterprises, Inc., to B3 from Caa1. The upgrade of the Corporate Family Rating to B3 reflects Hovnanian's improved financial performance including improvement in interest coverage to slightly above 1x and finally turning net income positive for the fiscal year 2013. HRK INDUSTRIES: Plan Filing Deadline Extended to April 10 --------------------------------------------------------- Bankruptcy Judge K. Rodney May in Tampa, Florida, extended the deadline by which HRK Holdings, LLC, and HRK Industries, LLC, must file their plan of reorganization and disclosure statement through and including April 10, 2014. The Court held a hearing on the Debtors' request on March 6 and again on March 12. The Court previously entered an order that established Feb. 28, 2014, as the expiration of the period within which to file a plan and disclosure statement. At the hearing, the Debtors made an ore tenus amendment to their Motion to seek an extension of the deadline through and including April 10, 2014. The Court, having considered the Motion, the ore tenus amendment and noting that there were no objections to the relief requested, finds it appropriate to grant the Motion. In their original request, the Debtors asked the Court to extend the deadline to March 17. The Debtros said the extension will allow them enough time to close a sale. Also, the maturity date under the existing debtor-in-possession obligations is March 17, 2014, and they need more time to negotiate with their lender Regions Bank, N.A., regarding the DIP financing. About HRK Holdings Based in Palmetto, Florida, HRK Holdings LLC owns roughly 675 contiguous acres of real property in Manatee County, Florida. Roughly 350 acres of the property accommodates a phosphogypsum stack system, called Gypstaks, a portion of which was used as an alternate disposal area for the management of dredge materials pursuant to a contract with Port Manatee and as authorized under an administrative agreement with the Florida Department of Environmental Protection. The remaining acres of usable land are either leased to various tenants or available for sale. HRK Industries holds various contracts and leases associated with the Debtors' property. HRK Holdings and HRK Industries LLC filed for Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on June 27, 2012. Judge K. Rodney May oversees the case. Barbara A. Hart, Esq., and Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents the Debtors. HRK Holdings disclosed $33,366,529 in assets and $26,092,559 in liabilities in its revised schedules. According to the Debtors, the bankruptcy filing was necessitated by the immediate need to sell a portion of the remaining property to create liquidity for (a) funding the urgent management of the site-related environmental concerns; the benefit of creditors; funding a litigation filed by the Debtors; and funding of expenses related to additional sales of the remaining property. HUNTINGTON INGALLS: Moody's Changes Ba2 CFR Outlook to Positive --------------------------------------------------------------- Moody's Investors Service has changed the rating outlook of Huntington Ingalls Industries, Inc. ("HII") to Positive from Stable. All ratings, including the Ba2 Corporate Family Rating, have been affirmed. The improved outlook reflects growth of backlog and operating profit over 2013. Income is expected to grow across 2014-2015 from a more profitable set of ship construction projects at hand and the better recovery of pension costs that will be possible ahead under the company's existing contracts. Credit metrics and cash flows could rise to levels that support a higher rating. Ratings: Huntington Ingalls Industries, Inc. Corporate Family, affirmed at Ba2 Probability of Default, affirmed at Ba2-PD $650 million first lien revolver due 2016, affirmed at Baa3, LGD2, to 19% from 13% $575 million first lien term loan due 2016, affirmed at Baa3, LGD2, to 19% from 13% $600 million senior unsecured notes due 2018, affirmed at Ba3 to LGD5 70% from LGD4 66% $600 million senior unsecured notes due 2021, affirmed at Ba3 to LGD5 70% from LGD4 66% Speculative Grade Liquidity, affirmed at SGL-2 Huntington Ingalls Incorporated $21.6 million industrial revenue bonds due 2028, affirmed at Ba3 to LGD5 70% from LGD4 66% Ratings Rationale The Positive rating outlook recognizes HII's operational progress since emerging as a standalone company three years ago, alignment with U.S. defense funding priorities, position as a key contractor to the Navy, run-off of unprofitable legacy contracts, and improvement in the company's pension funding level. At its spin-off from Northrop Grumman, the company's Ingalls segment faced several less profitable years, burdened by break- even, fixed-price amphibious ship construction contracts, but the performance outlook has improved as most of those unprofitable ships have delivered. The work schedule ahead will center on ship classes where production costs should be well understood. Moreover, a number of those ships will soon reach mature production stages where the profit rates embedded within the percentage of completion accounting are higher, which facilitates margin growth. A high backlog level also suggests that the company's two primary yards should enjoy a period of continuous work flow across the next few years. In 2013, the company's operating profit margin, before unusual items, rose to 7.9% from 6.1% on a Moody's adjusted basis; another 100 bps improvement could be achieved by 2015 as the mix of work becomes more favorable and pension costs recovered from the Navy under contractual arrangements will begin to materially rise from recent levels. Further, HII's high rate of discretionary pension plan contributions and a rising interest rate environment should help raise the defined benefit pension plan funding level, which improved to above 90% in 2013. The U.S. strategic pivot to the Asia Pacific region helps the Navy's funding outlook and HII is one of the Navy's two primary ship builders, and the only builder of its aircraft carriers. The Navy's fleet plan well suits HII's expertise (Arleigh-Burke destroyers, Virginia class submarines, and construction/overhaul/inactivation of aircraft carriers). The Ba2 Corporate Family Rating reflects high revenue visibility, the recent debt /EBITDA ratio decline to below 3x, and likelihood of minimally stable operating margins in coming quarters. Nonetheless the rating also recognizes that a transition period continues for HII as a decision on the ultimate disposition of its Avondale, LA shipyard (one of HII's three main shipyards) remains to be finalized. The plan of record has been to close the Avondale facility, but the yard may instead be repurposed as a commercial business. If the closure course is chosen, agreement from the Navy on recoverability of those closure costs remains to be finalized. Additionally, the last of the break-even amphibious ships is scheduled to deliver in 2014. Until these matters settle an added element of performance risk will remain. If the Avondale yard is ultimately repurposed as a commercial business, added execution risk could accompany that path. Other tempering considerations factored into the CFR include US budgetary pressures and only a modest amount of free cash flow expected near-term. While the legislation that alleviated sequestration's budgetary caps in the government's FY2014-FY2015 lessened pressure on defense contractors, sequestration is scheduled to reactivate in FY2016. The Navy's shipbuilding plans will face much Congressional scrutiny even if the sequestration caps beyond 2015 get legislated away. Moody's expects that HII will generate free cash flow in 2014 but the amount may not much exceed the $79 million of debt amortization scheduled, since added capital projects and (discretionary) pension plan contributions are anticipated. Realization of better cash flows from the company's operational improvements would likely not arrive until 2015 or 2016. The Speculative Grade Liquidity rating of SGL-2 denotes a good liquidity profile. Good borrowing availability under the company's $650 million revolver and a good level of covenant headroom expected are supportive considerations. Although free cash flow will probably not be robust near-term versus scheduled term loan amortizations, the company holds much cash ($1 billion at December 2013). A rating upgrade would depend on continued operating margin expansion in 2014, as expected, and progress toward a steady and more robust period of free cash flow. Credit ratios that would accompany an upgrade include debt/EBITDA in the high 2x range, free cash flow to debt above 10% and ROA of 5% or higher. Should the Avondale yard be repurposed rather than closed, the degree of associated execution and/or financial risk would be a consideration as well. Significant backlog growth would contribute upward momentum. Stabilization of the rating outlook could accompany discouraging performance developments, a lack of improvement in free cash flow generation, or an aggressive shift in financial policy. An expectation of debt/EBITDA sustained above the low 4x range, a large contract loss, or a weakening liquidity profile could drive a ratings downgrade. The principal methodology used in this rating was the Global Aerospace and Defense published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies. Huntington Ingalls Industries, Inc., through its Newport News, VA, Pascagoula/Gulfport, MS and Avondale, LA shipyards, provides full service design, engineering, construction, and lifecycle support of major surface ship programs for the U.S. Navy. Revenues in 2013 were approximately $6.8 billion. IBAHN CORP: Guest-tek Wins Court Approval to Buy Assets for $13MM ----------------------------------------------------------------- Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware authorized iBahn Corporation, et al., to sell all or substantially all of their assets to Guest-tek Interactive Entertainment Ltd. for $13 million. All objections and responses to the sale motion that have not been overruled, withdrawn, waived, settled, or otherwise resolved, are overruled and denied on the merits with prejudice. Notwithstanding the asset purchase agreement or the sale order, the Debtors are not selling or assigning any right to services under the CenturyLink Total Advantage Agreement between Qwest Communications Company, LLC, and iBahn General Holdings Corp., unless the CTA is assumed and assigned in accordance with Section 365 of the Bankruptcy Code, and the term "encumbrance" will not include any defense of Qwest, including but not limited to a right of recoupment. The Sale Order does not constitute the approval of the Debtors' assumption of any executory contracts with Oracle America, Inc., or Oracle USA, Inc., or the assignment of any contract to the Purchaser. The Debtors will pay at closing the $14,999 payable to the Local Texas Tax Authorities. Notwithstanding the free and clear sale provision of the Sale Order, the liens of the Local Texas Tax Authorities, if any, for 2014 ad valorem taxes will remain liens against the Purchased Assets post-closing and the obligation, if any, to pay any 2014 tax year ad valorem taxes is assumed and will be paid by the Purchaser as and when due. With respect to certain service agreements with Vibiquity, Inc., the Purchaser will assume and be liable for all obligations of the Debtors that may arise under the service agreements. The sale and the sale order are subject to the terms and conditions of a stipulation between the Debtors and W2007 Equity Inns Realty, LLC, and its affiliates. The Sale Order does not bar any claim, defense or right of Nomadix, Inc., relating to the post-closing acts or omissions with respect to any Purchased Asset, or with respect to the Purchased Assets owned by iBahn International Corporation immediately prior to the merger, any claim of Nomadix arising out of any contract or agreement to which iBahn International is a part pertaining to the provision of high speed internet access. The Sale Order will not be deemed or construed to modify the Debtors' obligations under the DIP Amended Credit Agreement, or any other obligation of any Debtor to JPMorgan Chase Bank, N.A., under the Financing Order, including JPMorgan's agreement to permit the Debtors to fund at closing the wind down budget filed on February 14, 2014, from the cash proceeds of the sale without any increase in the prepetition or postpetition financing balance. About iBahn Corp. Salt Lake City, Utah-based IBahn Corp., a provider of Internet services to hotels, sought bankruptcy protection (Bankr. D. Del. Case No. 13-12285), citing a loss of contracts with largest customer Marriott International Inc. and patent litigation costs. IBahn Chief Financial Officer Ryan Jonson said the company had assets of $13.6 million and it listed liabilities of as much as $50 million in the Chapter 11 filing on Sept. 6, 2013. The petitions were signed by Ryan Jonson as chief financial officer. Judge Peter J. Walsh presides over the case. Laura Davis Jones, Esq., Davis M. Bertenthal, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang, Ziehl Young & Jones, LLP, serve as the Debtors' counsel. The Debtors' claims and noticing agent is Epiq Bankruptcy Solutions. Epiq also serves as administrative agent. Houlihan Lokey Capital, Inc., serves as financial advisor and investment banker. IGATE CORP: Moody's Hikes CFR to 'Ba3' & Rates $325MM Note 'B1' --------------------------------------------------------------- Moody's Investors Service upgraded iGate Corporation's ("iGate") corporate family and probability of default ratings ("CFR" and "PDR", respectively) to Ba3 and Ba3-PD from B1 and B1-PD, respectively. Concurrently, Moody's assigned a B1 rating to the proposed $325 million senior unsecured note due 2019. The B2 rating for the existing unsecured senior unsecured note due 2016 will be withdrawn upon repayment following the close of the financing transaction. The rating outlook is stable. Rating Rationale The CFR upgrade reflects Moody's expectation that with the reduction of overall debt and the successful integration of the Patni acquisition, iGate will operate at a leverage target below 3 times through 2014 and 2015. With over $1.2 billion of projected revenue for 2014, iGate has achieved enhanced size and scale that enables the company to compete for larger technology and business process outsourcing (BPO) contracts. Moody's expects the larger scale to lead to consistent 20% operating margins with free cash flow exceeding $150 million annually by the end of 2015. iGate's Ba3 CFR considers iGate's highly competitive landscape, characterized by larger and financially stronger information technology (IT) services and outsourcing providers and concentrated customer base (e.g., top two customers comprised 24% of 2013 revenues). At the same time, iGate benefits from a recurring revenue stream from longstanding customer relationships, a record of solid operating performance buoyed by a low cost offshore labor infrastructure, and very good liquidity (Moody's projected cash and short-term investments of $280 million by the end of 2014). The stable outlook reflects Moody's expectation of high single digit annual revenue growth supported by favorable industry dynamics, in which enterprise clients seek to reduce costs by migrating further to an offshore delivery model. Moody's anticipates adjusted debt to EBITDA of less than 3 times by the end of 2014 through a combination of debt paydown and profit expansion. iGate's ratings could be upgraded if the company were to achieve double digit organic revenue growth, sustain operating margins at over 20% , generate free cash flow over $200 million, and maintain leverage at 2.5 times. The ratings could experience downward rating pressure if total revenue and profits decrease significantly (by 5%), a major customer defects, or iGate's adjusted debt to EBITDA leverage ratio exceeds 4 times on a sustained basis. Ratings upgraded: Corporate Family Rating -- Ba3 from B1 Probability of Default Rating -- Ba3-PD from B1-PD Rating assigned: Senior Unsecured Notes -- B1 (LGD 5, 72%) Rating affirmed: Speculative Grade Liquidity Rating of SGL-1 Rating to be withdrawn: Senior Unsecured Notes due 2016 -- B2 (LGD 4 -- 57%) Rating outlook of stable. The principal methodology used in this rating was Global Business & Consumer Service Industry published in October 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. With projected annual revenues over $1.2 billion, iGate Corporation (Nasdaq: IGTE), is a global outsourcing provider of information technology (IT) services and solutions with a significant offshore delivery model in India. IGATE CORP: S&P Raises CCR to 'BB-' on Refinancing; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Bridgewater, N.J.-based iGATE Corp. to 'BB-' from 'B+'. The outlook is stable. At the same time, S&P assigned the company's proposed $325 million senior unsecured notes a 'BB-' issue-level rating, with a recovery rating of '3', indicating its expectation for average (50% to 70%) recovery of principal in the event of a default. After the refinancing of the company's $770 million note closes, S&P will withdraw the rating on that note. The upgrade of iGATE is based on the company's improved competitive position to "fair" from "weak", as a result of better overall operating profitability and improved operating efficiency following the successful integration of Patni Computer Systems, a provider of information technology. In addition, iGATE's financial risk improved to "significant" from "highly leveraged" based on S&P's expectation that forecasted leverage will decline to the low-3x area at the end of 2014, reflecting debt paydowns and the netting of cash against debt per S&P's criteria. S&P believes that iGATE will generate positive free cash flows and consistent EBITDA margins, while maintaining leverage in the "significant" category. S&P adjusts the 'bb' anchor score downward by one notch because of its negative comparative rating analysis that reflects the company's unfavorable financial metrics, ratios, and market position relative to other peers. "The rating reflects iGATE's "fair" business risk profile and "significant" financial risk profile (as defined by our criteria). We view the industry risk as "intermediate" and the country risk as "very low." Our view of iGATE's fair business risk profile reflects the company's significant base of recurring revenue (98% of revenue), and consistent operating profitability. These factors are partially offset by the company's high customer and geographic concentration, relatively small operating scale to its larger direct peers, and modest market share in the highly competitive global information technology (IT) service industry. However we adjust the anchor score downward by one notch to the final 'BB-', given that the company's financial metrics and ratios are at the lower end of the range for the rating, FFO to debt falls within the "aggressive" category, and the company's market position is not favorable relative to competitors," S&P said. iGATE provides services to large and midsize organizations. iGATE's main differentiator relative to other IT service outsourcing providers is its business outcome-based pricing model- -iTOPS--that combines IT with its expertise in BPO and technology services. iGATE's May 2011 acquisition of Patni provided it with the scale to successfully compete against larger peers, improved its market position, and diversified its revenue base into high growth markets such as retail and health care. However, iGATE still has high geographic concentration (roughly 80% of revenue comes from the U.S. and Canada) and customer concentration as the company's top client accounted for 13% of fiscal year end 2013 revenues. In addition, the company's top 5 and top 10 clients accounted for 40% and 50.2% of revenues, respectively. IGLESIA PUERTA: Amends Schedules of Assets and Liabilities ---------------------------------------------------------- Iglesia Puerta del Cielo, Inc., filed with the U.S. Bankruptcy Court for the Western District of Texas, El Paso Division, amended schedules of assets and liabilities, disclosing: Assets Liabilities ----------- ----------- A. Real Property $16,915,000 B. Personal Property $4,393,181 C. Property Claimed as Exempt N/A D. Creditors Holding Secured Claims $9,428,705 E. Creditors Holding Unsecured Priority Claims 0 F. Creditors Holding Unsecured Nonpriority Claims $192,750 ----------- ----------- $21,308,181 $9,546,867 A full-text copy of the Debtor's recent schedules is available for free at http://is.gd/TiGWqu A full-text copy of the schedules dated Nov. 12 is available for free at http://is.gd/XCN5L2 Iglesia Puerta del Cielo, Inc., a domestic non-profit corporation that provides religious services to third parties, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 13-31911) on Nov. 12, 2013. The case is assigned to Judge Christopher Mott. Wiley F. James, III, Esq., at James & Haugland, P.C., in El Paso, Texas, represents the Debtor. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million. IGLESIA PUERTA: Files Amended List of Top Unsecured Creditors ------------------------------------------------------------- Iglesia Puerta del Cielo, Inc., has submitted an amended list that identifies its top 20 unsecured creditors. Creditors with the three largest claims are: Entity Nature of Claim Claim Amount ------ --------------- ------------ Jose Canales Other $105,318 c/o T.O. Gilstrap 5915 Silver Springs Bldg. 2 El Paso, TX 79912 Raul Arizpe Other $87,431 c/o Dennis Richard Wiglington Runley Dunn, LLP 601 Howard St. San Antonio, TX 78212 Judgment Creditors Other $30,000 c/o Mills Escrow 6501 Boeing, Suite H-4 EL Paso, TX 79925 A copy of the creditors' list is available for free at: http://bankrupt.com/misc/IGLESIAPUERTA_47_amendedcreditorslist.pdf Iglesia Puerta del Cielo, Inc., a domestic non-profit corporation that provides religious services to third parties, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 13-31911) on Nov. 12, 2013. The case is assigned to Judge Christopher Mott. Wiley F. James, III, Esq., at James & Haugland, P.C., in El Paso, Texas, represents the Debtor. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million. INOFIN INC: Holland & Knight Wants Jury Trial In Malpractice Case ----------------------------------------------------------------- Law360 reported that Holland & Knight LLP has asked a Massachusetts federal judge to withdraw an adversary complaint filed by the trustee in Inofin Inc.'s Chapter 7 bankruptcy case, saying in a motion that the malpractice case will likely be heard before a jury in district court given the underlying securities issues. According to the report, in the motion, attorneys for Holland & Knight indicated their opposition to the adversary suit being heard in bankruptcy court, arguing that the case contains no bankruptcy issues or claims. The case is Mark G. DeGiacomo v. Holland and Knight, et al., Case No. 1:14-cv-10483 (D. Mass.) before Judge Nathaniel M. Gorton. INDEPENDENCE TAX II: Incurs $131K Net Loss in Dec. 31 Qtr. ---------------------------------------------------------- Independence Tax Credit Plus L.P. II filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $130,553 on $210,744 of total revenues for the three months ended Dec. 31, 2013, as compared with a net loss of $234,373 on $209,466 of total revenues for the same period in 2012. For the nine months ended Dec. 31, 2013, the Company reported a net loss of $370,996 on $641,859 of total revenues as compared with net income of $14.38 million on $613,511 of total revenues for the period ended Dec. 31, 2012. The Company's balance sheet at Dec. 31, 2013, showed $2.80 million in total assets, $16.31 million in total liabilities and a $13.51 million total partners' deficit. "At December 31, 2013, the Partnership's liabilities exceeded assets by $13,511,275 and for the nine months ended December 31, 2013, the Partnership had net loss of ($370,996). These factors raise substantial doubt about the Partnership's ability to continue as a going concern," the Company said in the Quarterly Report. A copy of the Form 10-Q is available for free at: http://is.gd/ouD3Ap About Independence Tax Credit Plus L.P. II Based in New York, Independence Tax Credit Plus L.P. II was organized on Feb. 11, 1992, and commenced its public offering on Jan. 19, 1993. The general partner of the Partnership is Related Independence Associates L.P., a Delaware limited partnership. The general partner of Related Independence Associates L.P. is Related Independence Associates Inc., a Delaware Corporation. The ultimate parent of Related Independence Associates L.P. is Centerline Holding Company. The Partnership's business is primarily to invest in other partnerships owning leveraged apartment complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, some of which may also be eligible for the historic rehabilitation tax credit. The Partnership is in the process of developing a plan to dispose of all of its investments. INTERTAPE POLYMER: S&P Raises CCR to 'BB-'; Outlook Stable ---------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Intertape Polymer Group Inc. to 'BB-' from 'B+'. The outlook is stable. "The upgrade reflects continued strengthening in the company's earnings over the past two years, resulting from a better pricing environment, a shift in mix to higher-margin products, and ongoing cost-reduction initiatives," said Standard & Poor's credit analyst Daniel Krauss. Despite 2013 revenues being roughly flat versus 2011 levels, the company has been able to improve EBITDA to above $100 million in 2013, compared with about $65 million in 2011. Higher earnings and cash flows have allowed for significant debt reduction and thus a meaningful improvement in credit metrics. The key ratio of funds from operations (FFO) to total debt was above 50% in 2013--a significant increase from about 20% in 2011. Over the next one to two years S&P would expect credit metrics to be maintained in the "intermediate" financial risk profile band, including FFO to debt of between 30% and 45%. S&P adjusts the financial risk profile down by one category to "significant," which reflects its expectation that ratios would move by two categories during periods of stress given the expected volatility in Intertape's operating performance and potential acquisition opportunities. Over the business cycle S&P would expect FFO to total debt to average between 25% and 30%, a range which S&P considers appropriate for the rating. "The ratings on Intertape reflect our assessment of the company's business risk profile as "weak" and financial risk profile as "significant". With 2013 annual revenues of about $780 million, Intertape manufactures mainly tapes, films, and woven products for the industrial, packaging, housing and construction, and food and consumer durables end markets. Tapes are the company's largest business, accounting for about 65% of its revenues. Products consist mainly of carton sealing tapes, industrial tapes (including masking tape and duct tape), and water-activated tape. The films business, which accounts for nearly 20% of revenues, complements the tapes business and uses the same distribution network that markets the majority of Intertape's other products. The woven coated fabrics segment includes lumber wrap and house wrap for use in the housing construction market," S&P said. "We expect the company's continued shift toward a higher-margin product mix, ongoing cost-reduction initiatives, and new product introductions will allow it to maintain EBITDA margins at greater- than-historical levels. We believe that Intertape is well positioned to benefit from the cyclical recovery in the U.S. housing market and continued pick-up in industrial production. Our base case assumes that liquidity will improve throughout 2014 and we have not factored in any meaningful debt-funded acquisitions or share repurchases," S&P added. "We could lower the ratings if unexpected shocks caused the company's liquidity position to deteriorate to a level that we consider to be "less than adequate". We could also consider a modest downgrade if the company is unable to pass on raw material cost increases to its customers in a timely manner, or if more competitive market conditions caused the recent improvement in EBITDA to reverse and free cash flow to turn negative. Based on our downside scenario, we could lower the ratings if EBITDA margins deteriorate by 400 basis points or more from current levels, coupled with a moderate drop in revenues. If this scenario were to occur, we would expect the company's liquidity position could become pressured and credit metrics would fall below our expectations at the rating," S&P noted. S&P could raise the ratings modestly if the company is able to maintain credit metrics at above 45%, even after factoring in potential acquisitions and cyclical downturns. While less likely, considering the company's meaningful exposure to cyclical end markets, S&P could consider a one-notch upgrade if potential growth opportunities led to a reassessment of the company's business risk profile as "fair". Before considering an upgrade, S&P would have to gain additional comfort around the company's liquidity position, and expect that the company could maintain adequate liquidity after factoring in potential raw material spikes and seasonal working capital swings. INTERSTATE BANKERS: A.M. Best Lowers Fin. Strength Rating to 'C-' ----------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to C- (Weak) from B (Fair) and issuer credit rating to "cc" from "bb" of Interstate Bankers Casualty Company (Interstate Bankers) (Chicago, IL). The outlook for both ratings is negative. The rating actions reflect the continuing deterioration in Interstate Bankers' operating results, which resulted in a significant decline in capitalization in 2013, as shown by a 41% drop in statutory surplus during the past year. The company's poor operating performance was driven by underwriting losses, as it strengthened the loss reserves of its auto liability book of business. The company's recent decline in capitalization has further resulted in highly elevated premium and underwriting leverage ratios. Consequently, Interstate Bankers' risk-adjusted capitalization has significantly deteriorated. However, the company has recently begun taking actions to improve its underwriting performance, including implementing indicated rate increases, increasing loss reserves and implementing a 40% quota share reinsurance agreement that was effective December 31, 2013. The negative outlook reflects the possibility of future rating downgrades should there be continued deterioration in Interstate Bankers' operating results, underwriting leverage and risk- adjusted capitalization. Also, while near-to-medium-term improvements in the company's current rating level are not likely, sustained improvement in its risk-adjusted capitalization and operating results may result in A.M. Best re-evaluating the current outlook. INSTITUTO MEDICO: March 20 Hearing on US Trustee's Dismissal Bid ---------------------------------------------------------------- Guy G. Gebhardt, the Acting United States Trustee for Region 21, petitioned on Feb. 21, 2014, the Bankruptcy Court under Section 1112(b) of the Bankruptcy Code to dismiss the case of Instituto Medico Del Norte, Inc. The U.S. Trustee stated that it filed the motion to dismiss because the Debtor, a corporation, had failed to pay its quarterly fees (in the amount of $12,675.00) as required under 28 U.S.C Section 1930. The U.S. Trustee in its Memorandum in Support of the Motion to Dismiss states that Section 1112(b) of the Bankruptcy Code provides that the Court may dismiss or convert a case to Chapter 7 if the movant establishes "cause", which the Trustee argues includes "the failure to pay any fees or charges required under Chapter 123 of title 28." The U.S. Trustee further states that the Debtor's behavior demonstrates that it has no intention to comply with its duties and that its behavior is prejudicial to its creditors. The Bankruptcy Court has issued an order and notice stating that the Debtor should file an opposition to the Trustee's Motion to Dismiss within 14 days from the notice of the order. The Bankruptcy Court also stated that if a timely opposition is filed, a hearing will be held March 20, 2014 at 10:00 a.m., at the U.S. Bankruptcy Court, jos v. Toledo Post Office & Courthouse Building, Courtroom 2, Floor 2, 300 Recinto Sur, Old San Juan, Puerto Rico. The Court further stated that the parties should meet and file a report three days prior to the hearing. About Instituto Medico Instituto Medico del Norte, Inc., aka Centro Medico Wilma N. Vazquez, aka Hospital Wilma N. Vazquez Skill Nursing Facility of Centro Medico Wilma N. Vazquez, sought protection under Chapter 11 of the Bankruptcy Code on Oct. 30, 2013 (Bankr. D.P.R. Case No. 13-08961). The case is assigned to Judge Mildred Caban Flores. The Debtor scheduled $20,843,692 in total assets and $20,107,642 in total liabilities. The Debtor, however, said its real property has a book value of $16,000,000 and personal property is worth $6,105,979. The Debtor is represented by Fausto David Godreau Zayas, Esq., and Rafael A. Gonzalez Valiente, Esq., at Latimer Biaggi Rachid & Godreau, in San Juan, Puerto Rico. Luis B. Gonzalez & Co. CPA's P.S.C. serves as accountant. The U.S. Trustee for the District of Puerto Rico in December appointed Dr. Carlos Mellado (b/t Lcda Dinorah Collazo Ortiz) as patient care ombudsman. KINDRED HEALTHCARE: Moody's Rates Proposed $1BB Term Loan 'B1' -------------------------------------------------------------- Moody's Investors Service assigned a B1 (LGD 3, 43%) rating to Kindred Healthcare, Inc.'s proposed $1.0 billion term loan B due 2021. Moody's understands that the proceeds of the new term loan, a new $750 million ABL revolving credit facility (not rated by Moody's) and a potential $500 million senior unsecured debt restructuring will be used to refinance the company's existing capital structure. Moody's also affirmed the existing ratings of Kindred, including the B1 Corporate Family Rating and B1-PD Probability of Default Rating. The rating outlook is stable. The proposed term loan is rated at the same level as the corporate family rating due to the increase in expected loss at the senior secured debt level. This results from the larger size of the proposed credit facility and a reduction in the expected amount of unsecured debt in the capital structure following the refinancing. Kindred currently has $550 million of senior unsecured notes outstanding. Moody's will withdraw the ratings on the existing bank debt at the close of the transaction. Following is a summary of Moody's rating actions. Ratings assigned: $1.0 billion senior secured term loan due 2021 at B1 (LGD 3, 43%) Ratings affirmed: Corporate Family Rating at B1 Probability of Default Rating at B1-PD Senior secured term loan due 2018 at Ba3 (LGD 3, 41%) Senior unsecured notes due 2019 at B3 (LGD 5, 82%) Speculative Grade Liquidity Rating at SGL-2 Ratings Rationale Kindred's B1 Corporate Family Rating reflects Moody's expectation that the company will continue to decrease leverage from the currently high level through a combination of EBITDA growth and debt repayment. Moody's expects that the company will begin to grow revenue and EBITDA off of a lower base now that the majority of its repositioning strategy, which included the selling or exiting of noncore assets and markets, is significantly complete. Moody's also considers the scale and diversity of the company and its position as one of the largest post acute care service providers with a significant presence across the post acute care continuum. However, the rating also incorporates our consideration of risk associated with a high reliance on the Medicare program as a source of revenue and the expectation that the company will pursue acquisitions to fill out service line offerings in certain targeted markets. The stable rating outlook reflects Moody's expectation that EBITDA and free cash flow will grow and allow for the reduction of leverage over the next 12 to 18 months. However, Moody's expects that free cash flow available for debt repayment could be limited in the near term because of continued investment in the home health and hospice sectors and the payment of its recently instituted dividend. Moody's also believes that legislation passed in December 2013 related to specific patient criteria for the Medicare reimbursement of long term acute care hospital patients provides a level of stability to the operating results in that segment. If the company is unable to reduce and sustain adjusted debt to EBITDA below 5.0 times, the rating could be downgraded. This could result from negative developments in Medicare reimbursement in the company's various sectors or the completion of a material debt financed acquisition or shareholder initiative. Given the high leverage of the company and Moody's expectation of ongoing reimbursement pressure in the post acute care sectors, Moody's does not believe an upgrade of the rating is likely in the near term. However, the rating could be upgraded if adusted leverage is expected to be reduced and sustained below 4.5 times as a result of continued growth, operational improvements and/or debt repayment. Kindred Healthcare, Inc., through its subsidiaries, operates long term acute care hospitals, inpatient rehabilitation facilities, skilled nursing facilities, assisted living facilities, a contract rehabilitation services business and a home health and hospice business across the US. For the year ended December 31, 2013 the company recognized revenue of approximately $4.9 billion after considering the provision for doubtful accounts. The principal methodology used in this rating was Global Healthcare Service Providers published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. KNOWLEDGE UNIVERSE: Add-on Term Debt No Impact on Moody's B3 CFR ---------------------------------------------------------------- Moody's Investors Service said that Knowledge Universe's ("KUE LLC") upsize of its proposed first lien senior secured term loan due 2021 from $270 million to $300 million is credit negative, however, does not impact the ratings, including the B3 corporate family rating, B3-PD probability of default rating, and B2 rating on the proposed first lien senior secured term loan and revolving credit facility. The stable rating outlook is also unchanged. Knowledge Universe Education LLC ("KUE LLC"), based in Portland, Oregon, is a large scale for-profit provider of early childhood care and education in the U.S. KUE LLC operates over 1,500 community-based centers, about 385 school-partnership sites and about 100 employer-partnership centers under a number of recognized brands, including "KinderCare", "CCLC" and "Champions." KUE LLC is privately owned. KNOWLEDGE UNIVERSE: S&P Retains Prelim. 'B' Rating After Upsize --------------------------------------------------------------- Standard & Poor's Ratings Services said that its preliminary 'B' issue-level rating and preliminary '3' recovery rating on Portland, Ore.-based Knowledge Universe Education LLC are unchanged after the company's announcement of a proposed $30 million upsizing of its senior secured credit facilities. The proposed $370 million senior secured credit facilities will now consist of a $300 million term loan due 2021 and a $70 million revolving credit facility due 2019. The company will use the proceeds to refinance its existing $260 million 7.75% subordinated notes due February 2015, replace its $60 million revolving credit facility due December 2015, and to pay a $30 million dividend. The transaction upsizing has a marginal negative impact on credit measures, and the refinancing will extend debt maturities and reduce interest expense by slightly above 20%. The 'CCC' corporate credit rating on Knowledge Universe Education remains on CreditWatch positive, reflecting S&P's expectation that that it will raise the rating to 'B' following the satisfactory completion of the refinancing. An upgrade to 'B' would also be based on S&P's expectation that the company will maintain adequate liquidity, despite capital spending requirements and cyclical operating performance. "We regard KUE's business risk profile as "weak," reflecting the sensitivity of capacity utilization rates to unemployment levels, its lower EBITDA margin relative to peers as a result of lower capacity utilization, and its large number of money-losing centers. We view the company's financial risk profile as "highly leveraged," reflecting the company's high lease-adjusted debt to EBITDA and heavy capital expenditure requirements, which are necessary to maintain the competitiveness of its centers. We expect that improving operating performance and lower pro forma interest expense will result in consistently positive discretionary cash flow and an adequate margin of compliance with financial covenants, despite periodic step-downs through 2017," S&P said. RATINGS LIST Knowledge Universe Education LLC Corporate Credit Rating CCC/Watch Pos/-- Ratings Unchanged Knowledge Universe Education LLC Senior Secured $300M term loan due 2021 B (prelim) Recovery Rating 3 (prelim) $70M revolver due 2019 B (prelim) Recovery Rating 3 (prelim) LAFAYETTE YARD: NJ City Says Wong Fleming Isn't Owed Fees for Work ------------------------------------------------------------------ Law360 reported that Trenton, N.J., asked a New Jersey bankruptcy judge to deny Wong Fleming PC payment for its January billed hours, saying the firm billed incorrectly and failed to be of any benefit to its debtor, the bankrupt former owner of a Trenton hotel. According to the report, Douglas A. Kent of Becker Meisel LLC, an attorney for the city of Trenton, filed an objection asking U.S. Bankruptcy Judge Michael B. Kaplan to deny payment of Wong Fleming's $62,665 January fee statement, arguing the Princeton, N.J., firm has not earned the requested fees. 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. LANCELOT INVESTMENT: High Court Won't Revive Winston Claims ----------------------------------------------------------- Law360 reported that the U.S. Supreme Court declined to review a Seventh Circuit decision that threw out malpractice claims against Winston & Strawn LLP from the bankruptcy trustee for Colossus Capital Fund Ltd. and Lancelot Investors Fund Ltd., which both lost money in the mammoth Tom Petters' Ponzi scheme. According to the report, Ronald Peterson of Jenner & Block LLP, the Chapter 7 trustee for the funds, filed his petition for writ of certiorari in January, asking the high court to take up the case. LEHMAN BROTHERS: LBI Trustee Seeks to Disallow Frankel Claim ------------------------------------------------------------ The trustee of Lehman Brothers Holdings Inc.'s brokerage asked the U.S. Bankruptcy Court in Manhattan to disallow a $3.7 million claim filed by a former employee. Sofia Frankel filed a general creditor claim against the Lehman brokerage based on, among other things, compensation in the form of "Lehman stock and options" and indemnification of an arbitration award. The claim was assigned as Claim No. 4909. James Giddens, the trustee appointed to liquidate the brokerage, said there is "no legal or factual basis" for a claim against the brokerage. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases were initially handled by Judge James M. Peck. In March 2014, the case was reassigned to Judge Shelley C. Chapman after Judge Peck resigned to join Morrison & Foerster LLP as co-chairman of the restructuring and insolvency practice. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: LBI Trustee Seeks to Disallow Gales' Claim ----------------------------------------------------------- The trustee of Lehman Brothers Holdings Inc.'s brokerage asked the U.S. Bankruptcy Court in Manhattan to disallow a general creditor claim filed by Connie and Curtis Gale. The claim stemmed from an account maintained at the Lehman brokerage by the Gale Family LP where the claimants are general partners. The account, which invested in technology stocks, allegedly suffered significant losses soon after it was opened in June 2000. Gale Family, however, continued to maintain the account at the brokerage through February 2008. The claimants alleged that the Lehman brokerage made unauthorized trades in Gale Family's account and churned the account to fraudulently generate excessive and unwarranted commissions. According to James Giddens, the trustee appointed to liquidate the brokerage, the claim does not have any merit and that the brokerage is not liable to the claimants. The bankruptcy court will hold a hearing on April 24 to consider the proposed disallowance of claims. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases were initially handled by Judge James M. Peck. In March 2014, the case was reassigned to Judge Shelley C. Chapman after Judge Peck resigned to join Morrison & Foerster LLP as co-chairman of the restructuring and insolvency practice. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: Former Employees Defend Claims ----------------------------------------------- A group of former Lehman employees asked the bankruptcy court to deny the company's omnibus objections, which seek to reclassify compensation claims as equity or to subordinate those claims pursuant to Section 510(b) of the Bankruptcy Code. The Lehman employees argued they had fully liquidated claims for their services and that the company promised to compensate them even before it filed for bankruptcy protection. "Now, Lehman contends that its bankruptcy has transformed claimants into equity holders of equity they never had or sought to own, the risk of which they never sought to undertake and any conceivable rewards they never sought to reap," the group said in court papers filed last week. "Lehman has repeatedly imputed intent to claimants for which there is no evidentiary basis, withheld from the court plain language it used in its own documents, and glossed over material differences in the features of different compensation instruments," the group also said. The claimants are represented by: Richard J. Schager, Jr., Esq. Andrew R. Goldenberg, Esq. STAMELL & SCHAGER, LLP One Liberty Plaza, 23rd Floor New York, NY 10006-1404 Tel: (212) 566-4047 Fax: (212) 566-4061 Email: schager@ssnvc.com goldenberg@ssnyc.com - and - Lisa M. Solomon, Esq. Law Offices of Lisa M. Solomon One Grand Central Place 305 Madison Avenue, Suite 4700 New York, NY 10165 Tel: (212) 471-0067 Fax: (212) 980-6965 Email: lisa.solomon@att.net - and - Howard P. Magaliff, Esq. Robert N. Michaelson, Esq. Rich Michaelson Magaliff Moser LLP 340 Madison Avenue, 19th Floor New York, NY 10173 Tel: (212) 220-9402 Email: HMagaliff@R3MLaw.Com RMichaelson@R3MLaw.Com - and - A. James Boyajian, Esq. Law Office of A. James Boyajian 355 S. Grand Avenue, Suite 2450 Los Angeles, CA 90071 Tel: (424) 258-0777 Fax: (424) 298-4377 Email: jal11esbovajian@gmail.com Claims Disallowed The U.S. Bankruptcy Court in Manhattan disallowed seven claims, which assert $250,000 against Lehman Brothers. The claims are listed at: http://bankrupt.com/misc/LBHI_448thoo_2NoLiability.pdf http://bankrupt.com/misc/LBHI_455th_5NoLiability.pdf The bankruptcy court also ordered to reduce the amounts asserted in eight claims. A list of the claims is available for free at http://is.gd/T8snGe The amount of each claim is "greater than the fair, accurate, and reasonable value" of the amount for which Lehman is liable, according to court papers. Meanwhile, Lehman dropped its objection to three claims filed by 1199 Seiu Greater New York Benefit Fund and Peter Kollydas. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases were initially handled by Judge James M. Peck. In March 2014, the case was reassigned to Judge Shelley C. Chapman after Judge Peck resigned to join Morrison & Foerster LLP as co-chairman of the restructuring and insolvency practice. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: LBI Trustee Wants to Disallow $117MM in Claims --------------------------------------------------------------- James Giddens, the trustee liquidating Lehman Brothers Holdings Inc.'s brokerage, asked the U.S. Bankruptcy Court in Manhattan to disallow 116 claims, which assert more than $117 million. The claims are listed at: http://bankrupt.com/misc/LBHI_212thoo_45noliability.pdf http://bankrupt.com/misc/LBHI_213thoo_18employee.pdf http://bankrupt.com/misc/LBHI_214thoo_7noliability.pdf http://bankrupt.com/misc/LBHI_215thoo_46noliability.pdf The trustee also proposed for (i) the disallowance of the entire claim or (ii) the subordination and reclassification in part and disallowance in part of the claims listed at http://is.gd/TtfrhC Meanwhile, the Lehman trustee dropped his objection to eight claims filed by creditors including Fast Signs and RIJ International Equity. The SIPA Trustee defended his decision to consolidate the deferred-compensation claims for former Lehman employees into one proceeding, saying that doing so would save the estate money, Joseph Checkler, writing for Daily Bankruptcy Review, reported on Feb. 26. The Bankruptcy Court subsequently allowed the Trustee to consolidate the deferred-compensation claims of LBI's former employees into one proceeding over the objections of a lawyer representing the employees. Court Disallows $334-Mil. in Claims Judge Shelley Chapman disallowed 422 claims, which seek to recover more than $334 million from the Lehman brokerage. The claims are listed at: http://bankrupt.com/misc/LBHI_sipa143rdoo_2nonemployee.pdf http://bankrupt.com/misc/LBHI_sipa173rdoo_1employee.pdf http://bankrupt.com/misc/LBHI_sipa176thoo_10insuffdocs.pdf http://bankrupt.com/misc/LBHI_sipa178thoo_11noliability.pdf http://bankrupt.com/misc/LBHI_sipa181stoo_6insuffdocs.pdf http://bankrupt.com/misc/LBHI_sipa183rdoo_47untimely.pdf http://bankrupt.com/misc/LBHI_sipa186thoo_25insuffdocs.pdf http://bankrupt.com/misc/LBHI_sipa189thoo_75insuffdocs.pdf http://bankrupt.com/misc/LBHI_sipa190thoo_15noliability.pdf http://bankrupt.com/misc/LBHI_sipa191stoo_156compensation.pdf http://bankrupt.com/misc/LBHI_sipa193rdoo_33noliability.pdf http://bankrupt.com/misc/LBHI_sipa194thoo_9noliability.pdf http://bankrupt.com/misc/LBHI_sipa195thoo_9noliability.pdf http://bankrupt.com/misc/LBHI_sipa196thoo_14insuffdocs.pdf http://bankrupt.com/misc/LBHI_sipa197thoo_6noliability.pdf http://bankrupt.com/misc/LBHI_sipa199thoo_3noliability.pdf Meanwhile, the bankruptcy judge disallowed the portions of claims filed by former Lehman employees based on the ownership of common stock in the brokerage's parent company, ownership or the decline in value of the claimants' 401(k) savings plan accounts, and claims for equity interests in the Lehman parent. He also ordered that the portions of those employee claims asserting severance payments be reduced and reclassified. A list of the claims is available at http://is.gd/6jR3Gg Judge Chapman also granted the request of the Lehman trustee to reduce the amounts asserted in 250 claims and to reclassify those claims. Lists of those claims can be accessed for free at: http://bankrupt.com/misc/LBHI_sipa174thoo_38severance.pdf http://bankrupt.com/misc/LBHI_sipa175thoo_9employee.pdf http://bankrupt.com/misc/LBHI_sipa177thoo_26softdollar.pdf http://bankrupt.com/misc/LBHI_sipa180thoo_42compensation.pdf http://bankrupt.com/misc/LBHI_sipa184thoo_46tbaclaims.pdf http://bankrupt.com/misc/LBHI_sipa185thoo_71tbaclaims.pdf http://bankrupt.com/misc/LBHI_sipa187thoo_11tbaclaims.pdf http://bankrupt.com/misc/LBHI_sipa188thoo_7tbaclaims.pdf Most of those claims stemmed from unperformed forward contracts for the future purchase or sale of "to be announced" U.S. agency debt obligations. The amount asserted in each of the claims contradicts the brokerage's books and records, and that the claims do not meet the statutory requirements for secured status under U.S. bankruptcy law, according to court filings. Meanwhile, Judge Chapman ordered the reclassification of 59 claims and the subordination of 18 others to general unsecured creditor claims. The claims are listed at: http://bankrupt.com/misc/LBHI_sipa171stoo_18employee.pdf http://bankrupt.com/misc/LBHI_sipa179thoo_41compensation.pdf http://bankrupt.com/misc/LBHI_sipa192ndoo_18compensation.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases were initially handled by Judge James M. Peck. In March 2014, the case was reassigned to Judge Shelley C. Chapman after Judge Peck resigned to join Morrison & Foerster LLP as co-chairman of the restructuring and insolvency practice. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: E&Y to Face Fees Claim, Appeals Court Rules ------------------------------------------------------------ Ernst & Young LLP must face a bid by New York's attorney general to force the firm to give up fees it earned for its work with Lehman Brothers Holdings Inc., according to a report by Bloomberg News. An appeals court in Manhattan said disgorgement of the fees could be required if the attorney general proves that Ernst & Young engaged in fraud with Lehman although the state doesn't claim restitution is due to any individuals or the public. Disgorgement focuses on the gain to wrongdoers, not losses to victims, so the state is within its rights to pursue it, the court ruled. "While the attorney general does not allege direct injury to the public or consumers as a result of defendant's alleged collusion with Lehman Brothers in committing fraud, the equitable remedy of disgorgement is available in this action, and it was premature to categorically preclude it at the pleading stage," the appeals court said. The five-judge panel overturned a January 2013 ruling by Supreme Court Justice Jeffrey Oing dismissing the case, according to the Bloomberg report. Then-Attorney General Andrew Cuomo sued Ernst & Young in December 2010, accusing the firm of allegedly approving the so-called repo transaction. A repo transaction is an artificial sale and buy-back deal that enabled Lehman to hide billions of debts from regulators and allowed the company to look healthier when it reported quarterly financial data. The state is seeking $125 million in accounting fees that Ernst & Young received from 2001 through the 2008 bankruptcy, along with damages for Lehman shareholders. Judge Lewis Kaplan of U.S. District Court for the Southern District of New York is set to hold a hearing on April 15, 2014, to consider approval of the proposed $99 million settlement in the case against E&Y. The case is In re Lehman Brothers Equity/Debt Securities Litigation, 08-CV-5523-LAK. The case has been preliminarily certified as a class action for purposes of the settlement only. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases were initially handled by Judge James M. Peck. In March 2014, the case was reassigned to Judge Shelley C. Chapman after Judge Peck resigned to join Morrison & Foerster LLP as co-chairman of the restructuring and insolvency practice. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012, a second payment of $10.2 billion on Oct. 1, 2012, and a third distribution of $14.2 billion on April 4, 2013. The brokerage is yet to make a first distribution to non-customers, although customers are being paid in full. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). LIGHTSQUARED INC: Amends KEIP to Drop Regulatory Objective ---------------------------------------------------------- Lightsquared Inc., et al., seek authority from the U.S. Bankruptcy Court for the Southern District of New York to modify and extend their existing key employee incentive plan for four employees, each of whom provides critical services, drives performance, and impacts the Debtors' ability to enhance value in the Chapter 11 cases. The Debtors believe that in light of the recent developments in their Chapter 11 cases, it is necessary and appropriate to formally eliminate the regulatory objective of the existing KEIP, and modify, recalibrate, and extend the emergence objective under the KEIP to comport with the newest version of the plan of reorganization in file and the new timeline and milestones required to successfully implement the Plan. Specifically the Debtors propose the following cash bonuses for the new emergence objectives: * New Emergence Objective 1: Cash bonus of 75% of salary earned and paid upon (a) funding of the New DIP Facility and (b) payment in full of the Allowed DIP Claims, DIP LP Claims, Non-Converted Prepetition LP Facility Non-SPSO Claims, and Prepetition Inc. Facility Non-Subordinated Claims, as set forth under, and pursuant to, the LightSquared Plan. * New Emergence Objective 2: Cash bonus of 75% of salary earned upon successful completion of a change of control, as set forth under, and pursuant to, the LightSquared Plan (but paid upon the effective date of the confirmed Chapter 11 plan). The Debtors propose to incentivize (a) Douglas Smith, Chief Executive Officer, President, and Chairman of the Board, (b) Marc R. Montagner, Chief Financial Officer, (c) Curtis Lu, General Counsel, and (d) Jeffrey Carlisle, Executive Vice President, Regulatory Affairs & Public Policy. A hearing to consider approval of the request is on March 25, 2014, at 9:00 a.m. (prevailing Eastern time). Objections are due March 18. The Debtors are represented by Matthew S. Barr, Esq., Alan J. Stone, Esq., and Karen Gartenberg, Esq., at MILBANK, TWEED, HADLEY & MCCLOY LLP, in New York. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LILY GROUP: Sale of Coal Mine Is Formally Approved -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lily Group Inc., the developer of an open-pit coal mine in Greene County, Indiana, got formal permission on Feb. 28 from the U.S. Bankruptcy Court in Terra Haute, Indiana, to sell the facility to an affiliate of secured lender Platinum Partner's Credit Opportunities Master Fund LP in exchange for debt. According to the report, the lender also filed a lawsuit in bankruptcy court seeking a declaration that its lien comes ahead of suppliers who claim to have mechanics' liens. The buyer is using some of its $18 million secured claim rather than cash to buy the business, the report said. The price includes a $9 million credit bid, plus another $9 million credit bid in the form of production payments as coal is taken out of the ground in upcoming years. About Lily Group Inc. Lily Group Inc., the developer of an open-pit coal mine in Green County, Indiana, filed a petition for Chapter 11 reorganization (Bankr. S.D. Ind. Case No. 13-81073) on Sept. 23, 2013, in Terre Haute, estimating assets and debt both exceeding $10 million. The Debtor is represented by Courtney Elaine Chilcote, Esq., and David R. Krebs, Esq., at Tucker, Hester, Baker & Krebs, LLC, in Indianapolis, Indiana. U.S. Trustee Nancy J. Gargula appointed four members to the official committee of unsecured creditors in the Chapter 11 cases of Lily Group Inc. Faegre Baker Daniels LLP represents the Committee. LIVE TISSUE CONNECT: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Live Tissue Connect, Inc. c/o Shackelford Melton McKinley & Norton 3333 Lee Parkway, Tenth Floor Dallas, TX 75219 Case No.: 14-31320 Chapter 11 Petition Date: March 17, 2014 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Harlin DeWayne Hale Debtor's Counsel: Frances Anne Smith, Esq. SHACKELFORD, MELTON, MCKINLEY & NORTON LLP 3333 Lee Parkway, Tenth Floor Dallas, TX 75219 Tel: 214-780-1400 Fax: 214-780-1401 Email: fsmith@shacklaw.net Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Joseph Kutz, M.D., president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. LONGVIEW POWER: Kenneth Gibbs, Judge Lyons to Co-Mediate Disputes ----------------------------------------------------------------- The Bankruptcy Court authorized Kenneth Gibbs, Esq., and the Hon. Raymond T. Lyons to co-mediate the disputes among Longview Power, LLC, et al., the so-called Backstoppers, Kvaener North American Construction, Inc., Foster Wheeler North America Corp. and Siemens Energy, Inc. The mediation parties have agreed to appoint the co-mediators to lead a confidential mediation in an attempt to explore possible a settlement of disputes among them. The mediation will be conducted under these conditions: 1. mediation must be in New York City; 2. any mediation party may chose to discontinue its participation in the mediation on any date after March 28; About Longview Power LLC Longview Power LLC is a special purpose entity created to construct, own, and operate a 695 MW supercritical pulverized coal-fired power plant located in Maidsville, West Virginia, just south of the Pennsylvania border and approximately 70 miles south of Pittsburgh. The project is owned 92% by First Reserve Corporation (First Reserve or sponsor), a private equity firm specializing in energy industry investments, through its affiliate GenPower Holdings (Delaware), L.P., and 8% by minority interests. Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case. 13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery L. Keffer, the Company's chief executive officer, president, treasurer and secretary. The Debtor estimated assets and debts of more than $1 billion. Judge Brendan Linehan Shannon presides over the case. Kirkland & Ellis LLP and Richards, Layton & Finger, P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC acts as the Debtors' investment bankers. Alvarez & Marsal North America, LLC, is the Debtors' restructuring advisors. Ernst & Young serves as the Debtors' accountants. The Debtors' claims agent is Donlin, Recano & Co. Inc. The Debtor disclosed assets of $1,717,906,595 plus undisclosed amounts and liabilities of $1,075,748,155 plus undisclosed amounts. Roberta A. DeAngelis, U.S. Trustee for Region 3, disclosed that as of September 11, 2013, a committee of unsecured creditors has not been appointed in the case due to insufficient response to the U.S. Trustee's communication/contact for service on the committee. MARTIN BELZ: Peabody Hotel's Pres. Sets Hearing for Plan Approval ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Martin S. Belz, president and chairman of Peabody Hotel Group, is hoping to emerge from his individual Chapter 11 case shortly after an April 16 confirmation hearing for approval of his plan. According to the report, the plan up for approval in April is supported by more than two-thirds of creditors, whose claims total $84.7 million. The report related that guarantees that are only contingent, because there hasn't been a default to touch off his individual liability, will remain in place. Creditors holding guarantees where there has been a default are to receive 40 percent of their claims in cash. The case is In re Martin S. Belz, 13-bk-33888, U.S. Bankruptcy Court, Western District of Tennessee (Memphis). MCDERMOTT INTERNATIONAL: S&P Revises Outlook & Affirms 'BB' CCR --------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on U.S. upstream oil and gas engineering and construction (E&C) company McDermott International Inc. to negative from stable. At the same time, S&P affirmed its ratings on McDermott, including the 'BB' corporate credit rating. The outlook revision reflects the potential risks of further execution missteps or project losses, like those experienced in 2013. As a result of losses in 2013, S&P believes credit metrics will be worse than its expectations for the current rating in 2014, with adjusted debt to EBITDA greater than 4x. However, if the company successfully executes its backlog of projects as well as the business improvement initiatives from new senior management, S&P expects debt to EBITDA to return to less than 4x by 2015. Given the company's outsized capital expenditure plans for the next two years, S&P recognizes free operating cash flow will likely remain negative and, as a result, debt balances will likely increase over this period. S&P also notes that McDermott is pursuing an amendment with its revolving credit facility lenders. S&P's base-case assumption is that the company will successfully obtain an amendment under its credit facility in a timely manner. The company has a commitment letter for alternative financing, but S&P believes this is relatively expensive. S&P could lower its rating if the amendment is unsuccessful. The 'BB' rating on McDermott reflects S&P's view of the company's "fair" business risk profile, which incorporates the inherent cyclicality of the E&C services sector and McDermott's niche service offerings in the competitive offshore oil and gas market. Several national and major oil and gas companies account for a significant portion of McDermott's revenue, and S&P expects its customer diversity to remain limited. S&P describes the company's financial risk profile as "significant," marked by highly cyclical cash flows, which depend on development-related capital expenditures in the oil and gas sector. "We expect 2014 revenues of about $3 billion, based on current backlogs. Although the company generated substantial operating losses in 2013, our base case assumes a positive view of the outlook for demand for offshore oil and gas services and construction on a global basis. (95% of 2013 revenues were generated outside the U.S.) Oil prices remained strong over the past 12 months, which led to increased levels of capital expenditures by the major integrated and national oil and gas companies. We believe McDermott will benefit from a growing backlog and a slow economic rebound to generate revenue growth in 2014 and 2015. Bookings for McDermott have improved recently and the backlog was $4.8 billion as of Dec. 31, 2013--a decline from Dec. 31, 2012, levels, but up from $4.6 billion at Sept. 30, 2013," S&P said. Over the long term, S&P believes McDermott's business risk profile will continue to face the potential of cost overruns in its execution of its predominantly fixed-price contracts. S&P considers the construction industry to have above-average risks associated with fixed-price work. These risks are likely to persist despite the company's ongoing implementation of risk management systems. "We view McDermott's financial risk profile as "significant" despite low levels of funded debt and modest amounts of debt-like adjustments (such as underfunded pension obligations and operating leases) because of the very high volatility of cash flows. At the current rating level, we expect cash from operations to return to positive territory in the second half of 2014. Given the company's capital expenditure plans for the next two years, we recognize free operating cash flow will likely remain negative and, as a result, debt balances will likely increase over this period. At the current rating, we also expect debt to EBITDA to return to less than 4x in 2015," S&P added. MERCURY DELIVERY: Can't Be Named as Defendant in FLSA Suit ---------------------------------------------------------- District Judge Roslynn R. Mauskopf denied the request of plaintiffs in a purported class action alleging violations of Labor Standards Act, to amend their complaint to add Mercury Delivery Service, Inc., as a defendant by virtue of Mercury's Chapter 11 bankruptcy filing. The Plaintiffs commenced this action on Sept. 9, 2011, against former defendants Enjoy Food Corp. d/b/a C-Town and Maxwell Bristol, alleging violations of the FLSA, 29 U.S.C. Sec. 201 et seq., and New York Labor Law. On Jan. 16, 2012, they filed a First Amended Complaint, removing Bristol, and adding defendants Ahmad Saleh and Immortal Rise, Inc. d/b/a C-Town. Mercury, which has never been a party to this case, petitioned for Chapter 11 Bankruptcy in the United States Bankruptcy Court for the Eastern District of New York. See In re Mercury Delivery Service, Inc., No. 13-42796 (E.D.N.Y. Bankr. 2013). The case is, AMELIA HERNANDEZ, EDITH HERNANDEZ ROJAS, and JUAN EDUARDO HERNANDEZ, individually and on behalf of other persons similarly situated who were employed by IMMORTAL RISE, INC. d/b/a/C-Town and/or AHMAD SALEH or any other entities affiliated with or controlled by IMMORTAL RISE, INC. and/or AHDMAD SALEH, Plaintiffs, v. IMMORTAL RISE, INC. d/b/a C-TOWN, AHMAD SALEH, and/or any other entities affiliated with or controlled by IMMORTAL RISE, INC. d/b/a C-Town and/or AHMAD SALEH, Defendants, No. 11-CV-4360 (RRM) (LB)(E.D.N.Y.). The Plaintiffs are represented by represented by Suzanne B. Leeds, Esq., Leonor H Coyle, Esq., and Lloyd Robert Ambinder, Esq., at Virginia & Ambinder LLP. Defendants Immortal Rise, Inc., and Ahmad Saleh are represented by Joseph M. Labuda, Esq., and Matthew A Brown, Esq., at Milman Labuda Law Group PLLC. A copy of the District Court's March 13, 2014 Memorandum and Order is available at http://is.gd/QAODogfrom Leagle.com. Mercury Delivery Service, Inc., filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 13-42796) on May 7, 2013, listing under $1 million in both assets and debts. Gary C Fischoff, Esq., at Berger, Fischoff & Shumer, LLP, serves as bankruptcy counsel. MILLENNIUM BANK: First Virginia Bank Failure in Over Three Years ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Millennium Bank NA from Sterling, Virginia was taken over by regulators on Feb. 28. The two branches were absorbed by WashingtonFirst Bank of Reston, Virginia. According to the report, it was the first Virginia bank to fail in more than three years. Vantage Point Bank from Horsham, Pennsylvania, also failed on Feb. 28, the report said. The one branch was taken by First Choice Bank of Mercerville, New Jersey. Millennium had $121.7 million in deposits at the year's end, the report related. Its failure is estimated to cost the Federal Deposit Insurance Corp. $7.7 million. Vantage Point had assets of $62.5 million, and the estimated cost to the FDIC is $8.5 million. There have been five bank failure so far this year, the report said. MT. GOX: Recognition Hearing Set for April 1 -------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, granted MtGox Co., Ltd.'s application for provisional relief pursuant to Sections 105(a) and 1519(a)(1)-(3) of the U.S. Bankruptcy Code. The hearing to consider Mt. Gox's motion to recognize its bankruptcy proceeding before the Twentieth Civil Division of the Tokyo District Court, in Japan, as the "foreign main proceeding" will be held on April 1, 2014, at 1:30 p.m., to be continued, if necessary, on April 2, at 9:30 a.m. (CST). The Debtor has asked the U.S. Court to recognize that (i) Robert Marie Mark Karpeles is duly appointed as Mt. Gox's "foreign representative" as the term is defined in Section 101(24); (ii) the Japan Proceeding as a "foreign main proceeding," which includes an interim proceeding under a law relating to insolvency or the adjustment of debts. Mt. Gox's counsel, David W. Parham, Esq., at Baker & McKenzie LLP, in Dallas, Texas, related that Mt. Gox is a Japanese corporation formed in 2011. It is, and always has been, located in Tokyo. Since it was formed, and up to mid-February 2014, it was engaged in the business of operating an online bitcoin exchange through the website mtgox.com Mr. Parham said the Chapter 15 case is being filed in an effort to maximize recoveries to, and provide for an equitable distribution of value among, all creditors. The enjoining of certain ongoing litigation to which Mt. Gox and its affiliates are parties in conjunction with the protections afforded by the Japan Proceeding is essential to this effort, Mr. Parham told the Court. MtGox has approximately JPY6.5 billion (US$63.9 million) in liabilities and approximately JPY3.84 billion (US$37.7 million) of assets at present. MtGox has no secured debt. Approximately 12% of the equity in MtGox is held by the developer of the initial MtGox software, Jed MacCaleb, with the remaining equity held by Tibanne Co., Ltd., aka Tibanne KK, a Japanese corporation located in Japan. The Debtor is also represented by John Mitchell, Esq., at BAKER & McKENZIE LLP, in Dallas, Texas; and Erin E. Broderick, Esq. -- erin.broderick@bakermckenzie.com -- at BAKER & McKENZIE LLP, in Chicago, Illinois. About Mt. Gox Bitcoin exchange MtGox Co., Ltd., filed a petition under Chapter 15 of the U.S. Bankruptcy Code on March 9, 2014, days after the company sought bankruptcy protection in Japan. The bankruptcy in Japan came after the bitcoin exchange lost 850,000 bitcoins valued at about $475 million "disappeared." The Japanese bitcoin exchange that halted trading in February 2014. It filed for bankruptcy protection in the U.S. to prevent customers from targeting the cash it holds in U.S. bank accounts. The Chapter 15 case is In re MtGox Co., Ltd., Case No. 14-31229 (Bankr. N.D. Tex.). The Chapter 15 Petitioner is Robert Marie Mark Karpeles, the company's chief executive officer. Mr. Karpeles is represented by John E. Mitchell, Esq., and David William Parham, Esq., at BAKER & MCCKENZIE LLP, in Dallas, Texas. The company said it has estimated assets of $10 million to $50 million and debts of $50 million to $100 million. NAVISTAR INTERNATIONAL: Reports $248 Million First Quarter Loss --------------------------------------------------------------- Navistar International Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $248 million on $2.20 billion of net sales and revenues for the three months ended Jan. 31, 2014, as compared with a net loss attributable to the Company of $123 million on $2.63 billion of net sales and revenues for the same period in 2013. The Company's balance sheet at Jan. 31, 2014, showed $7.65 billion in total assets, $11.53 billion in total liabilities and a $3.87 billion total stockholders' deficit. "We signaled that this would be a tough quarter due to our mid- range product transition, the ongoing reduced sales in our military business, and because the first quarter, historically, represents the weakest operational period of the year for us. Given all this, we are encouraged we hit our cash and adjusted EBITDA guidance," said Troy A. Clarke, Navistar's president and chief executive officer. "Clearly, we have more hard work to do to rebuild our market share and further reduce our costs, but we continue to make progress on our Drive to Deliver, and we feel we're off to a solid start in 2014." A copy of the Form 10-Q is available for free at: http://is.gd/sznn9V About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The Company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Navistar International reported a net loss attributable to the Company of $898 million for the year ended Oct. 31, 2013, a net loss attributable to the Company of $3.01 billion for the year ended Oct. 31, 2012. * * * In the Oct. 9, 2013, edition of the TCR, Moody's Investors Service affirmed the ratings of Navistar International Corporation, including the B3 Corporate Family Rating (CFR). The ratings reflect Moody's expectation that Navistar's successful incorporation of Cummins engines throughout its product line up will enable the company to regain lost market share, and that progress in addressing component failures in 2010 vintage-engines will significantly reduce warranty expenses. As reported by the TCR on Oct. 9, 2013, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Illinois-based truckmaker Navistar International Corp. (NAV) to 'CCC+' from 'B-'. "The rating downgrades reflect our increased skepticism regarding NAV's prospects for achieving the market shares it needs for a successful business turnaround," said credit analyst Sol Samson. As reported by the TCR on Jan. 24, 2013, Fitch Ratings has affirmed the Issuer Default Ratings (IDR) for Navistar International Corporation and Navistar Financial Corporation at 'CCC' and removed the Negative Outlook on the ratings. The removal reflects Fitch's view that immediate concerns about liquidity have lessened, although liquidity remains an important rating consideration as NAV implements its selective catalytic reduction (SCR) engine strategy. Other rating concerns are already incorporated in the 'CCC' rating. NEOMEDIA TECHNOLOGIES: Burrington Stake at 9.9% as of Feb. 7 ------------------------------------------------------------ In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Burrington Capital LLC disclosed that as of Feb. 7, 2014, it beneficially owned 499,500,000 shares of common stock of NeoMedia Technologies, Inc., representing 9.9 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/jlDXfd About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. After auditing the 2011 results, Kingery & Crouse, P.A, in Tampa, FL, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has ongoing requirements for additional capital investment. NeoMedia reported a net loss of $19.38 million in 2012 and a net loss of $849,000 in 2011. The Company's balance sheet at Sept. 30, 2013, showed $5.62 million in total assets, $118.32 million in total liabilities, all current, $4.81 million in series C convertible preferred stock, $348,000 in series D convertible preferred stock and a stockholders' deficit of $117.86 million. NEW CENTURY TRS: Bankruptcy Doesn't Bar Assignment of Note ---------------------------------------------------------- District Judge Nelva Gonzales Ramos in Corpus Christi, Texas, dismissed the lawsuit, TIMOTHY D PHELPS, et al, Plaintiffs, v. US BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2006-NC2, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-NC2, et al, Defendants, Civil Action No. 2:13-CV-361 (S.D. Tex.), which arose from the foreclosure of a lien securing payment of a home equity loan, after the original loan had been modified to capitalize amounts in default and after the mortgagee -- New Century Mortgage Corporation -- filed for relief under Chapter 11 of the Bankruptcy Code. Defendants Wells Fargo and US Bank sought dismissal of the lawsuit. They challenge the premise of the wrongful foreclosure claim: that the assignment of the note and deed of trust from New Century to Defendant Trustee was void according to the United States Bankruptcy Code. The Defendants argue that New Century, as a Chapter 11 Debtor-in-Possession, was empowered to operate its ordinary business, including transferring notes and liens, and was not constrained by the automatic stay of 11 U.S.C. Sec. 362. The Borrowers insist that the effect of the automatic stay is to void the attempted transfer, thus eliminating the Trustee's power to foreclose the lien. According to the District Court, nothing in the Bankruptcy Code prohibited New Century from transferring the Borrowers' note and deed of trust to the Trustee. Thus there is no merit in the Borrowers' challenge to the Trustee's authority to foreclose as stated in their wrongful foreclosure claim. A copy of the District Court's March 13, 2014 Order is available at http://is.gd/sst2Cpfrom Leagle.com. The Plaintiffs are represented by Allen C Lee, Esq. US Bank National Association, as trustee for Securitized Asset Backed Receivables LLC Trust 2006-NC2, Mortgage Pass-Through Certificates, Series 2006-NC2, is represented by Daron L Janis, Esq., at Locke Lord LLP; and Ralph F Meyer, Esq., at Royston Rayzor et al. Wells Fargo Bank, N.A. d/b/a America's Servicing Company, Defendant, is represented by Robert T Mowrey, Esq., Jason Levi Sanders, Esq., and Daron L Janis, Esq., at Locke Lord LLP; and Ralph F Meyer, Esq., at Royston Rayzor et al. About New Century Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- was a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The Company was among firms hit by the collapse of the subprime mortgage business industry in 2006. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they disclosed total assets of $36,276,815 and total debts of $102,503,950. The Company sold its assets in transactions approved by the Bankruptcy Court. The Bankruptcy Court confirmed the Second Amended Joint Chapter 11 Plan of Liquidation of the Debtors and the Official Committee of Unsecured Creditors on July 15, 2008, which became effective on Aug. 1, 2008. An appeal was taken and, on July 16, 2009, District Judge Sue Robinson issued a Memorandum Opinion reversing the Confirmation Order. On July 27, 2009, the Bankruptcy Court entered an Order Granting Motion of the Trustee for an Order Preserving the Status Quo Including Maintenance of Alan M. Jacobs as Liquidating Trustee, Plan Administrator and Sole Officer and Director of the Debtors, Pending Entry of a Final Order Consistent with the District Court's Memorandum Opinion. On Nov. 20, 2009, the Court entered an Order confirming the Modified Second Amended Joint Chapter 11 Plan of Liquidation. The Modified Plan adopted, ratified and confirmed the New Century Liquidating Trust Agreement, dated as of Aug. 1, 2008, which created the New Century Liquidating Trust and appointed Alan M. Jacobs as Liquidating Trustee of New Century Liquidating Trust and Plan Administrator of New Century Warehouse Corporation. NEW LIFE: To Grant Adequate Protection to Regions Bank ------------------------------------------------------ New Life International is asking the U.S. Bankruptcy Court for the Middle District of Tennessee to enter an agreed order granting adequate protection to secured creditor Regions Bank. The Debtor owns numerous parcels of improved and unimproved parcels of real property, including two parcels of improved real estate encumbered by liens in favor of Regions. Prepetition, NLI executed two promissory notes in the original principal amounts of $361,250 and $467,500. Regions was granted first-in-priority liens in parcels of property in Monteagle, Tennessee. The Debtor and Regions have agreed to terms on which the Debtor will retain and continue to use the property and provide adequate protection to Regions, to which it is entitled under 11 U.S.C. Sec. 361 and 363. The deadline for filing a timely response to the motion is March 28, 2014. If a response is timely filed, the hearing will be held 9:00 a.m., on April 15, 2014, in Courtroom 1, Customs House, 701 Broadway, Nashville, TN 37203. Parties consenting to the entry of the agreed order: Thomas H. Forrester, Esq. GULLETT, SANFORD, ROBINSON & MARTIN, PLLC Counsel for Debtor-in-Possession 150 Third Ave., South, Suite 1700 Nashville, TN 37201 Tel: (615) 244-4994 Fax: (615) 256-6339 E-mail: tforrester@gsrm.com bke@gsrm.com - and - Eric V. Helmers Counsel for Regions Bank 1901 Sixth Avenue, 19th Floor Birmingham, AL 35203 Tel: (202) 326-5864 E-mail: Eric.Helmers@regions.com About New Life International New Life International, a religious corporation originally incorporated under the name "World Bible Society", sought Chapter 11 bankruptcy protection (Bankr. M.D. Tenn. Case No. 13-10974) in Nashville, Tennessee, on Dec. 31, 2013. The Debtor disclosed $44,651,301 in assets and $46,362,805 in liabilities as of the Chapter 11 filing. NLI's sources of revenue include donations of goods, money and other property, investment earnings, sale of Christian-themed merchandise and earnings from other real estate and operating entities. Other names used by the Debtor are the National Community Foundation, The New Life Group, and Band Angels. The Debtor has tapped Gullett Sanford Robinson & Martin, PLLC as attorneys and Kraft CPAs Turnaround & Restructuring Group, PLLC, as financial consultant. The U.S. Trustee for Region 8 appointed five creditors to serve in the Official Committee of Unsecured Creditors. NEW LIFE: Committee Wins Nod for Bradley Arant as Counsel --------------------------------------------------------- New Life International's official committee of unsecured creditors obtained bankruptcy court approval to retain Bradley, Arant, Boult, Cummings LLP as bankruptcy counsel. Bradley Arant will provide anticipated legal services needed to represent the interest of the creditors in the Chapter 11 case. William L. Norton III, a member of BABC, tells the Court that his hourly rate is $465, and members of the firm to assist in the engagement will charge $230 to $565 per hour. Mr. Norton assures the Court Bradley Arant is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About New Life International New Life International, a religious corporation originally incorporated under the name "World Bible Society", sought Chapter 11 bankruptcy protection (Bankr. M.D. Tenn. Case No. 13-bk-10974) in Nashville, Tennessee, on Dec. 31, 2013. The Debtor disclosed $44,651,301 in assets and $46,362,805 in liabilities as of the Chapter 11 filing. NLI's sources of revenue include donations of goods, money and other property, investment earnings, sale of Christian-themed merchandise and earnings from other real estate and operating entities. Other names used by the Debtor are the National Community Foundation, The New Life Group, and Band Angels. The Debtor has tapped Gullett Sanford Robinson & Martin, PLLC as attorneys and Kraft CPAs Turnaround & Restructuring Group, PLLC, as financial consultant. The U.S. Trustee for Region 8 appointed an official committee of unsecured creditors consisting of Robert T. Abbotts, Dorthy F. Mack, James D. Rice, Richard M. Taylor, and Sharon L. Upton-Rice. NII HOLDINGS: KPMG Replaces PricewaterhouseCoopers as Accountants ----------------------------------------------------------------- NII Holdings, Inc., disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that the Audit Committee of the Board of Directors of the Company dismissed PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm. On March 2, 2014, PwC was notified of this decision. The reports of PwC on the Company's consolidated financial statements for each of the two fiscal years ended Dec. 31, 2013, and Dec. 31, 2012, did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that PwC's report on the consolidated financial statements as of and for the year ended Dec. 31, 2013, contained a separate paragraph stating: "The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully discussed in Note 1 to the consolidated financial statements, the Company projects that it is likely that it will not be able to comply with certain debt covenants throughout 2014. This condition and its impact on the Company's liquidity raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to this matter are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty." The Company said the dismissal was not a result of any disagreement with the accounting firm. The Company provided PwC with a copy of the disclosures and has requested that PwC furnish a letter addressed to the Securities and Exchange Commission stating whether or not it agrees with the statements made by the Company in the Form 8-K report. On March 1, 2014, the Audit Committee appointed KPMG LLP as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2014. As of March 4, 2014, KPMG is in the process of its standard client evaluation procedures and has not accepted the engagement. During the fiscal years ended Dec. 31, 2013, and Dec. 31, 2012, and the subsequent interim period through March 1, 2014, neither the Company nor anyone acting on its behalf has consulted with KPMG, the Company said in the report. About NII Holdings With headquarters in Reston, Virginia, NII Holdings is an international wireless operator with more than 7 million largely post-pay, business subscribers. * * * As reported by the TCR on March 5, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating on Reston, Va.-based wireless carrier NII Holdings Inc. (NII) to 'CCC' from 'CCC+'. "The downgrade follows the company's poor fourth-quarter 2013 results that were below our expectations, and its disclosure that its auditors have uncertainty about the company's ability to continue as a going concern," said Standard & Poor's credit analyst Allyn Arden. The TCR also reported on March 5, 2014, that Moody's Investors Service downgraded the corporate family rating (CFR) of NII Holdings Inc. ("NII" or "the company") to Caa1 from B3. The downgrade reflects the company's poor 2013 operating performance and the risk that the company will violate the covenants governing its Mexican and Brazilian subsidiary debt, which could trigger an event of default for up to $4.4 billion of debt issued by intermediate holding companies NII Capital Corp. and NII International Telecom S.C.A. NNN 3500 MAPLE 26: Court Won't Upset Plan Status Quo ---------------------------------------------------- Judge Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas, Dallas division, entered an order on March 7 saying, "This court took the confirmation of several plans of reorganization under advisement. While this is under advisement, the stay will be continued. This court understands completely the lender's request to post. However, this court does not want to upset the status quo during the time it has the case under advisement. The court expects to rule within a few weeks, well before the posting date in April. No party should infer from this ruling it will prevail in the ruling on the confirmation hearing." About NNN 3500 Maple 26 NNN 3500 Maple 26, LLC, based in Costa Mesa, Calif., filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case No. 12-23718) on Nov. 30, 2012. Judge Scott C. Clarkson presided over the case. In its schedules, the Debtor disclosed $45,563,241 in total assets and $46,658,593 in total liabilities. On Jan. 23, 2013, the Bankruptcy Court entered an order transferring venue of the bankruptcy case to the U.S. Bankruptcy Court for the Northern District of Texas (Case No. 13-30402). Judge Harlin DeWayne Hale presides over the case. Darvy M. Cohan, Esq., with offices at La Jolla, Calif., and Michelle V. Larson, Esq., at Andrews Kurth LLP, in Dallas, represent the Debtor as counsel. NNN 3500 Maple 26 et al., submitted to the N.D. Texas Bankruptcy Court a Disclosure Statement and Joint Plan of Reorganization dated Nov. 7, 2013. The Plan proposes to pay in full all creditors. The Reorganized Debtors will assume the liability for and obligation to perform and make all distributions or payments on account of all Allowed Claims. NNN PARKWAY CORPORATE: Judge Smith Dismisses Chapter 11 Case ------------------------------------------------------------ The Hon. Erithe Smith of the U.S. Bankruptcy Court for the Central District of California has dismissed the Chapter 11 case of NNN Parkway Corporate Plaza 3 LLC. The Debtor told Judge Smith that a consensual reorganization appears extremely unlikely. The Debtor noted there is no reason to continue its Chapter 11 and that cause exists for dismissal or conversion. The Debtor believes that dismissal is in the best interests of all creditors. It provides a clean and efficient resolution. Many of the creditors of the estate are vendors that will continue to perform services for the property. They will benefit from the continued operation and they may be able collect some of the amounts owed out of the continued operation of the Property. They will be entitled to any rights and remedies that they have under their agreements with the Debtor. The Debtor pointed out the conversion does not offer a better alternative. The senior secured creditor is undersecured and there will not be any equity available from the property. The appointment of a chapter 7 trustee would threaten the continued operation of the property, which appears to have stabilized. The Debtor also said the complexities of this case and the fact that the Debtor only has a 17.25% interest in the Parkway Corporate Plaza -- which includes four separate buildings offering Class A office space of approximately 286,000 square feet and is located at 1620-1680 East Roseville Parkway, Roseville, California -- would significantly add to the expense of administering the estate. Any potential avoidance actions would also appear to be dramatically limited to only the estate's 17.25% interest. Simply, there is no meaningful benefit to conversion where the unsecured creditors would likely receive no distribution on their claims, the Debtor added. The Debtor said the U.S. Trustee does not oppose the dismissal of the bankruptcy case. The Debtor added that it agrees that as a condition of dismissal, all quarterly U.S. Trustee fees then due are paid. NNN Parkway Corporate Plaza 3, which owns 17.25% tenant-in-common interest in four parcels in the real property commonly referred to as Parkway Corporate Plaza, in Roseville, California, sought protection under Chapter 11 of the Bankruptcy Code on Nov. 14, 2013 (Case No. 13-19322, Bankr. C.D. Calif.). The Debtor is represented by Scott H.McNutt, Esq., Michael C. Abel, Esq., and Thomas B. Rupp, Esq., at McNutt Law Group LLP, in San Francisco, California; and Robert A. Hessling, Esq., and Matthew F. Kennedy, Esq., at ROBERT A. HESSLING, APC, in Torrance, California. The Debtor discloses total assets of $34,009,050 and total liabilities of $43,652,430. NORMANDY SCHOOL DISTRICT: Bankruptcy Looms Absent State Bailout --------------------------------------------------------------- Kelly MacNeil, writing for St. Louis Public Radio, reported that a rally was held Saturday by supporters of the Normandy School District, whose future is uncertain after losing accreditation and bearing the tuition costs of students transferred to other districts. Officials estimate the district will be bankrupt in April if millions of dollars in supplemental funding isn't approved by the legislature. Supporters are hopeful that the district, currently unaccredited, can survive this school year and beyond. The report said Missouri state education officials recently took over the district's foundering finances and appointed a committee to examine options for the district's future. OCTAVIAR ADMINISTRATION: Liquidators Sue Fortress on 2008 Collapse ------------------------------------------------------------------ Leo Shanahan, writing for The Australian, reported that liquidators for failed financial and hotels investment group MFS - - now called Octaviar -- have widened their pursuit of US-based investment vehicle Fortress Investment Group, filing a $210 million claim against the company and several of its managing directors in the New York Supreme Court. According to the report, the New York-based Fortress Investment Group and three of its managing directors are being accused of siphoning off at least $210m from MFS via its Drawbridge hedge fund, in proceeds liquidators claim were rightly owed to the company, just before its collapse. The Australian said the total claim by Octaviar liquidators Katherine Barnet and William Fletcher against Fortress is close to $300m with interest included. They allege Fortress ensured a payment of about $200m from the former directors of Octaviar, including to a Fortress-managed, Cayman Islands-based hedge fund, just before the Gold Coast-based company collapsed in February 2008, the report related. The repayments made by MFS to Fortress and its managed fund between February and December 2008 were funded through the sale of its hospitality arm, Stella, to the CVC Group the same year. About Octaviar Administration Katherine Elizabeth Barnet and William John Fletcher, joint and several liquidators of Queensland, Australia-based Octaviar Administration Pty Ltd. filed a Chapter 15 petition against the Company on Feb. 27, 2014. The case is In re Octaviar Administration Pty Ltd., Case No. 14-10438 (Bankr. S.D.N.Y.). The Company has estimated assets of $50 million to $100 million and estimated debts of more than $1 billion. OSX BRASIL: Batista's Shipbuilder Reaches Deal With Bondholders --------------------------------------------------------------- Luciana Magalhaes, writing for The Wall Street Journal, reported that a shipbuilding firm controlled by former Brazilian tycoon Eike Batista has reached an agreement with bondholders, marking the second debt restructuring of his distressed industrial group since December. According to the report, OSX Brasil SA, which filed for bankruptcy protection last year, said it has entered an agreement with the majority of holders of its $500 million in bonds outstanding due in 2015, which are guaranteed by its OSX-3 floating, production, storage and offloading vessel registered in Netherlands and left out from the court protection proceedings. The agreement includes an increase to the coupon on the bonds, from 9.25% to 13.00%, and a reduction on the daily rate OSX is charging sister company Oleo e Gas Participacoes SA for use of its OSX-3 vessel, currently at the Tubarao Martelo field, the report related. In December, OSX missed an $11.6 million interest payment and has since been in discussions with bondholders, the report further related. In a statement on March 13, the company said the agreement is still subject to a formal approval. OSX, which operates a shipyard under construction at the Port of Acu in the state of Rio de Janeiro, filed for court protection shortly after its sister firm Oleo e Gas, formerly known as OGX Petroleo e Gas Participacoes SA, sought bankruptcy protection from creditors with some $5.8 billion in the debts, the report said. About OSX Brasil Brazilian shipbuilding firm OSX Brasil SA, controlled by businessman Eike Batista, filed for protection from creditors on November 2013 on liabilities of BRL5.34 billion (US$2.30 billion). OSX Brasil filed for bankruptcy -- called "judicial recovery" in Brazil -- after Oleo e Gas Participacoes SA, formerly known as OGX Petroleo e Gas Participacoes, filed for bankruptcy on Oct. 30, 2013. OSX had outstanding debts of around US$2.2 billion as of June 30, 2013, including dollar-and real-denominated loans and bonds held by a mix of banks, investors and government institutions, such as Brazil's Merchant Marine Fund, according to The Wall Street Journal. The move on Nov. 11 at a Rio de Janeiro court follows a default and bankruptcy filing the prior month for Mr. Batista's flagship oil firm OGX Petroleo e Gas Participacoes SA, n/k/a Oleo e Gas, according to the WSJ report. The firm went public in 2008 for $4.1 billion but failed to produce nearly any of the up to 10.8 billion barrels it claimed to have. PATERSON PARKING: Moody's Cuts Bond Rating to Ba1; Outlook Stable ----------------------------------------------------------------- Moody's Investors Service has downgraded Paterson Parking Authority, NJ's rating to Ba1 from Baa3, and the outlook has been revised to stable. This action concludes a review for possible downgrade that Moody's had initiated on January 9, 2014. The rated bonds were issued by the Passaic County Improvement Authority (PCIA) in 2005. The proceeds were used to take out parking authority bonds privately placed with PCIA and the bonds are ultimately secured by net revenues of the parking authority. The downgrade affects approximately $16.76 million of rated revenue debt. The rated bonds continue to carry Assured Guaranty Municipal Corporation's A2 insured rating. Summary Rating Rationale The downgrade to Ba1 reflects the parking authority's trend of very weak annual debt service coverage and a failure to meet rate covenant in 2012. The failed covenant technically constitutes an event of default under the parking authority's general bond resolution, and the parking authority is currently working with its trustee, Bank of New York Mellon(long-term rating Aa2, not on watch), and insurer, Assured Guaranty Municipal Corp. (formerly Financial Security Assurance - long-term rated A2, stable, not on watch) to address the violation. Favorably, coverage levels improved in fiscal 2013 (unaudited) and are projected to remain stable in fiscal 2014. The rating incorporates the parking authority's well-established market position in downtown Paterson (GO rated Baa2, negative), the city's relatively weak local economy and below-average socioeconomic profile, and the user demand driven by the presence of government and retail centers, as well as the additional liquidity provided by a cash-funded three-pronged debt service reserve fund, and the absence of new debt plans. The outlook has been revised to stable to reflect Moody's expectation that the parking authority's debt service coverage is not likely to weaken further going forward. However, continued failure to comply with all covenants could negatively pressure the rating. Strengths -- Established market position in downtown Paterson, NJ -- Cash-funded debt service reserve fund -- Customers composed primarily of permanent and contracted users including a long-term lease with Passaic County Community College Challenges -- Historically narrow debt service coverage -- Failure to meet rate covenant consistently -- Demonstrated elasticity of transient parking demand -- Local economy exhibits below-average wealth levels and high unemployment (12.2% in December 2013) What Could Move The Rating Up -- Sustained improvement of annual debt service coverage -- Substantially improved local economy and operating environment What Could Move The Rating Down -- Failure to meet improved debt service coverage target above 130% or failure to meet a future rate covenant -- Substantially diminished local economy and operating environment Rating Methodology The principal methodology used in this rating was Generic Project Finance Methodology published in December 2010. PETERSON GROUP: Trustee Sues Houston Firm Over Asset Transfer ------------------------------------------------------------- Law360 reported that Houston-based Patel & Ervin PLLC was sued in Texas state court by the Chapter 7 trustee for a defunct shopping center development company who says the firm negligently allowed its owners to transfer millions in assets to avoid having the funds seized. According to the report, Trustee Rodney Tow sued the firm, formerly known as Patel & Warren PLLC, and attorney Hiren Patel, accusing the lawyer of setting up limited partnership entities into which Peterson Group Inc.'s assets would be transferred to avoid seizure for outstanding judgments. PETERSON GROUP: Trustee Sues Houston Firm Over Asset Transfer ------------------------------------------------------------- Law360 reported that Houston-based Patel & Ervin PLLC was sued in Texas state court by the Chapter 7 trustee for a defunct shopping center development company who says the firm negligently allowed its owners to transfer millions in assets to avoid having the funds seized. According to the report, Trustee Rodney Tow sued the firm, formerly known as Patel & Warren PLLC, and attorney Hiren Patel, accusing the lawyer of setting up limited partnership entities into which Peterson Group Inc.'s assets would be transferred to avoid seizure for outstanding judgments. PETRON ENERGY: Authorized Shares Increased to 15 Billion -------------------------------------------------------- Petron Energy II, Inc., by and through its Board of Directors and with written consent of a majority of its shareholders entitled to vote, effectuated an increase in the total number of authorized stock of the Corporation from 6,010,000,000 to 15,010,000,000 shares consisting of: (i) 15,000,000,000 shares of common stock, par value $0.001 per share; and (ii) 10,000,000 shares of preferred stock par value $0.001 per share. About Petron Energy Dallas-based Petron Energy II, Inc., is engaged primarily in the acquisition, development, production, exploration for and the sale of oil, gas and gas liquids in the United States. As of Dec. 31, 2011, the Company is operating in the states of Texas and Oklahoma. In addition, the Company operates two gas gathering systems located in Tulsa, Wagoner, Rogers and Mayes counties of Oklahoma. The pipeline consists of approximately 132 miles of steel and poly pipe, a gas processing plant and other ancillary equipment. The Company sells its oil and gas products primarily to a domestic pipeline and to another oil company. KWCO, PC, in Odessa, TX, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company's significant operating losses since inception raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2013, showed $3.27 million in total assets, $4.79 million in total liabilities and a $1.51 million total stockholders' deficit. PRIME PROPERTIES: March 19 Hearing on FTBK Plan Outline ------------------------------------------------------- The bankruptcy court will convene a hearing on March 19, 2014, at 3:00 p.m. to consider approval of the disclosure statement explaining the Chapter 11 plan proposed by a creditor for Prime Properties. Objections to the disclosure statement proposed by FTBK Investor II LLC, as Trustee for NY Brooklyn Investor II Trust, were due March 12. The Plan FTBK Investor II LLC, the Trustee for NY Brooklyn Investor II Trust 19, on Feb. 3, 2014, filed a Plan of Liquidation for Prime Properties of New York, Inc., which contemplates the sale of substantially all of the Debtor's assets. The Plan, which is dated Jan. 29, 2014, provides for FTBK to serve as the stalking horse bidder, subject to higher or better offers, at an auction of the Debtor's real property and improvements thereon located at 300-304 10th Street, Brooklyn, New York 11215 (Block 1016; Lots 2 and 5) in accordance with the provisions of the Bankruptcy Code, to be conducted immediately following the confirmation of the Plan. The proceeds generated from the auction, in addition to the cash being held by the State Court appointed Receiver will be utilized to fund distributions under the Plan. A copy of the Lender's Disclosure Statement is available at no extra charge at: http://bankrupt.com/misc/PRIMEPROPERTIESftbkDS.pdf About Prime Properties of New York, Inc. Prime Properties of New York, Inc., filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 13-44020) on June 28, 2013. Prime Properties of New York's business consists of the ownership and operation of a property, consisting of two adjacent five-story, residential apartment buildings, which collectively contain a total of 55 units, 52 of which are residential units on the corner of 10th Street and 4th Avenue, in Brooklyn. The Debtor identified itself to be Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B). The Debtor's principal and its 100% shareholder, Nick Gordon, managed the Property until March 2011, when management of the Property was taken over by a receiver. Prior to the Receiver's appointment, there were well documented disputes between Nick Gordon and the tenants with respect to the maintenance and upkeep of the Property. Bankruptcy Judge Hon. Carla E. Craig oversees the case. M. David Graubard, Esq., at Kera & Graubard, in New York, serves as counsel to the Debtor. The Debtor estimated up to $12 million in assets and up to $8.5 million in liabilities. An affiliate, 234 8th St. Corp., sought Chapter 11 protection (Case No. 13-42244) on the March 14, 2013. Prime Properties of New York, Inc., also sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 09-46912) on Aug. 12, 2009. In October 2010, Bankruptcy Judge Joel B. Rosenthal granted the request by JP Morgan Chase Bank, N.A., to lift the automatic stay to foreclose on the Debtor's property. Judge Rosenthal denied the Debtor's bid to sell the property, free and clear of liens. In the 2013 case, Prime Properties of New York filed a plan of reorganization providing for the payment of all administrative claims and priority claims in full upon confirmation. The Plan also offers to pay general unsecured creditors 100% of their claims, from a fund that will be established by the Debtor for the purpose of implementing the Plan. A full-text copy of the Disclosure Statement dated Sept. 18, 2013, is available for free at http://bankrupt.com/misc/PRIMEds0918.pdf Attorneys for FTBK Investor II LLC, as Trustee for NY Brooklyn Investor II Trust 19, are: Jerold C. Feuerstein, Esq. Jason S. Leibowitz, Esq. KRISS & FEUERSTEIN LLP 360 Lexington Avenue, Suite 1200 New York, NY 10017 Tel: (212) 661-2900 E-mail: jfeuerstein@kandfllp.com jleibowitz@kandfllp.com PROVIDENT COMMUNITY: To Suspend Filing of Reports with SEC ---------------------------------------------------------- Provident Community Bancshares, Inc., the holding company for Provident Community Bank, said it plans to deregister its common stock and suspend its reporting obligations with the Securities and Exchange Commission. The Company is taking this action to reduce the legal, accounting and administrative costs associated with being an SEC reporting company. Dwight V. Neese, president and chief executive officer, said, "The decision by the Board of Directors to deregister was made after careful consideration of the advantages and disadvantages of being a public reporting company and the high costs and demands on management's time arising from compliance with our ongoing SEC reporting requirements." After the deregistration becomes effective, the Company will no longer be required to file reports and forms with the SEC, including Forms 10-K, Forms 10-Q and Forms 8-K. Completion of the deregistration process is expected in late March. Both the Company and the Bank will continue to provide financial reports to the Federal Reserve Bank and the Office of the Comptroller of the Currency. The Company anticipates that its common stock will continue to be quoted on the OTC Bulletin Board after deregistration with the SEC to the extent market makers continue to make a market in its shares. No guarantee, however, can be made that a trading market in the Company's common stock through any over-the-counter market will be maintained. About Provident Community Rock Hill, South Carolina-based Provident Community Bancshares, Inc., is the bank holding company for Provident Community Bank, N.A. Provident Community Bancshares has no material assets or liabilities other than its investment in the Bank. Provident Community Bancshares' business activity primarily consists of directing the activities of the Bank. The Bank's operations are conducted through its main office in Rock Hill, South Carolina and seven full-service banking centers, all of which are located in the upstate area of South Carolina. The Bank is regulated by the Office of the Comptroller of the Currency, is a member of the Federal Home Loan Bank of Atlanta and its deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation. Provident Community Bancshares is subject to regulation by the Federal Reserve Board. Provident Community incurred a net loss to common shareholders of $598,000 in 2012, a net loss to common shareholders of $665,000 in 2011 and a net loss to common shareholders of $14.28 million in 2010. The Company's balance sheet at Sept. 30, 2013, showed $332.63 million in total assets, $329.61 million in total liabilities and $3.02 million in total shareholders' equity. Consent Order On Dec. 21, 2010, Provident Community Bank, N.A. entered into a stipulation and consent to the issuance of a consent order with the Office of the Comptroller of the Currency. At Dec. 31, 2011, the Bank met each of the capital requirements required by regulations, but was not in compliance with the capital requirements imposed by the OCC in its Consent order. The Bank is required by the consent order to maintain Tier 1 capital at least equal to 8% of adjusted total assets and total capital of at least 12% of risk-weighted assets. However, so long as the Bank is subject to the enforcement action executed with the OCC on Dec. 21, 2010, it will not be deemed to be well-capitalized even if it maintains the minimum capital ratios to be well- capitalized. At Dec. 31, 2011, the Bank did not meet the higher capital requirements required by the consent order and is evaluating alternatives to increase capital. At December 31, 2012, the Bank met each of the capital requirements required by regulations, but was not in compliance with the capital requirements imposed by the OCC in its Consent order. QUIZNOS: Senior Lenders to Give Up $444MM Debt for All of Equity ---------------------------------------------------------------- Jacqueline Palank, writing for The Wall Street Journal, reported that sandwich chain Quiznos filed for Chapter 11 bankruptcy protection on March 14, after reaching a deal to cut its debt by more than $400 million, or about two-thirds. According to the report, the maker of toasted subs said it would continue operating while it works to implement a debt- restructuring plan and make operational improvements. "The actions we are taking are intended to enable Quiznos to reduce our debt, execute a comprehensive plan to further enhance the customer experience, elevate the profile of the brand and help increase sales and profits for our franchise owners," Stuart K. Mathis, Quiznos's chief executive, said in a news release, the Journal cited. Court papers show that under the restructuring plan, Quiznos's senior lenders would trade more than $444 million in debt for all of the equity in the restaurant chain, subject to dilution, the report related. The lenders, which have offered $15 million to finance the company's restructuring, also would get $200 million in new debt under the so-called prepackaged bankruptcy plan. A separate Journal report written by Patrick Fitzgerald noted that the bankrupt sandwich chain will continue to honor gift cards and Groupons as lawyers for Quiznos are asking a bankruptcy judge to allow the company?s more-than 2,000 stores to honor gift certificates, Groupons and other promotional discounts. The Journal said gift cards, gift certificates and coupons can pose thorny problem in bankruptcy as companies can choose whether or not to continue honoring outstanding cards after the Petition Date and the Bankruptcy Code caps claims for unredeemed gift cards. QUIZNOS: Obtains Court Approval of DIP Financing ------------------------------------------------ Quiznos on March 17 disclosed that the U.S. Bankruptcy Court in Wilmington, Delaware granted the Company's request for certain "first day" orders that help support its business. The Court provided interim authorization for the Company to access up to $10 million of the $15 million Debtor-in-Possession financing ("DIP") committed by its senior lenders. The new financing, combined with cash generated from the Company's ongoing operations, will be available to support the business during the restructuring process. The Company also received interim approval to continue paying employee wages, salaries, benefits and other employee obligations. The Court also granted Quiznos final authorization to continue honoring all current customer and franchisee programs and to pay certain pre-petition claims arising under the Perishable Agriculture Commodities Act (PACA) and under Bankruptcy Code Section 503(b)(9), as well as pre-petition claims from shippers and claims incurred in connection with post-petition delivery of goods and services. "We are pleased with the initial progress we have made in the restructuring process," said Stuart K. Mathis, Quiznos Chief Executive Officer. "In particular, we appreciate the response we have received from our global network of franchise owners, who have demonstrated their commitment to providing Quiznos customers with fresh, high-quality and great-tasting food. We look forward to working closely with our franchisees to implement a business plan designed to further enhance the customer experience, elevate the profile of the brand and help increase sales and profits." As previously announced, Quiznos voluntarily filed a "pre-packaged" restructuring plan under Chapter 11 of the U.S. Bankruptcy Code to enable the Company to reduce its debt by more than $400 million. The Company's senior lenders have voted overwhelmingly in favor of the plan, which is intended to increase the Company's flexibility as it executes operational enhancements designed to strengthen performance, revitalize the Quiznos brand and reinforce its promise as a fresh, high-quality and great- tasting alternative to traditional fast food offerings. All but seven of Quiznos' nearly 2,100 restaurants are independently owned and operated by franchisees in the U.S. and 30 other countries around the world. As separate businesses, these restaurants are not a part of the Chapter 11 proceedings and are open and operating as usual. The Company expects to continue operating in the ordinary course throughout the restructuring process. Quiznos has established a Restructuring Information Hotline for interested parties at (855) 388-4579 in North America, or internationally at (646) 795-6978. Additional information can be found on the Quiznos website at http://www.quiznos.com/restructuring Court filings and information about the claims process can be found at a separate website maintained by Quiznos' claims agent, PrimeClerk, at http://cases.primeclerk.com/quiznos Akin Gump Strauss Hauer & Feld LLP is serving as legal advisor, Lazard Freres & Co. LLC is serving as financial advisor and Alvarez & Marsal is serving as restructuring advisor to Quiznos. About Quiznos Denver-based Quiznos -- http://www.quiznos.com-- is a chain designed for today's busy consumers who are looking for a high quality, tasty, freshly prepared alternative to traditional fast- food restaurants. With locations in 50 states and 30 countries, Quiznos is one of the world's premier quick-service restaurant chains and pioneer of the toasted sandwich; Quiznos restaurants offer creative, chef-created sandwiches and salads using premium ingredients. Quiznos was founded in 1981 by chefs who discovered that toasting brought out the best in every sandwich ingredient. RADIOSHACK CORP: To Offer Execs. $1.5MM in Retention Bonuses ------------------------------------------------------------ The Management Development and Compensation Committee of the Board of Directors of RadioShack Corporation approved the promotions of Ms. Janet Fox to senior vice president, global sourcing and product innovation, Mr. Paul Rutenis to senior vice president, chief merchandising officer, and Mr. Mark Boerio to senior vice president, planning, allocation and e-Commerce. In connection with these promotions, Ms. Fox's base salary was increased from $375,000 to $400,000; Mr. Rutenis' base salary was increased from $315,000 to $400,000; and Mr. Boerio's base salary was increased from $325,000 to $375,000. After giving due consideration of the skills and talent deemed critical to the Company's business turnaround efforts currently underway, the difficult business environment and the competition for skilled, talented employees, the MD&C Committee authorized and directed the Company to enter into retention agreements with certain of its executive officers. The retention agreements state that the officers will be entitled to a retention payment if the officer remains employed by the Company through March 1, 2015. The named executive officers and the amount of such potential retention payment are as follows: Retention Name Position Payment ---- -------- -------- Joseph C. Magnacca CEO $500,000 John W. Feray EVP-CFO $275,000 Telvin P. Jeffries EVP-Chief Human Resources Officer, Services, Int'l $250,000 Troy H. Risch EVP-Store Operations $275,000 Michael S. DeFazio SVP-Store Concepts $187,500 On March 3, 2014, the MD&C Committee recommended the Board approve a special opportunity bonus payable to Mr. Joseph C. Magnacca, the Company's chief executive officer. The payment of the bonus, if any, will depend on the achievement of performance based strategic initiatives relating to the fiscal year 2015 turnaround plan, as designated by the MD&C Committee. The maximum amount of this bonus is $600,000. This bonus is payable on April 3, 2015. This special opportunity bonus is a one-time bonus opportunity relating to performance during fiscal year 2015. The Board of Directors of the Company approved this plan on March 4, 2014. 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. Troubled Company Reporter, citing The Wall Street Journal, reported on March 5, 2014, that RadioShack plans to cut back its store count, after a sharp drop in sales over the holidays left it with a $400 million loss in 2013. The electronics retailer said it could close as many as 1,100 U.S. stores -- one out of every four that it operates itself -- underscoring the difficulty it has had adapting to a fast changing consumer landscape. REBELANES INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Rebelanes, Inc. 625 Robert E. Lee Drive Tupelo, MS 38801 Case No.: 14-11050 Chapter 11 Petition Date: March 17, 2014 Court: United States Bankruptcy Court Northern District of Mississippi (Aberdeen) Debtor's Counsel: Selene D. Maddox, Esq. MADDOX LAW OFFICE 362 North Broadway Street Tupelo, MS 38804 Tel: 662-841-0061 Email: maddoxlaw63@gmail.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kevin J. Hartigan, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/msnb14-11050.pdf REPUBLIC OF TEXAS: Ch. 11 Exit Strategy Includes CHILLO Sales ------------------------------------------------------------- Republic of Texas Brands, Inc., through its totally owned Cannabis-Holdings.com website, has started delivering CHILLO- energy drink product to various wholesale and retailers in the State of Texas. Brisk Sales of the CHILLO-energy drink has been at the forefront for the company to file a reorganization plan on Friday with the courts, and the company is seeking to leave Chapter 11 reorganization status soon. "Sales to new accounts have been strong, and we are just beginning to get restocking orders through Chill Texas from several retailers who have gone through the CHILLO inventory at a surprisingly brisk pace," says Randy Safford COO. "The product sells itself and retailers are hungry to get CHILLO on their shelves, our phones are ringing and we have already received orders for new product offerings that we have yet to announce. "The Reorganization plan filed, we believe, will be looked upon favorably and accepted by the courts, and Republic of Texas brands will be able to exit Bankruptcy in the near term future. Here are some of the highlights of the reorganization plan." Upon confirmation of the Plan, the Debtor shall receive a cash infusion of $50,000 from Jerry Grisaffi. These funds will be used to cover overhead and to operate the company and make any Plan payments, if needed. Upon confirmation of this Plan, the Debtor will acquire the company Chill Texas, Inc. for the exclusive distribution rights to Chillo Hemp Energy Drink in Texas. The Debtor believes this new avenue will provide sufficient income to pay the plan payments and provide the Debtor inroads into the new hemp based products market. There are no plans for share cancellation or stock reversals. "Our totally owned Cannabis-Holdings.com has placed an order for an additional tea based herbal drink sku in its product lineup, and upon manufacturer shipment of the product it will be announced and inserted at the Amazon.com and the Cannabis-Holdings.com storefronts. We are very excited that our product lineup is expanding and that more exciting sku's will be announced in the very near future." About Republic of Texas Brands Incorporated Republic of Texas Brands Incorporated's mission is to find the premier cannabis and hemp industry innovators, leveraging its team of professionals to source, evaluate and purchase value-added companies and products, while allowing them to keep their integrity and entrepreneurial spirit. The company filed a Chapter 11 bankruptcy petition (Bankr. N.D. Tex. Case No. 13-bk-36434) on Dec. 17, 2013. The company estimated assets of $0 to $50,000 and liabilities of $500,001 to $1 million. Judge Barbara J. Houser presides over the case. The Debtor is represented by: Eric A. Liepins ERIC A. LIEPINS, P.C. 12770 Coit Rd., Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 E-mail: eric@ealpc.com PLEASE TAKE FURTHER NOTICE THAT a final hearing shall be held before the Bankruptcy Court on March 27, 2014 at 11:00 a.m. Eastern Time. REVSTONE INDUSTRIES: BFG and Committee Balk at PBGC Settlement -------------------------------------------------------------- Boston Finance Group, LLC, joins in the Official Committee of Unsecured Creditors' objection to debtors Revstone Industries, LLC, et al.'s settlement with the Pension Benefit Guaranty Corporation. Both the Committee and BFG are objection to PBGC's claims. They assert that PBGC's claims are overstated and should be disallowed or estimated at amount tens of millions of dollars less than the proposed allowed amount of $95 million. A hearing on the motion for approval of the settlement is slated for March 20, 2014 at 10:00 a.m. (ET). The Committee objects to the Settlement because, among other reasons, the settlement is not in the best interest of unsecured creditors. BFG points out that the Debtor is seeking approval of a purported "settlement" of the contingent, disputed and unliquidated claims of the PBGC and the DOL in a summary proceeding under Bankruptcy Rule 9019, and outside a full trial and without the extensive disclosure and creditor vote that would be required by a plan process. The Settlement The PBGC filed proofs of claim against the Revstone/Spara Debtors based on alleged liabilities stemming from four pension plans established by non-debtor entities. The face amount of the liquidated portions of the proofs of claim, as amended, totals $61 million. Further, the Department of Labor (the "DOL") filed proofs of claim asserting liability against Revstone, Spara LLC and Greenwood Forgings LLC in the aggregate amount of $48 million, representing the total amount of funds allegedly improperly used by the Pension Plans for improper or prohibited transactions, plus various unpaid interest and penalties and "lost opportunity costs" associated with these investments. The Settlement Agreement contemplates allowing the PBGC Claims and the DOL Claims at $95 million, setting minimum and projected recoveries on those claims in the amounts of $80 million and $82 million, respectively. Attached as exhibit to the Settlement Agreement is a redacted form of funding schedule pursuant to which the Revstone/Spara Debtors are anticipated to fund distributions under a plan(s) of reorganization yet to be filed to holders of administrative expenses, almost entirely professionals, as well as priority and unsecured claims. Attached as another exhibit to the Settlement is a form of Plan Support Agreement to be executed by and among the Debtors and the PBGC. Under the Plan Support Agreement, the Revstone/Spara Debtors will propose a Chapter 11 plan of reorganization embodies the Funding and Distribution Schedules. The Plan also requires the PBGC to support certain release and exculpation provisions. Creditor Recoveries The Committee complains that the settlement agreement (i) dictates how and when estate assets will be distributed to various constituents, including the PBGC, administrative claimants, general unsecured claimants, and the post confirmation trusts, (ii) dictates recovery in favor of certain preferred creditors (the PBGC and the professionals) while limiting recovery to other creditors, provides for broad third party releases by the PBGC, (iv) provides for an agreement to support a plan of reorganization (which will likely include similar releases), and (v) provides for the continued management of the Debtors by the same management that negotiated the settlement through the effective date of any plan, and thereafter, for the same management to select the post- confirmation management. As to the creditor recoveries, the objectors note that the funding schedule attached to the Settlement outlines the distributions to the PBGC, administrative/priority creditors, the litigation reserve and the general unsecured creditors of Revstone and Spara. According to the Debtors' estimates, if the targeted net proceeds of $113.5 million are realized, the expected recovery for general unsecured creditors of Revstone will be 13% and the recovery for general unsecured creditors of Spara will be 23%. The Committee, however, maintains that this anticipated recovery is highly speculative and illusory as evidenced by the $20 million swing in potential outcomes. The Committee avers that an exhibit to the settlement shows examples of anticipated recovery should net proceeds differ from the targeted proceeds by $10 million to the positive and to the negative. If proceeds are $10 million higher than anticipated, then recoveries increase to 18% for Revstone general unsecured creditors and to 37% for Spara general unsecured creditors. However, if proceeds are $10 million less than projected, recoveries to both unsecured creditor groups are reduced to zero. "Although the existence of the funds available to make these projected distributions is far from certain, as evidenced by the $20 million swing in potential outcomes reflected on Exhibit B to the Settlement Agreement, and the mechanism by which these funds actually become available to the Revstone and Spara estates is nowhere to be found, the Debtors have not only guaranteed the PBGC a minimum recovery of $80 million, but also provided them an opportunity to receive $85 million out of potential sale proceeds as well as additional potential recoveries from certain causes of action," BFG tells the Court. A full-text copy of the BFG supplemental objection is available for free at: http://bankrupt.com/misc/Revstone_PBGC_Settlement_BFG_Obj.pdf A full text copy of the committee objection is available for free at: http://bankrupt.com/misc/Revstone_PBGC_Settlement_Comm_Obj.pdf About Revstone Industries et al. Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP represents Revstone. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. Metavation, also known as Hillsdale Automotive, LLC, joined parent Revstone in Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No. 13-11831) to sell the bulk of its assets to industry rival Dayco for $25 million, absent higher and better offers. Metavation has tapped Pachulski as its counsel. Pachulski also serves as counsel to Revstone and Spara. Metavation also has tapped McDonald Hopkins PLC as special counsel, and Rust Consulting/Omni Bankruptcy as claims agent and to provide administrative services. Stuart Maue is fee examiner. Mark L. Desgrosseilliers, Esq., at Womble Carlyle Sandridge & Rice, LLP, represents the Official Committee of Unsecured Creditors in Revstone's case. SAGAMORE PARTNERS: Default Interest Not Owing Under Sec. 1123(d) ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that whether interest is owing at the higher default rate is a question answered entirely by Section 1123(d) of the Bankruptcy Code, not Section 365(b)(2)(D), according to a Feb. 26 opinion by U.S. District Judge Robin Rosenbaum in Miami. The report said the case came up on appeal from a decision by U.S. Bankruptcy Judge A. Jay Cristol. It involved a corporate reorganization where there had been a payment default long before the Chapter 11 filing. The plan provided that the secured lender would be paid in full with whatever interest the court decided was required. The lender claimed entitlement to $5.1 million in so- called default interest on top of interest at the contractual rate the lender had been paid throughout. Judge Cristol determined that the lender wasn't entitled to default interest. His conclusion was upheld by Judge Rosenbaum, albeit on different grounds, according to the report. Judge Cristol found no entitlement to default interest because notice of default hadn't been given to the borrower's lawyer as required by the loan agreement, the report related. Judge Rosenbaum differed with the conclusion, finding that that default interest kicked in automatically on the occurrence of default, without need for notice. Judge Rosenbaum agreed with Judge Cristol's ultimate conclusion because she said Florida law requires the lender make an election between receiving default interest or fees and charges resulting from default, the report further related. Because the lender had been billing and receiving payment of charges and fees, she said the secured creditor waived entitlement to default interest. About Sagamore Partners Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and operates the oceanfront Sagamore Hotel, also known as The Art Hotel due to its captivating art collection from recognized artists and its contemporary design. The all-suite boutique hotel is situated within Miami's Art Deco Historic District on South Beach. Sagamore Partners is owned by Martin Taplin. Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol presides over the case. Joshua W. Dobin, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla., serve as the Debtor's counsel. The Debtor disclosed $71,099,556 in assets and $52,132,849 in liabilities as of the Chapter 11 filing. In its latest schedules, the Debtor disclosed $67,963,210 in assets and $52,060,862 in liabilities. The petition was signed by Martin W. Taplin, president of Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC, general partner. In July 2012, Bankruptcy Judge A. Jay Cristol denied approval of the disclosure statement explaining the Debtor's Plan of Reorganization. Pursuant to the Plan, the Debtor proposes to reinstate the maturity date of its loan with JPMCC 2006-LDP7 Miami Beach Lodging, with interest from the Effective Date of the Plan at the loan's non-default interest rate; and cure monetary defaults under the Loan by paying the Secured Lender unpaid interest which has accrued on the Loan at the Interest Rate, but not interest which has accrued on the Loan at the Default Rate. According to Judge Cristol, to cure the Loan, the Debtor must provide for the payment of all amounts due the Secured Lender under the Loan Documents, including default interest. Absent such payment, the Debtor may not treat the Secured Lender's claim as unimpaired under the Plan. Because, as presently structured, the Plan does not provide for the payment of default interest to the Secured Lender, the Plan is facially unconfirmable over the objection of the Secured Lender and approval of the Disclosure Statement is denied. The U.S. Trustee has not appointed an official committee in the case. Sagamore Partners, Ltd., notified the U.S. Bankruptcy Court for the Southern District of Florida that the Effective Date of the Amended Plan of Reorganization, modified on Nov. 12, 2012, and on Dec. 7, 2012, occurred on Jan. 9, 2013. SBARRO LLC: Joint Disclosures & Plan Hearing Set for April 25 ------------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York scheduled a hearing at which time the Court will consider, among other things, adequacy of the disclosure statement and confirmation of the Joint Prepackaged Chapter 11 Plan of Reorganization of Sbarro LLC, et al., for April 25, 2014, at 10:00 a.m., (Prevailing Eastern Time), which date may be continued from time to time without further notice other than adjournments announced in open court. Any objections to the Disclosure Statement or confirmation of the Plan, including to the assumption of executory contracts and unexpired leases and the proposed cure amounts associated therewith, must be filed by April 17, unless otherwise agreed-to by the Debtors in their sole discretion. The Reply Deadline is set for April 24. About Sbarro Pizza chain Sbarro sought Chapter 11 bankruptcy protection together with several affiliated entities (Sbarro LLC, Bankr. S.D.N.Y. Lead Case No. 14-10557) on March 10, 2014, in Manhattan. Bankruptcy Judge Martin Glenn presides over the Debtors' cases. The bankruptcy filing came after Sbarro said in February it would 155 of the 400 restaurants it owns in North America. Nicole Greenblatt, Esq., James H.M. Sprayregen, Esq., Edward O. Sassower, Esq., and David S. Meyer, Esq., at Kirkland & Ellis, LLP, represent Sbarro. Mark Hootnick, Brian Bacal, Gregory Doyle, and Roger Wood at Moelis & Company, serve as Sbarro's investment bankers. Loughlin Management serves as the financial advisors. Prime Clerk LLC serves as claims and noticing agent, and administrative advisor. Melville, N.Y.- based Sbarro LLC listed $175.4 million in total assets and $165.2 million in total liabilities. The petitions were signed by Stuart M. Steinberg, authorized individual. This is Sbarro's second bankruptcy filing in three years. The corporate entity was then known as Sbarro Inc., which, together with several affiliates, filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11527) on April 4, 2011, in Manhattan. Sbarro Inc. disclosed $51,537,899 in assets and $460,975,646 in liabilities in the 2011 petition. Bankruptcy Judge Shelley C. Chapman presided over the 2011 case. In the 2011 case, Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, served as the Debtors' general bankruptcy counsel; Rothschild, Inc., as investment banker and financial advisor; PriceWaterhouseCoopers LLP as bankruptcy consultants; Marotta Gund Budd & Dzera, LLC, as special financial advisor; Curtis, Mallet-Prevost, Colt & Mosle LLP as conflicts counsel; Epiq Bankruptcy Solutions, LLC, as claims agent; and Sard Verbinnen & Co as communications advisor. Sbarro Inc. emerged from Chapter 11 protection seven months later, in November 2011, after Judge Chapman confirmed a Plan of Reorganization that handed ownership of the company to the pre- bankruptcy first lien lenders. Under the terms of the Plan, Sbarro reduced debt by approximately 73%, or $295 million (from approximately $405 million to $110 million, plus any amounts funded under a new money term loan facility), by: -- converting 100% of the outstanding amount of the $35 million post-petition debtor-in-possession financing into an equal amount of a newly issued $110 million senior secured exit term loan facility; -- converting approximately $173 million in prepetition senior secured debt held by the Company's prepetition first lien lenders into the remaining exit term loan facility and 100% of the common equity of the reorganized company (subject to dilution by shares issued under a management equity plan); and -- eliminating all other outstanding debt. In January 2014, Standard & Poor's Ratings Services lowered Sbarro's corporate credit rating further into junk category -- to 'CCC-' from 'CCC+' -- with negative outlook; and The Wall Street Journal reported pizza chain enlisted restructuring lawyers at Kirkland & Ellis LLP and bankers at Moelis & Co. SBARRO LLC: Has Interim Authority to Obtain $10MM in DIP Loans -------------------------------------------------------------- Sbarro LLC, et al., sought and obtained interim authority from the U.S. Bankruptcy Court for the Southern District of New York to obtain postpetition financing up to $10 million from Cantor Fitzgerald Securities as agent for a consortium of lenders, and use cash collateral securing their prepetition indebtedness. The DIP Loan requires the Debtors to have confirmed an acceptable plan of reorganization and disclosure statement within 75 days after the Petition Date or May 24, 2014. The Debtors are also required to have substantially consummated the plan of reorganization within 85 days after the Petition Date or June 3. The final hearing to consider approval of the Debtors' request to tap the total amount of $20 million in postpetition financing will be held on April 7, at 2:00 p.m. (prevailing Eastern time). About Sbarro Pizza chain Sbarro sought Chapter 11 bankruptcy protection together with several affiliated entities (Sbarro LLC, Bankr. S.D.N.Y. Lead Case No. 14-10557) on March 10, 2014, in Manhattan. Bankruptcy Judge Martin Glenn presides over the Debtors' cases. The bankruptcy filing came after Sbarro said in February it would 155 of the 400 restaurants it owns in North America. Nicole Greenblatt, Esq., James H.M. Sprayregen, Esq., Edward O. Sassower, Esq., and David S. Meyer, Esq., at Kirkland & Ellis, LLP, represent Sbarro. Mark Hootnick, Brian Bacal, Gregory Doyle, and Roger Wood at Moelis & Company, serve as Sbarro's investment bankers. Loughlin Management serves as the financial advisors. Prime Clerk LLC serves as claims and noticing agent, and administrative advisor. Melville, N.Y.- based Sbarro LLC listed $175.4 million in total assets and $165.2 million in total liabilities. The petitions were signed by Stuart M. Steinberg, authorized individual. This is Sbarro's second bankruptcy filing in three years. The corporate entity was then known as Sbarro Inc., which, together with several affiliates, filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11527) on April 4, 2011, in Manhattan. Sbarro Inc. disclosed $51,537,899 in assets and $460,975,646 in liabilities in the 2011 petition. Bankruptcy Judge Shelley C. Chapman presided over the 2011 case. In the 2011 case, Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, served as the Debtors' general bankruptcy counsel; Rothschild, Inc., as investment banker and financial advisor; PriceWaterhouseCoopers LLP as bankruptcy consultants; Marotta Gund Budd & Dzera, LLC, as special financial advisor; Curtis, Mallet-Prevost, Colt & Mosle LLP as conflicts counsel; Epiq Bankruptcy Solutions, LLC, as claims agent; and Sard Verbinnen & Co as communications advisor. Sbarro Inc. emerged from Chapter 11 protection seven months later, in November 2011, after Judge Chapman confirmed a Plan of Reorganization that handed ownership of the company to the pre- bankruptcy first lien lenders. Under the terms of the Plan, Sbarro reduced debt by approximately 73%, or $295 million (from approximately $405 million to $110 million, plus any amounts funded under a new money term loan facility), by: -- converting 100% of the outstanding amount of the $35 million post-petition debtor-in-possession financing into an equal amount of a newly issued $110 million senior secured exit term loan facility; -- converting approximately $173 million in prepetition senior secured debt held by the Company's prepetition first lien lenders into the remaining exit term loan facility and 100% of the common equity of the reorganized company (subject to dilution by shares issued under a management equity plan); and -- eliminating all other outstanding debt. In January 2014, Standard & Poor's Ratings Services lowered Sbarro's corporate credit rating further into junk category -- to 'CCC-' from 'CCC+' -- with negative outlook; and The Wall Street Journal reported pizza chain enlisted restructuring lawyers at Kirkland & Ellis LLP and bankers at Moelis & Co. SBARRO LLC: Obtains Interim Approval of Stock Transfer Procedures ----------------------------------------------------------------- Sbarro LLC, et al., sought and obtained interim approval from Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York of procedures governing the transfer of ownership of the common stock of Sbarro Holdings, Inc., which transfer may lead to an "ownership change." The Debtors, in order to protect their net operating losses, which they estimate to total approximately $43.8 million as of the Petition Date, require any entity that currently is or becomes a "Substantial Shareholder" to file with the Court a declaration of status as substantial shareholder. The Debtors also require any entity, before effectuating any transfer of beneficial ownership of common stock, to file with the Court a declaration of intent to accumulate or transfer stock. The Debtors state that based on a combined federal and state income tax rate of approximately 40%, the NOLs could translate into a potential future tax savings of approximately $17.5 million. The Debtors' request, according to court papers, will affect only holders of the equivalent of more than approximately 90,000 shares of Common Stock and parties-in-interest who are interested in purchasing sufficient Common Stock to result in that party becoming a holder of the equivalent of at least approximately 90,000 shares of Common Stock. The final hearing on the Motion will be held on April 7, 2014, at 2:00 p.m. Eastern Time. Any objections must be filed on or before seven days before the Final Hearing. About Sbarro Pizza chain Sbarro sought Chapter 11 bankruptcy protection together with several affiliated entities (Sbarro LLC, Bankr. S.D.N.Y. Lead Case No. 14-10557) on March 10, 2014, in Manhattan. Bankruptcy Judge Martin Glenn presides over the Debtors' cases. The bankruptcy filing came after Sbarro said in February it would 155 of the 400 restaurants it owns in North America. Nicole Greenblatt, Esq., James H.M. Sprayregen, Esq., Edward O. Sassower, Esq., and David S. Meyer, Esq., at Kirkland & Ellis, LLP, represent Sbarro. Mark Hootnick, Brian Bacal, Gregory Doyle, and Roger Wood at Moelis & Company, serve as Sbarro's investment bankers. Loughlin Management serves as the financial advisors. Prime Clerk LLC serves as claims and noticing agent, and administrative advisor. Melville, N.Y.- based Sbarro LLC listed $175.4 million in total assets and $165.2 million in total liabilities. The petitions were signed by Stuart M. Steinberg, authorized individual. This is Sbarro's second bankruptcy filing in three years. The corporate entity was then known as Sbarro Inc., which, together with several affiliates, filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11527) on April 4, 2011, in Manhattan. Sbarro Inc. disclosed $51,537,899 in assets and $460,975,646 in liabilities in the 2011 petition. Bankruptcy Judge Shelley C. Chapman presided over the 2011 case. In the 2011 case, Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, served as the Debtors' general bankruptcy counsel; Rothschild, Inc., as investment banker and financial advisor; PriceWaterhouseCoopers LLP as bankruptcy consultants; Marotta Gund Budd & Dzera, LLC, as special financial advisor; Curtis, Mallet-Prevost, Colt & Mosle LLP as conflicts counsel; Epiq Bankruptcy Solutions, LLC, as claims agent; and Sard Verbinnen & Co as communications advisor. Sbarro Inc. emerged from Chapter 11 protection seven months later, in November 2011, after Judge Chapman confirmed a Plan of Reorganization that handed ownership of the company to the pre- bankruptcy first lien lenders. Under the terms of the Plan, Sbarro reduced debt by approximately 73%, or $295 million (from approximately $405 million to $110 million, plus any amounts funded under a new money term loan facility), by: -- converting 100% of the outstanding amount of the $35 million post-petition debtor-in-possession financing into an equal amount of a newly issued $110 million senior secured exit term loan facility; -- converting approximately $173 million in prepetition senior secured debt held by the Company's prepetition first lien lenders into the remaining exit term loan facility and 100% of the common equity of the reorganized company (subject to dilution by shares issued under a management equity plan); and -- eliminating all other outstanding debt. In January 2014, Standard & Poor's Ratings Services lowered Sbarro's corporate credit rating further into junk category -- to 'CCC-' from 'CCC+' -- with negative outlook; and The Wall Street Journal reported pizza chain enlisted restructuring lawyers at Kirkland & Ellis LLP and bankers at Moelis & Co. SBARRO LLC: Can Employ Prime Clerk as Claims & Noticing Agent ------------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York authorized Sbarro LLC, et al., to employ Prime Clerk LLC as claims and noticing agent to, among other things, (i) distribute required notices to parties-in-interest, (ii) receive, maintain, docket and otherwise administer the proofs of claim filed in the Debtors' Chapter 11 cases, and (iii) provide other administrative services. Prime Clerk will be paid the following hourly rates: Case Manager $45 Technology Consultant $130 Consultant $140 Senior Consultant $170 Director $195 Prime Clerk will also be reimbursed for any necessary out-of- pocket expenses. Stuart M. Steinberg, general counsel of Sbarro, assured the Court that the Debtors' selection of Prime Clerk to act as the Claims and Noticing Agent has satisfied the Court's Protocol for the Employment of Claims and Noticing Agents under 28 U.S.C. Section 156(c), in that the Debtors have obtained and reviewed engagement proposals from at least two other court-approved claims and noticing agents to ensure selection through a competitive process. Mr. Steinberg said based on all engagement proposals obtained and reviewed, that Prime Clerk's rates are competitive and reasonable given Prime Clerk's quality of services and expertise. Michael J. Frishberg, co-president and chief operating officer of Prime Clerk LLC, 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. Mr. Frishberg said that prior to the Petition Date, the Debtors provided Prime Clerk a retainer in the amount of $40,000. About Sbarro Pizza chain Sbarro sought Chapter 11 bankruptcy protection together with several affiliated entities (Sbarro LLC, Bankr. S.D.N.Y. Lead Case No. 14-10557) on March 10, 2014, in Manhattan. Bankruptcy Judge Martin Glenn presides over the Debtors' cases. The bankruptcy filing came after Sbarro said in February it would 155 of the 400 restaurants it owns in North America. Nicole Greenblatt, Esq., James H.M. Sprayregen, Esq., Edward O. Sassower, Esq., and David S. Meyer, Esq., at Kirkland & Ellis, LLP, represent Sbarro. Mark Hootnick, Brian Bacal, Gregory Doyle, and Roger Wood at Moelis & Company, serve as Sbarro's investment bankers. Loughlin Management serves as the financial advisors. Prime Clerk LLC serves as claims and noticing agent, and administrative advisor. Melville, N.Y.- based Sbarro LLC listed $175.4 million in total assets and $165.2 million in total liabilities. The petitions were signed by Stuart M. Steinberg, authorized individual. This is Sbarro's second bankruptcy filing in three years. The corporate entity was then known as Sbarro Inc., which, together with several affiliates, filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11527) on April 4, 2011, in Manhattan. Sbarro Inc. disclosed $51,537,899 in assets and $460,975,646 in liabilities in the 2011 petition. Bankruptcy Judge Shelley C. Chapman presided over the 2011 case. In the 2011 case, Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, served as the Debtors' general bankruptcy counsel; Rothschild, Inc., as investment banker and financial advisor; PriceWaterhouseCoopers LLP as bankruptcy consultants; Marotta Gund Budd & Dzera, LLC, as special financial advisor; Curtis, Mallet-Prevost, Colt & Mosle LLP as conflicts counsel; Epiq Bankruptcy Solutions, LLC, as claims agent; and Sard Verbinnen & Co as communications advisor. Sbarro Inc. emerged from Chapter 11 protection seven months later, in November 2011, after Judge Chapman confirmed a Plan of Reorganization that handed ownership of the company to the pre- bankruptcy first lien lenders. Under the terms of the Plan, Sbarro reduced debt by approximately 73%, or $295 million (from approximately $405 million to $110 million, plus any amounts funded under a new money term loan facility), by: -- converting 100% of the outstanding amount of the $35 million post-petition debtor-in-possession financing into an equal amount of a newly issued $110 million senior secured exit term loan facility; -- converting approximately $173 million in prepetition senior secured debt held by the Company's prepetition first lien lenders into the remaining exit term loan facility and 100% of the common equity of the reorganized company (subject to dilution by shares issued under a management equity plan); and -- eliminating all other outstanding debt. In January 2014, Standard & Poor's Ratings Services lowered Sbarro's corporate credit rating further into junk category -- to 'CCC-' from 'CCC+' -- with negative outlook; and The Wall Street Journal reported pizza chain enlisted restructuring lawyers at Kirkland & Ellis LLP and bankers at Moelis & Co. SBARRO LLC: Landlord Objects to Action on 574 Fifth Ave. Lease -------------------------------------------------------------- 574 Fifth Avenue Lessee, LLC, the ground lessee of the property known as 574 Fifth Avenue and the landlord of all the space leased on the property, including a lease of ground floor space to Sbarro Properties, Inc., objects to any order to be issued by the U.S. Bankruptcy Court for the Southern District of New York allowing the Debtors to deal with the Sbarro 574 Lease other than in accordance with the agreement entered into in 2013. According to the Landlord, it terminated the lease in 2013 by reason of the fee owner's intent to demolish the building. The Termination Notice declared that the Sbarro 574 Lease was terminated as of Feb. 28, 2014. By reason of the termination, the Sbarro 574 Lease is not property of the estate, the Landlord asserts. Subject to an agreement in principle, the Landlord and Sbarro agreed to allow Sbarro to remain in occupancy through Aug. 31, 2014. They also agreed to an adjustment of all monetary liabilities. The Landlord is represented by Edmond P. O'Brien, Esq., at Stempel Bennett Claman & Hochberg, P.C., in New York. About Sbarro Pizza chain Sbarro sought Chapter 11 bankruptcy protection together with several affiliated entities (Sbarro LLC, Bankr. S.D.N.Y. Lead Case No. 14-10557) on March 10, 2014, in Manhattan. Bankruptcy Judge Martin Glenn presides over the Debtors' cases. The bankruptcy filing came after Sbarro said in February it would 155 of the 400 restaurants it owns in North America. Nicole Greenblatt, Esq., James H.M. Sprayregen, Esq., Edward O. Sassower, Esq., and David S. Meyer, Esq., at Kirkland & Ellis, LLP, represent Sbarro. Mark Hootnick, Brian Bacal, Gregory Doyle, and Roger Wood at Moelis & Company, serve as Sbarro's investment bankers. Loughlin Management serves as the financial advisors. Prime Clerk LLC serves as claims and noticing agent, and administrative advisor. Melville, N.Y.- based Sbarro LLC listed $175.4 million in total assets and $165.2 million in total liabilities. The petitions were signed by Stuart M. Steinberg, authorized individual. This is Sbarro's second bankruptcy filing in three years. The corporate entity was then known as Sbarro Inc., which, together with several affiliates, filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 11-11527) on April 4, 2011, in Manhattan. Sbarro Inc. disclosed $51,537,899 in assets and $460,975,646 in liabilities in the 2011 petition. Bankruptcy Judge Shelley C. Chapman presided over the 2011 case. In the 2011 case, Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, served as the Debtors' general bankruptcy counsel; Rothschild, Inc., as investment banker and financial advisor; PriceWaterhouseCoopers LLP as bankruptcy consultants; Marotta Gund Budd & Dzera, LLC, as special financial advisor; Curtis, Mallet-Prevost, Colt & Mosle LLP as conflicts counsel; Epiq Bankruptcy Solutions, LLC, as claims agent; and Sard Verbinnen & Co as communications advisor. Sbarro Inc. emerged from Chapter 11 protection seven months later, in November 2011, after Judge Chapman confirmed a Plan of Reorganization that handed ownership of the company to the pre- bankruptcy first lien lenders. Under the terms of the Plan, Sbarro reduced debt by approximately 73%, or $295 million (from approximately $405 million to $110 million, plus any amounts funded under a new money term loan facility), by: -- converting 100% of the outstanding amount of the $35 million post-petition debtor-in-possession financing into an equal amount of a newly issued $110 million senior secured exit term loan facility; -- converting approximately $173 million in prepetition senior secured debt held by the Company's prepetition first lien lenders into the remaining exit term loan facility and 100% of the common equity of the reorganized company (subject to dilution by shares issued under a management equity plan); and -- eliminating all other outstanding debt. In January 2014, Standard & Poor's Ratings Services lowered Sbarro's corporate credit rating further into junk category -- to 'CCC-' from 'CCC+' -- with negative outlook; and The Wall Street Journal reported pizza chain enlisted restructuring lawyers at Kirkland & Ellis LLP and bankers at Moelis & Co. SCOTT BRASS: High Court Won't Hear $4.5M Sun Capital Debt Appeal ---------------------------------------------------------------- Law360 reported that the U.S. Supreme Court declined to hear an appeal from Sun Capital Partners Inc. aimed at overturning a circuit court's decision that it could be held liable for a bankrupt metal manufacturing company's $4.5 million debt. According to the report, filed in November, the appeal challenged a July ruling by the First Circuit, which found that two of the private equity investment company's funds could be considered businesses under the Employee Retirement Income Security Act, which made them liable for Scott Brass Inc.'s debts. In Nov. 2008, three creditors filed involuntary Chapter 11 petition against Cranston, Rhode Island-based Scott Brass, Inc., in the U.S. Bankruptcy Court for the District of Rhode Island (Providence). The case was assigned Case No. 08-13702. SHIVSHANKAR PARTNERSHIP: Case Summary & 20 Top Unsec. Creditors --------------------------------------------------------------- Debtor: Shivshankar Partnership LLC 140 Cusick Road Alcoa, TN 37701 Case No.: 14-30843 Chapter 11 Petition Date: March 17, 2014 Court: United States Bankruptcy Court Eastern District of Tennessee (Knoxville) Judge: Hon. Richard Stair Jr. Debtor's Counsel: Thomas Lynn Tarpy, Esq. TARPY, COX, FLEISHMAN & LEVEILLE, PLLC 1111 Northshore Drive Landmark Tower North, Suite N-290 Knoxville, TN 37919 Tel: (865) 588-1096 Fax: (865) 588-1171 Email: ltarpy@tcflattorneys.com Total Assets: $3.79 million Total Liabilities: $3.20 million The petition was signed by Anil Merai, chief manager. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/tneb14-30843.pdf SUNGARD AVAILABILITY: S&P Assigns 'B+' CCR; Outlook Stable ---------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B+' corporate credit rating to Wayne, Pa.-based Sungard Availability Services Capital Inc. (AS). The outlook is stable. S&P also assigned 'BB-' issue-level ratings and a '2' recovery ratings to the company's proposed $250 million four-year revolver and $1.025 billion term loan B. The '2' recovery rating indicates S&P's expectations of a substantial (70%-80%) recovery of principal in the event of a payment default. Additionally, S&P assigned a 'B-' issue-level rating with a recovery rating of '6' to the company's proposed approximately $425 million of unsecured notes. The '6' recovery rating indicates S&P's expectation of a negligible (0%-10%) recovery of principal in the event of a payment default. "The rating reflects our view of the company's "fair" competitive position incorporating our assessment of the company's strong brand, customer diversity, and signs of success in the company's multi-year effort to reposition the business for growth. This is coupled with an "aggressive" financial risk profile reflecting initial leverage above 4.0x. The final rating of 'B+' reflects a one notch comparative ratings downward adjustment from the initial 'bb-' anchor because of the fact that the business is viewed as being in transition with margins still declining," said credit analyst Jacob Schlanger. "We view industry risk as "intermediate" and country risk as "very low", with 75% of revenues coming from the U.S. and 20% from the U.K. We consider management and governance to be "fair"." The stable outlook reflects S&P's view that that the company's turnaround will continue resulting in near term revenue stabilization and intermediate term EBITDA growth while maintaining leverage near present levels. Upside Scenario S&P do not foresee an upgrade in the near term given the company's private equity ownership and the fact that the company is in the midst of a transition that is only beginning to show results. Downside Scenario S&P do not consider a downgrade likely. However, if the transition does not perform as anticipated and competitive conditions result in further revenue declines or margin compression such that leverage is sustained above 5x, S&P could lower the rating. SURGICAL SPECIALTIES: Moody's B3 CFR on Review for Downgrade ------------------------------------------------------------ Moody's Investors Service placed all ratings of Surgical Specialties Corporation (US), Inc. (SSC), including its B3 Corporate Family Rating and Caa1-PD Probability of Default rating, under review for downgrade. The review reflects Moody's expectation that the company's operating performance in 2013 and 2014 will likely be lower than our original expectations and liquidity will be pressured due to potential challenges meeting financial covenants under its credit agreement. Separately, SSC is in the process of amending some terms in the credit agreement in favor of shareholder friendly initiatives, including debt-financed acquisitions, asset sales and dividends. The amendment, if executed, will also give the company more flexibility in regard to compliance with financial covenants. Moody's review will focus on SSC's ability to stabilize revenue and EBITDA in light of the significant uncertainty associated with maintaining sales of Quill in the face of rising competition from Johnson and Johnson. Moody's review will also examine the company's liquidity position, and changes to its financial policy in the context of the proposed amendment. Ratings placed under review for possible downgrade: Corporate Family Rating at B3 PDR at Caa1-PD First lien senior secured Term Loan B at B3, (LGD3, 35%) First lien senior secured Revolver at B3, (LGD3, 35%) Ratings Rationale The B3 CFR (currently under review) reflects the company's very small revenue base and presence in a few low-technology oriented products aimed at niche customer bases amid much larger competitors. These concerns are partly offset by leverage, which is lower than what is typically associated with B3 rated issuers. The principal methodology used in this rating was the Global Medical Product and Device Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Surgical Specialties Corporation (US), Inc. (SSC) is the borrowing entity for Angiotech Pharmaceuticals, Inc, headquartered in Vancouver, Canada. SSC and its operating subsidiaries manufacture single-use surgical products within the areas of surgical wound closure, oral surgery and ophthalmology. Product sales for SSC were approximately $123 million during fiscal 2012. TOWER CAR WASH: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Tower Car Wash, Inc. 1400 E Whitestone Blvd #12 Cedar Park, TX 78613 Case No.: 14-10402 Chapter 11 Petition Date: March 17, 2014 Court: United States Bankruptcy Court Western District of Texas (Austin) Judge: Hon. Tony M. Davis Debtor's Counsel: Stephen W. Sather, Esq. BARRON & NEWBURGER, P.C. 1212 Guadalupe, Suite 104 Austin, TX 78701 Tel: (512) 476-9103 Ext. 220 Fax: (512) 476-9253 Email: ssather@bn-lawyers.com Total Assets: $4.43 million Total Liabilities: $3.81 million The petition was signed by Robert E. Tesch, president. A list of the Debtor's eight largest unsecured creditors is available for free at http://bankrupt.com/misc/txwb14-10402.pdf TUSCANY INT'L: Has 3-Member Official Equity Committee ----------------------------------------------------- The Office of the United States Trustee for Region 3, pursuant to Section 1102(a)(1) of the Bankruptcy Code, appointed three members to the Committee of Equity Security Holders in connection with the Debtor Tuscany International Drilling Inc. The Panel members are: 1. John Adler, 2119 Elliott Ave, McLean, VA 22101. 2. Jason Pageau, 6573 Goldencreek Way, Las Vegas, NV 89108. 3. Nassos Kirykos, Kaviron 8, Lavrio 19500, Greece. Roberta A. DeAngelis is the U.S. Trustee for Region 3. T. Patrick Tinker is the Assistant U.S. Trustee. About Tuscany International Tuscany International Holdings (U.S.A.) Ltd. and Tuscany International Drilling Inc. sought protection from creditors under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 14-10193) in Delaware on Feb. 2, 2014. Tuscany also commenced ancillary proceedings in the Court of Queen's Bench of Alberta under the Companies' Creditors Arrangement Act. Pursuant to a restructuring support agreement with prepetition lenders holding 95% of the prepetition loans, the Debtors have agreed to sell substantially all of the assets of TID to lenders in exchange for a credit bid of certain of their debt, effectuated through a plan of reorganization. Headquartered in Calgary, Alberta, Tuscany is engaged in the business of providing contract drilling and work-over services along with equipment rentals to the oil and gas industry. Tuscany is currently focused on providing services to oil and natural gas operators in South America. Tuscany has operating centers in Colombia, Brazil, and Ecuador. The Debtor disclosed $414,624,292 in assets and $207,332,530 in liabilities as of the Chapter 11 filing. The Colombian and Brazilian businesses are operated by certain non-debtor affiliates, while the Ecuador business is operated by branch office of debtor TID. As of the Petition Date, Tuscany entities owned 26 rigs, of which 12 are located in Colombia, nine in Brazil and five in Ecuador. Of the 26 rigs, 15 were contracted and operational as of the Petition Date and five were directly owned by the Debtors. Latham & Watkins LLP's Mitchell A. Seider, Esq., Keith A. Simon, Esq., David A. Hammerman, Esq., and Annemarie V. Reilly, Esq.; and Young Conaway Stargatt & Taylor, LLP's Michael R. Nestor, Esq., and Kara Hammond Coyle, Esq., serve as the Debtors' co-counsel. FTI Consulting Canada, Inc.'s Deryck Helkaa is the chief restructuring officer. Prime Clerk LLC is the claims and notice agent, and administrative agent. McCarthy Tetrautt LLP is the special Canadian counsel. Deloitte & Touche LLP provides tax services. The Debtors' plan of reorganization dated March 3, 2014, proposes that a newly-formed entity organized by certain prepetition lenders will credit bid a principal amount of the Prepetition Credit Agreement Claims or DIP Facility Claims to be determined in exchange for all or substantially all of the assets of the HoldCo. The U.S. Trustee said that an official committee of unsecured creditors has not been appointed in the Debtors' cases. TUSCANY INT'L: Landis Rath to Represent Equity Panel ---------------------------------------------------- The newly minted Official Committee of Equity Security Holders in the Chapter 11 case of Tuscany International Drilling Inc. has tapped as proposed bankruptcy counsel: Adam G. Landis, Esq. Kerri K. Mumford, Esq. James S. Green Jr., Esq. J. Landon Ellis, Esq. Joseph D. Wright, Esq. LANDIS RATH & COBB LLP 919 Market Street, Suite 1800 Wilmington, DE 19801 Telephone: (302) 467-4400 Facsimile: (302) 467-4450 Email: landis@lrclaw.com mumford@lrclaw.com green@lrclaw.com ellis@lrclaw.com wright@lrclaw.com About Tuscany International Tuscany International Holdings (U.S.A.) Ltd. and Tuscany International Drilling Inc. sought protection from creditors under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 14-10193) in Delaware on Feb. 2, 2014. Tuscany also commenced ancillary proceedings in the Court of Queen's Bench of Alberta under the Companies' Creditors Arrangement Act. Pursuant to a restructuring support agreement with prepetition lenders holding 95% of the prepetition loans, the Debtors have agreed to sell substantially all of the assets of TID to lenders in exchange for a credit bid of certain of their debt, effectuated through a plan of reorganization. Headquartered in Calgary, Alberta, Tuscany is engaged in the business of providing contract drilling and work-over services along with equipment rentals to the oil and gas industry. Tuscany is currently focused on providing services to oil and natural gas operators in South America. Tuscany has operating centers in Colombia, Brazil, and Ecuador. The Debtor disclosed $414,624,292 in assets and $207,332,530 in liabilities as of the Chapter 11 filing. The Colombian and Brazilian businesses are operated by certain non-debtor affiliates, while the Ecuador business is operated by branch office of debtor TID. As of the Petition Date, Tuscany entities owned 26 rigs, of which 12 are located in Colombia, nine in Brazil and five in Ecuador. Of the 26 rigs, 15 were contracted and operational as of the Petition Date and five were directly owned by the Debtors. Latham & Watkins LLP's Mitchell A. Seider, Esq., Keith A. Simon, Esq., David A. Hammerman, Esq., and Annemarie V. Reilly, Esq.; and Young Conaway Stargatt & Taylor, LLP's Michael R. Nestor, Esq., and Kara Hammond Coyle, Esq., serve as the Debtors' co-counsel. FTI Consulting Canada, Inc.'s Deryck Helkaa is the chief restructuring officer. Prime Clerk LLC is the claims and notice agent, and administrative agent. McCarthy Tetrautt LLP is the special Canadian counsel. Deloitte & Touche LLP provides tax services. The Debtors' plan of reorganization dated March 3, 2014, proposes that a newly-formed entity organized by certain prepetition lenders will credit bid a principal amount of the Prepetition Credit Agreement Claims or DIP Facility Claims to be determined in exchange for all or substantially all of the assets of the HoldCo. The U.S. Trustee said that an official committee of unsecured creditors has not been appointed in the Debtors' cases. TUSCANY INT'L: Claims Bar Date Set for April 7 ---------------------------------------------- The Bankruptcy Court in Delaware on March 13, 2014, entered an order establishing April 7, 2014, at 5:00 p.m. (Prevailing Pacific Time) -- General Bar Date -- as the last date and time for each person or entity to file a proof of claim in the Chapter 11 cases of Tuscany International Holdings (U.S.A.) Ltd. and Tuscany International Drilling Inc. With respect to a governmental unit, the last date and time for such governmental unit to file a Proof of Claim in the Chapter 11 cases is Aug. 1, 2014, at 5:00 p.m. (Prevailing Pacific Time). All Claimants must submit (by overnight mail, courier service, hand delivery, regular mail or in person) an original, written Proof of Claim that substantially conforms to the Proof of Claim Form so as to be actually received by Prime Clerk LLC, the Debtors? claims and notice agent, by no later than 5:00 p.m. (Prevailing Pacific Time) on or before the applicable Bar Date at the following address: Tuscany International Holdings (U.S.A.) Ltd. Claims Processing Center c/o Prime Clerk LLC 830 3rd Avenue, 9th Floor New York, NY 10022 About Tuscany International Tuscany International Holdings (U.S.A.) Ltd. and Tuscany International Drilling Inc. sought protection from creditors under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 14-10193) in Delaware on Feb. 2, 2014. Tuscany also commenced ancillary proceedings in the Court of Queen's Bench of Alberta under the Companies' Creditors Arrangement Act. Pursuant to a restructuring support agreement with prepetition lenders holding 95% of the prepetition loans, the Debtors have agreed to sell substantially all of the assets of TID to lenders in exchange for a credit bid of certain of their debt, effectuated through a plan of reorganization. Headquartered in Calgary, Alberta, Tuscany is engaged in the business of providing contract drilling and work-over services along with equipment rentals to the oil and gas industry. Tuscany is currently focused on providing services to oil and natural gas operators in South America. Tuscany has operating centers in Colombia, Brazil, and Ecuador. The Debtor disclosed $414,624,292 in assets and $207,332,530 in liabilities as of the Chapter 11 filing. The Colombian and Brazilian businesses are operated by certain non-debtor affiliates, while the Ecuador business is operated by branch office of debtor TID. As of the Petition Date, Tuscany entities owned 26 rigs, of which 12 are located in Colombia, nine in Brazil and five in Ecuador. Of the 26 rigs, 15 were contracted and operational as of the Petition Date and five were directly owned by the Debtors. Latham & Watkins LLP's Mitchell A. Seider, Esq., Keith A. Simon, Esq., David A. Hammerman, Esq., and Annemarie V. Reilly, Esq.; and Young Conaway Stargatt & Taylor, LLP's Michael R. Nestor, Esq., and Kara Hammond Coyle, Esq., serve as the Debtors' co-counsel. FTI Consulting Canada, Inc.'s Deryck Helkaa is the chief restructuring officer. Prime Clerk LLC is the claims and notice agent, and administrative agent. McCarthy Tetrautt LLP is the special Canadian counsel. Deloitte & Touche LLP provides tax services. The Debtors' plan of reorganization dated March 3, 2014, proposes that a newly-formed entity organized by certain prepetition lenders will credit bid a principal amount of the Prepetition Credit Agreement Claims or DIP Facility Claims to be determined in exchange for all or substantially all of the assets of the HoldCo. The U.S. Trustee said that an official committee of unsecured creditors has not been appointed in the Debtors' cases. UNIVERSAL BIOENERGY: Incurs $160,000 Net Loss in Dec. 31 Qtr. ------------------------------------------------------------- Universal Bioenergy, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $159,848 on $18.70 million of revenues for the three months ended Dec. 31, 2013, as compared with net income of $782,232 on $13.32 million of revenues for the same period in 2012. For the six months ended Dec. 31, 2013, the Company reported a net loss of $473,616 on $32.57 million of revenues as compared with a net loss of $940,935 on $28.88 million of revenues for the six months ended Dec. 31, 2012. As of Dec. 31, 2013, the Company had $9.22 million in total assets, $7.92 million in total liabilities and $1.29 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/l7SRw7 About Universal Bioenergy Headquartered in Irvine, California, Universal Bioenergy Inc. develops markets alternative and natural energy products including, natural gas, solar, biofuels, wind, wave, tidal, and green technology products. Universal Bioenergy incurred a net loss of $623,518 on $60.21 million of revenues for the year ended June 30, 2013, as compared with a net loss of $4.12 million on $57.32 million of revenues for the year ended June 30, 2012. Bongiovanni & Associates, CPA's, in Cornelius, North Carolina, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the the Company has suffered recurring operating losses, has an accumulated deficit, has negative working capital, and has yet to generate an internal cash flow that raises substantial doubt about its ability to continue as a going concern. UNS ENERGY: Staves Off Pair of Bankruptcy Hoaxes ------------------------------------------------ David Wichner, writing for The Arizona Daily Star, reported that Tucson-based UNS Energy Corp., parent of Tucson Electric Power Co., was the target of a failed hoax in which someone filed fraudulent bankruptcy papers on the company's behalf. According to the report, a fraudulent Chapter 7 bankruptcy petition was filed in UNS Energy Corp.'s name Jan. 21 in U.S. Bankruptcy Court in Tucson, with forged signatures of company executives. A similar filing was made Feb. 6 in the name of "Tucson Energy Power Corporation," with TEP and other UNS units named as affiliates, the report said. The initial case was dismissed on Jan. 29 and the second a week later, after UNS attorneys submitted affidavits saying the filings were fraudulent, court records show, the report related. Though there was little concern the cases would progress, UNS Energy acted quickly to halt the hoax, spokesman Joe Barrios said, adding that company operations and customer service were unaffected, the report further related. Though TEP and other utilities are periodically the subject of billing scams, Barrios said the bogus bankruptcy filings were a first in his seven years with the company, the report added. UPPER VALLEY: UST Seeks Conversion or Ch.11 Trustee Appointment --------------------------------------------------------------- William K. Harrington, the United States Trustee, on Feb. 13, 2014, asked the U.S. Bankruptcy Court for the District of New Hampshire to convert Upper Valley Commercial Corporation's case to one under Chapter 7 of the Bankruptcy Code or, in the alternative, to appoint a Chapter 11 Trustee to the case. The U.S. Trustee stated that the need to convert or appoint a Chapter 11 Trustee had become apparent because the case needs a disinterested fiduciary to investigate and liquidate insider claims and the Debtor's pre-petition mismanagement. The U.S. Trustee argues that sufficient grounds exist to appoint a Chapter 11 Trustee. Among the grounds stated, are such issues as the claims against insiders being such a significant portion of the Debtor's assets that the best interest of the creditors would only be served by the appointment of a disinterested trustee. Further, an inherent conflict of interest exists in the Debtor's officers and directors pursuing claims against themselves, their businesses, and family members. Moreover, because more than half ($5,238,638.06) of the Debtor's remaining Accounts Receivables consists of money borrowed from the Debtor by its principals, their family members, and businesses, the Debtor suffers from material conflicts of interests which give rise to the presumption that it will not be able to conduct unbiased investigations and make impartial decisions in pursuing claims on behalf of the Debtor. The U.S. Trustee argues that the case should be converted because there is no reorganization contemplated for the Debtor. The Debtor filed the bankruptcy case to wind down its affairs as a condition to avoiding the appointment of a state court receiver. Further, the Trustee argues that the Debtor in liquidating its estate has a fiduciary duty to maximize the return on its accounts receivables and pursue chapter 5 actions if it would benefit the estate. However, management is not likely to want to pursue this type of actions because of their various conflicts of interests. The Bankruptcy Court scheduled a hearing on the U.S. Trustee's request for April 1, 2014 at 11:00 a.m. at Courtroom 2 (JDM), 1000 Elm Street, 11th Floor, Manchester, NH. USEC INC: Bankruptcy Shakes Up Creditor Line -------------------------------------------- Stephen J. Lubben, writing for The New York Times' DealBook, reported that the Chapter 11 bankruptcy case of USEC, Inc., which processes uranium for power plants, provides a nice reminder that "there is theory and then there is actual practice." According to the report, academics, in both the business and legal worlds, spend a lot of timing worrying about the ?absolute priority rule.? This is the idea that secured creditors are paid in full before unsecured ones, and the unsecured creditors are paid in full before shareholders receive anything. Academics have long argued that failure to heed the absolute priority rule with great rigor results in higher debt costs for all borrowers in the economy, the report noted. It?s the basis for many academic criticisms of Chapter 11. But now there is the USEC reorganization plan, which creditors and preferred shareholders have agreed to support, the report related. It would give the holders of existing convertible notes cash for their accrued but unpaid interest, as well as new notes and just more than 79 percent of the stock of the reorganized company. The preferred shareholders -- Toshiba and Babcock & Wilcox -- would receive just more than $40 million in notes and not quite 16 percent of the new equity, the report further related. The old shareholders would retain a 5 percent interest in the company. About USEC Inc. USEC Inc. filed a Chapter 11 bankruptcy petition (Bank. D. Del. Case No. 14-10475) on March 5, 2014. John R. Castellano signed the petition as chief restructuring officer. The Debtor disclosed total assets of $70 million and total liabilities of $1.07 billion. The Hon. Christopher S. Sontchi presides over the case. Latham & Watkins LLP acts as the Debtor's general counsel. Richards, Layton and Finger, P.A., serves as the Debtor's Delaware counsel. Vinson & Elkins is the Debtor's special counsel. Lazard Freres & Co. LLC acts as the Debtor's investment banker. AP Services, LLC, provides management services to the Debtor. Logan & Company Inc. serves as the Debtor's claims and noticing agent. Deloitte Tax LLP are the Debtor's tax professionals. The Debtor's independent auditor is PricewaterhouseCoopers LLP. KPMG LLP provides fresh start accounting services to the Debtor. VALLEJO, CA: Council Voted to Close $5.2MM Budget Gap ----------------------------------------------------- An article at publicceo.com, written by Ed Mendel and originally posted at CalPensions, said the Vallejo city council this month voted to close a $5.2 million gap in the current budget, showing no alarm that in a five-year forecast the gap reopens, mainly driven by rising pension costs. The article said credit rating agency Moody's said in a report in February that Vallejo and two California cities currently in bankruptcy, Stockton and San Bernardino, risk returning to insolvency without pension relief. According to the article, Mayor Osby Davis, the lone council member remaining from the bankruptcy vote nearly six years go, told his colleagues after this month's budget vote that the city continues to face difficult decisions in the long drive toward a "balanced and sustainable" budget. "We are doing everything we can to try to make the ends meet," Mayor Davis said. "It's going to be a tough struggle, but I'm sure we will get there." The city's finance officer, Deborah Lauchner, who has the task of proposing budget solutions, shared the mayor's confidence that the Vallejo financial problems can be managed. "We are not on the brink of bankruptcy," Ms. Lauchner said, according to the article. "We are not going there." A copy of the article is available at http://is.gd/18gre7from publicceo.com VELTI INC: Files Ch. 11 Liquidating Plan after Sale to Blackstone ----------------------------------------------------------------- Velti Inc., et al., filed with the U.S. Bankruptcy Court for the District of Delaware a Chapter 11 plan of liquidation and accompanying disclosure statement after completing the sale of their business to an affiliate of Blackstone Group LP in January. GSO acquired the business in exchange for debt, the assumption of specified debt, and $1.25 million in cash for curing payment defaults on contracts going along with the sale. A Litigation Trust will be created under the Plan. Pursuant to a global settlement between GSO and the Official Committee of Unsecured Creditors, the Litigation Trust has been pre-funded with $550,000, of which $300,000 will be distributed to Class 3a (Allowed General Unsecured Claims) on a Pro Rata basis as soon as practical after the Effective Date and $250,000 will be held in reserve for payment of professional fees and expenses of the Litigation Trust. Additional amounts received, generated or recovered by the Litigation Trust will be used to pursue Causes of Action pursuant to the Litigation Trust Agreement, to adjudicate General Unsecured Claims, to pay the costs and expenses of the Litigation Trust, and for distribution to the beneficiaries of the Litigation Trust, at the discretion of the Litigation Trustee in accordance with the Litigation Trust Agreement. A full-text copy of the Plan, dated March 6, 2014, is available for free at http://bankrupt.com/misc/VELTIplan0306.pdf A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/VELTIds0306.pdf A hearing to consider approval of the Disclosure Statement is scheduled on April 10, 2014, at 10:30 a.m. (EDT). Objections are due April 3. About Velti Inc. Velti Inc., a provider of technology for marketing on mobile devices, sought Chapter 11 protection (Bankr. D. Del. Case No. 13-12878) on Nov. 4, 2013. Velti Inc., a San Francisco-based unit of Velti Plc, listed assets of as much $50 million and debt of as much as $100 million. Its Air2Web Inc. unit, based in Atlanta, also sought creditor protection. The parent, Dublin, Ireland-based Velti Plc, which trades on the Nasdaq Stock Market, isn't part of the bankruptcy process. Operations in the U.K., Greece, India, China, Brazil, Russia, the United Arab Emirates and elsewhere outside the U.S. didn't seek protection and business there will continue as usual. The Debtors are represented by attorneys Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Matthew M. Murphy, Esq., and Chun I. Jang, Esq., at DLA Piper LLP (US), in Chicago, Illinois. The Debtors have also tapped Jefferies LLC as investment banker, Sitrick Brincko Group LLC, as corporate communications consultants, and BMC Group, Inc., as claims and noticing agent. U.S. Bank, National Association, as administrative agent for GSO Credit-A Partners, LP, GSO Palmetto Opportunistic Investment Partners LP and GSO Coastline Partners LP, extended $25 million of postpetition financing to the Debtors. The DIP Lenders, which are also the Prepetition Lenders, are represented by Sandy Qusba, Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP, in New York. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. The Committee has tapped McGuireWoods LLP as lead counsel and Morris, Nichols, Arsht & Tunnell LLP as Delaware co-counsel. Asgaard Capital LLC serves as financial advisor to the Committee. Capstone Advisory Group LLC serves as consultant. VHGI HOLDINGS: Hires Street Capital for Possible Acquisition ------------------------------------------------------------ VHGI Holdings, Inc., is pursuing other US energy opportunities for acquisition. On Feb. 17, 2014, the Company entered into an engagement with Street Capital, Inc., for certain financial advisory and investment banking services to the Company in connection with the Company's review of its strategic and financial alternatives including, but not limited to, a possible Transaction or Financing. Street Capital will: (a) review historical and projected financial and operating information of the Company and any Strategic Partners; (b) assist the Company's management with the preparation of a memorandum describing the Company's business together with other materials as may be reasonably required for marketing of the Company; (c) identify and seek out persons, groups of persons, partnerships, joint ventures, corporations or other entities (each, a Strategic Partner) who would be interested in entering into a Transaction or Financing with the Company; (d) advise and assist the Company as to the financial aspects and structure of any proposed Financing or Transaction and assist in negotiating the terms thereof; and (e) perform other services as the Company and Street will mutually agree to in writing. "It is our goal to afford the shareholders extended options for growth opportunities. We continue to focus on the Energy Sector and negotiations are currently exchanging data for due diligence within 4 properties within the Coal Industry. The terms of the draws will be negotiated per draw down schedule and contingent upon successful due diligence," the Company said in a Form 8-K report filed with the U.S. Securities and Exchange Commission. Investment Pact Termination Lily Group, Inc., a wholly-owned subsidiary of VHGI Holdings, Inc., notified a counterparty on Sept. 12, 2013, that it was terminating an equity investment agreement between the parties. Lily Group, Inc., is unable to provide the full amount of the required deposit monies to close the transaction and is unable to perform under the terms of the agreement. Lily Group Inc. is currently attempting to retrieve deposited funds placed on deposit within the UAE banks associated with the anticipated closing of the transaction although they are continuing discussions going forward with potential opportunities. About VHGI Holdings Fort Worth, Tex.-based VHGI Holdings, Inc., is a holding company with revenue streams from these business segments: (a) precious metals (b) oil and gas (c) coal and (d) medical technology. On Jan. 9, 2014, four creditors filed an involuntary Chapter 11 case against VHGI Holdings in the United States Bankruptcy Court Southern District of Indiana (Terre Haute). VHGI Holdings incurred a net loss of $22.34 million on $481,568 of total revenue for the year ended Dec. 31, 2012, as compared with a net loss of $5.43 million on $499,617 of total revenue during the prior year. As of Dec. 31, 2012, the Company had $47.45 million in total assets, $62.18 million in total liabilities and a $14.72 million total stockholders' deficit. Liggett, Vogt & Webb, P.A., in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses, has significant amounts of past due debts and will have to obtain additional capital to sustain operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. WACO TOWN SQUARE: District Judge Reinstates NSJS Lawsuit -------------------------------------------------------- District Judge Nancy F. Atlas in Houston, Texas, remanded to the Bankruptcy Court a July 2013 order that required NSJS Limited Partnership to dismiss a lawsuit pending in the 414th Judicial District Court of McLennan County, Texas, against debtors Waco Town Square Partners, L.P. ("WTSP") and Waco Town Square Partners II, L.P. ("WTSP II"), and certain individual defendants. Judge Atlas also affirmed a bankruptcy court ruling that denied the Debtors' request to hold NSJS in contempt. NSJS was formed in 1998 by Sherry Bryan, James Bonnett, and Susan Bonnett after their father, Norman Bonnett, suffered a debilitating stroke and was unable to manage his affairs. NSJS was formed to manage Norman Bonnett's real estate holdings and to generate income to provide for his care. In August 2008, NSJS invested $200,000 in WTSP II, a company formed to conduct a second phase of a real estate development in Waco, Texas, by Wallace Bajjali Development Partners. David Wallace, a partner in Wallace Bajjali, and Michael Wray were responsible for obtaining investors in WTSP II, including NSJS. In exchange for its investment, NSJS received 2,083.33 units in WTSP II. The Agreement of Limited Partnership provided that NSJS had the right to redeem its interest and receive a full refund of its initial investment plus a Preferred Return of 10%. The Agreement provided further that cash or other proceeds from the sale of property would not be distributed by the general partner "except for distributions to NSJS in connection with the redemption of NSJS units described." In 2009, NSJS discovered that Wallace Bajjali had invested no cash in WTSP II, and that WTSP II pledged its real property as collateral for a loan to WTSP. In 2010, WTSP II's only asset was sold to Community Bank, which in turn lent the proceeds to WTSP, which in turn paid the money back to Community Bank to reduce WTSP's indebtedness of more than $7 million. The interest rate for the remaining debt to Community Bank was reduced from 6.5% to 4.5%. On July 30, 2010, NSJS tried unsuccessfully to exercise its redemption rights under the Agreement. Because WTSP II had used its assets to reduce WTSP's indebtedness to Community Bank, there were no funds to pay NSJS the redemption value of its units. On Nov. 18, 2010, NSJS sued Wallace, Wray, WTSM II, WTSP II and Community Bank in state court in McLennan County, Texas. After filing for bankruptcy in 2011, WTSP II removed the State Court Lawsuit to the Bankruptcy Court for the Western District of Texas. The case is, NSJS LIMITED PARTNERSHIP, Appellant, v. WACO TOWN SQUARE PARTNERS, LP, et al., Appellees, Civil Action No. H-13-2374 (S.D. Tex.). A copy of Judge Atlas' Memorandum and Order dated March 13, 2014, is available at http://is.gd/w8YXghfrom Leagle.com. Waco Town Square Partners, LP, and Waco Town Square Partners II, LP, are represented by Edward L Rothberg, Esq., Melissa A Haselden, Esq., and Terry Josh Judd, Esq., at Hoover Slovacek, LLP. NSJS Limited Partnership is represented by David W Anderson, Esq., at Rogers Anderson et al; and John Patrick Atkins, Esq. TEKELL & ATKINS, L.L.P. 5400 Bosque Boulevard Waco, TX 76710 Tel: 254-776-5095 Toll Free: 877-283-5355 Fax: 254-776-5091 Community Bank & Trust, Waco, Texas, is represented by Jeffrey R Cox, Esq. -- jcox@slmpc.com -- at Sheehy Lovelace & Mayfield. About Waco Town Square Partners Based in Sugar Land, Texas, Waco Town Square Partners, L.P., dba Austin Avenue Flats, filed for Chapter 11 bankruptcy (Bankr. S.D. Tex. Case No. 11-38928) on Oct. 21, 2011. Judge David R. Jones presides over the case. Edward L. Rothberg, Esq., at Hoover Slovacek LLP, served as the Debtor's counsel. In its petition, the Debtor estimated assets and debts of $1 million to $10 million. The petition was signed by David Wallace, manager and secretary. Waco Town Square Partners II LP filed a separate petition (Bankr. S.D. Tex. Case No. 11-38929) on the same day, listing $100,001 to $500,000 in assets and $1 million to $10 million in debts. SWB Waco SH, L.P. filed for Chapter 11 (Bankr. S.D. Tex. Case No. 10-38001) on Sept. 7, 2010. On May 20, 2012, the Bankruptcy Court entered Order Confirming Third Amended Joint Chapter 11 Plan of Reorganization of WTSP and WTSP II, As Modified on the Record at March 26, 2012 Hearing. WAFERGEN BIO-SYSTEMS: Incurs $17.7 Million Loss in 2013 ------------------------------------------------------- WaferGen Bio-systems, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss attributable to common stockholders of $17.71 million on $1.30 million of total revenue for the year ended Dec. 31, 2013, as compared with a net loss attributable to common stockholders of $8.97 million on $586,176 of total revenue for the year ended Dec. 31, 2012. For the three months ended Dec. 31, 2013, the Company reported net income attributable to common stockholders of $4.38 million on $490,465 of total revenue as compared with a net loss attributable to common stockholders of $1.23 million on $316,177 of total revenue for the same period in 2012. As of Dec. 31, 2013, the Company had $12.03 million in total assets, $13.24 million in total liabilities and a $1.21 million total stockholders' deficit. "We made solid progress in 2013 highlighted by the recapitalization in the latter half of the year which represents a clear turning point for the company," said Ivan Trifunovich, president and CEO of WaferGen. "We launched our SmartChip TE product line, used for target enrichment prior to Next-Generation Sequencing (NGS). We also drastically simplified our capital structure and raised $13.4 million of net proceeds in the third quarter, giving us a cash balance at December 31, 2013 of $10.7 million. On January 6, 2014, we acquired substantially all of the assets of IntegenX's product line used in library preparation for NGS, including the Apollo 324TM instrument and PrepXTM reagents which clearly puts us in a strong competitive position going forward. We are excited by the solid progress we have made and at this key inflection point we look forward to continuing the momentum as we further execute our growth strategy." SingerLewak LLP, in San Jose, California, issued a "going concern" qualification on the consoliated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred operating losses and negative cash flows from operating activities since inception which raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/99Cvir About WaferGen Bio-systems Fremont, California-based WaferGen Bio-systems, Inc., engages in the development of systems for gene expression quantification, genotyping and stem cell research. Since 2008, the Company's primary focus has been on the development, manufacture and marketing of its SmartChip System, a genetic analysis platform used for profiling and validating molecular biomarkers in the life sciences and pharmaceutical drug discovery industries. The Company reported a net loss of $8.2 million in 2012 following a net loss of $13.1 million in 2011. WEST TEXAS GUAR: March 20 Hearing on Bankruptcy, Trustee Bid ------------------------------------------------------------ Walt Nett, writing for the Lubbock Avalanche-Journal, reported U.S. Bankruptcy Judge Robert L. Jones has scheduled a hearing for March 20 on a request by local farmers for a trustee to monitor West Texas Guar's operations. Judge Jones will also consider a petition by the guar growers for an expedited decision on their request to place West Texas Guar into involuntary Chapter 11 bankruptcy. The hearing will be held at 2 p.m. in the U.S. Bankruptcy Court in Lubbock, in the George H. Mahon Federal Building. Representatives of 24 farms filed an involuntary Chapter 11 bankruptcy petition (Bankr. N.D. Tex. Case No. 14-50056) on March 14, 2014, against West Texas Guar Inc. The farmers claim they are owed nearly $4 million for seed they've delivered on the 2013 harvest but haven't been paid for. Guar is a seed crop that has a variety of uses in human and animal food production, textiles and fracking for oil and gas wells. Judge Robert L. Jones oversees the case. The farmers are represented by R. Byrn Bass, Jr., Esq., Attorney at Law. YELLOWSTONE MOUNTAIN: Suit v. Thornton Byron Goes to Trial ---------------------------------------------------------- Montana Bankruptcy Judge Ralph B. Kirscher denied a motion for summary judgment filed by the Yellowstone Club Liquidating Trust in its lawsuit against Thornton Byron LLP. Marc S. Kirschner, the former Trustee for the Yellowstone Club Liquidating Trust, commenced an adversary proceeding against Thornton Byron LLP on Feb. 19, 2010, seeking, among other things, disallowance of Thornton Byron LLP's Proof of Claim and to recover from Thornton Byron LLP at least $207,597.09 that was paid by the Debtors to the firm between April 8, 2008, and June 23, 2008, for professional services rendered to the Debtors, Timothy L. Blixseth and other non-Debtor individuals and entities. Judge Kirscher said testimony presented to the Court does not establish that the Debtor entities were insolvent when the payments were made to Thornton Byron. YCLT also has failed to affirmatively show that no genuine issues of material fact exist and that it is entitled to summary judgment as a matter of law. The Court also denied Thornton Byron LLP's Motion to Strike Portions of Plaintiff's Reply Brief filed Jan. 13, 2014. The case is, BRIAN A. GLASSER, AS SUCCESSOR TRUSTEE OF THE YELLOWSTONE CLUB LIQUIDATING TRUST, Plaintiff. v. DESERT RANCH LLLP, DESERT RANCH MANAGEMENT LLC, TIMOTHY L BLIXSETH, BEAU BLIXSETH, THORNTON BYRON LLP, George Mack, JOHN DOES 1-100, and XYZ CORP. 1-100, Defendants, Adv. Proc. No. 10-00015 (Bankr. D. Mont.). A copy of the Court's March 14, 2014 Memorandum of Decision is available at http://is.gd/JrKWYzfrom Leagle.com. About Yellowstone Mountain Located near Big Sky, Montana, Yellowstone Mountain Club LLC -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Club and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Montana, Case No. 08-61570) on Nov. 10, 2008. The Company's owner affiliate, Edra D. Blixseth, filed a separate Chapter 11 petition on March 27, 2009 (Case No. 09-60452). Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green PLLC represented Yellowstone. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors were represented by Parsons, Behle and Latimer; and James H. Cossitt, Esq., as counsel. Credit Suisse, the prepetition first lien lender, was represented by Skadden, Arps, Slate, Meagher & Flom. In June 2009, the Bankruptcy Court entered an order confirming Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor Capital Partners LLC acquired equity ownership in the reorganized Club for $115 million. Marc S. Kirschner, Esq., was appointed the Trustee of the Yellowstone Club Liquidating Trust created under the Plan. He has since been replaced by Brian A. Glasser as successor trustee. * 2nd Circ.'s Strict Ch. 15 Rule Will Drive Cases to Delaware ------------------------------------------------------------- Law360 reported that Delaware's bankruptcy court will be the new hot spot for insolvent foreign entities seeking Chapter 15 bankruptcy protection in the wake of the Second Circuit's tough take on who deserves that relief, experts predict. According to the report, Chapter 15 of the Bankruptcy Code, which allows foreign debtors' main insolvency proceedings to be recognized in the U.S., is still developing as courts and attorneys attempt to apply the nine-year-old law. * Voiding Mortgage Under State Law Is No Stern Problem ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that considering the validity of a mortgage exclusively under state law doesn't divest the bankruptcy court of power to render a final decision under the doctrine of Stern v. Marshall, Chief U.S. District Judge Christina Reiss from Burlington, Vermont, ruled on Feb. 28. According to the report, a husband and wife bought a home years before filing in Chapter 13. The husband didn't sign the mortgage. In bankruptcy, the couple dealt with the mortgage as a claims- allowance issue, the report said. Neither they nor the trustee attacked the mortgage using avoiding powers. The bankruptcy judge ruled under Vermont law that the mortgage was unenforceable, the report related. Consequently, the couple's plan, which the judge confirmed, allowed then to retain the home free of the mortgage because it was worth less than the $125,000 Vermont homestead exemption. On the Stern issue, Judge Reiss said the bankruptcy court had both statutory and constitutional power because the mortgage issue, as part of the claims-allowance process, was a "necessary integral, and indivisible part of the bankruptcy proceedings," the report further related. She cited Stern for saying that deciding an issue under state law doesn't undercut constitutional power because the Supreme Court focused on "whether the claim was central to the bankruptcy process." The case is GMAC Mortgage LLC v. Orcutt, 13-cv-00083, U.S. District Court, District of Vermont (Burlington). * Mortgage Servicer's Ties Raise Regulatory Concern --------------------------------------------------- Michael Corkery and Peter Eavis, writing for The New York Times' DealBook, reported that mortgage services collecting money from homeowners and distributing those payments to lenders is a fairly boring business. But not to William C. Erbey. According to the report, the 64-year-old billionaire has built a servicing empire of mind-aching complexity that plays a huge role in the nation's housing market. Mr. Erbey's flagship company, Ocwen Financial, now services about one of every four subprime mortgages in the United States. "He's a very smart guy," said Lawrence Bossidy, who worked with Mr. Erbey at the finance unit of General Electric in the late 1970s, the report related. "Brilliant," said Leon Cooperman, founder of the hedge fund firm Omega Advisors, which invests in one of Mr. Erbey's companies. Now, Mr. Erbey's smarts -- and his collection of companies are being tested, the report said. State and federal regulators are concerned that Ocwen is mishandling some of the mortgages it now services, citing examples of shoddy paperwork and faulty technology. Regulators and investors, which actually own most of the loans Ocwen services, are also questioning the unusual arrangements between Ocwen -- "new co" backward -- and four other publicly traded companies where Mr. Erbey is chairman, the report added. The companies do things from buying up delinquent loans to renting out foreclosed houses. * North Carolina Is a Case Study in Jobless-Benefits Cut -------------------------------------------------------- Damian Paletta, writing for The Wall Street Journal, reported that six years after the country plunged into recession, politicians and economic-policy makers face a prickly question: What happens when the government ends long-term unemployment benefits meant to help the jobless through the downturn and its aftermath? One state, North Carolina, is running an experiment that offers some real-life answers, the report related. Long-term unemployment benefits ended in North Carolina in July, six months before the federal government ended $25 billion in long-term jobless benefits for all the other states at the start of the new year, the report said. The Tar Heel State's unemployment rate since then has plunged, as people who were receiving benefits scrambled to find jobs or stopped looking for work, the report said. Employers report a flood of applicants. But the experience in North Carolina has exposed two persistent problems dogging the workforce: many experienced workers are settling for lower-skill jobs, and a lack of skills is blocking many other workers from settling into an abundance of openings. Many of the long-term unemployed have taken jobs for which they appear to be overqualified, based on experience or education, and some are piecing together multiple part-time jobs to fill the benefits gap, the report noted. * Senate Lawmakers Unveil Bill to Eliminate Fannie, Freddie ----------------------------------------------------------- Nick Timiraos, writing for The Wall Street Journal, reported that Senate lawmakers released their first draft of a bipartisan bill Sunday spelling out their proposal, previously announced last week, to eliminate Fannie Mae and Freddie Mac. The legislation replaces the mortgage-finance giants with a new system in which the government would continue to play a potentially significant role insuring U.S. home loans. According to the report, the 442-page bill, introduced by the heads of the Senate Banking Committee, Sens. Tim Johnson (D., S.D.) and Mike Crapo (R., Idaho), would construct an elaborate new platform by which a number of private sector entities, together with a privately-held but federally-regulated utility, would replace key roles long played by Fannie and Freddie. Fannie and Freddie don't make loans, but instead buy them from lenders, package them into securities, and sell those bonds to investors, the report related. They guarantee to make investors whole if loans default, attracting a diverse range of investors to the U.S. mortgage market. Over the past three decades, the companies facilitated the development of broad and deep markets for mortgage bonds, which helped make more widely available the 30-year, fixed-rate mortgage to American borrowers, the report further related. The companies were taken over by the government in 2008 as they neared collapse. The Senate measure is notable because it represents a rare bipartisan push to overhaul Fannie and Freddie, which are the single largest unaddressed legacy of the 2008 financial crisis, the report added. * TARP Funds Demolish Homes in Detroit to Lift Prices ----------------------------------------------------- Brian Louis and Jeff Green, writing for Bloomberg News, reported that in Flint, Michigan, once a thriving auto-industry hub, excavators with long metal arms and shovels have begun tearing down 1,500 dilapidated homes in an attempt to lift the housing market. According to the report, the demolitions in this Michigan city of about 100,000 people are part of the stepped up efforts by officials in several Midwestern states to rid their blighted neighborhoods of decayed housing that's depressing prices. The funding for the excavator work comes from a surprising source -- the Hardest Hit Fund of the Troubled Asset Relief Program, or TARP, created in 2008 to stabilize to the financial system. The $7.6 billion Hardest Hit Fund was intended to help troubled property owners avoid foreclosure and keep their homes, the report said. As foreclosures fall in most parts of the country, the fund is using the unspent $3.2 billion to remedy the crisis of abandoned homes. In Detroit alone, 70,000 dwellings, or about 19 percent of the total, may need to be torn down, according to the city. While demolition wasn't explicitly part of the initial program, policymakers are right to use the money to remove decaying properties, Raphael Bostic, director of the Bedrosian Center at the University of Southern California, told Bloomberg. "When a lot of these mortgage-relief programs were set up, demolition was not an acceptable use," Bostic, a former assistant secretary at the U.S. Department of Housing and Urban Development, added. "There are a number of places -- Detroit, Flint, for example -- where there are just far more houses than people to live in them." * Thin Film Market Expected to Grow to $10.25 Bil. by 2018 ---------------------------------------------------------- The report "Thin Film Material Market, By Type (CdTe, CIGS, a-Si, Others), End-User Industry [Photovoltaic Solar Cells, MEMS, Semiconductors and Electrical (Circuit Boards), Optical Coating, Others], and Deposition Processes - Global Trends & Forecast to 2018 ", defines and segments the thin film material market with an analysis and forecast of the market value. The thin film material market value expected to grow by significant CAGR to reach $10.25 billion by 2018. The advantages offered by thin film material in industrial as well as domestic operations, coupled with the rising demand for efficiency and miniaturization, will continue to drive the thin film material market. The growing demand from end-user industries would be responsible for the growth of thin film material market at a very swift pace in the future. Globally, thin film material manufacturing companies are dependent on the government funding and subsidies. During the global economic crisis, U.S. and the European countries were affected the most. Many countries such as the U.S. and Germany stopped the funding subsidies provided to the thin film material manufacturing companies. This resulted in bankruptcy, closure, or acquisition of these companies by their Chinese counterparts. It also affected the thin film material market adversely causing the revenues to decline in 2013. But the recovering global economy combined with the stringent government regulation and funding from venture capitalists is estimated to provide the market with a necessary boost in the future. The Thin Film Material Market is growing steadily in Europe, but will continue to grow at a rapid pace in Asia-Pacific. The countries such as China and Japan are the major contributors to the growing market of Asia-Pacific. The North American markets for thin film material will also continue to grow at a significant rate. The African and Latin American markets have still not realized their full potential but their growth rates would be considerably higher as compared to others owing to low base effect. The thin film material market is highly competitive and most companies don't offer all types of thin film material. First Solar (U.S.) is a major player which has dominated the CdTe market, accounting for nearly 90% of the total CdTe market in 2012. Hanergy (China) dominated the CIS/CIGS market; occupying around one-third of the market by acquiring other bankrupt companies in 2012. Ascent Solar (U.S.), Kaneka Solar Energy (Japan), and Solar Frontier (Japan) are the other major companies offering CIS/CIGS technology. The a-Si technology is majorly used by Asian companies such as Anwell Solar (Hong Kong), Suntech Power Co. Ltd. (China), and Moser Baer (India). Thin film materials are appropriate for high-density and high- frequency applications. Thin film materials are used for number of applications in several industries such as photovoltaic solar cells, MEMS, semiconductor, electrical and optical coating. One of the key factors contributing to this market growth is the increasing use of solar energy. The market has also witnessed growth due to various governments investing increasingly in the solar industry globally. However, the shortage of raw material used for the production of thin films could pose a challenge for the growth of this market. The report covers the thin film material market and its trends that concern five regions, namely, Europe, North America, Asia- Pacific, The Middle East & Africa, and Latin America; and the major countries in each region such as U.S., Canada, Germany, France, Italy, China, Japan, India, and others. Thin film material by types, which are, amorphous silicon (a-Si), cadmium telluride (CdTe), and copper indium gallium selenide (CIGS) along with others have also been studied. Thin film material deposition processes such as, chemical process and physical process are covered. About MarketsandMarkets MarketsandMarkets is a global market research and consulting company based in the U.S. It publishes strategically analyzed market research reports and serves as a business intelligence partner to Fortune 500 companies across the world. MarketsandMarkets also provides multi-client reports, company profiles, databases, and custom research services. M&M covers thirteen industry verticals, including advanced materials , automotives and transportation, banking and financial services, biotechnology, chemicals, consumer goods, energy and power, food and beverages, industrial automation, medical devices, pharmaceuticals, semiconductor and electronics, and telecommunications and IT. * LegalZoom's Referral Suit Against Bankruptcy Firm Stands ---------------------------------------------------------- Law360 reported that a California federal judge refused to drop Macey Bankruptcy Law Holdings PC from a lawsuit brought by LegalZoom Inc. against MBLH and affiliates for allegedly failing to pay for bankruptcy-case leads provided under contract, saying MBLH satisfied the "minimum contacts" requirement for jurisdiction. According to the report, LegalZoom filed suit last year against MBLH, its wholly owned subsidiary Macey Bankruptcy Law PC, and Jacob & Meyers Bankruptcy LLP, alleging breach of contract and other claims related to an agreement between MBL and LegalZoom. The case is LegalZoom.com Inc v. Macey Bankruptcy Law PC et al., Case No. 2:13-cv-08620 (C.D.Calif.) before Judge Beverly Reid O'Connell. The case was filed on November 21, 2013. * McCathern Merges with Braden, Hinchcliffe & Hawley ---------------------------------------------------- McCathern on March 17 announced the opening of its Los Angeles, California office commensurate with its merge with Los Angeles- based law firm, Braden, Hinchcliffe & Hawley LLP. While McCathern's expertise is national in reach, the firm understands the importance of a local presence. The addition of Braden, Hinchcliffe & Hawley's established reputation to McCathern's Los Angeles office will strengthen the firm's influence in California and its relationship with its clients across the nation. About McCathern Formed in 1998, McCathern is a Dallas, Texas based law firm with a practice that is national in scope. From its offices in Dallas, San Antonio, and Houston, Texas, and Los Angeles, California, and through an association with contract attorneys and attorneys "Of Counsel" to the firm in all fifty states, the firm handles complex litigation and transactional matters throughout the country. McCathern has a broad range of practice group specializations, including construction defect, employment, commercial litigation, non-subscription litigation, banking litigation, insurance and large loss subrogation litigation, oil and gas, bankruptcy, family law, and real property and business transactions. It is the largest provider of litigation defense services to non-subscribers in the State of Texas. Its clientele list ranges from Fortune 500 corporations and high-profile organizations, to small companies and high net worth individuals. * Parker Ibrahim's John Falzone Named to 2014 N.J. Super Lawyers ---------------------------------------------------------------- John M. Falzone, partner at New Jersey business law firm Parker Ibrahim & Berg, has been named to the 2014 New Jersey Super Lawyers list. In addition, two of the firm's associates -- Megan J. Strickland and Kashif T. Chand -- have been recognized as 2014 New Jersey Rising Stars by Super Lawyers, the Thomson Reuters lawyer rating service. Super Lawyers rates attorneys who have attained a high-degree of peer recognition and professional achievement in more than 70 practice areas. The selection process is multi-phased and includes peer nominations, independent research across 12 key categories and evaluation by a highly credentialed panel of attorneys. At the conclusion of this patented process, only 5% of attorneys from each state are selected each year as Super Lawyers. Rising Stars recognizes attorneys under the age of 40 who have been in practice less than 10 years. The selection process for this designation is the same as that for Super Lawyers. No more than 2.5% of attorneys in each state are named to Rising Stars. Mr. Falzone focuses his practice at Parker Ibrahim & Berg on the representation of financial institutions in the mortgage banking industry and has extensive experience with complex commercial and banking matters, as well as investor and consumer class actions. He was previously honored as a Super Lawyers Rising Star in 2011 and 2012, and has defended major U.S. and foreign banks, Big 4 accounting firms, various publicly owned companies, and directors and officers in federal and state court litigation across the country. Mr. Falzone received his B.A. from Villanova University, and his J.D. from Seton Hall Law School, where he was the Editor- in-Chief of the Seton Hall Law Review. Ms. Strickland is an associate with Parker Ibrahim & Berg and focuses her practice on the representation of financial institutions. She has extensive experience with financial services-related litigation and regulatory and transactional matters. Ms. Strickland received her Juris Doctor from Seton Hall University School of Law and her B.A. from Villanova University. She is admitted to practice law in the states of New York and New Jersey and in the United States District Court for the District of New Jersey. Mr. Chand represents financial institutions in connection with financial services-related litigation and regulatory and transactional matters. He received his Juris Doctor from Rutgers University School of Law and a B.A. in Chemistry degree from Rutgers University. Mr. Chand is admitted to practice before the bars of New Jersey and New York. "It's a thrill to have three of our attorneys recognized for their exceptional performance," said Scott Parker, firm co-founder and partner. "This honor is a testament to their outstanding work on behalf of our clients and the culture of excellence we strive to maintain within our firm." Parker Ibrahim & Berg was recently recognized by the New Jersey Law Journal as one of the top five large New Jersey law firms in terms of hiring in 2013. The firm was also named one of the 2014 Best Places to Work by NJBIZ. Based in Somerset, N.J., the firm also has offices in Philadelphia and New York City. Parker Ibrahim & Berg -- http://piblaw.com-- represents a wide array of corporate clients, including Fortune 500 companies, national banks, retailers, reinsurers, mortgage lenders and financial services companies. Its practice areas include mortgage banking, bankruptcy, commercial litigation, reinsurance/insurance, regulatory consulting, regulatory enforcement, consumer finance, fair lending, and corporate transactional matters. ********* 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 ***