/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140613.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 13, 2014, Vol. 18, No. 162 Headlines ABERDEEN LAND: TC Tampa Wants Full Payment on Effective Date ACADEMI HOLDINGS: Moody's Assigns 'B3' CFR & Bank Debt Rating AMBAC FINANCIAL: Posts $156-Mil. Net Income in First Quarter AUXILIUM PHARMACEUTICALS: Deerfield Mgmt. Holds 12.5% Stake B/E AEROSPACE: Moody's Affirms 'Ba1' Corporate Family Rating BAXANO SURGICAL: Reports $9.11-Mil. Loss for Q1 Ended March 31 BEAZER HOMES: To Sell $750 Million Worth of Securities BIO-KEY INTERNATIONAL: Has $299K Net Loss in First Quarter BIOLASE INC: Incurs $4.89-Mil. Net Loss in March 31 Quarter CAPROCK OIL: Incurs $546K Net Loss in March 31 Quarter CDRH PARENT: Moody's Assigns 'B3' Corporate Family Rating CHANTILLY BIOPHARMA: Case Summary & 19 Top Unsecured Creditors CHARLES FOGARTY: Pilgim Title Wins Summary Judgment CHINAMERICA ANDY: Going Concern Doubt Despite Revenues CLOCK TOWER: BB&T Entitled to $3.48 Million Damages COLTS NECK GOLF: Case Summary & 18 Largest Unsecured Creditors COMARCO INC: OKs Salary Reduction, One-Time Bonus for CEO COMSTOCK MINING: Van Den Berg Reports 20.6% Equity Stake COTT CORP: Moody's Rates New $525MM Sr. Unsecured Bond 'B3' CRANBERRY COUNTRY LODGE: Stays Open During Receivership DAVITA HEALTHCARE: Moody's Rates $1.75BB Sr. Unsecured Notes 'B1' DECISIONPOINT SYSTEMS: Posts $113K Net Loss for March 31 Quarter DEJOUR ENERGY: Has C$2.98-Mil. Net Loss For First Quarter ENERGY FUTURE: Asks Court to OK Crowson Settlement Agreement ENERGY FUTURE: CSC Trust Tapped as Successor Indenture Trustee ENERGY FUTURE: Schedules and Statements Due June 16 EQUINOX HOLDINGS: Moody's Hikes Corporate Family Rating to B2 EQUINOX HOLDINGS: S&P Affirms 'B' CCR; Outlook Positive EXPERT SOUTH TULSA: Cornerstone Creek Won't Cough Up Profit FERRELLGAS L.P.: Tack-on Offering No Impact on Moody's B1 Rating FIRST SECURITY: Gets Demand Letter Over Grant of Stock Options FIRST STAR PROPERTIES: Case Summary & 2 Unsecured Creditors FORESIGHT ENERGY: Moody's Revises B2 Rating Outlook to Positive FOUR OAKS: Amends 26.6MM Shares Rights Offering Prospectus GELTECH SOLUTIONS: Posts $1.63-Mil. Loss in Qtr. Ended March 31 GENERAL INVESTMENTS: Wins Dismissal of Chapter 11 Case GLEN AMERICAN: Voluntary Chapter 11 Case Summary GRIGGS OFFICE: Bellingham, WA Retailer Begins Liquidation HD SUPPLY: Incurs $12 Million Net Loss in First Quarter HORIZON LINES: Stockholders Elected Two Directors HOTEL OUTSOURCE: Reports $385-K Net Loss in First Quarter IMMEDIATEK INC: Incurs $298K Net Loss in Qtr. Ended March 31 INTEGRATED ENVIRONMENTAL: Posts $517K Net Loss in First Quarter INT'L STEM CELL: Incurs $1.43-Mil. Net Loss in March 31 Quarter ISHARES CORE: S&P Assigns 'BB+f' Rating on Total USD Bond Market IVANHOE ENERGY: Reports $7.88-Mil. Net Loss for March 31 Quarter J2 GLOBAL: Moody's Affirms 'B1' Corporate Family Rating JBS USA: Moody's Assigns Ba3 Rating on $750MM Sr. Unsecured Notes KCG HOLDINGS: Moody's Affirms 'B1' Corporate Family Rating LANDMARK ACADEMY: S&P Lowers Rating on 2010 Refunding Bonds to BB+ LOOP 76: 9th Cir. Affirms Plan Confirmation MERGERMARKET GROUP: S&P Affirms 'B' Corp. Credit Rating MGM RESORTS: Stockholders OK Amendment to 2005 Incentive Plan MINT LEASING: Amends 70 Million Shares Prospectus with SEC MONTREAL MAINE: Court Approves 3rd Amendment to Purchase Deal MONTREAL MAINE: Trustee Wants Red Shield to Pay for Rail Services MONTREAL MAINE: Wheeling Wants Settlement Payment Escrowed MORNINGSTAR MARKETPLACE: Can Access Cash Collateral Until Aug. 26 MOORE FREIGHT: SGEF Says Claims vs. Dan Moore Not Part of Plan NATROL INC: Meeting to Form Creditors' Panel Set for June 19 NEW ALBERTSON: Moody's Assigns 'B2' Corporate Family Rating NEW STREAM CAPITAL: Dispute on PAF's Claim Goes to Trial NPS PHARMACEUTICALS: FDA Postpones Advisory Committee Meeting OCEANSIDE MILE: Has Until Oct. 31 to Access Cash Collateral ONCOLOGY ASSOCIATES: Court Narrows Trustee's Suit v. GECC ONEIDA HEALTH: S&P Lowers Rating on $10.9MM 2007 Bonds to 'BB+' OVERSEAS SHIPHOLDING: Has $10.4-Mil. Income for March 31 Quarter P2 LOWER ACQUISITION: Moody's Affirms B2 CFR; Outlook Negative PANACHE BEVERAGE: Incurs $1.4 Million Net Loss in First Quarter PATRICK HANNON: ABCD Holdings Wins Order Denying Ch.7 Discharge PHILLIPS INVESTMENTS: Section 341(a) Meeting Set on July 11 PHILLIPS INVESTMENTS: Case Summary & 15 Top Unsecured Creditors PILGRIM'S PRIDE: Moody's Confirms 'B1' Corporate Family Rating POCMONT HOLDINGS: Voluntary Chapter 11 Case Summary PPL ENERGY: Moody's Affirms Ba1 Jr. Subordinated Hybrids Rating PPL ENERGY: S&P Lowers CCR to 'BB' Following Spin-Off PRECISION OPTICS: Major Shareholder Expresses "Serious Concern" QUANTUM FOODS: City Capital to Assist in Sale of Turn-Key Assets QUANTUM FOODS: Court Approves $45,000 Funding for Creditors Panel QUANTUM FOODS: Has Until Sept. 16 to Decide on Unexpired Leases QUANTUM FOODS: Can Hire Tiger to Assist in Turn-Key Asset Sale RADIOSHACK CORP: Reports Financial Results for Period Ended May 3 ROOMLINX INC: Posts $539K Net Loss in March 31 Quarter SAN DIEGO HOSPICE: Wells Fargo Wins Stay Relief SAN DIEGO HOSPICE: Accord Resolves Ross' Motion for Stay Relief SANCHEZ ENERGY: Moody's Rates New $700MM Unsecured Notes 'B3' SCOTTSDALE VENETIAN: Sierra Consulting Approved as Expert Witness SEARS METHODIST: Case Summary & 24 Largest Unsecured Creditors SIMPLEXITY LLC: Court Denies Chapter 7 Conversion Bid SIMPLEXITY LLC: Amends Asset Purchase Agreement with Wal-Mart SIMPLEXITY LLC: July 16 Hearing on Executory Contracts Rejection SIMPLEXITY LLC: Rutberg & Co. Approved as Investment Banker SOLAVEI LLC: Case Summary & 20 Largest Unsecured Creditors SPANISH BROADCASTING: Third Avenue Holds 16.4% of Class A Shares SPENCER GIFTS: Moody's Assigns B2 Rating on $360MM Sr. Sec. Debt SSH HOLDINGS: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable SUNEDISON SEMICONDUCTOR: S&P Assigns 'B-' CCR; Outlook Stable SURTRONICS INC: Loses Bid to Dismiss Own Chapter 11 Case TELKONET INC: Cancels Business Financing Agreement TENET HEALTHCARE: Moody's Keeps Ratings Over $500MM Add-On Notes TENET HEALTHCARE: S&P Retains 'CCC+' Rating After $500MM Add-On TGIF MERGER: Moody's Rates Proposed $475MM 1st Lien Debt 'B1' TRONOX INC: July 7 Objection Deadline to Findings on Anadarko Deal TRUE DRINKS: Incurs $3.6-Mil. Net Loss for March 31 Quarter UNILIFE CORP: Reports $15.1MM Net Loss for Qtr. Ended March 31 VAUGHAN COMPANY: Discovery in Suit v. Levann et al. Extended VERINT SYSTEMS: Moody's Places 'B1' CFR on Review for Upgrade VERINT SYSTEMS: S&P Puts 'BB-' CCR on CreditWatch Positive * BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and Consumer Credit in America ********* ABERDEEN LAND: TC Tampa Wants Full Payment on Effective Date ------------------------------------------------------------ TC Tampa I, LLC, holder of a Class 2 Secured Real Estate Tax Claim, filed an objection to Aberdeen Land II, LLC's Third Amended Plan. As reported by the Troubled Company Reporter on June 9, 2014, the Debtor, pursuant to the Feb. 10, 2014 Settlement Term Sheet Aberdeen Community Development District that the Debtor and certain creditors and parties-in-interest entered into, filed a Third Amended Plan of Reorganization, dated as of May 13, 2014, which amends and restates the terms of the Second Amended Plan consistent with, and incorporates the transactions, agreements and settlements contemplated in, the Settlement Term Sheet. The Debtor's Plan provides for (i) the continued operation of the property of its estate through a reorganized company; and (ii) cash payments to holders of allowed claims in certain instances and for the transfer of property to certain holders of allowed secured claims as the indubitable equivalent of such allowed secured claims. TC Tampa says that although the Debtor's counsel has advised counsel for TC Tampa that the Debtor intends to pay Class 2 claims in full on the Effective Date, the Plan, as drafted, still provides for an alternative treatment, namely, "such other treatment as otherwise authorized by Bankruptcy Code . . . ." that include payment in "regular installment payments in cash." The Plan, says TC Tampa, should be amended or the confirmation order should make it clear that payment of Class 2 claims will be paid in full in cash on the Effective Date or allowance of the claim, without providing for some other unspecified alternative method of treatment. However, if the Debtor wishes to preserve the option of payments in installments, the Plan should state the interval of the installment payments, provide for the retention of the existing lien, and provide that there will be no satisfaction until the claim is paid in full. TC Tampa is represented by: Zala L. Forizs, Esq. McIntyre Thanasides Bringgold ELLIOTT GRIMALDI & GUITO, P.A. 501 E. Kennedy Boulevard, Suite 1900 Tampa, Florida 33602 Tel: (813) 899-6059 Fax: (813) 899-6069 E-mail: zala@mcintyrefirm.com 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. ACADEMI HOLDINGS: Moody's Assigns 'B3' CFR & Bank Debt Rating ------------------------------------------------------------- Moody's Investors Service has assigned initial ratings to Academi Holdings, LLC, including Corporate Family and bank debt ratings of B3. Proceeds of the planned first lien credit facility will refinance existing debt and fully fund the company's pending acquisition of Constellis Group, Inc. The rating outlook is stable. Ratings assigned: Corporate Family, B3 Probability of Default, B3-PD $150 million first lien revolver due 2019, B3, LGD3, 45% $290 million first lien revolver due 2019, B3, LGD3, 45% Rating Outlook, Stable Ratings Rationale The B3 Corporate Family Rating balances moderate financial leverage, pro forma for the debt raise and acquisition, with contract concentration, integration risk, and a recent history of operating margin volatility. On a Moody's adjusted basis, the beginning debt to EBITDA, pro forma for the transaction, will be about 4.5x. This leverage level is rather low for the assigned rating and partially offsets high revenue dependence on the Worldwide Protective Services (WPS) contract, a $10 billion indefinite delivery indefinite quantity (IDIQ) vehicle under which the US Department of State (DoS) procures protective services globally. Both Academi and Constellis derive the bulk of their revenues as prime contractors on WPS, under which highly trained and often former military staff provide armed protection in dangerous regions. The WPS contract expires in September 2015. Although both companies are in similar business lines and concentrated on WPS, Academi performs more work in Afghanistan while Constellis has greater focus in Iraq. While Academi, beyond DoS, holds US military contracts, Constellis has expanded toward the US Department of Energy and commercial end markets. Integration risk will nonetheless be elevated until the planned operational consolidation concludes. Further, while Constellis is larger than Academi and has had a higher, more stable operating margin level historically, its revenues have been declining since 2011. In contrast, Academi's revenues have risen, but its operating margin has been volatile and was quite low in 2013 (though it significantly rose in Q1-2014). On a combined basis, revenues contracted by about 4.5% in 2012 and 7% in 2013. The business combination could help smooth earnings and importantly permit greater leveraging of fixed costs. Enhanced scale, geographic breadth and range of offerings may help expand penetration of the federal civil and commercial end markets. The B3 CFR also acknowledges exposure to the scope of DoS missions, particularly within Iraq and Afghanistan where the political environment could rapidly change. Over half of 2013 combined-basis revenues stemmed from work in these two countries. While demand for private, armed services contractors to the US military grew rapidly with high US operational tempo, US troops will withdraw from Afghanistan, likely by the end of 2016 and possibly by the end of 2014, which raises a revenue risk. Further the geographic footprint/scope of the DoS mission in those countries will be affected by the evolving political and security environment. It is expected that the DoS mission will expand (raising protective service needs) in Afghanistan as US troops withdraw since infrastructure and civil institutions there are limited and services in support of the government would otherwise diminish -- but that outcome is not assured. The rating broadly acknowledges that the use of private, armed services contractors in support of US foreign missions has sometimes received negative publicity in the past and foreign governments have objected to their presence in-theatre, but contractors have effectively served their purpose and role. Further addressing concerns, Academi and Constellis have each invested heavily in governance and practice standards, which has helped their contract performance. Beyond Afghanistan and Iraq, a continued robust US foreign policy and a high number of regions with instability should sustain a geographically broad DoS presence, one in need of contracted protective services. The rating outlook is stable. A reasonably good backlog level, an adequate liquidity profile and potential for good conversion of earnings to free cash flow are the main reasons. A tax refund anticipated near-term should help Academi reduce revolver borrowings that could be as high as $50 million at close of the transaction. Although near-term scheduled debt amortizations will only be about $3.5 million, the company will have about $8 million of claims due across 2015 related to export control violation settlements. Upward rating potential would depend on better revenue visibility, unlikely to surface until after the WPS successor contract competition, expectation of debt/EBITDA below 4x with FCF/debt approaching 10%. Downward rating pressure would follow weakening liquidity, backlog declines, significant contract loss or low FCF. Academi Holdings, LLC is a global provider of training and security services focused on counter terrorism, force protection, law enforcement and security operations. Before its 2010 ownership change, the company had been named Xe Services and Blackwater Worldwide. Pro forma for the pending acquisition of Constellis Group, Inc., revenues in 2013 would have been about $800 million. The company is majority-owned by Forte Capital and Manhattan Partners. The principal methodology used in this rating was Global Aerospace and Defense Industry published in April 2014. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. AMBAC FINANCIAL: Posts $156-Mil. Net Income in First Quarter ------------------------------------------------------------ Ambac Financial Group, Inc., filed its quarterly report on Form 10-Q, disclosing a net income of $156.05 million compared with net income of $282.25 million for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $27.11 billion in total assets, $25.88 billion in total liabilities, and stockholders' equity of $1.23 billion. As a result of uncertainties associated with the oversight by the Rehabilitator of the Ambac Assurance Corp.'s segregated account, management has concluded that there is substantial doubt about Ambac's ability to continue as a going concern. A copy of the Form 10-Q is available: http://is.gd/Z3UGP1 About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac's bond insurance unit, Ambac Assurance Corp., is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Judge Shelley C. Chapman entered an order confirming the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc. on March 14, 2012. The Plan provides for the full payment of secured claims and 8.5% to 13.2% recovery for general unsecured claims. The second modified version of the confirmed Plan was declared effective on May 1, 2013, with Ambac obtaining bankruptcy court approval of a $100+ million claims settlement with the Internal Revenue Service. AUXILIUM PHARMACEUTICALS: Deerfield Mgmt. Holds 12.5% Stake ----------------------------------------------------------- Deerfield Mgmt, L.P., and its affiliates disclosed in an amended Schedule 13G filed with the U.S. Securities and Exchange Commission that as of June 6, 2014, they beneficially owned 6,267,382 shares of common stock of Auxilium Pharmaceuticals, Inc., representing 12.47 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at: http://is.gd/EukIvQ About Auxilium Auxilium Pharmaceuticals, Inc., is a fully integrated specialty biopharmaceutical company with a focus on developing and commercializing innovative products for specialist audiences. With a broad range of first- and second-line products across multiple indications, Auxilium is an emerging leader in the men's healthcare area and has strategically expanded its product portfolio and pipeline in orthopedics, dermatology and other therapeutic areas. Auxilium now has a broad portfolio of 12 approved products. Among other products in the U.S., Auxilium markets edex(R) (alprostadil for injection), an injectable treatment for erectile dysfunction, Osbon ErecAid(R), the leading device for aiding erectile dysfunction, STENDRATM (avanafil), an oral erectile dysfunction therapy, Testim(R) (testosterone gel) for the topical treatment of hypogonadism, TESTOPEL(R) (testosterone pellets) a long-acting implantable testosterone replacement therapy, XIAFLEX(R) (collagenase clostridium histolyticum or CCH) for the treatment of Peyronie's disease and XIAFLEX for the treatment of Dupuytren's contracture. The Company also has programs in Phase 2 clinical development for the treatment of Frozen Shoulder syndrome and cellulite. To learn more, please visit www.Auxilium.com. As of March 31, 2014, the Company had $1.19 billion in total assets, $985.73 million in total liabilities and $210.14 million in total stockholders' equity. * * * As reported by the TCR on May 7, 2014, Moody's Investors Service downgraded the ratings of Auxilium Pharmaceuticals, Inc., including the Corporate Family Rating to B3 from B2. "The downgrade reflects Moody's expectations that declines in Testim, Auxilium's testosterone gel, will materially reduce EBITDA in 2014, resulting in negative free cash flow, a weakening liquidity profile, and extremely high debt/EBITDA," said Moody's Senior Vice President Michael Levesque. In the May 6, 2014, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Auxilium Pharmaceuticals Inc. to 'CCC' from 'B-'. "Our rating action on Auxilium is predicated on our assessment of its liquidity profile as "weak" and our expectation that the company is likely to deplete its liquidity sources over the next 12 months," said credit analyst Maryna Kandrukhin. B/E AEROSPACE: Moody's Affirms 'Ba1' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service has affirmed the debt ratings of B/E Aerospace, Inc. ("B/E"), including the Ba1 corporate family and Ba2 senior unsecured ratings, but changed the rating outlook to negative from stable. Ratings/Outlook changed: Rating Outlook, to Negative from Stable Ratings affirmed: Corporate Family Rating, Ba1 Probability of Default Rating, Ba1-PD $950 million senior secured revolver due 2017, Baa2, LGD2, 12% $650 million senior unsecured notes due 2020, Ba2, LGD4, to 67% from 64% $1,300 million senior unsecured notes due 2022, Ba2, LGD4, to 67% from 64% Speculative Grade Liquidity Rating, SGL-1 Ratings Rationale The negative rating outlook follows B/E's announcement that it intends to separate its business into two independent, publically traded companies comprised of a "Manufacturing Co" which will focus on aircraft cabin interior equipment and a "Services Co" which will be comprised of B/E's consumables business focusing on the aerospace and energy services markets. It remains to be seen how existing debt will be, if indeed can be, allocated between the two companies after the separation. The transaction is not likely to be completed until early 2015. That said, Moody's notes that the separation could result in a sizable increase in B/E's leverage if all existing debt were to remain with B/E Aerospace following the spin-off of the consumables business. Under this scenario, B/E's stand-alone earnings capacity would likely be reduced by about 40% (the reported portion of the consumables business). Moody's estimates this could increase debt to EBITDA by approximately 2 turns from about 3.3x to 5.3x. The Ba1 corporate family rating reflects B/E's leadership position as the world's largest manufacturer of aircraft cabin interior products and its strong position as a distributor of consumables, as well as the aerospace cycle with record delivery rates expected over the near term and the OEM backlog. Credit metrics are supportive of the rating category, although B/E has a record of making debt funded acquisitions which increase financial leverage, but then uses the cash flow to reduce debt and restore the leverage metrics to pre acquisition levels within a reasonable time. For example, B/E plans to acquire EMTEQ and Fisher for about $470 million, which are expected to be debt financed. On a pro- forma basis assuming the debt financing and the profit of the acquisition target, Moody's estimates that debt to EBITDA would be increased by over half a turn to about 3.3x The SGL-1 Speculative Grade Liquidity rating reflects Moody's expectation of a strong liquidity profile over the near term, supported by cumulative positive free cash flow generation, a cash balance of approximately $300, and continued access to the revolving credit facility which matures in 2017. The expectation of cumulative free cash flows is supported by B/E's large installed product base, strong profit margins and the current favorable phase of the aerospace demand cycle. The rating could come under downward pressure if operating margins tighten leading to Debt to EBITDA exceeding 3.5 times and EBIT-to- Interest below 3.0 times. Moody's notes that the ratings could be downgraded as the allocation of debt in connection with the proposed separation becomes clearer. Weak operating performance leading to a deterioration in earnings capacity could also pressure the ratings down. At this time, a ratings upgrade is unlikely until Moody's have greater clarity on the allocation of debt and the relative growth and cash flow prospects of the two companies. B/E Aerospace, Inc. ("B/E Aerospace") is the world's largest manufacturer of commercial and general aviation cabin interior products for commercial aircraft and business jets and the world's leading provider of aerospace fasteners, consumables and logistics services. B/E Aerospace's products include aircraft seats, equipment for food and beverage preparation and storage, modular lavatories, oxygen delivery systems, and a range of business jet and general aviation interior products. Revenue for the last twelve months March 31, 2014 was $3.6 billion. The principal methodology used in this rating was Global Aerospace and Defense Industry published in April 2014. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. BAXANO SURGICAL: Reports $9.11-Mil. Loss for Q1 Ended March 31 -------------------------------------------------------------- Baxano Surgical, Inc., filed a quarterly report on Form 10-Q, disclosing a net loss of $9.11 million on $4.41 million of revenue for the three months ended March 31, 2014, compared with a net loss of $7.1 million on $3.1 million of revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $40.91 million in total assets, $18.42 million in total liabilities, and stockholders' equity of $22.49 million. Since inception, the Company has been unprofitable. As of March 31, 2014, the Company had an accumulated deficit of $179.9 million. The Company's independent registered public accounting firm has indicated in its audit report on the Company's fiscal 2013 financial statements, included in its 2013 Form 10-K, that the Company's recurring losses from operations raise substantial doubt about its ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/GLuAin Baxano Surgical is a medical device company focused on designing, developing and marketing products to treat degenerative conditions of the spine affecting the lumbar region. It markets the AxiaLIF family of products for single and two level lumbar fusion, the VEO lateral access and interbody fusion system, the iO-Flex minimally invasive lumbar decompression system, the iO-Tome facetectomy system, and the Vectre and Avatar posterior fixation systems. The company was founded in May 2000 and is headquartered in Raleigh, NC. BEAZER HOMES: To Sell $750 Million Worth of Securities ------------------------------------------------------ Beazer Homes USA, Inc., filed with the U.S. Securities and Exchange Commission a Form S-3 registration statement relating to the Company's offer to sell up to $750,000,000 in aggregate initial offering price of senior debt securities, subordinated debt securities, common stock, preferred stock, depositary shares, warrants, rights, stock purchase contracts, stock purchase units or units. Certain of the Company's subsidiaries may guarantee any debt securities the Company offers. The Company said it will provide the specific terms of any securities to be offered in a supplement to the prospectus. The Company's common stock is listed on the New York Stock Exchange under the symbol "BZH." A full-text copy of the Form S-3 prospectus is available at: http://is.gd/YZUzmU About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." Beazer Homes incurred a net loss of $33.86 million for the year ended Sept. 30, 2013, a net loss of $145.32 million for the year ended Sept. 30, 2012, and a net loss of $204.85 million for the year ended Sept. 30, 2011. As of Dec. 31, 2013, the Company had $1.93 billion in total assets, $1.69 billion in total liabilities and $235.60 million in total stockholders' equity. * * * Beazer carries a 'B-' issuer credit rating, with "negative" outlook, from Standard & Poor's. In the Jan. 30, 2013 edition of the TCR, Moody's Investors Service raised Beazer Homes USA, Inc.'s corporate family rating to 'Caa1' from 'Caa2' and probability of default rating to 'Caa1-PD' from 'Caa2-PD'. The ratings upgrade reflects Moody's increasing confidence that Beazer's credit metrics, buoyed by a stregthening housing market, will gradually improve for at least the next two years and that the company may be able to return to a modestly profitable position as early as fiscal 2014. As reported by the TCR on Sept. 10, 2012, Fitch Ratings has upgraded the Issuer Default Rating (IDR) of Beazer Homes USA, Inc. (NYSE: BZH) to 'B-' from 'CCC'. The upgrade and the stable outlook reflect Beazer's operating performance so far this year, its robust cash position, and moderately better prospects for the housing sector during the remainder of this year and in 2013. The rating is also supported by the company's execution of its business model, land policies, and geographic diversity. BIO-KEY INTERNATIONAL: Has $299K Net Loss in First Quarter ---------------------------------------------------------- BIO-KEY International, Inc., disclosed a net loss of $299,214 on $1.37 million of revenues for the three months ended March 31, 2014, compared with a net loss of $315,579 on $804,643 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $2.34 million in total assets, $1.61 million in total liabilities, and stockholders' equity of $730,091. The Company has incurred significant losses to date and at March 31, 2014, had an accumulated deficit of $55 million. In addition, broad commercial acceptance of the Company's technology is critical to the Company's success and ability to generate future revenues. At March 31, 2014, the Company's total cash and cash equivalents were approximately $593,000, as compared to approximately $2.02 million at Dec. 31, 2013. The Company has financed itself in the past through access to the capital markets by issuing secured and convertible debt securities, convertible preferred stock, common stock, and through factoring receivables. The Company currently requires $460,000 per month to conduct operations, a monthly amount that it has been unable to achieve consistently through revenue generation. If the Company is unable to generate sufficient revenue to meet its goals, it will need to obtain additional third-party financing to (i) conduct the sales, marketing and technical support necessary to execute its plan to substantially grow operations, increase revenue, and serve a significant customer base; and (ii) provide working capital. No assurance can be given that any form of additional financing will be available on terms acceptable to the Company, that adequate financing will be obtained by the Company, in order to meet its needs, or that such financing would not be dilutive to existing shareholders. These matters raise substantial doubt about the Company's ability to continue as a going concern, according to the Company's regulatory filing. A copy of the Form 10-Q filed with the U.S. Securities and Exchange Commission is available at http://is.gd/pgFxeW About BIO-Key Wall, N.J.-based BIO-key International, Inc., develops and markets advanced fingerprint biometric identification and identity verification technologies, cryptographic authentication- transaction security technologies, as well as related Identity Management and Credentialing software solutions. In its report on the consolidated financial statements for the year ended Dec. 31, 2012, Rotenberg Meril Solomon Bertiger & Guttilla, P.C., in Saddle Brook, New Jersey, expressed substantial doubt about BIO-key's ability to continue as a going concern, citing the Company's substantial net losses in recent years, and accumulated deficit at Dec. 31, 2012. The Company reported net income of $3,267 on $3.8 million of revenues in 2012, compared with a net loss of $1.9 million on $3.5 million of revenues in 2011. BIOLASE INC: Incurs $4.89-Mil. Net Loss in March 31 Quarter ----------------------------------------------------------- BIOLASE, Inc., filed a quarterly report on Form 10-Q, disclosing a net loss of $4.89 million on $11.52 million of net revenue for the three months ended March 31, 2014, compared with a net loss of $2.63 million on $14.6 million of net revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $28.66 million in total assets, $19.65 million in total liabilities, and stockholders' equity of $9 million. The Company cannot guarantee that it will be able to increase sales, reduce expenses, or obtain additional funds when needed. If the Company is unable to increase sales, reduce expenses, or raise sufficient additional capital, it may be unable to continue to fund its operations, develop its products, or realize value from its assets and discharge its liabilities in the normal course of business. These uncertainties raise substantial doubt about the Company's ability to continue as a going concern, according to a regulatory filing. A copy of the Form 10-Q is available: http://is.gd/ilOWIY About BIOLASE, Inc. Irvine, Calif.-based BIOLASE, Inc., incorporated in Delaware in 1987, is a biomedical company that develops, manufactures, and markets lasers in dentistry and medicine. The Company currently operates in one business segment with laser systems that are designed to provide clinically superior performance for many types of dental procedures with less pain and faster recovery times than are generally achieved with drills, scalpels, and other dental instruments. The Company also markets and distributes dental imaging equipment and other products designed to improve technologies for applications and procedures in dentistry and medicine. CAPROCK OIL: Incurs $546K Net Loss in March 31 Quarter ------------------------------------------------------ Caprock Oil, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $546,628 on $504,625 of total revenues for the three months ended March 31, 2014, compared with a net loss of $91,983 on $765,300 of total revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $6.87 million in total assets, $5.75 million in total liabilities, and stockholders' equity of $1.12 million. The Company has reported net losses from continuing operations in the last two years and has a substantial working capital deficit as of March 31, 2014. These factors, among others, indicate that the Company may be unable to continue as a going concern for a reasonable period of time, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/tCIa3n Caprock Oil, Inc. is engaged in the exploration and production of oil and natural gas with interests in producing wells located in Texas and Louisiana. This energy holding company was formerly known as Stratum Holdings, Inc. CDRH PARENT: Moody's Assigns 'B3' Corporate Family Rating --------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating (CFR) and B3-PD Probability of Default Rating to CDRH Parent, Inc., the indirect parent of Healogics, Inc. and co-borrower. At the same time, Moody's assigned a B1 rating to CDRH's $500 million senior secured first lien credit facilities, consisting of a $100 million revolving credit facility expiring in 2019 and a $400 million first lien term loan due 2021. Concurrently, Moody's assigned a Caa2 rating to CDRH's proposed $220 million second lien term loan due 2022. The rating outlook is stable. Existing ratings for Healogics will be with withdrawn at the close of the transaction. On May 21, 2014, Clayton, Dubilier and Rice agreed to acquire Healogics from Metalmark Capital and Scale Venture Partners for $910 million. Proceeds from the proposed credit facilities, along with $330 million of cash, will be used to complete the acquisition. The transaction is expected to close in the third quarter of 2014. CDRH Parent, Inc.: Ratings assigned: Corporate Family Rating at B3 Probability of Default Rating at B3-PD $100 million first lien revolver expiring 2019 at B1 (LGD 3, 33%) $400 million first lien term loan due 2021 at B1 (LGD 3, 33%) $220 million second lien term loan due 2022 at Caa2 (LGD 5, 86%) Healogics, Inc. Ratings to be withdrawn at close: $30 million first lien revolver expiring 2018 at B1 (LGD 3, 35%) $290 million first lien term loan due 2019 at B1 (LGD 3, 35%) $110 million second lien term loan due 2020 at Caa1 (LGD 5, 87%) Rating Rationale CDRH's B3 Corporate Family Rating reflects the company's very weak credit metrics, due to the considerable amount of debt associated with its leveraged buyout and its small revenue base of less than $300 million. Moody's estimates that pro forma debt/EBITDA at 8.0 times, for the LTM period ending March 31, 2014. The rating is also constrained by the small absolute size and the early stage of development of the wound care market, and the company's narrow focus on wound care management. The rating benefits from Healogics' good customer and geographic diversification and modest direct government reimbursement risk. The stable outlook reflects Moody's expectation of relatively stable operating performance given low reimbursement risk and steady pricing over the near-term. It also reflects Moody's view that the company's highly leveraged capital structure is unlikely to improve significantly over the next 12-months. In addition, the rating could be downgrade if pricing or volumes weaken, such that financial performance is impacted, resulting in deterioration in credit metrics. The rating could be downgraded if liquidity deteriorates or if the company's free cash flow turns negative. The likelihood of a rating upgrade is limited in the near-term given the company's very high leverage. However, if the company is able to grow earnings and sustain debt to EBITDA below 6 times, while continuing to generate free cash flow, an upgrade could be considered. The methodologies used in this rating were Global Business & Consumer Service Industry Rating Methodology published in October 2010, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website. Headquartered in Jacksonville, Fl., Healogics partners with hospitals to establish, staff and run specialized wound care centers that treat patient with chronic, non-healing wounds. CHANTILLY BIOPHARMA: Case Summary & 19 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Chantilly BioPharma LLC 3701 Concorde Pkwy Chantilly, VA 20151 Case No.: 14-12195 Nature of Business: Health Care Chapter 11 Petition Date: June 9, 2014 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Hon. Brian F. Kenney Debtor's Counsel: Ronald J. Drescher, Esq. DRESCHER & ASSOCIATES, PA 4 Reservoir Circle, Ste 107 Baltimore, MD 21208 Tel: (410)484-9000 Email: ecf@drescherlaw.com rondrescher@drescherlaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million A list of the Debtor's 19 largest unsecured creditors is available for free at http://bankrupt.com/misc/vaeb14-12195.pdf CHARLES FOGARTY: Pilgim Title Wins Summary Judgment --------------------------------------------------- The Superior Court of Rhode Island in Kent County granted Pilgrim Title Insurance Company's Motion for Summary Judgment in the consolidated complaint filed by Charles Fogarty and James Ottenbacher. Fogarty and Ottenbacher initially filed pro se complaints against Defendants Ralph Palumbo and Jonathan Savage in Kent County Superior Court in mid-August 2008. After retaining counsel in March 2009, the individual complaints were consolidated on June 11, 2009, and on April 1, 2010, the Plaintiffs moved and were granted leave to amend their complaint to add Pilgrim as Defendant. Ottenbacher and Fogarty sued Savage and Palumbo, claiming that conveyance of certain Property was unauthorized and was executed in contravention of an Operating Agreement. Fogarty and Ottenbacher asserted negligence claims against Pilgrim. Fogarty filed for Chapter 11 bankruptcy in 1994. The cases are JAMES OTTENBACHER, Plaintiff, v. RALPH PALUMBO, PILGRIM TITLE INSURANCE COMPANY, and JONATHAN SAVAGE, Defendants. CHARLES E. FOGARTY v. RALPH PALUMBO, PILGRIM TITLE INSURANCE COMPANY, JONATHAN SAVAGE, C.A. NOS. KC 08-1087 CONSOLIDATED WITH, KC 08-1073 (R.I. Super. Ct.). A copy of the Superior Court's June 9, 2014 Decision is available at http://is.gd/9KBbKpfrom Leagle.com. CHINAMERICA ANDY: Going Concern Doubt Despite Revenues ------------------------------------------------------ ChinAmerica Andy Movie Entertainment Media Co. filed its quarterly report on Form 10-Q, disclosing a net income of $460,252 on $822,500 of revenue for the three months ended March 31, 2014, compared with a net loss of $8,646 on $nil of revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1 million in total assets, $298,416 in total liabilities, and stockholders' equity of $704,882. The Company had $822,500 in movie project income for the three months ended March 31, 2014. During that same period, the Company had a total net comprehensive income of $443,873. These factors indicate the Company is generating revenues; however, there is still substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/rtao4v ChinAmerica Andy Movie Entertainment Media Co. is an operating company that is seeking to increase operations in the development, production and distribution of documentaries and animated films within the movie, entertainment and media field in Beijing, China. The company was founded by Daniel Kelson on September 26, 2002 and is headquartered in Sarasota, FL. CLOCK TOWER: BB&T Entitled to $3.48 Million Damages --------------------------------------------------- Nevada District Judge Robert C. Jones granted Branch Banking and Trust Company's motion for summary judgment in its lawsuit against the guarantors of a commercial loan to debtor Clock Tower Center, LLC. Judge Jones ruled that the lender is entitled to damages in the amount of $3,488,129. The original lender, Colonial Bank, N.A., loaned Clock Tower Center $3,400,000 in exchange for a promissory note. Clock Tower's obligations were secured by a deed of trust, which collateralized real property located in Gardnerville, Nevada. Clock Tower's indebtedness was further secured by an unconditional guarantee executed by three guarantors: Defendants Jarrett, Bing, and the Bing Trust. Guarantors Jarrett and Bing hold a combined 67.5% interest in Clock Tower. Colonial's interest in the loan was ultimately acquired by BB&T. When the Note matured in April 2011, neither Clock Tower nor the Guarantors honored their promises under the Note and Guarantee. Instead, Clock Tower petitioned for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Nevada. During the bankruptcy proceedings, Clock Tower did not dispute the validity or amount of its debt to BB&T. Instead, it asserted that BB&T possessed a Class 1A secured claim "in the approximate unpaid principal sum of $3,400,000, plus accruing interest at the contractual rate" as well as an unsecured claim. Clock Tower also argued that BB&T had a viable third-party source of recovery through the Guarantee. Specifically, and with Guarantors' participation, Clock Tower successfully separated BB&T's claims from the other creditors' claims in order to obtain the voting necessary to confirm its plan over BB&T's objection. The other creditors were largely related to the Guarantors -- e.g., Bing Materials, Jarrett Construction, Jerry Bing, Niki Jarrett. To separate BB&T's claims, Clock Tower argued that BB&T belonged to a different class than the other creditors because it could recover under the Guarantee. On April 3, 2013, the bankruptcy court entered an order confirming Clock Tower's plan for reorganization. The relevant elements of the Bankruptcy Plan are: (1) BB&T has a reduced secured claim for $2,960,000, which reflects the decreased value of the Property; (2) BB&T has an unsecured deficiency claim for $297,045, which represents the difference between Clock Tower's indebtedness to BB&T at the time it filed for bankruptcy and the decreased value of the Property; (3) both claims are payable over six years, from March 2013 to February 2019, in monthly payments; (4) Clock Tower is not liable for any interest accruing after the filing of its 2011 petition; (5) Clock Tower is presumed to be able to comply with the bankruptcy plan without default, liquidation, or further financial reorganization; and (6) BB&T retains its lien rights against the property but cannot enforce those rights unless Clock Tower defaults under the plan. Clock Tower retained title to and possession of the Property and promised to make monthly payments on its reduced debt (now $3,257,045 instead of the agreed $3,400,000 and associated interest) until February 2019. During that time, the plan freezes BB&T's ability to collect interest or foreclose on the Deed of Trust. BB&T on May 7, 2013, filed the lawsuit to enforce the Guarantee, arguing that because Clock Tower has failed to satisfy its obligations under the Loan Documents, the Guarantors are jointly and severally liable for the entire amount originally due on the Note. The parties do not dispute that the total underlying debt is presently $3,488,129. The case is, BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, Plaintiff, v. MICHAEL E. JARRETT, an individual; D. GERALD BING, JR., an individual; D. GERALD BING, JR., Trustee of the D. GERALD BING, JR. TRUST dated January 17, 2000; and DOES 1 through 10, inclusive, Defendants, NO. 3:13-CV- 00235-RCJ-VPC (D. Nev.). A copy of the District Judge's June 9, 2014 Order is available at http://is.gd/G10pqQfrom Leagle.com. Branch Banking and Trust Company is represented by: Frank Z LaForge, Esq. Timothy A. Lukas, Esq. Tamara Reid, Esq. HOLLAND & HART LLP 5441 Kietzke Lane, Second Floor Reno, NV 89511 Tel: 775-327-3000 Fax: 775-786-6179 E-mail: fzlaforge@hollandhart.com tlukas@hollandhart.com treid@hollandhart.com The Defendants are represented by: Jonathan J. Tew, Esq. G. David Robertson, Esq. Richard D. Williamson, Esq. ROBERTSON, JOHNSON, MILLER & WILLIAMSON 50 West Liberty Street, Ste 600 Reno, NV 89501 Tel: (775) 329-5600 Fax: (775) 348-8300 E-mail: jon@nvlawyers.com gdavid@nvlawyers.com rich@nvlawyers.com Clock Tower Center, LLC, based in Minden, Nevada, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 11-53518) on Nov. 16, 2011. Judge Bruce T. Beesley presided over the case. Stephen R. Harris, Esq., at Harris - Petroni, LTD, served as the Debtor's counsel. In its petition, Clock Tower estimated $1 million to $10 million in assets and debts. A list of the Company's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb11-53518.pdf The petition was signed by Michael Jarrett, manager. COLTS NECK GOLF: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Colts Neck Golf & Country Club, Inc. dba Colts Neck Golf Club 50 Flock Road Colts Neck, NJ 07722 Case No.: 14-22032 Chapter 11 Petition Date: June 11, 2014 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Hon. Christine M. Gravelle Debtor's Counsel: Joseph Casello, Esq. COLLINS, VELLA & CASELLO 1451 Highway 34 South, Suite 303 Farmingdale, NJ 07727 Tel: (732) 751-1766 Fax: (732) 751-1866 Email: jcasello@cvclaw.net Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Anthony DeGennaro, president. A list of the Debtor's 18 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb14-22032.pdf COMARCO INC: OKs Salary Reduction, One-Time Bonus for CEO --------------------------------------------------------- The Compensation Committee of the Board of Directors of Comarco, Inc., approved an adjustment to the previously disclosed voluntary reduction in the Company's chief executive officer's annual base salary. This adjustment, computed based on an annualized base salary of $230,000, results in an interim rate of pay equal to $196,000 per annum effective as of June 9, 2014, up from the $184,005 interim annual rate of pay previously disclosed. Additionally, in recognition of the previously announced settlement of the Company's litigation with Chicony Power Technology, Co. Ltd., the Committee approved a one-time bonus of $10,000 payable to Thomas W. Lanni on June 27, 2014. Also on June 5, 2014, the Committee approved a modification to Mr. Lanni's Deferred Compensation Agreement. Pursuant to the modification, the monthly accrual of compensation under the Agreement was reduced to $2,833 from $3,833 per month, effective as of June 9, 2014. The modification does not reduce any amounts that have accrued prior to the effective date of the modification. The Agreement provides that the accrued compensation will be paid, if and only if, (i) the Company files a Quarterly Report on Form 10-Q that includes a balance sheet reflecting an aggregate balance of cash, cash equivalents, and short term investments of the Company of at least $5 million net of liabilities (ii) Mr. Lanni continues to provide substantial services to the Company through the date of filing of the Form 10-Q, and (iii) the Board of Directors provides written approval of the payment of the deferred compensation. About Comarco Inc. Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO) -- http://www.comarco.com/-- is a provider of innovative, patented mobile power solutions that can be used to power and charge notebook computers, mobile phones, and many other rechargeable mobile devices with a single device. Comarco reported a net loss of $2.05 million on $4.42 million of revenue for the year ended Jan. 31, 2014, as compared with a net loss of $5.59 million on $6.33 million of revenue for the year ended Jan. 31, 2013. As of Jan. 31, 2014, the Company had $1.33 million in total assets, $9.06 million in total liabilities and a $7.72 million total stockholders' deficit. Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Jan. 31, 2014. The independent auditors noted that the Company has suffered recurring losses and negative cash flow from operations, has negative working capital and faces uncertainties surrounding the Company's ability to raise additional funds. COMSTOCK MINING: Van Den Berg Reports 20.6% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Van Den Berg Management, Inc., disclosed that as of May 31, 2014, it beneficially owned 16,822,192 shares of common stock of Comstock Mining Inc. representing 20.64 percent of the shares outstanding. The reporting person previously owned 10,434,025 shares at Dec. 31, 2013. A copy of the regulatory filing is available for free at http://is.gd/czk08T About Comstock Mining Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based, gold and silver mining company with extensive, contiguous property in the historic Comstock district. The Company began acquiring properties in the Comstock in 2003. Since then, the Company has consolidated a substantial portion of the Comstock district, secured permits, built an infrastructure and brought the exploration project into test mining production. The Company continues acquiring additional properties in the Comstock district, expanding its footprint and creating opportunities for exploration and mining. The goal of the Company's strategic plan is to deliver stockholder value by validating qualified resources (measured and indicated) and reserves (probable and proven) of 3,250,000 gold equivalent ounces by 2013, and commencing commercial mining and processing operations by 2011, with annual production rates of 20,000 gold equivalent ounces. Comstock Mining incurred a net loss available to common shareholders of $25.36 million in 2013, a net loss available to common shareholders of $35.13 million in 2012 and a net loss available to common shareholders of $16.30 million in 2011. As of Dec. 31, 2013, the Company had $43.99 million in total assets, $23.75 million in total liabilities and $20.24 million in total stockholders' equity. COTT CORP: Moody's Rates New $525MM Sr. Unsecured Bond 'B3' ----------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Cott Corporation's new senior unsecured $525 million bond issue, issued by its wholly owned subsidiary, Cott Beverages, Inc. Proceeds will be used for the repayment of Cott's $375 million 8.125% Senior Unsecured Notes due 2018 and for general corporate purposes including the acquisition of Aimia Foods (Holdings) Limited announced last month. The company's B2 CFR and other ratings as well as the stable outlook were unchanged. Ratings Rationale Cott's B2 CFR reflects its moderate leverage, positive free cash flow, good liquidity and leadership position as the largest private label beverage producer in North American with a broad portfolio of beverages. These positives are offset by the company's limited market share, presence in an industry dominated by Coca-Cola and PepsiCo, customer concentration and volatility in operating performance due to significant commodity exposure and vulnerability to pricing decisions of branded industry players and retailers. Cott Corporation's proposed acquisition of UK based Aimia Foods (Holdings) Limited is a long-term credit positive because it will continue the company's diversification away from U.S. carbonated soft drinks ("CSD"), although it slightly increases leverage in the short run and presents certain integration risks. The acquisition does not impact Cott's leverage enough to affect the company's B2 Corporate Family Rating or SGL-2 Speculative Grade Liquidity Rating. The purchase price includes an initial payment of $80 million with another $33 million owed in September 2014 and a future earnout that will range from a minimum of $13 million to $27 million. The purchase price was initially funded through Cott's ABL facility and cash on hand and represents a reasonable pre-synergy trailing EBITDA multiple. Given the potential for volatility in Cott's operating performance, a ratings upgrade would require both debt-to-EBITDA of below 3.5 times on a sustainable basis, complemented by a good liquidity profile and the stabilization of revenues, profitability and volumes. A decline in earnings as a result of further volume declines, continued margin contraction, a weakening of Cott's liquidity, or an increase in leverage such that debt-to-EBITDA approaches 5.5 times could result in a ratings downgrade. The following rating was assigned: B3 rating (LGD5, 70%) to the $525 million senior unsecured notes. Cott Corporation (Cott), headquartered in Toronto, Ontario, and Tampa, Florida, is one of the world's largest private label and contract manufacturing beverage companies. Cott's product portfolio includes CSDs, clear, still and sparkling flavored waters, juice, juice-based products, bottled waters, energy related drinks, and ready-to-drink teas. Cott's customers include many of the largest national and regional grocery, drugstore, and convenience store chains, and wholesalers. Sales for the twelve months ending March 29, 2014 were approximately $2.1 billion. Aimia Foods is a privately owned business based in Merseyside, United Kingdom with revenues of approximately USD$110 million for the twelve months ending March 31, 2014. The company is a manufacturer of hot and cold beverages including hot chocolate, coffee, powders, juice drinks and hot cereals. The principal methodology used in this rating was the Global Soft Beverage Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CRANBERRY COUNTRY LODGE: Stays Open During Receivership ------------------------------------------------------- The Tomah Journal reports that the Cranberry Country Lodge in Tomah, Wisconsin, is under new management. The hotel went into receivership April 29 after F&M Bank filed a claim of nearly $5.2 million against Cranberry Country Lodge LLC to recover the balance of a March 2012 loan, according to The Tomah Journal. The report relates that Monroe County Circuit Court Judge Todd Ziegler appointed Milwaukee attorney Michael Polsky as receiver. Judge Ziegler set a deadline of Aug. 4 for other creditors to file claims. Mr. Polsky said the motel, which employs 15 people, is "open for business," the report discloses. "No one is being laid off," the report quoted Mr. Polsky as saying. "Reservations are still going strong. There is plenty of money to cover operating expenses and supplies . . . .employees didn?t miss any paychecks," Mr. Polsky said, the report relates. The report discloses that the business is being operated on an interim basis by IDM Hospitality Management of Madison. Its Web site says it specializes in the "repositioning of hotels in receivership." Mr. Polsky said IDM Hospitality isn?t a candidate to purchase the business. The report notes that as of April 29, the hotel had an unpaid property tax balance of $113,000 and $5,900 in unpaid city of Tomah room taxes. The report relates that Cranberry County Lodge owner Gloria Dippen said the March 2012 loan was for property improvements, primarily an HVAC system for the aquatic center that will be done this summer. Ms. Dippen said F&M "structured a finance package that protected existing cash flow for operations and enabled growth and continued sustainability for Cranberry Country Lodge." Although Cranberry Country Lodge LCC still owns the resort, its management is no longer involved in the day-to-day operation. DAVITA HEALTHCARE: Moody's Rates $1.75BB Sr. Unsecured Notes 'B1' ----------------------------------------------------------------- Moody's Investors Service assigned a B1 (LGD 5, 80%) rating to DaVita Healthcare Partners' offering of $1.75 billion of senior unsecured notes due 2024. Moody's existing ratings on the company, including the Ba3 Corporate Family Rating and Ba3-PD Probability of Default Rating, remain unchanged. The rating outlook remains stable. Moody's understands that the proceeds of the offering will be used to partially repay existing senior secured credit facilities. DaVita is also currently raising new senior secured credit facilities, the proceeds of which will be used to repay the remainder of the existing senior secured credit facilities and fund the purchase of DaVita's 6.375% senior unsecured notes due 2018. The combination of these transactions will result in an improved maturity profile and interest cost savings. Moody's will withdraw the ratings on the 6.375% senior unsecured notes due 2018 upon the successful completion of the tender offer. Following is a summary of Moody's rating actions. Ratings assigned: $1.75 senior unsecured notes due 2024 at B1 (LGD 5, 80%) Ratings unchanged: Corporate Family Rating at Ba3 Probability of Default Rating at Ba3-PD Speculative Grade Liquidity Rating at SGL-1 $1.00 billion senior secured revolving credit facility expiring 2019 at Ba1 (LGD 2, 25%) $1.00 billion senior secured term loan A due 2019 at Ba1 (LGD 2, 25%) $3.50 billion senior secured term loan B due 2021 at Ba1 (LGD 2, 25%) $2.025 billion senior unsecured notes due 2020 and 2022 at B1 (LGD 5, 80%) Rating to be withdrawn at close Senior unsecured notes due 2018 at B1 (LGD 5, 80%) Rating Rationale DaVita's Ba3 Corporate Family Rating reflects its high leverage, the challenges of operating a risk-based integrated care business and increased regulatory scrutiny. Furthermore, both its dialysis operations and risk-based integrated care business have come under increasing government reimbursement pressure over the past year, both experiencing rate cuts. The rating is supported by the company's position as the second largest dialysis service provider, treating over one-third of dialysis patients in the country. Additionally, DaVita benefits from the recurring nature of the treatments and patients high loyalty to their clinic, reflected in the company's strong profitability and stable cash flow. The stable outlook reflects Moody's expectation that DaVita's revenue will continue to grow at a steady pace, driven by increasing volumes and the opening of new dialysis centers. Furthermore, the rating outlook also anticipates that DaVita will be able to mitigate any additional Medicare reimbursement reductions, without significant detriment to the credit metrics. The outlook also reflects Moody's expectation that DaVita will continue to delever and debt to EBITDA will improve to slightly below 4 times by the end of fiscal 2014. Although, not likely in the near-term, Moody's could upgrade the ratings if the company repays debt or grows earnings such that debt to EBITDA was expected to be sustained below 3.5 times. Additionally, Moody's could consider upgrading the rating if cash flow from operations and free cash flow to adjusted debt ratios were expected to be sustained in the mid-teens. Downward pressure could develop if leverage increases either from additional Medicare reimbursement cuts, or if the company takes on additional debt for acquisitions or shareholder initiatives. More specifically, Moody's could downgrade the rating if leverage is expected to increase and be sustained above 4.5 times or free cash flow to debt is expected to be sustained below 3%. The principal methodology used in this rating was the Global Healthcare Service Providers Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. DaVita is an independent provider of dialysis services primarily in the US for patients suffering from end-stage renal disease (chronic kidney failure). The company also provides home dialysis services, inpatient dialysis services through contractual arrangements with hospitals, laboratory services and other ancillary services. Through HealthCare Partners' ("HCP"), DaVita provides patient-and physician-focused integrated health care delivery services that coordinates, outcomes-based medical care in a cost-effective manner. DECISIONPOINT SYSTEMS: Posts $113K Net Loss for March 31 Quarter ---------------------------------------------------------------- DecisionPoint Systems, Inc., filed a quarterly report on Form 10- Q, disclosing a net loss of $113,000 on $16.71 million of net sales for the three months ended March 31, 2014, compared with a net loss of $2.1 million on $13.77 million of net sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $29.84 million in total assets, $31.07 million in total liabilities, and a stockholders' deficit of $1.23 million. The Company's history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raises substantial doubt about the Company ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/bdP56D DecisionPoint Systems, Inc. is an Irvine, California-based provider of mobile technologies, including mobile business applications, wireless networks, mobile computers and related technical services for those who are on the front line in any business. The Company aims to "employer the mobile worker" referring to field repair technicians, sales associates, couriers, public safety employees and other workers. DEJOUR ENERGY: Has C$2.98-Mil. Net Loss For First Quarter --------------------------------------------------------- Dejour Energy Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of C$2.98 million on C$2.27 million of total revenues for the three months ended March 31, 2014, compared with a net loss of C$1.21 million on C$1.66 million of total revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed C$28.48 million in total assets, C$19.98 million in total liabilities, and stockholders' equity of C$8.51 million. The Company's ability to continue as a going concern is dependent upon attaining profitable operations and obtaining sufficient financing to meet obligations and continue exploration and development activities. There is no assurance that these activities will be successful. These material uncertainties cast substantial doubt upon the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/Eqq47x About Dejour Dejour Energy Inc. is an independent oil and natural gas exploration and production company operating projects in North America's Piceance Basin (approximately 80,000 net acres) and Peace River Arch regions (approximately 7,500 net acres). Dejour's seasoned management team has consistently been among early identifiers of premium energy assets, repeatedly timing investments and transactions to realize their value to shareholders' best advantage. Dejour maintains offices in Denver, USA, Calgary and Vancouver, Canada. The company is publicly traded on the New York Stock Exchange MKT (nyse mkt:DEJ) and Toronto Stock Exchange CA:DEJ 0. ENERGY FUTURE: Asks Court to OK Crowson Settlement Agreement ------------------------------------------------------------ Energy Future Holdings Corp., et al., filed a motion with the U.S. Bankruptcy Court for the District of Delaware for entry of an order authorizing the settlement agreement between debtor TXU Energy Retail Company, LLC, and Susan Combs, Comptroller of Public Accounts for the State of Texas and modifying the automatic stay. A hearing to consider the motion is set for June 30, 2014, at 9:30 a.m. Objections must be filed by June 23, 2014, at 4:00 p.m. The Crowson Settlement Agreement proposes to release $9,764,973.69 in principal and $1,551,893.72 in interest, totaling $11,316,867.41 to the trust, which was created for the benefit of the Crowson plaintiffs -- Thomas Crowson, dba Ivory Tree Arlington Limited, Rolling Oaks Apartments, Inc., Texas Arlington Oaks Management, L.L.C., and Texas Arlington Oaks Apartments, L.T.D., and other parties who filed in 20017 a class-action lawsuit against TXU Energy for erroneously charging and collecting sales taxes from customers who were exempt from paying the taxes -- to which TXU Energy assigned its right to file a claim or claims with the Texas Comptroller for refunds of the Credit Amount. The funds are likely outside the estates of Energy Future Competitive Holdings Company LLC and Texas Competitive Electric Holdings Company LLC and its direct and indirect Debtor subsidiaries and, in exchange for releasing the funds, the TXU Energy will receive a tax credit in the Credit Amount without any penalties or alterations to TXU Energy's right to a prepayment discount. A copy of the Crowson Settlement Agreement is available for free at http://is.gd/REmCXB About Energy Future Holdings, fka TXU Corp. Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). The cases are jointly administered for procedural purposes. Energy Future Holdings Corp. (Case No. 14-10979) is the lead case. As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4 billion in book value and total liabilities of $49.7 billion. The Debtors have $42 billion of funded indebtedness. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. Wilmington Savings Fund Society, FSB, the successor trustee for the second-lien noteholders owed about $1.6 billion, is represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee represents the interests of the unsecured creditors of ONLY of Energy Future Competitive Holdings Company LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings Company LLC; and EFH Corporate Services Company, and of no other debtors. The Committee has selected Morrison & Foerster LLP and Polsinelli PC for representation in this high-profile energy restructuring. The lawyers working on the case are James M. Peck, Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC. ENERGY FUTURE: CSC Trust Tapped as Successor Indenture Trustee -------------------------------------------------------------- Texas Competitive Electric Holdings Company LLC and Energy Future Competitive Holdings Company LLC filed a motion with the U.S. Bankruptcy Court for the District of Delaware for entry of an order approving the agreement of resignation, appointment, and acceptance, dated June 9, 2014, by and among U.S. Bank National Association, in its capacity as owner trustee, TCEH, EFCH, The Bank of New York Mellon Trust Company, N.A., in its capacity as resigning indenture trustee, and CSC Trust Company of Delaware, in its capacity as successor indenture trustee, providing for the appointment of CSC Trust Company of Delaware as successor indenture trustee to The Bank of New York Mellon Trust Company, N.A., for the 7.46% secured facility bonds. A copy of the Agreement is available for free at: http://is.gd/7UoDET Pursuant to the Agreement, the Parties seek to effectuate the appointment and acceptance of a successor indenture trustee as successor indenture trustee, bond registrar, and paying agent under the indenture and participation agreement. The Debtors says in a court filing dated June 9, 2014, that CSC is an appropriate successor indenture trustee, bond registrar and paying agent. The Agreement doesn't alter the status quo with respect to the rights of the Parties to assert or dispute any claims. About Energy Future Holdings, fka TXU Corp. Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). The cases are jointly administered for procedural purposes. Energy Future Holdings Corp. (Case No. 14-10979) is the lead case. As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4 billion in book value and total liabilities of $49.7 billion. The Debtors have $42 billion of funded indebtedness. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. Wilmington Savings Fund Society, FSB, the successor trustee for the second-lien noteholders owed about $1.6 billion, is represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee represents the interests of the unsecured creditors of ONLY of Energy Future Competitive Holdings Company LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings Company LLC; and EFH Corporate Services Company, and of no other debtors. The Committee has selected Morrison & Foerster LLP and Polsinelli PC for representation in this high-profile energy restructuring. The lawyers working on the case are James M. Peck, Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC. ENERGY FUTURE: Schedules and Statements Due June 16 --------------------------------------------------- The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware entered for the second time an order extending, at the behest of Energy Future Holdings Corp., et al., the time by which the Debtors will file their schedules of assets and liabilities, schedules of current income and expenditures, schedules of executory contracts and unexpired leases, and statements of financial affairs by an additional seven days, to and including June 16, 2014. In the first court order, the Court had given the Debtors a 30-day extension, to and including June 9, 2014. As reported by the Troubled Company Reporter on May 26, 2014, the Debtors asked the Court to extend the schedules filing deadline until June 30, 2014. The Debtors said that they are focused on preparing for the Chapter 11 filing, preparing the business to transition into Chapter 11, and negotiating with their significant creditor constituencies. According to the Debtors, such efforts made it difficult for them to prepare the schedules and statements. The Debtors stated that, given the amount of work entailed in completing the schedules and statements and the competing demands on the their employees and professionals to assist in efforts to stabilize business operations during the initial post-petition period, they wouldn't be able to properly and accurately complete the schedules and statements within the required time period. About Energy Future Holdings, fka TXU Corp. Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). The cases are jointly administered for procedural purposes. Energy Future Holdings Corp. (Case No. 14-10979) is the lead case. As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4 billion in book value and total liabilities of $49.7 billion. The Debtors have $42 billion of funded indebtedness. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. Wilmington Savings Fund Society, FSB, the successor trustee for the second-lien noteholders owed about $1.6 billion, is represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee represents the interests of the unsecured creditors of ONLY of Energy Future Competitive Holdings Company LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings Company LLC; and EFH Corporate Services Company, and of no other debtors. The Committee has selected Morrison & Foerster LLP and Polsinelli PC for representation in this high-profile energy restructuring. The lawyers working on the case are James M. Peck, Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC. EQUINOX HOLDINGS: Moody's Hikes Corporate Family Rating to B2 ------------------------------------------------------------- Moody's Investors Service upgraded the ratings of Equinox Holdings, Inc. including its Corporate Family Rating (CFR) to B2 from B3, its Probability of Default Rating to B2-PD from B3-PD, its first lien senior secured debt (including a $100 million proposed term loan add-on) to Ba3 from B1 and its second lien senior secured debt to Caa1 from Caa2. The rating outlook is stable. Proceeds from the proposed $100 million add-on will be used to pre-fund future investments including capex for new facilities. The upgrade reflects Moody's expectation that growth in Equinox's revenue and earnings will continue over the next two to three years due to strong same store sales at its existing club locations, growth in new stores across all three brands (Equinox, SoulCycle, and Blink), and increased membership count. From fiscal year ended December 31, 2012 to the LTM period ended March 31, 2014, Equinox's EBITDA has grown about 20%. Moody's expects a continuation of this strong growth will provide cash flow and de- leveraging capacity that the company will use to continue to re- invest in its brands to enhance long term earnings potential. The upgrade also considers the company's improved earnings diversification as SoulCycle has become a larger contributor to Equinox's overall EBITDA generation, thereby reducing its reliance on the Equinox brand as the only source of earnings, as well as its improved geographical diversification. New York City and its surrounding suburbs now account for only 50% of the company's revenue, down from approximately 80% in 2005. Moody's took the following rating actions on Equinox: Ratings upgraded: Corporate Family Rating to B2 from B3 Probability of Default Rating to B2-PD from B3-PD $100 million first lien senior secured revolving credit facility due 2018 to Ba3 (LGD3, 32%) from B1 (LGD 3, 31%) $595 million (including proposed $100 million add-on) first lien senior secured term loan due 2020 to Ba3 (LGD3, 32%) from B1 (LGD 3, 31%) $200 million second lien senior secured term loan due 2020 to Caa1 (LGD 5, 81%) from Caa2 (LGD 5, 82%) Rating Outlook is Stable Ratings Rationale The B2 CFR reflects Equinox's strong market position in upscale fitness clubs, good operating trends relative to its peers, upside from the membership ramp up at recently opened clubs, and the fitness industry's favorable long-term growth fundamentals. The rating also considers Equinox's high leverage and modest interest coverage with Moody's adjusted debt/EBITDA and EBITDA less maintenance capex/interest expected to approximate 7.0 times and 1.5 times, respectively, at the end of 2015. Moody's also expects capex spend on discretionary investments in new facilities and upgrades to existing clubs will consume the company's free cash flow, resulting in no debt reduction beyond mandatory amortization. The stable rating outlook reflects Moody's expectation that Equinox will generate sufficient cash flow to fund new club investments and maintain its good liquidity position. Any deleveraging will come from EBITDA growth, as Moody's does not expect the company will permanently reduce debt above and beyond required amortization on the first lien senior secured term loan. The ratings could be upgraded if Equinox is able to sustain high single digit comparable-club revenue growth, continue to execute on its expansion strategy, and improve profitability such that debt to EBITDA approaches 5.0 times and EBITDA less maintenance capex to interest exceeds 2.0 times. Downward ratings pressure could be caused if comparable store sales slow meaningfully or earnings growth is weaker than expected. A material weakening of the company's liquidity profile could also pressure the ratings. Independent of a CFR change, the ratings on the senior secured first lien debt could be downgraded if the company were to add incremental first lien debt. Headquartered in New York, Equinox Holdings, Inc. operates under the Equinox, Pure Yoga, SoulCycle and Blink fitness brands. The company operates in both the upper-end and the middle to budget market segments and targets members from all demographics. Equinox is owned by individuals and entities affiliated with Related Companies, L.P. ("Related"), a New York limited partnership, Leonard Green & Partners, L.P. and members of management. Revenues approximated $740 million for the LTM period ended March 31, 2014. The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. EQUINOX HOLDINGS: S&P Affirms 'B' CCR; Outlook Positive ------------------------------------------------------- Standard & Poor's Ratings Services affirmed all ratings, including the 'B' corporate credit rating, on U.S.-based fitness club operator Equinox Holdings Inc. The outlook is positive. "At the same time, we affirmed our issue-level ratings, including the 'B' issue-level rating, on the senior secured credit facility (consisting of a revolving credit facility and the term loan B), and the 'CCC+' issue-level rating on the second-lien term loan. The recovery rating on the senior secured credit facility remains '3', and our recovery rating on the second-lien term loan remains '6', indicating our expectation for meaningful (50%-70%) and negligible (0-10%) recovery, respectively, in the event of default," S&P said. The company announced its plan to exercise the accordion feature under its existing senior secured term loan B to issue $100 million in incremental debt. This incremental debt will have the same 2020 maturity as the company's existing $495 million term loan B. The company will use funds will for fees and for general corporate expenses. Standard & Poor's corporate credit rating on Equinox reflects the competitive nature of the fitness club operating environment, as well as high levels of customer attrition inherent in the industry. S&P believes Equinox's relatively high portion of revenue derived from ancillary services partially tempers these factors, benefitting EBITDA margin and creating a more loyal customer base. Additionally, S&P believes Equinox's strong brand image, which drives an approximately 40% higher price point for its memberships relative to competitors Town Sports International Holdings and 24 Hour Fitness Worldwide Inc., also improves S&P's assessment of Equinox's business risk profile. S&P's ratings on Equinox also reflect its expectation for operating lease-adjusted leverage, pro forma for this transaction, to remain above 6x in 2014 and to improve to the high-5x level in 2015. S&P believes the ratio of adjusted funds from operations (FFO) to debt will remain in the low-double digit area in 2014 and 2015, and that fully adjusted interest coverage will remain strong in the mid-2x level through 2015. These measures fully consolidate the company's controlling stake in SoulCycle Holdings LLC and Blink Holdings Inc. S&P could raise its rating one notch if continued strong EBITDA and cash flow from the expansion and organic growth lead to operating lease-adjusted leverage improving to below 6x and adjusted FFO to debt increasing to the 12% area. EXPERT SOUTH TULSA: Cornerstone Creek Won't Cough Up Profit ----------------------------------------------------------- Kansas Bankruptcy Judge Robert D. Berger granted the Motion for Summary Judgment filed by Cornerstone Creek Partners, LLC, in the lawsuit filed against it by Expert South Tulsa, LLC, and Intervenor E.H. Hawes Revocable Trust. Prior to EST's bankruptcy filing, the Debtor sold real property -- the Memorial Commons -- to Cornerstone. The sale closed on January 8, 2010. Under the Purchase Agreement, Cornerstone paid $3,000,000, but only $261,477 of this amount went to EST. The balance of the purchase price satisfied the claims of some of EST's creditors. Eleven days after the sale closed, Cornerstone sold Memorial Commons to South Memorial Development, LLC, for $4,421,230. As a result of the sale to South Memorial, Cornerstone allegedly earned a profit of $1,421,230. On March 30, 2010, EST was placed in involuntary chapter 7 bankruptcy by one of its creditors. The case was then converted to chapter 11 on May 7, 2010. EST filed the adversary proceeding on September 1, 2011, to recover $1,421,230 from Cornerstone under either 11 U.S.C. Sections 548 or 544(b) of the Bankruptcy Code. EST seeks to to avoid the sale of Memorial Commons to Cornerstone, asserting claims under the Bankruptcy Code and the Oklahoma Uniform Fraudulent Transfer Act. The Hawes Trust has been substituted for EST to protect the Trust's potential interest in a promissory note. Cornerstone challenges both the UFTA claim and the Sec. 548 claim on the grounds that the transfer of fully encumbered property does not satisfy the definition of an "asset" or "an interest of the debtor in property." Second, Cornerstone challenges the claim that EST did not receive reasonably equivalent value because, according to Cornerstone, the consideration EST received was equal to or greater than the fair market value of the property. According to Judge Berger, "Summary judgment is granted in favor of Cornerstone because the Trust cannot show any genuine issue of material fact precluding judgment in favor of Cornerstone. Interpreting the evidence in the light most favorable to the Trust fails to show that a reasonable finder of fact could reach a holding in favor of the Trust. The Trust cannot succeed on its [Sec.] 544(b) claim because the transfer of fully encumbered property is not subject to Oklahoma's Uniform Fraudulent Transfer Act. The Trust cannot succeed on its [Sec.] 548 claim because EST received reasonably equivalent value for the sale of Memorial Commons." The case is,EXPERT SOUTH TULSA, LLC, Plaintiff, v. E.H. HAWES REVOCABLE TRUST, Intervenor, v. CORNERSTONE CREEK PARTNERS, LLC, Defendant, CASE NO. 10-20982 (Bankr. D. Kan.). A copy of the Court's June 9, 2014 Memorandum Opinion and Order is available at http://is.gd/UZL8VUfrom Leagle.com. FERRELLGAS L.P.: Tack-on Offering No Impact on Moody's B1 Rating ---------------------------------------------------------------- Moody's Investors Service said that Ferrellgas L.P.'s (OLP) proposed $150 million unsecured note offering would not have any impact on Ferrellgas Partners, L.P.'s (Ferrellgas, B1 stable) ratings or stable outlook. OLP is the operating partnership subsidiary of Ferrellgas and the issuer of the majority of Ferrellgas' debt, including its bank credit facilities. These notes are add-ons to OLP's existing $325 million 6.75% notes due 2022, which were issued in November 2013. Net proceeds will be used to fund a portion of the $125 million purchase price of the pending fluids logistics business acquisition in the Eagle Ford Shale, reduce revolver borrowings and cover transaction fees. Ratings Rationale The proposed notes will be issued under the same indenture that govern OLP's existing 6.75% notes and will be classified as a single class and series. Prior to this issuance, OLP had $825 million of senior unsecured notes and a $500 million senior secured revolving credit facility. OLP's unsecured notes are rated B2, one notch below the Ferrellgas B1 Corporate Family Rating (CFR) because of the priority claim of the sizeable secured credit facility, under Moody's Loss Given Default Methodology. The B1 CFR reflects Ferrellgas' high, albeit improving, financial leverage, the seasonal nature of propane sales with significant dependency on cold winter months and the associated volatility in cash flows, and the inherent risks of the Master Limited Partnership (MLP) business model, which requires high recurring cash distributions to unitholders. The rating is favorably impacted by the partnership's substantial scale and geographic diversification that facilitate cost efficiencies in a fragmented industry, its utility-like services that provide a base level of revenue, and a propane tank exchange business which generates complementary cash flows during summer months. The B1 CFR also considers the increasing customer conservation trends, the growing use of natural gas as a competing source of energy, and the ongoing need to make acquisitions to offset secularly declining volumes. The stable outlook assumes that leverage will continue to improve over the more predictable spring and summer months as working capital debt is reduced and liquidity will remain adequate. An upgrade is unlikely in 2014 given Ferrellgas' significant distribution burden and limited prospects for permanent debt reduction. Moody's would look for leverage to remain firmly below 5x and distribution coverage above 1x over an extended period prior to considering a positive rating action. A downgrade could result if liquidity becomes insufficient or if the peak seasonal debt to EBITDA ratio cannot be held below 6.5x. The principal methodology used in this rating was the Global Midstream Energy Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Ferrellgas Partners, L.P. is a propane distributor and a publicly traded master limited partnership based in Overland Park, KS. FIRST SECURITY: Gets Demand Letter Over Grant of Stock Options -------------------------------------------------------------- First Security Group, Inc., received a letter on May 27, 2014, from the law firm of Levi & Korsinsky LLP, on behalf of purported shareholders of the Company, alleging certain irregularities with respect to the issuance of stock options to the Company's named executive officers, and demanding that the Board of Directors investigate claims, initiate legal action and take necessary and appropriate remedial measures. "While the Company's management generally believes the allegations in the Demand Letter are without merit, the Board of Directors has formed a special committee to investigate the allegations and take corrective action as necessary," the Company said in a Form 8-K report filed with the U.S. Securities and Exchange Commission. The Company is also making certain supplemental disclosure to its shareholders in advance of its Annual Meeting of Shareholders to ensure that shareholders have all information necessary for an informed vote. The Demand Letter alleges that the Compensation Committee of the Board of Directors granted stock options in excess of the annual limit imposed by the Company's shareholder-approved 2012 Long-Term Incentive Plan to the Company's named executive officers. The Demand Letter further alleges that the Company's proxy statement for the 2014 Annual Meeting of Shareholders scheduled to be held on June 18, 2014, failed to disclose that the Company's executive officers were granted awards in excess of the limit by the Compensation Committee. In connection with these allegations, the Letter demands that the Company's Board of Directors: 1. Rescind the excess stock options granted to the executive officers, and seek any further appropriate relief on behalf of the Company for damages sustained as a result of the misconduct from members of the Board, management, and any other person or entity (whether within or without the Company) responsible for the Plan violations described in the Demand Letter; 2. Investigate whether there are additional violations of the Plan with respect to any other officers and directors and other years beyond what is described in the Demand Letter, and if so, take appropriate action; 3. Issue curative disclosures prior to the Annual Meeting in a manner that corrects the alleged disclosure deficiencies described in the Demand Letter; and 4. Adopt and implement adequate internal controls and systems at the Company designed to prohibit and prevent a recurrence of Plan violations including such as those described in the Demand Letter and ensure full compliance with NASDAQ rules and regulations and applicable law. A full-text copy of the Form 8-K disclosure is available for free at http://is.gd/pvwNCc About First Security Group First Security Group, Inc., is a bank holding company headquartered in Chattanooga, Tennessee. Founded in 1999, First Security's community bank subsidiary, FSGBank, N.A. has 28 full- service banking offices along the interstate corridors of eastern and middle Tennessee and northern Georgia. In Dalton, Georgia, FSGBank operates under the name of Dalton Whitfield Bank; along the Interstate 40 corridor in Tennessee, FSGBank operates under the name of Jackson Bank & Trust. FSGBank provides retail and commercial banking services, trust and investment management, mortgage banking, financial planning, internet banking http://www.FSGBank.com/ First Security incurred a net loss of $13.44 million in 2013, a net loss of $37.57 million in 2012 and a net loss of $23.06 million in 2011. The Company's balance sheet at March 31, 2014, showed $980.50 million in total assets, $895.85 million in total liabiities and $84.65 million in total shareholders' equity. FIRST STAR PROPERTIES: Case Summary & 2 Unsecured Creditors ----------------------------------------------------------- Debtor: First Star Properties, LLC 89 Broad St. Keyport, NJ 07735 Case No.: 14-21851 Chapter 11 Petition Date: June 9, 2014 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Hon. Kathryn C. Ferguson Debtor's Counsel: Richard J. Kwasny, Esq. KWASNY & REILLY 53 South Main St. Yardley, PA 19067 Tel: (215) 321-0300 Fax: (215) 321-9336 Email: kwasnylaw@aol.com Total Assets: $1.19 million Total Liabilities: $1.09 million The petition was signed by Nathaniel C Chadwick, president. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/njb14-21851.pdf FORESIGHT ENERGY: Moody's Revises B2 Rating Outlook to Positive --------------------------------------------------------------- Moody's Investors Service revised the ratings outlook to positive from stable and affirmed the existing ratings of Foresight Energy LLC, including its Corporate Family Rating (CFR) of B2, probability of default rating of B2-PD, senior unsecured ratings of Caa1, and rating on the senior secured credit of Ba3. The company's speculative grade liquidity (SGL) rating was also affirmed at SGL-2. Outlook Actions: Issuer: Foresight Energy, LLC Outlook, Changed To Positive From Stable Affirmations: Issuer: Foresight Energy, LLC Corporate Family Rating, Affirmed B2 Senior Secured Bank Credit Facility, Affirmed Ba3 Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 Probability of Default Rating, Affirmed B2-PD Speculative Grade Liquidity Rating, Affirmed SGL-2 Upgrades: Issuer: Foresight Energy, LLC Senior Secured Bank Credit Facility, Upgraded to a range of LGD2, 27 % from a range of LGD3, 32 % Senior Unsecured Regular Bond/Debenture; Upgraded to a range of LGD5, 82 % from a range of LGD5, 85 % Rating Rationale The outlook change follows the completion of the company's capital expansion, with the new longwall Viking mine coming online in May 2014, as well as approximately $200 million of debt repayment expected from the company's formation and initial public offering of a Master Limited Partnership (MLP) structure. On June 9, 2014, Foresight Energy L.P., the new holding company of Foresight, announced that it has commenced an initial public offering of 17,500,000 common units representing limited partner interests in Foresight Energy L.P. at a price per unit ranging between $19.00 and $21.00, with up to 2,625,000 additional common units to cover over-allotments, if any. The common units being offered to the public represent a 13.5% to 15.5% limited partner interest in Foresight Energy L.P. Moody's expect that the proceeds from the offering will be used, in part, to repay approximately $200 million of amounts outstanding under senior secured Term Loan B due in 2020, which would bring pro-forma Debt/ EBITDA, as adjusted by Moody's, from 5.0x to 4.4x as of March 31, 2014. Following the transaction, Foresight Reserves L.P., the existing parent company of Foresight, will own the controlling interest in Foresight Energy L.P, the new holding company of Foresight. Foresight Reserves invests in various coal-related assets and is indirectly owned by the Cline Group. In addition to anticipated deleveraging, the change in outlook reflects the company's recent and expected continuing growth in revenues and EBITDA. In 2013, the company sold 19 million tons of coal from the company's four mining complexes, up from 14 million in 2012. The company's revenues and EBITDA, as adjusted by Moody's, grew to $957 and $382 million, respectively, in 2013, up from $846 and $351 million, respectively, in 2012. Moody's expect continued growth in 2014, with production in excess of 20 million tons, over $1 billion in revenues, and EBITDA of roughly $400 million. Beyond 2014, the company's average realizations could come under pressure, to the extent that additional supplies coming online in the Illinois Basin pressure domestic pricing, seaborne markets remain weak, and the company's higher priced long-term contracts continue to roll off. At the same time, Moody's expect costs per ton to increase over the next two to three years. That said, Moody's anticipate that Debt/ EBITDA, as adjusted, would be maintained at around 4x or below over the rating horizon. Moody's anticipates that the proposed MLP structure will direct the company's future free cash flows predominantly towards dividends to unit holders. With the recent addition of its Viking mine, the company is now substantially complete with its expansionary capital investments and going forward Moody's expect maintenance capex requirements in the range of $75 - 85 million. With cash flows from operations expected to exceed $200 million per year, the company should have sufficient cash remaining to meet its target payout to common unit holders without raising additional debt. That said, MLP dividend targets will limit the company's ability to pay down debt or to invest in further development. Moody's believe that over the long term, management may seek to grow the company from the existing four longwalls to as many as nine, with combined long-term potential productive capacity of up to 67.2 million tons of coal per year. The company has an agreement with Foresight Reserves, whereby Foresight Reserves has an option to develop additional longwalls, and the company has an option to purchase them at fair market value, once development is complete. The B2 CFR reflects Moody's expectation that the company will not make such longwall acquisitions in the next two to three years, and future investments would be managed such that leverage is maintained at around 4x on sustainable basis. The CFR also reflects uncertainties as to future financial policies under the MLP structure, as the company attempts to manage its future investment needs, target dividend payouts and leverage ratios. The CFR also reflects the company's position as one of the lowest cost producers in the Illinois Basin, ample reserves, multiple transportation options, and access to export markets. The rating also captures the stable domestic customer base of large scrubbed coal plants and attractive contracted position through the end of 2016. The ratings are further supported by Moody's view that Illinois Basin remains the better positioned coal region in the US, relatively insulated from the pressures facing domestic thermal market as a whole. Moody's believe the basin is poised for growth, as larger baseload coal plants will run at higher capacity factors to make up for anticipated regulatory-driven retirements of smaller plants. The ratings also reflect the company's geographical and operational concentration as an Illinois Basin producer with five underground mines. The company's SGL-2 speculative grade liquidity rating reflects Moody's expectation that the company will maintain good liquidity over the next twelve months, even though the MLP dividend targets will hamper the liquidity position going forward. As of March 31, 2014 the company's liquidity consisted of roughly $25 million in cash and over $200 million available under the $500 million secured revolver expiring in 2018. The company's nearest significant maturity, after the revolver, is Term Loan B, with outstanding balance, pro-forma for IPO proceeds repayment, of roughly $230 million. Moody's expect the company to be in compliance with the secured credit facility restrictive covenants over the next twelve months. Positive outlook reflects Moody's expectation of continued growth in volumes and revenues offsetting potential margin pressures, and stable or declining absolute levels of debt, with Debt/ EBITDA, as adjusted, declining below 4x over the next twelve months. The ratings could be upgraded if Debt/ EBITDA, as adjusted, were expected to be sustained below 4x and EBIT/ Interest were to approach 2x. Ratings or outlook could be negatively affected if Debt/ EBITDA, as adjusted, is sustained at 4.5x or above, liquidity deteriorates, and/or company undertakes financially aggressive policies. The principal methodology used in these ratings was the Global Mining Industry published in May 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Foresight Energy, LLC is a growing thermal coal producer operating in the Illinois Basin. Currently, the company has four operating mining complexes and over 3 billion tons of coal reserves. For the twelve months ended March 31, 2014 the company generated $968 million in revenues. FOUR OAKS: Amends 26.6MM Shares Rights Offering Prospectus ---------------------------------------------------------- Four Oaks Fincorp, Inc., filed with the U.S. Securities and Exchange Commission a pre-effective amendment no.2 to its Form S-1 registration statement relating to the distribution, at no charge, to holders of the Company's common stock, par value $1.00 per share, of non-transferable subscription rights to purchase up to an aggregate of 26,633,385 shares of the Company's common stock. The Company amended the registration statement to delay its effective date. Holders will receive one subscription right for each share of common stock they own as of 5:00 p.m., Eastern Time, on June 16 , 2014. Each subscription right will entitle holders of the Company's common stock, to purchase three shares of common stock at a subscription price of $1.00 per share. As of the close of business on June 9 , 2014, 8,877,795 shares of the Company's common stock were issued and outstanding. A full-text copy of the amended Form S-1 prospectus is available for free at http://is.gd/IK5VTO About Four Oaks Based in Four Oaks, North Carolina, Four Oaks Fincorp, Inc., is the bank holding company for Four Oaks Bank & Trust Company. The Company has no significant assets other than cash, the capital stock of the bank and its membership interest in Four Oaks Mortgage Services, L.L.C., as well as $1,241,000 in securities available for sale as of Dec. 31, 2011. Four Oaks reported a net loss of $350,000 in 2013, a net loss of $6.96 million in 2012 and a net loss of $9.09 million in 2011. The Company's balance sheet at March 31, 2014, showed $816.22 million in total assets, $791.81 million in total liabilities and a $24.40 million in total stockholders' equity. Written Agreement "In late May 2011, the Company and the Bank entered into a formal written agreement (the "Written Agreement") with the Federal Reserve Bank of Richmond (the "FRB") and the North Carolina Office of the Commissioner of Banks (the "NCCOB"). Under the terms of the Written Agreement, the Bank developed and submitted for approval, within the time periods specified, plans to: * revise lending and credit administration policies and procedures at the Bank and provide relevant training; * enhance the Bank's real estate appraisal policies and procedures; * enhance the Bank's loan grading and independent loan review programs; * improve the Bank's position with respect to loans, relationships, or other assets in excess of $750,000, which are now or in the future become past due more than 90 days, are on the Bank's problem loan list, or adversely classified in any report of examination of the Bank; and * review and revise the Bank's policy regarding the Bank's allowance for loan and lease losses and maintain a program for the maintenance of an adequate allowance. A material failure to comply with the terms of the Written Agreement could subject the Company to additional regulatory actions and further restrictions on its business. These regulatory actions and resulting restrictions on the Company's business may have a material adverse effect on its future results of operations and financial condition. GELTECH SOLUTIONS: Posts $1.63-Mil. Loss in Qtr. Ended March 31 --------------------------------------------------------------- GelTech Solutions, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1.63 million on $122,038 of sales for the three months ended March 31, 2014, compared with a net loss of $861,151 on $84,977 of sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.36 million in total assets, $3.05 million in total liabilities, and a stockholders' deficit of $1.69 million. As of March 31, 2014, the Company had a an accumulated deficit and stockholders' deficit of $33.61 million and $1.69 million, respectively, and incurred losses from operations of $5.59 million for the nine months ended March 31, 2014 and used cash from operations of $4.09 million during the nine months ended March 31, 2014. In addition, the Company has not yet generated revenue sufficient to support ongoing operations. These factors raise substantial doubt regarding the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/ZkncDu About GelTech Jupiter, Fla.-based GelTech Solutions. Inc., is a Delaware corporation organized in 2006. The Company markets four products: (1) FireIce(R), a water soluble fire retardant used to protect firefighters, structures and wildlands; (2) Soil2O(R) 'Dust Control', its new application which is used for dust mitigation in the aggregate, road construction, mining, as well as, other industries that deal with daily dust control issues; (3) Soil2O(R), a product which reduces the use of water and is primarily marketed to golf courses, commercial landscapers and the agriculture market; and (4) FireIce(R) Home Defense Unit, a system for applying FireIce(R) to structures to protect them from wildfires. GelTech reported a net loss of $5.22 million on $526,010 of sales for the year ended June 30, 2013, as compared with a net loss of $7.13 million on $419,577 of sales for the year ended June 30, 2012. Salberg & Company, P.A., in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company has a net loss and net cash used in operating activities in 2013 of $5,221,747 and $4,195,655, respectively, and has a working capital deficit, accumulated deficit and stockholders' deficit of $556,140, $28,021,633 and $2,270,386, respectively, at June 30, 2013. GENERAL INVESTMENTS: Wins Dismissal of Chapter 11 Case ------------------------------------------------------ General Investments, Inc., leased land in Waikiki, Hawaii, and subleased fractional interests in it to the owners of apartments in the Waikiki Skyliner condominium project. General Investments filed this case because the fee simple owners of the land were attempting to terminate General Investments' lease. General Investments has settled its dispute with the fee owners by surrendering its interest in the property to the fee owner, subject to the apartment subleases, in exchange for certain promised payments. General Investments has also paid all timely filed prepetition claims. The only matters that remain to be addressed are the turnover of certain funds claimed by General Investments, the approval of professional fees, and dismissal of the case. General Investments filed a motion to dismiss this case and fee applications for its counsel and its accountant. Susan K. Weiss objected to the motion to dismiss. No one else has responded to the motion or applications. Ms. Weiss makes a number of allegations and complaints about her condominium association, the Association of Apartment Owners of the Waikiki Skyliner (AOAO). She takes issue with the fact that the AOAO has raised her assessments, which has had an adverse impact on her and other seniors living on fixed incomes. In addition, she complains about her cable television service, the condition of the property, and excessive legal fees the AOAO has incurred. Bankruptcy Judge Robert J. Faris, however, held that the bankruptcy court does not have jurisdiction to decide Ms. Weiss' complaints. All of her complaints concern the AOAO and its management decisions. None of them states a claim for relief against General Investments. None of her contentions has anything to do with this bankruptcy case. If her contentions have merit, she must assert them in another forum. Accordingly, Judge Faris grants the Debtor's motion to dismiss and approves and allows the fee applications as filed. A copy of the Court's June 9, 2014 Memorandum of Decision is available at http://is.gd/LgqLBufrom Leagle.com. General Investments, Inc. filed for Chapter 11 bankruptcy (Bankr. D. Hawaii Case No. 12-00745) on April 4, 2012, listing under $1 million in both assets and liabilities. A copy of the petition is available at http://bankrupt.com/misc/hib12-00745.pdf The Law Office of Harrison P. Chung serves as the Debtor's counsel. GLEN AMERICAN: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Glen American Company LLC 3761 Beverly Ridge Drive Sherman Oaks, CA 91423 Case No.: 14-12907 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: June 10, 2014 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Hon. Victoria S. Kaufman Debtor's Counsel: Simon Aron, Esq. WOLF, RIFKIN, SHAPIRO & SCHULMAN & RABKIN, LLP 11400 W Olympic Blvd 9th Fl Los Angeles, CA 90064-1565 Tel: 310-478-4100 Fax: 310-479-1422 Email: saron@wrslawyers.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Ebrahim Shadsirat, manager. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. GRIGGS OFFICE: Bellingham, WA Retailer Begins Liquidation --------------------------------------------------------- The Bellingham Herald reports that Griggs Office Supply at Bellingham, Washington, will begin a liquidation sale on June 2, with the final day of business scheduled June 25. According to the Bellingham Herald, the business has had quite a run keeping up with all the technological changes in the workplace over the decades. Griggs is very much old-school as a retail store, harkening back to a time before big-box and online retailers by focusing on customer service and providing a wide range of hard-to-find supplies. But for third-generation owner Donel Griggs, it's time to retire and do some traveling and spend time with grandchildren. Her son, Steven, has decided to try something different after working at the store much of his adult life, the report relates. With a few weeks until the store closes, the employees said they hope to see customers a few more times, noting that the news has been a little tough for some of them. HD SUPPLY: Incurs $12 Million Net Loss in First Quarter ------------------------------------------------------- HD Supply Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report disclosing a net loss of $12 million on $2.16 billion of net sales for the three months ended May 4, 2014, as compared with a net loss of $131 million on $2.04 billion of net sales for the three months ended May 5, 2013. The Company's balance sheet at May 4, 2014, showed $6.55 billion in total assets, $7.30 billion in total liabilities and a $750 million total stockholders' deficit. "I am pleased with our solid performance this quarter, despite the adverse impact of the severe weather we experienced throughout February and March. We remain cautiously optimistic that our end markets will continue to build on the emerging strength that we are seeing in select geographies," stated Joe DeAngelo, CEO of HD Supply. "We remain focused on controllable execution to deliver profitable growth in excess of our market." A full-text copy of the Form 10-Q is available for free at: http://is.gd/FkvoBL About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. HD Supply reported a net loss of $218 million for the fiscal year ended Feb. 2, 2014, a net loss of $1.17 billion for the fiscal year ended Feb. 3, 2013, and a net loss of $543 million for the year ended Jan. 29, 2012. * * * As reported by the TCR on Jan. 11, 2013, Moody's Investors Service upgraded HD Supply, Inc.'s ("HDS") corporate family rating to B3 from Caa1 and its probability of default rating to B3 from Caa1. This rating action results from our expectations that HDS will refinance a significant portion of its senior subordinated notes due 2015, effectively extending the remainder of its maturities by at least two years to 2017. HD Supply carries a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. HORIZON LINES: Stockholders Elected Two Directors ------------------------------------------------- Horizon Lines, Inc., held its annual meeting of shareholders on June 5, 2014, at which the shareholders: (1) elected each of James LaChance and Steven L. Rubin to serve as directors to serve a three-year term on the Company's Board; (2) approved the adoption of a Section 382 rights plan which was adopted by the Board in August 2012 to preserve the Company's substantial amount of net operating loss carry forwards and other tax benefits; (3) ratified the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for fiscal 2014; and (4) approved, on an advisory basis, the Company's executive compensation program for its named executive officers. About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. For the year ended Dec. 22, 2013, the Company reported a net loss of $31.93 million following a net loss of $94.69 million for the year ended Dec. 23, 2012. As of March 23, 2014, the Company had $632.12 million in total assets, $701.39 million in total liabilities and a $69.26 million total stockholders' deficiency. * * * In June 2012, Moody's Investors Service affirmed Horizon Lines, Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating ("PDR") at Caa2 and removed the LD ("Limited Default") designation from the rating in recognition of the conversion to equity of the $228 million of Series A and Series B Convertible Senior Secured notes due in October 2017 ("Notes"). Moody's said the affirmation of the Corporate Family and Probability of Default ratings considers that total debt has been reduced by the conversion of the Notes, but also recognizes the significant operating challenges that the company continues to face. HOTEL OUTSOURCE: Reports $385-K Net Loss in First Quarter --------------------------------------------------------- Hotel Outsource Management International, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $385,000 on $642,000 of revenues for the three months ended March 31, 2014, compared with a net loss of $412,000 on $982,000 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $4.67 million in total assets, $4.48 million in total liabilities, and stockholders' equity of $194,000. The Company has suffered recurring losses from operations and has a net working capital deficiency that raises substantial doubt about its ability to continue as going concern, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/GVIBwD New York-based Hotel Outsource Management International, Inc., is a multi-national service provider in the hospitality industry, supplying a range of services in relation to computerized minibars that are primarily intended for in-room refreshments. IMMEDIATEK INC: Incurs $298K Net Loss in Qtr. Ended March 31 ------------------------------------------------------------ Immediatek, Inc., filed a Form 10-Q, disclosing a net loss of $298,264 on $747,877 of revenues for the three months ended March 31, 2014, compared to a net loss of $303,906 on $816,962 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $2.68 million in total assets, $1.19 million in total liabilities, total convertible preferred stock of $3.5 million, and a stockholders' deficit of $2 million. A copy of the Form 10-Q is available: http://is.gd/MJDh3z Irving, Tex.-based Immediatek, Inc., provides online back-up, file storage and other web-based services for individuals, businesses and governmental organizations. INTEGRATED ENVIRONMENTAL: Posts $517K Net Loss in First Quarter --------------------------------------------------------------- Integrated Environmental Technologies, Ltd., reported a net loss of $517,199 on $18,061 of revenues for the three months ended March 31, 2014, compared with a net loss of $408,613 on $38,830 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.16 million in total assets, $776,096 in total liabilities, and stockholders' equity of $380,022. The Company has incurred significant recurring operating losses and negative cash flows from operations. The Company had working capital of $559,446 and an accumulated deficit of $19.99 million as of March 31, 2014. The Company also has no lending relationships with commercial banks and is dependent on the completion of financings involving the private placement of its securities in order to continue operations. These factors raise substantial doubt about the Company's ability to continue as a going concern, according to the Company's regulatory filing. A copy of the Form 10-Q filed with the Securities and Exchange Commission is available at http://is.gd/WuV72K About Integrated Environmental Little River, S.C.-based Integrated Environmental Technologies, Ltd., operates through its wholly-owned subsidiary, I.E.T., Inc., a Nevada corporation incorporated on Jan. 11, 2002. IET produces and sells hypochlorous acid ("Anolyte") as well as an anti-oxidizing, mildly alkaline solution ("Catholyte" and, together with Anolyte, the "Solutions"), that provide an environmentally friendly alternative for cleaning, sanitizing and disinfecting as compared to the hazardous chemicals traditionally prevalent in commercial use. The Company manufactures proprietary EcaFlo(R) equipment that is used to produce the Solutions for distribution by the Company and, under certain circumstances, such equipment is leased by the Company to customers for use at a customer's facility. INT'L STEM CELL: Incurs $1.43-Mil. Net Loss in March 31 Quarter --------------------------------------------------------------- International Stem Cell Corporation reported a net loss of $1.43 million on $1.65 million of total revenue for the three months ended March 31, 2014, compared with a net loss of $1.71 million on $1.28 million of total revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $6.65 million in total assets, $6.05 million in total current liabilities, convertible redeemable preferred stock of $4.94 million and a stockholders' deficit of $4.34 million. The Company needs to raise additional working capital. The timing and degree of any future capital requirements will depend on many factors. Currently, the Company's burn rate is approximately $677,000 per month, excluding capital expenditures and patent costs averaging $52,000 per month. There can be no assurance that the Company will be successful in maintaining its normal operating cash flow, and that such cash flows will be sufficient to sustain the Company's operations through 2014. These factors raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q filed with the U.S. Securities and Exchange Commission is available for free at: http://is.gd/sAxDHB International Stem Cell Corp. operates as a biotechnology company, which develops a new stem cell technology called parthenogenesis that addresses the problem of immune-rejection. The company operates through two business subsidiaries: Lifeline Skin Care and Lifeline Cell Technology. Stem Cell was founded by William B. Adams, Kenneth C. Aldrich and Gregory S. Keller on August 17, 2001 and is headquartered in Carlsbad, CA. ISHARES CORE: S&P Assigns 'BB+f' Rating on Total USD Bond Market ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB+f' fund credit quality and 'S3' volatility ratings on the iShares Core Total USD Bond Market ETF. The fund is among more than 220 investment portfolios of the iShares Trust. The trust was organized as a Delaware statutory trust on Dec. 16, 1999, and is authorized to have multiple series or portfolios. The trust is an open-end management investment company registered under the Investment Company Act of 1940 as amended. The offering of the trust's shares is registered under the Securities Act of 1933 as amended. The shares of the trust are listed and traded at market prices on national securities exchanges. BlackRock Fund Advisors (BFA), the fund's investment adviser, is a subsidiary of BlackRock Inc. As of March 31, 2014, BlackRock's assets under management totaled US$4.401 trillion across equity, fixed-income, cash management, alternative investment, real estate, and advisory strategies. State Street Bank & Trust Co. is the administrator, custodian, and transfer agent for the fund. BlackRock Investments LLC, a subsidiary of BlackRock Inc., is the fund's distributor. BFA uses a passive or indexing approach to achieve the fund's investment objectives. iShares Core Total USD Bond Market ETF is expected to launch on June 12, 2014. The exchange-traded fund (ETF) seeks to track the performance, before fees and expenses, of its respective index: Barclays US Universal Index. The US Universal Index represents the union of the U.S. Aggregate Index, U.S. Corporate High Yield Index, Investment Grade 144A Index, Eurodollar Index, U.S. Emerging Markets Index, and the non-ERISA eligible portion of the CMBS Index. The index covers U.S. dollar- denominated taxable bonds that are rated either investment grade or high yield. S&P's fund credit quality ratings, identified by the 'f' subscript, reflect the level of protection the fund provides against losses from credit defaults. The credit quality ratings scale ranges from 'AAAf' (extremely strong protection against losses from credit defaults) to 'CCCf' (extremely vulnerable to losses from credit defaults). The ratings from 'AAf' to 'CCCf' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. S&P's fund volatility ratings, identified by the 'S' scale, are based on its current opinion of a fixed-income fund's sensitivity to changing market conditions, relative to a portfolio made up of government securities and denominated in the base currency of the fund. The volatility ratings are based on a scale from 'S1' (lowest sensitivity) to 'S6' (highest sensitivity). Volatility ratings evaluate sensitivity to factors such as interest rate movements, credit risk, and liquidity. S&P will monitor the fund monthly to ensure the consistency of the credit and volatility profiles with the assigned ratings. IVANHOE ENERGY: Reports $7.88-Mil. Net Loss for March 31 Quarter ---------------------------------------------------------------- Ivanhoe Energy Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of US$7.88 million on US$31,000 of interest income for the three months ended March 31, 2014, compared with a net loss of US$14.05 million on US$17,000 of interest income for the same period in 2013. The Company's balance sheet at March 31, 2014, showed US$222.94 million in total assets, US$69.96 million in total liabilities, and stockholders' equity of US$152.99 million. At March 31, 2014, Ivanhoe had an accumulated deficit of US$466.6 million and a working capital surplus of US$8.8 million, excluding assets held for sale. For the three months ended March 31, 2014, cash used in operating activities was US$8.7 million and the Company expects to incur further losses in the development of its business. Continuing as a going concern is dependent upon attaining future profitable operations to repay liabilities arising in the normal course of operations and accessing additional capital to develop the Company's properties. Ivanhoe intends to finance its future funding requirements through a combination of partnering with strategic investors and/or public and private debt and equity markets, either at the parent company level or at the project level, and through the sale of interests in existing oil properties. There is no assurance that the Company will be able to obtain such financing, or obtain it on favorable terms. Without access to additional financing or other cash generating activities in 2014, there is material uncertainty that casts substantial doubt upon the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/zVeVcT Vancouver, Canada-based Ivanhoe Energy Inc. is an independent international heavy oil development and production company focused on pursuing long term growth in its reserves and production. Ivanhoe plans to utilize advanced technologies, such as its HTL(TM) technology, that are designed to improve recovery of heavy oil resources. In addition, the Company seeks to expand its reserve base and production through conventional exploration and production of oil and gas. J2 GLOBAL: Moody's Affirms 'B1' Corporate Family Rating ------------------------------------------------------- Moody's Investors Service has affirmed j2 Global, Inc.'s B1 Corporate Family Rating (CFR), B1-PD Probability of Default Rating and SGL-1 Speculative Grade Liquidity (SGL) rating following the company's announcement that it will reorganize its corporate structure and raise $300 million of new convertible notes due 2029 at the newly formed holding company, j2 Global Holdings, Inc. ("Holdco"). Following the corporate restructuring, the existing issuer will become a wholly owned subsidiary of Holdco and change its name to j2 Cloud Services, Inc. As part of the rating action, Moody's has also upgraded the instrument ratings on the existing $250 million senior unsecured notes to Ba3 (LGD3-33%) from B1 (LGD4-56%) given the support from the new unrated convertible notes. The proceeds from the new convertible note offering will be used for general corporate purposes. The outlook remains stable. Upgrades: Issuer: J2 Global, Inc. Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3, 33-LGD3 from B1, 56-LGD4 Affirmations: Issuer: J2 Global, Inc. Probability of Default Rating, Affirmed B1-PD Speculative Grade Liquidity Rating, Affirmed SGL-1 Corporate Family Rating, Affirmed B1 Outlook Actions: Issuer: J2 Global, Inc. Outlook, Remains Stable Ratings Rationale j2's B1 corporate family rating reflects its strong financial metrics, market position and improved scale. The ratings are also supported by j2's very good liquidity as demonstrated by its large cash holdings and free cash flows. j2's revenues are stable and predictable, with 60% of total sales from subscriptions. The company has very low capital intensity, with capital expenditures at approximately 3.5% of revenues. These strengths are offset by execution risks related to the company's expansion into new business segments and Moody's doubts about the long-term sustainability of internet fax, which still accounts for a large percentage of the company's total revenues. The business has "long-tail" characteristics that are likely to sustain positive cash flows as the core internet-fax business gradually erodes. The company has actively been trying to diversify its business through acquisitions into cloud offerings and digital media and is very acquisitive, resulting in high execution and financing risk. Proforma for the new note offering, j2's leverage will increase to approximately 2.8x (Moody's adjusted) at year end 2014 from 1.3x (Moody's adjusted) at year end 2013. Moody's expects the company to continue to grow EBITDA through acquisitions such that leverage will trend towards 2x (Moody's adjusted) by year end 2016. Moody's expects j2 to have very good liquidity over the next twelve months supported by approximately $570 million in cash or equivalents and unrestricted short term investments along with an undrawn $40 million revolving credit facility pro-forma for the new note offering. Moody's projects that j2's cash from operations should be more than sufficient to meet its modest capex obligations, and fund its dividend program. The ratings for the debt instruments reflect both the overall probability of default of j2, to which Moody's has assigned a probability of default rating (PDR) of B1-PD, and individual loss given default assessments. The $250 million senior unsecured notes are rated Ba3 (LGD3 - 33%), one notch higher than the CFR given the support from the proposed unrated $300 million convertible notes due 2029. The company also has a $40 million senior secured revolver which ranks above the unsecured notes, also not rated by Moody's. The terms governing the unsecured notes allow for the incurrence of secured debt up to a secured leverage ratio of 2:1. The incurrence of a significant amount of secured debt would subordinate the unsecured notes and (assuming no change to j2's family rating) and could result in multi-notch downgrade of the senior unsecured notes. The stable outlook is based on Moody's view that the company will maintain revenue growth through acquisitions and continue to produce strong free cash flow. Moody's could consider a ratings upgrade if leverage (Moody's adjusted) were to trend towards 1.0x on a sustainable basis, while free-cash-flow to debt remained above 20%. Additionally, an upgrade would be contingent upon management's commitment to a conservative financial policy. Downward rating pressure could develop if adjusted leverage increases towards 3.0x or if FCF/Debt falls below 10% on a sustainable basis, which may result from future debt-funded acquisitions, or share buyback and dividend programs. The principal methodology used in this rating was the Global Telecommunications Industry published in December 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Los Angeles, CA, j2 Global, Inc ("j2" or "the company") is a provider of business cloud services and digital media. For last twelve month ending March 31, 2014, j2 generated approximately $541 million in revenue. JBS USA: Moody's Assigns Ba3 Rating on $750MM Sr. Unsecured Notes ----------------------------------------------------------------- Moody's Investor's Service has assigned a Ba3 senior unsecured debt rating to proposed $750 million senior unsecured notes to be issued jointly by JBS USA, LLC and JBS USA Finance, Inc. The rating outlook is negative. Proceeds from the notes offering will be used to make an intercompany loan to JBS USA Holdings, Inc., an intermediate holding company, for further transfer to JBS S.A. the ultimate parent holding company. JBS S.A. intends to use the loan proceeds to fund a tender offer launched today for any and all of the JBS S.A. $300 million 10.500% notes due 2016 and the $350 million 10.250% notes issued by wholly-owned Bertin S.A. Any remaining net proceeds from the offering will be used by JBS USA LLC for general corporate purposes. The tender offer announced today by JBS S.A. is scheduled to expire on July 9, 2014. Ratings Rationale JBS USA's ratings are driven primarily by the Corporate Family Rating of JBS S.A. (Ba3 negative), which controls JBS USA Holdings and its wholly-owned subsidiary JBS USA LLC in all material aspects. Thus, we expect any future changes to JBS USA's ratings to mirror changes to JBS S.A.'s Corporate Family Rating. Refer to JBS S.A.'s credit opinion on moodys.com for factors that could cause the rating to change. Rating assigned: JBS USA, LLC and JBS USA Finance, Inc.: $750 million proposed senior unsecured notes due 2024 at Ba3. The outlook is negative. The proposed notes will be guaranteed by JBS S.A. and two intermediate holding companies: JBS Hungary Holdings Kft., and JBS USA Holdings. The notes will also be guaranteed on a senior unsecured basis by wholly-owned US restricted subsidiaries, excluding JBS Five Rivers, JBS US Holdings LLC and JBS USA Finance, Inc. The non-guarantor subsidiaries represent approximately 63% of consolidated gross profit of JBS USA. The notes will rank equally to the existing senior unsecured debt at JBS USA, LLC including $700 million notes due February 2020, $1,150 million 7.250% notes due June 2021. The notes will be effectively subordinated to the existing senior secured debt at JBS USA, LLC including the $500 million senior secured term loan due 2020, the $475 million senior secured term loan B due May 2018, and the $850 million asset-backed revolving credit facility ($188 million outstanding as of March 30, 2014) expiring June 2016. JBS USA, LLC operates the U.S. beef and pork segments and the Australian beef and lamb operations of JBS S.A., one of the largest protein operators in the world. JBS USA is owned by an intermediate holding company, JBS USA Holdings, which also owns a controlling 76% equity interest in Pilgrim's Pride Corporation, one of the leading poultry producers in the United States. Reported sales for JBS S.A. and JBS USA for the twelve months ended March 30, 2014 were approximately BRL 99.8 billion (USD 44.5 billion) and $20.4 billion, respectively. JBS USA Finance, Inc., the co-issuer of the notes, is a special purpose entity wholly-owned by JBS USA LLC. It has no subsidiaries and no operations or assets other than those incidental to maintaining its corporate existence. The principal methodology used in this rating was the Global Protein and Agriculture Industry Methodology published in May 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. KCG HOLDINGS: Moody's Affirms 'B1' Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service assigned a positive outlook and affirmed the B1 Corporate Family Rating (CFR) of KCG Holdings, Inc. KCG's Secured Notes were upgraded to B1 from B2 and were also assigned a positive outlook. Ratings Rationale The positive outlook on the B1 CFR reflects the progress KCG has made to date following its merger with Getco Holdings LLC, nearly one year ago. The merger brought together two leading firms deploying advanced technology and high-frequency trading methods to make markets and provide liquidity to retail brokerages, exchanges and other execution venues for equity securities. KCG also deploys this expertise to run order books in other asset classes and offer additional execution services. In the long run, a successful merger execution should result in a more diversified firm with greater scale economies. Since the merger closing, KCG's new leadership team repaid debt, seized cost synergies and expanded controls throughout the operating platform. This has improved debt metrics and enhanced the competitive position of the firm. An upgrade to the CFR will depend on KCG's ability to continue to adapt its business model to periods of tepid trading volumes and volatility, continuing technological spending demands and possible regulatory headwinds. A pending review of equity market-structure and high-frequency trading and market-making in the United States could have business model implications for KCG. The upgrade to B1 from B2 for the Secured Notes reflects the full repayment of KCG's first lien credit facility. The repayment has eliminated the structural subordination of the Secured Notes, thereby reducing their severity of loss if a default were to occur. The principal methodology used in this rating was Global Securities Industry Methodology published in May 2013. LANDMARK ACADEMY: S&P Lowers Rating on 2010 Refunding Bonds to BB+ ------------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered to 'BB+' from 'BBB-' its long-term rating on the Michigan Public Educational Facilities Authority's series 2010 limited obligation revenue and refunding bonds issued for Landmark Academy. The outlook is stable. "The downgrade reflects our view of the school's weak enrollment profile, specifically the continued enrollment decline, weak retention rate, slim wait list, and increased competition in the area," said Standard & Poor's credit analyst Carolyn McLean. "Though management has cited increased marketing efforts and strategies to boost enrollment, we believe those efforts will not be immediate and may take a few years to realize." Although operations have not been significantly affected in fiscal 2013, S&P anticipates that the declines in enrollment for fall 2013 will pressure finances in fiscal 2014, with an anticipated draw on the school's unreserved general fund balance of about $350,000 to $400,000. S&P believes that the transient nature of the school's demographic base -- due to the weak local economy -- also affects enrollment, resulting in budgetary pressure and unexpected revenue volatility. LOOP 76: 9th Cir. Affirms Plan Confirmation ------------------------------------------- The United States Court of Appeals for the Ninth Circuit, in San Francisco, Calif., affirmed the order confirming the plan of reorganization of debtor Loop 76, LLC. The Ninth Circuit rejected the Debtor's motion to dismiss Wells Fargo's appeal to the Plan confirmation order, saying th appeal is not equitably moot. However, the Ninth Circuit said the bankruptcy court did not clearly err in finding that Genesee Funding held a secured claim and voted in good faith to accept the plan. Wells Fargo challenges the bankruptcy court's findings that Genesee Funding held a secured claim. Wells Fargo also faults the bankruptcy court for failing to make an explicit finding as to whether Genesee's vote should have been designated under 11 U.S.C. Sec. 1126(e). It also challenges the separate classification of its unsecured claim from the class of general unsecured creditors, which Wells Fargo argues is impermissible gerrymandering. A copy of the Court's June 10, 2014 Memorandum is available at http://is.gd/c2vSxZfrom Leagle.com. Scottsdale, Arizona-based Loop 76, LLC filed for Chapter 11 on July 20, 2009 (Bankr. D. Ariz. Case No. 09-16799). In its petition, the Debtor estimated assets and debts both ranging from $10 million to $50 million. MERGERMARKET GROUP: S&P Affirms 'B' Corp. Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit rating on global financial information services provider MergerMarket USA, Inc. The outlook is stable. At the same time, S&P assigned its issue rating of 'B' to the proposed U.S. dollar-equivalent GBP25 million incremental first- lien term loan to be raised by MergerMarket Group. The recovery rating on this loan is '3', reflecting S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. In addition, S&P affirmed its existing issue rating of 'B' on the U.S. dollar-equivalent GBP164.9 million first-lien term loan and $40 million-equivalent, multiple currency, five-year revolving credit facility (RCF). The recovery rating is '3', reflecting S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. Finally, S&P affirmed its issue rating of 'CCC+' on the existing GBP64 million second-lien term loan. The recovery rating on this loan is '6', reflecting S&P's expectation of negligible (0%-10%) recovery in the event of a payment default. The affirmation follows MergerMarket Group's definitive agreement to acquire Perfection Information Ltd. (PI) from Centaur Media PLC (Centaur). The acquisition will expand MergerMarket Group's subscription-based financial information portfolio. Although S&P do not believe the acquisition adds sufficient product diversity for S&P to revise the group's business risk profile upward to "fair" from "weak," the acquisition will add another recurring revenue stream in a niche market segment, with a possibility of cross-selling PI products to MergerMarket Group's existing customer base. PI is a leading provider of corporate finance and capital markets documents to a subscriber base including global investment banks, corporate law firms, financial services consultancies, and accountancy firms. MergerMarket Group intends to acquire PI for GBP26 million, which equates to more than 8x its EBITDA of GBP3 million. MergerMarket Group is seeking to raise a U.S. dollar- equivalent GBP25 million incremental first-lien term loan to finance the acquisition of PI. S&P believes that the acquisition will not have a significant impact on MergerMarket Group's credit metrics -- S&P sees it as neutral to modestly positive for leverage under some scenarios. S&P bases its view on the size and profitability of PI, the fairly predictable subscription-based nature of both PI's and MergerMarket Group's businesses, and the continued robust performance of MergerMarket Group's existing business. S&P anticipates that despite the increase in debt to finance this acquisition, positive free operating cash flow and incremental EBITDA growth will lead to stable to slightly improved credit metrics. That said, S&P forecasts that Standard & Poor's-adjusted leverage will remain above 12x on a pro forma basis. "Our 'B' rating on MergerMarket Group derives from our anchor of 'b', which in turn is based on our "weak" business risk and "highly leveraged" financial risk profile assessments for the group. The combination of these assessments leads to an anchor of 'b' or 'b-' under our criteria. We choose the higher of the two anchor options because of the comparative strength of MergerMarket Group's financial risk profile, underpinned by strong free operating cash flow generation," S&P said. S&P's assessment of MergerMarket Group's business risk profile as "weak" reflects its small scale, which leaves it vulnerable to changes in the competitive landscape. S&P's assessment is also based on the group's reliance on two key products, MergerMarket and Debtwire, which account for approximately two-thirds of invoiced sales. "On the positive side, we also incorporate MergerMarket Group's market leadership in the niche markets of merger and acquisition news, credit news, and intelligence services. The group's niche focus means that it has limited direct competition globally. MergerMarket Group also benefits from a loyal customer base operating in different segments of the financial services industry, with renewal rates of over 95%. We anticipate that MergerMarket Group should continue to post moderate revenue and EBITDA growth over the next few years, based on the increase in its global subscriber base. We also consider that the specialized nature of MergerMarket Group's offerings will somewhat guard it from direct competition from larger players in the global financial data, information, and analytics market," S&P added. MergerMarket Group's "highly leveraged" financial risk profile reflects S&P's view of its leveraged capital structure and ownership by the private equity firm BC Partners. Following the acquisition of MergerMarket Group by BC Partners from Pearson PLC for GBP382 million, the group's adjusted debt includes GBP229 million of term loans and over GBP162 million of payment-in-kind (PIK) shareholder loans and preference shares. Mitigating MergerMarket Group's highly leveraged capital structure is S&P's assessment of its liquidity as "adequate." This assessment is supported by MergerMarket Group's lack of material debt amortization requirements, limited capital expenditure (capex), and limited working capital needs. S&P believes that positive free operating cash flows will enable the group to gradually reduce the incremental debt through ongoing cash sweeps. That said, this is unlikely to meaningfully reduce the group's total adjusted leverage because of the PIK nature of the shareholder loans. Although these shareholder loans are outside the banking group, S&Ps treat them as debt in its adjusted credit metrics. S&P's base-case operating scenario for MergerMarket Group after the PI acquisition assumes: -- Mid-to-high single-digit top-line growth, based on a growing subscriber base and some cross selling; -- EBITDA growth, fueled by operating efficiencies and top-line growth, which, combined with moderate capex, will result in continued positive free operating cash flow; and -- Excess cash of around GBP10 million-GBP12 million, which the group will use to pay down the first-lien term loan. Based on these assumptions, S&P arrives at the following credit measures: -- Adjusted debt to EBITDA of above 12x following the acquisition. On a fully adjusted basis, S&P do not see leverage decreasing meaningfully due to the PIK nature of the shareholder loans. -- Excluding the shareholder loan, MergerMarket Group's adjusted leverage ratio would be about 7x, according to S&P's projections. Based on S&P's forecasts, this could decrease to about 6x over the next two years, through cash sweeps from excess cash and a prudent financial policy. -- EBITDA cash interest coverage of around 2.5x (1x adjusted EBITDA interest coverage) on an ongoing basis. The stable outlook mainly reflects S&P's view that MergerMarket Group should continue to post moderate revenue and EBITDA growth over the next few years, based on its business model's favorable dynamics. S&P assumes that the competitive landscape will not change materially and that the group will maintain "adequate" liquidity. S&P believes that positive free operating cash flows will enable the group to gradually reduce its debt through ongoing cash sweeps. That said, this is unlikely to meaningfully reduce total adjusted leverage due to the PIK nature of the shareholder loans. Downside scenario S&P could lower the ratings if MergerMarket Group does not grow its revenue and EBITDA, or if it increases its spending, leading to negative free cash flow or weakened liquidity. Specifically, S&P could lower the ratings if EBITDA cash interest coverage drops to less than 1.5x. More direct and persistent competition from larger players in the global financial data, information, and analytics market could also cause S&P to lower its assessment of the group's business risk profile, potentially leading to a downgrade. Although S&P do not anticipate any further acquisitions in the near term, material debt-funded acquisitions that increase leverage could cause downward rating pressure. Upside scenario Currently, S&P sees the likelihood of an upgrade as limited because of Mergermarket Group's highly leveraged capital structure and S&P's expectation that adjusted total leverage (including shareholder loans) will remain high. Notwithstanding the positive free operating cash flows and a certain amount of revenue growth built into S&P's base-case scenario for the group, any meaningful debt deleveraging will be unlikely in the near term, due to the PIK nature of the shareholder loans. MGM RESORTS: Stockholders OK Amendment to 2005 Incentive Plan ------------------------------------------------------------- MGM Resorts International held its annual meeting of stockholders on June 5, 2014, at which the Company's stockholders approved amendments to the Company's Amended and Restated 2005 Omnibus Incentive Plan, which had previously been approved by the Company's Board of Directors. The Plan was amended and restated to: * extend the term of the Plan to April 22, 2024; * increase the number of shares of the Company's common stock available for grant under the Plan by 10 million shares (to a total authorization of 45 million shares); * establish an annual limit of $600,000 on nonemployee director awards; and * make other administrative changes. A full-text copy of the Amended and Restated 2005 Omnibus Incentive Plan is available for free at http://is.gd/ILTOqi About MGM Resorts MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50 percent investments in four other properties in Nevada, Illinois and Macau. MGM Resorts reported a net loss attributable to the Company of $156.60 million in 2013 following a net loss attributable to the Company of $1.76 billion in 2012. As of March 31, 2014, the Company had $25.35 billion in total assets, $17.52 billion in total liabilities and $7.82 billion in total stockholders' equity. Bankruptcy Warning "The agreements governing our senior secured credit facility and other senior indebtedness contain restrictions and limitations that could significantly affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations. Covenants governing our senior secured credit facility and certain of our debt securities restrict, among other things, our ability to: * pay dividends or distributions, repurchase or issue equity, prepay certain debt or make certain investments; * incur additional debt; * incur liens on assets; * sell assets or consolidate with another company or sell all or substantially all assets; * enter into transactions with affiliates; * allow certain subsidiaries to transfer assets; and * enter into sale and lease-back transactions. Our ability to comply with these provisions may be affected by events beyond our control. The breach of any such covenants or obligations not otherwise waived or cured could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross defaults under other agreements governing our long-term indebtedness. Any default under our senior secured credit facility or the indentures governing our other debt could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our debt, and could force us to seek protection under the bankruptcy laws," the Company stated in the 2013 Annual Report. * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. In March 2012, S&P revised the outlook to positive from stable. "The revision of our rating outlook to positive reflects strong performance in 2011 and our expectation that MGM will continue to benefit from the improving performance trends on the Las Vegas Strip," S&P said. In March 2012, Moody's Investors Service affirmed its B2 corporate family rating and probability of default rating. The affirmation of MGM's B2 Corporate Family Rating reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 which will help improve MGM's leverage and coverage metrics, albeit modestly. Additionally, the company's declaration of a $400 million dividend ($204 million to MGM) from its 51% owned Macau joint venture due to be paid shortly will also improve the company's liquidity profile. The ratings also consider MGM's recent bank amendment that resulted in about 50% of its $3.5 billion senior credit facility being extended one year from 2014 to 2015. As reported by the TCR on Oct. 15, 2012, Fitch Ratings has affirmed MGM Resorts International's (MGM) Issuer Default Rating (IDR) at 'B-' and MGM Grand Paradise, S.A.'s (MGM Grand Paradise) IDR at 'B+'. MINT LEASING: Amends 70 Million Shares Prospectus with SEC ----------------------------------------------------------- The Mint Leasing, Inc., filed with the U.S. Securities and Exchange Commission an amended Form S-1 registration statement relating the offering of 70,000,000 shares of common stock. The public offering price will be $_____ per share. If fully subscribed the Company anticipates receiving $______ in total proceeds from this offering prior to deducting expenses associated with the offering, which the Company anticipates totaling approximately $90,000. The Company's common stock is currently listed on the OTCQB market maintained by OTC Markets Group Inc. under the symbol "MLES." On June 10, 2014, the last reported sale price of the Company's common stock as reported on the OTCQB was $0.10 per share. There is no minimum number of shares that must be sold by the Company for the offering to proceed, and the Company will retain the proceeds from the sale of any of the offered shares. Any funds that the Company raises from its offering of 70,000,000 shares of common stock will be immediately available for the Company's use and will not be returned to investors. The Company does not have any arrangements to place the funds received from the Company's offering of 70,000,000 shares of common stock in an escrow, trust or similar account. A full-text copy of the amended prospectus is available at: http://is.gd/kPPzcf About Mint Leasing Houston, Texas-based The Mint Leasing, Inc., is in the business of leasing automobiles and fleet vehicles throughout the United States. Mint Leasing reported net income of $3.22 million on $6.45 million of total revenues for the year ended Dec. 31, 2013, as compared with a net loss of $238,969 on $9.97 million of total revenues in 2012. The Company's balance sheet at March 31, 2014, showed $18.72 million in total assets, $14.78 million in total liabilities and $3.94 million in total stockholders' equity. Bankruptcy Warning "We do not currently have any commitments of additional capital from third parties or from our sole officer and director or majority shareholders. We can provide no assurance that additional financing will be available on favorable terms, if at all. If we choose to raise additional capital through the sale of debt or equity securities, such sales may cause substantial dilution to our existing shareholders and/or trigger the anti- dilution protection of the Warrants. If we are not able to obtain additional funding to repay the Amended Loan and our other outstanding notes payable and debt facilities, we may be forced to abandon or curtail our business plan, which may cause any investment in the Company to become worthless. Our independent auditor has expressed substantial doubt regarding our ability to continue as a going concern. If we are unable to continue as a going concern, we may be forced to file for bankruptcy protection, may be forced to cease our filings with the Securities and Exchange Commission, and the value of our securities may decline in value or become worthless," the Company said in the 2013 Annual Report. MONTREAL MAINE: Court Approves 3rd Amendment to Purchase Deal ------------------------------------------------------------- The Bankruptcy Court approved a third amendment to the asset purchase agreement between Robert J. Keach, as Chapter 11 trustee for Montreal Maine & Atlantic Railway, Ltd., Montreal Maine & Atlantic Canada Co., and Railroad Acquisition Holdings LLC. As previously reported in the TCR, the Debtors won authorization on Jan. 23, 2014, to sell substantially all of their assets to Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, for $15.7 million. The Bankruptcy Courts in the U.S. and Canada approved the sale. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. Since the entry of the sale order, the sellers and the purchaser continued to work towards a consummation of the sale. The sellers and the purchaser had reached an agreement that resolves certain critical issues. The terms of the agreement are contained in the Third Amendment to the APA. Wheeling and Lake Erie Railway Company objected to the Chapter 11 trustee's motion to amend the APA, stating that the trustee has proposed two amendments to the purchase and sale agreement that materially affect Wheeling's interests. These are (1) the addition of proposed Section 2.8 to the APA which grants the right to MMA Canada to sell to the purchaser certain so-called Specified MMA Canada Receivables; and (2) an amendment to change the allocation of the purchase price for the assets to be sold pursuant to the APA. Wheeling is represented by: George J. Marcus, Esq. David C. Johnson, Esq. Andrew C. Helman, Esq. MARCUS, CLEGG & MISTRETTA, P.A. One Canal Plaza, Suite 600 Portland, ME 04101 Tel: (207) 828-8000 About Montreal Maine Montreal, Maine & Atlantic Railway Ltd., the railway company that operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec, sought bankruptcy protection in U.S. Bankruptcy Court in Bangor, Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson, P.A., has been named as chapter 11 trustee. His firm serves as his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq., and D. Sam Anderson, Esq. Development Specialists, Inc., serves as the Chapter 11 trustee's financial advisor. Gordian Group, LLC, serves as the Chapter 11 Trustee's investment banker. U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the U.S. case. The Maine law firm of Verrill Dana served as counsel to MM&A. It now serves as counsel to the Chapter 11 Trustee. Justice Martin Castonguay oversees the case in Canada. The Canadian Transportation Agency suspended the carrier's operating certificate after the accident, due to insufficient liability coverage. The town of Lac-Megantic, Quebec, has sought financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. In the Canadian case, Andrew Adessky at Richter Consulting has been appointed CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by: Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. There's also an unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims. This group is represented by George W. Kurr, Jr., Esq., at Gross, Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP; Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C. Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups, Esq., at Weller, Green Toups & Terrell LLP. After the U.S. Trustee formed the Official Committee, the ad hoc committee filed papers asking the U.S. Court to have the official committee disbanded. The ad hoc group said it represents 46 victims of the disaster. On Jan. 23, 2014, the Debtors won authorization to sell substantially all of their assets to Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, for $15.7 million. The Bankruptcy Courts in the U.S. and Canada approved the sale. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. On Jan. 29, 2014, an ad hoc group of wrongful-death claimants submitted a plan, which would give 75% of the $25 million in available insurance to the families of those who died after an unattended train derailed in Lac-Megantic, Quebec, in July. The other 25% would be earmarked for claimants seeking compensation for property that was damaged when much of the town burned. Former U.S. Senator George Mitchell, a Democrat who represented Maine in the U.S. Senate from 1980 to 1995 and who is now chairman emeritus of law firm DLA Piper LLP, would administer the plan and lead the effort to wrap up MM&A's Chapter 11 bankruptcy. As reported by the Troubled Company Reporter on April 3, 2014, Judge Kornreich ruled that the unofficial committee of wrongful death claimants and its counsel have failed to comply with Rule 2019 of the Federal Rules of Bankruptcy Procedure, and as a result of that failure, the Unofficial Committee and its counsel will not be heard on any pending matter in the case. As reported by the TCR on April 11, 2014, Judge Kornreich rejected the disclosure statement for the Plan filed by the ad hoc group of wrongful-death claimants, holding that the Plan is flawed and unconfirmable. MONTREAL MAINE: Trustee Wants Red Shield to Pay for Rail Services ----------------------------------------------------------------- Robert J. Keach, Chapter 11 trustee for Montreal, Maine & Atlantic Railway, Ltd., filed a complaint against Red Shield Acquisition, LLC doing business as Old Town Fuel & Fiber. According to the trustee, in or about May 2009, MMA and the defendant entered in a credit terms agreement, whereby the Debtor agreed to provide the defendant with certain rail services. The defendant is obligated to pay MMA for the rail services. The Chapter 11 trustee noted that the defendant has been unjustly enriched by having accepted and retained the benefits without paying the $41,845 in value due to MMA. The defendant is indebted to MMA in the sum of $41,845, plus interest, no part of which has been paid although duly demanded. About Montreal Maine Montreal, Maine & Atlantic Railway Ltd., the railway company that operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec, sought bankruptcy protection in U.S. Bankruptcy Court in Bangor, Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson, P.A., has been named as chapter 11 trustee. His firm serves as his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq., and D. Sam Anderson, Esq. Development Specialists, Inc., serves as the Chapter 11 trustee's financial advisor. Gordian Group, LLC, serves as the Chapter 11 Trustee's investment banker. U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the U.S. case. The Maine law firm of Verrill Dana served as counsel to MM&A. It now serves as counsel to the Chapter 11 Trustee. Justice Martin Castonguay oversees the case in Canada. The Canadian Transportation Agency suspended the carrier's operating certificate after the accident, due to insufficient liability coverage. The town of Lac-Megantic, Quebec, has sought financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. In the Canadian case, Andrew Adessky at Richter Consulting has been appointed CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by: Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. There's also an unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims. This group is represented by George W. Kurr, Jr., Esq., at Gross, Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP; Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C. Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups, Esq., at Weller, Green Toups & Terrell LLP. After the U.S. Trustee formed the Official Committee, the ad hoc committee filed papers asking the U.S. Court to have the official committee disbanded. The ad hoc group said it represents 46 victims of the disaster. On Jan. 23, 2014, the Debtors won authorization to sell substantially all of their assets to Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, for $15.7 million. The Bankruptcy Courts in the U.S. and Canada approved the sale. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. On Jan. 29, 2014, an ad hoc group of wrongful-death claimants submitted a plan, which would give 75% of the $25 million in available insurance to the families of those who died after an unattended train derailed in Lac-Megantic, Quebec, in July. The other 25% would be earmarked for claimants seeking compensation for property that was damaged when much of the town burned. Former U.S. Senator George Mitchell, a Democrat who represented Maine in the U.S. Senate from 1980 to 1995 and who is now chairman emeritus of law firm DLA Piper LLP, would administer the plan and lead the effort to wrap up MM&A's Chapter 11 bankruptcy. As reported by the Troubled Company Reporter on April 3, 2014, Judge Kornreich ruled that the unofficial committee of wrongful death claimants and its counsel have failed to comply with Rule 2019 of the Federal Rules of Bankruptcy Procedure, and as a result of that failure, the Unofficial Committee and its counsel will not be heard on any pending matter in the case. As reported by the TCR on April 11, 2014, Judge Kornreich rejected the disclosure statement for the Plan filed by the ad hoc group of wrongful-death claimants, holding that the Plan is flawed and unconfirmable. MONTREAL MAINE: Wheeling Wants Settlement Payment Escrowed ---------------------------------------------------------- Wheeling and Lake Erie Railway Company requested that the Bankruptcy Court enforce an order approving a compromise and settlement that the Chapter 11 trustee for Montreal, Maine & Atlantic Railway Ltd., entered into with Travelers Property Casualty Company of America, dated Dec. 9, 2013, or, in the alternative, for a stay of the Court's decision and order regarding the proceeds of Traveler's Insurance Policy dated April 14, 2014. Pursuant to Section 105 of the Bankruptcy Code, Wheeling seeks entry of an order enforcing that portion of the Rule 9019 order placing the entirety of the settlement payment in escrow, that is, in the custodia legis of the Court, and prohibiting disbursement of the settlement payment until otherwise ordered by the Court or agreed upon by the parties. The Court ordered that the Debtor and its Canadian subsidiary, Montreal, Maine & Atlantic Canada Co., are entitled to the proceeds of that policy free from any claim of Wheeling. In light of this conclusion, there is no need to address Wheeling's objection to the allocation of the proceeds among the Debtor and MMAC. Pending before the court is an adversary proceeding brought on Oct. 7, 2013, by Wheeling against the Chapter 11 trustee, the Debtor and several other parties. Through it, Wheeling sought a determination that it holds a valid, perfected and enforceable security interest in certain property of the Debtor and the bankruptcy estate. Wheeling's assertion stemmed from a line of credit note and a security agreement dated June 15, 2009. Upon the commencement of the bankruptcy case, Wheeling was owed the fully extended line of credit in the amount of $6,000,000. About Montreal Maine Montreal, Maine & Atlantic Railway Ltd., the railway company that operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec, sought bankruptcy protection in U.S. Bankruptcy Court in Bangor, Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson, P.A., has been named as chapter 11 trustee. His firm serves as his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq., and D. Sam Anderson, Esq. Development Specialists, Inc., serves as the Chapter 11 trustee's financial advisor. Gordian Group, LLC, serves as the Chapter 11 Trustee's investment banker. U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the U.S. case. The Maine law firm of Verrill Dana served as counsel to MM&A. It now serves as counsel to the Chapter 11 Trustee. Justice Martin Castonguay oversees the case in Canada. The Canadian Transportation Agency suspended the carrier's operating certificate after the accident, due to insufficient liability coverage. The town of Lac-Megantic, Quebec, has sought financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. In the Canadian case, Andrew Adessky at Richter Consulting has been appointed CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by: Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. There's also an unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims. This group is represented by George W. Kurr, Jr., Esq., at Gross, Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP; Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C. Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups, Esq., at Weller, Green Toups & Terrell LLP. After the U.S. Trustee formed the Official Committee, the ad hoc committee filed papers asking the U.S. Court to have the official committee disbanded. The ad hoc group said it represents 46 victims of the disaster. On Jan. 23, 2014, the Debtors won authorization to sell substantially all of their assets to Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, for $15.7 million. The Bankruptcy Courts in the U.S. and Canada approved the sale. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. On Jan. 29, 2014, an ad hoc group of wrongful-death claimants submitted a plan, which would give 75% of the $25 million in available insurance to the families of those who died after an unattended train derailed in Lac-Megantic, Quebec, in July. The other 25% would be earmarked for claimants seeking compensation for property that was damaged when much of the town burned. Former U.S. Senator George Mitchell, a Democrat who represented Maine in the U.S. Senate from 1980 to 1995 and who is now chairman emeritus of law firm DLA Piper LLP, would administer the plan and lead the effort to wrap up MM&A's Chapter 11 bankruptcy. As reported by the Troubled Company Reporter on April 3, 2014, Judge Kornreich ruled that the unofficial committee of wrongful death claimants and its counsel have failed to comply with Rule 2019 of the Federal Rules of Bankruptcy Procedure, and as a result of that failure, the Unofficial Committee and its counsel will not be heard on any pending matter in the case. As reported by the TCR on April 11, 2014, Judge Kornreich rejected the disclosure statement for the Plan filed by the ad hoc group of wrongful-death claimants, holding that the Plan is flawed and unconfirmable. MORNINGSTAR MARKETPLACE: Can Access Cash Collateral Until Aug. 26 ----------------------------------------------------------------- The Bankruptcy Court approved a final stipulated order authorizing Morningstar Marketplace, Ltd.'s use of cash collateral until Aug. 26, 2014. The stipulation was entered between the Debtor and Manufacturers and Traders Trust Company. M&T, as duly appointed trustee under the Trust Indenture for the holders of the York County Industrial Development Authority Mortgage Revenue Bonds (Morningstar Solar LLC Project) Series 2010, filed an emergency motion on March 14, 2014, to prohibit use of property belonging to M&T or, in the alternative, for an order prohibiting the continued unauthorized use of cash collateral pursuant to Section 363(e) of the Bankruptcy Code, terminating the automatic stay pursuant to Section 362(d) of the Bankruptcy Code, and Federal Rule of Bankruptcy Procedure 4001(a). As of the Petition Date, the Debtor was obligated and indebted to M&T in the approximate amount of $3,350,000, without accounting for recovery, if any, from the Debt Service Reserve Fund claim to which is expressly reserved by the parties, together with accrued and unpaid interest thereon, costs and expenses, including trustee's fees and attorneys' fees. The Debtor would use the cash collateral to operate its business, the marketing and sale of their assets, funding the administrative expenses during the bankruptcy proceeding and preservation and maximization of the value of its estate. The Debtor and M&T prepared a budget until January 2015. The parties agreed that the Debtor is authorized to use cash collateral through the date of the final hearing in an aggregate amount equal to the amounts in the budget with an aggregate variance of 10% per line permitted. A copy of the budget is available for free at: http://bankrupt.com/misc/Morningstar_finalordercc.pdf The parties may mutually agree to amend the budget at any time without further Court order, provided that any amendment will not affect the monthly payments to PNC Bank, National Association, on account of the indebtedness owed to PNC and secured by PNC's first lien mortgage on the real property, all of which will be made as and when due under PNC's mortgage and the other agreements an documents that evidence and secure the Debtor's indebtedness and obligations to PNC. On April 17, the Court entered an interim stipulated order authorizing the Debtor to use cash collateral until May 13. About Morningstar Marketplace Morningstar Marketplace, LTD, operator of a flea market business in St. Thomas, Pennsylvania, filed a Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 14-00451) in Harrisburg on Feb. 3, 2014. Judge Mary D France presides over the case. Attorneys at Smigel, Anderson & Sacks, LLP serve as counsel to the Debtor. The Debtor estimated $100 million to $500 million in assets and liabilities. MOORE FREIGHT: SGEF Says Claims vs. Dan Moore Not Part of Plan -------------------------------------------------------------- SG Equipment Finance USA Corp. filed an objection to Moore Freight Service, Inc. and G.R.E.A.T. Logistics, Inc.'s motion for order compelling SG Equipment Finance USA Corp., to comply with the confirmation order and Second Amended Joint Plan of Reorganization or, alternatively, hold SGEF in contempt for violating the confirmed plan and the confirmation order. As reported by the Troubled Company Reporter on May 30, 2014, the Debtors said SGEF pursued domestication and collection of a judgment against Dan Moore arising out of a debt of Moore Freight Service, in violation of Section 1141(a) of the Bankruptcy Code. The Debtor requests, among other things, entry of an order: (i) compelling and directing SGEF to desist with its collection efforts against Dan Moore for as long as Debtor is current with its payments under the Confirmed Plan, or, alternatively, finding SGEF in civil contempt for its disobedience of the Confirmation Order and Confirmed Plan; and (ii) compelling and directing SGEF to desist with its efforts to collect payments from the Reorganized Debtor other than those provided under the Confirmed Plan, or, alternatively, finding SGEF in civil contempt for its disobedience of the Confirmation Order and Confirmed Plan. SGEF says in its on May 30, 2014 court filing that it is not subject to the restriction contained in Section 10.5 of the Plan because SGEF does not possess, nor is it enforcing, a claim against Mr. Moore for an obligation of both Moore Freight and G.R.E.A.T. Logistics, and that it is only enforcing its claim against Mr. Moore for an obligation of Moore Freight only. According to SGEF, Section 10.5 does not prohibit SGEF from enforcing its rights against Mr. Moore for an obligation of the Debtor. "To now modify the Plan beyond its plain terms, as the Reorganized Debtor would have it, creditors like SGEF would be severely prejudiced and Moore's independent obligations to such creditors would be vastly altered, if not completely eliminated. The Reorganized Debtor, however, would not face any prejudice. In fact, the Reorganized Debtor would actually benefit if SGEF is able collect against Moore, because any amount collected from Moore would offset the Reorganized Debtor's obligations to SGEF," SGEF states. A copy of the objection is available for free at: http://is.gd/kMadNC On June 5, 2014, Moore Freight filed a response to SGEF's objection, saying that SGEF admits in its objection that it chose to rely on its own interpretation of the language of Section 10.5 in voting to accept the Confirmed Plan. "Not one other creditor interpreted Section 10.5 in the way that SGEF does. In fact, the objections of other creditors reflect that they considered Section 10.5 to broadly apply to all third-party guaranties," Moore Freight says. According to Moore Freight, principles of res judicata bar SGEF from challenging the scope of Section 10.5 of the Confirmed Plan. The Confirmed Plan is substantially consummated -- payments to secured and general unsecured creditors have commenced and other actions have been taken in furtherance of the provisions of the Confirmed Plan. Moore Freight, the numerous other creditors holding guaranties, and the third-party guarantors, including Mr. Moore, have all acted in reliance on Section 10.5 staying collection of all third-party guaranties. Moore Freight says that to now modify the Confirmed Plan as SGEF suggests would unfairly disrupt the expectations under the Confirmed Plan of the parties who actively and timely protected their interests. "SGEF's calculated and knowing efforts to avoid the jurisdiction of this Court and the terms of the Confirmed Plan constitute contempt. SGEF's only offered excuse for its failure to comply with the Confirmed Plan and the Confirmation Order is its contention that Section 10.5 does not apply to it. SGEF intentionally chose not to seek a determination of the correctness of its position when it had the opportunity and the forum to do so in connection with the plan confirmation process," Moore Freight states. SGEF is represented by: Roy C. DeSha, Jr., Esq. DeSha Watson, PLLC 1106 18th Avenue South Nashville, TN 37212 Tel: (615) 369-9600 Fax: (615) 369-9613 E-mail: roy@deshalaw.com About Moore Freight Service and G.R.E.A.T. Logistics Moore Freight Service, Inc. and G.R.E.A.T. Logistics Inc. sought Chapter 11 protection (Bankr. M.D. Tenn. Case Nos. 12-08921 and 12-08923) in Nashville on Sept. 28, 2012. Moore Freight is a freight service company specializing in flat gas transportation. Founded in 2001, Moore is the largest commercial flat glass logistics firm in the U.S. It operates in the U.S., Canada and Mexico. GLI does not have any operations other than the limited, occasional freight brokerage services currently provided to Moore Freight. Bankruptcy Judge Keith M. Lundin oversees the cases. LTC Advisory Services LLC serves as the Debtor's financial advisors. Moore Freight estimated assets and debts of $10 million to $50 million. CEO Dan R. Moore signed the petitions. Counsel for the Debtor's pre-bankruptcy and DIP lender, Marquette Transportation Finance, Inc., are Linda W. Knight, Esq., at Gullett, Sanford, Robinson & Martin, PLLC; and Thomas J. Lallier, Esq., at Foley & Mansfield PLLP. On Sept. 17, 2013, the Court approved Moore Freight Service, Inc., et al.'s Amended Disclosure Statement describing the Debtors' Amended Plan of Reorganization dated Sept. 16, 2013. The Amended Plan contemplates the continuation of the Debtors' business, payment in full of Allowed Secured Claims, and a fair distribution to unsecured creditors, which distribution Debtor believe far exceeds the amount unsecured creditors would receive in the event of a Chapter 7 liquidation. NATROL INC: Meeting to Form Creditors' Panel Set for June 19 ------------------------------------------------------------ Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on June 19, 2014, at 10:00 a.m. in the bankruptcy case of Natrol, Inc. The meeting will be held at: J. Caleb Boggs Federal Building 844 N. King Street 5th Floor; Room 5209 Wilmington, DE 19801 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. NEW ALBERTSON: Moody's Assigns 'B2' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service assigned a Corporate Family Rating of B2 to and a Probability of Default Rating of B2-PD to New Albertson's Inc. ("NAI"). In addition Moody's also assigned a Ba3 rating to the company's proposed senior secured $850 million term loan maturing 2021. The outlook is stable. The proceeds of the proposed senior secured term loan will primarily be used to acquire 124 Safeway stores in Baltimore and Washington DC (Safeway Eastern Division). This is a first time rating of NAI. All ratings are subject to satisfactory review of final documentation. Ratings Rationale "The company's credit metrics are weak and it faces a challenging task of improving profitability with skittish consumers in a very price competitive business environment", Moody's Senior Analyst Mickey Chadha stated. "However, the initiatives undertaken by management in the last year have proven successful in stabilizing and improving the company's operating performance especially in light of the prolonged underperformance of the store base under its previous ownership", Chadha further stated. The B2 Corporate Family Rating anticipates the closing of the Safeway transaction and reflects NAI's weak credit metrics -- debt/EBITDA and EBITA/interest including lease and pension adjustments is expected to be about 6.5 times and 1.0 time respectively in the next 12-18 months - and the challenges associated with improving operating performance of its grocery banners in a highly competitive market. The ratings also reflect the execution and integration risks associated with NAI's planned acquisition of 124 Safeway stores in Baltimore and Washington DC (Safeway Eastern Division) and the financial policy risk associated with ownership by a financial sponsor. Management has been successful in improving identical store sales growth across all its grocery banners and the ratings reflect Moody's expectation that profitability of the stores will improve as price investments lead to increased traffic and volume. Operating efficiencies initiated by management are also expected to reduce expenses and improve cash flow generation. Ratings are also supported by the company's sizable scale and well established regional brands, its significant store ownership and good liquidity. The following ratings are assigned: Corporate Family Rating at B2 Probability of Default Rating at B2-PD Proposed $850 million senior secured term loan maturing 2021 at Ba3 (LGD2, 23%) NAI's stable rating outlook incorporates Moody's expectation that identical store sales will continue to improve and remain positive and margins will not meaningfully deteriorate thereby resulting in improved profitability and credit metrics in the next 12-18 months. Considering NAI's current credit metrics and planned acquisition of Safeway Eastern Division a ratings upgrade in the near to medium term is unlikely. In the longer term ratings could be upgraded if debt/EBITDA is sustained below 5.5 times, EBITA/interest is sustained above 1.5 times, financial policies remain benign and liquidity remains good. Failure to improve operating performance of the company such that debt/EBITDA and EBITA/interest do not demonstrate a sustained and meaningful improvement towards 6.25 times and 1.25 times respectively could lead to a downgrade. Ratings could also be downgraded if financial policies become aggressive or if liquidity deteriorates or if the integration of the acquired Safeway stores does not result in expected synergies and improvement in overall profitability of the combined company. New Albertson's Inc. ("NAI") is a supermarket chain operating 450 stores in 12 States under the Jewel-Osco, Shaw's, Star Market, and Acme banners. The company had about $10.1 billion in revenue for fiscal year ending February 20, 2014. NAI is owned by a consortium led by Cerberus Capital Management. In March 2014 AB Acquisition LLC (indirect owner of NAI) agreed to acquire Safeway, Inc. NAI plans to acquire 124 Safeway stores (Safeway Eastern Division) in Washington D.C and Baltimore from its affiliate Albertson's LLC at the closing of the transaction which is expected to be in the fourth quarter of 2014. The principal methodology used in this rating was the Global Retail Industry published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NEW STREAM CAPITAL: Dispute on PAF's Claim Goes to Trial -------------------------------------------------------- Bankruptcy Judge Mary F. Walrath denied the Motion of Prime Asset Funding GP, LLC to strike or deny the objection of New Stream Secured Capital Inc. to its claim. The Court also denied the Cross-Motion of Michael Buenzow, as the Plan Administrator for the Debtors, for summary judgment on the Debtors' objection to PAF's claim. The Court granted the Motion of the Plan Administrator for referral of this matter to mediation. New Stream Secured Capital, Inc.; New Stream Capital LLC; New Stream Secured Capital L.P.; and New Stream Insurance are a group of investment companies that managed a number of investment funds. Prime Asset Funding I, LLC was a direct subsidiary of NSSC. NSC was the managing member of the PA Fund. PAF was also a member of the PA Fund and served as its investment manager. PAF's relationship with NSSC, NSC, and the PA Fund was originally governed by an LLC Operating Agreement and a Management Agreement dated November 2005. The Management Agreement provided, inter alia, that PAF, as the investment manager of the PA Fund, was to receive Profit Sharing Fees. The Management Agreement further provided that such fees would continue to be paid to PAF if the Management Agreement was terminated by the PA Fund. After the PA Fund began making investments in early 2006, PAF received Profit Sharing Fees until early 2008. On January 11, 2008, the PA Fund notified PAF of its intent to terminate the Management Agreement. By contract dated February 26, 2008, PAF agreed to termination of the Management Agreement effective April 11, 2008, as well as to the sale of PAF's membership interest in the PA Fund to New Stream Real Estate, LLC, an affiliate of the Debtors. The Termination Agreement included a general release of any and all existing claims between PAF and the PA Fund and any of its affiliates (including the Debtors). The Termination Agreement also reserved the right of PAF to continue receiving the Profit Sharing Fee for investments held in the PA Fund at the time of termination, as provided in the Management Agreement. On March 13, 2011, the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. PAF filed proofs of claim against NSSC, NSC, and NSI seeking Profit Sharing Fees due to PAF under the Management Agreement and Termination Agreement, as well as damages for tort claims. The Debtors filed an objection to PAF's claim. A hearing was held on July 29, 2011, on certain issues presented by the claim objection. At the July 29 hearing, the Court rejected the Debtors' argument that PAF had released its tort claim in the Termination Agreement, holding that PAF had stated a plausible tort claim against the Debtors for claims arising after the Termination Agreement was executed. On April 23, 2012, the Court entered an Order confirming the Debtors' Second Amended Joint Plan of Reorganization. In settlement of PAF's objections to the Plan, the Plan established a $1.8 million reserve for any allowed claims of PAF. In discovery related to its claim, PAF noticed the depositions of former officers of the Debtors (Gillies, Pereira, and Bryson), along with three other witnesses. The Plan Administrator informed PAF that the proposed witnesses intended to assert their Fifth Amendment rights against self-incrimination, and thereafter filed a motion, inter alia, seeking an order delaying the depositions of the Debtors' former employees and officers pending an ongoing criminal investigation. After considering arguments of the parties, the Court granted the requested relief by Order dated December 21, 2012. On February 22, 2013, the federal government indicted three of the Debtors' former officers (Bryson, Pereira, and Bart Gutekunst) for securities, mail, and wire fraud conducted in connection with the Debtors' investment activities. A civil action was also filed by the SEC on February 26, 2013, against NSC, New Stream Capital (Cayman) Ltd, Bryson, Getekunst, Pereira, and another former officer, Tyra Bryson, alleging securities fraud. On December 12, 2013, PAF filed the Motion to Strike the Debtors' claim objection. On January 13, 2013, the Plan Administrator filed his Response along with the Cross-Motion seeking summary judgment on the claim objection. Briefing on the Motion to Strike and on the Cross-Motion was completed on February 14, 2014. On February 17, 2014, the Plan Administrator filed a motion requesting that the contested matters be referred to mediation. Briefing on the mediation request was completed on February 26, 2014. According to Judge Walrath, there is a genuine issue of material fact (based on the conflicting affidavits) as to whether the Debtors and the PA Fund operated as a single economic entity. Therefore, the Court cannot grant summary judgment to either party. A copy of the Court's June 10, 2014 Memorandum Opinion is available at http://is.gd/Kt4SUFfrom Leagle.com. About New Stream New Stream is an inter-related group of companies that collectively comprise an investment fund, headquartered in Ridgefield, Connecticut. Founded in 2002, New Stream focuses on providing non-traded private debt to the insurance, real estate and commercial finance sectors. In late 2010, New Stream announced that it had entered into an agreement with its Bermuda investors to liquidate its master fund, and that upon the consent of its US and Cayman investors, it would voluntarily file Chapter 11 bankruptcy petitions. On March 7, 2011, when New Stream was still soliciting votes on the Chapter 11 plan, certain investors filed a petition (Bankr. D. Del. Lead Case No. 11-10690) seeking to force three New Stream funds -- New Stream Secured Capital Fund (U.S.) LLC, New Stream Secured Capital Fund P1 (Cayman), Ltd. and New Stream Secured Capital Fund K1 (Cayman), Ltd. -- to Chapter 11 bankruptcy. The petitioning investors in the New Stream investment enterprise say they are collectively owed over $90 million, representing roughly 28% of the approximately $320 million owed to all U.S. and Cayman investors. The Petitioners are represented by (i) Joseph H. Huston, Jr., Esq., Maria Aprile Sawczuk, Esq., Meghan A. Cashman, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, and Beth Stern Fleming, Esq., at Stevens & Lee, P.C., in Philadelphia, Pennsylvania, and Nicholas F. Kajon, Esq., David M. Green, Esq., and Constantine Pourakis, Esq., at Stevens & Lee, P.C., in New York, (ii) Edward Toptani, Esq., at Toptani Law Offices, in New York, and (iii) John M Bradham, Esq., and David Hartheimer, Esq., at Mazzeo Song & Bradham LLP, in New York. New Stream Secured Capital, Inc., and three affiliates (New Stream Insurance, LLC, New Stream Capital, LLC, and New Stream Secured Capital, L.P.) filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-10753) on March 13, 2011, with a proposed prepackaged Chapter 11 plan. Kurt F. Gwynne, Esq., J. Cory Falgowski, Esq., Michael J. Venditto, Esq., and Scott M Esterbrook, Esq., at Reed Smith LLP, serve as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. NSSC, Inc., estimated its assets and debts at up to $50,000. NSC estimated its assets at $100,000 to $500,000 and debts at $50,000 to $100,000. NSI estimated its assets at $100 million to $500 million and debts at $50 million to $100 million. NSSC, LP, estimated its assets and debts at $500 million to $1 billion. NSI's insurance portfolio is being sold for $184.35 million as part of the Chapter 11 plan. The aggregate indebtedness secured by the investment portfolio of NSSC is $688,412,974. NSI owes $81,573,376 to certain account classes under a Bermuda fund. The Official Committee of Unsecured Creditors proposes to hire Kurtzman Carson Consultants LLC as its communications agent; Houlihan Lokey Howard & Zukin Capital, Inc., as its financial advisor and investment banker; and Zolfo Cooper, LLC, as its forensic accountants and litigation support consultants. New Stream completed a sale of its assets in June 2011, selling its portfolio of life-insurance policies to an affiliate of McKinsey & Co. for $127.5 million. NPS PHARMACEUTICALS: FDA Postpones Advisory Committee Meeting ------------------------------------------------------------- NPS Pharmaceuticals, Inc., reported that the U.S. Food and Drug Administration (FDA) shifted the tentative date for the Natpara(R) (rhPTH[1-84]) Advisory Committee Meeting from July 24 to Sept. 12, 2014. A definitive date for the advisory committee meeting is expected to be published by FDA in the Federal Register at least 15 days prior to such meeting. The Prescription Drug User Fee Act (PDUFA) Action Date of Oct. 24, 2014, remains unchanged. About NPS Pharmaceuticals Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing new treatment options for patients with rare gastrointestinal and endocrine disorders. NPS Pharmaceuticals reported a net loss of $13.50 million in 2013, a net loss of $18.73 million in 2012 and a net loss of $36.26 million in 2011. The Company's balance sheet at March 31, 2014, showed $279.49 million in total assets, $174.13 million in total liabilities and $105.35 million in total stockholders' equity. OCEANSIDE MILE: Has Until Oct. 31 to Access Cash Collateral ----------------------------------------------------------- Oceanside Mile LLC, dba Seabonay Beach Resort, submitted a status report regarding its the motion for use of cash collateral and the motion of First Citizens Bank & Trust Company for relief from the automatic stay. According to the Debtor, the Court on March 18 approved a settlement of secured claim of First Citizens Bank; procedures for sale of Seabonay Beach Resort; and conditional dismissal of the bankruptcy case. Under the terms of the settlement reached between the Debtor and its senior secured creditor First Citizens, among other provisions, the Debtor was required to pay the full amount of the allowed claim of First Citizens by Oct. 31, 2014. It was contemplated that the Debtor would do so through either a sale or refinance of the hotel. It was also agreed to by First Citizens and Mayo Group LLC that the Debtor may use cash collateral until Oct. 31. The Debtor also stated that it continues with its marketing efforts through its real estate broker and to explore other opportunities to refinance the hotel. The Court was slated to hold a status hearing on June 12, regarding the status of the Debtor's efforts to sell or refinance the hotel. The Debtor is represented by: Sanford L. Frey, Esq. Stuart L. Koenig, Esq. CREIM MACIAS KOENIG & FREY LLP 633 West Fifth Street, 51st floor Los Angeles, CA 90071 Tel: (213) 614-1944 Fax: (213) 614-1961 E-mails: sfrey@cmkllp.com skoenig@cmkllp.com First-Citizens is represented by: Craig H. Averch, Esq. Roberto J. Kampfner, Esq. WHITE & CASE LLP 633 West Fifth Street, Suite 1900 Los Angeles, CA 90071 Tel: (213) 620-7700 Fax: (213) 452-2329 E-mail: caverch@whitecase.com rkampfner@whitecase.com About Oceanside Mile Oceanside Mile LLC owns the Seabonay Resort Hotel, a resort hotel located in an affluent area of Florida's Hillsboro Beach, which is perched on the Atlantic Ocean. The hotel is close to Fort Lauderdale and its suburbs; three miles south of Boca Raton, and a mile east of Deerfield Beach. The hotel has 81 rooms and total 1.29 acres. Oceanside Mile filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-35286) on Oct. 17, 2013. Arturo Rubinstein signed the petition as managing member. In its schedules, the Debtor disclosed $13,148,100 in total assets and $8,367,297 in total liabilities. Judge Barry Russell presides over the case. The Debtor is represented by Sandford L. Frey, Esq., Stuart I. Koenig, Esq., and Martha C. Wade, Esq., at Creim Macias Koenig & Frey LLP, in Los Angeles, California. First-Citizens Bank & Trust Company is represented by Craig H. Averch, Esq., and Roberto J. Kampfner, Esq., at White & Case LLP, in Los Angeles, California. ONCOLOGY ASSOCIATES: Court Narrows Trustee's Suit v. GECC --------------------------------------------------------- New Jersey Bankruptcy Judge Michael B. Kaplan ruled on the motions filed by General Electric Capital Corporation and the United States of America, which seek to dismiss certain counts contained in the adversary proceedings filed against them by Morris S. Bauer, the Chapter 11 Trustee for Oncology Associates of Ocean County LLC, Modern Radiation and Oncology of Ocean County, LLC, and Dover Real Estate Holdings, LLC. The Chapter 11 Trustee on January 27, 2014, filed an adversary complaint against GECC asserting these counts: * Count I -- avoidance and recovery of certain alleged post-petition payments made by Modern to GECC pursuant to 11 U.S.C. Sections 549 and 550; * Count II -- to hold GECC liable for interference with the prospective economic advantages of the Trustee; * Count III -- avoidance and recovery of certain preferential pre-petition transfers pursuant to 11 U.S.C. Sections 547 and 550 as against General Electric Company; and * Count IV -- to disallow any claims GECC or GE may have against the estate pursuant to 11 U.S.C. Sec. 502(d). In lieu of filing an answer to the GECC Complaint, GECC filed its motion to dismiss, on March 21, 2014, which seeks to dismiss Counts I, II, and IV of the Complaint. The Chapter 11 Trustee also filed an adversary complaint against the United States asserting these counts: * Count I -- avoidance and recovery of fraudulent transfers pursuant to 11 U.S.C. Sections 544(b) and 550; N.J.S.A. Sections 25:2-25(b) and 25:2-27(a); * Count II -- avoidance and recovery of fraudulent transfers pursuant to 11 U.S.C. Sections 544(b) and 550; N.J.S.A. Sec. 25:2-25(a); * Count III -- avoidance and recovery of fraudulent transfers pursuant to 11 U.S.C. Sections 548 and 550; * Count IV -- avoidance and recovery of preferential transfers pursuant to 11 U.S.C. Sections 547 and 550; * Count V -- avoidance and recovery of post-petition transfers pursuant to 11 U.S.C. Sections 549 and 550; and * Count VI -- disallowance of claims pursuant to 11 U.S.C. Sec. 502(d). The United States also filed its motion to dismiss on March 3, 2014, seeking to dismiss Counts I, II, and V of the Complaint. In his June 10 Memorandum Decision is available at http://is.gd/ppWU8qfrom Leagle.com, Judge Kaplan ruled that the United States' motion is granted and the GECC motion is granted in part. About Oncology Associates Oncology Associates of Ocean County, LLC, based in Toms River, New Jersey, filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 12-11790) on Jan. 25, 2012, in Trenton. Judge Raymond T. Lyons, Jr., was assigned to the case. Joseph Casello, Esq., at Collins, Vella & Casello, served as bankruptcy counsel. In its petition, OAOC estimated $1 million to $10 million in both assets and debts. The petition was signed by Dr. Barbara Schneider, managing member. After considerable litigation, including substantial motion practice, the Court determined that OAOC's bankruptcy case warranted the appointment of a Chapter 11 Trustee. Accordingly, an order appointing Morris S. Bauer as the Chapter 11 Trustee was entered on Nov. 6, 2012. Upon his appointment, the Trustee sought to administer OAOC's estate through, among other things, a sale of OAOC's assets. Concerned that certain of OAOC's assets had been diverted to OAOC's affiliate, Modern Radiation and Oncology of Ocean County, LLC, and that certain real property relating to OAOC was controlled by Dover Real Estate Holdings, LLC, the Trustee sought, through separate motions, to extend OAOC's bankruptcy proceedings to both Modern and Dover. On Jan. 22, 2013 and April 26, 2013, respectively, the Court entered orders substantively consolidating Modern and Dover with OAOC's bankruptcy case. Attorney for Morris S. Bauer, Chapter 11 Trustee is: Gary N. Marks, Esq. NORRIS, MCLAUGHLIN & MARCUS, PA 721 Route 202-206 North, Suite 200 Bridgewater, NJ 08807 Attorneys for General Electric Capital Corporation are: Mark F. Magnozzi, Esq. Amish R. Doshi, Esq. MAGNOZZI & KYE, LLP 23 Green Street, Suite 302 Huntington, NY 11743 Attorney for the United States of America is: Ari D. Kunofsky, Esq. U.S. Department of Justice P.O. Box 227 Washington, D.C. 20044 ONEIDA HEALTH: S&P Lowers Rating on $10.9MM 2007 Bonds to 'BB+' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating on Madison County Industrial Development Agency, N.Y.'s $10.9 million series 2007 bonds issued for Oneida Health Systems, doing business as Oneida Healthcare Center (Oneida) to 'BB+' from 'BBB-'. At the same time, S&P lowered its underlying rating (SPUR) on the agency's $11.3 million series 2001 bonds also issued for Oneida to 'BB+' from 'BBB-'. "The downgrade reflects material operating losses, which were above expectations in both 2012 and 2013, and which continue through the first four months of 2014 with just one profitable month from operations this year to date," said Standard & Poor's credit analyst Cynthia Keller. "Although much of the weaker performance was due to expenses associated with an information technology installation and subsequent revenue cycle issues, we also believe that Oneida will be increasingly challenged to post solidly positive operations given health reform pressures, Oneida's commitment to the extended care unit, and the need to employ physicians, all of which we expect will continue to pressure earnings." Oneida's small size with an $80 million revenue base and significant regional competition also leaves it especially vulnerable to economic, operating, and reimbursement changes. A lower rating is precluded by Oneida's balance sheet which although weaker after the recently challenging operations, still compares favorably with many speculative-grade metrics. Because of Oneida's inherent balance sheet strength, S&P believes it is possible to raise the rating to investment grade over the long term, if the health system demonstrates multiple years of strong, positive operations at the hospital, stabilized volume, limited losses from the extended care and physician employment business lines, and the ability to strategize and work with other organizations, which could help offset risks associated with being a small independent provider. The outlook reflects S&P's opinion that the rating is stable at this level, even with continued expected operating losses, due to Oneida's balance sheet. Management has time to address the losses through a combination of revenue enhancements and expense reductions; however, a failure to return to at least breakeven operating performance and 2x debt service coverage during this two-year outlook period could result in a lower rating or negative outlook. A higher rating is unlikely during the outlook period given the current operating and financial pressures although S&P could consider a positive outlook with a longer term trend of stable operations and volume coupled with moderate losses at the extended care and employed physician divisions. OVERSEAS SHIPHOLDING: Has $10.4-Mil. Income for March 31 Quarter ---------------------------------------------------------------- Overseas Shipholding Group, Inc., filed its quarterly report on Form 10-Q, disclosing net income of $10.42 million on $292.45 million of shipping revenues for the three months ended March 31, 2014, compared with a net loss of $167.76 million on $247.44 million of shipping revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $3.66 billion in total assets, $3.71 billion in total liabilities, and a stockholders' deficit of $51.33 million. The commencement of the Chapter 11 Cases and weak industry conditions have negatively impacted the Company's results of operations and cash flows and may continue to do so in the future. These factors raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/Cnbf5m About Overseas Shipholding Overseas Shipholding Group, Inc. (OTC: OSGIQ), headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. James L. Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C. Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr., at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel. Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. U.S. Bank National Association is the successor administrative agent under the $1.5 billion credit agreement, dated as of February 9, 2006 by and among (a) OSG, OSG Bulk Ships, Inc., and OSG International, Inc., as joint and several borrowers, (b) the Administrative Agent and (c) various lenders party thereto. Counsel to the Administrative Agent are Milbank, Tweed, Hadley & McCloy LLP; Holland & Knight LLP; and Drinker Biddle & Reath LLP. Lazard Freres & Co. LLC serves as advisor to the Administrative Agent. An official committee of Equity Security Holders has been appointed in the case. It is represented by Brown Rudnick LLP's Steven D. Pohl, Esq., James W. Stoll, Esq. and Jesse N. Garfinkle, Esq.; Fox Rothschild LLP's Jeffrey M. Schlerf, Esq., John H. Strock, Esq. and L. John Bird, Esq. * * * In March 2014, OSG filed a plan of reorganization that hinges on a plan support agreement it struck with lenders holding an aggregate of approximately 77% of amounts outstanding under the Company's Unsecured Revolving Credit Facility. The Debtors and the so- called Consenting Lenders also agreed to the terms of a $300,000,000 rights offering, which would be backstopped by the Consenting Lenders. The Original Plan generally provided that creditors' allowed non-subordinated claims against the Debtors other than claims under the Unsecured Revolving Credit Facility, would be paid in full, in cash, including post-petition interest, or reinstated and holders of equity interests and claims subordinated pursuant to section 510(b) of the Bankruptcy Code would receive a combination of shares of common stock and warrants issued by reorganized OSG valued at approximately $61,400,000. Under the Original Plan, holders of claims arising out of the Unsecured Revolving Credit Facility would receive their pro rata share of stock and warrants of the reorganized OSG. In addition, the Original Plan provided that the 7.50% Unsecured Senior Notes due in 2024 issued by OSG and the 8.125% Unsecured Senior Notes due in 2018 issued by OSG will be reinstated, following payment of outstanding interest. The Debtors also entered into a commitment letter with Goldman Sachs Bank USA to provide $935,000,000 in exit financing to the fund the Debtors' emergence from bankruptcy. Late in April, following negotiations with equity holders and the official committee of equity security holders, OSG abandoned the agreement with the Consenting Lenders as well as the Original Plan, and filed an amended Plan premised on an equity commitment agreement with the Equity Holders, who collectively hold approximately 30% of the outstanding shares of the Company. Each Commitment Party has agreed to purchase shares in a rights offering with an aggregate offering amount of $1,500,000,000, and committed to purchase shares in respect of unexercised subscription rights in the rights offering. The Debtors will distribute to each Equity Holder one subscription right in respect of each existing equity interest held by such Equity Holder. So- called Class B securities carry an entitlement to distribution of up to 10 % of the net litigation recovery in the malpractice lawsuit against Proskauer Rose LLP and four of its partners. The Debtors also abandoned the financing deal with Goldman Sachs and, instead, accepted the funding offer from Jefferies Finance LLC, which consisted of (a) a $600,000,000 term loan secured by a first lien on the Debtors' U.S. Flag assets; (b) a $600,000,000 term loan secured by a first lien on the Debtors' International Flag assets; (c) a $75,000,000 asset based revolving loan facility; and (d) a $75,000,000 revolving loan facility. Hearing on the disclosure statement explaining the Amended Plan as well as the Equity Commitment Agreement and the exit financing commitments is scheduled for May 23, 2014. The Debtors have proposed a July 14, 2014 Plan confirmation hearing. P2 LOWER ACQUISITION: Moody's Affirms B2 CFR; Outlook Negative -------------------------------------------------------------- Moody's Investors Service changed the rating outlook of P2 Lower Acquisition, LLC (formerly Progressive Health Solutions) to negative from stable. At the same time, Moody's affirmed P2's existing ratings, including its B2 CFR. The company is adding $130 million to its First Lien and $80 million to its Second Lien Term Loan in order to fund a $210 million dividend to its sponsors and management. Ratings affirmed with a negative outlook: Corporate Family Rating at B2 Probability of Default Rating at B2-PD First Lien Term Loan at B1 (LGD3, 35%) Second Lien Term Loan at Caa1 (LGD5, 88%) Revolving Credit Facility at B1 (LGD3, 35%) Ratings Rationale The negative outlook reflects Moody's view that the company has adopted a more aggressive financial policy reflected in a relatively large dividend recapitalization relatively soon after the merger. If the company's debt/EBITDA does not approach 5.5 times within the next 12 to 18 months, the ratings could be downgraded. "We believe that P2's management is now more comfortable with higher leverage," said Diana Lee, a Moody's Vice President and Senior Credit Officer. "In addition, by borrowing to fund a dividend, the company's cushion for opportunistic acquisitions is diminished," commented Lee. P2's B2 CFR reflects its very high leverage, which will moderate somewhat as the company achieves all of its cost synergies and realizes full benefits from new contract wins. The ratings also reflect the company's position as a niche PBM focused exclusively on the workers' compensation market and its high customer concentration risk. Although this newly merged company is a leading player in this space, it will continue to face competition from several small PBMs as well as larger players that also serve the group health segment, such as Express Scripts Holding Company (Baa3 positive) and Coventry Health Care, acquired by Aetna Inc. (Baa2 stable). The company is on track with its planned cost savings, which management expects to be fully realized by the first quarter of 2015. New customers will be critical to future performance especially in light of only recent improvement in profitability at PMSI. Although P2 is still in the midst of completing the integration and achieving its cost savings, we believe there is risk of acquisitions, especially in this consolidating industry. If the company does not fully achieve expected cost savings, or engages in debt-financed acquisitions or additional dividends, such that debt/EBITDA is likely to be sustained above 5.5 times or RCF/debt is sustained below 7.5%, the ratings could be downgraded. If the company is able to gain new clients, improve profitability and cash flow, and demonstrates a more conservative posture toward shareholder and acquisitions, the ratings could be upgraded. If the company sustains debt/EBITDA below 4.5 times and RCF/debt above 10%, the ratings could be upgraded. The principal methodology used in this rating was the Global Distribution & Supply Chain Services published in November 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. P2 Lower Acquisition, LLC is the parent borrowing entity for Progressive Solutions, LLC, which merged with PMSI in October 2013 and is headquartered in Memphis, Tennessee. P2 is a workers' compensation pharmacy benefit manager and ancillary service provider. PANACHE BEVERAGE: Incurs $1.4 Million Net Loss in First Quarter --------------------------------------------------------------- Panache Beverage Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $1.43 million on $634,917 of net revenues for the three months ended March 31, 2014, as compared with a net loss attributable to the Company of $808,515 on $1.41 million of net revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $6.05 million in total assets, $14.36 million in total liabilities and a $8.31 million total deficit. "We have limited liquidity and capital resources and must obtain significant additional capital resources in order to sustain our product development efforts, for establishment of production capabilities, and for selling, general and administrative expenses and other working capital requirements. We have, in the past, successfully completed financings, but, due to market conditions and other factors, including our development stage and our ability to continue as a going concern, we may be unable to raise the required capital in the future," the Company stated in the Report. A full-text copy of the Form 10-Q is available for free at: http://is.gd/tJhwnk About Panache Beverage New York-based Panache Beverage, Inc., specializes in the strategic development and aggressive early growth of spirits brands establishing its assets as viable and attractive acquisition candidates for the major global spirits companies. Panache builds its brands as individual acquisition candidates while continuing to develop its pipeline of new brands into the Panache portfolio. Panache Beverage reported a net loss of $4.58 million in 2013 following a net loss of $3.27 million in 2012. In their report on the consolidated financial statements for the year ended Dec. 31, 2013, Silberstein Ungar, PLLC, expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has limited working capital and has incurred losses from operations. Silberstein Ungar also issued a going-concern qualification following the 2012 results. PATRICK HANNON: ABCD Holdings Wins Order Denying Ch.7 Discharge --------------------------------------------------------------- Massachusetts Bankruptcy Judge William C. Hillman granted the Motion for Partial Summary Judgment filed by ABCD Holdings, LLC, ABC&D Recycling, Inc., and Ware Real Estate, LLC, which seek to deny debtor Patrick Hannon a discharge pursuant to 11 U.S.C. Sec. 727(a)(4)(A) for making a false oath or account in connection with his bankruptcy case, asserting that the record undisputedly shows that the Debtor made false statements on his monthly operating reports. Patrick Hannon and his spouse, Elizabeth Hannon, filed a voluntary Chapter 11 bankruptcy petition (Bankr. D. Mass. Case No. 12-13862) on May 3, 2012. Mr. Hannon was the owner and sole officer and director of two companies -- Ware Real Estate, LLC and ABC&D Recycling, Inc. Ware Real Estate owns real property located in Ware, Massachusetts, at which ABC&D Recycling operates a construction and demolition debris transfer station. The Debtor's ownership interests were subject to warrant rights held by ABCD Holdings, LLC, a company wholly owned by the Debtor's former attorney, George McLaughlin. The warrant agreement gave ABCD Holdings the option of purchasing a 50.1% interest in each company. In December 2012, the Court directed the U.S. Trustee to appoint a Chapter 11 Trustee for the Debtors' case. On Dec. 21, 2012, the U.S. Trustee appointed Joseph H. Baldiga as the Chapter 11 Trustee. The same day, the Chapter 11 Trustee agreed to the motion to convert the Debtors' case to one under Chapter 7, asserting that conversion was in the best interest of the estate and creditors. On Jan. 2, 2013, the Court granted the motion to convert the Debtors' case. A copy of th Court's June 10, 2014 Memorandum of Decision is available at http://is.gd/mWLMocfrom Leagle.com. Joel Faller, Esq., The McLaughlin Brothers, P.C., in Boston, and James M. Liston, Esq., and Sarah A. Smegal, Esq., Bartlett Hackett Feinberg, P.C., in Boston, represent ABCD et al. Herbert Weinberg, Esq., and Patrick Martin, Esq., at Rosenberg & Weinberg, in North Andover, Mass., argue for the Hannons. PHILLIPS INVESTMENTS: Section 341(a) Meeting Set on July 11 ----------------------------------------------------------- A meeting of creditors in the bankruptcy case of Phillips Investments, LLC, will be held on July 11, 2014, at 11:00 a.m. at Hearing Room 367, Atlanta. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Phillips Investments, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 14-61444) on June 11, 2014. Ly Phillips signed the petition as managing member. The Debtor estimated assets and liabilities of between $10 million to $50 million. Scroggins & Williamson, P.C., serves as the Debtor's counsel. Judge Mary Grace Diehl presides over the case. PHILLIPS INVESTMENTS: Case Summary & 15 Top Unsecured Creditors --------------------------------------------------------------- Debtor: Phillips Investments, LLC P.O. Box 80129 Atlanta, GA 30336 Case No.: 14-61444 Chapter 11 Petition Date: June 11, 2014 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Hon. Mary Grace Diehl Debtor's Counsel: J. Robert Williamson, Esq. SCROGGINS & WILLIAMSON, P.C. 1500 Candler Building 127 Peachtree Street, N.E. Atlanta, GA 30303 Tel: (404) 893-3880 Email: rwilliamson@swlawfirm.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The petition was signed by Ly Phillips, managing member. List of Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sage & Sites, LLC $122,000 Reny Nguyen $53,900 Ace Capital Realty, LLC $48,000 Lee & Kim Enterprises, Inc. $30,000 Southeastern Construction $27,500 and Design, LLC World Petro Exchange, LLC $25,600 Johnson Landscape, Inc. Trade Debt $22,400 Kim Ly $15,000 Jackson EMC $11,211 Kimberly Morphis $9,000 Gwinnett County Water $5,680 MCC Total, LLC $3,300 Protection Security Systems Trade Debt $1,438 Gabasa Andrews $1,300 American Disposal Commercial $700 PILGRIM'S PRIDE: Moody's Confirms 'B1' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service confirmed the ratings of Pilgrim's Pride Corporation ("PPC") including the B1 Corporate Family Rating (CFR). This follows the company's withdrawal of its proposal to acquire Hillshire Brands ("Hillshire", Baa2 ratings under review for downgrade) for approximately $7.7 billion. Moody's also assigned a stable rating outlook. This action concludes the review for downgrade that began on May 27, 2014 following Pilgrim's initial $6.4 billion bid for Hillshire, which was later increase to $7.7 billion on June 3 following a competing $6.8 billion bid by Tyson Foods, Inc. ("Tyson", Baa3 rating under review for downgrade). Pilgrim's withdrew its offer after Tyson submitted a binding offer of $8.5 billion on June 9. The stable outlook reflects heightened event risk that will limit upward rating potential for Pilgrim's over the next year. Moody's is concerned that Pilgrim's will pursue other leveraged acquisitions to diversify its business portfolio or will take other aggressive measures to optimize its capital structure, which currently consists of more cash than debt. The outlook was positive prior to the rating review. "We don't expect that upward rating momentum will build for Pilgrim's until the company's long-term strategic goals and the path to achieve them become clearer to us," commented Brian Weddington, a Moody's Senior Credit Officer. Ratings Rationale Pilgrim's B1 CFR reflects the company's concentration in the cyclical U.S. chicken processing industry, which historically has generated volatile earnings and narrow average profit margins. The rating also reflects the company's willingness to pursue aggressive leveraged acquisitions. The rating is supported by the company's position as one of the world's largest chicken processors, low financial leverage, and its strong operating performance in recent years. The rating incorporates the wide range of operating performance that is typical in the cyclical U.S. chicken processing industry. As a result, at the top of the cycle Moody's expects financial leverage to be very modest relative to the rating category. Conversely, at the bottom of the cycle the rating can often tolerate financial leverage that is outside normal bounds for a limited period of time. Importantly, high earnings volatility should be balanced against abundant access to cash and external sources of liquidity. Pilgrim's Pride Corporation: Ratings Confirmed: Corporate Family Rating at B1; Probability of Default Rating at B1-PD; $500 million senior unsecured notes due 2018 at B3 (LGD5, 82%). Rating Affirmed: Speculative Grade Liquidity rating at SGL-1. An upgrade is not likely in the near-term. However Moody's would consider upgrading Pilgrim's ratings if the company sustains at least 4% operating profit margins and positive free cash flow. Additionally, the company would have to sustain debt to normalized EBITDA below 2.5 times and liquidity (cash and backup availability) of at least $750 million before an upgrade would be considered. The ratings could be lowered if weakening industry fundamentals result in a prolonged period of negative free cash flows at Pilgrim's or if liquidity falls below $500 million. The ratings could also be downgraded if a large acquisition results in a sharp increase in financial leverage. Headquartered in Greeley, Colorado, Pilgrim's Pride Corporation (NASDAQ: PPC) is the second largest chicken producer in the world, with operations in the United States, Mexico and Puerto Rico. The company produces, processes, markets and distributes fresh, frozen and value-added chicken products to foodservice customers, distributors and retail operators worldwide. For the twelve months ended March 30, 2014, revenues for the company approximated $8.4 billion. Pilgrim's Pride is controlled by JBS, S.A. through an indirect 75.5% equity ownership stake. The principal methodology used in this rating was the Global Protein and Agriculture Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. POCMONT HOLDINGS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Pocmont Holdings LLC aka Bushkill Inn & Conference Center 525 County Line Road, Suite 8 Lakewood, NJ 08701 Case No.: 14-21909 Chapter 11 Petition Date: June 9, 2014 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Hon. Christine M. Gravelle Debtor's Counsel: Donald W Clarke, Esq. WASSERMAN, JURISTA & STOLZ, P.C. 225 Millburn Avenue, Suite 207 Millburn, NJ 07041 Tel: (973) 467-2700 Fax: (973) 467-8126 Email: dclarke@wjslaw.com - and - Fred B. Ringel, Esq. ROBINSON, BROG, LEINWAND, GREENE, GENOVESE & GLUCK P.C. 875 Third Avenue, 9th Floor New York, NY 10022 Tel: 212-603-6300 Email: fbr@robinsonbrog.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Isaac Greenwald, member. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. PPL ENERGY: Moody's Affirms Ba1 Jr. Subordinated Hybrids Rating --------------------------------------------------------------- Moody's Investors Service lowered the senior unsecured rating of PPL Energy Supply (Supply) to Baa3 from Baa2, the commercial paper rating to P-3 from P-2, and revised the rating outlook to negative from stable. At the same time, Moody's affirmed the ratings of PPL Corporation (PPL: Baa3 senior unsecured) and LG&E and KU Energy LLC (LKE, Baa2 senior unsecured) and revised both outlooks to positive from stable. These actions follow yesterday's announcement that PPL will spin off Supply to existing shareholders and be merged with Riverstone Holdings LLC's merchant power operation at closing. The downgrade of Supply's rating by one notch reflects the likelihood that Supply will no longer be a part of the PPL family and receiving financial support that it has in the past regardless of the success of the proposed combination with Riverstone's merchant assets. Supply's negative outlook reflects the potential for a further rating downgrade which, depending upon a better understanding of the merged entity and their related plants, could be more than one notch since the much larger Supply is being combined with the substantially lower rated entities from Riverstone. The Riverstone merchant assets involved in this transaction include assets currently held by Topaz Power Holdings, LLC (B1 Negative), Sapphire Power Finance LLC (B1 negative) and Raven Power Finance, LLC (B1 stable). Moody's will publish issuer comments shortly addressing our view of the impact of the proposed transaction on these entities. If the transaction closes as proposed, PPL and LKE's ratings may be upgraded but by no more than one notch, reflecting the reduced business risk that will follow completion of the proposed spinoff. Prior to the announcement, our ratings at PPL and at LKE -- both of which are holding companies and outside of the jurisdiction of their respective state regulators -- had been constrained by the affiliation with the more volatile unregulated operations at Supply. The ratings on PPL's regulated subsidiaries in the US -- PPL Electric Utilities (Baa1 stable), Kentucky Utilities Company (A3 stable) and Louisville Gas & Electric Company (A3 stable) -- are not affected by the proposed Supply spinoff. In addition, no rating action was taken on the regulated operating utilities in the US and United Kingdom because their ratings were not previously constrained by PPL's parent rating. Additional explanation regarding our view of the impact of the proposed transaction on the UK entities can be found in an issuer comment to be published shortly. Moody's affirmation of PPL's Baa3 rating reflects the low business risk of its regulated utilities, offset by substantial debt leverage at the parent holding company. The regulated business is characterized by supportive regulatory environments and a current large capital expenditure program across all legal registrants resulting in substantial negative free cash flow which is depressing several of the key credit metrics. However, with the spin of Supply, PPL's business risk will decline as 70% of its operations will come from a networks or transmission and distribution platform, all of which provide good visibility from a recovery, earnings and cash flow perspective. As such, PPL will be evaluated on a prospective basis as a lower risk concern under our Regulated Electric and Gas Utility methodology published in December 2013. PPL's consolidated credit metrics for the last three years averaged CFO Pre-WC/debt of about 15% and RCF/debt of about 11%. As a point of reference, these credit metrics position the company reasonably well relative to the a range of 11% to 19% for CFO Pre-WC/Debt and 7% to 15% for RCF/debt for the Baa rating category as a lower risk concern under our Regulated Electric and Gas Utility methodology. Headquartered in Allentown, Pa., PPL Corp. currently controls or owns about 19,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets, and delivers electricity and natural gas to about 10 million customers in the United States and the United Kingdom. Rating List Issuer: PPL Corporation and PPL Capital Funding, Inc. Outlook revised to positive, from stable Ratings Affirmed: Issuer Rating Baa3 Senior Unsecured: Baa3 Subordinated Shelf: (P)Ba1 Junior Subordinated Hybrids: Ba1 Preferred Shelf: (P)Ba2 Multiple Seniority Shelf: (P)Baa3, (P)Ba1 Issuer: LG&E and KU Energy LLC Outlook revised to positive, from stable Ratings Affirmed: Issuer rating: Baa2 Senior Unsecured: Baa2 Issuer: PPL Energy Supply, LLC Outlook revised to negative, from stable Ratings downgraded: Commercial Paper: P-3, from P-2 Senior unsecured: to Baa3, from Baa2 Senior unsecured bank credit facility: Baa3, from Baa2 Multiple Seniority Shelf: (P)Baa3, (P)Ba1 from (P)Baa2, (P)Baa3 Revenue Bonds backed by PPL Energy Supply, LLC: Baa3, from Baa2 The methodologies used in this rating/analysis were Unregulated Utilities and Power Companies published in August 2009, and Regulated Electric and Gas Utilities published in December 2013. PPL ENERGY: S&P Lowers CCR to 'BB' Following Spin-Off ----------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on U.S. power generator PPL Energy Supply LLC (PPL Energy) to 'BB' from 'BB+' following the announcement by PPL Corp. that it is spinning off the company to its shareholders and will have no continuing ownership in PPL Energy. Immediately following the spin-off, PPL Energy will combine with Riverstone's generation assets under newly formed parent company Talen Energy Corp. "We have placed the ratings on CreditWatch with negative implications while we assess the pro forma debt structure of Talen to determine if there are implications for our ratings on PPL Energy," said Standard & Poor's credit analyst Aneesh Prabhu. PPL Energy's current stand-alone credit profile (SACP) of 'bb' incorporates a business risk profile of "fair" and a financial risk profile of "significant". From currently available disclosures it appears that PPL Energy Supply and Riverstone's generation business (comprising Sapphire, Topaz Holdings, and Raven Power) will combine operationally. S&P notes that all three of Riverstone's generation assets that are being offered into the combination are currently rated as project entities and have a credit profile that is weaker than 'BB'. If the assets are eventually combined, S&P will assess the pro forma cash flow and capitalization to determine if the 'BB' ratings are appropriate. PPL Energy is an unregulated electricity generation company with about 10,000 megawatts (MW) of generation capacity that consists of reasonably well located, low-cost nuclear and coal plants. PPL Energy had about $2.7 billion in debt and $500 million in cash-on- hand as of May 31, 2014. "We are in the process of reviewing the structural and legal aspects as well as the pro forma cash flows and capitalization. We expect that ratings will either be affirmed, or decline by no more than one notch. We expect to resolve the CreditWatch listing shortly," S&P said. PRECISION OPTICS: Major Shareholder Expresses "Serious Concern" --------------------------------------------------------------- AWM Investment Company, Inc., sent a communication to the Board of Directors of Precision Optics Corp. expressing concern about the management of the Company and asking for a meeting with the Board of Directors to discuss its concerns. "As you know our firm is by far the largest shareholder of Precision Optics Corporation. We have serious concerns about the management of the company and would like to address those concerns directly to you. We would like to set up a conference call as soon as possible to discuss these issues. Please let us know when you would be available to speak. This is an urgent and serious matter and request that you make every effort to make yourselves available. Given the nature of our concerns we do not think it appropriate that the management team be included in this call," the letter states. AWM serves as the investment adviser to Special Situations Cayman Fund, L.P.(Cayman), Special Situations Fund III QP, L.P. (SSFQP) and Special Situations Private Equity Fund, L.P.(SSPE). Austin W. Marxe, David M. Greenhouse and Adam C. Stettner disclosed that as of June 9, 2014, they beneficially owned 2,049,877 shares of common stock of Precision Optics Corp. representing 39.2 percent of the shares outstanding. The persons are members of SSCayman LLC, the general partner of Special Situations Cayman Fund, L.P. A full-text copy of the regulatory filing is available at: http://is.gd/uyoI8w About Precision Optics Headquartered in Gardner, Massachusetts, Precision Optics Corporation, Inc., has been a developer and manufacturer of advanced optical instruments since 1982. The Company designs and produces high-quality micro-optics, medical instruments and other advanced optical systems. The Company's medical instrumentation line includes laparoscopes, arthroscopes and endocouplers and a world-class product line of 3-D endoscopes for use in minimally invasive surgical procedures. Precision Optics reported a net loss of $1.78 million for the year ended June 30, 2013, as compared with net income of $960,972 for the year ended June 30, 2012. The Company's balance sheet at March 31, 2014, showed $1.89 million in total assets, $919,074 in total liabilities, all current, and $975,505 in total stockholders' equity. QUANTUM FOODS: City Capital to Assist in Sale of Turn-Key Assets ---------------------------------------------------------------- The Bankruptcy Court authorized Quantum Foods, LLC, et al., to amend the terms of the engagement letter the Debtors entered into with between the Debtors and City Capital Advisors, LLC, on Jan. 28, 2014. On May 21, the U.S. Trustee asked the Court to (i) deny the City Capital motion, and the debtor-in-possession financing motion; and (ii) dismiss or convert the Debtor's case to one under Chapter 7 of the Bankruptcy Code. The amendment reflected additional tasks for City Capital's financial advisory and investment banking services in relation to the marketing and sale of certain of the Debtors' assets in furtherance of the Debtors' wind-down. The Debtors are also authorized to pay City capital the advisory fee in an amount not to exceed $30,000 The additional services for City Capital will include: a. between May 10 and May 31, contacting parties that may have an interest in acquiring the Turn-Key Assets owned by or housed within the Debtors' Facilities as well as operating in one or more of the Debtors' Facilities; b. in coordination with Tiger Remarketing Services, providing evaluation material to interested parties; c. soliciting letters of intent or asset purchase agreements from interested parties by May 31, and determining, in conjunction with the Debtors and Tiger, whether the Debtors wish to proceed with any party that submits a letter of intent or asset purchase agreement; d. supplying a list of companies interested in pursuing a Possible Transaction and a status overview as reasonably requested by the Debtors but no less frequently than at the end of each weekly period; and e. providing testimony, as necessary, with respect to matters on which City Capital is engaged to advise the Debtors in an proceeding before the Court. As reported in the Troubled Company Reporter on March 5, 2014, City Capital will assist in the evaluation of strategic alternatives and render investment banking and financial advisory services to the Debtors in connection with the Chapter 11 cases. Specifically, City Capital will assist the Debtors in developing a strategy for pursuing a Sale Transaction or Restructuring and, if requested, contacting and eliciting interest from possible counterparties to a Sale Transaction or Restructuring. City Capital will also advise the Debtors on tactics and strategies for negotiating with their stakeholders and render financial advice to the Debtors and participate in meetings or negotiations with (i) stakeholders or other parties in connection with any Restructuring or Sale Transaction or (ii) possible counterparties to a Sale or Restructuring Transaction. City Capital will be paid in accordance with the following fee structure: (a) An initial, non-refundable advisory fee of $50,000 payable upon execution of the Engagement Letter. (b) Commencing on the Petition Date, a Monthly Fee of $30,000. (c) In the event that a Sale Transaction is consummated resulting in a change of control of greater than 50% of the equity or assets of the Company at the time the Sale Transaction is consummated, a Transaction Fee equal to 2% of the Transaction Consideration will be payable to City Capital upon the closing of the Sale Transaction. The Transaction Fee will not be less than $700,000. (d) In addition to any fees that may be payable to City Capital and, regardless of whether any transaction occurs, the Debtors will reimburse City Capital for all documented out-of-pocket expenses. Rachel Corn Kluge, a Managing Director of the firm, assured the Court that her 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. Ms. Kluge disclosed that prior to the Petition Date, the Debtors paid an initial non-refundable advisory fee of $50,000 to City Capital and reimbursed the firm $5,815 in expenses incurred and billed through the Petition Date. About Quantum Foods Founded in 1990 and headquartered in Bolingbrook, Illinois, Quantum Foods, LLC -- http://www.quantumfoods.com-- provides protein products made from beef, poultry and pork. Quantum Foods and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to facilitate the sale of substantially all their business to CTI Foods Holding Co., LLC. The Debtors' primary secured indebtedness totals $50.2 million, owing to lenders led by Crystal Financial, LLC, as administrative and collateral agent. Quantum Foods is being advised in its restructuring by Daniel J. McGuire, Esq., Gregory M. Gartland, Esq., and Caitlin S. Barr, Esq., at Winston & Strawn as counsel; M. Blake Cleary, Esq., Kenneth J. Enos, Esq., and Andrew Magaziner, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as local counsel. City Capital Advisors is the investment banker. FTI Consulting, Inc. also serves as advisor. BMC Group is the claims and notice agent. The U.S. Trustee for Region 3 appointed five members to the official committee of unsecured creditors in the case. The Committee is seeking to retain Triton Capital Partners, Ltd. as financial advisor; and Mark D. Collins, Esq., Russell C. Silberglied, Esq., Michael J. Merchant, Esq., Christopher M. Samis, Esq., and Robert C. Maddox, Esq., at Richards, Layton & Finger, P.A. as counsel. Raging Bull is represented in the case by Van C. Durrer II, Esq., at Skadden Arps Slate Meagher & Flom LLP. Crystal Finance LLC is represented by David S. Berman, Esq., at Riemer & Braunstein LLP. * * * Quantum Foods had a deal to sell substantially all of its assets for $54 million to a unit of Oaktree Capital Management LP, Raging Bull Acquisition Co. That deal, however, collapsed in May 2014. Oaktree had sought a reduction of the purchase price on account of an alleged deterioration in the business. Talks between seller and buyer were not fruitful and Oaktree canceled the contract. Quantum Foods now has decided to pursue a dual-track liquidation of its assets. Raging Bull has filed a complaint against the Debtor, alleging breach of the contract that required the buyer to pay $54 million in cash and assume $30.3 million in debt. Raging Bull wants Quantum to return a $5.4 million deposit. QUANTUM FOODS: Court Approves $45,000 Funding for Creditors Panel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered a first amended final order authorizing Quantum Foods, LLC, et al., to (i) incur postpetition financing; and (ii) use cash collateral. The amendment provides that in addition to funding the items in the approved budget, the lenders will fund a $45,000 advance to be used by the Creditors Committee to fund the Committee's pursuit of bankruptcy recoveries. The material amendments to the DIP facility include: Milestones: The DIP Borrowers will comply with these covenants: * By May 15, 2014, the Debtors will file a motion under Section 365 of the Bankruptcy Code requesting extension of the date on which the Debtors must assume or reject leases to 210 days after the entry of the order for relief. Any order extending that deadline will have been entered by the Bankruptcy Court on or before May 28. * The Debtors will engage a liquidation firm satisfactory to the agent to conduct a sale of all or substantially all of the Borrowers' assets by May 15, and the Debtors will have obtained an order of the Bankruptcy Court approving such engagement by May 28. As reported in the Troubled Company Reporter on April 21, 2014, Bankruptcy Judge Kevin Carey entered a final order authorizing Quantum Foods to incur $60 million of postpetition financing and use of cash collateral. The Court's order was based upon the declarations of Edgar Reilly and Michael Buenzow and after interim and final hearings on the Debtors' motion. The order provides the Debtors' stipulations to the amount of prepetition debt to the lenders, and the extent, priority and validity of the liens securing the debts. The order found that the Debtors had a need for postpetition financing to continue operations, and that no credit was available on more favorable terms. The postpetition financing may be used to fund the Debtor's daily operations and working capital needs and to roll-up all outstanding prepetition amounts under the prepetition revolving loan agreement. The order grants the lenders first priority priming liens on substantially all of the debtor's real and personal property detailed in the order, and a superpriority administrative claim status for all obligations owed, subject only to a specified carve out for U.S. Trustee fees, fees for the Debtor Professionals as limited by budget, $635,000 for Committee Professionals, and $150,000 for the Debtor Professionals for unpaid fees and expenses after the date of service of notice of default under the order. The Debtors are authorized to use cash collateral subject to the approved budget and the terms and conditions of the final order and post-petition financing agreements. The DIP Obligations under the order are due and payable on August 18, 2014 or the occurrence of other events. Among other requirements, the Debtors must make certain adequate protection payments to the lenders of "reasonable documented out- of-pocket costs and expenses of the [prepetition agent's and lenders'] financial advisors and attorneys" and "cash interest at the 'Default Rate' as provided in the Prepetition Financing Agreements." The Debtors also waived any right to surcharge the lenders' collateral under Section 506(c) of the Bankruptcy Code. The order also prohibited the use of the equitable doctrine of "marshaling" or any other similar doctrine with respect to the Debtors' collateral, entitled the lenders to all the rights and benefits of Section 552(b) of the Bankruptcy Code, and prohibited the Debtors from asserting the "equities of the case" exception under Section 552(b). The order also provided that the lenders were not required to file proofs or claim or be required to comply with the U.S. Trustee fee guidelines. The Debtors must provide the Office of the U.S. Trustee and the Committee's counsel invoices received from the lenders during the chapter 11 cases and will reimburse the lenders for such fees within 10 days of receipt unless a specific written objection to the reasonableness of the amounts is made. The Court also ordered that a status conference on the U.S. Trustee's objection will be held on June 26, at 3:00 p.m. The hearing on the U.S. Trustee's objection will be held on July 2, at 4:00 p.m. A copy of the Amended DIP Financing Order is available for free at http://bankrupt.com/misc/Quantum_orderamend_DIPfinancing.PDF About Quantum Foods Founded in 1990 and headquartered in Bolingbrook, Illinois, Quantum Foods, LLC -- http://www.quantumfoods.com-- provides protein products made from beef, poultry and pork. Quantum Foods and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to facilitate the sale of substantially all their business to CTI Foods Holding Co., LLC. The Debtors' primary secured indebtedness totals $50.2 million, owing to lenders led by Crystal Financial, LLC, as administrative and collateral agent. Quantum Foods is being advised in its restructuring by Daniel J. McGuire, Esq., Gregory M. Gartland, Esq., and Caitlin S. Barr, Esq., at Winston & Strawn as counsel; M. Blake Cleary, Esq., Kenneth J. Enos, Esq., and Andrew Magaziner, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as local counsel. City Capital Advisors is the investment banker. FTI Consulting, Inc. also serves as advisor. BMC Group is the claims and notice agent. The U.S. Trustee for Region 3 appointed five members to the official committee of unsecured creditors in the case. The Committee is seeking to retain Triton Capital Partners, Ltd. as financial advisor; and Mark D. Collins, Esq., Russell C. Silberglied, Esq., Michael J. Merchant, Esq., Christopher M. Samis, Esq., and Robert C. Maddox, Esq., at Richards, Layton & Finger, P.A. as counsel. Raging Bull is represented in the case by Van C. Durrer II, Esq., at Skadden Arps Slate Meagher & Flom LLP. Crystal Finance LLC is represented by David S. Berman, Esq., at Riemer & Braunstein LLP. * * * Quantum Foods had a deal to sell substantially all of its assets for $54 million to a unit of Oaktree Capital Management LP, Raging Bull Acquisition Co. That deal, however, collapsed in May 2014. Oaktree had sought a reduction of the purchase price on account of an alleged deterioration in the business. Talks between seller and buyer were not fruitful and Oaktree canceled the contract. Quantum Foods now has decided to pursue a dual-track liquidation of its assets. Raging Bull has filed a complaint against the Debtor, alleging breach of the contract that required the buyer to pay $54 million in cash and assume $30.3 million in debt. Raging Bull wants Quantum to return a $5.4 million deposit. QUANTUM FOODS: Has Until Sept. 16 to Decide on Unexpired Leases --------------------------------------------------------------- The Bankruptcy Court on June 3, 2014, entered an order extending until Sept. 16, Quantum Foods, LLC, et al.'s time to assume or reject these three remaining unexpired leases of nonresidential real property: 1. Industrial Building Lease, dated as of July 19, 2006, by and between First Industrial Development Services, Inc. and GDC Logistics, LLC, as assigned by that certain General Assignment, dated as of Sept. 24, 2007, to The Realty Associates Fund VIII, L.P., and as further amended by that certain First Amendment to Industrial Building Lease, dated as of Feb. 1, 2013, and guaranteed by Quantum Foods, LLC, Quantum Foods, Inc., Quantum Foods 213-D, LLC, Quantum Culinary, LLC, and Choice One Foods, LLC, for the premises commonly known as 550 West North Frontage Road, Bolingbrook, Illinois; 2. Industrial Building Lease, dated as of July 19, 2006, by and between First Industrial Development Services, Inc. and Quantum Culinary, LLC, as assigned by that certain assignment letter, dated as of September 4, 2007, to Bolingbrook 525, LLC, and as guaranteed by Quantum Foods, LLC, Quantum Foods 213-D, LLC, Choice One Foods, LLC, GDC Logistics, LLC and Quantum Foods, Inc., for the premises commonly known as 525 Crossroads Parkway, Bolingbrook, Illinois; and 3. Industrial Building Lease, dated as of July 19, 2006, by and between First Industrial Development Services, Inc. and Quantum Foods 213-D, LLC, as assigned by that certain assignment letter, dated as of Sept. 4, 2007, to 750 Schmidt Road, LLC, and as guaranteed by Quantum Foods, LLC, GDC Logistics, LLC, Choice One Foods, LLC, Quantum Foods, Inc. and Quantum Culinary, LLC, for the premises commonly known as 750 South Schmidt Road, Bolingbrook, Illinois. The Debtors and Raging Bull Acquisition, LLC, the stalking horse bidder, engaged in negotiations regarding the purchase price for substantially all of the Debtors' and the terms of the underlying transaction. Raging Bull has determined not to proceed with the transaction and elected not to purchase substantially all of the Debtors' assets. In light of Raging Bull's decision, in consultation with their advisors and their postpetition lender, determined that it is in the estates' best interest to maximize value through the immediate implementation of certain liquidation initiatives. About Quantum Foods Founded in 1990 and headquartered in Bolingbrook, Illinois, Quantum Foods, LLC -- http://www.quantumfoods.com-- provides protein products made from beef, poultry and pork. Quantum Foods and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to facilitate the sale of substantially all their business to CTI Foods Holding Co., LLC. The Debtors' primary secured indebtedness totals $50.2 million, owing to lenders led by Crystal Financial, LLC, as administrative and collateral agent. Quantum Foods is being advised in its restructuring by Daniel J. McGuire, Esq., Gregory M. Gartland, Esq., and Caitlin S. Barr, Esq., at Winston & Strawn as counsel; M. Blake Cleary, Esq., Kenneth J. Enos, Esq., and Andrew Magaziner, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as local counsel. City Capital Advisors is the investment banker. FTI Consulting, Inc. also serves as advisor. BMC Group is the claims and notice agent. The U.S. Trustee for Region 3 appointed five members to the official committee of unsecured creditors in the case. The Committee is seeking to retain Triton Capital Partners, Ltd. as financial advisor; and Mark D. Collins, Esq., Russell C. Silberglied, Esq., Michael J. Merchant, Esq., Christopher M. Samis, Esq., and Robert C. Maddox, Esq., at Richards, Layton & Finger, P.A. as counsel. Raging Bull is represented in the case by Van C. Durrer II, Esq., at Skadden Arps Slate Meagher & Flom LLP. Crystal Finance LLC is represented by David S. Berman, Esq., at Riemer & Braunstein LLP. * * * Quantum Foods had a deal to sell substantially all of its assets for $54 million to a unit of Oaktree Capital Management LP, Raging Bull Acquisition Co. That deal, however, collapsed in May 2014. Oaktree had sought a reduction of the purchase price on account of an alleged deterioration in the business. Talks between seller and buyer were not fruitful and Oaktree canceled the contract. Quantum Foods now has decided to pursue a dual-track liquidation of its assets. Raging Bull has filed a complaint against the Debtor, alleging breach of the contract that required the buyer to pay $54 million in cash and assume $30.3 million in debt. Raging Bull wants Quantum to return a $5.4 million deposit. QUANTUM FOODS: Can Hire Tiger to Assist in Turn-Key Asset Sale -------------------------------------------------------------- The Bankruptcy Court entered an order dated June 3, 2014, (i) approving the agency and sale agreement between Quantum Foods, LLC, et al., and Tiger Remarketing Services with respect to the sale of the Debtor's machinery, equipment, furniture and fixtures; (ii) approving the agency and sale agreement between the Debtors and Tiger Capital Group, LLC, with respect to the sale of the Debtors' inventory and intellectual property; and (iii) approving sale procedures relating to the turn-key assets. The Debtors related that they attempted to sell all their assets through a first-day sale motion, but Raging Bull Acquisition, LLC, the stalking horse bidder, determined not to proceed with the transaction. Since then, the Debtors have explored various options for selling the estates' assets and maximizing the value to all stakeholders. The Debtors proposed a dual-track process: they (a) will pursue "turn-key' sales of groups of assets, on one track, and (b) at the same time on the other track, retain Tiger and prepare for a liquidation at public action if all the assets are not sold through "turn-key" sales. The Debtors submit that the dual-track process requested through the motion is the best process to maximize the potential value of the Debtors' assets. The Court ordered that in the event that City Capital Advisors secures a potential buyer of one or more of the Debtors' turn-key assets, the Debtors would file motion to approve the proposed turn-key assets sale by June 11, with objections to the motion to be filed by June 16, a 12:00 noon; and the Court will hold a hearing to approve the turn-key asset sale on June 17 a 11:00 a.m. The pertinent terms of the FF&E Agreement are: a) The Debtors have agreed to retain Tiger to act as their exclusive agent to sell all FF&E at a publicly marketed sale. Tiger agrees to use its professional skill, knowledge and experience, but makes no representations or warranties regarding the outcome of the FF&E sale, except to the extent as may be provided for in the FF&E Agreement. b) Tiger acknowledges that the Debtors have engaged City Capital to seek one or more Turn-Key Asset Sales. Tiger and City Capital agree to cooperate with each other in City Capital's efforts toward the Turn-Key Asset Sales. In the event that City Capital obtains one or more purchasers acceptable to the Debtors by June 4, and approved by the Court on or before June 9, Tiger's engagement will automatically be terminated upon consummation of any such sales (it being understood that Tiger's engagement with respect to the FF&E not sold will continue). c) In the absence of Turn-Key Asset Sales approved by the Court by June, 9, consistent with the Liquidation Procedures, Tiger will schedule the auction of FF&E to occur no later than the week of June 23. Upon execution of the FF&E Agreement, Tiger will be authorized to begin immediate preparation and promotion of the FF&E auction. d) the Debtors authorize Tiger to sell the FF&E, in whole or in part, at live, online or sealed bid auction(s) and private sale(s) to the highest bidder thereof. e) Tiger's fees, which will be charged on the Gross Sales, are: i) Gross Sales proceeds received from $0 to $7,500,000 will be subject to a 6.0% commission; plus ii) Gross Sales proceeds received in excess of $7,500,001 but less than or equal to $8,500,000 will be subject to a 7.0% commission, plus iii) Gross Sales proceeds received in excess of $8,500,001 will be subject to a 8.5% commission. f) Tiger will be entitled to reimbursement for all reasonable and necessary FF&E sale related expenses incurred in preparing for and conducting the FF&E sale, including labor, marketing, supplies and other related costs. g) Tiger will assess auction purchasers a 15% buyers' premium, which will be added to the high bid prices to comprise the gross sales. Additionally, third party online webcast services may assess up to an additional 3% buyers' premium to online bidders, payable directly to the webcast service. h) In the event that all or a subset of the assets are sold as a package prior to the auction, and such package of assets is sold to a purchaser who will utilize them in-place at a Debtor's Facility, Tiger will be entitled to 2.5% of sale proceeds attributable to the Turn-Key Pre-Sale, well as reimbursement of costs incurred. i) Tiger intends to work with Schneider Industries, Inc., a party unrelated to Tiger, in connection with the engagement. A copy of the FF&E Agreement is available for free at http://bankrupt.com/misc/Quantum_ordersaleTiger.PDF Griffin Capital Corporation, in its capacity as agent for the fee owners of 750 South Schmidt Road, Bolingbrook, Illinois; and 525 Crossroads Parkway, Bolingbrook, Illinois -- the Main Plant -- asserted a limited objection and reservation of rights to the relief requested in the Debtors' motion. General Electric Capital Corporation also filed an objection. GECC said Tiger is not "disinterested." Tiger has inappropriate connections with the secured lenders that improperly incentivize Tiger to increase value allocated to assets on which the DIP lenders have the first-priority lien and to decrease value allocated to assets on which other parties-in-interest, such as GECC, have the first-priority security interest. The procedures and the Debtors' agreement with Tiger also seek to inappropriately limit or prime GECC's security interest or surcharge the equipment. GECC is represented by: Kurt F. Gwynne, Esq. Lucy Qiu, Esq. REED SMITH LLP 1201 Market Street, Suite 1500 Wilmington, DE 19801 Tel: (302) 778-7550 Fax: (302) 778-7575 E-mails: kgwynne@reedsmith.com lqiu@reedsmith.com The Realty Associates Fund VIII, L.P., a lessor of nonresidential real property to Debtor GDC Logistics, joined the objections of GECC and PNC Equipment Finance, LLC, and to the limited objection of Griffin Capital. About Quantum Foods Founded in 1990 and headquartered in Bolingbrook, Illinois, Quantum Foods, LLC -- http://www.quantumfoods.com-- provides protein products made from beef, poultry and pork. Quantum Foods and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to facilitate the sale of substantially all their business to CTI Foods Holding Co., LLC. The Debtors' primary secured indebtedness totals $50.2 million, owing to lenders led by Crystal Financial, LLC, as administrative and collateral agent. Quantum Foods is being advised in its restructuring by Daniel J. McGuire, Esq., Gregory M. Gartland, Esq., and Caitlin S. Barr, Esq., at Winston & Strawn as counsel; M. Blake Cleary, Esq., Kenneth J. Enos, Esq., and Andrew Magaziner, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as local counsel. City Capital Advisors is the investment banker. FTI Consulting, Inc. also serves as advisor. BMC Group is the claims and notice agent. The U.S. Trustee for Region 3 appointed five members to the official committee of unsecured creditors in the case. The Committee is seeking to retain Triton Capital Partners, Ltd. as financial advisor; and Mark D. Collins, Esq., Russell C. Silberglied, Esq., Michael J. Merchant, Esq., Christopher M. Samis, Esq., and Robert C. Maddox, Esq., at Richards, Layton & Finger, P.A. as counsel. Raging Bull is represented in the case by Van C. Durrer II, Esq., at Skadden Arps Slate Meagher & Flom LLP. Crystal Finance LLC is represented by David S. Berman, Esq., at Riemer & Braunstein LLP. * * * Quantum Foods had a deal to sell substantially all of its assets for $54 million to a unit of Oaktree Capital Management LP, Raging Bull Acquisition Co. That deal, however, collapsed in May 2014. Oaktree had sought a reduction of the purchase price on account of an alleged deterioration in the business. Talks between seller and buyer were not fruitful and Oaktree canceled the contract. Quantum Foods now has decided to pursue a dual-track liquidation of its assets. Raging Bull has filed a complaint against the Debtor, alleging breach of the contract that required the buyer to pay $54 million in cash and assume $30.3 million in debt. Raging Bull wants Quantum to return a $5.4 million deposit. RADIOSHACK CORP: Reports Financial Results for Period Ended May 3 ----------------------------------------------------------------- Radioshack Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $98.3 million on $736.7 million of net sales and operating revenues for the 13 weeks ended May 3, 2014, as compared with a net loss of $28 million on $848.4 million of net sales and operating revenues for the three months ended April 30, 2013. As of May 3, 2014, Radioshack had $1.32 billion in total assets, $1.25 billion in total liabilities and $72.6 million in total stockholders' equity. Joseph C. Magnacca, chief executive officer, said, "Overall, our first quarter performance was challenged by an industry-wide decline in consumer electronics and a soft mobility market which impacted traffic trends throughout the quarter. In particular, our mobility business was weak due to lackluster consumer interest in the current handset assortment and increased promotional activities across the industry including the wireless carriers. This resulted in disappointing sales and gross margin performance." The Company ended the quarter with total liquidity of $423.7 million at May 3, 2014, including $61.8 million in cash and cash equivalents and $361.9 million of availability under the 2018 Credit Agreement. This availability is net of letters of credit totaling $67.8 million outstanding at May 3, 2014. The Company's total debt was $614.5 million at May 3, 2014, which matures between 2018 and 2019. Subsequent to the end of the quarter, the Company drew on the 2018 Credit Facility for general corporate purposes. As of June 9th, the Company had outstanding borrowings of $35 million under the 2018 Credit Facility. The Company expects to further utilize the 2018 Credit Facility during the remainder of the year. A full-text copy of the Form 10-Q is available for free at: http://is.gd/CtvwOE About Radioshack Corporation RadioShack (NYSE: RSH) -- -- http://www.radioshackcorporation.com -- is a national retailer of innovative mobile technology products and services, as well as products related to personal and home technology and power supply needs. RadioShack's retail network includes more than 4,300 company-operated stores in the United States, 270 company-operated stores in Mexico, and approximately 1,000 dealer and other outlets worldwide. Radioshack disclosed a net loss of $139.4 million in 2012, as compared with net income of $72.2 million in 2011. * * * As reported by the TCR on Dec. 26, 2013, Standard & Poor's Ratings Services raised the corporate credit rating on the Fort Worth, Texas-based RadioShack Corp. to 'CCC+' from 'CCC'. "The upgrade reflects an improved liquidity position with a recent financing that increased funded debt by $125 million and increased the company's revolving credit borrowing capacity, which improved the company's liquidity by approximately $200 million," said credit analyst Charles Pinson-Rose. In the Dec. 30, 2013, edition of the TCR, Fitch Ratings has affirmed its 'CCC' Long-term Issuer Default Rating (IDR) on RadioShack Corporation. The IDR reflects the significant decline in RadioShack's profitability and cash flow, which has become progressively more pronounced over the past two years. As reported by the TCR on March 6, 2013, Moody's Investors Service downgraded RadioShack Corporation's corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3- PD. RadioShack's Caa1 Corporate Family Rating reflects Moody's opinion that the overall business strategy of the company to reverse the decline in profitability has not gained any traction. Troubled Company Reporter, citing The Wall Street Journal, reported on March 5, 2014, that RadioShack plans to cut back its store count, after a sharp drop in sales over the holidays left it with a $400 million loss in 2013. The electronics retailer said it could close as many as 1,100 U.S. stores -- one out of every four that it operates itself -- underscoring the difficulty it has had adapting to a fast changing consumer landscape. ROOMLINX INC: Posts $539K Net Loss in March 31 Quarter ------------------------------------------------------ RoomLinx, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $539,378 on $1.63 million of total revenues for the three months ended March 31, 2014, compared with a net loss of $1.4 million on $2.01 million of total revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $6.24 million in total assets, $10.75 million in total liabilities, and a stockholders' deficit of $4.5 million. The Company has experienced recurring losses and negative cash flows from operations. At March 31, 2014, the Company had approximate balances of cash and cash equivalents of $2.08 million, working capital deficit of $1.15 million, and accumulated deficit of $42.25 million. To date the Company has in large part relied on debt and equity financing to fund its shortfall in cash generated from operations. As of March 31, 2014, the Company has available approximately $19.8 million under its line of credit. The Company's cash balance has remained relatively constant through the twelve months ended March 31, 2014. If the Company is unable to borrow additional funds under the line of credit or obtain financing from alternative sources, the Company estimates its current cash and cash equivalents are sufficient to fund operations for at least the next twelve months. These factors raise substantial doubt about the Company's ability to continue as a going concern, according to the Company's regulatory filing. A copy of the Form 10-Q is available: http://is.gd/4gOPE3 About RoomLinX Headquartered in Bloomfield, Colorado, RoomLinX, Inc. (PINKSHEETS: RMLX) -- http://www.roomlinx.com/-- is a pioneer in Broadband High Speed Wireless Internet connectivity, specializing in providing the most advanced Wi-Fi Wireless and Wired networking solutions for High Speed Internet access to Hotel Guests, Convention Center Exhibitors, Corporate Apartments, and Special Event participants. Designing, deploying and servicing site- specific wireless networks for the hospitality industry is RoomLinX's core competency. SAN DIEGO HOSPICE: Wells Fargo Wins Stay Relief ----------------------------------------------- In the Chapter 11 case of San Diego Hospice & Palliative Care Corporation, the Bankruptcy Court terminated on May 12, 2014, the automatic stay as to Wells Fargo Bank, N.A.'s interest in certain investment accounts, subject to a Liquidating Trustee Agreement and a Bank Agreement which were approved by the Court on May 1. The Bankruptcy Court approved on May 1: 1. the Liquidating Trustee Agreement between Richard M. Kipperman as Liquidating Trustee of the Liquidating Trust of San Diego Hospice & Palliative Care Corporation and San Diego Hospice Foundation, Inc., including the releases contained therein pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure; and 2. the Bank Agreement between the Foundation and Wells Fargo Bank, N.A. pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure. Pursuant to the notes, revolving lines of credit, security agreements and custody agreements executed by the Debtor in favor of the Bank and its predecessors in interest, Wells Fargo asserts that (i) the Debtor owes the Bank $4,082,261 as of Jan. 24, 2014, and (ii) the Bank has a security interest in, inter alia, account numbers xxxxx800, xxxxx801, xxxxx803 and xxxxx400 maintained with the Investments & Fiduciary Services Group of WFB. The Liquidating Trustee Agreement provides that the Foundation will pay $1.4 million to the estate. The Bank Agreement (i) resolves the Bank's motion for relief from the automatic stay in the case; (ii) provides for a procedure for payment of the Wells Fargo Loan; and (iii) eliminates a potential claim against the Liquidating Trust in excess of $4 million. In lifting the automatic stay, the Court said granting the Bank's motion will not affect the claims or rights of parties claiming an interest in the investment accounts, including, but not limited to, Richard P. Woltman, trustee of the William Soroka Charitable Trust and of the Woltman Family Trust and the Price Philanthropies Foundation. On June 14, 2013, Wells Fargo requested for relief from the automatic stay with respect to the investment accounts so the Bank may liquidate the amount necessary in the investment accounts to full satisfy its outstanding loan. The Bank and the Foundation entered into a settlement, release and forbearance agreement that was approved by the Court on May 1. The Bankruptcy Court has terminated the hearing on the opposition filed by Richard Woltman, trustee of the William Soroka Charitable Trust and of The Woltman Family Trust, to Wells Fargo's motion for relief from stay. Trustee Woltman has withdrawn his objection to Wells Fargo motion. Price Family Charitable, for the benefit of the Doris Howell Children's [Irrevocable] Trust, has withdrawn its objection to the motion of Wells Fargo Bank, N.A., for relief from the automatic stay and joinder in oppositions filed by San Diego Hospice & Pallative Care Corporation and the William Soroka Charitable Trust and Woltman Family Trust filed on April 23, 2014. On May 2, the Foundation filed a corrected notice of its withdrawal of opposition to Wells Fargo's motion for stay relief. Price Family is represented by: Lynne R. Lasry, Esq. SANDLER, LASRY, LAUBE, BYER & VALDEZ LLP 402 West Broadway, suite 1700 San Diego, CA 92101-3542 Tel: (619) 235-5655 Fax: (619) 235-5648 E-mail: llasry@sllbv.com Mr. Woltman is represented by: Dean T. Kirby, Jr., Esq. Roberta S. Robinson, Esq. KIRBY & McGUINN, A P.C. 707 Broadway, Suite 1750 San Diego, CA 92101 Tel: (619) 685-4000 Fax: (619) 685-4004 About San Diego Hospice San Diego Hospice & Palliative Care Corporation filed a Chapter 11 petition (Bankr. S.D. Cal. Case No. 13-01179) in San Diego on Feb. 4, 2013. The Debtor is the operator of the San Diego Hospice and The Institute for Palliative Medicine, one of the largest community-owned, not-for-profit hospices in the country. The Debtor scheduled $20,369,007 in total assets and $14,888,058 in total liabilities. Even before the bankruptcy filing, the Debtor has been under a federal investigation, focusing whether it allowed patients to stay in the program even when their diagnosis changed. The Debtor said that it will meet with government agencies to address their concerns, explore partnerships with other health care organizations, and work to restructure and resize San Diego Hospice. The Debtor said it has encouraged Scripps Health, the region's largest provider of health care services, to enter the hospice business. On April 30, 2013, San Diego Hospice received Court authority to sell its unused 24-bed hospice facility to Scripps Health for $16.55 million. Scripps made the opening bid of $10.7 million at the auction that took place before the sale-approval hearing. The other bidder was Sharp Healthcare. The sale is also subject to approval by regulators in California. Judge Margaret M. Mann on Sept. 23, 2013 confirmed the First Amended Liquidating Plan, as modified on Aug. 27, 2013, and on Sept. 18, jointly proposed by San Diego Hospice and Palliative Care Corporation and its Official Committee of Unsecured Creditors. The Plan effectuates a distribution of the assets of the estate to creditors in accordance with the priorities set forth in the Bankruptcy Code. The Plan provides that all of the Debtor's Assets, to the extent they have not already been liquidated, will be liquidated through a liquidating trust and the proceeds will be utilized to pay Allowed Claims pursuant to the terms of the Plan and to fund the Liquidating Trust Expenses. Jeffrey Isaacs, Esq., at Procopio, Cory, Hargreaves & Savitch LLP, represents the Debtor. Samuel R. Maizel, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Committee. SAN DIEGO HOSPICE: Accord Resolves Ross' Motion for Stay Relief --------------------------------------------------------------- The Liquidating Trust of San Diego Hospice & Pallative Care Corporation, through Richard M. Kipperman, the liquidating Trustee of the Liquidating Trust, and Leilani Ross entered into a stipulation resolving Ms. Ross' motion for relief from automatic stay. On Oct. 8, 2013, Ms. Ross filed a motion to (i) modify the automatic stay to liquidate her claim in state court or district court and (ii) for relief from the Plan injunction to liquidate the claim in State Court or District Court. Pursuant to the stipulation, the parties agreed that: 1. Ms. Ross will be relieved from the automatic stay and any injunction under the Plan to commence litigation outside of the Bankruptcy Court; 2. the Liquidating Trustee will advance up to the full retention amount under an insurance the policy. If Ms. Ross obtains a recovery in the litigation, Ms. Ross will refund the Liquidating Trust in the amount equal to the lesser of (a) one- half of the amount of the recovery, and (b) 50 percent of the retention amount; and 3. any claim by Ms. Ross against the estate and the Liquidating Trust will be limited to the amount of any judgment obtained in the litigation (up to a maximum of $2,950,000), less any amounts actually paid by the insurer to Ms. Ross. The Court scheduled a June 5 hearing on the approval of the stipulation. The Liquidating Trustee and SDH Trust Committee are represented by: Samuel R. Maizel, Esq. Scotta E. McFarland, Esq. Jeffrey L. Kandel, Esq. PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Blvd., Suite 1300 Los Angeles, CA 90067-4003 Tel: (310) 277-6910 Fax: (310) 201-0760 E-mails: smizel@pszjlaw.com smcfarland@pszjlaw.com jkandel@pszjlaw.com About San Diego Hospice San Diego Hospice & Palliative Care Corporation filed a Chapter 11 petition (Bankr. S.D. Cal. Case No. 13-01179) in San Diego on Feb. 4, 2013. The Debtor is the operator of the San Diego Hospice and The Institute for Palliative Medicine, one of the largest community-owned, not-for-profit hospices in the country. The Debtor scheduled $20,369,007 in total assets and $14,888,058 in total liabilities. Even before the bankruptcy filing, the Debtor has been under a federal investigation, focusing whether it allowed patients to stay in the program even when their diagnosis changed. The Debtor said that it will meet with government agencies to address their concerns, explore partnerships with other health care organizations, and work to restructure and resize San Diego Hospice. The Debtor said it has encouraged Scripps Health, the region's largest provider of health care services, to enter the hospice business. On April 30, 2013, San Diego Hospice received Court authority to sell its unused 24-bed hospice facility to Scripps Health for $16.55 million. Scripps made the opening bid of $10.7 million at the auction that took place before the sale-approval hearing. The other bidder was Sharp Healthcare. The sale is also subject to approval by regulators in California. Judge Margaret M. Mann on Sept. 23, 2013 confirmed the First Amended Liquidating Plan, as modified on Aug. 27, 2013, and on Sept. 18, jointly proposed by San Diego Hospice and Palliative Care Corporation and its Official Committee of Unsecured Creditors. The Plan effectuates a distribution of the assets of the estate to creditors in accordance with the priorities set forth in the Bankruptcy Code. The Plan provides that all of the Debtor's Assets, to the extent they have not already been liquidated, will be liquidated through a liquidating trust and the proceeds will be utilized to pay Allowed Claims pursuant to the terms of the Plan and to fund the Liquidating Trust Expenses. Jeffrey Isaacs, Esq., at Procopio, Cory, Hargreaves & Savitch LLP, represents the Debtor. Samuel R. Maizel, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Committee. SANCHEZ ENERGY: Moody's Rates New $700MM Unsecured Notes 'B3' ------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Sanchez Energy Corporation's proposed $700 million unsecured notes due 2023. Sanchez's other ratings and positive outlook remained unchanged. Net proceeds from this offering will be used to finance the pending $639 million Catarina acquisition in the Eagle Ford Shale, repay borrowings under Sanchez's revolving credit facility, and for general corporate purposes. This debt issuance was contemplated in Moody's rating action on May 23, 2014 when Moody's changed Sanchez's outlook to positive from stable, following its announced agreement to acquire the Catarina properties from certain subsidiaries of Royal Dutch Shell Plc (Shell, Aa1 stable). Issuer: Sanchez Energy Corporation Assignments: US$700M Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD4, 63%) Ratings Rationale The new notes will rank pari passu with Sanchez's existing $600 million 7.75% senior unsecured notes, and hence will have the same B3 rating. Given the priority claim and the significant size of the senior secured revolving credit facility in Sanchez's capital structure, unsecured notes are rated one notch below Sanchez's B2 Corporate Family Rating (CFR) under Moody's Loss Given Default Methodology. The B2 CFR is underpinned by Sanchez's oil-weighted asset base and strong cash margins, meaningful leasehold acreage in one of the largest and most active unconventional resource plays in the US, improving operational performance notwithstanding its short operating history, and visible production and reserves growth through 2015. Sanchez's ratings are restrained by its limited scale, early stage and concentrated upstream operations in the Eagle Ford Shale, high debt levels relative to average daily production and PD reserves. The company's acquisition driven growth strategy and large capital spending program over the next several years entails execution and funding risks and involves significant drilling for lease retention. The positive outlook reflects Moody's belief that Sanchez will be able to successfully integrate its recently acquired assets and grow production and reserves without increasing leverage. Moody's would consider an upgrade if Sanchez can sustain production in excess of 40,000 boe/day, hold the debt to average daily production ratio below $35,000 per boe and maintain a retained cash flow (RCF)/debt ratio above 35% on a sustained basis. Accelerated capital spending leading to weak liquidity could prompt a downgrade. A material increase in leverage could also trigger a negative rating action; more specifically, if the debt to average daily production ratio remains above $45,000 per boe over a protracted period then the ratings could be downgraded. The principal methodology used in this rating was the Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sanchez Energy Corporation is an independent oil and gas exploration and production company focused on the Eagle Ford Shale in South Texas. SCOTTSDALE VENETIAN: Sierra Consulting Approved as Expert Witness ----------------------------------------------------------------- Bankruptcy Judge Brenda K. Martin authorized Scottsdale Venetian Village, LLC, to expand the scope of Sierra Consulting Group, LLC's engagement to include expert witness services. Sierra's engagement is expanded to include the preparation of expert reports, the provision of expert testimony at deposition and at trial, and the performance of all other tasks necessary for Sierra to serve as an expert witness with respect to confirmation of the plan of reorganization proposed by the Debtor. The Debtor, in its motion, stated that it does not intend to modify any of the financial terms of the current engagement of Sierra, but only to expand the scope of Sierra's engagement to include expert witness services. As reported in the Troubled Company Reporter on Aug. 2, 2013, Sierra was initially expected to perform financial analyses and review of the Debtor's overall historic books and records; and serve as Debtor's financial expert in its bankruptcy proceedings. Sierra will charge bill standard hourly rates of $95 to $345 for their services. Edward Burr, managing principal of Sierra Consulting Group LLC and its wholly owned subsidiary, Sierra Real Estate Solutions, LLC, assured the Court that his firm is a "disinterested person" as defined in 11 U.S.C. Sec. 101. Sierra does not hold or represent any interest adverse to the Debtor's estate, he said. He may be reached at: Edward M. (Ted) Burr, Jr. CTP, CIRA SIERRA CONSULTING GROUP, LLC Two North Central Avenue, Suite 700 Phoenix, AZ 85004 Tel: 602-424-7007 E-mail: tburr@sierracgllc.com About Scottsdale Venetian Scottsdale Venetian Village, LLC, operates the Days Hotel located at 5101 N. Scottsdale Road, in Scottsdale, Arizona. The Company also operates Papi Chulo's Mexican Grill & Cantina, located immediately adjacent to the hotel. The hotel consists of 211 guest rooms and, among other things, facilities for meetings and banquets. Scottsdale Venetian Village filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 13-02150) on Feb. 19, 2013, in Phoenix, estimating at least $10 million in assets and less than $10 million in liabilities. The Debtor is represented by John J. Hebert, Esq., and Wesley D. Ray at Polsinelli Shughart, P.C., in Phoenix. Charles B. Foley, CPA, PLLC serves as the Debtor's accountant. As reported in the March 12, 2014 edition of the TCR, Scottsdale Venetian Village LLC has won approval of the disclosure statement explaining its proposed Chapter 11 plan. The bankruptcy judge approved the disclosure statement after the Debtor resolved the objection made by First National Bank of Hutchinson. Scottsdale Venetian Village amended the Plan documents on Feb. 27, 2014, to incorporate terms reached with the buyer for the Debtor's interests in the Days Hotel in Scottsdale, Arizona. SEARS METHODIST: Case Summary & 24 Largest Unsecured Creditors -------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Sears Methodist Retirement System, Inc. 14-32821 2100 Ross Avenue, 21st Floor Dallas, TX 75201 Sears Caprock Retirement Corporation 14-32822 Sears Methodist Centers, Inc. 14-32824 Sears Plains Retirement Corporation 14-32825 Sears Methodist Foundation 14-32827 Sears Panhandle Retirement Corporation 14-32828 Canyons Senior Living, L.P. 14-32829 Odessa Methodist Housing, Inc. 14-32831 Sears Brazos Retirement Corporation 14-32832 Sears Permian Retirement Corporation 14-32833 Sears Tyler Methodist Retirement Corporation 14-32834 Senior Dimensions, Inc. 14-32835 Type of Business: Senior living industry Chapter 11 Petition Date: June 10, 2014 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Stacey G. Jernigan Debtors' Counsel: Vincent P. Slusher, Esq. Andrew Zollinger, Esq. DLA PIPER LLP (US) 1717 Main Street, Suite 4600 Dallas, TX 75201-4629 Tel: (214) 743-4500 Fax: (214) 743-4545 Email: vincent.slusher@dlapiper.com andrew.zollinger@dlapiper.com - and - Thomas R. Califano, Esq. Gabriella L. Zborovsky, Esq. Jacob S. Frumkin, Esq. DLA PIPER LLP (US) 1251 Avenue of the Americas New York, NY 10020-1104 Tel: (212) 335-4500 Fax: (212) 335-4501 Email: thomas.califano@dlapiper.com gabriella.zborovsky@dlapiper.com jacob.frumkin@dlapiper.com Debtors' Financial Advisor: ALVAREZ & MARSAL HEALTHCARE INDUSTRY GROUP, LLC Paul Rundell 55 West Monroe Street, Suite 4000 Chicago, IL 60603 Telephone: (312) 601-4220 Debtors' Investment Banker: CAIN BROTHERS & COMPANY, LLC 360 Madison Avenue, 5th Floor New York, NY 10017 Telephone: (212) 869-5600 Debtors' Notice, Claims and Solicitation Agent: GCG INC. Total Assets: $34.1 million as of January 2014 Total Liabilities: $103.8 million as of January 2014 The petitions were signed by Paul Rundell, chief restructuring officer. List of Debtor's 24 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Life Care Services LLC Trade $878,995 Capital Square 400 Locust Ste 820 Des Moines, IA 50309-2334 Tel: 515-875-4500 Fax: 515-875-4780 Email: info@lcsnet.com Cliftonlarson Allen LLP Trade $157,200 Texas Methodist Foundation Trade $92,034 Relias Learning, LLC Trade $25,600 Carls McDonald & Dalrymple LLP Trade $20,552 Century Plaza I and II Trade $10,332 Advantage Resourcing Trade $7,261 Hilton Garden Inn Abilene Trade $6,270 Abilene Family Health Care Trade $5,833 Lost Creek Point Trade $5,200 The Ultimate Software Group, Inc. Trade $4,967 Chatelle and Associates Trade $4,000 Business Records Management Trade $3,471 Wyndham Dallas Love Field Trade $3,395 Texas Tech University Health Trade $2,880 Sciences Center Toner Tiger Inc. Trade $2,568 Simpletc, Inc. Trade $1,900 ServiceMaster By A-Town/Hi-Tech Trade $1,650 Texas Health and Human Services Trade $1,086 Commission Earn Services LLC Trade $1,077 Automated Copy Systems, Inc. Trade $1,012 Copy Sense Trade $918 Restoration Unlimited Trade $790 E-Health Data Trade $650 SIMPLEXITY LLC: Court Denies Chapter 7 Conversion Bid ----------------------------------------------------- Bankruptcy Judge Kevin Gross, according to a minute entry, denied the motion to convert the Chapter 11 case of Simplexity, LLC, et al., to one under Chapter 7 of the Bankruptcy Code. Fifth Third Bank sought conversion of the Debtors' cases. It said the cases must be converted to chapter 7 so that a chapter 7 trustee can administer the estates' principal remaining assets, which consist of avoidance actions and certain other causes of action. The Debtors, in their objection, stated that the filing of the motion is another in a series of attempts by Fifth Third to exert control over the Chapter 11 Cases it has refused to adequately fund. In support of the motion to convert, Fifth Third Bank, in its capacity as DIP Agent and Pre-Petition Senior Secured Agent, responded to the Debtors' objection, stating that the Debtors are no longer operating businesses; does not generate no cash flow; have no assets to liquidate other than litigation claims, are in default of the DIP order and are incurring mounting administrative claims. In a separate filing, the Official Committee of Unsecured Creditors objected to the motion, stating that the manifest waste of the investment of investigative resources to date, as well as the delay and further waste that would be needed for new sets of professionals to get up to speed if these cases are converted, will do far more harm to creditors than FTB's alleged concerns about the cases remaining in chapter 11. Meanwhile, a stipulation approved by the Bankruptcy Court last month provides that the Committee may have until June 13 to investigate and file a challenge to the validity, security amount, or priority of the lenders' liens on the Debtors' assets. The stipulation was entered among the Debtors, the Committee and Fifth Third Bank, as the prepetition senior secured agent. Fifth Third Bank is represented in the case by: Paul N. Heath, Esq. Zachary I. Shapiro, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 E-mail: heath@rlf.com shapiro@rlf.com - and - Randall L. Klein, Esq. Jeremy M. Downs, Esq. Prisca M. Kim, Esq. GOLDBERG KOHN LTD. 55 East Monroe Street, Suite 3300 Chicago, IL 60603-5792 Tel: (312) 201-4000 Fax: (312) 332 2196 E-mail: randall.klein@goldbergkohn.com jeremy.downs@goldbergkohn.com prisca.kim@goldbergkohn.com About Simplexity Simplexity, LLC, sought protection under Chapter 11 of the Bankruptcy Code on March 16, 2014 (Case No. 14-10569, Bankr. D.Del.). The case is before Judge Kevin Gross. The Debtors' counsel is Kenneth J. Enos, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware. Prime Clerk LLC serves as claims and noticing agent. Simplexity hired Rutberg & Co. as investment banker. Simplexity LLC and Simplexity Services LLC both estimated $10 million to $50 million in assets, and $50 million to $100 million in liabilities. The U.S. Trustee for Region 3 appointed five members to an official committee of unsecured creditors. Peter S. Partee, Sr., Esq., and Michael P. Richman, Esq., at HUNTON & WILLIAMS LLP, in New York; and Christopher A. Ward, Esq., and Shanti M. Katona, Esq., at Polsinelli PC, in Wilmington, Delaware, represent the Committee. * * * As reported by the TCR on May 5, 2014, Bankruptcy Judge Kevin Gross approved the sale of certain equipment, intellectual property, contract rights and other assets of Simplexity LLC and Simplexity Services LLC to Wal-Mart Stores, Inc., pursuant to the asset purchase agreement dated March 20, 2014. Wal-Mart will pay $10 million and assume liabilities. SIMPLEXITY LLC: Amends Asset Purchase Agreement with Wal-Mart ------------------------------------------------------------- Simplexity, LLC, et al., ask the Bankruptcy Court to approve the amendment to the asset purchase agreement and the amended schedule of cure costs. The first amendment dated April 30 revises the Asset Purchase Agreement dated March 20, by and among Wal-Mart Stores, Inc., a Delaware corporation, and the Debtors. On April 30, 2014, the Court authorized the sale of certain of the Debtors' assets; and approved (i) the APA and ancillary agreements; and (ii) the assumption and assignment of executory contracts and unexpired leases. The Amendment provides that, among other things: (a) Section 2.6 of the Agreement is amended by deleting the words "by wire transfer of immediately available funds to a bank account designated in writing by the sellers to the buyer at least two business days prior to the closing date" and by inserting after the words "$10,000,000" the following: "in respect of the purchased assets set forth in Section 2.1(a)-(g) and $241,167 in respect of the other assets and items set forth in Schedule 2.1(h)". (b) Section 2.7(b)(i) of the Agreement is amended by adding these words before the semicolon "; provided that the parties hereby acknowledge that transfer of certain equipment included in the purchased assets may take place not more than 15 business days following the closing date to the extent such additional time is necessary for removal of confidential information of former customers or partners of the sellers in accordance with Section 5.2(b)". (c) Section 2.7(c)(i) of the Agreement is amended by deleting the words "the purchase price" and inserting in place thereof the words "one-half of the purchase price less the amount of any transfer taxes payable by the sellers pursuant to Section 8.2 and Designated Cure Costs". (d) Section 2.7(c)(ii) and (iv) of the Agreement are amended by adding the following words before the semicolon "to the extent Buyer is contemplated to be a party thereto". (e) Section 2.7(c)(v) of the Agreement is amended by deleting the word "executive" therein. (f) A new Section 2.7(d) will be added to the Agreement which will state in its entirety the following: "Promptly (but in no event later than two business days) following the date upon which all of the purchased assets have been transferred to the buyer in accordance with Section 2.7(b)(i), the buyer will deliver or cause to be delivered to the sellers the other half of the Purchase Price (without setoff or deduction, unless otherwise agreed to by the parties)." (g) A new Section 2.7(e) will added to the agreement which will state in its entirety the following: "Attached hereto as Schedule 2.7(e) are wiring instructions for delivery of the Purchase Price in accordance with Section 2.7(c)(i) and Section 2.7(d) hereof." On April 28, the Debtors notified the Bankruptcy Court that they received no qualified bidders with respect to stalking horse assets, and that the auction is canceled. About Simplexity Simplexity, LLC, sought protection under Chapter 11 of the Bankruptcy Code on March 16, 2014 (Case No. 14-10569, Bankr. D.Del.). The case is before Judge Kevin Gross. The Debtors' counsel is Kenneth J. Enos, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware. Prime Clerk LLC serves as claims and noticing agent. Simplexity hired Rutberg & Co. as investment banker. Simplexity LLC and Simplexity Services LLC both estimated $10 million to $50 million in assets, and $50 million to $100 million in liabilities. The U.S. Trustee for Region 3 appointed five members to an official committee of unsecured creditors. Peter S. Partee, Sr., Esq., and Michael P. Richman, Esq., at HUNTON & WILLIAMS LLP, in New York; and Christopher A. Ward, Esq., and Shanti M. Katona, Esq., at Polsinelli PC, in Wilmington, Delaware, represent the Committee. * * * As reported by the TCR on May 5, 2014, Bankruptcy Judge Kevin Gross approved the sale of certain equipment, intellectual property, contract rights and other assets of Simplexity LLC and Simplexity Services LLC to Wal-Mart Stores, Inc., pursuant to the asset purchase agreement dated March 20, 2014. Wal-Mart will pay $10 million and assume liabilities. SIMPLEXITY LLC: July 16 Hearing on Executory Contracts Rejection ---------------------------------------------------------------- The Bankruptcy Court will convene a hearing on July 16, 2014, at 2:00 p.m., to consider Simplexity, LLC, et al.'s third motion for authorization to reject certain executory contracts effective as of June 2, 2014. Objections, if any, are due June 16 at 4:00 p.m. Prior to the Petition Date, the Debtors entered into certain executory contracts for goods or services used to facilitate their business operations. As the Debtors have ceased operations and are in the process of liquidating their remaining assets, the Debtors have determined that the majority of the executory contracts are not necessary for the maintenance and sale of the Debtors' assets. The Debtors have determined that these executory contracts are no longer necessary: Non-Debtor Counterparty Entity Address Contract Date ----------------------- -------------- ------------- Accertify 1075 Hawthorn Drive 8/28/2013 Itasca, IL 60143 Accertify 1075 Hawthorn Drive 5/31/2012 Itasca, IL 60143 Pursuant to the sale order dated April 30, 2014, all licenses and products of the Debtors from Microsoft will be deemed rejected upon final consummation of the sale approved by the sale order. On April 30, the Debtors requested for permission to reject certain executory contracts effective as of that date. On June 2, the Court entered its order authorizing the relief requested in the first rejection motion. A copy of the list of the rejected contracts is available for free at: http://bankrupt.com/misc/SIMPLEXITY-326_contractrejord.pdf Qualution Systems, Inc., filed a limited objection and reservation of rights with respect to the Debtors' motion for entry of an order authorizing the rejection of the April 30 contracts. On May 30, the Debtors filed a second motion to reject executory contracts effective as of that date. The Debtors scheduled a July 16 hearing on the matter. Objections, if any, are due June 13, at 4:00 p.m. About Simplexity Simplexity, LLC, sought protection under Chapter 11 of the Bankruptcy Code on March 16, 2014 (Case No. 14-10569, Bankr. D.Del.). The case is before Judge Kevin Gross. The Debtors' counsel is Kenneth J. Enos, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware. Prime Clerk LLC serves as claims and noticing agent. Simplexity hired Rutberg & Co. as investment banker. Simplexity LLC and Simplexity Services LLC both estimated $10 million to $50 million in assets, and $50 million to $100 million in liabilities. The U.S. Trustee for Region 3 appointed five members to an official committee of unsecured creditors. Peter S. Partee, Sr., Esq., and Michael P. Richman, Esq., at HUNTON & WILLIAMS LLP, in New York; and Christopher A. Ward, Esq., and Shanti M. Katona, Esq., at Polsinelli PC, in Wilmington, Delaware, represent the Committee. * * * As reported by the TCR on May 5, 2014, Bankruptcy Judge Kevin Gross approved the sale of certain equipment, intellectual property, contract rights and other assets of Simplexity LLC and Simplexity Services LLC to Wal-Mart Stores, Inc., pursuant to the asset purchase agreement dated March 20, 2014. Wal-Mart will pay $10 million and assume liabilities. SIMPLEXITY LLC: Rutberg & Co. Approved as Investment Banker ----------------------------------------------------------- The Bankruptcy Court authorized Simplexity, LLC, et al., to employ Rutberg & Co. as investment banker. Fifth Third Bank, as Prepetition senior secured agent and DIP Agent, objected to the Debtors' application to employ Rutberg & Co., stating that, among other things: 1. the Debtors have not provided sufficient evidence to support the retention application; 2. the terms of the Rutberg's engagement are patently unreasonable; and 3. the success fee may not be paid from the proceeds of Fifth Third's collateral. As reported in the Troubled Company Reporter, Roberta A. DeAngelis, U.S. Trustee for Region 3, on April 11 filed a supplement to her objection stating that a provision in the engagement letter grants Rutberg a limitation of liability that is not warranted, not permissible for those performing the services and inconsistent with prior decisions of the bankruptcy court in the District of Delaware. In her first objection, the U.S. Trustee stated that Rutberg's $600,000 success fee does not appear to be proper because the firm may have had little to do with Walmart's stalking horse bid and the execution of the asset purchase agreement between Walmart and the Debtors. As reported in the TCR on April 10, 2014, Frank C. Bennett III attested that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm will, among other things, provide these services: a. assist the Debtors in preparing descriptive materials and presentations, and develop a strategy for marketing the business to potential financial and/or strategic investors and exploring various strategic alternatives available to the company; b. identifying and evaluating potential financial and/or strategic investors in cooperation with the Debtors; and c. contacting prospective investors with the company's prior authorization to determine the their level if interest in a transaction. About Simplexity Simplexity, LLC, sought protection under Chapter 11 of the Bankruptcy Code on March 16, 2014 (Case No. 14-10569, Bankr. D.Del.). The case is before Judge Kevin Gross. The Debtors' counsel is Kenneth J. Enos, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware. Prime Clerk LLC serves as claims and noticing agent. Simplexity hired Rutberg & Co. as investment banker. Simplexity LLC and Simplexity Services LLC both estimated $10 million to $50 million in assets, and $50 million to $100 million in liabilities. The U.S. Trustee for Region 3 appointed five members to an official committee of unsecured creditors. Peter S. Partee, Sr., Esq., and Michael P. Richman, Esq., at HUNTON & WILLIAMS LLP, in New York; and Christopher A. Ward, Esq., and Shanti M. Katona, Esq., at Polsinelli PC, in Wilmington, Delaware, represent the Committee. * * * As reported by the TCR on May 5, 2014, Bankruptcy Judge Kevin Gross approved the sale of certain equipment, intellectual property, contract rights and other assets of Simplexity LLC and Simplexity Services LLC to Wal-Mart Stores, Inc., pursuant to the asset purchase agreement dated March 20, 2014. Wal-Mart will pay $10 million and assume liabilities. SOLAVEI LLC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Solavei LLC 10500 NE 8th Street Bellevue, WA 98004 Case No.: 14-14505 Chapter 11 Petition Date: June 11, 2014 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Hon. Timothy W. Dore Debtor's Counsel: Armand J Kornfeld, Esq. BUSH STROUT & KORNFELD LLP 601 Union St Ste 5000 Seattle, WA 98101 Tel: 206-292-2110 Email: jkornfeld@bskd.com - and - Christine M Tobin-Presser, Esq. BUSH STROUT & KORNFELD LLP 601 Union St Ste 5000 Seattle, WA 98101 Tel: 206-292-2110 Email: ctobin@bskd.com Total Assets: $5.27 million Total Liabilities: $63.10 million The petition was signed by Richard A. White, general counsel and secretary. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/wawb14-14505.pdf SPANISH BROADCASTING: Third Avenue Holds 16.4% of Class A Shares ---------------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Third Avenue Management LLC reported that as of May 31, 2014, it beneficially owned 681,587 shares of Class A common stock of Spanish Broadcasting System, Inc., representing 16.36 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at: http://is.gd/3NP785 About Spanish Broadcasting Headquartered in Coconut Grove, Florida, Spanish Broadcasting System, Inc. -- http://www.spanishbroadcasting.com/-- owns and operates 21 radio stations targeting the Hispanic audience. The Company also owns and operates Mega TV, a television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico. Its revenue for the twelve months ended Sept. 30, 2010, was approximately $140 million. The Company's balance sheet at March 31, 2014, showed $466.08 million in total assets, $526.56 million in total liabilities and a $60.47 million total stockholders' deficit. Spanish Broadcasting reported a net loss of $88.56 million in 2013, as compared with a net loss of $1.28 million in 2012. * * * In November 2010, Moody's Investors Service upgraded the corporate family and probability of default ratings for Spanish Broadcasting System, Inc., to 'Caa1' from 'Caa3' based on improved free cash flow prospects due to better than anticipated cost cutting and the expiration of an unprofitable interest rate swap agreement. Moody's said Spanish Broadcasting's 'Caa1' corporate family rating incorporates its weak capital structure, operational pressure in the still cyclically weak economic climate, generally narrow growth prospects (though Spanish language is the strongest growth prospect) given the maturity and competitive pressures in the radio industry, and the June 2012 maturity of its term loan magnify this challenge. In July 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Miami, Fla.-based Spanish Broadcasting System Inc. to 'B-' from 'CCC+', based on continued improvement in the company's liquidity position. "The rating action reflects S&P's expectation that, despite very high leverage, SBS will have adequate liquidity over the intermediate term to meet debt maturities, potential swap settlements, and operating needs until its term loan matures on June 11, 2012," said Standard & Poor's credit analyst Michael Altberg. As reported by the TCR on Dec. 4, 2012, Standard & Poor's Ratings Services revised its rating outlook on Miami, Fla.-based Spanish Broadcasting System Inc. (SBS) to negative from stable. "We also affirmed our existing ratings on the company, including the 'B-' corporate credit rating," S&P said. SPENCER GIFTS: Moody's Assigns B2 Rating on $360MM Sr. Sec. Debt ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Spencer Gifts LLC's and Spirit Halloween Superstores LLC's proposed $360 million senior secured term loan due 2021. Concurrently, Moody's affirmed SSH Holdings, Inc.'s ("Spencer") B2 Corporate Family Rating ("CFR") and B2-PD Probability of Default Rating ("PDR"). The outlook remains stable. Proceeds from the proposed term loan will be used to refinance Spencer's $175 million senior secured notes and $165 million senior HoldCo PIK toggle notes and pay for transaction expenses. Moody's views the refinancing as modestly credit positive, since it will reduce annual interest expense by approximately $10 million. In addition, the company no longer plans to buy Brookstone, which is credit positive since Spencer will avoid potential near-term management distraction, as well as supportive for liquidity as the company's cash balance will be $30 million higher than previously anticipated. However, the rating is currently somewhat weakly positioned in the B2 rating category, given the company's high leverage and continuing headwinds from weak mall traffic. Moody's expects lease-adjusted leverage to improve modestly in the next 12-18 months, driven by continued growth in the Spirit segment and steady performance at Spencer's. Following the close of the transaction, the existing notes ratings will be withdrawn, and the CFR, PDR and outlook will be moved to Spencer Spirit Holdings, Inc. from SSH Holdings, Inc. Rating actions: Issuer: SSH Holdings, Inc. Corporate Family Rating, affirmed at B2 Probability of Default Rating, affirmed at B2-PD Stable Outlook Issuer: Spencer Gifts LLC and Spirit Halloween Superstores LLC Proposed $360 million senior secured term due 2021, assigned B2 (LGD 4, 51%) The ratings are subject to the receipt and review of final documentation. Ratings Rationale Spencer's B2 Corporate Family Rating considers the company's high pro-forma lease-adjusted leverage in the low 6.0 times and aggressive financial policies including a history of debt-financed shareholder distributions. The rating also reflects Spencer's limited scale, significant reliance on the Halloween season, and highly discretionary product offerings at the Spencer's segment, which appeal to a narrow demographic of 18-24 year olds. The company's track record of consistent and stable earnings growth, as well as its good liquidity profile, provide key support to the rating. The stable outlook incorporates Moody's expectation for modest revenue growth and stable operating margin of about 12%-12.5% (Moody's-adjusted), as well as good near-term liquidity. Ratings could be downgraded if Spencer's new store openings underperform historical trends, if debt/EBITDA is sustained above 6.0 times or EBITA/interest below 1.5 times, or if liquidity materially erodes for any reason. Ratings could be upgraded if Spencer demonstrates the ability and willingness to achieve and sustain debt/EBITDA of 5.0 times or lower, and EBITA/interest expense above 2.0 times. However, any upgrade would likely be limited to one notch as a result of the company's aggressive policies regarding debt financed shareholder distributions. SSH Holdings, Inc. ("Spencer"), headquartered in Egg Harbor, NJ, is a specialty retailer primarily operating under two brands: Spencer's and Spirit Halloween ("Spirit"). The company operated 646 Spencer's and 1,052 Spirit stores during the year ended February 1, 2014, and generated revenue of approximately $708 million. Spencer is owned principally by senior management (approximately 72%) and ACON Investments (approximately 25%). The methodologies used in this rating were Global Retail Industry published in June 2011, and Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SSH HOLDINGS: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on SSH Holdings Inc., the direct parent of Egg Harbor Township, N.J.-based Spencer Spirit Holdings Inc. The outlook is stable. S&P removed all the ratings from CreditWatch negative, where it placed them on March 27, 2014. Concurrently, S&P assigned a 'B' issue-level rating to the company's $360 million senior secured term loan with a '4' recovery rating, indicating S&P's expectation for average (30%-50%) recovery in the event of a payment default. S&P do not rate the company's asset-based revolver, which allows for peak borrowings up to $150 million from June to October and $60 million the remainder of the year. According to the company, it will use the proceeds of the proposed term loan to redeem $175 million of 11% senior secured notes and $165 million of 9% PIK toggle holdco senior notes, with the remainder to pay tender premiums and related fees and expenses. "The ratings on SSH reflect our assessment of the company's "weak" business risk profile and "aggressive" financial risk profile," said credit analyst Diya Iyer. "The business profile reflects Spencer's participation in the highly competitive and fragmented specialty teen apparel industry, which is facing declining mall traffic and heightened price competition from fast-fashion and online players. It also reflects Spirit's exposure to the seasonal Halloween business and the challenges involved in opening and closing roughly 1,000 pop-up stores within a few months every year." The stable outlook incorporates S&P's expectation that performance will remain relatively flat over the next year, with SSH only modestly reducing debt with cash flow generation. Although S&P forecasts some modest improvement in the company's credit protection measures, we believe they will remain commensurate with an "aggressive" financial risk profile over the next year. Upside Scenario To consider an upgrade, SSH would deliver performance ahead of S&P's expectations, with revenue growth in the 15% range as a result of faster-than-anticipated store growth and gross margin expansion of more than 200 bps through greater-than-projected sourcing and other cost savings. At that time, leverage would be in the high-3.0x range, coverage would be in the 5.0x range, and FFO to debt would be in the 30% range, which would cause S&P to revise its financial risk profile assessment to "significant". Downside Scenario S&P could lower the rating if performance falls significantly below its projections because of flat sales and margin contraction because of a decline in traffic or inability to boost transaction levels. Under this scenario, revenue would turn flat to slightly negative and gross margin would shrink more than 200 bps, with leverage approaching the 5.0x area. This would cause S&P to revise its financial risk profile to "highly leveraged". S&P would also consider a lower rating if financial sponsor ACON amends current loan covenants to support a dividend in the next 12 months, leading to a more negative view of financial policy or undertakes a significant leveraged acquisition. SUNEDISON SEMICONDUCTOR: S&P Assigns 'B-' CCR; Outlook Stable ------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned St. Peters, Mo.-based SunEdison Semiconductor Ltd. a 'B-' corporate credit rating. The outlook is stable. At the same time, S&P assigned the company's $210 million first- lien term loan due 2019 and $50 million revolving credit facility due 2017 its 'B' issue-level rating, with a recovery rating of '2', indicating its expectations for substantial (70%-90%) recovery in the event of a payment default. "The ratings on SunEdison Semiconductor reflect the company's 'vulnerable' business risk profile (as defined by our criteria), incorporating the company's exposure to the highly cyclical semiconductor industry and its high customer concentration," said Standard & Poor's credit analyst James Thomas. The ratings also reflect an "aggressive" financial risk profile, primarily reflecting S&P's expectation for negative free cash flow over the next 12 months. S&P views the industry risk as "moderately high," the country risk as "intermediate," and the company's management and governance as "fair." S&P adjusts the anchor score downward by one notch to the final 'B-' rating, given the company's very weak free cash flow and need to engage in higher capital expenditures in order to remain competitive compared with 'B' rated firms in the semiconductor industry, and S&P's view that standard leverage ratio analysis does not fully capture SunEdison Semiconductor's level of financial risk. S&P's outlook is stable, reflecting its expectation that SunEdison Semiconductor will be able to grow margins sufficiently to generate modestly positive free cash flow by 2015, and that the firm has adequate liquidity to finance necessary capital expenditures. S&P could lower the rating if a slowdown in the semiconductor wafer market leads to accelerating price declines and reduced revenues, and the firm's cash balance declines to the point that S&P would consider liquidity "less than adequate." S&P could raise the rating if the firm is able to successfully grow operating cash flow through better pricing on polysilicon and an improvement in industry pricing, causing sustained positive free cash flow generation. SURTRONICS INC: Loses Bid to Dismiss Own Chapter 11 Case -------------------------------------------------------- Bankruptcy Judge Stephani W. Humrickhouse declined the request of Surtronics, Inc. to dismiss its Chapter 11 case, saying the debtor failed to establish cause under 11 U.S.C. Sec. 1112(b). The Court said the debtor seeks to dismiss its own case after taking advantage of the benefits of the bankruptcy, including the automatic stay; and that Smith & Wade's right to repossess the Debtor's property derives solely from the operation of 11 U.S.C. Sec. 365 and has no immediately equivalent remedy under state law. Surtronics provides electroplating and anodizing for various commercial and industrial customers throughout the Southeast. Since 1971, the Debtor's place of business and operations have been located at 4001, 2025 Beryl Drive, Raleigh, North Carolina and 508 Method Road, Raleigh, North Carolina. The Debtor has leased the Property from Smith & Wade since 1992. On June 17, 2013, the Property suffered a fire which destroyed a substantial portion of the debtor's facility and equipment. Subsequently, on September 6, 2013, the debtor and Smith & Wade executed an amendment to their original 2003 Lease Agreement. The 2013 Addendum contains a provision adding two purchase options to the Lease. The first option is to purchase the property for $700,000 after the completion of a five year extension on the lease; and the second option is to purchase the property for $1.00 after the completion of two five year extensions. On September 9, 2013, the debtor filed a voluntary petition seeking relief under chapter 11 of the Bankruptcy Code. On September 26, the debtor initiated an adversary proceeding against Smith & Wade seeking a determination that the Lease, as amended by the 2013 Addendum, constitutes an installment land sales contract, and not a true lease. The next day, the debtor filed a second adversary proceeding against Smith & Wade seeking declaratory, equitable, and monetary relief pursuant to CERCLA regarding the remediation of environmental damage found on the Property. On October 8, 2013, debtor filed a Chapter 11 Plan of Reorganization, and, 10 days later, moved to extend the time to assume or reject the Lease for an additional 90 days. The Court granted the extension motion on December 19, allowing the debtor until the earlier of April 7, 2014, or the date of the entry of an order confirming a plan, to assume or reject the Lease. The Debtor amended the Plan on January 15, 2014, and a confirmation hearing took place on January 27. Thereafter, on January 31, the debtor filed a Notice of Voluntary Dismissal for both the Lease Agreement Adversary Proceeding and the CERCLA Adversary Proceeding. Then, on March 21, the debtor filed the motion to dismiss the case, followed three days later by a notice to withdraw the Amended Plan. The deadline for assuming or rejecting the Lease expired on April 7, 2014, and the debtor neither assumed nor rejected the Lease or sought an additional extension by that date. A week later, on April 14, Smith & Wade filed its response to the motion to dismiss and simultaneously commenced an adversary proceeding in which it seeks the surrender of the Property pursuant to Sec. 365(d)(4) for debtor's failure to assume the Lease by the April 7 deadline. The Debtor contends that dismissal is proper under Sections 1112(b) and 305(a) of the Bankruptcy Code because there has been a "substantial or continuing loss to or diminution of the estate" and because "dismissal is in the best interest of the creditors and estate." Smith & Wade, on the other hand, asserts that there is no cause for dismissal and that dismissal would not be in the best interest of creditors. Smith & Wade argues that it would be deprived of important rights gained through the bankruptcy, i.e., possession of the Property, if the case were dismissed. A copy of the Court's June 9, 2014 Order is available at http://is.gd/hawmf7from Leagle.com. About Surtronics, Inc. Raleigh, North Carolina-based Surtronics, Inc., filed a Chapter 11 bankruptcy petition in Wilson, North Carolina (Bankr. E.D.N.C. Case No. 13-05672) on Sept. 9, 2013. Founded in 1965, Surtronics is in the business of providing electroplating and anodizing services to base-metal alloys for use across various industries, including but not limited to aerospace, defense, medical, telecommunications, and automotive. Surtronics' primary production facility and corporate office are located in a series of buildings at 4001 and 4025 Beryl Drive, and 508 Method Road, Raleigh, North Carolina. The Debtor is represented by David A. Matthews, Esq., at Shumaker, Loop & Kendrick, LLP, in Charlotte, North Carolina. Carr Riggs & Ingram PLLC, serves as its accountants. In its schedules, the Debtor disclosed $16,300,878 in total assets and $3,507,088 in total liabilities. The Bankruptcy Administrator has been unable to organize and recommend to the Bankruptcy Court the appointment of a committee of creditors holding unsecured claims against Surtronics Inc. TELKONET INC: Cancels Business Financing Agreement -------------------------------------------------- Retroactively effective as of May 31, 2014, Telkonet, Inc., terminated its Business Financing Agreement, dated May 31, 2013. The Agreement provided for a revolving credit facility in a principal amount not to exceed $2,000,000, subject to a borrowing base equal to the sum of 80 percent of the Company's eligible accounts receivable and 25 percent of the eligible inventory. As previously disclosed, the Company was in violation of a financial performance covenant under the Agreement and, although the violation of the financial performance covenant constituted a default under the Agreement, Bridge Bank did not pursue any remedies under the default provisions of the Agreement prior to its termination. As of May 31, 2014, there were no amounts outstanding under the revolving line of credit component of the Agreement. The Company did not incur any penalties as a result of the termination of the Agreement. About Telkonet Milwaukee, Wisconsin-based Telkonet, Inc., is a clean technology company that develops and manufactures proprietary energy efficiency and smart grid networking technology. Telkonet reported a net loss attributable to common stockholders of $4.90 million on $13.88 million of total net revenues for the year ended Dec. 31, 2013, as compared with a net loss attributable to common stockholders of $507,558 on $12.75 million of total net revenues in 2012. As of March 31, 2014, the Company had $10.49 million in total assets, $5.57 million in total liabilities, $1.20 million in redeemable preferred stock and $3.72 million in shareholders' equity. BDO USA, LLP, in Milwaukee, Wisconsin, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has a history of losses from operations, a working capital deficiency, and an accumulated deficit of $121,948,847 that raise substantial doubt about its ability to continue as a going concern. TENET HEALTHCARE: Moody's Keeps Ratings Over $500MM Add-On Notes ---------------------------------------------------------------- Moody's Investors Service commented that Tenet Healthcare Corporation's proposed offering of $500 million of 5.0% senior unsecured notes due 2019 has no impact on the company's ratings, including the B3 rating on the existing unsecured notes. Moody's understands that the proceeds of the offering, which is an add-on to Tenet's March 2014 unsecured note offering, will be used for general corporate purposes, including redeeming the company's $474 million of 9.25% unsecured notes due 2015. Given that Moody's expects only a modest increase in leverage from this offering and the company will realize a reduction in interest costs, the existing ratings of the company remain unchanged, including the B1 Corporate Family Rating and B1-PD Probability of Default Rating. The stable rating outlook is also unchanged. Tenet's B1 Corporate Family Rating reflects Moody's expectation that debt to EBITDA will remain high due to the debt incurred in the acquisition of Vanguard Health Systems in October 2013 but will return to a level approaching 5.0 times by the end of 2014. Moody's anticipates that improvement in credit metrics will result from a combination of realized synergies from the acquisition and benefits from the implementation of the provisions of the Affordable Care Act. Offsetting some of the benefit of healthcare reform is Moody's expectation that certain industry challenges will likely continue, including slower growth in healthcare utilization as co-pay and deductible amounts increase and higher expenses associated with physician alignment initiatives. The rating also incorporates Moody's expectation that the company will remain disciplined in the use of incremental debt for acquisitions or shareholder initiatives until leverage is reduced. Finally, Moody's anticipates that free cash flow will be modest in the near term given significant capital spending requirements and will limit the ability to meaningfully repay debt. The principal methodology used in this rating was the Global Healthcare Service Providers published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Tenet, headquartered in Dallas, Texas, is one of the largest for- profit hospital operators by revenue. At March 31, 2014 the company's subsidiaries and affiliates operated 77 hospitals, 189 outpatient centers, six health plans and Conifer Health Solutions, LLC, which provides business process solutions to hospitals and other clients. Tenet generated revenue of approximately $12.6 billion for the twelve months ended March 31, 2014 after considering the provision for doubtful accounts. TENET HEALTHCARE: S&P Retains 'CCC+' Rating After $500MM Add-On --------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'CCC+' issue- level rating (two notches below the 'B' corporate credit rating on the company) on Tenet Healthcare Corp.'s senior unsecured notes will remain unchanged per the company's proposed $500 million add- on to the existing $600 million. The '6' recovery rating also remains unchanged, indicating S&P's expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default. The notes will be sold pursuant to Rule 144A under the Securities Act. Tenet will use the proceeds for general corporate purposes and to repay existing senior unsecured debt. The issue-level ratings are the same as S&P's existing senior unsecured ratings. S&P's ratings on Dallas-based Tenet reflect its "weak" business risk profile highlighted by reimbursement risk and some reliance on its top three states for nearly half of total revenues. In addition, Tenet operates in several large markets that S&P believes are competitive. S&P incorporated its expectation that adjusted debt leverage will remain above 5x into its revision of the company's financial risk profile to "highly leveraged" from "aggressive". Significant capacity on its revolving credit facility and lack of covenant pressure support its "adequate" liquidity. RATINGS LIST Tenet Healthcare Corp. Corporate Credit Rating B/Stable/-- New Rating Tenet Healthcare Corp. $1.1B senior unsecured notes CCC+ Recovery rating 6 TGIF MERGER: Moody's Rates Proposed $475MM 1st Lien Debt 'B1' ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to TGIF Merger Sub, Inc.'s (TGIF Merger Sub) proposed $50 million guaranteed 1st lien senior secured revolving credit facility and $425 million guaranteed 1st lien senior secured term loan. Moody's also assigned a Caa1 rating to the company's $195 million guaranteed 2nd lien senior secured term loan. In addition, Moody's assigned TGIF Merger Sub a B3 Corporate Family Rating (CFR) and B3-PD Probability of Default Rating (PDR). The outlook is positive. Proceeds from the proposed bank facilities along with approximately $200 million in common equity contributed by the acquirers and $20 million of preferred equity from current owners will be used to fund the acquisition of TGI Fridays, Inc. (TGIF) by TGIF Merger Sub. Upon consummation of the acquisition, TGIF Merger Sub, Inc. will be merged with and into TGIF, with TGIF being the surviving entity and assuming the obligations of TGIF Merger Sub. Upon the successful consummation of the transaction, Moody's will change the name of the rated entity to TGI Fridays, Inc. from TGIF Merger Sub, Inc. Moody's ratings are subject to review of final documentation. Ratings assigned are; Corporate Family Rating of B3 Probability of Default Ratings of B3-PD $50 million 1st lien guaranteed senior secured revolver, rated B1 (LGD2, 29%) $425 million 1st lien guaranteed senior secured term loan, rated B1 (LGD2, 29%) $195 million 2nd lien guaranteed senior secured term loan, rated Caa1 (LGD5, 77%) Ratings Rationale The B3 Corporate Family Rating (CFR) reflects TGIF's high leverage, modest interest coverage and persistently weak operating trends as soft consumer spending and intense competition persist. For the twelve month period ending December 31, 2013, credit metrics were weak with debt to EBITDA of over 6.75 times and EBITA to interest expense of under 1.3 times. Given Moody's expectation that soft consumer spending and high level of promotions and discounts by competitors will continue to weigh on traffic, Moody's believe TGIF's ability to materially strengthen credit metrics over the intermediate term through stronger operating performance alone will be challenging. The ratings are supported by the company's high level of brand awareness, material scale with about 925 restaurants and geographic diversity. The ratings also incorporate management's more strategic focus on reducing costs, re-imaging restaurants and enhancing guest service levels, as well as a targeted approach towards advertising and promotions. The positive outlook reflects the potential for a material improvement in credit metrics over the relatively near term driven by debt reduction over and above required amortization as TGIF moves to a more asset lite business model with proceeds used to reduce debt. TGIF plans to re-franchise its UK operations by the end of 2014 and longer term to re-franchise the substantial majority of its US restaurants. However, the outlook would likely go to stable in the event the UK operations were not sold as currently planned. Given an expectation that weak traffic trends will continue over the intermediate term, a higher rating through stronger operating performance alone is unlikely at this point. However, a material reduction in outstanding debt that more than offsets any associated loss of earnings from refranchising or selling restaurants and steady improvement in operating performance resulting in leverage of under 5.5 times and EBITA coverage of interest of above 1.75 on a sustained basis could result in an upgrade. A higher rating would also require maintaining at least adequate liquidity. An inability to improve leverage or coverage over the relatively near term could result in a stable outlook. Factors that could result in downgrade include a deterioration in credit metrics from current levels driven in part by an inability to stabilize negative same restaurants sales -- particularly traffic. A deterioration in liquidity for any reason could also result in downward rating pressure. TGI Friday's Inc. (TGIF) owns, operates and franchises restaurants in the casual dining space with over 510 restaurants in the US and 400 internationally. Annual revenues are about $1.13 billion. TGIF is being acquired by Sentinel Capital Partners and Tri-Artisan Capital Partners. The principal methodology used in this rating was the Global Restaurant Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. TRONOX INC: July 7 Objection Deadline to Findings on Anadarko Deal ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York on May 30, 2014, filed proposed Findings of Fact and Conclusions of Law on the parties' Joint Motion For A Report And Recommendation to the District Court Recommending Approval of Settlement Agreement Resolving the Adversary Proceeding and Issuance of Injunction in Support Thereof. The Clerk for the Bankruptcy Court also filed on May 30, 2014, a Notice of Proposed Findings and Conclusions of Law. The adversary proceeding involves the Anadarko Litigation Trust, as successor to Debtors Tronox Incorporated, Tronox Worldwide LLC, and Tronox LLC, and Anadarko Petroleum Corporation, Kerr-McGee Corporation, Kerr-McGee Oil and Gas Corporation (n/k/a Anadarko US Offshore Corporation), Kerr-McGee Worldwide Corporation, KM Investment Corporation (improperly named as Kerr-McGee Investment Corporation), Kerr-McGee Credit LLC, Kerr-McGee Shared Services Company LLC and Kerr-McGee Stored Power Company LLC. The U.S. Bankruptcy Court has recommended that the District Court approve the Settlement and issue the following permanent injunction: "Pursuant to 28 U.S.C. Secs. 1367 and 1651, Sec. 105(a) of the Bankruptcy Code and Bankruptcy Rules 7001 and 7065, (i) any Debtor(s), (ii) any creditor of any Debtor who filed or could have filed a claim in the Chapter 11 Cases, (iii) any other Person whose claim (A) in any way arises from or is related to the Adversary Proceeding, (B) is a Trust Derivative Claim, or (C) is duplicative of a Trust Derivative Claim, and (iv) any Person acting or purporting to act as an attorney for any of the preceding is hereby permanently enjoined from asserting against any Anadarko Released Party (I) any Trust Derivative Claims or (II) any claims that are duplicative of Trust Derivative Claims, whether or not held or controlled by the Litigation Trust, or whether or not the Litigation Trust could have asserted such claims against any Anadarko Released Party. The injunction herein shall not apply to or bar the following: (i) any criminal liability; (ii) any liability arising under Title 26 of the United States Code (Internal Revenue Code) or state tax laws; (iii) any liability arising under federal or state securities laws; (iv) any action to enforce a covenant not to sue, release, or agreement not to seek reimbursement contained in the Settlement Agreement; (v) any liability that an Anadarko Released Party might have that does not arise from or through a liability of a Debtor; (vi) any liability of an Anadarko Released Party due to its status or acts or omissions since November 28, 2005 as a/an (A) owner, (B) operator, (C) discharger, (D) lessee, (E) permittee, (F) licensee, (G) person in charge, (H) holder of a right of use and easement, (I) arranger for disposal or treatment, (J) transporter, or (K) person who generates, handles, transports, treats, stores or disposes of solid or hazardous waste; (vii) any liability relating to the EandP Business or the stored power or battery business (including, but not limited to, as owned or operated by U.S. Avestor LLC and Kerr-McGee Stored Power Company LLC ); and (viii) any liability that any Anadarko Released Party retained, received or assumed pursuant to the Assignment Agreement or Assignment, Assumption, and Indemnity Agreement. For the avoidance of doubt, to the extent that a liability of an Anadarko Released Party excluded from the injunction herein by the preceding sentence would be a liability for which such Anadarko Released Party would be jointly and severally liable with others, including but not limited to one or more Debtors or Reorganized Debtors, under applicable law, nothing in this injunction is intended to alter any such applicable principles of joint and several liability where otherwise provided by law. The injunction herein does not apply to the Litigation Trust and the United States, which are providing releases and covenants not to sue in the Settlement Agreement." However, as it relates to Kerr-McGee Stored Power Company LLC, subpart (vii) is applicable only to the extent that such liability, if any, relates to or arises from the stored power or battery business. Objections to the Proposed Findings and Conclusions, if any, must be filed by and received no later than July 7, 2014. Copies of the objections must be served: 1. Jeffrey J. Zeiger, Esq. KIRKLAND AND ELLIS LLP 300 N. LaSalle Chicago, IL 60654 2. John C. Hueston, Litigation Trustee IRELL AND MANELLA LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, CA 90067 3. Thomas R. Lotterman, Esq. BINGHAM McCUTCHEN LLP 2020 K Street NW Washington, DC 20006-1806 4. Kenneth N. Klee, Esq. KLEE, TUCHIN, BOGDANOFF AND STERN LLP 1999 Avenue of the Stars, 39th Floor Los Angeles, CA 90067 5. Robert Yalen, AUSA U.S. Attorney's Office - SDNY 86 Chambers St., 3rd Floor New York, NY 10028 As reported by the Troubled Company Reporter, the settlement is for $5.15 billion and resolves all claims against Kerr-McGee Corporation and certain of its subsidiaries and affiliates, which stemmed from alleged actions by Kerr-McGee prior to its acquisition by Anadarko in 2006. Kerr-McGee is now a wholly owned subsidiary of Anadarko. About $4.5 billion of the settlement is earmarked for cleaning up thousands of sites around the country contaminated by creosote and uranium debris. The remaining amount will be used to pay for legal claims filed by people who got sick from the pollution, according to a Wall Street Journal report. FOR MORE INFORMATION OR TO ACCESS THE PROPOSED FINDINGS, SETTLEMENT AGREEMENT AND RELATED DOCUMENTS, please call (from the U.S. and Canada) (877) 709-4747, or call (for remaining international callers) (424) 236-7228 or visit http://www.kccllc.net/TronoxKerrMcGeeSettlement About Tronox Inc. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-10156) on Jan. 13, 2009, before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represented the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants served as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders were appointed in the cases. The Creditors Committee retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until Sept. 30, 2008, Tronox was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of Dec. 31, 2008, Tronox had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. On Nov. 17, 2010, the Bankruptcy Court confirmed the Debtors' First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated Nov. 5, 2010. Under the Plan, Tronox reorganized around its existing operating businesses, including its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi; Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia. TRUE DRINKS: Incurs $3.6-Mil. Net Loss for March 31 Quarter ----------------------------------------------------------- True Drinks Holdings, Inc., filed its quarterly report on Form 10- Q, disclosing a net loss of $3.6 million on $650,532 of net sales for the three months ended March 31, 2014, compared with a net loss of $1.56 million on $410,801 of net sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $9.99 million in total assets, $6.99 million in total liabilities, and stockholders' equity of $3 million. The Company's auditors has included a paragraph in their report on the Company's consolidated financial statements, included in its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2013, indicating that there is substantial doubt as to the ability of the Company to continue as a going concern. As of and for the quarter ended March 31, 2014, the Company has negative working capital of $1.96 million and an accumulated deficit of $13.84 million. While subsequent to Dec. 31, 2013, the Company raised approximately $1.86 million resulting from the sale of shares of its Series B Convertible Preferred Stock ("Series B Preferred"), additional capital may be necessary to advance the marketability of the Company's products to the point at which the Company can sustain operations. Management's plans are to continue to contain expenses, expand distribution and sales of its AquaBall? Naturally Flavored Water as rapidly as economically possible, and, if necessary, raise capital through equity and debt offerings in the event additional capital is necessary to execute the Company's business, marketing and operating plan, and achieve profitability from continuing operations. A copy of the Form 10-Q is available: http://is.gd/4kL3it True Drinks Holdings, Inc. manufactures and markets beverages and health snack products. The company produces vitamin-enhanced water drinks. The company was formerly known as True Drinks, Inc. and changed its name to True Drinks Holdings, Inc. in October 2012. The company was founded in 2008 and is based in Irvine, California. UNILIFE CORP: Reports $15.1MM Net Loss for Qtr. Ended March 31 -------------------------------------------------------------- Unilife Corporation filed a quarterly report on Form 10-Q, disclosing a net loss of $15.11 million on $1.38 million of revenue for the three months ended March 31, 2014, compared with a net loss of $14.08 million on $685,000 of sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $101.77 million in total assets, $82.01 million in total liabilities, and stockholders' equity of $19.76 million. The proceeds from the term loans under the Credit Agreement combined with anticipated cash to be generated from new and existing customer agreements are expected to provide the Company with sufficient liquidity. However, there can be no assurance that such cash from customer agreements will be available when needed. These factors continue to raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/64DYoO Unilife Corporation is a developer, manufacturer and supplier of injectable drug delivery systems, based in York, Pennsylvania. The Company manufactures and supplies proprietary devices in a format that can be filled and packaged with an injectable therapy to pharmaceutical and biotechnology companies. VAUGHAN COMPANY: Discovery in Suit v. Levann et al. Extended ------------------------------------------------------------ Magistrate Judge Stephan M. Vidmar gave his stamp of approval on a stipulation modifying the scheduling order and extending the deadline for certain defendants to respond to the motion for summary judgment filed by the plaintiff in the lawsuit, JUDITH A. WAGNER, Chapter 11 Trustee of the bankruptcy estate of The Vaughan Company, Realtors, Plaintiff, v. JONATHAN LEVANN, MICHAEL MENKE, JAMES RICHARDS, individually and as Trustee of the James Richards Revocable Trust, DANIEL FENTON, and NANCY FENTON, MOSTAFA JAFARI, MARTEZA JAFARI a/k/a MORTEZA JAFARI a/k/a MORI JAFARI, MARYAM JAFARI, MELIKA JAFARI, MOHAMMAD REZA JAFARI, ZAHRA JAFARI, VAHID DERISS, MOJTABA JAFARI, and FARZANEH JAFARI, ABBAS ANSARI and PEYMANEH POUR, husband and wife, MARIE YEH, individually and as personal representative of the estate of Chon-Chiun Yeh, JENNY YEH NELSON, JULIE C. LOUIE, DAVID L. LOUIE, JOHN DOE, as trustee of the YEH FAMILY REVOCABLE TRUST uta dated October 2, 2001, JIMMY CHIH MING YEH a/k/a JIMMY C. YEH, RACHEL HANYEH, and MARIE YEH as personal representative of the estate of Chon-Chiun Yeh d/b/a Chinese Acupuncture Clinic, SAID BANDI a/k/a SAID ALAGHE BANDI, individually, SAID BANDA d/b/a Bandi Engineering, BANDI ENGINEERING COMPANY, INC., ADF FINANCIAL, INC., SHAHLA BANDI a/k/a SHAHLA ZOLFAGHARI, MARYAM ALAGHE-BANDI, HAMID ALAGHE BANDI, HOSSEIN ALAGHE BANDI, ABDUL DABIRI, SHARAREH SHAHIN, And NEW MEXICO ACCOUNTING SPECIALISTS, INC., JILL PLAMAN, as personal representative of the estate of Carla Kosinski, STEVEN S. ETKIND and SHERRY ETKIND, husband and wife; STEVEN S. ETKIND, as trustee of STEVEN AND SHERRY ETKIND REVOCABLE LIVING TRUST; and TALIA ETKIND, Defendants. On October 16, 2013, the Court entered a Scheduling Order, which set various discovery deadlines, including, inter alia, a June 12, 2014 termination date for discovery, a June 2, 2014 deadline for discovery motions, and a July 14, 2014 deadline for pretrial motions. The plaintiff and the defendants, excluding Sharareh Shahin and New Mexico Accounting Specialists, Inc., in Case No. 12-CV-00391, who are in default, agree that more time is necessary to conduct discovery. The new deadlines are: A. The termination date for discovery set is extended through and until July 31, 2014. B. The deadline for motions relating to discovery is extended through and until August 14, 2014. C. The deadline for pretrial motions is extended through and until August 21, 2014. D. The deadline for Plaintiff to provide a draft pretrial order to the Defendants is extended through and until October 6, 2014. E. The deadline for the Defendants to provide the completed pretrial order to the Court is extended through and until October 20, 2014. In addition, the defendants, except Sharareh Shahin and New Mexico Accounting Specialists, Inc., in Case No. 12-CV-00391, who are in default, may have through and until July 22, 2014, to respond to the Plaintiff's Motion for Partial Summary Judgment Against All Defendants on All But One Element of Trustee's Prima Facie Case on Actual and Constructive Fraudulent Transfers. A copy of the Court's June 9, 2014 Order approving the Stipulation is available at http://is.gd/IR6xLPfrom Leagle.com. About The Vaughan Company Realtors The Vaughan Company Realtors filed for Chapter 11 protection on Feb. 22, 2010 (Bankr. N.M. Case No. 10-10759). George D. Giddens, Jr., Esq., represents the Debtor in its restructuring efforts. The Company estimated both assets and debts of between $1 million and $10 million. Judith A. Wagner was appointed as Chapter 11 Trustee. Mr. Vaughan filed a separate Chapter 11 petition (Bankr. D. N.M. Case No. 10-10763) on Feb. 22, 2010. The case was converted to a chapter 7 proceeding on May 20, 2010. Yvette Gonzales is the duly appointed trustee of the Chapter 7 estate. VERINT SYSTEMS: Moody's Places 'B1' CFR on Review for Upgrade ------------------------------------------------------------- Moody's Investors Service placed Verint Systems Inc.'s ratings under review for upgrade, including the B1 corporate family rating. The review was prompted by the announcement that Verint plans to raise approximately $300 million of convertible notes and $260 million of equity and use the proceeds to refinance a portion of the senior secured facility. Ratings Rationale The review will include an assessment of Verint's new capital structure, its business prospects, liquidity and financial policies. The ratings on the existing debt instruments will also be assessed based on their position within the revised capital structure. Pending the closing of the refinancing transaction Moody's estimates that adjusted leverage will be reduced from approximately 5x to under 4x, pro forma for recent acquisitions. Liquidity is expected to be improved as a result of the transaction. On Review for Upgrade: Issuer: Verint Systems Inc. Corporate Family Rating, Placed on Review for Upgrade, currently B1 Probability of Default Rating, Placed on Review for Upgrade, currently B1-PD Speculative Grade Liquidity Rating, Placed on Review for Upgrade, currently SGL-2 Senior Secured Bank Credit Facilities, Placed on Review for Upgrade, currently B1 Outlook, Changed To Rating Under Review From Stable The principal methodology used in this rating was the Global Software Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Verint Systems Inc., headquartered in Melville, NY, is a leading provider of analytic software and related products for the workforce optimization and communications and security intelligence markets. Verint had revenues of $907 million for the twelve months ended January 31, 2014. VERINT SYSTEMS: S&P Puts 'BB-' CCR on CreditWatch Positive ---------------------------------------------------------- Standard & Poor's Ratings Services said it placed its 'BB-' corporate credit rating on Melville, N.Y.-based Verint Systems Inc. on CreditWatch with positive implications. S&P also placed the issue ratings on its debt on CreditWatch positive. "We expect to raise the ratings following the close of the transaction and are likely to revise the company's financial risk profile to 'intermediate' from 'significant' reflecting reduced leverage," said Standard and Poor's. "Our assessment of Verint's "fair" business risk profile reflects the company's improved business mix and broader product mix, aided by the early 2014 KANA Software and UTX acquisitions, as well as a predictable and growing revenue base stemming from high renewal rates. We adjust our 'bb+' anchor rating down by one notch reflecting the company's narrow business line in a highly competitive sector and the integration risks following its two recent acquisitions," S&P said. S&P will monitor the progress of the proposed transactions, including the equity sale. If they are successful as outlined, it expects to raise the rating reflecting the lower leverage and its expectation that the company will continue to reduce debt modestly with no further significant acquisitions and with integration of the recent ones. * BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and Consumer Credit in America ---------------------------------------------------------------- Authors: Teresa A. Sullivan, Elizabeth Warren, & Jay Westbrook Publisher: Beard Books Softcover: 370 Pages List Price: $34.95 Review by: Susan Pannell Order your personal copy today at http://www.beardbooks.com/beardbooks/as_we_forgive_our_debtors.html So you think you know the profile of the average consumer debtor: either deadbeat slouched on a sagging sofa with a three- day growth on his chin or a crafty lower-middle class type opting for bankruptcy to avoid both poverty and responsible debt repayment. Except that it might be a single or divorced female who's the one most likely to file for personal bankruptcy protection, and her petition might be the last stage of a continuum of crises that began with her job loss or divorce. Moreover, the dilemma might be attributable in part to consumer credit industry that has increased its profitability by relaxing its standards and extending credit to almost anyone who can scribble his or her name on an application. Such are among the unexpected findings in this painstaking study of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas during the seven-year period from 1981 to 1987. Rather than relying on case counts or gross data collected for a court's administrative records, as has been done elsewhere, the authors use data contained in the actual petitions. In so doing, they offer a unique window into debtors' lives. The authors conclude that people who file for bankruptcy are, as a rule, neither impoverished families nor wily manipulators of the system. Instead, debtors are a cross-section of America. If one demographic segment can be isolated as particularly debt- prone, it would be women householders, whom the authors found often live on the edge of financial disaster. Very few debtors (3.7 percent in the study) were repeat filers who might be viewed as abusing the system, and most (70 percent in the study) of Chapter 13 cases fail and become Chapter 7s. Accordingly, the authors conclude that the economic model of behavior--which assumes a petitioner is a "calculating maximizer" in his in his decision to seek bankruptcy protection and his selection of chapter to file under, a profile routinely used to justify changes in the law--is at variance with the actual debtor profile derived from this study. A few stereotypes about debtors are, however, borne out. It is less than surprising to learn, for example, that most debtors are simply not as well-off as the average American or that while bankrupt's mortgage debts are about average, their consumer debts are off the charts. Petitioners seem particularly susceptible to the siren song of credit card companies. In the study sample, creditors were found to have made between 27 percent and 36 percent of their loans to debtors with incomes below $12,500 (although the loans might have been made before the debtors' income dropped so low). Of course, the vigor with which consumer credit lenders pursue their goal of maximizing profits has a corresponding impact on the number of bankruptcy filings. The book won the ABA's 1990 Silver Gavel Award. A special 1999 update by the authors is included exclusively in the Beard Book reprint edition. ********* 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 ***