/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140709.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, July 9, 2014, Vol. 18, No. 189 Headlines 38 STUDIOS: RI Law Firm Strikes $4.4M Deal To Exit Row A G ASSOCIATES: Voluntary Chapter 11 Case Summary ARCHDIOCESE OF SEATTLE: Settles Sexual-Abuse Lawsuits from 30 Men ARIZONA LA CHOLLA: Files for Chapter 11 in Tucson ATP OIL: Case Converted to Chapter 7 Liquidation B.S. QUARRIES: Seeks Authority to Use Cash Collateral B.S. QUARRIES: Seeks to Employ Flaster/Greenberg as Counsel B.S. QUARRIES: Prepetition Lender Wants Ch. 11 Case Dismissed B.S. QUARRIES: Seeks Extension of Schedules Filing Date B.S. QUARRIES: Seeks Authority to Pay $100,000 to Critical Vendors BERNARD L. MADOFF: High Court Rejects Bid To Sue Big Banks BRILL MEDIA: Ind. Court Boots Suit Over Townsquare Radio Buys BUCCANEER ENERGY: Files Reorganization Plan CACTUS WELLHEAD: S&P Assigns 'B' CCR & Rates $350MM Loan 'B' CAMPUS HABITAT: Bankruptcy Court Dismisses Chapter 11 Case CHRYSLER GROUP: Daimler Unit Sues Ch. 11 Trust Over Tax Deal CLEAREDGE POWER: Committee Taps Brown Rudnick as Counsel CLEAREDGE POWER: Committee Taps Teneo Securities as Fin'l Advisor CLEAREDGE POWER: Files Schedules of Assets and Liabilities CLEAREDGE POWER: July 11 Hearing on Bid to Assign Contracts CNG HOLDINGS: Moody's Lowers CFR & Sr. Secured Rating to Caa1 DBK INVESTMENTS: Hearing on Stay Motion Subject to Property Sale DBK INVESTMENTS: Court Okays Supple Law Office as Bankr. Counsel DETROIT, MI: Syncora Emerges as Nemesis in Bankruptcy Proceedings EDGENET INC: Buyer Funds Severance for Fired Workers DEWEY & LEBOUEF: Mediator Needs Court's Help in Collecting Fees EDISON MISSION: Wins Approval Of $23M Retiree Settlement ENERGY FUTURE: Texas Lawmaker Warns v. Hedge Funds "Flipping" Unit ENERGY FUTURE: Lenders Seeking Direct Appeal ENERGY FUTURE: Creditors Balk at Loan Teeing up Future Sale FERRO CORP: Moody's Affirms Ba3 CFR & Rates 1st Lien Debt Ba3 FERRO CORP: S&P Affirms 'B+' CCR & Rates $500MM Facilities 'B+' FIDELITY & GUARANTY: Moody's Hikes Sr. Unsec. Debt Rating to Ba3 FISKER AUTOMOTIVE: WARN Claimants Say Plan Shortchanges Them FOREST LABORATORIES: S&P Raises $3BB Sr. Notes' Rating From BB+ FREEDOM INDUSTRIES: Told to Keep Public Better Informed FRESH & EASY: Deal with Class Plaintiffs Gets Final Approval FRESH & EASY: Employee Wage Settlement Approved GRAND TRAVERSE: S&P Alters Outlook to Neg, Affirms BB+ Bond Rating HDOS ENTERPRISES: Finds Buyer for Employee-Owned Chain HOSTESS BRAND: Wants Wash. Labor Department's Claim Estimated INDUSTRIA DE ALIMENTOS: Trustee Cleared To Root Out US Assets IRISH BANK: Blasts Developer's Bid To Review Fla. Mall Sale Plan KEY SAFETY: Moody's Assigns B1 CFR & Rates $500MM Sr. Debt B2 LIGHTSQUARED INC: Falcone's Exit Portends Peace LIGHTSQUARED INC: Judge Says Ergen Didn't Mediate in Good Faith LUXLAS FUND: Moody's Affirms 'B2' Term Loan Rating After Add-On LUXLAS FUND: S&P Affirms 'BB-' Term Loan Rating After $75MM Add-on LYONDELL CHEMICAL: D&Os Clinch Key Holdings In Excess Coverage Row MACLELLAN PARTNERS: Case Summary & 8 Largest Unsecured Creditors MD AMERICA ENERGY: Moody's Gives Caa2 CFR, Rates $525MM Loan Caa2 METRORIVERSIDE LLC: Access to Cash Collateral to Expire July 10 MOMENTIVE PERFORMANCE: Plan Ruling Expected by September NATIONAL HERITAGE: 4th Circ. Says 3rd-Party Release Won't Fly NEW DESIGNS: S&P Lowers on Revenue Bonds Rating to 'BB+' NEW ENGLAND LAND: Case Summary & 19 Largest Unsecured Creditors OCEAN 4660: Ch.11 Trustee to Pay Comerica's $1.85MM Claim in Full ORMET CORP: Court Approves Sale of Mineral Rights for $22.3MM OVERSEAS SHIPHOLDING: Court Approves Amendment to MEBA CBA OVERSEAS SHIPHOLDING: Solicitation Period Extended to July 14 OVERSEAS SHIPHOLDING: Inks Additional Agreements with PWC OVERSEAS SHIPHOLDING: OSG International Files Amended Schedules PHH CORPORATION: Moody's Lowers Corporate Family Rating to Ba3 PIONEER POINT: Administrators Wants Chapter 15 Case Closed PRETTY GIRL: 27-Store Women's Wear Retailer Seeks Bankruptcy PROSPECT SQUARE: Has Access to Cash Collateral Until July 31 PUERTO RICO: New Debt Law Usurps Congress, Funds Say QUANTUM FOODS: Allowed To Access Old Plant RESIDENTIAL CAPITAL: Judge Affirms Morrison's $4.2M Award For Fees RINCON BEACH: Case Summary & Largest Unsecured Creditors ROSSCO HOLDINGS: Kelly Hart, Beard Kultgen Say Ch. 11 Axes Suit SAXON ENTERPRISES: Moody's Withdraws B1 Corporate Family Rating SCRANTON, PA: Receiver Can't Stop Parking Auth. Union Arbitration STANFORD GROUP: High Court Rejects Appeal On Receiver's Powers STARR PASS: Gust Rosenfeld Approved as Local Bankruptcy Counsel SUPER BUY FURNITURE: Files for Chapter 11 with $27MM Debt SUPER BUY FURNITURE: Closing 12 of 23 Stores SUPER BUY FURNITURE: Proposes O'Neill & Borges as Counsel SUPER BUY FURNITURE: Proposes Carrasquillo as Fin'l Consultant WPLM ACQUISITION: Moody's Assigns B3 Corporate Family Rating WRIGLEYVILLE LLC: Case Summary & 7 Largest Unsecured Creditors * Secrecy in Pensions Triggers Legislative Brawl in North Carolina * BNP Paribas's U.S. Settlement to Cap Troublesome Period * Dark Pool Greed Drove Barclays to Lie to Clients, N.Y. Says * Argentina Euro Bondholders Seek Exemption From US Courts * Excess Cash Drives Hedge Funds To Feast On Distressed Cos. * World's Biggest Debt Load Lures Distressed Funds to China * Covenant-Lite Loans Surge as Default Rates Rise * Credit Card Lenders Pursue Riskier Borrowers * N.J. Governor Wins Legal Battle Over Cuts to Pension System * President's Recess-Appointment Power Cut by Supreme Court * Treasury Begins Push to Revive U.S. Mortgage-Bond Market * U.S. House Votes to Loosen Derivatives' Regulations w/ CFTC Bill * Leading NY Bankruptcy Lawyer Joins Grant & Eisenhofer ********* 38 STUDIOS: RI Law Firm Strikes $4.4M Deal To Exit Row ------------------------------------------------------ Law360 reported that a Rhode Island law firm will pay roughly $4.4 million to settle claims that it failed, as the state's counsel, to refute misrepresentations over a taxpayer-backed $75 million loan for ex-Major League Baseball ace Curt Schilling's now- bankrupt video game venture, according to a joint petition filed in state court. According to the report, the joint petition requests court approval of a settlement between Moses Afonso Ryan Ltd., lawyer Antonio Afonso Jr. and the Rhode Island Commerce Corp.'s board of directors, as the parties had reached a deal -- the first in the high-profile litigation over Schilling's 38 Studios. The case is Rhode Island Economic Development Corp. v. Wells Fargo Securities LLC et al., case number PB12-5616, in the Superior Court of the State of Rhode Island. 38 Studios LLC, a video-game developer founded by former Boston Red Sox pitcher Curt Schilling, filed for liquidation on June 8, 2012, without attempting to reorganize. Although based in Providence, Rhode Island, the company filed the Chapter 7 petition in Delaware (Case No. 12-11743). A G ASSOCIATES: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: A.G. Associates, Inc. 200 Beacham Street Chelsea, MA 02150 Case No.: 14-13239 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: July 7, 2014 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Hon. William C. Hillman Debtor's Counsel: Joseph G. Butler, Esq. LAW OFFICE OF JOSEPH G. BUTLER 355 Providence Highway Westwood, MA 02090 Tel: (781) 636-3638 Email: JGButlerlaw@gmail.com Total Assets: $850,000 Total Liabilities: $1.16 million The petition was signed by Stephen S. Guttadauro, president, treasurer, and director. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. ARCHDIOCESE OF SEATTLE: Settles Sexual-Abuse Lawsuits from 30 Men ----------------------------------------------------------------- Paige Cornwell, writing for Seattle Times, reported that the Archdiocese of Seattle has agreed to pay $12.125 million to 30? men who say they were sexually abused as students decades ago at Seattle's O'Dea High School and Briscoe Memorial School in Kent. According to the report, in lawsuits filed in King County Superior Court, the men alleged the archdiocese failed to protect them from known abusers, including two former O'Dea teachers who were members of the Roman Catholic Christian Brothers order, which filed for bankruptcy in April 2011. The cases involved abuse at the two schools from the early 1950s to 1984, the report related. ARIZONA LA CHOLLA: Files for Chapter 11 in Tucson ------------------------------------------------- Arizona La Cholla, L.L.C., filed a Chapter 11 bankruptcy petition (Bankr. D. Ariz. Case No. 14-10254) in Tucson, Arizona, on July 2, 2014, without stating a reason. The Debtor estimated assets and debt of $10 million to $50 million. John F. Battaile, Esq., at Altfeld & Battaile P.C., in Tucson, Arizona, serves as counsel to the Debtor. ATP OIL: Case Converted to Chapter 7 Liquidation ------------------------------------------------ Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, issued an order on June 26 converting ATP Oil & Gas Corporation's Chapter 11 case to one under Chapter 7 of the Bankruptcy Code. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, ATP's liquidating Chapter 11 plan was unusual because it didn't promise full payment to creditors with priority claims who are entitled to payment in full. Instead, the plan depended on consent from priority creditors to accept less than what they're owed, Mr. Rochelle noted. At least one priority creditor refused to go along, prompting the company to make an oral request for the Chapter 7 conversion, Mr. Rochelle related. ATP's $1.5 billion in 11.875 percent second-lien notes traded at 2:10 p.m. on June 27 for 1.5 cents on the dollar, the Bloomberg report said, citing Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About ATP Oil Houston, Texas-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A seven-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. B.S. QUARRIES: Seeks Authority to Use Cash Collateral ----------------------------------------------------- B.S. Quarries, Inc., seeks authority from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to utilize cash collateral securing their prepetition indebtedness from WM Capital Partners XXXIX, LLC, and HSK Funding, Inc., in order to finance its ongoing business operations. As of the Petition Date, the Debtor was indebted to WM in an aggregate amount in excess of $25 million. The Debtor tells the Court that the Lenders are adequately protected for any Cash Collateral the Debtor may use. As adequate protection for any interest in Cash Collateral which the Lenders have, the Debtor is willing to grant replacement liens in the Debtor's postpetition Cash Collateral, to the same extent, priority and validity as their respective prepetition liens, if any, and only to the extent that the Debtor diminishes the Cash Collateral. The proposed replacement liens will provide sufficient adequate protection to prevent any diminution in value to the creditors. The Debtor's cash collateral request was met with objections from WM, and Peoples Security Bank and Trust Company, a prepetition lender. WM complains that the cash collateral motion contains no budget, no cash flow projection, no explanation concerning the adequate protection, if any, which is being proposed and no pertinent information whatsoever which justifies the entry of an order authorizing the Debtor to use cash collateral. PSBT complains that the Debtor does not provide sufficient detail to allow the Court or PSBT to determine whether the cash collateral in which PSBT claims an interest will be expended consistent with the standard for preliminary use of cash collateral, which is irreparable harm, when the Debtor's short-term operations are tenable and whether PSBT is adequately protected as required by Section 363(e) of the Bankruptcy Code. WM is represented by: Jeffrey Kurtzman, Esq. KLEHR, HARRISON, HARVEY, BRANZBURG LLP 1835 Market Street, Suite 1400 Philadelphia, PA 19103 Tel: (215) 569-4493 PSBT is represented by: Myles R. Wren, Esq. NOGI, APPLETON, WEINBERGER & WREN, P.C. 415 Wyoming Avenue Scranton, PA 18503 Tel: (570) 963-8880 B.S. Quarries, Inc., filed a Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 14-02954) on June 25, 2014. Timothy Smith signed the petition as president. The Debtor estimated assets and liabilities of between $10 million to $50 million. Flaster/Greenberg, P.C., serves as the Debtor's counsel. The case is assigned to Judge John J Thomas. B.S. QUARRIES: Seeks to Employ Flaster/Greenberg as Counsel ----------------------------------------------------------- B.S. Quarries, Inc., seeks authority from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to employ Flaster/Greenberg, P.C., as its attorneys. The firm will render the following services: (a) provide legal advice with respect to the Debtor's powers and duties as a debtor-in-possession in the continued operation of its business and management of its property; (b) take necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on behalf of the Debtor and the defense of any actions commenced against the Debtor; (c) prepare, present and respond to, on behalf of the Debtor, necessary applications, motions, answers, orders, reports and other legal papers in connection with the administration of its estate; (d) negotiate and prepare, on the Debtor's behalf, plans of reorganization, disclosure statements, and all related agreements and/or documents, and take any necessary action on behalf of the Debtor to obtain confirmation of the plan; (e) attend meetings and negotiations with representatives of creditors and other parties-in-interest and advising and consulting on the conduct of the case; (f) advise the Debtor with respect to bankruptcy law aspects of any proposed sale or other disposition of assets as well as any efforts to obtain financing; and (g) perform any other legal services for the Debtor in connection with the Chapter 11 case, except those requiring specialized expertise or for other reasons, for which special counsel will be retained. The firm will be paid the following hourly rates: $375 to $695 for shareholders, $250 to $340 for associates, and $175 to $255 for paralegals. The firm will also be reimbursed for any necessary out-of-pocket expenses. The firm assures the Court that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The firm received advance payment retainers totaling $86,717 paid prior to the Petition Date. The firm applied $15,330 of the retainer to pay its invoice for services rendered prepetition. This resulted in the firm holding a remaining retainer of $71,387 as of the Petition Date. B.S. Quarries, Inc., filed a Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 14-02954) on June 25, 2014. Timothy Smith signed the petition as president. The Debtor estimated assets and liabilities of between $10 million to $50 million. Flaster/Greenberg, P.C., serves as the Debtor's counsel. The case is assigned to Judge John J Thomas. B.S. QUARRIES: Prepetition Lender Wants Ch. 11 Case Dismissed ------------------------------------------------------------- WM Capital Partners XXXIX, LLC, filed a motion asking the U.S. Bankruptcy Court for the Middle District of Pennsylvania to issue an order vacating the automatic stay or, in the alternative, dismissing the Chapter 11 case of B.S. Quarries, Inc. WM, the Debtor's principal secured lender, tells the Court that the Debtor's Chapter 11 filing is "a desperate attempt to hold onto assets in which it has no equity and to perpetuate a case in which it cannot formulate a feasible plan of reorganization within any timeframe, much less a reasonable one." Jeffrey Kurtzman, Esq., at Klehr, Harrison, Harvey, Branzburg LLP, in Philadelphia, Pennsylvania, on behalf of WM, points out that the timing of the commencement of the Debtor's Chapter 11 case clearly evidences an attempt to use the automatic stay as a litigation tactic to stall WM's realization of the value of its collateral by means of a sheriff's sale. In addition, the Debtor entered Chapter 11 on June 25, 2014, while the sheriff's sale was actually in progress, Mr. Kurtzman says. B.S. Quarries, Inc., filed a Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 14-02954) on June 25, 2014. Timothy Smith signed the petition as president. The Debtor estimated assets and liabilities of between $10 million to $50 million. Flaster/Greenberg, P.C., serves as the Debtor's counsel. The case is assigned to Judge John J Thomas. B.S. QUARRIES: Seeks Extension of Schedules Filing Date ------------------------------------------------------- B.S. Quarries, Inc., asks the U.S. Bankruptcy Court for the Middle District of Pennsylvania to extend until Aug. 8, 2014, the time by which it must file its schedules of assets and liabilities and statements of financial affairs. The Debtor says in court papers that the requested extension will provide sufficient time to prepare and file all necessary schedules. In the interim period of time, the Debtor is focusing on its business operations, employee issues, and maintenance of its customer base, the Debtor adds. Roberta A. DeAngelis, the U.S. Trustee assigned to the Debtor's Chapter 11 case, objects to the requested extension, arguing that the Debtor has not sufficiently established cause for a 44-day extension of time. An extension of time through Aug. 8 is both excessive and prejudicial to creditors given that the U.S. Trustee has scheduled the meeting of creditors for Aug. 1, the U.S. Trustee says in court papers. The U.S. Trustee, however, said she will not oppose an extension of time for the Debtor to file its Schedules through and including July 28. The U.S. Trustee is represented by: Gregory B. Schiller, Esq. Trial Attorney United States Department of Justice Office of the United States Trustee Middle District of Pennsylvania 228 Walnut Street, Suite 1190 Harrisburg, PA 17101 Tel: (717) 221-4515 Fax: (717) 221-4554 Email: Gregory.B.Schiller@usdoj.gov B.S. Quarries, Inc., filed a Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 14-02954) on June 25, 2014. Timothy Smith signed the petition as president. The Debtor estimated assets and liabilities of between $10 million to $50 million. Flaster/Greenberg, P.C., serves as the Debtor's counsel. The case is assigned to Judge John J Thomas. B.S. QUARRIES: Seeks Authority to Pay $100,000 to Critical Vendors ------------------------------------------------------------------ B.S. Quarries, Inc., seeks authority from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to pay $100,000 for prepetition obligations in connection with certain critical vendors and service providers. The Critical Vendors primarily consist of those entities which provide the Debtor with services and goods, which are crucial to the Debtor's continuation of its business and would be difficult and expensive to replace, if in fact the Debtor were even able to replace them. Payment of the claims of the Critical Vendors is vital to the Debtor's reorganization efforts because (a) the goods and services provided by the Critical Vendors are often the only source from which the Debtor can produce those goods or services; (b) failure to pay the Critical Vendor Claims would, in the business judgment of the Debtor, result in the Critical Vendor refusing to provide goods and/or services to the Debtor; (c) the Critical Vendors provide goods and services to the Debtor on advantageous terms; and/or (d) the Critical Vendors would themselves be irreparably damaged by the Debtor's failure to pay their prepetition claims, resulting in the Debtor's being forced to obtain goods or services elsewhere that would either be at a higher price or not of the quantity or quality required by the Debtor. The Debtor seeks authority to pay up to $100,000 in Critical Vendor Claims. While the Debtor reserves the right to seek Court authority at a later date to increase the Critical Vendor Cap, the Debtor believes that payment of the amount would allow it to obtain those goods and services that are absolutely necessary to the Debtor's postpetition operations. Roberta A. DeAngelis, the U.S. Trustee assigned in the Chapter 11 case of the Debtor, complains that the Critical Vendor Motion is plainly insufficient as filed since it offers no detail in support of the Debtor's request for blanket authority to pay up to $100,000 in prepetition claims. At a minimum, the Debtor should be required to identify the creditors that it wishes to designate as critical vendors, the relationship of those creditors to the Debtor and the prepetition amounts sought to be paid to each creditor. B.S. Quarries, Inc., filed a Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 14-02954) on June 25, 2014. Timothy Smith signed the petition as president. The Debtor estimated assets and liabilities of between $10 million to $50 million. Flaster/Greenberg, P.C., serves as the Debtor's counsel. The case is assigned to Judge John J Thomas. BERNARD L. MADOFF: High Court Rejects Bid To Sue Big Banks ---------------------------------------------------------- Law360 reported that the U.S. Supreme Court has declined to hear an appeal filed by the trustee liquidating Bernard L. Madoff's estate, leaving the trustee unable to pursue common law claims against banks including UBS AG and HSBC PLC over allegations that they helped the fraudster carry out his epic Ponzi scheme. According to the report, Irving H. Picard, the trustee appointed by the Securities Investor Protection Corp. to wind down Madoff's operation and compensate his victims, had been seeking to overturn a Second Circuit opinion from last June that blocked him from suing the banks. Jonathan Stempel, writing for Reuters, reported that the Supreme Court did not give reasons for its decision, which leaves intact a June 2013 ruling in the Madoff case by the federal appeals court in New York. Reuters related that Amanda Remus, a spokeswoman for Picard, said the trustee respected the decision in the Madoff case, and will still pursue $3.5 billion of bankruptcy claims against international banks such as Switzerland's UBS AG and Britain's HSBC Holdings Plc. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said the Supreme Court's decision was a victory for HSBC Holdings Plc, UBS AG and UniCredit SpA, because the trustee won't be able to reinstate $10.6 billion in lawsuits against the banks. Mr. Rochelle related that the better part of the trustee's suits were knocked out on two theories: (1) the so-called in pari delicto doctrine, where Picard was deemed to be a participant in Madoff's fraud and therefore barred from suing anyone else involved in the scheme; and the theory that Picard can't sue based on claims that belonged to individual creditors. 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. BRILL MEDIA: Ind. Court Boots Suit Over Townsquare Radio Buys ------------------------------------------------------------- Law360 reported that an Indiana appeals court declined to revive a media company's lawsuit against Townsquare Media Inc., saying a lower court was correct to dismiss claims that Townsquare used embargoed information to submit a winning bid for its radio stations at a 2002 bankruptcy auction. According to the report, a three-judge panel ruled that two confidentiality agreements between Townsquare and Brill Media Co. LP that the companies entered during failed negotiations for a sale aimed at helping Brill avoid insolvency contained no language that would barred Townsquare from bidding at the auction. The court also found there was no evidence to prove Townsquare used information it acquired during the talks to help submit its winning bid at the auction. The case is Brill et al. v. Regent Communications Inc., case number 82A01-1304-PL-174, in the Court of Appeals of the State of Indiana. BUCCANEER ENERGY: Files Reorganization Plan ------------------------------------------- BankruptcyData reported that Buccaneer Energy Limited filed with the U.S. Bankruptcy Court a Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the BData, the Disclosure Statement provides that: "The Debtors' assets are being marketed for sale with the assistance of a sales agent based on prior authorization from the Bankruptcy Court. The Debtors anticipate that the majority of their oil and gas properties and interests will be sold at an auction to be held several days prior to the hearing on the Plan. The Plan will not become effective until after the closing of this sale....Plan proposes the orderly liquidation of the Debtors' assets. All of the assets of the Debtors including the net proceeds from the sale...any remaining unsold assets, rights to receivables and refunds, and the Debtors' Causes of Action against third parties will be transferred to a Liquidating Trust." About Buccaneer Energy Buccaneer Resources, LLC, and eight affiliates, including Buccaneer Energy Ltd. sought Chapter 11 bankruptcy protection in Victoria, Texas (Bankr. S.D. Tex. Lead Case No. 14-60041) on May 31, 2014. Founded in 2006, Buccaneer Energy, Ltd. is a publicly traded independent oil and gas company listed on the Australian Securities Exchange under the symbol "BCC". Although BCC is an Australian listed entity, the company operates exclusively through its eight U.S. subsidiary debtors, each of which are headquartered in the U.S. and which maintain offices in Houston and Dallas, Texas, and Kenai and Anchorage, Alaska. The Debtors' primary business is the exploration for and production of oil and natural gas in North America. Operations have historically focused on both onshore and offshore opportunities in the Cook Inlet of Alaska as well as the development of offshore projects in the Gulf of Mexico and onshore oil opportunities in Texas and Louisiana. CEO Curtis Burton was terminated in May 2014. Manning the Debtors' operations is Conway MacKenzie senior managing director John T. Young, who was appointed chief restructuring officer in March 2014. The bankruptcy cases are assigned to Judge David R Jones. The Debtors have sought and obtained an order authorizing joint administration of their Chapter 11 cases. The Debtors have tapped Robert Andrew Black, Esq., Jason Lee Boland, Esq., Robert Bernard Bruner, and William R Greendyke, Esq., at Fulbright Jaworski LLP as counsel. Norton Rose Fulbright Australia will render legal services related to cross-border insolvency and general corporate and litigation matters to Buccaneer Energy Ltd. Epiq Systems is the claims and notice agent. CACTUS WELLHEAD: S&P Assigns 'B' CCR & Rates $350MM Loan 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to Cactus Wellhead LLC. The outlook is stable. At the same time, S&P assigned its 'B' issue-level rating (the same as the corporate credit rating) to the company's proposed $350 million first-lien term loan due 2020, with a recovery of '3', indicating S&P's expectation for meaningful (50% to 70%) recovery for lenders in the event of default. "The stable outlook reflects our view that Cactus will continue to grow by expanding its presence near well-established U.S. shale plays, with associated capital spending largely funded within operating cash flows," said Standard & Poor's credit analyst Ben Tsocanos. S&P could lower the rating if it no longer view liquidity as being adequate. This could occur if the company pursued debt-funded expansion that did not result in incremental business, or if margins deteriorated meaningfully due to increased competition. While unlikely in the near term, given the company's limited size, S&P could raise the rating if Cactus increased its scale such that EBITDA and cash flow were comparable to higher-rated peers, while maintaining strong profit margins, adequate liquidity, and moderate financial leverage. CAMPUS HABITAT: Bankruptcy Court Dismisses Chapter 11 Case ---------------------------------------------------------- The Bankruptcy Court dismissed the Chapter 11 case of Campus Habitat 15 LLC. The Court also ordered that any subsequent bankruptcy petition filed by the Debtor will be filed in the U.S. Bankruptcy Court for the District of Wyoming. As reported in the Troubled Company Reporter on May 28, 2014, in its motion, Campus Habitat said it intends "to enter into a workout with its creditors" after the case gets dismissed. The company further said it will pay the U.S. trustee overseeing its case quarterly fees prior to or concurrently with the dismissal of the case. The move came after the company withdrew its Chapter 11 reorganization plan filed on March 31 with the U.S. Bankruptcy Court for the District of Wyoming. The plan proposed to pay the claims of its creditors, which were classified into three classes. Under the plan, Deutsche Bank Trust Co. Americas' Class 1 secured claim would be paid from the proceeds of the sale of Campus Habitat's housing complex. The bank would be paid a 25 year amortization with 5.24% interest with a "balloon payment." Gertch-Baker's Class 2 secured claim would be paid in full 30 days after the effective days of the plan with the statutory judgment interest rate while Class 3, which consists of unsecured claims, would be paid with 5% interest over a period of 60 months, according to the plan. As for the equity security holders, they would retain their ownership interests, according to the plan. On April 15, the bankruptcy court conditionally approved the company's disclosure statement and set a hearing for June 4 to consider approval of the disclosure statement and confirmation of the plan. About Campus Habitat Campus Habitat 15, LLC, aka University Lodge, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Wyo. Case No. 13-21179) on Dec. 29, 2013. The case is assigned to Judge Peter J. McNiff. The Debtor is represented by Paul Hunter, Esq., in Cheyenne, Wyoming. CHRYSLER GROUP: Daimler Unit Sues Ch. 11 Trust Over Tax Deal ------------------------------------------------------------ Law360 reported that two North American Daimler AG units sued the old Chrysler company's liquidation trust in bankruptcy court, saying the trust is violating an agreement to hand over to the German automaker millions of dollars in tax refunds dating back to 2007. According to the report, Daimler Investments US Corp. and Daimler North America Finance Corp. argue in their amended complaint that after three years of complying with the terms of the deal, the liquidation trust of Old Carco LLC adopted a new interpretation of the settlement in June 2012. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). The U.S. and Canadian governments provided Chrysler LLC with $4.5 billion to finance its bankruptcy case. In connection with the bankruptcy filing, Chrysler reached an agreement to sell all assets to an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC in June 2009, formally sold substantially all of its assets to the new company, named Chrysler Group LLC. In January 2014, the American car manufacturer officially became 100% Italian when Fiat Spa completed its deal to purchase the 40% it did not already own of Chrysler. Fiat has shared ownership of Chrysler with the health care fund of the United Automobile Workers unions since Chrysler emerged from bankruptcy in 209. * * * Standard & Poor's Ratings Services raised its ratings on U.S.- based auto manufacturer Chrysler Group LLC, including the corporate credit rating to 'BB-' from 'B+' in mid-January 2014. The outlook is stable. CLEAREDGE POWER: Committee Taps Brown Rudnick as Counsel -------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of ClearEdge Power, Inc., et al., asks the Bankruptcy Court for permission to retain Brown Rudnick LLP as its counsel. The engagement will be headed by the firm's partners and their hourly rates are: Howard L. Siegel $1,060 Cathrine M. Castaldi $700 Sunni P. Beville $790 The partners intend to manage the team of Brown Rudnick associates and paraprofessionals who will be involved on a regular basis in carrying out the engagement so as to achieve an optimum cost effective blended hourly rate in the range of $500 for the overall engagement. The hourly rates of other firm personnel are: Attorneys $355 - $1,190 Paraprofessional $310 - $370 To the best of the Committee's knowledge, Brown Rudnick is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Catherine M. Castaldi, Esq. Howard L. Siegel, Esq. Sunni P. Siegel, Esq. BROWN RUDNICK LLP 211 Michelson Drive, Seventh Floor Irvine, CA 92612 Tel: (949) 752-7100 Fax: (949) 252-1514 E-mails: ccastaldi@brownrudnick.com hsiegel@brownrudnick.com sbelville@brownrudnick.com On May 22, Tracy Hope Davis, U.S. Trustee for Region 17, appointed five creditors to serve in the Committee, which is consist of: 1. Metro Mold & Design LLC ATTN: Tim Holland 20600 County Rd. No. 81 Rogers, MN 55374 2. ABB, Inc. ATTN: Galit Mizrahi 8585 Trans-Canada Highway Saint-Laurent, QC Canada H45126 3. Johnson Matthey Fuel Cells Limited ATTN: Kevin Fothergill 5th Floor, 25 Farringdon Street London EC4A 4AB UK 4. Estes Express Lines ATTN: Nicole Washington 3901 West Broad Street Richmond, VA 23230 5. Kelly Services, Inc. ATTN: Jody McLeod 999 West Big Beaver Troy MI, 48084 About ClearEdge Power Sunnyvale, California-based ClearEdge Power Inc. and two other affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Cal. Lead Case No. 14-51955) on May 1, 2014, in San Jose. Affiliates ClearEdge Power, LLC, and ClearEdge Power International Service, LLC, are based in South Windsor, Connecticut, where the manufacturing operations are located. Privately held ClearEdge designs, manufactures, sells and services distributed generation fuel cell systems for commercial, industrial, utility and residential applications. ClearEdge bought United Technologies Corp.'s UTC Power division in late 2012. ClearEdge sought bankruptcy protection just a week after shutting operations. John Walshe Murray, Esq., at Dorsey and Whitney LLP, serves as counsel to the Debtors. Insolvency Services Group, Inc., serves as noticing and claims agent. ClearEdge Power disclosed $31,271,670 in assets and $67,414,779 in liabilities as of the Chapter 11 filing. Power Inc. estimated $100 million to $500 million in both assets and debts. The petitions were signed by David B. Wright, chief executive officer. CLEAREDGE POWER: Committee Taps Teneo Securities as Fin'l Advisor ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of ClearEdge Power Inc., et al., asks the Bankruptcy Court for permission to retain Teneo Securities LLC as its financial advisor nunc pro tunc to May 30, 2014. Teneo will, among other things: a. review and analyze the Company's operations, assets, financial condition, business plan, strategy, and operating forecasts; b. evaluate the assets and liabilities of the Company and evaluate the Company's strategic and financial alternatives; and c. assist in the evaluation of asset sale process, including the identification of the potential buyer. The Debtor will pay Teneo on an hourly basis based upon the time incurred by Teneo professional in providing the services. Teneo will be compensated at the blended hourly rate of $475. To the best of the Committee's knowledge, Teneo is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About ClearEdge Power Sunnyvale, California-based ClearEdge Power Inc. and two other affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Cal. Lead Case No. 14-51955) on May 1, 2014, in San Jose. Affiliates ClearEdge Power, LLC, and ClearEdge Power International Service, LLC, are based in South Windsor, Connecticut, where the manufacturing operations are located. Privately held ClearEdge designs, manufactures, sells and services distributed generation fuel cell systems for commercial, industrial, utility and residential applications. ClearEdge bought United Technologies Corp.'s UTC Power division in late 2012. ClearEdge sought bankruptcy protection just a week after shutting operations. John Walshe Murray, Esq., at Dorsey and Whitney LLP, serves as counsel to the Debtors. Insolvency Services Group, Inc., serves as noticing and claims agent. ClearEdge Power disclosed $31,271,670 in assets and $67,414,779 in liabilities as of the Chapter 11 filing. Power Inc. estimated $100 million to $500 million in both assets and debts. The petitions were signed by David B. Wright, chief executive officer. On May 22, 2014, the U.S. Trustee for Region 17 appointed five creditors to serve in the Committee. CLEAREDGE POWER: Files Schedules of Assets and Liabilities ---------------------------------------------------------- ClearEdge Power Inc., filed with the U.S. Bankruptcy Court for the Northern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $31,271,670 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $30,945,650 E. Creditors Holding Unsecured Priority Claims $7,619,661 F. Creditors Holding Unsecured Non-Priority Claims $28,849,468 ----------- ----------- Total $31,271,670 $67,414,779 A copy of the schedules is available for free at http://bankrupt.com/misc/CLEAREDGEPOWER_70_sal.pdf About ClearEdge Power Sunnyvale, California-based ClearEdge Power Inc. and two other affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Cal. Lead Case No. 14-51955) on May 1, 2014, in San Jose. Affiliates ClearEdge Power, LLC, and ClearEdge Power International Service, LLC, are based in South Windsor, Connecticut, where the manufacturing operations are located. Privately held ClearEdge designs, manufactures, sells and services distributed generation fuel cell systems for commercial, industrial, utility and residential applications. ClearEdge bought United Technologies Corp.'s UTC Power division in late 2012. ClearEdge sought bankruptcy protection just a week after shutting operations. John Walshe Murray, Esq., at Dorsey and Whitney LLP, serves as counsel to the Debtors. Insolvency Services Group, Inc., serves as noticing and claims agent. ClearEdge Power disclosed $31,271,670 in assets and $67,414,779 in liabilities as of the Chapter 11 filing. Power Inc. estimated $100 million to $500 million in both assets and debts. The petitions were signed by David B. Wright, chief executive officer. On May 22, 2014, the U.S. Trustee for Region 17 appointed five creditors to serve in the Committee. CLEAREDGE POWER: July 11 Hearing on Bid to Assign Contracts ----------------------------------------------------------- The Bankruptcy Court will convene a hearing on July 11, 2014, at 4:00 p.m., to consider ClearEdge Power, Inc., et al.'s motion to authorize the assumption and assignment of executory contracts and unexpired leases in connection with the sale of certain of their assets in an auction led by Doosan Corporation. The Debtors and Doosan have negotiated and entered into an asset purchase agreement dated June 26, 2014, subject to overbid and Court approval, which provides the terms of the sale. Under the purchase agreement, Doosan has agreed to act as the stalking horse bidder. In this connection, the Debtors seeks authorization to assume and assign certain executory contracts and unexpired leases to the successful purchaser(s). Under the terms of the purchase agreement, Doosan has agreed to pay the cure costs with respect to the executory contracts it intends to assume up to the aggregate amount of $12,899,000. About ClearEdge Power Sunnyvale, California-based ClearEdge Power Inc. and two other affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Cal. Lead Case No. 14-51955) on May 1, 2014, in San Jose. Affiliates ClearEdge Power, LLC, and ClearEdge Power International Service, LLC, are based in South Windsor, Connecticut, where the manufacturing operations are located. Privately held ClearEdge designs, manufactures, sells and services distributed generation fuel cell systems for commercial, industrial, utility and residential applications. ClearEdge bought United Technologies Corp.'s UTC Power division in late 2012. ClearEdge sought bankruptcy protection just a week after shutting operations. John Walshe Murray, Esq., at Dorsey and Whitney LLP, serves as counsel to the Debtors. Insolvency Services Group, Inc., serves as noticing and claims agent. ClearEdge Power disclosed $31,271,670 in assets and $67,414,779 in liabilities as of the Chapter 11 filing. Power Inc. estimated $100 million to $500 million in both assets and debts. The petitions were signed by David B. Wright, chief executive officer. On May 22, 2014, the U.S. Trustee for Region 17 appointed five creditors to serve in the Committee. CNG HOLDINGS: Moody's Lowers CFR & Sr. Secured Rating to Caa1 ------------------------------------------------------------- Moody's Investors Service downgraded CNG Holdings, Inc.'s corporate family rating and Senior Secured notes rating to Caa1 from B3. Moody's also changed the rating outlook to negative from stable. Ratings Rationale The downgrade reflects the anticipated deterioration in CNG's credit metrics as a result of substantial restructuring costs related to the company's recent suspension of lending activities in the U.K., as well as sizeable losses from its majority stake in the specialty finance business WhyNot Leasing, LLC (WNL). CNG voluntarily suspended lending in the U.K. after it concluded that it would not be able to comply with the requirements imposed by the Financial Conduct Authority (FCA), which assumed regulatory responsibility for the consumer credit industry earlier this year. The company expects to resume lending in early 2015, provided that the improvements it makes to its lending policies and procedures are satisfactory to the FCA. CNG's recently announced restructuring plan entails a significant reduction in the total number of operating stores in the U.K. (approximately 300, or two- thirds of total stores in the U.K.). The company expects to incur $25 million of cash charges associated with this restructuring, most of which would relate to reductions in workforce and termination of occupancy obligations. Worse than anticipated performance of WNL's fourth quarter 2013 lease vintages have resulted in substantial losses in this business to date. The higher-than-expected leasing volumes resulting from the addition of a large client stressed WNL's customer service and collections infrastructure and exposed vulnerabilities in its underwriting and fraud prevention capabilities. The negative outlook reflects the uncertainty related to CNG's ongoing restructuring efforts in the U.K. as well as to the turnaround of the financial performance of WNL. CNG's high financial leverage and absence of capital cushion are indicative of a Caa rating. In addition to the negative developments described above, the rating also reflects a number of credit challenges facing the company, including ongoing regulatory risks in the U.S. payday lending business, as well as execution risks related to the company's installment product expansion. CNG's credit strengths include its extensive and well-established retail network in the U.S., with satisfactory underlying demand fundamentals for short-term and installment loan products. CNG's ratings are unlikely to be upgraded given the negative outlook. The outlook could return to stable if the company demonstrates cost containment in its U.K. business, as well a sustained improvement in the financial performance of WNL. Ratings could be downgraded should costs related to the U.K. restructuring escalate above expectations, or WNL's financial performance fail to meaningfully improve. Further, a legislative action which would severely impact CNG's franchise positioning and profitability in the U.S. could also have negative rating implications. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. DBK INVESTMENTS: Hearing on Stay Motion Subject to Property Sale ---------------------------------------------------------------- In the Chapter 11 case of DBK Investments and Development Corp., the Bankruptcy Court continued the hearing on City National Bank of West Virginia's motion to lift, modify or terminate the automatic stay, until such time as CNB requests a final hearing on the motion. The Court also directed the Debtor to pursue the sale of the property -- 1939 Harper Road, Beckley, Raleigh County, West Virginia. The Court held hearings on the motion on Feb. 19 and Jan. 28. On Jan. 28, CNB asked the Court for relief from the automatic stay and for abandonment of property. According to CNB, the Debtor and a related entity, Springmore II, LLC, on August 21, 2008, entered into a commercial loan transaction with CNB, to pay the principal sum of $1,410,000, and agreed to repay the indebtedness. The indebtedness was secured by a deed of trust also dated August 21, 2008, whereby the Debtor granted and conveyed, in trust, to William H. File as trustee, all those certain tracts or parcels of land West Virginia. The property was appraised on June 29, 2012, and has an appraised value of $1,100,000. The Debtor, CNB said, has defaulted on the payments. CNB is represented by: Sarah C. Ellis, Esq. Arthur M. Standish, Esq. STEPTOE & JOHNSON, PLLC P.O. Box 1588 Charleston, WV 25326-1588 Tel: (304) 353-8000 About DBK Investments and Development Corp. Hillsville, Virginia-based DBK Investments and Development Corp. filed for Chapter 11 protection (Bankr. S.D. W.Va. Case No. 14- 50033) on Feb. 11, 2014. Bankruptcy Judge Ronald G. Pearson presides over the case. The Debtor estimated assets and debts at $1 million to $10 million. The petition was signed by Bettye J. Morehead, secretary. The Debtor is represented by Joe M. Supple, Esq., at Supple Law Office, PLLC. DBK INVESTMENTS: Court Okays Supple Law Office as Bankr. Counsel ---------------------------------------------------------------- According to DBK Investments and Development Corp.'s case docket, the Bankruptcy Court has authorized the Debtors to employ Joe M. Supple as its co-counsel. Mr. Supple will, among other things: a. provide legal advice to the Debtor in matters arising in the administration of the Chapter 11 proceedings; b. assist the Debtor in formulating a Plan of Reorganization including the liquidation of assets to fund the plan and to represent the Debtor in efforts to negotiate terms for reorganization in the best interest of all creditors and parties-in-interest; and c. provide other matters as properly require the services of counsel in connection with the case and in the best interest of the noted parties-in-interest. The Debtor disclosed in court papers that Bettye J. Morehead is the president and holder of 50% of the issued and outstanding shares of DBK. The estate of Don Springman, deceased, also owns 50% of DBK's stock. Ms. Morehead initially sought to employ both Joe Supple and George Lemon as co-counsel for the Debtor. However, because Don Springman would not affirmatively agree to the bankruptcy filing, nor did he object, Joe Supple agreed to file an involuntary petition for Ms. Morehead and two other petitioning creditors. The Debtor then applied for authority to employ George L. Lemon, which was approved by the Court. The Debtor agreed to employ Mr. Supple on an hourly basis at the rate of $250 per hour for attorney services, with paralegal support being billed at the rate of $75 per hour. Mr. Supple was paid directly by Ms. Morehead for preparing and filing the involuntary petition and received not retainer from the Debtor. Mr. Supple can be reached at: Joe M. Supple, Esq. SUPPLE LAW OFFICE, PLLC 801 Viand Street Point Pleasant, WV 25550 Tel: (304) 675-6249 About DBK Investments and Development Corp. Hillsville, Virginia-based DBK Investments and Development Corp. filed for Chapter 11 protection (Bankr. S.D. W.Va. Case No. 14- 50033) on Feb. 11, 2014. Bankruptcy Judge Ronald G. Pearson presides over the case. The Debtor estimated assets and debts at $1 million to $10 million. The petition was signed by Bettye J. Morehead, secretary. DETROIT, MI: Syncora Emerges as Nemesis in Bankruptcy Proceedings ----------------------------------------------------------------- Karen Pierog, writing for Reuters, reported that bond insurer Syncora Guarantee Inc. has emerged as Detroit's chief nemesis in the city's historic bankruptcy case and is fighting as if its financial life depends on a decent recovery on its $400 million exposure to the city. According to Reuters, Syncora's latest pleading demands information on the current assets and income of all Detroit's retired workers -- some 20,000 of them. In one of Syncora's filing in Detroit's bankruptcy case, the bond insurer demanded for details relating to the City's rare art collection. Judge Steven Rhodes, the bankruptcy judge overseeing the City's Chapter 9 proceeding, however, denied the request, Law360 said. Bill Rochelle, the bankruptcy columnist for Bloomberg News, pointed out that Syncora was dealt a series of defeats in bankruptcy court on June 26, after the bankruptcy judge approved his bus tour of the city and after the bankruptcy judge prohibited the bond insurer from examining Michigan Attorney General Bill Schuette. Moreover, Judge Rhodes blocked Syncora from seeing records from confidential mediation that led to the so-called grand bargain where workers would suffer fewer losses on their pensions in return for supporting the plan. In other news, Joe Guillen, writing for Detroit Free Press, reported that the judge overseeing Detroit's bankruptcy case said he plans to take a three-hour bus tour for an up-close view of the blight and other conditions many of the city's residents endure every day. Details must be kept confidential, U.S. bankruptcy Judge Steven Rhodes said in court, the Free Press related. Moreover, Law360 reported that American Federation of State, County and Municipal Employees Council 25, Detroit's largest union, has ratified a new labor contract with the city that will implement raises for members over the course of five years and provide the city with support of its proposed debt restructuring plan. Under the deal, the union members will receive 5 percent wage increases on July 1 and 2.5 percent increases in 2016, 2017 and 2018, and will also receive a 2.5 percent bonus in 2015, Law360 said. In a separate report by Reuters, the news agency said Detroit and a group of hold-out creditors will meet over one of the last unresolved major issues in the city's bankruptcy case, which issue involves the $1.4 billion of certificates of participation the city sold in 2005 and 2006 to boost funding for its two retirement systems. Judge Rhodes, on July 1, issued an order blocking initial attempts to stop the city from trying to invalidate the $1.4 billion of debt, saying the pension debt was "a significant factor in later forcing the city into bankruptcy," and that the corporations sued -- the Detroit General Retirement System Service Corporation and the Detroit Police and Fire Retirement System Service Corporation -- were the proper defendants in the case. To recall, Detroit filed the lawsuit in January, claiming that because the pension COPs were illegally sold the court should void the city's obligation to pay them off, Reuters related. 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: Buyer Funds Severance for Fired Workers ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the buyers of Edgenet Inc.'s business agreed to fund $150,000 in severance for workers they didn't hire as a result of the sale of the business. Anything not spent on severance goes back to the buyer, a group of former managers who paid almost $8 million for the business, which provides cloud-based applications and services, according to the report. The group of former managers include the chief executive and chief financial officer, the Bloomberg report said. 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 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. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed on March 13, 2014, five noteholders to serve on the Official Committee of Note Holders. In May, Bankruptcy Judge Brendan L. Shannon denied Edgenet Inc., et al.'s motion to disband the Noteholders Committee. The Noteholders Committee has retained Morris James LLP's Jeffrey R. Waxman, Esq.; and Cooley LLP's Cathey Hershcopf, Esq., and Jeffrey L. Cohen, Esq., as co-counsel to the Committee. DEWEY & LEBOUEF: Mediator Needs Court's Help in Collecting Fees --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Richard S. Toder, a bankruptcy lawyer who has practiced for almost 50 years and conducted more than 30 mediations, sought the help of the bankruptcy court to collect a fee for the preparation and conduct of a mediation in the liquidation proceeding of defunct law firm Dewey & LeBoeuf LLP. According to the report, Mr. Toder, who graduated from Harvard Law School in 1965 and was co-chairman of Morgan, Lewis & Bockius LLP's bankruptcy and restructuring practice, successfully mediated a $1.4 million dispute in January in which the liquidating trustee of Dewey & LeBoeuf sought to collect an unpaid fee from the law firm's former client Moinian Group. The fee to prepare for and conduct the mediation was $26,223, and Dewey's liquidating trustee promptly paid his half, but, five months later, Moinian still hadn't paid its share despite, numerous demands, the report related. The report said, in addition to Moinian's split of mediation costs, Mr. Toder wants an additional $7,160 for more than eight hours spent writing demand letters, speaking to Moinian's counsel and preparing his June 25 request for the court's debt collection assistance. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. FTI Consulting, Inc. was appointed secured lender trustee for the Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A. Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at Togut, Segal & Segal LLP, serve as counsel to the Liquidation Trustee. Dewey's liquidating Chapter 11 plan was approved by the bankruptcy court in February 2013 and implemented in March. The plan created a trust to collect and distribute remaining assets. The firm estimated that midpoint recoveries for secured and unsecured creditors under the plan would be 58.4 percent and 9.1 percent, respectively. EDISON MISSION: Wins Approval Of $23M Retiree Settlement -------------------------------------------------------- Law360 reported that bankrupt Edison Mission Energy won court approval for a settlement with its retirees, allowing the company to pay off their claims for $22.9 million, or less than a third of what the retirees demanded. According to the report, in a brief order, U.S. Bankruptcy Judge Jacqueline P. Cox signed off on the settlement agreement, saying it is fair and in the parties' best interest. The Troubled Company Reporter, citing Law360, previously reported that Edison Mission announced the settlement with its retirees that allows the company to pay off their claims for $22.9 million, less than a third of what the retirees have demanded, and unload obligations to pay their benefits. The reorganization trust for EME, which recently sold its assets to NRG Energy Inc. after a stint in bankruptcy, will stop paying for non-unionized retirees' benefits through the last day of the month following the month in which the deal is approved by a judge. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. In its schedules, Edison Mission Energy disclosed total assets of assets of $5,721,559,170 and total liabilities of $6,202,215,094 as of the Petition Date. The Debtors, other than Camino Energy Company, are also represented by James H.M. Sprayregen, P.C., Sarah Hiltz Seewer, Esq., and Seth A. Gastwirth, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois; and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in New York. Debtor Camino Energy Company is represented by David A. Agay, Esq., and Joshua Gadharf, Esq., at McDonald Hopkins LLC, in Chicago, Illinois. Perella Weinberg Partners is acting as the Debtors' financial advisor and McKinsey & Company Recovery and Transformation Services is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case and is represented by Ira S. Dizengoff, Esq., Stephen M. Baldini, Esq., Arik Preis, Esq., and Robert J. Boller, Esq., at Akin Gump Strauss Hauer & Feld LLP in New York; James Savin, Esq., and Kevin M. Eide, Esq., at Akin Gump Strauss Hauer & Feld LLP in Washington, DC; and David M. Neff, Esq., and Brian Audette, Esq., at Perkins Coie LLP. The Committee also has tapped Blackstone Advisory Partners as investment banker and FTI Consulting as financial advisor. EME's Joint Plan of Reorganization was confirmed on March 11, 2014. The Plan provides for: (a) the sale to NRG Energy, Inc. and NRG Energy Holdings, Inc. of substantially all of EME's assets for approximately $2.635 billion, subject to certain adjustments provided in the Acquisition Agreement, and assumption of so-called PoJo Leases, as modified; (b) a settlement with Edison International -- EIX -- and certain EME noteholders pursuant to which EME will emerge from bankruptcy free of liabilities but will remain an indirect wholly-owned subsidiary of EIX; and (c) the transfer of substantially all remaining assets and liabilities of EME that are not otherwise discharged in the bankruptcy or transferred to NRG to the Reorganization Trust. Once consummated, the Plan will result in recoveries of over 80% for holders of unsecured claims against EME and payment in full in cash of claims against EME's subsidiaries. The Plan was declared effective on April 1, 2014. ENERGY FUTURE: Texas Lawmaker Warns v. Hedge Funds "Flipping" Unit ------------------------------------------------------------------ Tom Halls, writing for Reuters, reported that a powerful Texas state senator warned against a takeover by hedge funds of the power distribution unit of bankrupt Energy Future Holdings and said the state would prefer an owner with a long-term view. According to Reuters, Senator Troy Fraser told Reuters that Texas prefers that the new owner of the power distribution unit, Oncor, invest cash in the business, and would be concerned about any deal that increases debt levels. Fraser is chairman of the Texas Senate Committee on Natural Resources, and he opposed the 2007 leveraged buyout that loaded Energy Future, then known as TXU Corp, with much of the $41 billion in debt it carried into bankruptcy in April, Reuters said. Law360 reported that Energy Future has urged a Delaware bankruptcy judge to bless a $1.9 billion debtor-in-possession facility and a settlement with junior noteholders, drawing fire from an array of creditors involved in the mammoth Chapter 11 case. Reuters, in a separate report, said Energy Future's creditors urged the bankruptcy judge to slow the Chapter 11 case and warned if a key refinancing proposal was approved it might block better deals from being considered. Creditors not involved in financing the DIP loan have called it "unprecedented" because it will convert into a stake of about 60 percent of Energy Future when the company exits bankruptcy, the Reuters report said. Law360, in a July 1 report, related that the Delaware bankruptcy judge said the power giant needs to offer additional evidence justifying its intent to take on a $1.9 billion debtor-in- possession facility to pay off a group of junior noteholders. Following a second straight day of proceedings in Wilmington, Delaware, U.S. Bankruptcy Judge Christopher S. Sontchi said that going forward, he wants to hear more about how the DIP was marketed to potential lenders and why the $1.9 billion package should be approved, Law360 said. About Energy Future Holdings, fka TXU Corp. Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. 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: Lenders Seeking Direct Appeal -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that CSC Trust Co., representing holders of 10 percent first-lien notes issued by an Energy Future Holdings Corp. subsidiary wants the U.S. Court of Appeals to review a June 10 ruling by the bankruptcy court approving a settlement with first- lien noteholders. According to the report, CSC called the bankruptcy judge's action unprecedented, saying he approved a tender offer that hadn't been sanctioned by any court or reviewed by the U.S. Securities and Exchange Commission. The indenture trustee likewise faulted the process because it entailed paying off pre-bankruptcy debt long before adoption of a Chapter 11 plan, the report related. U.S. Bankruptcy Judge Christopher Sontchi will decide at a July 18 hearing in Delaware whether to recommend a direct appeal to the circuit court, bypassing the federal district court in Wilmington, the report further related. ENERGY FUTURE: Creditors Balk at Loan Teeing up Future Sale ----------------------------------------------------------- Tom Hals, writing for Reuters, reported that Energy Future Holdings' novel plan to sell itself through a loan provision has Texas's largest power company in hot water with creditors, who accuse it of trying to skirt a public sale process and hiding its true value. According to the report, other creditors have cried foul over the proposed $2 billion loan, saying Energy Future hasn't considered competing offers and is selling itself without a traditional court-supervised bankruptcy auction. 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. FERRO CORP: Moody's Affirms Ba3 CFR & Rates 1st Lien Debt Ba3 ------------------------------------------------------------- Moody's Investors Service affirmed Ferro Corporation's Ba3 Corporate Family Rating (CFR) and assigned Ba3 ratings to its new $300 million first lien term loan B and $200 million first lien revolving credit facility. Proceeds from the new term loan and revolver will be used to refinance existing debt of a commensurate size. The credit agreement for the new bank debt is expected to include provisions to allow for the planned divestiture of Ferro's Polymer Additives business, which was announced in June 2014. The Speculative Grade Liquidity rating was upgraded to SGL-2 from SGL- 3. The outlook is stable. Recently, Ferro's announced the closure of the Specialty Plastics sale on July 1, 2014, for $88 million in net proceeds, which will be used primarily to reduce debt. Residual cash from the transaction is available to support the next steps in Ferro's strategic initiatives to focus on its core expertise in functional coatings and color solutions. A small acquisition of porcelain enamel distribution assets in Turkey, announced July 1, 2014, is evidence that Ferro is beginning to execute on this strategy, as this purchase will enhance access to a fast growing market. "The refinanced debt and resulting interest savings mark another positive step in Ferro's restructuring efforts," said Lori Harris, Moody's Analyst, "while restructuring costs and elevated capex will impact cash flows in 2014, Moody's expect Ferro to realize earnings and margin gains as the strategic initiatives are executed." Ratings Assigned: Issuer: Ferro Corporation $300 million Senior Secured Term Loan B at Ba3, LGD3 $200 million Senior Secured Revolving Credit Facility at Ba3, LGD3 Ratings Upgraded: Speculative Grade Liquidity Rating (SGL), to SGL-2 from SGL-3 Ratings Affirmed: Issuer: Ferro Corporation Corporate Family Rating, Ba3 Probability of Default Rating, Ba3-PD 7.875% Senior Notes due 2018 at B1, LGD4 * The outlook is stable * Rating will be withdrawn upon completion of refinancing Ratings Rationale Ferro's Ba3 CFR reflects the company's improved leverage resulting from increased margins and improving, but still somewhat weak, cash flows. Factors supporting the Ba3 rating include the favorable debt refinancing and related long-term interest expense savings, reduced usage of precious metals lease lines, as well as successful restructuring efforts thus far. Moody's expectation for continued success in cost cutting and efficiency initiatives is also factored in the rating. The business divestitures have reduced Ferro's business size and diversity, but the remaining core businesses, specifically those in Performance Materials, provide higher margins and earnings stability. Because of its smaller size, Moody's would expect Ferro to achieve strong credit metrics for the rating category (3.5x Debt/EBITDA and 15% Retained Cash Flow/Debt -- RCF/Debt). The outlook is stable as a result of the progress under the restructuring programs and cost cutting measures that have resulted in Debt/EBITDA of 3.5x, EBITDA margins of 10%, and Retained Cash Flow/Debt of 10%. While there is limited upside to the rating at this time because of continuing restructuring activities, if revenues expand, Debt/EBITDA is sustainably below 3.0x, EBITDA margins reach the mid-teens, and if 20% RCF/Debt is sustainably realized, Moody's would contemplate a higher rating. Conversely, given the smaller revenue base, Moody's expects the credit metrics to be strong for the rating category, such that the rating could come under pressure if Debt/EBITDA under 3.5x and RCF/Debt over 15% is not realized by 2015. Additionally, Moody's could contemplate negative rating actions if the precious metals leases trigger for collateralization or if a sizable acquisition or other unanticipated event were to increase leverage to over 4.0x. (All ratios include Moody's Standard Adjustments.) Ferro's Speculative Grade Liquidity of SGL-2 reflects the positive cash generation and a cash balance of $41 million as of March 31, 2014. The SGL-2 is supported by liquidity improvements which include the reduction in precious metals lease arrangements to $30.1 million, as of March 31 ,2014, and an additional $88 million in proceeds from the sale of the Specialty Plastics business. Ferro is expected to have minimal outstandings under its new $200 million revolver. 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. Ferro Corporation, (Ferro) headquartered in Cleveland, Ohio, is a global producer of an array of specialty materials and chemicals including coatings, enamels, pigments, and specialty chemicals for use in industries ranging from construction to automotive to telecommunications. Ferro operates through two groups; Performance Materials and Performance Chemicals which contribute 69% and 31% to revenues, respectively. Revenues were $1.6 billion for the LTM ended March 31, 2014. (Pro forma for the July 1, 2014 sale of the Specialty Plastics business, revenues for the LTM ending March 31, 2014 are approximately $1.4 billion.) FERRO CORP: S&P Affirms 'B+' CCR & Rates $500MM Facilities 'B+' --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Mayfield Heights, Ohio-based chemical company Ferro Corp. At the same time, S&P assigned a 'B+' issue-level rating to the company's proposed $500 million senior secured credit facilities. The recovery rating is '3', indicating S&P's expectation for meaningful (50% to 70%) recovery in the event of a payment default. The outlook is stable. The proposed senior secured credit facilities, which include a $200 million revolving credit facility due 2019 and a $300 million term loan B due 2021, will be used to refinance existing indebtedness, and pay transaction fees and expenses. S&P expects to withdraw the ratings on the outstanding $250 million senior unsecured notes once they have been repaid following the transaction. "The ratings on Ferro Corp. reflect our assessment of the company's business risk profile as 'weak' and financial risk profile as 'aggressive'," said Standard & Poor's credit analyst Daniel Krauss. Ferro produces a variety of performance materials and chemicals for use primarily in the construction, appliances, automotive, household furnishings, and electronics end markets. Some specific products include glazes, enamels, pigments, dinnerware decoration colors, coatings, and porcelain enamel. On July 1, 2014, Ferro completed the divestiture of nearly all of its specialty plastics business to A. Schulman Inc. (unrated) for $91 million. The company also announced that it has launched a process to sell its polymer additives segment, which generated revenues of nearly $300 million in 2013. S&P believes that these initiatives reflect the company's continued shift to focus on the higher growth performance materials side of the business and better aligns with Ferro's core competencies in glass and color technologies. S&P expects that the proceeds from the plastics and potential polymer additives divestitures should provide liquidity for the company to look at bolt-on acquisitions in the performance materials space. While the company has not completed an acquisition in several years, S&P believes opportunities are present, particularly in some of the more highly fragmented industries it competes in. S&P's base-case scenario does not factor in any transformational acquisitions, and it would have to reassess the ratings and outlook if the company meaningfully increased debt to fund an acquisition. The outlook is stable. S&P's base case assumes that earnings in the performance materials businesses will improve modestly in 2014 and 2015. This is supported by Standard & Poor's outlook for modest global GDP growth and increased consumer spending, along with our view that the company's ongoing restructuring actions should lead to a pickup in EBITDA. Based on S&P's scenario forecasts, it expects that the company will maintain the FFO to debt ratio at about 15%, which is in line with S&P's expectations at the current rating. "We could raise the ratings if high-single-digit percent revenue growth, coupled with EBITDA margin improvement of 200 basis points beyond our expectations. We could also consider a one-notch upgrade if the company generated stronger free cash flow than expected or if we gained comfort that the company would be able to pursue its growth initiatives while maintaining a financial risk profile that we assess as "significant". In our upside scenario, we would expect the company to maintain an FFO to total debt ratio of 20% to 25%," S&P noted. S&P could lower the ratings if revenue growth stalls or turns negative and unexpected business challenges reduce the company's EBITDA margins by 200 basis points or more from S&P's expectations, resulting in FFO to total adjusted debt declining to about 12%. S&P could also consider a downgrade if liquidity were to come under pressure resulting from either EBITDA cushions under the covenants declining to about 10% or free cash flow turning negative for an extended period of time. FIDELITY & GUARANTY: Moody's Hikes Sr. Unsec. Debt Rating to Ba3 ---------------------------------------------------------------- Moody's Investors Service has upgraded the senior unsecured debt rating of Fidelity & Guaranty Life Holdings, Inc. (FGLH), a wholly owned subsidiary of Fidelity & Guaranty Life (FGL, NYSE:FGL, unrated, formerly Harbinger F&G, LLC), to Ba3 from B1. Moody's also upgraded the insurance financial strength (IFS) rating of FGLH's primary operating company, Fidelity & Guaranty Life Insurance Company (FGLIC), to Baa3. The outlook on the ratings is stable. Ratings Rationale Commenting on the upgrade, Moody's Vice President and Senior Credit Officer Ann Perry, said, "FGLIC's improved financial profile reflects good asset quality, higher investment yields resulting from a recent portfolio repositioning and strong capital, which is resilient under a stress scenario." The rating agency said that the upgrade also reflects improving profitability driven by healthy sales expansion and low asset impairments. According to Moody's, two 2013 capital markets transactions, FGLH's issuance of $300 million of new debt and FGL's initial public offering (IPO), which provided net proceeds of approximately $172 million, have increased financial flexibility for the company with the proceeds available for additional capital infusion to support new business growth, if needed. The reduction of Harbinger Group Inc.'s (B2 senior secured debt) stake in ownership of FGL as a result of the IPO also improves financial flexibility as a more broad ownership structure limits the potential of a single owner to de-capitalize the company to shore up its own capital in a stress scenario. Moody's commented that the stable rating outlook reflects the expectation that FGLIC's sales will likely continue to be highly concentrated in annuity products in the near-term, with currently more than three quarters in fixed index annuities (FIAs) and the balance in deferred fixed annuities. According to Moody's, FIAs incorporate hedging challenges and the need to carefully manage actuarial assumptions. Substantial or rapid organic growth would present challenges of managing the capital strain of new business growth and would present risks relating to competitive pricing and/or overly aggressive product features, which would weaken the credit profile of the company. According to Moody's the following could place upward pressure on FGLH's and FGLIC's ratings: 1) a growth strategy that allows the NAIC RBC ratio (company action level) to remain above 375%; 2) sustained statutory return on capital exceeding 6%; 3) more balanced growth in profitably priced new FIA business and life insurance. Conversely, the following could place downward pressure on FGLH's and its operating subsidiary's ratings: 1) adjusted financial leverage above 30%; 2) sustained statutory return on capital less than 4%; 3) significant use of reinsurance to finance growth; 4) NAIC RBC ratio declines below 350%. FGLH is an insurance holding company headquartered in Baltimore, Maryland. As of March 31, 2014, FGLH reported total assets of about $23 billion and shareholders' equity of approximately $1.4 billion. The principal methodology used in this rating was Global Life Insurers published in December 2013. FISKER AUTOMOTIVE: WARN Claimants Say Plan Shortchanges Them ------------------------------------------------------------ Law360 reported that the class of former employees suing the Fisker Automotive Holdings Inc. bankruptcy estate over their terminations blasted the defunct electric carmaker's Chapter 11 plan, arguing that it doesn't set aside enough money to pay their claims and could immunize the debtor's ex-leadership from liability. According to the report, Sven Etzelsberger, representing nearly 160 ex-Fisker employees asserting claims under the U.S. Worker Adjustment and Retraining Notification Act, stated its arguments in a motion before the Delaware bankruptcy court. About Fisker Automotive Fisker Automotive Holdings, Inc., developer of the Karma plug-in hybrid electric sedan, filed a petition for Chapter 11 protection (Bankr. D. Del. Case No. 13-13087) on Nov. 22, 2013. Fisker estimated assets of more than $100 million and listed debt of $500 million in its bankruptcy petition. The assets include an assembly plant purchased for $21 million from General Motors Corp. The plant never operated. The cars were assembled in Finland. Fisker received a $529 million loan from the Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program and drew down about $192 million before the department froze the loan after Fisker failed to hit several development targets. The company defaulted on its loan in April 2013. Bankruptcy Judge Kevin Gross presides over the case. The Debtors have tapped James H.M. Sprayregen, P.C., Esq., Anup Sathy, P.C., Esq., and Ryan Preston Dahl, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, as co-counsel; Laura Davis Jones, Esq., James E. O'Neill, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel; Beilinson Advisory Group as restructuring advisors; and Rust Consulting/Omni Bankruptcy, as notice and claims agent and administrative advisor. On Nov. 5, 2013, the Official Committee of Unsecured Creditors was appointed. The members are: (a) David M. Cohen; (b) Sven Etzelsberger; (c) Kuster Automotive Door Systems GmbH; (d) Magna E-Car USA, LLC; (e) Supercars & More SRL; and (f) TK Holdings Inc. The Committee is represented by William R. Baldiga, Esq., and Sunni P. Beville, Esq., at Brown Rudnick LLP; and Mark Minuti, Esq., at Saul Ewing LLP. Emerald Capital Advisors Corp. is the financial advisors for the Committee. Fisker sought bankruptcy protection to pursue a private sale of its business to Hybrid Tech Holdings, LLC. The Committee, however, wants a sale public sale, and has identified Wanxiang America Corporation as stalking horse bidder. Hybrid was initially under contract to buy Fisker in exchange for $75 million of the $168.5 million government loan it acquired immediately before the Debtor's Chapter 11 filing. Hybrid later raised its offer by adding an additional $1 million cash and agreeing to share proceeds from the sale of a facility in Delaware it doesn't intend to operate. Hybrid also offered to pay real estate taxes on the Delaware plant. Hybrid also will waive $90 million in deficiency claims that otherwise would dilute unsecured creditors' recovery. Wanxiang, as stalking horse bidder, initially offered $25.8 million in cash. However, Wanxiang has said it has raised its offer by $10 million and is willing to go higher. After the hearings on Jan. 10 and 13, the Court directed a public auction, and capped Hybrid's credit bid to $25 million. In response, Hybrid raised its offer to $55 million. Hybrid is represented by Tobias Keller, Esq., and Peter Benvenutti, Esq., at Keller & Benvenutti LLP, in San Francisco, California. Wanxiang, which bought A123 Systems, Inc., a manufacturer of lithium-ion batteries used in electric vehicles such as the Fisker Karma, in a bankruptcy auction early in 2013 for $256.6 million, is represented in Fisker's case by Sidley Austin LLP's Bojan Guzina, Esq., and Andrew F. O'Neill, Esq.; and Young Conaway Stargatt & Taylor, LLP's Edmon L. Morton, Esq., Robert S. Brady, Esq., and Kenneth J. Enos, Esq. On Feb. 19, 2014, the Bankruptcy Court approved the sale of Fisker's assets to Wanxiang America Corporation. The sale closed on March 24. The sale to Wanxiang is valued at approximately $150 million, Fisker said in a news statement. On March 27, 2014, the Court authorized Fisker Automotive Holdings to change its name to FAH Liquidating Corp. and its affiliate, Fisker Automotive Inc., to FA Liquidating Corp., following the sale. FOREST LABORATORIES: S&P Raises $3BB Sr. Notes' Rating From BB+ --------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised the issue- level ratings on Forest Laboratories Inc.'s $3 billion of senior unsecured notes due 2019 and 2021 to 'BBB-' from 'BB+'. S&P removed the ratings from CreditWatch, where it placed them on June 16, 2014. The upgrade follows Actavis PLC's assumption and guarantee of Forest Laboratories Inc.'s senior unsecured debt. Concurrent with the completion of the acquisition, Forest Laboratories Inc. was renamed Forest Laboratories LLC and became a subsidiary of Actavis PLC. At the same time, S&P is withdrawing the 'BB+' corporate credit rating on New York City,-based Forest Laboratories Inc. The withdrawal follows the completion of Forest's acquisition by Actavis PLC on July 1, 2014. S&P is also withdrawing the '4' recovery rating on the unsecured debt. The corporate credit rating on Dublin-based Actavis PLC is 'BBB-' and S&P's rating outlook is stable. The ratings on this generic drug maker reflect S&P's "satisfactory" business risk profile and "significant" financial risk profile assessments. S&P's view of the company's business risk reflects Actavis' well-established position as one of the largest companies in the competitive generic drug industry and its growing portfolio of specialty branded products. The just-completed acquisition of Forest Laboratories adds to the company's higher-margin specialty pharmaceutical portfolio. Actavis' patent-protected specialty pharmaceutical franchise somewhat insulates the company from the intense price competition in the generic drug segment. S&P's assessment of Actavis' "significant" financial risk profile reflects its view of pro forma leverage near 4x. Its leverage is the result of heightened acquisition activity, the most recent of which is the acquisition of Forest Laboratories. S&P expects the company to use strong free cash flow generation to repay debt, with leverage falling below 3.5x by mid-2015. Still, S&P expects a stronger focus on acquisition-based growth will likely keep leverage in the 3x-4x range. RATINGS LIST Rating Raised Forest Laboratories LLC $3B senior unsecured notes BBB- BB+/Watch Pos due 2019 and 2021 Recovery Rating NR 4 Rating Withdrawn Forest Laboratories Inc. Corporate Credit Rating NR BB+/Stable/-- FREEDOM INDUSTRIES: Told to Keep Public Better Informed ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Freedom Industries Inc., whose leaking chemical tank made much of West Virginia's water undrinkable early this year, must keep the public better informed about the bankruptcy and site cleanup if it wants more time to propose a liquidating plan. According to the report, Freedom didn't prepare adequately for predicted heavy rainstorms in mid-June, U.S. Bankruptcy Judge Ronald G. Pearson in Charleston, West Virginia said in an order he signed. As result, there were "unfortunate containment breaches," the judge said, the report related. Judge Pearson said in his order that Freedom can retain the exclusive right to propose a Chapter 11 plan only if there is better disclosure to the public going forward, and, to assure the public that environmental issues are being dealt with responsibly, required the restructuring officer to attend all hearings unless excused beforehand and to hold press conferences or issue bulletins to the public, the report further related. About Freedom Industries Freedom Industries Inc., is engaged principally in the business of producing specialty chemicals for the mining, steel and cement industries. The Debtor operates two production facilities located in (a) Nitro, West Virginia; and (b) Charleston, West Virginia. The company, connected to a chemical spill that tainted the water supply in West Virginia, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan. 17, 2014. The case is assigned to Judge Ronald G. Pearson. The petition was signed by Gary Southern, president. The Debtor is represented by Mark E Freedlander, Esq., at McGuire Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson, Esq., at Barth & Thompson, in Charleston, West Virginia. On Dec. 31, 2013, four companies merged under the umbrella of Freedom Industries: Freedom Industries Inc., Etowah River Terminal LLC, Poca Blending LLC and Crete Technologies LLC. As reported in the Troubled Company Reporter on Feb. 20, 2014, Kate White, writing for The Charleston Gazette, reported that the Debtor disclosed $16 million in assets and $6 million in liabilities when it filed for bankruptcy. On Feb. 5, 2014, the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Frost Brown Todd LLC as counsel. On March 18, the Bankruptcy Court approved the hiring of Mark Welch at MorrisAnderson in Chicago as Freedom's chief restructuring officer. FRESH & EASY: Deal with Class Plaintiffs Gets Final Approval ------------------------------------------------------------ The Bankruptcy Court approved, on a final basis, the California Wage and Hour Class settlement and release agreement between Old FENM Inc, et al., and the California Wage and Hour Class Plaintiffs. The Court also certified a class of wage and hour employee claimants for settlement purposes only. As reported in the Troubled Company Reporter on April 15, 2014, the Court approved the appointment of The Cooper Law Firm P.C. and Blumenthal Nordrehaug & Bhowmik as co-lead class counsel; and the law firms of (a) The Carter Law Firm, (b) Aegis Law Firm, P.C., (c) Mahoney Law Group, and (d) Jose Garay, APLC as class counsel; and Deanna Weatherspoon, Rene F. Lina, Yessenia Martinez and Dandre Jackson as class representatives. The Class is comprised of all non-exempt, non-managerial employees who worked at or reported to any of the Debtors' California Retail Stores or the Debtors' Food Production Facility, Campus Kitchen Facility or Distribution Center in Riverside, California between April 9, 2006 and Nov. 26, 2013 and who will not timely request to opt out of the Class. Pursuant to the settlement agreement, class counsel sought fees in the amount of $660,000, representing 33% of the gross settlement amount. The settlement agreement also allows for Class Counsel to seek up to $100,000 in collective costs and expenses. About Fresh & Easy Neighborhood Fresh & Easy Neighborhood Market Inc., and its affiliate filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-12569 and 13-12570) on Sept. 30, 2013. The petitions were signed by James Dibbo, chief financial officer. Judge Kevin J. Carey presides over the case. Fresh & Easy owes $738 million to Cheshunt, England-based Tesco, the U.K.'s biggest retailer. Fresh & Easy never made a profit and lost an average of $22 million a month in the 12 months ended in February, according to court papers. Jones Day serves as lead bankruptcy counsel. Richards, Layton & Finger, P.A., serves as local Delaware counsel. Alvarez & Marsal North America, LLC, serves as financial advisors, and Alvarez & Marsal Securities, LLC, serves as investment banker. Prime Clerk LLC acts as the Debtors' claims and noticing agent. Gordon Brothers Group, LLC, and Tiger Capital Group, LLC, serves as the Debtors' consultant. The Debtors estimated assets of at least $100 million and liabilities of at least $500 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five creditors to serve in the Official Committee of Unsecured Creditors in the Chapter 11 cases of Fresh & Easy Neighborhood Market Inc., et al. Pachulski Stang Ziehl & Jones LLP serves as counsel to the Committee. FTI Consulting, Inc. serves as its financial advisor. The Debtors closed, on or about Nov. 26, 2013, the sale of about 150 supermarkets plus a production facility in Riverside, California, to Ron Buckle's Yucaipa Cos. Pursuant to the sale terms, the bankruptcy company changed its name, and the name of the case, to Old FENM Inc. FRESH & EASY: Employee Wage Settlement Approved ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Fresh & Easy Neighborhood Market Inc., the former supermarket operator, obtained approval from the U.S. Bankruptcy Court in Delaware of a settlement with a class representing workers who alleged violation of California labor law. According to the report, the company is paying $2 million for a release of all claims up until the time the business was sold last year. Lawyers representing the employee class get $660,000, plus $61,500 for their expenses, while giving notice to the class members is costing another $65,000, the report related. About Fresh & Easy Fresh & Easy Neighborhood Market Inc., and its affiliate filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-12569 and 13-12570) on Sept. 30, 2013. The petitions were signed by James Dibbo, chief financial officer. Judge Kevin J. Carey presides over the case. Fresh & Easy owes $738 million to Cheshunt, England-based Tesco, the U.K.'s biggest retailer. Fresh & Easy never made a profit and lost an average of $22 million a month in the 12 months ended in February, according to court papers. Jones Day serves as lead bankruptcy counsel. Richards, Layton & Finger, P.A., serves as local Delaware counsel. Alvarez & Marsal North America, LLC, serves as financial advisors, and Alvarez & Marsal Securities, LLC, serves as investment banker. Prime Clerk LLC acts as the Debtors' claims and noticing agent. Gordon Brothers Group, LLC, and Tiger Capital Group, LLC, serves as the Debtors' consultant. The Debtors estimated assets of at least $100 million and liabilities of at least $500 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five creditors to serve in the Official Committee of Unsecured Creditors in the Chapter 11 cases of Fresh & Easy Neighborhood Market Inc., et al. Pachulski Stang Ziehl & Jones LLP serves as counsel to the Committee. FTI Consulting, Inc. serves as its financial advisor. The Debtors closed, on or about Nov. 26, 2013, the sale of about 150 supermarkets plus a production facility in Riverside, California, to Ron Buckle's Yucaipa Cos. Pursuant to the sale terms, the bankruptcy company changed its name, and the name of the case, to Old FENM Inc. Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware on July 2, 2014, issued an order confirming Old FENM, Inc., et al.'s second amended joint Chapter 11 plan of reorganization. GRAND TRAVERSE: S&P Alters Outlook to Neg, Affirms BB+ Bond Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook to negative from stable and affirmed its 'BB+' long-term rating on Grand Traverse Academy (GTA), Mich.'s series 2007 public school academy revenue and refunding bonds. "The outlook revision reflects our view of GTA's two years of deficits, resulting in maximum annual debt service coverage of less than 1x in fiscal 2013 and possibly in fiscal 2014," said Standard & Poor's credit analyst Duncan Manning. "The outlook revision also reflects our view of GTA's relatively recent transition to new management in March of this year," Mr. Manning added. HDOS ENTERPRISES: Finds Buyer for Employee-Owned Chain ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hot Dog on a Stick restaurants will be sold to Los Angeles-based private-equity firm LB Advisors LLC under a contract valued at $16.2 million unless a better offer turns up at auction proposed to be held on July 18. According to the report, if the Los Angeles bankruptcy judge agrees at a July 10 hearing, competing bids, which must be at least $17 million, will be due July 16. A hearing to approve the sale will occur on July 29, the report related. The company says the sale, which isn't opposed by secured creditors, will allow it to propose and confirm a plan of reorganization, the report further related. About Hot Dog On A Stick Established in 1946 in Southern California, Hot Dog On A Stick -- http://www.hotdogonastick.com-- is known for its fair-inspired menu of corn dogs, lemonades, and a sampling of other menu items such as cheese on a stick, hot dog in a bun, fries, and funnel cake sticks. HDOS is owned by its employees. HDOS Enterprises sought protection under Chapter 11 of the Bankruptcy Code on Feb. 3, 2014 (Case No. 14-12028, Bankr. C.D. Cal.). The case is assigned to Judge Neil W. Bason. The Debtor's counsel is represented by Jerome Bennett Friedman, Esq., Stephen F. Biegenzahn, Esq., and Michael D. Sobkowiak, Esq., at Friedman Law Group, P.C., in Los Angeles, California. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, serves as claims, noticing and balloting agent. The Law Offices of Brian H. Cole serves as special counsel. The petition was signed by Dan Smith, president and CEO. The U.S. Trustee has appointed three members to an official committee of unsecured creditors. The Committee retained Jeffrey N. Pomerantz, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California, as counsel. HOSTESS BRAND: Wants Wash. Labor Department's Claim Estimated ------------------------------------------------------------- The Bankruptcy Court was set to convene a hearing July 8, 2014, at 10:00 a.m., to consider a motion by Old HB, Inc., formerly known as Hostess Brands, Inc., et al. for estimation of the claim of the Department of Labor and Industries of the State of Washington. The Debtors, in their motion, stated that prior to the bankruptcy cases, they posted a bond in the amount of $4,557,000, to obtain authorization to be a self-insured employer in the State of Washington, the beneficiary of which was the Department. The Bond was meant to cover obligations that the Debtors incurred as self- insured employers for workers' compensation claims in the State of Washington in the event that the Debtors did not satisfy these obligations. Under Washington law, when the Debtors' bankruptcy cases were commenced, the Debtors had a contingent property interest in the form of a right to reduction or cancellation of the Bond and a return of the Bond collateral once all valid workers' compensation claims were paid. However, when the Debtors became unable to continue paying these claims due to restrictions imposed on their use of cash collateral by their secured lenders, the Department declared the Debtors to be in default, drew on the entire amount of the Bond, and asserted that the Department alone had title to the proceeds. At no point did the Department seek relief from the automatic stay to declare the default and divest the Debtors of their contingent property interest. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November 2012 opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands sold its businesses and most of the plants to five different buyers for an aggregate of $860 million. Hostess still has some plants, depots and other facilities the buyers didn't acquire. The bankruptcy estate has changed its name to Old HB Inc. INDUSTRIA DE ALIMENTOS: Trustee Cleared To Root Out US Assets ------------------------------------------------------------- Law360 reported that a Florida bankruptcy judge granted recognition of a foreign main proceeding to the trustee of a bankrupt Brazilian dairy company so that it can investigate possible assets the company's owner allegedly hid by transferring them into the United States. According to the report, the request came from Dr. Alexandre Borges Leite, the court-appointed judicial administrator and foreign representative for Industria de Alimentos Nilza SA, which indicated in court filings that it has assets and liabilities both ranging from $100 million to $500 million. Dr. Alexandre Borges Leite sought protection for Industria de Alimentos Nilza, SA, under Chapter 15 of the U.S. Bankruptcy Code on May 30, 2014. The case is In re Industria de Alimentos Nilza, SA, Case No. 14-22549 (Bankr. S.D. Fla.). The case is assigned to Judge Robert A. Mark. The Chapter 15 Petitioner's counsel are Gregory S. Grossman, Esq., Edward H. Davis, Jr. Esq., and Daniel M. Coyle, Esq., at Astigarraga Davis Mullins & Grossman, P.A., in Miami, Florida. IRISH BANK: Blasts Developer's Bid To Review Fla. Mall Sale Plan ---------------------------------------------------------------- Law360 reported that Chapter 15 debtor Irish Bank Resolution Corp. urged a Delaware bankruptcy judge to reject a real estate developer's request that the court review bidding procedures for IBRC's interest in a Florida shopping mall, claiming the developer is actually trying to revive a dead deal. According to the report, Liberty Channelside LLC filed a motion earlier in June asking the court to examine how the sale process for the Tampa, Florida, mall has been run, a move IBRC claims has little to do with the purported fairness and transparency of its bidding procedures, according to its objection. About Irish Bank Resolution Irish Bank Resolution Corp., the liquidation vehicle for what was once one of Ireland's largest banks, filed a Chapter 15 petition (Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect U.S. assets of the former Anglo Irish Bank Corp. from being seized by creditors. Irish Bank Resolution sought assistance from the U.S. court in liquidating Anglo Irish Bank Corp. and Irish Nationwide Building Society. The two banks failed and were merged into IBRC in July 2011. IBRC is tasked with winding them down and liquidating their assets. In February, when Irish lawmakers adopted the Irish Bank Resolution Corp., IBRC was placed into a special liquidation in the Irish High Court to complete liquidation and distribution of the two banks' assets. IBRC's principal asset as of June 2012 was a loan portfolio valued at some EUR25 billion (US$33.5 billion). About 70 percent of the loans were to Irish borrowers. Some 5 percent of the portfolio was under U.S. law, according to a court filing. Total liabilities in June 2012 were about EUR50 billion, according to a court filing. Most assets in the U.S. have been sold already. IBRC is involved in lawsuits in the U.S. IBRC was granted protection under Chapter 15 of the U.S. Bankruptcy Code in December 2013. Kieran Wallace and Eamonn Richardson of KPMG have been named the special liquidators. KEY SAFETY: Moody's Assigns B1 CFR & Rates $500MM Sr. Debt B2 ------------------------------------------------------------- Moody's Investors Service assigned public ratings to new Key Safety Systems, Inc. -- Corporate Family Rating at B1 and Probability of Default Rating at B1-PD. In a related action, Moody's assigned a Ba2 rating to the new $500 million first lien senior secured bank credit facility, and assigned a B2 to the $100 million second lien senior secured term loan. The rating outlook is stable. The rating assignment follows the announcement that FountainVest Partners ("FountainVest") has entered into a definitive agreement to acquire a 67.9% majority stake in Key Safety from Crestview Partners ("Crestview"). As part of the transaction, FountainVest will contribute cash equity of approximately $205 million, and the company will enter into a new $420 million first lien senior secured term loan and a new $100 million second lien senior secured term loan. Proceeds from the above, along with cash on hand will be used to fund FountainVest's investment in Key Safety, repay existing debt, and pay related fees and expenses. The following ratings were assigned: Corporate Family Rating, B1; Probability of Default, B1-PD; Ba2 (LGD2), to the new $80 million first lien senior secured revolving credit facility; Ba2 (LGD2), to the new $420 million first lien senior secured term loan; B2 (LGD5), to the new $100 million second lien senior secured term loan. The ratings for Key Safety under its prior ownership structure will be withdrawn following the closing of the current transaction. Ratings Rationale Key Safety's B1 Corporate Family Rating reflects the company's increased leverage following the FountainVest transaction balanced by the company's established market position within its core markets and improving operating performance. Pro forma for the transaction, the company's leverage increases to about 4.7x for the last-twelve-months period ending March 31, 2014 (including Moodys' standard adjustments), up from about 3.3x. While high for the assigned rating, this metric remains within previously established downward rating drivers. Supporting the rating is Key Safety's long history in the automotive parts supplier industry as a supplier of airbags, seatbelts and steering wheels. While Key Safety is rather modest in scale with 2013 revenues of $1.2 billion, the company's EBITA margin at about 7.6% compares favorably to other similarly rated auto parts suppliers, and is up from about 5.1% in 2012. Through May 2014 management indicates that new business wins appear to be well positioned to track strong levels achieved in 2013 at about $2.1 billion. The stable outlook incorporates Key Safety's increased leverage following the transaction and Moody's expectation that the company will continue to strengthen its credit metrics within the assigned rating category over the next 12 to 18 months. An improvement in Key Safety's rating or outlook would be driven by an improvement in credit metrics and free cash flow generation used to reduce debt. A consideration for a higher rating or outlook could result from EBITA/Interest sustained above 3.3x and Debt/EBITDA approaching 3.5x while demonstrating a financial policy that is focused on debt reduction rather than shareholder returns. A lower outlook or rating could result from weakening global automotive demand or inefficiencies resulting from the company's new business backlog. A consideration for a lower rating or outlook could result from EBITA margins falling below 4%, EBIT/Interest approaching 1.5x and debt/EBITDA approaching 5.0x. A deteriorating liquidity profile or the initiation of large shareholder distributions could also lower the company's rating or outlook. The principal methodology used in this rating was Global Automotive Supplier Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Key Safety Systems, Inc., headquartered in Sterling Heights, Michigan, primarily designs, engineers and manufactures airbags and inflators, seat belts, and steering wheels for the global automotive industry. LIGHTSQUARED INC: Falcone's Exit Portends Peace ----------------------------------------------- Law360 reported that LightSquared Inc.'s bankruptcy has been long, unpredictable and extremely contentious, but the recent departure of the man driving much of the conflict, Philip Falcone, from the company's board suggests that a resolution could be just around the corner. According to the report, Falcone -- who owns Harbinger Capital Partners LLC, the controlling shareholder of LightSquared -- has spent the two-year-long bankruptcy fighting to stay in control of the telecommunications company, which he insists will be worth billions once it receives federal regulatory approval to license certain wireless spectrum. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LIGHTSQUARED INC: Judge Says Ergen Didn't Mediate in Good Faith --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Robert Drain, who presides over a court-ordered mediation in the Chapter 11 case of LightSquared Inc., said that Charles Ergen and his company SP Special Opportunities, LLC, a secured creditor of the communications system developer, "have not participated in the mediation in good faith and have wasted the parties' and the mediator's time." According to Bloomberg, Judge Drain said in his report that Ergen left the June 23 mediation session "without my permission," although Ergen's attorney remained. Judge Drain reported in a court filing on June 23 that the parties aside for Ergen agreed on "key business terms" of a plan which Judge Drain believes can be confirmed, or approved by the parties and Chapman, without support from Ergen, the report related. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LUXLAS FUND: Moody's Affirms 'B2' Term Loan Rating After Add-On --------------------------------------------------------------- Moody's Investors Service affirmed the B1 Corporate Family Rating and B1-PD Probability of Default Rating of Luxlas Fund Limited Partnership (d.b.a. Clement Pappas and Company or "CPC"), a subsidiary of Canadian parent Lassonde Industries, Inc. At the same time, Moody's affirmed the B2 rating on the company's upsized $230 million senior secured term loan due 2017. The rating outlook is maintained at stable. Luxlas will increase its existing term loan, which is currently estimated to have $155 million outstanding, by $75 million via an accordion feature. The term loan together with $5 million of ABL borrowings and $75 million of equity from the parent will be used to acquire Apple & Eve (A&E), a US branded juice manufacturer, for $150 million plus fees and expenses. Moody's views the acquisition of A&E favorably because it will enhance CPC's size, improve its pricing power with retailers through A&E's well-established branded juice offerings, and broaden its scale on the purchasing front, primarily for key input apple juice concentrate. According to Moody's Analyst Brian Silver, "post-transaction the company remains small and before considering upward rating pressure Moody's would need to see a more significant increase in the company's size and better top-line growth, smooth integration of A&E, and leverage to come down and be sustained at lower levels for a few quarters". The following ratings have been affirmed (with point estimate changes) subject to the review of final documentation: B1 Corporate Family Rating; B1-PD Probability of Default Rating; and $230 million senior secured term loan (including $75 million add- on) due 2017 at B2 (LGD4, 58%) from B2 (LGD4, 60%). The outlook is maintained at stable Ratings Rationale The B1 Corporate Family Rating reflects CPC's relatively small size in terms of revenues, top-line growth challenges, moderate leverage at approximately 3.7 times (Moody's adjusted at March 29, 2014), and material exposure to apple concentrate and cranberry price fluctuations. At the same time, the rating also considers the company's favorable track record of debt repayment via free cash flow and strong position in the roughly $1 billion niche US private label shelf stable juice and non-CSD beverage category dominated by two players, CPC and Cliffstar (owned by Cott Corporation). CPC's credit profile is strengthened by its longstanding and well- diversified customer base, which is enhanced by the acquisition of Apple & Eve (A&E). A&E also increases the company's scale and purchasing power while strengthening its pricing power at retail due to the branded nature of A&E's offerings. Although CPC lacks category diversification, Moody's believe limited competition in the private label space creates a somewhat rational competitive environment. The rating anticipates that free cash flow will largely be directed toward debt reduction over the next twelve to eighteen months, that there will be limited integration issues associated with the acquisition of A&E, and that CPC will remain conservative with respect to its financial policies. The stable outlook reflects Moody's expectation that the company will achieve moderate top line and EBITDA growth largely driven by volume increases, partially offset by ongoing pricing pressure. Further, the outlook anticipates that credit metrics will improve as free cash flow is allocated to debt reduction over the next twelve to eighteen months, which should result in leverage trending below 3.0 times. An upgrade is not anticipated until CPC increases its size materially while continuing to maintain conservative financial policies. Moody's would expect debt-to-EBITDA to be sustained below 3.5 times for several quarters prior to considering a change in the outlook and/or positive rating action. In addition, weak top-line growth continues to be viewed as a limiting factor to near-term ratings momentum. Alternatively, although not expected in the near term, a meaningful deterioration in the company's earnings, in its ability to generate cash or in its liquidity profile could have negative rating implications. Given CPC's size and limited category diversification, Moody's would likely lower the ratings if leverage were sustained above 5.0 times for several quarters. The principal methodology used in this rating was the Global Soft Beverage Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Luxlas Fund Limited Partnership is the borrowing entity for subsidiary Clement Pappas and Company, Inc. (CPC), both of which are subsidiaries of ultimate Canadian parent Lassonde Industries (TSX: LAS.A). Clement Pappas and Company, Inc. (CPC) is primarily a leading manufacturer and supplier of private label, shelf-stable juices in the US. The company produces fruit juices, fruit drinks, organic juices and cranberry sauces. CPC sells its product through grocery, mass merchant, club, dollar, drug, natural and foodservice channels while also performing co-packing services. CPC was acquired by Lassonde Industries Inc. (TSX: LAS.A), the Pappas family and the Lassonde Family for approximately $400 million in August 2011. In July 2014 CPC announced the proposed acquisition of Apple & Eve (A&E), an independent branded juice company in the US for approximately $150 million. Pro-forma for the elimination of A&E net of sales to CPC for co-packing arrangements, revenues for the combined CPC and A&E entities were in excess of $580 million for the twelve months ended March 29, 2014. LUXLAS FUND: S&P Affirms 'BB-' Term Loan Rating After $75MM Add-on ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB-' issue-level rating on Quebec-based Luxlas Fund Limited Partnership's senior secured term loan due 2017 following the add-on of $75 million. The '3' recovery rating, which is unchanged, reflects S&P's expectation for meaningful (50% to 70%) recovery in the event of a payment default. Proceeds, along with an equity contribution from its ultimate parent, Lassonde Industries (unrated), and from its minority owner, 3346625 Canada Inc., will fund the recently announced acquisition of Apple & Eve, a U.S.-based branded juice company. The rating on Luxlas includes S&P's assessment that Luxlas is "core" to its ultimate parent, Lassonde, as per S&P's group rating methodology. S&P assess the group credit profile (Consolidated Lassonde) as 'bb-'. In accordance with S&P's group rating methodology, the corporate credit rating of a core entity is generally at the group credit profile level. S&P's assessment of the business risk profile is "fair" and financial risk profile is "intermediate." S&P's intermediate financial risk profile reflects the group's credit metrics (including S&P's adjustments) that S&P believes is currently consistent with indicative measures for that descriptor. This includes funds from operations to debt in the 30% to 45% range and leverage of 2x to 3x. A negative comparable rating analysis had a one-notch negative adjustment to the stand-alone credit profile. This reflects S&P's view the credit ratios will be on the weak end of the "intermediate" ratio ranges. Other modifiers had no impact on the rating outcome. Key credit factors in our "weak" business risk profile assessment include the company's narrow business and geographic focus, its participation in the mature, low-growth, and concentrated North American branded and private-label juice and drink markets, and its exposure to volatile commodity costs, as well as to negative publicity in the category. Ratings List Luxlas Fund Limited Partnership Corporate Credit Rating BB-/Stable/-- Issue Ratings Affirmed; Recovery Ratings Unchanged Luxlas Fund Limited Partnership Senior secured $305 mil. term loan due 2017 BB- Recovery Rating 3 LYONDELL CHEMICAL: D&Os Clinch Key Holdings In Excess Coverage Row ------------------------------------------------------------------ Law360 reported that a New York state judge has rejected four insurers' efforts to apply an interrelated acts provision in a dispute over excess coverage for an adversary proceeding in bankruptcy court targeting Lyondell Chemical Co.'s former directors and officers over the company's acquisition by Basell AF SCA. According to the report, the court was not swayed by the insurers' argument that more policyholder-friendly language adopted in 2009 doesn't apply to coverage for the adversary proceeding because the underlying case was related to a shareholder class action launched in 2007 -- well before the new language was adopted. The case is American Casualty Co. of Reading, Pa. et al. v. Morris Gelb et al., case number 653280-2011, in the Supreme Court of New York, New York County. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. Luxembourg-based Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. Len Blavatnik's Access Industries owned the Company prior to its bankruptcy filing. On Jan. 6, 2009, LyondellBasell Industries' U.S. operations, led by Lyondell Chemical Co., and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities filed for Chapter 11. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 protection on April 24, 2009. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, served as the Debtors' bankruptcy counsel. Evercore Partners served as financial advisors, and Alix Partners and its subsidiary AP Services LLC, served as restructuring advisors. AlixPartners' Kevin M. McShea acted as the Debtors' Chief Restructuring Officer. Clifford Chance LLP served as restructuring advisors to the European entities. LyondellBasell emerged from Chapter 11 bankruptcy protection in May 2010, with a plan that provides the Company with US$3 billion of opening liquidity. A new parent company, LyondellBasell Industries N.V., incorporated in the Netherlands, is the successor of the former parent company, LyondellBasell Industries AF S.C.A., a Luxembourg company that is no longer part of LyondellBasell. LyondellBasell Industries N.V. owns and operates substantially the same businesses as the previous parent company, including subsidiaries that were not involved in the bankruptcy cases. LyondellBasell's corporate seat is Rotterdam, Netherlands, with administrative offices in Houston and Rotterdam. MACLELLAN PARTNERS: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Maclellan Partners, LLC 219 Boulevard NE Gainesville, GA 30501 Case No.: 14-12913 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: July 7, 2014 Court: United States Bankruptcy Court Eastern District of Tennessee (Chattanooga) Judge: Hon. John C. Cook Debtor's Counsel: Justin M. Sveadas, Esq. BAKER, DONELSON, BEARMAN ET AL. 1800 Republic Centre 633 Chestnut Street Chattanooga, TN 37450 Tel: (423) 209-4184 Email: jsveadas@bakerdonelson.com Total Assets: $4.35 million Total Liabilities: $2.87 million The petition was signed by Bentley J. Parker, member. A list of the Debtor's eight largest unsecured creditors is available for free at http://bankrupt.com/misc/tneb14-12913.pdf MD AMERICA ENERGY: Moody's Gives Caa2 CFR, Rates $525MM Loan Caa2 ----------------------------------------------------------------- Moody's Investors Service assigned first time ratings to MD America Energy, LLC (MD America), including a Caa2 Corporate Family Rating (CFR) and a Caa2 rating to its proposed $525 million senior secured term loan due 2019. Moody's also assigned a SGL-3 Speculative Grade Liquidity Rating to MD America. The proceeds from the proposed term loan will be used to repay revolver drawings, repay its existing senior secured and PIK notes and to add cash to the balance sheet for general corporate purposes. The rating outlook is positive. "MD America's ratings are constrained by its small size and limited drilling inventory, as well as execution risk related to its need to do acquisitions," commented Gretchen French, Moody's Vice President. "These risks offset the benefits of the company's high unleveraged cash margins and the financial sponsorship of its Chinese-based parent company, Meidu." Rating Assignments: $525 Million Secured Term Loan due in 2019, Rated Caa2 (LGD 3, 49%) Corporate Family Rating of Caa2 Probability of Default Rating of Caa2-PD Speculative Grade Liquidity Rating of SGL-3 Ratings Rationale MD America's Caa2 Corporate Family Rating (CFR) reflects its small scale, with geographic concentration in east Texas and a limited drilling inventory. The company's short drilling inventory necessitates the need for acquisitions in order for it to offset production declines anticipated by the fourth quarter of 2015. Acquisition risk, in turn, creates ongoing event risk at the company, with attendant execution and financing risks. These risks factors are elevated when considering the company's limited operating history and high initial financial leverage in terms of debt/production and debt/proved developed reserves. The CFR is supported by MD America's relatively high liquids exposure of its production profile, which has supported strong unleveraged cash margins, the operator status for most of its property base, the improving results the company has exhibited on its drilling program, and the financial sponsorship of its China- based owner, Meidu Holding Co., Ltd. (Meidu). Meidu has contributed $297 million in equity to MD America to date. In addition, Meidu has committed a further $288 million in equity to the company, which the company expects to receive in the third quarter of 2014. This additional equity will be used for MD America's growth capital spending and could be a source of funding for potential acquisitions. The Caa2 rating on the proposed $525 million term loan reflects both the overall probability of default of the company, to which Moody's assigns a Probability of Default Rating of Caa2-PD, and a Loss Given Default of LGD 3 (24%). The proposed term loan will be guaranteed by all domestic subsidiaries of MD America and its immediate parent company, MD America Holdings, LLC. The term loan will be secured by essentially all the assets of the company and guarantors, but with a priority first lien carve-out for a future first lien revolving credit facility the greater of $75 million or a conforming borrowing base provided by traditional lenders. MD America's pro forma capital structure does not include a senior secured revolving credit facility, and therefore, the proposed term loan is rated the same as the CFR under Moody's Loss Given Default Methodology. If MD America were to put in place a $75 million revolver, it is not expected to impact the notching of the term loan relative to the CFR, as the term loan would continue to comprise the majority of MD America's capital structure. However, if the company's credit facility were to become substantially larger relative to the term loan, there could be downward notching pressure on the term loan's rating. MD America's SGL-3 Speculative Grade Liquidity Rating reflects an adequate liquidity profile through mid-2015. Liquidity is deemed adequate in order to maintain current production levels, based on cash on the balance sheet ($75 million, pro forma for the term loan), a manageable proposed financial covenant of the term loan (minimum senior secured coverage of at least 1.25x of the PV-10 value at December 31, 2014, but stepping up to 1.5x as of June 30, 2015 and thereafter), and a supportive oil price environment and the high margin oil production of the company. However, alternative liquidity is weak and inadequate in order to support the company's production growth targets. MD America has a heavy $409 million capital drilling program for 2014, which is expected to outstrip operating cash flow by $206 million in 2014. The company has no revolving credit facility, with the only available source of liquidity outside of its cash balances being future potential equity contributions by its parent company Meidu. In absence of equity funding from Meidu, MD America would need to cut back its drilling program severely, hampering its production growth prospects. The positive rating outlook is based on Moody's expectation that MD America will raise adequate financing through equity sponsorship from its parent company and execute on its development plans in Woodbine formation, which would result in higher production levels and lower leverage on debt/production from current high values, and provide additional capital to fund potential acquisitions. Moody's could upgrade the ratings if the company is able to raise adequate equity financing from its parent and deepen its drilling inventory while maintaining improving financial leverage (debt/average daily production less than $40,000 barrels of oil equivalent per day). Moody's could downgrade the ratings if there is a significant deterioration in liquidity or if the company is not able to execute on its development plans. 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. MD America Energy, LLC is an independent oil and gas exploration and production company headquartered in Fort Worth, Texas. The company is a wholly-owned subsidiary of Meidu Holding Co., Ltd., a public real estate and energy company listed on the Shanghai Stock Exchange and headquartered in Hangzhou, China. METRORIVERSIDE LLC: Access to Cash Collateral to Expire July 10 --------------------------------------------------------------- MetroRiverside, LLC, interim authority to use $390,901 of cash collateral is slated to expire July 10, 2014, absent an extension. Pursuant to the Bankruptcy Court's interim Cash Collateral order, as adequate protection from any diminution in value of the lender's collateral, the Debtor will grant City of Riverside replacement liens against postpetition assets of the same nature, extent, priority and validity as its prepetition liens. As reported in the Troubled Company Reporter on June 20, 2014, the Debtor sought to use cash collateral in the ordinary course of business consistent with a budget for the months of June 2014 through September 2014. For approximately three to four weeks pending the final hearing on the request, the Debtor seeks to pay ordinary expenses up to $390,901 per month, with a variance of plus or minus $19,030 (less than 5%). The City of Riverside, as successor agency to the former Redevelopment Agency of the City, holds liens against the Debtor's real and personal property in the estimated claim amount of $20.6 million. The Debtor sought to use cash collateral pending the earlier of (1) Sept. 1, 2014, or (2) the effective date of a chapter 11 plan, dismissal or conversion of the within case, appointment of a trustee, sale of substantially all assets, abandonment of substantially all assets, entry of an order granting of relief from the automatic stay to foreclose a lien against substantially all assets or further order of this Court, as the case may be. The Debtor is represented by: Iain A. Macdonald, Esq. Reno F.R. Fernandez III, Esq. Matthew J. Olson, Esq. Roxanne Bahadurji, Esq. MACDONALD | FERNANDEZ LLP 221 Sansome Street, Third Floor San Francisco, CA 94104 Tel: (415) 362-0449 Fax: (415) 394-5544 About MetroRiverside, LLC MetroRiverside, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Calif. Case No. 14-30901) on June 12, 2014. The petition was signed by Siavash Barmand as manager. The Debtor disclosed total assets of $18.79 million and total liabilities of $21.80 million. MacDonald Fernandez LLP serves as the Debtor's counsel. Judge Dennis Montali oversees the case. The Debtor operates a Hyatt Place hotel, franchised from Hyatt Place Franchising LLC. The Hotel is located at 3500 Market Street, Riverside, California. MOMENTIVE PERFORMANCE: Plan Ruling Expected by September -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Robert D. Drain has formally approved the disclosure statement explaining Momentive Performance Inc.'s plan of reorganization and indicated that he expects to rule on the plan by mid-September. According to the report, Judge Drain said the confirmation hearing to approve the plan will run from Aug. 18 to Aug. 22, with one day off. At the same time, Judge Drain will hear evidence and argument on three lawsuits to determine the pecking order among noteholders, the report related. The $635 million in 9 percent second-lien notes due 2021 traded at 10:41 a.m. New York time on June 27 for 83 cents on the dollar, according to Trace, the Bloomberg report said, citing bond-price reporting system of the Financial Industry Regulatory Authority. The senior subordinated notes traded at 12:38 a.m. on June 27 for 28.784 cents on the dollar, according to Trace, the report related. 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. Klee, Tuchin, Bogdanoff & Stern LLP serves as its counsel. FTI Consulting, Inc., serves as its financial advisor. Rust Consulting Omni Bankruptcy serves as its information agent. NATIONAL HERITAGE: 4th Circ. Says 3rd-Party Release Won't Fly ------------------------------------------------------------- Law360 reported that the Fourth Circuit affirmed a lower court's finding that a provision of National Heritage Foundation Inc.'s Chapter 11 reorganization plan releasing certain third parties from liability is unenforceable, saying the foundation failed to meet its burden to show that the release is justified. According to Law360, a three-judge panel upheld a ruling by U.S. District Judge Anthony J. Trenga, which affirmed a bankruptcy court decision declaring the nondebtor release unenforceable. The release prevented potential claimants from asserting claims against NHF and certain officers and directors, as well as the official committee of unsecured creditors. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said the opinion would bar the currently popular practice in Delaware and New York of handing out so-called third-party release in tandem with Chapter 11 reorganization plans. To decide if a third-party release can be included in a plan, the Fourth Circuit said it follows a 2002 decision by the U.S. Court of Appeals in Cincinnati in a case called Dow Corning. The case if National Heritage Foundation Inc. v. Highbourne Foundation et al., case number 13-1608, in the U.S. Court of Appeals for the Fourth Circuit. About National Heritage Foundation Falls Church, Virginia-based National Heritage Foundation, Inc. -- http://www.nhf.org/-- is a non-profit tax-exempt charitable institution. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D. Va. Case No. 09-10525) on Jan. 24, 2009. Alan Michael Noskow, Esq., at Patton Boggs LLP, assisted the Company in its restructuring effort. The Company estimated more than $100 million in assets and $1 million to $100 million in debts. The Bankruptcy Court entered an Order confirming the Debtor's Fourth Amended and Restated Plan of Reorganization on Oct. 16, 2009. NEW DESIGNS: S&P Lowers on Revenue Bonds Rating to 'BB+' -------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating to 'BB+' from 'BBB-' on California School Finance Authority's series 2012A, 2012B, and 2012C educational facilities revenue bonds issued for New Designs Charter School (NDCS). In addition, S&P assigned its 'BB+' rating to the authority's series 2014A and taxable series 2014B educational facility revenue bonds, also issued for New Designs Charter School for its Watts Campus Project. The outlook is stable. "The revised, 'BB+' rating reflects NDCS' historic variability and weak liquidity over the past three years," said Standard & Poor's credit analyst Debra Boyd. "It also reflects the issuance of additional debt, which increases the maximum annual debt service burden to 19.5% of fiscal 2013 expenditures or 23% including expected 2016 lease payments in fiscal 2013," added Ms. Boyd. The stable outlook reflects S&P's view of New Design's consistently positive operating performance on a consolidated basis and positive historic enrollment growth. Given the improvement in the state's funding environment, including a reduction in deferrals and an increase in charter school funding, S&P expects that during the next two years, NDCS will improve its liquidity and balance sheet metrics, continue to remain positive on a full-accrual basis, manage its existing cost structure so as to maintain at least 1.2x lease-adjusted maximum annual debt service (MADS) coverage, and reduce its lease-adjusted MADS burden as projected. NEW ENGLAND LAND: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: New England Land and Lumbar Corporation 18 Butterworth Road Holland, MA 01521 Case No.: 14-30687 Chapter 11 Petition Date: July 7, 2014 Court: United States Bankruptcy Court District of Massachusetts (Springfield) Judge: Hon. Henry J. Boroff Debtor's Counsel: Henry E. Geberth, Jr. HENDEL & COLLINS, P.C. 101 State Street Springfield, MA 01103-2006 Tel: (413) 734-6411 Email: hgeberth@hendelcollins.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Michel J. Bergeron, president. A list of the Debtor's 19 largest unsecured creditors is available for free at http://bankrupt.com/misc/mab14-30687.pdf OCEAN 4660: Ch.11 Trustee to Pay Comerica's $1.85MM Claim in Full ----------------------------------------------------------------- The Hon. John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida authorized on June 13, 2014, Maria M. Yip, the Chapter 11 trustee for Ocean 4660 LLC, to pay Comerica Bank $1,850,000 in full, complete, and final satisfaction of the secured claim. The court also approved the parties' settlement agreement. As reported in the Troubled Company Reporter on June 5, 2014, according to the Chapter 11 trustee, the Debtor owed Comerica $14,002,108 in principal, interest, default interest, attorney's fees and costs under the terms of a secured loan. Comerica has filed proof of claim 13-1 in the case. The Chapter 11 trustee said it marketed the Debtor's property for sale, which was eventually sold for $17.0 million. In connection with closing, the Chapter 11 trustee disbursed $11,941,376 to Comerica which sum satisfied the principal amount due on the secured loan along with other amounts advanced by Comerica to protect and preserve its interest in the Property as allowable under a secured loan documents. After payment of the sums to Comerica, as well as other claims and expenses relating to the sale, the estate retained approximately $3.6 million in net proceeds from the sale of the property. The Chapter 11 trustee related it is in the process of reconciling claims against the estate as well as investigating whether there are any viable avoidance actions to pursue for the benefit of the estate. The Chapter 11 trustee seeks to compromise and pay any and all remaining claims asserted by Comerica in this case. The Chapter 11 trustee told the Court that it believes that one alleged creditor, Ken Frank, may object to the settlement. About Ocean 4660 Ocean 4660, LLC filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-23165) in its hometown on June 2, 2013. Rick Barreca signed the petition as chief restructuring officer. The Company disclosed $15,762,871 in assets and $16,587,678 in liabilities as of the Chapter 11 filing. Judge John K. Olson presides over the case. The Debtor tapped RKJ Hotel Management, LLC, as hotel manager and RKJ's Rick Barreca as the CRO. The Debtor tapped Genovese Joblove & Battista, P.A. as counsel. Irreconcilable differences prompted the firm to withdraw as counsel in July 2013. The Court approved the appointment of Maria Yip, of Coral Gables, Florida, as Chapter 11 trustee. Drew M. Dillworth, Esq., at the law firm of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. serves as his counsel. Kerry-Ann Rin, CPA, and the consulting firm of Yip Associates serve as financial advisor, and accountant. The U.S. Trustee has not appointed an official committee of unsecured creditors. ORMET CORP: Court Approves Sale of Mineral Rights for $22.3MM ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Ormet Corp. received court approval to sell mineral rights on property it owns in Monroe County, Ohio, and Wetzel County, West Virginia, for $22.3 million to a Magnum Hunter Resources Corp. subsidiary. According to Mr. Rochelle, the sale of the mineral rights to Triad Hunter LLC without an auction was almost upset by Viper Energy Partners LLC, which said it was interested in submitting a higher offer. Viper Energy ultimately declined to bid and withdrew its objection to the private sale to Triad on the day of the approval hearing, Mr. Rochelle said. Meanwhile, Mr. Rochelle said U.S. Bankruptcy Judge Mary Walrath in Delaware is waiting to decide whether she will approve Ormet's sale of its shuttered aluminum smelter in Hannibal, Ohio, following objections from the steelworkers union and others. Law360 reported that Judge Walrath said she would not approve Ormet's $25 million sale of the Hannibal plant, citing concerns about waived pension liability for the former and a rival suitor for the latter. Judge Walrath, according to Law360, said she was "uncomfortable" approving the sale of the defunct aluminum company's plant to property developer Niagara Worldwide LLC after a representative from the Steelworkers Pension Trust objected to the transaction. BankruptcyData said Ormet filed with the Bankruptcy Court a notice of an extension of the bid deadline related to the sale of all or substantially all of the Debtors' assets. 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: Court Approves Amendment to MEBA CBA ---------------------------------------------------------- The Bankruptcy Court entered an order authorizing Overseas Shipholding Group, Inc., et al., to (i) enter into an amendment to the Jan. 4, 2012 memorandum of understanding modifying the collective bargaining agreement between the District No. 1 - Pacific Coast District, Marine Engineers Union and the Debtors; and (ii) assume and perform their obligations under the MEBA CBA, as amended. Pursuant to the MEBA Amendment, the Debtors are authorized to pay the pension contribution with retroactive effect to June 1, 2014. The MEBA Amendment also provides that there is no monetary or non- monetary cure or compensation owed by the Debtors in connection with the assumption of the MEBA CBA. Moreover, no adequate assurance of future performance is required as a condition to or in connection with the assumption of the MEBA CBA. The Debtors related that the Amendment will provide MEBA tanker engineers with an annual pension contribution -- calculated for each MEBA Engineer as 50% of the amount that such MEBA Engineer currently contributes to his or her MEBA-provided pension plan. The practical effect of the Pension Contribution will be to reduce the amount of pension plan contributions that each MEBA Engineer is responsible for, thus effecting a net increase in the engineers' take-home wages. The Debtors anticipate that the Pension Contribution will entail a cost of approximately $179 per tanker per day, or an annual cost of approximately $900,000. Pursuant to the MEBA Amendment, in exchange for the Pension Contribution, MEBA has committed to fill OSG's open tanker engineer positions. Thus, in exchange for a modest payment, the Debtors will reaffirm their ability to fill U.S. Flag tanker engineer positions with top-grade engineers, ensuring that they can maintain the high caliber of engineer service that has been crucial to their past success in the U.S. Flag and Jones Act business segments and bolstering their prospects for a successful emergence. 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 May 2014, the Debtors won Bankruptcy Court approval of the disclosure statement explaining their amended plan of reorganization that effectuates the terms of an alternative plan received from the parties under an Equity Commitment Agreement. Those parties include certain holders of existing equity interests of the Company representing approximately 30% of the existing common stock of OSG. The plan confirmation hearing is on July 18, 2014, at 9:30 a.m., prevailing Eastern Time. Confirmation objections are due July 11. OVERSEAS SHIPHOLDING: Solicitation Period Extended to July 14 ------------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware, in a fifth order, extended until July 14, 2014, Overseas Shipholding Group, Inc., et al.'s time to solicit acceptances for a plan of reorganization. As reported in the Troubled Company Reporter on June 20, 2014, Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, related that the Debtors are poised to confirm their reorganization plan, which generally provides for the payment of all allowed unsecured claims in full, the reinstatement of certain unsecured notes, and a substantial return to holders of common stock. The plan represents the culmination of months of work to ensure the highest possible value for stakeholders. On May 28, 2014, the Court set forth procedures that govern the solicitation of Plan votes. Creditors and interest holders were given until July 7 to return completed ballots and rights offering solicitation materials. However, the exclusive solicitation period was set to expire June 30, 2014. Overseas Shipholding requested a final extension of the exclusive solicitation period by two weeks to allow the solicitation of Plan votes to continue uninterrupted. Mr. Butz pointed out that if extension is not granted, it would only serve to distract Overseas Shipholding and their professionals and sow potential confusion among creditors and stakeholders at the most crucial phase of these cases. 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 May 2014, the Debtors won Bankruptcy Court approval of the disclosure statement explaining their amended plan of reorganization that effectuates the terms of an alternative plan received from the parties under an Equity Commitment Agreement. Those parties include certain holders of existing equity interests of the Company representing approximately 30% of the existing common stock of OSG. The plan confirmation hearing is on July 18, 2014, at 9:30 a.m., prevailing Eastern Time. Confirmation objections are due July 11. OVERSEAS SHIPHOLDING: Inks Additional Agreements with PWC --------------------------------------------------------- Overseas Shipholding Group., et al., notified the Bankruptcy Court that it entered into additional agreements in the form of a letter agreement dated April 13, 2014, with PricewaterhouseCoopers LLP. On March 21, 2013, the Court authorized the employment PwC as independent auditor, accountant and tax advisor. In accordance with the procedures set forth in the PwC retention order, the Debtors said the additional agreement with PwC will allow PwC to audit the financial statements of Aframax International at Dec. 31, 2013, and for the year then ending. A copy of the PwC agreements is available for free at: http://is.gd/vvBcxP The Debtors are represented by: James L. Bromley, Esq. Luke A. Barefoot, Esq. CLEARY GOTTLIEB STEEN & HAMILTON LLP One Liberty Plaza New York, NY 10006 Tel: (212) 225-2000 Fax: (212) 225-3999 - and - William M. Alleman, Jr., Esq. Derek C. Abbott, Esq. Daniel B. Butz, Esq. MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 North Market Street P.O. Box 1347 Wilmington, DE 19801 Tel: (302) 658-9200 Fax: (302) 658-3989 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 May 2014, the Debtors won Bankruptcy Court approval of the disclosure statement explaining their amended plan of reorganization that effectuates the terms of an alternative plan received from the parties under an Equity Commitment Agreement. Those parties include certain holders of existing equity interests of the Company representing approximately 30% of the existing common stock of OSG. The plan confirmation hearing is on July 18, 2014, at 9:30 a.m., prevailing Eastern Time. Confirmation objections are due July 11. OVERSEAS SHIPHOLDING: OSG International Files Amended Schedules --------------------------------------------------------------- OSG International, Inc., has filed with the Bankruptcy Court amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $3,863,497,291 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $279,998,833 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-Priority Claims $3,538,165,948 -------------- -------------- Total $3,863,497,291 $3,818,164,781 As reported in the Troubled Company Reporter OSG International Inc. disclosed $3,863,497,291 in assets and $3,818,201,151 in liabilities. A copy of the schedules is available for free at: http://bankrupt.com/misc/OVERSEASSHIPHOLDING_3439_sal.pdf 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 May 2014, the Debtors won Bankruptcy Court approval of the disclosure statement explaining their amended plan of reorganization that effectuates the terms of an alternative plan received from the parties under an Equity Commitment Agreement. Those parties include certain holders of existing equity interests of the Company representing approximately 30% of the existing common stock of OSG. The plan confirmation hearing is on July 18, 2014, at 9:30 a.m., prevailing Eastern Time. Confirmation objections are due July 11. PHH CORPORATION: Moody's Lowers Corporate Family Rating to Ba3 -------------------------------------------------------------- Moody's Investors Service downgraded PHH Corporation's corporate family rating (CFR) and senior unsecured debt rating to Ba3 from Ba2 and affirmed the Not Prime short term rating. The outlook is stable. Ratings Rationale The rating action follows the closing of the sale of PHH's Fleet Management Services business, PHH Arval, to Element Financial Corporation to Element Financial Corporation. The sale of the Fleet Management business weakens the company's franchise strength and results in a more concentrated monoline business solely focused on residential mortgage banking. The mortgage business has significant reliance on the company's Realogy, Merrill Lynch and Morgan Stanley relationships which account for more than 60% of origination volume. In selling the operationally and financially more stable and more profitable fleet business, PHH becomes a cyclical, low margin, lower franchise strength prime mortgage banking business. The company has indicated that it will use the sale proceeds to invest in its mortgage banking business, de-lever its balance sheet, and return capital to shareholders. Nonetheless, it is likely that it will take several years before the company can reestablish acceptable levels of profitability. This is due in part to the low origination volumes and gain-on-sale margins that Moody's projects over the next several years. The company's mortgage business profitability has been constrained by a changing business mix in which its private label clients are electing to keep an increasing percentage of their mortgage originations. As a result, PHH is increasingly responsible for administering the mortgage origination and servicing process while its clients retain the more profitable mortgage and mortgage servicing assets. According to the company, approximately 75% of its private label mortgage contracts, or half of its mortgage originations, are currently unprofitable on a fully allocated basis. The company's ratings could be upgraded in the event that the company's franchise strength strengthens materially as demonstrated by achieving strong, consistent and sustainable profitability (e.g. net income to risk weighted assets above 5%) while maintaining its current solid capital and adequate liquidity profile. The company's ratings could be downgraded if its liquidity profile weakens, its core earnings materially deteriorate or if current regulatory reviews result in material monetary exposures or other consequences that weaken the company's franchise value. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. PIONEER POINT: Administrators Wants Chapter 15 Case Closed ---------------------------------------------------------- The Bankruptcy Court will convene a hearing on July 17, 2014, at 10:00 a.m., to consider the motion to close the Chapter 15 case of Pioneer Point Limited. Objections, if any, are due July 10 at 4:00 p.m. Patrick O'Sullivan and David John Dunkley, administrators for the Debtor's estate, said that on Sept. 8, 2012, Global Design Strategies LLC (GDS) tendered a further invoice in the sum of GBP407,000. The Administrators requested that GDS provide further information in respect of the work allegedly carried out by GDS which led to the additional fees. As of the Date on which the Chapter 11 case was commenced, the administrators considered it a possibility that disputes may arise as to the amount of monies that were due to GDS, and whether or not the sums were to be proved as an unsecured claim in the administration or paid as an expense of the same. Subsequent to the entry of the recognition order dated Dec. 30, 2012, the Administrators and GDS were able resolve amicably issues related to GDS Invoice Dispute. With the resolution of the GDS Invoice Dispute, and no further activity in the proceeding anticipated, the administrators believe that the proceeding has been fully administered. The administrators are represented by: Michael J. Venditto, Esq. Christopher A. Lynch, Esq. REED SMITH LLP 599 LEXINGTON Avenue New York, NY 10022 Tel: (2120 521-5400 Fax: (212) 521-5450 As reported in the Troubled Company Reporter on Nov. 20, 2012, administrators filed a Chapter 15 bankruptcy petition in Manhattan (Bankr. S.D.N.Y. Case No. 12-14615) to seek recognition of the company's administration proceeding in the United Kingdom. Formerly known as Empire (SPV) Limited, Pioneer is the owner of a real estate development project in Ilford, England, consisting of two towers containing approximately 290 residential units and several ground floor commercial units. Pioneer breached various obligations to Landesbank Hessen-Thuringen Gironzentrale, which was owed GBP108.2 million as of March 2012. After talks for a restatement of the facility broke down, Landesbank sought appointment of administrators under the Insolvency Act 1986 of the United Kingdom. The administrators, namely Trevor Patrick O'Sullivan and David John Dunckley, both from Grant Thornton UK LLP, filed the Chapter 15 petition with a U.S. bankruptcy court to avoid and resolve disputes with Global Design Strategies LLC. Pursuant to an agreement dated Sept. 8, 2010, New York-based GDS agreed to provide certain art and design consultancy services in connection with the development of Pioneer's properties. The administrators are concerned that, within the context of any future dispute with GDS, GDS may commence legal or arbitral proceedings against Pioneer in New York pursuant to the GDS Agreement which endows the courts of New York with exclusive jurisdiction over any such disputes. The administrators say that the cost of defending any legal or arbitral proceedings in New York would be prohibitively expensive as well as disruptive to their efforts in the U.K. proceeding to rehabilitate Pioneer. By granting recognition, the U.S. Bankruptcy Court would empower the administrators to deal with any action or proceeding commenced in the United States. PRETTY GIRL: 27-Store Women's Wear Retailer Seeks Bankruptcy ------------------------------------------------------------ Pretty Girl, Inc., which operates 27 price-friendly stores mostly in New York and New Jersey, filed a Chapter 11 bankruptcy petition after an employee won a $3.36 million judgment against the company. For the year ended June 30, 2014, the Debtor had net sales of $17.1 million and generated a loss from operations of $4.33 million. As of June 30, 2014, its books and records reflect assets totaling $10.76 million and liabilities totaling $12.27 million. As of June 30, 2014, the Debtor's unsecured trade debt aggregated $4.22 million. The Debtor's only secured creditor is JPMorgan Chase Bank, NA, which, as of the commencement of the chapter 11 case, has an undisputed claim in the amount of $2.75 million. The formal schedules of assets and liabilities, statement of financial affairs and other incomplete filings are due July 16, 2014. The Chapter 11 plan and disclosure statement are due Oct. 30, 2014. The initial case conference is due Aug. 1, 2014. Road to Bankruptcy Albert Nigri, the owner, disclosed in a court filing that the Debtor's business has suffered as a result of the weak economic recovery from the recession, which has particularly affected the buying habits of the stores' cost-conscious customers. In addition, Mr. Nigri added that a judgment was entered against the Debtor on June 13, 2014 by the United States District Court for the Eastern District of New York in the amount of $3,365,000. The judgment arose from an action by an employee of one of the stores which sought damages based upon claims of a "hostile work environment," assault and battery, and negligence. The Debtor commenced its chapter 11 case to afford it a centralized forum for the restructuring of its various obligations. It also did so in order to avoid possible precipitous action by the judgment creditor, among others, which could have resulted in an ad hoc piecemeal exercise of remedies that would have jeopardized the Debtor's enterprise value. The Debtor believes chapter 11 will afford it the opportunity to propose, confirm and consummate a plan of reorganization that will be in the best interests of its estate and all of its creditors and ensure the Debtor's health and growth for years to come. About Pretty Girl Pretty Girl, Inc., which was founded in 1985, manages 27 individually incorporated and operated retail stores that sell fashionable junior, missy, and plus-size clothing, accessories, and footwear to price-conscious women. Twenty-five of the stores are located in New York and New Jersey and one is located in each of Chicago, IL and Philadelphia, PA. Albert Nigri is the sole officer, director and 100% shareholder of each of the Company. Pretty Girl, Inc., filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 14-11979) in Manhattan on July 2, 2014. The case is assigned to Judge Sean H. Lane. The Debtor has tapped Rosen & Associates, P.C., in New York, as counsel. PROSPECT SQUARE: Has Access to Cash Collateral Until July 31 ------------------------------------------------------------ The U.S. Bankruptcy Court, in a fourth interim order, authorized Prospect Square 07 A, LLC, et al.'s access to cash collateral in which MSCI 20074-IQ16 Retail 9654 LLC asserts an interest. The Debtor is authorized to use cash collateral until July 31, 2014, subject to 5% expense line item deviation. The lender is also authorized to release from funds it holds in the tax and insurance escrow fund and in suspense for the Debtor the sum of $166,704 to Hamilton County, Ohio, on account of unpaid real estate taxes for the project. As adequate protection from any diminution value of the lender's collateral, the Debtor will (i) grant replacement liens on all postpetition rental income from the property, any and all insurance proceeds from the project, etc.; and (ii) make adequate protection payment of $30,428. As reported in the Troubled Company Reporter on April 17, 2014, as of the Petition Date, the Debtors owed MSCI in excess of $18,000,000, including real estate taxes advanced by the MSCI, and not reimbursed by the Debtors in the amount of $951,929. About Prospect Square 07 A, LLC Prospect Square 07 A, LLC, and related entities sought Chapter 11 bankruptcy protection from creditors (Bankr. D. Colo. Lead Case No. 14-10896) in Denver on Jan. 29, 2014. Prospect Square 07 A is a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B) with principal assets located at 9690 Colerain Avenue, Cincinnati, Ohio. The Debtor listed $16 million in assets and more than $12 million in liabilities. Lee M. Kutner, Esq., at Kutner Brinen Garber, P.C., in Denver, serves as the Debtors' counsel. Lender MSCI 2007-IQ16 Retail 9654, LLC, is represented by James T. Markus, Esq., and Jeffery O. McAnallen, Esq., at Markus Williams Young & Zimmermann LLC. PUERTO RICO: New Debt Law Usurps Congress, Funds Say ---------------------------------------------------- Law360 reported that two investment firms sued the commonwealth of Puerto Rico, saying the law its government enacted over the weekend providing debt restructuring options for public agencies violates the U.S. Constitution. According to the report, a lengthy list of funds overseen by Franklin Templeton Investments and OppenheimerFunds Inc. are seeking a declaratory judgment from the U.S. District Court for the District of Puerto Rico finding the law unconstitutional, saying it blatantly ignores Congress' authority to determine who may and who may not file for bankruptcy. The case is Franklin California Tax-Free Trust et al v. Commonwealth of Puerto Rico et al., Case No. 3:14-cv-01518 (D.P.R.). * * * The Troubled Company Reporter, on July 4, 2014, reported that Moody's Investors Service has downgraded the Commonwealth of Puerto Rico to B2 from Ba2, affecting $14.4 billion of outstanding general obligation (GO) bonds. Concurrently, commonwealth agencies and public corporations have been downgraded, affecting about $46 billion of non-GO bonds, including $15.6 billion of senior- and subordinate-lien bonds issued by the Sales-Tax Financing Corporation (COFINA), which respectively were lowered to Ba3 and B1. The Puerto Rico Electric Power Authority (PREPA) was downgraded to Caa2 from Ba3, while the Puerto Rico Aqueduct and Sewer Authority (PRASA) was downgraded to Caa1 from Ba3. The Puerto Rico Highway and Transportation Authority (PRHTA) was downgraded to Caa1 (senior 1998 resolution and 1968 resolution) from Ba3, and to Caa2 from B1 (subordinate 1998 resolution). For PREPA, PRHTA and PRASA, the newly lowered ratings remain under review for possible further downgrade. The debt of the Government Development Bank (GDB) was downgraded to B3 from Ba2, and the debt of the University of Puerto Rico was downgraded to Caa1 and Caa2. The outlook for the GDB as well as for commonwealth GO and related debt remains negative. QUANTUM FOODS: Allowed To Access Old Plant ------------------------------------------ Law360 reported that Quantum Foods LLC came to an agreement with the purchaser of its equipment on the impasse over access to its old meatpacking plant, but a Delaware bankruptcy judge pushed consideration of any contempt order or sanctions to an undetermined later date. According to the report, at an emergency hearing in Wilmington, U.S. Bankruptcy Judge Kevin J. Carey approved an order that will allow the debtors and their representatives access to their facilities, and permit them to copy all the data it needs from its computers and servers. Bill Rochelle, the bankruptcy columnist for Bloomberg News, said Judge Carey gave Quantum access to the facility and the right to copy files from the computer system through July 15 and barred West Liberty from having access to Quantum's books and records. Law360 related that Quantum Foods has asked the Delaware bankruptcy court to let it access the meatpacking plants from which it sold equipment to West Liberty, after it claimed the buyer wouldn't allow the debtor access to its own records and had its representatives escorted out by local police. About Quantum Foods Founded in 1990 and headquartered in Bolingbrook, Illinois, Quantum Foods, LLC -- http://www.quantumfoods.com-- provides protein products made from beef, poultry and pork. Quantum Foods and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to facilitate the sale of substantially all their business to CTI Foods Holding Co., LLC. The Debtors' primary secured indebtedness totals $50.2 million, owing to lenders led by Crystal Financial, LLC, as administrative and collateral agent. Quantum Foods is being advised in its restructuring by Daniel J. McGuire, Esq., Gregory M. Gartland, Esq., and Caitlin S. Barr, Esq., at Winston & Strawn as counsel; M. Blake Cleary, Esq., Kenneth J. Enos, Esq., and Andrew Magaziner, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as local counsel. City Capital Advisors is the investment banker. FTI Consulting, Inc. also serves as advisor. BMC Group is the claims and notice agent. The U.S. Trustee for Region 3 appointed five members to the official committee of unsecured creditors in the case. The Committee is seeking to retain Triton Capital Partners, Ltd. as financial advisor; and Mark D. Collins, Esq., Russell C. Silberglied, Esq., Michael J. Merchant, Esq., Christopher M. Samis, Esq., and Robert C. Maddox, Esq., at Richards, Layton & Finger, P.A. as counsel. Raging Bull is represented in the case by Van C. Durrer II, Esq., at Skadden Arps Slate Meagher & Flom LLP. Crystal Finance LLC is represented by David S. Berman, Esq., at Riemer & Braunstein LLP. RESIDENTIAL CAPITAL: Judge Affirms Morrison's $4.2M Award For Fees ------------------------------------------------------------------ Law360 reported that a New York bankruptcy judge approved an award of nearly $4.2 million in attorneys' fees to Morrison Cohen LLP for its representation of Residential Capital LLC's independent directors, rejecting accusations from the liquidating trust that it was being billed for unnecessary work. According to the report, U.S. Bankruptcy Judge Martin Glenn said that due to the number of related-party transactions between ResCap and its nondebtor parent, Ally Financial Inc., ResCap's independent directors had a decisive and important role in this case, which warranted the separate representation by Morrison. 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. RINCON BEACH: Case Summary & Largest Unsecured Creditors -------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Rincon Beach Front, LLC 14-51046 41 Scenic Hill Road Trumbull, CT 06611 Golden Beach Group, Inc. 14-51047 41 Scenic Hill Road Trumbull, CT 06611 Chapter 11 Petition Date: July 7, 2014 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Debtors' Counsel: Elizabeth J. Austin, Esq. PULLMAN AND COMLEY, LLC 850 Main Street P.O. Box 7006 Bridgeport, CT 06601-7006 Tel: (203) 330-2000 Email: eaustin@pullcom.com - and - Jessica Grossarth, Esq. PULLMAN & COMLEY, LLC 850 Main Street P.O. Box 7006 Bridgeport, CT 06601-7006 Tel: (203) 330-2215 Fax: (203) 257-0993 Email: jgrossarth@pullcom.com Estimated Estimated Assets Liabilities ---------- ----------- Rincon Beach Front, LLC $1MM-$10MM $1MM-$10MM Golden Beach Group, Inc. $1MM-$10MM $1MM-$10MM The petitions were signed by Glenn Tatangelo, managing member. A list of Rincon Beach Front, LLC's four largest unsecured creditors is available for free at: http://bankrupt.com/misc/ctb14-51046.pdf A list of Golden Beach Group, Inc.'s 19 largest unsecured creditors is available for free at: http://bankrupt.com/misc/ctb14-51047.pdf ROSSCO HOLDINGS: Kelly Hart, Beard Kultgen Say Ch. 11 Axes Suit --------------------------------------------------------------- Law360 reported that Beard Kultgen Brophy Bostwick Dickson & Squires LLP asked a court to throw out a malpractice suit lodged against it and Kelly Hart & Hallman LLP, arguing a real estate holding company lacks standing to sue them because it failed to properly reserve claims related to hotel foreclosures in a bankruptcy proceeding. According to the report, the two Texas firms say Leonard M. Ross and his company Rossco Holdings Inc. -- which sells, leases and rents residential, commercial and investment properties -- is procedurally barred from suing them. The case is ROSSCO Holdings Incorporated et al v. McConnell et al., Case No. 4:14-cv-00374 (N.D. Tex.). College Station, Texas-based Rossco Holdings, Inc., filed for Chapter 11 protection (Bankr. W.D. Tex. Case No. 10-60953) on Aug. 2, 2010. The new California Case No. of Rossco Holdings is LA10-55951BB. David J Richardson, Esq., and Laura L Buchanan, Esq., at The Creditors' Law Group, represent the Debtor. The Debtor disclosed $28,415,681 in assets and $10,567,302 in liabilities as of the Petition Date. Affiliates Monte Nido Estates, LLC; LJR Properties, Ltd.; WM Properties, Ltd.; Colony Lodging, Inc.; and Rossco Plaza, Inc., filed separate Chapter 11 petitions. The Troubled Company Reporter reported that the U.S. Bankruptcy Court for the Central District of California in March 2013 entered a final decree closing the Chapter 11 cases of Rossco Holdings, Inc., et al., after confirming the Debtors' Modified First Amended Joint Plan of Reorganization. SAXON ENTERPRISES: Moody's Withdraws B1 Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service has withdrawn all of its ratings involving Saxon Enterprises LLC and its parent, SES Intermediate Holdings Limited. The rating withdrawals follow Schlumberger Ltd's (Aa3 stable) acquisition of the 50.5% of SES it did not already own and the repayment and cancelation of Saxon's rated debt facilities. Ratings Withdrawn: Issuer: SES Intermediate Holdings Limited B1 Corporate Family Rating B2-PD Probability of Default Rating Issuer: Saxon Enterprises LLC Ba3 Senior Secured Bank Credit Facility Outlook Action: Withdraw Ratings Under Review for Upgrade Ratings Rationale SES, through Saxon, provides land-based drilling and workover rigs to global exploration and production companies. SES is incorporated in the Cayman Islands with corporate headquarters in Calgary, Alberta. Schlumberger Limited is the industry's leading oilfield services and technology company. It is registered in Curacao, Netherlands Antilles, with principal offices located in Paris, The Hague, and Houston, Texas. SCRANTON, PA: Receiver Can't Stop Parking Auth. Union Arbitration ----------------------------------------------------------------- Law360 reported that the Pennsylvania Commonwealth Court ruled that unionized employees of the City of Scranton's parking authority could pursue arbitration with their employer after they were sacked by a fiscal receiver appointed by a county judge to take over the entity's operations and right its troubled finances. According to the report, an en banc panel of the court ruled that a Lackawanna County judge had improperly granted a preliminary injunction barring Teamsters Local 229 from pursuing arbitration with the authority for alleged violations of their collective bargaining agreement. STANFORD GROUP: High Court Rejects Appeal On Receiver's Powers -------------------------------------------------------------- Law360 reported that the U.S. Supreme Court refused to review the Fifth Circuit's decision that the receiver for Robert Allen Stanford's $7 billion Ponzi scheme cannot assert claims on behalf of creditors, leaving in place what the receiver called an existing "disarray" among the circuit courts. According to Law360, the high court left in place a Fifth Circuit ruling that receiver Ralph Janvey's clawback suits against former employees may be brought only on behalf of the Stanford entities themselves, rejecting Janvey's contention that he could sue on behalf of Stanford creditors. Jonathan Stempel, writing for Reuters, reported that Kevin Sadler, a lawyer for Janvey, said the receiver is disappointed with the decision in the Stanford case, and will continue to press claims on behalf of more than 18,000 victims against those who profited from or aided Stanford's fraud. The case is Ralph Janvey v. James Alguire, et al., Case No. 11- 10838 (5th Cir.). About Stanford Group The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States (U.S.) authorities in early 2009. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management served more than 70,000 clients in 140 countries. On Feb. 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The case in district court was Securities and Exchange Commission v. Securities Investor Protection Corp., 11-mc-00678, U.S. District Court, District of Columbia (Washington). The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money- laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. STARR PASS: Gust Rosenfeld Approved as Local Bankruptcy Counsel --------------------------------------------------------------- Bankruptcy Judge Eileen W. Hollowell authorized Starr Pass Residential, LLC to employ Gust Rosenfeld P.L.C. as local bankruptcy counsel. To the best of the Debtor's knowledge, the firm has no connection "disinterested person" as that term is defined in Section 101(14) of Bankruptcy Code. The firm can be reached at: Jody A. Corrales, Esq. GUST ROSENFELD P.L.C. One South Church Ave., Suite 1900 Tucson, AZ 85701-1627 Tel: (520) 628-7070 Fax: (520) 624-3849 E-mail: jcorrales@gustlaw.com About Starr Pass Residential LLC Starr Pass Residential LLC, filed a Chapter 11 bankruptcy petition (Bankr. D. Ariz. Case No. 14-09117) on June 12, 2014. Christopher Ansley signed the petition as authorized officer. Gust Rosenfeld, P.L.C., serves as the Debtor's counsel. The Debtor disclosed total assets of $7.40 million and total liabilities of $145.86 million. The bankruptcy case was reassigned to Judge Eileen W. Hollowell because Judge Brenda Moody Whinery recused herself from hearing any matter on the Chapter 11 proceeding. SUPER BUY FURNITURE: Files for Chapter 11 with $27MM Debt --------------------------------------------------------- Super Buy Furniture, Inc., sought bankruptcy protection in Puerto Rico, disclosing assets of $18 million and debt of almost $27 million. Super Buy as of the bankruptcy filing operated 23 stores throughout Puerto Rico under the business name of "Casa Pitusa Muebles y Enseres". The Company has lease agreements for commercial spaces in Aguadilla, Cidra, Barranguitas, San Sebastian, Utuado, Guaynabo, Barbosa, Villa Prades, Bayamon, Guayama, Manati, Aercibo, Adjuntas, Cupey, Coamo, Cabo Rojo, Ponce, Morovis, Iturregui, Mayaguez, Caguas, and Yauco. The home furniture sales company disclosed in its schedules filed together with the bankruptcy petition: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $18,209,692 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $717,355 F. Creditors Holding Unsecured Non-priority Claims $26,039,962 ----------- ----------- TOTAL $18,209,692 $26,757,317 Personal property assets are primarily comprised of inventory worth $10.6 million and leasehold improvements of $5.18 million. About Super Buy Furniture Cidra, Puerto Rico-based Super Buy Furniture, Inc., operator of furniture stores throughout Puerto Rico under the business name of "Casa Pitusa Muebles y Enseres", filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 14-05523) in Old San Juan, Puerto Rico, on July 3, 2014. The Company disclosed $18.2 million in assets and $26.8 million in debt in its schedules. The Company has tapped the firm O'Neill & Borges, in San Juan, Puerto Rico, as counsel, and CPA Luis R. Carrasquillo & Co., P.S.C., as financial consultant. SUPER BUY FURNITURE: Closing 12 of 23 Stores -------------------------------------------- Super Buy Furniture, Inc., sought bankruptcy protection and immediately filed a motion to reject leases for 12 of 23 furniture stores in Puerto Rico. The Debtor's management, with the assistance of Chapter 11 professionals, concluded that it is in the best interest of the Debtor's estate, creditors, and the Debtor's reorganization efforts to reject lease agreements for 12 stores, and surrender the premises to the respective landlords. Other than the Yauco, Puerto Rico store, the Debtor will close the stores and surrender the premises to their respective landlords on July 31, 2014. The Debtor did not disclose the exact closing date of the Yauco store, only disclosing that it would be sometime 2014. In its first omnibus motion to reject contracts, the Debtor intends to reject these leases: Store Landlord Number Location -------- ------ -------- K & W Investment, SE 205 Ave. Barbosa Esquina Francia Antiguo Local Carrillo Distr. Hato Rey, PR Montvinas Soulmate, Inc. 219 Ave. Sim�n Madera Edif. 2 Villa Prades Rio Piedras, PR PR Retail Stores 211 Bo. Machete, Carr. No. 3 Guayama, PR PDCM Associates, SE 200 Adjuntas Plaza Shopping Center Sector el Desvio Carr. 5518, Km. 1 Hm. 4 Adjuntas, PR PDCM Associates, SE 209 Carr. No. 1 Km. 14.1 Urb. Caribe Rio Piedras, PR PDCM Associates, SE 206 Carr. No. 100, Km. 6.7 Bo. Miradero Cabo Rojo, PR PDCM Associates, SE 217 Calle Marin San Rafael Industrial Park Ant. Local Fondo del Seguro del Estado Ponce, PR Regency Park Assoc., SE 212 Gurabo, PR PDCM Associates, SE 202 Arecibo, PR PDCM Associates, SE 214 Manati, PR PDCM Associates, SE 208 Coamo, PR Yabucoa Development, SE 220 Calle 25 de Julio Local No. 89 Yauco, PR The Debtor has conducted an extensive evaluation of each of the lease agreements and concluded that each of the stores under the respective lease agreement is operating at a net operating loss and, therefore, the rejection of the lease agreements for the 12 stores is needed for the effective reorganization of the estate. The Debtor does not intend to continue operating its business at each of the stores. Other Contracts The Debtor filed a separate motion to reject an asset purchase agreement dated Nov. 15, 2012, with P.F. Stores, Inc. The Debtor said it has conducted an evaluation of the contract and concluded that it is unable to comply with its obligations under the contract, as they are too onerous for Debtor's business operations, considering the net operating losses incurred during the prepetition period and, therefore, the rejection of the contract is needed for the effective reorganization of the estate. The Debtor also filed a motion to assume an executory contract for the use of its trade name. The contract pertains to a license agreement dated Dec. 5, 2012, with Israel Kopel Amster. The Debtor has conducted an evaluation of the contract and concluded that the same is beneficial for Debtor's business operations and, therefore, the assumption of the contract will assist in the effective reorganization of the estate. About Super Buy Furniture Cidra, Puerto Rico-based Super Buy Furniture, Inc., operator of furniture stores throughout Puerto Rico under the business name of "Casa Pitusa Muebles y Enseres", filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 14-05523) in Old San Juan, Puerto Rico, on July 3, 2014. The Company disclosed $18.2 million in assets and $26.8 million in debt in its schedules. The Company has tapped the firm O'Neill & Borges, in San Juan, Puerto Rico, as counsel, and CPA Luis R. Carrasquillo & Co., P.S.C., as financial consultant. SUPER BUY FURNITURE: Proposes O'Neill & Borges as Counsel --------------------------------------------------------- Super Buy Furniture, Inc., seeks approval from the bankruptcy court in Puerto Rico to employ O'Neill & Borges LLC as bankruptcy counsel. Subject to Court approval in accordance with Section 330(a) of the Bankruptcy Code, compensation will be payable to OB on an hourly basis, plus reimbursement of actual, necessary expenses incurred in connection with the Debtor's chapter 11 case. The attorneys presently designated to have primary responsibility in representing the Debtor, and their standard hourly rates, are: Professional Category Hourly Rate ------------ -------- ----------- Luis C. Marini Member $270 Nayuan Zouairabani Associate $175 The hourly rates are subject to periodic adjustments. Occasionally, other attorneys and paralegals may serve Debtor in connection with its chapter 11 case as provided by Bankruptcy Rule 2014(b). OB's associates' hourly rates range from $140 to $205 and members' hourly rates range from $180 to $345 per hour. The Debtor has provided to OB prior to the Petition Date a retainer in the amount of $35,000. The Debtor believes that OB is a "disinterested person" within the meaning of Sections 101(14) and 327 of the Bankruptcy Code. About Super Buy Furniture Cidra, Puerto Rico-based Super Buy Furniture, Inc., operator of furniture stores throughout Puerto Rico under the business name of "Casa Pitusa Muebles y Enseres", filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 14-05523) in Old San Juan, Puerto Rico, on July 3, 2014. The Company disclosed $18.2 million in assets and $26.8 million in debt in its schedules. The Company has tapped the firm O'Neill & Borges, in San Juan, Puerto Rico, as counsel, and CPA Luis R. Carrasquillo & Co., P.S.C., as financial consultant. SUPER BUY FURNITURE: Proposes Carrasquillo as Fin'l Consultant -------------------------------------------------------------- Super Buy Furniture, Inc., seeks approval from the bankruptcy court in Puerto Rico to employ CPA Luis R. Carrasquillo & Co., P.S.C., as financial consultant. The Debtor needs a financial consultant to assist it in the restructuring of its affairs by providing advice in strategic planning and the preparation of amended schedules, plan of reorganization, disclosure statement and business plan, and participating in the Debtor's negotiations with creditors. The Debtor has retained Carrasquillo on the basis of a $20,000 retainer, against which Carrasquillo will bill as per the hourly billing rates. The Debtor believes that Carrasquillo's hourly billing rates are reasonable and fair, in line with services comparable to hose performed on behalf of other clients. Except that Carrasquillo has acted as financial consultant in other bankruptcy cases in which Luis C. Marini Biaggi, Esq., and O'Neill & Borges, LLC, the Debtor's counsel, has or is representing certain creditors, Carrasquillo has no prior connection with the Debtor and its creditors. About Super Buy Furniture Cidra, Puerto Rico-based Super Buy Furniture, Inc., operator of furniture stores throughout Puerto Rico under the business name of "Casa Pitusa Muebles y Enseres", filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 14-05523) in Old San Juan, Puerto Rico, on July 3, 2014. The Company disclosed $18.2 million in assets and $26.8 million in debt in its schedules. The Company has tapped the firm O'Neill & Borges, in San Juan, Puerto Rico, as counsel, and CPA Luis R. Carrasquillo & Co., P.S.C., as financial consultant. WPLM ACQUISITION: Moody's Assigns B3 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned WPLM Acquisition Corp (aka ALM Media, LLC) a B3 corporate family rating (CFR) and a B3-PD probability of default rating (PDR). The proposed $215 million first lien term loan and $22.5 million revolving credit facility were assigned B2 facility ratings. The $50 million second lien term loan was assigned a Caa2. The use of proceeds and $162 million of new equity will be used to fund the purchase of the company by Wasserstein & Co, repay outstanding debt, and pay transaction fees. The outlook is stable. Initially, the borrower will be WPLM Acquisition Corp and following the closing of the acquisition, the borrower will be ALM Media, LLC (ALM). Moody's took the following rating actions: Borrower: WPLM Acquisition Corp and then ALM Media, LLC following consummation of the merger Corporate Family Rating, assigned B3 Probability of Default Rating, assigned B3-PD $22.5 million 1st lien Revolving Credit Facility due 2020, assigned B2, LGD3 $215 million 1st lien term loan due 2020, assigned B2 LGD3 $50 million 2nd lien term loan due 2021, assigned Caa2, LGD6 Outlook, Stable The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as provided to Moody's. Ratings Rationale ALM Media LLC's B3 CFR reflects the company's high pro-forma leverage of 5.3x (including Moody's standard adjustments), small size, niche business focus, and the challenge of migrating print based media to digital. The ratings receive support from ALM's strong position in the legal media business that has been less cyclical than other industries and the value of the content and data provided by the firm. Moody's also anticipates that the company will benefit from recent cost savings efforts and actions to increase corporate subscription sales. Some of ALM's content is licensed to a third party which adds stability to revenues and has offset declines in other segments. The company also operates a small real estate media division and a trade show business that, while modest in size, offers some diversity to the company and should benefit as the economy continues to improve. Moody's anticipate the company will maintain good liquidity over the next year and will benefit from the new $22.5 million revolver in addition to good free cash flow. Moody's expects that free cash flow will be directed to business reinvestment opportunities or possible acquisitions. The first lien term loan is expected to be covenant lite and the revolving facility is anticipated to be subject to a Total Net Leverage Ratio only when the revolver is more than 25% drawn and set at levels with a 25% cushion. The stable outlook reflects Moody's expectations for flat to modestly positive revenue and EBITDA growth aided by cost saving opportunities that will lead to modest declines in leverage over the next year. Moody's expects the company will look for acquisitions to increase the scale and product offerings provided by the company. Given the high leverage and challenges transitioning print to digital, a rating upgrade is unlikely in the near term. Positive rating pressure could develop if leverage drops below 5x and the sponsor intends to maintain leverage below this level on a sustained basis, with positive revenue and EBITDA growth while maintaining a good liquidity profile. Ratings would face downward pressure if the debt-to-EBITDA ratio increases above 6.5x due to declining subscribers or ad revenue. Increased debt levels for shareholder friendly transactions or for debt funded acquisitions that are not offset additional EBITDA could also result in negative rating pressure. The principal methodology used in this rating was the Global Publishing 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. ALM Media, LLC is a media publishing and information services business focused on the legal industry. The company also operates a real estate information service and tradeshow business division. Revenue for the LTM period ending March 31, 2014 was $178 million. WRIGLEYVILLE LLC: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Wrigleyville LLC 3458 N Clark St. Chicago, IL 60657 Case No.: 14-25027 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: July 7, 2014 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Hon. Jacqueline P. Cox Debtor's Counsel: Jonathan D. Golding, Esq. Richard N. Golding, Esq. THE GOLDING LAW OFFICES, P.C. 500 N. Dearborn St., 2nd Fl. Chicago, IL 60654 Tel: 312-832-7892 Fax: 312-755-5720 Email: jgolding@goldinglaw.net RGOLDING@GOLDINGLAW.NET Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Timothy Collins, president. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb14-25027.pdf * Secrecy in Pensions Triggers Legislative Brawl in North Carolina ------------------------------------------------------------------ Darrell Preston, Neil Weinberg and Margaret Newkirk, writing for Bloomberg News, reported that a legislative fight between North Carolina Treasurer Janet Cowell and a state employee association is signaling growing tension over disclosure practices as public pensions seek to improve returns with alternative investments. According to the report, Cowell, a 45-year-old Democrat, opposed a bill by the State Employees Association of North Carolina to require more disclosure about deals with Wall Street firms hired to manage alternatives to stocks and bonds for the $87 billion pension she controls. Cowell warned that giving out more information would cost more than $1.8 billion for violating secrecy agreements, and instead supported a bill that would conceal details for five years after a contract is completed, the report related. * BNP Paribas's U.S. Settlement to Cap Troublesome Period --------------------------------------------------------- David Gauthier-Villars, Christopher M. Matthews and Noemie Bisserbe, writing for The Wall Street Journal, reported that the landmark settlement between U.S. authorities and BNP Paribas SA began to take shape last summer, after bank executives flew to New York to share an embarrassing admission: The French bank had been processing potentially illicit dollar transactions with countries blacklisted by Washington years after the U.S. began investigating the lender. A separate report by the Journal said BNP Paribas sought to allay concern about its ability to weather the $9 billion settlement, as the French government refrained from fresh objections. The bank agreed to pay nearly $9 billion in penalties and plead guilty to attempting to conceal $30 billion in transactions with sanctioned countries. The bank, according to the Journal, said the penalties would shave a little more than a half a percentage point from its core tier-one capital ratio, less than the full percentage point most analysts had anticipated. * Dark Pool Greed Drove Barclays to Lie to Clients, N.Y. Says ------------------------------------------------------------- Keri Geiger, Sam Mamudi and Chris Dolmetsch, writing for Bloomberg News, reported that Barclays Plc was so bent on lifting its private trading venue to the upper ranks of Wall Street dark pools that it lied to customers and masked the role of high-frequency traders, according to New York's attorney general. Barclays falsified marketing materials to hide how much high-frequency traders were buying and selling, the Bloomberg report, citing a complaint filed on June 26 by Eric Schneiderman. * Argentina Euro Bondholders Seek Exemption From US Courts ---------------------------------------------------------- Law360 reported that investment firms that hold restructured bonds issued by Argentina that are denominated in euros asked a New York federal court to find that foreign banks that process interest payments on these bonds are outside the reach of U.S. courts. According to Law360, the investment firms claim that the euro bonds are governed by the laws of England and Wales, and are processed in euros by foreign entities outside of U.S. jurisdiction. As such, the court should clarify that prior injunctions restricting payment on Argentina's restructured debt, Law360 said, citing the investment firms. Reuters reported that Argentina's Economy Minister Axel Kicillof will head its mission to meet with a court-appointed mediator in the country's dispute with holdout investors in its bonds. The economy ministry announced it would send a mission to New York to meet with mediator Daniel Pollack, but said the composition of the team had not been decided, raising questions over whether Argentina would send an official with sufficient authority to negotiate -- such as Kicillof, Reuters related. * Excess Cash Drives Hedge Funds To Feast On Distressed Cos. ------------------------------------------------------------ Law360 reported that hedge funds have always been in the business of buying distressed corporate debt, but the combination of new banking regulations, an overabundance of available capital and the increasingly high cost of Chapter 11 has recently caused an uptick in their prebankruptcy acquisition activity. According to the report, the number of Chapter 11 filings has been dropping steadily for the past few years, and while it would seem natural to credit that trend to a slightly healthier economy, restructuring experts say it's largely a result of the easily accessible money. * World's Biggest Debt Load Lures Distressed Funds to China ----------------------------------------------------------- David Yong, writing for Bloomberg News, reported that distressed debt funds are raising cash to seek greater opportunities in China, where Standard & Poor's says corporate borrowing topped the U.S. last year. Planned commitments to funds investing in Chinese and other Asian troubled assets are set to surpass $2 billion this year, up from $303 million in 2013, the Bloomberg report said, citing data from researcher Preqin Ltd. Bloomberg, citing a June 15 S&P report, noted that China's economic growth has slowed to the least in more than a decade even as companies increased debt to $14.2 trillion as of Dec. 31, surpassing the $13.1 trillion in the U.S. * Covenant-Lite Loans Surge as Default Rates Rise ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the laws of gravity are catching up with "covenant- lite" loans, which got good publicity for faring comparatively well during the financial crisis. According to Mr. Rochelle, recently, default rates on those loans -- which don't allow creditors to force a borrower into a restructuring as long as interest is paid on time -- are now exceeding the rates on their more conservatively written counterparts. In a 2011 analysis of 15 covenant-lite defaults, Moody's Investors Service said the 2.5-year cumulative default rate was 7.8 percent, better than the 10.4 percent default rate for similarly rated issuers in North America, the Bloomberg report related. Even though they were "viewed as risky and even reckless," covenant lights' good performance fueled a jump in new issues, Moody's said, the Bloomberg report further related. * Credit Card Lenders Pursue Riskier Borrowers ---------------------------------------------- Annamaria Andriotis and Robin Sidel, writing for The Wall Street Journal, reported that lenders are courting risky credit-card borrowers more aggressively than they have since the financial crisis in a bid to jolt revenue in a period of sluggish growth and tight regulation. Banks and other lenders issued 3.7 million credit cards to so- called subprime borrowers during the first quarter, a 39% jump from a year earlier and the most since 2008, according to data provided exclusively to The Wall Street Journal by credit bureau Equifax Inc. About one-third of all credit cards issued in that period were to subprime customers, the biggest share in six years, the Journal, said citing Equifax. * N.J. Governor Wins Legal Battle Over Cuts to Pension System ------------------------------------------------------------- David Voreacos and Terrence Dopp, writing for Bloomberg News, reported that New Jersey Governor Chris Christie won a key budget battle when a judge ruled he had legal authority to cut payments to the state pension system because he faced a fiscal emergency. According to the report, Christie was confronted with "staggering" shortfalls in his $33 billion budget for the year ending June 30, Superior Court Judge Mary Jacobson said on June 26. Christie acted reasonably in paying $696 million to cover current employees, while deferring $887 million to help close the gap left by previous governors, the judge ruled, the report related. * President's Recess-Appointment Power Cut by Supreme Court ----------------------------------------------------------- Greg Stohr, writing for Bloomberg News, reported that the U.S. Supreme Court curbed the president's power to make temporary appointments without Senate approval, backing congressional Republicans and dealing a blow to President Barack Obama. According to the report, the justices ruled unanimously that Obama exceeded his constitutional authority when he appointed three members of the National Labor Relations Board in January 2012. Four Republican-appointed justices would have gone even further in limiting the appointment power, the report related. The case is National Labor Relations Board v. Canning, 12-1281. * Treasury Begins Push to Revive U.S. Mortgage-Bond Market ---------------------------------------------------------- Clea Benson and Jody Shenn, writing for Bloomberg News, reported that the U.S. Treasury Department will start an initiative to revive the market for mortgage securities without government backing as part of an effort to aid recovery of the housing market, Treasury Secretary Jacob J. Lew said. The Treasury also will begin offering financing for loans for affordable apartment buildings and extend aid programs for troubled borrowers for an additional year, Lew said in remarks prepared for a speech in Washington, the report related. According to the report, together the moves are designed to bring more capital to the housing market to ease the crunch for those most affected by tight credit and a dwindling supply of affordable rentals, while aiding those still struggling with the aftermath of the 2008 credit crisis. * U.S. House Votes to Loosen Derivatives' Regulations w/ CFTC Bill ------------------------------------------------------------------ Douwe Miedema, writing for Reuters, reported that the U.S. House of Representatives voted to weaken the Commodity Futures Trading Commission's power to regulate swaps overseas and take other steps likely to loosen regulation in derivatives markets, a shift critics say could weaken market stability. According to the report, the bill, which reauthorizes the agency's mandate, would reverse the CFTC's tough rules on U.S. businesses' swaps with counterparties abroad, requiring it to draw up a new regime together with the Securities and Exchange Commission. In addition, the law would make the agency's staff responsible to the full five-strong commission, not just its chairman, which critics said would slow down decisions, Reuters said. * Leading NY Bankruptcy Lawyer Joins Grant & Eisenhofer ------------------------------------------------------- Leading financial litigation law firm Grant & Eisenhofer P.A. announced that prominent creditor-side bankruptcy lawyer Gordon Z. Novod has joined the firm to head its bankruptcy litigation practice. Mr. Novod, who joins G&E's New York office as a director, was previously a partner in the bankruptcy & corporate restructuring practice of Brown Rudnick in New York. He also formerly practiced in the corporate restructuring and bankruptcy group of Kramer Levin Naftalis & Frankel. With more than a decade of experience handling complex corporate restructurings, Mr. Novod generally focuses on creditor-side representations. He has advised official and ad hoc committees, distressed investors, trustees, trade creditors and other stakeholders in a number of high-profile restructurings that span the automotive, chemical energy, entertainment, manufacturing, retail and other sectors. Among his noteworthy engagements, Mr. Novod represented Wilmington Trust Company as indenture trustee for the subordinated debentures in the Tribune Company's historic bankruptcy. He also represented unsecured creditors' committees in the General Motors, Herbst Gaming, Bethlehem Steel, Lyondell Chemical and other major Chapter 11 cases, as well as ad hoc creditor groups in Lehman Brothers, Central European Distribution Corp., Charter Communications and WCI Steel. Mr. Novod's arrival complements Grant & Eisenhofer's work litigating on behalf of domestic and foreign institutional investors in securities class actions, corporate governance matters and derivative suits. In recent years, G&E has broadened its practice to represent plaintiffs in national whistleblower suits, consumer class actions and private antitrust litigation. The firm has recovered more than $13 billion for plaintiffs in the last five years. G&E is currently representing the estate of bankrupt futures broker Refco Inc. and its administrator Marc Kirschner in a lawsuit against financial services firm Cantor Fitzgerald and senior executives, including Chairman and CEO Howard Lutnick. The estate alleges that Cantor failed to compensate Refco for its 10% stake in core technology supporting Cantor's Nevada gaming businesses. Earlier this month, a federal judge in New York's Southern District upheld key claims against Cantor, allowing the case to move forward. G&E co-founders and managing directors Stuart Grant and Jay Eisenhofer said of Mr. Novod's arrival: "Gordon brings an outstanding track record in handling complex bankruptcy matters and working with creditors and administrators of major restructurings. His litigation success fits extremely well with our ongoing work on behalf of investor plaintiffs, including our role in some of the biggest bankruptcy cases of the last dozen years such as Delphi, Parmalat, Global Crossing and other companies." Mr. Novod commented: "Representing creditors and investors in large Chapter 11 proceedings is the cornerstone of my practice, and I'm pleased to be joining Grant & Eisenhofer's stellar litigation platform. The firm is well-known for its successful representation of plaintiffs in investor lawsuits and other complex business litigation, and I am looking forward to further expansion of its existing bankruptcy business." Mr. Novod received his undergraduate degree from Emory University, and his J.D. from Benjamin N. Cardozo School of Law. Other recent bankruptcy-related litigation handled by G&E includes representation of funds managed by Conseco Capital Management, Credit Suisse Asset Management, Pilgrim American Funds and Oppenheimer Funds in a securities action against bankrupt beauty care product maker Styling Technology. G&E also represents a group of institutional investors who collectively purchased over $600 million of debt issued by Washington Mutual Bank, in a securities fraud action and related bankruptcy claim stemming from WaMu's dissolution. G&E led litigation behind some of the largest investor recoveries on record in securities cases, including serving as co-lead counsel to investors in an epic class action against Tyco International alleging accounting and other fraud that looted the company under disgraced CEO Dennis Kozlowski. The resulting $3 billion settlement struck in 2007 represented the largest payment ever made by a corporate defendant in resolving a securities class action. A separate $225 million payment was made by Tyco's former auditor PricewaterhouseCoopers, itself a near-record payment by an accounting firm. Mr. Novod may be reached at: Gordon Z. Novod, Esq. GRANT & EISENHOFER P.A. 485 Lexington Avenue New York, NY 10017 Tel: (646) 722-8523 E-mail: gnovod@gelaw.com 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. ********* 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 ***