/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140416.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, April 16, 2014, Vol. 18, No. 105 Headlines ABERDEEN LAND: Exclusive Solicitation Period Extended to June 26 ABERDEEN LAND: Fletcher & Fischer Okayed as Special Counsel AFA FOODS: Seeks $84M in Slew of Clawback Suits ALLIED IRISH: Issues EUR500MM of 5-year Senior Unsecured Funding ASBURY AUTOMOTIVE: S&P Revises Outlook to Pos. & Affirms 'BB' CCR ASHLEY STEWART: Holdings Files Schedules of Assets and Debts ASHLEY STEWART: NAS Files Schedules of Assets and Liabilities AXION INTERNATIONAL: Revenues Grew to $6.6 Million in 2013 AXION INTERNATIONAL: Allen Kronstadt Hikes Equity Stake to 47% BAY AREA FINANCIAL: Hires Lombardo & Safford as Special Counsel BAY AREA FINANCIAL: Taps Hendricks Berkadia as Agent BIOMET INC: S&P Retains 'B+' CCR on CreditWatch Positive BROOKSTONE HOLDINGS: Blucora Plans All-Cash Offer C&K MARKET: Can Employ Evans Elder as Real Estate Broker C&K MARKET: Trucker Huss Okayed as Employee Benefits Counsel CALDERA PHARMACEUTICALS: Timothy Tyson Named Non-Exec. Chairman CASH STORE: CCAA Court Hears DIP Financing Request CHINA NATURAL: Wants Plan Extension, Reports 4 Potential Buyers COGECO CABLE: Fitch Affirms 'BB+' Sr. Unsecured Notes Rating COLONIAL BANCGROUP: PwC Escapes Securities Fraud Claim CUE & LOPEZ: Wants Court to Deny Oriental Bank's Bid for Examiner D & L ENERGY: Files Additional Info to Support RLB Hiring DETROIT, MI: Has Until July 2 to Decide on Police Station Leases DETROIT, MI: Post-Ch. 9 City Will Still Be Under Watchful Eyes DIAMOND WATERFALLS: Files Supporting Docs for LNBY Hiring DOTS LLC: Otterbourg Approved as Creditors Committee's Counsel DOTS LLC: Taps Pearson Simon to Handle Visa/MasterCard Litigation DOTS LLC: PricewaterhouseCoopers Approved as Tax Advisor EASTMAN KODAK: Baker Hughes Turns Ch. 11 Into $25,000 Test Case FAIRMONT GENERAL: Ombudsman Can Tap Bowles Rice as Local Counsel FILENE'S BASEMENT: Seeks Nod to Sell NJ Lease For $30M FREEDOM INDUSTRIES: Chief Drops Pay, Insurance Requests GARLOCK SEALING: Ruling Rocked the Asbestos World, Judge Told GARLOCK SEALING: Judge Gives Aetna Access to Asbestos Claim Files GARLOCK SEALING: Ford Can Ask District Court to Unseal Docs GENERAL MOTORS: Reopened Bankruptcy Could Land in Uncharted Waters GENERAL MOTORS: Panel Chair Questions Delay GENERAL MOTORS: U.S. Firm Considered Opening Defect Probe in 2007 GENERAL MOTORS: Chief Can't Shake Recall Furor GENON ENERGY: Moody's Lowers Corporate Family Rating to 'B3' GFL ENVIRONMENTAL: S&P Revises Outlook to Neg. & Affirms 'B+' CCR GLOBAL GEOPHYSICAL: Alvarez & Marsal as Restructuring Advisor GLOBAL GEOPHYSICAL: Hires Rothschild Inc as Financial Advisor GLOBALSTAR INC: Common Stock to be Listed on NYSE GREGORY WOOD: Chapter 11 Reorganization Case Dismissed HEDWIN CORPORATION: Has Interim Authority to Tap DIP Loans HEDWIN CORPORATION: Seeks to Sell Assets to Fujimori for $6.5MM HEDWIN CORPORATION: Lists $18.2MM in Assets, $22.6MM in Debts HEDWIN CORPORATION: Seeks to Employ Tydings & Rosenberg as Counsel HOFFMASTER GROUP: S&P Assigns 'B' Rating to $265MM 1st Lien Loan HOWREY LLP: Perkins Coie Latest Target of Trustee HURLEY MEDICAL: Moody's Affirms 'Ba1' Rating; Outlook Negative INDRA HOLDING: Moody's Assigns 'B2' CFR & Rates $245MM Loan 'B2' INDYMAC BANCORP: 9th Circ. Cancels Oral Argument In D&O Saga INSTITUTIONAL SHAREHOLDER: Moody's Assigns B3 Corp. Family Rating INTERFAITH MEDICAL: Amends DIP Order to Increase Loan Amount JEWISH COMMUNITY CENTER: Estate Fully Administered, Case Closed LAFAYETTE YARD: Court Okays Waterford Settlement LARSEN ROAD: Case Summary & 20 Largest Unsecured Creditors LEO MOTORS: Asher Enterprises Reports 9.9% Equity Stake LIGHTSQUARED INC: Lenders Protest Exclusion From Conference LIGHTSQUARED INC: Falcone Touts Confidence In Firm's Post-Ch. 11 LIME ENERGY: John O'Rourke Quits as Director M/A-COM TECHNOLOGY: Moody's Assigns 'Ba3' Corporate Family Rating M/A-COM TECHNOLOGY: S&P Assigns Prelim. 'B+' CCR; Outlook Stable MACH GEN: Milbank Tweed Approved as Bankruptcy Counsel MACH GEN: Richards Layton Approved as Bankruptcy Co-Counsel METRO FUEL: Global Settlement OK'd; May 6 Case Conversion Hearing MF GLOBAL: Parent Sues PricewaterhouseCoopers for $1 Billion MF GLOBAL: Plan Head Raps PwC With $1B Malpractice Suit MINI MASTER: Can Hire Jose Andino as Debt Collection Counsel MINI MASTER: May Hire Jesus Nieves as Auditor MINI MASTER: Can Hire Alice Net Carlo as Special Counsel MOMENTIVE PERFORMANCE: RSA Requires Plan Order in 4 Months MOMENTIVE PERFORMANCE: Gets Court OK to Access $430-Mil. Financing MOMENTIVE PERFORMANCE: Meeting to Form Creditors' Panel April 22 MONARCH COMMUNITY: Files Articles Supplement MT. GOX: Japanese Bank Denies Aiding Alleged Fraud NEPHROS INC: Joseph Jacobs, et al., Hold 67% Equity Stake NEW CENTURY TRS: Augustin Claim Disallowed and Expunged NTG CLARITY: Refiles 2012 MD&A & Q2 2013 Interim Report NUVEEN INVESTMENTS: Moody's Puts 'B3' CFR on Review for Upgrade NUVEEN INVESTMENTS: S&P Puts 'B-' ICR on CreditWatch Positive PACIFIC STEEL: Creditors' Panel Hires Sheppard Mullin as Counsel PACIFIC STEEL: Creditors' Panel Hires Arch & Beam as Advisors PALM DRIVE HEALTH: California Hospital Files for Chapter 9 PARSLEY ENERGY: $150MM Add-on Notes No Impact Moody's Caa1 CFR PARSLEY ENERGY: $150MM Add-on Notes No Impact Moody's Caa1 CFR PARSLEY ENERGY: S&P Lowers Sr. Unsecured Notes Rating to 'CCC' POLY PLANT PROJECT: Case Summary & 17 Largest Unsecured Creditors REEVES DEV'T: Court Okays Interim Cash Collateral Use RICE ENERGY: Moody's Assigns 'B2' CFR & Rates $750MM Notes 'B3' S.E. SHIRES: Brass Instruments Files for Sale to Eastman SAAB AUTOMOBILE: Trustee Claims Execs' Missteps Led to Bankruptcy SCRUB ISLAND: Creditors' Committee Seeks Mediation of Disputes SCRUB ISLAND: U.S. Trustee, Creditors Object to Plan Outline SENTINEL MANAGEMENT: First Horizon Wins Round in Securities Row SHELBOURNE NORTH WATER: "Huge interest" in Spire Deal in Chicago SHOTWELL LANDFILL: Court Rejects LSCG's Deposition Bid SHOTWELL LANDFILL: Double "J" Wants Claim Estimated at $500,000 SHOTWELL LANDFILL: LSCG Wants Landfill Valued at $15,232,435 SMITHFIELD FOODS: S&P Puts 'BB-' CCR on CreditWatch Positive SSH HOLDINGS: Brookstone Plan No Impact on Moody's B2 Rating STERLING INFOSYSTEMS: Moody's Rates New Sr. Secured Debt 'B2' SUNLAND INC: Second Auction Brings $6-Mil. More for Peanut Plant SW BOSTON: 1st Cir Says Prudential Entitled to 14.5% Default Rate SWJ HOLDINGS: Bankruptcy Case Transferred to Connecticut TELEXFREE LLC: Files After Brazil Litigation TOLL ROAD: Fitch Affirms 'BB+' Revenue Bonds Ratings TRIAD GUARANTY: Exclusivity Extension Sought TRILOGY INTERNATIONAL: S&P Retains 'CCC' Rating After $80MM Add-On UNITED AIRLINES: 2nd Circ. Remands DHL's Price-Fixing Suit UNITEK GLOBAL: Moody's Affirms 'Caa2' CFR; Outlook Stable UNIVERSAL HEALTH: May 1 Hearing on Sole Director Appointment VERMONT LAW SCHOOL: Moody's Lowers $10.3MM Bonds to 'Ba1' WEST CORP: Enters Into Agreement to Acquire SchoolMessenger WILLBROS GROUP: S&P Revises Outlook to Positive & Affirms 'B-' CCR XTREME POWER: Younicos Completes Strategic Acquisition of Assets XTREME POWER: Horizon Technology Successfully Exits Investment ZUERCHER TRUST: Hearing on Plan Outline Scheduled for May 8 ZUERCHER TRUST: Case Conversion Hearing Continued Until Sept. 25 ZUERCHER TRUST: Drops Bid to Terminate Chapter 11 Trustee * Selling 'Out of Trust' Makes Debt Nondischargeable * Recording Foreclosure Deed Not Required to Divest Ownership * BofA, Ex-CEO Lewis Settle Crisis-Era Suits * BofA Wins Recommendation for U.S. Mortgage Suit Dismissal * Falcone Accused of Using Company Assets in Cash Crunch * Haynes And Boone Ducks High Court Appeal Over $1.3M Fee * High Court Won't Hear BofA's Ch. 7 Junior Lien Appeal * SAC Urges Approval of U.S. Insider Trading Pact * PBOC Official Blogs Skepticism About Bitcoin * Solons Call on Automakers to Share More Info on Fatal Accidents * Gavin/Solmonese's Weitz Among T&W People to Watch List for 2014 ********* ABERDEEN LAND: Exclusive Solicitation Period Extended to June 26 --------------------------------------------------------------- The Hon. Jerry A. Funk of the U.S. Bankruptcy Court for the Middle District of Florida has extended, at the behest of Aberdeen Land II, LLC, the exclusive period during which the Debtor may solicit acceptances of the Chapter 11 Plan of Reorganization for an additional 90 days, through and including June 26, 2014, from March 28, 2014. The Debtor anticipates that, with the requested extension of the Solicitation Period, it will be able to finalize the documents to implement the terms of the Settlement Term Sheet and move forward towards the successful confirmation of the Plan as amended. About Aberdeen Land II Aberdeen Land II, LLC, doing business as Aberdeen, owns a 1,316-acre master- planned community near Jacksonville, Florida. The project is designed for 1,623 single-family homes and 395 multi-family units. More than 1,000 units have been sold, leaving Aberdeen with 856 undeveloped lots and 28.1 acres zoned for commercial or residential use. Aberdeen filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-04103) on July 1, 2013, in Jacksonville, Florida. The Debtor has tapped Genovese Joblove & Battista, P.A., as counsel, Kapila & Company as accountant, Kellerhals Ferguson Fletcher Kroblin, PLLC, as special counsel, and Fishkind & Associates as expert consultants. Aberdeen owes $24 million in bonds that financed the project and more than $20 million to secured lenders with mortgages on the property. In its amended schedules, the Debtor disclosed $41,165,861 in assets and $31,189,704 in liabilities as of the petition date. No creditors' committee was appointed in the case. ABERDEEN LAND: Fletcher & Fischer Okayed as Special Counsel ----------------------------------------------------------- The Hon. Jerry A. Funk of the U.S. Bankruptcy Court for the Middle District of Florida has granted Aberdeen Land II, LLC, permission to employ Leigh Kellett Fletcher and the law firm of Fletcher & Fischer, P.L., as special counsel, nunc pro tunc to Jan. 1, 2014. As reported by the Troubled Company Reporter on April 11, 2014, Fletcher & Fischer will assist the Debtor in dealing with all aspects of the Community Development District governing the Aberdeen Development, as well as any and all issues related to the special assessments levied on the Debtor's property by the CDD and those certain bonds issued by the CDD to various bondholders. About Aberdeen Land II Aberdeen Land II, LLC, doing business as Aberdeen, owns a 1,316-acre master- planned community near Jacksonville, Florida. The project is designed for 1,623 single-family homes and 395 multi-family units. More than 1,000 units have been sold, leaving Aberdeen with 856 undeveloped lots and 28.1 acres zoned for commercial or residential use. Aberdeen filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-04103) on July 1, 2013, in Jacksonville, Florida. The Debtor has tapped Genovese Joblove & Battista, P.A., as counsel, Kapila & Company as accountant, Kellerhals Ferguson Fletcher Kroblin, PLLC, as special counsel, and Fishkind & Associates as expert consultants. Aberdeen owes $24 million in bonds that financed the project and more than $20 million to secured lenders with mortgages on the property. In its amended schedules, the Debtor disclosed $41,165,861 in assets and $31,189,704 in liabilities as of the petition date. No creditors' committee was appointed in the case. AFA FOODS: Seeks $84M in Slew of Clawback Suits ----------------------------------------------- Law360 reported that the estate of bankrupt AFA Foods Inc., the meat processor driven into Chapter 11 amid controversy over its "pink slime" filler, launched a host of avoidance actions in Delaware bankruptcy court, seeking to claw back about $84 million for the benefit of its creditors. According to the report, AFA's estate filed a total of 125 suits in Delaware bankruptcy court, aimed at recovering allegedly preferential payments made to vendors and other parties during the run-up to company's April 2012 bankruptcy. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the largest processors of ground beef products in the United States. AFA had seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings (BLBT) affected sales. Judge Mary Walrath presides over the case. Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware; Tobias S. Keller, Esq., at Jones Day, in San Francisco; and Jeffrey B. Ellman, Esq., and Brett J. Berlin, Esq., at Jones Day, in Atlanta, Georgia, represent the Debtors. FTI Consulting Inc. serves as the Debtors' financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, the Debtors' books and records on a consolidated basis, reflected approximately $219 million in assets and $197 million in liabilities. AFA Foods, Inc., disclosed $615,859,574 in assets and $544,499,689 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' cases. The Committee has obtained approval to hire McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon LLP serves as co-counsel. The Committee also obtained approval to retain J.H. Cohn LLP as its financial advisor. AFA, in its Chapter 11 case, sold plants and paid off the first- lien lenders and the loan financing the Chapter 11 effort. Remaining assets are $14 million cash and the right to file lawsuits. General Electric Capital Corp. and Bank of America Corp. provided about $60 million in DIP financing. The loan was paid off in July 2012. In October 2012, the Bankruptcy Court denied a settlement that would have released Yucaipa Cos., the owner and junior lender to AFA Foods, from claims and lawsuits the creditors might otherwise bring, in exchange for cash to pay unsecured creditors' claims under a liquidating Chapter 11 plan. Under the deal, Yucaipa would receive $11.2 million from the $14 million, with the remainder earmarked for unsecured creditors. Asset recoveries above $14 million would be split with Yucaipa receiving 90% and creditors 10%. Proceeds from lawsuits would be divided roughly 50-50. ALLIED IRISH: Issues EUR500MM of 5-year Senior Unsecured Funding ---------------------------------------------------------------- Allied Irish Banks, p.l.c., successfully completed the issue of a EUR500 million fixed rate senior unsecured debt with a maturity of five years and coupon of 2.75 percent. The transaction was arranged by Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs International, Morgan Stanley and Nomura and attracted EUR2 billion of total demand from a diverse range of international investors. Final pricing was at 180bps over mid swaps and the final order book at these pricing levels was in excess of four times over-subscribed. The deal attracted a very high quality mix of over 170 investors and a total of 96 percent of the final allocations were made to international investors. Today's issuance reflects continued progress at AIB and demonstrates its improving funding position, pricing and access to capital markets. The bank has successfully issued a range of funding transactions since November 2012 including four covered bond issuances, two senior unsecured issuances and a credit card securitisation, totalling EUR3.5 billion, in line with its strategy to engage with the markets in a measured and balanced way. About Allied Irish Banks Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. The Company reported a loss of EUR2.29 billion in 2011, a loss of EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009. Allied Irish's consolidated statement of financial position for the year ended Dec. 31, 2011, showed EUR136.65 billion in total assets, EUR122.18 billion in total liabilities and EUR14.46 billion in shareholders' equity. Allied Irish's balance sheet at June 30, 2012, showed EUR129.85 billion in total assets, EUR116.59 billion in total liabilities and EUR13.26 billion in total shareholders' equity. ASBURY AUTOMOTIVE: S&P Revises Outlook to Pos. & Affirms 'BB' CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its rating outlook on Duluth, Georgia-based automotive retailer Asbury Automotive Group Inc. to positive from stable. At the same time, S&P affirmed its ratings on the company, including the 'BB' corporate credit rating. The '6' recovery rating remains unchanged, reflecting S&P's expectation for negligible recovery (0%-10%) in the event of a payment default. The rating on Asbury reflects S&P's "fair" business risk profile and "significant" financial risk assessments on the company. S&P's rating modifiers had no impact on the rating, based on its criteria. The "fair" business risk profile assessment reflects S&P's view that Ashbury's resilient business model, with its diverse revenue stream and variable cost structure, will support continued good profitability during the next two years. The high gross profit margin revenue that its parts and service (P&S) operations generate is relatively stable, compared with vehicle sales which have volatile revenue and lower margins. Therefore, the P&S business should provide some revenue and margin stability for Asbury if the U.S. economy weakens. "The positive rating outlook on Asbury indicates a one-third or better chance that we could raise the corporate credit rating in the year ahead," said Standard & Poor's credit analyst Nancy Messer. To raise the rating, S&P would need to view Asbury's business profile as "satisfactory," including the company's ability to sustain profitability. Specifically, S&P would need to believe that the company can sustain EBITDA margins of 4.0% or better and earn a return on invested capital of 12.5% or higher. S&P would also need to believe that the company will employ a "moderate" financial policy that balances shareholder expectations for revenue growth (and cash for share repurchases) with credit quality that is consistent with a higher rating. A revision of the company's business profile assessment to "satisfactory" from "fair" could support an upgrade to a 'BB+' corporate credit rating, even if S&P continues to view the company's financial profile as "significant." The company's credit measures have been improving since 2009, and gross margin has been stable. For a 'BB+' corporate credit rating, Asbury would need to maintain debt leverage of 4x or less and FFO to debt of 20% or better. S&P could revise the outlook to stable if it believes Asbury's profitability will slip from the current level, reflecting an unexpected negative trend in its business operations. This could occur if the U.S. economy falls into another recession, which would decrease rather than expand (as we project) demand for vehicles and service maintenance. This could reduce Asbury's gross margin to below S&P's expectation for 16% or better and cause debt leverage to rise. S&P could also lower the rating if it believes higher-than- expected capital spending on dealer upgrades will hinder free cash flow, if Asbury uses a significant amount of cash to fund a dividend payout to shareholders or to repurchase its common shares, or if the company adopts an aggressive acquisition policy. ASHLEY STEWART: Holdings Files Schedules of Assets and Debts ------------------------------------------------------------ Ashley Stewart Holdings Inc. filed with the Bankruptcy Court for the Northern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $20 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $33,659,505 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $0 ----------- ----------- TOTAL $20 $33,659,505 A copy of Holdings' Schedules of Assets and Liabilities is available free at: http://bankrupt.com/misc/ASHLEYSTEWART_169_sal.pdf About Ashley Stewart Ashley Stewart Holdings Inc. and affiliates New Ashley Stewart Inc., AS IP Holdings Inc. and NAS Gift LLC filed Chapter 11 petitions in Newark, New Jersey (Bankr. D.N.J. Case Nos. 14-14383 to 14-14386) on March 10, 2014. Michael A. Abate signed the petitions as senior vice president finance/treasurer. Ashley Stewart Holdings estimated assets and liabilities of at least $10 million. The Hon. Michael B. Kaplan oversees the case. Curtis, Mallet-Prevost, Colt & Mosle LLP serves as the Debtors' general counsel. Cole, Schotz, Meisel, Forman & Leonard, P.A., is the Debtors' local counsel. PricewaterhouseCoopers LLP acts as the Debtors' financial advisor. Prime Clerk LLC serves as the Debtors' claims and noticing agent. Ashley Stewart has obtained authority to conduct store closing sales at 27 locations around the United States in accordance with a consulting agreement with Gordon Brothers Retail Partners, LLC. ASHLEY STEWART: NAS Files Schedules of Assets and Liabilities ------------------------------------------------------------- New Ashley Stewart, Inc., filed with the Bankruptcy Court for the Northern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $44,186,218 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $33,659,505 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $13,266,994 ----------- ----------- TOTAL $44,186,218 $46,926,499 A copy of New Ashley Stewart, Inc.'s Schedules of Assets and Liabilities is available free at: http://bankrupt.com/misc/ASHLEYSTEWART_170_sal.pdf About Ashley Stewart Ashley Stewart Holdings Inc. and affiliates New Ashley Stewart Inc., AS IP Holdings Inc. and NAS Gift LLC filed Chapter 11 petitions in Newark, New Jersey (Bankr. D.N.J. Case Nos. 14-14383 to 14-14386) on March 10, 2014. Michael A. Abate signed the petitions as senior vice president finance/treasurer. Ashley Stewart Holdings estimated assets and liabilities of at least $10 million. The Hon. Michael B. Kaplan oversees the case. Curtis, Mallet-Prevost, Colt & Mosle LLP serves as the Debtors' general counsel. Cole, Schotz, Meisel, Forman & Leonard, P.A., is the Debtors' local counsel. PricewaterhouseCoopers LLP acts as the Debtors' financial advisor. Prime Clerk LLC serves as the Debtors' claims and noticing agent. Ashley Stewart has obtained authority to conduct store closing sales at 27 locations around the United States in accordance with a consulting agreement with Gordon Brothers Retail Partners, LLC. AXION INTERNATIONAL: Revenues Grew to $6.6 Million in 2013 ---------------------------------------------------------- AXION International Holdings, Inc., reported financial results for 12 months ended Dec. 31, 2013. Full-Year Highlights: * 2013 revenues increased 24 percent to $6.6 million, over the prior year period * Sold engineered products to 58 customers during the year, representing 40 new customers and 18 existing customers * Approximately $30 million in current sales opportunities for ECOTRAXTM and STRUXURETM, consisting of 57 active opportunities and 51 customers with the potential to close by the end of 2014 * Executed bringing manufacturing in house, signed multi-year lease and now operating Waco, TX facility. More than doubled manufacturing capacity through investments of approximately $2 million in manufacturing equipment; strengthened internal operations through vertical integration and enabling reduction in supply chain costs * STRUXURE(R) Heavy Construction Mats have been installed at customers in Canada and the Northeastern U.S. * Announced first purchase order for ECOTRAXTM in Russia and received re-orders from many domestic transit lines and international customers * Reduced reliance on largest customer to 46 percent of total revenues in 2013 from 59 percent in 2012 Fourth Quarter Highlights: * Acquired assets of Ohio-based Y City Recycling. Launched subsidiary, AXION Recycled Plastics (ARPI) * ARPI signed a multi-million dollar, three-year contract to provide recycled materials to a major thermoplastics company * Received order for ECOTRAX(R) rail ties from major Australian rail line * Reduced reliance on largest customer to 48 percent of total revenues in the fourth quarter of 2013 * Commissioned an extrusion line in Zanesville, OH to increase manufacturing capacity, bringing a total of 5 extrusion lines across 2 facilities Steve Silverman, president and CEO of AXION said, "Overall 2013 was a period of change and progress. We executed our plan to bring manufacturing in house, while increasing our manufacturing capacity. We also made huge strides to become a vertically integrated and diversified manufacturer with the acquisition of assets of a re-processor of recycled plastic products. This transformation has enabled us to control quality, stabilize costs, improve margins and increase revenues." Silverman further commented, "Sales exceeded our expectations in 2013 and our margins increased due to a more normalized revenue mix and less concentration of sales with our largest Class I rail customer. The launch of our heavy construction mat is on schedule and we saw sales pick up in the 4th quarter with increased sales activity as we head into the spring months. Our existing customers are acknowledging our infrastructure products' wide ranging advantages and are recognizing our consistent quality and seeing AXION as a world class manufacturer. Our pipeline and large international business development projects continue to grow and are on schedule. Strategically, we have taken a step to become a vertically integrated supplier with a diversified business that reduces overall supply chain costs in bringing our recycled engineered products to market. We have a high degree of confidence that 2014 will provide even greater returns for our shareholders," Silverman added. About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. Axion International incurred a net loss of $5.43 million in 2012, following a net loss of $10.96 million in 2011. BDO USA, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. AXION INTERNATIONAL: Allen Kronstadt Hikes Equity Stake to 47% -------------------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Allen Kronstadt disclosed that as of April 8, 2014, he beneficially owned 27,651,963 shares of common stock of Axion International Holdings, Inc., representing 47 percent of the shares outstanding. Mr. Kronstadt previously reported beneficial ownership of 15,839,389 common shares at Jan. 28, 2013. A copy of the regulatory filing is available for free at http://is.gd/0SjeT5 About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. Axion International incurred a net loss of $5.43 million in 2012, following a net loss of $10.96 million in 2011. BDO USA, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. BAY AREA FINANCIAL: Hires Lombardo & Safford as Special Counsel --------------------------------------------------------------- Bay Area Financial Corporation seeks authorization from the U.S. Bankruptcy Court for the Central District of California to employ Lombardo & Safford LLP as special counsel, nunc pro tunc to Dec. 9, 2013. The Debtor requires Lombardo & Safford to provide legal services with respect to the collection of delinquent loans, any loan transactions, foreclosures, and corporate documentation. Lombardo & Safford will provide those legal services reasonably required to represent the Debtor's interests with respect to the foregoing legal matters. Counsel will also take reasonable steps to keep the Debtor informed of the progress of the matter and to respond to the Debtor's inquiries in a timely fashion. Vincent J. Lombardo, Esq., a partner of Lombardo & Safford, who will lead the engagement, bills $385 per hour. Lombardo & Safford will also be reimbursed for reasonable out-of- pocket expenses incurred. Lombardo & Safford has incurred $31,080 and costs of $0 post- petition. Lombardo & Safford requested that the application be granted, nunc pro tunc, from Dec. 9, 2013 so that counsel can seek approval of the fees and costs. Mr. Lombardo assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Mr. Lombardo, in his individual capacity and not as a member of Lombardo & Safford, is a creditor of the Debtor, holding a general unsecured claim in the amount of $73,452.88 as a commercial account note holder. Lombardo & Safford can be reached at: Vincent J. Lombardo, Esq. LOMBARDO & SAFFORD LLP 12400 Wilshire Blvd., Ste.350 Los Angeles, CA 90025 Tel: (310) 820-5966 About Bay Area Financial Bay Area Financial Corp., a consumer finance company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 13-38974) on Dec. 9, 2013. The case is assigned to Judge Thomas B. Donovan. The Debtor is represented by Sandford L. Frey, Esq., and Stuart I. Koenig, Esq., at Creim Macias Koenig & Frey LLP, in Los Angeles, California. The Debtor disclosed $15,248,851 in assets and $21,239,663 in liabilities as of the Chapter 11 filing. Peter C. Anderson, the U.S. Trustee for Region 16, appointed five members to the Official Committee of Unsecured Creditors. Shulman Hodges & Bastian LLP as general counsel of the Committee. BAY AREA FINANCIAL: Taps Hendricks Berkadia as Agent ---------------------------------------------------- Bay Area Financial Corporation asks for permission from the Hon. Thomas B. Donovan of the U.S. Bankruptcy Court for the Central District of California to employ Steffan Braunlich of Hendricks Berkadia as agent. Mr. Braunlich will list and sell the Debtor's property located at 625 West 8th Street, San Pedro, CA 90731. The professional services to be rendered by Hendricks Berkadia shall include, but not limited to: (a) ordering, analyzing and preparing the documentation necessary to place the subject Property in proper position to be listed and advertised for sale; (b) listing the Property with the most propitious listing services available, responding to inquiries of purchase, and soliciting reasonable offers for purchase; (c) conveying all reasonable offers of purchase to the Debtor, subject to the Debtor's approval, and confirming acceptance of the best offer; and (d) causing to be prepared on behalf of the Debtor and submitted to escrow, any and all documents requiring the endorsement of the Debtor to consummate a sale of the Property. Hendricks Berkadia will be employed on a commission basis, with commission noto to exceed 6% of the gross selling price of the Property. The period of employment is for six months. Mr. Braunlich 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. Hendricks Berkadia can be reached at: Steffan Braunlich HENDRICKS BERKADIA 2321 Rosecrans Ave., Ste. 3235 El Segundo, CA 90245 Tel: (424) 239-5900 Fax: (424) 239-5901 About Bay Area Financial Bay Area Financial Corp., a consumer finance company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 13-38974) on Dec. 9, 2013. The case is assigned to Judge Thomas B. Donovan. The Debtor is represented by Sandford L. Frey, Esq., and Stuart I. Koenig, Esq., at Creim Macias Koenig & Frey LLP, in Los Angeles, California. The Debtor disclosed $15,248,851 in assets and $21,239,663 in liabilities as of the Chapter 11 filing. Peter C. Anderson, the U.S. Trustee for Region 16, appointed five members to the Official Committee of Unsecured Creditors. Shulman Hodges & Bastian LLP as general counsel of the Committee. BIOMET INC: S&P Retains 'B+' CCR on CreditWatch Positive -------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Biomet Inc., including the 'B+' corporate credit rating, remain on CreditWatch with positive implications following the company's S-1/A filing, which does not include sufficient information to make a rating determination at this time. "The ratings on the medical products manufacturer Biomet Inc. reflect its "satisfactory" business risk profile and "highly leveraged" financial risk profile. Biomet's satisfactory business risk profile reflects the relatively stable nature of its industry, Biomet's relatively full orthopedic product offerings, and favorable long-term volume trends," said credit analyst Cheryl Richer. "Currently, the company's highly leveraged financial risk profile reflects stable debt leverage averaging 5.5x and funds from operations (FFO) to debt between 8% and 9% over the past several years." S&P will resolve the CreditWatch listing when the IPO is executed and it can quantifies the amount of proceeds being applied to debt reduction. S&P could raise the ratings one to two notches depending on the degree of deleveraging and financial improvement. If the company reduces debt such that debt to EBITDA is at the upper range of S&P's "aggressive" financial risk profile, or closer to 5x, an upgrade would likely be limited to one notch. A higher amount of debt reduction, such that leverage was lower around 4.5x, S&P could consider a two notch upgrade. BROOKSTONE HOLDINGS: Blucora Plans All-Cash Offer ------------------------------------------------- Emily Glazer, writing for The Wall Street Journal, reported that the owner of the Spencer's retail chain may be facing some competition in its bid for consumer electronics retailer Brookstone Inc. The Journal, citing people familiar with the matter, said the company that owns e-commerce retailer Monoprice is preparing an all-cash bid for Brookstone that would challenge Spencer Sprit Holdings Inc.'s offer, which includes $120 million in cash and the assumption of Brookstone debt, among other things. Spencer earlier offered to serve as the lead bidder at an auction for Brookstone, which is preparing to file for bankruptcy protection in the coming days. According to the report, Monoprice's owner, Blucora Inc., would merge the two retailers if its bid is successful, the people said. Blucora bought Monoprice, an Internet seller of electronics accessories, in 2013. Brookstone has been in touch with possible buyers for weeks as it battles disappointing sales, weak liquidity and a roughly $140 million debt load, the Journal said, citing people familiar with the matter. Spencer is expected to complete the paperwork to serve as the so-called stalking horse bidder at Brookstone's bankruptcy auction ahead of the Chapter 11 filing, a Brookstone spokeswoman said. As previously reported by The Troubled Company Reporter, any potential bidder must submit a qualified bid prior to May 28, 2014. Any competing bid must exceed the aggregate consideration offered by SPB by at least $4.45 million. If one or more qualified bids have been submitted, the Debtors will conduct an auction on June 2, at 10:00 a.m. (ET), at the offices of their counsel, K&L Gates LLP, in Boston, Massachusetts. About Brookstone Holdings Brookstone Holdings Corp. and its affiliated debtors on April 3, 2013, filed for relief under Chapter 11 (Bankr. D. Del. Lead Case No. 14-10752) with a plan to sell its business to another retailer. Specialty retailer Brookstone operated 242 retail stores across 40 states and Puerto Rico as of Feb. 1, 2014. Of those stores, 195 are generally located near "center court" in America's top retail centers and 47 are located in airports. Brookstone also operates an e-commerce business that includes the Brookstone catalog and http://www.Brookstone.com/ An affiliate of Spencer Spirit Holdings Inc., the parent of gift- shop chain Spencer's, has signed a deal to pay $147 million in exchange for 100% of the reorganized debtor's equity, absent higher and better offers from other parties. As of Dec. 31, 2013, Spencer operated 644 stores in 49 states and Canada. As of the bankruptcy filing, the Debtors owe more than $50 million on a senior secured prepetition credit facility ($34.1 million on a revolver, $12.3 million on a term loan and $4.7 million on account of letters of credit), and $137.3 million to holders of junior notes. The Debtors estimate that their unsecured debt is between $75 million and $85 million. The agreement with Spencer contemplates that Brookstone, headquartered in New Hampshire, will continue to operate its mall and airport stores, catalog, website, and wholesale channels, under the Brookstone brand with current employees remaining at their respective locations. The Debtors have tapped K&L Gates LLP and Landis Rath & Cobb LLP as attorneys, Deloitte Financial Advisory Services LLP as their financial advisors, Jefferies LLC as their investment banker, and Kurtzman Carson Consultants as claims agent. The DIP lenders are represented by Stroock & Stroock & Lavan LLP and Young Conaway Stargatt & Taylor LLP. C&K MARKET: Can Employ Evans Elder as Real Estate Broker -------------------------------------------------------- C&K Market, Inc. sought and obtained permission from the U.S. Bankruptcy Court for the District of Oregon to employ Evans, Elder & Brown, Inc. as real estate broker. The Debtor desires to employ Broker to assist in selling the Debtor's real property located at Map 21-35-16-31, tax lots 01700, 02000, and 03100, Lane County, Oregon, commonly known as 48083 Highway 58, Oakridge, OR 97463 (the "Property"). The Debtor seeks to compensate the Broker at a commission rate of 5% of the gross sale price of the Property, with the commission to be paid directly out of the proceeds from the sale of the Property without the need for a fee application. Alan Evans, partner of Evans Elder, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About C&K Market C&K Market Inc., a 57 year-old grocery store chain, sought bankruptcy protection from creditors with a plan to sell or close some of its stores, on Nov. 19, 2013 (Bankr. D. Ore. Case No. 13-64561). The case is assigned to Judge Frank R. Alley, III. C&K Market scheduled $157,696,921 in total assets and $101,604,234 in total liabilities. The Debtor is represented by Albert N. Kennedy, Esq., Timothy J. Conway, Esq., Michael W. Fletcher, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, in Portland, Oregon. Edward Hostmann has been tapped as chief restructuring officer, and The Food Partners, LLC, serves as the Debtor's financial advisor. Kieckhafer Schiffer & Company LLP serves as advisors and consultants to communicate with lenders, brokers, attorneys and other professionals. Henderson Bennington Moshofsky, P.C., serves as accountants. Watkinson Laird Rubenstein Baldwin & Burgess PC serves as labor counsel. The Debtor hired Great American Group, LLC, to conduct store closing sales. Kurtzman Carson Consultants is the Debtor's noticing agent. An Official Committee of Unsecured Creditors appointed in the Debtor's case has retained Scott L. Hazan, Esq., David M. Posner, Esq., and Jenette A. Barrow-Bosshart, Esq., at Otterbourg P.C. as lead co-counsel, and Tara J. Schleicher, Esq., at Farleigh Wada Witt as local co-counsel; and Protiviti, Inc. as financial consultant. C&K Market has filed a Chapter 11 plan and accompanying disclosure statement dated Jan. 31, 2014, which provide that each holder of an allowed general unsecured claim will receive one share of common stock of the reorganized debtor in exchange for each $10 of the holder's allowed general unsecured claim and a subscription right in the event the Debtor elects to consummate a rights offering. The Plan provides for the payment in full on the Effective Date of all Allowed Administrative Expense Claims, Priority Tax Claims, Other Priority Claims and the Allowed Secured Claim of U.S. Bank. The Plan provides for the payment in full over time, with interest, of all other Secured Claims. In general, Secured Creditors with personal property collateral will be paid in 60 equal amortizing payments, with interest at 5%, and Secured Creditors with real property collateral will be paid in 84 equal amortizing payments with interest at 5% based on a 25-year amortization with a balloon payment in seven years. C&K MARKET: Trucker Huss Okayed as Employee Benefits Counsel ------------------------------------------------------------ C & K Market, Inc. sought and obtained permission from the U.S. Bankruptcy Court for the District of Oregon to employ Trucker Huss APC as special purpose counsel, nunc pro tunc to Nov. 19, 2013. The Debtor desires to employ Trucker Huss as special purpose counsel in this Chapter 11 case, pursuant to Section 327(e) of the Code, to provide retirement plan, health and welfare plan, and other employee benefits advice and consulting to the Debtor, consistent with Trucker Huss' representation of the Debtor prior to the filing of Debtor's Chapter 11 petition. Trucker Huss served as the Debtor's health and welfare plan and employee benefits counsel prepetition, and the Debtor desires that Trucker Huss continue to provide such services post-petition. Trucker Huss will be paid at these hourly rates: R. Bradford Huss $675 Nicholas J. White $600 Callan G. Carter $575 Jennifer D. Brooks $525 Trucker Huss will also be reimbursed for reasonable out-of-pocket expenses incurred. From the Petition Date through Feb. 28, 2014, Trucker Huss incurred post-petition fees for services performed for the Debtor in the amount of $15,500.50. The Debtor has not paid Trucker Huss for any of these services. R. Bradford Huss, director of Trucker Huss, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About C&K Market C&K Market Inc., a 57 year-old grocery store chain, sought bankruptcy protection from creditors with a plan to sell or close some of its stores, on Nov. 19, 2013 (Bankr. D. Ore. Case No. 13-64561). The case is assigned to Judge Frank R. Alley, III. C&K Market scheduled $157,696,921 in total assets and $101,604,234 in total liabilities. The Debtor is represented by Albert N. Kennedy, Esq., Timothy J. Conway, Esq., Michael W. Fletcher, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, in Portland, Oregon. Edward Hostmann has been tapped as chief restructuring officer, and The Food Partners, LLC, serves as the Debtor's financial advisor. Kieckhafer Schiffer & Company LLP serves as advisors and consultants to communicate with lenders, brokers, attorneys and other professionals. Henderson Bennington Moshofsky, P.C., serves as accountants. Watkinson Laird Rubenstein Baldwin & Burgess PC serves as labor counsel. The Debtor hired Great American Group, LLC, to conduct store closing sales. Kurtzman Carson Consultants is the Debtor's noticing agent. An Official Committee of Unsecured Creditors appointed in the Debtor's case has retained Scott L. Hazan, Esq., David M. Posner, Esq., and Jenette A. Barrow-Bosshart, Esq., at Otterbourg P.C. as lead co-counsel, and Tara J. Schleicher, Esq., at Farleigh Wada Witt as local co-counsel; and Protiviti, Inc. as financial consultant. C&K Market has filed a Chapter 11 plan and accompanying disclosure statement dated Jan. 31, 2014, which provide that each holder of an allowed general unsecured claim will receive one share of common stock of the reorganized debtor in exchange for each $10 of the holder's allowed general unsecured claim and a subscription right in the event the Debtor elects to consummate a rights offering. The Plan provides for the payment in full on the Effective Date of all Allowed Administrative Expense Claims, Priority Tax Claims, Other Priority Claims and the Allowed Secured Claim of U.S. Bank. The Plan provides for the payment in full over time, with interest, of all other Secured Claims. In general, Secured Creditors with personal property collateral will be paid in 60 equal amortizing payments, with interest at 5%, and Secured Creditors with real property collateral will be paid in 84 equal amortizing payments with interest at 5% based on a 25-year amortization with a balloon payment in seven years. CALDERA PHARMACEUTICALS: Timothy Tyson Named Non-Exec. Chairman --------------------------------------------------------------- The Board of Directors of Caldera Pharmaceuticals, Inc., has appointed Timothy Tyson to serve as the Company's independent, non-executive Chairman. Mr. Tyson has served on the Company's Board of Directors since October 2013, and will continue to serve on the Compensation and Nominations Committees. For his services as independent, non- executive Chairman of the Board, Mr. Tyson was issued options exercisable for 132,000 shares of the Company's common stock and will receive monthly compensation of $10,000. About Caldera Based in Cambridge, Massachusetts, Caldera Pharmaceuticals, Inc., is a drug discovery and pharmaceutical services company that is based on a proprietary x-ray fluorescence technology, called XRpro(R). The Company's balance sheet at Sept. 30, 2013, showed $2.14 million in total assets, $3.1 million in total liabilities, and a stockholders' deficit of $1.09 million. "[T]he Company incurred a net loss of $2,350,606 and $413,539 during the nine months ended September 30, 2013 and 2012, respectively. As of September 30, 2013, the Company had an accumulated deficit of $11,357,932. The Company had a working capital deficiency of $1,500,503, including a non-cash derivative liability of $1,475,975 as of September 30, 2013. These operating losses and working capital deficiency create an uncertainty about the Company?s ability to continue as a going concern. Although no assurances can be given, management of the Company believes that potential additional issuances of equity or other potential financing will provide the necessary funding for the Company to continue as a going concern. The unaudited consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company is economically dependent upon future capital contributions or financing to fund ongoing operations," the Company said in its quarterly report for the period ended Sept. 30, 2013. CASH STORE: CCAA Court Hears DIP Financing Request -------------------------------------------------- The Ontario Superior Court of Justice determined that Cash Store Financial's request for approval of debtor-in-possession financing will be considered at a hearing April 15 to afford the Court time to consider competing DIP Financing Proposals. The decision to commence CCAA proceedings was made after extensively exploring alternatives following thorough consultation with its legal and financial advisors. The Company sought protection to address near term liquidity issues, which were caused in part by certain regulatory actions taken in Ontario that impacted on the Company's primary product offering in that jurisdiction. In light of these and other matters, Cash Store Financial's board of directors determined that a CCAA proceeding is the most prudent and effective way to carry on business and maximize value for the Company's stakeholders. Cash Store is committed to completing the restructuring process quickly and efficiently. The Company remains open for business, its branches continue to operate and daily lending is continuing. Protection under the CCAA and the financing available under the DIP financing agreement will provide Cash Store Financial with the time and stability to attempt to restructure its affairs under the CCAA. The CCAA protections and the DIP financing agreement are subject to approval by the Ontario Superior Court of Justice. About Cash Store Financial Headquartered in Edmonton, Alberta, The Cash Store Financial is the only lender and broker of short-term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store Financial operates 512 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 25 branches in the United Kingdom. Cash Store Financial is a Canadian corporation that is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States. Cash Store Financial employs approximately 1,900 associates. Cash Store reported a net loss and comprehensive loss of C$35.53 million for the year ended Sept. 30, 2013, as compared with a net loss and comprehensive loss of C$43.52 million for the year ended Sept. 30, 2012. As of Sept. 30, 2013, the Company had C$164.58 million in total assets, C$165.90 million in total liabilities and a C$1.32 million shareholders' deficit. * * * As reported in the Feb. 8, 2013 edition of the TCR, Standard & Poor's Ratings Services lowered its issuer credit rating on Cash Store Financial (CSF) to 'CCC+' from 'B-'. The outlook is negative. "The downgrades follow a proposal by the payday loan registrar in Ontario to revoke CSF's payday lending licenses and CSF's announcement that it has discontinued its payday loan product in the region," said Standard & Poor's credit analyst Igor Koyfman. The company's businesses in Ontario, which account for approximately one-third of its store count, will begin offering a new line of credit product to its customers. S&P believes this is to offset the loss of its payday lending product; however, this is a relatively new product, and S&P believes that it will be challenging for the company to replace its lost earnings from the payday loan product. S&P also believes that the registrar's proposal could lead to similar actions in other territories. As reported by the TCR on Feb. 21, 2014, Moody's Investors Service downgraded the Corporate Family of Cash Store Financial Services Inc to Ca from Caa2. The downgrade reflects the increased pressure on Cash Store's near-term liquidity position after the company was forced to cease offering its Line of Credit product in Ontario by its regulator, the Ministry of Consumer Services. CHINA NATURAL: Wants Plan Extension, Reports 4 Potential Buyers --------------------------------------------------------------- China Natural Gas Inc. filed with the U.S. Bankruptcy Court a third motion to extend the exclusive period during which it can file a plan and solicit acceptances thereof through and including June 9, 2014 and August 9 2014, respectively. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that China Natural Gas, the operator of a pipeline in China, said it has identified four potential investors or buyers. According to the report, the statement was made in papers filed seeking a third extension of its exclusive right to propose a Chapter 11 plan. In the prior request for longer exclusivity in February, the company said there were three interested buyers. All four signed confidentiality agreements, allowing them to receive detailed financial information, the company said in its court filing, the report related. If the bankruptcy judge in New York agrees, the deadline for filing a plan will be extended by two months to June 9, the report further related. About China Natural Headquartered in Xi'an, Shaanxi Province, P.R.C., China Natural Gas, Inc., was incorporated in the State of Delaware on March 31, 1999. The Company through its wholly owned subsidiaries and variable interest entity, Xi'an Xilan Natural Gas Co., Ltd., and subsidiaries of its VIE, which are located in Hong Kong, Shaanxi Province, Henan Province and Hubei Province in the People's Republic of China ("PRC"), engages in sales and distribution of natural gas and gasoline to commercial, industrial and residential customers through fueling stations and pipelines, construction of pipeline networks, installation of natural gas fittings and parts for end-users, and conversions of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles at 0ptmobile conversion sites. On Feb. 8, 2013, an involuntary petition for bankruptcy was filed against the Company by three of the Company's creditors, Abax Lotus Ltd., Abax Nai Xin A Ltd., and Lake Street Fund LP (Bankr. S.D.N.Y. Case No. 13-10419). The Petitioners claimed that they have debts totaling $42,218,956.88 as a result of the Company's failure to make payments on the 5% Guaranteed Senior Notes issued in 2008. Adam P. Strochak, Esq., at Weil, Gotshal & Manges, LLP, in Washington, D.C., represents the Petitioners as counsel. China Natural Gas, Inc., sought dismissal of the involuntary petition but in July 2013, it consented to the entry of an order for relief under Chapter 11 of the U.S. Code. The last regulatory filing listed assets as of June 30 of $29.5 million and liabilities totaling $82.5 million. COGECO CABLE: Fitch Affirms 'BB+' Sr. Unsecured Notes Rating ------------------------------------------------------------ Fitch Ratings has affirmed the ratings for Cogeco Cable Inc. The Rating Outlook is Stable. Fitch affirms the following: Cogeco -- Issuer Default Rating at 'BB+'; -- Senior secured notes at 'BBB-'; -- Senior unsecured notes at 'BB+'. Key Rating Drivers Fitch believes Cogeco's stable operating profile and the strength of the Canadian cable segment that generates the majority of the company's revenue and cash flow materially, benefits its credit profile. Cogeco's competitive position is anchored by its high- speed internet and triple-play offering. The cable systems are clustered in less concentrated and generally less competitive suburban regions as compared to large urban areas. Cogeco's goal of diversifying its revenue base through its past acquisitions is a result of maturing Canadian cable services, Canadian consolidation that is essentially complete, and the competitive intensity that has lowered growth prospects. Canadian cable growth slowed to approximately 2% for the past 12 months. Consequently, Cogeco now generates 35% of its revenues and approximately 30% of its EBITDA through its faster growing Enterprise Services and American Cable segments. Cogeco's enterprise services segment will require higher capital intensity rates and additional working capital to support ongoing operations and expansion for the next several years. Competition in Canada will continue to increase over time due to wireless substitution and additional IPTV footprint expansion of fiber-to-the-node overbuilds in a growing portion of Cogeco's regions. This has pressured primary service unit additions which have been decreasing due to factors mentioned above along with economic uncertainty and the past tightening of credit controls. Cogeco is in the process of upgrading technology to support an evolved video distribution platform to improve its competitive offering compared to the enhanced capabilities demonstrated by the telco's IPTV video service. However, the testing and expected deployment of this new IP evolved video distribution platform is taking much longer than initially anticipated due to the technical challenges of implementing new technologies. Thus, Cogeco remains at a slight disadvantage competitively with its video offering. Cogeco expects to mitigate at least a portion of its consumer Canadian cable revenue pressure through rate increases and SMB primary service unit additions by offering high-speed internet and telephony services, which could become an increasingly important offset. Cogeco Data Services targeting medium to large businesses in the enterprise services segment provides a growing diversified revenue stream with good growth prospects and margins. Cogeco has accelerated capital spending associated with its Barrie data center due to higher than anticipated demand thus delaying the break-even point between EBITDA and capital spending until fiscal year 2015. The PEER 1 Network Enterprises Inc. (PEER 1) business generates a substantial portion of its revenues outside of Canada thus providing additional diversification as Cogeco pursues investment opportunities outside of their traditional cable footprint. Execution risk is reducing as PEER 1's core business sustains double-digit growth focusing on complex, higher-priced managed services and web hosting solutions that require a greater level of service and support. As such, these higher priced services targeting small and medium sized businesses differentiates the company from the highly competitive areas within the U.S data center segment that have experienced greater pricing pressure. Cogeco has indicated pricing is generally stable to increasing for the majority of its more than 13,000 customers. Credit Metrics Improving Cogeco's credit metrics are improving following the acquisitions as total leverage (total debt to operating EBITDA) was 3.4x at the end of the second quarter of fiscal 2014 or 3.3x excluding Atlantic Broadband's operations. Fitch expects Cogeco should achieve its target of reducing leverage to 3x before the end of fiscal year 2015. Liquidity Appropriate Cogeco's main sources of liquidity are through its credit facilities, cash position and free cash flow (FCF). As of Feb. 28, 2014, Cogeco and ABB had approximately CAD229 million and USD80 million available under their bank credit facilities of CAD800 million and USD100 million, respectively. The bank credit facilities mature in January 2019 and November 2017 respectively. Cash was CAD55 million on a consolidated basis. Fitch expects Cogeco will increase available liquidity and reduce leverage by using FCF to pay down bank credit facilities through fiscal year 2015. Cogeco's FCF guidance for FY2014, after dividend payments, is approximately CAD180 million. Cogeco increased its dividend by 15% for fiscal year 2014 to CAD1.20 per share. Going forward, Fitch anticipates Cogeco could increase its dividend at similar rates absent a leveraging transaction or a change in earnings growth expectations. Cogeco's next significant maturity of US190 million is not due until October 2015. Rating Sensitivities Negative: Future developments that may, individually or collectively, lead to negative rating include: -- A large transaction that increases consolidated leverage to in excess of 3.5x range for an extended period of time; -- Greater than expected IPTV competition in Cogeco Cable territory that adversely affects operating trends and cash flow growth; -- A change in financial policy resulting in higher leverage due to increased dividends or aggressive share repurchases; -- Negative operating trends in the Atlantic Broadband operations that requires Cogeco Cable to infuse additional funding; -- Reduced consolidated free cash flow prospects as a result of competitive factors. Positive: At this time Fitch does not anticipate a positive rating action. Future developments that may, individually or collectively, lead to positive rating include: -- A change in financial policy and long-term commitment to maintain leverage at mid 2x range or below; -- Stable and/or growing operating trends across its three business segments; -- Increased operational diversification; -- Pre-dividend FCF to sales of greater than 10%. COLONIAL BANCGROUP: PwC Escapes Securities Fraud Claim ------------------------------------------------------ Law360 reported that an Alabama federal judge threw out a putative class of Colonial BancGroup Inc. shareholders' securities fraud claim against PricewaterhouseCoopers LLP alleging the professional services firm played a role in the massive fraud that brought down Colonial Bank and drove its holding company parent to bankruptcy. According to the report, U.S. District Judge R. David Proctor wrote that the investors hadn?t adequately alleged that PwC had caused any economic losses, had any knowledge of wrongdoing or made any material misstatements in connection with audit reports it issued. The case is In re COLONIAL BANCGROUP, INC. SECURITIES LITIGATION, Case No. 2:09-cv-00104 (M.D. Ala.). About The Colonial BancGroup Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc., (NYSE: CNB) owned Colonial Bank, N.A., its banking subsidiary. Colonial Bank -- http://www.colonialbank.com/-- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On Aug. 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. The Colonial BancGroup filed for Chapter 11 bankruptcy protection (Bankr. M.D. Ala. Case No. 09-32303) on Aug. 25, 2009. W. Clark Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, serve as counsel to the Debtor. The Debtor disclosed $45 million in total assets and $380 million in total liabilities as of the Petition Date. In September 2009, an Official Committee of Unsecured Creditors was formed consisting of three members, Fine Geddie & Associates, The Bank of New York Trust Company, N.A., and U.S. Bank National Association. Burr & Forman LLP and Schulte Roth & Zabel LLP serve as co-counsel for the Committee. Colonial Brokerage, a wholly owned subsidiary of Colonial BancGroup, filed for Chapter 7 protection with the U.S. Bankruptcy Court in the Middle District of Alabama in June 2010. Susan S. DePaola serves as Chapter 7 trustee. CUE & LOPEZ: Wants Court to Deny Oriental Bank's Bid for Examiner ----------------------------------------------------------------- Construction Inc. and Cue & Lopez Contractors Inc. ask the U.S. Bankruptcy Court for the District of Puerto Rico to deny Oriental Bank's motion for the appointment of an examiner to investigate the Debtors regarding: (a) transactions with insiders; (b) postpetition payments to suppliers that hold prepetition claims; and (c) amounts held by third parties for work completed. The Debtors claim in their March 19, 2014 court filing that "the jurisdictional basis motion is ill founded as there is no such thing as 28 U.S.C. Section 1104, and neither 11 U.S.C. Section 105, or Bankruptcy Rules 9013 and 9014 go to this Court's jurisdiction." According to the Debtors, their fixed, liquidated, unsecured debts, other than debts for goods, services, or unsecured taxes, or owing to insiders amount to $2,792,643.47 as of the filing date, thus, the appointment of an examiner in the instant case doesn't fall within the scope of Section 1104(c)(2). The Debtors state in their filing that an examiner entails additional expenses, which can be burdensome to the estate, as the appointment warrants compensation, as will any professionals that the examiner is authorized to retain and can cause potential delay in the Chapter 11 process. The Debtors claim that Oriental Bank has not alleged the existence of a fundamental reason in support of its request, that the protection afforded by the appointment is needed, that the cost and expense thereof would not be disproportionately higher than the value of the protection and that the appointment of an examiner would be beneficial to the various constituencies. The Debtors add that mere allegations of fraud, among other things, specially without any evidence whatsoever as the case of Oriental Bank's motion, are insufficient to justify the appointment of an examiner under Section 1104(c). About Cue & Lopez San Juan, Puerto Rico-based Cue & Lopez Construction, Inc., sought protection under Chapter 11 of the Bankruptcy Code on Oct. 4, 2013 (Case No. 13-08297, Bankr. D.P.R.). The case is assigned to Judge Brian K. Tester. Cue & Lopez Contractors, Inc., filed a separate Chapter 11 petition (Case No. 13-08299) on the same date. The Debtors are represented by Charles Alfred Cuprill, Esq., at Charles A Curpill, PSC Law Office, in San Juan, Puerto Rico. CPA Luis R. Carrasquillo & Co., P.S.C., serves as accountant. Cue & Lopez Construction scheduled $13,334,151 in total assets and $17,520,089 in total liabilities. The Chapter 11 petitions were signed by Frank F. Cue Garcia, president. D & L ENERGY: Files Additional Info to Support RLB Hiring --------------------------------------------------------- D & L Energy, Inc. filed documents to supplement its request for authority to employ Roderick Linton Belfance, LLP as general counsel. The information disclosed in the original application to employ Roderick Linton Belfance, LLP is accurate with the inclusion of the following additional information: prior to the date of the filing of the application, attorney Christopher Esker of Roderick Linton Belfance, LLP represented Dr. Oscar Sterle, a current creditor of the Debtor. The scope of attorney Esker's past and potential future representation of Dr. Sterle was and is in no relation to the D&L bankruptcy matter now currently pending. D&L Energy and Dr. Sterle have jointly executed a waiver of potential conflict of interest whereby they have both acknowledge that there are certain oil and gas leases entered into by and between D&L Energy, Inc. and Dr. Sterle which is the subject of litigation. Dr. Sterle is the named plaintiff and D&L is/was named a defendant in the Trumbull County Litigation. Dr. Sterle is and has been separately represented in the Trumbull County Litigation by separate counsel not affiliated with Roderick Linton Belfance, LLP and has not been represented by any Roderick Linton Belfanc, LLP attorney/professional in the Trumbull County Litigation. About D & L Energy D & L Energy, Inc., based in Youngstown, Ohio, was formed by David DeChristofaro, Ben Lupo, and James Beshara in 1986 to be a conventional oil and gas well operator and producer, primarily targeting oil and gas reserves in the Clinton Sandstone formation throughout Northeast Ohio and Northwest Pennsylvania. D&L currently has three (3) shareholders, Ben Lupo (80.76% shareholder), Susan Faith (15% shareholder), and Holly Serensky Lupo (4.24% shareholder). Nicholas C. Paparodis is the acting CEO and President of D&L. Kathy Kaniclides is the acting Secretary and Treasurer of D&L. Currently, Serensky Lupo is the sole director of D&L. Petroflow, Inc., is an Ohio corporation which is a wholly owned subsidiary of D&L. Originally intended to operate as the "drilling arm" of D&L, Petroflow ceased all operations prior to the filing of these bankruptcy matters. Petroflow has no current income, no bank accounts, and no employees. Paparodis is the president, CEO and sole director of Petroflow. D&L and Petroflow filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Lead Case No. 13-40813) on April 16, 2013. Judge Kay Woods oversees the case. The Debtor disclosed in its amended schedules, $40,615,677 in assets and $6,187,217 in liabilities as of the Chapter 11 filing. Brian T. Angeloni, Esq., Kathryn A. Belfance, Esq., Steven Heimberger, Esq., and Todd A. Mazzola, Esq., at Roderick Linton Belfance, LLP, serve as the Debtors' counsel, and Walter Haverfield, LLP, is the environmental counsel. SS&G Parkland Consulting, LLC, serves as financial advisor and investment banker. Sherri Lynn Dahl, Esq., and Peter R. Morrison, Esq., at Squire Sanders (US) LLP, have been tapped as counsel to the official committee of unsecured creditors. BBP Partners LLC serves as the panel's financial advisors. Resource Land Holdings emerged as the winning bidder for the substantially all of the Debtor's assets. Resource Land offered to buy the assets for $20.4 million. DETROIT, MI: Has Until July 2 to Decide on Police Station Leases ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, extended through and including July 2, 2014, the City of Detroit's time to elect to assume or reject real property leases for the City's police stations and offices for the City's Water and Sewer Department and Department of Elections. The City said that prior to making the decision to assume or reject the leases it must carefully analyze, among other things, (a) the availability of potential new locations for the relevant City operations, (b) the logistics and costs of relocation, and (c) the possible "move-out" dates for the affected City departments. 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. DETROIT, MI: Post-Ch. 9 City Will Still Be Under Watchful Eyes -------------------------------------------------------------- Tom Walsh, writing for The Detroit Free Press, reported that slogging through the biggest Chapter 9 municipal bankruptcy in U.S. history is bad enough, but what Detroit really wants to avoid is becoming what some wags cheekily call a Chapter 18 -- a double- dipper, a repeat offender, emerging from Chapter 9 only to collapse back into insolvency a few years later. According to the report, preventing this outcome will be a major priority of Judge Steven Rhodes and emergency manager Kevyn Orr as they push Detroit's bankruptcy toward conclusion this summer. Whatever they propose about Detroit's future governance -- how much control to return to elected leaders, and how quickly -- will surely spark contentious debate, the report said. Mayor Mike Duggan and Detroit City Council members will want authority, right away, to do what they were elected to do, the report said. Bankers and municipal bond issuers, though, will want strong outside oversight in place to prevent a return to bad habits and another fiscal debacle. Ditto for the governor and state Legislature, presumably. 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. DIAMOND WATERFALLS: Files Supporting Docs for LNBY Hiring --------------------------------------------------------- Coastline Investments LLC and Diamond Waterfalls LLC filed a supplemental application to employ Levene, Neale, Bender, Yoo & Brill LLP as general bankruptcy counsel. Due to lack of funds, the Debtors were unable to fund LNBYB's retainer. Subsequently, ACE Management Services Corporation agreed to fund such retainer. Ace was the management company of the Debtors. Prior to the bankruptcy filing, Ace funded $50,000 of the retainer amount, plus filing fee. The funding of the retainer by Ace is not subject to repayment by any of the Debtors and is deemed a gift to the Debtors. The U.S. Trustee inquired as to the connection between Ace and the Debtors. As disclosed in the Debtors' statement of financial affairs, Shih-Chung Liu is the 100% member of each of the Debtors, having acquired such interest from Lucy Gao in 2013. Ace in turn is owed by Helena Cosman. Ms. Cosman is not an officer, director or member of any of the Debtors. Shih-Chung Liu is an owner, officer or director of Ace. There are no financial agreements or arrangements for repayment of the retainer as between the Debtors, on one hand, and Ms. Cosman or Ace, on the other hand. Coastline Investments, doing business as Hilltop Suites Hotel, and Diamond Waterfalls LLC, doing business as Diamond Bar Inn & Suites, filed bare-bones Chapter 11 bankruptcy petitions (Bankr. C.D. Cal. Case No. 14-13028 and 14-13030) in Los Angeles on Feb. 18. The Pomona, California-based Debtors each estimated at least $10 million in assets and $1 million to $10 million in liabilities. Shih-Chung Liu, who has a 100 percent membership in the companies, signed the bankruptcy petitions. The Debtors are represented by attorneys at Levene Neale Bender Rankin & Brill LLP, in Los Angeles. The Hon. Richard M Neiter oversees the case. DOTS LLC: Otterbourg Approved as Creditors Committee's Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of Dots LLC to retain Otterbourg P.C. as its counsel effective Feb. 6, 2014. As reported in the Troubled Company Reporter on April 8, 2014, Otterbourg will, among other things: (a) assist and advise the Committee in its consultation with the Debtors relative to the administration of these cases; (b) attend meetings and negotiate with the representatives of the Debtors and other parties in interest; and (c) assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs. Otterbourg will be paid at these hourly rates: Partner/Counsel $595 - $940 Associate $275 - $645 Paralegal $250 - $260 Otterbourg will also be reimbursed for reasonable out-of-pocket expenses incurred. Scott L. Hazan, Esq., member of Otterbourg, 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. The Executive Office for United States Trustees recently adopted new Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 by Attorneys in Larger Chapter 11 Cases -- so-called Appendix B Guidelines. Otterbourg said it intends to make a reasonable effort to comply with the United States Trustee's requests for information and additional disclosures as set forth in the New UST Guidelines both in connection with this application and the interim and final fee applications to be filed by Otterbourg in the Chapter 11 Cases. Otterbourg also intends to work cooperatively with the United States Trustee Program to address the concerns that prompted the adoption of the New UST Guidelines. 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. The Debtors disclosed $51,574,560 in assets and $85,442,656 in liabilities as of the Chapter 11 filing. 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. Otterbourg P.C. serves as counsel to the Official Committee of Unsecured Creditors; and FTI Consulting, Inc., serves as its financial advisor. DOTS LLC: Taps Pearson Simon to Handle Visa/MasterCard Litigation ----------------------------------------------------------------- Dots, LLC, et al., ask the U.S. Bankruptcy Court for the District of New Jersey to employ Pearson, Simon & Warshaw, LLP as special litigation counsel effective as of March 13, 2014. PSW will represent the Debtors in connection with the Visa/ MasterCard Litigation pending in the District Court for the Eastern District of New York. The Debtors relate that they have potential antitrust claims against credit card companies including, but not limited to, VISA USA, Inc., MasterCard Incorporated, and their affiliates in In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, Master File No. 1720 (the Visa/MasterCard Litigation). The Debtors opted out of the class in the Visa/ MasterCard Litigation in May 2013. PSW will be compensated on a 20% contingency fee of any recovery and costs and expenses capped at $20,000. To the best of the Debtors' knowledge, PSW does not represent or hold any interest adverse to the Debtors or their estates with respect to the matters on which PSW is to be employed. The Executive Office for United States Trustees recently adopted new Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 by Attorneys in Larger Chapter 11 Cases -- so-called Appendix B Guidelines. PSW said it intends to make a reasonable effort to comply with the United States Trustee's requests for information and additional disclosures as set forth in the New UST Guidelines both in connection with this application and the interim and final fee applications to be filed by PSW in the Chapter 11 cases. PSW also intends to work cooperatively with the United States Trustee Program to address the concerns that prompted the adoption of the New UST Guidelines. 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. Kenneth A. Rosen, Esq., at 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. The Debtors disclosed $51,574,560 in assets and $85,442,656 in liabilities as of the Chapter 11 filing. 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. Otterbourg P.C. serves as counsel to the Official Committee of Unsecured Creditors; and FTI Consulting, Inc., serves as its financial advisor. DOTS LLC: PricewaterhouseCoopers Approved as Tax Advisor -------------------------------------------------------- Judge Donald H. Steckroth has issued a second amended order authorizing Dots, LLC, et al., to employ PricewaterhouseCoopers LLP as tax advisor, in addition to financial advisor and investment banker effective as of Feb. 24, 2014. The Court on Feb. 4 first entered an order granting the Debtors' application to employ PwC. On Feb. 20, the Court issued a first amended order authorizing PwC's employment. PwC is expected to provide tax advisory services, including the preparation of the Debtors' 2013 tax returns and provision of tax compliance, planning, and consulting services for fiscal year 2014. Perry Mandarino, a partner with PwC, told the Court that fees for the 2013 Tax Compliance Services are $18,500. Fees pertaining to 2014 Tax Compliance Services and Recurring Tax Consulting Services will be billed by PwC on an hourly basis, with individual hourly rates varying according to the experience and skill required. The Debtors will also reimburse PwC for reasonable out-of-pocket expenses it incurs in connection with its services under the Supplemental PwC Agreement, including travel related costs. To the best of the Debtors' knowledge, PwC is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Court also ordered that all other provisions of the amended order will remain in effect. In a separate order, the Court authorized the Debtors to reject an employment and noncompete agreement with Liza Rhodes, nunc pro tunc to Feb. 7, 2014. About DOTS LLC Dots is a retailer of fashionable clothing, accessories, and footwear for price-conscious women. Dots provides missy and plus size choices to fashion savvy 25 to 35 year old women at approximately 400 retail stores throughout the Midwest, East, and South United States. Dots' workforce includes 3,500 individuals in their stores, distribution center, and corporate headquarters. Dots, LLC, and its affiliates sought bankruptcy protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 14-11016) on Jan. 20, 2014, to sell some or all of their assets. Lowenstein Sandler LLP serves as counsel to the Debtors. PricewaterhouseCoopers LLP is financial advisor and investment banker. Donlin, Recano & Company, Inc., is the claims and notice agent. As of the Petition Date, the Debtors have outstanding secured debt owed to senior lender Salus Capital Partners, LLC, of which $14.5 million remains outstanding under a revolving facility and $16.1 million is owed under a term facility. The Debtors also have not less than $17 million outstanding under subordinated term loan agreements with Irving Place Capital Partners III L.P. ("IPC") and related entities. Moreover, the Debtors have aggregate unsecured debts of $47.0 million. The Debtors disclosed $51,574,560 in assets and $85,442,656 in liabilities as of the Chapter 11 filing. 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. Otterbourg P.C. serves as counsel to the Official Committee of Unsecured Creditors; and FTI Consulting, Inc., serves as its financial advisor. EASTMAN KODAK: Baker Hughes Turns Ch. 11 Into $25,000 Test Case --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Baker Hughes Inc., the oilfield services provider, is using a $25,000 dispute with Eastman Kodak Co. to establish a precedent that bankruptcy judges are barred by the U.S. Constitution from handling preference and fraudulent-transfer cases, the most common types of lawsuits used to collect additional assets for creditors. According to the report, Houston-based Baker Hughes was sued by the creditors' representative for about $25,000, representing payments received from Kodak within 90 days of bankruptcy. The creditors contended the payments were both preferences and so- called constructive fraudulent transfers. In papers filed in court, Baker Hughes relied on a loophole in bankruptcy law created when the U.S. Supreme Court decided Stern v. Marshall in 2011, ruling that bankruptcy courts don't have the constitutional power to make final rulings in fraudulent-transfer suits against a creditor who didn't file a claim in bankruptcy, the report related. In the Baker Hughes case, Kodak said the payments were recoverable preferences because they were in satisfaction of overdue debt, the report further related. Kodak also said the payments were fraudulent transfers because Baker Hughes gave no new value in return. Baker Hughes said that because it filed no claims against Kodak, it didn't consent to being sued in bankruptcy court, the report added. 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. FAIRMONT GENERAL: Ombudsman Can Tap Bowles Rice as Local Counsel ---------------------------------------------------------------- Suzanne Koenig, the patient care ombudsman appointed in the Chapter 11 cases of Fairmont General Hospital, Inc., et al., sought and obtained permission from the Bankruptcy Court to employ the law firm of Bowles Rice LLP, as its local, West Virginia counsel, nunc pro tunc as of Dec. 2, 2013. Bowles Rice will render services to the ombudsman, including: a) to the extent that an appearance of local counsel is required, representing the ombudsman in any proceeding or hearing in the Bankruptcy Court, and in any action in other courts where the rights of the patients may be litigated or affected as a result of the cases; b) advising the ombudsman and her lead counsel, Greenberg Traurig, concerning local practice and procedure in the Bankruptcy Court and in any action in other courts where the rights of the patients may be litigated or affected as a result of the cases; and c) advising the ombudsman and her lead counsel, Greenberg Traurig, concerning the requirements of the Office of the Assistant United States Trustee for West Virginia relating to the discharge of her duties under Section 333 of the Bankruptcy Code. To the best of the ombudsman's knowledge, Bowles Rice is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Bowles Rice has advised the ombudsman that the primary professionals who will likely provide services to the ombudsman and Greenberg Traurig throughout the course of the cases, and their respective usual and customary hourly rates are: Professional Rate Per Hour ------------ ------------- Richard M. Francis, partner $350 Julia A. Chincheck, partner $350 Daniel J. Cohn, associate $175 Annette W. Jones, legal assistant $95 Bowles Rice has agreed to discount all of its professional fees in thee cases by 15 percent, yielding the following hourly rates to be used to calculate professional fees in the cases; (i) Mr. Francis -- $297; (ii) Ms. Chincheck -- $297; (iii) Mr. Cohn -- $148; and (iv) Ms. Jones -- $80. About Fairmont General Hospital Inc. Fairmont General Hospital Inc. and Fairmont Physicians, Inc., which operate a 207-bed acute-care facility in Fairmont, West Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 13-01054) on Sept. 3, 2013. The fourth-largest employer in Marion County, West Virginia, filed for bankruptcy as it looks to partner with another hospital or health system. The Debtors are represented by Rayford K. Adams, III, Esq., and Casey H. Howard, Esq., at Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina; David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors' financial analyst is Gleason & Associates, P.C. The Debtors' claims and noticing agent is Epiq Bankruptcy Solutions. Hammond Hanlon Camp, LLC, has been engaged as investment banker and financial advisor. UMB Bank is represented by Nathan F. Coco, Esq., and Suzanne Jett Trowbridge, Esq., at McDermott Will & Emery LLP. The Committee of Unsecured Creditors is represented by Andrew Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. and Kirk B. Burkley, Esq., Bernstein Burkley, P.C. Janet Smith Holbrook, Esq., at Huddleston Bolen LLP, represents the Committee as local counsel. The Bankruptcy Court has named Suzanne Koenig at SAK Management Services, LLC, as patient care ombudsman. Ms. Koenig has hired her own firm as medical operations advisor; and Greenberg Traurig, LLP, as her counsel. The Debtors are engaged in the process of locating a buyer or strategic partner for the hospital, through the Debtors' investment bankers. The Debtors believe that by the end of March 2014 that process will be complete and a plan can be filed. The Debtors have scheduled $48,568,863 in total assets and $54,774,365 in total liabilities. FILENE'S BASEMENT: Seeks Nod to Sell NJ Lease For $30M ------------------------------------------------------ Law360 reported that former clothing retailer Syms Corp., reorganized in Chapter 11 as a real estate holding company, asked a Delaware bankruptcy judge to bless a $30.2 million deal for the lease of a New Jersey property, a sale opposed by the property's landlord. According to the report, now known as Trinity Place Holdings Inc., Syms seeks approval to sell the unexpired lease at its former Secaucus location to ASG Equities Secaucus LLC, but the property's landlord -- Hartz Mountain Industries Inc. and 99 Hudson TIC II LLC -- said the court shouldn't approve the sale. About Filene's Basement Massachusetts-based Filene's Basement, also called The Basement, is the oldest off-price retailer in the United States. The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. Filene's Basement first filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures, Inc., the following year. Retail Ventures in April 2009 transferred the unit to Buxbaum. Filene's Basement, Inc. and its affiliates filed for Chapter 22 (Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy Solutions serves as claims and notice agent. The Debtors disclosed assets of $236 million, including real estate of $97.7 million, and liabilities of $94 million, including $31.1 million owing on a revolving credit with Bank of America NA as agent. In addition, there were $11.1 million in letters of credit outstanding on the revolver. The 2009 Debtor was formally renamed FB Liquidating Estate, following the sale of all of its assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the Chapter 11 case have been paid in full, and holders of priority, administrative and convenience class claims have received 100% of their allowed claims. As reported by the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen, Chairman of Abacus Advisors LLC and Chief Restructuring Officer for FB Liquidating Estate disclosed that a second distribution of dividend checks to Filene's unsecured creditors amounting to 12.5% of approved claims has been made, bringing the cumulative distributions on unsecured claims to 62.5%. On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-13511 to 11-13514) after a failed bid to sell the business. The two units are Syms Clothing Inc. and Syms Advertising Inc. Judge Kevin J. Carey presides over the case. Lawyers at Skadden Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The Debtors tapped Rothschild Inc. as investment banker and Cushman and Wakefield Securities, Inc., as real estate financial advisors. Syms shuttered its namesake and Filene's Basement outlets upon the bankruptcy filing and tapped a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to run the going-out-of-business sales. The sale may continue until Jan. 31, 2012. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. Gordon Brothers and Hilco are represented by Goulston & Storrs, P.C. and Ashby & Geddes, P.A. FREEDOM INDUSTRIES: Chief Drops Pay, Insurance Requests ------------------------------------------------------- Jonathan Matisse, writing for Insurance Journal, reported that the president of Freedom Industries "bears no fault" for a West Virginia chemical spill that spurred a water-use ban for up to 10 days for 300,000 people, his lawyer said in a court filing. According to the Insurance Journal, Freedom President Gary Southern withdrew his application to get paid for work he already did during the company's bankruptcy proceedings. He also wanted Freedom and its insurance to cover his legal fees related to the Jan. 9 spill. While withdrawing the motions, Southern's attorney Steven Thomas wrote that the executive still didn't think either request was improper, the Insurance Journal said. "Mr. Southern is withdrawing the Application to try to end the unfounded allegations and ceaseless vilification of him for an incident that occurred a mere 6 working days after he became the President of the Debtor, for which he bears no fault," Thomas wrote, the Insurance Journal related. Peg Brickley, writing for Daily Bankruptcy Review, reported that creditors of Freedom Industries say they don't want to pay its president or his lawyers while the disaster is under investigation. Those seeking payment from Freedom Industries, the defunct supplier of industrial chemicals whose tank farm leaked into the state's water supply, say in bankruptcy-court papers that they don't know whether President Gary Southern has been looking out for the company or protecting himself in the weeks since the Jan. 9 spill, the report related. About Freedom Industries Freedom Industries Inc., is engaged principally in the business of producing specialty chemicals for the mining, steel and cement industries. The Debtor operates two production facilities located in (a) Nitro, West Virginia; and (b) Charleston, West Virginia. The company, connected to a chemical spill that tainted the water supply in West Virginia, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan. 17, 2014. The case is assigned to Judge Ronald G. Pearson. The petition was signed by Gary Southern, president. The Debtor is represented by Mark E Freedlander, Esq., at McGuire Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson, Esq., at Barth & Thompson, in Charleston, West Virginia. On Dec. 31, 2013, four companies merged under the umbrella of Freedom Industries: Freedom Industries Inc., Etowah River Terminal LLC, Poca Blending LLC and Crete Technologies LLC. As reported in the Troubled Company Reporter on Feb. 20, 2014, Kate White, writing for The Charleston Gazette, reported that the Debtor disclosed $16 million in assets and $6 million in liabilities when it filed for bankruptcy. On Feb. 5, 2014, the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Frost Brown Todd LLC as counsel. On March 18, the Bankruptcy Court approved the hiring of Mark Welch at MorrisAnderson in Chicago as Freedom's chief restructuring officer. GARLOCK SEALING: Ruling Rocked the Asbestos World, Judge Told ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a lawyer for Legal Newsline, a publication of the U.S. Chamber of Commerce, told the bankruptcy judge at a hearing that his opinion in the bankruptcy of Garlock Sealing Technologies LLC "rocked the world of asbestos litigation." According to the report, U.S. Bankruptcy Judge George R. Hodges from Charlotte, North Carolina ruled in January that the "impropriety of some law firms" representing asbestos personal- injury plaintiffs led to "unfairly inflating recoveries against" Garlock, a unit of EnPro Industries Inc. The bottom line in Judge Hodges's opinion was a conclusion that $125 million was the "reasonable and reliable" estimate of present and future liability for mesothelioma claims, the report related. The asbestos claimants sought almost $1.3 billion. The January ruling prompted Legal Newsline to file papers asking Judge Hodges to unseal evidence and parts of the trial transcript that were sealed, the report further related. In court on March 27, Legal Newsline's lawyer Steven F. Pflaum said it's important for the public to see the evidence underlying the ruling because Judge Hodges decided that "Garlock was victimized by a startling pattern of misrepresentations and by the suppression of evidence." Volkswagen Group of America Inc.'s lawyer Alice S. Johnston told Judge Hodges that his opinion "made clear the possibility that there was fraud not only against Garlock in the past, but against our client Volkswagen," the report added. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in their Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. Judge George Hodges of the United States Bankruptcy Court for the Western District of North Carolina on Jan. 10, 2014, entered an order estimating the liability for present and future mesothelioma claims against EnPro Industries' Garlock Sealing Technologies LLC subsidiary at $125 million, consistent with the positions GST put forth at trial. GARLOCK SEALING: Judge Gives Aetna Access to Asbestos Claim Files ----------------------------------------------------------------- Daniel Fisher, writing for Forbes, reported that Aetna won a judicial ruling giving it access to filings made by asbestos claimants in the bankruptcy of gasket maker Garlock Sealing Technologies, opening a new front in the battle between plaintiff lawyers and companies that accuse them of double-dipping and fraud. According to the report, in a hearing on March 27, U.S. Bankruptcy Judge George R. Hodges granted the motion of Aetna to examine so- called Rule 2019 statements lawyers have filed in the Garlock bankruptcy. The statements, named after a provision of the federal bankruptcy code, require lawyers to identify clients with claims against the bankrupt company as well as the nature of those claims. Aetna is one of several insurers seeking asbestos claims information to try and recover medical expenses from customers who have been paid for the same costs through litigation. Judge Hodges denied similar requests from Ford, Volkswagen, and other companies that are seeking access to other sealed documents from a trial over Garlock's asbestos liabilities, the report said. The judge deferred that request, saying it is already being considered by a federal court weighing an appeal by Legal Newsline, a publication funded by the U.S. Chamber Institute for Legal Reform. "Get all of these things done at once," Judge Hodges said, Forbes cited a report in Legal NewsLine. "I don't know about y'all, but I would find that helpful." The companies want access to Rule 2019 filings and evidence from the estimation proceedings to bolster their own defenses against asbestos claims, Forbes said. Garlock has sued several law firms for fraud, accusing them of deliberately withholding evidence that their clients had been exposed to other sources of asbestos in order to win larger settlements from Garlock. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in their Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. Judge George Hodges of the United States Bankruptcy Court for the Western District of North Carolina on Jan. 10, 2014, entered an order estimating the liability for present and future mesothelioma claims against EnPro Industries' Garlock Sealing Technologies LLC subsidiary at $125 million, consistent with the positions GST put forth at trial. GARLOCK SEALING: Ford Can Ask District Court to Unseal Docs ----------------------------------------------------------- Law360 reported that a North Carolina bankruptcy judge said that Ford Motor Co. can ask a federal district court to decide whether to grant its bid to access sealed evidence that allowed Garlock Sealing Technologies LLC to expose dubious tactics by plaintiffs' attorneys that inflated past asbestos injury settlements. According to the report, U.S. Bankruptcy Judge George Hodges, who in January relied on that evidence to slash Garlock's estimated liability from $1.25 billion to $125 million, said at a hearing that Ford can ask a federal district court to decide on its request. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in their Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. Judge George Hodges of the United States Bankruptcy Court for the Western District of North Carolina on Jan. 10, 2014, entered an order estimating the liability for present and future mesothelioma claims against EnPro Industries' Garlock Sealing Technologies LLC subsidiary at $125 million, consistent with the positions GST put forth at trial. GENERAL MOTORS: Reopened Bankruptcy Could Land in Uncharted Waters ------------------------------------------------------------------ Law360, citing experts, reported that the federal investigation and class actions surrounding the question of whether General Motors hid a critical product defect during its Chapter 11 proceedings could lead to new precedent involving concealed claims in bankruptcies if the matter winds up back in bankruptcy court. According to the report, the possibility of GM returning to bankruptcy court has been bounced around lately as a way for the company to handle the class actions that have been popping up in response to an ignition switch defect that led to 13 deaths. About General Motors Corp., nka 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. GENERAL MOTORS: Panel Chair Questions Delay ------------------------------------------- Michael A. Fletcher, writing for The Washington Post, reported that the chairman of the House Energy and Commerce Committee questioned whether General Motors failed to follow federal law when it delayed informing regulators about an auto ignition switch that has been blamed for at least a dozen deaths. According to the report, Rep. Fred Upton (R-Mich.), whose panel is investigating GM's belated recall of 1.6 million Chevrolet Cobalts and other small cars, said an auto-safety law passed in 2000 required the automaker to inform regulators about the problem within five business days or face as much as $35 million in civil penalties. The law, called the TREAD Act, also makes it a crime to intentionally mislead the National Highway Transportation Safety Administration about defects that lead to serious accidents, the report related. The Justice Department recently hit Toyota with a $1.2 billion fine for violating the law. "What troubles me the most is that the TREAD Act was pretty specific: five days. You got a problem, it's five days," Upton, the law's chief author, said in an interview, the report cited. "It's not five years; it is not 10 years." About General Motors Corp., nka 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. GENERAL MOTORS: U.S. Firm Considered Opening Defect Probe in 2007 ----------------------------------------------------------------- Jeff Plungis, writing for Bloomberg News, reported that General Motors Co., after months of studying ignition-switch failures in the Chevrolet Cobalt, canceled a proposed fix in 2005, when a project engineering manager cited high tooling costs and piece prices, according to documents obtained by U.S. congressional investigators. According to the report, a separate opportunity to address the defect was passed over by the National Highway Traffic Safety Administration in 2007, when it opted not to open a formal defect investigation even after an agency official had said a probe was justified, according to an interview between current NHTSA officials and staff members of the House Energy and Commerce Committee. Those decisions and this year's recall of 2.6 million small cars for faulty ignition switches are the main focus of congressional hearings, the report said. GM Chief Executive Officer Mary Barra and acting NHTSA Administrator David Friedman are being asked to explain the handling of years of complaints about stalling cars and disabled air bags that have now been linked to the switches and tied to 13 deaths. "Lives are at stake, and we will follow the facts where they take us as we work to pinpoint where the system failed," Representative Fred Upton, the chairman of the House Energy and Commerce Committee, said in a statement on March 30, the report related. GM opened an engineering inquiry about the Cobalt ignition switch in November 2004, after customers complained the engine "can be keyed off with knee while driving," according to a problem- tracking system document obtained by House investigators, the report further related. Four months later, the Cobalt project engineering manager rejected a key slot change, citing cost and long lead times. About General Motors Corp., nka 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. GENERAL MOTORS: Chief Can't Shake Recall Furor ---------------------------------------------- Jeff Bennett, writing for The Wall Street Journal, reported that General Motors Co. Chief Executive Mary Barra sought to shift the focus to the auto maker's coming new vehicles and away from investigations of a troubled ignition-switch recall, but struggled amid a barrage of questions about its responses to the probes. According to the report, in New York ahead of an auto show, Ms. Barra deflected questions about a potential U.S. criminal probe, saying she wasn't aware if the Department of Justice has sought documents from the company, and declined to say when GM expected to answer all questions posed by auto-safety regulator National Highway Traffic Safety Administration. "We are working on those every day," the Journal cited Ms. Barra as saying of the NHTSA inquiry while surrounded by a media crowd peppering her with questions. GM Global Product Chief Mark Reuss was recruited to help provide crowd control after her speech. GM said it is forming a product integrity organization under Mr. Reuss that will include a newly named vehicle safety czar, the report related. GM named engineering veteran Jeff Boyer as vice president of global vehicle safety and charged him with handling all safety-related issues including recalls. His group will be moved into the new organization. Mr. Reuss declined to provide more details on how the group will work but did say he will make additions to the team in the coming days. "We have pulled the wagon a long way, and we are not about to give up right now," Ms. Reuss said, the report cited. "We have to power through this and we will. As far as the integrity team, this is a long time coming, but the market has changed and we have to change." About General Motors Corp., nka 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. GENON ENERGY: Moody's Lowers Corporate Family Rating to 'B3' ------------------------------------------------------------ Moody's Investors Service downgraded GenOn Energy Inc. (GEN)'s Corporate Family Rating (CFR) and senior unsecured rating to B3 from B2. Additionally, the Probability of Default Rating (PDR) was downgraded to B3-PD from B2-PD. Among its subsidiaries, GenOn Americas Generation, LLC (GAG)'s senior unsecured rating was downgraded to Caa1 from B3 and GenOn Mid-Atlantic's (GMA) senior secured rating was downgraded to Ba3, from Ba2. GenOn REMA LLC's (REMA) senior secured rating was confirmed at B2. GEN's speculative-grade (SGL) liquidity rating was raised to SGL-3 from SGL-4. The outlook for GEN and each of the GEN rated subsidiaries is now stable. The rating action concludes our review of GEN's ratings for possible downgrade which initiated on January 24, 2014. GEN's parent company NRG Energy Inc. (NRG Ba3 Stable) was not included in the review for downgrade and the action has no effect on NRG's ratings. "Our decision to downgrade GenOn is mainly driven by its deteriorating long-term fundamentals, exacerbated by dividend restrictions at its REMA and GenOn Mid-Atlantic subsidiaries" said Toby Shea, VP -- Senior Analyst. "The recent price spikes driven by the cold weather have alleviated GenOn's near-term liquidity concerns and Moody's have upgraded GEN's liquidity rating accordingly. However, the cold winter was a transient event and is insufficient to change our view regarding GenOn's long-term credit profile." Ratings Rationale GEN's B3 rating largely reflects its high debt burden and poor plant economics. In round numbers, GEN has about $4 billion of debt and lease obligations outstanding at the end of 2013 and Moody's estimate that GEN generated about an average of $400 million of open EBITDA for the past three years (2011-2013). GEN's default risk is exacerbated by dividend restrictions from its GMA and REMA subsidiaries. GMA and REMA, combined, generated about $200 million of the $400 million of the open EBITDA but only hold about $1 billion of the $4 billion of debt and lease obligation among GEN entities. With the dividend restrictions at GMA and REMA, GEN and GAG will rely heavily on its internal cash balance to satisfy debt obligations. At year end 2013, GEN reported a cash balance of $566 million, excluding GMA and REMA's cash holdings of $194 million. GEN also has access to a $500 million of revolving credit facility provided by NRG. The credit facility has no cash draws but a large portion of it (about $350 million at the year end 2013) is used for posting letters of credit to support business transactions. The amount of internal liquidity at GEN is a material factor in Moody's decision to change the speculative grade liquidity rating to SGL-3 from SGL-4, as Moody's now project that, without any parent support, GEN will have enough liquidity for the next 12-18 months and would likely exhaust its liquidity in late 2016 to 2017 time frame. If the current forecast holds, Moody's believe GEN will have difficulty meeting a $725 million bond maturity due 2017. Moody's rating for GEN factors in NRG's approach in managing its GEN subsidiaries. NRG treats GEN much like a non-recourse project- finance subsidiary. NRG retains the upside if GEN performs well but limits its downside by exercising its non-recourse rights should financial failure prevail at GEN. Similar to project financing entities, GEN has limited growth prospects. NRG may sell GEN's assets or investment in improvements time to time to maximize value or generate liquidity at GEN but is not developing or allocating capital for new project to GEN. NRG also charges GEN approximately $200 million for a corporate shared services fee. Moody's believe that NRG would forgo or defer a portion of the shared services fee if it is critical to keep GEN viable, thus preserving its value to NRG. However, NRG will only inject capital if the return justifies the incremental investment. Moody's have assigned different ratings to the various GEN entities mainly based on the prospect for recovery. GMA, rated Ba3 on a senior secured basis, has the highest rating among GEN entities, because the superior location of its assets and because GMA has the least amount of leverage among the GEN entities. GAG, which is rated Caa1 on a senior unsecured basis, has the lowest rating among the GEN entities because it is the most leveraged with about $50 million a year of open EBITDA relative to $850 million of debt. Moody's confirmation of REMA's senior secured rating at B2 incorporates its declining debt balance (due to debt amortization) and rising cash balance (due to dividend restrictions.) Outlook Stable The stable outlook reflects GEN's adequate liquidity cushion and the company's ability to meet its liquidity needs in the next 12 to 18 months. What Can Change The Rating -- UP In light of the rating action, limited prospects exist for the rating to be upgraded over the intermediate term. It will take a sizeable and sustainable improvement in market fundamentals to justify an upgrade at GEN. What Can Change the Rating -- DOWN Moody's would likely downgrade GEN's CFR and PDR rating to the Caa category if Moody's believe that it could exhaust its liquidity within eighteen months. Rating list: Outlook: All GenOn entities were revised to Stable from Under Review for Downgrade Ratings Downgraded: Issuer: GenOn Energy, Inc. Corporate Family Rating: to B3, from B2 Probability of Default Rating: B3-PD, from B2-PD Senior Unsecured: to B3 LGD4 58%, from B2, LGD4 58% Issuer: GenOn Americas Generation, LLC Senior Unsecured: Caa1, LGD4 60%, from B3, LGD4 58% Issuer: GenOn Mid-Atlantic, LLC Senior Secured: Ba3, LGD1 6%, from Ba2, LGD1 4% Ratings Confirmed: Issuer: GenOn REMA, LLC Senior Secured: B2, LGD3 38% from LGD3 44% Ratings upgraded: Issuer: GenOn Energy, Inc. Speculative-Grade Liquidity Rating to SGL-3 from SGL-4 GFL ENVIRONMENTAL: S&P Revises Outlook to Neg. & Affirms 'B+' CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Toronto-based environmental services company GFL Environmental Inc. to negative from stable. At the same time, Standard & Poor's affirmed its 'B+' long-term corporate credit and issue-level ratings on the company's C$275 million senior unsecured notes, including a proposed C$75 million notes add-on. The '4' recovery rating on the notes is unchanged, and indicates average (30%-50%) recovery in S&P's default scenario. "The outlook revision reflects our assessment of GFL's weaker leverage and cash flow metrics in the past 12 months, primarily because of debt-funded acquisitions and negative free cash flow," said Standard & Poor's credit analyst Jarrett Bilous. In Standard & Poor's view, the company will most likely continue to aggressively pursue growth from acquisitions financed largely with incremental debt. As a result, there is an increased likelihood that adjusted debt-to-EBITDA will remain above 4.5x (S&P's threshold for a negative rating action) or that liquidity could weaken. The ratings on GFL reflect Standard & Poor's view of the company's "fair" business risk profile and "highly leveraged" financial risk profile, which result in an anchor score of 'b'. S&P then applied the comparable rating analysis (CRA) modifier, which had a positive one-notch impact on the anchor, as S&P believes GFL's financial profile is stronger than what its highly leveraged financial risk profile suggests. GFL is a regional waste services company that conducts business primarily in Canada. The company generates revenues predominantly in Ontario, with diversity characteristics and market positions weaker than those of the much larger national leaders. In addition, S&P considers GFL's solid waste business, which accounts for the majority of sales and earnings, mature and very competitive; a few large players dominate this segment, while the remaining market is highly fragmented. The negative outlook on GFL reflects S&P's assessment of the heightened risk that the company's credit ratios or liquidity position could weaken over the next 12 months due primarily to its debt-financed acquisition strategy. S&P could lower the ratings if GFL's financial measures deteriorate from its current expectations, specifically adjusted debt to EBITDA of more than 5x, or if funds from operations (FFO)- to-debt declines below 12%. This could occur if the company increases leverage through debt-financed acquisitions in tandem with lower-than-expected cash flow generation. At this point, S&P could remove the one-notch upward adjustment for the CRA due to the weakening financial risk profile. S&P could revise the outlook to stable should GFL strengthen and keep its credit metrics, including adjusted debt-to-EBITDA below 4.5x and FFO-to-adjusted debt above 15%, while maintaining adequate liquidity. GLOBAL GEOPHYSICAL: Alvarez & Marsal as Restructuring Advisor ------------------------------------------------------------- Global Geophysical Services Inc. and its debtor-affiliates seek authorization from the U.S. Bankruptcy Court for the Southern District of Texas to employ Alvarez & Marsal North America LLC as restructuring advisor, nunc pro tunc to Mar. 25, 2014 petition date. The Debtors require Alvarez & Marsal to: (a) assist in the review/development and management of a 13- week cash flow forecast; (b) assist in identification of cost reduction and operations improvement opportunities; (c) assist in evaluation of the Debtors' current business plan and in preparation of a revised operating plan and cash flow forecast and presentation of such plan and forecast to the Debtors' Board of Directors (the "Board") and its creditors; (d) assist in financing issues including assistance in preparation of reports and liaison with creditors; (e) assist with technical accounting and financial reporting matters; (f) report to the Board as desired or directed by the Responsible Officers; (g) assist the overall financial reporting division in managing the administrative requirements of the Bankruptcy Code, including post-petition reporting requirements and claim reconciliation efforts; and (h) other activities as are approved by the Responsible Officers or the Board and agreed to by Alvarez & Marsal that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in this proceeding. Alvarez & Marsal will be paid at these hourly rates: Managing Directors $700-$925 Directors $500-$725 Analysts/Associates $325-$525 Alvarez & Marsal will also be reimbursed for reasonable out-of- pocket expenses incurred. Upon execution of the Engagement Letter, the Debtors remitted a retainer to Alvarez & Marsal in the amount of $250,000 (the "Retainer"). Not including the Prior Engagements, according to the books and records of Alvarez & Marsal, from the commencement of services under the Engagement Letter to the commencement of these chapter 11 cases, Alvarez & Marsal received approximately $1,001,271 for professional services performed and expenses incurred and the Retainer. Upon the reconciliation of its prepetition fees and expenses, Alvarez & Marsal will apply the unapplied portion of the Retainer, currently estimated at $140,000, toward any prepetition invoices and, thereafter, the unapplied residual retainer will not be segregated by Alvarez & Marsal in a separate account and will be held until the end of these chapter 11 cases and applied to Alvarez & Marsal's finally approved fees in these chapter 11 cases. Jonathan Goulding, managing director of Alvarez & Marsal, 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. The Court for the Southern District of Texas will hold a hearing on the application on April 25, 2014, at 9:00 a.m. Alvarez & Marsal can be reached at: Jonathan Goulding ALVAREZ & MARSAL NORTH AMERICA LLC 700 Louisiana Street, Ste. 900 Houston, TX 77002 Tel: +1 (713) 571-2400 Fax: +1 (713) 547-3697 About Global Geophysical, Autoseis et al. Global Geophysical Services Inc., a provider of seismic data for the oil and gas drilling industry, sought bankruptcy protection, intending to reorganize on its own with additional capital or explore a sale or other transaction. Based in Missouri City, Texas, Global Geophysical disclosed assets of $468.7 million and liabilities totaling $407.3 million as of Sept. 30, 2013. Liabilities include $81.8 million on a secured term loan owing to TPG Specialty Lending Inc. and Tennenbaum Capital Partners LLC. TPG is the lenders' agent. Global also owes $250 million on two issues of 10.5 percent senior unsecured notes, with Bank of New York Mellon Trust Co. as indenture trustee. Global Geophysical and five affiliates, including Autoseis, Inc. (lead debtor), filed Chapter 11 petitions in Corpus Christi, Texas (Bankr. S.D. Tex. Lead Case No. 14-20130) on March 25, 2014. The Debtors have tapped Baker Botts LLP as general bankruptcy counsel, Jordan Hyden Womble Culbreth & Holzer PC, as local counsel, Alvarez & Marsal as restructuring advisors, and Prime Clerk as claims and noticing agent. GLOBAL GEOPHYSICAL: Hires Rothschild Inc as Financial Advisor ------------------------------------------------------------- Global Geophysical Services Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of Texas to employ Rothschild Inc. as financial advisor and investment banker, nunc pro tunc to April 1, 2014. The Debtors require Rothschild Inc to: (a) identify and initiate potential Transactions; (b) review and analyze the operating and financial strategies of the Debtors; (c) review and analyze the business plans and financial projections prepared by the Debtors including, but not limited to, testing assumptions and comparing those assumptions to historical Debtors and industry trends; (d) evaluate the Debtors' debt capacity in light of projected cash flows and assist in the determination of an appropriate capital structure for the Debtors; (e) assist the Debtors and their other professionals in reviewing the terms of any proposed Transaction, in responding thereto and, if directed, in evaluating alternative proposals for a Transaction, whether in connection with a Plan or otherwise; (f) determine a range of values for the Debtors and any securities that the Debtors offer or propose to offer in connection with a Transaction; (g) advise the Debtors on the risks and benefits of considering a Transaction with respect to the Debtors' intermediate and long-term business prospects and strategic alternatives to maximize the business enterprise value of the Debtors, whether pursuant to a Plan or otherwise; (h) review and analyze any proposals the Debtors receive from third parties in connection with a Transaction, including, without limitation, any proposals for debtor-in-possession financing, as appropriate; (i) assist or participate in negotiations with the parties in interest, including, without limitation, any current or prospective creditors of, holders of equity in, or claimants against the Debtors and their respective representatives in connection with a Transaction; (j) advise the Debtors with respect to, and attend, meetings of the Debtors' board of directors, creditor groups, official constituencies and other interested parties, as necessary; (k) if requested by the Debtors, participate in hearings before the Bankruptcy Court and provide relevant testimony with respect to the matters described herein and issues arising in connection with any proposed Plan; and (l) render other financial advisory and investment banking services as may be agreed upon by Rothschild and the Debtors. The Debtors have agreed to pay Rothschild the proposed compensation and expense reimbursements in the Engagement Letter (the "Fee and Expense Structure"), which may be summarized as follows: -- "Monthly Fee": $250,000 per month for the first three months, then $150,000 per month. -- "Completion Fee": $3,000,000, payable once, upon confirmation and effectiveness of a Plan or closing of a Transaction. -- "New Capital Fee": Payable upon the closing of each commitment of new capital (i) 1.0% of the face amount of senior secured debt raised other than debtor-in-possession financing; (ii) 2.0% of the face amount of junior secured debt raised other than debtor-in-possession financing; (iii) 4.0% of unsecured debt raised; and (iv) 6.0% of equity capital, capital convertible into equity or hybrid capital raised. provided, that to the extent any New Capital Raise consists of any new capital raised from existing creditors or equity holders of the Company ("Existing Stakeholder New Capital"), the New Capital Fee with respect to such Existing Stakeholder New Capital shall not exceed $500,000 (it being understood that the full New Capital Fee shall remain payable with respect to any other new capital raised as part of any such New Capital Raise). -- Monthly Fee Credit: Half of Monthly Fees paid in excess of $750,000 will be credited once against any Completion or New Capital Fee, up to the amount of such fee. -- New Capital Fee Credit: Half of any portion of a New Capital Fee paid (other than any New Capital Fee paid with respect to Existing Stakeholder New Capital) will be credited once against any Completion Fee, up to the amount of such fee. -- Expenses: The Debtors shall reimburse Rothschild for its reasonable expenses, including, without limitation, the reasonable fees, disbursements and other charges of Rothschild's counsel (without the requirement that the retention of such counsel be approved by the Bankruptcy Court). The Debtors have agreed that Rothschild's reimbursable counsel fees may include, without limitation, fees incurred in representing Rothschild's interests during the pendency and following the conclusion of these chapter 11 cases, such as may be incurred in connection with Rothschild's retention and payment. Neil A. Augustine, executive vice chairman of North American GFA and Co-Chair of the North American Debt Advisory and Restructuring Group for the investment banking firm Rothschild Inc., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Rothschild can be reached at: Neil A. Augustine ROTHSCHILD INC. 1251 Avenue of the Americas New York, NY 10020 Tel: (212) 403-5411 E-mail: neil.augustine@rothschild.com About Global Geophysical, Autoseis et al. Global Geophysical Services Inc., a provider of seismic data for the oil and gas drilling industry, sought bankruptcy protection, intending to reorganize on its own with additional capital or explore a sale or other transaction. Based in Missouri City, Texas, Global Geophysical disclosed assets of $468.7 million and liabilities totaling $407.3 million as of Sept. 30, 2013. Liabilities include $81.8 million on a secured term loan owing to TPG Specialty Lending Inc. and Tennenbaum Capital Partners LLC. TPG is the lenders' agent. Global also owes $250 million on two issues of 10.5 percent senior unsecured notes, with Bank of New York Mellon Trust Co. as indenture trustee. Global Geophysical and five affiliates, including Autoseis, Inc. (lead debtor), filed Chapter 11 petitions in Corpus Christi, Texas (Bankr. S.D. Tex. Lead Case No. 14-20130) on March 25, 2014. The Debtors have tapped Baker Botts LLP as general bankruptcy counsel, Jordan Hyden Womble Culbreth & Holzer PC, as local counsel, Alvarez & Marsal as restructuring advisors, and Prime Clerk as claims and noticing agent. GLOBALSTAR INC: Common Stock to be Listed on NYSE ------------------------------------------------- The New York Stock Exchange has approved Globalstar, Inc.'s common shares for trading, which will commence on Monday, April 21, 2014. The Company will be listed on the NYSE MKT under the ticker "GSAT" and will concurrently withdraw its shares from the OTCQB. The NYSE has invited Globalstar's leadership team to ring the NYSE Opening Bell at 9:30am EDT on the first day of trading. "Trading on the New York Stock Exchange represents yet another important milestone in Globalstar's resurgence and has been made possible by our many important accomplishments over the past twelve months," said Jay Monroe, Chairman and CEO of Globalstar. "Listing on the NYSE will enhance the Company's trading liquidity as well as its visibility, all to the benefit of our loyal stockholders who have stuck with us over the past many years. Do not think for a moment that we are finished or that we plan to rest. Quite frankly, we are just getting started and look forward to continuing our resurgence." NYSE MKT is a fully integrated trading venue within the NYSE Euronext community and leverages the NYSE's advanced and innovative market model to offer a premier venue for listing and trading the stocks of small companies. The venue utilizes the trading, connectivity and routing technologies of the NYSE platform and offers superior price discovery, superior liquidity and reduced trading volatility. Listed companies benefit from issuer-selected Designated Market Makers (DMM) that utilize world- class NYSE trading systems to discover and improve prices, dampen volatility, add liquidity and enhance value. In addition, NYSE MKT-listed companies gain access to the brand visibility and are eligible for the issuer services enjoyed by the NYSE Euronext community. "We welcome Globalstar to the NYSE community and look forward to a strong partnership with the Company and its stockholders," said Scott Cutler, executive vice president and Head of Global Listings at NYSE Euronext. "Globalstar will join other high technology companies that benefit from NYSE's trusted and reliable platform." About Globalstar Covington, Louisiana-based Globalstar Inc. provides mobile satellite voice and data services. Globalstar offers these services to commercial and recreational users in more than 120 countries around the world. The Company's products include mobile and fixed satellite telephones, simplex and duplex satellite data modems and flexible service packages. Globalstar incurred a net loss of $591.11 million on $82.71 million of total revenue for the year ended Dec. 31, 2013, as compared with a net loss of $112.19 million on $76.31 million of total revenue in 2012. The Company incurred a net loss of $54.92 million in 2011. As of Dec. 31, 2013, the Company had $1.37 billion in total assets, $1.25 billion in total liabilities and $116.75 million in total stockholders' equity. Crowe Horwath LLP, in Oak Brook, Illinois, did not issue a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors previously 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 Globalstar had suffered recurring losses from operations and was not in compliance with certain financial and nonfinancial covenants under certain long-term debt agreements. GREGORY WOOD: Chapter 11 Reorganization Case Dismissed ------------------------------------------------------ The Hon. Laura T. Beyer of the U.S. Bankruptcy Court for the Western District of North Carolina dismissed the Chapter 11 case of Gregory Wood Products, Inc. As reported in the Troubled Company Reporter on April 10, 2014, the Office of the Bankruptcy Administrator requested for the dismissal of the Debtor's case. The Debtor consented to dismissal and believed that it is in the best interest of creditors and the estate. David A. Matthews, Esq., at Shumaker, Loop & Kendrick, LLP, in Charlotte, North Carolina, told the Court that all of the Debtor's assets were sold at foreclosure by Carolina Farm Credit, ACA, its senior prepetition secured lender. In a September 2013 monthly status report, Gregory Wood stated that Carolina Farm Credit has obtained relief from automatic stay and had scheduled the foreclosure sale on November 1, 2013. Gregory Wood had not submitted monthly status reports since then. About Gregory Wood Products Gregory Wood Products, Inc., filed a Chapter 11 petition (Bankr. W.D.N.C. Case No. 13-50104) on Feb. 15, 2013, disclosing total assets of $15.1 million and liabilities of $10.9 million. The Debtor owns land and building in Woodtech Drive, in Newton, California, worth $3.28 million, serving as collateral to a $10.3 million debt. The Debtor valued its machinery and equipment at $11.3 million. David A. Matthews, Esq., at Shumaker, Loop & Kendrick, LLP, in Charlotte, North Carolina, serves as counsel to the Debtor. Judge Laura T. Beyer presides over the case. HEDWIN CORPORATION: Has Interim Authority to Tap DIP Loans ---------------------------------------------------------- Judge Nancy V. Alquist of the U.S. Bankruptcy Court for the District of Maryland, Baltimore Division, gave Hedwin Corporation interim authority to obtain postpetition loans from Bank of America, N.A., in an amount not to exceed $430,000, and use cash collateral securing its prepetition indebtedness. The Debtor has secured indebtedness to BofA, as successor to LaSalle Business Credit, LLC, (a) principal in an amount not less than $4.98 million under prepetition revolving loans; and (b) principal in the amount of $600,000 under a prepetition term loan. The Debtor also has a subordinate debt obligation owed to ACP-I, L.P. in the amount of $3.20 million, exclusive of attorneys' fees, accrued interest or other fees. A final hearing is scheduled for April 22, 2014, at 2:00 p.m. About Hedwin Corporation Founded in 1946, Hedwin Corporation is a manufacturer of customized industrial plastic packaging, which it sells to wholesalers and distributors throughout the United States, Canada and Europe. Its manufacturing facility is located at 1600 Roland Heights Avenue, Baltimore, Maryland. It has a warehouse facility at 1700 West 41st Street, Baltimore, Maryland and a warehouse and assembly facility at 9175 Moya Blvd. (Unit D), Reno, Nevada. All of the facilities are leased. As of the fiscal year end December 31, 2013, the Debtor had total assets of approximately $15 million. Hedwin filed a Chapter 11 bankruptcy petition (Bankr. D. Md. Case No. 14-151940) in Maryland on April 2, 2014, to sell its assets to Fujimori Kogyo Co., Ltd., absent higher and better offers. The Debtor has tapped Tydings and Rosenberg, in Baltimore, Maryland, as counsel, and Shared Management Resources, Ltd.'s Charles S. Deutchman as chief restructuring officer. The 11 U.S.C. Sec. 341(a) meeting of creditors is slated for May 7, 2014, 10:00 a.m. at 341 meeting room 2650 at 101 W. Lombard St., Baltimore. The Debtor is required to submit its formal schedules of assets and liabilities and statement of financial affairs by April 16, 2014. According to the docket, the deadline for filing proofs of claims is on Aug. 5, 2014. The deadline for filing governmental proofs of claims is on Sept. 29, 2014. The exclusive period to propose a plan expires July 31, 2014. HEDWIN CORPORATION: Seeks to Sell Assets to Fujimori for $6.5MM --------------------------------------------------------------- Hedwin Corporation seeks authority from the U.S. Bankruptcy Court for the District of Maryland, Baltimore Division, to sell all or substantially all of its assets to Fujimori Kogyo Co., Ltd., subject to higher and better offers. Under the stalking horse asset purchase agreement, the Debtor will sell all of its assets, excluding cash and cash equivalents and avoidance claims arising under Chapter 5 of the Bankruptcy Code, for $16,500,000, plus the assumption of certain liabilities. The Debtor propose to sell the assets free and clear of liens, claims, encumbrances and other interests. To maximize the value of the Debtor's estate, the Debtor asks the Court to schedule an auction on a date no later than May 8, 2014, to afford potential bidders sufficient opportunity to bid on the one hand, and tailor the process to the needs of the Debtor on the other. The Debtor also asks that the hearing to consider approval of the sale be scheduled on May 9. If the Debtor closes an alternative transaction, the Debtor proposes to pay to the Stalking Horse Purchaser a break-up fee in an amount equal to $600,000 and an expense reimbursement in an amount not to exceed $250,000 for the Stalking Horse Bidder's reasonable and documented out-of-pocket expenses incurred in connection with the transaction. The Debtor is represented by Alan M. Grochal, Esq., Stephen M. Goldberg, Esq. -- sgoldberg@tydingslaw.com -- and Catherine K. Hopkin, Esq., at Tydings & Rosenberg, LLP, in Baltimore, Maryland. About Hedwin Corporation Founded in 1946, Hedwin Corporation is a manufacturer of customized industrial plastic packaging, which it sells to wholesalers and distributors throughout the United States, Canada and Europe. Its manufacturing facility is located at 1600 Roland Heights Avenue, Baltimore, Maryland. It has a warehouse facility at 1700 West 41st Street, Baltimore, Maryland and a warehouse and assembly facility at 9175 Moya Blvd. (Unit D), Reno, Nevada. All of the facilities are leased. As of the fiscal year end December 31, 2013, the Debtor had total assets of approximately $15 million. Hedwin filed a Chapter 11 bankruptcy petition (Bankr. D. Md. Case No. 14-151940) in Maryland on April 2, 2014, to sell its assets to Fujimori Kogyo Co., Ltd., absent higher and better offers. The Debtor has tapped Tydings and Rosenberg, in Baltimore, Maryland, as counsel, and Shared Management Resources, Ltd.'s Charles S. Deutchman as chief restructuring officer. The 11 U.S.C. Sec. 341(a) meeting of creditors is slated for May 7, 2014, 10:00 a.m. at 341 meeting room 2650 at 101 W. Lombard St., Baltimore. The Debtor is required to submit its formal schedules of assets and liabilities and statement of financial affairs by April 16, 2014. According to the docket, the deadline for filing proofs of claims is on Aug. 5, 2014. The deadline for filing governmental proofs of claims is on Sept. 29, 2014. The exclusive period to propose a plan expires July 31, 2014. HEDWIN CORPORATION: Lists $18.2MM in Assets, $22.6MM in Debts ------------------------------------------------------------- Hedwin Corporation filed with the U.S. Bankruptcy Court for the District of Maryland, Baltimore Division, its schedules disclosing $18,236,469 in total assets and $22,695,950 in total liabilities. The Debtor said its assets are comprised of: Cash on hand $5,000 Accounts receivable 4,801,772 Fire insurance claim 4,000,000 Automobiles & other vehicle accessories 408,992 Office equipment 2,050,751 Machinery & supplies used in business 2,050,751 Inventory 4,919,203 The secured claims against the Debtor total $8,833,453, comprising of a $3,276,333 secured claim by ACP-I, LP, of Delaware, and two secured claims by Bank of America, one amounting to $575,000, and the other one amounting to $4,982,120. Unsecured priority claims total $346,265, while unsecured non-priority claims total $13,516,231. Full-text copies of the Schedules are available for free at http://bankrupt.com/misc/HEDWINsal0407.pdf About Hedwin Corporation Founded in 1946, Hedwin Corporation is a manufacturer of customized industrial plastic packaging, which it sells to wholesalers and distributors throughout the United States, Canada and Europe. Its manufacturing facility is located at 1600 Roland Heights Avenue, Baltimore, Maryland. It has a warehouse facility at 1700 West 41st Street, Baltimore, Maryland and a warehouse and assembly facility at 9175 Moya Blvd. (Unit D), Reno, Nevada. All of the facilities are leased. As of the fiscal year end December 31, 2013, the Debtor had total assets of approximately $15 million. Hedwin filed a Chapter 11 bankruptcy petition (Bankr. D. Md. Case No. 14-151940) in Maryland on April 2, 2014, to sell its assets to Fujimori Kogyo Co., Ltd., absent higher and better offers. The Debtor has tapped Tydings and Rosenberg, in Baltimore, Maryland, as counsel, and Shared Management Resources, Ltd.'s Charles S. Deutchman as chief restructuring officer. The 11 U.S.C. Sec. 341(a) meeting of creditors is slated for May 7, 2014, 10:00 a.m. at 341 meeting room 2650 at 101 W. Lombard St., Baltimore. The Debtor is required to submit its formal schedules of assets and liabilities and statement of financial affairs by April 16, 2014. According to the docket, the deadline for filing proofs of claims is on Aug. 5, 2014. The deadline for filing governmental proofs of claims is on Sept. 29, 2014. The exclusive period to propose a plan expires July 31, 2014. HEDWIN CORPORATION: Seeks to Employ Tydings & Rosenberg as Counsel ------------------------------------------------------------------ Hedwin Corporation seeks authority from the U.S. Bankruptcy Court for the District of Maryland, Baltimore Division, to employ Tydings & Rosenberg LLP as bankruptcy attorney to, among other things, assist in the sale of substantially all of the Debtor's assets, to assume and assign certain executory contracts, and to file a plan of reorganization or liquidation. T&R was retained for general workout services in November of 2013, and, at that time, received the sum of $10,000 as a retainer to be applied towards future services rendered and expenses to be incurred. Subsequently, T&R received the sum of $200,000 as an additional retainer. After applying its bills for work performed between November 2013 and March 2014, T&R is holding a net retainer in the amount of $30,163, plus the filing fee in escrow subject to further Order of the Court. T&R will charge the Debtor on an hourly basis for time expended and on an actual dollar amount for expenses incurred plus reimbursement for ordinary out-of pocket expenses. Currently, hourly rates for partners in the T&R bankruptcy department range from $450 to $525 per hour, other attorneys' rates range from $230 to $350 per hour, and the hourly rates charged for T&R's paralegal is $145 per hour. The firm assures the Court that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About Hedwin Corporation Founded in 1946, Hedwin Corporation is a manufacturer of customized industrial plastic packaging, which it sells to wholesalers and distributors throughout the United States, Canada and Europe. Its manufacturing facility is located at 1600 Roland Heights Avenue, Baltimore, Maryland. It has a warehouse facility at 1700 West 41st Street, Baltimore, Maryland and a warehouse and assembly facility at 9175 Moya Blvd. (Unit D), Reno, Nevada. All of the facilities are leased. As of the fiscal year end December 31, 2013, the Debtor had total assets of approximately $15 million. Hedwin filed a Chapter 11 bankruptcy petition (Bankr. D. Md. Case No. 14-151940) in Maryland on April 2, 2014, to sell its assets to Fujimori Kogyo Co., Ltd., absent higher and better offers. The Debtor has tapped Tydings and Rosenberg, in Baltimore, Maryland, as counsel, and Shared Management Resources, Ltd.'s Charles S. Deutchman as chief restructuring officer. The 11 U.S.C. Sec. 341(a) meeting of creditors is slated for May 7, 2014, 10:00 a.m. at 341 meeting room 2650 at 101 W. Lombard St., Baltimore. The Debtor is required to submit its formal schedules of assets and liabilities and statement of financial affairs by April 16, 2014. According to the docket, the deadline for filing proofs of claims is on Aug. 5, 2014. The deadline for filing governmental proofs of claims is on Sept. 29, 2014. The exclusive period to propose a plan expires July 31, 2014. HOFFMASTER GROUP: S&P Assigns 'B' Rating to $265MM 1st Lien Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' issue- level rating to Oshkosh, Wis.-based Hoffmaster Group Inc.'s proposed $265 million first-lien term loan and $35 million revolver due 2020 and 2019, respectively. The recovery rating on the proposed first-lien term loan and revolver is '3', indicating S&P's expectation of meaningful (50% to 70%) recovery in the event of payment default. S&P also assigned its 'CCC+' issue-level rating (two notches below the corporate credit rating) on the proposed $104 million second- lien term loan. The recovery rating on the proposed second-lien term loan is '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. Hoffmaster will use the proceeds to refinance the existing $248 million first-lien term loan due 2018, $91 million second-lien term loan due 2019, repay revolver borrowings under the existing $35 million revolver due 2017 and apply the remainder to transaction fees and expenses. At the same time, Standard & Poor's affirmed its 'B' corporate credit rating on Hoffmaster and revised its outlook to stable from negative. The outlook revision is contingent on the successful completion of the proposed transaction and with particular emphasis on the absence of maintenance financial covenants and a springing financial covenant with cushion levels of more than 30% if tested in the next few quarters. "The ratings affirmation reflects our assessment that the proposed refinancing transaction will have a minimal impact on Hoffmaster's credit measures while improving the company's liquidity," said Standard & Poor's credit analyst Henry Fukuchi. "We based our assessment of Hoffmaster's business risk profile as "weak" on our view that the company is a niche player in disposable tableware products with limited product and geographic diversity and moderate customer concentration. Our "highly leveraged" assessment of Hoffmaster's financial risk profile reflects our view of the risks associated with its financial sponsor-owned status and high debt leverage. However, the proposed refinancing transaction will not have significant impact on credit measures because we expect the debt levels to increase only slightly. We assess Hoffmaster's liquidity as "adequate" under our criteria," S&P said. The stable outlook reflects S&P's expectation of fairly predictable business conditions and stable cash flow generation over the next few years. S&P's base-case scenario incorporates its expectation that Hoffmaster will be able to maintain FFO to total adjusted debt in the 10% to 12% range after the proposed transaction. Also, the proposed transaction will improve the company's liquidity and minimal risk of financial covenant violation. S&P could raise the ratings if EBITDA margins improve by 300 basis points and volumes increase by 10% or more from current levels. At this level, S&P expects FFO to adjusted debt will increase to about 15%. S&P currently expects FFO to adjusted debt to improve to about 10% in 2014 and remain within 10% to 12% over the next few years. S&P could lower the ratings if EBITDA margins weaken by 300 basis points or more resulting in FFO adjusted debt to decrease to toward 5%. S&P could also lower the ratings if unexpected cash outlays related to capital expansion or shareholder rewards deplete Hoffmaster's liquidity, such that its cash balances and revolver availability decline significantly. HOWREY LLP: Perkins Coie Latest Target of Trustee ------------------------------------------------- Sara Randazzo, writing for The Wall Street Journal, reported that Howrey LLP's bankruptcy trustee has turned his attention to yet another law firm that hired Howrey partners around the time of the firm's 2011 dissolution in an attempt to strum up money for creditors. According to the report, in a lawsuit filed against Perkins Coie LLP, trustee Allan Diamond seeks a cut of the profits that he says Perkins earned thanks to nine ex-Howrey partners who joined the firm in California and Washington, D.C. both before and after Howrey disbanded. Mr. Diamond says Howrey's creditors are entitled to a share of the profits from the so-called unfinished business that lawyers took with them as Howrey faltered, the report related. Of the nine partners mentioned in the suit, court papers show five have filed proofs of claim in Howrey's bankruptcy seeking payment of between $117,000 and $625,000 each, the report further related. Mr. Diamond has sued at least 20 of the 70 firms that hired Howrey partners and has entered into settlement discussions with many others, the report noted. So far, Mr. Diamond has struck deals to collect millions of dollars under unfinished business settlements with other firms. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Cal. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March 2011. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June 2011 at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. He is represented by Andrew Baxter Ryan, Esq., and Stephen Todd Loden, Esq., at Diamond McCarthy LLP as counsel. HURLEY MEDICAL: Moody's Affirms 'Ba1' Rating; Outlook Negative -------------------------------------------------------------- Moody's Investors Service has affirmed Hurley Medical Center's Ba1 rating. This action affects approximately $104 million of rated revenue bonds issued through the City of Flint Hospital Building Authority. The outlook has been revised to negative from stable, reflecting Hurley's suppressed liquidity position in recent years. Summary Rating Rationale: The affirmation of the Ba1 rating reflects Hurley's position as providing a differentiation of essential services in a broad service area and history of generating positive cash flow adequate to cover debt service. The negative outlook factors Hurley's suppressed liquidity position in recent years and thinner debt coverage ratios. Failure to rebuild cash reserves materially in the near term likely will result in a downgrade. Strengths -- Hurley's adjusted debt ratios are adequate for a Ba rated credit. Based on FY 2013 results, Hurley's adjusted debt-to- cash flow measured 5.7 times (below Baa median is 7.0 times), maximum annual debt service (MADS) coverage measured 2.2 times (below Baa median is 1.7 times), and debt-to-total operating revenue measured 29% (below Baa median is 31%). -- Hurley provides a differentiation of essential high-end tertiary services (e.g., burn unit, Level I trauma, and NICU), which contributes to Hurley's draw of patients beyond the City of Flint and Genesee County. Management reports that more than 40% of Hurley's business is derived from patients outside the City of Flint. -- Hurley's capital spending plans are manageable in the coming years ($44 million planned between FY 2014 and FY 2016, compared to a budgeted depreciation expense of $17 million in FY 2014). Hurley's average age of plant measured 11.4 years at fiscal year end (FYE) 2013 (below Baa median is 13.1 years). Hurley does not have new money debt plans in the coming years. Challenges -- Hurley's absolute and relatively cash positions have decreased significantly in recent years. Total unrestricted cash decreased from a high of $94 million at FYE 2010 to $60 million at FYE 2013 and $51 million at December 31, 2013. At unaudited December 31, 2013, cash on hand measured a thin 51 days (below Baa median is 80 days). -- Hurley's service area is characterized by weak demographic characteristics, including low median income levels. Medicaid represented a high 40% of Hurley's gross revenues in FY 2013. -- Hurley relies significantly on special funding sources from the state such as Medicaid disproportionate share (DSH), which accounts for a sizeable share of cash flow (approximately $52 million in FY 2013, according to management). While this funding demonstrates significant public policy support from the state, Moody's view these revenues as "at risk" and any contraction of these funds will require commensurate cost reductions. -- Hurley faces competition in the service area, with the presence of two hospitals in the area that are part of larger systems. -- Hurley debt ratios are stressed by pension and operating lease obligations; Hurley's cash-to-comprehensive debt measured a thin 23% at FYE 2013 (below Baa median is 31%). -- Hurley has a heavily unionized workforce as Hurley employees are represented by nine different labor bargaining units. Outlook The outlook revision to negative reflects Hurley's weaker liquidity position in recent years and thinner debt coverage ratios. Failure to rebuild cash reserves materially in the near term likely will result in a downgrade. What Could Change The Rating UP Given the negative outlook, an upgrade is not likely in the near term. In the longer-term, an upgrade may be warranted if Hurley demonstrated materially improved operating margins for a sustained period and improved its A/Rs leading to significantly stronger liquidity ratios and better debt coverage ratios. What Could Change The Rating DOWN A downgrade will be considered if Hurley fails to improve its A/Rs and liquidity position materially by FYE 2014 or fails to show further improvement in interim FY 2015, or if operating margins do not rebound. INDRA HOLDING: Moody's Assigns 'B2' CFR & Rates $245MM Loan 'B2' ---------------------------------------------------------------- Moody's Investors Service assigned B2 Corporate Family and B2-PD Probability of Default Ratings to Indra Holding Corp. ("Totes") following the announcement of its leveraged buyout. Moody's also assigned a B2 rating to the company's proposed $245 million first lien term loan. The outlook is stable. Proceeds from the proposed $245 million first lien term loan, the proposed $80 million second lien term loan and minor revolver borrowings, along with sponsor equity from Freeman Spogli & Co. and Investcorp will be used to fund the $525 million (including fees and expenses) acquisition of Totes from MidOcean Partners. The ratings of predecessor company Totes Isotoner Corporation, including the B3 Corporate Family Rating and the ratings of the existing senior secured credit facilities, will be withdrawn upon closing of the transaction and repayment of existing debt. While the buyout will add approximately $60 million of debt, raising leverage to the low 6 times (Moody's-adjusted), the company will benefit from a covenant-lite debt structure, an increased ABL revolver line cap to $100 million from $85 million, and improved interest coverage in the low 2 times EBITA/interest expense. In Moody's view, the ability to operate with a covenant- lite structure in particular will reduce default probability from potential weather-driven short-term earnings volatility. Moreover, Totes has demonstrated the ability to generate steady EBITDA despite recent challenging retail traffic and weather trends by expanding distribution and product breadth. In addition, the company's exit from its retail operations in 2013 has strengthened its profitability profile. Nonetheless, the rating has limited cushion for additional debt incurrence, as Moody's views the company's post-LBO leverage as high for the rating category. Ratings assignments: Borrower: Indra Holdings Corp. Corporate Family Rating at B2 Probability of Default Rating at B2-PD $245 million first lien senior secured term loan due 2021 at B2 (LGD3, 48%) Stable outlook The ratings are subject to the completion of the transaction and Moody's review of final documentation. The following ratings of Totes Isotoner Corporation will be withdrawn upon consummation of the LBO: Corporate Family Rating of B3 Probability of Default Rating of B3-PD $172 million senior secured fist lien term loan at B3 (LGD3, 44%) $100 million senior secured second lien term loan at Caa2 (LGD5, 79%) Stable outlook Ratings Rationale The B2 corporate family rating reflects the company's high leverage, risks associated with private equity ownership, modest scale, and the commoditized nature of its products. In addition, Totes' make-or-break seasonality not only means that adverse weather patterns or consumer spending habits during its peak season could significantly impact its operations, but it also makes the company heavily reliant on its revolver for seasonal working capital uses. Nevertheless, the rating is supported by the company's low fashion risk, well-recognized brands (albeit in niche product categories), established presence across diversified distribution channels, geographic diversification and good interest coverage relative to the rating category. The rating also reflects Totes' good liquidity, including consistent positive free cash flow generation, a covenant-lite structure, and good revolver availability, despite significant seasonal revolver borrowings. The stable outlook reflects Moody's expectations for modest organic growth and good liquidity. Given significant seasonality, Moody's expects lease-adjusted debt/EBITDA to swing between 6 and 7 times over the next 12-18 months depending on revolver borrowings. The ratings could be downgraded if operating performance or liquidity meaningfully deteriorates, including a sustained decline in free cash generation or reduced revolver availability. Quantitatively, the ratings could be downgraded if leverage is sustained above 6.5 times Moody's-adjusted debt/EBITDA. An upgrade is unlikely in the near term given the company's modest scale, weather dependence and the risk associated with private equity ownership. The ratings could be upgraded if Totes demonstrates a financial policy aimed at reducing debt, while sustaining revenue and earnings growth, and good liquidity. Quantitatively, the ratings could be upgraded if debt/EBITDA (Moody's-adjusted) is sustained below 5.0 times. Based in Cincinnati, Ohio, Indra Holding Corp. ("Totes") is an international designer, marketer and distributor of cold and wet weather accessories, slippers, sandals, headwear, and sunglasses with net revenues approaching $400 million. The company distributes umbrellas and related products primarily under the "totes" and "Raines" brands, cold-weather products (gloves and hats) including under the "Isotoner", "Dockers", "Manzella", "Grandoe" and C9 brands, and slippers and sandals, under the "Isotoner" and "Acorn" brands as well as private labels. The company will be owned by Freeman Spogli & Co. and Investcorp following its acquisition from previous private equity sponsor MidOcean Partners. Totes' fiscal year ends on July 31. INDYMAC BANCORP: 9th Circ. Cancels Oral Argument In D&O Saga ------------------------------------------------------------ Law360 reported that reversing course, the Ninth Circuit agreed to pull the plug on an oral argument planned for a settled $80 million directors and officers coverage fight involving IndyMac Bancorp Inc.'s bankruptcy trustee, the Federal Deposit Insurance Corp. and former IndyMac executives. According to the report, the appeals court took the April 7 oral argument off its calendar and ordered the parties to report back by May 30 on their progress in finalizing the statement. The Ninth Circuit turned heads by initially refusing to cancel the argument despite the announcement of a settlement with insurers, the report related. Though the insurers have worked out a definitive settlement agreement with some parties, a bankruptcy court still has to clear the way for other settlements to be finalized, the Ninth Circuit previously noted. The case is XL Specialty Insurance Co, et al v. Alfred Siegel, et al., Case No. 12-56275 (9th Cir.). About Indymac Bancorp Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. Through its hybrid thrift- mortgage bank business model, IndyMac designed, manufactured, and distributing cost-efficient financing for the acquisition, development, and improvement of single-family homes. IndyMac also provided financing secured by single-family homes to facilitate consumers' personal financial goals and strategically invests in single-family mortgage-related assets. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. Indymac Bancorp filed for Chapter 7 bankruptcy protection (Bankr. C.D. Cal. Case No. 08-21752) on July 31, 2008. Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. Bloomberg noted that Indymac had about $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. INSTITUTIONAL SHAREHOLDER: Moody's Assigns B3 Corp. Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned new ratings to Institutional Shareholder Services ("ISS"), including B3 Corporate Family and Senior Secured Ratings, and a B3-PD Probability of Default Rating. Proceeds from new first and second lien loans, along with an equity contribution from Vestar Capital Partners, will be used to fund Vestar's $377 million acquisition (including $13 million of transaction expenses) of ISS (representing roughly 9.0 times ISS's adjusted EBITDA). The ratings outlook is stable. Ratings Rationale At approximately 6.2 times, pro-forma at closing, ISS's debt-to- EBITDA (including Moody's standard adjustments) is high, but in line with other companies rated at the B3 level. Moody's believes that, given ISS's strong, low- to mid-30% EBITDA margins, the high leverage is sustainable, even given the company's small, approximately $125 million revenue base. However, Moody's also believe top-line growth will be limited (at about 2 or 3% annually) because price increases, planned for after the spinoff, have been untested while ISS has been a captive MSCI business unit, and because virtually all revenue growth over the past couple of years has come solely from corporate-executive- compensation consulting services that have been driven by the passage, in 2011, of Dodd-Frank "say for pay" mandates. With minimal required debt amortization and minimal expected growth in EBITDA at ISS, Moody's believes leverage will remain high over the intermediate term, although good cash flows and low capex requirements will allow for substantial cash buildup. ISS's diverse institutional and corporate client base, and its subscription-driven model, which accounts for more than 90% of revenues, allow for a predictable revenue stream. Moody's stable outlook derives from a handful of factors that it believes will continue to support ISS's model: expanding, dynamic regulatory and compliance requirements; corporate clients increasingly viewing governance as an "asset" that can attract investor interest; more investor and regulatory focus on executive compensation; and increasing shareholder activism. Given ISS's relatively small scale, narrow product focus, and weakly growing (albeit stable) top line, a rating upgrade would require materially stronger operating and credit metrics. Meaningful revenue growth, stemming from international expansion, incremental-product bundling, greater market penetration, and the successful passage of price increases, could lead to higher absolute levels of earnings and cash flows, which in turn can bring down leverage. Moody's would consider an upgrade if revenues can grow in the mid- to upper-single-digit percentages and leverage, consequently, falls to under 5.0 times. The B3 rating allows for some leeway in leverage, but Moody's would consider a downgrade if a substantial revenue falloff, while unexpected, were to materialize. Senior secured first lien credit facilities due 2020 and 2021, B2; LGD3, 34% Senior secured second lien credit facility due 2022, Caa2; LGD5, 87% Based in Rockville, MD, ISS is a leading, global provider of corporate governance services (such as facilitating the voting of proxies) for institutional investors, and for public corporate clients looking to improve their governance practices. Moody's estimates ISS's 2014 revenues at $125 million. INTERFAITH MEDICAL: Amends DIP Order to Increase Loan Amount ------------------------------------------------------------ Interfaith Medical Center, Inc., and the Dormitory Authority of the State of New York, entered into a court-approved third stipulation modifying the Final DIP Order to further increase the Initial Loan Commitment from $27,350,000 to $37,350,000. The parties also agreed that the date first written in the Definition of ?Loan Maturity Date? is modified from January 31, 2014 to April 14, 2014, and the Challenge Deadline for the Official Committee of Unsecured Creditors is extended to May 1, 2014. About Interfaith Medical Center Headquartered in Brooklyn, New York, Interfaith Medical Center, Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford- Stuyvesant and an ambulatory care network of eight clinics in central Brooklyn, in Crown Heights and Bedford-Stuyvesant. The Company filed for Chapter 11 protection (Bankr. E.D. N.Y. Case No. 12-48226) on Dec. 2, 2012. The Debtor disclosed $111,872,972 in assets and $193,540,998 in liabilities as of the Chapter 11 filing. Liabilities include $117.9 million owing to the New York State Dormitory Authority on bonds secured by the assets. Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP, serves as bankruptcy counsel to the Debtor. Nixon Peabody LLP is the special corporate and healthcare counsel. CohnReznick LLP serves as financial advisor. Donlin, Recano & Company, Inc. serves as administrative agent. The Official Committee of Unsecured Creditors tapped Alston & Bird LLP as its counsel, and CBIZ Accounting, Tax & Advisory of New York, LLC as its financial advisor. Eric M. Huebscher, the patient care ombudsman, tapped the law firm of DiConza Traurig LLP, as his counsel. JEWISH COMMUNITY CENTER: Estate Fully Administered, Case Closed --------------------------------------------------------------- The Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey on March 12, 2014, entered a final decree closing the Chapter 11 case of Jewish Community Center of Greater Monmouth County. The Court said in its order that the estate of the Debtor has been fully administered, and Catherine E. Youngman is discharged as trustee of the estate, and the bond is canceled. The Court confirmed the Debtor's Chapter 11 Plan on Aug. 28, 2013. As reported in the Troubled Company Reporter on July 30, 2012, the Debtor filed the Plan and Disclosure Statement on June 22, 2012. The salient terms are: * TD Bank, N.A., holder of a secured claim of $6.71 million, will receive monthly interest payments on the total amount of the undisputed claim at the variable interest rate of 30-day LIBOR plus 2% commencing on the Effective Date. Beginning at the end of the 13 month following the Effective Date, Debtor will in addition to the interest payment make a monthly principal payment based upon a 30 amortization schedule with a balloon payment at the end of the 72 months. * Holders of general unsecured claims estimated to total $1.66 million will be paid 25% of their claims unless the holder of any allowed unsecured claim elects to receive 100% of its claims with payments commencing one year after the Effective Date for 60 months thereafter, secured by a third mortgage against the Property. * Member interests will be extinguished as of the Effective Date. All existing or pending rights to signage or dedications relating to the building will be extinguished. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Jewish_Comm_DS_062212.pdf About Jewish Community Center Headquartered in Deal Park, New Jersey, Jewish Community Center of Greater Monmouth County, A Not-For-Profit Corporation -- http://jccmonmouth.org/-- offers services, programs, events, activities, and facilities to Jewish families and individuals in Monmouth County. Jewish Community Center filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 11-44738) on Dec. 5, 2011. Judge Michael B. Kaplan presides over the case. Timothy P. Neumann, Esq., at Broege, Neumann, Fischer & Shaver, serves as the Debtor's bankruptcy counsel. In its petition, the Debtor estimated assets of $10 million to $50 million and debts of $1 million to $10 million. LAFAYETTE YARD: Court Okays Waterford Settlement ------------------------------------------------ The Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey has approved the agreement Lafayette Yard Community Development Corp. made with Waterford Hotel Group Inc., which calls for the turnover of funds held by the company. As reported by the Troubled Company Reporter on March 3, 2014, Waterford Hotel has been holding funds belonging to Lafayette in the amount of $79,554 since the termination of their 2008 contract, under which Waterford managed the hotel owned by the company in Trenton. Under the settlement, Waterford will retain $15,704 while the rest of the funds will be turned over to Lafayette. The companies also agreed to mutually release each other from any claims, whether known or unknown. The Court directed Wells Fargo Bank, N.A., to unfreeze the bank account in the name of "Lafayette Yard Community Development Corp dba The Trenton Marriott at Lafayette Yard" ending in ****2388 and transfer the monies in those accounts to the attorney trust account maintained by Wong Fleming. The Official Committee of Unsecured Creditors objected to the settlement on Feb. 27, 2014, stating that "while the settlement motion makes blanket statements that LYCDC and Waterford reviewed an accounting of monies held by Waterford before entering into the settlement agreement, it is completely devoid of any information to support the broad releases being provided to Waterford. Given that the proposed settlement was negotiated and executed prior to the Petition Date, it is important to know who conducted the analysis and investigation of potential claims against Waterford on behalf of LYCDC before the Court approves the settlement." 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. LARSEN ROAD: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Larsen Road Green Bay A Wisconsin Limited Partnership 300 N. Main St., Suite 300 Oshkosh, WI 54901 Case No.: 14-24324 Chapter 11 Petition Date: April 14, 2014 Court: United States Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Debtor's Counsel: Mark L. Metz, Esq. LEVERSON & METZ, S.C. 225 E. Mason St., Suite 100 Milwaukee, WI 53202 Tel: 414-271-8502 Fax: 414-271-8504 Email: mlm@levmetz.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The petition was signed by Peter Jungbacker, president of general manager. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ashwaubenon Water Trade Debt $20,808 Blindauer Sheet Metal & Roof Trade Debt $1,000 CliftonLarsonAllen Services rendered $1,500 Darkside Ventures II, d/b/a Security Deposit $500 Halloween Express GG Green Bay Fitness Trade debt $21,960 Great Lakes Roofing Trade Debt $1,234 Green Valley Landscape Trade Debt $400 Management LLC Healthy Home Inspections LLC Trade Debt $100 Hobbytown USA Security Deposit $6,375 Keller Trade Debt $19,023 Lighthouse Christian Books Security Deposit $8,910 Ragatz LLP Promissory Note $225,334 2334 Lake Mendota Drive Madison, WI 53705 262-364-5534 Reader Plumbing & Septic Inc. Trade Debt $119 Square One Restoration, Inc. Trade Debt $19,012 Steinhilber, Swanson & Mares Services rendered $3,000 TLC Sign Trade Debt $267 Veterans Mechanical Service Trade Debt $267 WILC/Ashwaubenon LP Promissory Note $2,002,977 13400 Bishop's Lane, Suite 100 Brookfield, WI 53005 262-364-5534 Wisconsin Investment LLC Promissory Note $225,334 13400 Bishop's Lane, Suite 100 Brookfield, WI 53005 262-364-5534 WPS Utility service $3,809 LEO MOTORS: Asher Enterprises Reports 9.9% Equity Stake ------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Asher Enterprises, Inc., reported that as of April 9, 2014, it beneficially owned 8,030,327 shares of common stock of Leo Motors, Inc., representing 9.9 percent (based on the total of 80,383,662 outstanding shares of Common Stock). A copy of the regulatory filing is available at http://is.gd/PLKD6d About Leo Motors Headquartered in Hanam City, Gyeonggi-do, Republic of Korea, Leo Motors, Inc., a Nevada corporation, is currently engaged in the research and development of multiple products, prototypes and conceptualizations based on proprietary, patented and patent pending electric power generation, drive train and storage technologies. In 2011, the Company determined its investment in Leo B&T Inc. an investment account was impaired and recorded an expense of $4.5 million. During the 2012 year the Company had a net non operating income largely from the result of the forgiveness of debt for $1.3 million. The Company reported a net loss of $1.9 million on $25,605 of revenues in 2012, compared with a net loss of $5.4 million on $920,587 of revenues in 2011. In its audit report on the consolidated financial statements for the year ended Dec. 31, 2012, John Scrudato CPA, in Califon, New Jersey, expressed substantial doubt about Leo Motors' ability to continue as a going concern, citing the Company's significant losses since inception of $16.2 million and working capital deficit of $632,161. The Company's balance sheet at Sept. 30, 2013, showed $1.58 million in total assets, $2.10 million in total liabilities and a $511,693 total deficit. LIGHTSQUARED INC: Lenders Protest Exclusion From Conference ----------------------------------------------------------- Tiffany Kary, writing for Bloomberg News, reported that the judge in LightSquared Inc.'s bankruptcy has been excluding some parties from closed-door conferences, possibly hindering a resolution of the case, two companies underwriting the wireless broadband provider's reorganization said. According to the report, the lenders, Melody Business Finance LLC and Centaurus Capital LP, wrote a letter to U.S. Bankruptcy Judge Shelley Chapman in Manhattan on March 26 to address what they called their "exclusion" by the court from an off-the-record conference in her chambers on March 25. Philip Falcone's LightSquared is seeking approval of a bankruptcy exit plan that would put Dish Network Corp. Chairman Charles Ergen at the back of the line to be repaid and close a two-year battle for control of the company's airwaves, the report related. Hearings are under way to determine the status of Ergen's $1 billion claim and get approval of the reorganization. Melody and Centaurus are both underwriting part of a loan LightSquared plans to use to exit bankruptcy, and both said they already agreed to confidentiality provisions in the case, the report further related. Their exclusion is "counterproductive to fostering the very consensus that the court is trying to achieve," the lenders wrote in the letter obtained by Bloomberg News. LightSquared's plan would value the company at $7.7 billion, and parties including the lenders would supply $1.65 billion in debtor-in-possession financing plus $1 billion in exit financing, the report said. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LIGHTSQUARED INC: Falcone Touts Confidence In Firm's Post-Ch. 11 ---------------------------------------------------------------- Law360 reported that the man behind LightSquared Inc.'s majority shareholder, Harbinger Capital Partners LLC, said that he still firmly believes the bankrupt company will receive federal regulatory approval to use certain wireless spectrum and subsequently boost its value for shareholders. According to the report, Phil Falcone, appearing as a witness in a trial over LightSquared's proposed bankruptcy exit plan, has long held that LightSquared will win approval from the Federal Communications Commission to license spectrum that complements the spectrum it already controls. 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. LIME ENERGY: John O'Rourke Quits as Director -------------------------------------------- John O'Rourke resigned from the board of directors of Lime Energy Co., effective April 9, 2014. Mr. O'Rourke had no disagreements with the Company known to any executive officer of the Company. About Lime Energy Headquartered in Huntersville, North Carolina, Lime Energy Co. -- http://www.lime-energy.com-- is engaged in planning and delivering clean energy solutions that assist its clients in their energy efficiency and renewable energy goals. The Company's solutions include energy efficient lighting upgrades, energy efficient mechanical and electrical retrofit and upgrade services, water conservation, building weatherization, on-site generation and renewable energy project development and implementation. The Company provides energy solutions across a range of facilities, from high-rise office buildings, distribution facilities, manufacturing plants, retail sites, multi-tenant residential buildings, mixed use complexes, hospitals, colleges and universities, government sites to small, single tenant facilities. Lime Energy disclosed in regulatory filings in July 2013 it is in discussions with PNC Bank about entering into a forbearance agreement in which they would agree not to accelerate a loan for a period of time while the Company attempts to correct the gas flow issue and sell its landfill-gas facility. The bank is considering the Company's request. As of Sept. 30, 2013, the Company had $33.15 million in total assets, $26.70 million in total liabilities and $6.45 million in total stockholders' equity. For the nine months ended Sept. 30, 2013, the Company reported a net loss of $12.58 million. The Company incurred a net loss of $31.81 million in 2012 as compared with a net loss of $18.93 million in 2011. BDO USA, LLP, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses and negative cash flow from operations that raise substantial doubt about its ability to continue as a going concern. M/A-COM TECHNOLOGY: Moody's Assigns 'Ba3' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned ratings to the debt of the M/A- COM Technology Solutions Holdings Inc ("M/A-Com")-- Corporate Family Rating (CFR) of Ba3 and Probability of Default Rating (PDR) of Ba3-PD, and a Ba3 (LGD3-48%) rating to the $450 million Senior Secured Credit Facilities. The rating outlook is stable. Ratings Rationale The Ba3 CFR reflects M/A-Com's small scale as a niche player in the analog semiconductor market, which is characterized by long product life cycles and stable revenues compared to the overall semiconductor market. Moreover, M/A-Com's fab-lite operating model tends to result in fairly stable free cash flow (FCF) due to a large portion of outsourced production and thus limited required capital expenditures. The rating also reflects the starting leverage of nearly 5x debt to EBITDA (LTM December 31, 2013, Moody's adjusted) pro forma for the Mindspeed acquisition, which is high for the Ba category given M/A-Com's small revenue base, though Moody's expect rapid deleveraging over the near term as M/A-Com reduces Mindspeed's cost structure and uses Free Cash Flow ("FCF") to reduce debt. The Ba3 rating of the Senior Secured debt, which equals the Ba3 CFR, reflects the single class of debt, the absence of financial maintenance covenants, and the limited cushion of subordinated liabilities in the capital structure. The Speculative Grade Liquidity rating of SGL-2 reflects M/A-Com's good liquidity, which is supported by consistent FCF due to the fab-lite manufacturing model and the long product life cycles, the large cash balance, and $100 million secured revolver, which Moody's expect will remain undrawn. The stable outlook reflects Moody's expectation that Mindspeed will be integrated into M/A-Com without any significant operational disruption and that the combined company will generate revenue growth in the upper-single digits over the next 12 months. Moody's expect that M/A-Com will generate annual cash from operations (Moody's adjusted) of at least $75 million, which will comfortably cover capital expenditures of less than $25 million. Although a ratings upgrade is unlikely over the next year due to the high leverage and the small revenue base. Over the intermediate term the ratings could be upgraded if M/A-Com builds scale and generates organic revenue growth at levels suggesting significant market share expansion. Moody's would expect the EBITDA margin (Moody's-adjusted) to be sustained above the upper twenties percent level. Moody's would also expect progress on reducing leverage through both debt repayment and improved profitability. Moody's would expect that leverage would be consistently modest, with debt to EBITDA (Moody's adjusted) maintained below 3.0x. The ratings could be lowered if the integration of Mindspeed does not raise M/A-Com's EBITDA margin (Moody's adjusted) into the mid- twenty percent level or if M/A-Com's revenue growth trails that of its key competitors, indicating a loss of market share. The rating could also be lowered if M/A-Com does not make steady progress towards reducing leverage to below 3.5x EBITDA (Moody's adjusted) over the next year. M/A-Com, based in Lowell, Massachusetts, is a fab-lite semiconductor firm that produces high performance analog communication semiconductor products across the radiofrequency spectrum, including integrated circuits, diodes, power amplifiers and transistors, that are used in various end-market applications, including cellular telephony backhaul, military and commercial RADAR, car navigation systems, and cable TV set-top boxes. Assignments: Issuer: M/A-COM Technology Solutions Holdings, Inc. Probability of Default Rating, Assigned Ba3-PD Speculative Grade Liquidity Rating, Assigned SGL-2 Corporate Family Rating, Assigned Ba3 Senior Secured Bank Credit Facility, Assigned Ba3 Senior Secured Bank Credit Facility, Assigned Ba3 Senior Secured Bank Credit Facility, Assigned a range of LGD3, 48 % Senior Secured Bank Credit Facility, Assigned a range of LGD3, 48 % Outlook Actions: Issuer: M/A-COM Technology Solutions Holdings, Inc. Outlook, Stable M/A-COM TECHNOLOGY: S&P Assigns Prelim. 'B+' CCR; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a preliminary 'B+' corporate credit rating to Lowell, Mass.-based M/A-COM Technology Solutions Holdings Inc. The outlook is stable. S&P also assigned its preliminary 'BB-' issue level rating and preliminary '2' recovery rating to the company's proposed $100 million revolving credit facility due 2019 and proposed $350 million term loan due 2021. The preliminary '2' recovery rating indicates S&P's expectation of substantial (70%-90%) recovery in the event of payment default. "The ratings on M/A-COM reflect the company's 'weak' business risk profile (as defined by our criteria), incorporating the company's limited scale, short track record operating at the current revenue level, narrow focus on a subsector of the analog semiconductor industry, and end-market concentration," said Standard & Poor's credit analyst James Thomas. S&P considers M/A-COM's financial risk profile to be "aggressive" reflecting its expectation for leverage greater than 3x over the next two years, potential for volatility in revenue and cash flows, and that an acquisitive growth strategy may lead to increased leverage. S&P views the industry risk as "moderately high," the country risk as "low," and the company's management and governance as "fair." The outlook is stable, reflecting S&P's expectation that M/A-COM will be able to successfully integrate MindSpeed, leading to improved margins and lower leverage to the mid-to-low 3x area over the next fiscal year. S&P could lower the rating if business performance deteriorated due to failure to secure critical design wins, leading to a significant EBITDA decline or an additional large debt-financed acquisition resulted in leverage above 4x. Given the company's limited scale when compared to industry peers in the "BB" category, an upgrade is unlikely over the next year, although S&P could consider an upgrade over the longer term if the firm is able to successfully execute its growth plans and achieve and sustain below 3x. MACH GEN: Milbank Tweed Approved as Bankruptcy Counsel ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware on April 10 authorized MACH Gen, LLC, et al., to employ Milbank, Tweed, Hadley and McCloy LLP as counsel. Milbank's services to the Debtors include: 1. advising the Debtor with respect to their rights, powers and duties in the continued operation of their businesses and management of their properties; 2. attending meetings and negotiating with representatives of creditors and other parties-in-interest, including governmental authorities, as necessary; and 3. advising the Debtor in connection with any potential asset disposition. Tyson M. Momazow, Esq., a partner at Milbank, assures the Court that Milbank is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About MACH Gen MACH Gen, LLC, and four of its affiliates, sought protection under Chapter 11 of the Bankruptcy Code on March 3, 2014. The lead case is In re MACH Gen, LLC, Case No. 14-10461 (Bankr. D.Del.). The case is assigned to Judge Mary F. Walrath. The Debtors' general counsel is Matthew S. Barr, Esq., Tyson M. Lomazow, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York; and Russell C. Silberglied, Esq., John H. Knight, Esq., and Zachary L. Shapiro, Esq., at Richards, Layton, & Finger P.A., in Wilmington, Delaware. The Debtors' financial advisors and investment bankers are Mark Hootnick, Brian Bacal, Gregory Doyle, and Roger Wood from Moelis & Company. Protiviti, Inc., serves as consultant. Prime Clerk LLC serves as claims and noticing agent and administrative advisor. The Debtors said they had $750 million in total assets and $1.6 billion in total liabilities as of Dec. 31, 2013 The petitions were signed by Garry N. Hubbard, chief executive officer. MACH GEN: Richards Layton Approved as Bankruptcy Co-Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court on April 10 authorized MACH Gen, LLC et al., to employ Richards, Layton & Finger, P.A. as their bankruptcy co-counsel. James K. Teringo, Jr., Esq., attested that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm's rates are: Position Range of Hourly Rates -------- --------------------- Directors $560 to $800 an hour Counsel $490 an hour Associates $250 to $465 an hour Paraprofessionals $225 an hour Prior to the Petition Date, MACH Gen paid RL&F a total retainer of $100,000, which was periodically drawn from and replenished, in connection with and in contemplation of the Chapter 11 Cases. MACH Gen requests that the retainer monies paid to RL&F and not expended for prepetition services and disbursements be treated as an evergreen retainer to be held by RL&F as security throughout the Chapter 11 Cases until RL&F's fees and expenses are awarded by final order and payable to RL&F. About MACH Gen MACH Gen, LLC, and four of its affiliates, sought protection under Chapter 11 of the Bankruptcy Code on March 3, 2014. The lead case is In re MACH Gen, LLC, Case No. 14-10461 (Bankr. D.Del.). The case is assigned to Judge Mary F. Walrath. The Debtors' general counsel is Matthew S. Barr, Esq., Tyson M. Lomazow, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York; and Russell C. Silberglied, Esq., John H. Knight, Esq., and Zachary L. Shapiro, Esq., at Richards, Layton, & Finger P.A., in Wilmington, Delaware. The Debtors' financial advisors and investment bankers are Mark Hootnick, Brian Bacal, Gregory Doyle, and Roger Wood from Moelis & Company. Protiviti, Inc., serves as consultant. Prime Clerk LLC serves as claims and noticing agent and administrative advisor. The Debtors said they had $750 million in total assets and $1.6 billion in total liabilities as of Dec. 31, 2013 The petitions were signed by Garry N. Hubbard, chief executive officer. METRO FUEL: Global Settlement OK'd; May 6 Case Conversion Hearing ----------------------------------------------------------------- The Hon. Elizabeth S. Stong of the U.S. Bankruptcy Court for the Eastern District of New York has approved Metro Fuel Oil Corp., et al.'s global settlement agreement with the Official Committee of Unsecured Creditors, Paul J. Pullo Jr. and Gene V. Pullo, New York Commercial Bank, Valley National Bank, Rochester Fund Municipals and Limited Term New York Municipal Fund, U.S. Bank, N.A., Trufund Financial Services, Inc., Hess Corporation, Global Companies LLC, and Phillips 66 Company. As reported by the Troubled Company Reporter on April 7, 2014, Hess supported the approval of the Global Settlement, while William K. Harrington, U.S. Trustee for Region 2, objected to the settlement's approval. The U.S. Trustee claimed that, among other things, the Global Settlement divests the Debtors' principals of possession and control of the estates and places the control of the Chapter 11 cases in the hands of an estate representative who takes direction from a steering committee of creditors. The Debtors and the Committee stated in a court filing dated April 3, 2014, that the Global Settlement brings a far greater recovery into the estate than would be available under any other alternative scenario, especially conversion of the Chapter 11 cases to cases under Chapter 7. The Global Settlement provides that the Debtors' estates will receive an approximate distribution of $3.7 million, which is derived from two sources: (1) the $17.5 million Pullo settlement payment, and (2) the Debtors' escrowed sale proceeds and cash on hand. According to the Debtors and the Committee, administrative creditors could expect to receive a recovery of approximately 47% of their claims. Bayside Fuel Oil Depot Corp. is expected to recover at least $1,028,138 pursuant to the terms of the Global Settlement Agreement, an amount that represents 47% of the $2,187,527.88 Section 503(b)(9) claims Bayside asserted against the Debtors' estates. As reported by the Troubled Company Reporter on March 31, 2014, Stuart I. Gordon, Esq., at Rivkin Radler LLP, the attorney for Bayside, claimed that, among other things, (i) the March 2013 auction sale conducted by the Debtors resulted in general unsecured creditors receiving nothing; and (ii) the cases are administratively insolvent and the Debtors are no longer operating, having sold substantially all of their operating assets to United Metro Energy Corp. The TCR reported on June 26, 2013, that NYCB also claimed that the Debtors' estates have been administratively insolvent, with no viable method of exit other than conversion to Chapter 7. A hearing to consider the conversion motions, along with the motions to extend or modify exclusive periods, is scheduled for May 6, 2014, at 10:30 a.m. (Prevailing Eastern Time). NIC Holding is represented by: Brian R. Zurich, Esq. Pepper Hamilton LLP Suite 400 301 Carnegie Center Princeton, NJ 08543-5276 Tel: (609) 452-0808 Fax: (609) 452-1147 and Henry J. Jaffe, Esq. (admitted pro hac vice) John H. Schanne, II, Esq. (admitted pro hac vice) Hercules Plaza, Suite 5100 1313 Market Street P.O. Box 1709 Wilmington, DE 19899-1709 Tel: (302) 777-6500 Fax: (302) 421-8390 NYCB is represented by: Loeb & Loeb LLP William M. Hawkins, Esq. Daniel B. Besikof, Esq. 345 Park Avenue New York, New York 10154-0037 Tel: (212) 407-4000 Fax: (212) 407-4990 About Metro Fuel Metro Fuel Oil Corp., is a family-owned energy company, founded in 1942, that supplies and delivers bioheat, biodiesel, heating oil, central air conditioning units, ultra low sulfur diesel fuel, natural gas and gasoline throughout the New York City metropolitan area and Long Island. Owned by the Pullo family, Metro has 55 delivery trucks and a 10 million-gallon fuel terminal in Brooklyn. Financial problems resulted in part from cost overruns in building an almost-complete biodiesel plant with capacity of producing 110 million gallons a year. Based in Brooklyn, New York, Metro Fuel Oil Corp., fka Newtown Realty Associates, Inc., and several of its affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Lead Case No. 12-46913) on Sept. 27, 2012. Judge Elizabeth S. Stong presides over the case. Nicole Greenblatt, Esq., at Kirkland & Ellis LLP, represents the Debtor. The Debtor selected Epiq Bankruptcy Solutions LLC as notice and claims agent. Th Debtor tapped Carl Marks Advisory Group LLC as financial advisor and investment banker, Curtis, Mallet-Prevost, Colt & Mosle LLP as co-counsel, AP Services, LLC as crisis managers for the Debtors, and David Johnston as their chief restructuring officer. The petition showed assets of $65.1 million and debt totaling $79.3 million. Liabilities include $58.8 million in secured debt, with $48.3 million owing to banks and $10.5 million on secured industrial development bonds. Metro Terminals Corp., affiliate of Metro Fuel Oil Corp., disclosed $38,613,483 in assets and $71,374,410 in liabilities as of the Chapter 11 filing. The U.S. Trustee appointed a seven-member creditors committee. Kelley Drye & Warren LLP represents the Committee. The Committee tapped FTI Consulting, Inc. as its financial advisor. On Feb. 15, 2013, the Bankruptcy Court entered an order approving the sale of substantially all of the assets of the Debtors to United Refining Energy Corp., for the base purchase price of $27,000,000, subject to adjustments. MF GLOBAL: Parent Sues PricewaterhouseCoopers for $1 Billion ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that MF Global Holdings Ltd. sued PricewaterhouseCoopers LLP for "egregious professional malpractice" for the manner in which it allowed the now-defunct broker to account for transactions in European sovereign debt that led to the company's demise. According to the complaint filed under the MF Global parent's confirmed Chapter 11 plan, the accounting firm gave "flatly erroneous accounting advice" when it allowed the brokerage to treat so-called repo-to-maturity transactions as sales rather than as secured transactions, the report related. The off-balance sheet accounting allowed by PricewaterhouseCoopers allowed MF Global to amass large positions in sovereign debt that drained the broker's capital when the securities fell in value, the report further related. The complaint doesn't implicate the accountants in MF Global's mishandling of $1.6 billion in customer deposits. According to the report, the accountants said in an e-mailed statement that there have been several investigations and none has found the accounting treatment to be wrong. "PwC is disappointed that this meritless claim has been brought," the firm said. MF Global treated the European debt transactions as sales, booking revenue 21 months before the revenue was received, according to the complaint seeking more than $1 billion in damages, the report added. The lawsuit is MF Global Holdings Ltd. v. PricewaterhouseCoopers LLP, 14-cv-02197, U.S. District Court, Southern District of New York (Manhattan). About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MF GLOBAL: Plan Head Raps PwC With $1B Malpractice Suit ------------------------------------------------------- Law360 reported that MF Global Holdings Ltd.'s bankruptcy plan administrator hit longtime outside auditor PricewaterhouseCoopers LLP with a suit in New York federal court, alleging the accounting expert's malpractice and negligence caused more than $1 billion in damages in connection with European sovereign debt instruments. According to the report, accusing PwC of extraordinary and egregious professional malpractice and negligence, the suit says the financial services firm had relied on PwC's "flatly erroneous" accounting advice when it made billions of dollars in foreign investments by using "repurchase to maturity" financing transactions. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MINI MASTER: Can Hire Jose Andino as Debt Collection Counsel ------------------------------------------------------------ Mini Master Concrete Services, Inc. sought and obtained permission from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Jose E. Andino Delgado, Esq. as counsel for debt collection services. The Debtor seeks to employ the services of Mr. Andino to continue providing the services as its special counsel under 11 U.S.C. Section 327 (e). The Debtor wishes to employ Mr. Andino, subject to Court approval, on the basis of a 15% contingency fee for extrajudicial debt collections, 20% contingency fee for cases that require the filing of a collection claim, 20% contingency fee for collections relative to closed accounts and returned checks for insufficient funds, plus expenses. The compensation to Mr. Andino shall be from funds as may be available to the Debtor and to which the Debtor may be legally entitled. Mr. Andino 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. Master Aggregates Toa Baja Corporation filed a Chapter 11 petition (Bankr. D.P.R. Case No. 13-10305) in Old San Juan, Puerto Rico on Dec. 11, 2013. Charles Alfred Cuprill, Esq., at Charles A Cuprill, PSC Law Office, in San Juan, serves as counsel. The Debtor disclosed $11,125,939 in assets and $10,148,437 in liabilities. Mini Master Concrete aka Mini Master aka Empresas Master filed a Chapter 11 petition (Bankr. D. P.R. Case No. 13-10302) on Dec. 11, 2013, in Old San Juan, District of Puerto Rico. Charles A Cuprill, PSC Law Office, also serves as counsel to Mini Master Concrete. The petition was signed by Carmen Betancourt, president. MINI MASTER: May Hire Jesus Nieves as Auditor --------------------------------------------- Mini Master Concrete Services, Inc. sought and obtained permission from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Jesus Mora Nieves, CPA as its auditor, to audit the Debtor's balance sheet as of Mar. 31, 2014, and the related statements of income, retained earnings, and cash flows for the year then ended. Mr. Nieves' compensation consists of a fee ranging from $9,000 to $10,000 for the monitoring and audit of the year ending Mar. 31, 2014, to be payable upon presentation. Mr. Nieves 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. Master Aggregates Toa Baja Corporation filed a Chapter 11 petition (Bankr. D.P.R. Case No. 13-10305) in Old San Juan, Puerto Rico on Dec. 11, 2013. Charles Alfred Cuprill, Esq., at Charles A Cuprill, PSC Law Office, in San Juan, serves as counsel. The Debtor disclosed $11,125,939 in assets and $10,148,437 in liabilities. Mini Master Concrete aka Mini Master aka Empresas Master filed a Chapter 11 petition (Bankr. D. P.R. Case No. 13-10302) on Dec. 11, 2013, in Old San Juan, District of Puerto Rico. Charles A Cuprill, PSC Law Office, also serves as counsel to Mini Master Concrete. The petition was signed by Carmen Betancourt, president. MINI MASTER: Can Hire Alice Net Carlo as Special Counsel -------------------------------------------------------- Mini Master Concrete Services, Inc. sought and obtained authorization from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Alice Net Carlo, Esq. ("Ms. Net") as the Debtor's special counsel, to conclude the process of collection cases filed by her before the courts of the Commonwealth of Puerto Rico. The Debtor wishes to retain Ms. Net on the basis of a 25% contingency fee, plus expenses, to be compensated upon application and the approval of the Court, rates which are considered to be reasonable and fair, in line with services comparable to those performed on behalf of other clients. The compensation to Ms. Net shall be from such funds as may be available to the Debtor and to which the Debtor may be legally entitled. Ms. Net 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. Master Aggregates Toa Baja Corporation filed a Chapter 11 petition (Bankr. D.P.R. Case No. 13-10305) in Old San Juan, Puerto Rico on Dec. 11, 2013. Charles Alfred Cuprill, Esq., at Charles A Cuprill, PSC Law Office, in San Juan, serves as counsel. The Debtor disclosed $11,125,939 in assets and $10,148,437 in liabilities. Mini Master Concrete aka Mini Master aka Empresas Master filed a Chapter 11 petition (Bankr. D. P.R. Case No. 13-10302) on Dec. 11, 2013, in Old San Juan, District of Puerto Rico. Charles A Cuprill, PSC Law Office, also serves as counsel to Mini Master Concrete. The petition was signed by Carmen Betancourt, president. MOMENTIVE PERFORMANCE: RSA Requires Plan Order in 4 Months ---------------------------------------------------------- Momentive Performance Materials Inc., the silicones and quartz products manufacturer owned by Leon Black's Apollo Global Management LLC., sought bankruptcy protection after signing a deal with noteholders of a balance sheet restructuring that will eliminate $3 billion in debt. Pursuant to a Restructuring Support Agreement, holders of 85% of the outstanding second lien notes have agreed to support a chapter 11 plan to be proposed by the Debtors that provides for payment in full payment in full in cash to the Debtors' general unsecured creditors and over $1.3 billion in claims owing under their first lien credit facilities, and conversion of $1.34 billion of second lien notes into the new equity of the reorganized Debtors. The Debtors have secured a commitment for postpetition debtor-in- possession credit facilities totaling $570 million that, if approved by the Court, will fund the Debtors' operations during these chapter 11 cases. The same lenders have also committed, subject to certain conditions, to provide exit financing to the Debtors in connection with the consummation of a chapter 11 plan, consisting of a $270 million exit asset-based revolving credit facility and a $1 billion exit term loan. Prepetition Capital Structure As of Dec. 31, 2013, the Debtors had $4.114 billion of consolidated outstanding indebtedness, including payments due within the next 12 months and short-term borrowings. The Company's projected 2014 annualized cash interest expense on its fixed-rate obligations, absent these cases, would be $288 million. The components of the Debtors' outstanding indebtedness are: -- A revolving credit facility with maximum aggregate availability of $270 million (the "ABL Facility") with lenders, and JPMorgan Chase Bank, N.A., as Administrative Agent. As of the Petition Date, the borrowing base reflecting various reserves was determined to be $270 million, and the Company had $71 million of issued and outstanding letters of credit and $166 million of revolver borrowings under the ABL Facility. -- A revolving credit facility with maximum aggregate availability of $75 million with General Electric Capital Corporation as designated lender, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. As of the Petition Date, $20.7 million was currently outstanding under the Cash Flow facility. -- $1.1 billion of 8.875% First-Priority Senior Secured Notes due 2020 ("First Lien Notes") issued by MPM pursuant to an Indenture dated as of October 25, 2012, with The Bank of New York Mellon Trust Company, N.A., as indenture trustee. -- $250 million of 10% Senior Secured Notes due 2020 ("1.5 Lien Notes") issued by MPM pursuant to an Indenture dated as of May 25, 2012, with The Bank of New York Mellon Trust Company, N.A., as indenture trustee. -- Approximately $1.161 billion of 9% Second-Priority Springing Lien Notes due 2021 and EUR133 million 9.5% Second-Priority Springing Lien Notes due 2021 issued by MPM pursuant to an Indenture dated as of November 5, 2010, with The Bank of New York Mellon Trust Company, N.A., as indenture trustee. -- $382 million in aggregate principal amount of unsecured 11.5% Senior Subordinated Notes due 2016 issued by MPM pursuant to an Indenture dated as of December 4, 2006, with Wells Fargo Bank, National Association, as indenture trustee. -- pay-in-kind unsecured 11% Senior Discount Note, due June 4, 2017, with an original principal amount of $400 million issued by MPM Holdings in connection with the purchase of the Debtors from GE in December 2006. As of Dec. 31, 2013, the aggregate principal amount outstanding on the Holdings PIK Note was $854 million. Apollo owns 90.4% of the outstanding common equity interests in Holdings LLC, the ultimate parent of the Debtors. GE Capital Equity Investments, Inc. holds approximately 6.3% of the outstanding common equity interests in Holdings LLC, with the remainder held by certain institutional investors, as well as certain current or former employees, officers or directors of the Company, Holdings LLC or MSC. Restructuring Support Agreement The Debtors, Apollo and Second Lien Noteholders entered into a Restructuring Support Agreement, which provides that the Noteholders will support, and vote in favor of, a chapter 11 plan that provides for: (a) payment in full in cash to the Debtors' general unsecured creditors and holders of claims arising from the Cash Flow Facility, First Lien Notes and 1.5 Lien Notes (including accrued interest, but not including any premium or "make-whole" amount), (b) conversion of the Second Lien Notes into the new equity of the reorganized Debtors (subject to dilution by a management incentive plan and the new equity to be issued by the rights offering), (c) subscription rights to holders of Second Lien Notes in a $600 million rights offering, giving such holders the opportunity to purchase a percentage of the new equity of the reorganized Debtors at a price per share determined by using the pro forma capital structure and an enterprise value of $2.2 billion and applying a 15% discount to the equity value thereto, (d) a recovery to holders of the Holdings PIK Note in the amount of the cash available at Holdings as of the effective date of the Plan, after taking into account administrative expenses, and (e) no recovery to the holders of Subordinated Notes on account of the subordination provisions set forth in the indenture . The Second Lien Noteholders have agreed, subject to definitive documentation, to backstop the $600 million rights offering in exchange for a fee, payable in new equity, of an additional 5% of the Rights Offering Amount. This fee is payable in kind at the closing of the rights offering, or in cash, if the Debtors terminate the backstop commitment. The Plan also provides that the reorganized Debtors will hire a new chief executive officer, chief financial officer, and general counsel which will not be shared with MSC under the Shared Services Agreement, and that the Agreement will be amended to provide for certain transition services in the event of a termination. The Debtors anticipate that they will file the Plan and an accompanying disclosure statement in the near term, and will promptly seek this Court's approval of a backstop commitment agreement, the Restructuring Support Agreement, and subsequently, the disclosure statement and confirmation of the Plan. Milestones Noteholders can terminate the RSA if the Debtors fail to: -- obtain an interim order approving the DIP facility within three calendar days after the date of the commencement of the Chapter 11 cases; -- execute and file with the Bankruptcy Court the backstop commitment agreement on or before 11:59 p.m. (prevailing New York City time) on April 28, 2014; -- obtain final approval of the DIP facility within 60 calendar days after the Petition Date; -- obtain approval of the RSA, and the Backstop Commitment Agreement within 60 calendar days after the Petition Date; -- obtain approval of the Disclosure Statement within 75 calendar days after the Petition Date; -- amend the SSA within 75 calendar days after the Petition Date; -- obtain an order approving the Plan within 120 calendar days after the Petition Date; and -- consummate the Plan and rights offering within 180 calendar days from the Petition Date. Road to Bankruptcy According to William H. Carter, CFO, Executive Vice President and Director, since 2011, the Company has experienced significant deterioration in its financial performance, primarily attributable to a fundamental shift in industry dynamics, including industry- wide overcapacity, causing severe price pressure for the Company's basic products, and the commoditization of lower-end specialty products, which have collectively given rise to decreased profit margins industry-wide. Since 2011, the Company has cumulatively paid $739 million in cash interest payments on its funded indebtedness, which gave rise to $437 million in negative free cash flow over such time period. The Debtors have substantial indebtedness, leading them to be levered at approximately 16 times their 2013 EBITDA. The nearly $300 million in annual interest that the Debtors must pay on these obligations has meant that the Debtors were free cash flow negative in 2013 by over $200 million, rapidly draining the cash available to the Company. Ultimately, due to a lack of available funds, the Debtors were unable to make interest payments totaling $62 million due April 14, 2014 on the First Lien Notes and 1.5 Lien Notes, absent the additional liquidity available from debtor- in-possession financing. Further, one additional potential source of liquidity, the Cash Flow Facility, matures at the end of 2014. With an impending liquidity crisis at the Company, the Debtors retained Moelis & Company as investment banker in November 2013, and Willkie Farr & Gallagher LLP as restructuring counsel in December 2013. The Company's lack of liquidity and unsustainable capital structure ultimately gave rise to the Debtors' decision to commence the chapter 11 cases. First Day Motions To enable the Debtors to operate effectively postpetition and to avoid adverse effects with respect to the chapter 11 cases, the Debtors have requested various types of relief in "first day" applications and motions filed with the Court, including a motion seeking to have the Debtors' chapter 11 cases consolidated for procedural purposes and jointly administered. The Debtors are asking, among other things, for an extension by 46 days through and including June 12, 2014, of the deadline to file schedules of assets and liabilities and statements of financial affairs. To aid in the administration of the Debtors' bankruptcy cases and to further their reorganization efforts, the Debtors seek entry of an order confirming the application of two key protections provided by the Bankruptcy Code: the automatic stay provisions of Section 362, and the anti-discrimination provisions of section 525. The global nature of the Debtors' businesses, the fact that numerous non-Debtor Global Affiliates are not part of this reorganization process, and the Debtors' extensive dealings with non-U.S. creditors who are unfamiliar with the protections afforded chapter 11 debtors under the Bankruptcy Code require, out of an abundance of caution, that an order implementing these protections be entered by this Court. The Debtors are seeking approval to pay $15.5 million for prepetition claims of critical vendors and $2.3 million for claims of foreign vendors, plus $13.3 million for vendors with claims entitled to priority under Sections 503(b)(9) and 507(a)(2) of the Bankruptcy Code. The Debtors propose to condition the payment of trade claims on the agreement of individual trade claimants to supply goods and services to the debtors on the most favorable trade terms that such trade claimant offered to the debtors prior to the Petition Date. A copy of the RSA filed together with the affidavit in support of the first-day motions is available for free at: http://bankrupt.com/misc/Momentive_1st_Day_Affidavit_RSA.pdf About Momentive Performance Momentive Performance is one of the world's largest producers of silicones and silicone derivatives, and is a global leader in the development and manufacture of products derived from quartz and specialty ceramics. Momentive has a 70-year history, with its origins as the Advanced Materials business of General Electric Company. In 2006, investment funds affiliated with Apollo Global Management, LLC, acquired the company from GE. As of Dec. 31, 2013, the Company had 4,500 employees worldwide, of which 46% of the Company's employees are members of a labor union or are represented by workers' councils that have collective bargaining agreements. Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., and their affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 14-22503) on April 14, 2014, with a deal with noteholders on a balance-sheet restructuring. The Debtors have tapped Willkie Farr & Gallagher LLP as bankruptcy counsel with regard to the filing and prosecution of these chapter 11 cases; Sidley Austin LLP as special litigation counsel; Moelis & Company LLC as financial advisor and investment banker; AlixPartners, LLP as restructuring advisor; PricewaterhouseCoopers as auditor; and Crowe Horwath LLP as benefit plan auditor. Kurtzman Carson Consultants LLC is the notice and claims agent. Consenting Noteholders are represented by: Milbank, Tweed, Hadley & McCloy LLP 1 Chase Manhattan Plaza New York, New York 10005 Attn: Dennis F. Dunne, Esq. Samuel A. Khalil, Esq. Eric K. Stodola, Esq. Telecopy: (212) 822-5770 E-mail: ddunne@milbank.com skhalil@milbank.com estodola@milbank.com Apollo is represented by: Akin Gump Strauss Hauer & Feld LLP One Bryant Park New York, New York 10005 Attn: Ira S. Dizengoff, Esq. Philip C. Dublin, Esq. Telecopy: (212) 872-1002 E-mail: idizengoff@akingump.com pdublin@akingump.com MOMENTIVE PERFORMANCE: Gets Court OK to Access $430-Mil. Financing ------------------------------------------------------------------ Momentive Performance Materials Inc. on April 14 disclosed that the U.S. Bankruptcy Court for the Southern District of New York has issued a variety of "first-day" orders requested by the Company. The First Day Orders will help MPM continue operating its business in normal course as MPM executes its balance sheet restructuring. Among other things, the Court has provided interim authorization for MPM to access up to $430 million of its $570 million in debtor-in-possession financing led by J.P. Morgan Securities LLC as lead arranger. The new financing, combined with cash generated by the Company's ongoing operations, will be available to MPM to meet its operational and restructuring needs; and on a pro forma basis for [Mon]day's approvals, MPM will have over $300 million in available liquidity. The Court also approved MPM's requests to continue paying employee wages and benefits and honoring customer programs. "The Court's approval of our first-day motions is a positive step forward in our efforts to strengthen MPM's financial condition," said Craig O. Morrison, Chairman, President and CEO of MPM. "With these approvals, MPM can continue operating and funding its business operations in the normal course. We deeply appreciate the ongoing partnership of our valued customers and are fully- committed to continuing to provide them with the high-quality products and services they expect from MPM throughout this important process." On April 13, 2014, MPM reached an agreement with certain of its key stakeholders regarding the terms of a balance sheet restructuring plan that will strengthen its financial position by eliminating more than $3 billion of debt from MPM's balance sheet and enhancing liquidity. To implement this "pre-negotiated" plan, MPM and its U.S. subsidiaries voluntarily filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code. MPM's operations outside the U.S. are not included in the Chapter 11 proceedings. The restructuring relates solely to MPM and not to Momentive Specialty Chemicals Inc. (MSC), which has a fully independent debt capital structure and a separate and strong balance sheet. About Momentive Performance Momentive Performance is one of the world's largest producers of silicones and silicone derivatives, and is a global leader in the development and manufacture of products derived from quartz and specialty ceramics. Momentive has a 70-year history, with its origins as the Advanced Materials business of General Electric Company. In 2006, investment funds affiliated with Apollo Global Management, LLC, acquired the company from GE. As of Dec. 31, 2013, the Company had 4,500 employees worldwide, of which 46% of the Company's employees are members of a labor union or are represented by workers' councils that have collective bargaining agreements. Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., and their affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 14-22503) on April 14, 2014, with a deal with noteholders on a balance-sheet restructuring. The Debtors have tapped Willkie Farr & Gallagher LLP as bankruptcy counsel with regard to the filing and prosecution of these chapter 11 cases; Sidley Austin LLP as special litigation counsel; Moelis & Company LLC as financial advisor and investment banker; AlixPartners, LLP as restructuring advisor; PricewaterhouseCoopers as auditor; and Crowe Horwath LLP as benefit plan auditor. Kurtzman Carson Consultants LLC is the notice and claims agent. MOMENTIVE PERFORMANCE: Meeting to Form Creditors' Panel April 22 ---------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on April 22, 2014, at 10:30 a.m. in the bankruptcy case of MPM Silicones, LLC, et al. The meeting will be held at: 80 Broad Street 4th Floor New York, NY 10014 212-510-0500 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Momentive Performance Momentive Performance is one of the world's largest producers of silicones and silicone derivatives, and is a global leader in the development and manufacture of products derived from quartz and specialty ceramics. Momentive has a 70-year history, with its origins as the Advanced Materials business of General Electric Company. In 2006, investment funds affiliated with Apollo Global Management, LLC, acquired the company from GE. As of Dec. 31, 2013, the Company had 4,500 employees worldwide, of which 46% of the Company's employees are members of a labor union or are represented by workers' councils that have collective bargaining agreements. Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., and their affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 14-22503) on April 14, 2014, with a deal with noteholders on a balance-sheet restructuring. The Debtors have tapped Willkie Farr & Gallagher LLP as bankruptcy counsel with regard to the filing and prosecution of these chapter 11 cases; Sidley Austin LLP as special litigation counsel; Moelis & Company LLC as financial advisor and investment banker; AlixPartners, LLP as restructuring advisor; PricewaterhouseCoopers as auditor; and Crowe Horwath LLP as benefit plan auditor. Kurtzman Carson Consultants LLC is the notice and claims agent. MONARCH COMMUNITY: Files Articles Supplement -------------------------------------------- The State Department of Assessments and Taxation of Maryland accepted the Articles Supplementary filed by Monarch Community Bancorp, Inc., Redesignating and Reclassifying the authorized shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A. The Articles Supplementary eliminate the class of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, and return these shares to the status of "Preferred Stock." A copy of the Articles Supplementary is available for free at; http://is.gd/VFG4bn About Monarch Community Coldwater, Michigan-based Monarch Community Bancorp, Inc., was incorporated in March 2002 under Maryland law to hold all of the common stock of Monarch Community Bank, formerly known as Branch County Federal Savings and Loan Association. The Bank converted to a stock savings institution effective Aug. 29, 2002. In connection with the conversion, the Company sold 2,314,375 shares of its common stock in a subscription offering. In their audit report on the consolidated financial statements for the year ended Dec. 31, 2012, Plante & Moran, PLLC, in Grand Rapids, Michigan, expressed substantial doubt about Monarch Community's ability to continue as a going concern, noting that the Corporation has suffered recurring losses from operations and as of Dec. 31, 2012, did not meet the minimum capital requirements as established by its regulators. The Corporation reported a net loss of $353,000 on $6.8 million of net interest income (before provision for loan losses) in 2011, compared with a net loss of $10.9 million on $7.5 million of net interest income (before provision for loan losses) in 2010. Total non-interest income was $4.0 million for 2011, compared with $3.7 million for 2010. The Company's balance sheet at Dec. 31, 2013, showed $171.05 million in total assets, $151.33 million in total liabilities, and $19.72 million in stockholders' equity. MT. GOX: Japanese Bank Denies Aiding Alleged Fraud -------------------------------------------------- Law360 reported that Japan-based Mizuho Bank Ltd. denied that it ignored an alleged fraud taking place under its nose at Mt. Gox, telling an Illinois federal judge that it should be dismissed from a class action against the bankrupt bitcoin exchange and its chief executive officer. According to the report, Mizuho was recently added as a defendant in the suit, which accuses Mt. Gox CEO Mark Karpeles of defrauding his customers. The bank, which held accounts for Mt. Gox and processed wire transfers from its customers, allegedly turned a blind eye to the fraudulent acts, the report said. The case is Greene v. MtGox Inc. et al., Case No. 1:14-cv-01437 (N.D. Ill.) before Judge Honorable Gary Feinerman. 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. NEPHROS INC: Joseph Jacobs, et al., Hold 67% Equity Stake --------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Joseph M. Jacobs and his affiliates disclosed that as of March 14, 2014, they beneficially owned 26,739,985 shares of common stock Nephros, Inc., representing 67.07 percent of the shares outstanding. The reporting persons previously owned 18,443,052 common shares at Nov. 12, 2013. A copy of the regulatory filing is available at http://is.gd/Zaa5sd About Nephros River Edge, N.J.-based Nephros, Inc., is a commercial stage medical device company that develops and sells high performance liquid purification filters. Its filters, which it calls ultrafilters, are primarily used in dialysis centers and healthcare facilities for the production of ultrapure water and bicarbonate. Nephros reported a net loss of $3.26 million in 2012, a net loss of $2.36 million in 2011, and a net loss of $1.9 million in 2010. The Company's balance sheet at Sept. 30, 2013, showed $2.55 million in total assets, $2.12 million in total liabilities and $430,000 in total stockholders' equity. Rothstein Kass, in Roseland, New Jersey, expressed substantial doubt about Nephros' ability to continue as a going concern, following its audit of the Company's financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred negative cash flow from operations and net losses since inception. NEW CENTURY TRS: Augustin Claim Disallowed and Expunged ------------------------------------------------------- In the Chapter 11 cases of New Century TRS Holdings, Inc., Bankruptcy Judge Kevin J. Carey sustained the Eighteenth Omnibus Objection as it relates to proof of claim no. 3759 filed by Pierre Augustin, and disallowed and expunged the Augustin claim in its entirety. A copy of the Court's April 10, 2014 memorandum is available at http://is.gd/AxKWhVfrom Leagle.com. 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. NTG CLARITY: Refiles 2012 MD&A & Q2 2013 Interim Report ------------------------------------------------------- NTG Clarity Networks Inc. on April 14 disclosed that following a review by staff of the Ontario Securities Commission in connection with the filing of the Company's annual consolidated financial statements, notes and related Management's Discussion and Analysis for the year ended December 31, 2012 and the interim consolidated financial statements, notes and related Management's Discussion and Analysis, the OSC has determined that Company is in default of its continuous disclosure requirements under the Securities Act (Ontario). These filings amend those made on April 2, 2014. 1. For NTG's 2012 Annual Filings, the following have been corrected: -Expand/enhance the Company's revenue recognition policy -Correct the label in Trade and Other Receivables, Note 12, now on page 62 to read "Trade receivables after impairment" instead of Related Party. -Update Financial Risk Management Objectives and Policies, Note 21, under Liquidity Risk, now on page 68 to remove reference to "operating losses in the current year" and ". . . to reach profitable levels of operation". -Update the MD&A to enhance analysis and comparisons and other requirements of 51-102F1. These changes have no effect on figures previously reported in the 2012 financial statements (the Audited Consolidated Statement of Financial Position, the Audited Consolidated Statements of Changes in Shareholders' Equity, the Audited Statement of Comprehensive Income, or the Audited Consolidated Statement of Cash Flows). 2. For NTG's Q2 2013 Interim Filings, the following have been corrected: -revenue recognition policy found in Note 3 on page 31 should be consistent with that of the revised 2012 Annual Filings (above) -Condensed Consolidated Interim Statement of Cash Flow on page 28, remove long term debt from Operation Activities and correct decrease in long term debt under Financing for three and six months. Correct the accounts payable and accrued liabilities number. Changes to MD&A section on Liquidity to reflect the adjusted numbers. -Under Operating Segments, Note 6 on page 50, for the Six Months ended June 30, 2013, replaced the table with the correct 6 month figures. Three months was mistakenly duplicated. -Under Related Party Disclosures, Note 19, Key Management Compensation, on page 66, corrected June 30, 2013 and June30, 2012 figures that were mistakenly reversed. -Update the MD&A to enhance analysis and comparisons and other requirements of 51-102F1. -On Statement of Financial Position on page 25, correct typo for June 30, 2013 Total non-current assets number to $3,081,461. -On Statement of Comprehensive Income on page 26, Other Expenses, add Write Down of investment of $2,489 for Six Month 2012 comparative. This was mistakenly left out. Adding of section components remains the same. These changes have no effect on figures previously reported in the Interim Q2 2013 (the Condensed Consolidated Interim Statement of Financial Position, the Condensed Consolidated Interim Statement of Comprehensive Income, or the Condensed Consolidated Interim Statement of Changes in Shareholders' Equity). For Cash Flow: -Increase in accounts payable and accrued liabilities changes to $878,544 from $635,715 (for 3 months) and $878,227 from $635,398 (for 6 months) Headquartered in Markham, Ontario, NTG Clarity Networks Inc. -- http://www.ntgclarity.com-- is a provider of telecommunications engineering, networking and related software solutions. NTG is engaged in developing niche software products directed at the telecom service providers market. NTG works in partnership with its clients to provide a source of design, documentation and implementation on an outsourcing or consulting basis. The Company provides network, telecom, information technology (IT) and infrastructure solutions to medium and large network service providers. The Company's operations are located in North America and internationally. The Company offers professional telecom services in North American market, professional services and software development services. Its products include mobile applications, BUSINTEL, NTS utility billing, knowledge management, SMART2GO and smart compounds. NUVEEN INVESTMENTS: Moody's Puts 'B3' CFR on Review for Upgrade --------------------------------------------------------------- Moody's has placed Nuveen Investments, Inc.'s B3 corporate family rating on review for upgrade. The agency has also placed on review for upgrade the company's B2 first lien senior secured term loan rating, Caa1 second lien senior secured term loan rating, and Caa2 senior unsecured debt rating. The rating actions follow the announcement by TIAA-CREF (Aaa, on review for downgrade) on April 14 that it will acquire Nuveen, which is currently owned by private equity sponsor, Madison Dearborn Partners. The transaction is expected to close by year- end. Moody's does not expect an impact as a result of the planned acquisition on the ratings of any of the closed-end funds managed by Nuveen. Ratings Rationale Following successful completion of the transaction, a reduction in Nuveen's outstanding debt is contemplated. In addition, Nuveen's corporate family and debt ratings should benefit from implied financial support from TIAA-CREF, given its very strong credit profile and strategic commitment to the asset management business. The magnitude of the impact on Nuveen's standalone corporate family and debt ratings will be highly dependent on the level of debt pay down following the transaction. If the debt pay down is significant, Moody's are likely to view the resulting improvement in Nuveen's financial flexibility as material enough to result in an investment grade rating for Nuveen's corporate family rating. The transaction should also provide benefit to Nuveen's market position and business diversification through greater access to TIAA-CREF's leading 403(b) retirement platform and strong institutional relationships. However such revenue synergies would likely accrue over a longer period of time. Nuveen's B3 Corporate Family Rating is primarily driven by the company's weak financial flexibility, characterized by high financial leverage, weak profitability and elevated refinancing risk. Nuveen's solid market position, strong distribution capabilities and adequate liquidity profile, which are generally consistent with higher rated asset managers, are also incorporated into the rating. The company's refinancing and deleveraging strategy is also reflected in the B3 rating. The list of Nuveen's ratings following the rating action is as follows: Corporate family rating: B3; Under review for upgrade First lien senior secured term loan: B2; Under review for upgrade Second lien senior secured term loan: Caa1; Under review for upgrade Senior unsecured: Caa2; Under review for upgrade The last rating action on Nuveen was on February 28, 2014, when all ratings were affirmed. The principal methodology used in this rating was Asset Managers: Traditional and Alternative, published in February 2014. Nuveen is headquartered in Chicago, and managed approximately $221 billion as of December 31, 2013. NUVEEN INVESTMENTS: S&P Puts 'B-' ICR on CreditWatch Positive ------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its 'B-' issuer credit rating on Nuveen Investments Inc. on CreditWatch with positive implications. S&P also placed its 'B' issue rating on Nuveen's senior secured first-lien term loan and revolver and its 'CCC' issue rating on its senior unsecured notes and senior secured second-lien term loan on CreditWatch positive. The CreditWatch action follows Teachers Insurance and Annuity Association - College Retirement Equities Fund's (TIAA-CREF) announcement that it is planning to acquire Nuveen from its current owner, private equity firm Madison Dearborn Partners. The acquisition price is $6.25 billion, inclusive of Nuveen's outstanding debt. TIAA-CREF has indicated that Nuveen will operate as a stand-alone unit within TIAA-CREF's Asset Management, retaining its current multiboutique business model. The companies expect to complete the transaction by year-end 2014, subject to customary closing conditions. "In our view, this transaction could improve Nuveen's business and financial profiles by creating new growth opportunities, reducing the company's outstanding debt, and supporting cash flow generation by lowering interest expenses," said Standard & Poor's credit analyst Olga Roman. "Additionally, our ratings on Nuveen likely will benefit from implicit support from TIAA-CREF, according to our group rating methodology." Nuveen is one of the leading U.S. asset managers, with $220.5 billion of assets under management as of Dec. 31, 2013. The company operates seven independently branded investment managers. Each affiliate has a relatively high degree of autonomy and primary investment product focus. In S&P's view, Nuveen's well-respected brand name in mutual funds, strong competitive position in closed-end funds, and good third-party distribution support its relatively strong business profile. S&P's current ratings on Nuveen reflect the company's very weak financial profile, including high leverage, weak profitability, and negative tangible equity. As of Dec. 31, 2013, Nuveen had approximately $4.5 billion of outstanding debt--the extremely high debt burden that the company incurred following its buyout in November 2007. EBITDA interest coverage and debt to EBITDA were 1.4x and 10.7x, respectively, as of Dec. 31, 2013. During the CreditWatch period, S&P will gather additional information on the transaction, including the financing structure and the companies' integration plan, as well as determine S&P's view of Nuveen's strategic importance to TIAA. S&P will resolve the CreditWatch status upon the completion of the merger, which is expected by year-end 2014. Alternatively, S&P may resolve the CreditWatch sooner in the event acquisition plans are called off. In this case, S&P would reevaluate Nuveen's creditworthiness as a stand-alone entity. PACIFIC STEEL: Creditors' Panel Hires Sheppard Mullin as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Pacific Steel Casting Company and Berkeley Properties, LLC seeks authorization from the U.S. Bankruptcy Court for the Northern District of California to employ Sheppard, Mullin, Richter & Hampton LLP as counsel to the Committee, effective Mar. 25, 2014. The Committee requires Sheppard Mullin to: (a) advise regarding bankruptcy law; (b) advise with respect to the Committee's powers and duties in the Debtors' bankruptcy cases; (c) attend Committee meetings; (d) review financial information furnished by the Debtors to the Committee and investigating various potential claims; (e) assist in the investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors; (f) provide aid and assistance in monitoring the progress of the Debtors' and administration of these chapter 11 cases; (g) provide representation in all negotiations and proceedings involving the Debtors, the Committee, and other parties- in-interest; (h) represent the Committee in any proceedings or hearings before this Court and in any action in any other court where the Debtors' rights under the Bankruptcy Code may be litigated or affected; (i) conduct examinations of witnesses, claimants, or adverse parties and preparing and assisting in the preparation of reports, accounts, and pleadings related to these bankruptcy cases; (j) advise the Committee concerning the requirements of the Bankruptcy Code and applicable rules as they may affect the Committee in these bankruptcy cases and any related adversary proceeding; (k) assist the Committee and working with the Debtors with regard to the restructuring or liquidation of the Debtors or auction or sale of the Debtors' assets; (l) advise the Committee and working with the Debtors with regard to the formulation, negotiation, confirmation, and implementation of any chapter 11 plan; (m) advise and assist the Committee with respect to any matters involving the U.S. Trustee and the Debtors; (n) making court appearances on behalf of the Committee; and (o) represent the Committee in all other legal aspects of these chapter 11 cases and taking any other action and performing any other services as the Committee may require of Sheppard Mullin in connection with these chapter 11 cases. Sheppard Mullin will be paid at these hourly rates: Ori Katz, Partner $695 Michael Lauter, Associate $570 For purposes of these cases only, Sheppard Mullin has agreed to discount its hourly rates as follows: Ori Katz discounted to $595, and Michael Lauter discounted to $425. Sheppard Mullin will also be reimbursed for reasonable out-of- pocket expenses incurred. Ori Kat, partner of Sheppard Mullin, 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. Sheppard Mullin can be reached at: Ori Katz, Esq. SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Four Embarcadero Center, 17th Floor San Francisco, CA 94111-4109 Tel: (415) 434-9100 Fax: (415) 434-3947 E-mail: okatz@sheppardmullin.com About Pacific Steel Casting Company Pacific Steel Casting Company and Berkeley Properties, LLC, separately filed Chapter 11 bankruptcy petitions (Bankr. N.D. Cal. Case Nos. 14-41045 and 14-41048) on March 10, 2014. Pacific Steel's petition was signed by Charles H. Bridges, Jr., chief financial officer and director. The Law Offices of Binder and Malter, LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims, noticing and balloting agent. The Debtors estimated assets and liabilities of at least $10 million. Pacific Steel makes carbon, low-alloy and stainless steel castings for U.S. and international customers, largely for heavy-duty trucks and construction equipment. Tracy Hope Davis, the United States Trustee for Region 17, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. PACIFIC STEEL: Creditors' Panel Hires Arch & Beam as Advisors ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Pacific Steel Casting Company and Berkeley Properties, LLC seeks authorization from the U.S. Bankruptcy Court for the Northern District of California to employ Arch & Beam Global, LLC as financial advisors to the Committee, effective Mar. 31, 2014. The Committee requires Arch & Beam to: (a) analyze the Debtors' financial statements and condition; (b) analyze and challenge the budgets and projects developed by the Debtors' management in these cases; (c) analyze the proposed DIP loan and any other sources of financing for the Debtors in these cases; (d) advise the Committee on the foregoing issues, and Develop appropriate strategies in conjunction with the Committee and its legal counsel; and (e) analyze and advise the Committee regarding bidding procedures, proposed buyers, proposed terms of a sale, and other issues in respect to the process of selling the Debtors' assets. Arch & Beam will be paid at these hourly rates: Howard Bailey, Managing Director $395 Matthew English, Managing Director $395 Arch & Beam will also be reimbursed for reasonable out-of-pocket expenses incurred. Howard Bailey, managing director of Arch & Beam, 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. Arch & Beam can be reached at: Howard Bailey ARCH & BEAM GLOBAL, LLC 2500 Camino Diablo, Suite 108 Walnut Creek, CA 94597 Tel: (415) 252-2900 Fax: (415) 358-4486 About Pacific Steel Casting Company Pacific Steel Casting Company and Berkeley Properties, LLC, separately filed Chapter 11 bankruptcy petitions (Bankr. N.D. Cal. Case Nos. 14-41045 and 14-41048) on March 10, 2014. Pacific Steel's petition was signed by Charles H. Bridges, Jr., chief financial officer and director. The Law Offices of Binder and Malter, LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims, noticing and balloting agent. The Debtors estimated assets and liabilities of at least $10 million. Pacific Steel makes carbon, low-alloy and stainless steel castings for U.S. and international customers, largely for heavy-duty trucks and construction equipment. Tracy Hope Davis, the United States Trustee for Region 17, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. PALM DRIVE HEALTH: California Hospital Files for Chapter 9 ---------------------------------------------------------- Palm Drive Health Care District, owner and operator of the Palm Drive Hospital, in Sebastopol, California, filed a petition under Chapter 9 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 14-10510) last week amid a "sustained reduction in patient volme and revenue." In its Chapter 9 petition filed April 7, 2014 in Santa Rosa, California, the Debtor estimated $10 million to $50 million in assets and liabilities. According to the Web site http://www.palmdrivehospital.com/, Palm Drive, founded in 1941 as a 15-bed acute-care hospital, is an independent, non-profit facility that is licensed for 37 beds, five of which are intensive care beds and the remainder medical- surgical beds. The hospital provides a full range of primary acute care services including respiratory care, emergency care, intensive care and outpatient ambulatory care services. According to the docket, incomplete filings are due by April 21, 2014. The Debtor has tapped Fox Rothschild in San Francisco, California, as attorneys. Palm Drive explained in court filings that despite efforts over the past several years of PDH management and board to take significant steps to reduce expenses, uncontrollable inflationary increases combined with volume and reimbursement declines has created an operating gap and cash flow deficit. In 2010, the District borrowed $11 million to be used to cover debts dealt with by the plan of adjustment of debts approved in its Chapter 11 bankruptcy case filed in 2007 and operational deficits from 2010 forward. However, the funds from that source have since been depleted. Faced with a position of insolvency and projected continued declines in volume and revenue, management recommended the termination of inpatient acute care services and the closure of the hospital's emergency department. The District has now determined that at the current rate of operating losses, it will be unable to meet cash obligations not later than May 30, 2014. The board of directors of PDH determined that the financial state of the District jeopardizes the health, safety, or well-being of the residents in the service area absent the protections of Chapter 9 of the Bankruptcy Code. PARSLEY ENERGY: $150MM Add-on Notes No Impact Moody's Caa1 CFR -------------------------------------------------------------- Moody's Investors Service ratings for Parsley Energy, LLC are unaffected by the proposed $150 million add-on of senior unsecured notes, co-issued by Parsley Finance Corp. The Caa1 Corporate Family Rating (CFR), Caa2 senior note rating, and positive outlook remain unchanged. The notes are an add-on to the company's existing 7.5% senior notes due 2022 -- the two issuances will be treated as a single class of securities under the indenture. The add-on proceeds will be initially used to reduce revolving credit borrowings, but ultimately used for general corporate purposes including drilling and the acquisition of properties in the Permian Basin. "The add-on offering will ultimately be used to finance a portion of an acquisition in the Midland Basin in the company's core operating area," said Stuart Miller, Vice President and Senior Credit Officer. "The acquisition along with the projected $400 million out-spend of cash flow through the end of 2015 will leave the company highly reliant on future borrowing base increases from its senior secured lenders to maintain adequate liquidity, unless it is successful in its initial public offering of common stock later this year." Ratings Rationale Parsley's Caa1 CFR reflects the company's modest and concentrated scale, early-stage upstream operations, and high leverage. Since our initial rating in January 2014, the company has grown reserves and production significantly and is on track to be considered for an upgrade later this year, hence the positive outlook. Parsley has about 100,000 highly prospective acres in the Permian Basin and is in the early stages of proving that it has the operational expertise to develop its acreage at a reasonable cost. Production in March 2014 exceeded 11,000 Boe/d and the after tax present value of its total proved reserves more than doubled over the course of 2013 -- at year end 2013, the reported present value was $721 million. However, leverage remains elevated at nearly $50,000 per average daily Boe of production. The Caa2 rating on the company's senior notes reflects both the Caa1-PD Probability of Default and an estimated loss given default of LGD 5 (71%). The senior notes are subordinated to the company's $750 million senior secured revolving credit facility. In connection with the April 2014 borrowing base redetermination, the lenders agreed to a borrowing base of $365 million, subject to a reduction to $327.5 million after the issuance of the proposed $150 million add-on. The revolver's first-lien claim extends to cover all of Parsley's assets. The magnitude of this priority claim pushes the unsecured note rating to Caa2, one notch below Parsley's Caa1 CFR using Moody's Loss Given Default Methodology. An upgrade will be considered when production reaches 10,000 Boe/d and debt to average daily production falls below $45,000 per Boe. To the contrary, if debt to average daily production rises above $60,000 per Boe on a sustained basis, or if liquidity deteriorates, the ratings could be downgraded. PARSLEY ENERGY: $150MM Add-on Notes No Impact Moody's Caa1 CFR -------------------------------------------------------------- Moody's Investors Service ratings for Parsley Energy, LLC are unaffected by the proposed $150 million add-on of senior unsecured notes, co-issued by Parsley Finance Corp. The Caa1 Corporate Family Rating (CFR), Caa2 senior note rating, and positive outlook remain unchanged. The notes are an add-on to the company's existing 7.5% senior notes due 2022 -- the two issuances will be treated as a single class of securities under the indenture. The add-on proceeds will be initially used to reduce revolving credit borrowings, but ultimately used for general corporate purposes including drilling and the acquisition of properties in the Permian Basin. "The add-on offering will ultimately be used to finance a portion of an acquisition in the Midland Basin in the company's core operating area," said Stuart Miller, Vice President and Senior Credit Officer. "The acquisition along with the projected $400 million out-spend of cash flow through the end of 2015 will leave the company highly reliant on future borrowing base increases from its senior secured lenders to maintain adequate liquidity, unless it is successful in its initial public offering of common stock later this year." Ratings Rationale Parsley's Caa1 CFR reflects the company's modest and concentrated scale, early-stage upstream operations, and high leverage. Since our initial rating in January 2014, the company has grown reserves and production significantly and is on track to be considered for an upgrade later this year, hence the positive outlook. Parsley has about 100,000 highly prospective acres in the Permian Basin and is in the early stages of proving that it has the operational expertise to develop its acreage at a reasonable cost. Production in March 2014 exceeded 11,000 Boe/d and the after tax present value of its total proved reserves more than doubled over the course of 2013 -- at year end 2013, the reported present value was $721 million. However, leverage remains elevated at nearly $50,000 per average daily Boe of production. The Caa2 rating on the company's senior notes reflects both the Caa1-PD Probability of Default and an estimated loss given default of LGD 5 (71%). The senior notes are subordinated to the company's $750 million senior secured revolving credit facility. In connection with the April 2014 borrowing base redetermination, the lenders agreed to a borrowing base of $365 million, subject to a reduction to $327.5 million after the issuance of the proposed $150 million add-on. The revolver's first-lien claim extends to cover all of Parsley's assets. The magnitude of this priority claim pushes the unsecured note rating to Caa2, one notch below Parsley's Caa1 CFR using Moody's Loss Given Default Methodology. An upgrade will be considered when production reaches 10,000 Boe/d and debt to average daily production falls below $45,000 per Boe. To the contrary, if debt to average daily production rises above $60,000 per Boe on a sustained basis, or if liquidity deteriorates, the ratings could be downgraded. PARSLEY ENERGY: S&P Lowers Sr. Unsecured Notes Rating to 'CCC' -------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its issue rating on Midland-based exploration and production (E&P) company Parsley Energy LLC's senior unsecured notes to 'CCC' from 'CCC+' and revised its recovery rating on the notes to '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default, from '5'. The rating action follows the announcement that Parsley will increase the outstanding amount of its 7.5% senior unsecured notes to $550 million, reflecting a $150 million add-on issuance. S&P expects proceeds from the add-on offering to be used for debt repayment and general purposes, including acquisition funding. "The positive outlook reflects the potential for an upgrade within the next 12 months if Parsley can successfully execute its drilling program and increase production in line with our forecast, while maintaining debt leverage below 5x and adequate liquidity," said Standard & Poor's credit analyst Paul Harvey. S&P could stabilize the rating if Parsley's drilling program failed to meet its current expectation or if S&P expected debt leverage to exceed 5x for an extended period. S&P could also stabilize the rating if liquidity were to fall to "less than adequate." POLY PLANT PROJECT: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Poly Plant Project fka PPP Equipment Corporation 3099 North Lima Street Burbank, CA 91504-2013 Case No.: 14-17109 Type of Business: Provides the photovoltaic and semiconductor industries with advanced, world-class polysilicon production solutions. Chapter 11 Petition Date: April 14, 2014 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Hon. Thomas B. Donovan Debtor's Counsel: Mark T Young, Esq. DONAHOE & YOUNG LLP 25152 Springfield Ct Ste 345 Valencia, CA 91355-1096 Tel: 661-259-9000 Fax: 661-554-7088 Email: myoung@donahoeyoung.com Total Assets: $16.75 million Total Debts: $22.29 million The petition was signed by Tetsunori T. Kunimune, chief executive officer. List of Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Express Charges $3,576 American Express Charges $992 American Express Charges $735 Aspen Technology Inc. License Agreement $853,464 200 Wheeler Road Burlington, MA 01803 Bryan Cave LLP Legal Services $450,000 120 Broadway Suite 300 Santa Monica, CA 90401 Fabrizio Goi Commissions $20,000 Poly Service SRL Franchise Tax Board Income Taxes $4,000,000 Bankruptcy Section MS A-340 PO Box 2952 Sacramento, CA 95812-2952 Friem SpA Equipment and $548,000 Via Thomas Alva Edison 1 Startup Agreement 20090 Segrate Milan ITALY Grant Genovese & Baratta LLP Legal Services $51,624 Hinckley Allen Legal Services $29,409 Internal Revenue Service Unpaid Income $15,320,610 PO Box 7346 Taxes Philadelphia, PA 19101-7346 Jan Maurits Wages $30,000 Montana Department of Revenue License Tax $128,183 Resolve Mediation Services Inc. Mediation Fees $3,533 Stoel Rives LLP Legal Services $7,500 Tetsunori T Kunimune Loans $360,000 3099 N Lima Street Burbank, CA 91502 Walter Tosto SpA Services rendered $484,813 Via Ermaso Piaggo, 72 66100 Chieti Scalo ITALY REEVES DEV'T: Court Okays Interim Cash Collateral Use ----------------------------------------------------- The Hon. Robert R. Summerhays of the U.S. Bankruptcy Court for the Western District of Louisiana has granted Reeves Development Company, LLC, interim authorization to use cash collateral. The final hearing on the cash collateral use is set for May 15, 2014, at 10:30 a.m. As reported by the Troubled Company Reporter on March 26, 2014, IberiaBank asserts a lien on the Debtor's cash, accounts receivable, and substantially all other assets. After filing for Chapter 11, Reeves has developed real estate that serves as collateral of IberiaBank and has generated postpetition accounts receivable which it needs to use to further develop an industrial property in Calcasieu Parish, Louisiana. Reeves sought court authorization to determine that the cash and accounts receivable generated postpetition are not the cash collateral of IberiaBank. In the alternative, Reeves wants to use cash that is a portion of the funds represented by cash generated by postpetition efforts. About Reeves Development Reeves Development Company, LLC, a commercial and residential real estate developer, filed a Chapter 11 petition (Bankr. W.D. La. Case No. 12-21008) in Lake Charles, Louisiana, on Oct. 30, 2012. The closely held developer was founded in 1998 by Charles Reeves Jr., its sole owner. Reeves Development has about 80 employees and generates about $40 million in annual revenue, according to its Web site. Bankruptcy Judge Robert Summerhays oversees the case. Arthur A. Vingiello, Esq., at Steffes, Vingiello & McKenzie, LLC, in Baton Rogue, Louisiana, represents the Debtor as counsel. Reeves Development scheduled assets of $15,454,626 and liabilities of $20,156,597 as of the Petition Date. Affiliate Reeves Commercial Properties, LLC (Bankr. W.D. La. Case No. 12-21009) also sought court protection. The Bankruptcy Court approved on Feb. 21 the adequacy of information in the Amended Disclosure Statement explaining the Debtor's Plan of Reorganization dated Dec. 31, 2013. The Court has not set a confirmation hearing. Instead, the Court set a status conference for March 20, 2014. A full-text copy of the Dec. 31 version of the Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/REEVESDEV_AmdDSDec31.PDF RICE ENERGY: Moody's Assigns 'B2' CFR & Rates $750MM Notes 'B3' --------------------------------------------------------------- Moody's Investors Service assigned first time ratings to Rice Energy Inc., including a B2 Corporate Family Rating and a B3 rating to its proposed offering of $750 million of senior unsecured notes due 2022. Moody's also assigned a SGL-3 Speculative Grade Liquidity rating to Rice. The proceeds from the proposed notes offering will be used to repay and retire a second lien term loan and for capital expenditures. The rating outlook is stable. Rating Assignments: $750 Million Senior Unsecured Notes due in 2022, Rated B3 (LGD 4, 68%) Corporate Family Rating of B2 Probability of Default Rating of B2-PD Speculative Grade Liquidity rating of SGL-3 "Rice benefits from a low cost, early entry position in the Marcellus Shale, where it has demonstrated improving operating performance and a high focus on capital efficiency. However, the company's operating history remains short and it faces considerable funding needs and execution risk as it continues to develop its acreage," commented Gretchen French, Moody's Vice President. Rating Rationale Rice's B2 Corporate Family Rating (CFR) reflects the company's small scale and concentrated production in the Marcellus Shale. The company has established a favorable acreage position in the Marcellus, which provides visible production and cash flow growth potential. However, it will require significant outspending of cash flow to develop and hold Rice's acreage positions in both in the Marcellus and the still emerging Utica Shale, entailing execution risk and reliance on external funding sources to finance. While Rice has improved its drilling performance and benefits from a low cost structure, with a high level of operational control of its Marcellus properties and valuable midstream infrastructure, the company is still in the early stages. The B3 rating on the $750 senior notes reflects both Rice's overall probability of default, to which Moody's assigns a PDR of B2-PD, and a loss given default of LGD 4 (68%). The senior notes benefit from upstream guarantees from all material subsidiaries, but are unsecured and contractually subordinated to the senior secured credit facility's potential priority claim to the company's assets. The borrowing base under the revolver is currently $350 million. The size of the potential senior secured claims relative to the unsecured notes outstanding results in the senior notes being notched one rating below the B2 CFR under Moody's Loss Given Default Methodology. Rice's SGL-3 Speculative Grade Liquidity rating reflects adequate liquidity over the next 12-15 months. While pro-forma for the bond issuance Rice will have full availability under its $350 million borrowing base credit facility and $782 million in cash on the balance sheet, the company faces a considerable funding gap over the next 12-15 months, with an estimated funding gap of around $1.4 billion in 2014 and nearly $500 million in 2015, resulting in a high reliance on its revolver once cash on the balance sheet has been depleted. Rice's credit facility has $1.5 billion of commitments, and Moody's expect the borrowing base to grow as Rice ramps up its drilling program. Rice will outspend internally generated cash flow through at least 2015 and remain reliant on its revolver to fund project based capital expenditures, as well as provide for modest letters of credit needs for its firm transportation contracts. The revolving credit facility matures in January 2019. It requires that Rice maintain a minimum current ratio of 1.0x and a minimum interest coverage ratio of 2.5x. Moody's expects Rice to remain well in compliance with these covenant ratios. The stable outlook assumes Rice maintains sufficient liquidity and reasonable operating performance over the next 12 to 18 months. An upgrade could be considered if Rice successfully grows production at sound returns while also maintaining sufficient liquidity and debt/production less than $25,000 barrels of oil equivalent (boe)/day. An upgrade would also consider the degree of progress on Rice's Utica drilling program and midstream infrastructure build out. A downgrade is possible if debt to average daily production is sustained above $30,000 boe/day, retained cash flow/debt falls below 15%, or liquidity tightens. Rice Energy Inc. is an exploration and production company with operations in the Appalachian Basin. Rice is headquartered in Canonsburg, Pennsylvania. S.E. SHIRES: Brass Instruments Files for Sale to Eastman -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that S.E. Shires Inc., a maker of high-end custom-made brass musical instruments, filed a Chapter 11 petition last week in Worcester, Massachusetts, setting up a sale of the business for $2 million to Eastman Brass Instruments Inc. According to the report, the company?s bank account was seized by state authorities over $145,000 in unpaid taxes. The U.S. Internal Revenue Service is owed $685,000, according to a court filing. The petition listed assets of $1.8 million and debt totaling $3.1 million, including $833,000 in secured claims, the report related. Debt includes $150,000 to trade suppliers and $360,000 in unpaid wages. Eastman is providing $230,000 in financing for the Chapter 11 effort, the report added. The case is In re S.E. Shires Inc., 14-bk-40715, U.S. Bankruptcy Court, District of Massachusetts (Worcester). SAAB AUTOMOBILE: Trustee Claims Execs' Missteps Led to Bankruptcy ----------------------------------------------------------------- Law360 reported that the trustee for the U.S. arm of Saab Automobile AB's bankruptcy case filed an adversary suit in Delaware federal court against three of the company's former executives, saying they made several ill-advised decisions, including taking on a letter of credit, that pushed the company into insolvency. According to the report, Edward T. Gavin alleges that ex-President and CEO Tim Colbeck, ex-General Counsel Alan Lowenthal and ex- Chief Financial Officer Marcellos Matos made various missteps while at the helm of Saab Cars North America Inc. About Saab Automobile Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. Saab halted production in March 2011 when it ran out of cash to pay its component providers. On Dec. 19, 2011, Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy after running out of cash. Some of Saab's assets were sold to National Electric Vehicle Sweden AB, a Chinese-Japanese backed start-up that plans to make an electric car using Saab Automobile's former factory, tools and designs. On Jan. 30, 2012, more than 40 U.S.-based Saab dealerships filed an involuntary Chapter 11 petition for Saab Cars North America, Inc. (Bankr. D. Del. Case No. 12-10344). The petitioners, represented by Wilk Auslander LLP, assert claims totaling US$1.2 million on account of "unpaid warranty and incentive reimbursement and related obligations" or "parts and warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia Gentile & Associates, in New York, signed the Chapter 11 petition on behalf of the dealers. The dealers want the vehicle inventory and the parts business to be sold, free of liens from Ally Financial Inc. and Caterpillar Inc., and "to have an appropriate forum to address the claims of the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg News. Saab Cars N.A. is the U.S. sales and distribution unit of Swedish car maker Saab Automobile AB. Saab Cars N.A. named in December an outside administrator, McTevia & Associates, to run the company as part of a plan to avoid immediate liquidation following its parent company's bankruptcy filing. On Feb. 24, 2012, the Court granted Saab Cars NA relief under Chapter 11 of the Bankruptcy Code. Donlin, Recano & Company, Inc., was retained as claims and noticing agent to Saab Cars NA in the Chapter 11 case. On March 9, 2012, the U.S. Trustee formed an official Committee of Unsecured Creditors and appointed these members: Peter Mueller Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander LLP as general bankruptcy counsel, and Polsinelli Shughart as its Delaware counsel. The Troubled Company Reporter, on July 18, 2013, reported that the U.S. arm of Saab Automobile AB won approval of its Chapter 11 liquidation plan, marking the end of the road for Swedish auto maker's bankruptcy proceedings. SCRUB ISLAND: Creditors' Committee Seeks Mediation of Disputes -------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of Scrub Island Development Group Limited and Scrub Island Construction Limited asks the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, to require a mediation of the various disputes and the terms of a proposed consensual plan of reorganization. The Committee tells the Court that it has recently learned that FirstBank opposes the Debtors' proposed plan and that the Debtors and FirstBank are in the process of restarting their litigation efforts against each other. The Committee says the Debtors will also likely file an adversary proceeding asserting their lender liability claims against FirstBank unless the current litigation posture changes. Given the significant delay associated with litigation among the parties and the significant expense to the Debtors' estates associated with continued and additional litigation, the Committee asserts that mediation at this time would be beneficial to the parties and would be in the best interest of the Debtors' estates. The Committee is represented by Edwin G. Rice, Esq., and Robert B. Glenn, Esq., at Glenn Rasmussen, P.A., in Tampa, Florida. About Scrub Island Scrub Island Development Group Ltd., the owner of a British Virgin Islands luxury resort, and its affiliate, Scrub Island Construction Limited, sought bankruptcy protection (Bankr. M.D. Fla. Case Nos. 13-15285 and 13-15286) on Nov. 19, 2013, to end a receivership Scrub Island claims was secretly put in place by its lender. The bankruptcy case is assigned to Judge Michael G. Williamson. The 230-acre resort operates as a Marriott Autograph Collection property. It has 52 rooms and suites, a spa and a 55-slip marina. Scrub Island Development Group scheduled $125,569,235 in total assets and $130,695,731 in total liabilities. The Debtors are represented by Charles A. Postler, Esq., and Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida. FirstBank Puerto Rico, the prepetition secured lender, is represented by W. Keith Fendrick, Esq., at Holland & Knight LLP, in Tampa, Florida. The Debtors are represented by Charles A. Postler, Esq., and Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida. FirstBank Puerto Rico, the Debtor's prepetition secured lender, is represented by W. Keith Fendrick, Esq., at Holland & Knight LLP, in Tampa, Florida. The Official Committee of Unsecured Creditors appointed in Scrub Island's cases has retained Robert B. Glenn, Esq., Edwin G. Rice, Esq., and Victoria D. Critchlow, Esq., at Glenn Rasmussen, P.A., as general counsel. SCRUB ISLAND: U.S. Trustee, Creditors Object to Plan Outline ------------------------------------------------------------ Scrub Island Utility (BVI) Ltd.; Guy G. Gebhardt, the acting U.S. Trustee for Region 21; and Marriott International, Inc., object to the approval of Scrub Island Development Group Limited and Scrub Island Construction Limited's Joint Plan of Reorganization and Disclosure Statement. SIU, which provides the Debtor its sole source of non-bottled fresh water and wastewater treatment services, objects to the Plan and Disclosure Statement, specifically with respect to the classification and treatment of its $1,553,068 unsecured claim. Marriott, which also filed claims against the Debtors, asserts that the Debtors should be prepared to pay those claims upon confirmation of the Plan. The U.S. Trustee complains that the Plan contains broad non-debtor third-party release and exculpation provisions, which also release and exculpate professionals. The Disclosure Statement fails to explain whether the narrow criteria for allowing the non-debtor releases and exculpation are satisfied, the U.S. Trustee adds. SIU is represented by Adam Lawton Alpert, Esq. -- aalpert@bushross.com -- at BUSH ROSS, P.A., in Tampa, Florida. The U.S. Trustee is represented by Denise E. Barnett, Esq. -- denise.barnett@usdoj.gov -- Trial Attorney, in Tampa, Florida. Marriott is represented by Lori V. Vaughan, Esq. -- lvaughan@trenam.com -- at Trenam, Kemker, Scharf, Barkin, Frye, O'Neill and Mullis, P.A., in Tampa, Florida; and Carren B. Shulman, Esq. -- cshulman@sheppardmullin.com -- at Sheppard, Mullin, Richter & Hampton LLP, in New York. About Scrub Island Scrub Island Development Group Ltd., the owner of a British Virgin Islands luxury resort, and its affiliate, Scrub Island Construction Limited, sought bankruptcy protection (Bankr. M.D. Fla. Case Nos. 13-15285 and 13-15286) on Nov. 19, 2013, to end a receivership Scrub Island claims was secretly put in place by its lender. The bankruptcy case is assigned to Judge Michael G. Williamson. The 230-acre resort operates as a Marriott Autograph Collection property. It has 52 rooms and suites, a spa and a 55-slip marina. Scrub Island Development Group scheduled $125,569,235 in total assets and $130,695,731 in total liabilities. The Debtors are represented by Charles A. Postler, Esq., and Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida. FirstBank Puerto Rico, the prepetition secured lender, is represented by W. Keith Fendrick, Esq., at Holland & Knight LLP, in Tampa, Florida. The Debtors are represented by Charles A. Postler, Esq., and Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida. FirstBank Puerto Rico, the Debtor's prepetition secured lender, is represented by W. Keith Fendrick, Esq., at Holland & Knight LLP, in Tampa, Florida. The Official Committee of Unsecured Creditors appointed in Scrub Island's cases has retained Robert B. Glenn, Esq., Edwin G. Rice, Esq., and Victoria D. Critchlow, Esq., at Glenn Rasmussen, P.A., as general counsel. SENTINEL MANAGEMENT: First Horizon Wins Round in Securities Row --------------------------------------------------------------- Law360 reported that a Tennessee federal judge rejected an attempt by a group of insurers to dodge First Horizon National Corp.'s suit seeking up to $25 million in coverage for litigation alleging it improperly sold collateralized debt obligations to now-bankrupt Sentinel Management Group Inc. According to the report, U.S. District Judge Samuel H. Mays Jr. agreed with First Horizon's argument that Underwriters with Lloyd's of London, Aspen Insurance UK Ltd., U.S. Specialty Insurance Co. and Federal Insurance Co. had unreasonably interpreted insolvency exclusions they said applied to First Horizon's claims. The case is First Horizon National Corporation et al v. Certain Underwriters at Lloyd's Syndicate Nos. 2987 et al., Case No. 2:11- cv-02608 (W.D.Tenn.). About Sentinel Management Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- was a full service firm offering a variety of security solutions. The Company filed a voluntary Chapter 11 petition (Bankr. N.D. Ill. Case No. 07-14987) on Aug. 17, 2007. Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd., represented the Debtor. Lawyers at Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represented the Official Committee of Unsecured Creditors. When the Debtor sought bankruptcy protection, it estimated assets and debts of more than $100 million. On Aug. 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper US LLP, and Vincent E. Lazar, Esq., at Jenner & Block LLP, represent the Chapter 11 Trustee. The Court confirmed the Fourth Amended Chapter 11 Plan of Liquidation for Sentinel on Dec. 15, 2008, which created a Liquidation Trust. The Plan became effective Dec. 17, 2008, and Mr. Grede was appointed Liquidation Trustee. SHELBOURNE NORTH WATER: "Huge interest" in Spire Deal in Chicago ---------------------------------------------------------------- Mary Ellen Podmolik, writing for The Chicago Tribune, reported that six years after work to construct the tallest building in the western hemisphere came to a standstill, Chicago Spire developer Garrett Kelleher is back, this time with a partner, talking with potential buyers and making plans to find funding to restart the project. According to the report, standing in a hallway just after a bankruptcy court hearing, during which a federal judge said she would approve efforts to pay off creditors, Kelleher said it'd been quite a task to find a resolution to the bankruptcy case of his company. Now, he was ready to move forward with the project, possibly even this year. "I'm very pleased with the settlement. It's good for all," the report cited Kelleher as saying in an interview. "We prefer to pay fees to architects and consultants, not lawyers." U.S. Bankruptcy Judge Janet Baer has said she would approve a bankruptcy settlement agreement that gives Kelleher and a new majority partner time to pay claims tied to the case and then proceed with the long-stalled project that would bring 1,194 condos and 1,420 parking spaces to 400 N. Lake Shore Drive, the report related. Under the plan negotiated between Kelleher's Shelbourne North Water Street LP, Atlas Apartment Holdings LLC and Related Midwest, Atlas and Kelleher have at least six months, and possibly a year, to resolve bankruptcy claims, the report further related. Atlas, an apartment developer and manager, is required to provide up to $135 million either from its own funds or with lenders and investors, to pay those claims. That planned investment agreement, which Shelbourne considers its 'pathway to a confirmed plan of reorganization,' would also be approved, Baer told attorneys. About Shelbourne North Water Street L.P. A group of creditors filed an involuntary Chapter 11 petition against Chicago, Illinois-based Shelbourne North Water Street L.P. on Oct. 10, 2013 (Bankr. D. Del. Case No. 13-12652). The case is assigned to Judge Kevin J. Carey. The petitioners are represented by Zachary I Shapiro, Esq., and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. The Debtor consented on Nov. 8, 2013, to being in Chapter 11 reorganization. FrankGecker LLP represents the Debtor in its restructuring efforts. SHOTWELL LANDFILL: Court Rejects LSCG's Deposition Bid ------------------------------------------------------ Bankruptcy Judge Stephani W. Humrickhouse has denied LSCG Fund 18, LLC's motion for a protective order requiring Shotwell Landfill, Inc. to conduct the deposition of the company at its principal place of business in Los Angeles, California. The Court, however, permitted LSCG to produce a witness capable of testifying about who LSCG communicated with about David King, Shotwell Landfill, Inc., Capitol Recycling, LLC, Debris Removal Partners, LLC, Shotwell Transfer Station II, Inc., Capitol Waste Transfer, LLC, Dynasty Holdings, LLC, King's Grading, LLC and Allied Installation, LLC and what was communicated, both before and after the loans were purchased by LSCG. LSCG is (i) the successor to the claim of Branch Banking and Trust Company as that claim relates to Shotwell Landfill; and (ii) the holder of original filed claims against all the other debtors. LSCG said it holds a valid and perfected first lien on the real property that is Shotwell Landfill, located in Wendell, Wake County, North Carolina; as well as a valid and perfected lien against certain personal property of Shotwell Landfill and the other Debtors. On Jan. 15, Shotwell served LSCG's counsel with a notice, informing them that it would take the deposition of LSCG on March 10 in Raleigh, North Carolina. According to LSCG, it never agreed to give its deposition anywhere other than California, and that it wasn't informed prior to service of the notice that Shotwell wanted to conduct the deposition outside California. LSCG also asked for a protective order modifying or striking the proposed deposition Topics 2 through 13 in the Jan. 15 notice, saying they seek irrelevant information. About Shotwell Landfill et al. Raleigh, North Carolina-based Shotwell Landfill, Inc., filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-02590) in Wilson on April 19, 2013. In its amended schedules, Shotwell disclosed $23,043,736 in assets and $10,048,364 in liabilities as of the Chapter 11 filing. Blake P. Barnard, Esq., William P. Janvier, Esq., and Samantha Y. Moore, Esq., at the Janvier Law Firm, PLLC, in Raleigh, N.C., represent Shotwell as counsel. William W. Pollock, Esq., at Ragsdale Liggett PLLC, in Raleigh, N.C., represents the Debtor as special counsel. Capitol Recycling, LLC, Capitol Waste Transfer LLC, Debris Removal Partners LLC, Shotwell Transfer Station II, Inc and Kings Grading Inc filed for Chapter 11 on Dec. 6, 2013. The cases were administratively consolidated by Court order dated Jan. 22, 2014. Shotwell Landfill is the lead case. Shotwell operates a landfill located in Wendell, North Carolina near Shotwell off Smithfield Road. The other debtors provide hauling and transfer station services to Shotwell. They accept solid waste and provide transportation of the waste to Shotwell's landfill or they provide services at the landfill itself. The Servicing Debtors are separate corporate entities and although they may have some creditors in common, they have different assets and liabilities. Although the management of Shotwell has often operated these companies without regard to their separate corporate forms, the Debtors have not sought approval of a substantive consolidation in these cases. Accordingly, the Debtors have filed separate monthly reports and separate schedules and statements of financial affairs. Shotwell sought bankruptcy protection when its major secured creditor at the time, BB&T, refused to renew its note. BB&T subsequently assigned its note to LSCG Fund 18 LLC. The Servicing Debtors, who are either obligors or guarantors in one fashion or another of all or part of LSCG's debt, filed their cases when LSCG began collection activities against them. LSCG has also filed a motion to appoint a trustee. On Aug. 16, 2013, Shotwell filed an initial Chapter 11 Plan and Disclosure Statement. On Aug. 19, 2013, an Order Conditionally Approving the Disclosure Statement was entered by the Court. On Jan. 22, 2014, the cases were administratively consolidated. The initial Plan was withdrawn and supplanted by the filing of the Consolidated Chapter 11 Plan by all the Debtors on Feb. 3. On March 13, 2014, the Court entered an Order Approving Motion to Appoint Creditors' Committee. The Committee is represented by Gerald A. Jeutter, Jr., Esq. SHOTWELL LANDFILL: Double "J" Wants Claim Estimated at $500,000 --------------------------------------------------------------- Creditor Double "J" Enterprises, Inc., filed an amended motion, asking the Bankruptcy Court to (i) estimate at $500,000 its claim against the estates of Shotwell Landfill, Inc., Capital Recycling, LLC, and Shotwell Transfer Station II, Inc.; and (ii) temporarily allow the claim for purposes of voting on Shotwell's Plan of Reorganization. As reported in the Troubled Company Reporter on Jan. 10, 2014, Double J said that prepetition, the Debtor and Double J were involved in a lawsuit that began in The General Court of Justice, District Court Division, Wake County, North Carolina and was later transferred to the Superior Court Division. The main issue in the Lawsuit involved certain equipment owned by Double J and the Debtor's wrongful possession of the same. On Aug. 16, 2013, Double J filed its proof of claim in the estimated, unliquidated amount of $50,000. On Nov. 26, Double J amended its claim to an estimated, unliquidated amount of $150,000. The Debtor filed objections to that claim. If the Court denies Double J's motion, Double J requests that the Court fully adjudicate its claim prior to the vote on confirmation of the Plan. About Shotwell Landfill et al. Raleigh, North Carolina-based Shotwell Landfill, Inc., filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-02590) in Wilson on April 19, 2013. In its amended schedules, Shotwell disclosed $23,043,736 in assets and $10,048,364 in liabilities as of the Chapter 11 filing. Blake P. Barnard, Esq., William P. Janvier, Esq., and Samantha Y. Moore, Esq., at the Janvier Law Firm, PLLC, in Raleigh, N.C., represent Shotwell as counsel. William W. Pollock, Esq., at Ragsdale Liggett PLLC, in Raleigh, N.C., represents the Debtor as special counsel. Capitol Recycling, LLC, Capitol Waste Transfer LLC, Debris Removal Partners LLC, Shotwell Transfer Station II, Inc and Kings Grading Inc filed for Chapter 11 on Dec. 6, 2013. The cases were administratively consolidated by Court order dated Jan. 22, 2014. Shotwell Landfill is the lead case. Shotwell operates a landfill located in Wendell, North Carolina near Shotwell off Smithfield Road. The other debtors provide hauling and transfer station services to Shotwell. They accept solid waste and provide transportation of the waste to Shotwell's landfill or they provide services at the landfill itself. The Servicing Debtors are separate corporate entities and although they may have some creditors in common, they have different assets and liabilities. Although the management of Shotwell has often operated these companies without regard to their separate corporate forms, the Debtors have not sought approval of a substantive consolidation in these cases. Accordingly, the Debtors have filed separate monthly reports and separate schedules and statements of financial affairs. Shotwell sought bankruptcy protection when its major secured creditor at the time, BB&T, refused to renew its note. BB&T subsequently assigned its note to LSCG Fund 18 LLC. The Servicing Debtors, who are either obligors or guarantors in one fashion or another of all or part of LSCG's debt, filed their cases when LSCG began collection activities against them. LSCG has also filed a motion to appoint a trustee. On Aug. 16, 2013, Shotwell filed an initial Chapter 11 Plan and Disclosure Statement. On Aug. 19, 2013, an Order Conditionally Approving the Disclosure Statement was entered by the Court. On Jan. 22, 2014, the cases were administratively consolidated. The initial Plan was withdrawn and supplanted by the filing of the Consolidated Chapter 11 Plan by all the Debtors on Feb. 3. On March 13, 2014, the Court entered an Order Approving Motion to Appoint Creditors' Committee. The Committee is represented by Gerald A. Jeutter, Jr., Esq. SHOTWELL LANDFILL: LSCG Wants Landfill Valued at $15,232,435 ------------------------------------------------------------ LSCG Fund 18, LLC asks the Bankruptcy Court to (i) value Shotwell Landfill, Inc.'s landfill at $15,232,435 and (ii) find that LSCG has a fully secured claim pursuant to 11 U.S.C. Section 506(a)(1). In a brief and supporting memorandum of law in support of real property valuation, LSCG said, among other things, that at the March 24 hearing, the Court heard the testimony of William Nelson -- a nationally recognized expert in the landfill and waste business. Mr. Nelson prepared an expert report valuing the combined entities of Shotwell Landfill, Inc.; Shotwell Transfer Station II, Inc.; Capital Waste Transfer, LLC; and Capital Recycling, LLC at $15,232,435. As reported in the Troubled Company Reporter on March 6, 2014, LSCG had asked for the termination of the stay in Shotwell's bankruptcy case, saying its interest in the company's property is not adequately protected. LSCG also claimed that it is owed $14,323,122 by the company. Shotwell objected to the Stay Relief motion, arguing that the maximum secured claim that LSCG could have in the case is $2,900,000, with the remainder of its claim -- $11,423,122 -- as an unsecured claim. Shotwell also argued that LSCG is not entitled to any adequate protection payments based on a decrease in value of its collateral -- the company's property located at 4724 Smithfield Road, Wendell, North Carolina with a value of $2,900,000. About Shotwell Landfill et al. Raleigh, North Carolina-based Shotwell Landfill, Inc., filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-02590) in Wilson on April 19, 2013. In its amended schedules, Shotwell disclosed $23,043,736 in assets and $10,048,364 in liabilities as of the Chapter 11 filing. Blake P. Barnard, Esq., William P. Janvier, Esq., and Samantha Y. Moore, Esq., at the Janvier Law Firm, PLLC, in Raleigh, N.C., represent Shotwell as counsel. William W. Pollock, Esq., at Ragsdale Liggett PLLC, in Raleigh, N.C., represents the Debtor as special counsel. Capitol Recycling, LLC, Capitol Waste Transfer LLC, Debris Removal Partners LLC, Shotwell Transfer Station II, Inc and Kings Grading Inc filed for Chapter 11 on Dec. 6, 2013. The cases were administratively consolidated by Court order dated Jan. 22, 2014. Shotwell Landfill is the lead case. Shotwell operates a landfill located in Wendell, North Carolina near Shotwell off Smithfield Road. The other debtors provide hauling and transfer station services to Shotwell. They accept solid waste and provide transportation of the waste to Shotwell's landfill or they provide services at the landfill itself. The Servicing Debtors are separate corporate entities and although they may have some creditors in common, they have different assets and liabilities. Although the management of Shotwell has often operated these companies without regard to their separate corporate forms, the Debtors have not sought approval of a substantive consolidation in these cases. Accordingly, the Debtors have filed separate monthly reports and separate schedules and statements of financial affairs. Shotwell sought bankruptcy protection when its major secured creditor at the time, BB&T, refused to renew its note. BB&T subsequently assigned its note to LSCG Fund 18 LLC. The Servicing Debtors, who are either obligors or guarantors in one fashion or another of all or part of LSCG's debt, filed their cases when LSCG began collection activities against them. LSCG has also filed a motion to appoint a trustee. On Aug. 16, 2013, Shotwell filed an initial Chapter 11 Plan and Disclosure Statement. On Aug. 19, 2013, an Order Conditionally Approving the Disclosure Statement was entered by the Court. On Jan. 22, 2014, the cases were administratively consolidated. The initial Plan was withdrawn and supplanted by the filing of the Consolidated Chapter 11 Plan by all the Debtors on Feb. 3. On March 13, 2014, the Court entered an Order Approving Motion to Appoint Creditors' Committee. The Committee is represented by Gerald A. Jeutter, Jr., Esq. SMITHFIELD FOODS: S&P Puts 'BB-' CCR on CreditWatch Positive ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on Smithfield, Va.-based Smithfield Foods Inc., including the 'BB-' corporate credit rating, on CreditWatch with positive implications. Smithfield Foods reported debt outstanding of $3 billion as of Dec. 31, 2013. "The CreditWatch placement follows WH Group Ltd.'s (Smithfield's parent company) announcement that it is seeking to issue equity through an IPO on the Hong Kong Stock Exchange, with the mid-point of the indicative offer price range resulting in net proceeds of approximately $3.6 billion," said credit analyst Chris Johnson. "We expect the company to use net proceeds from the transaction for debt repayment. If net proceeds well exceed $4 billion and debt is repaid as currently envisioned, we believe this transaction could improve the group's financial risk profile and result in a higher group credit profile." S&P intends to resolve the CreditWatch listing following the completion of WH Group's planned IPO. S&P will assess the impact of any debt reduction on both the group's and Smithfield's financial risk profiles as appropriate. However, if WH Group does not complete the proposed IPO as currently described, S&P would reevaluate the CreditWatch listing and ratings. SSH HOLDINGS: Brookstone Plan No Impact on Moody's B2 Rating ------------------------------------------------------------ Moody's Investors Service said that SSH Holdings, Inc.'s ("SSH" or "Spencer Spirit", B2 stable) plan to acquire Brookstone, Inc. out of bankruptcy through one of its newly formed unrestricted subsidiaries is a modest credit negative but not likely result in changes to the company's ratings, according to Moody's preliminary assessment of the contemplated acquisition and post-closing capital structure. SSH Holdings, Inc., ("SSH") headquartered in Egg Harbor Township, NJ, is a holding company whose principal subsidiary is Spencer Spirit Holdings, Inc. Spencer Spirit Holdings Inc. is a specialty retailer primarily operating under two brands: Spencer's and Spirit Halloween. Revenues for the last twelve months ended November 2, 2013 were in excess of $700 million. At November 2, 2013 SSH operated 644 Spencer's and, during the 2013 Halloween season, 1,052 Spirit Stores. STERLING INFOSYSTEMS: Moody's Rates New Sr. Secured Debt 'B2' ------------------------------------------------------------- Moody's Investors Service has changed the ratings outlook for Sterling Infosystems, Inc. to stable from positive. At the same time, Moody's has affirmed Sterling's B2 Corporate Family Rating ("CFR"), and has assigned B2 ratings to the company's proposed senior secured credit facilities. The change in outlook was prompted by increased leverage that will result from the company's planned use of incremental debt from a new credit facility to fund a sizeable distribution to its shareholders. Ratings and their outlooks are subject to review of final transaction documentation. Assignments: Issuer: Sterling Infosystems, Inc. Senior Secured Bank Credit Facility, Assigned B2 (LGD3, 48 % ) Outlook Actions: Issuer: Sterling Infosystems, Inc. Outlook, Changed To Stable From Positive Affirmations: Issuer: Sterling Infosystems, Inc. Corporate Family Rating, Affirmed B2 Upgrades: Issuer: Sterling Infosystems, Inc. Probability of Default Rating, Upgraded to B2-PD from B3-PD On April 14, 2014, Sterling announced that it plans to issue a senior secured first lien credit facility, comprising a $290 million term loan due 2021 and a $25 million revolving credit that expires in 2020. Proceeds from this offering will be used to repay the company's existing term loan, to fund a $115 million distribution to shareholders (primarily Calera Capital and management), as well as for transaction fees. The revolver, which has been increased from $20 million, will be undrawn on close. Ratings Rationale Moody's estimates that Sterling's planned dividend recap will materially increase leverage. On close, the company would undertake an estimated 60% debt increase to fund a sizeable shareholder distribution. Debt to EBITDA, which at 3.5 times for the FY ending December 2013 was strong for a B2-rated company of this size prior to this transaction, will increase to 5.7 times with the additional $124 million in debt. This would represent the highest leverage ratio that the company has undertaken since Calera's 2010 equity investment, and is now somewhat weak for the rating category. However, Moody's estimate that leverage will return to levels that more strongly support the B2 rating over the near term, in expectation of continued strong organic revenue growth at stable margins. In addition to increased leverage, Moody's views the use of the increased debt to fund a $115 million distribution to its private equity shareholders and management to be indicative of an aggressive financial policy. The contemplated distribution would represent the first such return of capital to owners since Calera purchased its partnership shares in 2010, and could be indicative of owners' willingness to undertake similar debt-funded distributions in the future. Sterling's B2 CFR continues to be constrained by the company's small scale, its narrow product focus, and risks associated with an acquisition-oriented growth strategy. Total revenue, which is approximately $250 million annually, is modest when compared to other B2-rated services companies. Sterling's revenue base is significantly concentrated in one service line, with approximately 60% of FY 2013 sales derived from criminal background checks. This is a key constraint to ratings given the highly fragmented nature of the industry and the presence of a few larger competitors. The ratings also take into account the company's historical use of acquisitions to pursue growth, and risks associated with the pace, complexity, and the potential use of debt for such activities in the future. However, offsetting these concerns, Sterling has demonstrated an ability to maintain stable, albeit modest operating margins, resulting in a steady stream of positive free cash flow that supports debt service and lowers leverage. Despite the concentration in one service offering, Sterling has a stable and visible revenue base as illustrated by its low customer concentration (largest customer makes up less than 4% of total revenue) and strong customer retention rates over the past several years. The company's cost structure benefits from use of automated services and offshore operations in lower-cost regions, which Moody's expect will provide on-going support of margins. Debt capital will be comprised of a single tranche of secured bank debt with a $25 million first lien senior secured revolving credit facility due 2020 and a $290 million first lien senior secured term loan due 2021. The senior secured credit facilities will represent the preponderance of debt in the capital structure and are rated consistent with the CFR at B2. The company has no financial covenants governing the first lien term loan, while the revolver will only be subject to a maximum total leverage test in the event that this facility is drawn by at least 30% of total capacity. As such, Moody's has assigned to Sterling a 50% Loss Given Default Assessment, and has changed the Probability of Default Rating to B2-PD from B3-PD, per Moody's Loss Given Default methodology. The ratings could be lowered if the company experiences an unexpected decline in revenue, possibly due to loss or underperformance of contracts, resulting in declining operating margins or free cash flow. Also, ratings could face downward pressure if Sterling increases the pace or size of its acquisition activities, particularly if the company were to raise debt to fund such purchases, or if the company were to engage in a material return of capital to shareholders. Debt to EBTDA remaining in excess of 5.5 times or EBITA to Interest of less than 2 times could warrant a lower rating. The ratings could be raised if the company achieves significant revenue and earnings growth, while maintaining a good liquidity profile over the near term. Demonstration of a conservative shareholder return policy as well as a modest pace of acquisitions over such a period would be important considerations for an upgrade. The ability to sustain credit metrics such as Debt to EBITDA below 3.5 times and EBITA to Interest of 4 times could support higher ratings. Sterling Infosystems, Inc. provides pre- and post-employment verification services including criminal background checks, credential verification and employee drug testing. Sterling is majority-owned by affiliates of private equity sponsor Calera Capital and management. SUNLAND INC: Second Auction Brings $6-Mil. More for Peanut Plant ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Sunland Inc., a producer of peanuts and peanut butter, got $6 million more for the assets after the bankruptcy judge in Albuquerque, New Mexico, allowed the trustee to hold the auction a second time. According to the report, at the request of the Chapter 7 trustee for the owner of a peanut-butter plant, U.S. Bankruptcy Judge David T. Thuma approved procedures for a March 20 auction, with a first bid of about $17.5 million. The winning bidder at that sale was Hampton Farms LLC, with a $20.05 million offer. Just before the hearing to approve the sale, Golden Boy Foods Ltd. told the trustee it was willing to bid $25 million, the report related. Golden Boy said it was confused about when the auction was to occur. Judge Thuma reopened the auction, and Golden Boy won with a $26 million offer, which the judge approved, the report further related. Judge Thuma also denied a request by Hampton to preclude completion of the sale to Golden Boy while it appeals. Judge Thuma said Hampton, as a losing bidder, might not even have a right to appeal, the report added. Portales, N.M.-based Sunland, Inc., on Oct. 8, 2013, initiated proceedings under Chapter 7 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Mexico. The case docket number is 13-13301-7. SW BOSTON: 1st Cir Says Prudential Entitled to 14.5% Default Rate ----------------------------------------------------------------- The Prudential Insurance Company of America, secured creditor to SW Boston Hotel Venture, LLC, owner of the W Hotel and Residences in Boston, appealed to the Bankruptcy Appellate Panel for the First Circuit from the bankruptcy court's orders determining its entitlement to post-petition interest (and thus the total amount of its claim) and confirming the debtors' Chapter 11 plan. The BAP reversed in part, significantly increasing Prudential's entitlement to post-petition interest, and vacated and remanded the confirmation order. The debtors and the City of Boston, as a junior creditor, appealed to the Court of Appeals for the First Circuit. Prudential provided up to $192.2 million in financing for the construction of the hotel. The City of Boston agreed to provide $10.5 million in funding to complete the construction, after Prudential declined to provide additional funds. The City Loan was secured by a junior lien on most of the collateral that secured the Prudential Loan and a first lien on $4 million in cash provided by an Affiliated Debtor. Prudential filed a proof of claim asserting secured claims of not less than $180,803,186, plus fees, costs, and pre- and post- petition interest. Shortly after the petition date, Prudential drew down on a letter of credit, reducing its pre-petition claim to $165,592,659. The parties agree that Prudential was oversecured during at least part of the bankruptcy proceeding and therefore is entitled to some amount of post-petition interest, but they differ as to how to determine oversecured status, when Prudential became oversecured, and the applicable interest rate and type. In an April 11 decision available at http://is.gd/suOy3mfrom Leagle.com, the First Circuit held that the BAP erred in reversing the bankruptcy court's post-petition interest determination. And, because the BAP's confirmation order was based solely on its erroneous interest determination, that order is vacated as well. The First Circuit also affirmed affirm the bankruptcy court's holding that Prudential is entitled to post-petition interest accruing from the hotel sale date at the default rate of 14.5% without compounding, and reverse the BAP's order to the extent it conflicts. On Jan. 28, 2011, the bankruptcy court found that SW Boston's outstanding debt to Prudential, after deductions for payments made from ongoing condominium sales and exclusive of any post-petition interest or expenses, was approximately $154 million. Prudential's expert valued the remaining condominiums at $86 million and the W hotel at $55 million, while SW Boston's expert valued the remaining condominiums at $90.6 million and the hotel at $65.6 million. After a three-day evidentiary hearing, the bankruptcy court concluded that the value of the condominiums was $88 million and the value of the hotel was $65.6 million, making the total value of SW Boston's collateral $153.6 million. Thus, Prudential was undersecured as to SW Boston alone. However, the bankruptcy court noted that, with respect to the entire collateral package of all of the Debtors, Prudential had an equity cushion in excess of $19 million. In March 2011, SW Boston struck a deal to sell the hotel and garage to an unrelated third party for $89.5 million. After SW Boston managed to resolve various contingencies, the sale closed on June 8, 2011, and the net proceeds of $88,322,017 were paid over to Prudential. On March 31, 2011, three days after filing the hotel sale motion, the Debtors filed their reorganization plan. The plan called for Prudential to be paid in full by March 2014 if the hotel sale closed, or after a more extended period if it did not. The plan contemplated that Prudential would receive post-effective-date interest of 4.25% per annum, but it made no provision for post- petition, pre-effective-date interest. Prudential objected to confirmation of the plan on multiple grounds. Throughout the pendency of the bankruptcy case, SW Boston continued construction. Thereafter, SW Boston sold condominiums, while paying over the proceeds (less certain deductions) to Prudential. On April 15, 2011, Prudential moved for a determination that it was oversecured and therefore entitled to post-petition interest under 11 U.S.C. Sec. 506(b). A claim is oversecured if the value of the creditor's interest in its collateral exceeds the amount of its claim. Under Sec. 506(b), an oversecured creditor is entitled to post-petition interest, as well as reasonable fees, costs, or charges provided for in the parties' contracts or by state law, up to the extent of its oversecurity. Prudential argued that it should receive post-petition interest at the contractual default rate of 14.5% per annum, 5% higher than the contractual base rate, accruing from the petition date. The Debtors argued that Prudential only became oversecured upon the closing of the hotel sale, and therefore could only receive post- petition interest from that point forward. They also claimed that the default rate was unenforceable and inequitable, and requested that, to the extent Prudential was entitled to any post-petition interest, it should accrue at the base rate of 9.5% per annum. The bankruptcy court held a three-day combined trial addressing Prudential's Sec. 506(b) motion and the Debtors' proposed plan. On Oct. 4, 2011, it issued an order granting Prudential post-petition interest at 14.5% per annum, commencing on the hotel sale date. The court ruled that the hotel sale price, rather than its earlier valuation at a lift-stay hearing, was the best indicator of the hotel's value. However, it also noted that, in light of the ongoing improvements and the resolution of various contingencies, the sale price did not reflect its value on any earlier date. Therefore, it found that Prudential only became oversecured once the hotel sale closed. After receiving the parties' interest calculations (which differed only as to whether the interest should be compounding), the bankruptcy court entered an order fixing Prudential's claims, inclusive of non-compounding post-petition interest. Prudential appealed and the Debtors cross-appealed the Sec. 506(b) decision and the resultant claim order to the BAP. While the parties were briefing the appeals, the Debtors moved to dismiss Prudential's appeals as equitably moot. The BAP found that, although the plan had been substantially consummated, the appeals were not equitably moot because Prudential could still be afforded relief without harming innocent third parties or unraveling the reorganization (especially because Prudential represented its willingness to accept alternative forms of relief that would not require such unraveling). As to the Sec. 506(b) appeal, the BAP: (1) held that Prudential was entitled to post-petition interest from the petition date, reversing the bankruptcy court's finding that Prudential had only become oversecured on the hotel sale date; (2) affirmed the bankruptcy court's determination that the contractual default rate of interest (14.5%) applied; and (3) reversed the bankruptcy court's ruling that the interest was not compounding. As to the confirmation order appeal, without addressing the confirmability of the plan, the BAP vacated and remanded the confirmation order so that the plan could be amended to accommodate Prudential's now- increased claim. The Debtors and the City each appealed both of the BAP's decisions to this court. Prudential moved to dismiss the confirmation order appeals for lack of jurisdiction, arguing that they were not final appealable orders. Those motions were referred to the First Circuit for consideration along with the merits. Throughout these proceedings, the Debtors have continued to sell W condominiums and have since paid Prudential the full amount due under the originally confirmed plan. The City, in contrast, has not received all the payments owed to it under the plan, which became effective on Dec. 1, 2011. The Debtors have also stopped making installment payments owed to other creditors under that plan. The appellate cases are: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Appellee, v. SW BOSTON HOTEL VENTURE, LLC; AUTO SALES & SERVICE, INC.; GENERAL TRADING COMPANY; FRANK SAWYER CORPORATION; 100 STUART STREET, LLC; 30-32 OLIVER STREET CORPORATION; GENERAL LAND CORPORATION; 131 ARLINGTON STREET TRUST, Appellants; and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Appellee, v. CITY OF BOSTON, Appellant, Nos. 12-9008, 12-9009 12-9011, 12-9012 (1st Cir.). Harold B. Murphy, Esq., with whom Charles R. Bennett, Jr., Esq., John C. Elstad, Esq., Christopher M. Condon, Esq., at Murphy & King, P.C., were on brief, argue for SW Boston Hotel Venture, LLC; Auto Sales & Service, Inc.; General Trading Company; Frank Sawyer Corporation; 100 Stuart Street, LLC; 30-32 Oliver Street Corporation; General Land Corporation; and 131 Arlington Street Trust. E. Kate Buyuk, Esq., with whom Joseph F. Ryan, Esq., at Lyne, Woodworth & Evarts LLP were on brief, argue for the City of Boston. Emanuel C. Grillo, Esq., with whom William M. Jay, Esq., and Goodwin Procter LLP were on brief, argue for Prudential. About SW Boston Hotel Boston, Massachusetts-based SW Boston Hotel Venture LLC is the developer of the W Hotel in Boston. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Mass. Case No. 10-14535) on April 28, 2010. Harold B. Murphy, Esq., and Natalie B. Sawyer, Esq., at Hanify & King, P.C., is the Debtors' bankruptcy counsel. Edwards Angell Palmer & Dodge LLP is the Company's special counsel. The Company estimated its assets and debts at $100 million to $500 million. SWJ HOLDINGS: Bankruptcy Case Transferred to Connecticut -------------------------------------------------------- The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware transferred the Chapter 11 cases of SWJ Holdings, LLC, et al., and all related adversary proceedings to the Bankruptcy Court for the District of Connecticut. Richard M. Coan, Chapter 7 trustee of First Connecticut Consulting Croup, Inc., requested for the venue transfer. Meanwhile, Roberta A. DeAngelis, United States Trustee for Region 3, has scheduled a meeting of creditors in the Chapter 11 cases of SWJ Holdings and SWJ Management on May 5, 2014, at 1:00 a.m. The meeting will be held at the Office of the U.S. Trustee. According to the case docket, Aug. 4 has been as the deadline for any individual or entity to file proofs of claim against the Debtors. About SWJ Holdings and SWJ Management SWJ Holdings, LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 14-10376) on Feb. 25, 2014, estimating $10 million to $50 million in assets and less than $10 million in liabilities. A related entity -- SWJ Management, LLC -- filed for Chapter 11 protection (Bankr. D. Del. Case No. 14-10460) on March 3, 2014. It estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Judge Christopher S. Sontchi is assigned to the cases. Bruce Duke, Esq., in Mount Laurel, New Jersey, serves as counsel to the Debtors. The Chapter 11 plan and disclosure statement are due July 1, 2014, according to the case docket. The petitions were signed by Richard Annunziata as managing member. TELEXFREE LLC: Files After Brazil Litigation -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that TelexFree LLC, a marketer of Internet-based phone services, filed for Chapter 11 protection on April 13 in Las Vegas, listing assets for less than $100 million and debt exceeding $100 million. According to the report, the company grew rapidly, generating revenue of $1 billion in 2013. To distribute and sell services, it used 700,000 associates or promoters who sold unlimited international calling for $49.90 a month. In response to litigation in Brazil, the Las Vegas-based company changed the associates? compensation program in March, the report related. The new program resulted in a decline in revenue and increased compensation requests from the associates, the report further related. The case is In re TelexFree LLC, 14-12524, U.S. Bankruptcy Court, District of Nevada (Las Vegas). TOLL ROAD: Fitch Affirms 'BB+' Revenue Bonds Ratings ---------------------------------------------------- Fitch Ratings has affirmed at 'BB+' the rating for Toll Road Investors Partnership II (TRIP II) Dulles Greenway project's approximately $1 billion in outstanding revenue bonds, series 1999 and 2005. The Rating Outlook is Stable. The 'BB+' rating reflects Dulles Greenway's relatively high leverage and back loaded debt structure extending to 2056, combined with expected thin coverage and dependence on future toll increases despite already above average toll rates. Revenue risk is partially offset by the presence of healthy reserve balances as well as cash trap triggers and flexibility afforded by the debt structure. In Fitch's opinion, continual rate increases going forward, translating into sustained above-inflationary revenue growth, will be needed. The Virginia State Corporation Commission's (SCC) approved formulaic toll increases add more certainty through 2020; however, political risk surrounding the project's future tolling practices remains. Key Rating Drivers Commuter Base Facing Competition in Solid Service Area: Dulles Greenway's metro DC service area supports strong inherent demand and has long term growth potential despite housing induced weakness experienced during the recent economic downturn. Dulles Greenway traffic, which is primarily commuter in nature and has experienced declines back to 2006, has in part been affected by improvements in alternative routes and a series of significant toll increases. Dulles Greenway continues to be subject to some risk from the expansion of free alternatives and implementation of mass transit. Revenue Risk - Volume: Midrange High Tolls Limiting Ratemaking Flexibility: Congestion management and base toll rates per mile of $0.36 and $0.30, respectively, are among the highest relative to peers in Fitch's rated portfolio, and are likely to be considered high among those who take shorter trips. However, scheduled annual increases through 2020, with the most recent implemented in April 2014, have been approved by the SCC. While the negative effects on demand from toll rate increases to-date have been small, the economic rate-making ability of TRIP II is only moderate. The ability to maximize revenues in a prolonged weak economic climate may be more limited especially when the length of the debt profile and growing debt service obligations are taken into consideration. Revenue Risk - Price: Weaker Infrastructure Renewal & Capital Works: Dulles Greenway is a relatively young asset with a manageable six-year capital improvement plan through 2019, with over 90% of the $14 million plan allocated to resurfacing. Based on projected levels of traffic and due to the lack of development activity, additional construction works under existing agreements are not expected to occur over the medium-term; the amounts and timing of these construction obligations are currently uncertain. Infrastructure Development & Renewal: Midrange Back Loaded Debt With Flexible Amortization Structure: The debt service profile steadily increases to maximum annual debt service of $84.7 million at final maturity in 2056, reflecting mandatory redemptions. The debt structure provides flexibility to mitigate potential near-term shortfalls in revenue to meet planned debt service payments in the form of lower principal prepayments on the series 2005 debt and two triggers for cash trapping. However, a continued deferral of planned debt repayment would cause debt service obligations to balloon in the latter years of the project's life. Cash funded reserve balances, with more than $93 million in 2013, provide some added protection. Debt Structure: Midrange High Leverage With Thin Debt Service Coverage: Leverage is high, in the high 15x range. The facility is dependent on continued toll rate increases and revenue growth through maturity to maintain minimum coverage levels at or above 1.25x. While the minimum debt service coverage threshold has been violated in recent years, a trend that is likely to continue in the near-to- medium term, the requirement to annually trap excess revenues when the threshold is breached somewhat mitigates this factor. Rating Sensitivities: -- The project's inability to sustain revenue growth at or above an annual rate of around 4% that results in debt service coverage levels at or below 1.10x for a prolonged period would pressure the rating; -- Changes in the pricing regime resulting in reduced overall tolls and/or lower than expected toll increases would further constrain the project's financial flexibility; -- O&M and improvement expenses materially above expectations that cause financial flexibility to be reduced; -- Further capacity enhancements on competing free routes, or significant diversions resulting from the Dulles Metrorail project that reduces Dulles Greenway's value of time advantage would likely weaken credit quality. Security The bonds are secured by a pledge of net revenues. Credit Update Traffic on the Dulles Greenway declined annually between 2006 and 2011, reflecting the combined effects of the economic downturn, the impact of improvements along competing Route 28 that enhance the attractiveness of the toll free alternative, and a series of significant toll rate increases. Traffic stabilized in 2012 and 2013, evidenced by a relatively flat performance in 2012 and 1.3% growth in 2013, despite 8% and 2.5% toll increases in 2012 and 2013, respectively. Data through March 2014 indicate that traffic is down slightly by 0.4% when compared with the same period in 2013, with some of this underperformance likely due to the winter weather conditions in the earlier months offset by stronger March results this year due to falling of the Easter holiday in April versus March of last year when traffic was lower. As traffic on the Dulles Greenway is primarily driven by commuters, revenue performance will largely be dependent on elasticity of demand and the economic performance of the region. The unemployment rate of below 4% in Loudoun County is currently much lower than the national average. To date, the impact of the traffic declines has been more than offset by the impact of toll increases, resulting in growing toll revenues. In 2013, toll revenues grew by 3.5% to $74.6 million, a rate of growth consistent with the toll increases that took effect in January 2013. The 2.5% toll increase in January 2013 was the first of those expected to occur annually through January 2020 pursuant to an SCC approved formula equal to the greater of the consumer price index plus 1%, real GDP growth, or 2.8%. The SCC may allow a greater increase if the following three criteria are met: an independent traffic and revenue study finds that tolls will be insufficient to meet minimum coverage ratios, proposed tolls will not materially discourage use of the roadway, and the proposed tolls provide the operator no more than a reasonable rate of return. Year-over-year toll revenues through March 2014 were slightly down by approximately 0.3% as no toll increases were implemented over this period. In 2013, a member of the state legislature called for the SCC to review the Dulles Greenway's tolling practices with a request that they be lowered. Fitch notes that the investigation of Dulles Greenway's tolling practices is still ongoing and Fitch will continue to monitor events on this front. He also filed an objection to this year's toll increase and a request to delay the increase until 30 days after the General Assembly regular session in March. This has resulted in a two months delay of the 2014 planned toll increase; the final approval to increase toll rates has been issued on April 8 with an effective date of April 11 when the peak and non-peak tolls will increase to $5.10 and $4.20, respectively. This represents a 2.8% toll increase plus an additional three cent increase for payment of an increase in local property taxes to Loudoun County and the Town of Leesburg. Fitch views favorably the scheduled toll hikes and the continued acknowledgement of the SCC that TRIP II should be allowed to raise rates to comply with covenants to bondholders as it adds certainty to the amount and timing of increases through 2020. Additionally, the inflationary nature of the increases moderate the political risk associated with future toll increases. Debt service coverage for fiscal 2013 was 1.09x (based on the mandatory redemption schedule). In years where debt service coverage falls below the minimum coverage ratio of 1.25x, excess cashflows must be trapped in the early redemption reserve fund for one year. In the event debt service coverage falls below 1.15x, excess cashflows are required to be trapped for three years. An early redemption reserve is required to be maintained at a minimum of $42.35 million and given cash trapping in prior years, the reserve grew to hold approximately $47.34 million by fiscal 2013. Additionally, a senior debt service reserve fund (DSRF) is present, funded at $84.7 million with $39.7 million in cash and the balance represented by an MBIA surety. Together, the DSRF and early redemption reserve provide adequate liquidity to support any shortfalls in the medium term. Total Dulles Greenway liquidity as of December 2013, inclusive of the reserves noted above and the operating reserve funded at 50% of O&M costs, was approximately $93.6 million which serves as an added mitigant to near term risk. Fitch's base case assumes traffic growth of less than 1% from 2013 and in this scenario actual debt service coverage based on the mandatory redemption schedule would remain below the minimum coverage level requiring continued trapping of cash in the near term but then grows to over 1.25x in 2019 without regard to the effects of the early redemptions pursuant to the Seventh Supplemental Trust Agreement, and per that calculation Dulles Greenway will not be able to make distributions to investors as. Fitch notes that the flexibility of the debt structure allows for lower scheduled debt service payments, which provides some relief in the near term but only increases the burden in the back end. Under a rating case that contemplate flat to declining traffic, coverage ratios drop to just about 1.0x over an extended time period. Should this traffic profile play out and be viewed as more permanent, negative rating action would be likely. TRIAD GUARANTY: Exclusivity Extension Sought -------------------------------------------- BankruptcyData reported that Triad Guaranty filed with the U.S. Bankruptcy Court a second motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including September 26, 2014 and November 25, 2014, respectively. According to the report, the motion explains, "Exclusivity serves several important purposes, embodying the policy that in most circumstances, a debtor-in-possession is best suited to lead the plan process, of course with the benefit of fulsome participation by all case stakeholders. As set forth above, the further 180-day extension of the Exclusive Periods is warranted here because, among other things, an extension of the Exclusive Periods will give the Debtor a reasonable opportunity to complete the formulation and prosecution of a chapter 11 plan following the adjudication of the Adversary Proceeding and Trading Motion. Maintaining exclusivity for the extended period will benefit the Debtor, its estate, and creditors and stakeholders as a whole. The Debtor submits that its substantial progress in this case warrants affording the Debtor a reasonable amount of additional time to have exclusive plan filing and solicitation rights - in effect to finish out the administration of this case in the manner in which chapter 11 of the Bankruptcy Code is designed. In sum, the requested extension of the Exclusive Periods will benefit the Debtor and its estate by providing the Debtor with a full and fair opportunity to resolve the Adversary Proceeding and formulate and seek approval of a chapter 11 plan consistent with such resolution. It is in the best interests of the Debtor, its estate, and all creditors and stakeholders to obtain an extension of the Exclusive Periods to ensure that the Debtor is afforded a reasonable and sufficient time to resolve the litigation regarding its rights with respect to the tax attributes and solicit, confirm, and consummate a plan without the costly and counter- productive prospect of a competing plan. Accordingly, the Debtor believes that the requested extension is warranted and, indeed, appropriate under the circumstances." About Triad Guaranty Winston-Salem, N.C.-based Triad Guaranty Inc. (OTC BB: TGIC) -- http://www.triadguaranty.com/-- is a holding company that historically provided private mortgage insurance coverage in the United States through its wholly-owned subsidiary, Triad Guaranty Insurance Corporation. TGIC is a nationwide mortgage insurer pursuing a run-off of its existing in-force book of business. In December 2012, the Company's mortgage insurer subsidiary, Triad Guaranty Insurance Corporation, was placed into rehabilitation, whereby the Illinois Department of Insurance was vested with possession and control over all of TGIC's assets and operations. On May 30, 2013, the magistrate judge for the U.S. District Court of the Middle District of North Carolina issued an order denying the Company's motion to dismiss a class action lawsuit against the company and two of its former officers. Shareholders filed the class action suit in 2009, claiming the company misled investors about poor financial results caused by improper underwriting procedures. Triad Guaranty Inc. filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-11452) on June 3, 2013. The Company estimated assets of at least $100 million and liabilities of less than $50,000. Attorneys at Womble Carlyle Sandridge & Rice, LLP, serve as counsel to the Debtor. The Debtor said in court filings that it has no significant operating activities, and has limited remaining cash and other assets on hand. The Debtor has been exploring various strategic alternatives, and will continue to do so from and after the Petition Date. The Debtor said that expenses primarily consist of legal fees, fees paid to its board, annual premiums for directors' and officers' liability insurance and general operating expenses. The expenses range from $100,000 to $500,000 per quarter. Unless the expenses are reduced, the Debtor expects to deplete all of its remaining cash by the end of 2013 or earlier. TRILOGY INTERNATIONAL: S&P Retains 'CCC' Rating After $80MM Add-On ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its 'CCC' issue-level rating on Trilogy International Partners LLC's (Trilogy; B- /Stable/--) 10.25% senior secured notes due 2016 remains unchanged after an $80 million add-on. This add-on increases the notes' outstanding amount to $450 million. The company will use the proceeds for capital expenditures and for general corporate purposes. Trilogy completed the sale of additional notes in a private placement after it amended its limitation on incurrence of additional debt. The notes are secured by a first priority lien on the equity interests of Trilogy's certain, direct, wholly-owned domestic subsidiaries and a pledge of certain intercompany and third-party debt owed to the company or its subsidiaries. RATINGS LIST Trilogy International Partners LLC Corporate credit rating B-/Stable/-- Senior secured notes due 2016 CCC UNITED AIRLINES: 2nd Circ. Remands DHL's Price-Fixing Suit ---------------------------------------------------------- Law360 reported that the Second Circuit remanded DHL's antitrust lawsuit alleging United Airlines Inc. participated in a price- fixing scheme, saying it's "skeptical" that DHL couldn't have brought its allegations under United's Chapter 11 bankruptcy proceedings. According to the report, under the remand order, U.S. District Judge John Gleeson will have to take a closer look at DHL's claims it didn't have a "meaningful opportunity" to address its allegations about the air-cargo fuel charge conspiracy during the airline's Chapter 11 reorganization, which ended in 2009. The case is DPWN Holdings (USA), Incorporated v. United Airlines, Inc., Case No. 12-4867 (2d. Cir.). DHL filed the complaint in February 2011. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. UNITEK GLOBAL: Moody's Affirms 'Caa2' CFR; Outlook Stable --------------------------------------------------------- Moody's Investors Service changed UniTek Global Services, Inc. ("UniTek")'s outlook to stable from developing due to the company's recent filing of its 10-K for the fiscal year ending December 31, 2013 with an unqualified audit opinion and its steady operating performance in 2013. In addition the company has publicly indicated that it will address its high interest burden. UniTek's Corporate Family Rating ("CFR") and Probability of Default Rating ratings were affirmed at Caa2 and Caa2-PD, respectively. Concurrently, the rating on the company's $135 million term loan due 2018 was affirmed at Caa2. A Speculative Grade Liquidity rating of SGL-4 was assigned, denoting a weak liquidity profile. Ratings affirmed: Corporate family rating, at Caa2 Probability of default rating, at Caa2-PD $135 million term loan due 2018, at Caa2 (LGD-4, 57%) from Caa2 (LGD-4, 61%) Outlook, changed to Stable from Developing Ratings Rationale UniTek's Caa2 CFR reflects the company's high interest burden, lower revenue contribution expected from a contract with AT&T (it's second largest customer) that expires in August 2014 as well as the continued need to address internal control weaknesses over financial reporting as cited in the company's 2013 10-K filing. The expiring contract with AT&T accounted for 17.8% of revenues in 2013. In addition, although there is slightly greater near-term operating performance visibility, there continues to be less certainty regarding longer-term revenue and earnings performance, particularly given lower than expected revenue contribution from AT&T. The ratings also reflect concerns related to longer-term operating performance given any reputational risk the company could have sustained from last year's litigation, financial statement restatements and audit committee investigation in 2013. Furthermore, the company has gone through a fair level of senior management changes over the last two years including the coming on board of the company's current Chief Executive Officer in mid-2012 and the appointment of a new Chief Financial Officer in June 2013. The high interest burden is associated with the company's refinancing in July 2013 (that increased revolver availability and facilitated the continuation of the company's contract with its primary customer, DirecTV that accounts for 44% of the company's revenues) in the midst of the financial statement delays. The ratings are supported by the company's established market position and blue-chip customer base. While revenue is concentrated with a few customers, they are large media and telecommunication companies that continue to invest in growth. Longer term, outsourcing trends should expand UniTek's market opportunities, however relatively low entry barriers and execution risks are factors that have also been considered in the ratings. The ratings also reflect the company's weak liquidity position primarily due to aggressive covenant step-downs that the company must meet through the remainder of the year to remain in compliance with its bank agreement financial maintenance covenants and very high interest costs on its debt. The company's SGL-4 liquidity rating is characterized by the company's expected continued tight headroom under covenants and likelihood that it will not remain in compliance if operating performance does not improve in tandem with required step-downs in the covenants through the year. In addition, the company relies on its $75 million revolving credit facility that is constrained by its borrowing base levels that totaled $64.1 million at December 31, 2013. Although free cash flow generation could improve over the next twelve months, it is not likely to be sufficient to fund all its liquidity needs without relying on its asset-based revolver. Virtually all assets are secured by the company's debt facilities. The stable outlook reflects the potential for weakening financial performance over the medium term due to the loss of the AT&T contract and uncertainty as to whether the company can refinance its bank credit agreement on more favorable terms. An upgrade and/or change in outlook would likely be predicated on UniTek meaningfully improving operating performance, addressing internal control weaknesses and/or entering into a refinancing to loosen financial maintenance covenants and address its high interest expense. Quantitatively, ratings could be upgraded if EBIT/interest were to reach and be sustained at 1.0 times, debt/EBITDA continue to stay below 6.0 times (4.8 times at 2013 year-end) while maintaining positive free cash flow. Ratings could be downgraded if the company's liquidity position or credit metrics deteriorate leading to an increased expectation for a default or distressed exchange. UniTek Global Services, Inc., based in Blue Bell, Pennsylvania, provides fulfillment and infrastructure services to media and telecommunication companies in the United States and Canada. Revenues for the fiscal year ended December 31, 2013 totaled $472 million. UNIVERSAL HEALTH: May 1 Hearing on Sole Director Appointment ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida has set for May 1, 2014, at 3:00 p.m., the hearing on the motion of Soneet Kapila, Chapter 11 Trustee for Universal Health Care Group, Inc., to (i) authorize the appointment of Mark Abernathy as the sole director of certain of the Debtor's subsidiaries; (ii) direct Mr. Abernathy to evaluate the appropriateness of filing Chapter 11 bankruptcy petitions for the subsidiaries; and (iii) authorize Mr. Abernathy to file Chapter 11 bankruptcy petitions for the subsidiaries. As reported by the Troubled Company Reporter on Feb. 21, 2014, the Chapter 11 Trustee withdrew, without prejudice, his emergency motion to, among other things, appoint Mr. Abernathy as sole director of the Debtor's subsidiaries. On March 6, 2014, the Chapter 11 Trustee filed with the Court a supplement in support of his motion for the appointment of Mr. Abernathy. BankUnited, N.A., in its capacity as the administrative agent for secured parties currently owed in excess of $36.5 million in outstanding note obligations by the Debtor, supported that motion. On the same day, objections to that motion were filed by: (i) the Florida Department of Financial Services, as court-appointed receiver for Universal Health Care, Inc., and Universal Health Care Insurance Company; (ii) Jean Johnson, special deputy receiver of Universal HMO of Texas, Inc.; (iii) Patrick H. Cantilo, on behalf of Cantilo & Bennett, LLP, special deputy receiver of Universal Health Care of Nevada, Inc.; and (iv) the Texas Department of Insurance. In its objection, FDFS claims that: (i) the Chapter 11 Trustee lacks the authority to replace the board of directors; (ii) it is improper for a Trustee to file bankruptcy petitions for subsidiaries of a debtor corporation without prior court authority; and (iii) the subsidiaries are ineligible for bankruptcy relief under the Bankruptcy Code. The Texas Department of Insurance asked that the Court should determine that the Debtor's Texas insurance subsidiary, Universal-Texas is not an eligible debtor pursuant to 11 U.S.C. Section 109(b)(2). In a filing dated March 21, 2014, FDFS states that Mr. Abernathy's disclosures concede that he is not disinterested, has a pecuniary stake in the outcome of the neutral "guidance" he is being employed to deliver, and would hold an interest adverse to Debtor's estate. "BankUnited's attempts (i) to puppeteer a substantive consolidation of the Debtor and its subsidiaries to expand its secured claim; and (ii) to thwart the adversary proceeding by taking control of its opponent through subterfuge ought not to be countenanced by this Court," FDFS says. On April 8, 2014, Antilo & Bennett, L.L.P., the special deputy receiver of Universal Health Care of Nevada, Inc., filed a joinder in the objections of HCA Affiliated Providers and FDFS to the appointment of Mr. Abernathy. The Nevada SDR asserts its agreement that the appointment of Mr. Abernathy should not be approved because, among other things, none of the papers filed either by the Chapter 11 Trustee or by BankUnited have these parties explained how, even if appointed, Mr. Abernathy could exercise the authority required to commence bankruptcy proceedings for UHCNI or Universal HMO of Texas, Inc., in the face of valid state court injunctions expressly barring anyone other than the state receivers from exercising such authority. BankUnited, in a filing dated March 28, 2014, says that the motion to appoint is by no means an employment application subject to approval under 11 U.S.C. 327(a). According to BankUnited, it is simply a request by the Chapter 11 Trustee for authority to exercise his voting rights in the non-debtor subsidiaries outside of the ordinary course of business subject to the Chapter 11 Trustee's sound business judgment. "The mere fact that Abernathy has agreed to serve as a director of the subsidiaries without compensation should not raise any concerns as to his objectivity. Many directors in a wide range of businesses often provide services without compensation. In the event Abernathy determines that placing the subsidiaries into bankruptcy is appropriate, Abernathy will waive his right to receive compensation for any time accrued prepetition," BankUnited says. BankUnited filed on March 18, 2014, a response and motion to strike the Amicus Curiae Brief of the National Organization of Life and Health Insurance Guaranty Associations in opposition to the appointment motion, which seeks to challenge the Chapter 11 authority of the Chapter 11 Trustee to appoint Mr. Abernathy. Mr. Cantilo can be reached at: Patrick H. Cantilo Cantilo & Bennett, L.L.P. 11401 Century Oaks Terrace, Suite 300 Austin, Texas 78758 Tel: (512) 478-6000 Fax: (512) 404-6550 E-mail: phcantilo@cb-firm.com UHCNV@cb-firm.com FDFS is represented by: Thomas M. Messana, Esq. Messana, P.A. 401 East Las Olas Boulevard, Suite 1400 Fort Lauderdale, Florida 33301 Tel: (954) 712-7400 Fax: (954) 712-7401 E-mail: tmessana@messana-law.com BankUnited is represented by: Frank P. Terzo, Esq. Steven J. Solomon, Esq. Robert D. Peters, Esq. GrayRobinson, P.A. 1221 Brickell Avenue, Suite 1600 Miami, Florida 33131 Tel: (305) 416-6880 Fax: (305) 416-6887 E-mail: frank.terzo@gray-robinson.com steven.solomon@gray-robinson.com robert.peters@gray-robinson.com NOLHGA is represented by: Mark J. Wolfson, Esq. Foley & Lardner LLP 100 North Tampa Street, Suite 2700 Tampa, FL 33602-5810 Tel: (813) 229-2300 Fax: (813) 221-4210 E-mail: mowolfson@foley.com Jean Johnson is represented by: Robert B. Glenn, Esq. Glenn Rasmussen, P.A. 100 S. Ashley Drive, Suite 1300 Tampa, FL 33602 Tel: (813) 229-3333 Fax: (813) 229-5946 E-mail: rglenn@glennrasmussen.com and Robert H. Nunnally, Jr., Esq. Wisener Nunnally Gold, LLP 245 Cedar Sage, Suite 240 Garland, Texas 75040 Tel: (972) 530-2200 Fax: (972) 530-7200 E-mail: robert@wnglaw.com About Universal Health Care Universal Health Care Group, Inc., owns an insurance company and three health-maintenance organizations that provide managed care services for government sponsored health care programs, focusing on Medicare and Medicaid. Universal Health was founded in 2002 by Dr. A.K. Desai and grew its operations of offering Medicare plans to more than 37,000 members to over 20 states. Universal Health filed a Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida regulators moved to put two of the company's subsidiaries in receivership. Universal Health Care estimated assets of up to $100 million and debt of less than $50 million in court filings in Tampa, Florida. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, serves as counsel to the Debtor. Soneet R. Kapila has been appointed the Chapter 11 Trustee in the Debtor's case. He is represented by Roberta A. Colton, Esq., at Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, PA. Dennis S. Jennis, Esq., and Jennis & Bowen, P.L., serve as special conflicts counsel and E-Hounds, Inc. serves as a forensic imaging consultant to the Chapter 11 trustee. VERMONT LAW SCHOOL: Moody's Lowers $10.3MM Bonds to 'Ba1' --------------------------------------------------------- Moody's Investors Service has downgraded its rating to Ba1 from Baa2 on Vermont Law School's (VLS) $10.3 million Series 2011 Revenue Bonds issued by the Vermont Educational and Health Buildings Finance Agency. The outlook is negative. Moody's also maintain a Aa3/VMIG 1 on VLS's Series 2003B bonds based on a Letter of Credit (LOC) from TD Bank, N.A. (Aa3/P-1 stable). There is no underlying rating on these bonds. Summary Rating Rationale The downgrade to Ba1 reflects continued substantial declines in JD enrollment given reduced national demand, expectations for lower net tuition revenue that will pressure cash flow and debt service coverage, and modest projected headroom on a financial covenant that may require an extraordinary release of net assets to remain compliant in the near term. The Ba1 rating captures Vermont Law School's adequate liquidity coverage of demand debt and financial resource cushion for debt and operations, as well as management's demonstrated ability to manage through the past few years' weakened law school demand while maintaining stable cash flow. The rating also incorporates the school's small size and niche position as a standalone law school, modest financial resources, and high dependence on student charges. The negative outlook reflects the potential for future erosion of the school's market position leading to weaker operating performance and erosion of financial covenant headroom that could jeopardize orderly access to the market or raise concerns about debt acceleration. Challenges -- Nationwide pressure on law school demand has resulted in lower enrollment and weaker student demand for VLS. Enrollment declined 3.5% in fall 2013 for all programs and new matriculants for the JD program have declined 45% from fall 2009 to fall 2013. -- VLS's very small operating size ($28.2 million in revenue for FY 2013), combined with a high dependence on tuition revenue, makes the school vulnerable to even a small decline in enrollment. Operating revenue declined 4% in FY 2013 and is projected to decline further in FY 2014. -- Provisions of the Letter of Credit and Master Trust Indenture introduce potential acceleration risk. Downgrade to below investment grade permits the letter of credit bank to accelerate $3.4 million in demand bonds. While Moody's do not anticipate a financial covenant breach in the near-term, two consecutive years of below 1.0 times debt service coverage is considered an event of default. -- Net tuition per student has stagnated or declined for four years, and is projected to decline further in FY 2014 and FY 2015. Strengths: -- Management has demonstrated an ability and willingness to cut expenses resulting in historically stable cash flow (11.6% in FY 2013). Fiscal diligence will be critical in the future as revenues continue to decline. -- VLS has a fairly low debt burden at roughly one-half of annual operating revenue. The school does not have any near-term debt plans and does not expect to spend down reserves further. -- VLS is developing new revenue streams by introducing new master's programs to boost enrollment, and seeking new grants and gifts. Outlook The negative outlook reflects the potential for future erosion of the school's market position leading to weaker operating performance and erosion in financial covenant headroom that could jeopardize orderly access to the market or raise concerns about debt acceleration. What Could Make The Rating Go UP An upgrade is unlikely at this time given the negative outlook and pressure on operating performance. Return to a stable outlook could result from stabilized enrollment and net tuition revenue growth, combined with satisfactory debt service coverage. Growth in financial resources, leading to improved coverage of debt and operations, would also be considered a credit positive. What Could Make The Rating Go DOWN A downgrade could result from continued enrollment declines leading to weaker cash flow and debt service coverage, erosion of financial resources or liquidity, or debt acceleration. WEST CORP: Enters Into Agreement to Acquire SchoolMessenger ----------------------------------------------------------- West Corporation on April 14 disclosed that it has entered into an agreement to acquire Reliance Holding, Inc. d/b/a SchoolMessenger, a provider of notification and mobile communication solutions for the K-12 education market. Thousands of public and private school districts in all 50 states depend on SchoolMessenger's innovative solutions to connect and effectively communicate with millions of parents, students and staff every day. SchoolMessenger was founded in 1999 and has become the leading provider of high volume, on-demand messaging and communication platforms for the K-12 community. SchoolMessenger will be a part of West's Unified Communications business segment. "We are excited to add SchoolMessenger to West's strong portfolio of alerts and notifications solutions," said Todd Strubbe, president of West's Unified Communications operating segment. "We know that domain expertise, platform performance and customer service are the three critical requirements for delivering a world-class messaging and notifications service. SchoolMessenger has demonstrated outstanding capability on all three dimensions. We look forward to sustaining this excellence and helping drive even greater innovation." "A focus on serving our customers has shaped the SchoolMessenger culture since day one. We are pleased to be joining such a widely respected communications industry leader that shares our commitment to customers," said Ron Davies, executive chairman of SchoolMessenger. "As part of West, we will have access to additional resources and expertise that will further fuel our growth and reputation as the recognized communications leader in K-12." Closing of this transaction, which is subject to customary closing conditions, is expected to occur during the second quarter of 2014. SchoolMessenger had revenue of approximately $27 million in 2013. West expects this transaction to be slightly accretive in 2014 on an earnings per share basis, adjusted for deal-related amortization and expenses. About West Corporation Founded in 1986 and headquartered in Omaha, Nebraska, West Corporation -- http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West Corporation has a team of 41,000 employees based in North America, Europe and Asia. The Company's balance sheet at Sept. 30, 2013, showed $3.48 billion in total assets, $4.26 billion in total liabilities and a $782.60 million total stockholders' deficit. Bankruptcy Warning "If we cannot make scheduled payments on our debt, we will be in default, and as a result: * our debt holders could declare all outstanding principal and interest to be due and payable; * the lenders under our Senior Secured Credit Facilities could terminate their commitments to lend us money and foreclose against the assets securing our borrowings; and * we could be forced into bankruptcy or liquidation," the Company said in its quarterly report for the period ended Sept. 30, 2013. * * * As reported by the TCR on June 21, 2013, Standard & Poor's Ratings Services raised its corporate credit rating on Omaha, Neb.-based business process outsourcer West Corp. to 'BB-' from 'B+'. The upgrade reflects Standard & Poor's view that lower debt leverage and a less aggressive financial policy will strengthen the company's financial profile. In the April 4, 2013, edition of the TCR, Moody's Investor Service upgraded West Corporation's Corporate Family Rating to B1 from B2. "The CFR upgrade to B1 reflects West's shift to a more conservative capital structure and financial policies as a publicly owned company", stated Moody's analyst Suzanne Wingo. WILLBROS GROUP: S&P Revises Outlook to Positive & Affirms 'B-' CCR ------------------------------------------------------------------ Standard & Poor's Rating Services said that it revised its rating outlook on Houston-based engineering and construction company Willbros Group Inc. to positive from stable. At the same time, S&P affirmed its ratings on the company, including the 'B-' corporate credit rating. The rating on specialty energy infrastructure contractor Willbros reflects S&P's assessment of the company's "aggressive" financial risk profile and "vulnerable" business risk profile. Willbros serves the oil, gas, refining, petrochemical, and power industries, providing engineering, procurement and construction (either individually or as an integrated engineering, procurement, and construction service offering), turnarounds, maintenance, facilities development, and operations services. The rating incorporates the inherent cyclicality of the engineering and construction services sector in which Willbros participates. The operating losses associated with certain of the company's previous projects illustrate the inherent risks associated with the sector. Specifically, these risks include the sector's competitive nature, the economic and political risks in Willbros' upstream markets, and the potential for cost overruns in the execution of fixed-price contracts. The outlook is positive. Willbros used the proceeds from its recent asset sales to reduce debt leverage. "Despite its previous execution challenges, we expect that Willbros' gradually improving operating performance will enable the company to generate moderate free cash flow in 2014," said Standard & Poor's credit analyst Robyn Shapiro. "We also expect that the company will maintain at least 15% headroom under financial covenants in its credit agreement." S&P could raise the rating during the next 12 months if the company continues to generate and sustain positive free cash flow. S&P would expect the company to maintain "adequate" liquidity, including at least 15% headroom under financial covenants, and to continue maintaining debt leverage at less than 5x. S&P could revise the outlook to stable or negative during the next 12 months if Willbros' operating performance declines, causing liquidity to deteriorate so that ongoing cash outflows and covenant headroom to decrease to less than 10%. This could result from any unexpected execution challenges and project losses. XTREME POWER: Younicos Completes Strategic Acquisition of Assets ---------------------------------------------------------------- Younicos Inc., a wholly-owned subsidiary of Younicos AG, a Berlin- based company, on April 14 disclosed that it acquired Xtreme Power's assets with a winning bid in a chapter 11 auction supervised by the US District Bankruptcy Court of West Texas. Younicos Inc. acquired all relevant strategic assets and will also retain members of Xtreme Power's former management, engineering, business development and operations team. The former Xtreme Power team joins Younicos with industry leading experience in designing, implementing and servicing over 78 MW of energy storage installations for a wide range of applications and has provided several years of profitable up time and 24/7 customer support for a multiple installations and customers. James P. McDougall, CEO of Younicos: "This is a historic and strategic moment for Younicos. We're onboarding a great and talented team, acquiring important assets, know-how and customer relationships that are complementary to our current product and services offering. Younicos AG is the industry leader in Europe. The Xtreme Power asset acquisition and joining of forces establishes Younicos firmly in North America, one of the highest potential growth markets for large scale energy storage applications. We look forward to integrating the two teams under the Younicos flag and in doing so becoming the world leader in large scale energy storage solutions." Younicos and Xtreme Power have historically been industry leaders on their respective sides of the Atlantic. The two companies have independently developed solutions that integrate key infrastructure elements including multiple battery technologies, inverters and power control systems with proprietary software that sense and react to the needs of a wide range of power and energy management requirements for grid-scale and island solutions. Younicos is currently building Europe's first stand-alone commercial battery park in Schwerin, Germany and is providing the software for Europe's biggest commercial energy storage trial in Leighton Buzzard, UK. Xtreme Power was among the few companies in the industry with multi-megawatt installations in the field. Teaming up with Duke Energy it implemented the largest US wind energy storage system at the Notrees wind power project in west Texas. In Hawaii and Alaska, Xtreme Power's energy management systems are deployed at five locations providing island renewable integration and grid support. This acquisition and combination of teams positions Younicos in a global leadership role and as the go-to-company for megawatt-scale energy storage solutions. About Xtreme Power Xtreme Power focuses on the design, engineering, installation, and monitoring of integrated energy storage systems for power generators, grid operators and commercial and industrial end users, among others. Xtreme Power claims to be one of the world's leading grid-scale power control technology provider capable of integrating the full spectrum of energy generation sources and battery technologies. Xtreme Power Inc. and two affiliates filed Chapter 11 bankruptcy petitions (Bankr. W.D. Tex. Lead Case No. 14-10096) in Austin, Texas, on Jan. 22, 2014. Judge Christopher H. Mott presides over the case. The Debtors have tapped Jordan Hyden Womble & Culbreth & Holzer, P.C., as bankruptcy attorneys, Baker Botts L.L.P. as special counsel, and Gordian Group, LLC, as investment banker and financial advisor. The Official Committee of Unsecured Creditors has retained Hohmann, Taube & Summers, L.L.P. as counsel, and Baker Botts L.L.P. as special counsel. Debtor Power Inc. scheduled $7,004,915 in total assets and $65,743,283 in total liabilities. Debtor Power Grove scheduled $5,179,692 in total assets and $31,882,277 in total liabilities. Power Systems scheduled $4,303,921 in total assets and $87,666,873 in total liabilities. XTREME POWER: Horizon Technology Successfully Exits Investment -------------------------------------------------------------- Horizon Technology Finance Corporation on April 14 disclosed that, in connection with the United States Bankruptcy Court-approved sale of substantially all of the assets of Xtreme Power, Inc., Horizon has successfully exited its investment in Xtreme. Robert D. Pomeroy, Jr., Chairman and Chief Executive Officer of Horizon, stated, "We are pleased to reach a successful exit of our investment in Xtreme, our second resolution of a non-accrual account over the past month. The sale of Xtreme's assets has provided a full recovery of Horizon's investment including all principal, interest and fees, resulting in a realized internal rate of return on the transaction of 17.7%. As we continue to aggressively manage our dynamic venture loan portfolio, we will maintain our focus on taking advantage of the underlying value of the assets securing our loans for the benefit of shareholders." The United States Bankruptcy Court for the Western District of Texas approved the sale of substantially all of the assets of Xtreme. In connection with the sale, Horizon has received cash proceeds of $9.9 million. Horizon applied $2.8 million of the proceeds to fully reimburse the debtor-in-possession financing it provided to Xtreme in the first quarter of 2014 and applied the remaining $7.1 million of proceeds to fully pay off Xtreme's venture loan balance, including fees and expenses. For the quarter ended March 31, 2014, Horizon expects to reverse approximately $1.3 million in previously recorded unrealized depreciation on its loan investment in Xtreme. As of December 31, 2013, the loan was on non-accrual with a cost of $6.0 million and fair value of $4.7 million. About Horizon Technology Finance Horizon Technology Finance Corporation -- http://www.horizontechnologyfinancecorp.com-- is a business development company that provides secured loans to development- stage companies backed by established venture capital and private equity firms within the technology, life science, healthcare information and services, and cleantech industries. The investment objective of Horizon is to maximize total returns by generating current income from a portfolio of directly originated secured loans as well as capital appreciation from warrants that it receives when making such loans. Headquartered in Farmington, Connecticut, with regional offices in Walnut Creek, California and Reston, Virginia, Horizon is externally managed by its investment advisor, Horizon Technology Finance Management LLC. Horizon's common stock trades on the NASDAQ Global Select Market under the ticker symbol "HRZN". In addition, Horizon's 7.375% Senior Notes due 2019 trade on the New York Stock Exchange under the ticker symbol "HTF." About Xtreme Power Xtreme Power focuses on the design, engineering, installation, and monitoring of integrated energy storage systems for power generators, grid operators and commercial and industrial end users, among others. Xtreme Power claims to be one of the world's leading grid-scale power control technology provider capable of integrating the full spectrum of energy generation sources and battery technologies. Xtreme Power Inc. and two affiliates filed Chapter 11 bankruptcy petitions (Bankr. W.D. Tex. Lead Case No. 14-10096) in Austin, Texas, on Jan. 22, 2014. Judge Christopher H. Mott presides over the case. The Debtors have tapped Jordan Hyden Womble & Culbreth & Holzer, P.C., as bankruptcy attorneys, Baker Botts L.L.P. as special counsel, and Gordian Group, LLC, as investment banker and financial advisor. The Official Committee of Unsecured Creditors has retained Hohmann, Taube & Summers, L.L.P. as counsel, and Baker Botts L.L.P. as special counsel. Debtor Power Inc. scheduled $7,004,915 in total assets and $65,743,283 in total liabilities. Debtor Power Grove scheduled $5,179,692 in total assets and $31,882,277 in total liabilities. Power Systems scheduled $4,303,921 in total assets and $87,666,873 in total liabilities. ZUERCHER TRUST: Hearing on Plan Outline Scheduled for May 8 ----------------------------------------------------------- The Bankruptcy Court will convene a hearing on May 8, 2014, at 10:00 a.m., to consider the adequacy of information in the Disclosure Statement explaining the Plan of Reorganization filed by The Zuercher Trust of 1999. Objections, if any, are due May 1. According to the Disclosure Statement, the Debtor seeks to accomplish payments under the Plan by income generated from -- or through financing or sale of -- the real property located at 2400 - 2420 Bayshore Blvd., San Francisco, California. The Plan says the Bayshore property as of June 26, 2013, had an "as is" value of $4.5 million plus upwards of $5.7 million if full rented. The Debtor said "there is positive cash flow out of tenant current and potential from rental payments" on the Bayshore property. Two properties of the Debtor -- at Alexandria and Union in Los Angeles -- were sold in bankruptc over the Debtor's objection. The order approving the sale is on appeal before the Bankruptcy Appellate Panel. Under the Plan, all administrative claims will be paid on the Effective date of the Plan, unless a particular claimant agrees to a different treatment. Holders of classes of priority unsecured claims on the Effective Date will be paid in full in cash. As to general unsecured claims, the Plan provides this treatment: "monthly as to undisputed. Upon confirmation of plan at rate of total $750.00 per month in equal shares." Class of Interest holders will maintain their 100% interest. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/ZUERCHERTRUST_ds.pdf About The Zuercher Trust of 1999 San Mateo, California-based The Zuercher Trust of 1999 filed for Chapter 11 bankruptcy (Bankr. N.D. Cal. Case No. 12-32747) on Sept. 26, 2012. Bankruptcy Judge Hannah L. Blumenstiel presides over the case. Derrick F. Coleman, Esq., at Coleman Frost LLP, served as the Debtor's counsel. The Debtor is now represented by: Bradley Kass, Esq. KASS & KASS LAW OFFICES 520 S. El Camino Real, Suite 810 San Mateo, CA 94402 The Debtor, a business trust, estimated assets and debts of $10 million to $50 million. The Debtor owns property in 621 S. Union Avenue, in Los Angeles. The property is currently in REAP for alleged city health code violations. In its schedules, the Debtor disclosed $28,450,000 in total assets and $12,084,015 in total liabilities. The petition was signed by Monica H. Hujazi, trustee of the Zuercher Trust. As reported in the TCR on March 22, 2013, August B. Landis, Acting U.S. Trustee for Region 17, obtained authorization from the U.S. Bankruptcy Court to appoint Peter S. Kravitz as Chapter 11 Trustee for The Zuercher Trust of 1999. Steven T. Gubner, Esq., and Richard D. Burstein, Esq., at Ezra Brutzkus Gubner LLP, represent the Chapter 11 Trustee as bankruptcy counsel. ZUERCHER TRUST: Case Conversion Hearing Continued Until Sept. 25 ---------------------------------------------------------------- Bankruptcy Judge Hannah L. Blumenstiel continued until Sept. 25, 2014 at 10:00 a.m., the hearing on the motion to convert the Chapter 11 case of The Zuercher Trust of 1999 to one under Chapter 7 of the Bankruptcy Code. Judge Blumenstiel also denied the motion by the Chapter 11 trustee to vacate the order related to the sale of the real property located at 2400-2424 Bayshore Blvd., San Francisco, California. Peter S. Kravitz, the duly appointed and acting Chapter 11 trustee, on Dec. 30, 2013, filed the motion to vacate the Court's prior order granting the sale motion and for entry of a new order (1) approving a new stalking horse bidder; (2) approving amended sale procedures and bid protections in connection with sale. Interested party Sterling Heatley, creditor Sequoia Mortgage Capital, and Monica Hujazi, the Debtor's principal, on behalf of the Debtor, opposed the trustee's motion to vacate. Sterling Heatley, co-owner of the Bayshore Property, on Jan. 9, 2014, filed the motion to convert. Heatley cited these grounds: (a) substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation; (b) gross mismanagement of the estate; and (c) unauthorized use of cash collateral substantially harmful to one or more creditors. Judge Blumenstiel's order provides that: 1. the Chapter 11 trustee must continue marketing the property until June 27, in a commercially reasonable manner and at a commercially reasonable price based upon the evidence of value currently in the record; and 2. the Chapter 11 trustee must file and serve a disclosure statement by Sept. 19. The Debtor has filed its own plan of reorganization and a hearing has been set for May 8 to consider approval of the explanatory disclosure statement. Mr. Heatley -- through counsel, David M. Wiseblood, Esq., at the Law Offices of David M. Wiseblood -- said in court papers filed on Feb. 7 that he wants to see the Bayshore Property sold and his interest paid for. He said he has no desire to revert to the prepetition status if the Court is seriously considering such a result. A sale of the asset will provide the best opportunity for creditors to be paid, he said. Bradley Kass, Esq., at Kass & Kass Law Offices, on behalf of the Debtor and Ms. Hujazi, said the motion to convert must be denied as the moving party has not met their burden of proof for such drastic relief, and converting the case is not in the best interests of the estate or disputed or undisputed creditors. The Debtor and Ms. Hujazi also submitted a memorandum of points and authorities in opposition to the motion, relating that the motion to convert has minimal to do with the estate but is believed to be for the self serving pursuit by the trustee and their counsel to generate fees for themselves in the quickest method possible. The Chapter 11 trustee also objected to the motion to convert, saying that many of the issues raised in the motion as grounds for conversion have already been addressed to and disposed of by the Court. The trustee also objected to Mr. Heatley's description of the trustee's actions in the Debtor's case as "grossly mismanaged". Mr. Heatley responded to the Chapter 11 trustee's filings, saying the trustee cited no legal authority on point to defeat conversion. Meanwhile, Michael Joseph Profit Sharing Plan, a secured claimant, has notified the Bankruptcy Court that its has not consented to the Debtor's use of cash collateral related to the real property at 911 N. Amphlett Blvd., San Mateo, California. The Plan also asked the Court to sequester all cash collateral for the Plan's benefit. Mark J. Romeo, Esq., at the Law Offices of Mark J. Romeo, represented the Plan. Real Estate Brokers Hired On Dec. 12, 2013, the Bankruptcy Court authorized the Chapter 11 trustee to employ Madison Partners and Apartment Realty Advisors as real estate brokers. As reported in the Troubled Company Reporter on Nov. 28, 2013, Madison has proposed to engage ARA as sub-broker to handle local activities related to the marketing and sale of the Bayshore Property, with compensation to ARA to be paid from Madison's share of the commission. The listing agreement provides for a listing price of $3,425,000 and brokers have agreed to accept a 6% commission of the gross sale price to be evenly divided between Madison and ARA (3%) and the prospective buyer's agent (3%). In the event brokers are also agents for the prospective buyer then brokers will be entitled to the 3% commission otherwise paid to the third party agent, for a total of 6% commission to be divided between Madison and ARA. Mr. Heatley, the minority co-owner of the Bayshore Property, opposed the hiring. Mr. Heatley said the Court must deny the trustee's prejudicial and prejudicially untimely broker application, not only because the trustee has violated the Court's Sept. 11, 2013, that sets forth the requirements for the broker application, but also because the application makes no sense. Mr. Heatley asserted that the trustee does not need two real estate brokers to market and sell the property. About The Zuercher Trust of 1999 San Mateo, California-based The Zuercher Trust of 1999 filed for Chapter 11 bankruptcy (Bankr. N.D. Cal. Case No. 12-32747) on Sept. 26, 2012. Bankruptcy Judge Hannah L. Blumenstiel presides over the case. Derrick F. Coleman, Esq., at Coleman Frost LLP, served as the Debtor's counsel. The Debtor is now represented by Bradley Kass, Esq., at Kass & Kass Law Offices. The Debtor, a business trust, estimated assets and debts of $10 million to $50 million. The Debtor owns property in 621 S. Union Avenue, in Los Angeles. The property is currently in REAP for alleged city health code violations. In its schedules, the Debtor disclosed $28,450,000 in total assets and $12,084,015 in total liabilities. The petition was signed by Monica H. Hujazi, trustee of the Zuercher Trust. As reported in the TCR on March 22, 2013, August B. Landis, Acting U.S. Trustee for Region 17, obtained authorization from the U.S. Bankruptcy Court to appoint Peter S. Kravitz as Chapter 11 Trustee for The Zuercher Trust of 1999. Steven T. Gubner, Esq., and Richard D. Burstein, Esq., at Ezra Brutzkus Gubner LLP, represent the Chapter 11 Trustee as bankruptcy counsel. ZUERCHER TRUST: Drops Bid to Terminate Chapter 11 Trustee --------------------------------------------------------- The Zuercher Trust of 1999 and Monica Hujazi last month notified the U.S. Bankruptcy Court Northern District of California of withdrawal of their motion to terminate the appointment of Peter S. Kravitz as Chapter 11 trustee for the bankruptcy estate of the Debtor. The hearing scheduled for March 20, 2014, was canceled. The Chapter 11 trustee, through its counsel, Steven T. Gubner, Esq., at Ezra Brutzkus Gubner LLP, opposed to the motion and requested that the hearing on the motion, if not denied, must at the least, be coordinated with the continued hearing on Sterling Heatley's motion to convert the case to Chapter 7, set for Sept. 25. The Chapter 11 trustee said the Debtor's motion is just one more example of the Debtor's and Ms. Hujazi's efforts to disrupt the trustee's administration of the estate as well as to burden the Court and attempt to interfere with its processes. Meanwhile, the Bankruptcy Court denied the Debtor's request for the Court to cite the Chapter 11 trustee for contempt, and to impose sanctions against the trustee. About The Zuercher Trust of 1999 San Mateo, California-based The Zuercher Trust of 1999 filed for Chapter 11 bankruptcy (Bankr. N.D. Cal. Case No. 12-32747) on Sept. 26, 2012. Bankruptcy Judge Hannah L. Blumenstiel presides over the case. Derrick F. Coleman, Esq., at Coleman Frost LLP, served as the Debtor's counsel. The Debtor is now represented by Bradley Kass, Esq., at Kass & Kass Law Offices. The Debtor, a business trust, estimated assets and debts of $10 million to $50 million. The Debtor owns property in 621 S. Union Avenue, in Los Angeles. The property is currently in REAP for alleged city health code violations. In its schedules, the Debtor disclosed $28,450,000 in total assets and $12,084,015 in total liabilities. The petition was signed by Monica H. Hujazi, trustee of the Zuercher Trust. As reported in the TCR on March 22, 2013, August B. Landis, Acting U.S. Trustee for Region 17, obtained authorization from the U.S. Bankruptcy Court to appoint Peter S. Kravitz as Chapter 11 Trustee for The Zuercher Trust of 1999. Steven T. Gubner, Esq., and Richard D. Burstein, Esq., at Ezra Brutzkus Gubner LLP, represent the Chapter 11 Trustee as bankruptcy counsel. * Selling 'Out of Trust' Makes Debt Nondischargeable ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that selling equipment "out of trust" gave rise to a nondischargeable debt when the owners of the business filed for bankruptcy, the Bankruptcy Appellate Panel in Cincinnati ruled, reversing the decision of a bankruptcy court. According to the report, a lender had a blanket lien on construction equipment making up inventory of the company owned by the bankrupt. The owner caused the company to sell several items and didn't turn the proceeds over to the lender as required by the security agreement. The bankruptcy judge ruled after trial that the debt was dischargeable, or wiped out in bankruptcy, the report related. The appellate panel in Cincinnati reversed, in a March 26 opinion by U.S. Bankruptcy Judge George W. Emerson Jr., holding that the record showed that the owner knew about the lender's lien rights and also knew the failure to pay over "would be substantially certain to harm" the lender, the report further related. Those findings satisfied the requirements of willful and malicious, Judge Emerson said, the report added. The case is Kraus Anderson Capital Inc. v. Bradley (In re Bradley), 13-8010, U.S. Bankruptcy Appellate Panel for the Sixth Circuit (Cincinnati). * Recording Foreclosure Deed Not Required to Divest Ownership ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that in West Virginia, concluding a foreclosure sale extinguished the owner's legal and equitable interest in the property, even though the deed wasn't delivered and recorded before the owner filed for bankruptcy, according to a March 26 opinion by U.S. District Judge Irene C. Berger in Beckley, West Virginia. The report related that federal district courts in West Virginia are split on whether the deed must be delivered and recorded after a foreclosure sale to extinguish the owner's equitable interest in the property. Judge Berger decided to follow a case called Bardell in reversing the bankruptcy court's decision. Judge Berger largely relied on the fact that Bardell the U.S. Court of Appeals in Richmond, Virginia, upheld the lower court in an unreported opinion, the report further related. She interpreted West Virginia law as meaning that completion of the foreclosure sale ended the owner's equitable interest in the property, the report added. Consequently, the property didn't belong to the bankrupt estate and the bankruptcy judge should have modified the automatic stay to permit recording the deed. The case is RBS Inc. v. Bell (In re Bell), 13-27240, U.S. District Court, Southern District of West Virginia (Beckley). * BofA, Ex-CEO Lewis Settle Crisis-Era Suits -------------------------------------------- James Sterngold, Dan Fitzpatrick and Nick Timiraos, writing for The Wall Street Journal, reported that Bank of America Corp. and former Chief Executive Kenneth Lewis took big steps to put the financial crisis behind them by paying state and federal agencies to settle lawsuits over the acquisitions of Countrywide Financial Corp. and Merrill Lynch & Co. According to the report, the Charlotte, N.C., lender said that it would pay $9.5 billion to settle mortgage claims with Fannie Mae, Freddie Mac and their federal regulator. Bank of America also agreed to pay the state of New York $15 million to end a civil lawsuit by New York state Attorney General Eric Schneiderman alleging the bank duped shareholders by failing to disclose mounting losses at Merrill before buying the securities firm in a rushed deal struck in 2008 near the height of the financial crisis, the report related. The bank neither admitted nor denied wrongdoing in both settlements. Mr. Lewis agreed to pay $10 million and accept a three-year ban from work at any public company as part of the New York settlement, the report further related. Bank of America will cover Mr. Lewis's penalty, according to people familiar with the deal. Mr. Lewis neither admitted nor denied wrongdoing. Bruce Yannett, Mr. Lewis's lawyer, said the former CEO "is proud of the role he played in helping the U.S. banking system survive" but that he "is pleased to put this matter behind him and to move on with his life," the Journal cited. * BofA Wins Recommendation for U.S. Mortgage Suit Dismissal ----------------------------------------------------------- Erik Larson and Keri Geiger, writing for Bloomberg News, reported that Bank of America Corp. should win dismissal of a U.S. Justice Department lawsuit accusing it of misleading investors about the quality of loans tied to $850 million in mortgage-backed securities, a judge said. According to the report, the government's claim that the bank made false statements wasn't properly supported, U.S. Magistrate Judge David Cayer in Charlotte, North Carolina, said on March 28 in a recommendation to dismiss the case. The U.S., which filed a notice that it will object, has a chance to challenge the recommendation before a district court judge and appeal any dismissal. Dismissal of the case "will represent a significant setback for the government's legal efforts and likely mark the beginning of the end for crisis-era litigation," Isaac Boltansky, a policy analyst at Compass Point Research & Trading LLC in Washington, said in a research note, the report cited. The proposal comes as the U.S. seeks to punish companies for wrongdoing that helped trigger the financial crisis, the report related. The case and others like it allege violations of a law that is a relic of the savings-and-loan crisis of the 1980s, allowing civil suits to reach back further in time to target bad behavior and seek larger damages in court. If the case is dismissed, it will be a first for about a dozen companies that have been targeted under the Financial Institution Reform, Recovery and Enforcement Act of 1989, known as FIRREA, which allows the government to sue an individual or group, rather than charge them with a crime, for fraud that affects a federally insured financial institution, the report further related. * Falcone Accused of Using Company Assets in Cash Crunch -------------------------------------------------------- Alexandra Stevenson, writing for The New York Times' DealBook, reported that an investor has accused the hedge fund billionaire Philip A. Falcone of using his publicly listed company "to bail himself out" after a reaching an $18 million settlement with the Securities and Exchange Commission. In the weeks after the S.E.C. settlement last August, Mr. Falcone's hedge fund Harbinger Capital Partners was confronted with a flurry of requests from investors to return their money, the report related, citing a complaint filed by a Harbinger Group shareholder, Haverhill Retirement System. In a desperate attempt to find capital to replace the money flowing out, according to the lawsuit, Mr. Falcone sold some shares in Harbinger Group, where he is chief executive, the report further related. He later sold additional shares and added two seats to the board of directors, eventually securing a $400 million investment by the Leucadia National Corporation, the suit contends. By doing so, "Falcone effectively used Company assets to bail himself out of a personal financial crisis," the complaint said, the report added. According to the report, the lawsuit is the latest legal hurdle for Mr. Falcone, who agreed to admit wrongdoing and be banned from the securities industry for at least five years to settle market manipulation accusations. * Haynes And Boone Ducks High Court Appeal Over $1.3M Fee --------------------------------------------------------- Law360 reported that the U.S. Supreme Court declined to hear an appeal by a once-bankrupt man arguing he should not have to pay $1.3 million in fees to his former attorneys at Haynes and Boone LLP and Griffith Nixon & Davison PC. According to the report, Timothy Michael Frazin filed his petition to the high court in February, arguing that the Fifth Circuit Court of Appeals erred in October when it ruled that he was not entitled to damages for an alleged breach of fiduciary duty by the law firms. * High Court Won't Hear BofA's Ch. 7 Junior Lien Appeal ------------------------------------------------------- Law360 reported that the U.S. Supreme Court has refused to take up Bank of America NA's push to prevent Chapter 7 debtors from completely nixing junior mortgage liens when the senior lien exceeds the property's value, according to an order. The report related that in a brief order, the high court denied Bank of America's petition for a writ of certiorari without comment, leaving in place lower court rulings the bank claims ignore high court precedent on the issue and jeopardize Chapter 7 bankruptcy uniformity. * SAC Urges Approval of U.S. Insider Trading Pact ------------------------------------------------- Bob Van Voris, writing for Bloomberg News, reported that SAC Capital Advisors LP urged a federal judge to approve its record $1.8 billion insider-trading settlement with the government, saying the firm is "deeply remorseful" for the illegal acts of its employees. According to the report, SAC lawyer Martin Klotz asked U.S. District Judge Laura Taylor Swain in a two-page letter on March 27 to sign off on the agreement, which also calls for the firm to close its investment advisory business. "The defendants are deeply remorseful for the misconduct of each of the individuals who broke the law while employed by them," Klotz wrote, the report related. "Even one person crossing the line into illegal behavior is unacceptable. The defendants are chastened by this experience, but are determined to learn from it." Four SAC units were indicted last year, accused of reaping hundreds of millions of dollars in illegal profit through insider trades by employees dating to 1999, the report further related. Steven A. Cohen, 57, the firm's founder, faces an administrative action by the Securities and Exchange Commission alleging he failed to supervise the hedge fund's activities. Eight current or former SAC employees have been convicted of insider trading charges. Manhattan U.S. Attorney Preet Bharara called SAC Capital "a veritable magnet for market cheaters" when the indictment was filed in July, the report added. Cohen has denied wrongdoing and isn't accused of a crime. The criminal case is U.S. v. SAC Capital Advisors LP, 13-cr-00541, U.S. District Court, Southern District of New York (Manhattan). The civil case is U.S. v. SAC Capital Advisors LP, 1:13-cv-5182, U.S. District Court, Southern District of New York (Manhattan). The investor suit is Kaplan v. SAC Capital Advisors LP, 12-cv- 09350, U.S. District Court, Southern District of New York (Manhattan). * PBOC Official Blogs Skepticism About Bitcoin ---------------------------------------------- Chao Deng, writing for The Wall Street Journal, reported that an official from China's central bank voiced his skepticism toward bitcoin on his personal microblogging account, a move that comes amid uncertainty around the digital currency's future in China. According to the report, Zhang Niannian likened bitcoin exchanges to "casinos" on Chinese microblogging website Sina Weibo in a post. Mr. Zhang asked several rhetorical questions in his posting, including "Aren't you afraid that a bitcoin platform will leave with your money?" as well as, "Do you think the court would protect you?" "Cherish life, walk away from bitcoin," the Journal cited the official as saying. Chinese media reported that the People's Bank of China has ordered domestic banks to stop doing business with websites that trade in bitcoin, the report related. The price of bitcoin has fallen since the start of the year amid the collapse of Tokyo-based bitcoin exchange Mt. Gox, which had for a long time been the world's most prominent platform but which filed for bankruptcy protection on Feb. 28, saying it had lost hundreds of thousands of bitcoin, the report further related. * Solons Call on Automakers to Share More Info on Fatal Accidents ----------------------------------------------------------------- Michael A. Fletcher, writing for The Washington Post, reported that two Senate Democrats unveiled a plan that would require automakers to share more information about fatal accidents in an effort to help federal regulators uncover defects such as the flawed General Motors ignition switch that has been linked to at least 12 deaths. According to the report, GM has said it knew about the defective switch for more than a decade before initiating a recall in February of 1.6 million Chevrolet Cobalts and five other small models. The National Highway Traffic Safety Administration had been looking into the defect for years but has said it did not have enough information to order a recall. The legislation by Sens. Richard Blumenthal (D-Conn.) and Edward J. Markey (D-Mass.) would require automakers to routinely submit accident reports or other documents to the NHTSA when they learned of a fatality involving one of their vehicles, the report related. The bill would require the NHTSA, in turn, to make the information available to the public in a user-friendly, searchable database, the report further related. That would allow consumers and watchdog groups to more easily sift through the data in search of safety problems. "A massive information breakdown at NHTSA has led to deadly vehicle breakdowns on our roads," the report cited Markey as saying in a statement. "The Department of Transportation has the authority to require critical safety information be made publicly available, but it has never used its authority." * Gavin/Solmonese's Weitz Among T&W People to Watch List for 2014 ----------------------------------------------------------------- Wayne Weitz, Managing Director at Gavin/Solmonese, was named one of the top business professionals making their mark in turnaround, bankruptcy and restructuring by Turnarounds & Workouts (T&W) in its "People To Watch" list for 2014. Mr. Wayne was recognized specifically for his financial advisory roles in several high-profile bankruptcy cases during 2013. These included 11 statutory and ad hoc committees in bankruptcies, such as the equity committee in AgFeed Industries, and creditors' committees in Oreck Manufacturing, Conexant Systems, Namco Pools, Highway Technologies and MFM Industries. Additionally, Wayne serves as financial advisor to the indenture trustee in Exide and was Chapter 11 trustee in the Waste2Energy bankruptcy, where he won a significant legal victory in the Isle of Man. "I am honored to be named among the industry's leading bankruptcy, restructuring and turnaround professionals," said Mr. Weitz. "In each case, I was a member of a tremendous team of dedicated individuals who worked toward the best possible outcome for our clients. It is gratifying to see that our successes are recognized among our peers and valued colleagues," he added. In addition to Wayne's individual recognition, in January 2014, The M&A Advisor recognized Gavin/Solmonese for its role representing the Official Committee of Equity Security Holders in the Chapter 11 sale of AgFeed Industries, Inc. The firm was also part of a distinguished professional team that received the Retail Manufacturing/Distribution Deal of the Year Award from The M&A Advisor for the sale of Oreck Corporation to Royal Appliance Mfg. Co. About Wayne Weitz Wayne Weitz is a Managing Director of Gavin/Solmonese. He is a senior financial professional with more than 25 years of experience advising clients and executing transactions as a principal in corporate finance and capital structure optimization, restructuring, mergers and acquisitions, financial management, and bankruptcy. He began his career as an investment banker and has completed nearly 100 acquisitions, dispositions, and capital formation transactions. Wayne earned a Bachelor of Arts in economics and politics from Brandeis University and an MBA in finance and accounting from the University of Chicago Booth School of Business. About Gavin/Solmonese Whether it's protecting a company or its creditors from failure, deploying new leadership, or reversing antiquated thinking, Gavin/Solmonese -- http://www.gavinsolmonese.com--leads companies to measurable bottom line improvement. Named one of the country's Outstanding Turnaround Firms by Turnarounds & Workouts, the Gavin/Solmonese Corporate Restructuring Group (formerly NHB Advisors) provides leadership for underperforming and troubled companies and their stakeholders, helping businesses maximize value for owners, investors, creditors and employees. The Gavin/Solmonese Corporate Engagement & Public Affairs Group leads organizations through critical strategic thinking and tactical planning, creating better connections with consumers, decision makers and the media, resulting in market share growth and higher profitability. ********* 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 ***