/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140710.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, July 10, 2014, Vol. 18, No. 190 Headlines 250 AZ: Requests Dismissal of Chapter 11 Case 37 WEST 24TH STREET: Voluntary Chapter 11 Case Summary ACG CREDIT: Files List of 7 Largest Unsecured Creditors ACG CREDIT: July 14 Hearing on SageCrest's Bid for Stay Relief ADELPHI ACADEMY: Seeks More Time to File Schedules & Statements ADEPT TECHNOLOGIES: Final Decree Entered Closing Chapter 11 Case ALM MEDIA: S&P Assigns 'B' CCR; Outlook Stable AMERICAN APPAREL: Gets Default Notice from Lion Capital AMERICAN MEDIA: Moody's Lowers Corporate Family Rating to Caa1 ARIZONA LA CHOLLA: Section 341(a) Meeting Scheduled for Aug. 14 ARVADA STRUCTURES: Court Dismisses Reorganization Case ASR CONSTRUCTORS: Hearing on Plan Outline Continued to Aug. 26 ASR CONSTRUCTORS: July 29 Hearing on Bid to Sell Phelan Property BAY CLUB PARTNERS: Set to Present Plan for Confirmation Sept. 5 BENTLEY PREMIER: Court Confirms Plan Proposed by Pourchot Parties BUDD COMPANY: Will Have Official Asbestos PI Committee CACTUS WELLHEAD: Moody's Rates $350MM 2st Lien Secured Loan 'B3' CALPINE CORP: S&P Rates New Senior Unsecured Debt 'B' CARAUSTAR INDUSTRIES: S&P Puts 'B+' CCR on CreditWatch Negative CITGO PETROLEUM: Fitch Affirms 'BB-' IDR & Rates New Debt 'BB+' CITGO PETROLEUM: S&P Affirms 'B' CCR & Rates Sr. Facilities 'BB-' COMMUNITY ACTION: Case Summary & 20 Largest Unsecured Creditors CORINTHIAN COLLEGES: Warned of Weakened State Before Funding Cuts CRUMBS BAKE SHOP: Closes Stores as Cupcake Declines DETROIT, MI: Some European Banks Sell Holdings of City Bonds DOUGLAS HIMMELFARB: Faces Sanctions for Disclosing Info to WSJ ENERGY FUTURE: Seeks Approval to Take Part in Optim Asset Auction ENERGY FUTURE: Asks Court to Approve Joint Venture Agreements EPL OIL & GAS: Moody's Withdraws 'B2' Corporate Family Rating EPR PROPERTIES: S&P Raises Corp. Credit Rating to 'BB+' EVERYWARE GLOBAL: PE Backer Proposes Cash Infusion FALCON STEEL: Can Use Cash Collateral Until July 18 FIRED UP: Streusand Landon Approved as Committee's Local Counsel FIRED UP: Vernon Firm to Prepare 2014 Franchise Disclosure Docs FL 6801 SPIRITS: U.S. Trustee to Hold Creditors' Meeting July 23 FL 6801 SPIRITS: Sec. 341 Creditors' Meeting Set for July 23 FLORIDA GAMING: Seeks More Time to Serve Solicitation Packages FLORIDA GAMING: Dismissal of Freedom Holdings' Case Sought FLORIDA GAMING: Dismissal of Tara Club's Case Sought GBG RANCH: Files Bare-Bones Chapter 11 Petition in Laredo, TX GBG RANCH: Voluntary Chapter 11 Case Summary GENERAL MOTORS: Executives to Testify Before Senate Subcommittee HARRON COMM: Moody's Announces Asset Sale No Impact on B2 CFR IBCS MINING: Seeks to Obtain $3.5-Mil. in DIP Loans IBCS MINING: Hires David Stetson as Chief Restructuring Officer IBCS MINING: Wants Court to Issue Joint Administration Order IBCS MINING: Wants Schedules Filing Deadline Extended to Aug. INLAND SALVAGE: Case Summary & 20 Largest Unsecured Creditors KID BRANDS: U.S. Trustee Appoints Creditors' Committee KID BRANDS: U.S. Trustee to Hold Section 341(a) Meeting July 23 LABORATORY PARTNERS: Wants Plan Exclusivity Extended to Aug. 22 LIGHTSQUARED INC: Harbinger Files Racketeering Suit Against Ergen MAGNETATION LLC: Moody's Assigns B3 Rating on $100MM Senior Notes MAGNETATION LLC: S&P Affirms 'B-' Corp. Credit Rating MD AMERICA ENERGY: S&P Assigns 'B-' CCR & Rates $525MM Loan 'CCC+' MERITAS SCHOOLS: Moody's Rates $80MM 2nd Lien Senior Debt 'Caa2' MIG LLC: Employs Cousins Chipman as Conflicts Counsel MIG LLC: Can Hire Prime Clerk as Claims & Noticing Agent MILLER HEIMAN: Moody's Affirms 'B3' Corporate Family Rating NATIONAL ENVELOPE: Seeks Extension of Exclusive Plan Filing Period NATIONAL ENVELOPE: Trust Agreement with Committee Approved NCR CORP: S&P Affirms 'BB+' CCR on Increased Revenue NELSON EDUCATION: Moody's Lowers Corporate Family Rating to 'Ca' NELSON EDUCATION: S&P Lowers CCR to 'D' on Missed Payments OHCMC-OSWEGO: L.B. Anderson-Led Auction on Sept. 16 Okayed OHCMC-OSWEGO: Amends Sale-Based Plan Documents OUTERSTUFF LLC: Moody's Assigns 'B1' Corporate Family Rating OUTERSTUFF LLC: S&P Assigns 'B+' CCR & Rates $100MM Revolver 'BB' PEREGRINE FINANCIAL: Lawsuits Seek Return of More Than $1.5MM PHH CORP: Fitch Affirms 'BB-' IDR & Removes From Watch Negative PHH CORP: S&P Cuts Ratings to 'B+' on Sale of Leasing Business PRETTY GIRL: Section 341(a) Meeting Set for Aug. 13 PROSPECT PARK: Wants Exclusive Plan Filing Date Extended to Aug. PSL-NORTH AMERICA: U.S. Trustee to Hold Creditors' Meeting July 23 PSL-NORTH AMERICA: Seeks Additional Time to File Schedules RAPID AMERICAN: Creditors' Panel Taps Gilbert LLP as Special Atty REGENCY ENERGY: S&P Assigns 'BB' Rating on $499MM Unsec. Notes REFCO PUBLIC: Court Sets Sept. 2 as Claims Bar Date RESIDENTIAL CAPITAL: "Wilson" Complaint Dismissed REVEL AC: Seeks Court Approval to Reject Five Contracts REVSTONE INDUSTRIES: 2 Subsidiaries File Ch. 11 Plans SABRE INDUSTRIES: Moody's Lowers Corporate Family Rating to 'B3' SEGA BIOFUELS: Plan Confirmation Hearing Continued to July 31 SUMMIT MIDSTREAM: Moody's Assigns B3 Rating on $300MM Sr. Notes TACTICAL INTERMEDIATE: Files for Ch. 11 to Quickly Sell Assets TACTICAL INTERMEDIATE: Section 341(a) Meeting Set on August 26 TACTICAL INTERMEDIATE: Case Summary & 30 Top Unsecured Creditors TTC PLAZA: Aug. 4 Trial in Avoidance Suit Against Wu et al. USEC INC: Settles Joint Venture Dispute With Babcox & Wilcox USEC INC: Has Until Oct. 1 to Decide on Unexpired Leases VERSO PAPER: S&P Lowers CCR to 'CC' on Potential Selective Default VETS FOR PETS: Case Summary & 20 Largest Unsecured Creditors WABASH NATIONAL: S&P Raises CCR to 'BB-' on Improved Profits WALTER ENERGY: $320MM Notes Add-on No Impact on S&P's 'B-' Rating WALTER ENERGY: Moody's Assigns 'B3' Rating on New $320MM Notes WESTERN CAPITAL: Seeks to Modify Plan Post-Confirmation * Big Banks' Living Wills Detail How To Avoid Bailouts * Recent Small-Dollar & Individual Chapter 11 Filings ********* 250 AZ: Requests Dismissal of Chapter 11 Case --------------------------------------------- 250 AZ, LLC has requested that Honorable Eileen W. Hollowell of the Bankruptcy Court for the District of Arizona dismiss its Chapter 11 case. The Debtor submitted a plan of reorganization in December 2013. The confirmation hearing was continued to July 8, 2014, to allow secured creditor RREF to challenge the feasibility of the Debtor's plan. The Debtor does not have the ability to fund its plan now and argues that a dismissal rather than conversion to Chapter 7 liquidation is in the best interest of the estate and creditors, as creditors would be able to pursue remedies in state court. The Court ordered an expedited hearing on the Debtor's Motion for July 8, 2014 in Tucson. About 250 AZ, LLC 250 AZ, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 13-00851) in Tucson, Arizona, on Jan. 22, 2013. In its schedules, the Debtor disclosed $25 million in assets and $70.8 million in liabilities. 250 AZ owns an 84.70818% tenant in common interest in a 29-story office building located at 250 East Fifth Street, in Cincinnati, Ohio. The Debtor is represented by Dennis M. Breen, III, Esq., and John E. Olson, Esq., at Breen Olson & Trenton, LLP as counsel. The U.S. Trustee said an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against the company have expressed interest in serving on a committee. 37 WEST 24TH STREET: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: 37 West 24th Street, LLC 40 West 8th Street New York, NY 10011 Case No.: 14-12006 Chapter 11 Petition Date: July 8, 2014 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Hon. Martin Glenn Debtor's Counsel: Scott S. Markowitz, Esq. TARTER KRINSKY & DROGIN LLP 1350 Broadway, 11th Floor New York, NY 10018 Tel: (212) 216-8000 Fax: (212) 216-8001 Email: smarkowitz@tarterkrinsky.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $100,000 to $500,000 The petition was signed by Roee Nahmani, managing member. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. ACG CREDIT: Files List of 7 Largest Unsecured Creditors ------------------------------------------------------- ACG Credit Company II, LLC, filed with the Bankruptcy Court a list of its largest unsecured creditors, disclosing: Name of Creditor Nature of Claim Amount of Claim ---------------- --------------- --------------- 1. Fine Art Finance, LLC Arranger Fees $6,250,000 James Reilly Brooksite 423 South Ocean Avenue, Floor 2 Patchogue, NY 11772 Tel: (631) 656-9018 Fax: (347) 572-0416 E-mail:james.reilly@brooksite.biz 2. Hahn & Hessen LLP Legal Services $877,630 488 Madison Ave. New York, NY 10022 Tel: (212) 478-7200 Fax: (212) 478-7400 3. SorinRand LLP Legal Services $58,192 4. Cohen and Wolf, P.C. Legal Services $50,000 5. Cohen Reznik LLP Accounting Services $22,500 6. SageCrest II, LLC Stipulated Settlement Unknown Agreement Dispute 7. Art Capital Group, Inc. Contract-Management Unknown Agreement About ACG Credit Company II, LLC New York-based ACG Credit Company II, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 14-11500) on June 17, 2014. Ian Peck signed the petition as director. Gellert Scali Busenkell & Brown, LLC, serves as the Debtor's counsel. In its schedules, the Debtor disclosed that the value of its assets and liabilities is "unknown". A copy of the schedules is available for free at: http://bankrupt.com/misc/ACGCREDIT_36_sal.pdf ACG CREDIT: July 14 Hearing on SageCrest's Bid for Stay Relief -------------------------------------------------------------- The Bankruptcy Court will convene a hearing on July 14, 2014, at 1:00 p.m. to consider Sagecrest II, LLC's motion for relief from automatic stay in the Chapter 11 cases of ACG Credit Company II, LLC. SageCrest seeks to proceed to trial in two consolidated actions pending in the U.S. District Court for the District of Connecticut (Bridgeport) entitled Sagecrest II, LLC v. ACG Credit Company II, LLC, et al., 3:13-CV-973 (SRU), and Sagecrest II, LLC v. Ian S. Peck, et al., 3:12-CV-974 (SRV). As reported in the Troubled Company Reporter on July 1, 2014, the claims pending in the Connecticut Action are SageCrest's claims against numerous non-Debtor defendants and the Debtor for their failure to meet their obligations under a May 19, 2008 settlement stipulation and mutual release, and the Debtor's counterclaims arising from that same agreement. SageCrest alleges that the Debtor failed to pay $11,125,000 under the settlement stipulation, and have committed numerous tortious acts to avoid making those payments. Discovery in the Connecticut Action is completed and the only remaining proceeding is the trial, SageCrest said in court papers. Given the advanced stage of the Connecticut Action, allowing the case to proceed to trial before the Connecticut District Court is warranted, SageCrest asserted. On June 26, SageCrest replied to the Debtor's objection stating that the objection failed to address the fact that Ian Pect, the Debtor's director, testified at his continued deposition that the Debtor has no active bank accounts and does not do business other than collecting loans related to the SageCrest settlement. Objections to SageCrest's request were due July 9. SageCrest is represented by J. Kate Stickles, Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware; Laurence May, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in New York; and Craig A. Wolfe, Esq., Robert S. Friedman, Esq., and Mark E. McGrath, Esq., at Sheppard Mullin Richter & Hampton LLP, in New York. About ACG Credit Company II, LLC New York-based ACG Credit Company II, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 14-11500) on June 17, 2014. Ian Peck signed the petition as director. Gellert Scali Busenkell & Brown, LLC, serves as the Debtor's counsel. In its schedules, the Debtor disclosed that the value of its assets and liabilities is "unknown". A copy of the schedules is available for free at: http://bankrupt.com/misc/ACGCREDIT_36_sal.pdf ADELPHI ACADEMY: Seeks More Time to File Schedules & Statements --------------------------------------------------------------- Adelphi Academy d/b/a Adelphi Academy of Brooklyn requests an extension through July 30, 2014, to file its Statement of Financial Affairs, Schedules of Assets and Liabilities, as well as address executory contracts and unexpired leases. The Debtor's Chapter 11 case was filed on June 16, 2014, in the Bankruptcy Court for the Eastern District of New York. The Debtor contends that "cause" exists for the extension. The Debtor is a non-profit private school. The Debtor's emergency Chapter 11 filing coincided with the end of its school year, which has made it impossible for the Debtor to timely file its Schedules and Statement or deal with contracts and leases. The Debtor believes its request for an extension comports with Sec. 1007(c)of the Bankruptcy Code as well as case law. Adelphi Academy -- operator of the Adelphi Academy of Brooklyn, a not-for-profit, 501(c)(3), private and independent school from property it owns at 8515 Ridge Boulevard in Bay Ridge, Brooklyn -- filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 14-43065) in Brooklyn on June 16, 2014. The bankruptcy case is assigned to Judge Elizabeth S. Stong. The proposed attorney for the Debtor is A. Mitchell Greene, Esq. at Robinson, Brog, Leinwand, Greene, Genovese, & Gluck PC of New York, New York. Metropolitan Commercial Bank is represented by Lee Attanasio, Esq., at Sidley Austin LLP, in New York. ADEPT TECHNOLOGIES: Final Decree Entered Closing Chapter 11 Case ---------------------------------------------------------------- Bankruptcy Judge Jack Caddell entered on June 30, 2014, a final decree closing the Chapter 11 case of ADEPT Technologies, LLC. The Debtor has reported to the Court that its reorganization plan has been fully confirmed, and that it is a new company under the plan and has acquired its assets in accordance with the plan. The Court scheduled a "show cause" hearing on June 23 why a final decree must not be entered and the case closed. The Court on June 5, 2014, confirmed the Debtor's Amended Plan of Reorganization dated March 21, 2014. Objections to confirmation of the Plan were filed by PNC Bank, Birmingham City Wide Local Development Company, Inc. and Southern Development Council, Inc., First Volunteer Bank and J. Thomas Corbett, Bankruptcy Administrator. The objections by Birmingham City Wide Local Development Company, Inc. and Southern Development Council, Inc., as well as J. Thomas Corbett, Bankruptcy Administrator confirmation were withdrawn at the Plan confirmation hearing. As reported by the Troubled Company Reporter, the Plan proposes a 10% recovery for allowed general unsecured claims. Under the Plan, First Volunteer Bank will retain its lien on the collateral securing the Debtor's $129,536 prepetition loan until the time the debt is paid in full, with the secured claim to be paid through monthly payments of $943 per month; (ii) PNC Bank's $6.2 million secured claim will be paid through the execution of a new promissory note to be secured by the same collateral upon which PNC had a lien prepetition according to its same priority; and (iii) the Debtor will restructure its $2.2 million and $135,078 secured debt with Southern Development Council, Inc., and will assume the debt according to the terms and conditions of the existing finance agreements in place. SDC will retain its lien on the collateral securing the debt until the time the debt is paid in full. About ADEPT Technologies ADEPT Technologies, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-83490) on Oct. 31, 2012, in Decatur, Alabama. The Debtor, which has principal assets located in Huntsville, Alabama, estimated assets of $10 million to $50 million and liabilities of up to $10 million. Judge Jack Caddell presides over the case. Kevin D. Heard, Esq., at Heard Ary, LLC, represents the Debtor as counsel. The petition was signed by Brad Fielder, managing member. Creditor PNC Bank is represented by Kevin C. Gray, Esq., Matthew W. Grill, Esq., and Christine K. Borton, Esq., at Maynard, Cooper & Gale, P.C., in Birmingham, Alabama. ALM MEDIA: S&P Assigns 'B' CCR; Outlook Stable ---------------------------------------------- Standard & Poor's Ratings Services assigned ALM Media LLC its 'B' corporate credit rating. The rating outlook is stable. At the same time, S&P assigned ratings to ALM Media LLC's proposed $287.5 million senior secured credit facilities. The credit facilities consist of a $215 million first-lien term loan due 2020, a $22.5 million first-lien revolving credit facility due 2020, and a $50 million second-lien term loan due 2021. S&P rated the first-lien term loan and revolver 'B+' (one notch higher than the 'B' corporate credit rating on the company) with a recovery rating of '2', indicating S&P's expectation of substantial (70%- 90%) recovery for lenders in the event of a payment default. S&P rated the second-lien loan 'CCC+' (two notches below the corporate credit rating), with a recovery rating of '6', indicating negligible (0%-10%) recovery for lenders. The company will use proceeds from the facilities to help fund Wasserstein & Co.'s acquisition of the company and to repay its existing debt. The 'B' corporate credit rating on ALM Media LLC reflects S&P's assessment of the business risk profile as "weak" and its financial risk profile as "highly leveraged." "We based our assessment of the business risk profile as "weak" on the company's narrow business focus, relatively small size, mature organic growth prospects, and competition with much larger players," said credit analyst Hal Diamond. "ALM Media has a niche position in the legal publishing sector. The company's subscription base, which accounts for roughly 30% of revenues, provides advertisers with a highly targeted vehicle. Subscription revenue has slightly declined since 2009 as a result of the consolidation of certain larger law firms and minimal growth in legal end market demand." The stable rating outlook incorporates S&P's expectation that operating performance will remain steady and liquidity will remain adequate. S&P expects the company will be able to renew or replace its high-margin contract with LexisNexis under multi-year terms before its expiration, at least at the same pricing level. S&P also anticipates that leverage will remain relatively high (above 5x), reflecting its expectation that the company will redeploy the majority of its discretionary cash flow in acquisitions. Upside scenario S&P could consider raising the rating to 'B+' if it become convinced that the company will maintain lease-adjusted leverage below 5x, and if it demonstrates improving revenue and EBITDA growth, while broadening the business base and scale. An important consideration for an upgrade would also be satisfactory renewal or replacement of its LexisNexis agreement at a higher amount. Downside scenario S&P could lower the rating over the intermediate term if lease- adjusted debt leverage rises above 6x and discretionary cash flow approaches breakeven levels. This could result from a failure to renew the LexisNexis contract under favorable terms and/or an economic downturn, together the potential for increased competitive or client pressure on pricing. AMERICAN APPAREL: Gets Default Notice from Lion Capital ------------------------------------------------------- Anna Prior, writing for Daily Bankruptcy Review, reported that American Apparel Inc. confirmed on July 8 that investment firm Lion Capital has demanded repayment of a $10 million loan, asserting the casual clothing maker defaulted under their credit pact when Dov Charney ceased to be chief executive. According to the report, the company, which makes T-shirts, leggings and other casual clothes, said it disputes the lender's claims and may seek damages from Lion for what it deemed an invalid acceleration of the loan maturity. Suzanne Kapner, writing for The Wall Street Journal, reported on July 9 that hedge fund Standard General gained sway over American Apparel with an 11th-hour lifeline, part of a deal that will overhaul the company's board and install ousted founder Dov Charney as a strategic consultant -- at least for now. According to the Journal, the deal, completed on July 9, will provide the company with $25 million, some of which will be used to pay off a loan that has been called in by Lion Capital. As part of the deal, all but two of American Apparel's seven- member board will be replaced, and Mr. Charney will serve as a strategic consultant until an investigation into his conduct is completed, the Journal related. About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. American Apparel reported a net loss of $106.29 million on $633.94 million of net sales for the year ended Dec. 31, 2013, as compared with a net loss of $37.27 million on $617.31 million of net sales for the year ended Dec. 31, 2012. As of Dec. 31, 2013, the Company had $333.75 million in total assets, $411.15 million in total liabilities and a $77.40 million total stockholders' deficit. * * * As reported by the Troubled Company Reporter on Feb. 26, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating to 'CCC' from 'B-' on Los Angeles-based American Apparel Inc. The outlook is developing. The Troubled Company Reporter, on Nov. 21, 2013, reported that American Apparel Inc. had its corporate family rating cut one level to Caa2 by Moody's Investors Service. The clothing retailer's probability of default was also lowered one level and the outlook is negative. AMERICAN MEDIA: Moody's Lowers Corporate Family Rating to Caa1 -------------------------------------------------------------- Moody's Investors Service has lowered American Media, Inc.'s ("American Media," "AMI" or the "company") Corporate Family Rating (CFR) to Caa1 from B3 and Probability of Default Rating (PDR) to Caa1-PD from B3-PD. Moody's also downgraded the ratings on the 11.5% Senior Secured First-Lien Notes due December 2017 to B3 from B2 and 13.5% Senior Secured Second-Lien Notes due June 2018 to Caa3 from Caa2 as well as the Speculative Grade Liquidity Rating to SGL-4 from SGL-3. The rating outlook has been revised to negative. Ratings Downgraded: Issuer: American Media, Inc. Corporate Family Rating to Caa1 from B3 Probability of Default Rating to Caa1-PD from B3-PD Speculative Grade Liquidity Rating to SGL-4 from SGL-3 $385 Million ($365 Million outstanding) 11.5% Senior Secured First-Lien Notes due December 2017 to B3 (LGD-3) from B2 (LGD-3) $105 Million ($10.6 Million outstanding) 13.5% Senior Secured Second-Lien Notes due June 2018 to Caa3 (LGD-5) from Caa2 (LGD-6) Ratings Rationale The downgrade of American Media's CFR to Caa1 reflects Moody's expectation for lower revenue and EBITDA resulting in higher financial leverage. Moody's anticipate the company's total debt to EBITDA leverage will climb to the 9-10x range (Moody's adjusted) over the rating horizon from 6.5x as of December 31, 2013. The rating revision also captures AMI's deteriorating liquidity profile and weakening EBITDA cushion under the revolver's first- lien leverage covenant. Last week, AMI submitted a Notification of Late Filing to the SEC to alert investors that it plans to delay submission of its Form 10-K for fiscal 2014 (ended March 31) to no later than July 15, 2014 due to the need to assess the financial impact of the disruption in its wholesaler distribution channel as a result of the recent shutdown and bankruptcy filing of and non-payment by its second largest publications wholesaler, Source Interlink Distribution ("Source"). AMI disclosed that it now expects revenue could decline by approximately $10-20 million compared to its prior estimate of $5-10 million. Additionally, the company revised upward its estimate for the timeframe to transition to replacement wholesalers (i.e., TNG and Hudson News), which it now expects will take approximately 12-24 weeks instead of 6-12 weeks cited previously. AMI has obtained a waiver from its bank lenders to extend the period to comply with the credit agreement covenant that requires delivery of its audited annual financial statements to 105 days after the fiscal year end from 90 days. The downgrade of the Speculative Grade Liquidity rating to SGL-4 reflects weak liquidity with around $4 million of cash plus $4.6 million of borrowing capacity under the $40 million revolving credit facility as of December 31, 2013. In fiscal 2015, Moody's project free cash flow will be breakeven to negative. Given that Moody's anticipate EBITDA less capex interest coverage will drop below 1x, Moody's believe the company will continue to draw under its revolver to fund semi-annual interest payments in June and December. At December 2013, the total first-lien debt ratio was 4.01x (as defined by the credit agreement) versus the revolver's maximum allowable covenant of 4.5x. Moody's expect the EBITDA covenant cushion to fall below 10% and believe the company could breach the leverage covenant before the end of fiscal 2015. The negative outlook reflects our expectation for lower circulation sales over the near-term as well as the possibility that the revenue decline could be bigger than expected and/or the transition period could take longer than expected. Negative pressure is further exacerbated by AMI's exposure to newsstand sales, which account for about 45% of total revenue. In addition, Moody's continue to expect continued secular decline in traditional print-based magazine publishing due to increasing alternatives for magazine and tabloid delivery across various digital platforms. As such, Moody's believe there is a risk that AMI's revenue and cash flow could experience permanent reduction if consumers do not resume purchasing AMI's publications and circulation does not revert to prior levels after the company reallocates Source's distribution business to its other wholesalers. Ratings are supported by the strong brand name, reputation and readership loyalty of AMI's flagship titles including Star, Shape, National Enquirer, OK!, and Muscle & Fitness, as well as some ability to partially offset declining newsstand and subscription revenue by raising cover prices, increasing number of ad pages per magazine, publishing additional special issues for key publications and optimizing print programs designed to reduce manufacturing and distribution costs. What Could Change the Rating -- Down Ratings could be lowered due to higher-than-expected declines in circulation or print advertising demand resulting in further free cash flow deterioration and inability to reduce debt balances or meet financial maintenance covenants. Ratings could also be downgraded if weaker EBITDA, debt-financed acquisitions or other leveraging events result in higher-than-expected total debt to EBITDA ratios (includes Moody's standard adjustments) that diverge from Moody's expectations. What Could Change the Rating -- Up An upgrade is unlikely over the near-term, however the outlook could be stabilized if circulation sales revert to prior levels, advertising revenue improves, or incremental service revenue and/or higher cover prices offset circulation declines resulting in neutral to positive free cash flow generation, debt reduction and total debt to EBITDA sustained comfortably below 6x (includes Moody's standard adjustments). The principal methodology used in this rating was 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. Headquartered in Boca Raton, Fl, American Media, Inc. is a leading publisher of celebrity weekly journals including Star, OK!, and National Enquirer as well as health and fitness magazines including Shape and Men's Fitness, published 10 times per year. The company also provides services to other publishers and arranges for the placement of owned publications and third party publications with retailers. Post-emergence from Chapter 11 in December 2010, Avenue Capital Management II, L.P., Angelo, Gordon & Co., L.P., The Capital Group Companies and Oppenheimer Funds collectively own approximately 79% of the common stock. ARIZONA LA CHOLLA: Section 341(a) Meeting Scheduled for Aug. 14 --------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Arizona La Cholla, L.L.C., will be held on Aug. 14, 2014, at 10:30 a.m. at U.S. Trustee Meeting Room, James A. Walsh Court, 38 S Scott Ave, St 140, Tucson, Arizona. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Arizona La Cholla, L.L.C., filed a Chapter 11 bankruptcy petition (Bankr. D. Ariz. Case No. 14-10254) on July 2, 2014. Steven L. Nannini signed the petition as manager. The Debtor estimated assets and liabilities of at least $10 million. Altfeld & Battaile P.C. serves as the Debtor's counsel. ARVADA STRUCTURES: Court Dismisses Reorganization Case ------------------------------------------------------ The Hon. Howard R. Tallman of the U.S. Bankruptcy Court for the District of Colorado dismissed the Chapter 11 case of Arvada Structures, LLC. The Debtor, in its motion, said that on March 13, 2014, the Court granted primary secured creditor 2010-1 RADC/CADC Venture, LLC, relief from the automatic stay. The Debtor stated that there is no purpose served by continuing the Chapter 11 case, and there are no assets to administer if the case is converted to Chapter 7. About Arvada Structures Arvada Structures filed a Chapter 11 petition (Bankr. D. Colo. Case No. 13-29222) on Nov. 19, 2013. The petition was signed by Halston Mikail as manager. The Debtor estimated assets and debts of at least $10 million. Judge Howard R Tallman presides over the case. Jeffrey S. Brinen, Esq., serves as the Debtor's counsel. Richard A. Wieland, U.S. Trustee for Region 19, notified the Bankruptcy Court that he was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of Arvada Structures, LLC. ASR CONSTRUCTORS: Hearing on Plan Outline Continued to Aug. 26 -------------------------------------------------------------- The Bankruptcy Court approved a stipulation continuing until Aug. 26, 2014, at 2:00 p.m., the hearing to consider the adequacy of the Disclosure Statement explaining ASR Constructors, Inc., et al.'s Chapter 11 Liquidating Plan. The hearing is continued from July 8. The stipulation was entered among the Debtors, and Federal Insurance Company, Berkeley Regional Insurance Company, the Office of the U.S. Trustee, Gotte Electric, Inc., and ICW Group Insurance Companies. The Debtors, in their motion, stated that the terms of the Plan rely on the outcome of the action entitled Gotte Electric, Inc. v. ASR Constructors, Inc., et al., which was removed to the Bankruptcy Court and assigned Adversary Case No. 6:13-ap-01402-MH. The parties agreed to continue the hearing for at least 45 days. The parties hope that the action is settled in the next 45 days at which the Debtor will amend its Plan and Disclosure Statement and provide more specific information and terms regarding payment to creditors. According to the Disclosure Statement, the purpose of the Plan is to orderly liquidate, collect and maximize the cash value of the remaining assets of the Debtors and make distributions in respect of any Allowed Claims against the Debtors' estates. Upon the Effective Date, the property of the Debtors' estates will vest in the Debtors and, in accordance with the Plan, transferred to the Creditors' Trust which will be managed by the Disbursing Agent by liquidating or abandoning, as necessary, all potential sources of assets of the Debtors for funding for the Plan. Because there are competing liens and claims against the Debtors' assets, most of the payments cannot be made under the Plan until the Gotte Bankruptcy Court Action is resolved and all projects on which ASR is the contractor are completed. The Creditors' Trust will be funded by the remaining assets of each of the Debtors' Estates including (i) cash, (ii) remaining accounts receivable, (iii) remaining Meridian Properties, (iv) Inland's remaining machinery and equipment, and (v) all Causes of Action. The Creditors' Trust will be managed by the Disbursing Agent by orderly liquidating or abandoning, as necessary, all sources of assets of the Debtors for funding for the Plan. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/ASRCONSTRUCTORS_266_ds.pdf The Debtors are represented by: James C. Bastian, Esq. Melissa Davis Lowe, Esq. SHULMAN HODGES & BASTIAN LLP 8105 Irvine Center Drive, Suite 600 Irvine, CA 92618 Tel: (949) 340-3400 Fax: (949) 340-3000 E-mail: jbastian@shbllp.com mlowe@shbllp.com About ASR Constructors ASR Constructors, Inc., filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-25794) on Sept. 20, 2013. The petition was signed by Alan Regotti as president. ASR disclosed $17,647,556 in assets and $18,901,467 in liabilities as of the Chapter 11 filing. Judge Mark D. Houle presides over the case. James C Bastian, Jr., Esq., at Shulman Hodges & Bastian, LLP, serves as the Debtor's counsel. The Law Office of John D. Mannerino serves as corporate counsel to the Debtor. Rodgers, Anderson, Malody & Scott LLP CPAs serves as accountant to the Debtor. Two affiliates -- Another Meridian Company, LLC and Inland Machinery, Inc. -- also filed Chapter 11 petitions. ASR CONSTRUCTORS: July 29 Hearing on Bid to Sell Phelan Property ---------------------------------------------------------------- Bankruptcy Judge Mark D. Houle will convene a hearing on July 29, 2014, at 2:00 p.m., to consider ASR Constructors, Inc., et al.'s motion to sell real property of Debtor Another Meridian Company, LLC located at 3758 Kreuer Rd., Phelan, California, in accordance with Section 363(b) of the Bankruptcy Code. The Debtor has received an offer from Dean S. Thompson and David J. Thompson to purchase the property for $59,000. The buyer is the owner of real property located adjacent to the Phelan Property. The Phelan Property is not encumbered by any lender liens but is encumbered by the cross-collateralized lien of Federal Insurance Company. Through the sale, after payment of (1) real property taxes, (2) brokerage commissions, and (3) other costs of the sale including escrow fees, title charges and documentary transfer taxes, the balance of the net sale proceeds estimated to be approximately $51,320, will be held by Meridian in a segregated account subject to the liens and cash collateral agreements with Federal. The Debtors said the agreements reached with Federal have allowed for the preservation and completion of the sale of the Phelan Property and will provide Meridian with additional net proceeds for distribution to creditors. Therefore, good cause exists to grant the sale motion so that the favorable business opportunity is not lost. About ASR Constructors ASR Constructors, Inc., filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-25794) on Sept. 20, 2013. The petition was signed by Alan Regotti as president. ASR disclosed $17,647,556 in assets and $18,901,467 in liabilities as of the Chapter 11 filing. Judge Mark D. Houle presides over the case. James C. Bastian, Jr., Esq., at Shulman Hodges & Bastian, LLP, serves as the Debtor's counsel. The Law Office of John D. Mannerino serves as corporate counsel to the Debtor. Rodgers, Anderson, Malody & Scott LLP CPAs serves as accountant to the Debtor. Two affiliates -- Another Meridian Company, LLC and Inland Machinery, Inc. -- also filed Chapter 11 petitions. BAY CLUB PARTNERS: Set to Present Plan for Confirmation Sept. 5 --------------------------------------------------------------- Judge Randall L. Dunn has approved the Amended Disclosure Statement filed by Bay Club Partners-472, LLC, dated June 30, 2014. The hearing on confirmation of the plan will be held on Sept. 5, 2014, at 9:00 AM, in U.S. Bankruptcy Court, Courtroom #3, 1001 SW 5th Ave, 7th Floor, Portland, OR 97204. The Amended Plan provides that: (a) Legg Mason Real Estate CDO I Ltd. will be repaid in full with interest by the third anniversary of the Effective Date; (b) General Unsecured creditors will be paid in full with interest on the third anniversary of the Effective Date unless any creditors elect to be paid 60% of their Allowed Claims within 90 days of the Effective Date (c) all membership interests in Debtor will be retained; and (d) Debtor will operate in the ordinary course and pay all Creditors pursuant to the Plan. A copy of the Amended Disclosure Statement is available at: http://bankrupt.com/misc/BAYCLUB_179_1ds.pdf About Bay Club Bay Club Partners-472, LLC, was formed to renovate and operate the residential property at 2121 W. Main St., Mesa, Arizona, known as Midtown on Main Street. The property has 470 rental units and offers residents amenities including a fitness center, spa, clubhouse, three swimming pools, a covered play area, assigned parking, and 24-hour emergency maintenance services. As of the bankruptcy filing, the Debtor has leased 91% of the apartments. Bay Club filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 14-30394) on Jan. 28, 2014. The Debtor disclosed $28,247,787 in assets and $27,311,084 in liabilities as of the Chapter 11 filing. The case has been assigned to Judge Randall L. Dunn. Attorneys at Tonkon Torp LLP serve as counsel to the Debtor. The U.S. Trustee has not appointed a committee of unsecured creditors. Legg Mason Real Estate CDO I, Ltd., is represented in the case by Laura J. Walker, Esq., at Cable Huston LLP. BENTLEY PREMIER: Court Confirms Plan Proposed by Pourchot Parties ----------------------------------------------------------------- The Bankruptcy Court confirmed on June 26, 2014, the Joint Plan of Reorganization for Bentley Premier Builders, LLC, filed by the Starside, LLC, and the Phillip M. Pourchot Revocable Trust. All objections to confirmation not withdrawn or otherwise resolved were overruled. In another order, the Court denied the Plan of Reorganization filed by Sandy Golgart, 50% equity holder and creditor of the Debtor, and interested party in the case. As reported by the Troubled Company Reporter, competing plans of reorganization were filed on behalf of the Debtor by Starside, LLC and the Phillip M. Pourchot Revocable Trust, on the one hand; and Sandy Golgart, on the other. The Trust and Golgart each own 50% of the Debtor. Golgart's plan would allow Golgart to maintain control of the Debtor. If Pourchot's plan is approved, Pourchot will likely grab control of the company as the plan would allow it to submit a credit bid for the assets. The two factions differ on the valuation of the Debtor's assets and the amount of Pourchot's claims. Golgart's Plan says the Debtor's properties have a fair market value in excess of $36 million and the maximum amount of the secured debt is $18 million, thus leaving substantial equity in the Debtor's properties. Pourchot's plan says the present value of the Debtor's real estate assets is just $23 million to $27 million, and the secured claims of Pourchot and Starside are at least $29.2 million -- thus equity is out of the money, and Golgart would be wiped out. Plan votes are due March 7, 2014. Plan confirmation began March 28. The Lewisville Independent School District, the County of Denton, the City of Frisco, Starside, LLC and The Phillip M. Pourchot Revocable Trust, Jason Searcy, and Mary Ann Rallo, Sal Rallo and Teresa Loughborough each filed objections to confirmation of the Golgart Plan. The objections of the Lewisville Independent School District, the County of Denton, the City of Frisco, and Jason Searcy, were withdrawn or otherwise resolved prior to the hearing on the Golgart Plan. The Pourchot Parties, in response to the supplemental post-closing brief of Ms. Golgart, stated that Ms. Golgart continued to try to divert the Court's attention from the fact there is insufficient value in Bentley Premier Builders to satisfy both the minimum amount due to the Pourchot Parties under the most favorable scenario to Golgart and the allowed claims against the estate. Ms. Golgart submitted a post-closing brief to correct and clarify certain issues discussed in written closing statements or in oral closing argument on April 10, 2014. Ms. Golgart asserted that her plan is feasible and an appropriate preservation of approximately $3.5 million in remaining equity owned both by her and Mr. Pourchot. As reported in the TCR on March 26, 2014, in a court filing, Ms. Golgart's lawyer questioned a provision of the plan proposed by the Pourchot Parties that would ensure she receives nothing for her equity in Bentley. The provision stated that the plan proponents won't "reserve or pursue avoidance actions against non- insiders except to the extent an avoidable payment or transfer was made to a non-insider for the benefit of an insider." "The failure to properly preserve claims that could pay Golgart on her 50% equity position is a violation of the [Bankruptcy] Code," said Mark Castillo, Esq., at Curtis Castillo PC, in Dallas, Texas. Mr. Castillo also questioned another provision that provides full releases of those causes of action that could pay Ms. Golgart in further violation of U.S. bankruptcy law. "Pourchot's plan fails to provide the means for payment to Golgart's prepetition equity position of the recoveries from reserved and pursued causes of action," the lawyer said in court papers. The Phillip M. Pourchot Revocable Trust and Starside, LLC is represented by: Laura L. Worsham, Esq. Nathan Allen, Jr., Esq. JONES, ALLEN & FUQUAY, L.L.P. 8828 Greenville Avenue Dallas, TX 75243 Tel: (214) 343-7400 Fax: (214) 343-7455 Ms. Golgart is represented by: Mark A. Castillo, Esq. Joshua L. Shepherd, Esq. CURTIS | CASTILLO PC 901 Main Street, Suite 6515 Dallas, TX 75202 Tel: (214) 752-2222 Fax: (214) 752-0709 - and - John T. Palter, Esq. Kimberly M.J. Sims, Esq. Palter Stokley, Esq. SIMS WRIGHT PLLC Preston Commons - East 8115 Preston Road, Suite 600 Dallas, TX 75225 Tel: (214) 888-3111 Fax: (214) 888-3109 About Bentley Premier Bentley Premier Builders, LLC, is a Texas limited liability company in the business of selling high-end residential lots and building high-quality luxury homes. The Debtor owns and develops lots, primarily in the two subdivisions known as Normandy Estates, which straddles both Denton and Collin Counties, near the intersection of Spring Creek Parkway and Midway Road in Plano, and Wyndsor Pointe, which is located in Frisco off Stonebrook Parkway, one-half mile west of the Dallas North Tollway. The company has 100 vacant residential lots, with listing prices ranging from $150,000 to $900,000. In addition to these vacant lots, the company owns a model house and an Amenities Center in Normandy Estates, two houses in Wyndsor Pointe, some common areas and an approximately 5-acre tract zoned for commercial use. Bentley filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 13-41940) on Aug. 6, 2013 in Sherman, Texas. The Debtor disclosed $35,793,857 in assets and $30,428,782 in liabilities as of the Chapter 11 filing. The Phillip M. Pourchot Revocable Trust (led by co-trustee Phillip M. Pourchot) and Sandy Golgart each hold a 50% member's interest in the Debtor. Ms. Golgart signed the bankruptcy petition. The Debtor sought bankruptcy after Starside LLC, an entity owned by Phillip Pourchot, acquired the note issued to Sovereign Bank for a $7,250,000 loan, and served notice of its attempt to foreclose upon properties securing the note. Gerald P. Urbach, Esq., and Jason A. Katz, Esq., at Hiersche, Hayward, Drakeley & Urbach, P.C., in Addison, Texas, serve as the Debtor's counsel. Judge Brenda Rhoades presides over the case. A chapter 11 trustee was appointed following motions filed by the U.S. Trustee and the Pourchot Trust. Jason R. Searcy, the Chapter 11 trustee, tapped to employ Joshua P. Searcy, Esq., at Searcy & Searcy, P.C. as attorneys, and Gollob, Morgan, Peddy & Co., P.C., as accountants. The deadline to file claims against and interest in the Debtor was Dec. 5, 2013. Governmental entities had until Feb. 3, 2014, to file proofs of claim. Golgart is represented by Mark A. Castillo, Esq., and Joshua L. Shepherd, Esq., at Curtis | Castillo PC; and John T. Palter, Esq., and Kimberly M. J. Sims, Esq., at Palter Stokley Sims Wright PLLC. The Pourchot Parties are represented by Mark E. Andrews, Esq., and Aaron M. Kaufman, Esq., at Cox Smith Matthews Incorporated; and Laura L. Worsham, Esq., and Lynn Schleiner, Esq., at Jones, Allen & Fuquay, LLC. BUDD COMPANY: Will Have Official Asbestos PI Committee ------------------------------------------------------ Bankruptcy Judge Jack B. Schmetterer green-lighted the appointment of an Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 case of The Budd Company, Inc. An Ad Hoc Committee of Asbestos Personal Injury Claimants filed the request. Budd Co. objected. Joinders in the Debtor's objection were filed by Thyssenkrupp North America, Inc., the Debtor's parent; and The Committee of Executive & Administrative Retirees. By letter dated April 16, 2014, counsel for the Ad Hoc committee requested the U.S. Trustee to appoint an official committee of asbestos personal injury claimants. By a letter dated May 7, 2014, the U.S. Trustee declined the request. The U.S. Trustee has not appointed an official committee of general unsecured creditors. According to the Court, the Movant has met its burden to show that the asbestos claimants are not adequately represented in this case and that the cost to the estate of appointing the proposed committee is justified. Most important is the consideration that an Asbestos Committee will be able to obtain sophisticated expert to supply information helpful in evaluating the necessary plan treatment of asbestos claims." The Debtor ceased all manufacturing activities in 2006 and is said to have no current employees. The Debtor filed this bankruptcy case to liquidate its assets in an orderly manner and dispose of creditor claims. It asserts that its significant case assets likely will be insufficient to satisfy its long-term liabilities, most of which are owed to its retirees. The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America acts as the authorized representative for the Debtor's union retirees, and the Retiree Committee represents the interests of the Debtor's non-union retirees. Although the Debtor has some environmental and asbestos related liabilities, the vast majority of the Debtor's creditors are its former employees, and the vast majority of the Debtor's liabilities (by dollar amount) arise from medical, pension, and other post-retirement obligations owed to its former employees. The Debtor estimates that the retiree benefit and pension obligations for union and non-union retirees comprise approximately 97% of the Debtor's total liabilities. However, the Debtor also estimates the value of its asbestos liabilities to be approximately $23 million net of insurance coverage. According to Brian Bastien's (CEO and President of Debtor) Declaration, as of the Petition Date, the Debtor had approximately $384 million in cash and had, as of September 30, 2013, book-value liabilities of approximately $1.2 billion. The Debtor appears to have claims against TKNA to fund pension and health claims and a motion is pending to approve an agreement to resolve these claims. In its Schedules, Debtor scheduled approximately 578 creditors holding asbestos claims, as disputed, contingent and unliquidated. In Bastien's Declaration, the Debtor notes that there are approximately 356 pending asbestos personal injury claimants with claims valued by the Debtor at $23 million net of insurance coverage. In an April 28, 2014 letter, the Debtor's counsel states that, as of the Petition Date, the Debtor was a defendant in 336 such actions. The Ad Hoc committee states that it consists of lawyers representing more than 950 asbestos personal injury claimants holding claims which the Committee asserts to be valued at $50 million. According to the Debtor, "as of September 30, 2013, the book value of its asbestos liabilities comprised less than 2% of the book value of its total liabilities," and "approximately 50% of this book value is a reserve for defense costs." According to the Bankruptcy Court, even at the Ad Hoc committee's estimated value the asbestos claims would be only approximately 4% of the unsecured claims, but they require a reorganization plan to deal in some way with the net value of these claims in excess of insurance coverage. The U.S. Trustee argues that the asbestos claims are speculative, contingent and unliquidated, and cites to the April 28, 2014 letter from the Debtor's counsel as the source for its belief that "historically 95% of such claims have been dismissed without payment and the remaining actions have generally settled for less than $5,000." The Ad Hoc committee asserts that the Debtor has underestimated its asbestos liability, while the Debtor asserts that the Ad Hoc committee has overestimated the Debtor's liability after insurance. The Ad Hoc committee contends that, absent the formation of an official committee, it will be difficult for asbestos claimants to have any meaningful participation in the case. The Ad Hoc committee cites the claimants' age, health and dispersion across the country as a reason for their inability to individually participate in the case. It also argues that the claimants are of modest means, and while they are able to retain personal injury counsel on a contingent fee basis, they cannot pay the hourly charges of bankruptcy counsel. The Debtor argues that even without appointment of an official committee, the asbestos claimants may continue to monitor and participate in the case. The Debtor further argues that the Movant members have many years of asbestos litigation experience, and several firms represented by such members have significant experience in Chapter 11 cases as well (citing as examples Steven Kazan as one such member who advertises bankruptcy experience in his firm biography and Peter G. Angelos as one such member involved in a successful bankruptcy appeal before the Second Circuit). The Debtor also contends that there are more than 10,000 retirees who are also elderly and who rely upon the Debtor for their benefits and health care. But, in contrast to the asbestos claimants, the 10,000 retirees cited by the Debtor have representative voices in the case through the Retiree Committee, the UAW and the PBGC. The Ad Hoc committee is comprised of seven lawyers, but not all attorneys and firms that represent individual asbestos claimants. To require each attorney for all claimants to participate in the case will likely become chaotic and opens the risk of inequitable treatment depending on the sophistication and experience in bankruptcy of the particular counsel. Instead, the Court has determined that it would benefit the asbestos claimants and the bankruptcy process to have one voice represent all asbestos claimants. No plan has been filed in this case and at this early state the Debtor has not indicated how it plans to handle the asbestos claims. The Bankruptcy Judge held that the Debtor may or may not propose a trust under 11 U.S.C. 524(g). Because this is a liquidating case, the asbestos claims will not "pass through" the bankruptcy to allow the claimants to have the ability to seek recovery from a reorganized Debtor entity. The Debtor must propose some treatment of the asbestos claims. A copy of the Court's July 7, 2014 Memorandum Opinion is available at http://is.gd/xH0HlBfrom Leagle.com. About The Budd Company The Budd Company, Inc., a former supplier to the automotive industry, filed for chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 14-11873) on March 31, 2014, with a deal to settle potential claims against its parent, ThyssenKrupp AG. The company -- which ceased manufacturing operations in 2006 and does not have any current employees, facilities or customers -- has obligations consisting largely of medical and other benefits to approximately 10,000 former employees. Liabilities amount to approximately $1 billion with assets of approximately $400 million. Most of the debt consists largely of medical and other benefits to approximately 10,000 former employees. The Debtor disclosed $387,555,681 in assets and $1,107,350,034 in liabilities as of the Chapter 11 filing. The Hon. Jack B. Schmetterer oversees the case. The Debtor has tapped Proskauer Rose LLP as Chapter 11 counsel, Dickinson Wright PLLC as special counsel, Epiq Bankruptcy Solutions, LLC as noticing, claims and balloting agent, and Conway MacKenzie Management Services, LLC's Charles M. Moore as CRO. The U.S. Trustee appointed five individuals to serve on the Committee of Executive & Administrative Retirees. The Segal Company (Eastern States), Inc. serves as the Committee's actuarial consultant. CACTUS WELLHEAD: Moody's Rates $350MM 2st Lien Secured Loan 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating (CFR) to Cactus Wellhead, LLC and B3 ratings to its proposed $350 million first lien secured term loan due 2020 and $50 million secured revolving credit facility. Moody's also assigned a SGL-2 Speculative Grade Liquidity rating. The net proceeds of the term loan offering will be used to repay existing debt and to pay a distribution to its owners. This is the first time Moody's has rated Cactus Wellhead. The outlook is stable. "Term loan proceeds will refinance the existing debt of this manufacturer of wellhead pressure control equipment, more firmly grounding the debt component of its capital structure although adding substantially to its financial leverage," commented Andrew Brooks, Moody's Vice President. "Having rapidly grown the company into a leading supplier of wellhead control systems, Cactus's senior management and financial sponsors will receive a substantial return on and of their invested capital, the distribution of which will also be funded by the proceeds of this secured term loan offering." Ratings assigned Assignments: Issuer: Cactus Wellhead LLC Probability of Default Rating, Assigned B3-PD Speculative Grade Liquidity Rating, Assigned SGL-2 Corporate Family Rating, Assigned B3 Senior Secured Bank Credit Facility, Assigned B3 range of LGD3 Ratings Rationale Cactus's B3 CFR reflects the company's small size in the roughly $6.4 billion surface equipment segment of the oil field service and equipment market, its relatively short operating history, the inherent cyclicality of oil and gas drilling activity to which Cactus is exposed and the significant increase in leverage represented by this debt offering. Offsetting these concerns are Cactus's strong presence and broad customer penetration in a product line, which while low in its relative cost, is a critical component of wellsite operations, its geographic scope with sales and service locations in most major US hydrocarbon producing basins, the financial flexibility imparted by its largely variable cost business model and a seasoned management team who appears to have established a firm footing for future growth in profitability and cash flow with which to de-lever the company's balance sheet. Predecessor companies to Cactus, and much of its senior management, trace their histories back to the mid-1970s, firmly establishing the Cactus brand name in the oilfield equipment market. Cactus Wellhead in its present configuration was established in August 2011 by its current senior management team with the backing of financial sponsor Cadent Energy Partners. The company has experienced rapid growth since its inception with 2013 revenues and EBITDA up 147% and 279%, respectively, over 2012 results. Despite its relatively brief history of operations, Cactus has emerged as one of the leading manufacturers and suppliers of wellhead pressure control equipment, competing against less than half a dozen significantly larger, more broadly diversified service and equipment providers. Its operations, which include US and Chinese manufacturing facilities, also span 13 sales and service centers which cover the majority of the US oil and gas producing regions. The company's revenue mix is well diversified among product sales, equipment rentals -- largely "frac" trees, enabling Cactus to capitalize on the service intensive hydraulic fracturing boom - and service and repairs. While the term loan financing proposed by the company will re- finance existing debt, it is also a leveraged recapitalization of the company that will fund a substantial $240 million dividend to shareholders, increasing pro forma debt leverage to over 4x. Moody's does not view leveraging the company to provide for shareholder returns as a particularly productive use of capital, especially given the history of periodic volatility evidenced in the broader oilfield services market. However, Cactus generally produces free operating cash flow after funding its expansionary capital spending requirements, which should enable it to reduce leverage, presuming it can continue to execute on its robust growth trajectory. Cactus's SGL-2 Speculative Grade Liquidity rating reflects good liquidity through 2015. Moody's expects Cactus to generate at least break-even free cash flow after funding debt service, working capital requirements, its capital spending needs and the ongoing payment of distributions to its shareholders. Should a deceleration of growth or a downturn in the business emerge, the liquidation of working capital should bolster near-term liquidity. The company expects to close on a $50 million, five-year secured revolving credit facility, which should provide sufficiently for working capital and liquidity needs arising from its rapid growth. Moody's sees little likelihood of this facility having material permanent utilization. The stable outlook reflects favorable industry dynamics for continued strength in drilling and hydrocarbon production, enabling Cactus to continue a growth trajectory which should generate free cash flow sufficient to achieve improved debt leverage through 2015. Increased size and the demonstrated durability of its business model together with a permanent reduction in debt leverage to 3x or below could warrant consideration of an upgrade. The rating could be downgraded if revenue growth stalls and free cash from operations turns negative, if debt leverage exceeds 5x, if another large debt- financed cash distribution to shareholders materializes or should liquidity concerns impinge on company operations. The secured term loan and secured revolving credit facility share on a pari passu basis a first-lien interest in substantially all the company's assets, effectively creating a single class of rated debt. This results in the secured term loan and the secured revolver being rated the same as the B3 CFR under Moody's Loss Given Default (LGD) Methodology. Cactus Wellhead, LLC is a privately owned oilfield service and equipment provider headquartered in Houston, Texas. The principal methodology used in this rating was the Global Oilfield Services Rating Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CALPINE CORP: S&P Rates New Senior Unsecured Debt 'B' ----------------------------------------------------- Standard & Poor's Rating Services assigned its 'B' debt issue rating and '5' recovery rating to Calpine Corp.'s planned senior unsecured notes due 2023 and 2025. S&P don't expect that allocation between the two maturities to affect its conclusions. The total amount of senior unsecured debt issued could vary from expectations. S&P also affirmed Calpine's 'B+' corporate credit rating. However, S&P raised Calpine's senior secured debt rating to 'BB' from 'BB-' and revised the recovery rating to '1' from '2'. S&P left unchanged its 'BB' debt issue rating and '1' recovery rating on Calpine Construction Finance Co. L.P. (CCFC). The dollar-for-dollar exchange in debt does not affect S&P's view of Calpine's business risk profile or our expectations of financial performance over the forecast period of the next three years or so. "Calpine will fund the tender premiums with cash, so the transaction is essentially debt-neutral, although interest costs will decline a bit," said Standard & Poor's credit analyst Terry Pratt. The change in capital structure leads to less senior secured debt and results in an improved recovery rating and hence debt rating and influences the rating S&P assigned to the new senior unsecured debt. Thus, the analytic focus involved with this change in capitalization revolves around recovery analysis of the senior secured and senior unsecured debt. The stable outlook reflects S&P's view that Calpine's business risk profile is not likely to change and that financial performance will likely stay within the middle of the highly leveraged range over the next two years based on S&P's expectations that power prices will remain stable to slightly positive in some markets. The company's recently completed sale of six plants in the U.S. Southeast does not affect our outlook. CARAUSTAR INDUSTRIES: S&P Puts 'B+' CCR on CreditWatch Negative --------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings, including its 'B+' corporate credit rating, on Austell, Ga.-based Caraustar Industries Inc. on CreditWatch with negative implications. The CreditWatch negative listing follows Caraustar's announcement that it agreed to acquire the Newark Group, a manufacturer of recycled paperboard, linerboard, industrial tubes, cores, and other converted products. Purchase and financing terms have not been publicly disclosed. While purchase and financing terms have not been disclosed, S&P estimates that the transaction could weaken the company's credit ratios, with pro forma leverage, as measured by debt to EBITDA, exceeding 5x before projected synergies. This compares to Caraustar's projected 2014 year-end leverage of about 4.5x before the acquisition. Caraustar is a vertically integrated manufacturer of 100% recycled paperboard and converted paperboard products. The company serves the four principal recycled paperboard product end-use segments: tubes and cores; folding cartons; gypsum facing paper; and specialty paperboard products. Caraustar is owned by private equity firm H.I.G. Capital LLC. "We will resolve the CreditWatch listing following our review of the financing details of the pending transaction and implications for Caraustar's financial risk profile," said Standard & Poor's credit analyst Thomas Nadramia. "Upon completion of our review, we could leave the ratings unchanged or lower them. Based on preliminary information, we believe that if the ratings were to be lowered, the downgrade would not exceed one notch." CITGO PETROLEUM: Fitch Affirms 'BB-' IDR & Rates New Debt 'BB+' --------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDR) for CITGO Petroleum Corporation (CITGO) at 'BB-' and expects to assign 'BB+' ratings to the proposed new senior secured debt issuances as follows: -- $1 billion Senior Secured Bank Credit Facility due 2019; -- $650 million Senior Secured Term Loan B due 2021; -- $650 million Senior Secured Notes due 2022. Fitch also affirms the company's pari passu, fixed-rate Industrial Revenue Bonds (IRBs) at 'BB+'. The other outstanding debt remains unaffected. The Rating Outlook remains Negative. Approximately $1.4 billion in balance sheet debt (excluding $255 million in capitalized leases) is affected by today's rating action. REFINANCING TRANSACTION The proposed CITGO transaction will result in a refinance of its existing Senior Secured Term Loan B due 2015, Term Loan C due 2017, 11.5% notes due 2017, and Revolving Credit Facility, as well as make a $300 million dividend payment to its parent using proceeds from the proposed refinancing. The security across CITGO's capital structure is expected to remain mostly pari passu and covenants will be largely unchanged from the 2010 refinancing package. The company's IRBs, which are also secured pari passu with the rest of the package, will remain outstanding. The proposed refinancing is modestly leveraging (total debt including capital leases rises from $1.33 billion to $1.66 billion proforma) causing debt/EBITDA to rise from about 1.1x at March 31, 2014 to 1.4x proforma at year-end 2014 as calculated by Fitch. The transaction is expected to result in a modest interest coverage improvement due to lower coupons on the proposed refinanced debt, despite total leverage increasing. CITGO has substantial headroom on a stand-alone basis at the current 'BB-' rating level. However, the company's linkage to its much weaker parent, Petroleos de Venezuela, S.A. (PDVSA) ('B'/Negative Outlook), has historically constrained CITGO's ratings. KEY RATINGS DRIVERS CITGO's ratings are supported by the scale and quality of the company's refining assets, with three high-complexity refineries consisting of approximately 749,000 barrels per day (bpd) of refining capacity on the Gulf Coast and Midcontinent; significant access to price-advantaged Canadian and U.S. shale crudes, resulting in strong financial performance and free cash flow (FCF); the company's export capability out of the Gulf that allows it to access higher growth markets abroad, especially distillates; and strong covenant protections in the senior indenture, which limit the ability of CITGO's parent to dilute CITGO's credit quality. Other considerations include the historical use of CITGO by its parent as a cash cow, and the historical volatility of refining. Linkage to PDVSA The company's stand-alone strengths are balanced by CITGO's strong operational linkage to parent PDVSA which is evidenced through CITGO's contracts to take approximately 300,000 bpd of PDVSA crude at its Gulf coast refineries, frequent appointment of PDVSA personnel to CITGO executive and board positions, and procurement services agreements between CITGO and PDVSA. At the end of March, Fitch downgraded PDVSA's IDR from 'B+' to 'B' and revised the Outlook from Stable to Negative, citing PDVSA's inextricable linkage to the government of Venezuela, which in turn has experienced heightened macroeconomic instability, delays in implementation of policies to address rising inflation, distortions in the foreign exchange (FX) market and deterioration in external accounts. Favorable Crude Spreads CITGO has benefited from wide discounts associated with landlocked WTI and other interior North American crudes, as embodied in the Brent-WTI gap (average of approximately $8.00/barrel year-to-date) versus historical spreads in the +/-$3/barrel range). While this spread has narrowed considerably from the $16 - $20/barrel level seen in 2011, it remains historically wide and has provided robust cash generation for refineries positioned to take advantage of it and other discounted regional crudes. CITGO can run up to 200,000 bpd of such discounted crudes in its Gulf Coast system, and approximately 100,000 bpd of Canadian heavy crudes at its 167,000 bpd Lemont, IL refinery. It is worth noting that this spread has held up despite a flood of logistics projects that have come online to move crude to consumption centers on the coasts. Current forward prices for oil suggest that a healthy discount will continue at least over the next several years. Strong Stand-Alone Credit Metrics CITGO's credit metrics are strong for the rating category. As calculated by Fitch, on a proforma basis, CITGO's total debt and capitalized lease obligations will be $1.66 billion versus $2.2 billion in 2009. The company's free cash flow declined to - $344.9 million as of YE 2013 but this was primarily driven by a distribution to its parent PDVSA of $887 million. Absent that distribution, FCF would have been +$542 million, given CITGO's strong cash flow from operations and relatively light capex. It is important to note in this regard that CITGO's restricted payment basket caps the company to distributing cumulative net income levels. The net income basket will be reset to April 1, 2014 upon completion of the proposed refinance transaction. Looking forward, Fitch expects CITGO will be modestly FCF positive in our base case across the next two years. Liquidity CITGO's liquidity was ample as of March 31, 2014 on a proforma basis and totals $1.58 billion. This includes $130 million in cash; $1 billion in availability on its new secured revolver; and $450 million in A/R Securitization availability under the current program (the proposed refinance terms allow CITGO to issue up to $500 million). The company's new secured revolver will expire July 2019, while its A/R Securitization facility is renewed annually. In addition, CITGO has $290 million in repurchased Industrial Revenue Bonds (IRBs), which were held in Treasury and can be remarketed at the company's discretion. Additional liquidity could come from the sale of other assets, or the liquidation of excess inventory (total crude + product inventories increased to 33 million barrels as of March 31, 2014, versus more typical levels in the 27 - 28 million barrel level). Management estimates that proforma headroom on its key financial covenant will remain good with the debt-to-cap ratio expected to increase to about 45% at year-end 2014 from 32.8% at year-end 2013 (versus a 60% max). The company's interest coverage covenant will be eliminated from the covenant package given the inherent volatility in refinery results. However, the cushion is anticipated to remain solid with management's estimated proforma coverage over 12x at year-end 2014 from 15.7x at year-end 2013. The proforma maturities profile is manageable with no maturities within the next five years. Other Liabilities CITGO's other obligations are manageable. The deficit on the funded status of CITGO's Pension Benefit Obligation (Pension Assets - PBO) declined to -$192.7 million from -$353.5 million the year prior. The main sources of improvement stemmed from actuarial gains, and better returns on plan assets. CITGO estimates it will contribute $68 million into qualified plans in 2014. CITGO's asset retirement obligation (ARO) was essentially unchanged at $18.76 million and was primarily linked to asbestos remediation. Rental expense for operating leases rose to $170 million in 2013 and is comprised of leases for product storage, office space, marine chartered vessels, computer equipment and equipment used to store and transport feedstocks and refined products. Covenant Protections It is important to note that there are relatively robust covenant protections in CITGO's secured debt which restrict the ability of its parent to dilute CITGO's credit quality. These include a debt/cap maximum of 60%, with a lower 55% test for purposes of making distribution to the parent; and a restricted payment basket which limits the ability of CITGO to make distributions to its parent. The notching between CITGO's IDR and secured ratings reflects the strength of the underlying security package, which was expanded in 2010 to include the 167,000 bpd Lemont refinery, in addition to CITGO's Lake Charles and Corpus Christi refineries, and select petroleum inventories and accounts receivables. RATINGS SENSITIVITIES Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Improved ratings at the parent level; -- Continued strong financial performance at CITGO centered on maintenance of low debt/EBITDA leverage ratios and continued positive FCF. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- A downgrade at the parent level; -- A collapse in refining fundamentals or sustained operational problem at one or more refineries; -- Weakening or elimination of key covenant protections contained in the senior secured debt through refinancing or other means. Note that this last action in particular, while not expected over the medium-term given the planned refinance transaction, would weaken the notching rationale between parent and subsidiary, as the ring fencing created by the secured debt covenants offer substantial protections to all CITGO debtholders. CITGO PETROLEUM: S&P Affirms 'B' CCR & Rates Sr. Facilities 'BB-' ----------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' corporate credit rating on Houston-based CITGO Petroleum Corp. At the same time, S&P assigned its 'BB-' issue rating and '1' recovery rating to the company's proposed senior secured facilities. The outlook is negative. Pro forma for the debt issuance, our assessment of CITGO's 'bb' stand-alone credit profile remains unchanged, reflecting S&P's assessment of its "fair" business risk profile and "significant" financial risk profile. S&P's "fair" business risk assessment of CITGO incorporates its "moderately high" industry risk assessment of the oil refining industry and a "fair" assessment of CITGO's competitive position. CITGO has a total processing capacity of 749,000 barrels per day (bpd} of capacity across three refiners: two on the U.S. Gulf Coast, and one in the Mid-Continent region. Mid-continent margins have been highly favorable in recent years, although slightly weaker now than last year. S&P characterizes CITGO's financial risk profile as "significant" due largely to the sector's very high margin volatility and our expectation for pro forma debt to EBITDA in the 1.5x to 2x range in 2014. The company's credit measures improved significantly during the past two years, and S&P expects crack spreads will continue to produce favorable margins. In S&P's base case projections, it assumes flat utilization and modestly higher operating expenses compared with 2013. Also, S&P forecasts CITGO's weighted average crack spread per barrel to reside in the $12.00 to $12.50 range. Pro forma for the debt issuance, these assumptions translate to debt to EBITDA in the 1.5x to 2x range and EBITDA interest coverage of 7.5x to 8x in 2014. At the current rating level, CITGO's negative outlook mirrors that of PdVSA. The outlook on PdVSA reflects that on Venezuela. S&P don't expect PDVSA's relationship with the government to change significantly in the next two to three years. S&P also believes that the government won't significantly reduce its heavy involvement in the sector or in the company. Therefore, the rating on PdVSA will likely follow the rating trajectory on the sovereign. S&P would likely lower the rating on CITGO if it downgrade PdVSA. Similarly, S&P would revise the outlook on CITGO to stable if it did the same on PDVSA. Since CITGO's stand-alone credit profile is 'bb', it is very unlikely that S&P would lower CITGO's rating due to company-specific factors. COMMUNITY ACTION: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Community Action Partnership of Western Nebraska, Inc. fdba Panhandle Community Services 3350 10th Street Gering, NE 69341-1724 Case No.: 14-41212 Chapter 11 Petition Date: July 8, 2014 Court: United States Bankruptcy Court District of Nebraska (Lincoln Office) Debtor's Counsel: David Grant Hicks, Esq. POLLAK, HICKS, & ALHEJAJ, P.C. 6910 Pacific St #216 Omaha, NE 68106 Tel: (402) 345-1717 Email: dhicks@bankruptcynebraska.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Margo Hartman, interim executive director. A list of the Debtor's 20 largest unsecured creditors is available for free at http://docdroid.net/ehm7 CORINTHIAN COLLEGES: Warned of Weakened State Before Funding Cuts ----------------------------------------------------------------- Josh Mitchell and Stephanie Gleason, writing for The Wall Street Journal, reported that the collapse of Corinthian Colleges Inc. is raising questions about the Obama administration's aggressive handling of one of the country's largest for-profit education companies, which was hemorrhaging money before regulators cut off its federal funding. According to the report, three days before the administration's freeze of federal funds, an analyst at Wells Fargo & Co., a major holder of Corinthian shares, warned of the company's weakened state in a note to clients. The analyst said the company was expected to burn through $73 million in the three-month period through June, leaving it with a negative balance of $45 million, the report related. The Education Department says it was unaware of the dire state of the company's finances before it moved June 12 to restrict access to federal student-aid dollars, which made up 80% of Corinthian's revenue, the report further related. CRUMBS BAKE SHOP: Closes Stores as Cupcake Declines --------------------------------------------------- Sydney Ember, writing for The New York Times' DealBook, reported that Crumbs Bake Shop, on July 7, said it was closing all of its stores, the latest sign that the gourmet-cupcake industry is in decline. According to the DealBook, when Crumbs went public on the Nasdaq stock exchange in 2011, its shares have steadily fallen. Last week, the Nasdaq suspended trading of the company?s stock, the DealBook said. In its filing with the Securities and Exchange Commission, Crumbs said the Nasdaq had based its decision to delist the company on its failure to comply with a minimum stockholders equity requirement of at least $2.5 million, the DealBook related. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that Crumbs reported sales of $47.2 million in 2013, throwing off a $15.4 million operating loss and a $15.3 million net loss. On March 31, the balance sheet had assets of $17.9 million and liabilities totaling $21 million, Mr. Rochelle noted. New York City-based Crumbs Bake Shop, Inc. -- https://www.crumbs.com/ -- engages in the business of selling a wide variety of cupcakes, cakes, cookies and other baked goods as well as hot and cold beverages. Crumbs offers these products through its stores, e-commerce division, catering services and wholesale distribution business. The Troubled Company Reporter, on April 11, 2014, reported that Rothstein Kass, in Crumbs' Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended Dec. 31, 2013, expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has incurred negative cash flow from operations and significant operating losses for the years ended December 31, 2013 and 2012. DETROIT, MI: Some European Banks Sell Holdings of City Bonds ------------------------------------------------------------ Matt Wirz, writing for The Wall Street Journal, reported that two European banks have sold hundreds of millions of dollars of Detroit municipal bonds after prices rose from lows reached when the city went bankrupt last year. According to the Journal, Depfa Bank PLC and Commerzbank AG sold about $700 million of Detroit bonds in recent weeks for as much as 60 cents on the dollar, people familiar with the matter said. When the city went bankrupt last July, some of the debt they sold traded for as little as 30 cents on the dollar as other investors bailed out, the Journal said, citing data from Electronic Municipal Market Axess. In a separate report by the Journal, the value of Detroit's fine- art collection is pegged at $2.8 billion to $4.6 billion, a sharp increase over a previous partial estimate that could create a headache for the city in bankruptcy court. The new, all-inclusive valuation released on July 9 by New York-based Artvest Partners could add fuel to their arguments ahead of the bankruptcy trial set to begin next month, the Journal said. 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. DOUGLAS HIMMELFARB: Faces Sanctions for Disclosing Info to WSJ -------------------------------------------------------------- Douglas Bruce Himmelfarb, a debtor in a Chapter 11 case pending in bankruptcy court in Hawaii (Bankr. D. Hawaii Case No. 13-00229), owns a painting which may or may not be a work by the late Mark Rothko. The value of the painting depends largely on whether it is in fact a Rothko. In an effort to determine who created the painting, the debtor obtained an order under Fed. R. Bankr. P. 2004 directing Marion Kahan to produce documents and testify at a deposition. Ms. Kahan manages certain documents and artworks held by Mr. Rothko's children, including Christopher Rothko, and his estate. The parties entered into a Stipulated Protective Order which laid out procedures under which the parties could assert and challenge claims of confidentiality. The order also establishes procedures to resolve disputes about confidentiality, and provides that "Confidential Information shall not be disclosed to any person other than" certain categories of people, some of whom must sign a certification in which they agree to be bound by the Stipulated Protective Order. Subsequently, Ms. Kahan produced documents and testified at a deposition. She designated virtually all of her production and testimony as confidential. Ms. Kahan did this because she and the Rothkos do not want to be drawn into litigation. The debtor believes that the presence of certain materials in Ms. Kahan's files -- particularly the negative of a photograph of the debtor's painting -- implies that his painting is a Rothko. Ms. Kahan and the Rothko family do not wish to be dragged into any disputes about the debtor's painting and do not want to create any perception that they either support or oppose his claims. They understandably worry that, if they do or say anything that suggests they think the painting is or isn't authentic, they might be sued. The debtor objected to Ms. Kahan's confidentiality designation. The Stipulated Protective Order provides that, if there is such an objection, the party who designated the material has 25 days to seek a court order designating the material as confidential. On October 17, 2013, the debtor objected to Ms. Kahan's confidentiality designation. On October 29, 2013, well within the 25-day period and before Ms. Kahan filed her own motion, the debtor brought the matter before the court. After letter briefing, discovery conferences, and a motion for reconsideration by the debtor, the Bankruptcy Court entered an Amended Discovery Order on January 9, 2014. The order permits the debtor to show third parties prints made from the negative on the condition that the debtor simultaneously provide those parties a specified written disclaimer. The order spells out the exact terms of the disclaimer. The order further provides that "All other documents and testimony provided by Ms. Kahan or the Rothkos shall remain confidential." On April 2, 2014, a Wall Street Journal reporter told Ms. Kahan that the reporter was preparing an article about the debtor's painting and had read Ms. Kahan's deposition testimony. The reporter's article appeared a few weeks later. Ms. Kahan and Christopher Rothko filed a motion for a contempt citation and sanctions. They argued that the debtor or his attorney must have given the reporter Ms. Kahan's deposition transcript, in violation of the court's orders. At the hearing on the motion, the Court directed the debtor to file a disclosure, under oath, of any disclosures which he or anyone acting for him had made of confidential materials, and directed Ms. Kahan and Mr. Rothko to file additional materials in support of their claim for attorneys' fees. The debtor filed a disclosure in which he admitted that, "to the best of [his] knowledge," he gave all of the confidential materials to the Wall Street Journal reporter and also gave Ms. Kahan's deposition transcript to a reporter for BuzzFeed, an online news outlet. He also admitted, "to the best of [his] knowledge," that he gave some or all of the confidential materials to about two dozen other individuals after they signed an agreement to be bound by the Stipulated Protective Order. According to Bankruptcy Judge Robert J. Faris, the debtor has flagrantly violated the Stipulated Protective Order and the Amended Discovery Order. Under that order, he was free to disclose the photograph with the disclaimer, but he was forbidden from disclosing any of the other materials which Ms. Kahan designated as confidential. "There is no doubt that the debtor should be cited for civil contempt. He flagrantly and repeatedly violated the clear and definite terms of the Stipulated Protective Order and the Amended Discovery Order. The evidence is uncontroverted, and therefore more than clear and convincing," according to Judge Faris. Accordingly, Judge Faris: -- awarded the movants reasonable attorneys' fees and costs in the amount of $68,063; and -- imposed a fine of $9,000 for the debtor's violations to date. The Court also required the debtor to file monthly reports, in writing and under penalty of perjury, stating whether he (or anyone acting on his behalf) has disclosed during the month covered by the report any information designated by the movants as confidential and if so, what he has disclosed, to whom, and when. The first report will cover the month of June 2014 and will be due on July 15, 2014. Reports for subsequent months will be due by the tenth day of the following month. "In order to encourage future compliance with the court's orders, I will require the debtor to pay, not later than seven days after the filing of each monthly report, a fine of $2,500 for each such disclosure during the immediately preceding month," Judge Faris added. A copy of the Court's July 7, 2014 Memorandum of Decision on Motion for Order of Contempt and Sanctions, is available at http://is.gd/SWx9Hkfrom Leagle.com. ENERGY FUTURE: Seeks Approval to Take Part in Optim Asset Auction ----------------------------------------------------------------- Energy Future Holdings Corp.'s units are among the likely bidders expected to take part in Optim Energy, LLC's auction for its coal plants in Bremond, Texas. In a motion, the company asked the U.S. Bankruptcy Court for the District of Delaware to allow Luminant Generation Company LLC and two other subsidiaries to make a bid for the assets and complete the acquisition if they win. Energy Future needs "new, strategic market opportunities" to be competitive in the electricity business, according to its lawyer, Tyler Semmelman, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware. Last month, Optim Energy, another bankrupt Texas-based power producer, asked for permission to hold an auction on August 4, with Twin Oaks Power LLC's $82 million offer serving as the stalking horse bid or lead bid. Optim Energy previously received a $60 million offer from Major Oak Power LLC, an affiliate of The Blackstone Group LP. Earlier reports said Major Power doesn't intend to complete the deal. The deadline for filing bids is July 23, according to court papers. The bankruptcy court will hold a hearing on July 18 to consider whether to allow Energy Future's units to participate in the auction. Objections are due by July 11. 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: Asks Court to Approve Joint Venture Agreements ------------------------------------------------------------- Energy Future Holdings Corp. asked the U.S. Bankruptcy Court for the District of Delaware to approve new amendments to the agreements related to a joint venture it helped form with a subsidiary for the construction of nuclear generation units. Under the amended agreements, the rights to certain land, water and intellectual property held by the joint venture would be transferred to the energy company's subsidiary Luminant Generation Company LLC or to a non-debtor entity Nuclear Energy Future Holdings II LLC. The proposed amendments would terminate Texas Competitive Electric Holdings Company LLC's guaranty of certain rights and obligations of Nuclear Energy under the agreements, and give Luminant Generation the right to dissolve the joint venture at its option. The amendments call for material releases of claims by and between the companies party to the joint venture agreements. Energy Future also asked for court approval to execute a letter that confirms the intention of companies party to the agreements to treat the amendments collectively as a "single, unified, non- severable" document. The letter memorializes the companies' intent to treat the effectiveness of each individual amendment as being dependent on the execution of the other amendments, according to Energy Future lawyer, Tyler Semmelman, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware. A court hearing is scheduled for July 18. Objections are due by July 11. 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. EPL OIL & GAS: Moody's Withdraws 'B2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service withdrew EPL Oil & Gas, Inc.'s B2 Corporate Family Rating (CFR), B2 Probability of Default Rating and SGL-2 Speculative Grade Liquidity Rating following its acquisition by Energy XXI (Bermuda) Ltd. (EXXI, unrated), the parent company of Energy XXI Gulf Coast, Inc. (EGC, B2 stable). EPL's B3 senior unsecured notes rating and its stable outlook remain in place. Issuer: EPL Oil & Gas, Inc. Withdrawals: Corporate Family Rating, Withdrew B2 Probability of Default Rating, Withdrew B2-PD Speculative Grade Liquidity Rating, Withdrew SGL-2 Ratings Rationale On June 3, 2014, EPL became a wholly-owned restricted subsidiary of EGC and their combined credit risk is now reflected in EGC's B2 CFR, B2-PD PDR and SGL-3 Speculative Grade Liquidity Rating. EPL's $510 million 8.25% notes remain outstanding and will continue to have guarantees from each of EPL's direct and indirect subsidiaries. EPL will not be a guarantor for any of EGC's unsecured debt, and EPL's notes will not have a downstream guarantee from EGC. Moody's note that both EPL and EGC senior notes were rated B3 prior to the acquisition. EPL's notes become callable on February 15, 2015 and will most likely be refinanced near or after the first call date with debt raised at the EGC level. EPL Oil & Gas, Inc. is a US Gulf of Mexico focused E&P company that was acquired by Energy XXI (Bermuda) Limited on June 3, 2014 for approximately $2.3 billion. EPR PROPERTIES: S&P Raises Corp. Credit Rating to 'BB+' ------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on EPR Properties Inc. (EPR) to 'BB+' from 'BB'. The outlook is stable. S&P raised the issue-level ratings to 'BBB-' from 'BB+'. "The rating upgrade reflects our view that EPR's core portfolio of special-purpose assets exhibit solid rent coverage, and the company's tenant base will continue to diversify as EPR invests in development and acquisitions," said Standard & Poor's credit analyst Jaime Gitler. The company's commitment to financing investment conservatively along with strengthened credit measures are also supportive of the ratings upgrade. "Our assessment of a "fair" business risk profile reflects EPR's geographically diversified portfolio of special-purpose, non- traditional net-leased real estate properties, which we believe have a more limited potential for profitable adaptive reuse of vacated space relative to traditional commercial real estate property types. The assessment also reflects the company's somewhat concentrated and generally weak credit quality tenant base, and the secular decline in movie theatre attendance. These risks are partially offset by EPR's well-positioned theater portfolio and long-term leases (less than 3% of rents roll over per year through 2017), which we believe will continue to support its near-term core cash flow," S&P noted. With $3.6 billion of undepreciated real estate assets as of March 31, 2014, EPR's 14.6 million square foot portfolio of entertainment (68% of net operating income [NOI]), education (17%), and recreation (14%) properties was 99% leased and included interests in 128 entertainment properties (121 theaters), 56 public charter schools, and $203 million of land held for development. This portfolio is diversified across 38 states, Washington, D.C., and Ontario, Canada, but concentrated by tenant, with the top 10 tenants contributing over two-thirds of NOI. EPR's tenants have generally weak credit quality, but maintain ample (1.8x) rent coverage, in S&P's view. Given, in S&P's view, the weaker potential for adaptive reuse of vacated space S&P expects that the company will maintain comparatively stronger rent coverage measures than peers. The stable outlook reflects S&P's view that the company will maintain good property-level rent coverage, pursue prudent growth in a leverage-neutral manner, and will garner modest growth from its same-property portfolio. At this time S&P considers upward rating momentum to be less likely given the concentrated asset base and investments in comparatively unusual assets. S&P could lower the ratings if the company's tenants encounter meaningful distress causing rent coverage to weaken or leverage and/or coverage measures to deteriorate such that the company is not operating at the higher end of the "intermediate" financial risk category. This could occur if debt leverage rises above the 6.5x level or FCC falls below the mid-2.0x range on a sustained basis. S&P could also take a negative rating action if the company were to broaden its investment pipeline to include additional forms of non-traditional real estate, involvement in the gaming industry beyond a real estate investment, or if the company were to ease its stringent underwriting standards. EVERYWARE GLOBAL: PE Backer Proposes Cash Infusion -------------------------------------------------- Jamie Mason, writing for The Deal, reported that plate and cookery maker EveryWare Global Inc. has received a $20 million investment proposal from its private equity owner, Monomoy Capital Partners LP, but the two parties aren't breaking bread just yet. According to the report, the Lancaster, Ohio-based seller of tableware to mass retail and foodservice industries warned in a July 3 statement that while it has received the investment proposal from its 59% owner, "the company and Monomoy have no agreement on an investment at this time." Previously, EveryWare had received a commitment for a $12 million equity cure from the New York middle-market PE firm on March 31 but the company didn't use the equity cure because it wasn't sufficient enough to get EveryWare back in compliance with its covenants after a violation, the report related. EveryWare announced on March 31 that it had hired Alvarez & Marsal LLC to "assist in a number of projects, including working capital management, expense reduction, product profitability and margin improvement," The Deal recalled. EveryWare is operating under a forbearance agreement with its lenders that is set to expire on July 15, The Deal noted. About EveryWare EveryWare Global, Inc. is a global marketer of tabletop and food preparation products for the consumer and foodservice markets, with operations in the United States, Canada, Mexico, Latin America, Europe and Asia. Its global platform allows it to market and distribute internationally its total portfolio of products, including bakeware, beverageware, serveware, storageware, flatware, dinnerware, crystal, buffetware and hollowware; premium spirit bottles; cookware; gadgets; candle and floral glass containers; and other kitchen products, all under a broad collection of widely-recognized brands. FALCON STEEL: Can Use Cash Collateral Until July 18 --------------------------------------------------- Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, approved the stipulation giving Falcon Steel Company and New Falcon Steel, LLC, interim authority to access Texas Capital Bank, National Association's cash collateral to pay the ordinary and necessary operating expenses for the period June 30, 2014, through and including July 18, 2014. Approximately $16 million is currently outstanding under the Texas Capital loan documents. Texas Capital holds valid and perfected claims secured by the Debtors' right, title, present and future interest in the Collateral. Texas Capital told the Court that it has not consented to the use of its cash collateral; accordingly, the Debtors must prove that Texas Capital is adequately protected and that expenses reflected in the Budget are "necessary to avoid immediate and irreparable harm to the estate" in order to use such cash collateral on an interim basis. Texas Capital said it has serious reservations and concerns about the Debtors' use of its cash collateral, pointing out that the Debtors have failed to provide Texas Capital with pertinent information, leaving Texas Capital to conclude that the Debtors' cash flow projection does not reflect realistic revenues and expenses, and that the Debtors will not be able to provide adequate protection for the use of Texas Capital's Collateral and Cash Collateral. A full-text copy of the Cash Collateral Order with Budget is available at http://bankrupt.com/misc/FALCONcashcol0702.pdf Texas Capital is represented by: Eli O. Columbus, Esq. Brandon J. Tittle, Esq. WINSTEAD PC 500 Winstead Building 2728 N. Harwood Street Dallas, TX 75201 Phone: (214) 745-5400 Fax: (214) 745-5390 Email: ecolumbus@winstead.com btittle@winstead.com About Falcon Steel Company Falcon Steel Company and New Falcon Steel, LLC, sought Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division (Case Nos. 14-42585 and 14-42586) on June 29, 2014. Falcon Steel claims to be the only American-owned company that builds steel lattice towers for high electrical transmission lines. The Debtors are seeking joint administration of their Chapter 11 cases (Lead Case No. 14-42585). Falcon Steel was formed in 1963 and has operated continuously since that time as a manufacturer engaged in fabricating and galvanizing structural steel for customers in the United States. New Falcon, a subsidiary, suspended operations in June 2013 and is being held for sale. Falcon has three manufacturing plants in the DFW area in Texas, with one facility in Haltom City, another in Euless, and the third facility in Kaufman, Texas. The company's corporate headquarters is located at its Haltom City plant. It currently employs approximately 255 employees. Falcon Steel estimated assets and debt of $10 million to $50 million. The Debtors have tapped Forshey & Prostok, LLP, as counsel. FIRED UP: Streusand Landon Approved as Committee's Local Counsel ---------------------------------------------------------------- Bankruptcy Judge Tony M. Davis signed off on an agreed order authorizing the Official Committee of Unsecured Creditors in the Chapter 11 case of Fired Up Inc. to retain Streusand Landon & Ozburn, LLP as local counsel effective as of April 8, 2014. The agreement was entered among the Committee, the Debtor, and the U.S. Trustee's Office. The Debtor has made a limited objection to the Committee's attempt to retain both a national law firm and a local counsel. According to the Debtor, the Committee must not be allowed to retain multiple attorneys absent a showing that two law firms will provide more benefit to the estate than one. The Committee, in its application, related that SLO will use its best efforts to avoid duplication with Pachulski, Stang, Ziehl, and Jones LLP, the lead counsel. The hourly rates of SLO's personnel are: Sabrina L. Streusand, partner $440 G. James Landon, partner $390 Seth Meisel, counsel $325 Arlana Prentice, paralegal $175 Mr. Landon assures the Court that SLO is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: G. James Landon, Esq. Seth E. Meisel, Esq. STREUSAND, LANDON & OZBURN, LLP 811 Barton Springs Road, suite 811 Austin, TX 78704 Tel: (512) 236-9900 Fax: (512) 236-9904 E-mails: landon@slollp.com meisel@slollp.com About Fired Up, Inc. Fired Up, Inc., the Austin, Texas-based owner and operator of the Johnny Carino's Italian restaurant chain, sought Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 14-10447) on March 27, 2014, in Austin. The Debtor is represented by attorneys at Barron & Newburger, P.C., in Austin. It estimated assets and debt of $10 million to $50 million. As of the bankruptcy filing, Fired Up had 2,900 employees and owned and operated 46 company-owned stores known as Johnny Carino's Italian in seven states (Texas, Arkansas, Colorado, Louisiana, Idaho, Kansas and Missouri) and 61 franchised or licensed locations in 17 states and four other countries (Bahrain, Dubai, Egypt and Kuwait). The company began its own "out of court" reorganization in the last quarter of 2013 by closing 20 unprofitable restaurants. The company later opted to seek bankruptcy protection to tie up the "loose ends" of its self-imposed "reorganization" that did not appear capable of being tied up without litigation. In particular, the provisions of the Bankruptcy Code with respect to the rejection of burdensome leases and the ability to propose and pay out its debts pursuant to a Plan without piecemeal prosecution by random uncooperative creditors undermining same were particularly attractive. For the fiscal year ending June 27, 2012, the company reported total revenues of $125.7 million, net income of $614,000, and guest counts of 8.6 million. For the fiscal year ending June 26, 2013, the company reported total revenues of $120.8 million, a net loss of $5.9 million, and guest counts totaling 8.5 million. The Debtor disclosed $10,360,877 in assets and $36,139,375 in liabilities. Creed Ford III is the majority shareholder and has served as president and CEO since 2008. Mr. Ford and Norman J. Abdallah formed Fired Up in 1997 for the purpose of acquiring the then six- unit Johnny Carino's Italian Kitchen chain from Brinker International, Inc. The U.S. Trustee appointed a seven-member Official Committee of Unsecured Creditors. The Committee tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and FTI Consulting, Inc. as its financial advisor. FIRED UP: Vernon Firm to Prepare 2014 Franchise Disclosure Docs --------------------------------------------------------------- Bankruptcy Judge Tony M. Davis signed off on an agreed order authorizing Fired Up, Inc., to employ Vernon Law Group, PLLC as special counsel as of March 27, 2014. The agreement was entered among the Debtor, the Official Unsecured Creditors' Committee and the U.S. Trustee's Office. On May 14, the Debtor asked that the Court deny the objection of the U.S. Trustee and authorize the employment of the Vernon Law. On May 7, Judy A. Robbins, U.S. Trustee for Region 7 filed a limited objection to the request to employ Vernon Law Group, PLLC as special counsel, stating that the fee procedure is better for the creditors and the estate when there are multiple professionals whose fee applications will need to be reviewed simultaneously. As reported in the Troubled Company Reporter on May 12, 2014, Vernon Law will prepare 2014 Franchise Disclosure Documents for Johnny Carino's Italian Restaurants, perform franchise registration and renewal filings in applicable states, and provide franchise advice with regard to ongoing business operations. Vernon Law will be paid at these hourly rates: John Vernon $575 Taylor Vernon $275 Vernon Law will also be reimbursed for reasonable out-of-pocket expenses incurred. Vernon Law is owed for fees incurred during the week prior to bankruptcy. The Debtor paid the Firm a $25,000 retainer. John M. Vernon, Esq., attorney of Vernon Law, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. In May, Judge Davis entered a final order authorizing Fired Up to: 1. pay critical vendors in the ordinary course of business; provided, however, Ford Restaurant Group, Pictoric and any other creditors of the Debtor on the list of critical vendors who are insiders will not, at this time, be paid any sums they were owed as of the Petition Date, and PACA vendor payments; and 2. assume its agreements with Fintech and CASS and continue payments to these entities per the terms set out in their agreements. As reported in the Troubled Company Reporter on April 7, 2014, the Debtor has identified 67 of the 215 vendors it does business with as "critical" vendors. The Debtor said of the 67 vendors, 15 are owed nothing, 25 are owed less than $1,000 and 16 are owed less than $15,000. The aggregate amount owed to these vendors is $1,260,022. About Fired Up, Inc. Fired Up, Inc., the Austin, Texas-based owner and operator of the Johnny Carino's Italian restaurant chain, sought Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 14-10447) on March 27, 2014, in Austin. The Debtor is represented by attorneys at Barron & Newburger, P.C., in Austin. It estimated assets and debt of $10 million to $50 million. As of the bankruptcy filing, Fired Up had 2,900 employees and owned and operated 46 company-owned stores known as Johnny Carino's Italian in seven states (Texas, Arkansas, Colorado, Louisiana, Idaho, Kansas and Missouri) and 61 franchised or licensed locations in 17 states and four other countries (Bahrain, Dubai, Egypt and Kuwait). The company began its own "out of court" reorganization in the last quarter of 2013 by closing 20 unprofitable restaurants. The company later opted to seek bankruptcy protection to tie up the "loose ends" of its self-imposed "reorganization" that did not appear capable of being tied up without litigation. In particular, the provisions of the Bankruptcy Code with respect to the rejection of burdensome leases and the ability to propose and pay out its debts pursuant to a Plan without piecemeal prosecution by random uncooperative creditors undermining same were particularly attractive. For the fiscal year ending June 27, 2012, the company reported total revenues of $125.7 million, net income of $614,000, and guest counts of 8.6 million. For the fiscal year ending June 26, 2013, the company reported total revenues of $120.8 million, a net loss of $5.9 million, and guest counts totaling 8.5 million. The Debtor disclosed $10,360,877 in assets and $36,139,375 in liabilities. Creed Ford III is the majority shareholder and has served as president and CEO since 2008. Mr. Ford and Norman J. Abdallah formed Fired Up in 1997 for the purpose of acquiring the then six- unit Johnny Carino's Italian Kitchen chain from Brinker International, Inc. The U.S. Trustee appointed a seven-member Official Committee of Unsecured Creditors. The Commitee tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and FTI Consulting, Inc. as its financial advisor. FL 6801 SPIRITS: U.S. Trustee to Hold Creditors' Meeting July 23 ---------------------------------------------------------------- The U.S. Trustee for Region 2 is set to hold a meeting of creditors of FL 6801 Spirits LLC and its affiliated debtors on July 23, at 2:30 p.m. (NY Time). The meeting will be held at the Office of the U.S. Trustee, 80 Broad Street, Fourth Floor, in New York. A representative of FL 6801 Spirits is required to appear at the meeting to be examined under oath. Attendance by creditors is welcomed but not required. At the meeting, creditors may examine the company and transact other business as may properly come before the meeting. The meeting may be continued or adjourned from time to time by notice at the meeting without further written notice to creditors. About FL 6801 Spirits FL 6801 Spirits LLC, a wholly owned subsidiary of Lehman Brothers Holdings Inc. and three of its wholly owned subsidiaries filed voluntary Chapter 11 petitions, seeking bankruptcy protection for their condominium hotel property in Miami Beach. FL Spirits' Canyon Ranch Living Hotel and Spa is a luxury full- service, ocean front condominium hotel located at the site of the old Carillon Hotel in Miami Beach, Florida. The current operator of the hotel, Canyon Ranch Living, is not a debtor, and operations at the property are expected to continue without interruption. FL Spirits and the three affiliates companies have sought joint administration, with pleadings to be maintained at FL 6801's case docket (Bankr. S.D.N.Y. Lead Case No. 14-11691). FL Spirits is pursuing a sale process for the hotel property under 11 U.S.C. Sec. 363 where 360 Miami Hotel & Spa LLC will be the stalking horse bidder. The purchaser will acquire the hotel lot (including the spa) and 13 condominium units for $12 million, absent higher and better offers. FL Spirits has tapped Togut, Segal & Segal LLP as general bankruptcy counsel, Shutts & Bowen LLP as special real estate counsel, CBRE, Inc., as real estate broker, and Prime Clerk as claims and notice agent. Upon a successful closing of the transaction, the project will be managed by the Enchantment Group, an operator of award-winning resorts and destination spas, including Mii amo, a destination spa at Enchantment Resort. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Lehman's Chapter 11 plan became effective on March 6, 2012. FL 6801 SPIRITS: Sec. 341 Creditors' Meeting Set for July 23 ------------------------------------------------------------ A meeting of creditors of FL 6801 Spirits LLC and its debtor- affiliates is set for July 23, 2014, at 2:30 p.m. at 80 Broad St., 4th Floor, USTM. The last day to oppose the discharge of the debtor or to challenge dischargeability of certain debts is Sept. 22, 2014. The meeting of creditors is being held pursuant to 11 U.S.C. Sec. 341(a). A representative of the Debtors, as specified in Rule 9001(5) of the Federal Rules of Bankruptcy Procedure, is required to appear at the section 341 meeting of creditors on the date and at the place set forth below to be examined under oath. Attendance by creditors at the meeting is welcomed, but not required. At the meeting, creditors may examine the Debtor and transact other business as may properly come before the meeting. The meeting may be continued or adjourned from time to time by notice at the meeting, without further written notice to creditors. The Debtors' schedules of assets and liablities are due to be filed pursuant to Bankruptcy Rule 1007 on or before July 15, 2014. Any creditor holding a scheduled claim not listed as disputed, contingent, or unliquidated as to amount may, but is not required to, file a proof of claim in these cases. About FL 6801 Spirits FL 6801 Spirits LLC, a wholly owned subsidiary of Lehman Brothers Holdings Inc. and three of its wholly owned subsidiaries filed voluntary Chapter 11 petitions, seeking bankruptcy protection for their condominium hotel property in Miami Beach. The affiliates are FL 6801 Collins North LLC, FL 6801 Collins Central LLC, and FL 6801 Collins South LLC. FL Spirits' Canyon Ranch Living Hotel and Spa is a luxury full- service, ocean front condominium hotel located at the site of the old Carillon Hotel in Miami Beach, Florida. The current operator of the hotel, Canyon Ranch Living, is not a debtor, and operations at the property are expected to continue without interruption. FL Spirits and the three affiliates companies have sought joint administration, with pleadings to be maintained at FL 6801's case docket (Bankr. S.D.N.Y. Lead Case No. 14-11691). FL Spirits has tapped Togut, Segal & Segal LLP as general bankruptcy counsel, Shutts & Bowen LLP as special real estate counsel, CBRE, Inc., as real estate broker, and Prime Clerk as claims and notice agent. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Lehman's Chapter 11 plan became effective on March 6, 2012. * * * FL Spirits is pursuing a sale process for the hotel property under 11 U.S.C. Sec. 363 where 360 Miami Hotel & Spa LLC will be the stalking horse bidder. The purchaser will acquire the hotel lot (including the spa) and 13 condominium units for $12 million, absent higher and better offers. Upon a successful closing of the transaction, the project will be managed by the Enchantment Group, an operator of award-winning resorts and destination spas, including Mii amo, a destination spa at Enchantment Resort. FLORIDA GAMING: Seeks More Time to Serve Solicitation Packages -------------------------------------------------------------- Florida Gaming Centers, Inc. has requested that the Bankruptcy Court for the Southern District of Florida extend the deadline to distribute solicitation packages and non-voting packages. The Court had set a deadline of June 16, 2014 for the distribution of packages. The Debtor served substantially all of the packages by June 16th, but served the remaining packages on June 18th for parties whose addresses could not be easily determined. Therefore, the Debtor asks that the deadline be extended to June 18th. Honorable Robert A. Mark approved the extension. About Florida Gaming Florida Gaming Centers Inc. filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 13-29597) in Miami on Aug. 19, 2013. Florida Gaming Centers operates a casino and jai-alai frontons in Miami. The Company disclosed debt of $138.3 million and assets of $180 million in its petition. Its parent, Florida Gaming Corp. (FGMG:US), and two other affiliates also sought court protection. Bankruptcy Judge Robert A. Mark oversees the case. The Debtors are represented by Luis Salazar, Esq. and Jesse R. Cloyd, Esq. at Salazar Jackson, LLP of Miami, Florida. ABC Funding, LLC, as Administrative Agent for a consortium of prepetition lenders, and the prepetition lenders are represented by Dennis Twomey, Esq., and Andrew F. O'Neill, Esq., at SIDLEY AUSTIN LLP, in Chicago, Illinois; and Drew M. Dillworth, Esq., and Marissa D. Kelley, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida. The Prepetition Lenders are Summit Partners Subordinated Debt Fund IV-A, L.P., Summit Partners Subordinated Debt Fund IV-B, L.P., JPMorgan Chase Bank, N.A., Locust Street Funding LLC, Canyon Value Realization Fund, L.P., Canyon Value Realization Master Fund, L.P., Canyon Distressed Opportunity Master Fund, L.P., and Canyon-GRF Master Fund II, L.P. Counsel to the Official Joint Committee of Unsecured Creditors are Glenn D. Moses, Esq., and Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., in Miami, Florida. * * * The Debtors have sold their assets to Fronton Holdings, LLC, an entity established by ABC Funding. The $140,000,000 purchase price consisted of a credit bid of $99,907,336 on account of the Loan Claim and cash in the amount of $40,092,664. The Bankruptcy Court approved the sale on April 7, 2014. The parties consummated the 363 Sale on April 30. The Debtors have submitted to the Bankruptcy Court a Disclosure Statement explaining their Second Amended Joint Plan of Liquidation dated June 16, 2014. The Plan serves as a separate plan of liquidation for each of the Debtors. The Plan does not seek to effect a substantive consolidation or other combination of the separate estates of each Debtor but instead provides that creditors of each Debtor will be permitted to assert their claims only against the Debtor(s) which they hold Allowed Claims. FLORIDA GAMING: Dismissal of Freedom Holdings' Case Sought ---------------------------------------------------------- Freedom Holdings, Inc., a debtor in Florida Gaming Centers, Inc.'s jointly administered Chapter 11 case, has requested that the Chapter 11 case in the Southern District of Florida be dismissed. The jointly administered case also includes debtors Florida Gaming Corporation and Tara Club Estates, Inc. Although Florida Gaming Centers and Florida Gaming Corporation have filed a joint Plan of Reorganization which is set for confirmation hearing on July 16, 2014, Freedom has sold all of its assets and has no viable business to reorganize. The Court approved the sale of substantially all of Freedom's assets on April 7, 2014. Freedom's remaining asset is stock in Florida Gaming Corporation which will be extinguished on the Plan effective date. Accordingly, Freedom argues that "cause" exists for dismissal under Sec. 1112(b) of the Bankruptcy Code. Conversion would be inappropriate because there are no assets to liquidate. About Florida Gaming Florida Gaming Centers Inc. filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 13-29597) in Miami on Aug. 19, 2013. Florida Gaming Centers operates a casino and jai-alai frontons in Miami. The Company disclosed debt of $138.3 million and assets of $180 million in its petition. Its parent, Florida Gaming Corp. (FGMG:US), and two other affiliates also sought court protection. Bankruptcy Judge Robert A. Mark oversees the case. The Debtors are represented by Luis Salazar, Esq. and Jesse R. Cloyd, Esq. at Salazar Jackson, LLP of Miami, Florida. ABC Funding, LLC, as Administrative Agent for a consortium of prepetition lenders, and the prepetition lenders are represented by Dennis Twomey, Esq., and Andrew F. O'Neill, Esq., at SIDLEY AUSTIN LLP, in Chicago, Illinois; and Drew M. Dillworth, Esq., and Marissa D. Kelley, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida. The Prepetition Lenders are Summit Partners Subordinated Debt Fund IV-A, L.P., Summit Partners Subordinated Debt Fund IV-B, L.P., JPMorgan Chase Bank, N.A., Locust Street Funding LLC, Canyon Value Realization Fund, L.P., Canyon Value Realization Master Fund, L.P., Canyon Distressed Opportunity Master Fund, L.P., and Canyon-GRF Master Fund II, L.P. Counsel to the Official Joint Committee of Unsecured Creditors are Glenn D. Moses, Esq., and Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., in Miami, Florida. * * * The Debtors have sold their assets to Fronton Holdings, LLC, an entity established by ABC Funding. The $140,000,000 purchase price consisted of a credit bid of $99,907,336 on account of the Loan Claim and cash in the amount of $40,092,664. The Bankruptcy Court approved the sale on April 7, 2014. The parties consummated the 363 Sale on April 30. The Debtors have submitted to the Bankruptcy Court a Disclosure Statement explaining their Second Amended Joint Plan of Liquidation dated June 16, 2014. The Plan serves as a separate plan of liquidation for each of the Debtors. The Plan does not seek to effect a substantive consolidation or other combination of the separate estates of each Debtor but instead provides that creditors of each Debtor will be permitted to assert their claims only against the Debtor(s) which they hold Allowed Claims. FLORIDA GAMING: Dismissal of Tara Club's Case Sought ---------------------------------------------------- Tara Club Estates, Inc., a debtor in Florida Gaming Centers, Inc.'s jointly administered Chapter 11 case, has requested that the case in the Southern District of Florida be dismissed. The jointly administered case also includes debtors Florida Gaming Corporation and Freedom Holdings, Inc. Although Florida Gaming Centers and Florida Gaming Corporation have filed a joint Plan of Reorganization which is set for confirmation hearing on July 16, 2014, Tara Club has sold all of its assets and has no viable business to reorganize. A settlement approved by the Court on March 20, 2014 divested Tara Clubs of 6 real estate lots. On April 7, the Court approved the sale of substantially all of Tara Club's assets to Fronton Holdings, LLC. Tara Club's only remaining claimholder is Southern Storage whose $1800 claim Tara Club intends to satisfy prior to the requested dismissal. About Florida Gaming Florida Gaming Centers Inc. filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 13-29597) in Miami on Aug. 19, 2013. Florida Gaming Centers operates a casino and jai-alai frontons in Miami. The Company disclosed debt of $138.3 million and assets of $180 million in its petition. Its parent, Florida Gaming Corp. (FGMG:US), and two other affiliates also sought court protection. Bankruptcy Judge Robert A. Mark oversees the case. The Debtors are represented by Luis Salazar, Esq. and Jesse R. Cloyd, Esq. at Salazar Jackson, LLP of Miami, Florida. ABC Funding, LLC, as Administrative Agent for a consortium of prepetition lenders, and the prepetition lenders are represented by Dennis Twomey, Esq., and Andrew F. O'Neill, Esq., at SIDLEY AUSTIN LLP, in Chicago, Illinois; and Drew M. Dillworth, Esq., and Marissa D. Kelley, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida. The Prepetition Lenders are Summit Partners Subordinated Debt Fund IV-A, L.P., Summit Partners Subordinated Debt Fund IV-B, L.P., JPMorgan Chase Bank, N.A., Locust Street Funding LLC, Canyon Value Realization Fund, L.P., Canyon Value Realization Master Fund, L.P., Canyon Distressed Opportunity Master Fund, L.P., and Canyon-GRF Master Fund II, L.P. Counsel to the Official Joint Committee of Unsecured Creditors are Glenn D. Moses, Esq., and Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., in Miami, Florida. * * * The Debtors have sold their assets to Fronton Holdings, LLC, an entity established by ABC Funding. The $140,000,000 purchase price consisted of a credit bid of $99,907,336 on account of the Loan Claim and cash in the amount of $40,092,664. The Bankruptcy Court approved the sale on April 7, 2014. The parties consummated the 363 Sale on April 30. The Debtors have submitted to the Bankruptcy Court a Disclosure Statement explaining their Second Amended Joint Plan of Liquidation dated June 16, 2014. The Plan serves as a separate plan of liquidation for each of the Debtors. The Plan does not seek to effect a substantive consolidation or other combination of the separate estates of each Debtor but instead provides that creditors of each Debtor will be permitted to assert their claims only against the Debtor(s) which they hold Allowed Claims. GBG RANCH: Files Bare-Bones Chapter 11 Petition in Laredo, TX ------------------------------------------------------------- GBG Ranch, LTD, a Texas Limited Partnership, sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 14-50155) in Laredo, Texas on July 8, 2014, without stating a reason. The company estimated assets of $50 million to $100 million and debt of less than $10 million. The company is represented by the Law Office of Carl M. Barto. GBG RANCH: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: GBG Ranch, Ltd. 1019 Chihuahua Laredo, TX 78040 Case No.: 14-50155 Chapter 11 Petition Date: July 8, 2014 Court: United States Bankruptcy Court Southern District of Texas (Laredo) Debtor's Counsel: Carl Michael Barto, Esq. LAW OFFICE OF CARL M. BARTO 817 Guadalupe St. Laredo, TX 78040 Tel: 956-725-7500 Fax: 956-722-6739 Email: cmblaw@netscorp.net Estimated Assets: $50 million to $100 million Estimated Liabilities: $1 million to $10 million The petition was signed by Manuel A. Benavides, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. GENERAL MOTORS: Executives to Testify Before Senate Subcommittee ---------------------------------------------------------------- Siobhan Hughes and Jeff Bennett, writing for The Wall Street Journal, reported that General Motors Co. Chief Executive Mary Barra and General Counsel Mike Millikin have been called to testify on July 17 before a senate subcommittee investigating why it took the company nearly 11 years to recall older small cars equipped with a faulty ignition switch. According to the report, the witness list also includes Chicago Attorney Anton Valukas, Delphi Automotive PLC CEO Rodney O'Neal and compensation expert Kenneth Feinberg who is handling payouts to any driver, passenger, pedestrian or occupant of another car hurt or killed in accidents attributed to the faulty ignition switch. About General Motors With its global headquarters in Detroit, Michigan, General Motors -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government provided financing. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM -- General Motors Corporation -- filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. The Debtors tapped Weil, Gotshal & Manges LLP Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel; and Morgan Stanley, Evercore Partners and the Blackstone Group LLP as financial advisor. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. HARRON COMM: Moody's Announces Asset Sale No Impact on B2 CFR ------------------------------------------------------------- Moody's Investors Service commented that the announced asset sale of cable systems in Mississippi and Alabama by Harron Communications, L.P. does not impact its B2 Corporate Family Rating or the stable outlook. Moody's expects the company to use proceeds to repay debt, lowering leverage and reducing interest expense, favorable for the credit profile. However, the sale reduces Harron's already small scale. Moody's believes the purchase multiple exceeds Harron's leverage of approximately 5.9 times debt-to-EBITDA (based on trailing twelve months through March 31, 2014), so application of proceeds to debt reduction would improve credit metrics. The first lien credit agreement requires the company to prepay its term loan with asset sale proceeds. Depending on the amount of debt repaid, the transaction could possibly result in a one notch upgrade of the Caa1 rating on the senior unsecured bonds and of the Ba3 rating on the first lien credit facility of MetroCast Cablevision of New Hampshire, LLC (a subsidiary of Harron). Headquartered in Frazer, PA, Harron Communications, L.P. houses the cable operating assets of Gans Communications, LP, MetroCast Cablevision of New Hampshire, LLC, MetroCast Communications of Connecticut, LLC, and MetroCast Communications of Mississippi, LLC. Its cable operating companies serve approximately 151,000 video subscribers, 143,000 high speed data subscribers, and 49,000 telephone subscribers across New Hampshire, Maine, Connecticut, Maryland, Virginia, Mississippi, Alabama, Pennsylvania, and South Carolina. The Harron family and management own the company. IBCS MINING: Seeks to Obtain $3.5-Mil. in DIP Loans --------------------------------------------------- IBCS Mining, Inc., et al., seek authority from the U.S. Bankruptcy Court for the Western District of Virginia, Lynchburg Division, to obtain postpetition financing and use the cash collateral securing their prepetition indebtedness to fund their operational and working capital needs. Callidus Capital Corporation committed to provide a $2.5 million superpriority senior secured term loan and a $1 million revolving loan. The DIP Loan will bear interest at a rate of 18% per annum. From and after an event of default, the DIP Loan will accrue interest at 3% per annum above the otherwise applicable interest rates. The DIP Loan will be due on the earliest of: (i) Dec. 15, 2014; (ii) the occurrence of an event of default; (iii) closing of a sale; or (iv) the effective date of any confirmed plan of reorganization. Separately, the Debtors filed a motion seeking authority to assume an agreement, confirmation and amendment with Virginia Electric and Power Company, because assumption of such agreement is a condition precedent to the DIP Financing. The Debtors tell the Court that assumption of the agreement ensures that IBCS will be able to resume operations and generate income. Without assumption of the agreement, IBCS will be unable to generate sufficient cash flow required by the terms of the DIP Financing Facility, will be unable to resume operations, and will likely be forced to liquidate. Branch Banking and Trust Company, as a secured creditor of the Debtors, objects to the Debtors' motion for approval of the DIP financing and use of use of cash collateral and asks the Court to issue an order directing the Debtors to provide adequate protection of BB&T's interests in certain property owned by the Debtors. BB&T complains that the offer of adequate protection fails to meet the standards set forth in the Bankruptcy Code as the value of the as-extracted coal as of the Petition Date will decline as it is used and a replacement lien will be of no value. BB&T is represented by: Peter M. Pearl, Esq. SPILMAN THOMAS & BATTLE, PLLC P. O. Box 90 Roanoke, Virginia 24002 Tel: (540) 512-1832 Fax: (540) 342-4480 Email: ppearl@spilmanlaw.com IBCS Mining, Inc., and IBCS Mining, Inc., Kentucky Division, filed separate Chapter 11 bankruptcy petitions (Bankr. W.D. Va. Case Nos. 14-61215 and 14-61216) on June 27, 2014. Edmund Scarborough signed the petition as president. Hirschler Fleischer, P.C., serves as the Debtors' counsel. The cases are assigned to Judge Kevin R. Huennekens. IBCS Mining estimated assets and debts of at least $10 million. IBCS MINING: Hires David Stetson as Chief Restructuring Officer --------------------------------------------------------------- IBCS Mining, Inc., et al., seek authority from the U.S. Bankruptcy Court for the Western District of Virginia, Lynchburg Division, to employ David Stetson as chief restructuring officer to, among other things, cause the Debtors to negotiate financing, incur debt and grant liens; direct and manage the Debtors' operations, including negotiating with significant business partners, contractors and customers of the Debtors; and cause the Debtors to dispose of estate assets outside the ordinary course of business. CRO will be entitled to annual base salary of $300,000, health insurance for himself and his family, $750 monthly vehicle allowance, and an incentive compensation in the event the Court approves a sale of the Debtors' assets or approves a plan of reorganization in lieu of a sale of assets. The CRO will also be entitled to take five weeks' vacation each year and additional performance-based incentive bonuses. Moreover, the CRO will be reimbursed of his reasonable ordinary and necessary business expenses. Mr. Stetson assures the Court that he 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. IBCS Mining, Inc., and IBCS Mining, Inc., Kentucky Division, filed separate Chapter 11 bankruptcy petitions (Bankr. W.D. Va. Case Nos. 14-61215 and 14-61216) on June 27, 2014. Edmund Scarborough signed the petition as president. Hirschler Fleischer, P.C., serves as the Debtors' counsel. The cases are assigned to Judge Kevin R. Huennekens. IBCS Mining estimated assets and debts of at least $10 million. IBCS MINING: Wants Court to Issue Joint Administration Order ------------------------------------------------------------ IBCS Mining, Inc., et al., seek authority from the U.S. Bankruptcy Court for the Western District of Virginia, Lynchburg Division, to issue an order consolidating, for procedural purposes only, the Chapter 11 cases of the Debtors under Case No. 14-61215. Joint administration will avoid the preparation, replication, service and filing of duplicative notices, applications and orders, thereby saving the Debtors considerable expense and resources. IBCS Mining, Inc., and IBCS Mining, Inc., Kentucky Division, filed separate Chapter 11 bankruptcy petitions (Bankr. W.D. Va. Case Nos. 14-61215 and 14-61216) on June 27, 2014. Edmund Scarborough signed the petition as president. Hirschler Fleischer, P.C., serves as the Debtors' counsel. The cases are assigned to Judge Kevin R. Huennekens. IBCS Mining estimated assets and debts of at least $10 million. IBCS MINING: Wants Schedules Filing Deadline Extended to Aug. ------------------------------------------------------------- IBCS Mining, Inc., et al., seek authority from the U.S. Bankruptcy Court for the Western District of Virginia, Lynchburg Division, to extend until Aug. 11, 2014, the time by which they must file their schedules of assets and liabilities and statements of financial affairs, as they won't be able to complete their Schedules in the original deadline provided under Rule 1007(c) of the Federal Rules of Bankruptcy Procedure. IBCS Mining, Inc., and IBCS Mining, Inc., Kentucky Division, filed separate Chapter 11 bankruptcy petitions (Bankr. W.D. Va. Case Nos. 14-61215 and 14-61216) on June 27, 2014. Edmund Scarborough signed the petition as president. Hirschler Fleischer, P.C., serves as the Debtors' counsel. The cases are assigned to Judge Kevin R. Huennekens. IBCS Mining estimated assets and debts of at least $10 million. INLAND SALVAGE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Inland Salvage, Inc. 29000 US Higwhay 98, Suite 200 Daphne, AL 36526 Case No.: 14-02189 Chapter 11 Petition Date: July 8, 2014 Court: United States Bankruptcy Court Southern District of Alabama (Mobile) Debtor's Counsel: Douglas S. Draper, Esq. HELLER DRAPER PATRICK HORN & DABNEY, L.L.C. 650 Poydras Street, Suite 2500 New Orleans, LA 70124 Tel: 504.299.3300 Email: ddraper@hellerdraper.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Eli M. Zatezalo, chief executive officer. A list of the Debtor's 20 largest unsecured creditors is available for free at http://docdroid.net/ehrq KID BRANDS: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------ The U.S. Trustee for Region 3 on July 2 appointed three creditors of Kid Brands Inc. and its affiliated debtors to serve on the official committee of unsecured creditors. The unsecured creditors' committee is composed of: (1) Disney Consumer Products, Inc. 500 South Buena Vista Street Burbank, CA 91521 Tel.: 212-456-7176 Fax: 646-505-6769 Attn: Alec M. Lipkind, Esq. (2) Markup Corp. dba Kids Basics 6955 N.W. 36th Street Miami, FL 33147 Tel.: 305-836-1496 Fax: 305-836-1499 Attn: Ray Martin (3) Structure Tone, Inc. 770 Broadway, 9th Floor New York, NY 10003-9522 Tel.: 212-251-9443 Fax: 212-991-0305 Attn: Glen P. Kennedy, Esq. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Kid Brands Kid Brands, Inc., and six of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the United States Code in the U.S. Bankruptcy Court for the District of New Jersey (Bankr. D. N.J. Lead Case No. 14-22582) on June 18, 2014. Glenn Langberg signed the petitions as chief restructuring officer. As of April 30, 2014, the Debtors had $32.40 million in total assets and $109.1 million in total liabilities. Judge Donald H. Steckroth oversees the cases. Lowenstein Sandler LLP serves as the Debtors' counsel. PricewaterhouseCoopers LLP is the Debtors' financial advisor. GRL Capital Advisors acts as the Debtors' restructuring advisors. Rust Consulting/Omni Bankruptcy is the Debtors' claims and noticing agent. KID BRANDS: U.S. Trustee to Hold Section 341(a) Meeting July 23 --------------------------------------------------------------- The U.S. Trustee for Region 3 is set to hold a meeting of creditors of Kid Brands Inc. and its affiliated debtors on July 23, at 10:00 a.m. (Eastern Time). The meeting will be held at the Office of the U.S. Trustee, Suite 1401, One Newark Center, 1085 Raymond Boulevard, in Newark, New Jersey. The meeting, which is required under Section 341(a) of the Bankruptcy Code, offers creditors an opportunity to examine Kid Brands' representative under oath about its financial affairs and operations that would be of interest to the general body of creditors. About Kid Brands Kid Brands, Inc., and six of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the United States Code in the U.S. Bankruptcy Court for the District of New Jersey (Bankr. D. N.J. Lead Case No. 14-22582) on June 18, 2014. Glenn Langberg signed the petitions as chief restructuring officer. As of April 30, 2014, the Debtors had $32.40 million in total assets and $109.1 million in total liabilities. Judge Donald H. Steckroth oversees the cases. Lowenstein Sandler LLP serves as the Debtors' counsel. PricewaterhouseCoopers LLP is the Debtors' financial advisor. GRL Capital Advisors acts as the Debtors' restructuring advisors. Rust Consulting/Omni Bankruptcy is the Debtors' claims and noticing agent. LABORATORY PARTNERS: Wants Plan Exclusivity Extended to Aug. 22 --------------------------------------------------------------- Laboratory Partners, Inc. has requested an extension to its exclusivity period for filing a plan of reorganization and obtaining acceptance thereto in its Chapter 11 case in the District of Delaware. The Debtor is requesting extensions to August 22, 2014 and October 21, 2004 respectively. This is the Debtor's third request for such an extension since filing its voluntary petition on October 25, 2013. Since the petition date, the Debtor has been occupied with selling assets to three different buyers. The sales have grossed over $10 million for the estate. The Debtor also gave notice of the claims deadlines as well as filed its Plan of Reorganization and Disclosure Statements. Because its Plan is yet to be confirmed, out of an abundance of caution, the Debtor is requesting this extension. The Debtor submits that due to the circumstances, an extension for "cause" pursuant to Sec. 1121(d)(1) of the Bankruptcy Code is warranted. About Laboratory Partners Laboratory Partners Inc., a Cincinnati-based provider of lab and pathology services, and several affiliates filed petitions for Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12769) on Oct. 25, 2013, in Delaware. In its assets, the Debtor disclosed $43,034,702.91 in total assets and at least $132,357,067.42 (plus unknown) in total liabilities. The debtor-affiliates are Kilbourne Medical Laboratories, Inc., MedLab Ohio, Inc., Suburban Medical Laboratory, Inc., Biological Technology Laboratory, Inc., Terre Haute Medical Laboratory, Inc., and Pathology Associates of Terre Haute, Inc. Certain of the Debtors do business as MEDLAB. Judge Peter J. Walsh presides over the case. The Debtors are represented by Robert J. Dehney, Esq., Derek C. Abbott, Esq., Andrew R. Remming, Esq., and Ann R. Fay, Esq., at Morris, Nichols, Arsht, and Tunnell, LLP in Wilmington, Delaware; and Leo T. Crowley, Esq., Jonathan J. Russo, Esq., and Margot Erlich, Esq., at Pillsbury, Winthrop, Shaw, Pittman, LLP in New York, NY. BMC Group Inc. serves as claims and administrative agent. Duff & Phelps Securities LLC serves as the Debtors' investment bankers. The Official Committee of Unsecured Creditors has retained Otterbourg P.C., as Lead Co-Counsel; Klehr Harrison Harvey Branzburg LLP as Delaware Counsel; and Carl Marks Advisory Group LLC, as financial advisors. * * * In March 2014, the Bankruptcy Court authorized the Debtors to sell their so-called "Talon Division," which refers to the clinical laboratory and anatomic pathology services to (i) physicians, physician officers and medical groups in Indiana, Illinois, and (ii) Union Hospital, Inc., in Terre Haute and Clinton, Indiana, to Laboratory Corporation of America Holdings for $10.5 million. An auction was cancelled after the Debtors received no competing bid during the bid deadline. The Court also authorized the Debtors to sell certain of their assets relating to their nuclear medicine business to Union Hospital, Inc. In June 2014, the Debtors won Court approval to sell its long-term care division to Amerathon LLC for a $5.5 million credit bid. Amerathon is a joint venture between American Health Associates, Inc., and the Debtor's prepetition senior secured lender. The U.S. Bankruptcy Court has approved the disclosure statement explaining Laboratory Partners, Inc.'s Chapter 11 plan and scheduled a July 9, 2014, confirmation hearing. The Plan provides that only the prepetition lender holding secured claims is entitled to vote. The rest of the creditors, including general unsecured creditors, are unimpaired, will receive nothing under the Plan, and are not entitled to vote. LIGHTSQUARED INC: Harbinger Files Racketeering Suit Against Ergen ----------------------------------------------------------------- William Alden, writing for The New York Times' DealBook, reported that Philip A. Falcone's hedge fund, Harbinger Capital Partners, filed a lawsuit against Dish Network, the satellite television company, and its chairman, Charles W. Ergen, accusing them of violating a federal racketeering law. Harbinger is seeking at least $1.5 billion in damages, according to the report. The lawsuit, filed in Federal District Court in Colorado, where Dish is based, contends that Mr. Ergen and Dish carried out a fraudulent scheme to acquire LightSquared?s wireless spectrum at bargain-basement prices, 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. MAGNETATION LLC: Moody's Assigns B3 Rating on $100MM Senior Notes ----------------------------------------------------------------- Moody's Investors Service affirmed the B3 corporate family rating and B3-PD probability of default rating of Magnetation LLC, but revised the outlook to negative. In addition, Moody's assigned a B3 rating to the proposed $100 million add-on to the company's senior secured notes due 2018. The proceeds from the proposed note offering will be used to fund the remaining construction of the company's iron ore pellet plant and an upsized iron reclamation plant. Magnetation's outlook reflects the recent volatility and weakness in iron ore prices and the leverage being added from the add-on note offering. The following ratings were affected in this rating action: Assignments: $100 Million Add-On to Senior Secured Notes, Assigned B3 (LGD4, 53%) Outlook Actions: Changed To Negative From Stable Affirmations: Probability of Default Rating, Affirmed B3-PD Corporate Family Rating, Affirmed B3 $325 Million Senior Secured Notes, Affirmed B3 Ratings Rationale The B3 corporate family rating reflects Magnetation's weak credit metrics, short operating history, small scale and low level of revenue and EBITDA, the risks associated with a start-up operation based on a relatively new technology, lack of end-market diversification and high risk customer base. The company is expected to have only two customers with weak financial profiles. The company is also focused on the volatile steel industry and has no exposure to other end-markets. Magnetation's ratings are supported by the company's strong profit margins, attractive off- take contracts, adequate pro forma liquidity profile and lack of near term debt maturities. Magnetation's credit metrics are expected to remain very weak in the short term since the company is in a start-up phase and has limited revenue and EBITDA. The company generated revenues of only $56 million and adjusted EBITDA of $26 million during the twelve months ended March 31, 2014. As a result, the company has an elevated leverage ratio (Debt/EBITDA) of 12.0x and a weak interest coverage ratio (EBIT/Interest Expense) of 0.6x. The company's sales should rise dramatically in 2014 since the pellet plant is scheduled to begin production during the third quarter of this year. However, the company's profitability is expected to increase only modestly due to weaker than expected first half 2014 operating earnings resulting from severe winter weather, start-up expenses at the pellet plant and proportionally higher consumption of concentrate from its higher cost iron reclamation plant as the company consumes its iron concentrate inventory. The add-on note offering along with modestly improved profitability is expected to keep the company's credit metrics weak in 2014 and similar to the levels at the end of March. Magnetation is expected to have substantially negative free cash flow in 2014 due to the capital investments in the new pellet and iron reclamation plants. Capital expenditures are now estimated at approximately $360 million in 2014, which is about $60 million higher than previous expectations. The higher capital spend is due to modest cost overruns on the pellet plant and the company's decision to increase the capacity and accelerate the construction of the new iron reclamation plant and move forward the start-up date to the first quarter of 2015. The company is likely pursuing these actions to increase the operating rate of the pellet plant to reduce its cost structure in the face of weaker than expected iron ore prices. The company's free cash flow is expected to remain modestly negative in 2015 as it completes the investment in additional iron reclamation capacity, but should turn positive thereafter as long as iron ore prices remain near current price levels. The company's credit metrics are also expected to improve substantially in 2015 as pellet sales ramp up to AK Steel and its EBITDA increases significantly. Magnetation is targeting a minimum unrestricted liquidity level of approximately $40 million throughout its construction life cycle. The company had $49 million of unrestricted cash and $42 million of borrowing availability on its $50 million revolving credit facility on March 31, 2014. The company had no borrowings on its revolver and $8.3 million of letters of credit outstanding. The company expects the proceeds from the $100 million add-on note offering, $55 million of additional equity investments by AK Steel, cash flow from operations and availability on the revolver to enable it to maintain ample liquidity. They have no plans to draw on the revolver during the construction of the pellet and iron reclamation plants, although it will continue to be used for modest letters of credit of about $10 million. The negative outlook reflects the recent volatility and weakness in iron ore prices and the impact that will have on the company's operating earnings, along with the leverage being added from the add-on note offering. The outlook could return to stable if the company successfully completes the construction of the iron ore pellet and iron reclamation plants and operating results and credit metrics improve substantially over the next 12 to 18 months. The ratings are unlikely to experience upward pressure in the short term since the company's credit metrics are expected to remain weak for the current rating until construction of the pellet and iron reclamation plants is completed. However, an increase in the interest coverage ratio (EBIT/Interest) to more than 2.5x or a decline in the leverage ratio (Debt/EBITDA) below 5.0x could lead to an upgrade. Negative rating pressure could persist if operating results do not improve as significantly as expected, the timing of the start-up of the pellet and iron reclamation plants is delayed or the construction runs well over budget resulting in weaker than expected credit metrics. This would include the interest coverage ratio (EBIT/Interest) staying below 1.0x and the leverage ratio remaining above 8.0x. A significant reduction in borrowing availability or liquidity could also result in a downgrade. The principal methodology used in this rating was Global Mining Industry published in May 2009. Headquartered in Grand Rapids, Minnesota, Magnetation LLC is a joint venture between Magnetation Inc. (50.1% ownership) and AK Steel Corporation (49.9% ownership) that reclaims iron ore concentrate from previously abandoned iron ore waste stockpiles and tailings basins located on the Mesabi Iron Range. The joint venture currently owns and operates two reclamation plants located in Keewatin and Taconite, MN, which produce iron ore concentrate from iron ore tailings. The company is in the process of constructing a 3 million metric ton per year iron ore pellet plant in Reynolds, Indiana and an additional concentrate reclamation plant in Grand Rapids, MN. The joint venture has an off-take agreement with Altos Hornos de M'xico, S.A.B. de C.V. (AHMSA) to sell up to 637,000 dry metric tons of iron concentrate per annum and plans to eventually sell up to 3.5 million tons of iron pellets to AK Steel Corporation. The company generated approximately $56 million in revenues for the trailing 12-month period ended March 31, 2014. MAGNETATION LLC: S&P Affirms 'B-' Corp. Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B-' corporate credit rating on U.S.-based Magnetation LLC. The outlook is stable. S&P's 'B-' issue-level rating and '4' recovery rating remain the same after the company's proposed $100 million add-on to its $325 million 11% senior secured notes. "We expect Magnetation's financial profile to improve considerably over the next year as the company achieves a significant increase in revenues and earnings from its new pellet plant, which we expect will go into operation during the third quarter of this year, and from its concentrate plant, which goes into operation in the first quarter of next year. Pro forma for the proposed $100 million tack-on offering, the existing $325 million senior secured notes will be upsized to $425 million. Proceeds will be used to accommodate the concentrate plant expansion, to complete pellet plant construction ahead of schedule, and for general corporate purposes," S&P said. "The rating outlook is stable, reflecting our belief that Magnetation will maintain adequate liquidity while it brings its new pellet and concentrate plants online, despite estimated leverage in excess of 10x for this year," said Standard & Poor's credit analyst Funmi Afonja. "The stable outlook also captures diminishing execution risks with its plants close to completion. The rating and stable outlook also reflect our anticipation that AK Steel will contribute about $10 million in remaining equity payments to Magnetation in 2014." S&P could lower the ratings if the company's liquidity position deteriorated such that S&P deemed it to be "less than adequate" under its criteria. This could occur if iron ore prices come in substantially below S&P's expectations or if the company ran into delays, cost overruns, or operating difficulties in opening and operating its two new plants. S&P views an upgrade as unlikely over the next 12 months due to the company's limited operating track record and to the significant, albeit diminishing, operational and execution risks. MD AMERICA ENERGY: S&P Assigns 'B-' CCR & Rates $525MM Loan 'CCC+' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Fort Worth, Texas-based MD America Energy LLC. The outlook is stable. At the same time, S&P assigned its 'CCC+' issue rating (one notch below the corporate credit rating) to MD America's proposed $525 million secured term loan due 2019. The recovery rating is '5', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. "We expect that MDAE will use proceeds from the proposed term loan to fully repay existing indebtedness and partially fund its capital spending program," said Standard & Poor's credit analyst Susan Ding. MD America is a wholly owned subsidiary of Meidu Holding Co., Ltd., a public real estate and energy concern traded on the Shanghai Stock Exchange. S&P considers MDAE "moderately strategic" to Meidu, reflecting Meidu's publicly stated long-term strategy of expanding its U.S. oil E&P investments, combined with our expectation that Meidu would provide support to MDAE during periods of stress. The ratings on MDAE reflect our assessment of the company's "vulnerable" business risk, "highly leveraged" financial risk, and "adequate" liquidity. The stable outlook reflects S&P's expectation that MDAE will maintain adequate liquidity, FFO to debt of about 25%, and debt leverage below 5x, while growing its reserve and production base. S&P could lower the rating if liquidity falls to below $50 million. Such an event could occur if the company's production failed to meet S&P's current expectations, or if hydrocarbon prices fall significantly from current levels. S&P considers an upgrade unlikely over the next 12 months. However, S&P could raise the rating if the company can significantly increase its scale (reserve size and production), while maintaining adequate liquidity, and debt leverage below 3x. MERITAS SCHOOLS: Moody's Rates $80MM 2nd Lien Senior Debt 'Caa2' ---------------------------------------------------------------- Moody's Investors Service assigned a Caa2 rating to Meritas Schools Holdings, LLC's proposed $80 million second lien senior secured term loan. In a related action, Moody's affirmed the company's B3 corporate family rating ("CFR") and B3-PD probability of default rating. The ratings on the company's existing $30 million revolving credit facility and first lien term loan were upgraded to B1 from B3. The ratings outlook is stable. Meritas will use proceeds from the proposed second lien term loan, along with balance sheet cash, to pay a distribution to equity holders, fund Leman Manhattan (which is outside of the restricted group), pay down a portion of the company's existing first lien term loan, and pre-fund capital expenditures. The ratings are subject to review of final documentation. The following rating actions were taken: Corporate Family Rating, affirmed at B3 Probability of Default rating, affirmed at B3-PD $30 million first lien senior secured revolving credit facility due 2018, upgraded to B1 (LGD3) from B3 (LGD3) $180 million (originally $215 million) first lien senior secured term loan due 2019, upgraded to B1 (LGD3) from B3 (LGD3) $80 million second lien senior secured term loan due 2021, assigned Caa2 (LGD5) Ratings Rationale Meritas' B3 corporate family rating reflects the company's high leverage level of near 7 times on a pro-forma basis, and incorporates our expectation that debt to EBITDA will decline from this level over the next 12 to 18 months. The rating considers the company's reduced financial flexibility following the increase in debt and distribution to shareholders and to fund Leman Manhattan (outside of the credit group). The rating further reflects the company's small scale, high levels of discretionary capital spending that constrain near-term free cash flow generation, and approximately 30-40% of revenue and operating income derived from one school. Notwithstanding these concerns, the rating derives support from our expectation that the company will continue to demonstrate revenue and EBITDA growth primarily due to tuition increases and recent school expansion projects. The B3 rating acknowledges the recent reduction in enrollment (which Moody's expect to continue near term), but also reflects our expectations of flat to modestly positive enrollment growth over the medium term. The rating is further supported by the company's adequate liquidity profile, high enrollment and revenue visibility, diverse network of preparatory schools, a consistent track record of top line and average revenue per student growth, and generally improving operating margins. The stable outlook reflects Moody's expectation that Meritas will continue to exhibit modest topline growth and sustain or improve its operating margins, such that debt to EBITDA declines below 6.5 times and EBITDA less capex coverage of interest expense towards 1.0 times over the next 12 to 18 months. The rating also reflects our expectation that the company will maintain adequate liquidity. The ratings could be downgraded if unfavorable enrollment trends, or higher than expected expenses causes Meritas' operating performance to decline such that debt to EBITDA is sustained well above 7.0 times (including Moody's standard adjustments) and/or EBITDA less capex coverage of interest expense is less than 1.0 times. Material weakening of the company's liquidity profile, sustained negative free cash flow and/or additional debt financed dividends or acquisitions could also pressure the ratings. Meritas' rating or outlook could improve if it can organically grow its revenue/earnings through price increases and enrollment growth, and increase size and improve diversification such that debt to EBITDA approaches 5.0 times (including Moody's standard adjustments) and EBITDA less capex coverage of interest expense is sustained above 1.5 times. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Northbrook, Illinois, Meritas operates a network of college preparatory schools. The company, which was formed in 2005, manages ten schools (eight included in restricted group) with 13 campuses and over 10,000 students in grades Pre-K through grade 12. Schools are located in Florida, Texas, Nevada, New York, Arizona, Chengdu, China, Monterrey, Mexico, and Geneva, Switzerland. The company is privately owned by affiliates of Sterling Partners. Revenue for the LTM period ended March 31, 2014 was approximately $236 million. MIG LLC: Employs Cousins Chipman as Conflicts Counsel ----------------------------------------------------- MIG, LLC, and ITC Cellular, LLC, seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Cousins Chipman & Brown, LLP, as conflicts counsel to represent them in matters that the lead bankruptcy counsel, Greenberg Traurig, LLP, may be unable to handle due to conflicts of interest. CCB is expected to provide legal advice to the Debtors with respect to legal disputes in which conflicts of interest prevent representation by the Debtors' lead bankruptcy counsel, and negotiate, draft, and pursue all litigation and documentation necessary in conjunction with those legal disputes. The current hourly rates applicable to the principal attorneys and paralegals proposed to represent the Debtors are as follows: Scott D. Cousins, Esq. $645 Adam D. Cole, Esq. $625 Ann M. Kashishian, Esq. $265 Other attorneys and paralegals will render services to the Debtors as needed. CCB's current hourly rates for the matter range from $450 to $645 for partners, $250 to $450 for associates, and $180 and $225 for legal assistants and paralegals. CCB intends to seek compensation for all time and expenses associated with its employment. Since its employment on June 23, 2014, CCB collected a retainer from the Debtors in the amount of $50,000. In compliance with the New U.S. Trustee Guidelines, CCB represents that it did not agree to any variations from, or alternatives to, the firm's standard and customary billing arrangements for its engagement with the Debtors, and none of the professionals included in the engagement vary their rates based on the geographic location of the case. CCB also says that it did not represent the Debtors in the 12 months preceding the Petition Date and the Debtors have approved CCB's proposed rates and staffing plan. Scott D. Cousins, Esq., a partner at Cousins, Chipman & Brown, LLP, in Wilmington, Delaware, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The firm may be reached at: Scott D. Cousins, Esq. Adam D. Cole, Esq. Ann M. Kashishian, Esq. COUSINS CHIPMAN & BROWN, LLP 1007 North Orange Street, Suite 1110 Wilmington, DE 19801 Tel: (302) 295-0191 Email: cousins@ccbllp.com cole@ccbllp.com kashishian@ccbllp.com A hearing on the employment application is scheduled for July 23, 2014, at 1:00 p.m. (ET). Objections are due July 16. About MIG LLC Formerly operating under the name "Metromedia International Group, Inc.," MIG LLC -- http://www.migllc-group.com/-- owned and operated and sold dozens of companies in diverse industries, including entertainment, photo finishing, garden equipment and sporting goods, until the late 1990s. In 1997 and 1998, MIG consummated the sale of substantially all of its U.S.-based entertainment assets and began focusing on expanding into emerging communications and media businesses. By 2005, all of MIG's operating businesses were located in the Republic of Georgia and operated through its subsidiaries. MIG LLC and affiliate ITC Cellular, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11605) on June 30, 2014. As of the bankruptcy filing, MIG's sole valuable asset, beyond its existing cash, is its indirect interest in Magticom Ltd. Headquartered in Tbilisi, Georgia, Magticom is the leading mobile telephony operator in Georgia and is also the largest telephone operator in Georgia. Magticom serves 2.4 million subscribers with a network that covers 97% of the populated regions in Georgia. Magticom is owned by International Telcell Cellular, LLC, which is 46% owned by MIG unit ITC Cellular, 51% owned by Dr. George Jokhtaberidze, and 3% owned by Gemstone Management Ltd. The cases are assigned to Judge Kevin Gross. The Debtors are seeking joint administration of their Chapter 11 cases. The Debtors have tapped Greenberg Traurig LLP as counsel, Fox Rothschild Inc. as financial advisor, Cousins Chipman and Brown, LLP as conflicts counsel, and Prime Clerk LLC as claims and notice agent and administrative advisor. The Debtors have also filed an application to retain Natalia Alexeeva as chief restructuring officer. Formerly known as MIG, Inc., MIG was a debtor in a previous case (Bankr. D. Del. Case NO. 09-12118). It obtained approval of its reorganization plan in November 2010. MIG LLC: Can Hire Prime Clerk as Claims & Noticing Agent -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized MIG, LLC, and ITC Cellular, LLC, to employ Prime Clerk LLC as claims and noticing agent to, among other things, (i) distribute required notices to parties-in-interest, (ii) receive, maintain, docket and otherwise administer the proofs of claim filed in the Debtors' Chapter 11 cases, and (iii) provide other administrative services. About MIG LLC Formerly operating under the name "Metromedia International Group, Inc.," MIG LLC -- http://www.migllc-group.com/-- owned and operated and sold dozens of companies in diverse industries, including entertainment, photo finishing, garden equipment and sporting goods, until the late 1990s. In 1997 and 1998, MIG consummated the sale of substantially all of its U.S.-based entertainment assets and began focusing on expanding into emerging communications and media businesses. By 2005, all of MIG's operating businesses were located in the Republic of Georgia and operated through its subsidiaries. MIG LLC and affiliate ITC Cellular, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11605) on June 30, 2014. As of the bankruptcy filing, MIG's sole valuable asset, beyond its existing cash, is its indirect interest in Magticom Ltd. Headquartered in Tbilisi, Georgia, Magticom is the leading mobile telephony operator in Georgia and is also the largest telephone operator in Georgia. Magticom serves 2.4 million subscribers with a network that covers 97% of the populated regions in Georgia. Magticom is owned by International Telcell Cellular, LLC, which is 46% owned by MIG unit ITC Cellular, 51% owned by Dr. George Jokhtaberidze, and 3% owned by Gemstone Management Ltd. The cases are assigned to Judge Kevin Gross. The Debtors are seeking joint administration of their Chapter 11 cases. The Debtors have tapped Greenberg Traurig LLP as counsel, Fox Rothschild Inc. as financial advisor, Cousins Chipman and Brown, LLP as conflicts counsel, and Prime Clerk LLC as claims and notice agent and administrative advisor. The Debtors have also filed an application to retain Natalia Alexeeva as chief restructuring officer. Formerly known as MIG, Inc., MIG was a debtor in a previous case (Bankr. D. Del. Case NO. 09-12118). It obtained approval of its reorganization plan in November 2010. MILLER HEIMAN: Moody's Affirms 'B3' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service affirmed Miller Heiman, Inc.'s ("MHI") B3 Corporate Family Rating ("CFR") and B3-PD Probability of Default Rating, after the company announced the incurrence of $136 million incremental first lien debt in order to help fund an acquisition of VitalSmarts. Moody's also affirmed the B2 facility rating on MHI's first lien revolver and term loan, the latter which is being increased to $356 million, from $220 million. Along with the incremental term debt, MHI will be using $95 million of new cash equity to fund the VitalSmarts acquisition and to repay $37 million in revolver drawings. The rating outlook remains stable. Ratings (and Loss Given Default Assessments) affirmed: Corporate Family Rating, B3 Probability of Default Rating, B3-PD $40 million Senior Secured Revolving Credit Facility, expiring 2018, B2 (LGD3) $356 million (upsized from $220 million) Senior Secured Term Loan B, maturing 2019, B2 (LGD3) The ratings are subject to Moody's review of final documentation. Ratings Rationale The B3 CFR takes into account MHI's moderate apparent success in integrating the September 2013 acquisition of a much larger, poorly performing target, as well as the leverage-neutral impact of the company's proposed acquisition of VitalSmarts, a smartly growing, sub-$100 million-revenue provider of leadership-training services. VitalSmarts' inclusion into the MHI sales and leadership training suite of services should modestly boost MHI's operating margins, given the target company's significantly higher profitability. Moody's estimates that debt-to-EBITDA financial leverage, pro- forma for the VitalSmarts acquisition, remains high, at between 5.5 and 6.0 times, unchanged from the level at September 2013, when MHI acquired Informa plc's Performance Improvement ("PI") business. Through the combination of these corporate-training purchases (and a much smaller one in early 2014), MHI seeks to create a global leader in sales and leadership training, albeit one that will have a combined revenue base of only about $300 million With full year 2013 results mostly in line with expectations (except for distinct underperformance at Omega, a small, credit- training unit of PI), and markedly better 1Q 2014 top-line and EBITDA performance, MHI appears to have had some success with stabilizing its portfolio of training services. However, integration expenses have run higher than anticipated, and the company has had to draw heavily under its $40 million revolver in order to fund these expenses as well as the cost of recent acquisitions. The acquired PI businesses were not only three times MHI's size, but had also been posting sharp and uniform declines in sales and profitability. Availability under the revolver will be freed up fully as a result of the revolver paydown using a portion of the proceeds from the new financing and equity offering, giving MHI what Moody's views as adequate liquidity. The repeated use of MHI products and services, though not a recurring revenue model per se, may be expected to provide some operating stability. Given low working capital and capital expenditure requirements, as well as minimal scheduled amortization, the company could, without unforeseen hurdles to the acquisition integration, generate decent free cash flow, which Moody's projects could be as much as $25 million annually. If MHI can continue to stanch the decline of the acquired PI businesses' revenues, and successfully integrate their operations and those of VitalSmarts into its current platform, attractive EBITDA growth could follow. The resulting improvement in debt-to- EBITDA, if the measure could be sustained below about 4.5x, could prompt an upgrade. Without MHI's having posted an actual track record of improving operations, Moody's reserve more favorable assessment until several quarters of good performance bear out the investment rationale. If MHI fails both to integrate acquisitions successfully and to reverse PI's trajectory of underperformance, it may require higher than anticipated funds for capex and marketing expenses, which could strain MHI's liquidity and its ability to service its debt. In our view, strained liquidity could reflect both top line pressure and an underestimation of integration and SG&A expenses, which could prompt a downgrade. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Privately held by Providence Equity Partners, Miller Heiman, Inc. provides sales training, leadership, project management, and credit analysis instruction to corporate customers, and is expected to generate approximately $300 million in 2014 revenues. NATIONAL ENVELOPE: Seeks Extension of Exclusive Plan Filing Period ------------------------------------------------------------------ NE Opco, Inc., f/k/a National Envelope, and its debtor affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend until Oct. 6, 2014, their exclusive period to file a Chapter 11 plan and until Dec. 2 their exclusive period to solicit acceptances of that plan. The Debtors state in court papers that now that the sales have closed, the transition of the purchased assets to the purchasers have been substantially completed, and the bar dates have run, they are better-situated to evaluate their financial standing and the proofs of claim filed in an effort to determine the appropriate next steps for brining closure to the Chapter 11 cases, through either a plan or otherwise. The Debtors need the additional time to properly analyze the best path towards winding up their estates. Papers filed in court show that the Debtors are engaged in a dispute over the termination of an employee as a result of the sale of their assets to Cenveo Corporation and Cenveo, Inc. Paul Torres, a former employee of NE Opco terminated the day after the Sale Order was entered approving the sale of assets to Cenveo, filed an action in a California state court against Cenveo for, among other things, disability discrimination. The Cenveo Entities, in response, filed a motion asking the Bankruptcy Court to enforce the Sept. 12, 2013 Sale Order and Injunction. Cenveo asserts that, among other things, the Sale Order and Injunction enjoins all parties, specifically including employees, with claims resulting from the transfer of the assets from pursuing Cenveo with respect to those claims. The Debtors assert that pursuant to the Sale Order and Injunction, Mr. Torres was enjoined from commencing the State Court Action against Cenveo and otherwise bringing any claims or causes of action against Cenveo, in each case, arising from the Debtors terminating Mr. Torres' employment with the Debtors. The hearing on the Debtors' request for exclusivity extension is set for Aug. 5, at 10:00 a.m. (EDT). Objections are due July 21. The Debtors are represented by Eric J. Fromme, Esq., at Jeffer Mangels Butler & Mitchell LLP, in Irvine, California; and Mark D. Collins, Esq., John H. Knight, Esq., Michael J. Merchant, Esq., Paul N. Heath, Esq., and Zachary I. Shapiro, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. Cenveo is represented by: Matthew G. Summers (No. 5533) BALLARD SPAHR LLP 919 N. Market Street, 11th Floor Wilmington, DE 19801 Tel: (302) 252-4428 Fax: (410) 361-8930 Email: summersm@ballardspahr.com -- and -- Kathryn A. Coleman, Esq. Christopher Gartman, Esq. HUGHES HUBBARD & REED LLP One Battery Park Plaza New York, NY 10004 Tel: (212) 837-6000 Fax: (212) 422-4726 Email: kcoleman@hugheshubbard.com gartman@hugheshubbard.com Mr. Torres is represented by: Michael Busenkell, Esq. Brya Keilson, Esq. GELLERT SCALI BUSENKELL & BROWN, LLC 913 N. Market Street, 10th Floor Wilmington, DE 19801 Tel: (302) 425-5800 Fax: (302) 425-5814 Email: mbusenkell@gsbblaw.com bkeilson@gsbblaw.com -- and -- Scott R. Ames, Esq. LAW OFFICE OF SCOTT R. AMES, P.C. 1137 West Olympic Blvd., Suite 500 Los Angeles, CA 90064 Tel: (310) 478-2500 Fax: (310) 478-2501 Email: scott@scottameslaw.com About NE OPCO, Inc. National Envelope is the largest privately-held manufacturer of envelopes in North America. Headquartered in Frisco, Texas, National Envelope has eight plants and 15 percent of the envelope market. Revenue of $427 million in 2012 resulted in a $60.1 million net loss, continuing an unbroken string of losses since 2007. NE OPCO, Inc., doing business as National Envelope, along with affiliate NEV Credit Holdings, Inc., filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-11483) on June 10, 2013. The company disclosed liabilities including $148.4 million in secured debt, with $37.5 million owing on a revolving credit and $15.6 million on a secured term loan. There is a $55.7 million second-lien debt 82 percent held by a Gores Group LLC affiliate. National Envelope, then known as NEC Holdings Corp., first sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. The business was bought by Gores Group LLC for $208 million in a bankruptcy sale. National Envelope, through NE OPCO, has returned to bankruptcy to pursue a plan of reorganization or sell the assets as a going concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a sale of the business with publicly traded competitor Cenveo Inc. In the 2013 case, the company tapped the law firm Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP as financial adviser, and Epiq Bankruptcy Solutions as claims and notice agent. The Gores Group is represented by Weil, Gotshal and Manges LLP and Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht & Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition senior agent, is represented by Goldberg Kohn Ltd and DLA Piper. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP's Laura Davis Jones, Esq., Bradford J. Sandier, Esq., Robert J. Feinstein, Esq., and Peter J. Keane, Esq. Guggenheim Securities, LLC, serves as its investment banker and financial advisor. National Envelope won court approval on July 19, 2013, for a global settlement permitting a sale of the company without objection from the official unsecured creditors' committee. The settlement ensures some recovery for unsecured creditors. The Company also won final approval for $67.5 million in bankruptcy financing being supplied by Salus Capital Partners LLC. Judge Christopher Sontchi authorized three buyers to acquire National Envelope's business for a total of about $70 million. Connecticut-based printer Cenveo Inc. acquired National Envelope's operating assets for $25 million, Hilco Receivables LLC picked up accounts receivable for $25 million and Southern Paper LLC took on its inventory for $15 million. NATIONAL ENVELOPE: Trust Agreement with Committee Approved ---------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware approved the trust agreement and a stock escrow agreement between NE Opco, Inc., et al., and the Official Committee of Unsecured Creditors of NE Opco and NEV Credit Holdings Inc., and authorized the transfer of the Debtors' remaining assets to a trustee. The order followed Spirit SPE Portfolio 2006-4, LLC's withdrawal of its objection to the approval of the trust agreement and stock escrow agreement. Spirit, however, said that notwithstanding the withdrawal, it expressly reserves its rights vis-a-vis Cenveo Corporation under both the Sale Order and the Stipulation Approval Order. About NE OPCO, Inc. National Envelope is the largest privately-held manufacturer of envelopes in North America. Headquartered in Frisco, Texas, National Envelope has eight plants and 15 percent of the envelope market. Revenue of $427 million in 2012 resulted in a $60.1 million net loss, continuing an unbroken string of losses since 2007. NE OPCO, Inc., doing business as National Envelope, along with affiliate NEV Credit Holdings, Inc., filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-11483) on June 10, 2013. The company disclosed liabilities including $148.4 million in secured debt, with $37.5 million owing on a revolving credit and $15.6 million on a secured term loan. There is a $55.7 million second-lien debt 82 percent held by a Gores Group LLC affiliate. National Envelope, then known as NEC Holdings Corp., first sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. The business was bought by Gores Group LLC for $208 million in a bankruptcy sale. National Envelope, through NE OPCO, has returned to bankruptcy to pursue a plan of reorganization or sell the assets as a going concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a sale of the business with publicly traded competitor Cenveo Inc. In the 2013 case, the company tapped the law firm Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP as financial adviser, and Epiq Bankruptcy Solutions as claims and notice agent. The Gores Group is represented by Weil, Gotshal and Manges LLP and Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht & Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition senior agent, is represented by Goldberg Kohn Ltd and DLA Piper. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP's Laura Davis Jones, Esq., Bradford J. Sandier, Esq., Robert J. Feinstein, Esq., and Peter J. Keane, Esq. Guggenheim Securities, LLC, serves as its investment banker and financial advisor. National Envelope won court approval on July 19, 2013, for a global settlement permitting a sale of the company without objection from the official unsecured creditors' committee. The settlement ensures some recovery for unsecured creditors. The Company also won final approval for $67.5 million in bankruptcy financing being supplied by Salus Capital Partners LLC. Judge Christopher Sontchi authorized three buyers to acquire National Envelope's business for a total of about $70 million. Connecticut-based printer Cenveo Inc. acquired National Envelope's operating assets for $25 million, Hilco Receivables LLC picked up accounts receivable for $25 million and Southern Paper LLC took on its inventory for $15 million. NCR CORP: S&P Affirms 'BB+' CCR on Increased Revenue ---------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'BB+' corporate credit rating on Duluth, Ga.-based NCR Corp. The outlook is stable. At the same time, S&P raised the issue-level rating on the first- lien debt to 'BBB' from 'BBB-' and revised the recovery rating to '1' from '2' reflecting the low amount of first-lien debt outstanding and an accelerating term loan amortization. The '1' recovery rating indicates S&P's expectation of very high (90%- 100%) recovery of principal in the event of a payment default. S&P also affirmed its 'BB' issue-level rating on NCR's unsecured debt. The recovery rating remains '5', indicating S&P's expectation of a modest (10%-30%) recovery in the event of a payment default. The rating reflects S&P's view of NCR's "satisfactory" business risk profile, incorporating its leading positions in the financial, retail and hospitality, and specialty automation segments, an earnings concentration with heavy reliance on financial self-service and retail store automation and related services, and a growing software and service business with higher margins and recurring revenues. The "significant" financial risk profile reflects the company's increased leverage due to acquisition activity over the last few years and its strong cash flow generation, which S&P expects to lead to a moderate decline in leverage over the ratings horizon. S&P views industry risk as moderately high, based on its industry risk assessment of the technology hardware sector, and S&P considers country risk low, reflecting its geographically diversified revenue exposure. S&P assess management and governance as "satisfactory." The stable outlook reflects S&P's expectation that leverage will decline from the elevated levels incurred by the recent DI acquisition through earnings growth, good cash flow generation, and debt reduction. S&P could lower our rating if a macroeconomic slowdown or operating pressures in NCR's businesses result in lower margins and limit cash flow available for debt reduction, causing leverage to be sustained above 4x. Although not expected in the near term, S&P could raise its rating if strong earnings growth and free cash flow, along with asset sales, result in leverage sustained at the high-2x level. NELSON EDUCATION: Moody's Lowers Corporate Family Rating to 'Ca' ---------------------------------------------------------------- Moody's Investors Service downgraded Nelson Education Ltd.'s probability of default rating to D-PD from Caa3-PD, corporate family rating to Ca from Caa3, second lien term loan rating to C from Ca, and withdrew the Caa1 rating on the first lien term loan as the debt was not repaid at maturity. The ratings outlook was revised to stable from negative. The downgrade reflects Nelson's missed interest payment on the second lien term loan and the missed principal payment on the first lien term loan. Moody's will withdraw all of the ratings in the next few days as the company is restructuring its debt and information flow required to maintain the ratings has become more limited. Please refer to Moody's withdrawal policy on Moodys.com. Ratings Downgraded: Corporate Family Rating, to Ca from Caa3 Probability of Default Rating, to D-PD from Caa3-PD Second Lien Term Loan due July 2015, to C (LGD5, 79%) from to Ca (LGD5, 80%) Outlook: Changed to Stable from Negative Ratings Rationale The downgrade was prompted by Nelson's recent notification to Moody's that it failed to make the interest payment under its C$169 million second lien term loan (due March 31, 2014) after the expiry of a seven business day grace period. The company also did not to make the interest payment on the second lien term loan, due on June 30, 2014 and did not pay the C$297 million principal payment on the first lien term loan, due July 4, 2014. As the company is restructuring its debt and there is limited information available to Moody's, all ratings will shortly be withdrawn. 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. Nelson Education Ltd. publishes college and K-through-12 textbooks and reference materials for the Canadian educational market. The company is owned by funds managed by Apax Partners and OMERS Private Equity and is headquartered in Toronto, Ontario, Canada NELSON EDUCATION: S&P Lowers CCR to 'D' on Missed Payments ---------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Toronto-based Nelson Education Ltd. to 'D' from 'CCC-'. At the same time, Standard & Poor's lowered its issue-level rating on the company's US$311 million senior secured first-lien term loan B (currently US$269 million outstanding) to 'D' from 'CCC-'. The recovery rating on this facility is unchanged at '3', reflecting S&P's expectation for meaningful recovery (50%-70%) in its default scenario. S&P also lowered its issue-level rating on the US$171 million senior secured second- lien term loan (currently US$153 million outstanding) to 'D' from 'C'. The recovery rating on this facility is unchanged at '6', reflecting S&P's expectation for negligible recovery (0%-10%). "The rating action reflects the company's default on its debt obligations," said Standard & Poor's credit analyst Lori Harris. Nelson missed the principal payment on its first-lien debt, which was due July 4, 2014 (revised to July 7 due to the U.S. holiday), as well as the interest payment on its US$171 million second-lien term loan, which was due June 30. S&P do not expect Nelson to make the principal payment at par, nor the interest payment. The missed principal and interest payments on the bank facilities follow the company's deteriorating operating performance and weak liquidity. OHCMC-OSWEGO: L.B. Anderson-Led Auction on Sept. 16 Okayed ---------------------------------------------------------- Judge Carol Doyle has authorized OHCMC-Oswego, LLC, to sell substantially all of its assets to L.B. Anderson Construction, Inc., subject to an auction, in connection with the Debtor's proposed plan of liquidation. Judge Doyle also approved the stalking horse aset purchase agreement (APA) with L.B. Anderson and the payment of a break-up fee in the event L.B. Anderson is outbid at the auction. On May 7, 2014, the Debtor filed its Plan of Liquidation and Disclosure Statement. The Plan provides for, among other things, the sale of substantially all of the Debtor's assets. Prior to filing the Plan, the Debtor engaged in negotiations with several potential buyers. The Debtor ultimately decided to enter into an agreement with L.B. Anderson for the sale of the Assets. The following summarizes key provisions of the Stalking Horse APA: (a) Stalking Horse: L.B. Anderson Construction, Inc. (b) Purchase Price and Deposit: $11,750,000 in cash, plus the assumption of certain liabilities, and the payment of certain cure costs in connection with assumption by the Debtor and assignment to the Stalking Horse of Assumed Contracts. Stalking Horse will tender a deposit of five percent of the purchase price. (c) Assets: Stalking Horse will purchase substantially all of the Debtor's assets. (d) Due Diligence Period: Stalking Horse will have 30 days from the Effective Date of the Stalking Horse APA to complete its due diligence. (e) Closing Date: The closing shall occur no later than 30 days following the date Stalking Horse is identified as the ultimate purchaser of the Assets. (f) Break-Up Fee: $352,500, payable on the terms and conditions provided in the Stalking Horse APA. The salient terms of the Sale Procedures governing the auction are: A. An entity that wishes to submit a qualified bid must submit its bid so that it is actually received on or before 4:00 p.m. Central Time on Sept. 12, 2014. B. Not later than Sept. 8, 2014, the Debtor will designate those submitted bids, if any, that are qualified bids. C. Not later than Sept. 15, 2014, the Debtor will notify each entity that that has submitted a qualified bid by electronic mail only, that its bid has been designated as a qualified bid. D. If one or more qualified bids are received for the assets, an auction will be conducted at the offices of Freeborn & Peters LLP, 311 S. Wacker Drive, Suite 3000, Chicago, IL 60606, on Sept. 16, 2014, commencing at 10:00 a.m. Central Time. A copy of the sale motion is available at: http://bankrupt.com/misc/OHCMC-OSWEGO_71_sale.pdf About OHCMC-Oswego OHCMC-Oswego, LLC, is an Illinois limited liability company that was formed on July 12, 2005 to, inter alia, acquire, develop and sell a series of real estate developments. It is wholly owned by Oliver-Hoffman Corporation. Its principal place of business is located at 3108 S. Rt. 59, Ste. 124-373, Naperville, Illinois. OHCMC-Oswego filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 14-05349) in Chicago on Feb. 19, 2014, with plans to sell its assets. Camille O. Hoffmann signed the petition as president of managing and sole member. The Debtor disclosed $92,268 plus an unknown amount in assets and $56,782,127 in liabilities. The Hon. Carol A. Doyle presides over the case. The Debtor is represented by David C. Gustman,, Esq., at Freeborn & Peters LLP. No trustee, examiner or creditors' committee has been appointed in the case. OHCMC-OSWEGO: Amends Sale-Based Plan Documents ---------------------------------------------- OHCMC-Oswego, LLC, filed a Modified Plan of Liquidation and Disclosure Statement on June 30, 2014. According to the latest plan documents, the Debtor's assets will be sold pursuant to the Court-approved sale procedures. The Debtor anticipates a sale process that will allow its real estate broker adequate time to market the properties to ensure the Debtor receives the highest and best offer for the properties. The proceeds of the sale of the properties will be used to satisfy the secured claims of BMO and PNC. Further, the Debtor will distribute a set sum of money that is currently held in an escrow account with the Village of Oswego and totaling $29,408 to unsecured creditors in accordance with the Bankruptcy Code's priority scheme. The Debtor currently has an offer from L.B. Anderson Construction, Inc., the stalking horse bidder, to purchase the properties for $11,750,000, absent higher and better offers. The Debtor will solicit written bids from other potential bidders with all such bids to be received no later than 4:00 p.m. on Sept. 12, 2014. If the Debtor receives two or more qualified bids for the assets, the debtor will conduct an auction. the Debtor will determine the winning bid in its reasonable discretion. It will also select the back-up bid, to be utilized, in the event that the best bid is unable to timely close. The Bankruptcy Court has scheduled a joint hearing with respect to the sufficiency of the Disclosure Statement and confirmation of the Plan for Aug. 6, 2014. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/OHCMC-OSWEGO_80_dsmodifiedplan.pdf About OHCMC-Oswego OHCMC-Oswego, LLC, is an Illinois limited liability company that was formed on July 12, 2005 to, inter alia, acquire, develop and sell a series of real estate developments. It is wholly owned by Oliver-Hoffman Corporation. Its principal place of business is located at 3108 S. Rt. 59, Ste. 124-373, Naperville, Illinois. OHCMC-Oswego filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 14-05349) in Chicago on Feb. 19, 2014, with plans to sell its assets. Camille O. Hoffmann signed the petition as president of managing and sole member. The Debtor disclosed $92,268 plus an unknown amount in assets and $56,782,127 in liabilities. The Hon. Carol A. Doyle presides over the case. The Debtor is represented by David C. Gustman,, Esq., at Freeborn & Peters LLP. No trustee, examiner or creditors' committee has been appointed in the case. OUTERSTUFF LLC: Moody's Assigns 'B1' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned a B1 Corporate Family Rating and B1-PD Probability of Default Rating to Outerstuff LLC. Moody's also assigned a B2 rating to the company's proposed $155 million senior secured term loan. This is the first time Moody's has assigned a rating to Outerstuff. The rating outlook is stable. Proceeds from the term loan will be used to finance a return of capital to shareholders. The transaction follows the acquisition by private equity funds affiliated with the Blackstone Group of approximately 50% of Outerstuff equity in May 2014. The initial acquisition was entirely equity-funded, including an equity contribution by Blackstone and rollover management equity. Ratings assigned: Issuer: Outerstuff LLC Corporate Family Rating, assigned B1 Probability of Default Rating, assigned B1-PD $155 million proposed senior secured first lien term loan due 2021, assigned B2 (LGD 5) Stable outlook The ratings are subject to receipt and review of final documentation. Ratings Rationale The B1 corporate family rating reflects Outerstuff's key man risk stemming from reliance on founder and CEO Solomon Werdiger and revenue concentration with several sports leagues. The rating also incorporates the company's small scale, narrow product concentration, risks associated with private equity ownership and the joint control by management and the private equity sponsor. These risks are mitigated by the company's good credit metrics compared to those of similarly rated apparel peers. Pro-forma for the transaction, debt/EBITDA will be in the mid-3 times and EBITA/interest expense in the low-5 times (Moody's-adjusted, as of March 31, 2014). Moreover, the rating benefits from the company's entrenched position in its niche market, exclusive licenses with key sports leagues, diversification across retail channels, and good liquidity. In addition, Moody's views the children's licensed sports apparel market as relatively stable and recession-resistant because of its low fashion risk, natural replenishment cycle and consumers' steady interest in team sports. The B2 rating assigned to the proposed $155 million senior secured term loan reflects its junior position to the $100 million asset- based revolver (unrated). The term loan will benefit from a first lien on substantially all of the company's tangible and intangible assets except for the ABL collateral, in which the term loan will have second priority interest. The stable outlook reflects Moody's expectations for moderate revenue and EBITDA growth and good near term liquidity. The ratings could be downgraded if the company loses a major license partner, or if the founder ceases to be involved in a key executive role without a suitable replacement. In addition, a deterioration in operating performance or liquidity, or more aggressive financial policies including debt-financed dividend distributions, would pressure the ratings. Quantitatively, ratings could be downgraded if debt/EBITDA is sustained above 4.5 times. In view of the company's limited scale and narrow product focus, an upgrade is unlikely in the near term, and would require the company to maintain stronger financial metrics than similarly rated peers. The company would also need to (i) expand its scale and product line beyond children's sports apparel, (ii) sustain debt/EBITDA below 3 times, (iii) reduce its dependence on current league partners by expanding into other sports, and (iv) maintain healthy operating margins and continue to demonstrate stability in operating performance. Outerstuff, LLC, is a designer, manufacturer and marketer of licensed children's sports apparel. The company generates the majority of its revenues from products sold under exclusive licenses with the NFL, NBA, NHL, MLB, MLS and Adidas, and sells to department stores, mass merchants and specialty chain stores mainly in the United States. Since the May 2014 investment by Blackstone, the private equity sponsor and management have equal equity stakes of approximately 50% and share control of the company. Revenues for the last twelve months ended March 31, 2014 were below $500 million. The principal methodology used in this rating was Global Apparel Companies 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. OUTERSTUFF LLC: S&P Assigns 'B+' CCR & Rates $100MM Revolver 'BB' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Outerstuff LLC. The outlook is stable. "At the same time, we assigned our 'BB' issue rating (two notches above the corporate credit rating) to the company's $100 million asset-based revolver with a recovery rating of '1', indicating that lenders could expect very high (90% to 100%) recovery in the event of a payment default or bankruptcy. We also assigned our 'B+' issue rating (same as the corporate credit rating) to the company's $155 million first-lien facility, with a recovery rating of '3', indicating that lenders could expect meaningful (50% to 70%) recovery in the event of a payment default or bankruptcy," S&P noted. "Our ratings on Outerstuff reflect our view that the company's leverage increased due to the sale of approximately 50% of the company to private equity funds affiliated with Blackstone," said Standard & Poor's credit analyst Jacqueline Hui. Pro forma adjusted leverage will be near 3.5x (credit metrics include Standard & Poor's standard adjustments) and bank- calculated leverage is just below 3x. The proposed transaction includes a $100 million asset-based revolver and $155 million in first-lien term debt. Per the proposed credit agreement, 100% of excess cash flow can be distributed to shareholders if bank- calculated leverage is below 3x. As such, S&P believes credit metrics, including leverage, will remain near current levels over the next year. The company generates good cash flow, and S&P believes the company will direct its excess cash flow toward shareholder distributions. S&P has factored this into its assessment of the company's financial policy, which S&P views as aggressive. The ratings also reflect Standard & Poor's assessment that Outerstuff has a "weak" business risk profile, reflecting its relatively small size and narrow focus within the niche licensed children's sports apparel segment, as well as its participation within the overall competitive North American apparel industry. The outlook on Outerstuff Ltd. is stable. "We expect overall profit stability because of Outerstuff's licensing business model and exclusive contracts with professional leagues with high retention rates, underlining our expectation that credit metrics will remain near current levels and liquidity will be adequate over the next year," said Ms. Hui. PEREGRINE FINANCIAL: Lawsuits Seek Return of More Than $1.5MM ------------------------------------------------------------- Jacqueline Palank, writing for Daily Bankruptcy Review, reported that a handful of new lawsuits seek to recover more than $1.5 million for defunct brokerage Peregrine Financial Group Inc.'s creditors from the likes of CNBC, MTV and various charitable organizations. According to the report, Ira Bodenstein, the trustee leading Peregrine's bankruptcy liquidation, filed the lawsuits against corporate defendants, a university, several nonprofits and two individuals, court papers show. The lawsuits seek to recover funds the defendants received from Peregrine in the months before the brokerage's July 2012 collapse, which was brought on by the exposure of its founder's fraud. About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. PHH CORP: Fitch Affirms 'BB-' IDR & Removes From Watch Negative --------------------------------------------------------------- Fitch Ratings has affirmed PHH Corporation's (PHH) long-term Issuer Default Rating (IDR) and senior unsecured debt rating at 'BB-'. Fitch has also removed the ratings from Rating Watch Negative and assigned a Negative Rating Outlook. Fitch previously downgraded PHH to 'BB-' on Rating Watch Negative from 'BB' on Rating Watch Evolving on June 4, 2014, following the announced sale of PHH's auto fleet leasing business. The downgrade reflected Fitch's view that the credit risk profile of the entity was at least one notch weaker as a monoline business focused on mortgage servicing/origination. The Rating Watch Negative reflected uncertainty around the use of proceeds from the sale of the fleet business. KEY RATING DRIVERS - IDRS AND SENIOR DEBT The affirmation of PHH's ratings and the removal of the Rating Watch Negative follow the closing of the auto fleet leasing business sale and the company's announced capital allocation plan for its stand-alone mortgage business, which results in improved in capitalization, leverage and liquidity primarily due to $420m in identified debt pay downs using cash proceeds received from the spin-off of PHH's auto fleet leasing business. The Negative Outlook reflects uncertainty and execution risk associated with the planned re-investing in and re-engineering of the company's mortgage origination and servicing business, in order to improve profitability, particularly in light of up to $450 million in announced share repurchases which will modestly reduce financial flexibility. The company has identified ambitious plans to improve its mortgage origination and servicing business, including renegotiating existing private label mortgage servicing contracts with clients at more favorable economic terms. Fitch believes that there is significant uncertainty and execution risk with this strategy due to the inherently cyclical nature of the mortgage origination business and the capital intensive nature and highly volatile earnings profile of the mortgage servicing business. Furthermore, the overall mortgage business remains subject to intensive regulatory and legislative scrutiny, which could potentially be a drain on cash resources. Pro forma March 31, 2014 for the sale of PHH's fleet business, the standalone mortgage business has equity of $1.87 billion and total debt of $1.88 billion, resulting in leverage, as measured by debt to tangible equity, of 1.01x, which compares favorably to the company's year-end 2013 leverage of 3.4x. Fitch expects leverage to moderately increase from its current pro forma levels but also expects that PHH will manage leverage conservatively. Liquidity, as measured by balance sheet cash, is bolstered by the $821 million in net cash proceeds after payment of taxes and transaction expense received from the fleet business sale. The company has identified uses for liquidity, which in addition to debt paydown and reinvestment in mortgage business, include share buybacks. Factoring in the planned debt paydowns, the company does not have any other unsecured debt maturities until 2017, when $250 million of convertible notes come due. Fitch views the company's liquidity profile as appropriate for the ratings. RATING SENSITIVITIES - IDRS AND SENIOR DEBT Inability to renegotiate existing private label contracts at more favorable economic terms, loss of clients, weakening in PHH's competitive position, and/or sustained operating losses would lead to negative rating actions. In addition, a sustained increase in leverage, reduction in liquidity due to higher than expected operational and contingency needs, or higher than planned share repurchases would also be viewed negatively. Successful execution of management's strategic objectives as measured by strengthened competitive position, higher client contract renewals, and sustained increased in earnings and cash flows, while maintaining appropriate capital and liquidity levels could result in the Outlook being revised to Stable from Negative. Given the expected time it will take to implement the proposed strategic changes and observe meaningful change, Fitch expects that resolution of the Negative Rating Outlook could be towards the outer end of the 12 to 24 month Outlook horizon. Fitch removes from Rating Watch Negative and affirms the following ratings: PHH Corporation -- Long-term IDR at 'BB-'; -- Senior unsecured debt at 'BB-'; -- Short-term IDR at 'B'; -- Commercial paper at 'B'. The Rating Outlook is Negative. PHH CORP: S&P Cuts Ratings to 'B+' on Sale of Leasing Business -------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its counterparty and senior unsecured ratings on PHH Corp. to 'B+' from 'BB-'. S&P also removed the ratings from CreditWatch with negative implications where it had placed them on June 3, 2014. The outlook is stable. "The downgrade of Mount Laurel, N.J.-based residential mortgage servicer and originator PHH Corp. follows the firm's July 7 sale of its fleet management services business, PHH Arval, to Element Financial Corp. (Element) for $1.4 billion in a cash-for-stock transaction," said Standard & Poor's credit analyst Jeffrey Zaun. This transaction will be treated as an asset sale for tax purposes. Net proceeds from the transaction were $821 million after payment of expected taxes and transaction expenses, and management will use these proceeds to pay down debt due in 2016, provide for ongoing liquidity needs, make investments (including possible acquisitions) in its mortgage business, and repurchase up to $450 million of its equity shares over the next 12 to 18 months. Although S&P believes the proceeds from this sale will bolster PHH's financial position in the near term, S&P also believes that without the steady income from its fleet leasing business, the mortgage business will be more vulnerable to market volatility and will encounter greater difficulty funding its volatile mortgage servicing rights assets. Over the past year, PHH suffered as housing markets deteriorated and origination volumes, especially refinancings, declined when interest rates rose. As a result, S&P expects earnings will be under pressure, and that the company may experience losses through the first half of 2015. At the same time, regulatory changes and new capital requirements could cause banks to pull back from mortgage lending and servicing, which would likely improve PHH's strategic position. Increased scrutiny over consumer protections should increase barriers to entry for new competitors and may drive more banks and nonbank financial institutions to consider outsourcing their mortgage origination and servicing. As the largest provider of private label mortgage production and servicing, PHH has a strong strategic position. Over the past two years, however, management has been unable to pass along the increased compliance costs of originating and servicing mortgage loans, pressuring PHH's margins. Management has announced that they will re-engineer the company's private label services business. S&P will monitor the firm's progress on re-negotiating its contracts and retaining its longer-term customers. S&P will also monitor management's plans to invest in its retail servicing platform. The ratings on PHH will remain limited by uncertainty surrounding the longer-term (two to five year) structure of the mortgage origination and servicing industry and management's need to maintain a stable funding platform for its volatile mortgage servicing assets and interest-rate sensitive mortgage origination platform. The stable outlook incorporates S&P's expectation that PHH's earnings will remain negative through 2014 and into 2015 as the firm completes its re-engineering as a stand-alone mortgage company. S&P also considers management's commitment to deleveraging as a positive rating factor. Management's commitment includes maintaining the ratio of unencumbered assets to unsecured debt above 3.0x. S&P could downgrade PHH if losses place pressure on the firm's ability to retire its 2017 debt obligation, or if S&P believes the firm's ratio of debt to EBITDA will remain above 4.0x through 2015. S&P could upgrade PHH if the firm is able to reduce its leverage, measured as debt to EBITDA, below 3x on a sustainable basis and if earnings improve and stabilize with a return on average assets above 2.0%. PRETTY GIRL: Section 341(a) Meeting Set for Aug. 13 --------------------------------------------------- A meeting of creditors in the bankruptcy case of Pretty Girl, Inc., will be held on Aug. 13, 2014, at at 3:00 p.m. at 80 Broad St., 4th Floor, USTM. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Pretty Girl, Inc., filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 14-11979) on July 2, 2014. The petition was signed by Albert Nigri as president. The Debtor disclosed total assets of $10.76 million and total liabilities of $12.27 million. Rosen & Associates, P.C., acts as the Debtor's counsel. PROSPECT PARK: Wants Exclusive Plan Filing Date Extended to Aug. ---------------------------------------------------------------- Prospect Park Networks, LLC, asks the U.S. Bankruptcy Court for the District of Delaware that the period in which the Debtor has the exclusive right to file a Chapter 11 plan be extended through and including Aug. 7, 2014, and the period in which the Debtor has exclusive right to solicit acceptances of that plan be extended through and including Oct. 6. The Debtor explains in court papers that it is currently contemplating various ways to conclude the Chapter 11 case, and it needs the additional time to file and solicit acceptances of a plan. The extension motion was filed by William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at Cousins Chipman & Brown, LLP, in Wilmington, Delaware; and John H. Genovese, Esq., Michael Schuster, Esq., and Heather L. Harmon, Esq., at Genovese Joblove & Battista, P.A., in Miami, Florida, on behalf of the Debtor. A hearing on the extension request is scheduled for July 28, at 3:00 p.m. (ET). Objections are due July 21. About Prospect Park Networks Prospect Park Networks, LLC, a Los Angeles, Calif.-based talent and management company, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-10520) in Wilmington, on March 10, 2014, estimating $50 million to $100 million in assets, and $10 million to $50 million in debts. The petition was signed by Jeffrey Kwatinetz, president. William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at Cousins Chipman & Brown LLP, in Wilmington, Delaware; and John H. Genovese, Esq., Michael Schuster, Esq., and Heather L. Harmon, Esq., at Genovese Joblove & Battista, P.A. serve as the Debtor's bankruptcy counsel. The Debtor also hired Cohn Reznick LLP as an ordinary course professional. The U.S. Trustee for Region 3 selected three creditors to serve on the Official Committee of Unsecured Creditors. Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the Committee's counsel. PSL-NORTH AMERICA: U.S. Trustee to Hold Creditors' Meeting July 23 ------------------------------------------------------------------ The U.S. Trustee for Region 3 is set to hold a meeting of creditors of PSL-North America LLC on July 23, at 1:00 p.m. The meeting will be held at Room 2112, 2nd Floor, J. Caleb Boggs Federal Building, 844 King Street, in Wilmington, Delaware. The meeting, which is required under Section 341(a) of the Bankruptcy Code, offers creditors an opportunity to examine PSL- North America's representative under oath about its financial affairs and operations that would be of interest to the general body of creditors. About PSL-North America Founded in 2006, PSL-North America LLC is a manufacturer and coater of large diameter steel pipes. The company has a state-of- the-art facility located in Bay St. Louis, Mississippi, with the land leased for 99 years. The company is an American-based partially owned subsidiary of India's largest producer and manufacturer of steel piping, PSL Limited. On June 16, 2014, PSL-North America LLC and PSL USA Inc., filed voluntary petitions in Delaware (Lead Case No. 14-11477) seeking relief under chapter 11 of the United States Bankruptcy Code. The Debtors' cases have been assigned to Judge Peter J. Walsh. The Debtors are seeking to have their cases jointly administered for procedural purposes. PSL-North America estimated $50 million to $100 million in assets and $100 million to $500 million in debt in the bankruptcy petition. As of the Petition Date, the company had total outstanding debt obligations of $130 million, according to a court filing. The Debtors have tapped Richards Layton & Finger, P.A., as counsel. Epiq Bankruptcy Solutions serves as claims agent. PSL-NORTH AMERICA: Seeks Additional Time to File Schedules ---------------------------------------------------------- PSL-North America, Inc. is requesting that the Bankruptcy Court for the District of Delaware extend the deadline by which it must file its Schedules of Assets and Liabilities, Schedules of Current Income and Expenditures, Schedules of Executory Contracts and Unexpired Leases, and Statements of Financial Affairs. The Debtor is requesting an additional 30 days to July 16, 2014, to make its required filings. The Debtor filed its voluntary petition on June 16, 2014. The Debtor contends that "cause" exist for such extension under Bankruptcy Rule 1007(c). The Debtor believes it has more than 200 creditors and thus does not qualify for an automatic extension. Prior to the petition date, the Debtor exhausted its time and resources reviewing its debt structure, analyzing operations and cash flows, marketing assets, and negotiating and documenting the DIP Facility and the Stalking Horse Asset Purchase Agreement. Further, the Debtor's business operations require it to maintain significant amounts of records and accounting systems. In order to prepare the Schedules and Statements, the Debtor must gather information from these various records and documents. Collecting this information, which is voluminous, will require significant expenditure of time and effort on the part of the Debtor's limited staff and advisors. About PSL-North America Founded in 2006, PSL-North America LLC is a manufacturer and coater of large diameter steel pipes. The company has a state-of- the-art facility located in Bay St. Louis, Mississippi, with the land leased for 99 years. The company is an American-based partially owned subsidiary of India's largest producer and manufacturer of steel piping, PSL Limited. On June 16, 2014, PSL-North America LLC and PSL USA Inc., filed voluntary petitions in Delaware (Lead Case No. 14-11477) seeking relief under chapter 11 of the United States Bankruptcy Code. The Debtors' cases have been assigned to Judge Peter J. Walsh. The Debtors seek to have their cases jointly administered for procedural purposes. PSL-North America estimated $50 million to $100 million in assets and $100 million to $500 million in debt in the bankruptcy petition. As of the Petition Date, the company had total outstanding debt obligations of $130 million, according to a court filing. Proposed counsel for the Debtor are John H. Knight, Esq., Paul N. Heath, Esq., Tyler D. Semmelman, Esq., Amanda R. Steele, Esq. and William A. Romanowicz, Esq. at Richards, Layton & Finger, P.A. of Wilmington, Delaware. Epiq Bankruptcy Solutions serves as claims agent. RAPID AMERICAN: Creditors' Panel Taps Gilbert LLP as Special Atty ----------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 case of Rapid-American Corporation sought and obtained authority from Judge Stuart Bernstein of the U.S. Bankruptcy Court for the Southern District of New York to retain Gilbert LLP as special insurance counsel. As special insurance counsel, Gilbert LLP will: (a) advise the Committee on steps to be taken to preserve and maximize insurance coverage; (b) attend meetings and negotiate with representatives of the Debtor, its non-bankrupt affiliates, its insurance carriers, and other parties-in-interest related to the preservation of insurance coverage; and (c) assist the Committee with any insurance-related matters arising in connection with the formulation of a plan of reorganization and Section 524(g) channeling injunction and funding any trust for the payment of asbestos claims established under a plan. Gilbert LLP's hourly rates are as follows: Partners $600 to $1,000 Of Counsel/Associates $280 to $550 Paralegals/Litigation Support $175 to $280 Law Clerks $150 The firm will also be reimbursed for any necessary out-of-pocket expenses. Kami E. Quinn, Esq., a partner at Gilbert LLP, in Washington, D.C., assured the Court that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Ms. Quinn, however, disclosed that her firm previously served as insurance counsel in the asbestos-related bankruptcy cases of ACandS, Inc., Armstrong World Industries, Inc., and Federal-Mogul Global, Inc. About Rapid-American Corp. Rapid-American Corp. filed for Chapter 11 bankruptcy protection in Manhattan (Bankr. S.D.N.Y. Case No. 13-10687) on March 8, 2013, to deal with debt related to asbestos personal-injury claims. New York-based Rapid-American was formerly a holding company with subsidiaries primarily engaged in retail sales and consumer products and was never engaged in an asbestos business of any kind. Through a series of merger transactions going back more than 45 years, Rapid has nevertheless incurred successor liability for personal injury claims arising from plaintiffs' exposure to asbestos-containing products sold by The Philip Carey Manufacturing Company -- Old Carey -- as that entity existed prior to June 1, 1967. Attorneys at Reed Smith LLP serve as counsel to the Debtor. The Debtor disclosed assets in excess of $4,446,261 and unknown liabilities. The Official Committee of Unsecured Creditors retained Caplin & Drysdale, Chartered, as counsel. Young Conaway Stargatt & Taylor, LLP, represents Lawrence Fitzpatrick, the Future Claimants' Representative, as counsel. REGENCY ENERGY: S&P Assigns 'BB' Rating on $499MM Unsec. Notes -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB' issue-level rating to Regency Energy Partners L.P. and Regency Energy Finance Corp.'s new $499 million senior unsecured notes due 2019. Regency recently completed the offer to exchange Eagle Rock Energy Partners L.P.'s outstanding 8.375% senior unsecured notes due 2019 for debt of the same tenor. S&P also assigned its '4' recovery rating to the debt, indicating average (30% to 50%) recovery of principal. S&P's corporate credit rating on Regency is 'BB', and the outlook is stable. As of March 31, 2014, Regency had about $5.6 billion of reported debt. Dallas-based Regency is a midsize master limited partnership in the U.S. midstream energy sector. RATINGS LIST Regency Energy Partners L.P. Corp credit rating BB/Stable/-- New Rating Regency Energy Partners L.P. Regency Energy Finance Corp. $499 mil sr unsecd notes due 2019 BB Recovery rating 4 REFCO PUBLIC: Court Sets Sept. 2 as Claims Bar Date --------------------------------------------------- The Bankruptcy Court for the District of Delaware has established bar dates for the filing of proofs of claim and equity security interests in Refco Public Commodity Pool, LP d/b/a S&P Managed Futures Index Fund's Chapter 11 case. The claim bar date and equity interest bar date is September 2, 2014 at 5:00 p.m. The Governmental Unit bar date is November 9 at 5:00 p.m. Claim holders with a claim that arose on or prior to May 13, 2014 are required to file a proof of claim. Claims must be filed in a manner conforming to Official Bankruptcy Form B10. Claims may be filed by U.S. mail addressed to Refco Public c/o American Claims Legal Services, LLC P.O. Box 23650 Jacksonville, Florida 32241-3650 Or by hand-delivery or overnight mail to Refco Public c/o American Claims Legal Services, LLC 5985 Richard Street, Suite 3 Jacksonville, Florida 32216 Or via facsimile to Refco Public c/o American Legal Claims Services, LLC 904-517-8414 Or by email to Refco@Americanlegalclaims.com An entity is not required to file a claim if: a) it has already filed a Proof of Claim with American Legal Claims or the Clerk of the Bankruptcy Court, b) the claim is listed in the Schedules, is not classified as "disputed", "contingent" or "unliquidated", and the entity agrees with the amount and characterization of the claim, c) the equity security interest is listed in the Rule 1007 (a)(3) list and the entity does not dispute the amount and characterization of the claim, d) the entity is a professional retained in this case pursuant to Court Order, or e) the claim has been allowed by Order of the Court prior to the Bar date. Schedules and Lists may be obtained free of charge from American Legal Claims' website: www.Americanlegalclaims,com/refco, from the Clerk of the District of Delaware Bankruptcy Court, 3rd Floor, 824 Market Street, Wilmington, Delaware 19801, through Delaware Document Retrieval, 2 East 7th Street, 2nd Floor, Wilmington, Delaware 19801 or on the Court's website through the ECF system: www.deb.uscourts.gov About Refco Public Commodity Refco Public Commodity Pool, L.P., also known as S&P Managed Futures Index Fund, L.P., is a fund that was formed in May 2003 to make investments that substantially track the performance of the Standard & Poor's Managed Futures Index. It did this by investing substantially all of its assets in SPhinX Managed Futures Fund, SPC, a Cayman Islands domiciled segregated portfolio company. RefcoFund Holdings, LLC was the general partner of the Fund. Refco Public filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 14-11216) in Wilmington, Delaware, on May 13, 2014. Daniel F. Dooley signed the petition as managing member of MAA, LLC. The Debtor estimated assets of $17 million and debt of $0. The case is assigned to Judge Brendan Linehan Shannon. Attorneys for the Debtor are Russell C. Silberglied, Esq., Paul N. Heath, Esq., and Amanda R. Steele, Esq., at Richards, Layton, & Finger, PA of Wilmington, Delaware and Dennis J. Connolly, Esq., William S. Sudgen, Esq., and Suzanne N. Boyd, Esq., at Alston & Bird, LLP of Atlanta, Georgia. Morris Anderson & Associates, Ltd., is the Debtor's financial advisor, and Maples & Calder serves as the Debtor's Cayman Islands counsel. RESIDENTIAL CAPITAL: "Wilson" Complaint Dismissed ------------------------------------------------- Bankruptcy Judge Martin Glenn dismissed, in part with prejudice, and, in part without prejudice Jennifer Wilson's adversary proceeding against Residential Capital, LLC, Residential Funding Company, LLC, and Does 1-10. Wilson's complaint alleges three causes of action for breach of contract and one cause of action for violation of North Carolina's Unfair and Deceptive Trade Practices Act. These claims stem from the foreclosure of Wilson's home in North Carolina. Wilson remains in possession of the property even though the foreclosure sale was completed following a final state court judgment. Wilson admits that she never entered into a contract with ResCap or RFC; therefore, the three breach of contract claims must be dismissed with prejudice. The ResCap Liquidating Trust sought dismissal. Judge Glenn held that Wilson's Complaint as presently drafted fails to state a plausible claim for relief. Therefore, the Trust's Motion is granted as follows: 1. Counts I-III are dismissed with prejudice, 2. Count IV is dismissed without prejudice with leave to amend to add allegations regarding SunTrust's and STB's submissions during the Foreclosure Action. 3. Wilson may not add any new causes of action or theories of relief in her Amended Complaint. 4. ResCap and John Does 1-10 are dismissed with prejudice as to all counts. The case is, Jennifer Wilson, Plaintiff, v. Residential Capital, LLC, et al., Defendant, Adv. Pro. No. 12-01936 (MG)(Bankr. S.D.N.Y.). A copy of the Court's July 7, 2014 Memorandum Opinion is available at http://is.gd/wXPJelfrom Leagle.com. 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. REVEL AC: Seeks Court Approval to Reject Five Contracts ------------------------------------------------------- Revel AC, Inc. has filed a motion seeking approval from U.S. Bankruptcy Judge Gloria Burns to reject five contracts. The contracts include four employment agreements and a separation agreement, which the company says, are no longer necessary to its operations. A list of the contracts is available for free at http://is.gd/fdgUsb A court hearing is scheduled for July 21. Objections to the proposed rejection of the contracts is July 14. About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. Revel AC Inc. and five of its affiliates sought bankruptcy protection (Bankr. D.N.J., Lead Case No. 14-22654) on June 19, 2014, to pursue a quick sale of the assets. The Chapter 11 cases are assigned to Judge Gloria M. Burns. The Debtors' Chapter 11 cases are jointly consolidated for procedural purposes. Revel AC estimated assets ranging from $500 million to $1 billion, and the same amount of liabilities. White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors' Counsel, and Moelis & Company, LLC, is the investment banker. The Debtors' solicitation and claims agent is Alixpartners, LLP. The prepetition first lenders are represented by Cadwalader, Wickersham & Taft LLP. The prepetition second lien lenders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. The DIP agent is represented by Milbank, Tweed, Hadley & McCloy LLP. This is Revel AC's second trip to bankruptcy. The company first sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13- 16253) on March 25, 2013, with a prepackaged plan that reduced debt by $1.25 billion. Less than two months later on May 15, 2013, the 2013 Plan was confirmed and became effective on May 21, 2013. REVSTONE INDUSTRIES: 2 Subsidiaries File Ch. 11 Plans ----------------------------------------------------- US Tool & Engineering, LLC, and Greenwood Forgings, LLC, debtor affiliates of Revstone Industries, LLC, filed with the U.S. Bankruptcy Court for the District of Delaware separate Chapter 11 plans of reorganization without accompanying disclosure statements. The Plans incorporate the Court-approved settlement between the Debtors, the Pension Benefit Guaranty Corporation, and certain other parties-in-interest. General unsecured claims under both Plans will receive a pro rata share of the net distributable assets of the Debtor up to the full allowed amount of the claim. Impaired under the Plans are holders of miscellaneous secured claims, general unsecured claims, PBGC claims, and interests. A full-text copy of US Tool's Plan dated July 7 is available for free at http://bankrupt.com/misc/USTOOLplan0707.pdf A full-text copy of Greenwood's Plan is available for free at http://bankrupt.com/misc/GREENWOODplan0707.pdf Greenwood Forgings, US Tool, and another debtor affiliate, Spara, LLC, also filed motions asking the U.S. Bankruptcy Court for the District of Delaware to extend until Aug. 31, 2014, the time for them to file a disclosure statement in connection with their Chapter 11 Plan of Reorganization. To recall, on June 3, Spara filed its Plan without a disclosure statement. In support of their extension requests, the Debtors said they need the additional time to continue to work with interested parties to finalize key provisions that remain open and that will be resolved in an amended Plan. In another filing with the Court, Homer W. McClarty, Trustee for Equity Security Holders Owning 100% of Revstone Industries and Spara, and their wholly owned subsidiaries, withdrew his motion to retain Ramaekers Group, LLC, to provide a person responsible for the Debtors and additional personnel for the Debtors, and motion to terminate the order employing Huron Consulting Services, LLC. About Revstone Industries et al. Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Colin Robinson, Esq., at Pachulski Stang Ziehl & Jones LLP represent Revstone. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. Metavation, also known as Hillsdale Automotive, LLC, joined parent Revstone in Chapter 11 on July 22, 2013 (Bankr. D. Del. Case No. 13-11831) to sell the bulk of its assets to industry rival Dayco for $25 million, absent higher and better offers. Metavation has tapped Pachulski as its counsel. Pachulski also serves as counsel to Revstone and Spara. Metavation also has tapped McDonald Hopkins PLC as special counsel, and Rust Consulting/Omni Bankruptcy as claims agent and to provide administrative services. Stuart Maue is fee examiner. Mark L. Desgrosseilliers, Esq., Ericka Fredricks Johnson, Esq., Steven K. Kortanek, Esq., and Matthew P. Ward, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent the Official Committee of Unsecured Creditors in Revstone's case. Boston Finance Group, LLC, a committee member, also has hired as counsel Gregg M. Galardi, Esq., and Sarah E. Castle, Esq., at DLA Piper LLP. SABRE INDUSTRIES: Moody's Lowers Corporate Family Rating to 'B3' ---------------------------------------------------------------- Moody's Investors Service downgraded Sabre Industries, Inc.'s Corporate Family and Probability of Default ratings to B3 and B3- PD from B2 and B2-PD respectively. At the same time ratings on the company's secured revolving credit facility ($80 million commitment) and term loan (approximately $155 million outstanding) were lowered to B2, LGD-3. The rating outlook is stable. Ratings Rationale The actions follow a material shortfall in Sabre's performance in fiscal 2014 (April) and lower expectations for the coming year. Although the company's revenues grew significantly over the last year from organic developments as well as consolidation of an acquisition, margins declined and produced EBITDA far below Moody's previous assumptions. While negative free cash flow (FCF) in 2014 had been anticipated, in part from higher working capital requirements, capital expenditures came in above assumed levels and further widened the gap. Nonetheless, slower growth limited the extent of incremental working capital needs and resulted in lower outstanding debt than prior expectations. Still, the net impact reflects higher financial leverage, slimmer margins and weaker coverage metrics. Furthermore, although the company has liberal "add-back" buckets in measuring EBITDA under its credit agreement, step-downs in the applicable leverage covenant over the coming two years could pinch effective availability under its revolving credit agreement and possibly lead to compliance concerns unless performance improves and/or debt reduction occurs. Major factors behind these variances included lower second half volumes in the company's utility support structures segment, start-up and integration expenses reflecting inefficiencies encountered with ramping a new facility in Sioux City, IA, as well as integration costs in the recently organized telecom services segment. While some of these have a non-recurring nature, it is challenging to assess when higher margins and material FCF may be attained. The underlying business remains project driven which can lead to volatility in future volumes and limited visibility. The B3 Corporate Family Rating (CFR) incorporates the company's modest revenue base, financial leverage resident in its capital structure and lack of free cash flow generation to date. The company's comparatively slim margins, teething issues with new capacity, expenses related to expanding service capabilities and the level of fixed charges flowing from its debt burden have produced relatively weak coverage metrics. Working capital needs should moderate as growth rates subside over the next year, which, along with capital expenditures that should begin to retreat from peak levels, improve prospects for free cash flow should operational challenges be resolved. The rating also recognizes Sabre as one of the larger North American providers of poles, towers and related storage shelters deployed in electric transmission & distribution grids as well as wireless communication networks. These sectors remain subject to cyclical developments with the company's backlog supporting expectations of sustained revenue. The project nature of the business mix, dependence upon a relatively narrow set of customers, and continued management of metal cost/price developments can also add volatility to results. The stable outlook anticipates that operating efficiencies should improve as the company and the work force gain additional experience with the new plant and that the company will have sufficient availability under its revolving credit facility to provide flexibility over the coming year. Demand for Sabre's product and service offerings should maintain revenues at fairly high levels over the rating horizon. But progress in restoring margins and generating free cash flow has to be demonstrated. Lower ratings could develop if debt/EBITDA exceeded 7 times as a result of weak profitability or incurrence of additional debt, EBITA/interest fell below 1.25 times or if free cash flow remained negative. Furthermore, should financial covenant compliance materially constrain access to the company's revolving credit facility, adverse rating actions could ensue. Developments that could lead to stronger ratings or a stable outlook would include lowering debt/EBITDA below 5 times combined with EBITA/interest coverage materially above 1.5 times and free cash flow/debt consistently above 5%. The B2 (LGD-3) ratings on the first lien facilities reflect their expected loss in downside scenarios from the application of a probability of default of B3-PD against their loss-given-default. The ratings, one notch above the underlying CFR, incorporate their senior secured position which also benefits from having close to $65 million of effectively subordinated debt (not rated) below their claims in the capital structure. The rated facilities have both up-streamed guarantees from material domestic subsidiaries as well as a down-streamed guarantee from the holding company parent. Ratings downgraded: Corporate Family to B3 from B2 Probability of default to B3-PD from B2-PD $80 million secured revolving credit to B2 (LGD-3) from B1 (LGD-3) $155 million secured term loan to B2 (LGD-3) from B1 (LGD-3) The last rating action was on July 3, 2013 at which time the company's then B2 CFR was affirmed upon an up-sizing of the company's bank credit facilities. The principal methodology used in this rating was the Global Manufacturing Industry published in December 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sabre Industries, Inc., headquartered in Alvarado, TX, manufactures and services towers, poles, shelters and related transmission structures used in the wireless communications and electric transmission and distribution industries. Annual revenue in fiscal 2014 (April) was approximately $695 million. SEGA BIOFUELS: Plan Confirmation Hearing Continued to July 31 ------------------------------------------------------------- The Bankruptcy Court continued until July 31, 2014, at 10:30 a.m., the hearing to consider the confirmation of SEGA Biofuels, LLC's Amended Chapter 11 Plan dated May 2, 2014. Objections, if any, are due July 17. The Debtor's case docket stated that if no timely objections are filed, the matter will be removed from the calendar and the Court will enter an order confirming the Debtor's plan. As reported in the Troubled Company Reporter on May 26, 2014, the Amended Plan proposes to pay creditors in full. The Debtor estimates that claims will total $19,331,457, with secured claims totaling $11,897,747 and general unsecured claims totaling $1,804,710. The Amended Plan also contains agreements with certain parties-in-interest, including Logistec USA, Inc., which provides storage and handling services to the Debtor; Ogle Engineering; James Huntley; and United Forest Products. The Debtor said it will be unable to make payments due under its agreement with Logistec but that it is negotiating another agreement with the service provider, which agreement is anticipated to be in place by the time the of Plan confirmation. The Debtor added that it will extend the proceedings related to its objection to the claim of Ogle Engineering and James Huntley to allow for the parties to determine which amounts in the claims filed may be substantiated to the satisfaction of the Debtor. It is possible that some or all of the claims of these creditors will be allowed and will become part of the group of general unsecured claims. United Forest filed a claim in an unspecified amount. The Debtor agreed that United Forest may file an amended proof of claim in the amount of $73,722, and that the Debtor will not object to that amended claim becoming part of the Class of General Unsecured Claims. The Debtor has obtained Court authority to enter into a premium finance agreement with Premium Assignment Corporation, which agreement provides for the financing of the insurance premiums to be paid for the Debtor's insurance policies. The policies will bear a total premium of $156,000. PAC is granted a first and only priority security interest in (i) all unearned premiums and dividends which may become payable under the financed insurance policies for whatever reason; and (ii) loss payments which reduce the unearned premiums, subject to any mortgage or loss payee interests. The Bankruptcy Court, separately, issued an order granting the motion of Deere Credit, Inc., to reinstate the consent order requiring the Debtor to cure default and to assume or reject lease between the Debtor and Deere. A full-text copy of the May 2 Amended Disclosure Statement is available at http://bankrupt.com/misc/SEGAds0502.pdf About Sega Biofuels Sega Biofuels LLC, the owner of a wood-pellet plant in Nahunta, Georgia, filed a petition for Chapter 11 protection (Bankr. S.D. Ga. 13-50694) on Sept. 11 in Waycross, Georgia. The Company listed assets worth $10.6 million and debt totaling $13.7 million. C. James McCallar, Jr., Esq., at McCallar Law Firm, in Savannah, Georgia. The U.S. Trustee has not appointed an official committee in the Debtor's bankruptcy case. SUMMIT MIDSTREAM: Moody's Assigns B3 Rating on $300MM Sr. Notes --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Summit Midstream Holdings, LLC's and co-issuer Summit Midstream Finance Corp.'s proposed $300 million of senior unsecured notes due 2022. Summit's other ratings and stable outlook were unchanged. Net proceeds from this offering will be used to repay indebtedness outstanding under its senior secured revolving credit facility. "While this offering will provide some permanent financing to re- align its capital structure, Moody's expects Summit to continue its strategy of growing in size and scale through future drop- downs, to be likely funded with a moderate mix of debt and equity funding," said Amol Joshi, Moody's Vice President. Issuer: Summit Midstream Holdings, LLC Assignments: $300 million senior notes, assigned B3 (LGD5) Ratings Rationale The new senior notes due 2022 are rated B3, the same as the company's existing notes given they will rank equally in right of payment and have the same guarantor arrangement. These notes are rated two notches below Summit's B1 Corporate Family Rating (CFR) under Moody's Loss Given Default Methodology because of the priority claim of its $700 million senior secured revolving credit facility. The outlook is stable based on the expected sustainability of Summit's fee-based cash flow stream, whose contract-based structures largely negate volume risk through the substantial presence of minimum volume commitments and acreage dedications. Moody's expect that Summit will likely absorb additional dropdowns, but that a conservative mix of debt and equity funding will be used to finance the dropdowns, as has been the case to date. An upgrade could be considered based on the extent and composition of future asset growth, and as annual EBITDA grows to exceed $250 million, contingent upon leverage remaining under 4.0x. A negative rating action or downgrade is unlikely in 2014 given Summit's projected adequate liquidity and growth prospects. However, if future dropdowns result in leverage exceeding 5.0x on a sustained basis or if an aggressive growth strategy materially exposes the company to undue execution risk, or to increased commodity price or volume risk, a downgrade is possible. The principal methodology used in this rating was Global Midstream Energy Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Dallas, Texas, Summit Midstream Partners, LP is a midstream company primarily engaged in natural gas gathering, treating and processing. TACTICAL INTERMEDIATE: Files for Ch. 11 to Quickly Sell Assets -------------------------------------------------------------- Private equity-controlled Tactical Intermediate Holdings, Inc., a supplier of combat boots and apparel for the U.S. military and other agencies, sought Chapter 11 protection with plans to quickly sell its assets. Tactical and its affiliates marketed their military boots business and Massif flame resistant apparel business prepetition. The Debtors received various offers for substantially all of their assets, either in whole or in parts. During the Chapter 11 cases, the Debtors intend to sell their two business lines separately to realize the most value available under the circumstances. The Debtors say they need to complete these sales on an expedited basis to avoid a likely shut down in operations. After consultation with their advisors and their secured lenders, the Debtors selected the proposal from an entity formed by Sun Capital Partners Group V, LLC, to serve as stalking horse bid for Massif's assets. Massif Apparel Enterprises, LLC, the Sun Capital entity, is offering to pay $13 million, comprised of an $8 million cash purchase price together with adjustments plus a $5 million contingency payment for Massif's assets. Should there be rival bids submitted for the Massif assets by the Aug. 19, 2014 proposed deadline, the Debtors intend to conduct an auction by Aug. 22. The Debtors have filed a separate motion to sell their footwear business assets or the non-Massif assets, although the Debtors have not yet reached a deal with a buyer for the assets. The Debtors' proposed timeline is to conduct the bidding procedures hearing on or before July 21, 2014, in an effort to sell the footwear assets as a going concern and conduct an auction and sale hearing by July 31. Should it appear unlikely by the July 21, 2014 hearing that a going concern sale is no longer possible, the Debtors may suggest a longer period of time before an auction is held. The Debtors have filed a Chapter 11 plan of liquidation. The Plan is a waterfall plan and the proceeds of the sales will be applied in the order of absolute priority. The Plan contemplates that the assets of the estates at the time of confirmation will remain property of the Debtors' estates and be subject to administration by a plan administrator. The Debtors have entered into a plan support agreement with senior secured lender, Wells Fargo Bank N.A., and the second lien lender, GGC Tactical Debt Holdings, LLC, in order to ensure their smooth and timely completion of this restructuring. Milestones The Debtor's liquidating plan, the plan support agreement, and the proposed debtor-in-possession financing all contemplate milestones to ensure that the case progresses and that the maximum value for creditors is captured and preserved through this process. The Debtors' failure to meet such milestones would result in a breach of the debtor-in-possession financing and in turn breach the plan support agreement. More specifically, the milestones contemplate as follows: -- The commencement of the Chapter 11 cases by July 8, 2014; -- The filing on the Petition Date of: * A sale motion relating to Footwear; * A sale procedures motion relating to Footwear; * A sale motion relating to Massif; * A sale procedures order relating to Massif; and * A plan of liquidation and a disclosure statement; -- The entry of bidding procedures orders relating to Footwear and Massif by August 5, 2014; -- The entry of sale orders relating to Footwear and Massif by Aug. 27, 2014; and -- Closing of the Footwear and Massif sales by Sept. 12, 2014. Road to Bankruptcy "Today is the result of a culmination of events that created a perfect storm for these Debtors and necessitated the filing of these cases," Carlin Adrianopoli, the CRO, said in a July 8 filing. According to Mr. Adrianopoli, while the Debtors have experienced financial difficulties in the past, in October 2012 the Debtors effectuated a comprehensive out of court restructuring that was supported by the Debtors' senior secured lender, the Debtors' second lien lender, GGC Tactical Debt Holdings, LLC, the Debtors' ultimate equity holders, affiliates of Golden Gate Capital -- the "Sponsor" -- and certain minority owners in Massif Holdings LLC. The out of court restructuring provided the Debtors with necessary liquidity through a new second lien loan from the affiliates of the Sponsor, a modification of the Debtors' first lien facility with Wells Fargo to ensure operating breathing room through borrowing base enhancements and covenant relief, and the elimination of approximately $18 million in an earnout liability of the B Holders, of which $9 million was past due at the time. Following the Debtors' out-of-court restructuring in 2012, plant inefficiencies, manufacturing concerns, reduced military purchases, and difficulty with government contracts has led to a run on operating margins and tremendous stress on liquidity. This has necessitated modifications to the Debtors' facility with Wells Fargo on several occasions during the last year. Additionally, since the summer of 2012, Wellco Group has cooperated fully with investigations by the Department of Homeland Security ("DHS"), the Department of Treasury, Office of Foreign Asset Control ("OFAC") and the Department of Defense (the "DOD"). These investigations have pressured liquidity and impacted the Debtors' day-to-day operations. The first investigation involved DHS and OFAC subpoenas served on or about July 26 and Sept. 12, 2012 respectively. The subpoenas both sought information about a transaction between Wellco and an entity allegedly located in Zimbabwe. After conducting an internal inquiry and searching for responsive materials, Wellco cooperated and provided documents and information in response to the government's subpoenas. Additionally, on Jan. 18, 2013, Wellco provided a detailed written submission to OFAC. Pursuant to its Cautionary Letter, date July 17, 2013, OFAC concluded its investigation and did not impose sanctions or penalties against Wellco. Wellco is working with OFAC to obtain the seized funds or the boots. The second investigation also involved DHS, beginning with a subpoena that was served on counsel for Wellco on or about May 20, 2013. DHS, later joined by DOD and other military investigators, sought information about the country of origin for several Wellco boot styles that were produced and sold between 2008 to 2012. Wellco has cooperated fully with the government's investigation by, among other things, producing voluminous documents, making 13 current employees available for interviews, voluntarily leading investigators on a tour of the Morristown, Tenn. facilities and voluntarily placing more than 40,000 pairs of boots into quarantine. Wellco, through counsel, is in regular contract with the government's investigators, has advised the investigators of Wellco's difficult financial situation, and is working toward resolution of the government's investigation. Wellco's cooperation in these investigations, however, has increased expenses and demands on personnel. For example, Wellco has devoted significant resources to pursuing its internal investigation and document review efforts. Also, Wellco's voluntary quarantine of over 40,000 pairs of boots has meant that these boots are not available for sale. Wellco is working with the government to identify subsets of the quarantined boot styles that may be cleared for sale, but this process has proved to be difficult, labor intensive, and time-consuming. THO has also developed a comprehensive compliance program for all of the operating entities. Mr. Adrianopoli avers that the two government investigations have imposed a significant liquidity strain on the Debtors. Moreover, the pending investigation and uncertainties as to its outcome have negatively impacted the Debtors ability to obtain additional financing and/or to engage in transactions outside of a formal chapter 11 process. Massif has leveraged its products to be a main provider on a significant number of its contracts. Massif projects current year revenue from these main government contracts to comprise over 80% of its total revenue. The Debtors have been engaged in marketing Massif since late 2013. The original intent was to effectuate an out of court sale or investment. Due to the recent performance of Massif, and the inability to meet financial projections from continued customer purchase reductions and government camouflage pattern changeover delays, the original expressions of interest declined significantly in value. According to Mr. Adrianopoli, both Footwear and Massif have a significant amount of their business with governmental entities and thus are subject to large swings in revenue and profit based upon the impact of current events, foreign policy, and the preferences within individual governmental programs. The Debtors have experienced a confluence of multiple negative events that have pushed against the profitability of the Debtors and challenged their liquidity position, necessitating this restructuring. First Day Motions Aside from the sale motions, the Debtors on the Petition Date filed with the bankruptcy court motions to, among other things, continue operating their cash management system, pay prepetition employee wages, continue prepetition insurance coverage, and pay certain taxes and fees, prohibit utilities from discontinuing service, maintain customer programs, pay prepetition claims of lien claimants, pay critical vendors, and access DIP financing. About Tactical Intermediate Tactical Intermediate Holdings, Inc., and its affiliates' operations are comprised of two major lines of business -- a footwear line, and a fabric and clothing line, including flame resistant material ("Massif"). Footwear is comprised of the Altama group ("Altama") and the Wellco Group ("Wellco"). Wellco was founded in 1941 and manufactures and sells combat boots, primarily for the United States Military as well as commercial uniform and work boots for a variety of customers. Altama was founded in 1969 and manufactures and sells boots for the United States and international militaries as well as for federal, state and local agencies, military schools, police, uniform shops and Army/Navy retailers. Headquartered in Ashland, Oregon, Massif was founded in 1999 by a group of veteran search and rescue team members and alpine climbers who believed that the options for sanctioned fire resistant protective gear at the time were too limited. Massif is a world leader in supplying flame resistant and high performance outdoor apparel to the military, law enforcement, search and rescue professionals, and the wildland firefighting community. Tactical Intermediate Holdings, Inc., and its affiliates sought Chapter 11 protection in Delaware on July 8, 2014, with plans to quickly sell their assets. Judge Kevin Gross is assigned to the Chapter 11 cases. The Debtors have requested joint administration of the cases under Case No. 14-11659. The Debtors have tapped Klehr Harrison Harvey Branzburg LLP as counsel, FTI Consulting, Inc., as financial advisor, Houlihan Lokey Capital, Inc., as investment banker, and PrimeClerk as claims and noticing agent. The stalking horse purchaser for the Massif assets can be reached at: Massif Apparel Enterprises, LLC c/o Sun Capital Partners Group V, LLC 5200 Town Center Circle, Suite 600 Boca Raton, FL 33486 Attn: William James, Jr. E-mail: wjames@suncappart.com Massif Apparel Enterprises LLC, the entity formed by Sun Capital Partners Group V LLC, to serve as stalking horse bid for Massif's assets, is represented by: Corey Fox, Esq. Brad Weiland, Esq. Gregory F. Fesce, Esq. KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 60654 E-mail: corey.fox@kirkland.com Brad.weiland@kirkland.com Gregory.pesce@kirkland.com TACTICAL INTERMEDIATE: Section 341(a) Meeting Set on August 26 -------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Tactical Intermediate Holdings, Inc., will be held on Aug. 26, 2014, at 10:00 a.m. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Tactical Intermediate Tactical Intermediate Holdings, Inc., and its affiliates' operations are comprised of two major lines of business -- a footwear line, and a fabric and clothing line, including flame resistant material ("Massif"). Footwear is comprised of the Altama group ("Altama") and the Wellco Group ("Wellco"). Wellco was founded in 1941 and manufactures and sells combat boots, primarily for the United States Military as well as commercial uniform and work boots for a variety of customers. Altama was founded in 1969 and manufactures and sells boots for the United States and international militaries as well as for federal, state and local agencies, military schools, police, uniform shops and Army/Navy retailers. Headquartered in Ashland, Oregon, Massif was founded in 1999 by a group of veteran search and rescue team members and alpine climbers who believed that the options for sanctioned fire resistant protective gear at the time were too limited. Massif is a world leader in supplying flame resistant and high performance outdoor apparel to the military, law enforcement, search and rescue professionals, and the wildland firefighting community. Tactical Intermediate Holdings, Inc., and its affiliates sought Chapter 11 protection in Delaware on July 8, 2014, with plans to quickly sell their assets. Judge Kevin Gross is assigned to the Chapter 11 cases. The Debtors have requested joint administration of the cases under Case No. 14-11659. The Debtors have tapped Klehr Harrison Harvey Branzburg LLP as counsel, FTI Consulting, Inc., as financial advisor, Houlihan Lokey Capital, Inc., as investment banker, and PrimeClerk as claims and noticing agent. TACTICAL INTERMEDIATE: Case Summary & 30 Top Unsecured Creditors ---------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Tactical Intermediate Holdings, Inc. 14-11659 5968 Commerce Blvd. Morristown, TN 37814 Tactical Holdings Operations, Inc. 14-11660 Wellco Enterprises, Inc. 14-11661 Ro-Search Incorporated 14-11662 Mo-Ka Shoe Corporation 14-11663 Altama Delta Corporation 14-11664 Altama Delta (Puerto Rico) Corporation 14-11665 Massif Holding, LLC 14-11666 Massif Mountain Gear Company L.L.C. 14-11667 Type of Business: The Debtors' operations are comprised of two major lines of business, a fabric and clothing business and a footwear business. Chapter 11 Petition Date: July 8, 2014 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Kevin Gross Debtors' Counsel: Domenic E. Pacitti, Esq. Michael W. Yurkewicz, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 919 Market Street, Suite 1000 Wilmington, DE 19801 Tel: 302-552-5511 Fax: 302-426-9193 Email: dpacitti@klehr.com myurkewicz@klehr.com - and - Morton R. Branzburg, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 1835 Market Street, Suite 1400 Philadelphia, PA 19103 Tel: 215.569.2700 Fax: 215.568.6603 Email: mbranzburg@klehr.com Debtors' FTI CONSULTING, INC. Financial 227 West Monroe Street, Suite 900 Advisor: Chicago, IL 60606 Tel: 312.759.8100 Fax: 312.759.8119 Debtors' HOULIHAN LOKEY CAPITAL, INC. Investment Banker: Debtors' PRIMECLERK LLC Claims and Noticing Agent: Tactical Intermediate's Estimated Assets: $0 to $50,000 Tactical Intermediate's Estimated Liabilities: $50 million to $100 million The petitions were signed by Carlin Adrianopoli, chief restructuring officer. List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kirkland & Ellis LLP Legal $2,064,259 Joshua A. Sussberg 601 Lexington Avenue New York, NY 10022-4611 Email: joshua.sussberg@kirkland.com Fax: 212-446-4829 Tel: 212-446-6460 Antex Knitting Mills Trade Debt $776,208 Becky Acosta 3750 S. Broadway Place Los Angeles, CA 90007 Email: becky@antexknitting.com Fax: 323-233-7751 Tel: 323-232-2061 W.L. Gore & Associates, Inc. Trade Debt $695,230 Robert Lundquist 551 Papermill Road Newark, DE 19711 Email: collegerecruiting@wlgalore.com Fax: 410-506-7633 Tel: 410-506-7787 S.B. Foot Tanning Company Trade Debt $654,310 CM 9420 St. Paul, MN 55170-9420 Email: sales@sbfoot.com Fax: 651-388-8054 Tel: 651-388-4731 Tasman Leather Group, LLC Trade Debt $581,983 9 Main Street P.O. Box 400 Hartland, ME 04043 Email: info@tasmanindustries.com Fax: 207-938-5100 Tel: 207-553-3700 Puerto Rico Industrial Development Grant/Loan $472,423 Company (PRIDCO) & rent PO Box 362350 Email: jamille_muriente@pridco.pr.gob Fax: 787-754-5028 Tel: 787-758-4747 Vibram USA, Inc. Trade Debt $443,707 Bill Ellis 18 School Street North Brookfield, MA 01535 Email: bill.ellis@vibramusa.com Fax: 508-867-4600 Tel: 800-325-5022 CAPPS Shoe Company Trade Debt $335,954 260 Fastener DR Lynchburg, VA 24502 Email: salesinfo@capps-shoe.com Fax: 434-528-3514 Tel: 434-528-3213 Travel Leather Company, Inc. Trade Debt $200,798 CaribEx Worldwide Trade Debt $173,048 Lakeway Container, Inc. Trade Debt $138,695 Stanbee Co., Inc. Trade Debt $138,539 Manpower Inc. Tem Labor $104,281 Evercapital Shoes Limited Trade Debt $90,268 Jade Apparel Inc. Trade Debt $88,974 Vulcan Corporation Trade Debt $86,338 A. Lyons & Co., Inc. Trade Debt $82,004 Synergy Manufacturing Trade Debt $66,280 Enefco International, Inc. Trade Debt $50,471 (GlobalDie) Compounding Solutions LLC Trade Debt $46,770 Huntsman Polyurethanes Trade Debt $45,275 (Huntsman International LLC) Solcum Adhesives Corporation Trade Debt $44,073 DACHSER Transport of America Inc. Trade Debt $41,037 (DACHSER USA) McAllister & Quinn Legal $40,087 Collt Manufacturing, Inc. Trade Debt $38,793 Emtexglobal Trade Debt $38,354 American & Schoen Machinery Company Trade Debt $37,458 G. Goldberg Co., Inc. Trade Debt $36,865 Rhode Island Textile Company Trade Debt $34,184 TDS Exhibits, Inc. Trade Debt $31,982 TTC PLAZA: Aug. 4 Trial in Avoidance Suit Against Wu et al. ----------------------------------------------------------- Randy Williams, chapter 7 trustee for TTC Plaza, LP, filed an amended complaint, seeking to recover allegedly fraudulent transfers made by the Debtor against Defendants Chung Hua Wu, United Wu, LP, Mundo Mex, Inc., Mohamed A Sohani, and Harwin Bintliff Center, Inc., Barney River Investments, Inc., Hussainali Ali, Zubee 786 Investment, Inc., and Zubeda Ali. (Case No. 13- 03261). On April 8, 2014, the Court issued an order severing defendants Mohammed A. Sohani and Harwin Bintliff Center, Inc. (HBC) from this adversary proceeding. (Case No. 14-03114). On April 29, 2014, the Court approved a settlement between Randy Williams and defendants Sohani and HBC. Accordingly, the remaining defendants in this adversary proceeding are Wu, United Wu, LP, Mundo Mex, Inc., Barney River Investments, Inc., Hussainali Ali, Zubee 786 Investment, Inc., and Zubeda Ali. The Court held a trial on the issue of insolvency on April 17, 2014. At the beginning of the hearing, Mr. Wu stipulated that TTC was insolvent during 2010 and 2011. Defendants Barney River Investments and Zubee 786 Investment, Inc. are the only parties challenging insolvency. The only alleged fraudulent transfer with regards to these defendants occurred on March 3, 2011. TTC Plaza owned a retail strip center located at 7250 Harwin Drive, Houston, Texas. On May 26, 2006, TTC Plaza sold the Harwin Retail Center to HBC. As part of the sale, HBC executed a promissory note payable to TTC Plaza in the amount of $790,000.00 (the "Harwin Note"). Mr. Sohani (president of HBC) personally executed a promissory note payable to TTC Plaza in the amount of $300,000 (the "Sohani Note"). Both notes were secured by a deed of trust in the Harwin Retail Center. Mundo Mex was the general partner of TTC Plaza. Chung Hua ("Wu"), was the President, Director, and sole shareholder of Mundo Mex. Wu also served as an officer, director, and shareholder of New Vargo LLC. On June 16, 2006, Wu caused New Vargo to be formed to purchase, own, and operate Vargo's Restaurant. On June 23, 2006, TTC Plaza purchased the real property and improvements located at 2401 Fondren Drive, Houston, Texas 77063, which had been the site of Vargo's Restaurant since 1965. TTC Plaza financed its purchase by executing a promissory note payable to Capital One in the amount of $4,998,000. TTC Plaza leased the property to New Vargo for its operation of Vargo's Restaurant. On April 15, 2009, TTC settled the Sohani Note by accepting a lump sum payment of $193,000 from HBC. At the time of the settlement, the Sohani Note had a balance of approximately $288,252. In September 2011, New Vargo was financially unable to operate the restaurant business and it abandoned its lease with TTC Plaza. In the fall of 2011, Capital One refused to renew the Capital One Note owed by TTC Plaza and it noticed a foreclosure sale of Vargo's Restaurant for October 4, 2011. On the eve of the foreclosure sale, TTC filed its voluntary petition under Chapter 11 of the Bankruptcy Code. Hussainali A. Ali, is the president, director, and shareholder of Barney River. Zubeda K. Ali, is the president, director, and shareholder of Zubee 786 Investment, Inc. On March 3, 2011, TTC Plaza sold the Harwin Note to Barney River Investments, Inc. and Zubee 786 Investment, Inc. Mr. Williams claims that TTC sold the Note for $250,000 and the defendants claim that they paid $360,000. At the time of the sale, the Harwin Note had a balance of $730,582. TTC Plaza retained the option to repurchase the note at any time prior to March 1, 2012 for $420,000. TTC did not exercise its option to repurchase. In a decision on July 7, 2014, Bankruptcy Judge Marvin Isgur held that TTC Plaza was balance sheet insolvent at the time of the March 3, 2011 transfer and became even more insolvent as a result of the transfer. The Court will conduct a trial on whether the transfer is avoidable on August 4, 2014 at 9:00 am. The case is, RANDY W. WILLIAMS, Plaintiff(s), v. CHUNG HUA WU, et al., Defendant(s), Adv. Proc. No. 13-03261 (Bankr. S.D. Tex.). A copy of the Court's July 7, 2014 Memorandum Opinion is available at http://is.gd/hdG26Hfrom Leagle.com. TTC Plaza L.P. filed for Chapter 11 bankruptcy (Bankr. S.D. Tex. Case No. 11-38381) on Oct. 3, 2011, before Judge Marvin Isgur. Jack Nicholas Fuerst, Esq., in Houston, Texas, represents the Debtor. The Debtor scheduled assets of $12,016,768 and liabilities of $5,312,263. The petition was signed by William Wu, managing partner. The Troubled Company Reporter on May 11, 2012, reported that Judge Isgur ordered the conversion of the Chapter 11 case to one under Chapter 7. USEC INC: Settles Joint Venture Dispute With Babcox & Wilcox ------------------------------------------------------------ USEC Inc. is seeking court approval for a deal that would resolve disputes stemming from a joint venture that was established when it shifted focus from its gaseous diffusion plants to developing its American Centrifuge Project in Ohio. The joint venture company was established by American Centrifuge Holdings, LLC and Babcox & Wilcox Technical Services Group, Inc. to manufacture and assemble AC100 centrifuge machines. It was part of USEC's effort to move from gaseous diffusion technology to gas centrifuge technology. Under the settlement, the joint venture company will pay Babcock & Wilcox Co. more than $3.34 million, of which $2.89 million will be paid immediately after approval of the deal. The joint venture company will pay the remaining amount pursuant to a labor agreement it made recently with Babcox & Wilcox Technical. Under the contract, Babcox & Wilcox Technical agreed to assist the joint venture company in completing demobilization activities through the provision of personnel. A full-text copy of the settlement agreement is available without charge at http://is.gd/12ztey U.S. Bankruptcy Judge Christopher Sontchi will hold a hearing on August 5 to consider approval of the proposed settlement. Objections are due by July 11. About USEC Inc. USEC Inc. filed a Chapter 11 bankruptcy petition (Bank. D. Del. Case No. 14-10475) on March 5, 2014. John R. Castellano signed the petition as chief restructuring officer. The Hon. Christopher S. Sontchi presides over the case. D. J. Baker, Esq., Rosalie Walker Gray, Esq., Adam S. Ravin, Esq., and Annemarie V. Reilly, Esq., at Latham & Watkins LLP, serve as the Debtor's general counsel. Amanda R. Steele, Esq., Mark D. Collins, Esq., and Michael J. Merchant, Esq., at Richards, Layton & Finger, P.A., serve as the Debtor's Delaware counsel. Vinson & Elkins is the Debtor's special counsel. Lazard Freres & Co. LLC acts as the Debtor's investment banker. AP Services, LLC, provides management services to the Debtor. Logan & Company Inc. serves as the Debtor's claims and noticing agent. Deloitte Tax LLP are the Debtor's tax professionals. The Debtor's independent auditor is PricewaterhouseCoopers LLP. KPMG LLP provides fresh start accounting services to the Debtors. USEC INC: Has Until Oct. 1 to Decide on Unexpired Leases -------------------------------------------------------- U.S. Bankruptcy Judge Christopher Sontchi has given USEC Inc. until October 1 to either assume or reject its leases of nonresidential real property. About USEC Inc. USEC Inc. filed a Chapter 11 bankruptcy petition (Bank. D. Del. Case No. 14-10475) on March 5, 2014. John R. Castellano signed the petition as chief restructuring officer. The Hon. Christopher S. Sontchi presides over the case. D. J. Baker, Esq., Rosalie Walker Gray, Esq., Adam S. Ravin, Esq., and Annemarie V. Reilly, Esq., at Latham & Watkins LLP, serve as the Debtor's general counsel. Amanda R. Steele, Esq., Mark D. Collins, Esq., and Michael J. Merchant, Esq., at Richards, Layton & Finger, P.A., serve as the Debtor's Delaware counsel. Vinson & Elkins is the Debtor's special counsel. Lazard Freres & Co. LLC acts as the Debtor's investment banker. AP Services, LLC, provides management services to the Debtor. Logan & Company Inc. serves as the Debtor's claims and noticing agent. Deloitte Tax LLP are the Debtor's tax professionals. The Debtor's independent auditor is PricewaterhouseCoopers LLP. KPMG LLP provides fresh start accounting services to the Debtors. VERSO PAPER: S&P Lowers CCR to 'CC' on Potential Selective Default ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Memphis, Tenn.-based Verso Paper Holdings LLC to 'CC' from 'CCC'. The outlook is negative. Concurrently, S&P took the following actions on the company's issue-level ratings: -- Lowered the issue-level rating on the $150 million asset- based loan (ABL) facility due 2017 to 'CCC' from 'B-' and maintained the '1' recovery rating; -- Lowered the issue-level rating on the $50 million cash flow revolving credit facility due 2017 to 'CC' from 'CCC' and maintained the '3' recovery rating; -- Lowered the issue level rating on the $417.9 million first- lien notes due 2019 to 'CC' from 'CCC' and maintained the '3' recovery rating; -- Lowered the issue level rating on the $271.6 million senior secured notes due 2019 to 'C' from 'CC' and maintained the '6' recovery rating; and -- Lowered the issue level rating on the $396 million senior secured second-priority notes and $300 million senior subordinated notes to 'C' from 'CC' and maintained the '6' recovery rating. "The rating action reflects the announcement that the company plans to conduct a two-part exchange for its senior secured second-priority notes and senior subordinated notes," said Standard & Poor's credit analyst David Kuntz. The first part will be the exchange of old senior secured second- priority notes and senior subordinated notes to new senior secured second-priority notes and senior subordinated notes on or about Aug. 1, 2014. At the time, certain noteholders that tender after midnight (New York City time) on July 16, 2014, would receive less than their original principal payment. In addition, any accrued and unpaid interest will not be paid on both obligations. The second exchange will occur simultaneously with the consummation of the merger with NewPage Holdings Inc., where both senior secured second-priority and senior subordinated noteholders will realize meaningful reductions in principal. S&P treats these transactions as tantamount to a default, given the company's current financial condition and since the investors are receiving less than the original promise of the original security. The "vulnerable" business risk profile reflects S&P's view that Verso Paper faces significant risks associated with North American coated paper markets, which are subject to periods of overcapacity and structurally declining demand. The "highly leveraged" financial risk profile reflects S&P's expectation for further EBITDA declines. S&P assess Verso Paper's liquidity as "less than adequate" because it believes there is the potential for shortfalls absent the sale of nonstrategic assets. S&P's rating outlook is negative. S&P intends to lower the corporate credit rating to 'SD' and the affected issue-level ratings to 'D' on completion of the first distressed exchange offer. S&P believes this will occur on or about Aug. 1, 2014. Subsequently, S&P would assign a corporate credit rating and outlook that would reflect the consummation of the Verso and NewPage merger. This will incorporate S&P's view of the combined company's business and financial risk profile, including the benefit from the proposed debt exchange. VETS FOR PETS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Vets for Pets Cream Ridge, Inc. 14-24003 aka Cream Ridge Pet Care Center 820 Monmouth Road Cream Ridge, NJ 08514 Hope Veterinary Associates, LLC 14-24009 820 Monmouth Road Cream Ridge, NJ 08514 Nature of Business: Veterinary Practice Chapter 11 Petition Date: July 8, 2014 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Hon. Kathryn C. Ferguson Debtors' Counsel: Thaddeus R. Maciag, Esq. MACIAG LAW, LLC 475 Wall Street Princeton, NJ 08540 Tel: (908) 704-8800 Fax: (908) 704-8804 Email: MaciagLaw1@aol.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petitions was signed by Dr. Ajaz Rashid, D.V.M., president/CEO. A list of Vets for Pets's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb14-24003.pdf A list of Hope Veterinary's 13 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb14-24009.pdf WABASH NATIONAL: S&P Raises CCR to 'BB-' on Improved Profits ------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on Lafayette, Ind.-based Wabash National Corp., including the corporate credit rating, which S&P raised to 'BB-' from 'B'. The outlook is stable. At the same time, S&P revised its senior secured issue rating on the company's term loan to 'BB-' from 'B+'. The recovery rating remains a '4', indicating S&P's expectation of average (30% to 50%) recovery for debtholders in the event of a payment default. "The upgrade reflects recent development in Wabash's diversified products segment, which has improved overall profitability, contributed to increased cash flow, and brought about greater end- market diversity," said Standard & Poor's credit analyst Larry Orlowski. "The ratings also reflect the company's solid credit metrics, including debt to EBITDA of 2.5x and free operating cash flow to debt of 29% at the end of 2013. We estimate Wabash's ratio of debt to EBITDA will remain below 4.0x and FOCF to debt will stay above 10% in 2014." WALTER ENERGY: $320MM Notes Add-on No Impact on S&P's 'B-' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B-' issue-level rating and '2' recovery rating on U.S.-based coal producer Walter Energy Inc.'s 9.5% senior secured first-lien notes due 2019 are unaffected by the company's proposed $320 million add-on. S&P's '2' recovery rating indicates substantial (70% to 90%) recovery in the event of a payment default. Walter intends to use the proceeds from the notes to repay debt outstanding under its revolving credit facility and to pay related fees and expenses. As of March 31, 2014, Walter had about $43 million of standby letters of credit outstanding under the facility. Pro forma for the note issuance, the company will have about $3.25 billion of total reported debt. S&P's corporate credit rating on Walter is 'CCC+', and the outlook is negative. The company is a Southern Appalachian metallurgical (met) coal producer based in Birmingham, Ala. S&P assess its business risk profile as "weak" and financial risk profile as "highly leveraged." The negative outlook reflects S&P's expectation that weak met coal market conditions will persist over the next 12 months, which will pressure the company's liquidity position. S&P also expects very weak credit measures in 2014, with debt leverage above 20x and EBITDA interest coverage of less than 1x in 2014. Ratings List Walter Energy Inc. Corporate Credit Rating CCC+/Negative/-- New Rating Walter Energy Inc. $970 mil sr secd 1st-lien nts due 2019 B- WALTER ENERGY: Moody's Assigns 'B3' Rating on New $320MM Notes -------------------------------------------------------------- Moody's assigned a B3 rating to the new $320 million notes proposed to be issued by Walter Energy, Inc. as an add-on to the existing first-lien 9.500% Senior Secured Notes due 2019, and affirmed the B3 rating on the amended revolving credit facility and the existing first-lien debt. At the same time, Moody's downgraded the corporate family rating (CFR) to Caa2 from Caa1, probability of default rating to Caa2-PD from Caa1-PD, $350 million second lien notes to Caa3 from Caa1, and senior unsecured debt rating to Caa3 from Caa2. Moody's also affirmed the SGL-4 speculative grade liquidity rating. The outlook is stable. The proceeds from the debt offering, less any fees and expenses, are expected to be used to increase cash on balance sheet. Subsequent to the transaction, the total revolver capacity will be reduced to $77 million from the original $314 million, with $43 million utilized at closing for letters of credit. Going forward, revolver commitments will most likely be predominantly used for letters of credit and will expire in 2016 and 2017. The nearest term debt maturity is $978 million in term loans due in 2018. Issuer: Walter Energy, Inc. Assignments: Add on Senior Secured Regular Bond/Debenture Oct 15, 2019, Assigned B3, LGD2 Affirmations: Senior Secured Bank Credit Facility, Affirmed B3, LGD2 Senior Secured Regular Bond/Debenture Oct 15, 2019, Affirmed B3, LGD2 Speculative Grade Liquidity Rating, Affirmed SGL-4 Downgrades: Corporate Family Rating, Downgraded to Caa2 from Caa1 Probability of Default Rating, Downgraded to Caa2-PD from Caa1-PD Senior Secured Regular Bond/Debenture Apr 1, 2020, Downgraded to Caa3, LGD4 from Caa1, LGD3 Senior Unsecured Regular Bond/Debenture Apr 15, 2021, Downgraded to Caa3, LGD5 from Caa2, LGD4 Senior Unsecured Regular Bond/Debenture Dec 15, 2020, Downgraded to Caa3, LGD5 from Caa2, LGD4 Outlook Actions: Outlook, Remains Stable Ratings Rationale Although Moody's believe that the proposed transaction improves the company's liquidity position by increasing their cash balance, the SGL-4 speculative grade liquidity rating remains unchanged given the decrease in revolver availability and our expectation that the company will burn roughly $300 million of cash over the next twelve months if current prices persist. Pro-forma for the transaction, Walter would have over $700 million in cash as of March 31, 2014; but Moody's expect any cash draws on the revolver to be restricted by the springing first-lien leverage ratio. The downgrade in the corporate family rating reflects the anticipated deterioration in performance, increased cash burn and increase in leverage, given the recent met coal benchmark settlement of $120 per tonne for high quality coking coal and our expectation that meaningful recovery in metallurgical coal markets is twelve to eighteen months away. The double notch downgrade of second-lien debt to Caa3 from Caa1 reflects the increase in first- lien debt, which will have priority claim on collateral in the event of bankruptcy. The B3 ratings on the first-lien senior secured credit facilities and senior secured notes, two notches above the Caa2 CFR, reflect their priority claim on collateral and structural seniority to the unsecured notes and other unsecured obligations of the company. The Caa3 ratings on the second-lien and senior unsecured notes, one notch below the Caa2 CFR, reflect contractual subordination to a substantial amount of first-lien secured debt and accordingly a junior claim relative to these obligations in the event of a restructuring. The Caa2 CFR continues to reflect the difficulties of operating a commodity-driven business in a protracted trough cycle environment with an even higher leveraged balance sheet proforma for the proposed transaction. The rating is also constrained by high operating risk implied by heavy reliance on a few key coal mines for the majority of earnings and cash flow, and limited trough- cycle margin potential of the metallurgical coal assets in western Canada. Success in implementing cost control programs, strong potential earnings and cash flow on a mid-cycle basis, and the value of the very cost competitive metallurgical coal assets in Alabama support the rating. The stable outlook anticipates that modest improvement in met coal fundamentals in the next eighteen months will eventually drive modest quarterly improvement in operating results and that the company will maintain adequate liquidity to support operations. Moody's could upgrade the rating with evidence that improvement in spot met coal pricing will translate into positive free cash flow on a sustained basis and a demonstrated willingness to reduce debt. Moody's could downgrade the rating with further deterioration in market conditions or pricing, expectations for substantive erosion in the company's cash position, or heightened concerns related to the increased secured debt levels. The principal methodology used in this rating was the Global Mining Industry published in May 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Walter Energy, Inc., is primarily a metallurgical coal producer with additional operations in metallurgical coke, steam and industrial coal, and natural gas. Headquartered in Birmingham, Alabama, the company generated $1.8 billion in revenue for the last twelve months as of March 31, 2014. WESTERN CAPITAL: Seeks to Modify Plan Post-Confirmation ------------------------------------------------------- U.S. Bankruptcy Judge Michael Romero confirmed the Amended Plan of Reorganization filed by Western Capital Partners LLC nunc pro tunc to May 15, 2014. The order was issued over the objections of creditor Richard J. Samson to the confirmation of the amended plan. Samson objected to confirmation for the following three reasons: (1) under Section 1129(a)(3) the Amended Plan was not proposed in good faith and lacks adequate means for implementation; (2) under Section 1123(a)(4), the Amended Plan unfairly discriminates among unsecured creditors; and (3) under Section 1129(b) the Amended Plan violates the absolute priority rule. Western Capital has filed a motion asking the Bankruptcy Court to modify its confirmed Amended Plan of Reorganization dated January 6, 2014 The Debtor requests that the Court enter an Order modifying the Plan to provide that in Article VI, Paragraph 6.1(a), upon entry of the Confirmation Order, title in the Debtor's assets, except for the Litigation and the Litigation Proceeds will be transferred from the bankruptcy estate to the Reorganized Debtor but that Litigation and Litigation Proceeds will remain in the Debtor's bankruptcy estate pending completion of the Litigation and payment of the Litigation Proceeds to creditors as provided for in the Plan. Further, the Debtor requests that the Court enter an Order modifying Article VI, Paragraph 6.1(b) to state that the Reorganized Debtor, through its members, shall have the authority and standing to pursue its Litigation and, if successful, to pay the Debtor's allowed unsecured creditors and allowed secured creditor claims from the Litigation Proceeds as provided for in the Plan. As confirmed by the Court, the Plan provides for title in the Debtor's Assets to transfer from the bankruptcy estate to the Reorganized Debtor (Article VI, Paragraph 6.1(a)). The Plan defines "Assets" as assets owned by the Debtor or the Estate. Jeffrey Weinman, Esq., of Weinman & Associates, P.C., says that it is not the intent of the Plan to strip the Litigation and Litigation Proceeds of the protections of the Code. The intent and purpose is quite the opposite. The central focus of all contested matters in this case raised by Objector Richard J. Samson is his desire to usurp and take control of that certain Litigation asset of the estate known generally as the Sandoval claim. Samson believes this asset is his to compromise and settle with Sandoval for his exclusive and pecuniary benefit. Samson has even sought stay relief to do so. By contrast, the Debtor and this Court have recognized that the Sandoval claim is an asset of this estate, albeit contingent. Moreover, it is one of the most important assets around which the Debtor seeks to reorganize and to pay legitimate unsecured creditors. With his very recent motion for clarification, Samson has made it clear that with Plan confirmation, he believes the automatic stay does not apply to prevent him from usurping ownership and control over the Sandoval claim. It is likewise apparent that Samson's motion for clarification was directed at ?clarifying?, from Samson's perspective, that he should be free to usurp the Sandoval claim for his exclusive benefit notwithstanding the Plan. While Samson's belief is erroneous, modification of the Plan is necessary to "clarify" this issue for Samson and to avoid future and unnecessary litigation in this Court or in other courts. Samson Objects to Modification Richard J. Samson, the Chapter 7 Trustee in the bankruptcy proceeding of Edra D. Blixseth pending in the United States Bankruptcy Court for the District of Montana, opposes the Debtor's motion for post-confirmation modification to Amended Plan of Reorganization and to continue the Automatic Stay. According to Mr. Samson, the proposed amendment proposes to construct a heretofore unknown bankruptcy contraption whereby ownership of the Debtor's most important assets (the Litigation) would not actually go to the Reorganized Debtor at confirmation, but would instead remain with "the Estate," where they would be protected by the automatic stay for an undetermined period of time. At the same time, the proposed amendment would expressly vest in the Reorganized Debtor's constitutional standing actually to prosecute that Litigation, directly and "through its members." In other words, the proposed amendment, Mr. Samson relates, would make clear that the Reorganized Debtor does not actually own or hold any interest in the Litigation, but, pretending that it had not just done that, would give the Reorganized Debtor standing to litigate the Litigation as if it actually did own the Litigation. The Debtor is constructing this device for the sole purpose of attempting to prevent Samson from moving forward with a settlement of the "Atigeo Litigation." The Debtor, Mr. Samson points out, has cited no authority for the fabrication of such a strange structure, and Samson does not believe any exists. As Samson pointed out in his motion for clarification, it is nearly blackletter law that the estate created under Section 541 of the Code terminates upon confirmation of a Chapter 11 plan. About Western Capital Western Capital Partners LLC filed a Chapter 11 petition (Bankr. D. Col. Case No. 13-15760) in Denver on April 10, 2013. The Englewood-based company estimated assets and debt of $10 million to $50 million. Judge Michael E. Romero presides over the case. The Debtor is represented by Jeffrey A. Weinman, Esq., at Weinman & Associates, P.C. Eason Rohde, LLC, is litigation counsel to the Debtor. Strauss & Malk, LLP, is also litigation counsel to the Debtor pertaining to a foreclosure case in the Circuit Court of Cook County, Illinois. * Big Banks' Living Wills Detail How To Avoid Bailouts ------------------------------------------------------ Ronald Orol, writing for The Deal, reported that critics of too- big-to-fail banks should relax -- the largest financial institutions won't cost taxpayers any money if they fail, according to living wills by the 17 biggest financial institutions. According to the report, the documents are meant to be guides for how these institutions would be wound down if they fail. The plans seek to help regulators and financial institutions limit the damage from a big bank failure and avoid the kind of Chapter 11 filing submitted by Lehman Brothers in 2008 that helped drive a global banking crisis, the report related. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Ali Reza Zargaran Bankr. S.D. Fla. Case No. 14-24390 Chapter 11 Petition filed June 24, 2014 In re Nancy Vance Bankr. S.D. Fla. Case No. 14-24351 Chapter 11 Petition filed June 24, 2014 In re The Ikonic Group Bankr. N.D. Ga. Case No. 14-62195 Chapter 11 Petition filed June 24, 2014 Filed as Pro Se In re Lee Williams Bankr. N.D. Ill. Case No. 14-23337 Chapter 11 Petition filed June 24, 2014 In re Milan Cesal and Guadalupe Cesal Bankr. N.D. Ill. Case No. 14-23498 Chapter 11 Petition filed June 24, 2014 In re Foley Chemical and Machine Company Bankr. S.D. Ill. Case No. 14-31065 Chapter 11 Petition filed June 24, 2014 See http://bankrupt.com/misc/ilsb14-31065.pdf represented by: Jerry D. Graham, Jr, Esq. J. D. GRAHAM, P.C. E-mail: court@jdgrahamlaw.com In re Hancock 112, LLC Bankr. D.N.J. Case No. 14-22969 Chapter 11 Petition filed June 24, 2014 See http://bankrupt.com/misc/njb14-22969.pdf represented by: Laurent W. Metzler, Esq. METZLER & DESANTIS, LLP E-mail: LWM@metzlerdesantis.com In re Michael W. Filibeck Bankr. D. N.M. Case No. 14-11933 Chapter 11 Petition filed June 24, 2014 In re Aseal, Inc. dba Mitchell Mobil Bankr. S.D. Ohio Case No. 14-12675 Chapter 11 Petition filed June 24, 2014 See http://bankrupt.com/misc/ohsb14-12675.pdf represented by: David A. Kruer, Esq. DAVID KRUER & COMPANY, LLC E-mail: dkandco@fuse.net In re Tim D. Wilson Bankr. S.D. Tex. Case No. 14-33476 Chapter 11 Petition filed June 24, 2014 In re Mark Wellington Gilbert and Susan Gwen Gilbert Bankr. E.D. Wash. Case No. 14-02357 Chapter 11 Petition filed June 24, 2014 In re Ray Villesca Palma Bankr. E.D. Cal. Case No. 14-26936 Chapter 11 Petition filed July 2, 2014 In re Phillip C. Booth, Jr. and Robin Booth Bankr. D. Md. Case No. 14-20598 Chapter 11 Petition filed July 2, 2014 In re Capitale Ventures I, LLC dba Espace Bankr. S.D.N.Y. Case No. 14-11984 Chapter 11 Petition filed July 2, 2014 See http://bankrupt.com/misc/nysb14-11984.pdf represented by: Douglas J. Pick, Esq. PICK & ZABICKI, LLP E-mail: dpick@picklaw.net In re 256-260 Limited Partnership Bankr. W.D.N.Y. Case No. 14-11582 Chapter 11 Petition filed July 2, 2014 See http://bankrupt.com/misc/nywb14-11582.pdf represented by: Arthur G. Baumeister, Jr., Esq. AMIGONE, SANCHEZ, ET AL. E-mail: abaumeister@amigonesanchez.com In re Sandra Eaves Overbeck Bankr. E.D.N.C. Case No. 14-03809 Chapter 11 Petition filed July 2, 2014 In re David Leon Campbell Bankr. E.D. Tenn. Case No. 14-12875 Chapter 11 Petition filed July 2, 2014 In re Robert Dale Holmes Bankr. M.D. Tenn. Case No. 14-05300 Chapter 11 Petition filed July 2, 2014 In re NP Gregorys, LLC Bankr. N.D. Tex. Case No. 14-33232 Chapter 11 Petition filed July 2, 2014 See http://bankrupt.com/misc/txnb14-33232.pdf represented by: Eric A. Liepins, Esq. ERIC A. LIEPINS, P.C. E-mail: eric@ealpc.com In re Stuart Allen Meeks and Teri Vaughn Meeks Bankr. D. Ariz. Case No. 14-10334 Chapter 11 Petition filed July 3, 2014 In re Daniel M. Prekker Bankr. C.D. Cal. Case No. 14-11442 Chapter 11 Petition filed July 3, 2014 In re Jerome A. Jacques Bankr. C.D. Cal. Case No. 14-14154 Chapter 11 Petition filed July 3, 2014 In re Servicentro Garcia, Inc. Bankr. S.D. Fla. Case No. 14-25261 Chapter 11 Petition filed July 3, 2014 See http://bankrupt.com/misc/flsb14-25261.pdf represented by: Peter D. Spindel, Esq. E-mail: peterspindel@gmail.com In re Jacobs & Son, Inc. Bankr. N.D. Ill. Case No. 14-24965 Chapter 11 Petition filed July 3, 2014 See http://bankrupt.com/misc/ilnb14-24965.pdf represented by: Keevan D. Morgan, Esq. MORGAN & BLEY, LTD. E-mail: kmorgan@morganandbleylimited.com In re Shahla Nozary Bankr. D. Md. Case No. 14-20664 Chapter 11 Petition filed July 3, 2014 In re MM 130 Bowery Rest. Corp. Bankr. S.D.N.Y. Case No. 14-11988 Chapter 11 Petition filed July 3, 2014 See http://bankrupt.com/misc/nysb14-11988.pdf represented by: David C. McGrail, Esq. MCGRAIL & BENSINGER, LLP E-mail: dmcgrail@mcgrailbensinger.com In re Martin Tenenbaum Bankr. S.D.N.Y. Case No. 14-22961 Chapter 11 Petition filed July 3, 2014 In re Roland R. Kosser Bankr. C.D. Cal. Case No. 14-22981 Chapter 11 Petition filed July 7, 2014 In re William L. Comstock Bankr. N.D. Cal. Case No. 14-52892 Chapter 11 Petition filed July 7, 2014 In re Cynthia Jeanne Simonson Bankr. S.D. Fla. Case No. 14-25407 Chapter 11 Petition filed July 7, 2014 In re Leon Francis Hall Bankr. D. Kans. Case No. 14-21588 Chapter 11 Petition filed July 7, 2014 In re O'Bar Development, Inc. Bankr. D. Mass. Case No. 14-30686 Chapter 11 Petition filed July 7, 2014 See http://bankrupt.com/misc/mab14-30686.pdf represented by: Henry E. Geberth, Jr., Esq. HENDEL & COLLINS, P.C. E-mail: hgeberth@hendelcollins.com In re Performance Staging, Inc. dba Performance Event Services Bankr. E.D. Mich. Case No. 14-51212 Chapter 11 Petition filed July 7, 2014 See http://bankrupt.com/misc/mieb14-51212.pdf represented by: John C. Lange, Esq. GOLD, LANGE & MAJOROS, P.C. E-mail: jlange@glmpc.com In re Charles Gallub Bankr. D.N.J. Case No. 14-23903 Chapter 11 Petition filed July 7, 2014 In re Carlos E. Castillo Bankr. E.D.N.Y. Case No. 14-73072 Chapter 11 Petition filed July 7, 2014 In re 200 Elmont Rd. Corp. Bankr. E.D.N.Y. Case No. 14-73079 Chapter 11 Petition filed July 7, 2014 See http://bankrupt.com/misc/nyeb14-73079.pdf Filed as Pro Se In re Margaux International Inc. Bankr. E.D.N.Y. Case No. 14-73085 Chapter 11 Petition filed July 7, 2014 See http://bankrupt.com/misc/nyeb14-73085.pdf represented by: John M. Stravato, Esq. E-mail: jmstravato@aol.com In re Chong Sun Oh Bankr. S.D.N.Y. Case No. 14-22972 Chapter 11 Petition filed July 7, 2014 In re Patricio Rodriguez Lopez and Eunice Maribel Lugo Mejias Bankr. D. P.R. Case No. 14-05570 Chapter 11 Petition filed July 7, 2014 In re Charleston Transportation Leasing, LLC Bankr. D. S.C. Case No. 14-03859 Chapter 11 Petition filed July 7, 2014 See http://bankrupt.com/misc/scb14-03859.pdf represented by: D. Nathan Davis, Esq. DAVIS LAW FIRM E-mail: nathan@davislawsc.com In re North Area Taxi, Inc. Bankr. D. S.C. Case No. 14-03860 Chapter 11 Petition filed July 7, 2014 See http://bankrupt.com/misc/scb14-03860.pdf represented by: D. Nathan Davis, Esq. DAVIS LAW FIRM E-mail: nathan@davislawsc.com In re Phillip Edward Simpson, Sr. Bankr. M.D. Tenn. Case No. 14-05389 Chapter 11 Petition filed July 7, 2014 In re Worley Properties Bankr. W.D. Tenn. Case No. 14-26880 Chapter 11 Petition filed July 7, 2014 See http://bankrupt.com/misc/tnwb14-26880.pdf represented by: Steven N. Douglass, Esq. HARRIS SHELTON HANOVER WALSH, PLLC E-mail: snd@harrisshelton.com In re 5124 El Segundo Blvd., LLC Bankr. C.D. Cal. Case No. 14-23097 Chapter 11 Petition filed July 8, 2014 See http://bankrupt.com/misc/cacb14-23097.pdf represented by: Todd B. Becker, Esq. LAW OFFICES OF TODD B. BECKER E-mail: veloz@toddbeckerlaw.com In re Jon H. Berkey Bankr. S.D. Cal. Case No. 14-05460 Chapter 11 Petition filed July 8, 2014 In re Joseph L. Klun, Jr. Bankr. D. Colo. Case No. 14-19403 Chapter 11 Petition filed July 8, 2014 In re Thomas A. Klun Bankr. D. Colo. Case No. 14-19405 Chapter 11 Petition filed July 8, 2014 In re MAAA, LLC Bankr. D. Conn. Case No. 14-31301 Chapter 11 Petition filed July 8, 2014 See http://bankrupt.com/misc/ctb14-31301.pdf represented by: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN E-mail: ressmul@yahoo.com In re James C. Campbell, Jr. Bankr. M.D. Fla. Case No. 14-03298 Chapter 11 Petition filed July 8, 2014 In re Control and Automation Contractors, LLC Bankr. S.D. Fla. Case No. 14-25556 Chapter 11 Petition filed July 8, 2014 See http://bankrupt.com/misc/flsb14-25556.pdf represented by: Jonathan Y. Markhoff, Esq. LAW OFFICE OF YONI MARKHOFF, P.A. E-mail: bknotice@markhoffpa.com In re Linda Graves Jelinek Bankr. N.D. Ill. Case No. 14-25220 Chapter 11 Petition filed July 8, 2014 In re Jane L. Fairweather Bankr. D. Md. Case No. 14-20847 Chapter 11 Petition filed July 8, 2014 In re Lake Town Realty, LLC Bankr. D. Mass. Case No. 14-13256 Chapter 11 Petition filed July 8, 2014 See http://bankrupt.com/misc/mab14-13256.pdf represented by: Norman Novinsky, Esq. NOVINSKY & ASSOCIATES E-mail: nnovinsky@msn.com In re Mr. City Realty, LLC Bankr. D. Mass. Case No. 14-13257 Chapter 11 Petition filed July 8, 2014 See http://bankrupt.com/misc/mab14-13257.pdf represented by: Norman Novinsky, Esq. NOVINSKY & ASSOCIATES E-mail: nnovinsky@msn.com In re New York Southern Live System Bankr. S.D.N.Y. Case No. 14-12007 Chapter 11 Petition filed July 8, 2014 See http://bankrupt.com/misc/nysb14-12007.pdf represented by: Scott S. Markowitz, Esq. TARTER KRINSKY & DROGIN, LLP E-mail: smarkowitz@tarterkrinsky.com In re Geraghty Suarez, LLP Bankr. S.D.N.Y. Case No. 14-12016 Chapter 11 Petition filed July 8, 2014 See http://bankrupt.com/misc/nysb14-12016.pdf represented by: James M. Sullivan, Esq. MOSES SINGER, LLP E-mail: jsullivan@mosessinger.com In re Bradford Joseph Moss Bankr. M.D. Tenn. Case No. 14-05431 Chapter 11 Petition filed July 8, 2014 In re OIS Investments, Inc. Bankr. W.D. Tex. Case No. 14-51782 Chapter 11 Petition filed July 8, 2014 See http://bankrupt.com/misc/txwb14-51782.pdf represented by: William R. Davis, Jr., Esq. LANGLEY & BANACK, INC. E-mail: wrdavis@langleybanack.com In re Terrence L Mason and Tracey L. Mason Bankr. N.D. W.Va. Case No. 14-00769 Chapter 11 Petition filed July 8, 2014 ********* 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. 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