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/raid1/www/Hosts/bankrupt/TCR_Public/140617.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, June 17, 2014, Vol. 18, No. 167 Headlines AIMCO: Fitch Affirms 'BB+' Issuer Default Rating; Outlook Positive AMERICAN AIRLINES: Reaches Tentative Labor Deals with Machinists ARAMID ENTERTAINMENT: Sent to Chapter 11 Due to Lawsuits ARAMID ENTERTAINMENT: Proposes Reed Smith as Counsel ARAMID ENTERTAINMENT: Taps Kinetic Partners as Crisis Managers ARCHDIOCESE OF MILWAUKEE: Fate of Insurance Remains Unknown ARMOR HOLDING II: S&P Retains 'B-' CCR on New $40MM Add-On Debt AUXILIUM PHARMACEUTICALS: Moody's Keeps Ratings Over Vogelxo OK BAY VIEW ELDERLY: Voluntary Chapter 11 Case Summary BAYTEX ENERGY: Moody's Hikes Rating on $300MM Senior Notes to Ba3 BERNARD L. MADOFF: SIPC Pushes For Clawback Claims Ruling Review BERNARD L. MADOFF: High Court Frees JPMorgan From Trustee's Bid BERNARD L. MADOFF: Banks Back Bid Against Cert in Trustee Suit BIRCH COMMUNICATIONS: Moody's Assigns 'B3' Corp. Family Rating BROOKLYN CENTER: Moody's Affirms Ba3 Gen. Obligation Debt Rating BROOKSTONE HOLDINGS: Sale Expected to Close in July BUDD CO: Says It Needs No Official Asbestos Claimant Committee CBRE SERVICES: Moody's Affirm 'B1' Senior Secured Rating CHASSIX INC: New $25MM Add-on No Impact on Moody's Caa1 Rating COLDWATER CREEK: May Reject Groupon Merchant Agreement COLDWATER CREEK: Files Schedules; Oct. 8 Gov't Claims Bar Date Set COLDWATER CREEK: Wood County Balks at Employment of GA Keen COLDWATER CREEK: Lease Assignment Procedures Approved COLDWATER CREEK: Committee Loses Bid to Block Disclosure Hearing COMPASS MINERALS: Moody's Rates $200MM Sr. Unsecured Notes 'Ba2' CONSOLIDATED ALUMINUM: Confirms Asbestos Plan CONSTAR INT'L: UTB Takes Over Netherlands PET Plant Operations DAIS ANALYTIC: Posts $404K Net Loss for Q1 Ended March 31 DETROIT, MI: Automakers Commit $26MM to Aid City's Retirees EDGENET INC: Gets Nod for $8MM Sale to Former Execs EFACTOR GROUP: Incurs $3.91-Mil. Net Loss in March 31 Quarter EAU TECHNOLOGIES: Has $186K Net Loss for Q1 Ended March 31 ENERGY FUTURE: Hires Alvarez & Marsal as Restructuring Advisor ENERGY FUTURE: Wants to Hire Kirkland & Ellis as Attorneys ENERGY FUTURE: Taps Richards Layton as Co-counsel ENERGY FUTURE: Hires Deloitte & Touche as Independent Auditor ENERGY FUTURE: Sets Record for 'Ordinary Course' Payments ENERGY FUTURE: Bondholders Urge Judge To Stall Key Deal ENERGY FUTURE: Seeks OK On $11-Mil. Texas Tax-Refund Deal ENVISION HEALTHCARE: Moody's Rates $650MM Sr. Unsecured Notes B3 EPMI INC: Case Summary & 15 Largest Unsecured Creditors EVENT RENTALS: Closes Secaucus Site & Cuts Nearly 100 Jobs EVERGREEN TANK: Moody's Lowers Corp. Family Rating to 'B3' FAIRMONT GENERAL: Cancels Auction; Proceeds With Alecto Deal FIRST-CITIZENS BANK: Moody's Affirms C Bank Fin. Strength Rating FJM BREAKAWAY: Case Summary & 16 Largest Unsecured Creditors FOLSOM LEARNING: Case Summary & 7 Largest Unsecured Creditors GENERAL MOTORS: Recalls More Cars Over Ignition Switch Issues GENERAL MOTORS: Recall Cases Consolidated in New York GLENVILLE STATE: Moody's Lowers Revenue Bonds Rating to 'Ba2' GEOPETRO RESOURCES: Incurs $543K Net Loss for First Quarter GROWLIFE INC: Posts $37.77-Mil. Net Loss for March 31 Quarter GSE ENVIRONMENTAL: Alvarez & Marsal's Swick Okayed as VP Finance GSE ENVIRONMENTAL: Court Approves Prime Clerk as Admin Advisor GSE ENVIRONMENTAL: Court Okays Moelis as Investment Banker GSE ENVIRONMENTAL: Pachulski Stang Approved as Co-counsel GSE ENVIRONMENTAL: Taps Kirkland & Ellis as Attorneys HILLMAN GROUP: Moody's Hikes Rating on Notes Due 2022 to 'Caa1' HUSKY INT'L: Moody's Rates $300MM 2nd Lien Debt 'Caa1' ICEWEB INC: Posts $271K Net Loss for First Quarter INT'L MANUFACTURING: Deepal Agrees to Appointment of Trustee INTERREX INC: Case Summary & 9 Largest Unsecured Creditors IPAYMENT INC: S&P Lowers CCR to 'CCC' on Constrained Liquidity ISR GROUP: Drone Service Provider Settles to Permit Sale JAMAT LLC: Case Summary & 20 Largest Unsecured Creditors KEMPER CORP: Fitch Affirms BB Rating on $150MM Subordinated Notes LABORATORY PARTNERS: Gets Nod For $5.5-Mil. Unit Sale LATEX FOAM: Has Until June 30 to Use Cash Collateral LATEX FOAM: Seeks to Hire Wiggin and Dana as Special Corp. Counsel LATEX FOAM: Amends List of Largest Unsecured Creditors LONGVIEW POWER: Gets Stay On $825M Insurance Policy Suit In Calif. MAXCOM TELECOMUNICACIONES: Posts MXN1.25-Bil. Loss in 2013 MEGA RV CORP: Case Summary & 20 Largest Unsecured Creditors METABOLIX INC: Has $8.15-Mil. Net Loss in March 31 Quarter MF GLOBAL: Corzine Must Defend His Claims MONTICELLO REALTY: Case Summary & 3 Largest Unsecured Creditors MOMENTIVE PERFORMANCE: Creditors' Committee Can Retain Jefferies MOTIVATING THE MASSES: Reports $19K Net Income in March 31 Quarter MT. GOX: Nears Chapter 15 Protection in U.S. NEW CENTURY: Bid to Dismiss Denied, Ch. 11 Trustee to be Appointed OIL STATES: S&P Lowers CCR to 'BB' on Spin-Off & Withdraws Rating OP FINANCIAL: Voluntary Chapter 11 Case Summary ORMET CORP: Seeks Auction For Ohio Plant With $15M Bid OVERSEAS SHIPHOLDING: Moody's Assigns B2 Corporate Family Rating OVERSEAS SHIPHOLDING: To Sell Maremar Ship for $9-Mil. POLY SHIELD: Has $10.6-Mil. Net Loss for First Quarter POLYCONCEPT FINANCE: Moody's Affirms 'B2' Corp. Family Rating PREMIER TRAILER: S&P Assigns 'B-' CCR; Outlook Stable PROSPECT HOLDING: S&P Lowers ICR to 'B'; Outlook Stable PSL-NORTH AMERICA: File for Bankruptcy With Plan to Sell Assets PSL - NORTH AMERICA: Case Summary & 20 Top Unsecured Creditors QUANTASON LLC: Ultrasound Developer Converting After Sale Fails REFCO INC: Judge Upholds Key Claims in Suit v. Cantor Fitzgerald RESIDENTIAL CAPITAL: Claimants Must Plead Claim With Specifics REVSTONE INDUSTRIES: Judge OKs $13M Sale, But GM Still Objects RESIDENTIAL CAPITAL: Objects To $1M In 'Unnecessary' Fees ROVI SOLUTIONS: Moody's Assigns 'Ba3' Rating on 1st Lien Debt ROYCE HOMES: Defunct Builder's CEO Slammed With $27M Fraud Verdict SIMA TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors SITV LLC: Moody's Assigns 'B3' CFR & Rates $230 Senior Bonds 'B3' SITV MEDIA: S&P Assigns 'B-' CCR on FUSE Network Acquisition SPECIALTY HOSPITAL: S. Koenig Appointed as Patient Care Ombudsman SPECIALTY HOSPITAL: Has $23.2MM in Assets, $90.5MM in Debts SPHERIX INC: Reports $7.96-Mil. Net Loss in First Quarter STEARNS HOLDINGS: S&P Affirms 'B+' ICR & Revises Outlook to Neg. TELIK INC: Reports $1.07-Mil. Net Loss in Q1 Ended March 31 TRIZETTO CORP: Moody's Hikes Corporate Family Rating to 'B2' TUSCANY INTERNATIONAL: Administrative Claims Due July 9 US COAL CORPORATION: Kolmar Americas Files Involuntary Petition USEC INC: Exclusivity Extension Sought VIRGINIA H. OLIVER: Case Summary & 2 Largest Unsecured Creditors W G O V INC: Case Summary & 6 Largest Unsecured Creditors WAVEDIVISION HOLDINGS: S&P Affirms 'B+' CCR; Outlook Stable ZBB ENERGY: Reports $46K Net Loss in Q1 Ended March 31 * High Court Sides With Holdout Creditors in Argentina Debt Case * 3rd Circ. Clarifies Lien Enforcement on Bankrupt Homeowners * UK Finalizes Post-Lehman, MF Global Client Asset Rule Fixes * Bank of America Mortgage Settlement Is Said to Be Deadlocked * Wells Fargo Loses Appeal to Throw Out Suit Over Reckless Lending * Obama Expands Student Loan Repayment Cap and Pushes Bill * Large Companies With Insolvent Balance Sheet ********* AIMCO: Fitch Affirms 'BB+' Issuer Default Rating; Outlook Positive ------------------------------------------------------------------ Fitch Ratings affirms the following credit ratings for Apartment Investment and Management Company (NYSE: AIV), AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc. (collectively AIMCO): Apartment Investment and Management Company -- Issuer Default Rating (IDR) at 'BB+'; -- Secured revolving credit facility at 'BB+'; -- Preferred stock 'BB-'. AIMCO Properties, L.P. -- IDR at 'BB+'; -- Secured revolving credit facility at 'BB+'. AIMCO/Bethesda Holdings, Inc. -- IDR at 'BB+'; -- Secured revolving credit facility at 'BB+'. Fitch maintained the Positive Rating Outlook. KEY RATING DRIVERS The 'BB+' IDR reflects AIMCO's large, well-diversified portfolio, reduced leverage, simplified portfolio strategy, and ample financial flexibility highlighted by strong liquidity and conservative dividend payout ratio. These strengths are balanced by a small unencumbered asset pool, somewhat weak fixed-charge coverage relative to Fitch-rated investment grade peers, and execution risk associated with completing the redevelopment pipeline. The Positive Rating Outlook anticipates further progress over the next 12 months toward building an unencumbered pool to a size and quality that is consistent with that of an investment grade rating. The Rating Outlook also reflects Fitch's view that the company's leverage and fixed charge coverage will continue to improve over the next 12 months to levels consistent with those of an investment grade issuer. LARGE, WELL-DIVERSIFIED PORTFOLIO AIMCO maintains an $8.2 billion real estate portfolio that averages 'B' to 'B+' asset quality and is geographically diversified across coastal and job growth markets (i.e. Chicago), with each market comprising less than 15% of NOI. The underlying granularity and diversity across the portfolio insulates AIMCO's cash flow from regional economic weakness or new supply entering individual markets, a credit positive. NON-RECOURSE, PROPERTY-LEVEL BORROWER AIMCO's debt financing strategy centers on secured, non-recourse, property-level borrowings with limited corporate debt. This strategy somewhat inhibits financial flexibility given the majority of the portfolio is encumbered and is unlikely to provide contingent liquidity in a weak capital markets environment. However, AIMCO's recourse debt is limited to its secured line of credit and the company does not intend to issue corporate debt in the foreseeable future. Further, the company's secured debt contains contractual amortization payments that drive moderate loan to values on property debt, implying some equity cushion across the portfolio. GROWING UNENCUMBERED ASSET POOL AIMCO has recently shifted its strategy to maintain and grow a modest pool of unencumbered assets via the repayment of maturing mortgage debt. The pro forma unencumbered pool is comprised of 10 properties with $572 million of gross asset value. The pool would need to grow to at least $600 million (based on a stressed 8% capitalization rate) and have comparable asset quality to AIMCO's encumbered pool for Fitch to consider an investment grade rating. Fitch's stressed valuation on the pool is currently $361 million, an improvement from $220 million year-over-year. IMPROVING LEVERAGE AND FIXED CHARGE COVERAGE Fitch's projected credit metrics are indicative of a 'BBB-' rating for a large, well-diversified apartment REIT. AIMCO's leverage is 7.3x as of March 31, 2014 pro forma for its $125 million 6.875% preferred stock offering in May 2014, the proceeds of which were used to repay secured debt. Fitch expects leverage to trend lower toward 7.0x over the next 12 - 24 months. Fitch defines leverage as net debt divided by recurring operating EBITDA. Fixed charge coverage for the trailing 12 months (TTM) ended March 31, 2014 was 1.9x and Fitch expects the metric will exceed 2.0x over the next 12-24 months, driven by low-mid single digit same- store NOI (SSNOI) growth and incremental cash flow from redevelopment completions. TTM coverage was somewhat skewed lower by $16.6 million of capital replacements tied to multi-phase projects. Fitch defines fixed charge coverage as recurring operating EBITDA less recurring capital expenditures, divided by total interest incurred and preferred dividends. REDEVELOPMENT-DRIVEN GROWTH STRATEGY Fitch views favorably AIMCO's growth strategy, which emphasizes redeveloping existing assets rather than greenfield development projects. The investment strategy also aims to improve overall asset quality in a leverage-neutral manner while generating attractive risk-adjusted internal rates of return. AIMCO has encountered sizable cost overruns of more than $90 million at its Lincoln Place, Preserve at Marin, and Pacific Bay Vistas projects (18% of initial project costs); however, these missteps are not expected to have a material adverse impact on corporate credit metrics and Fitch believes redevelopment continues to provide the highest risk-adjusted returns over the longer term. CONSERVATIVE DIVIDEND PAYOUT AIMCO reduced its normalized dividend more than 80% in 2009 to align distributions with the weak operating environment. Management has since grown the dividend gradually since 2011 including an 8% increase in January 2014 to $0.26/share. Longer term, Fitch expects that the company will maintain a conservative adjusted funds from operations (AFFO) payout ratio in the 60% range, a credit positive given approximately $100 million of retained cash flow can be used to repay annual secured debt amortization requirements of approximately $80 million. RATING SENSITIVITIES The following factors may have a positive impact on AIMCO's ratings: -- Growing the unencumbered pool to $600 million (based on a stressed 8% capitalization rate) with asset quality consistent with the overall portfolio; -- Fitch's expectation of leverage sustaining below 7.5x (pro forma leverage is 7.3x); -- Fixed charge coverage sustaining above 2.0x (coverage for the TTM ended March 31, 2014 was 1.9x). The following factors may have a negative impact on the company's ratings and/or Outlook: -- Fitch's expectation of leverage sustaining above 8.5x; -- Fitch's expectation of fixed charge coverage sustaining below 1.5x; -- Encumbrance of the current unencumbered asset pool. AMERICAN AIRLINES: Reaches Tentative Labor Deals with Machinists ---------------------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reported that American Airlines Group Inc. said it reached tentative labor agreements with three bargaining groups of US Airways employees represented by the International Association of Machinists union. A majority of the 11,000 ramp workers, mechanics and maintenance instructors must ratify the three-year pacts in the coming weeks. According to the report, American, which merged with US Airways in December, is beginning work on reaching joint-labor agreements with its American and US Airways workers. This will allow the employees to agree on combined seniority lists, which is important to airline employees because it dictates their schedules, vacation times and, in the case of pilots, type of airplane, which affects pay, the Journal said. About American Airlines AMR Corp. and its subsidiaries including American Airlines filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost- cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so- called U.S. legacy airlines to seek court protection from creditors. It was the third largest airline in the United States at the time of the bankruptcy filing. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. In November 2013, AMR and the U.S. Justice Department a settlement of the anti-trust suit. The settlements require the airlines to shed 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. AMR stepped out of Chapter 11 protection after its $17 billion merger with US Airways was formally completed on Dec. 9, 2013. ARAMID ENTERTAINMENT: Sent to Chapter 11 Due to Lawsuits -------------------------------------------------------- Aramid Entertainment Fund Limited, which made loans to, and investments in, participants in the global media and entertainment industry, was sent to Chapter 11 bankruptcy by its liquidators appointed in the Cayman Islands. Jess Shakespeare and Geoffrey Varga were appointed joint voluntary liquidators of Aramid funds on May 7, 2014, following the decisions of the board of directors to wind down those funds. According to Mr. Varga, over the last several years, AEF has been embroiled in substantial and time-consuming litigation relating to some of its investments. The prosecution and defense of these actions has consumed a substantial portion of AEF's liquidity and exposes it to potential liability in several ways. Mr. Varga believes that the protections afforded by the U.S. Bankruptcy Code will afford the JVLs an opportunity to evaluate the merits of each case and formulate a plan with regard to each of these litigations. Non-debtor Aramid Capital Partners LLP, a UK partnership, was the technical service provider of the Debtor. Molner, the founder of Sreen Capital International ("SCI"), was the lead individual involved in ACP's relationship with AEF. ACP's engagement by AEF was mutually terminated prior to the Petition Date. Prior to the Petition Date, Asset Resolution Partners, Ltd. ("ARP"), a Cayman Islands exempted company, was retained by AEF to help monetize assets and pursue or defend certain legal proceedings. ARP reports to the JVLs in all material respects. Bergstein Dispute One of the primary reasons for the Debtors' current liquidity concerns is the inability to collect on loans made by AEF to certain entities controlled by David Bergstein and Ronald Tutor, and the numerous ancillary litigations arising from or relating to these loans. This litigation -- as well as other litigation involving AEF -- gives rise not only to potential direct liability to AEF, but to contractual indemnity rights of David Molner and others, which rights may be enforceable in certain circumstances such that they could require AEF to indemnify David Molner and others. In addition, investors in AEF have repeatedly raised concerns with ACP, the directors of AEF and the Cayman Islands Monetary Authority with respect to the prior actions of ACP, including in connection with its managements of certain of the affairs of AEF including, without limitation, the multitude of litigation that ACP has either recommended be brought on behalf of the Debtors or which has resulted in AEF being named as a defendant which has resulted in substantial litigation expense. Further, AEF has been asked to provide extensive discovery pursuant to Bankruptcy Rule 2004 in connection with the bankruptcy case of Susan H. Tregub, P.C., former counsel to Bergstein, and also may face litigation in connection with that bankruptcy case. Prior to December 2009, AEF had an extensive lending relationship with certain Bergstein companies. Beginning in February 2007, AEF had engaged in approximately 36 transactions in which entities owned or controlled by Bergstein had borrowed a total of $62.7 million from AEF. By January 2010, AEF had recovered approximately $20 million, leaving more than $42 million outstanding, and that debt was not being serviced by the Bergstein Companies. On March 16, 2010, AEF and Cayman Film Holdings Ltd., a wholly- owned subsidiary of AEF, filed a suit in the United States District Court in Los Angeles against Bergstein and Tutor, individually, seeking to collect approximately $12 million owed on guaranties of loans made to finance motion pictures known as "Love Ranch" and "Bad Meat". Aramid Entertainment v Bergstein. Case No. 2:10-cv-01881-JFW-PLA. One day after commencing litigation against Bergstein and Tutor to enforce guaranties, on March 17, 2010, involuntary bankruptcy petitions (initially filed by a group of 13 creditors that subsequently increased to 27 creditors) were filed in the U.S. Bankruptcy Court in Los Angeles with respect to certain of the Bergstein Companies. These bankruptcy cases have been extraordinarily contentious and litigious. On Dec. 30, 2011, AEF, acting jointly with several other creditors, filed liquidation plans for each of the debtors in those cases together with the requisite disclosure statements for each of the Plans. The Bankruptcy Court has never approved the disclosure statement. Instead, at the recommendation of ACP, the technical service provider, AEF has litigated, or as applicable, funded additional proceedings, both in the Bankruptcy Court and other courts, in an effort to collect the monies owed by the Bergstein Companies. About Aramid Entertainment Aramid Entertainment Fund Limited has been engaged in the business of providing short and medium term liquidity to producers and distributors of film, television and other media and entertainment content by way of loans and equity investments. On May 7, 2014, Geoffrey Varga and Jess Shakespeare of Kinetic Partners (Cayman) Limited were appointed under Cayman law as the joint voluntary liquidators of AEF and two affiliates. On June 13, 2014, the JVLs authorized AEF and two affiliates to file for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-11802) in Manhattan on June 13, 2014. The Debtors have tapped Reed Smith, LLP, in New York, as counsel; and Kinetic Partners (Cayman) Limited as crisis managers. AEF estimated at least $100 million to $500 million in assets and less than $50 million in debt. The Debtors have filed a motion asking the Bankruptcy Court to extend the time for the Debtors to file their schedules of assets and liabilities and statements of financial affairs. ARAMID ENTERTAINMENT: Proposes Reed Smith as Counsel ---------------------------------------------------- Aramid Entertainment Fund Limited and its affiliated debtors ask the bankruptcy court for approval to hire Reed Smith LLP as bankruptcy counsel, nunc pro tunc to the Petition Date. Reed Smith is an international law firm with approximately 1,900 attorneys in 25 offices in major cities throughout the United States, Europe, the Middle East and Asia, including an office in New York City. By virtue of its prepetition retention, Reed Smith is well- acquainted with the Debtors' business history, capital structure and operations. From September 2010 through May 2014, Reed Smith was engaged, for the benefit of AEF to provide certain limited specified services to a committee of independent, non-management- affiliated directors of AEF. From the period commencing on May 7, 2014 through the Petition Date, Reed Smith provided advice and services in connection with the joint voluntary liquidators' management and efforts with respect to AEF and an affiliate. The Debtors seek to employ Reed Smith on an hourly basis to act as general bankruptcy and restructuring counsel in the Chapter 11 cases and, subject to the use of special counsel where necessary or appropriate, in any and all matters that arise with respect thereto or to the Debtors. Reed Smith will bill at its agreed-upon hourly rates, plus out-of- pocket expenses, advances, and expenses, all subject to the approval of the Court. The hourly rates that Reed Smith will charge for the time worked by the paralegals and attorneys that will be primarily responsible for Reed Smith's representation of the Debtors in these cases, effective on and after Jan. 1, 2014, will be as follows: Hourly Rate ----------- Partners: James L. Sanders $890 Paul M. Singer $805 James C. McCarroll $770 Michael J. Venditto $765 Jordan W. Siev $750 Richard A. Robinson $715 Francisca Mok $680 James Hnilo $650 Casey D. Laffey $605 Associates: Sarah K. Kam $605 Chrystal A. Puleo $595 Paralegals: Christopher M. LauKamg $225 The Debtors' counsel can be reached at: REED SMITH LLP James C. McCarroll, Esq. Michael J. Venditto, Esq. Jordan W. Siev, Esq. Richard A. Robinson, Esq. 599 Lexington Avenue New York, NY 10022-7650 Telephone: (212) 521-5400 Facsimile: (212) 521-5450 E-mail: jmccarroll@reedsmith.com mvenditto@reedsmith.com jsiev@reedsmith.com rrobinson@reedsmith.com About Aramid Entertainment Aramid Entertainment Fund Limited has been engaged in the business of providing short and medium term liquidity to producers and distributors of film, television and other media and entertainment content by way of loans and equity investments. On May 7, 2014, Geoffrey Varga and Jess Shakespeare of Kinetic Partners (Cayman) Limited were appointed under Cayman law as the joint voluntary liquidators of AEF and two affiliates. On June 13, 2014, the JVLs authorized AEF and two affiliates to file for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-11802) in Manhattan on June 13, 2014. The Debtors have tapped Reed Smith, LLP, in New York, as counsel; and Kinetic Partners (Cayman) Limited as crisis managers. AEF estimated at least $100 million to $500 million in assets and less than $50 million in debt. The Debtors have filed a motion asking the Bankruptcy Court to extend the time for the Debtors to file their schedules of assets and liabilities and statements of financial affairs. ARAMID ENTERTAINMENT: Taps Kinetic Partners as Crisis Managers -------------------------------------------------------------- Aramid Entertainment Fund Limited and its affiliated debtors ask the bankruptcy court for approval to hire Kinetic Partners (Cayman) Limited as crisis managers, nunc pro tunc to the Petition Date. Kinetic Partners LLP, of which Kinetic is the firm's wholly owned Cayman operating entity is a leading provider of tailored consulting, advisory and assurance services to clients within the financial services industry. Kinetic Partners currently has over 160 professionals across its eight global offices. The joint voluntary liquidators of the Debtors are partners at Kinetic Partners. Geoffrey Varga is the global head of Kinetic Partners' Corporate Recovery and Restructuring group. Jess Shakespeare is a partner in Kinetic Partners' Corporate Recovery group. As provided for in an Engagement Letter, Messrs. Varga and s Shakespeare will continue to provide services as joint voluntary liquidators of AEF and ALTL, and with the help of certain professionals at Kinetic Partners, will perform a broad range of services, including but not limited to: -- locating and taking possession of all remaining assets of the Debtors, and performing accounting of the assets and liabilities of the Debtors if required; -- diligently and efficiently pursuing recovery and realization of the assets of the Debtors; -- carrying out operations of the Debtors insofar as it may be necessary for the beneficial liquidation thereof, and subject to available cash in the Debtors, paying the outstanding debts, obligations and liabilities of the Debtors; -- distributing any proceeds received and remaining assets of the Debtors to each of the Debtors' respective creditors and investors (in the priorities as prescribed under the applicable laws); -- providing advice when required and to manage the various litigation relating to the Debtors' investments. The hourly rates that will be charged for the time for Geoffrey Varga and Jess Shakespeare in connection with this engagement are $750 and $650, respectively. The Debtor will reimburse Kinetic, upon receipt of periodic billings, for all reasonable and necessary out-of-pocket expenses incurred in connection with the Chapter 11 cases including travel, accommodation and incidentals. Because Kinetic is not being employed as a professional under Section 327 of the Bankruptcy Code, it will not submit quarterly fee applications pursuant to 11 U.S.C. Sections 330 and 331. Kinetic will, however, file with the Court, and provide notice to the United States Trustee and all official committees, reports of compensation earned and expenses incurred on at least a quarterly basis. The Debtors do not believe that Kinetic is a "professional" whose retention is subject to approval under Section 327. Nonetheless, to the best of Debtors' knowledge, and except as otherwise disclosed, Kinetic (a) is a "disinterested person" within the meaning of Section 101(14), (b) does not hold or represent an interest adverse to the Debtors' estates, and (c) has no connection to the Debtors, their creditors, or their related parties. The firm can be reached at: Geoffrey Varga Jess Shakespeare KINETIC PARTNERS (CAYMAN) LIMITED 1st Floor, The Harbour Centre 42 North Church Street PO Box 10387, Grand Cayman Cayman Islands Tel: +1 646 867 7833 New York +1 345 623 9900 Cayman Fax: +1 345 943 9900 E-mail: geoff.varga@kinetic-partners.com jess.shakespeare@kinetic-partners.com About Aramid Entertainment Aramid Entertainment Fund Limited has been engaged in the business of providing short and medium term liquidity to producers and distributors of film, television and other media and entertainment content by way of loans and equity investments. On May 7, 2014, Geoffrey Varga and Jess Shakespeare of Kinetic Partners (Cayman) Limited were appointed under Cayman law as the joint voluntary liquidators of AEF and two affiliates. On June 13, 2014, the JVLs authorized AEF and two affiliates to file for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-11802) in Manhattan on June 13, 2014. The Debtors have tapped Reed Smith, LLP, in New York, as counsel; and Kinetic Partners (Cayman) Limited as crisis managers. AEF estimated at least $100 million to $500 million in assets and less than $50 million in debt. The Debtors have filed a motion asking the Bankruptcy Court to extend the time for the Debtors to file their schedules of assets and liabilities and statements of financial affairs. ARCHDIOCESE OF MILWAUKEE: Fate of Insurance Remains Unknown ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that sexual abuse victims won't know until after the Archdiocese of Milwaukee emerges from Chapter 11 whether they can look to an insurance policy with OneBeacon Insurance Co. to pay part of their claims. According to the report, U.S. Bankruptcy Judge Susan V. Kelley in Milwaukee denied OneBeacon's request to continue an insurance coverage appeal in state supreme court. The insurance company won a lawsuit in state court before bankruptcy where the judge ruled that sexual abuse claims weren't a type of "accident" covered by the policy. To complete an appeal, OneBeacon must wait until the archdiocese's Chapter 11 plan is approved, at which time the so- called automatic stay will terminate and the appeal can proceed, Judge Kelley said, the report related. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. * * * Judge Susan Kelly has set the confirmation hearing for mid-October 2014. Specifically, the dates for the confirmation hearing are Oct. 14, 15, 16, and 17, to begin at 10:00 a.m. each day. ARMOR HOLDING II: S&P Retains 'B-' CCR on New $40MM Add-On Debt --------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B-' corporate credit rating on Armor Holding II LLC, the holding company for American Stock Transfer (AST), and its 'B' issue-level and '2' recovery ratings on Armor's first-lien credit facilities, are unchanged on the proposed issuance of a $40 million add-on to the company's first-lien term loan to fund its acquisition of D.F. King. The acquisition will expand AST's proxy solicitation business, and add bankruptcy services. The acquisition is roughly neutral to credit metrics initially, including the company's leverage of over 12x treating its preferred stock as debt due to the liquidation preference on change of control. S&P believes that cost-saving opportunities at D.F. King are likely to result in lower leverage over the next 12 months. The ratings reflect Armor's "highly leveraged" financial risk profile and "weak" business risk profile, incorporating its narrow market focus and float income, which is volatile (though currently at cyclically low levels). The stable outlook reflects S&P's view that the company's good position in the transfer agent market, recurring fee revenues, and improving product diversity are likely to support stable operating earnings and positive free operating cash flow. RATINGS LIST Armor Holding II LLC Corporate credit rating B-/Stable Senior secured first lien B Recovery rating 2 Senior secured second lien CCC Recovery rating 6 AUXILIUM PHARMACEUTICALS: Moody's Keeps Ratings Over Vogelxo OK --------------------------------------------------------------- Moody's Investors Service commented that the FDA's recent approval of a new testosterone gel product is credit negative for Auxilium Pharmaceuticals, Inc., the manufacturer of Testim testosterone gel. The newly approved product is Vogelxo, a 1% testosterone gel manufactured by Upsher-Smith Laboratories, Inc. There is currently no effect on Auxilium's ratings including the B3 Corporate Family Rating or the Ba3 senior secured bank credit facility rating. The rating outlook is negative. Headquartered in Chesterbook, Pennsylvania, Auxilium Pharmaceuticals, Inc. ("Auxilium") is a niche pharmaceutical company with a focus on urological diseases and other specialty areas. Auxilium reported $400 million of revenue in 2013 including revenue from Actient Holdings LLC, acquired on April 26, 2013. The principal methodology used in this rating was the Global Pharmaceutical Industry published in December 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. BAY VIEW ELDERLY: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Bay View Elderly Housing LLP 238 Northway Park Road Machesney Park, IL 61115 Case No.: 14-81875 Chapter 11 Petition Date: June 13, 2014 Court: United States Bankruptcy Court Northern District of Illinois (Rockford) Judge: Hon. Thomas M. Lynch Debtor's Counsel: George P Hampilos, Esq. HAMPILOS & LANGLEY, LTD. 308 West State Street, Suite 210 Rockford, IL 61101 Tel: 815 962-0044 Fax: 815 962-6250 Email: georgehamp@aol.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Joseph R. Gallina, president/Land Development Inc. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. BAYTEX ENERGY: Moody's Hikes Rating on $300MM Senior Notes to Ba3 ----------------------------------------------------------------- Moody's Investor's Services upgraded Baytex Energy Corp.'s US$150 million senior unsecured notes due 2021 and C$300 million senior unsecured notes due 2022 to Ba3 from B1 and Baytex's shelf rating to (P)Ba3 from (P)B1. Baytex's other ratings are unchanged and the outlook remains positive. The senior unsecured notes were upgraded because Baytex's entire capital structure has now become unsecured following the closing of the Aurora Oil & Gas Limited (Aurora) acquisition. Issuer: Baytex Energy Corp. Multiple Seniority Shelf, Upgraded to (P)Ba3 from (P)B1 Senior Unsecured Regular Bond/Debenture Jul 19, 2022, Upgraded to Ba3 from B1 Senior Unsecured Regular Bond/Debenture Feb 17, 2021, Upgraded to Ba3 from B1 Senior Unsecured Regular Bond/Debenture Jul 19, 2022, Upgraded to a range of LGD4, 51 % from a range of LGD5, 77 % Senior Unsecured Regular Bond/Debenture Feb 17, 2021, Upgraded to a range of LGD4, 51 % from a range of LGD5, 77 % Ratings Rationale Baytex's Ba3 Corporate Family Rating (CFR) reflects its significant reserves and production base, oily product mix (85% liquids), geographic diversity, and solid cash margins and leveraged full cycle ratio (LFCR). The rating also considers the high dividend payment compared to cash flow which drives a weak retained cash flow to debt metric, and weak leverage in terms of E&P debt to production and E&P debt to proved developed reserves. Baytex will have adequate liquidity (SGL-3) through mid-2015. Although Baytex had no cash at closing, it does have $500 million available under $1.4 billion of increased bank revolver and term facilities, against Moody's expectation of about $100 million of negative free cash flow after capital expenditures and dividends. Baytex has no debt maturities in the next year, and Moody's expects covenant headroom to be adequate. Baytex will also gain liquidity from likely asset dispositions. The positive outlook reflects Moody's view that Baytex may exhibit the characteristics of a Ba2 rating if it sells assets to reduce debt, and can successfully integrate Aurora and demonstrate production and reserves growth. The rating could be upgraded if Baytex closes the Aurora acquisition and production exceeds 70,000 boe/d, while maintaining retained cash flow to debt above 40% and E&P debt to production below US$25,000/boe. The rating could be downgraded if E&P debt to production appeared likely to rise above US$40,000/boe or if retained cash flow to debt appeared likely to fall below 20%. 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. Baytex is a Calgary, Alberta-based exploration and production company that has proved reserves of approximately 250 million barrels of oil equivalent and net of royalties average daily production of approximately 70,000 boe/d of which 85% is oil. BERNARD L. MADOFF: SIPC Pushes For Clawback Claims Ruling Review ---------------------------------------------------------------- Law360 reported that Securities Investor Protection Corp. urged a New York federal court to allow the trustee liquidating disgraced Ponzi schemer Bernie Madoff's investment group to appeal a recent decision that could threaten the trustee's clawback suits against investors affected by the scheme. According to the report, SIPC is pushing the court to grant trustee Irving H. Picard's bid for certification of an interlocutory appeal of U.S. District Judge Jed S. Rakoff's April 27 decision, which allowed the defendants to seek dismissal of Picard's claims on the grounds he had failed to adequately allege they were motivated by a lack of good faith. Picard has maintained that Judge Rakoff's decision conflicts with rulings by the Second Circuit that place the burden of proof for such a defense on the defendants. The case is Securities Investor Protection Corporation v. Bernard L. Madoff Investment Securities LLC, case number 1:12-mc-00115, in the U.S. District Court for the Southern District of New York. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. The most recent distribution was in March 2013. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Picard is holding almost $4.4 billion he can't distribute on account of outstanding appeals and disputes. The largest holdback, almost $2.8 billion, results from disputed claims. BERNARD L. MADOFF: High Court Frees JPMorgan From Trustee's Bid --------------------------------------------------------------- Law360 reported that the U.S. Supreme Court has agreed to remove JPMorgan Chase & Co. from a list of respondents in the trustee for notorious Ponzi scheme mastermind Bernie Madoff's petition to sue various banks for their alleged roles in the $64 billion scheme, according to documents filed with the court. According to the report, the high court granted a joint request to remove JPMorgan from the list, citing the settlement of trustee Irving Picard's claims against the investment bank for $543 million, which a New York bankruptcy judge approved in February. Picard and JPMorgan each said they had agreed to pay their own costs relative to the petition, the report related. The order does not otherwise affect the status of the petition, which names various other respondents including UBS AG and HSBC Bank PLC, the report further related. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. The most recent distribution was in March 2013. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Picard is holding almost $4.4 billion he can't distribute on account of outstanding appeals and disputes. The largest holdback, almost $2.8 billion, results from disputed claims. BERNARD L. MADOFF: Banks Back Bid Against Cert in Trustee Suit -------------------------------------------------------------- Law360 reported that a group of banks has joined together to ask the U.S. Supreme Court not to hear a bid by the liquidation trustee for Bernie Madoff's investment group to sue the banks for billions of dollars for what he says is their complicity in Madoff's Ponzi scheme, according to a brief. According to the report, HSBC Bank PLC, UBS AG, UniCredit SpA and others banded together to fend off Supreme Court scrutiny of a June 2013 decision by the Second Circuit that found that the trustee, Irving H. Picard, could not sue for a wrong as the representative of a perpetrator of the wrongdoing, according to the filing. The banks argued that Picard hadn't shown why the Securities Investor Protection Corp. should be permitted to step in and pursue litigation in markets that are already regulated by the U.S. Securities and Exchange Commission and others, Law360 reported, citing the brief. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. The most recent distribution was in March 2013. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Picard is holding almost $4.4 billion he can't distribute on account of outstanding appeals and disputes. The largest holdback, almost $2.8 billion, results from disputed claims. BIRCH COMMUNICATIONS: Moody's Assigns 'B3' Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service has assigned a B3 Corporate Family Rating (CFR) and Caa1-PD Probability of Default Rating (PDR) to Birch Communications, Inc. Moody's has also assigned B3 (LGD3-35%) ratings to the company's proposed $500 million senior secured 1st lien credit facilities which consist of a $450 million term loan due 2020 and a $50 million revolver due 2019. The proceeds from the new term loan will be used to refinance existing debt at Birch and fund the acquisition of Cbeyond, Inc., a telecom provider based in Atlanta, GA. The ratings are contingent upon Moody's review of final documentation and no material change in the terms and conditions of the debt as advised to Moody's. The outlook is stable. Issuer: Birch Communications, Inc Assignments: Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned Caa1-PD US$450M Senior Secured Bank Credit Facility, Assigned B3 (LGD3-35%) US$50M Senior Secured Bank Credit Facility, Assigned B3 (LGD3-35%) Outlook Actions: Outlook, Stable Ratings Rationale Birch's B3 CFR reflects its low margin, weak organic revenue growth and the intense competitive pressures that the company faces from larger peers. Birch's acquisition of Cbeyond will require extensive integration work due to the slightly different business models and network assets of the two companies. Birch's plan to double Cbeyond's EBITDA through cost reductions could be disruptive to Cbeyond's existing customer base and require a significant cash investment before merger benefits are realized. The pro forma credit metrics of the combined business including management's estimated synergies would be strong for the B3 rating. However, Moody's views the execution risk inherent in the integration work precludes a higher rating. Despite the integration risks, the ratings are supported by Birch's moderate leverage of 3.9x (Moody's adjusted) within 18 to 24 months following the transaction (including some cost savings from deal synergies) and good free cash flow given its low capital intensity of around 5% capex/revenue. In addition, management's high ownership stake in the company and focus on cost controls and prudent capital spending are credit positives. Moody's believes that service providers that own end user connections are the industry's dominant players, and are protected by high barriers to entry from competition. These last-mile assets also have the longest economic lives in the network and are the slowest to evolve technologically. However, while the end user connections have the most value and are the most difficult to replicate, they are also the most capital intensive relative to applicable revenue generated. Given Birch's heavy reliance upon leased last-mile connections, Moody's believes it faces challenges competing effectively with cable competitors and other telecom peers which have invested heavily in their networks. Moody's expects Birch's margin to remain low given continued industry pricing pressure. Moody's expects Birch to have adequate liquidity over the next twelve months supported by approximately $11 million of cash on the balance sheet and an undrawn $50 million revolving credit facility following the close of the transaction. The senior secured credit facilities are expected to have two financial covenants: maximum total leverage and minimum interest coverage tests, and Moody's expects these to be set with ample cushion with the new credit agreement. The ratings for the debt instruments reflect both the probability of default of Birch, to which Moody's assigns a PDR of Caa1-PD, and individual loss given default assessments. The senior secured credit facilities are rated B3 (LGD-3, 35%), in line with the CFR, given that the credit facilities comprise the majority of debt in the capital structure. The stable outlook reflects Moody's view that Birch will realize acquisition synergies and reverse revenue declines such that leverage will fall below 4x (Moody's adjusted) by year end 2015. Moody's could consider a ratings upgrade if the company is able to improve its EBITDA margin towards the mid to high 20% range such that leverage falls below 3x (Moody's adjusted) and free cash flow to debt exceeds 10%. Downward rating pressure could develop if liquidity becomes strained or if leverage approaches 5x (Moody's adjusted). Moody's could also lower the ratings if the company is unable to grow revenue and improve EBITDA margin. The principal methodology used in this rating was 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 Atlanta, GA, Birch Communications, Inc. is a provider of IP- based voice and data communications, cloud and managed services to small and medium businesses. BROOKLYN CENTER: Moody's Affirms Ba3 Gen. Obligation Debt Rating ---------------------------------------------------------------- Moody's Investors Service has affirmed the Ba3 rating on Brooklyn Center Independent School District (ISD) 286, MN's outstanding general obligation (GO) debt. Debt service on the bonds is secured by the district's general obligation unlimited tax pledge which is not limited by rate or amount. As of June 30, 2013, the district had $29.9 million of GO debt outstanding. Moody's has also revised the outlook to positive. Summary Rating Rationale The Ba3 rating reflects the district's long-term deficit General Fund position as well as its heavy reliance on cash flow borrowing to finance operations. The rating also incorporates the district's modestly sized and declining tax base, weak demographic profile, and elevated debt burden. The positive outlook reflects Moody's expectation that the changes implemented by management will continue to generate positive results and improve the district's overall financial position over the medium term. The district has posted two consecutive operating surpluses and management expects the district to emerge from Statutory Operating Debt (SOD) at the close of fiscal 2015 and have a positive fund balance by the close of fiscal 2016. Strengths Positive results in both fiscal 2012 and 2013 with additional operating surplus anticipated in fiscal 2014 Relatively new strong management team has implemented stronger financial policies and expenditure controls Favorable location in the Twin Cities metropolitan area Growing enrollment, which favors favorably into revenue Challenges High debt burden Long-term trend of operating deficits resulting in deficit General Fund position Heavy reliance on cash flow borrowing Extended history of negative budgetary variances Outlook Given recent performance and new management policies, the positive outlook reflects Moody's expectation that the changes implemented by management will continue to generate positive results and improve the district's overall financial position over the medium term. What Could Move The Rating Up Ongoing operating surpluses that lead to material improvement in the district's liquidity and reserves Significant expansion of the district's tax base coupled with strengthening of the district's resident income profile Material reduction in the district's debt burden What Could Move The Rating Down Failure to adhere to the published Statutory Operating Plan and/or operating deficits Emergence of enrolment declines placing pressure on district revenues Growth in the district's debt burden The principal methodology used in this rating was US Local Government General Obligation Debt published in January 2014. BROOKSTONE HOLDINGS: Sale Expected to Close in July --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Brookstone Co., the 242-store specialty retailer, will be sold to a group composed of retailing conglomerate Sanpower Group and Hong Kong-based private-equity firm Sailing Capital under a $173 million contract that includes $135.7 million in cash. According to the report, the agreement with Sailing Innovation requires that the bankrupt retailer use "commercially reasonable efforts" to insure that the bankruptcy court approve Brookstone's Chapter 11 plan and that the plan be implemented by July 8. The outside closing date is July 31, the report related. About Brookstone Holdings Brookstone Holdings Corp. and its affiliated debtors on April 3, 2013, filed for relief under Chapter 11 (Bankr. D. Del. Lead Case No. 14-10752) with a plan to sell its business to another retailer. Specialty retailer Brookstone operated 242 retail stores across 40 states and Puerto Rico as of Feb. 1, 2014. Of those stores, 195 are generally located near "center court" in America's top retail centers and 47 are located in airports. Brookstone also operates an e-commerce business that includes the Brookstone catalog and http://www.Brookstone.com/ An affiliate of Spencer Spirit Holdings Inc., the parent of gift- shop chain Spencer's, has signed a deal to pay $147 million in exchange for 100% of the reorganized debtor's equity, absent higher and better offers from other parties. As of Dec. 31, 2013, Spencer operated 644 stores in 49 states and Canada. As of the bankruptcy filing, the Debtors owe more than $50 million on a senior secured prepetition credit facility ($34.1 million on a revolver, $12.3 million on a term loan and $4.7 million on account of letters of credit), and $137.3 million to holders of junior notes. The Debtors estimate that their unsecured debt is between $75 million and $85 million. The agreement with Spencer contemplates that Brookstone, headquartered in New Hampshire, will continue to operate its mall and airport stores, catalog, website, and wholesale channels, under the Brookstone brand with current employees remaining at their respective locations. The Debtors have tapped K&L Gates LLP and Landis Rath & Cobb LLP as attorneys, Deloitte Financial Advisory Services LLP as their financial advisors, Jefferies LLC as their investment banker, and Kurtzman Carson Consultants as claims agent. The DIP lenders are represented by Stroock & Stroock & Lavan LLP and Young Conaway Stargatt & Taylor LLP. BUDD CO: Says It Needs No Official Asbestos Claimant Committee -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Budd Co., in a filing with the U.S. Bankruptcy Court in Chicago, said it doesn't need an official committee to represent asbestos personal-injury claimants, since almost 95 percent of 42,400 suits were dismissed outright and the rest were settled for less than $5,000 each. The filing was in response to an ad hoc group of asbestos claimants's request for the appointment of an official committee to represent them, so Budd would pay the cost of their lawyers, according to the report. The company and the U.S. Trustee both opposed the request, the report said. About The Budd Company The Budd Company, Inc., a former supplier to the automotive industry, filed for chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 14-11873) on March 31, 2014, with a deal to settle potential claims against its parent, ThyssenKrupp AG. The company -- which ceased manufacturing operations in 2006 and does not have any current employees, facilities or customers -- has obligations consisting largely of medical and other benefits to approximately 10,000 former employees. Liabilities amount to approximately $1 billion with assets of approximately $400 million. Most of the debt consists largely of medical and other benefits to approximately 10,000 former employees. The Debtor disclosed $387,555,681 in assets and $1,107,350,034 in liabilities as of the Chapter 11 filing. The Hon. Jack B. Schmetterer oversees the case. The Debtor has tapped Proskauer Rose LLP as Chapter 11 counsel, Dickinson Wright PLLC as special counsel, Epiq Bankruptcy Solutions, LLC as noticing, claims and balloting agent, and Conway MacKenzie Management Services, LLC's Charles M. Moore as CRO. The U.S. Trustee appointed five individuals to serve on the Committee of Executive & Administrative Retirees. The Segal Company (Eastern States), Inc. serves as the Committee's actuarial consultant. CBRE SERVICES: Moody's Affirm 'B1' Senior Secured Rating -------------------------------------------------------- Moody's Investors Service affirmed the Ba1 senior secured bank credit facility rating, Ba1 senior unsecured rating, (P)Ba1 senior unsecured shelf rating, (P)Ba2 senior subordinate shelf rating, and the (P)Ba2 subordinate shelf rating of CBRE Services, Inc. The rating outlook was revised to positive from stable. Ratings Rationale The positive outlook reflects CBRE's improved balance sheet through a reduction in Net Debt/Recurring TTM EBITDA to 2.6x at 1Q14 from 3.8x at 1Q12, and enhanced liquidity with a $1.2 billion revolving credit facility and large cash balance. In addition, the company has steadily improved its operating performance, resulting in interest coverage increasing to 6.3x at 1Q14 from 4.1x at 1Q12. The outlook revision also reflects Moody's expectation that these improved credit metrics and operating improvement will continue. CBRE has made meaningful improvement in broadening its global diversification following the acquisition of Norland Managed Services in December 2013, such that revenues from the Americas has been reduced to 54% as of the 1Q14 from 62% as of 1Q13. In addition, the company has made progress in diversifying and expanding business lines/revenue streams within its commercial real estate services by adding materially to recurring revenues from the purchase of ING REIM's businesses and more recently, Norland. Finally, Moody's notes the company's track record for making large leveraged acquisitions, however the current management team has adopted a more deliberate and conservative strategy such that this no longer represents a major credit concern. A rating upgrade would be predicated upon a permanent reduction in leverage as defined by net debt to recurring EBITDA below 2.0X (accounting for CBRE's proportionate share of notes payable), fixed charge coverage exceeding 4.5X, with the expectation that it would remain above 4.5X through market cycles and continued growth in free cash flow and retained cash flow as a percentage of debt. Ratings improvement also would reflect continued demonstration of the company's commitment to a conservative financial policy. A return to stable would result should the company experience a reversal in its deleveraging strategy such that net debt to recurring EBITDA exceeds 4.0X and fixed charge coverage falls below 3.0X, both on a sustained basis. Additionally, erosion in market leadership or a large leveraged acquisition would also create downward ratings pressure. The following ratings were affirmed and the outlook was revised to positive: CBRE Services, Inc. -- senior secured bank credit facility at Ba1, senior unsecured debt at Ba1, senior unsecured shelf at (P)Ba1, senior subordinate shelf at (P)Ba2 and subordinate shelf at (P)Ba2. Moody's last rating with respect to CBRE Services, Inc. was on April 16, 2013. Moody's affirmed the Ba1 senior secured bank credit facility rating, the Ba1 senior unsecured rating and the Ba2 senior subordinated rating and assigned a (P)Ba1 rating to the senior unsecured shelf, a (P)Ba2 to the senior subordinated shelf, and a (P)Ba2 to the subordinated shelf. The ratings outlook remained stable. CBRE Services, Inc. [NYSE: CBG] is the largest global commercial real estate services and investment firm based on 2013 revenues. Services provided include commercial property and facilities management, occupier and property/agency leasing, property sales, investment management, valuation, commercial mortgage origination and servicing, capital markets (equity and debt) solutions, development and proprietary research. CBG is headquartered in Los Angeles, California, USA, and has approximately 44,000 employees in approximately 350 offices worldwide. CBRE Services, Inc.'s ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside CBRE Services, Inc.'s core industry and believes CBRE Services, Inc.'s ratings are comparable to those of other issuers with similar credit risk. CHASSIX INC: New $25MM Add-on No Impact on Moody's Caa1 Rating -------------------------------------------------------------- Moody's Investors Service commented that Chassix, Inc.'s proposed $25 million add-on to its $350 million 9.25% senior secured notes has no impact on the company's ratings, including the Caa1 corporate family rating or stable outlook. The proposed add-on also has no impact on the company's 9.25% senior secured operating company notes rated Caa1 or the Chassix Holdings, Inc. $150 million PIK toggle notes rated Caa3. Chassix, Inc. is the parent holding company for the combined operations of Diversified Machine, Inc. (DMI) and Concord International, Inc. DMI and Concord manufacture, cast, machine and assemble fully-engineered chassis and powertrain components and modules for leading automotive original equipment manufacturers ("OEMs") and Tier 1 suppliers. Chassix, Inc. is a wholly-owned subsidiary of affiliates of Platinum Equity Advisors, LLC. COLDWATER CREEK: May Reject Groupon Merchant Agreement ------------------------------------------------------ The Bankruptcy Court authorized Coldwater Creek Inc., et al., to reject a Merchant Agreement with Groupon, Inc., nunc pro tunc to the Petition Date. As reported in the Troubled Company Reporter on April 15, 2014, the Debtors had determined that their estates would be best served by avoiding the burdens associated with the Debtors' continued performance under the Contract, which was entered into by and between Debtor CWC Rewards Inc. and Groupon on Nov. 15, 2013. The deal provides for general promotional advertising and marketing services. Because the Debtors are seeking to liquidate their business as expeditiously as possible, these services are no longer necessary. About Coldwater Creek Coldwater Creek is a multi-channel retailer that offers its merchandise through retail stores across the country, its catalog and its e-commerce Web site, http://www.coldwatercreek.com/ Originally founded in Sandpoint, Idaho in 1984 as a direct, catalog-based marketer, Coldwater evolved into a multi-channel specialty retailer operating 334 premium retail stores, 31 factory outlet stores and seven day spa locations throughout the United States. As of the bankruptcy filing, the Debtors domestically employ a total of approximately 5,990 employees throughout their retail locations, corporate headquarters and distribution, design and call centers. Coldwater Creek Inc. and its debtor-affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10867) on April 11, 2014, to liquidate their assets. Coldwater Creek Inc. disclosed assets of $721,468,388 plus undetermined amount and liabilities of $425,475,739 plus undetermined amount. Affiliate Coldwater Creek U.S. Inc. estimated $100 million to $500 million in assets and liabilities. The Debtors have drawn $37.5 million and have approximately $10 million in letters of credit outstanding under a senior secured credit facility (ABL facility) provided by lenders led by Wells Fargo Bank, National Association, as agent. The Debtors also owe $96 million, which includes accrued interest and approximately $23 million representing a prepayment premium payable, under a term loan from lenders led by CC Holding Agency Corporation, as agent. Aside from the funded debt, the Debtors have accumulated a significant amount of accrued and unpaid trade and other unsecured debt in the normal course of their business. The Debtors have tapped Young Conaway Stargatt & Taylor, LLP, and Shearman & Sterling LLP as attorneys, Perella Weinberg Partners LP as financial advisor, Alvarez & Marsal as restructuring advisor, and Prime Clerk LLC as claims and noticing agent. The U.S. Trustee for Region Three named seven creditors to serve on the official committee of unsecured creditors. Lowenstein Sandler LLP represents the Committee. COLDWATER CREEK: Files Schedules; Oct. 8 Gov't Claims Bar Date Set ------------------------------------------------------------------ Coldwater Creek Inc. filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $721,468,388 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-Priority Claims $425,475,739 ----------- ----------- Total $721,468,388* $425,475,739* * plus undetermined amount A copy of the schedules is available for free at http://bankrupt.com/misc/COLDWATERCREEK_356_sal.pdf * * * The U.S. Bankruptcy Court for the District of Delaware established Oct. 8, 2014, as the deadline for any governmental unit to file proofs of claim against Coldwater Creek Inc., et al. The Court set June 13 as the general claims bar date. Coldwater Creek is a multi-channel retailer that offers its merchandise through retail stores across the country, its catalog and its e-commerce Web site, http://www.coldwatercreek.com/ Originally founded in Sandpoint, Idaho in 1984 as a direct, catalog-based marketer, Coldwater evolved into a multi-channel specialty retailer operating 334 premium retail stores, 31 factory outlet stores and seven day spa locations throughout the United States. As of the bankruptcy filing, the Debtors domestically employ a total of approximately 5,990 employees throughout their retail locations, corporate headquarters and distribution, design and call centers. Coldwater Creek Inc. and its debtor-affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10867) on April 11, 2014, to liquidate their assets. Coldwater Creek Inc. disclosed assets of $721,468,388 plus undetermined amount and liabilities of $425,475,739 plus undetermined amount. Affiliate Coldwater Creek U.S. Inc. estimated $100 million to $500 million in assets and liabilities. The Debtors have drawn $37.5 million and have approximately $10 million in letters of credit outstanding under a senior secured credit facility (ABL facility) provided by lenders led by Wells Fargo Bank, National Association, as agent. The Debtors also owe $96 million, which includes accrued interest and approximately $23 million representing a prepayment premium payable, under a term loan from lenders led by CC Holding Agency Corporation, as agent. Aside from the funded debt, the Debtors have accumulated a significant amount of accrued and unpaid trade and other unsecured debt in the normal course of their business. The Debtors have tapped Young Conaway Stargatt & Taylor, LLP, and Shearman & Sterling LLP as attorneys, Perella Weinberg Partners LP as financial advisor, Alvarez & Marsal as restructuring advisor, and Prime Clerk LLC as claims and noticing agent. The U.S. Trustee for Region Three named seven creditors to serve on the official committee of unsecured creditors. Lowenstein Sandler LLP represents the Committee. COLDWATER CREEK: Wood County Balks at Employment of GA Keen ----------------------------------------------------------- Wood County Development Authority filed a limited objection to Coldwater Creek Inc., et al.'s application to employ GA Keen Realty Advisors as real estate advisors. Wood County leases a large distribution center to the Debtor. Wood County asserted that the Debtor must not market the distribution center lease, subject to the same provisions that the Debtors propose to govern the leases of their retained stores. As reported in the Troubled Company Reporter on June 2, 2014, the Debtors employed GA Keen, the real estate division of Great American Group, Inc., subject to bankruptcy court approval. The Debtors announced its decision to liquidate all of its stores earlier this year. "These leaseholds represent a strategic opportunity for retailers to acquire below market leases in many of the most desirable Malls, Lifestyle Centers, Street and Factory Outlet locations throughout the country. A portfolio like this has not come on the market in years," said GA Keen Realty Advisors Co-President, Matthew Bordwin. "As part its bankruptcy proceeding Coldwater Creek controls the disposition process and has the ability to assign its leases to other retailers. As such, retailers should contact us immediately if they are interested in any of the available locations," added Mr. Bordwin. The retail spaces range from 3,249 sq. ft. to 15,844 sq. ft., averaging approximately 5,600 sq. ft. The leases are being marketed pursuant to Bid Procedures that have been filed with the bankruptcy court and remain subject to court approval. The Bid Procedures provide for a Bid Deadline of June 26 and an Auction Date of July 8. However, offers are now being considered for both individual stores and/or packages of multiple locations. About Coldwater Creek Coldwater Creek is a multi-channel retailer that offers its merchandise through retail stores across the country, its catalog and its e-commerce Web site, http://www.coldwatercreek.com/ Originally founded in Sandpoint, Idaho in 1984 as a direct, catalog-based marketer, Coldwater evolved into a multi-channel specialty retailer operating 334 premium retail stores, 31 factory outlet stores and seven day spa locations throughout the United States. As of the bankruptcy filing, the Debtors domestically employ a total of approximately 5,990 employees throughout their retail locations, corporate headquarters and distribution, design and call centers. Coldwater Creek Inc. and its debtor-affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10867) on April 11, 2014, to liquidate their assets. Coldwater Creek Inc. disclosed assets of $721,468,388 plus undetermined amount and liabilities of $425,475,739 plus undetermined amount. Affiliate Coldwater Creek U.S. Inc. estimated $100 million to $500 million in assets and liabilities. The Debtors have drawn $37.5 million and have approximately $10 million in letters of credit outstanding under a senior secured credit facility (ABL facility) provided by lenders led by Wells Fargo Bank, National Association, as agent. The Debtors also owe $96 million, which includes accrued interest and approximately $23 million representing a prepayment premium payable, under a term loan from lenders led by CC Holding Agency Corporation, as agent. Aside from the funded debt, the Debtors have accumulated a significant amount of accrued and unpaid trade and other unsecured debt in the normal course of their business. The Debtors have tapped Young Conaway Stargatt & Taylor, LLP, and Shearman & Sterling LLP as attorneys, Perella Weinberg Partners LP as financial advisor, Alvarez & Marsal as restructuring advisor, and Prime Clerk LLC as claims and noticing agent. The U.S. Trustee for Region Three named seven creditors to serve on the official committee of unsecured creditors. Lowenstein Sandler LLP represent the Committee. COLDWATER CREEK: Lease Assignment Procedures Approved ----------------------------------------------------- The Bankruptcy Court authorized Coldwater Creek Inc., et al., to i) implement procedures to effectuate the assumption and assignment of the Debtors' unexpired leases of nonresidential real property; and ii) establish bidding procedures for those leases not subject to the Assignment Procedures. The Court also approved cure procedures and noticing to the landlords and any other non-Debtor parties with respect to each applicable lease in connection with any assumption and assignment of the leases. The Court approved the auction for the leases on July 8, 2014, at 10:00 a.m., at the offices of Shearman & Sterling LP, 599 Lexington Avenue, New York City. The sale hearing will be held July 17, at 11:00 a.m. The Debtors, in their application, stated that as the going out business sales progress, and store inventory decreases, the Debtors will close stores and look to rid the estates of the administrative expense associated with the leases. To assist with their efforts to maximize the value of their lease portfolio, the Debtors have entered into an engagement agreement with GA Keen Realty Advisors, LLC. SPA Lease On May 22, the Debtors requested for authorization to assume unexpired, nonresidential leases and executory contracts, and assign their interests therein to ASJ Consulting, LLC or its designee. The purchaser emerged as the successful bidder at the Spa auction with a bid that involved cash consideration in the amount of $1,050,000, plus additional consideration for certain inventory at the spa locations. It is expected that the Spa sale will be fully consummated on a date that is approximately four weeks from entry of the order approving the motion. About Coldwater Creek Coldwater Creek is a multi-channel retailer that offers its merchandise through retail stores across the country, its catalog and its e-commerce Web site, http://www.coldwatercreek.com/ Originally founded in Sandpoint, Idaho in 1984 as a direct, catalog-based marketer, Coldwater evolved into a multi-channel specialty retailer operating 334 premium retail stores, 31 factory outlet stores and seven day spa locations throughout the United States. As of the bankruptcy filing, the Debtors domestically employ a total of approximately 5,990 employees throughout their retail locations, corporate headquarters and distribution, design and call centers. Coldwater Creek Inc. and its debtor-affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10867) on April 11, 2014, to liquidate their assets. Coldwater Creek Inc. disclosed assets of $721,468,388 plus undetermined amount and liabilities of $425,475,739 plus undetermined amount. Affiliate Coldwater Creek U.S. Inc. estimated $100 million to $500 million in assets and liabilities. The Debtors have drawn $37.5 million and have approximately $10 million in letters of credit outstanding under a senior secured credit facility (ABL facility) provided by lenders led by Wells Fargo Bank, National Association, as agent. The Debtors also owe $96 million, which includes accrued interest and approximately $23 million representing a prepayment premium payable, under a term loan from lenders led by CC Holding Agency Corporation, as agent. Aside from the funded debt, the Debtors have accumulated a significant amount of accrued and unpaid trade and other unsecured debt in the normal course of their business. The Debtors have tapped Young Conaway Stargatt & Taylor, LLP, and Shearman & Sterling LLP as attorneys, Perella Weinberg Partners LP as financial advisor, Alvarez & Marsal as restructuring advisor, and Prime Clerk LLC as claims and noticing agent. The U.S. Trustee for Region Three named seven creditors to serve on the official committee of unsecured creditors. Lowenstein Sandler LLP represents the Committee. COLDWATER CREEK: Committee Loses Bid to Block Disclosure Hearing ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Official Committee of Unsecured Creditors appointed in the Chapter 11 case of Coldwater Creek Inc. failed in its second effort at forestalling a hearing on approval of disclosure materials explaining the liquidating retailer's Chapter 11 plan. According to the report, U.S. Bankruptcy Judge Brendan L. Shannon denied the Committee's motion for its request to file a competing plan to be heard on an expedited basis, saying there's "absolutely no need" for an emergency hearing. Following entry of Judge Shannon's order, the creditors' committee filed another objection, again saying the disclosure statement shouldn't be approved because it has been submitted in connection with a "patently unconfirmable" plan, the report related. About Coldwater Creek Coldwater Creek is a multi-channel retailer that offers its merchandise through retail stores across the country, its catalog and its e-commerce Web site, http://www.coldwatercreek.com/ Originally founded in Sandpoint, Idaho in 1984 as a direct, catalog-based marketer, Coldwater evolved into a multi-channel specialty retailer operating 334 premium retail stores, 31 factory outlet stores and seven day spa locations throughout the United States. As of the bankruptcy filing, the Debtors domestically employ a total of approximately 5,990 employees throughout their retail locations, corporate headquarters and distribution, design and call centers. Coldwater Creek Inc. and its debtor-affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10867) on April 11, 2014, to liquidate their assets. Coldwater Creek Inc. estimated $10 million to $50 million in assets and $100 million to $500 million in liabilities. Affiliate Coldwater Creek U.S. Inc. estimated $100 million to $500 million in assets and liabilities. The Debtors have drawn $37.5 million and have approximately $10 million in letters of credit outstanding under a senior secured credit facility (ABL facility) provided by lenders led by Wells Fargo Bank, National Association, as agent. The Debtors also owe $96 million, which includes accrued interest and approximately $23 million representing a prepayment premium payable, under a term loan from lenders led by CC Holding Agency Corporation, as agent. Aside from the funded debt, the Debtors have accumulated a significant amount of accrued and unpaid trade and other unsecured debt in the normal course of their business. The Debtors have tapped Young Conaway Stargatt & Taylor, LLP, and Shearman & Sterling LLP as attorneys, Perella Weinberg Partners LP as financial advisor, Alvarez & Marsal as restructuring advisor, and Prime Clerk LLC as claims and noticing agent. COMPASS MINERALS: Moody's Rates $200MM Sr. Unsecured Notes 'Ba2' ---------------------------------------------------------------- Moody's Investors Service has assigned a Ba2 rating to the proposed $200 million senior unsecured notes due 2024 of Compass Minerals International, Inc. Compass Minerals has stated that proceeds from the new notes will be used to redeem the company's outstanding $100 million senior unsecured notes due 2019 and for general corporate purposes. Moody's also assigned a Ba1 rating to the company's amended and restated $125 million revolving senior credit facilities due August 2017. Concurrently, the rating agency has affirmed Compass Minerals' Ba1 corporate family rating (CFR), Ba1-PD probability of default rating (PDR), and SGL-2 Speculative Grade Liquidity (SGL) rating. The rating outlook remains stable. "The new notes will slightly increase Compass Minerals' leverage, but leverge will remain adequate for the current rating level," says Anthony Hill, a Moody's Vice President -- Senior Analyst and lead analyst for Compass Minerals. "We believe the company will use some of the proceeds from the new notes to pre fund growth capital expenditures that will support its credit profile." Assignments: Issuer: Compass Minerals International, Inc. $125 million Senior Secured Bank Credit Facility due 2017, Ba1 LGD3, 38% $200 million Senior Unsecured Notes due 2024, Ba2 LGD5, 86% Affirmations: Issuer: Compass Minerals International, Inc. Corporate Family Rating, Ba1 Probability of Default Rating, Ba1-PD Speculative Grade Liquidity Rating, SGL-2 $384 million Senior Secured Term Loan due 2017, Ba1 LGD3, 38% $100 million Senior Unsecured Notes due 2019, Ba2 LGD6, 90% Ratings Rationale The Ba1 CFR reflects Compass Minerals' small scale as measured by net sales, net assets, and limited product portfolio diversity. For example, the salt segment typically makes-up approximately 82% of Compass Minerals' net sales. Furthermore, the weather-dependent highway deicing business (which is a part of the salt segment) alone typically generates around 50% of the company's net sales. Additionally, the rating reflects the mature nature of the highway deicing business (Moody's expects continued low single digit volume growth rates over the coming years), as well as the company's need to pursue capital projects or acquisitions in order to provide any desired increase in revenue and earnings growth over time. More positively, the rating also reflects the company's solid operating and credit metrics. Pro forma for the new note issuance, Compass Minerals' Moody's-adjusted debt/EBITDA ratio for the last 12 months ending March 2014 will increase to 2.4x from 2.0x. Nevertheless, Moody's views the company's leverage as adequate for the rating. Additionally, Compass Minerals has cost-advantaged, secure access to high quality salt deposits, and maintains an efficient distribution network that utilizes low-cost water transportation. The company is also a cost-advantaged producer of sulfate of potash (SOP) fertilizer from naturally occurring brines. As a specialty fertilizer for high-value crops such as fruits and nuts that is sold at a premium over commodity potash fertilizer, SOP helps to insulate the company from commodity potash industry pressures. Compass Minerals' liquidity is currently good, as reflected by the assigned SGL-2 rating. Moody's expects Compass Minerals to maintain sufficient cash balances and ample availability under its $125 million revolving credit facility over the next 12 to 18 months; however, the company may exhibit negative free cash flow in 2015 as it embarks on a number of capital expenditure projects to support its stated goal to reach EBITDA generation of $500 million by 2018 (versus an EBITDA $287 million for the twelve months ended March 31, 2014 and on a Moody's-adjusted basis). Moody's expects cash from the new debt issuance, cash flow from operations and revolver availability to support the company's good liquidity over the next 12 to 18 months. In accordance with the rating agency's Loss Given Default methodology, the first-lien senior secured credit facilities (the $125 million revolver due 2017 and the $379.3 million term Loan also due in 2017) are rated Ba1, at the same level as the CFR. This is due to the first-lien senior secured agreement's priority over the proposed $200 million senior unsecured notes due 2024, which are rated Ba2 or one notch below the Ba1 CFR. The new senior unsecured notes due 2024 are notched down from the CFR, reflecting their subordinated ranking in the capital structure. The stable rating outlook reflects Moody's expectation of solid operating performance from Compass Minerals over at least the next 18 months. Compass Minerals' business profile, modest size, and secured capital structure constrain its long-term rating to the high-end of the Ba-rating category. Further growth in the company's specialty fertilizer business such that it becomes a larger contributor to Compass Minerals' overall earnings could help the company achieve an investment-grade profile (Baa3 or higher). Additionally, to be considered for an investment-grade rating, Moody's would expect the company to exhibit an investment-grade capital structure (comprised only of unsecured debt with extended maturities); and establish a financial policy appropriate for an investment-grade rating. Moody's does not expect any pressure to move the rating downward over the coming quarters. However, if Compass Minerals made a large acquisition or if there was a change in the company's financial philosophy, the rating agency would consider downgrading the rating. Quantitatively, Moody's would consider downgrading Compass Minerals' rating if its EBITDA margin falls sustainably to around 20%; or its debt/EBITDA ratio rises towards 3.5x, both on a Moody's-adjusted basis. The principal methodology used in this rating was the Global Chemical Industry Rating Methodology published in December 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. Headquartered in Kansas, US, Compass Minerals International, Inc. is a leading North American producer of salt used for highway deicing, agriculture applications, water conditioning, and other consumer and industrial uses. The company is also a significant producer of SOP used on specialty crops, such as fruits and nuts, in the US and Canada. For the twelve months ended March 31, 2014 Compass Minerals generated net sales (gross revenues after shipping and handling) and a Moody's-adjusted EBITDA of $851 million and $287 million, respectively. CONSOLIDATED ALUMINUM: Confirms Asbestos Plan --------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Consolidated Aluminum Corp., an indirect subsidiary of Switzerland-based Lonza Group AG, won approval of a Chapter 11 plan dealing with asbestos and other personal-injury claims. According to the report, the Allendale, New Jersey-based company, which ceased operations in 1994 when the business was sold, easily won approval of its plan because it only deals with existing claims. The case is In re Consolidated Aluminum Corp., 13-bk-37149, U.S. Bankruptcy Court, District of New Jersey (Newark). The Debtor's counsel is Sharon L. Levine, Esq., at LOWENSTEIN SANDLER LLP, in Roseland, New Jersey. CONSTAR INT'L: UTB Takes Over Netherlands PET Plant Operations -------------------------------------------------------------- Anthony Clark, writing for European Plastics News, reported that UTB Industry, situated in Waalwijk in the Netherlands, has taken over the Zevenaar-based operations of PET bottle manufacturer Constar following its bankruptcy in May. The report noted that Constar was declared bankrupt after its parent company, Constar International in the US, proposed to break ties with its European operations when it went into Chapter 11 bankruptcy protection. The report said Constar's Netherlands activities will resume as part of a new venture, Constar Plastics. The company will continue under the current management, the report added. About Constar Int'l Privately held Constar International Holdings and nine affiliated debtors filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-13281) on Dec. 19, 2013. This is Constar International's third bankruptcy. Constar, which manufactures plastic containers, first filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13432) in December 2008, with a pre-negotiated Chapter 11 Plan and emerged from bankruptcy in May 2009. Constar and its affiliates returned to Chapter 11 protection (Bankr. D. Del. Case No. 11-10109) on Jan. 11, 2011, with a pre-negotiated Chapter 11 plan and emerged from bankruptcy in June 2011. The 2013 petition listed assets worth less than $100 million against $123 million on three layers of secured debt. Judge Christopher S. Sontchi oversees the 2013 case. Constar is represented by Michael J. Sage, Esq., Brian E. Greer, Esq., Stephen M. Wolpert, Esq., and Janet Bollinger Doherty, Esq., at Dechert LLP; and Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP. Prime Clerk LLC serves as Constar's claims and noticing agent, and administrative advisor. Lincoln Partners Advisors LLC serves as the Debtors' financial advisor. Attorneys at Brown Rudnick LLP represent the official committee of unsecured creditors. The Committee retained Alvarez & Marsal North America LLC as its financial advisor. Counsel to Wells Fargo Capital Finance, LLC, the revolving loan agent, is Andrew M. Kramer, Esq., at Otterbourg P.C. In February 2014, the Bankruptcy Court authorized Constar to sell certain assets to Plastipak Packaging, Inc., a global manufacturer of rigid plastic packaging. The Court determined that Plastipak's $102,450,000 offer for the Debtors' U.S. assets bested the offers from Amcor Rigid Plastics USA, Inc., and Envases Universales De Mexico S.A.P.I. De C.V. during a Feb. 6 auction. Separately, the Court authorized Constar to sell a facility in Havre de Grace, Maryland, to Smucker Natural Foods, Inc., for $3 million. There was no other bidder for the Maryland facility. The sole director of debtor Constar International U.K. Limited has appointed Daniel Francis Butters and Nicolas Guy Edwards of Deloitte LLP as administrators. The U.K. Administration Proceeding follows the closing of the sale of the U.K. assets to Sherburn Acquisition Limited. The Delaware Bankruptcy Judge authorized the U.S. Debtors to sell the U.K. Assets to Sherburn for GBP3,512,727, (or US$7,046,000), less the deposit in the sum of US$1,250,000. Secured lender Black Diamond Commercial Finance, LLC, as DIP note agent, and Wells Fargo Capital Finance, LLC, as DIP revolving agent and agent under the revolving loan facility, consented to the administration of Constar U.K. and the appointment of the Joint Administrators. DAIS ANALYTIC: Posts $404K Net Loss for Q1 Ended March 31 --------------------------------------------------------- Dais Analytic Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $404,370 on $251,581 of revenue for the three months ended March 31, 2014, compared with a net loss of $306,149 on $620,042 of revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.51 million in total assets, $4.15 million in total liabilities, and a stockholders' deficit of $2.64 million. The Company has incurred significant losses since inception. As of March 31, 2014, the Company has an accumulated deficit of $40.48 million. The Company used $625,562 and $283,854 of cash in operations during the three months ended March 31, 2014 and 2013, respectively, which was funded by proceeds from product sales and equity financings. The Company, as a result of an equity financing completed in the quarter ended March 31, 2014, has $848,440 in cash and cash equivalents. There is no assurance that such equity financing will be available in the future. In view of these matters, there is substantial doubt that the Company will continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available: http://is.gd/jxj3ET About Dais Analytic Odessa, Fla.-based Dais Analytic Corporation has developed and patented a nano-structure polymer technology, which is being commercialized in products based on the functionality of these materials. The initial product focus of the Company is ConsERV, an energy recovery ventilator. The Company also has new product applications in various developmental stages. DETROIT, MI: Automakers Commit $26MM to Aid City's Retirees ----------------------------------------------------------- Reuters reported that Detroit's three automakers said they had committed $26 million toward $100 million pledged by the city's art museum to save its collection from being tapped to raise cash for Detroit's historic bankruptcy. According to the report, the $26 million from the automakers consists of $10 million from Ford Motor Company Fund, $5 million from General Motors Co, $5 million from General Motors Foundation and $6 million from Chrysler Group LLC. About City of Detroit, Michigan The City of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The City's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's financial advisor. EDGENET INC: Gets Nod for $8MM Sale to Former Execs --------------------------------------------------- Law360 reported that a Delaware bankruptcy judge blessed the $8 million sale of data technology firm Edgenet Inc. to a group of its former principals, who prevailed in a Chapter 11 auction with a winning offer that improved upon the stalking horse bid by $2.5 million. According to the report, at a hearing in Wilmington, U.S. Bankruptcy Judge Brendan L. Shannon agreed to approve Edgenet's sale to EdgeAQ LLC, a vehicle formed by the three former employees, and said he would enter an order once a final version was submitted to the court. About Edgenet Inc. Edgenet, Inc., and Edgenet Holding Corp. are providers of cloud- based content and applications that enable companies to sell more products and services with greater ease across multiple channels and devices. Edgenet has three business locations: Waukesha, WI, Brentwood, TN, and its main office in Atlanta, GA. The Company has 80 employees. Edgenet Inc. and Edgenet Holding filed for Chapter 11 bankruptcy protection in Delaware (Lead Case No. 14-10066) on Jan. 14, 2014. Edgenet Inc. estimated assets of at least $10 million and liabilities of $100 million to $500 million. Raymond Howard Lemisch, Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington, Delaware, serves as counsel to the Debtors; Glass Ratner Advisory & Capital Group LLC is the financial advisor; JMP Securities, LLC, is the investment banker, and Phase Eleven Consultants, LLC, is the claims and noticing agent. The U.S. Trustee has been unable to appoint an official unsecured creditors committee as no sufficient interest has been generated from creditors. Fred Marxer, Timothy Choate and Davis Carr, individuals and holders of a segment of the promissory notes issued in 2004 that have been referred to by Edgenet, Inc., et al., requested that the Court will issue an order appointing an official committee of Seller Noteholders, or in the alternative, an official committee of unsecured creditors, with members appointed from the Seller Noteholders who agree to waive any continued security interest arising from the Seller Notes. EFACTOR GROUP: Incurs $3.91-Mil. Net Loss in March 31 Quarter ------------------------------------------------------------- EFactor Group Corp. filed its quarterly report on Form 10-Q, disclosing a net loss of $3.91 million on $116,545 of net revenues for the three months ended March 31, 2014, compared with a net loss of $1.13 million on $188,762 of net revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $4.53 million in total assets, $5.51 million in total liabilities, and a stockholders' deficit of $983,342. The Company has suffered losses from operations and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/DWmycc EFactor Group Corp. owns and operates a social networking site for entrepreneurs. It operates EFactor.com, a platform that enables access to a network of contacts, registration for networking events, advisory consulting, and various business tools, as well as a range of services and information. The company also provides key support services in the areas of funding, knowledge, cost savings, and business development, as well as offers public relations and advertising services. It operates in the United States, the United Kingdom, India, China, and the Netherlands. The company is based in San Francisco, California. EAU TECHNOLOGIES: Has $186K Net Loss for Q1 Ended March 31 ----------------------------------------------------------- EAU Technologies, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $186,064 on $490,974 of total revenues for the three months ended March 31, 2014, compared with a net loss of $282,806 on $631,853 of total revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.07 million in total assets, $9.06 million in total liabilities, and a stockholders' deficit of $7.99 million. At March 31, 2014, the Company had working capital deficit, equity deficit and has sustained recurring losses from operations, all of which 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 at: http://is.gd/qew8k1 About EAU Technologies Kennesaw, Ga.-base EAU Technologies, Inc., is in the business of developing, manufacturing and marketing equipment that uses water electrolysis to create non-toxic cleaning and disinfecting fluids for food safety applications as well as dairy drinking water. ENERGY FUTURE: Hires Alvarez & Marsal as Restructuring Advisor -------------------------------------------------------------- Energy Future Holdings Corp., and its debtor-affiliates seek authorization from the U.S. Bankruptcy Court for the District of Delaware to employ Alvarez & Marsal North America, LLC as restructuring advisor, nunc pro tunc to Apr. 29, 2014 petition date. The Debtors require Alvarez & Marsal to: (a) assist the Debtors in the preparation of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, Statement of Financial Affairs, and Monthly Operating Reports; (b) assist with the refinement and management of a 13-week cash flow forecast; (c) assist in financing issues including assistance in preparation of reports and liaison with creditors, including assisting in the management and analysis required for the Debtors' debtor-in-possession financing facility; (d) assist in the identification and performance of cost/benefit analyses related to supply agreements and other executory contracts and the assumption/rejection of each; (e) assist in the discussions with and providing information to potential investors, secured lenders, official committees and, the Office of the U.S. Trustee for the District of Delaware as deemed necessary and appropriate by the Debtors; (f) assist the Debtors and their other advisors in developing restructuring plans or strategic alternatives for maximizing the enterprise value of their various business lines; (g) serve as the principal contact with the Debtors' key constituents/creditors with respect to financial and operational matters; (h) report to the Debtors Board of Directors as desired or directed by the Responsible Officers; and (i) other activities as are approved by the Debtors, the Responsible Officers, or the Board and agreed to by Alvarez & Marsal. The Engagement Letter provides for the following compensation to Alvarez & Marsal.: -- Retainer. A retainer in the amount of $500,000, which the Debtors paid upon execution of the Engagement Letter and to be credited against any amounts due at the termination of the engagement and returned upon the satisfaction of all obligations enumerated in the Engagement Letter. -- Hourly rates. Fees based on the following hourly rates: Managing Directors $675-$925 Directors $475-$675 Analysts/Associates $275-$475 Alvarez & Marsal will also be reimbursed for reasonable out-of- pocket expenses incurred. As of the Petition Date, the Debtors do not owe Alvarez & Marsal any fees for services performed or expenses incurred under the Engagement Letter. Further, during the 90-day period before the Petition Date, Alvarez & Marsal received approximately $4,678,000 for professional services performed and approximately $168,000 for expenses incurred. Jeffery J. Stegenga, managing director of Alvarez & Marsal, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Bankruptcy Court for the District of Delaware will hold a hearing on the application on Jun. 30, 2014, at 9:30 a.m. Objections were due Jun. 13, 2014. Alvarez & Marsal can be reached at: Jeffrey Stegenga ALVAREZ & MARSAL NORTH AMERICA, LLC 2100 Ross Avenue, 21st Floor Dallas, TX 75201 Tel: +1 (214) 438-1099 E-mail: jstegenga@alvarezandmarsal.com 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 Debtors are seeking to have their cases jointly administered for procedural purposes. 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: Wants to Hire Kirkland & Ellis as Attorneys ---------------------------------------------------------- Energy Future Holdings Corp., and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the District of Delaware to employ Kirkland & Ellis LLP as attorneys, nunc pro tunc to Apr. 29, 2014 petition date. The Debtors require Kirkland & Ellis to: (a) advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their businesses and properties; (b) advise and consult on the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; (c) attend meetings and negotiating with representatives of creditors and other parties in interest; (d) take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; (e) prepare pleadings in connection with these chapter 11 cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; (f) represent the Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; (g) advise the Debtors in connection with any potential sale of assets; (h) appear before the Court and any appellate courts to represent the interests of the Debtors' estates; (i) advise the Debtors regarding tax matters; (j) take any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto; and (k) perform all other necessary legal services for the Debtors in connection with the prosecution of these chapter 11 cases, including: -- analyzing the Debtors' leases and contracts and the assumption and assignment or rejection thereof; -- analyzing the validity of liens against the Debtors; and -- advising the Debtors on corporate and litigation matters. Kirkland & Ellis's rates are subject to periodic change in the ordinary course of business. Kirkland & Ellis's hourly rates for matters related to these chapter 11 cases from Apr. 29, 2013, to Dec. 31, 2013, ranged as follows: Partners $655-$1,150 Of Counsel $450-$1,150 Associates $430-$790 Paraprofessionals $150-$335 Kirkland & Ellis' current hourly rates for matters related to these chapter 11 cases range as follows: Partners $665-$1,295 Of Counsel $415-$1,195 Associates $450-$865 Paraprofessionals $170-$355 Kirkland & Ellis will also be reimbursed for reasonable out-of- pocket expenses incurred. On Sep. 13, 2012, the Debtors paid $1 million to Kirkland & Ellis as a classic retainer, and the Debtors subsequently increased the classic retainer to $6 million. A balance of approximately $4.23 million remained as of the petition date. Edward O. Sassower, partner of Kirkland & Ellis, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Bankruptcy Court for the District of Delaware will hold a hearing on the application on Jun. 30, 2014, at 9:30 a.m. Objections were due Jun. 13, 2014. Kirkland & Ellis can be reached at: Edward O. Sassower, Esq. KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, NY 10022 Tel: +1 (212) 446-4733 Fax: +1 (212) 446-4900 E-mail: edward.sassower@kirkland.com 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 Debtors are seeking to have their cases jointly administered for procedural purposes. 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: Taps Richards Layton as Co-counsel ------------------------------------------------- Energy Future Holdings Corp., and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the District of Delaware to employ Richards, Layton & Finger, P.A. as co-counsel, nunc pro tunc to Apr. 29, 2014 petition date. The Debtors require Richards Layton to: (a) take all necessary actions to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; (b) advise the Debtors of their rights, powers, and duties as debtors and debtors in possession under the chapter 11 of the Bankruptcy Code; (c) prepare on behalf of the Debtors, as debtors in possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates and serve such papers on creditors; (d) take all necessary or appropriate actions in connection with a plan or plans of reorganization and related disclosure statements and all related documents, and further actions as may be required in connection with the administration of the Debtors' estates; and (e) perform all other necessary legal services in connection with the prosecution of these Chapter 11 cases. Richards Layton will also be reimbursed for reasonable out-of- pocket expenses incurred. Richards Layton received a total retainer in the amount of $125,000 from the Debtors as compensation for professional services rendered and reimbursement for expenses incurred in connection with the commencement of these Chapter 11 cases. The Debtors propose that the remainder of the retainer paid to Richards Layton and not expensed for prepetition services and disbursements be treated as an evergreen retainer to be held by Richards Layton as security throughout these Chapter 11 cases until Richards Layton's fees and expenses are awarded by final order and payable to Richards Layton. Daniel J. DeFranceschi, director of Richard Layton, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Bankruptcy Court for the District of Delaware will hold a hearing on the application on Jun. 30, 2014, at 9:30 a.m. Objections were due Jun. 13, 2014. Richard Layton can be reached at: Daniel J. DeFranceschi, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7816 Fax: (302) 498-7816 E-mail: defranceschi@rlf.com 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 Debtors are seeking to have their cases jointly administered for procedural purposes. 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: Hires Deloitte & Touche as Independent Auditor ------------------------------------------------------------- Energy Future Holdings Corp., and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Deloitte & Touche LLP as independent auditor, nunc pro tunc to Apr. 29, 2014 petition date. The Debtors request the employment of Deloitte & Touche to perform: (a) financial statement audits in accordance with the standards established by the Public Company Accounting Oversight Board (United States) or the American Institute of Certified Public Accountants, as applicable, including opinions on the effectiveness of internal control over financial reporting for the year ending Dec.31, 2014; and (b) reviews of the applicable Debtors' condensed interim financial information for each of the quarters in the year ending Dec. 31, 2014. The Services may also include accounting and financial reporting research and consultation related to the restructuring and related financing activities customarily provided by the independent auditor as may be required in large and complex chapter 11 cases like these cases that were not specifically contemplated in the Engagement Letters when they were drafted. As fully described in the Engagement Letters, initially, the fees for the Services, other than the Out of Scope Services, were anticipated to be approximately $5,000,000. However, additional procedures are expected to be performed with respect to the audit and review services due to the commencement of these chapter 11 cases. Deloitte & Touche will also be reimbursed for reasonable out-of- pocket expenses incurred. The Debtors paid approximately $625,000 as retainers under the Engagement Letters prior to the Petition Date. As of the Petition Date, approximately $180,000 of the retainer remained outstanding. Randy Stokx, director of Deloitte & Touche, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Bankruptcy Court for the District of Delaware will hold a hearing on the application on Jun. 30, 2014, at 9:30 a.m. Objections were due Jun. 12, 2014. Deloitte & Touche can be reached at: Randy Stokx DELOITTE & TOUCHE LLP 2200 Ross Ave., Suite 1600 Dallas, TX 75201 Tel: +1 (214) 840-7000 Fax: +1 (214) 840-7050 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 Debtors are seeking to have their cases jointly administered for procedural purposes. 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: Sets Record for 'Ordinary Course' Payments --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Christopher S. Sontchi is allowing Energy Future to pay eight law firms as much as $150,000 a month each. The firms in this group provide real estate, environmental and litigation services not related to bankruptcy, the report said. According to the report, there are about 115 other professional firms, including law firms, eligible to receive as much as $65,000 each a month without specific court approval. 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 Debtors are seeking to have their cases jointly administered for procedural purposes. 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: Bondholders Urge Judge To Stall Key Deal ------------------------------------------------------- Law360 reported that a group of Energy Future Holdings Corp. bondholders urged a Delaware federal judge to temporarily halt the implementation of a deal that the group says would allow other bondholders an unfair boost in recovery on their claims. According to the report, the first-lien bondholder group, represented by indenture trustee CSC Trust Co. of Delaware, argued in court papers that the deal should be stalled pending an appeal. CSC says the settlement allows certain bondholders to bring in substantially higher recoveries, the report related. 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 Debtors are seeking to have their cases jointly administered for procedural purposes. 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: Seeks OK On $11-Mil. Texas Tax-Refund Deal --------------------------------------------------------- Law360 reported that electricity giant Energy Future Holdings Corp. asked a Delaware bankruptcy court to approve an $11.3 million settlement between its Texas subsidiary, TXU Energy Retail Company LLC, and the Texas comptroller, saying the settlement would boost strained customer relations and prevent future litigation over the company's tax credit claims. According to the report, if approved, the settlement would finally open the spigot for customers to receive a refund for alleged illegal sales tax collections by TXU Energy, and end a separate class action filed against the company by several apartment complexes across Texas. 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. ENVISION HEALTHCARE: Moody's Rates $650MM Sr. Unsecured Notes B3 ---------------------------------------------------------------- Moody's Investors Service assigned a B3 (LGD 5, 87%) rating to Envision HealthCare Corporation's offering of $650 million of senior unsecured notes due 2022. Moody's existing ratings on the company, including the B1 Corporate Family Rating and B1-PD Probability of Default Rating, remain unchanged. The rating outlook remains positive. Moody's understands that the proceeds of the offering will be used to fund the repurchase of the company's 8.125% senior unsecured notes due 2019 resulting in an improved maturity profile and interest cost savings. Moody's will withdraw the ratings on the 8.125% senior secured notes upon the successful completion of the tender offer. Following is a summary of Moody's rating actions. Ratings assigned: $650 senior unsecured notes due 2022 at B3 (LGD 5, 87%) Ratings unchanged: Corporate Family Rating at B1 Probability of Default Rating at B1-PD Senior secured term loan due 2018 at Ba3 (LGD 3, 42%) Speculative Grade Liquidity rating at SGL-1 Rating to be withdrawn at close Senior unsecured notes due 2019 at B3 (LGD 5, 87%) Rating Rationale The B1 Corporate Family Rating reflects Envision's solid credit metrics and Moody's expectation that such metrics will improve modestly as strong free cash flow will allow the company to grow its operations without the use of incremental debt. Moody's also acknowledges Envision's considerable scale and geographic diversification in its two primarily segments -- physician staffing and medical transport -- which are otherwise very fragmented among other providers. The rating also reflects Moody's concerns with the uncertainty around healthcare reform and the potential for greater Medicare reimbursement cuts. The positive outlook incorporates Moody's view that EBITDA margins and leverage will likely improve as the company benefits from the recent growth in new contracts and acquisitions. Moody's anticipates that Envision will use its strong free cash flow to fund small to moderately sized acquisitions and expand into new service areas. Moody's could upgrade the rating if the company experiences continued favorable growth in both revenues and EBITDA, which result in debt to EBITDA sustained below 4.0 times. Furthermore, an upgrade would be contingent upon Moody's expectation that Envision will continue to maintain a conservative financial policy, given that the company remains predominately controlled by private equity. Conversely, if the company pursues material debt-financed acquisitions or shareholder initiatives, Moody's could downgrade the rating. In addition, a deterioration in the company's liquidity profile and/or material negative developments in the reimbursement environment could result in a downgrade. More specifically, the rating could be downgraded if the company's debt to EBITDA increases above 5.0 times on a sustained basis The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Envision is a leading provider of emergency medical services in the U.S. Envision operates through three business segments: EmCare is the company's emergency department and hospital physician outsourcing segment, AMR is a leading provider of medical transport in the U.S, and Evolution Health is an emerging provider of comprehensive physician-led post-hospital management solutions. EPMI INC: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------- Debtor: EPMI, Inc. 8222 S. 48th St, Suite 240 Phoenix, AZ 85044 Case No.: 14-09184 Chapter 11 Petition Date: June 13, 2014 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Hon. Eddward P. Ballinger Jr. Debtor's Counsel: Blake D Gunn, Esq. LAW OFFICE OF BLAKE D. GUNN Po Box 22146 Mesa, AZ 85277-2146 Tel: 480-270-5073 Email: blake.gunn@gunnbankruptcyfirm.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Michael Powell, president. A list of the Debtor's 15 largest unsecured creditors is available for free at http://bankrupt.com/misc/azb14-09184.pdf EVENT RENTALS: Closes Secaucus Site & Cuts Nearly 100 Jobs ---------------------------------------------------------- Linda Moss, writing for The (N.J.) Record, reported that Classic Party Rentals Inc., based in Inglewood, Calif., is shutting its warehouse and showroom at 550 Meadowlands Parkway, Secaucus. The company notified the New Jersey Department of Labor and Workforce Development that it "has elected to cease operations in the tri- state area due to competitive market conditions." The company will be letting 94 employees go in August, according to the filing. Classic, however, said it will try to relocate some of these workers. Under the federal WARN Act, companies under some circumstances are required to give local and state government 60 days' notice of job reductions. About Event Rentals Event Rentals Inc., the largest event-rental provider in the U.S., filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 14-bk-10282) on Feb. 13, 2014. Event Rentals, which sought bankruptcy protection with affiliates, including Classic Midwest, Inc., has 39 locations across 22 markets. The company has the largest offering of event equipment, value-added event services, and temporary structure assets, and provide services for over 145,000 events for approximately 55,000 customers annually. The company taps 2,500 employees throughout the year and has total annual revenues of $235 million. Assets were listed for $148 million, with debt of $246 million. The Debtors owe $175 million in outstanding principal under a senior secured credit agreement; $36 million in outstanding principal under certain unsecured and subordinated liquidity notes; $5.5 million in outstanding principal under certain unsecured and subordinated seller financing relating to business acquisitions; and trade debt, as of Dec. 26, 2013, totaling $16.6 million. The Debtors have tapped Jeffrey M. Schlerf, Esq., and John H. Strock, Esq., at Fox Rothschild LLP as local counsel; John K. Cunningham, Esq., and Craig H. Averch, Esq., at White & Case LLP as bankruptcy counsel; Jefferies LLC as financial advisor; and Kurtzman Carson Consultants LLC as claims and noticing agent. The Debtors sought bankruptcy protection as they seek a new owner to take over the business. Existing lenders led by Ableco Finance LLC, as administrative agent, have agreed to finance the bankruptcy with a DIP financing facility of up to $20 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors for the Debtors' Chapter 11 cases. The Debtors disclosed that funds managed by Apollo Global Management, LLC submitted the winning offer to acquire substantially all of the Debtors' business at the April 21, 2014 auction. Apollo acquired the business for $125.2 million in cash. EVERGREEN TANK: Moody's Lowers Corp. Family Rating to 'B3' ---------------------------------------------------------- Moody's Investors Service has lowered the ratings of Evergreen Tank Solutions, Inc., including its Corporate Family Rating ("CFR") to B3 from B2. Concurrently, the senior secured term loan rating was lowered one notch to Caa1. The downgrade was driven by the company's weaker than expected operating performance stemming largely from an oversupply of tank equipment rental fleet and lower rig count. These trends have been driven by less oil and gas drilling activity negatively affecting tank equipment utilization levels and rental pricing. This, combined with higher debt levels to fund bolt-on acquisitions over the last year, has resulted in credit metrics that are expected to be more reflective of the B3 rating level over the intermediate term. The ratings outlook is stable. The following ratings were downgraded: Corporate Family Rating, to B3 from B2 Probability of Default Rating, to B3-PD from B2-PD $207.5 million face value term loan ($195.8 million outstanding) term loan due September 2018, to Caa1 (LGD-4, 63%) from B3 (LGD-4, 63%) Outlook, Stable Ratings Rationale Evergreen's B3 CFR reflects the company's small size, geographic concentration in the Gulf and Pennsylvania region, exposure to maintenance spending levels by companies in its end markets, as well as sensitivity to the price and production levels of oil and natural gas. The company's ratings also consider Moody's expectation that the company will maintain elevated debt levels to fund operations and to make meaningful term loan amortization payments relative to the company's cash flow generation. EBITDA is expected to benefit moderately from a stabilization in the company's core equipment rental business and modest EBITDA contribution from the relatively recent bolt-on acquisitions. The stable outlook is based on the expectation that operating performance at the company's core tank equipment rental business has stabilized as well as the maintenance of an adequate liquidity profile provided by access to a $65 million asset-based revolving credit facility and expectation of near term moderate free cash flow generation. Ratings could be upgraded if the company were to improve operating performance or pay down debt such that debt to EBITDA were to decrease below 4.5 times on a sustained basis while EBITDA to interest expense were above 2.5 times while maintaining at least an adequate liquidity profile. The rating or outlook could be downgraded if debt to EBITDA were to increase towards 6.0 times, or if EBITDA to interest expense were to decrease below 2.0 times on a sustained basis. The ratings could also be adversely impacted if the company's equipment utilization or free cash flow generation does not improve. The principal methodology used in this rating was the Global Equipment and Automobile Rental 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. Evergreen Tank Solutions, Inc., headquartered in Houston, Texas rents temporary-use liquid and solid storage containers to chemical, refinery, oil and natural gas drilling, and environmental service customers. The company also provides transportation and related services. Evergreen operates 28 locations covering the Gulf region and Pennsylvania and has a fleet of over 9,000 units including frac tanks, roll-off boxes, stainless steel tankers, de-watering boxes, and vacuum boxes. Via recent acquisitions, the company also participates in the pump business. Evergreen is majority owned by the private equity firm Odyssey Investment Partners. FAIRMONT GENERAL: Cancels Auction; Proceeds With Alecto Deal ------------------------------------------------------------ Fairmont General Hospital, Inc. and Fairmont Physicians, Inc., on Monday announced that they were canceling the June 17 auction for their assets, saying no qualified bids have been received. On May 9, 2014, the Debtors filed their motion seeking approval of the Asset Purchase Agreement with Alecto Healthcare Services Fairmont LLC. In the Sale Motion, the Debtors seek authority to sell their assets to Alecto, subject to certain procedures designed to allow additional bids from qualified bidders and an auction sale of the assets thereafter. On May 20, the Court approved bidding procedures and related matters associated with the sale process. Parties wishing to participate in the sale process as prospective buyers were required to submit "Qualified Bids" by noon (prevailing Eastern time) on June 12, 2014. If one or more additional Qualified Bids were received before the Bid Deadline, the Debtors would conduct an auction of the Debtors? assets on June 17, 2014, in Wheeling, West Virginia. As of the Bid Deadline, no additional Qualified Bids had been received from any parties. Prior to the Bid Deadline, the Debtors received one bid package from Monongalia Health System, Inc. After consultation among the Debtors, their advisors, the Official Committee of Unsecured Creditors, and the Indenture Trustee, the Debtors advised MHS that its bid did not constitute a Qualified Bid pursuant to the Sale Motion or the Bidding Procedures Order because the bid only sought the purchase and sale of certain real property known as the Connector Property, rather than the purchase and sale of substantially all of the Debtors? assets. The Debtors did not disclose the terms of the MHS offer. In the absence of additional Qualified Bids received before the deadline and pursuant to the Bidding Procedures Order, the Debtors said they would not conduct the auction originally scheduled for June 17. The Debtors will proceed to the hearing on June 23 for the approval of the sale to Alecto. As reported by the Troubled Company Reporter, pursuant to the APA, Alecto will (i) assume the assumed liabilities; (ii) pay or deliver to seller $15,000,000; (iii) pay the amount required under Section 2.9 of the APA; (iv) pay 50 percent of all transfer taxes due in connection with the closing of the transactions; and (v) on or before the one year anniversary of the closing, pay or deliver to the seller cash by wire of immediately available funds in the amount of $300,000 (the additional cash purchase price). As additional consideration for the sale, transfer, conveyance and assignment of the purchased assets, the purchaser will either spend or commit to spend at least $5,000,000 in capital expenditures at the Hospital during the two year period after the closing date. The APA also provides that in the event of any competing bids for the assets, resulting in the purchaser not being the successful buyer, Alecto will receive a breakup fee of $500,000 to be paid at the time of the closing of the sale with such third party buyer. The board-hired Cain Brothers and Associates, LLC, has assisted the Debtor in locating and negotiating with potential partners and purchasers for FGH, beginning in late 2011. From November 2011 through the end of 2012, Cain Brothers identified and brought to FGH 13 potential partners or buyers. About Fairmont General Hospital Inc. Fairmont General Hospital Inc. and Fairmont Physicians, Inc., which operate a 207-bed acute-care facility in Fairmont, West Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 13-01054) on Sept. 3, 2013. The fourth-largest employer in Marion County, West Virginia, filed for bankruptcy as it looks to partner with another hospital or health system. The Debtors are represented by Rayford K. Adams, III, Esq., and Casey H. Howard, Esq., at Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina; David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors' financial analyst is Gleason & Associates, P.C. The Debtors' claims and noticing agent is Epiq Bankruptcy Solutions. Hammond Hanlon Camp, LLC, has been engaged as investment banker and financial advisor. UMB Bank is represented by Nathan F. Coco, Esq., and Suzanne Jett Trowbridge, Esq., at McDermott Will & Emery LLP. The Committee of Unsecured Creditors is represented by Andrew Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. and Kirk B. Burkley, Esq., Bernstein Burkley, P.C. Janet Smith Holbrook, Esq., at Huddleston Bolen LLP, represents the Committee as local counsel. The Bankruptcy Court has named Suzanne Koenig at SAK Management Services, LLC, as patient care ombudsman. Ms. Koenig has hired her own firm as medical operations advisor; and Greenberg Traurig, LLP, as her counsel. The Debtors have scheduled $48,568,863 in total assets and $54,774,365 in total liabilities. FIRST-CITIZENS BANK: Moody's Affirms C Bank Fin. Strength Rating ---------------------------------------------------------------- Moody's Investors Service affirmed all the ratings of First- Citizens Bank & Trust Company. First Citizens has long- and short- term bank deposit ratings of A3 and Prime-2, respectively, and a standalone bank financial strength of C, mapping to a standalone baseline credit assessment of a3. The rating outlook is stable. First Citizens Bank & Trust Company is the banking subsidiary of First Citizens BancShares, Inc., which is not rated by Moody's (collectively hereto referred to as 'First Citizens'). The rating affirmation follows First Citizens' announcement that it has entered into an agreement to acquire South Carolina-based First Citizens Bancorporation, Inc. Affirmations with Stable Outlook: Issuer: First-Citizens Bank & Trust Company Adjusted Baseline Credit Assessment, Maintained a3 Baseline Credit Assessment, Maintained a3 Bank Financial Strength Rating, Affirmed C Issuer Rating, Affirmed A3 Deposit Ratings, Affirmed A3/P-2 OSO Ratings, Affirmed A3/P-2 Subordinate Regular Bond/Debenture, Affirmed Baa1 Outlook Actions: Issuer: First-Citizens Bank & Trust Company Outlook, Remains Stable Ratings Rationale The affirmation of First Citizens' ratings with a stable outlook was based on Moody's view that integration risk is low despite the fact that First Citizens is acquiring a company that is nearly 40% of its size. Moody's also expects the acquisition of First Citizens Bancorporation will not weaken First Citizens' sound credit fundamentals. Moody's said there are a number of important elements making the integration risk lower than average for an acquisition of this size. Firstly, First Citizens has good knowledge of First Citizens Bancorporation through its common ownership interests by the Holding family. Also, it has already acquired familiarity in First Citizens Bancorporation's operation because most data processing has been outsourced to First Citizens. Moody's added that both banks have a relatively simple business model of taking deposits and originating loans to hold on their balance sheets. Additionally, the acquired branches are primarily located in contiguous markets. Moody's said that First Citizens Bancorporation has a similar credit profile as First Citizens and the rating agency expects the pro-forma financial metrics of the combined company to remain solid upon closing. Specifically, First Citizens Bancorporation's profitability and liquidity metrics are better than those of First Citizens'. Moody's did note that the acquired company's asset quality ratios are comparatively weaker than First Citizens', but they are still relatively strong. Moody's also expects First Citizens' pro-forma capital to remain comparatively high as the transaction is priced conservatively and will be financed principally by common share issuance. FJM BREAKAWAY: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: FJM Breakaway Properties, LLC 68 Route 31 Flemington, NJ 08822 Case No.: 14-22244 Nature of Business: Real Estate Chapter 11 Petition Date: June 13, 2014 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Hon. Christine M. Gravelle Debtor's Counsel: Stephen B. McNally, Esq. MCNALLY & BUSCHE, L.L.C. 93 Main Street, Suite 201 Newton, NJ 07860 Tel: (973) 300-4260 Fax: (973) 300-4264 Email: steve@mcnallylawllc.com Total Assets: $1.60 million Total Liabilities: $1.64 million The petition was signed by Vincent J. Lentine, officer. A list of the Debtor's 16 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb14-22244.pdf FOLSOM LEARNING: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Folsom Learning Center Associates 8640 Auburn-Folsom Rd. Granite Bay, CA 95746 Case No.: 14-26240 Chapter 11 Petition Date: June 13, 2014 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Hon. Thomas Holman Debtor's Counsel: W. Steven Shumway W. STEVEN SHUMWAY 300 Harding Blvd., Suite 116 Roseville, CA 95661 Tel: 916-789-8821 Email: sshumway@shumwaylaw.com Total Assets: $6.36 million Total Liabilities: $5.32 million The petition was signed by Gregory Nichols, general partner. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/caeb14-26240.pdf GENERAL MOTORS: Recalls More Cars Over Ignition Switch Issues ------------------------------------------------------------- Jeff Bennett, writing for The Wall Street Journal, reported that General Motors Co. pushed its repair-cost estimate for auto recalls this year to $2 billion as it disclosed plans to replace potentially faulty ignition keys on 3.37 million older model cars in North America. According to the Journal, the move comes two days before Chief Executive Mary Barra is set to testify before a House committee on the auto maker's mishandling of an ignition switch recall involving Chevrolet Cobalts and other older models. The nation's largest auto maker is attempting to "clear the decks" of any potential recall problems ahead of Ms. Barra's testimony in a show of good faith to lawmakers currently investigating its safety operations, the Journal said, citing people familiar with the matter. Peter J. Henning, writing for The New York Times' DealBook, reported that the U.S. Justice Department is taking a hard look at who should be held accountable when it comes to the GM debacle. According to the DealBook, prosecutors, along with the U.S. Securities and Exchange Commission, are looking more broadly at G.M.'s disclosures to regulators as well as the conduct of individuals who were involved in the flawed ignition switch. About General Motors With its global headquarters in Detroit, Michigan, General Motors -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government provided financing. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM -- General Motors Corporation -- filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. The Debtors tapped Weil, Gotshal & Manges LLP Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel; and Morgan Stanley, Evercore Partners and the Blackstone Group LLP as financial advisor. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GENERAL MOTORS: Recall Cases Consolidated in New York ----------------------------------------------------- Ashby Jones, writing for The Wall Street Journal, reported that lawsuits against General Motors Co. alleging economic losses from ignition-switch defects will be consolidated and sent to a federal court in Manhattan, a panel of judge has ruled. According to the report, more than 80 ignition-switch-related civil lawsuits have been filed against GM, most alleging economic damages, such as repair costs and declines in resale value on about 2.6 million cars recalled since February. The lawsuits will be sent to U.S. District Judge Jesse M. Furman, who will handle all pretrial rulings related to the cases, the Journal said. The decision by the seven-judge panel to send the cases to Manhattan doesn't impact the lawsuits over personal injuries or deaths allegedly caused by the ignition default, the report added. About General Motors With its global headquarters in Detroit, Michigan, General Motors -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government provided financing. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM -- General Motors Corporation -- filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. The Debtors tapped Weil, Gotshal & Manges LLP Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel; and Morgan Stanley, Evercore Partners and the Blackstone Group LLP as financial advisor. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. GLENVILLE STATE: Moody's Lowers Revenue Bonds Rating to 'Ba2' ------------------------------------------------------------- Moody's Investors Service has downgraded Glenville State College's rating to Ba2 from Baa3 on the Series 2011A Commercial Development Refunding Revenue Bonds issued through the County Commission of Glimer County. The outlook has been revised to negative. Ratings Rationale The downgrade to Ba2 with a negative outlook is driven by Glenville State College's ("GSC") extended period of fiscal stress, elevated financial leverage, and extremely weak liquidity that is insufficient to cover $25 million of bank debt which the bank has the option to call on August 31, 2014 or any day thereafter upon 120 days notice. The rating action also reflects GSC's negative operating margins, very thin debt service coverage and a steeper drop in enrollment than originally anticipated with likely continued enrollment pressure. The Ba2 rating is based on the lease-backed structure of the rated debt for which lease payments are subject to annual appropriation by the college. In addition, GSC has modest revenue and enrollment, weak liquidity and low financial resources relative to a very high debt burden and complex debt structure. The rating also incorporates the college's essentiality as the sole public education provider in north central West Virginia and strong state support for operations and capital. Challenges Dual credit challenges of razor thin liquidity and a complex debt structure including variable rate debt, bank debt and swaps heightens risk. Fiscal 2013 monthly liquidity of just $3.2 million covered $25 million of demand debt by just 12.9%. The lease-backed security structure on the college's Series 2011A bonds is weaker than a general obligation or broader pledge competing with other obligations and priorities, particularly in times of fiscal stress. Low occupancy rates for the housing project will require the college to temporarily draw on its own reserves for lease payments during the summer months. Very high leverage and weak debt metrics is evidenced by debt to operating revenues of 2.15 times and expendable financial resources to debt of 0.06 times in FY 2013. GSC has negative operating margins, as calculated by Moody's, averaging negative 8.8% from FYs 2011-2013. While operating performance improved considerably in FY 2013, margins are expected to weaken in fiscal 2014 due to a significant 8% enrollment decline. GSC's limited enrollment makes it vulnerable to even small fluctuations in enrollment. Fall 2014 enrollment is expected to at least match fall 2013's 1,330 full-time equivalent students. State appropriations were approximately 9% lower in FY 2014 than in the prior year and are expected to be lower still in FY 2015. Strengths Strong support from the state is evidenced by consistent funding for operations, student financial aid and capital projects. GSC has established a regional presence, is an economic driver for the county, and is an essential provider of post secondary education in a traditionally underserved Appalachian region. Outlook The negative outlook reflects the urgency of the pending call on the bank debt given the college's weak liquidity profile and negative operations, which could result in more rapid credit deterioration should the college be unable to resolve any potential debt acceleration. What Could Make The Rating Go UP An upgrade would be considered if Glenville State is able to sustainably improve operating performance and debt service coverage, stabilize enrollment and grow liquidity. What Could Make The Rating Go DOWN A rating downgrade is likely if operating deficits persist beyond FY 2016 or there is further erosion of operating margins, liquidity or balance sheet cushion to debt. More rapid credit deterioration could occur should the bank exercise its call option or there is any change in bank covenants resulting in more onerous covenants or bank requirements. Rating Methodology The principal methodology used in this rating was U.S. Not-for- Profit Private and Public Higher Education published in August 2011. An additional methodology used was the Fundamentals of Credit Analysis for Lease-Backed Municipal Obligations published in December 2012. GEOPETRO RESOURCES: Incurs $543K Net Loss for First Quarter ------------------------------------------------------------ GeoPetro Resources Company filed its quarterly report on Form 10- Q, disclosing a net loss of $543,523 on $nil of natural gas sales for the three months ended March 31, 2014, compared with a net loss of $766,860 on $nil of natural gas sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $23.45 million in total assets, $8.36 million in total liabilities, and stockholders' equity of $15.08 million. GeoPetro's ability to meet its contractual obligations and remit payment under its arrangements with its vendors depends on its ability to generate additional financing. GeoPetro's management continues to renegotiate the terms of its existing borrowing arrangements and raise additional capital through debt and equity issuances. These conditions raise 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/7AGcF2 San Francisco-based GeoPetro Resources Company is engaged in the exploration and development of oil and natural gas reserves in the United States and abroad. The Company has conducted leasehold acquisition, exploration and drilling activities on its North American and international prospects. GROWLIFE INC: Posts $37.77-Mil. Net Loss for March 31 Quarter ------------------------------------------------------------- GrowLife, Inc., reported a net loss of $37.77 million on $2.38 million of net revenue for the three months ended March 31, 2014, compared with a net loss of $1.18 million on $760,709 of net revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $7.58 million in total assets, $30.27 million in total liabilities, and a stockholders' deficit of $22.7 million. For the three month period ended March 31, 2014, the Company's cash used in operations was $1.13 million. The Company has experienced recurring operating losses and negative operating cash flows since inception, and has financed its working capital requirements during this period primarily through the recurring issuance of convertible notes payable and advances from a related party. These facts indicate that there is substantial doubt of the Company's continuation 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 at: http://is.gd/0lmnPb GrowLife, Inc. operates businesses that manufacture and supply branded equipment and expendables in the United States for urban gardening, including equipment and expendables for growing of medical marijuana. This holding company, formerly known as Phototron Holdings, Inc., maintains its principal executive offices in Woodland Hills, California. GSE ENVIRONMENTAL: Alvarez & Marsal's Swick Okayed as VP Finance ---------------------------------------------------------------- GSE Environmental, Inc. and its debtor-affiliates sought and obtained permission from the Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware to employ Alvarez & Marsal North America, LLC and the firm's Dean E. Swick as the Debtors' Vice President, Finance, nunc pro tunc to May 4, 2014 petition date. The Debtors require Alvarez & Marsal to: (a) provide A&M personnel to assist Mr. Swick in the execution of his duties; (b) assist in the evaluation of and implementation of enhancements to the weekly cash flow forecast for the Debtors; (c) assist in identification of liquidity generation opportunities, and support to the Debtors' management team in implementation, as needed; (d) assist the Debtors' CEO and other professionals engaged by the Debtors in the evaluation of the Debtors' long-term financial forecast and business plan; (e) assist in the restructuring process including assistance in preparation of reports and liaison with creditors, as deemed necessary by the CEO and other professionals engaged by the Debtors; (f) aid with treasury and cash management functions of the Debtors; (g) assist in the development of a budget used to arrange debtor in possession financing and compliance reporting related to such financing; (h) assist in the preparation of first day motions and other motions during the chapter 11 cases; (i) support the preparation of statements of financial affairs, schedules, monthly operating reports, and other requirements for the chapter 11 cases; (j) support the preparation of information for management, counsel, and stakeholders during the course of the chapter 11 cases; (k) provide testimony; and (1) perform other services, as requested or directed by the Debtors' boards of directors or other personnel of the Debtors as authorized by the Board and agreed to by Alvarez & Marsal, that are not duplicative of work others are performing for the Debtors. Alvarez & Marsal will be paid at these hourly rates: Managing Directors $675-$875 Directors $475-$675 Analysts/Associates $275-$475 Alvarez & Marsal will also be reimbursed for reasonable out-of- pocket expenses incurred. Alvarez & Marsal received $250,000 as a retainer. In the 90 days prior to the petition date, Alvarez & Marsal received additional payments totaling approximately $1,400,152 in the aggregate for services performed for the Debtors. Dean E. Swick, managing director of Alvarez & Marsal, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Alvarez & Marsal can be reached at: Dean E. Swick ALVAREZ & MARSAL NORTH AMERICA, LLC 600 Madison Avenue, 8th Floor New York, NY 10022 Tel: +1 (212) 759-4433 Fax: +1 (212) 759-5532 About GSE Environmental GSE Environmental -- http://www.gseworld.com-- is a global manufacturer and marketer of geosynthetic lining solutions, products and services used in the containment and management of solids, liquids and gases for organizations engaged in waste management, mining, water, wastewater and aquaculture. Headquartered in Houston, Texas, USA, GSE maintains sales offices throughout the world and manufacturing facilities in the US, Chile, Germany, Thailand, China and Egypt. GSE Environmental, Inc. and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11126) on May 4, 2014 as part of a restructuring support agreement with their lenders. The Debtors are seeking joint administration of their Chapter 11 cases. GSE announced an agreement with its lenders to restructure its balance sheet by converting all of its outstanding first lien debt to equity, leaving the Company well-positioned for long-term growth and profitability. The Company has tapped Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP as counsel, Alvarez & Marsal North America, LLC, as restructuring advisor, and Moelis & Company, as financial advisor. The first lien lenders are represented by Wachtell, Lipton, Rosen & Katz. Prime Clerk is the Debtors' claims agent. Cantor Fitzgerald Securities as agent for a consortium of DIP lenders is represented by Nathan Z. Plotkin, Esq., at Shipman & Goodwin LLP, in Hartford, Connecticut. The DIP Lenders are represented by Scott K. Charles, Esq., Emily D. Johnson, Esq., and and Neil K. Chatani, Esq., at Wachtell, Lipton, Rosen & Katz, in New York. The local Delaware counsel to the DIP Lenders and the DIP Agent is Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. GSE Environmental's non-U.S. subsidiaries are not included in the U.S. Chapter 11 filings and will continue to operate in the ordinary course without interruption. GSE ENVIRONMENTAL: Court Approves Prime Clerk as Admin Advisor -------------------------------------------------------------- GSE Environmental, Inc. and its debtor-affiliates sought and obtained permission from the Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware to employ Prime Clerk LLC as administrative advisor, nunc pro tunc to May 4, 2014 petition date. The Debtors require Prime Clerk to: (a) assist with, among other things, solicitation, balloting, and tabulation of votes, and prepare any related reports, as required in support of confirmation of a chapter 11 plan, and in connection with such services, process requests for documents from parties in interest, including, if applicable, brokerage firms, bank back-offices, and institutional holders; (b) prepare an official ballot certification and, if necessary, testify in support of the ballot tabulation results; (c) assist with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs and gather data in conjunction therewith; (d) provide a confidential data room, if requested; (e) manage and coordinate any distributions pursuant to a chapter 11 plan; and (f) provide such other processing, solicitation, balloting, and other administrative services described in the Engagement Agreement, but not included in the Section 156(c) Application, as may be requested from time to time by the Debtors, the Court or the Office of the Clerk of the Bankruptcy Court (the "Clerk"). Prime Clerk will be paid at these hourly rates: Analyst $45 Technology Consultant $130 Consultant $140 Senior Consultant $170 Director $195 Solicitation Consultant $195 Director of Solicitation $210 Prime Clerk will also be reimbursed for reasonable out-of-pocket expenses incurred. Benjamin P. D. Schrag, executive vice president of Prime Clerk, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Prime Clerk can be reached at: Shai Waisman PRIME CLERK LLC 830 3rd Avenue, 9th Floor New York, NY 10022 Tel: (212) 257-5450 E-mail: bschrag@primeclerk.com About GSE Environmental GSE Environmental -- http://www.gseworld.com-- is a global manufacturer and marketer of geosynthetic lining solutions, products and services used in the containment and management of solids, liquids and gases for organizations engaged in waste management, mining, water, wastewater and aquaculture. Headquartered in Houston, Texas, USA, GSE maintains sales offices throughout the world and manufacturing facilities in the US, Chile, Germany, Thailand, China and Egypt. GSE Environmental, Inc. and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11126) on May 4, 2014 as part of a restructuring support agreement with their lenders. The Debtors are seeking joint administration of their Chapter 11 cases. GSE announced an agreement with its lenders to restructure its balance sheet by converting all of its outstanding first lien debt to equity, leaving the Company well-positioned for long-term growth and profitability. The Company has tapped Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP as counsel, Alvarez & Marsal North America, LLC, as restructuring advisor, and Moelis & Company, as financial advisor. The first lien lenders are represented by Wachtell, Lipton, Rosen & Katz. Prime Clerk is the Debtors' claims agent. Cantor Fitzgerald Securities as agent for a consortium of DIP lenders is represented by Nathan Z. Plotkin, Esq., at Shipman & Goodwin LLP, in Hartford, Connecticut. The DIP Lenders are represented by Scott K. Charles, Esq., Emily D. Johnson, Esq., and and Neil K. Chatani, Esq., at Wachtell, Lipton, Rosen & Katz, in New York. The local Delaware counsel to the DIP Lenders and the DIP Agent is Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. GSE Environmental's non-U.S. subsidiaries are not included in the U.S. Chapter 11 filings and will continue to operate in the ordinary course without interruption. GSE ENVIRONMENTAL: Court Okays Moelis as Investment Banker ---------------------------------------------------------- GSE Environmental, Inc. and its debtor-affiliates sought and obtained permission from the Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware to employ Moelis & Company LLC as investment banker and financial advisor, nunc pro tunc to May 4, 2014 petition date. The Debtors require Moelis & Company to: (a) assist the Debtors in reviewing and analyzing the Debtors' results of operations, financial condition and business plan; (b) assist the Debtors in preparing information materials (the "Information Memo") describing the Debtors; (c) assist the Debtors in formulating a marketing strategy to support a potential Sale Transaction and Capital Transaction; (d) assist the Debtors in identifying and contacting prospective third party purchasers who would be interested in a Sale Transaction and Capital Transaction, and providing on behalf of the Debtors such prospective Purchasers with the Information Memo and such information about the Debtors as may be appropriate and acceptable to the Debtors; (e) assist the Debtors in reviewing and analyzing potential Restructuring and Sale Transactions including transactions pursuant to Section 363 of the Bankruptcy Code or pursuant to a plan of reorganization; (f) advise and assist the Debtors in negotiating with current lenders and potential investors over the terms of a number of potential restructuring transactions; (g) advise the Debtors as to the strategy and tactics of negotiations with existing lenders as it pertains to the transactions contemplated by that certain restructuring support agreement, dated as of May 4, 2014, (the "RSA"); (h) advise the Debtors as to the timing, structure and pricing of various potential Capital Transactions; and (i) meet with the Debtors' board of directors to discuss various proposed restructuring transactions and the financial implications of each. The Fee Structure of Moelis & Company: -- Monthly Fee: during the term of the agreement set forth in the Engagement Letter, a non-refundable cash fee of $125,000 per month, payable in advance of each month. Whether or not a Restructuring, Sale Transaction, or Capital Transaction occurs, Moelis shall earn and be paid the Monthly Fee every month during the term of the agreement. 50% of Monthly Fees paid after the third full Monthly Fee shall be credited against any Restructuring Fee, Sale Transaction Fee, or Capital Transaction Fee, as applicable. -- Restructuring Fee: at the closing of a Restructuring, a fee of $1,800,000. -- Sale Transaction Fee: at the closing of a Sale Transaction, a fee equal to the greater of: (i) 1.75% of the Sale Transaction Value; and (ii) the Restructuring Fee. -- Termination Fee: a fee equal to 25% of any net "termination fee," "break-up fee," "topping fee," "expense reimbursement," or other form of compensation payable to the Debtors if, after the execution of a definitive agreement for a Sale Transaction, the Sale Transaction fails to close and the Company receives any such compensation. -- Capital Transaction Fee: a fee (the "Capital Transaction Fee"), calculated separately, with respect to each Capital Transaction completed outside of a Restructuring or Sale Transaction, payable at the initial closing of any Capital Transaction in the amount of (i) 1.0% of the aggregate gross amount of any Revolving Credit Facility, including unfunded commitments, plus (ii) 1.5% of the aggregate gross amount of any first lien Term Loan Credit Facility, plus (iii) 3.0% of the aggregate gross amount of any second lien Term Loan Credit Facility or any Bond or Mezzanine financing, subject in the case of the first Capital Transaction only to a minimum Capital Transaction Fee of $1,000,000, provided that the difference between such $1,000,000 minimum payment and the actual Capital Transaction Fee without giving effect to such minimum shall be applied as a credit against any subsequent Capital Transaction Fee required to be paid. The Capital Transaction Fee shall be payable in respect of each Capital Transaction in the event that more than one Capital Transaction shall occur. Moelis & Company will also be reimbursed for reasonable out-of- pocket expenses incurred. Prior to the Petition Date, according to the Debtors' books and records, the Debtors paid Moelis & Company $1,275,000 for fees and $90,258 for reimbursement of expenses during the 90-day period before the Petition Date. As of the Petition Date, the Debtors do not owe Moelis & Company any fees for services performed or expenses incurred under the Engagement Letter in excess of $15,000, which Moelis & Company is holding on account for prepetition expenses incurred in connection with the Engagement Letter. Mark Hootnick, managing director of Moelis & Company, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Moelis & Company can be reached at: Mark Hootnick MOELIS & COMPANY LLC 399 Park Avenue, 5th Floor New York, NY 10022 Tel: +1 (212) 883-3595 E-mail: mark.hootnick@moelis.com About GSE Environmental GSE Environmental -- http://www.gseworld.com-- is a global manufacturer and marketer of geosynthetic lining solutions, products and services used in the containment and management of solids, liquids and gases for organizations engaged in waste management, mining, water, wastewater and aquaculture. Headquartered in Houston, Texas, USA, GSE maintains sales offices throughout the world and manufacturing facilities in the US, Chile, Germany, Thailand, China and Egypt. GSE Environmental, Inc. and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11126) on May 4, 2014 as part of a restructuring support agreement with their lenders. The Debtors are seeking joint administration of their Chapter 11 cases. GSE announced an agreement with its lenders to restructure its balance sheet by converting all of its outstanding first lien debt to equity, leaving the Company well-positioned for long-term growth and profitability. The Company has tapped Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP as counsel, Alvarez & Marsal North America, LLC, as restructuring advisor, and Moelis & Company, as financial advisor. The first lien lenders are represented by Wachtell, Lipton, Rosen & Katz. Prime Clerk is the Debtors' claims agent. Cantor Fitzgerald Securities as agent for a consortium of DIP lenders is represented by Nathan Z. Plotkin, Esq., at Shipman & Goodwin LLP, in Hartford, Connecticut. The DIP Lenders are represented by Scott K. Charles, Esq., Emily D. Johnson, Esq., and and Neil K. Chatani, Esq., at Wachtell, Lipton, Rosen & Katz, in New York. The local Delaware counsel to the DIP Lenders and the DIP Agent is Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. GSE Environmental's non-U.S. subsidiaries are not included in the U.S. Chapter 11 filings and will continue to operate in the ordinary course without interruption. GSE ENVIRONMENTAL: Pachulski Stang Approved as Co-counsel --------------------------------------------------------- GSE Environmental, Inc. and its debtor-affiliates sought and obtained permission from the Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware to employ Pachulski Stang Ziehi & Jones LLP as co-counsel, nunc pro tunc to May 4, 2014 petition date. The Debtors require Pachulski Stang to: (a) provide legal advice regarding local rules, practices, and procedures; (b) review and comment on drafts of documents to ensure compliance with local rules, practices, and procedures; (c) file documents as requested by Kirkland & Ellis LLP and coordinating with the Debtors' claims agent for service of documents; (d) prepare agenda letters, certificates of no objection, certifications of counsel, and notices of fee applications and hearings; (e) prepare hearing binders of documents and pleadings, printing of documents and pleadings for hearings; (f) appear in Court and at any meeting of creditors on behalf of the Debtors in its capacity as Delaware counsel with Kirkland & Ellis LLP; (g) monitor the docket for filings and coordinating with Kirkland & Ellis LLP on pending matters that need responses; (h) prepare and maintain critical dates memorandum to monitor pending applications, motions, hearing dates and other matters and the deadlines associated with same; distributing critical dates memorandum with Kirkland & Ellis LLP for review and any necessary coordination for pending matters; (i) handle inquiries and calls from creditors and counsel to interested parties regarding pending matters and the general status of these Cases, and, to the extent required, coordinating with Kirkland & Ellis LLP on any necessary responses; and (j) provide additional administrative support to Kirkland & Ellis LLP, as requested. Pachulski Stang will be paid at these hourly rates: Laura Davis Jones $995 Timothy P. Cairns $645 Patricia Cuniff $295 Pachulski Stang will also be reimbursed for reasonable out-of- pocket expenses incurred. Pachulski Stang received payments from the Debtors during the year prior to the Petition Date in the amount of $50,000, which includes the Debtors' aggregate filing fees for these cases, in connection with the preparation of initial documents and the prepetition representation of the Debtors. Laura Davis Jones, partner of Pachulski Stang, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Pachulski Stang can be reached at: Laura Davis Jones, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 E-mail: ljones@pszjlaw.com About GSE Environmental GSE Environmental -- http://www.gseworld.com-- is a global manufacturer and marketer of geosynthetic lining solutions, products and services used in the containment and management of solids, liquids and gases for organizations engaged in waste management, mining, water, wastewater and aquaculture. Headquartered in Houston, Texas, USA, GSE maintains sales offices throughout the world and manufacturing facilities in the US, Chile, Germany, Thailand, China and Egypt. GSE Environmental, Inc. and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11126) on May 4, 2014 as part of a restructuring support agreement with their lenders. The Debtors are seeking joint administration of their Chapter 11 cases. GSE announced an agreement with its lenders to restructure its balance sheet by converting all of its outstanding first lien debt to equity, leaving the Company well-positioned for long-term growth and profitability. The Company has tapped Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP as counsel, Alvarez & Marsal North America, LLC, as restructuring advisor, and Moelis & Company, as financial advisor. The first lien lenders are represented by Wachtell, Lipton, Rosen & Katz. Prime Clerk is the Debtors' claims agent. Cantor Fitzgerald Securities as agent for a consortium of DIP lenders is represented by Nathan Z. Plotkin, Esq., at Shipman & Goodwin LLP, in Hartford, Connecticut. The DIP Lenders are represented by Scott K. Charles, Esq., Emily D. Johnson, Esq., and and Neil K. Chatani, Esq., at Wachtell, Lipton, Rosen & Katz, in New York. The local Delaware counsel to the DIP Lenders and the DIP Agent is Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. GSE Environmental's non-U.S. subsidiaries are not included in the U.S. Chapter 11 filings and will continue to operate in the ordinary course without interruption. GSE ENVIRONMENTAL: Taps Kirkland & Ellis as Attorneys ----------------------------------------------------- GSE Environmental, Inc. and its debtor-affiliates seek authorization from the Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware to employ Kirkland & Ellis LLP as attorneys, nunc pro tunc to May 4, 2014 petition date. The Debtors require Kirkland & Ellis to: (a) advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their businesses and properties; (b) advise and consult on the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; (c) attend meetings and negotiating with representatives of creditors and other parties in interest; (d) take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; (e) prepare pleadings in connection with these chapter 11 cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; (f) represent the Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; (g) advise the Debtors in connection with any potential sale of assets; (h) appear before the Court and any appellate courts to represent the interests of the Debtors' estates; (i) advise the Debtors regarding tax matters; (j) take any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto; and (k) perform all other necessary legal services for the Debtors in connection with the prosecution of these chapter 11 cases, including: (i) analyzing the Debtors' leases and contracts and the assumption and assignment or rejection thereof; (ii) analyzing the validity of liens against the Debtors; and (iii) advising the Debtors on corporate and litigation matters. Kirkland & Ellis will be paid at these hourly rates: Partners $665-$1,295 Of Counsel $415-$1,195 Associates $450-$865 Paraprofessionals $170-$355 Kirkland & Ellis will also be reimbursed for reasonable out-of- pocket expenses incurred. On Jan. 3, 2014, the Debtors paid $500,000 to Kirkland & Ellis as a classic retainer and the Debtors subsequently made additional classic retainer payments to Kirkland & Ellis totaling $2,503,379.85 in the aggregate. Patrick J. Nash, Jr., partner of Kirkland & Ellis, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Kirkland & Ellis can be reached at: Patrick J. Nash, Jr., P.C. KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 60654 Tel: (312) 862-2000 Fax: (312) 862-2200 E-mail: patrick.nash@kirkland.com About GSE Environmental GSE Environmental -- http://www.gseworld.com-- is a global manufacturer and marketer of geosynthetic lining solutions, products and services used in the containment and management of solids, liquids and gases for organizations engaged in waste management, mining, water, wastewater and aquaculture. Headquartered in Houston, Texas, USA, GSE maintains sales offices throughout the world and manufacturing facilities in the US, Chile, Germany, Thailand, China and Egypt. GSE Environmental, Inc. and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11126) on May 4, 2014 as part of a restructuring support agreement with their lenders. The Debtors are seeking joint administration of their Chapter 11 cases. GSE announced an agreement with its lenders to restructure its balance sheet by converting all of its outstanding first lien debt to equity, leaving the Company well-positioned for long-term growth and profitability. The Company has tapped Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP as counsel, Alvarez & Marsal North America, LLC, as restructuring advisor, and Moelis & Company, as financial advisor. The first lien lenders are represented by Wachtell, Lipton, Rosen & Katz. Prime Clerk is the Debtors' claims agent. Cantor Fitzgerald Securities as agent for a consortium of DIP lenders is represented by Nathan Z. Plotkin, Esq., at Shipman & Goodwin LLP, in Hartford, Connecticut. The DIP Lenders are represented by Scott K. Charles, Esq., Emily D. Johnson, Esq., and and Neil K. Chatani, Esq., at Wachtell, Lipton, Rosen & Katz, in New York. The local Delaware counsel to the DIP Lenders and the DIP Agent is Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. GSE Environmental's non-U.S. subsidiaries are not included in the U.S. Chapter 11 filings and will continue to operate in the ordinary course without interruption. HILLMAN GROUP: Moody's Hikes Rating on Notes Due 2022 to 'Caa1' --------------------------------------------------------------- Moody's Investors Service moved the rating on The Hillman Group Inc.'s (NEW) proposed senior unsecured notes due 2022 to Caa1 from Caa2 following the company's announcement of a change in its proposed financing structure. Moody's also affirmed the company's B3 corporate family rating, B3-PD probability of default rating, B1 rating on proposed first lien senior secured term loan B due 2021, and B1 rating on proposed first lien senior secured revolving credit facility due 2019. The rating outlook is stable. Hillman's proposed capital structure modification does not result in a change of total debt or pro forma debt leverage. The amount of proposed senior unsecured notes increases by $60 million to $330 million from $270 million in the original proposed capital structure, while first lien senior secured term loan is reduced to $550 million from $610 million. This change results in a one notch higher rating on senior unsecured notes compared to the original proposed transaction, reflecting a higher recovery rate for this instrument. Hillman is being acquired by CCMP Capital Advisors from its current owners Oak Hill Capital Partners (which will maintain a minority interest ownership) in a transaction valued at $1.475 billion. The acquisition will be financed with a $550 million first lien senior secured term loan B due 2021, a $70 million first lien senior secured revolving credit facility due 2019, $330 million senior unsecured notes due 2022, and $439 million of new equity from CCMP. Oak Hill Capital Partners and management will roll over $106 million of the existing equity, and the existing $105 junior subordinated notes due 2027 (issued by Hillman Group Capital Trust) will stay in place. Subject to regulatory approvals, the transaction is expected to close during the second or third calendar quarter of 2014. The proceeds of the financing will be used to repay the company's existing debt, including the outstanding $384 million senior secured term loan due 2017 (rated Ba3), $30 million senior secured revolving credit facility due 2017 (rated Ba3), and $265 million of senior unsecured notes due 2018 (rated B3). The ratings on these instruments will be withdrawn upon repayment. The acquisition and the proposed financing will cause Hillman's absolute debt level to rise by $240 million and pro forma leverage to increase to about 8.6x debt-to-EBITDA (Moody's adjusted) from 6.7x at March 31, 2014. Given this high debt load, other key credit metrics, namely, adjusted free cash flow to debt, which is currently weak at around 1%, will weaken further. The high leverage profile leaves the company with very little financial flexibility and exposes it to vulnerability in an event of any end market weakness or delays in achieving acquisition-related synergies. According to Moody's Analyst Natalia Gluschuk, "the significant increase in leverage reflects Hillman's aggressive financial policies, particularly in light of its acquisitive nature. The company has made 10 acquisitions since 2000." The following rating actions have been taken: Issuer: The Hillman Group Inc. (NEW): $330 million of senior unsecured notes due 2022, adjusted to Caa1 (LGD5, 78%) from Caa2 (LGD5, 80%); Corporate family rating, affirmed at B3; Probability of default rating, affirmed at B3-PD; $550 million first lien senior secured term loan B due 2021, affirmed at B1 (LGD2, 27%); $70 million first lien senior secured revolving credit facility due 2019, affirmed B1 (LGD2, 27%); Speculative grade liquidity rating, affirmed at SGL-3; Stable outlook. LGD point estimates are subject to change and all ratings are subject to the execution of the transaction as currently proposed and Moody's review of final documentation. Ratings Rationale Hillman's B3 corporate family rating reflects its very high debt leverage, aggressive financial policies and a debt-funded acquisition strategy that leaves limited free cash flow available for debt reduction. The rating also considers Hillman's modest scale, private equity ownership and potential shareholder-friendly activities that could be detrimental to lenders. At the same time, the ratings are supported by the company's track record of successfully integrating acquisitions and modest deleveraging through EBITDA growth. In addition, the rating recognizes the stable demand for Hillman's products as a result of their replenishment nature and low price points, and thus stable revenues, as well as healthy operating margins and the company's long-standing relationships with well-recognized retailers. The B1 rating on first lien senior secured term loan and revolving credit facility benefits from junior capital provided by both the senior unsecured notes (rated Caa1) and the trust preferred junior debentures due 2027 (unrated). The trust preferred securities provide cushion for the notes, but bondholders lack security in the company's assets and therefore rank behind the bank lenders. Hillman's adequate liquidity position is reflected in its SGL-3 speculative grade liquidity rating, supported by an increased capacity under the revolving credit facility of $70 million, extended debt maturity profile, and lack of financial maintenance covenants unless the facility is utilized. However, liquidity is constrained by capital expenditures and resulting low free cash flows, which may turn negative during working capital intensive quarters. Additionally, given the company's growth strategy, in Moody's view free cash flow is likely to be utilized for acquisitions or organic growth initiatives rather than for debt reduction. The stable outlook reflects Moody's expectations that the company will demonstrate modest organic revenue and earnings growth, maintain stable operating margins, and accomplish deleveraging through EBITDA growth, while maintaining adequate liquidity. Downward rating pressure may occur if the company's adjusted debt- to-EBITDA is sustained above 8.0x, if adjusted EBITA to interest expense were to decline below 1.0x, if operating margins were to weaken, or if negative free cash flows were to persist. Additionally, a liquidity deterioration or a material debt- financed acquisition would also pressure the ratings. Given the company's highly leveraged capital structure, an upgrade is unlikely in the foreseeable future. However, a commitment to a more conservative financial policy, including equity funding of acquisitions or material debt reduction, accompanied by strengthened liquidity, could result in upward rating pressure. Quantitatively, an upgrade would require adjusted debt-to-EBITDA to be sustained below 7.0x, EBITA to interest coverage above 2.0x, and free cash flow to debt to increase to 5%. The Hillman Group, Inc., headquartered in Cincinnati, OH, is a product and services provider in the hardware and home improvement industry. The company sells hardware including fasteners, rods, keys, tags and signs to retailers in the North and South Americas as well as in Australia, and provides related services including installing and maintaining key duplication and engraving machines. Hillman is being acquired by CCMP Capital Advisors from its current owners Oak Hill Capital Partners (which will maintain a minority interest ownership). In the last twelve months ended March 31, 2014, the company generated approximately $713 million in revenues. The principal methodology used in this rating was the Global Consumer Durables 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. HUSKY INT'L: Moody's Rates $300MM 2nd Lien Debt 'Caa1' ------------------------------------------------------ Moody's Investors Service affirmed Husky International Ltd.'s B2 corporate family rating (CFR) and B2-PD probability of default rating, and assigned B1 and Caa1 ratings respectively to the company's proposed first lien credit facilities and second lien term loan. The Ba3 and Caa1 ratings on Husky's existing first lien credit facilities and senior unsecured notes were affirmed and will be withdrawn when the refinance transaction closes. The ratings outlook is stable. Proceeds from the new first and second lien term loans (totaling $1.565 billion) together with balance sheet cash ($51 million) will be used to refinance existing debt ($1.561 billion) and pay breakage costs on notes, fees and expenses ($55 million). Husky's new $110 million revolving credit facility will be undrawn at close. Ratings Assigned: $110M Revolving Credit Facility due 2019, B1, LGD3, 39% $1265M First Lien Term Loan due 2021, B1, LGD3, 39% $300M Second Lien Term Loan due 2022, Caa1, LGD5, 89% Ratings Affirmed: Corporate Family Rating, B2 Probability of Default Rating, B2-PD $110M Revolving Credit Facility due 2018, Ba3, LGD3, 30%; to be withdrawn at close $991M Sen. Sec. Term Loan B due 2018, Ba3, LGD3, 30%; to be withdrawn at close $570M Sen. Unsecured Notes due 2019, Caa1, LGD5, 84%; to be withdrawn at close Outlook Action: Remains Stable Ratings Rationale Husky's B2 CFR primarily reflects its high leverage (adjusted Debt/EBITDA of 6.5x at Q1/14) and narrow product profile with technology risk exposure. The rating also reflects the company's strong global market position in the PET pre-form market for beverage packaging, large installed base which drives material replacement revenue, good geographic diversity, strong EBITA margins, and expectations that modest EBITDA growth will enable leverage to fall below 6x in the next 12 to 18 months. The rating considers Husky's earnings diversification into tooling for medical consumables (such as syringes) and its increased scale in beverage closures after closing the Sch"ttli Group acquisition in December 2013. Demand for the company's PET equipment is cyclical, and is influenced by capital spending decisions of its customers, which include the world's largest beverage brands. However, this cyclicality is tempered by Husky's relatively stable parts and aftermarket service revenue, exposure to the growing medical market, ongoing trend towards PET as a packaging material and significant exposure to developing markets, where the majority of industry growth is occurring. Despite its exposure to technology risks from Asian competition, Moody's expects the strength of Husky's market position to prevail into the medium term given its continuing technological leadership. Husky's liquidity is good, supported by pro forma cash of about $75 million, and expectations for annual free cash flow around $100 million. These sources will be sufficient to cover annual term loan amortization of $13 million. As well, Husky will have access to a new $110 million revolving credit facility due in 2019 which is not expected to be drawn through the next 4 to 6 quarters, although about $10 million will be used for letters of credit. The revolving facility will have no applicable financial covenant unless drawings exceed $35 million, at which point a first lien leverage covenant comes into effect. Moody's expects the covenant to have cushion in excess of 25% if applicable. Husky's ability to generate liquidity from asset sales is limited as the credit facilities are secured by liens on all the assets of the company and its material subsidiaries. The outlook is stable because Moody's expects order trends to continue to improve and support modest EBITDA growth which should enable leverage to fall below 6x in the next 12 to 18 months. Upward rating action could be considered should Husky improve its adjusted Debt/ EBITDA towards 5x and EBITA/ Interest above 2x on a sustainable basis. Downward rating pressure could arise if Husky's adjusted Debt/ EBITDA is sustained above 6.5x or EBITA/ Interest coverage is likely to trend below 1.25x. The principal methodology used in this rating was the Global Heavy Manufacturing Rating Methodology published in November 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. Husky International Ltd. is a leading global manufacturer of PET injection molding equipment and related components and services for the beverage industry. Revenue for the twelve months ended March 31, 2014 was $1.3 billion. The company is headquartered in Bolton, Ontario, Canada. ICEWEB INC: Posts $271K Net Loss for First Quarter -------------------------------------------------- IceWEB, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $271,055 on $176,483 of sales for the three months ended March 31, 2014, compared with a net loss of $2.12 million on $455,144 of sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.24 million in total assets, $3.72 million in total liabilities, and a stockholders' deficit of $2.48 million. The Company had net losses and net cash used in operating activities of $7.11 million and $2.7 million, respectively, for the year ended Sept. 30, 2013. The Company also had an accumulated deficit of $47.92 million at Sept. 30, 2013. For the nine months ended March 31, 2014, the Company had a net loss of $6.18 million and net cash used in operations of $1.5 million. These matters 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/mpLIrE About IceWEB Sterling, Va.-based IceWEB, Inc., manufactures and markets purpose-built appliances, network and cloud-attached storage solutions and delivers on-line cloud computing application services. The Company's customer base includes U.S. government agencies, enterprise companies, and small to medium sized businesses (SMB). INT'L MANUFACTURING: Deepal Agrees to Appointment of Trustee ------------------------------------------------------------ International Manufacturing Group, Inc., through its president and sole shareholder, Deepal Sunil Wannakuawatte, ageed with the U.S. Trustee's request for the appointment of a Chapter 11 trustee in the Chapter 11 case. The U.S. Trustee said the appointment of a Chapter 11 trustee is warranted in the case because Mr. Wannakuatte, who admitted to engaging in criminal wire fraud, is presently incarcerated in the Sacramento County Jail. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, Mr. Wannakuatte's consent was contained in his guilty plea to criminal wire fraud. About International Manufacturing Deepal Wannakuwatte, the mastermind of a $150 million Ponzi scheme, put himself and his company, International Manufacturing Group Inc., into Chapter 11 after he pleaded guilty to one count of wire fraud and agreed to a 20-year prison sentence. The bankruptcy filing was part of his plea bargain with federal prosecutors. International Manufacturing Group, Inc., filed a bare-bones Chapter 11 bankruptcy petition (Bankr. E.D. Cal. Case No. 14-25820) in Sacramento, on May 30, 2014. The case is assigned to Judge Robert S. Bardwil. According to the docket, governmental entities have until Nov. 26, 2014, to file claims. The Debtor has tapped Marc A. Caraska, in Sacramento, as counsel. Mr. Wannakuwatte is the former owner of the Sacramento Capitols tennis team. INTERREX INC: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Interrex Inc. 1700 Sylvan Ave. Hamilton, NJ 08610 Case No.: 14-22245 Chapter 11 Petition Date: June 13, 2014 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Hon. Kathryn C. Ferguson Debtor's Counsel: Alexander Booth, Esq. 145 Gifford Ave. Jersey City, NJ 07302 Total Assets: $2,378,100 Total Liabilities: $1,779,897 A list of the Debtor's nine largest unsecured creditors is available for free at http://bankrupt.com/misc/njb14-22245.pdf IPAYMENT INC: S&P Lowers CCR to 'CCC' on Constrained Liquidity -------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on New York City-based iPayment Inc. to 'CCC' from 'B-'. The outlook is negative. At the same time, S&P lowered its issue-level ratings on the company's first-lien term loan and revolving credit facility to 'CCC+' from 'B'. The recovery rating remains '2', indicating S&P's expectation for substantial (70%-90%) recovery of principal in the event of payment default. S&P also lowered its ratings on iPayment's senior unsecured notes due 2018 and iPayment Holdings Inc.'s PIK notes due 2018 to 'CC' from 'CCC'. The recovery rating remains '6', indicating S&P's expectation for negligible (0%-10%) recovery of principal in the event of a payment default. "We base our downgrade primarily on our assessment of the company's liquidity as 'weak,' which we have revised from 'adequate,'" said Standard & Poor's credit analyst Jenny Chang. As of March 31, 2014, the company was in compliance with its financial covenants with over 10% of headroom. However, the senior secured leverage covenant steps down to 3.75x to be tested for the period ending June 30, 2014. Given the company's recent operating performance, S&P believes that the risk of covenant violation is high during the next few quarters. The negative outlook reflects S&P's expectation that the company may not be able to comply with the financial covenants in the near term due to recent revenue and EBITDA declines. The outlook also reflects S&P's view of the company's constrained liquidity position as evidenced by minimal cash on hand and the lack of access to the revolver in the event that the financial covenants are not met. S&P could lower the rating if, in the absence of covenant relief, it expects the company will have insufficient funds to meet its debt service obligations when they are due. S&P could stabilize the rating outlook if the company is able to mitigate client attrition, curtail revenue and margin degradation, or amend financial covenants to obtain at least 10% headroom. ISR GROUP: Drone Service Provider Settles to Permit Sale -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that ISR Group Inc., a provider of services for military and civilian users of drones, may operate again under a new owner if a bankruptcy judge approves a global settlement among the company, the creditors' committee and the proposed buyer. According to the report, under the settlement, an affiliate of Trive Capital will buy the business without an auction in exchange for its $17.4 million of secured debt and the amount of its increased bankruptcy loan, the company said. TCFI IG LLC, the company formed to carry out the purchase, will fund payments to some creditors, including a minimum of $100,000 for general unsecured creditors, the report said. ISR Group, Incorporated, filed a Chapter 11 bankruptcy petition (Bankr. W.D. Tenn. Case No. 14-11077) on April 29, 2014. John Stuecheli signed the petition as chief restructuring officer. The Debtor estimated $10 million to $50 million in assets and liabilities. Franklin Childress, Jr., Esq., at Baker Donelson Bearman, serves as the Debtor's counsel. Judge Jimmy L Croom presides over the case. JAMAT LLC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Jamat, LLC dba Mattress Source 2597 Breakwater Drive Imperial, MO 63052 Case No.: 14-44811 Chapter 11 Petition Date: June 13, 2014 Court: United States Bankruptcy Court Eastern District of Missouri (St. Louis) Judge: Hon. Barry S. Schermer Debtor's Counsel: Spencer P. Desai, Esq. DESAI EGGMAN MASON LLC Pierre Laclede Center 7733 Forsyth Boulevard, Suite 2075 St. Louis, MO 63105 Tel: (314) 881-0800 Fax: (314) 881-0820 Email: sdesai@demlawllc.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Barry Seidel, member. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/moeb14-44811.pdf KEMPER CORP: Fitch Affirms BB Rating on $150MM Subordinated Notes ----------------------------------------------------------------- Fitch Ratings has affirmed Kemper Corporation's holding company ratings, including the senior debt rating at 'BBB-'. Fitch has also affirmed the Insurer Financial Strength (IFS) ratings of Kemper's operating subsidiaries at 'A-'. The Rating Outlook is Stable. KEY RATING DRIVERS Kemper's ratings reflect modest earnings, solid balance sheet strength, and sufficient debt servicing capability. The ratings also consider the company's more volatile earnings profile caused by natural catastrophe exposures. Kemper reported net earnings of $35.1 million for first-quarter 2014, a 40% decline over the prior year quarter. When net investment gains are excluded, the deterioration was more modest at 25%. Weaker results were primarily driven by higher catastrophe losses and expense pressure from the lower premium base, including the impact of the direct-to-consumer business runoff. For the first quarter of 2014, Kemper reported a combined ratio of 99.5%, which included 5.0pp of catastrophe losses and 4.7pp of favorable reserve development. This compares to a 95.8% combined ratio for the prior-year period, which included 2.5pp of catastrophe losses and 3.8pp of favorable reserve development. Kemper's personal auto book benefited from previous rate actions and improved risk selection, evidenced by a modest improvement in the underlying loss ratio during the first quarter. However, the underlying loss ratio in commercial auto deteriorated by 7pp, due to higher claims frequency. Kemper is implementing further rate actions to address these profitability issues. In the aggregate, pure premium trends are expected to increase by low single digits. Kemper's Life/Health segment continues to generate stable earnings with minimal volatility. The segment reported a 4% increase in operating profit to $22 million for first-quarter 2014. The improvement was largely due to better mortality and lower property losses from products sold by home service agents. This was partially offset by expenses related to expanding its accident & health distribution channels. Fitch views Kemper's p/c and life companies as strongly capitalized. NAIC risk-based capital ratios were 353% and 427% of the company action level at year-end 2013, respectively. Net premiums written-to-surplus for Kemper's property/casualty operations remains acceptable for its line of business at approximately 1.4x. Kemper's financial leverage ratio remains in line with median guidelines at 27.9% as of March 31, 2014. Kemper's fixed charge coverage was modest at 5.5x for first- quarter 2014. Debt servicing capacity is further supported by dividend capacity from its insurance subsidiaries and holding company cash of $256 million, which is intended to be used to retire debt in November 2015. RATING SENSITIVITIES Factors that could lead to a downgrade include statutory fixed charge coverage below 3.5x; a combined ratio above 106% for a sustained period; or a deterioration in capitalization with a p/c Prism capital model score below 'adequate', an RBC ratio for the p/c and life insurance entities below 200% and 250%, respectively, or a financial leverage ratio that exceeds 30%. Factors that could lead to an upgrade include significant improvement in capitalization with a Prism score of 'strong', a sustained underwriting profit, and GAAP fixed charge coverage at or above 8x. Fitch has affirmed the following ratings with a Stable Outlook: Kemper: -- IDR at 'BBB'; -- $610 million senior notes at 'BBB-'; -- $225 million credit facility at 'BBB-'. -- $150 million subordinated notes at 'BB'. Trinity Universal Insurance Co. United Insurance Co. of America Union National Life Insurance Co. Reliable Life Insurance Co. -- Insurer Financial Strength rating at 'A-'. LABORATORY PARTNERS: Gets Nod For $5.5-Mil. Unit Sale ----------------------------------------------------- Law360 reported that clinical testing firm Laboratory Partners Inc., also known as MedLab, received the blessing of a Delaware bankruptcy judge on Wednesday to sell its long-term care division to Amerathon LLC for a $5.5 million credit bid. According to the report, at a hearing in Wilmington, U.S. Bankruptcy Judge Peter J. Walsh approved the sale of the company's remaining operating unit to Amerathon, a joint venture that includes MedLab's senior secured lenders. About Laboratory Partners Laboratory Partners Inc., a Cincinnati-based provider of lab and pathology services, and several affiliates filed petitions for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12769) on Oct. 25, 2013, in Delaware. In its assets, the Debtor disclosed $43,034,702.91 in total assets and at least $132,357,067.42 (plus unknown) in total liabilities. The debtor-affiliates are Kilbourne Medical Laboratories, Inc., MedLab Ohio, Inc., Suburban Medical Laboratory, Inc., Biological Technology Laboratory, Inc., Terre Haute Medical Laboratory, Inc., and Pathology Associates of Terre Haute, Inc. Certain of the Debtors do business as MEDLAB. Judge Peter J. Walsh presides over the case. Laboratory Partners is represented by Morris, Nichols, Arsht & Tunnell LLP's Robert Dehney, Esq., and Erin R. Fay, Esq.; and Pillsbury Winthrop Shaw Pittman LLP's Leo T. Crowley, Esq., and Margot P. Erlich, Esq. and Jonathan J. Russo, Esq. BMC Group Inc. serves as claims and administrative agent. Duff & Phelps Securities LLC serves as the Debtors' investment bankers. The Official Committee of Unsecured Creditors has retained Otterbourg P.C., as Lead Co-Counsel; Klehr Harrison Harvey Branzburg LLP as Delaware Counsel; and Carl Marks Advisory Group LLC, as financial advisors. In March 2014, the Bankruptcy Court authorized the Debtors to sell their so-called "Talon Division," which refers to the clinical laboratory and anatomic pathology services to (i) physicians, physician officers and medical groups in Indiana, Illinois, and (ii) Union Hospital, Inc., in Terre Haute and Clinton, Indiana, to Laboratory Corporation of America Holdings for $10.5 million. An auction was cancelled after the Debtors received no competing bid during the bid deadline. The Court also authorized the Debtors to sell certain of their assets relating to their nuclear medicine business to Union Hospital, Inc. LATEX FOAM: Has Until June 30 to Use Cash Collateral ---------------------------------------------------- Judge Alan H. W. Shiff of the U.S. Bankruptcy Court for the District of Connecticut, Bridgeport Division, approved a stipulation between Latex Foam International, LLC, et al., and Wells Fargo Bank, a national banking association, under which the Bank consents to the Debtors' use of cash collateral until June 30, 2014. The Bank provided financing to Latex in the original principal amount of $34 million. The loans advanced under the Loan Agreement are secured by substantially all assets of the Debtors. A further hearing to consider whether the Debtors will be granted use of cash collateral will be held on June 26, at 2:00 p.m. A full-text copy of the Cash Collateral Stipulation and Budget is available at http://bankrupt.com/misc/LATEXcashcolord0605.pdf The Debtors are represented by James Berman, Esq., Zeisler & Zeisler, P.C., in Bridgeport, Connecticut. The Bank is represented by Scott M. Esterbrook, Esq., at Reed Smith LLP, in Philadelphia, Pennsylvania. About Latex Foam Headquartered in Shelton, Connecticut, Latex Foam International, LLC manufactures foam mattresses and component mattresses. The 196-employee company produces mattress cores, toppers, and pillow buns utilizing both the Talaway and Dunlop manufacturing processes. LFI and four affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Conn. Lead Case No. 14-50845) in Bridgeport, Connecticut, on May 30, 2014. David Fisher signed the petitions as president. The Debtors are seeking joint administration of their cases. LFI estimated $10 million to $50 million in assets and debt. Judge Alan H.W. Shiff presides over the cases. James Berman, Esq., and Craig I. Lifland, Esq., at Zeisler and Zeisler, serve as the Debtors' counsel. LATEX FOAM: Seeks to Hire Wiggin and Dana as Special Corp. Counsel ------------------------------------------------------------------ Latex Foam International, LLC, et al., seek authority from the U.S. Bankruptcy Court for the District of Connecticut, Bridgeport Division, to employ Wiggin and Dana as special corporate counsel to provide legal services for the corporate law and transactional requirements of the Debtors as well as their subsidiaries, including assisting with regulatory compliance with the applicable state authorities. Subject to the Court's approval, W&G will charge the Debtor for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered. W&G accrued approximately $148,814 of billed fees and a certain amount of unbilled fees and disbursements for services rendered before the Petition Date. Michael Grundei, Esq., a partner at Wiggin and Dana, in Stamford, Connecticut, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The firm may be reached at: Michael Grundei, Esq. WIGGIN AND DANA Two Stamford Plaza 281 Tresser Boulevard Stamford, CT 06901 Phone: 203-363-7630 Fax: 203-363-7676 Email: mgrundei@wiggin.com About Latex Foam Headquartered in Shelton, Connecticut, Latex Foam International, LLC manufactures foam mattresses and component mattresses. The 196-employee company produces mattress cores, toppers, and pillow buns utilizing both the Talaway and Dunlop manufacturing processes. LFI and four affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Conn. Lead Case No. 14-50845) in Bridgeport, Connecticut, on May 30, 2014. David Fisher signed the petitions as president. The Debtors are seeking joint administration of their cases. LFI estimated $10 million to $50 million in assets and debt. Judge Alan H.W. Shiff presides over the cases. James Berman, Esq., and Craig I. Lifland, Esq., at Zeisler and Zeisler, serve as the Debtors' counsel. LATEX FOAM: Amends List of Largest Unsecured Creditors ------------------------------------------------------ Latex Foam International, LLC, amends its list of creditors holding largest unsecured claims to disclose the following: Entity Nature of Claim Claim Amount ------ --------------- ------------ State of Connecticut $2,500,000 Dept. of Economic & Comm Dev. 505 Hudson Street Hartford, CT 06106 BASF Corporation Business Debt 951,631 Attn: Pres, GP or Mng. Membr PO Box 360941 Pittsburgh, PA 15251-6941 Goodyear Tire & Rubber Co. Business Debt 597,941 Attn: Pres, GP or Mang Membr Reference: 2290 P.O. Box 100605 Atlanta, GA 30384-0605 UI Co. #010-0000217-176 Business Debt 365,057 Attn: Pres, GP or Mang Membr P.O. Box 9230 Chelsea, MA 02150-9230 Monroe Staffing Services LLC Business Debt 324,563 Attn: Pres, GP or Mang Membr PO Box 60839 Charlotte, NC 28260-0839 Tiarco Chemical Division Business Debt 292,177 Attn: Pres, GP or Mang Membr PO Box 281995 Atlanta, GA 30384-1995 Tradebe Environmental Services Business Debt 207,753 Attn: Pres, GP or Mang Membr PO Box 845033 Boston, MA 02284-5033 Unisource WorldWide Inc. Business Debt 202,173 Attn: Pres, GP or Mang Membr P.O. Box 409884 Atlanta, GA 30384-9884 State of Texas 190,000 Mr. Michael Bryant Office of TX Gov. Rick Perry 1100 San Jacinto Austin, TX 78701 Absolutely Knits, Inc. Business Debt 166,351 Attn: Pres, GP or Mang Membr 21 Ridge Drive East Great Neck, NY 11021 Craft Click, Inc. Business Debt 161,000 Attn: Pres, GP or Mang Membr 19 Greensway New Rochelle, NY 10805-1223 William Bassett Business Debt 161,000 Attn: Pres, GP or Mang Membr 52 Homestead Road Southbury, CT 06488 RCMA Americas, Inc. Business Debt 158,715 Attn: Pres, GP or Mang Membr 115 College Place Norfolk, VA 23510-9998 Wiggin & Dana LLP Business Debt 136,480 Attn: Accounts Receivables PO Box 1832 New Haven, CT 06508-1832 Gareth Clarke Business Debt 134,167 Attn: Pres, GP or Mang Membr 507 Pine Tree Drive NE Atlanta, GA 30305 Phoenix Holdings, LLC Business Debt 125,131 c/o First Bank Attn: Pres, GP or Mang Membr 4110 Kell Boulevard Wichita Falls, TX 76309 Unicorr Packaging Group, Inc. Business Debt 123,554 Attn: Pres, GP or Mang Membr 4282 Paysphere Circle Chicago, IL 60674 City of Wichita Falls 108,066 Attn: Pres, GP or Mang Membr 1300 7th Street PO Box 1431 Wichita Falls, TX 76307 CW Textiles, LLC Business Debt 106,018 Attn: Pres, GP or Mang Membr 4017 Terra Alta Drive San Ramon, CA 94582 SHELTON 2009 LLC Business Debt 104,558 Attn: Pres, GP or Mang Membr Minskoff Grant Realty & Mgmt. 55 Church Street, Suite 207 White Plains, NY 10601 About Latex Foam Headquartered in Shelton, Connecticut, Latex Foam International, LLC manufactures foam mattresses and component mattresses. The 196-employee company produces mattress cores, toppers, and pillow buns utilizing both the Talaway and Dunlop manufacturing processes. LFI and four affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Conn. Lead Case No. 14-50845) in Bridgeport, Connecticut, on May 30, 2014. David Fisher signed the petitions as president. The Debtors are seeking joint administration of their cases. LFI estimated $10 million to $50 million in assets and debt. Judge Alan H.W. Shiff presides over the cases. James Berman, Esq., and Craig I. Lifland, Esq., at Zeisler and Zeisler, serve as the Debtors' counsel. LONGVIEW POWER: Gets Stay On $825M Insurance Policy Suit In Calif. ------------------------------------------------------------------ Law360 reported that a Delaware bankruptcy judge has agreed to enforce Longview Power LLC's automatic stay on a suit in California state court, freezing an insurer's suit over an $825 million policy that forms a key element in the coal plant operator's Chapter 11 plan. According to the report, at a hearing in Wilmington, Delaware, U.S. Bankruptcy Judge Brendan L. Shannon granted Longview's motion to halt the California action brought by First American Title Insurance Co., ruling that the issue at stake -- whether coverage is available under the policy -- is a core matter in the Chapter 11 case. About Longview Power LLC Longview Power LLC is a special purpose entity created to construct, own, and operate a 695 MW supercritical pulverized coal-fired power plant located in Maidsville, West Virginia, just south of the Pennsylvania border and approximately 70 miles south of Pittsburgh. The project is owned 92% by First Reserve Corporation (First Reserve or sponsor), a private equity firm specializing in energy industry investments, through its affiliate GenPower Holdings (Delaware), L.P., and 8% by minority interests. Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case. 13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery L. Keffer, the Company's chief executive officer, president, treasurer and secretary. The Debtor estimated assets and debts of more than $1 billion. Judge Brendan Linehan Shannon presides over the case. Kirkland & Ellis LLP and Richards, Layton & Finger, P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC acts as the Debtors' investment bankers. Alvarez & Marsal North America, LLC, is the Debtors' restructuring advisors. Ernst & Young serves as the Debtors' accountants. The Debtors' claims agent is Donlin, Recano & Co. Inc. The Debtor disclosed assets of $1,717,906,595 plus undisclosed amounts and liabilities of $1,075,748,155 plus undisclosed amounts. Roberta A. DeAngelis, U.S. Trustee for Region 3, disclosed that as of September 11, 2013, a committee of unsecured creditors has not been appointed in the case due to insufficient response to the U.S. Trustee's communication/contact for service on the committee. MAXCOM TELECOMUNICACIONES: Posts MXN1.25-Bil. Loss in 2013 ---------------------------------------------------------- Maxcom Telecomunicaciones, S.A.B. de C.V., reported a net loss of MXN1.25 billion on MXN2.5 billion of revenue in 2013, compared with a net loss of MXN136.09 million on MXN2.2 billion of revenue in 2012. The Company's balance sheet at Dec. 31, 2013, showed MXN5.76 billion in total assets, MXN2.59 billion in total liabilities, and stockholders' equity of MXN3.16 billion. KPMG's report on the consolidated financial statements for the years ended Dec. 31, 2012 and 2011, each contained a paragraph stating that the Company has experienced recurring losses, declines in revenues, cash flows and cash balances. Additionally, the Company's ability to fulfill its debt obligations that mature in 2014, including the payment of semi-annual interest payments on such obligations is dependent on obtaining sufficient cash for the outstanding interest payments and on successfully completing the refinancing of the debt obligations. This raises substantial doubt about the Company's ability to continue as a going concern, according to the Company's regulatory filing with the U.S. Securities and Exchange Commission. A copy of the Form 20-F is available: http://is.gd/nMB0XL About Maxcom Maxcom Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico City, Mexico, is a facilities-based telecommunications provider using a "smart-build" approach to deliver last-mile connectivity to micro, small and medium-sized businesses and residential customers in the Mexican territory. Maxcom launched commercial operations in May 1999 and is currently offering local, long distance, data, value-added, paid TV and IP-based services on a full basis in greater metropolitan Mexico City, Puebla, Tehuacan, San Luis, and Queretaro, and on a selected basis in several cities in Mexico. In June 2013, Maxcom didn't make an $11 million interest payment on the notes. Maxcom sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 13-11839) in Wilmington, Delaware, on July 23, 2013. Maxcom listed $11.1 billion in assets and $402.3 million in debt. The company had assets valued at 4.98 billion pesos ($394 million) in the quarter ended March 31, according to an April 26 regulatory filing. The company reached a restructuring agreement with Ventura Capital, a group holding about $86 million, or 48.7 percent, of the senior notes and about 44 percent of its equity holders, court papers show. The Company engaged Lazard Freres & Co. LLC and its alliance partner Alfaro, Davila y Rios, S.C., as its financial advisor; and Kirkland & Ellis LLP and Santamarina y Steta, S.C. as its U.S. and Mexican legal advisors in connection with its restructuring proceedings and Chapter 11 case. The Ad Hoc Group retained Cleary Gottlieb Steen & Hamilton LLP and Cervantes Sainz, S.C., as its U.S. and Mexican legal advisors. Ventura retained VACE Partners as its financial advisor, and Paul Hastings LLP and Jones Day as its U.S. and Mexican legal advisors, respectively. Maxcom disclosed that the U.S. Bankruptcy Court in Delaware on Sept. 10 entered an order confirming the Company's prepackaged Chapter 11 plan of reorganization. Confirmation of the Plan was fully-consensual: the only class of creditors entitled to vote overwhelmingly voted in favor of the Plan and no party objected to confirmation of the Plan. In October 2013, Maxcom's First Amended Joint Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. MEGA RV CORP: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Mega RV Corp. dba McMahon's RV dba McMahon's RV Irvine dba McMahon's RV Colton dba McMahon's RV Palm Desert 5400 Garden Grove Blvd. Westminster, CA 92683 Case No.: 14-13770 Chapter 11 Petition Date: June 15, 2014 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Hon. Mark S Wallace Debtor's Counsel: Robert P Goe, Esq. GOE & FORSYTHE, LLP 18101 Von Karman, Ste 510 Irvine, CA 92612 Tel: 949-798-2460 Fax: 949-955-9437 Email: kmurphy@goeforlaw.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Brent McMahon, president. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Allied Recreation Group, Inc. $291,000 1031 US 224 East Decatur, IN 46733 Ally Financial Unpaid Trade $179,670 412 N Sierra Way San Bernardino, CA 92402 Arrowhead Central Credit Union Unpaid Trade $117,489 Bank of America Unpaid Trade $651,394 FL09-600-02-26 9000 Southside Blvd Building 600 Jacksonville, FL 32256 Bank of the West Unpaid Trade $484,277 2527 Camino Ramon San Ramon, CA 94583 Dale Carson/Jerry Ferrar $261,125 c/o Smith Mitchellweiler 4204 Riverwalk Pk, Ste. 250 Riverside, CA 92505-3377 Forest River, Inc. $3,303,000 55470 County Road 1 Elkhart, IN 46514 Jerry Fields $374,662 c/o William Clevenger 24152 Lyons Ave, #226 Newhall, CA 91321 NTP $163,895 271150 SW Kinsman Rd Wilsonville, OR 97070 NTP Trade Debt $148,830 27150 SW Kinsman Road Wilsonville, OR 97070 NTP $122,000 27150 SW Kinsman Road Wilsonville, OR 97070 Portfolio General Manage $564,874 Group Inc. 14651 Dallas Parkway, Suite 502 Dallas, TX 75254 Portfolio Group Trade Debt $561,496 14651 Dallas Parkway, Suite, 502 Dallas, TX 75254 Reynolds & Reynolds $264,670 6700 Hollister Houston, TX 77040 Reynolds & Reynolds Co. $208,138 P.O. Box 182206 Columbus, OH 43218 River Rock Advertising $277,022 5400 Garden Grove Blvd. Westminster, CA 92683 Santander Consumer USA $208,212 1010 Mockingbird Lane Dallas, TX 75247 US Bank Unpaid Trade $553,446 Consumer Loan Servicing WI-OS-FCLS 1850 Osborn Avenue Oshkosh, WI 54902 Wells Fargo Bank $130,000 PO Box 54180 Los Angeles, CA 90054 Winnebago Industries $455,000 605 West Crystal Lake Road Forest City, IA 50436 METABOLIX INC: Has $8.15-Mil. Net Loss in March 31 Quarter ---------------------------------------------------------- Metabolix, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $8.15 million on $1.07 million of total revenue for three months ended March 31, 2014, compared with a net loss of $6.76 million on $1.94 million of total revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $17.43 million in total assets, $4.05 million in total liabilities, and stockholders' equity of $13.37 million. As of March 31, 2014, the Company held unrestricted cash, cash equivalents and investments of $10.42 million. The Company's present capital resources are not sufficient to fund its planned operations for a twelve month period, and therefore, raise substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available: http://is.gd/R6y0kb Headquartered in Cambridge, Massachusetts, Metabolix, Inc. is an innovation-driven bioscience company focused on delivering sustainable solutions to the plastics, chemicals and energy industries. The Company has core capabilities in microbial genetics, fermentation process engineering, chemical engineering, polymer science, plant genetics and botanical science. MF GLOBAL: Corzine Must Defend His Claims ----------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Jon Corzine and other former officers and directors of MF Global Holdings Ltd. are holding up distributions to creditors with indemnification claims they filed after being sued numerous times for alleged securities law violations after mishandling $1.6 billion in customer funds. According to the report, the administrator of MF Global's approved Chapter 11 plan asked the bankruptcy judge to rule that former officers don't have more than $5 million in claims each against the holding company. The former officers filed claims for undetermined amounts, because the securities lawsuits are far from completion, the report related. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MONTICELLO REALTY: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Monticello Realty Investments, LLC 580 Ellis Road, South Jacksonville, FL 32254 Case No.: 14-02892 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: June 13, 2014 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Debtor's Counsel: Eric N McKay, Esq. THE LAW OFFICES OF ERIC N. MCKAY 3948 3rd Street South, #297 Jacksonville Beach, FL 32250-5847 Tel: 907-273-2661 Email: eric@ericmckaylaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Scott R. Foster, manager. A list of the Debtor's three largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb14-02892.pdf MOMENTIVE PERFORMANCE: Creditors' Committee Can Retain Jefferies ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Official Committee of Unsecured Creditors appointed in the Chapter 11 case of Momentive Performance Inc. secured court authority to retain Jefferies LLC as the panel's investment banker. According to the report, the bankrupt producer of silicones for the semiconductor industry objected to Jefferies's payment arrangement with its $2.5 million fee if the court approves a plan that's acceptable to a majority of the committee, including at least one subordinated noteholder. U.S. Bankruptcy Judge Robert Drain approved the retention, with a qualification, the report said. Although Judge Drain tentatively approved Jefferies's monthly fee and the $2.5 million transaction fee, he said the U.S. Trustee still can object to payment if the fee isn't "reasonable," the report added. About Momentive Performance Momentive Performance is one of the world's largest producers of silicones and silicone derivatives, and is a global leader in the development and manufacture of products derived from quartz and specialty ceramics. Momentive has a 70-year history, with its origins as the Advanced Materials business of General Electric Company. In 2006, investment funds affiliated with Apollo Global Management, LLC, acquired the company from GE. As of Dec. 31, 2013, the Company had 4,500 employees worldwide, of which 46% of the Company's employees are members of a labor union or are represented by workers' councils that have collective bargaining agreements. Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., and their affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 14-22503) on April 14, 2014, with a deal with noteholders on a balance-sheet restructuring. As of Dec. 31, 2013, the Debtors had $4.114 billion of consolidated outstanding indebtedness, including payments due within the next 12 months and short-term borrowings. The Debtors said that the restructuring will eliminate $3 billion in debt. The Debtors have tapped Willkie Farr & Gallagher LLP as bankruptcy counsel with regard to the filing and prosecution of these chapter 11 cases; Sidley Austin LLP as special litigation counsel; Moelis & Company LLC as financial advisor and investment banker; AlixPartners, LLP as restructuring advisor; PricewaterhouseCoopers as auditor; and Crowe Horwath LLP as benefit plan auditor. Kurtzman Carson Consultants LLC is the notice and claims agent. The U.S. Trustee for Region 2 appointed seven members to serve on the Official Committee of Unsecured Creditors of the Debtors' cases. MOTIVATING THE MASSES: Reports $19K Net Income in March 31 Quarter ------------------------------------------------------------------ Motivating the Masses, Inc., filed its quarterly report on Form 10-Q, disclosing net income of $19,007 on $685,300 of revenue for the three months ended March 31, 2014, compared with a net loss of $216,712 on $185,012 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.34 million in total assets, $982,175 in total liabilities, and stockholders' equity of $359,899. According to the regulatory filing, the Company's ability to continue as a going concern is contingent upon its ability to achieve and maintain profitable operations, and the Company's ability to raise additional capital as required. A copy of the Form 10-Q is available: http://is.gd/kD6aYp Motivating the Masses provides professional development and coaching services through Motivating the Masses programs. The company offers strategic coaching, professional development, and counseling services for small business owners, entrepreneurs, and self-employed professionals. It also provides keynote speaking events comprising industry and private events teaching services; and training and development services through live seminars, as well as offers Motivating the Masses program books and CDs. The company was founded in 1998 and is based in Carlsbad, California. MT. GOX: Nears Chapter 15 Protection in U.S. -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Mt. Gox bitcoin exchange will win formal protection from creditors under Chapter 15 of bankruptcy law, although where the bankruptcy takes place is up in the air. According to the report, the bankruptcy judge in Dallas will hold a hearing on June 17 to decide whether to recognize Japan as presiding over the company's primary bankruptcy. About Mt. Gox Bitcoin exchange MtGox Co., Ltd., filed a petition under Chapter 15 of the U.S. Bankruptcy Code on March 9, 2014, days after the company sought bankruptcy protection in Japan. The bankruptcy in Japan came after the bitcoin exchange lost 850,000 bitcoins valued at about $475 million "disappeared." The Japanese bitcoin exchange that halted trading in February 2014. It filed for bankruptcy protection in the U.S. to prevent customers from targeting the cash it holds in U.S. bank accounts. The Chapter 15 case is In re MtGox Co., Ltd., Case No. 14-31229 (Bankr. N.D. Tex.). The Chapter 15 Petitioner is Robert Marie Mark Karpeles, the company's chief executive officer. Mr. Karpeles is represented by John E. Mitchell, Esq., and David William Parham, Esq., at Baker & Mcckenzie LLP, in Dallas, Texas. The company said it has estimated assets of $10 million to $50 million and debts of $50 million to $100 million. NEW CENTURY: Bid to Dismiss Denied, Ch. 11 Trustee to be Appointed ------------------------------------------------------------------ Judge Robert R. Summerhays of the U.S. Bankruptcy Court for the Western District of Louisiana denied the motion filed by Robert Schleizer, the temporary receiver for the company, seeking dismissal of the Chapter 11 case of New Century Fabricators, Inc., and instead, directed the U.S. Trustee to appoint a Chapter 11 trustee. James Castille, an officer, director and sole shareholder of the Debtor, and the Debtor, objected to the motion to dismiss, arguing that the receivership laws of Louisiana contains no mechanism for oversight by the State Court nor are the State Courts equipped to oversee the operations of a $35,000,000, while bankruptcy courts, on the other hand are uniquely qualified to balance the inherent conflicts between owners, managers and secured and unsecured creditors. New Century Fabricators, Inc., filed a Chapter 11 bankruptcy petition (Bankr. W.D. La. Case No. 14-50652) on May 30, 2014. The petition was signed by James C. Castille as president. The Debtor estimated assets and liabilities of at least $10 million. The Keating Firm, APLC, serves as the Debtor's counsel. Judge Robert Summerhays presides over the case. OIL STATES: S&P Lowers CCR to 'BB' on Spin-Off & Withdraws Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Oil States International Inc. to 'BB' from 'BB+' and removed it from CreditWatch, where S&P placed them with negative implications on Aug. 19, 2013. The outlook is stable. S&P subsequently withdrew its rating at the company's request. The downgrade is based on S&P's reassessment of Oil States' business risk profile following the recent completion of the spin- off of its accommodations business in a separate entity. The rating action primarily reflects Oil States' smaller size, scale, and scope, as well as reduced business diversity and revenue visibility following the spin-off. The pro forma company generated EBITDA of about $420 million in 2013, compared with $792 million on a fully consolidated basis (including the accommodations segment for the full year). "We assigned a stable outlook following our lowering of the corporate credit rating on Oil States. However, because we subsequently withdrew the rating, the conditions to raise or lower the rating are not applicable," said Standard & Poor's credit analyst Christine Besset. OP FINANCIAL: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- OP Financial, LLC 14-33356 7521 Westview, Suite 200 Houston, TX 77055 7521 Westview, LP 14-33357 Suite 200, Houston, TX 77055 Enerby LLC 14-33358 Denson and Tang Law Firm 14-33359 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: June 15, 2014 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Hon. Marvin Isgur Debtors' Counsel: Melissa Anne Haselden, Esq. HOOVER SLOVACEK LLP 5847 San Felipe, Suite 2200 Houston, TX 77057 Tel: 713.977.8686 Fax: 713.977.5395 Email: Haselden@hooverslovacek.com Estimated Estimated Assets Liabilities ---------- ----------- OP Financial, LLC $1MM-$10MM $1MM-$10MM 7521 Westview, LP $1MM-$10MM $1MM-$10MM The petitions were signed by Tan M. Tang, manager. The Debtors did not file a list of their largest unsecured creditors when they filed the petitions. ORMET CORP: Seeks Auction For Ohio Plant With $15M Bid ------------------------------------------------------ Law360 reported that Ormet Corp. sought court approval to hold an auction to sell its Ohio smelter with an offer to purchase the plant for $15.2 million in its pocket, according to court documents. The aluminum company selected CCP ORMT Acquisition LLC as its stalking horse bidder for its Hannibal, Ohio-based plant that can produce up to 270,000 tons of aluminum per year after an agreement with another interested buyer fell through, the report related. If the court signs off on the bidding procedures and the company receives other qualifying offers for the plant, an auction will take place June 26, the report said. About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on Feb. 25, 2013, with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Affiliates that separately filed Chapter 11 petitions are Ormet Primary Aluminum Corporation; Ormet Aluminum Mill Products Corporation; Specialty Blanks Holding Corporation; and Ormet Railroad Corporation. Ormet emerged from a prior bankruptcy in April 2005. Lender Wayzata Investment Partners LLC is among existing owners. Others are UBS Willow Fund LLC and Fidelity Leverage Company Stock Fund. In the 2013 case, Ormet is represented in the case by Morris, Nichols, Arsht & Tunnell LLP's Erin R. Fay, Esq., Robert J. Dehney, Esq., Daniel B. Butz, Esq.; and Dinsmore & Shohl LLP's Kim Martin Lewis, Esq., Patrick D. Burns, Esq. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung and Paul Billyard serve as investment bankers to the Debtor. An official committee of unsecured creditors was appointed in the case in March 2013. The Committee is represented by Rafael X. Zahralddin, Esq., Shelley A. Kinsella, Esq., and Jonathan M. Stemerman, Esq., at Elliott Greenleaf; and Sharon Levine, Esq., S. Jason Teele, Esq., and Cassandra M. Porter, Esq., at Lowenstein Sandler LLP. In October 2013, the U.S. Trustee filed papers saying the bankruptcy instead should be converted to a liquidation in Chapter 7. The U.S. Trustee said there is no budget and no financing for a wind-down in Chapter 11. In November 2013, the Bankruptcy Court approved on an interim basis Ormet's motion for (a) an interim plan to wind down the Debtors' businesses and protections for certain employees implementing the wind down, (b) authorizing the Debtors to modify employee benefit plans consistent with the wind down plan, and (c) authorizing the Debtors to take any and all actions necessary to implement the wind down plan. In December 2013, Ormet completed a previously approved sale of its alumina smelter in Burnside, Louisiana, to Almatis Inc. for $39.4 million. There was no auction. Completion of a court- approved sale of the business to lender and part owner Wayzata Investment Partners LLC became impossible when Ohio utility regulators refused in October to grant reductions in electricity prices. Wayzata would have acquired the business largely in exchange for debt. Ormet also has sold 32,000 metric tons of alumina for $8.4 million to Glencore AG, and its rights and interests in and to 17,086 MT baked carbon anodes, located at the Debtors' Hannibal, Ohio location, and its rights and interest in and to 34,755 MT baked carbon anodes, located in a storage in Baltimore, Maryland, to Alcoa Materials Management, Inc. In 2014, the Bankruptcy Court issued several interim orders related to the wind-down plan. Those orders authorize the Debtors to make payments through a certain date, as part of implementing the wind-down plan. OVERSEAS SHIPHOLDING: Moody's Assigns B2 Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned new ratings to Overseas Shipholding Group, Inc. ("OSG"): Corporate Family Rating (CFR) of B2, Probability of Default Rating (PDR) of B2-PD, first lien senior secured of B1, 36-LGD3, first lien super priority senior secured of Ba2, 1-LGD1 and Speculative Grade Liquidity of SGL-3. The outlook is stable. The ratings are being assigned in anticipation of the completion of OSG's Chapter 11 restructuring following the plan confirmation hearing scheduled for July 18, 2014. OSG has arranged two separate credit facilities on which its intermediate holding company subsidiaries, OSG Bulk Ships, Inc. ("OBS") and OSG International, Inc. ("OIN") are the respective primary obligors. These facilities will have guarantees from certain respective operating subsidiaries and from OSG but not from each other or from the other's subsidiaries. Moody's base Moody's ratings analysis on OSG's consolidated financial statements and projected performance given the parent guarantee. The closing and funding of these credit facilities is predicated on a number of conditions including that there is a final and non-appealable order confirming OSG's plan of reorganization. Each facility provides a $600 million term loan and a $75 million revolving credit facility. The $1.2 billion of term loan proceeds and $1.51 billion of new equity raised via a rights offering will fund the settlement of the various claims pursuant to the company's plan of reorganization. The OIN revolver will have a super priority lien in the OIN collateral, which results in the up-notching relative to the B1 ratings of the OBS facility and the OIN term loan. The plan also provides for the reinstatement of two issues of unsecured notes that were outstanding when the company filed for bankruptcy: the $300 million of 8.125% unsecured notes due March 30, 2018 and the $146 million of 7.5% unsecured notes due February 15, 2024. Moody's has not re-rated these instruments. Ratings Rationale The B2 Corporate Family rating considers OSG's leading position in the ocean freight markets in which it trades its vessels, the U.S. Jones Act and international crude and refined petroleum products. The rating recognizes the future financial benefits of the reduction in fixed overhead that the company achieved while in bankruptcy, primarily by cancelling charter-in contracts for 25 international tankers, outsourcing the technical management of the international fleet and reducing shore-side headcount. These actions provide a more flexible cost structure for the international operations, which should reduce pressure on profits during future periods of weak freight rates, whether because of weak economic activity or sustained excess industry capacity, or both. Moody's anticipates that credit metrics will become more supportive of the B2 rating through 2016. With no planned capital investment for growth, projected free cash flow exceeds $100 million per year. Debt to EBITDA is projected at about 6.0 times and FFO + Interest to Interest at about 2.4 times at year end 2015, somewhat weak for the B2 rating. Moody's believes the projected financial performance through 2015 is achievable because the company's freight rate assumptions for its international tankers are reasonable, reflecting nominal increases above current levels. The terms of the new credit agreements will incorporate excess cash flow sweeps, so Moody's expects a portion of the free cash flow to be applied to debt reduction. The favorable fundamentals of the U.S. Jones Act market support the ratings assignment. Moody's believes that the good conditions will continue, even when newly-built Jones Act product tankers begin to enter the market in 2016 and as incremental barge capacity (articulated tug barges or ATBs) enters the fleet in upcoming years. Moody's expects continuing demand for movement of shale oil and refined products to and from the Louisiana Gulf Coast refineries, as well as across the other U.S. coastal trades, the contracted nature of the company's operations in this sector and the quality of its relatively young product tanker fleet to support earnings and cash flow generation over the five-year terms of the new credit facilities. Adequate liquidity further supports the rating assignment. The company expects to not need the revolvers to meet operating expenses or for working capital. There are no debt maturities until 2018 and compliance with maintenance financial covenants should not be an issue. The B2 rating also incorporates Moody's expectation that the company will seek to grow the international fleet, notwithstanding that the financial plan contemplates very little capital spending and is devoid of investment for growth, let alone replacement of vessels that retire from either of the subsidiaries' fleets. "In Moody's view, OSG did not reorganize to execute what would be an orderly liquidation of the fleet as vessels reach retirement age," said Senior Credit Officer, Jonathan Root. "Moody's believes that under the direction of the new hedge fund and private equity owners that will participate in the rights offering, management will grow the fleet in an attempt to enhance the company's return on equity," continued Root. Based on Moody's assumptions that the company will acquire five year old vessels, rather than order new ships, credit metrics still improve, though at a slower pace than in the company's no growth plan. Implementation of a fleet growth strategy would lead to weaker free cash flow generation than planned and increases in funded debt via the starter basket and or purchase money credit facilities that would be arranged in compliance with the incurrence covenants of the new rated credit agreements. However, at current freight rates, projected Debt to EBITDA and interest coverage under this scenario do not meaningfully weaken as compared to the company's no growth plan. The stable outlook reflects Moody's view that the fundamentals of the U.S. Jones Act petroleum transportation market will remain supportive, helping OSG to comfortably service the mostly interest-only debt service of its debt capital following its reorganization. The outlook also reflects that downside risk to freight rates in the company's international tanker markets should remain contained in upcoming years as the unfavorable gap between ton-mile demand and vessel supply does not meaningfully increase. There will be little upwards pressure on the ratings until the company demonstrates the efficacy of its reorganization strategy by strengthening credit metrics following its exit from Chapter 11. Clarity on its fleet plan will identify the extent to which funded debt might increase and the related effect on credit metrics. FFO + Interest to Interest that approaches 3.5 times, Retained Cash Flow to Net Debt in excess of 13% and Debt to EBITDA that approaches 4.5 times could support an upgrade. Application of free cash flow to repayments of the new term loans will be the primary driver of the improving metrics profile in the near term. The ratings could be downgraded if unrestricted cash is sustained below $50 million or the company becomes reliant on at least one of the revolvers to meet working capital needs. Debt to EBITDA sustained above 6.5 times, FFO + Interest to Interest that approaches 2.0 times, a decline in the EBIT margin to the 12% range, Retained Cash Flow to Net Debt that approaches 8% or sustained negative free cash flow generation could pressure the ratings as could fleet growth or returns to shareholders that are funded with debt. Additionally, the ratings could be downgraded if the negotiated terms of the credit agreements differ from Moody's expectations as of the date of this press release such that the company has greater ability to increase funded debt or make restricted payments under incurrence tests, or the priority of the OIN revolver is changed. Moody's use a consolidated waterfall for Moody's Loss Given Default analysis. Moody's ranked the OIN revolving credit facility ahead of the other first lien credit facilities because of its planned super priority claim against the collateral that secures OIN's obligations under the OIN credit facility. Doing so reflects the extensive over-collateralization of this facility given the more than $1.3 billion of appraised fair market value of OIN's vessels and results in the Ba2 rating on the OIN revolver, which is three notches above the Corporate Family rating. The principal methodology used in this rating was the Global Shipping Industry published in February 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. Overseas Shipholding Group, Inc., a Delaware Corporation headquartered in New York, New York, is one of the larger players in the ocean transportation of crude oil and petroleum products. The company operates separate fleets of internationally-flagged tankers trading in international markets and US Jones Act qualified vessels trading mainly in US coastal markets. The company has been operating under Chapter 11 of the US Bankruptcy Code since its filing on November 14, 2012. Assignments: Issuer: OSG Bulk Ships, Inc. Senior Secured Bank Credit Facility, Assigned B1, 36-LGD3 Issuer: OSG International, Inc. Super Priority Senior Secured Bank Credit Facility, Assigned Ba2, 1-LGD1 Senior Secured Bank Credit Facility, Assigned B1, 36-LGD3 Reinstatements: Issuer: Overseas Shipholding Group, Inc. Corporate Family Rating, Reinstated to B2 Probability of Default Rating, Reinstated to B2-PD Speculative Grade Liquidity Rating, Reinstated to SGL-3 Outlook Actions: Issuer: Overseas Shipholding Group, Inc. Outlook, Changed To Stable From Rating Withdrawn Issuer: OSG Bulk Ships, Inc. Outlook, To Stable Issuer: OSG Bulk Ships, Inc. Outlook, To Stable OVERSEAS SHIPHOLDING: To Sell Maremar Ship for $9-Mil. ------------------------------------------------------ Overseas Shipholding Group, Inc., et al., seek authority from the U.S. Bankruptcy Court for the District of Delaware for Maremar Tanker LLC to sell to Maremar Product Tanker Corporation its rights, titles and interests in VICTORY (ex-Overseas Maremar). The Debtors relate that prior to the Petition Date, they have determined that the asset should be reflagged as a Marshall Islands vessel and transferred via intercompany sale from the Debtor Seller to the Debtor Buyer, a Marshall Islands entity created for the sole purpose of owning the asset, in order to rationalize their organizational structure with the international operations of the Asset. According to the Debtors, the transfer would better align the Asset's international-fleet operations with those of the rest of the Debtors' international fleet and would result in a substantial reduction in operating costs for the Asset. As of April 2014, the Asset was appraised by three independent valuation experts and found, on average, to have a fair market value of $9 million, which the Debtor Buyer will pay to the Debtor Seller as the purchase price pursuant to the Purchase Agreement. A hearing on the request will be held on June 26, 2014, at 9:30 a.m. (ET). Objections are due June 19. 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. Bankruptcy Judge Peter J. Walsh in Wilmington, Delaware, issued an order dated May 27 approving the First Amended Disclosure Statement explaining Overseas Shipholding Group, Inc.'s Joint Plan of Reorganization. The Debtors have proposed a July 14, 2014 Plan confirmation hearing. POLY SHIELD: Has $10.6-Mil. Net Loss for First Quarter ------------------------------------------------------ Poly Shield Technologies Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $10.56 million on $24,948 of total revenues for the three months ended March 31, 2014, compared with a net loss of $432,370 on $10,219 of total revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $54.33 million in total assets, $3.34 million in total liabilities, and stockholders' equity of $50.99 million. According to the regulatory filing, continuation as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due and ultimately upon its ability to achieve profitable operations. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/JBMzzi Boca Raton, Fla.-based Poly Shield Technologies Inc., has, as a result of acquiring rights to the Teak Shield fluoropolymer products, the Bio Scrubber technology and the Exhaust Scrubber, shifted its efforts into marketing of cost effective, energy efficient and durability solutions in various industries worldwide. Its main efforts are directed toward marketing the Exhaust Scrubbers to various divisions of the marine industry, such as cruise, cargo, tanker and navy ships. The fluoropolymer (Teak Shield) products complement the Company's Exhaust and Bio Scrubbers, as one of the main usages for these products is also in marine industry. POLYCONCEPT FINANCE: Moody's Affirms 'B2' Corp. Family Rating ------------------------------------------------------------- Moody's Investors Service revised Polyconcept Finance B.V.'s rating outlook to negative from stable, while affirming its ratings including the B2 Corporate Family Rating ("CFR") and Probability of Default Rating ("PDR") at B2-PD. The change of outlook reflects Moody's expectation that the company's operating performance in 2014 will likely be lower than Moody's original expectations and liquidity will be pressured due to weak free cash flow and potential challenges meeting financial covenants under its credit agreement. The rating action reflects the on-going challenges in turning around some of its business segments, such as its ADM division that develops promotional product campaigns for corporate clients and to a lesser extent its European promotional product division which underperformed expectations in FY 2013. The weak operating results from the above divisions have more than offset the modest earnings growth at Polyconcept's North American division, dragging down the overall company's financial results for FY 2013. The negative outlook also reflects Moody's increasing concern regarding the company's liquidity. Moody's expects the company will face significant challenges in the coming quarters to meet the financial maintenance covenants in its credit facility in part due to scheduled tightening of the covenant requirements. In addition, Moody's anticipates free cash flow to be weak over the next year. Polyconcept's free cash flow has been negative in the past 12 months, primarily due to unfavorable working capital and weaker than expected earnings. Therefore, its total cash on hand and availability under the revolver are also below Moody's expectation. Moody's affirmed the following ratings: Corporate Family Rating at B2 Probability of Default Rating at B2-PD $80 million senior secured first lien revolving credit facility at Ba3 (LGD 3, 32%) $315 million senior secured first lien term loan at Ba3 (LGD 3, 32%) Rating Outlook, Changed to Negative from Stable Rating Rationale Polyconcept's B2 CFR reflects the company's modest scale and earnings volatility due to cyclical and fragmented industry characteristics and the highly discretionary nature of its products. The rating is also constrained by the company's high leverage of around 5.0 times (including Moody's standard accounting adjustments) and modest future free cash flow. The ratings also reflect Moody's concerns with near term operating challenges facing Polyconcept due to unfavorable economic headwinds and execution risks associated with its business transition in Europe. The ratings are supported by the company's leading market niche, its competitive advantage in low purchasing cost and quick order lead time, diverse geographic presence, customer base and broad product offering within the promotional product category, and overall good margins. A meaningful deterioration in revenue growth or operating margin trends due to sustained lower demand for promotional products or challenges from its business transition in Europe could exert downward pressure on ratings. Credit metrics that could result in a downgrade include debt/EBITDA levels remaining above 6.0x, or EBITA/interest coverage falling below 1.5x. A weakened liquidity profile could also affect ratings negatively. A rating upgrade is unlikely in the near term given the negative rating outlook and cyclical nature of the industry in which the company operates. Over the longer term, ratings could be upgraded if Moody's come to expect strong, sustained revenue growth as well as improved margins. Quantitatively, upgrade pressure could occur if debt/EBITDA is sustained below 4.5x, EBITA/interest coverage can be sustained above 2.0x and free cash flow/debt remains above 5%. Polyconcept Finance, BV, headquartered in the Netherlands, designs, sources, distributes and decorates promotional products through its main offices in the US, the Netherlands, France, Hong Kong and China. With annual sales of approximately $858 million, the company supplies a wide range of promotional, lifestyle and gift products to several hundred thousand companies ranging from small enterprises to global corporations in over 100 countries with a focus on Europe and North America. The principal methodology used in this rating was the Global Consumer Durables 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. PREMIER TRAILER: S&P Assigns 'B-' CCR; Outlook Stable ----------------------------------------------------- Standard & Poor's Ratings Services assigned trailer lease and rental provider Premier Trailer Leasing Inc. a 'B-' corporate credit rating. The outlook is stable. At the same time, S&P assigned the company's $135 million second- lien term loan a 'CCC' issue-level rating, with a recovery rating of '6', indicating S&P's expectation that lenders would receive negligible recovery (0-10%) in the event of a payment default. S&P's ratings on Premier reflect risks associated with the company's increase in leverage and very aggressive financial profile. Premier is the third largest trailer leasing company, but it is a fraction of the size of the largest industry participant, XTRA Lease LLC, which is owned by Berkshire Hathaway. The company's current industry position reflects the impact of a recent acquisition, which added new locations on the west coast and bolstered the company's national presence. The industry is mature, but is currently somewhat supply- constrained, which is currently resulting in high utilization and favorable rates. S&P believes market fundamentals will remain favorable over the next two years, driven by modestly increasing demand from the continuing slow economic recovery. Despite the favorable market outlook, Premier's financial ratios will deteriorate significantly as a result of the debt-financed dividend. The company has a short operating track record and will now be operating with higher debt levels than in the past. S&P expects funds from operations (FFO) to debt in the mid-teens percent area this year. The company's limited scale, which makes it especially vulnerable to swings in earnings, heightens credit risk. However, as a leasing company, the company has some leeway in terms of the magnitude and timing of capital investments, and this provides some cushion. "We characterize the company's liquidity as "adequate." We believe the company' internally generated cash flow and availability under its revolving credit facility will enable the company to meet debt repayment requirements of about $5.3 million annually and cover capital expenditures. As a leasing company, Premier benefits from an ability to manage its cash flow by flexing its capital expenditures. Maintenance capital expenditure requirements are quite low. Covenants have not yet been finalized, but we expect them to include a leverage covenant and we expect the covenant to be set at a level that would result in a 20% cushion to projected EBITDA," S&P said. PROSPECT HOLDING: S&P Lowers ICR to 'B'; Outlook Stable ------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its long- term issuer credit rating on Prospect Holding Co. LLC and its subsidiaries Prospect Holding Finance Co. and Prospect Mortgage LLC to 'B' from 'B+'. The outlook is stable. At the same time, S&P lowered its issue rating on Prospect's senior unsecured debt to 'B' from 'B+'. "The downgrade reflects Prospect's weakening profitability and leverage following multiple quarters of lower origination volume as industrywide loan applications remain subdued," said Standard & Poor's credit analyst Stephen Lynch. Loan production declined industrywide beginning in the third quarter of 2013 when higher mortgage rates stifled mortgage refinance activity. Prospect's loan production in the second half of 2013 was 13% lower than the first half of 2013. Moreover, the company's first-quarter origination volume was down 27% year over year, leading S&P to believe the seasonally adjusted trend may continue to worsen in 2014 before normalizing in 2015. Prospect reported a net loss of $28.7 million in the first quarter of 2014. As a result, Prospect's leverage (measured as debt to adjusted EBITDA) has spiked beyond 10x and the debt-service coverage ratio has fallen below 1x. Although these metrics may reflect cyclical lows, S&P believes it may take several quarters before they begin to normalize. At the same time, the company's debt to tangible equity of 1.3x provides some rating support. S&P's ratings on Prospect reflect the firm's rising leverage, weakening interest coverage, and geographic and business concentration in residential real estate. The company's low credit risk, tangible equity, and recurring cash flows from a growing mortgage servicing rights portfolio are strengths to the rating. S&P's stable outlook reflects its expectation that earnings will remain strained for the remainder of 2014. S&P do not expect worsening earnings to have a negative impact on the firm's liquidity because the company has the capacity to generate cash by releasing servicing rights on newly originated loans and the ability to sell select portions of its portfolio, which it believes to be fully valued. S&P could nonetheless lower its rating on Prospect if the company's earnings continue to show significant deterioration or if liquidity comes under duress. S&P could also lower the rating if the company's debt service coverage ratio does not begin to approach 1x by the first half of 2015. An upgrade is unlikely over the next one to two years because of the excess capacity in the origination market and broader uncertainty about government- related entity reform. Over time, S&P could raise the rating if the company meaningfully reduces its leverage and lowers earnings volatility without altering the long-term prospects of the firm's fundamental business model. PSL-NORTH AMERICA: File for Bankruptcy With Plan to Sell Assets --------------------------------------------------------------- Michael Bathon, writing for Bloomberg News, reported that the U.S. and North American units of PSL Ltd., an Indian steel-pipe maker for the oil and gas industry, sought bankruptcy protection with a plan to sell assets to Jindal Tubular USA LLC for about $100 million. According to the report, PSL-North America LLC and PSL USA Inc., based in Bay St. Louis, Mississippi, each listed assets of more than $50 million and debt of about $130 million in Chapter 11 documents filed in U.S. Bankruptcy Court in Wilmington, Delaware. The lead case is In re PSL-North America LLC, 14-bk- 11477, U.S. Bankruptcy Court, District of Delaware (Wilmington). PSL - NORTH AMERICA: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- PSL - North America LLC 14-11477 13092 Sea Plane Road Bay St. Louis, MS 39520 PSL USA Inc. 14-11478 Type of Business: Manufacturer and coater of large diameter steel pipe. Chapter 11 Petition Date: June 16, 2014 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Peter J. Walsh Debtors' Counsel: Paul Noble Heath, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square P. O. Box 551 Wilmington, DE 19899 Tel: 302-651-7700 Fax: 302-651-7701 Email: heath@rlf.com - and - John Henry Knight, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19899 Tel: (302) 651-7700 Fax: (302) 651-7701 Email: knight@rlf.com - and - William A. Romanowicz, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, XX 19801 Tel: 302.651.7700 Fax: 302.651.7710 Email: Romanowicz@rlf.com - and - Amanda R. Steele, Esq. RICHARDS, LAYTON & FINGER, P.A. 920 N. King Street Wilmington, DE 19801 Tel: 302-651-7838 Fax: 302-428-7838 Email: steele@rlf.com Debtors' Financial Advisor: DUFF & PHELPS, LLC Debtors' Claims and Noticing Agent: EPIQ SYSTEMS Estimated Assets: $50 million to $100 million Estimated Liabilities: $100 million to $500 million As of the Petition Date, the Debtors had total outstanding debt obligations of approximately $130 million. The petitions were signed by Brian J. Vaill, chief executive officer. Consolidated List of Debtors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ AM/NS Calvert, LLC Trade Debt $5,317,400 Attn: Stefan Wolfe PO Box 456 Calvert, AL 36513 Stefan Wolfe Tel: 251.289.3000 Fax: 251-289-5681 PSL Limited Machinery and $4,808,381 Attn: Nirmala Chandran Equipment/Spare PSL Towers Parts 615 Makwana Road Marol Mumbai, 400059 Tel: +91 22 6644 7777 Fax: +91 22 6644 7711 CSX Transportation Trade Debt/Note $4,078,974 Attn: Kay Fearrington Payable CSXT N/A 130303 PO Box 532652 Atlanta, GA 30353-2652 Tel: 904-279-4904 Fax: 904-279-5086 Export Import Bank of India Bank Loan $1,367,746 Attn: T.D. Sivakumar Head of Office Centre One World Trade Centre Mumbai, Maharastra 400 005 Tel: 202-223-3238 Fax: 202-785-8487 Hanwa American Corp Note Payable $1,288,042 9800 Richmond Ave., Suite 515 Houston, TX 77042 Tel: 713-978-7904 Fax: 713-978-7790 Valspar Lockbox 741667 Trade Debt $506,179 Attn: Karl Jorgenrud PO Box 741667 Atlanta, GA 30374-1167 Tel: 918-625-6690 Fax: 512-300-0375 Balch & Bingham, LLP Legal Fees $220,331 Attn: Terri Gass P.O. Box 306 Birmingham, AL 35201 Tel: 205-521-8100 Fax: 205-226-8799 Lincoln Electric Trade Debt $117,955 Attn: Frank Vincek PO Box 677561 Dallas, TX 75267-7561 Tel: 888-935-3860 Fax: 678-934-0592 Merchant Capital, LLC Bond Remarking $115,727 Attn: Doug Sellers Agent Fees P.O. Box 241858 Montgomery, AL 36124 Tel: 334-834-5100 Fax: 334-269-0902 Axalta Coating System Trade Debt $69,301 Coast Electric Power Association Utility $61,446 Boone Valley Forest Products, Inc. Trade Debt $55,640 SunBelt Rentals Trade Debt $54,220 ADS, LLC Trade Debt $51,404 Nucor Steel Tuscaloosa Trade Debt $29,422 Snow Coating Equipment and Services, Trade Debt $28,009 LLC Prewett Enterprises, Inc. Trade Debt $24,766 Southern Gas and Supply of Trade Debt $21,337 Mississippi, Inc. Pascagoula Sheet Metal WOrks, Inc. Trade Debt $20,140 Harbert's Products, Inc. Trade Debt $15,031 QUANTASON LLC: Ultrasound Developer Converting After Sale Fails --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Quantason LLC, a company developing three-dimensional ultrasound screening for breast cancer, couldn't find a buyer at an acceptable price and filed to convert its Chapter 11 effort to a liquidation under Chapter 7. According to the report, the company said the best offer it received, $50,000, wouldn't even cover expenses of the reorganization attempt. The case is In re Quantason LLC, 14-bk-10932, U.S. Bankruptcy Court, District of Delaware (Wilmington). The Debtor's lawyers are Daniel N. Brogan, Esq., and R. Craig Martin, Esq., at DLA PIPER LLP (US), in Wilmington, Delaware; and Kimberly D. Newmarch, Esq., at DLA PIPER LLP (US), in Chicago, Illinois. REFCO INC: Judge Upholds Key Claims in Suit v. Cantor Fitzgerald ---------------------------------------------------------------- Grant & Eisenhofer P.A. on June 16 disclosed that a federal judge in New York's Southern District has upheld all of the key claims in a lawsuit filed against financial services firm Cantor Fitzgerald and its primary owner and chief executive Howard Lutnick by the bankruptcy estate of former futures broker Refco Inc. The suit, filed in 2013, alleges that Cantor's Nevada gaming businesses acquired proprietary technology and other assets from a subsidiary in which Refco held a 10% stake, without ever compensating the subsidiary and depriving Refco of its interest in the assets. In an 80-page ruling on Cantor's motion to dismiss delivered June 10, U.S. District Judge Ronnie Abrams allowed the Refco bankruptcy estate's conversion, waste, breach of fiduciary duty, aiding and abetting claims and other claims to survive against Cantor Fitzgerald and several of its subsidiaries and executives. The named individual defendants are Cantor Fitzgerald Chairman and CEO Howard Lutnick, Cantor Gaming President Lee Amaitis and Cantor General Counsel and Cantor Index Holdings director Stephen Merkel. Leading financial litigation law firm Grant & Eisenhofer is counsel for Refco's bankruptcy estate and its administrator Marc Kirschner. The firm filed suit seeks to recover compensation owed to the Refco estate under Chapter 11 of the bankruptcy code. The lawsuit contends that in 2002, Refco invested $8 million in Cantor Fitzgerald subsidiary, Cantor Index Holdings, in exchange for a 10% partnership interest. Over the next several years, CIH developed successful gaming technology, such as devices for remote gambling and other betting techniques. The bankruptcy estate alleges that Cantor Gaming ultimately shut down CIH and took the rights of its core assets and intellectual property for its own profit, developing valuable businesses in Nevada and elsewhere -- while failing to provide any compensation to the bankruptcy estate to reflect its 10% stake in CIH. The complaint notes that Cantor defendants have repeatedly represented to regulators, analysts and the press that the technology developed by CIH and its subsidiaries in the U.K. was critical to the successful build-out of Cantor's Nevada operations. The bankruptcy estate's suit seeks tens of millions of dollars in compensatory and punitive damages. In allowing the case to go forward, Judge Abrams upheld major claims against the defendants, as follows: Against Cantor Fitzgerald, L.P. and its affiliates/subsidiaries Cantor Index Holdings, L.P., Cantor Index Limited, Cantor Fitzgerald Game Holdings LLC, and Cantor Fitzgerald Securities, Judge Abrams upheld claims that they aided and abetted a breach of fiduciary duty and engaged in the tort of "Conversion" Against Lutnick and Amaitis claims for "Aiding & Abetting Breach of Fiduciary Duty" will proceed and against Lutnick, Amaitis and Merkel, the "Unjust Enrichment," "Waste" and "Conversion" claims will go forward; Against Cantor Index Holdings L.P. LLC, the "Breach Of Fiduciary Duty," "Waste," and "Conversion" claims will go forward; Against Cantor G&W (Nevada) L.P. the "Unjust Enrichment" and "Conversion" claims will go forward. Following the ruling, the parties in the litigation will be required to jointly submit to the court a proposed case management plan and scheduling order, and the court has set a conference on June 24, 2014. Grant & Eisenhofer co-managing director Jay Eisenhofer said: "We're pleased that the Southern District Court has upheld all of the key claims against the main parties in this action. We are prepared to move forward with our litigation, to prove that Cantor still owes Refco's bankruptcy estate for the value of assets which Refco helped finance more than a decade ago. Cantor's success in the mobile gaming sector has depended heavily on the technologies that Refco helped bankroll and we will continue to press for recovery for the fair value of that investment." Mr. Kirschner added that: "If the case goes to trial, we will demonstrate that the Cantor defendants used CIH's core technology and related assets in which Refco had original ownership stake to build its subsidiary gaming business. This case is about honoring the terms of that original agreement." In addition to Mr. Eisenhofer, Grant & Eisenhofer director Geoffrey Jarvis is special litigation counsel to plaintiff bankruptcy estate. The case is captioned as: Refco Group LTD., LLC v. Cantor Fitzgerald, L.P., et al. About Grant & Eisenhofer Grant & Eisenhofer P.A. represents plaintiffs in a wide range of complex financial litigation. G&E's clients include institutional investors, whistleblowers and other stakeholders in bankruptcy litigation, securities class actions, derivative lawsuits, consumer class actions, antitrust suits, and cases involving the False Claims Act. G&E has recovered more than $13 billion for investors in the last five years and has consistently been cited by RiskMetrics for securing the highest average investor recovery in securities class actions. Grant & Eisenhofer has been named one of the country's top plaintiffs' law firms by The National Law Journal for the past ten years. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc., and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. RESIDENTIAL CAPITAL: Claimants Must Plead Claim With Specifics -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Martin Glenn threw out a claim against Residential Capital LLC, explaining in his opinion how the homeowner didn't meet the heightened standard requiring fraud- based claims to be supported by specific facts, not mere conclusory allegations about improper conduct. According to the report, Judge Glenn said a creditor can file a claim initially making only conclusory allegations about fraud. Once ResCap objects to the claim and refutes the allegations, the burden shifts back to the creditor, who must then lay elements of fraudulent conduct with particularity, as required by Rule 9(b) of the Federal Rule of Civil Procedure, the report related. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11 Plan co-proposed by Residential Capital and the Official Committee of Unsecured Creditors. The Plan became effective on Dec. 17, 2013. REVSTONE INDUSTRIES: Judge OKs $13M Sale, But GM Still Objects -------------------------------------------------------------- Law360 reported that a Delaware bankruptcy judge said that he's ready to approve Revstone Industries LLC's $13 million sale of its equity stake in a Canadian unit to private equity firm Zynik Capital Corp., but the deal is in danger of collapsing after General Motors Co. refused to back down from its objection. According to the report, GM is not opposed to the principle of the transaction but has filed a limited objection on June 3, arguing that it is owed nearly $6.3 million and wants a direct payment out of the auto parts conglomerate's sale proceeds. At a hearing over the matter in Wilmington, Delaware, Revstone attorney Alan J. Kornfeld of Pachulski Stang Ziehl & Jones LLP said the debtor was willing to set aside the sum GM wants in escrow to fight over it later but wanted the auto giant to release its claims on the Canadian unit's assets that Revstone hopes to sell its ownership stake to Zynik for CA$14.1 million (US$12.9 million), subject to adjustments, the report related. About Revstone Industries et al. Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Colin Robinson, Esq., at Pachulski Stang Ziehl & Jones LLP represent Revstone. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. Metavation, also known as Hillsdale Automotive, LLC, joined parent Revstone in Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No. 13-11831) to sell the bulk of its assets to industry rival Dayco for $25 million, absent higher and better offers. Metavation has tapped Pachulski as its counsel. Pachulski also serves as counsel to Revstone and Spara. Metavation also has tapped McDonald Hopkins PLC as special counsel, and Rust Consulting/Omni Bankruptcy as claims agent and to provide administrative services. Stuart Maue is fee examiner. Mark L. Desgrosseilliers, Esq., Ericka Fredricks Johnson, Esq., Steven K. Kortanek, Esq., and Matthew P. Ward, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent the Official Committee of Unsecured Creditors in Revstone's case. Boston Finance Group, LLC, a committee member, also has hired as counsel Gregg M. Galardi, Esq., and Sarah E. Castle, Esq., at DLA Piper LLP. RESIDENTIAL CAPITAL: Objects To $1M In 'Unnecessary' Fees --------------------------------------------------------- Law360 reported that the liquidating trust of Residential Capital LLC filed an objection in New York bankruptcy court over nearly $1 million in attorneys' fees paid to Morrison Cohen LLP, claiming it was being charged for double-billed hours and unnecessary work. According to the report, in the filing, ResCap takes issue with $987,677 of a $4.3 million bill from Morrison Cohen for representing its independent directors during its bankruptcy proceedings, including $315,967 for "unnecessary internal conferences and meetings" and $100,569 for "vaguely described tasks." About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11 Plan co-proposed by Residential Capital and the Official Committee of Unsecured Creditors. The Plan became effective on Dec. 17, 2013. ROVI SOLUTIONS: Moody's Assigns 'Ba3' Rating on 1st Lien Debt ------------------------------------------------------------- Moody's Investors Service assigned Ba3 ratings to Rovi Solutions Corporation's proposed 1st lien senior secured credit facilities, consisting of a $200 million revolving credit facility due 2019, $100 million term loan A due 2019 and a $700 million term loan B due 2021. In addition, Moody's affirmed Rovi Corporation's Ba3 Corporate Family Rating ("CFR") and SGL-2 Speculative Grade Liquidity rating. The company's Probability of Default Rating ("PDR") was lowered to B1-PD from Ba3-PD. The rating outlook remains negative. Proceeds from the proposed debt offering will be used to refinance existing debt, for general corporate purposes and to pay fees and expenses associated with the transaction, resulting in essentially a leverage neutral transaction. LGD point estimates are subject to change and all ratings are subject to the execution of the transaction as currently proposed and Moody's review of final documentation. The affirmation of Rovi's Ba3 CFR reflects the company's recent progress in reducing financial leverage to about 5.6 times (Moody's adjusted; pro forma for proposed transaction) from approximately 7.0 times at the end of September 2013, while sustaining favorable revenue trends within the service provider business segment, generating free cash flow in the mid teen percentages of debt and maintaining a good liquidity profile. The affirmation also reflects the fact that because of Rovi's sizeable cash balances, its comparable net leverage is only around 3.4 times (Moody's adjusted; pro forma for proposed transaction) currently. The negative outlook continues to reflect Moody's concerns regarding the company's still elevated financial leverage (which is weak for the rating category), challenges in regards to gaining revenue traction within the consumer electronics segment and meaningfully deleveraging over the near to medium term, absent a substantial reduction in funded debt. The negative outlook also incorporates the company's execution risk as it re-orients its product portfolio and invests in cloud based guidance, metadata and analytics offerings. The downgrade of the PDR to B1-PD from Ba3-PD reflects reduced loss absorption cushion as per Moody's Loss Given Default Methodology, given the potential that the unrated 2040 convertible notes can be put to the company by holders on February 20th, 2015. In such an event, the 1st lien senior secured debt would substantially comprise the company's capital structure. The following summarizes the rating activity: Issuer: Rovi Corporation Ratings affirmed: Corporate Family Rating at Ba3 Speculative Grade Liquidity Rating at SGL-2 Ratings downgraded: Probability of Default Rating to B1-PD from Ba3-PD Co-Issuers: Rovi Solutions Corporation and Rovi Guides, Inc. Ratings assigned: Proposed $200 million 1st lien senior secured revolving credit facility due 2019 at Ba3 (LGD3, 34%) Proposed $100 million 1st lien senior secured term loan A due 2019 at Ba3 (LGD3, 34%) Proposed $700 million 1st lien senior secured term loan B due 2021 at Ba3 (LGD3, 34%) Ratings to be withdrawn at close of transaction: $222 million (outstanding) senior secured Term Loan A-1 due February 2016 at Ba2 (LGD3, 36%) $168 million (outstanding) senior secured Term Loan A-2 due March 2017 at Ba2 (LGD3, 36%) $474 million (outstanding) senior secured Term Loan B-3 due March 2019 at Ba2 (LGD3, 36%) The rating outlook is negative. Ratings Rationale Rovi's Ba3 Corporate Family Rating ("CFR") reflects the company's broad portfolio of electronic guidance related patents, large installed base of global users, and a high margin revenue stream generated under multi-year licensing agreements. The company's solid market position and broad coverage in the set-top box-based interactive program guides market within the service provider vertical, especially in the North American region, as well as its renewed focus on its core discovery and personalization competencies lend support to the rating. The rating also considers Rovi's solid interest coverage and consistently healthy free cash flow generation profile. The rating is further supported by Moody's expectations that Rovi will generate free cash flow in the low teens percentages of total debt and maintain good liquidity over the next 12 to 18 months. However, the rating also acknowledges the company's persistently high, albeit improving financial leverage, as measured by debt to EBITDA of about 5.6 times (including Moody's standard analytical adjustments, such as stock compensation expense and capitalized operating leases) for the LTM period ended March 31, 2014. As a result, Moody's view the company's CFR as weakly positioned within the Ba3 ratings category and expect that financial leverage will improve moderately over the near to medium term, absent any substantial debt reduction or potential increase in EBITDA resulting from major contract renewals in 2015/2016. Finally, the rating incorporates Rovi's reliance on patents that have applicability only in niche areas to generate a significant portion of its high margin revenues and the execution risk of achieving sustainable revenue growth over the next 12 months or so. Moody's does not anticipate a ratings upgrade in the near term. However, Moody's could stabilize Rovi's ratings if the company demonstrates sustained improvement in revenues and operating cash flow such that the company reduces and maintains total debt-to- EBITDA below 4.5 times (incorporating Moody's standard analytical adjustments) and sustains free cash flow in excess of 10% of total debt. Moody's could downgrade Rovi's ratings if the company's liquidity erodes as a result of declining earnings or management's aggressive financial policies. Rovi's ratings could be downgraded if sequential improvement in EBITDA and profitability appears unsustainable over the medium term, and if Moody's comes to believe that leverage is unlikely to decline below 4.5 times (Moody's adjusted) or free cash flow will sustain below 10% of total debt over a protracted period of time. The ratings could also be lowered if Rovi is unable to renew upcoming licensing agreements with key customers at economically feasible terms or if the competitive position of its intellectual property portfolio weakens. 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. Headquartered in Santa Clara, California, Rovi Corporation provides integrated discovery and personalization solutions to the media entertainment market. Rovi reported approximately $547 million in revenue from continuing operations for the twelve months ended March 31, 2014. ROYCE HOMES: Defunct Builder's CEO Slammed With $27M Fraud Verdict ------------------------------------------------------------------ Law360 reported that a Texas federal jury hit the former head of a defunct homebuilder with a $27 million verdict for allegedly bilking the company out of tens of millions, causing it to collapse into bankruptcy and leaving creditors empty handed. According to the report, T. Micah Dortch of Cooper & Scully PC told Law360 that jurors returned the verdict against former Royce Homes LP CEO John H. Speer, who allegedly participated in a raid of the company that swindled creditors to the tune of $40 million. Dortch, who represents Royce Homes' Chapter 7 trustee Rodney Tow, said that the award includes $19.8 million in actual damages tied to Speer's fraudulent transfers and another $7 million in prejudgment interest, the report said. The case is TrackTow v. Amegy Bank N.A. et al., Case No. 4:11-cv- 03700 (S.D. Tex.). SIMA TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Sima Technologies, LLC 125 Commerce Drive Hauppauge, NY 11788 Case No.: 14-72754 Chapter 11 Petition Date: June 13, 2014 Court: United States Bankruptcy Court Eastern District of New York (Central Islip) Judge: Hon. Robert E. Grossman Debtor's Counsel: Robert Nosek, Esq. SILVERMANACAMPORA LLP 100 Jericho Quadrangle, Ste 300 Jericho, NY 11753 Tel: 516-479-6300 Fax: 516-479-6307 Email: rnosek@silvermanacampora.com Total Assets: $853,073 Total Liabilities: $8.30 million The petition was signed by Robert S. Leifer, vice president of operations. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/nyeb14-72754.pdf SITV LLC: Moody's Assigns 'B3' CFR & Rates $230 Senior Bonds 'B3' ----------------------------------------------------------------- Moody's Investors Services assigned a B3 Corporate Family Rating and a B3-PD Probability of Default Rating to SiTV, LLC (Nuvo) and a B3 rating to its proposed $230 million of senior secured bonds. The company plans to use proceeds, together with a cash advance from DISH Network, LLC, to fund the announced $226 million acquisition of Fuse Network (Fuse) from The Madison Square Garden Company (MSG), to repay existing debt, and to provide some cash to its balance sheet. MSG will also receive 15 percent equity of the combined company (subject to potential reduction based on certain performance goals) and gain a seat on the SiTV Media, Inc. (parent of SiTV, LLC) Board of Directors. The outlook is stable, and a summary of the action follows. Ratings are subject to review of documentation. SiTV, LLC and co-issuer SiTV Finance, Inc. Senior Secured Bonds, Assigned B3, LGD3, 49% SiTV, LLC Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Outlook, Assigned as Stable Ratings Rationale Expectations for weak free cash flow and a modest $10 million revolver (unrated) as well as high leverage provide Nuvo with minimal flexibility to integrate Fuse. Furthermore, the combined company lacks scale, with estimated revenue of about $135 million. These factors position the company weakly at the B3 CFR. Nuvo provides English language content targeted at young Latinos in the United States, and Moody's believes growth in this population, currently underserved by mainstream English language television, positions the company well for improved cash flow from both pay television distributors and advertisers. However, these same factors draw other operators. Nuvo faces significant competition for viewers, for channel placement and carriage fees from pay television distributors, and for advertising dollars, in many cases from much larger companies with far more financial flexibility to invest in content. The contractual stream of revenue from affiliate partners (estimated at about 70% of total revenue for the combined company) lends stability and creates revenue visibility over the next few years, but without MSG, which owns valuable sports content, Fuse will likely lose some of its negotiating leverage. Moody's believes potential for significant cost reduction exists as management combines the companies, with low risk to achieving a meaningful portion of the expected expense cuts. Moody's estimates leverage at close will be about 7 times debt-to- EBITDA, pro forma for the acquisition of Fuse and a portion of expected costs savings. Moody's also adjusts EBITDA to incorporate programming expenses on a cash basis, which results in lower EBITDA (and therefore higher leverage) than management's calculation while the company is investing in programming, which Moody's expects will be the case over the next few years. Moody's believes leverage could reach the 8 to 9 times debt-to-EBITDA range and free cash flow could turn slightly negative as management integrates the companies, a significant risk given the company's lack of scale and modest external availability under its revolver. However, Moody's believes the company will have about $35 million of cash on its balance sheet upon close of the transaction and the ability to manage its cash costs to maintain adequate liquidity during the integration period. Moody's also believes the company will be in a position to generate at least breakeven free cash flow in 2016 and better in the following years. The stable outlook assumes Nuvo will execute on the majority of its projected cost savings, successfully combine the companies, and generate about breakeven or better free cash flow. The outlook also incorporates expectations for Nuvo to achieve affiliate contracts with major distributors at least in line with management forecasts and for evidence of some traction with its content from distributors, advertisers, and consumers. Given the execution risk, weak financial profile and lack of scale an upgrade is less likely over at least the next three years. Moody's would consider a positive action with evidence of successful integration, meaningful EBITDA growth, and traction with affiliates and advertisers. An upgrade would also require expectations for adequate liquidity and sustainable positive free cash flow. Deterioration of the liquidity profile, such as projected inability to comply with revolver covenants or materially negative free cash flow, would likely warrant a negative ratings action. Evidence of lack of traction with advertisers or distributors such that Moody's expected the combined company to receive affiliate fees at a significantly lower rate or for a much smaller number of pay television subscribers could also have negative ratings implications. The principal methodology used in this rating was the Global Broadcast and Advertising Related Industries published in May 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. SiTV, LLC does business as NUVOtv and provides a mixture of original and acquired English language entertainment and lifestyle content targeted at Latinos. NUVOtv reaches approximately 32 million homes through distribution partners including AT&T U- verse, Comcast, Cox, Dish Network, Time Warner Cable and Verizon FIOS. The principal financial shareholders in NUVO are Columbia Capital and Rho Capital Partners. The company maintains headquarters in Los Angeles, California. The Madison Square Garden Company (MSG) is a sports, media and entertainment business comprised of MSG Sports, MSG Media and MSG Entertainment. The Fuse network, a national network dedicated to music (currently part of MSG Media), reaches approximately 73 million subscribers through its pay television distribution partners. MSG maintains headquarters in New York, New York. SITV MEDIA: S&P Assigns 'B-' CCR on FUSE Network Acquisition ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to SiTV Media Inc. At the same time, S&P assigned a 'B-' issue level rating to the proposed $230 million senior secured notes due 2019. The recovery rating on this debt is '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a default. S&P expects the company will use proceeds to acquire FUSE Network. The 'B-' corporate credit rating partly reflects SiTV Media's limited scale, with only two cable TV networks. S&P also weighs the company's narrow business focus, (NUVOtv primarily targets Hispanics living in the U.S.) and tough competition from major players in this segment. "We believe the company's focus on Hispanics living in the U.S. provides the company some protection from broad English-language competition--largely in relation to carriage by cable, satellite, and telecom video service providers--but also limits growth prospects," said Standard & Poor's credit analyst Chris Valentine. "We also view the competition for ad spending targeting Hispanic consumers as growing steadily, while the arena remains dominated by Univision Communications Inc. NUVOTv's network currently has carriage with some but not all of the major cable providers. SiTV also has a smaller EBITDA base than other rated cable networks, which could make for challenging negotiations with cable providers." The ratings are also based on Standard & Poor's expectation that leverage will remain above 5x over the next 12 to 18 months. However, S&P expects leverage to decline slightly in 2014 to the mid-5x area. S&P's stable outlook reflects its expectation that liquidity will meet the company's operating needs over the next 12 months but could be strained if expected discretionary cash flow generation is less than S&P's expectations in 2015. SPECIALTY HOSPITAL: S. Koenig Appointed as Patient Care Ombudsman ----------------------------------------------------------------- Judy A. Robbins, United States Trustee for Region 4, notified the U.S. Bankruptcy Court for the District of Columbia that she has appointed Suzanne Koenig of Northfield, Illinois, as Patient Care Ombudsman in the Chapter 11 cases of Specialty Hospital of Washington, LLC, et al., following Judge S. Martin Teel, Jr.'s order for the appointment of a PCO. The U.S. Trustee sought the appointment of a PCO to monitor the quality of patient care in the Debtors' bankruptcy cases given the uncertain nature of the Debtors' operations and the critical threat that a disruption could cause the patients. The U.S. Trustee said the debtors are facing incredible financial pressure, which threatens to create tension between management trying to keep the doors open and the needs of patients to receive high quality care. The Debtor?s current management has allegedly accumulated more than $50 million in tax liens, judgments, and commercial debt. Under the current management, the patient census has gone from 45 to 14 over the past year. In connection with her appointment as PCO, Ms. Koenig filed a verified statement pursuant to Rule 2007.2 of the Federal Rules of Bankruptcy Procedure, disclosing that she is president of SAK Management Services, LLC, which manages and turns around distressed health care businesses. Ms. Koenig assured the Court that assures the Court that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About Specialty Hospital Specialty Hospital of America LLC operates nursing home facilities and long-term acute care hospitals. On April 23, 2014, an involuntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 14- 10935) was filed against Specialty Hospitals of Washington, LLC ("SHDC"). Capitol Hill Group and five other alleged creditors who signed the involuntary bankruptcy petition are represented by Stephen W. Spence, Esq., at Phillips, Goldman & Spence, in Wilmington, Delaware. Capitol Hill Group claims to be owed $1.66 million on a lease for non-residential real property while another creditor, Metropolitan Medical Group, LLC, claims $837,000 for physician services. The petitioners assert $2.69 million in total claims. On May 9, 2014, the Delaware court transferred the case to Washington, D.C. (Bankr. D.C. Case No. 14-00279). On May 21, 2014, SHDC filed an answer and consent for relief under Chapter 11. Also on May 21, six affiliates of SHDC, including Specialty Hospital of America, LLC filed for Chapter 11 protection. The U.S. Bankruptcy Court entered an order directing the joint administration the cases under Specialty Hospital of Washington, LLC, Case No. 14-00279. The Debtors announced plans to sell all of their assets in exchange for a $15 million debtor-in-possession loan from Silver Point Capital, which will allow the Debtors to continue operating through the bankruptcy process. Specialty Hospital of America estimated between $10 million and $50 million in assets and between $50 million and $100 million in liabilities in its bankruptcy petition. The Debtors are represented by Pillsbury Winthrop Shaw Pittman LLP as counsel. Alvarez and Marsal Healthcare Industry Group, LLC, serves as the Debtors' financial advisor. Cain Brothers & Company, LLC, is the Debtors' investment banker. The U.S. Trustee has named three members to the Official Committee of Unsecured Creditors. SPECIALTY HOSPITAL: Has $23.2MM in Assets, $90.5MM in Debts ----------------------------------------------------------- Specialty Hospital of Washington, LLC, filed with the U.S. Bankruptcy Court for the District of Columbia its schedules disclosing $23,265,804 in total assets and $90,594,249 in total liabilities. The Debtor has $542 in cash on hand; $95,743 in checkings, savings and other financial accounts; $19,427,007 in accounts receivable; $372,411 in office equipment, furnishings and supplies; $1,041,130 in machinery, fixtures, equipment and supplies used in business; $363,083 in inventory; and $1,965,885 in other personal property. Secured claims against the Debtor total $50,419,868, while unsecured priority claims total $11,076. Unsecured non-priority claims total $45,734. Full-text copies of the Schedules are available at http://is.gd/sCkozY The Schedules were filed ahead of the June 20, 2014, deadline for interested parties to file competing bids for the Debtors' assets. The Schedules were filed on June 9, a date that was already extended by the Court at the behest of the Debtors. The June 9 deadline was objected to by the U.S. Trustee but U.S. Bankruptcy Judge S. Martin Teel, Jr., said the June 9 deadline leaves sufficient time for the schedules to be used for due diligence and for allowing creditors to have schedules they can examine to determine the extent of the Debtors' assets in objecting to the proposed sale. About Specialty Hospital Specialty Hospital of America LLC operates nursing home facilities and long-term acute care hospitals. On April 23, 2014, an involuntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 14- 10935) was filed against Specialty Hospitals of Washington, LLC ("SHDC"). Capitol Hill Group and five other alleged creditors who signed the involuntary bankruptcy petition are represented by Stephen W. Spence, Esq., at Phillips, Goldman & Spence, in Wilmington, Delaware. Capitol Hill Group claims to be owed $1.66 million on a lease for non-residential real property while another creditor, Metropolitan Medical Group, LLC, claims $837,000 for physician services. The petitioners assert $2.69 million in total claims. On May 9, 2014, the Delaware court transferred the case to Washington, D.C. (Bankr. D.C. Case No. 14-00279). On May 21, 2014, SHDC filed an answer and consent for relief under Chapter 11. Also on May 21, six affiliates of SHDC, including Specialty Hospital of America, LLC filed for Chapter 11 protection. The U.S. Bankruptcy Court entered an order directing the joint administration the cases under Specialty Hospital of Washington, LLC, Case No. 14-00279. The Debtors announced plans to sell all of their assets in exchange for a $15 million debtor-in-possession loan from Silver Point Capital, which will allow the Debtors to continue operating through the bankruptcy process. Specialty Hospital of America estimated between $10 million and $50 million in assets and between $50 million and $100 million in liabilities in its bankruptcy petition. The Debtors are represented by Pillsbury Winthrop Shaw Pittman LLP as counsel. Alvarez and Marsal Healthcare Industry Group, LLC, serves as the Debtors' financial advisor. Cain Brothers & Company, LLC, is the Debtors' investment banker. The U.S. Trustee has appointed three members to the Official Committee of Unsecured Creditors. SPHERIX INC: Reports $7.96-Mil. Net Loss in First Quarter --------------------------------------------------------- Spherix Incorporated filed its quarterly report on Form 10-Q, disclosing a net loss of $7.96 million on $4,000 of revenues for the three months ended March 31, 2014, compared with a net loss of $3.7 million on $6,000 of total revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $68.76 million in total assets, $1.12 million in total liabilities, redeemable preferred stock of $20 million, and stockholders' equity of $47.63 million. As a result of the Company's recurring operating losses and net operating cash flow deficits, there is 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 at: http://is.gd/HuFUyY About Spherix Incorporated Bethesda, Md.-based Spherix Incorporated (NASDAQ CM: SPEX) -- http://www.spherix.com/-- was launched in 1967 as a scientific research company, under the name Biospherics Research. The Company now leverages its scientific and technical expertise and experience through its two subsidiaries -- Biospherics Incorporated and Spherix Consulting, Inc. Biospherics is currently running a Phase 3 clinical trial to study the use of D-tagatose as a treatment for Type 2 diabetes. Its Spherix Consulting subsidiary provides scientific and strategic support for suppliers, manufacturers, distributors and retailers of conventional foods, biotechnology-derived foods, medical foods, infant formulas, food ingredients, dietary supplements, food contact substances, pharmaceuticals, medical devices, consumer products, and industrial chemicals and pesticides. STEARNS HOLDINGS: S&P Affirms 'B+' ICR & Revises Outlook to Neg. ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B+' long-term issuer credit rating on Stearns Holdings Inc. and revised the outlook to negative from stable. "The negative outlook reflects Stearns' weakening profitability and leverage following multiple quarters of lower origination volume as industrywide loan applications remain subdued," said Standard & Poor's credit analyst Stephen Lynch. Loan production declined industrywide beginning in the third quarter of 2013 when higher mortgage rates stifled mortgage refinance activity. Stearns' loan production in the second half of 2013 was 25% lower than the first half of 2013. Moreover, the company's first- quarter origination volume is down 27% year over year, leading S&P to believe the seasonally adjusted trend may continue to worsen in 2014 before normalizing in 2015. Stearns reported a net loss of $10 million in the first quarter of 2014. The decline in earnings has caused Stearns' leverage (measured as debt to adjusted EBITDA) to increase to 6x and the debt-service coverage ratio to fall below 2x. S&P's ratings on Stearns reflect the firm's rising leverage, weakening interest coverage, and geographic and business concentration in residential real estate. The company's low credit risk, tangible equity, and recurring cash flows from a growing mortgage servicing portfolio are strengths to the rating. The company's debt to tangible equity of 1.3x provides some rating support. S&P's negative outlook reflects its expectation that earnings will remain strained for the remainder of 2014 compared with 2013. S&P do not expect worsening earnings to have a negative impact on the firm's liquidity because the company has the capacity to generate cash by releasing servicing rights on newly originated loans and the ability to sell select portions of its mortgage servicing rights portfolio, which it believes to be undervalued on its balance sheet. S&P could lower our rating on Stearns if the company's earnings fail to show significant improvement or if liquidity comes under duress. S&P could also lower the rating if the company's debt service coverage ratio remains below 2x for multiple quarters. An upgrade is not likely over the next one to two years because of the excess capacity in the origination market and broader uncertainty about government-sponsored entity reform. Over time, S&P could raise the rating if the company meaningfully reduces its leverage and lowers earnings volatility without altering the long- term prospects of the firm's fundamental business model. TELIK INC: Reports $1.07-Mil. Net Loss in Q1 Ended March 31 ----------------------------------------------------------- Telik, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1.07 million for three months ended March 31, 2014, compared with a net loss of $1.94 million for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.58 million in total assets, $996,000 in total liabilities, and stockholders' equity of $588,000. If the Company is not unable to raise adequate funds in the near future, it will not be able to continue to fund its operations, research programs, preclinical testing and clinical trials to develop and manufacture its drug product candidates, and the Company's auditors have indicated that its recurring losses and net capital deficiency 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/fgCNMb Palo Alto, Calif.-based Telik, Inc. (Nasdaq: TELK) is a clinical stage drug development company focused on discovering and developing small molecule drugs to treat cancer. The Company's most advanced drug candidate is Telintra(R), a modified glutathione analog intended for the treatment of hematologic disorders including myelodysplastic syndrome; followed by Telcyta(R), a cancer activated prodrug for the treatment of a variety of cancers. Telik's product candidates were discovered using its proprietary drug discovery technology, TRAP(R), which enables the rapid and efficient discovery of small molecule drug candidates. TRIZETTO CORP: Moody's Hikes Corporate Family Rating to 'B2' ------------------------------------------------------------ Moody's Investors Service upgraded TriZetto Corporation's ("TriZetto", f/k/a The TriZetto Group, Inc.) Corporate Family Rating to B2 from B3, Probability of Default Rating to B2-PD from B3-PD, sr. secured revolver and term loan ratings to B1 from B2, and sr. secured 2nd lien term loan's rating to Caa1 from Caa2. The rating outlook was changed to stable from negative. According to Moody's analyst Adam McLaren, "The upgrade of the corporate family rating to B2 reflects TriZetto's improved operating results and liquidity profile. Operational improvements, cost management, and strong perpetual license revenue led to an improvement of key credit metrics including cash flow and debt leverage." The change in outlook to stable from negative reflects TriZetto's good liquidity profile incorporating positive free cash flow and availability under its revolving credit facility, which was previously unavailable due to covenant compliance constraints. The following rating actions were taken: Corporate family rating, upgraded to B2 from B3; Probability of default rating, upgraded to B2-PD from B3-PD; $85 million senior secured revolving credit facility due 2016, upgraded to B1 (LGD3, 39%) from B2 (LGD3, 39%); $650 million ($611 million outstanding) senior secured term loan due 2018, upgraded to B1 (LGD3, 39%) from B2 (LGD3, 39%); $150 million senior secured 2nd lien term loan due 2019, upgraded to Caa1 (LGD6, 90%) from Caa2 (LGD5, 89%); Outlook, changed to stable from negative. Ratings Rationale The B2 corporate family rating reflects TriZetto's improved leverage level, strong market position as a provider of information technology solutions to the healthcare industry, and good liquidity profile. The company's focus on margin improvement through cost controls and cash collections have resulted in strong cash generation and significant margin improvement. Further supporting the rating is the company's sizeable backlog, the high level of recurring revenue, and ongoing market opportunity given healthcare reform and the need for the healthcare industry to improve productivity and efficiency. The B2 rating remains constrained by the company's size, scale, and the highly competitive IT and healthcare IT marketplace. The stable outlook reflects end market demand for healthcare information technology, revenue visibility due to the high and increasing level of recurring revenue, and the company's good liquidity profile. The rating could be downgraded if TriZetto's adjusted debt-to- EBITDA was projected to be sustained above 6.5 times and adjusted (EBITDA less capital expenditures)-to-interest expense to be sustained below 1.5 times. In addition, if TriZetto's liquidity profile deteriorates, the rating could be downgraded. There may also be rating pressure if TriZetto were to face contract losses from competitive pressures, or if the company pursued debt financed acquisitions. Any shareholder friendly activities would put negative pressure on the rating as well. The rating could be upgraded if TriZetto successfully grows both the payer and provider businesses, while de-leveraging the company towards 4.0 times on a sustained basis. The rating could be upgraded if TriZetto were to maintain free cash flow-to-debt above 10% and a good liquidity profile. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Englewood, Colorado, TriZetto is a provider of information technology solutions to the healthcare industry. TriZetto's shareholders include Apax Partners, BlueCross BlueShield of Tennessee, Inc. and Cambia Health Solutions. For the trailing twelve months ended March 31, 2014 the company's revenue was $682 million. TUSCANY INTERNATIONAL: Administrative Claims Due July 9 ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware established July 9, 2014 at 5:00 p.m. (Prevailing Eastern Time) as the deadline by which holders of Administrative Claims in the Chapter 11 cases of Tuscany International Holdings (U.S.A.) Ltd., et al., must file proofs of administrative claim against the Debtors. An order confirming the First Amended Joint Plan of Reorganization for the Debtors was entered by the Court on May 21, 2014, following the overwhelming support shown by holders of Class 4 Prepetition Credit Agreement Claims against Holdco, which was the only class entitled to vote to accept or reject the Plan. The Disclosure Statement explaining the Plan was approved on April 9. The Plan was substantially consummated, and the Effective Date occurred on June 9. Prior to the occurrence of the Effective Date, the Bankruptcy Court gave the Debtors authority to employ PricewaterhouseCoopers LLP (Canada) as auditors and expand the scope of employment of Deloitte LLP to include additional tax services for Debtor Tuscany International Drilling Inc. The Official Committee of Equity Security Holders also obtained court authority to retain Landis Rath & Cobb LLP as counsel and Gavin/Solmonese LLC as financial advisor. The Debtors have a motion pending in Court seeking an extension of the exclusive periods to file a Chapter 11 plan of reorganization through and including Sept. 1, and to solicit votes on a chapter 11 plan of reorganization through and including Oct. 30. A hearing on the Debtors' request is set for June 13. The Debtors have until Aug. 29 within which they may file notices of removal of civil actions to which they are or may become party, and until the same time to assume or reject leases. About Tuscany International Tuscany International Holdings (U.S.A.) Ltd. and Tuscany International Drilling Inc. sought protection from creditors under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 14-10193) in Delaware on Feb. 2, 2014. Tuscany also commenced ancillary proceedings in the Court of Queen's Bench of Alberta under the Companies' Creditors Arrangement Act. Pursuant to a restructuring support agreement with prepetition lenders holding 95% of the prepetition loans, the Debtors have agreed to sell substantially all of the assets of TID to lenders in exchange for a credit bid of certain of their debt, effectuated through a plan of reorganization. Headquartered in Calgary, Alberta, Tuscany is engaged in the business of providing contract drilling and work-over services along with equipment rentals to the oil and gas industry. Tuscany is currently focused on providing services to oil and natural gas operators in South America. Tuscany has operating centers in Colombia, Brazil, and Ecuador. The Debtor disclosed $414,624,292 in assets and $207,332,530 in liabilities as of the Chapter 11 filing. The Colombian and Brazilian businesses are operated by certain non-debtor affiliates, while the Ecuador business is operated by branch office of debtor TID. As of the Petition Date, Tuscany entities owned 26 rigs, of which 12 are located in Colombia, nine in Brazil and five in Ecuador. Of the 26 rigs, 15 were contracted and operational as of the Petition Date and five were directly owned by the Debtors. Latham & Watkins LLP's Mitchell A. Seider, Esq., Keith A. Simon, Esq., David A. Hammerman, Esq., and Annemarie V. Reilly, Esq.; and Young Conaway Stargatt & Taylor, LLP's Michael R. Nestor, Esq., and Kara Hammond Coyle, Esq., serve as the Debtors' co-counsel. FTI Consulting Canada, Inc.'s Deryck Helkaa is the chief restructuring officer. Prime Clerk LLC is the claims and notice agent, and administrative agent. McCarthy Tetrautt LLP is the special Canadian counsel. Deloitte & Touche LLP provides tax services. GMP Securities, LLC serves as investment banker. The Debtors' plan of reorganization dated March 3, 2014, proposes that a newly-formed entity organized by certain prepetition lenders will credit bid a principal amount of the Prepetition Credit Agreement Claims or DIP Facility Claims to be determined in exchange for all or substantially all of the assets of the HoldCo. The Bankruptcy Court has entered an order approving the bidding procedures for the sale of all or any portion of the Debtors' assets or the new capital stock of Reorganized HoldCo, as reorganized under the Plan. These bidding procedures are to be utilized by the Debtors in the postpetition sale process in an effort to secure the highest or otherwise best offer for the sale of the Debtors' businesses. The U.S. Trustee said that an official committee of unsecured creditors has not been appointed in the Debtors' cases. An Official Committee of Equity Security Holders has been appointed in the case. The Equity Committee has tapped as bankruptcy counsel Adam G. Landis, Esq., Kerri K. Mumford, Esq., James S. Green Jr., Esq., J. Landon Ellis, Esq., and Joseph D. Wright, Esq., at Landis Rath & Cobb LLP. US COAL CORPORATION: Kolmar Americas Files Involuntary Petition --------------------------------------------------------------- Kolmar Americas, Inc., filed an involuntary Chapter 11 bankruptcy petition for U.S. Coal Corporation (Bankr. E.D. Ky. Case No. 14-51461) in Lexington, Kentucky on June 10, 2014. Bridgeport, Connecticut-based Kolmar says it is owed by Lexington- based U.S. Coal roughly $1.36 million on account of a business debt. Kolmar sought and obtained dismissal of a duplicate involuntary petition (Case No. 14-51460) on grounds that it was a duplicate case. Kolmar is represented by Daniel I. Waxman, Esq., at Wyatt, Tarrant & Combs, LLP, in Lexington, Kentucky. Chief Judge Tracey N. Wise presides over the case. USEC INC: Exclusivity Extension Sought -------------------------------------- BankruptcyData reported that USEC filed with the U.S. Bankruptcy Court a motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including September 1, 2014 and November 30, 2014, respectively. According to BData, the motion explains, "The Chapter 11 Case is large in size and complex in nature. As of the Petition Date, the Debtor's material obligations consisted of (a) convertible note debt in the principal amount of $530 million; (b) preferred stock obligations of approximately $113.9 million; (c) intercompany secured loans in the approximate amount of $56.3 million; and (d) intercompany unsecured loans and other funding in the approximate amount of $274.1 million. In addition, the Debtor is part of a global energy company that is heavily regulated by the DOE, which gives rise to various challenges....These factors demonstrate the size and complexity of the Chapter 11 Case and weigh in favor of granting an extension of the Exclusive Periods." About USEC Inc. USEC Inc. filed a Chapter 11 bankruptcy petition (Bank. D. Del. Case No. 14-10475) on March 5, 2014. John R. Castellano signed the petition as chief restructuring officer. The Hon. Christopher S. Sontchi presides over the case. D. J. Baker, Esq., Rosalie Walker Gray, Esq., Adam S. Ravin, Esq., and Annemarie V. Reilly, Esq., at Latham & Watkins LLP, serve as the Debtor's general counsel. Amanda R. Steele, Esq., Mark D. Collins, Esq., and Michael J. Merchant, Esq., at Richards, Layton & Finger, P.A., serve as the Debtor's Delaware counsel. Vinson & Elkins is the Debtor's special counsel. Lazard Freres & Co. LLC acts as the Debtor's investment banker. AP Services, LLC, provides management services to the Debtor. Logan & Company Inc. serves as the Debtor's claims and noticing agent. Deloitte Tax LLP are the Debtor's tax professionals. The Debtor's independent auditor is PricewaterhouseCoopers LLP. KPMG LLP provides fresh start accounting services to the Debtors. VIRGINIA H. OLIVER: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Virginia H. Oliver Trust 6 Barra Lane Bella Vista, AR 72715 Case No.: 14-71811 Chapter 11 Petition Date: June 13, 2014 Court: United States Bankruptcy Court Western District of Arkansas (Fayetteville) Judge: Hon. Ben T Barry Debtor's Counsel: Jill R. Jacoway, Esq. JACOWAY LAW FIRM, LTD. PO Drawer 3456 Fayetteville, AR 72702-3456 Tel: (479)521-2621 Email: jacowaylaw@sbcglobal.net Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Cynthia Oliver, authorized individual. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/arwb14-71811.pdf W G O V INC: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------- Debtor: W.G.O.V., Inc. 2973 U.S. Hwy 84 West Valdosta, GA 31601 Case No.: 14-70731 Chapter 11 Petition Date: June 13, 2014 Court: United States Bankruptcy Court Middle District of Georgia (Valdosta) Debtor's Counsel: Robert Craig Bruner, Esq. ROBERT BRUNER LAW OFFICE 261 Pinewood Drive Tallahassee, FL 32303 Tel: 850-385-0342 Fax: 850-870-2441 Email: robertcbruner@hotmail.com Total Assets: $81,710 Total Liabilities: $2.14 million The petition was signed by Kells Rivers Faulkner, vice president/director. A list of the Debtor's six largest unsecured creditors is available for free at http://bankrupt.com/misc/gamb14-70731.pdf WAVEDIVISION HOLDINGS: S&P Affirms 'B+' CCR; Outlook Stable ----------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B+' corporate credit rating on Kirkland, Wash.-based WaveDivision Holdings LLC (Wave). The outlook is stable. At the same time, S&P assigned a 'B-' issue-level rating and '6' recovery rating to the company's proposed $150 million of senior PIK toggle notes due 2019, proceeds of which will be used to fund a distribution to shareholders. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%) recovery in the event of payment default. The notes will be issued out of newly formed holding company Wave Holdco LLC. S&P also affirmed the existing 'BB-' issue-level rating on the company's senior secured debt and its 'B-' issue-level rating on its senior unsecured debt. The recovery rating on the secured debt is unchanged at '2', which indicates S&P's expectation for substantial (70%-90%) recovery in the event of payment default. "The rating affirmation reflects our view that while debt to EBITDA will increase to around 6.9x from 5.8x as of March 31, 2014, to fund the distribution to shareholders, we believe the company has good prospects to reduce leverage to below 6.5x over the next year, a parameter that is supportive of the current rating," said Standard & Poor's credit analyst Allyn Arden. S&P's view of Wave's business risk profile reflects its demographically attractive and well-clustered cable properties, healthy EBITDA margins, and good capabilities to serve business customers. However, the company faces significant competition from incumbent telephone companies and satellite television providers. Wave is also an over-builder (a competitor to the local cable TV company) in about one-third of its footprint where it competes with incumbent cable provider Comcast Corp. Additionally, Wave's penetration levels for video, data, and telephone service are below the industry average. These factors lead to our view of a "satisfactory" business risk profile. The outlook is stable and reflects S&P's expectation for mid- single-digit percent revenue growth and some margin improvement. As a result, S&P expects leverage to improve to below 6.5x over the next year. S&P could lower the ratings if Wave were to initiate another debt- financed dividend to shareholders, or if operating performance was below S&P's expectations, resulting in leverage remaining about 6.5x for multiple quarters. Additionally, aggressive competition that results in pricing pressure and higher churn could prompt a downward revision of S&P's business risk profile assessment and result in a lower rating. Although a higher rating is unlikely, S&P believes this could be achieved if the company improved leverage to below 5x and S&P believed it could sustain that level. This could occur if Wave's broadband and business revenue exceeded S&P's expectations under its base-case forecast. However, even under such a scenario, Wave's private equity owners' financial policy and the potential for additional debt-financed dividends constrain any prospects for an upgrade. ZBB ENERGY: Reports $46K Net Loss in Q1 Ended March 31 ------------------------------------------------------ ZBB Energy Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $46,497 on $4.57 million of total revenues for the three months ended March 31, 2014, compared with a net loss of $2.94 million on $2.12 million of total revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $23.48 million in total assets, $5.97 million in total liabilities, and stockholders' equity of $17.51 million. The Company incurred a net loss of $4.75 million attributable to ZBB Energy Corporation for the nine months ended March 31, 2014 and as of March 31, 2014 has an accumulated deficit of $85.68 million and total ZBB Energy equity of $15.51 million. The ability of the Company to settle its total liabilities of $5.97 million and to continue as a going concern is dependent upon increasing revenues and achieving profitability, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/OqaLAc About ZBB Energy Corporation ZBB Energy Corporation (nyse mkt:ZBB) -- http://www.zbbenergy.com -- designs, develops, licenses and manufactures advanced energy storage and power electronics systems, as well as engineered custom and semi-custom products targeted at the growing global need for distributed renewable energy, energy efficiency, power quality, and grid modernization. ZBB's corporate offices, engineering and development, and production facilities are located in Menomonee Falls, WI, USA with a research facility also located in Perth, Western Australia. ZBB has a joint venture with Meineng Energy, a provider of leading-edge energy storage systems and solutions to the greater China market. * High Court Sides With Holdout Creditors in Argentina Debt Case ---------------------------------------------------------------- Ken Parks, Nicole Hong and Brent Kendall, writing for The Wall Street Journal, reported that the U.S. Supreme Court handed Argentina a major setback in its long-running battle with a small group of determined creditors, heightening the risk the country will default for the second time in 13 years. According to the report, the justices on June 16 rejected Argentina's appeal of a lower-court ruling that said the country can't make bond payments until it compensates hedge funds that refused to accept restructured debt in the years following Argentina's 2001 default. Because of that earlier ruling, Argentina must decide by the end of the month whether to reach a deal with the holdouts or default on its next debt payment, the Journal said. The Journal said the Supreme Court's action is a pivotal -- and potentially final -- twist in a bitter battle pitting Argentina's government against a few deep-pocketed hedge funds that have been steadfast in their insistence on full payment. "We have long anticipated that the Supreme Court would not grant certiorari, but were less certain about the timing. This decision makes it more critical than ever that the parties come promptly to a negotiated settlement that will enable Argentina to avoid default, lower its borrowing costs and return to the capital markets," Bruce Wolfson, Esq. -- bruce.wolfson@bingham.com -- of counsel at Bingham McCutchen LLP, said in a statement. * 3rd Circ. Clarifies Lien Enforcement on Bankrupt Homeowners ------------------------------------------------------------- Law360 reported that in a precedential decision, the Third Circuit clarified the standard for enforcing statutory liens over unpaid homeowners association dues against bankrupt homeowners, saying foreclosure -- rather than a collection action against the individual -- is the proper method for enforcing such statutory liens. According to the report, a three-judge panel of the Third Circuit clarified the standard, in a case that involved interpreting Pennsylvania's Uniform Planned Community Act in the bankruptcy context, which hadn't yet been done by the Pennsylvania Supreme Court. The case is In re: Kelly L. Makowka, Case No. 13-3469 (3rd Cir.). * UK Finalizes Post-Lehman, MF Global Client Asset Rule Fixes ------------------------------------------------------------- Law360 reported that the U.K. Financial Conduct Authority said it has finalized changes to rules on handling client money and assets, in light of problems that arose after the collapse of Lehman Brothers International Europe and other firms. According to the report, in a 410-page policy statement, the regulator outlined its responses to a consultation paper it issued last year seeking input on how to protect client accounts in the event of bankruptcy and hasten the distribution of customer assets that get tied up in the process. * Bank of America Mortgage Settlement Is Said to Be Deadlocked -------------------------------------------------------------- Michael Corkery, writing for The New York Times' DealBook, reported that talks between the U.S. Justice Department and Citigroup to settle a civil investigation into its sale of shoddy mortgage investments have deteriorated in recent days, as the sides are deadlocked on how much money the bank should pay. According to the report, the Justice Department has told Citigroup?s lawyers that it plans to sue the bank unless the sides can reach an agreement soon, people briefed on the matter said. The standoff sets the stage for Citigroup to be among the first large banks to fight the Justice Department?s findings in court rather than seek a settlement -- a development that would carry risks for both sides, the report said. * Wells Fargo Loses Appeal to Throw Out Suit Over Reckless Lending ------------------------------------------------------------------ Saabira Chaudhuri, writing for The Wall Street Journal, reported that Wells Fargo & Co. lost an appeal made to the U.S. Court of Appeals in Washington, D.C., that aimed to bar the government from suing it for "reckless" lending and leaving a federal insurance program to pick up the tab. According to the report, the U.S. government in October 2012 sued Wells Fargo, seeking "hundreds of millions of dollars" in damages on behalf of the Federal Housing Administration, a government agency that doesn't make loans but insures those made by lenders that meet its standards. That complaint alleged nearly a decade of misconduct dating back to May 2001 and contended that Wells engaged in "regular practice of reckless origination and underwriting" of government-backed loans. * Obama Expands Student Loan Repayment Cap and Pushes Bill ---------------------------------------------------------- Mark Landler, writing for The New York Times, reported that President Obama has signed an executive order intended to lessen the college loan burden on nearly five million younger Americans by capping repayments at 10 percent of the borrowers' monthly income. According to the report, joined by indebted graduates in the East Room of the White House, Mr. Obama said the spiraling cost of higher education had put "too big a debt load on too many people." * Large Companies With Insolvent Balance Sheet ---------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ALSWF US 133.7 (10.5) (5.9) ABSOLUTE SOFTWRE ABT CN 133.7 (10.5) (5.9) ABSOLUTE SOFTWRE OU1 GR 133.7 (10.5) (5.9) ACHAOGEN INC AKAO US 13.8 (0.0) 2.1 ACTINIUM PHARMAC ATNM US 6.6 (13.5) (13.5) ADVANCED EMISSIO OXQ1 GR 106.4 (46.1) (15.3) ADVANCED EMISSIO ADES US 106.4 (46.1) (15.3) ADVENT SOFTWARE ADVS US 452.2 (91.1) (90.7) ADVENT SOFTWARE AXQ GR 452.2 (91.1) (90.7) AEMETIS INC AMTX US 97.1 (12.8) (23.4) AEROHIVE NETWORK 2NW GR 69.9 (3.3) 21.5 AEROHIVE NETWORK HIVE US 69.9 (3.3) 21.5 AGENUS INC AGEN US 34.8 (4.5) 17.9 AIR CANADA-CL A ADH TH 9,964.0 (1,947.0) (185.0) AIR CANADA-CL A AIDIF US 9,964.0 (1,947.0) (185.0) AIR CANADA-CL A ADH GR 9,964.0 (1,947.0) (185.0) AIR CANADA-CL A AC/A CN 9,964.0 (1,947.0) (185.0) AIR CANADA-CL B AC/B CN 9,964.0 (1,947.0) (185.0) AIR CANADA-CL B AIDEF US 9,964.0 (1,947.0) (185.0) ALDER BIOPHARMAC ALDR US 26.7 (32.0) 2.5 ALDER BIOPHARMAC 3A9 GR 26.7 (32.0) 2.5 ALLIANCE HEALTHC AIQ US 465.3 (136.6) 59.5 AMC NETWORKS-A 9AC GR 3,484.7 (478.3) 642.3 AMC NETWORKS-A AMCX US 3,484.7 (478.3) 642.3 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0 AMYRIS INC AMRS US 236.8 (112.5) 33.5 ANGIE'S LIST INC 8AL TH 124.3 (20.3) (30.0) ANGIE'S LIST INC ANGI US 124.3 (20.3) (30.0) ANGIE'S LIST INC 8AL GR 124.3 (20.3) (30.0) ARRAY BIOPHARMA AR2 TH 135.2 (23.3) 72.2 ARRAY BIOPHARMA ARRY US 135.2 (23.3) 72.2 ARRAY BIOPHARMA AR2 GR 135.2 (23.3) 72.2 ASPEN AEROGELS I ASPN US 88.2 (80.7) (5.2) AUTOZONE INC AZ5 GR 7,262.9 (1,710.3) (860.8) AUTOZONE INC AZ5 TH 7,262.9 (1,710.3) (860.8) AUTOZONE INC AZO US 7,262.9 (1,710.3) (860.8) BARRACUDA NETWOR CUDA US 350.1 (5.7) 30.5 BARRACUDA NETWOR 7BM GR 350.1 (5.7) 30.5 BERRY PLASTICS G BP0 GR 5,367.0 (135.0) 684.0 BERRY PLASTICS G BERY US 5,367.0 (135.0) 684.0 BIOCRYST PHARM BO1 TH 43.4 (5.7) 22.0 BIOCRYST PHARM BCRX US 43.4 (5.7) 22.0 BIOCRYST PHARM BO1 GR 43.4 (5.7) 22.0 BRP INC/CA-SUB V BRPIF US 2,019.7 (17.0) 172.7 BRP INC/CA-SUB V DOO CN 2,019.7 (17.0) 172.7 BRP INC/CA-SUB V B15A GR 2,019.7 (17.0) 172.7 BURLINGTON STORE BURL US 2,547.8 (136.3) 124.8 BURLINGTON STORE BUI GR 2,547.8 (136.3) 124.8 CABLEVISION SY-A CVY GR 6,542.9 (5,210.9) 281.8 CABLEVISION SY-A CVC US 6,542.9 (5,210.9) 281.8 CAESARS ENTERTAI CZR US 24,376.7 (2,276.8) 566.0 CAESARS ENTERTAI C08 GR 24,376.7 (2,276.8) 566.0 CALLIDUS CAPITAL 28K GR 444.5 (4.3) - CALLIDUS CAPITAL CBL CN 444.5 (4.3) - CANNAVEST CORP CANV US 10.7 (0.2) (1.3) CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CC MEDIA-A CCMO US 14,597.1 (9,128.0) 643.8 CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CENVEO INC CVO US 1,206.8 (511.7) 145.0 CHOICE HOTELS CZH GR 554.9 (454.6) 109.5 CHOICE HOTELS CHH US 554.9 (454.6) 109.5 CIENA CORP CIEN TE 1,795.5 (80.8) 641.3 CIENA CORP CIE1 TH 1,795.5 (80.8) 641.3 CIENA CORP CIEN US 1,795.5 (80.8) 641.3 CIENA CORP CIE1 GR 1,795.5 (80.8) 641.3 CINCINNATI BELL CBB US 2,101.5 (670.7) 7.7 DEX MEDIA INC DXM US 2,275.0 (782.0) 162.0 DIRECTV DIG1 GR 22,520.0 (6,512.0) (929.0) DIRECTV DTV US 22,520.0 (6,512.0) (929.0) DIRECTV DTV CI 22,520.0 (6,512.0) (929.0) DOMINO'S PIZZA DPZ US 524.3 (1,269.0) 113.5 DOMINO'S PIZZA EZV TH 524.3 (1,269.0) 113.5 DOMINO'S PIZZA EZV GR 524.3 (1,269.0) 113.5 DUN & BRADSTREET DNB US 1,807.2 (1,061.9) (85.5) DUN & BRADSTREET DB5 TH 1,807.2 (1,061.9) (85.5) DUN & BRADSTREET DB5 GR 1,807.2 (1,061.9) (85.5) EDGEN GROUP INC EDG US 883.8 (0.8) 409.2 ELEVEN BIOTHERAP EBIO US 5.1 (6.1) (2.9) EMPIRE RESORTS I LHC1 GR 38.7 (14.0) (14.6) EMPIRE RESORTS I NYNY US 38.7 (14.0) (14.6) EMPIRE STATE -ES ESBA US 1,122.2 (31.6) (925.9) EMPIRE STATE-S60 OGCP US 1,122.2 (31.6) (925.9) FAIRPOINT COMMUN FRP US 1,546.4 (338.8) 25.3 FAIRPOINT COMMUN FONN GR 1,546.4 (338.8) 25.3 FERRELLGAS-LP FGP US 1,589.9 (88.9) 89.0 FERRELLGAS-LP FEG GR 1,589.9 (88.9) 89.0 FIVE9 INC 1F9 GR 56.3 (3.0) 1.1 FIVE9 INC FIVN US 56.3 (3.0) 1.1 FREESCALE SEMICO FSL US 3,100.0 (3,851.0) 1,244.0 FREESCALE SEMICO 1FS TH 3,100.0 (3,851.0) 1,244.0 FREESCALE SEMICO 1FS GR 3,100.0 (3,851.0) 1,244.0 GAMING AND LEISU 2GL GR 2,561.9 (68.0) (44.7) GAMING AND LEISU GLPI US 2,561.9 (68.0) (44.7) GENTIVA HEALTH GTIV US 1,234.9 (297.6) 99.2 GENTIVA HEALTH GHT GR 1,234.9 (297.6) 99.2 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GLOBALSTAR INC P8S GR 1,350.0 (74.3) (97.3) GLOBALSTAR INC GSAT US 1,350.0 (74.3) (97.3) GLORI ENERGY INC GLRI US 0.1 (0.0) - GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 GTT COMMUNICATIO GTT US 168.5 (0.1) (25.3) HCA HOLDINGS INC 2BH TH 29,809.0 (6,467.0) 2,986.0 HCA HOLDINGS INC 2BH GR 29,809.0 (6,467.0) 2,986.0 HCA HOLDINGS INC HCA US 29,809.0 (6,467.0) 2,986.0 HD SUPPLY HOLDIN 5HD GR 6,552.0 (750.0) 1,446.0 HD SUPPLY HOLDIN HDS US 6,552.0 (750.0) 1,446.0 HORIZON PHARMA I HPM TH 299.1 (229.2) 93.2 HORIZON PHARMA I HPM GR 299.1 (229.2) 93.2 HORIZON PHARMA I HZNP US 299.1 (229.2) 93.2 HOVNANIAN ENT-A HO3 GR 1,838.8 (462.5) 1,122.1 HOVNANIAN ENT-A HOV US 1,838.8 (462.5) 1,122.1 HOVNANIAN ENT-B HOVVB US 1,838.8 (462.5) 1,122.1 HOVNANIAN-A-WI HOV-W US 1,838.8 (462.5) 1,122.1 HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) INCYTE CORP ICY GR 666.8 (162.4) 474.2 INCYTE CORP ICY TH 666.8 (162.4) 474.2 INCYTE CORP INCY US 666.8 (162.4) 474.2 INFOR US INC LWSN US 6,515.2 (555.7) (303.6) INTERCEPT PHARMA I4P GR 141.9 (153.7) (148.2) INTERCEPT PHARMA ICPT US 141.9 (153.7) (148.2) INTERCEPT PHARMA I4P TH 141.9 (153.7) (148.2) IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE US 1,642.6 (117.4) 221.0 JUST ENERGY GROU 1JE GR 1,642.6 (117.4) 221.0 JUST ENERGY GROU JE CN 1,642.6 (117.4) 221.0 KINAXIS INC KXS CN 44.6 (70.4) (6.4) L BRANDS INC LTD TH 6,663.0 (609.0) 1,070.0 L BRANDS INC LTD GR 6,663.0 (609.0) 1,070.0 L BRANDS INC LB US 6,663.0 (609.0) 1,070.0 LEAP WIRELESS LWI TH 4,662.9 (125.1) 346.9 LEAP WIRELESS LEAP US 4,662.9 (125.1) 346.9 LEAP WIRELESS LWI GR 4,662.9 (125.1) 346.9 LEE ENTERPRISES LE7 GR 797.3 (155.6) 0.8 LEE ENTERPRISES LEE US 797.3 (155.6) 0.8 LORILLARD INC LO US 3,912.0 (2,161.0) 897.0 LORILLARD INC LLV TH 3,912.0 (2,161.0) 897.0 LORILLARD INC LLV GR 3,912.0 (2,161.0) 897.0 LUMENPULSE INC LMP CN 29.4 (38.4) 3.5 LUMENPULSE INC 0L6 GR 29.4 (38.4) 3.5 MALIBU BOATS-A MBUU US 57.2 (32.5) (2.0) MALIBU BOATS-A M05 GR 57.2 (32.5) (2.0) MARRIOTT INTL-A MAR US 6,665.0 (1,625.0) (1,031.0) MARRIOTT INTL-A MAQ TH 6,665.0 (1,625.0) (1,031.0) MARRIOTT INTL-A MAQ GR 6,665.0 (1,625.0) (1,031.0) MDC PARTNERS-A MDZ/A CN 1,570.3 (94.1) (218.7) MDC PARTNERS-A MDCA US 1,570.3 (94.1) (218.7) MDC PARTNERS-A MD7A GR 1,570.3 (94.1) (218.7) MERITOR INC AID1 GR 2,531.0 (782.0) 298.0 MERITOR INC MTOR US 2,531.0 (782.0) 298.0 MERRIMACK PHARMA MACK US 165.0 (65.8) 81.9 MERRIMACK PHARMA MP6 GR 165.0 (65.8) 81.9 MONEYGRAM INTERN MGI US 4,761.4 (39.5) 115.9 MORGANS HOTEL GR MHGC US 571.2 (178.5) 8.1 MORGANS HOTEL GR M1U GR 571.2 (178.5) 8.1 MPG OFFICE TRUST MPG US 1,280.0 (437.3) - NATIONAL CINEMED XWM GR 998.4 (179.2) 99.9 NATIONAL CINEMED NCMI US 998.4 (179.2) 99.9 NAVISTAR INTL IHR TH 7,727.0 (4,072.0) 1,070.0 NAVISTAR INTL NAV US 7,727.0 (4,072.0) 1,070.0 NAVISTAR INTL IHR GR 7,727.0 (4,072.0) 1,070.0 NEKTAR THERAPEUT ITH GR 487.0 (9.8) 225.5 NEKTAR THERAPEUT NKTR US 487.0 (9.8) 225.5 NEW ENG RLTY-LP NEN US 180.1 (23.2) - NEXSTAR BROADC-A NXZ GR 1,148.8 (8.4) 134.7 NEXSTAR BROADC-A NXST US 1,148.8 (8.4) 134.7 NII HOLDING INC NIHD* MM 8,189.7 (8.8) 1,078.9 NYMOX PHARMACEUT NYMX US 1.0 (6.1) (3.2) OCI PARTNERS LP OCIP US 460.3 (98.7) 79.8 OCI PARTNERS LP OP0 GR 460.3 (98.7) 79.8 OMTHERA PHARMACE OMTH US 18.3 (8.5) (12.0) OPOWER INC 38O TH 63.1 (6.3) (11.9) OPOWER INC OPWR US 63.1 (6.3) (11.9) OPOWER INC 38O GR 63.1 (6.3) (11.9) OVERSEAS SHIPHLD OSGIQ US 3,658.3 (51.3) 480.8 PALM INC PALM US 1,007.2 (6.2) 141.7 PHIBRO ANIMAL HE PAO EU 473.3 (78.7) 177.3 PHIBRO ANIMAL HE PAHC LN 473.3 (78.7) 177.3 PHIBRO ANIMAL HE PAO GR 473.3 (78.7) 177.3 PHIBRO ANIMAL-A PB8 GR 473.3 (78.7) 177.3 PHIBRO ANIMAL-A PAHC US 473.3 (78.7) 177.3 PHILIP MORRIS IN PM FP 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN 4I1 GR 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN PM1EUR EU 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN 4I1 TH 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN PM1 TE 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN PMI SW 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN PM1CHF EU 36,137.0 (7,157.0) 854.0 PHILIP MORRIS IN PM US 36,137.0 (7,157.0) 854.0 PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PLUG POWER INC PLUG US 35.4 (15.5) 11.1 PLUG POWER INC PLUN GR 35.4 (15.5) 11.1 PLUG POWER INC PLUN TH 35.4 (15.5) 11.1 PLY GEM HOLDINGS PG6 GR 1,033.7 (107.2) 199.4 PLY GEM HOLDINGS PGEM US 1,033.7 (107.2) 199.4 PROTALEX INC PRTX US 1.2 (8.6) 0.6 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 443.2 (51.2) 106.0 QUALITY DISTRIBU QDZ GR 443.2 (51.2) 106.0 QUINTILES TRANSN QTS GR 3,061.9 (559.5) 571.3 QUINTILES TRANSN Q US 3,061.9 (559.5) 571.3 RADIUS HEALTH IN 1R8 GR 12.8 (24.5) (22.7) RADIUS HEALTH IN RDUS US 12.8 (24.5) (22.7) RADNET INC PQI GR 737.2 (9.3) 61.4 RADNET INC RDNT US 737.2 (9.3) 61.4 REGAL ENTERTAI-A RGC US 2,787.3 (751.2) 142.6 REGAL ENTERTAI-A RETA GR 2,787.3 (751.2) 142.6 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) RENTPATH INC PRM US 208.0 (91.7) 3.6 RETROPHIN INC RTRX US 94.0 (35.4) (107.0) RETROPHIN INC 17R GR 94.0 (35.4) (107.0) REVLON INC-A RVL1 GR 2,105.1 (589.0) 248.9 REVLON INC-A REV US 2,105.1 (589.0) 248.9 RITE AID CORP RTA GR 6,944.9 (2,113.7) 1,777.7 RITE AID CORP RAD US 6,944.9 (2,113.7) 1,777.7 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SABRE CORP 19S GR 4,750.4 (312.9) (279.6) SABRE CORP 19S TH 4,750.4 (312.9) (279.6) SABRE CORP SABR US 4,750.4 (312.9) (279.6) SALLY BEAUTY HOL S7V GR 2,106.0 (268.8) 715.8 SALLY BEAUTY HOL SBH US 2,106.0 (268.8) 715.8 SEQUENOM INC SQNM US 122.9 (58.6) 40.8 SILVER SPRING NE 9SI TH 524.4 (97.1) 97.5 SILVER SPRING NE SSNI US 524.4 (97.1) 97.5 SILVER SPRING NE 9SI GR 524.4 (97.1) 97.5 SPORTSMAN'S WARE 06S GR 224.2 (121.1) 83.2 SPORTSMAN'S WARE SPWH US 224.2 (121.1) 83.2 SUNEDISON INC SUNE* MM 7,166.1 (236.5) 250.8 SUNEDISON INC WFR GR 7,166.1 (236.5) 250.8 SUNEDISON INC SUNE US 7,166.1 (236.5) 250.8 SUNEDISON INC WFR TH 7,166.1 (236.5) 250.8 SUNGAME CORP SGMZ US 0.9 (2.8) (3.0) SUPERVALU INC SJ1 GR 4,374.0 (738.0) 52.0 SUPERVALU INC SJ1 TH 4,374.0 (738.0) 52.0 SUPERVALU INC SVU US 4,374.0 (738.0) 52.0 THRESHOLD PHARMA NZW1 GR 94.7 (29.0) 50.3 THRESHOLD PHARMA THLD US 94.7 (29.0) 50.3 TRANSDIGM GROUP T7D GR 6,399.3 (125.6) 975.5 TRANSDIGM GROUP TDG US 6,399.3 (125.6) 975.5 TRINET GROUP INC TNETEUR EU 1,434.7 (270.4) 65.1 TRINET GROUP INC TNET US 1,434.7 (270.4) 65.1 TRINET GROUP INC TN3 TH 1,434.7 (270.4) 65.1 TRINET GROUP INC TN3 GR 1,434.7 (270.4) 65.1 ULTRA PETROLEUM UPM GR 2,881.8 (227.7) (374.8) ULTRA PETROLEUM UPL US 2,881.8 (227.7) (374.8) UNISYS CORP UISEUR EU 2,399.2 (659.6) 421.4 UNISYS CORP UIS1 SW 2,399.2 (659.6) 421.4 UNISYS CORP UISCHF EU 2,399.2 (659.6) 421.4 UNISYS CORP USY1 TH 2,399.2 (659.6) 421.4 UNISYS CORP UIS US 2,399.2 (659.6) 421.4 UNISYS CORP USY1 GR 2,399.2 (659.6) 421.4 VARONIS SYSTEMS VRNS US 33.7 (1.5) 1.8 VARONIS SYSTEMS VS2 GR 33.7 (1.5) 1.8 VECTOR GROUP LTD VGR GR 1,459.2 (12.6) 422.5 VECTOR GROUP LTD VGR US 1,459.2 (12.6) 422.5 VENOCO INC VQ US 738.2 (130.8) (13.4) VERISIGN INC VRS TH 2,609.3 (457.6) (253.6) VERISIGN INC VRS GR 2,609.3 (457.6) (253.6) VERISIGN INC VRSN US 2,609.3 (457.6) (253.6) VICTORY ELECTRON ECIG US 2.6 (6.9) 0.1 VICTORY ELECTRON 0V2 GR 2.6 (6.9) 0.1 VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VISKASE COS I VKSC US 346.7 (16.3) 106.1 WEIGHT WATCHERS WW6 TH 1,483.1 (1,452.8) (31.0) WEIGHT WATCHERS WW6 GR 1,483.1 (1,452.8) (31.0) WEIGHT WATCHERS WTW US 1,483.1 (1,452.8) (31.0) WEST CORP WT2 GR 3,544.1 (709.4) 405.3 WEST CORP WSTC US 3,544.1 (709.4) 405.3 WESTMORELAND COA WME GR 1,407.1 (206.2) (30.5) WESTMORELAND COA WLB US 1,407.1 (206.2) (30.5) XERIUM TECHNOLOG XRM US 631.1 (11.8) 104.4 XERIUM TECHNOLOG TXRN GR 631.1 (11.8) 104.4 YRC WORLDWIDE IN YRCW US 2,215.1 (363.1) 193.6 YRC WORLDWIDE IN YEL1 TH 2,215.1 (363.1) 193.6 YRC WORLDWIDE IN YEL1 GR 2,215.1 (363.1) 193.6 ********* 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 ***