/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140711.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, July 11, 2014, Vol. 18, No. 191 Headlines ACCELERA INNOVATIONS: Incurs $1.76-Mil. Net Loss in First Quarter ACG CREDIT: Hires Gellert Scali as Counsel ALLIANCE HOME: Case Summary & 20 Largest Unsecured Creditors AMERICAN APPAREL: Gets $25MM in Financing From Standard General AMERICAN APPAREL: SG May Reconstitute Board if Ongoing Talks Fail AMERICAN ENERGY-PERMIAN: Moody's Assigns B3 Corp. Family Rating AMERICAN ENERGY-PERMIAN: S&P Assigns 'B' CCR; Outlook Stable AMERICAN ENERGY: Reports $3.54-Mil. Net Loss in March 31 Quarter AMERICAN MEDIA: Acquisition Deal no Impact on Moody's 'Caa1' CFR AMERICAN MEDIA: Chatham, Cooperman Offer To Buy Publisher ANPULO FOOD: Incurs $100K Net Loss in Q1 Ended March 31 AMERICAN NATURAL: Has $972K Net Loss in Q1 Ended March 31 AMPLIPHI BIOSCIENCES: Incurs $10.14-Mil. Net Loss in First Quarter AT EMERALD: Is "Small Business Debtor", Says U.S. Trustee AT EMERALD: Court Approves Joint Administration Request ATP OIL: Case Converted to Chapter 7 Liquidation BEAMZ INTERACTIVE: Has $1.16-Mil. Net Loss in First Quarter CARDINAL RESOURCES: Incurs $188K Net Loss in First Quarter CAROLINA CREATIONS: Case Summary & 7 Largest Unsecured Creditors CASH STORE: Gordon Reykdal & Ed McLelland Step Down as Directors CASPIAN SERVICES: Reports $10.96-Mil. Net Loss for First Quarter CCS INTERMEDIATE: S&P Assigns 'B' Rating to $335MM 1st-Lien Loan CCS INTERMEDIATE: Moody's Assigns 'B2' Corporate Family Rating CHINA BAK: Posts $9.26-Mil. Net Loss in Q1 Ended March 31 CHINA GINSENG: Files Amendment to Q4 2013 Report CHINA GINSENG: Has $674K Net Loss in March 31 Quarter CHINA NATURAL: Bankruptcy Converted To Ch. 7 CHINA PEDIATRIC: Posts $1.53-Mil. Net Loss in Q1 Ended March 31 CICERO INC: Has $723K Net Loss for Q1 Ended March 31 CITGO PETROLEUM: Moody's Assigns 'B1' Rating on $650MM Term Loan CLEARWATER SEAFOODS: Moody's Affirms 'B2' Corporate Family Rating COLOR STAR: Barrier Blocks Approval of Settlement With Regions COOPER-BOOTH WHOLESALE: SSG Advises on Exit Financing Package CORINTHIAN COLLEGES: Thousands To Be Affected by Schools Closure COVENANT SURGICAL: Moody's Assigns B3 CFR & Rates $120MM Notes B3 CRUMBS BAKE SHOP: Investor Group Eyes Rescue of Cupcake Chain DAVE & BUSTER'S: S&P Affirms 'B' CCR & Rates $580MM Debt 'B' DENTAL CARE: A.M. Best Upgrades Finc'l. Strength Rating to 'B+' DETROIT, MI: Bid To Undo $1.5B Pension Finance Deals Survives DIGITAL REALTY: S&P Affirms 'BB+' Preferred Stock Rating ECOTALITY INC: 8% Recovery Seen for Unsecured Creditors Under Plan ECOTALITY INC: Blink UYA Seeks Dual Track Solicitation for Plans EASTCOAL INC: Seeks Shareholder OK for AIM Admission Cancellation EKDN PROPERTY: Files for Chapter 11 in Florida ELITE DATA: Incurs $37K Net Loss in Q1 Ended March 31 ELITE DIGITAL: Files for Chapter 11 in Florida EMMAUS LIFE: Incurs $6.74-Mil. Net Loss for March 31 Quarter ENERGY FUTURE: Lenders Seeking Direct Appeal ENERGY FUTURE: Second Lien Expiration Date Extended to July 11 ENERPULSE TECHNOLOGIES: Has $702K Net Loss in Q1 Ended March 31 EXIDE TECHNOLOGIES: Exclusive Plan Filing Pd Extended Thru July 31 FANNIE MAE: Hearing on Continental Western's Motion to Compel FL 6801 SPIRITS: Auction of Canyon Ranch Hotel Set for Aug. 19 FL 6801 SPIRITS: Associations Drop Bid to Transfer Cases to Fla. FREDDIE MAC: Hearing on Continental Western's Motion to Compel FREEDOM INDUSTRIES: Told to Keep Public Better Informed FRESH & EASY: Employee Wage Settlement Approved FUEL PERFORMANCE: Incurs $1.34-Mil. Net Income in First Quarter FURNITURE BRANDS: Files Second Amended Liquidation Plan GEMINI HDPE: S&P Assigns Prelim. 'B+' Rating on $420MM Loan GENCO SHIPPING: Exits Chapter 11 Bankruptcy Protection GENCO SHIPPING: Rothschild Approved as Equityholders' Advisor GLOBAL ARENA: Has $349K Net Loss for March 31 Quarter GOLDKING HOLDINGS: Plan Outline Approved, Aug. 18 Conf. Hrg Set GOLDKING HOLDINGS: Reaches Deal to Access DIP Loans Thru Aug. 1 GRANDPARENTS.COM INC: Has $1.98-Mil. Net Loss in First Quarter GREEN AUTOMOTIVE: Accumulated Deficit at $54MM as of March 31 GRILLED CHEESE: Incurs $1.2-Mil. Net Loss for First Quarter HCSB FINANCIAL: Elliott Davis LLC Raises Going Concern Doubt HCSB FINANCIAL: Reports $317K Net Income for March 31 Quarter HELLAS TELECOM: Termination of Ch.15 Recognition Order Sought HUNTER DEFENSE: S&P Puts 'CCC' Rating on CreditWatch Positive IBAHN CORP: Seeks Extension of Plan Filing Date IDENTIVE GROUP: Posts $5.17-Mil. Net Loss for March 31 Quarter INFRAX SYSTEMS: Has $513K Net Loss in March 31 Quarter IPARADIGMS HOLDINGS: Moody's Rates 2nd Lien Sr. Secured Loan Caa2 IPARADIGMS HOLDINGS: S&P Assigns 'B-' CCR; Outlook Stable JAMES RIVER: Has $224-Mil. in Assets, $886-Mil. in Debts K. LAURENMARTIN: Files for Chapter 7 in Florida KAISER ALUMINUM: Moody's Affirms 'Ba3' Corporate Family Rating KEMPER CORP: A.M. Best Affirms 'bb' on Preferred Stock Rating KISMET: Obtains Affirmance in Post-Petition Transfer Appeals LABORATORY PARTNERS: Files First Amended Ch. 11 Plan LIGHT TOWER: Moody's Assigns B2 Rating on $300MM Secured Notes LIGHTSQUARED INC: Judge Says Ergen Didn't Mediate in Good Faith LIVINGVENTURES INC: Reports $379K Net Loss in Q1 Ended March 31 LTR HOLDCO: S&P Assigns 'B' CCR & Rates $300MM Sr. Notes 'B' MEDISWIPE INC: Incurs $235K Net Loss in Q1 Ended March 31 MERCANTILE BANCORP: Plan Effective Date Occurred on June 30 MERITAS SCHOOLS: S&P Assigns 'CCC+' Rating on $80MM 2nd Lien Loan MF GLOBAL: Gardiner Koch Sued Over Trading Firm Manager's Ouster MILLENNIUM HEALTHCARE: Has $7.92-Mil. Net Loss in First Quarter MILLER HEIMAN: S&P Keeps 'B' Rating Over $359MM Debt Add-on MOMENTIVE PERFORMANCE: Plan Ruling Expected by September MT LAUREL LODGING: Plan Exclusivity Period Extended to Aug. 29 NEW WESTERN: Reports $1.31-Mil. Net Loss in March 31 Quarter NEWLEAD HOLDINGS: Files Claims Against Ironbridge Global IV NORTHWEST HARDWOODS: Moody's Assigns 'B2' Corp. Family Rating NORTHWEST HARDWOODS: S&P Assigns 'B' CCR & Rates Secured Notes 'B' OPTIM ENERGY: Energy Future May Bid Up to $87.5MM for Plant OSUM PRODUCTION: Moody's Assigns B3 Rating on $210MM Senior Notes OSUM PRODUCTION: S&P Assigns 'B-' LT Corp. Credit Rating PAID INC: Reports $173K Net Loss for Q1 Ended March 31 PAMPA ENERGIA: Incurs ARS719.77-Mil. Net Loss in First Quarter PETAQUILLA MINERALS: Posts $11.62-Mil. Net Loss for First Quarter PHILLIPS INVESTMENTS: Taps Scroggins & Williamson as Attorneys PHILLIPS INVESTMENTS: Taps Burroughs Keene as Special Counsel PINAFORE HOLDINGS: Moody's Withdraws Ba3 Corporate Family Rating PLEASANT HILL: Case Summary & 7 Largest Unsecured Creditors PLYMOUTH OIL: Court to Defer Ruling on Stay Motion Against Prairie POSITIVEID CORP: Reports $2.31-Mil Net Loss for First Quarter POWIN CORP: Posts $1.47-Mil. Net Loss for Q1 Ended March 31 PRETTY GIRL: Meeting to Form Creditors' Panel Set for July 15 PRIME CHOICE: Hiring Heritage to Seek Buyer or Investor PUERTO RICO: Electric Power Authority Given More Time to Pay Debt QUARTZ HILL: Hearing on Case Transfer Motion Scheduled for Today RELIABRAND INC: Reports $198K Net Loss for First Quarter REVEL AC: KEIP, Seal Approval Sought RIVER-BLUFF: Parties Dispute Receiver Fees RIVERA & MIRO: Files for Chapter 7 in Florida SALIX PHARMACEUTICAL: Cosmo Merger No Impact on Moody's B1 CFR SALON SEVEN: Files for Chapter 7 in Florida SCH-TRIDENT: Files Schedules of Assets and Liabilities SCRIPSAMERICA INC: Incurs $1.26-Mil. Net Loss for First Quarter SCRUB ISLAND: FirstBank's Plea to End Exclusivity Period Denied SANTA FE GOLD: Posts $2.99-Mil. Net Loss for Q1 Ended March 31 SCRUB ISLAND: Seeks Court Approval to Hire HVS as Appraiser SIMPLEXITY LLC: Seeks More Time to Negotiate, File Plan SIMPLY WHEELZ: Wants Bar Dates for Sec. 503(b)(9) & 365 Claims SINCLAIR TELEVISION: Moody's Assigns Ba1 Rating on $500MM Loan SINCLAIR BROADCAST: S&P Raises Sr. Unsecured Debt Rating to 'B+' SKYLINE MANOR: May Use Oxford's Cash Collateral Until July 16 STARSTREAM ENTERTAINMENT: Has $921K Net Loss in March 31 Quarter SUMMIT MIDSTREAM: S&P Assigns 'B' Rating to $300MM Unsecured Notes SUPER BUY FURNITURE: Section 341(a) Meeting Set on August 8 TAAZA FRESH: Voluntary Chapter 11 Case Summary TACTICAL INTERMEDIATE: Asks for Approval of $3.5MM DIP Loans TACTICAL INTERMEDIATE: Proposes to Pay Critical Vendors TACTICAL INTERMEDIATE: Proposes Prime Clerk as Claims Agent TACTICAL INTERMEDIATE: Meeting to Form Creditors Panel on July 18 TARGUS GROUP: S&P Cuts CCR to B- on Expected Thin Covenant Cushion THREE FORKS: Incurs $725K Net Loss for First Quarter TRIANGLE USA: Moody's Rates New $350MM Sr. Unsecured Notes 'Caa1' TRIANGLE USA: S&P Assigns 'B' CCR & Rates Sr. Unsec. Notes 'CCC+' UMED HOLDINGS: Incurs $465K Net Loss for Q1 Ended March 31 UNITED AIRLINES: Hawaii Ground Workers Vote for Concessions UNITED AMERICAN: Incurs $423K Net Loss for Q1 Ended March 31 UNIVERSAL COOPERATIVES: Lowenstein Sandler Named Panel's Counsel UNIVERSAL COOPERATIVES: Venable LLP Okayed as Panel's Co-Counsel UNIVERSAL COOPERATIVES: EisnerAmper Okayed as Panel's Accountants USEC INC: Plan Terms Approved, Confirmation Hearing on Sept. 5 VISION INDUSTRIES: Posts $1.12-Mil. Net Loss in First Quarter WELLNESS CENTER: Incurs $3.92-Mil. Net Loss for March 31 Quarter XTREME GREEN: Incurs $84K Net Income for Q1 Ended March 31 YARWAY CORP: Needs Until October to File Reorganization Plan * Moody's Says U.S. High-yield Bond Covenant Declines in June * Cornerstone Research Names Michael E. Burton President & CEO * BOOK REVIEW: Lost Prophets -- An Insider's History of the Modern Economists ********* ACCELERA INNOVATIONS: Incurs $1.76-Mil. Net Loss in First Quarter ----------------------------------------------------------------- Accelera Innovations Inc. filed its quarterly report on Form 10-Q disclosing a net loss of $1.76 million on $840,885 of revenues for the three months ended March 31, 2014, compared with a net loss of $1.75 million on $nil of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $5.95 million in total assets, $6.78 million in total liabilities, and a stockholders' deficit of $822,230. The Company has conducted minimal operations since inception. Minimal revenue has been generated by the Company from April 29, 2008 (Inception) to Dec. 31, 2013, and these revenues have come from newly acquired companies. The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management's plan includes obtaining additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available. These conditions raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/YVROHn Accelera Innovations, Inc., a development stage healthcare service company, focuses on the development of Internet-based software. Its Internet-based software enhances the functionality and performance of healthcare services through making clinical healthcare data available to healthcare consumers. The company was formerly known as Accelerated Acquisitions IV, Inc. and changed its name to Accelera Innovations, Inc. in October 2011. Accelera Innovations, Inc. was founded in 2008 and is based in Frankfort, Illinois. ACG CREDIT: Hires Gellert Scali as Counsel ------------------------------------------ ACG Credit Company II, LLC asks for permission from the U.S. Bankruptcy Court for the District of Delaware to employ Gellert Scali Busenkell & Brown LLC as counsel, nunc pro tunc to Jun. 17, 2014. The Debtor requires Gellert Scali to: (a) provide the Debtor with advice and prepare all necessary documents regarding debt restructuring, bankruptcy and asset dispositions; (b) take all necessary actions to protect and preserve the Debtor's estate during the pendency of the Chapter 11 case, including the prosecution of actions by the Debtor, the defense of actions commenced against the Debtor, negotiations, concerning litigation in which the Debtor is involved and objecting to claims filed against the estate; (c) prepare on behalf of the Debtor, as debtor in possession, all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the Chapter 11 case; (d) counsel the Debtor with regard to its rights and obligations as debtor in possession; (e) appear in Court and protect the interests of the Debtor before the Court; and (f) perform other legal services for the Debtor which may be necessary and proper in this proceeding. The Gellert Scali professionals and paraprofessionals who will represent the Debtor have a range of hourly rates that Gellert Scali charges for their services. Gellert Scali will also be reimbursed for reasonable out-of-pocket expenses incurred. Gellert Scali received a $50,000 retainer from the Debtor. Michael Busenkell, member of Gellert Scali, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Court for the District of Delaware will hold a hearing on the application on July 29, 2014, at 11:00 a.m. Objections, if any, are due July 15, 2014, at 4:00 p.m. Gellert Scali can be reached at: Michael Busenkell, Esq. GELLERT SCALI BUSENKELL & BROWN LLC 913 N. Market Street, 10th Floor Wilmington, DE 19801 Tel: (302) 425-5812 Fax: (302) 425-5814 E-mail: mbusenkell@gsbblaw.com 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. The Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Ian Peck signed the petition as director. Gellert Scali Busenkell & Brown, LLC, serves as the Debtor's counsel. ALLIANCE HOME: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Alliance Home Healthcare, Inc. 11001 Southwest Highway Palos Hills, IL 60465 Case No.: 14-25269 Nature of Business: Health Care Chapter 11 Petition Date: July 9, 2014 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Hon. Donald R. Cassling Debtor's Counsel: Penelope N Bach, Esq. SULAIMAN LAW GROUP, LTD. 900 Jorie Boulevard, Suite 150 Oak Brook, IL Tel: (630)575-8181 Email: pnbach@sulaimanlaw.com mbadwan@sulaimanlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Reginaldo A. Sulit, secretary. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/alnb14-25269.pdf AMERICAN APPAREL: Gets $25MM in Financing From Standard General --------------------------------------------------------------- American Apparel, Inc., has reached a Nomination, Standstill and Support Agreement with Standard General L.P. and company founder Dov Charney, the beneficial owners of nearly 44% of the Company's outstanding stock. Under the agreement, Standard General will provide up to $25 million in immediate financial support to the Company, the Company's board will be reconstituted, and an independent board committee will be formed to oversee the continuing investigation into alleged misconduct by Mr. Charney. As part of the agreement, Standard General affirmed its support for American Apparel's sweatshop-free, "Made in USA" manufacturing philosophy and commitment to maintain the Company's manufacturing headquarters in Los Angeles. Standard General and Mr. Charney also agreed to certain standstill and voting limitations through the Company's 2015 annual meeting. Pursuant to the agreement, five of the current seven members of the Company's board of directors, including Mr. Charney, will voluntarily step down. The departing directors will be replaced by two new directors, chosen jointly by Standard General and the current board, and three new directors designated by Standard General. All but one of the new directors are expected to be independent directors and unaffiliated with either Standard General or Mr. Charney. The board will continue to be led by its current co-chairmen, David Danziger and Allan Mayer. Mr. Charney will not serve as a board member or be nominated by the Company or Standard General as a board member. The ongoing investigation into Mr. Charney's alleged misconduct overseen by a newly appointed, independent board committee, will continue. Mr. Charney will serve as strategic consultant until the end of the investigation. Based on the findings of the investigation, the committee will determine if it is appropriate for Mr. Charney to serve as CEO or an officer or employee of American Apparel. Adoption of a standstill agreement through the Company's 2015 annual meeting that, among other things, prohibits Standard General and Mr. Charney from acquiring any additional shares in American Apparel and limits their vote to no more than one third of the Company's shares on any issue put to stockholders; their remaining shares would be voted proportionately to the vote of other stockholders. "This truly marks the beginning of an important new chapter in the American Apparel story," said Mr. Mayer. "With the support of Standard General, we are confident the Company will finally be able to realize its true potential." "The last few weeks have been difficult ones for the company, and we are especially indebted to our special committee members Robert Greene, Marv Igelman, and William Mauer, who have worked so tirelessly on the company's behalf," said Mr. Danziger. "Any success the company enjoys in the future will in large part be the result of their efforts." Amendment to Rights Agreement On July 9, 2014, prior to the execution of the Support Agreement, a duly authorized committee of the Board approved an amendment to the Rights Agreement, dated as of June 27, 2014, between the Company and Continental Stock Transfer & Trust Company as Rights Agent. The Rights Amendment provides that no person will be deemed to be an "Acquiring Person" (as such term is defined in the Rights Agreement) as a result of (i) the negotiation of and entry into the Support Agreement, (ii) the performance of such person's obligations or the exercise of such person's rights under the Support Agreement or (iii) the performance of obligations or the exercise of rights under the letter agreement dated June 25, 2014, between Dov Charney and Standard General L.P., including but not limited to entry into the Cooperation Agreement and the other agreements and arrangements described in the Letter Agreement (including, without limitation, the SG Loan Documents and related pledge of Additional Shares and Original Shares, and the Warrant Agreements and Warrants, in each case as such capitalized terms are defined in the Letter Agreement), and the performance of obligations or the exercise of rights thereunder. The Rights Amendment also amends and restates the definition of "Final Expiration Date" in Section 1(s) of the Rights Agreement in its entirety as follows: "'Final Expiration Date' shall mean 5:00 P.M., New York City time, on July 24, 2014." A full-text copy of the Nomination, Standstill and Support Agreement, dated as of July 9, 2014, by and among the Company, Standard General L.P., Standard General Master Fund L.P., P Standard General Ltd. and Dov Charney is available for free at: http://is.gd/bhm3Ci A full-text copy of the Amendment No. 1 to Rights Agreement is available for free at http://goo.gl/Qzwz1t 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 APPAREL: SG May Reconstitute Board if Ongoing Talks Fail ----------------------------------------------------------------- Standard General L.P., an investment manager, disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that it has opened a constructive, detailed and substantive dialogue with members of the current board of American Apparel with a view to finding common ground for an amicable and expeditious resolution. Standard General intends to continue to engage in discussions with the board and members of the Company's management team concerning the composition of the board, capital structure, governance, management, strategy and other matters concerning the Company. No agreement has yet been reached. Standard General said it will only support initiatives that comply with the highest standards of governance, ethics, and corporate citizenship. Absent a consensual agreement with the Company, Standard General plans to bring before the Company's stockholders a highly qualified slate of independent directors. Standard General expects the reconstituted board to be able to quickly identify and empower a strong management team that will allow the Company to fulfill its full potential. Currently, the Company is threatened by defaults in various parts of its debt structure, that if not addressed in the near term, may result in a bankruptcy, and possibly, a liquidation of the company. Standard General believes that this would be an unfortunate outcome for a company with over 10,000 employees earning in excess of a living wage with subsidized, affordable health insurance and a socially conscious mission to manufacture in the USA. Standard General said it is prepared to lend its credibility and capital resources to prevent this avoidable outcome in what Standard General believes is otherwise a healthy business. Standard General beneficially owned 1,540,000 shares of American Apparel as of June 26, 2014, representing 0.9 percent of the shares outstanding. A copy of the Schedule 13D is available for free at http://is.gd/xNMvfb On June 25, 2014, Standard General, on behalf of one or more of the funds for which it serves as investment manager, entered into a letter agreement with Dov Charney. Standard General has established a voting agreement to control Mr. Charney's shares and give it the opportunity to resolve this situation and restore the Company to health. Standard General clarified that this transaction is not about Mr. Charney, nor is it an endorsement of him. 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 ENERGY-PERMIAN: Moody's Assigns B3 Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating (CFR) to first time issuer American Energy-Permian Basin, LLC (AEPB). Moody's also assigned a Caa1 rating to its new $1.4 billion of senior unsecured notes and a Speculative Grade Liquidity Rating of SGL-3. AEPB Finance Corporation, a wholly- owned subsidiary of AEPB, is a co-issuer of the notes. The rating outlook is stable. The company is acquiring production, reserves, and approximately 63,000 net acres of leasehold in the Permian Basin from Enduring Resources (Enduring), a privately held company. The total purchase price of $2.5 billion will be funded with $1.15 billion of equity and $1.4 billion of notes. AEPB was founded by Aubrey McClendon, the former CEO of Chesapeake Energy Corporation (Chesapeake, Ba1 stable). AEPB's management has teamed with The Energy & Minerals Group and First Reserve Corporation (together the Sponsors) to provide the equity portion of the purchase price. "With the purchase of Enduring's Permian Basin assets, AEPB will gain exposure to highly prospective acreage in the Southern Midland Basin", said Stuart Miller, Moody's Vice President -- Senior Credit Officer. "However, much of the value being acquired is comprised of undeveloped reserves and prospective acreage. Therefore, using our traditional leverage metrics of debt to average daily production and debt to proved developed reserves, leverage will be higher than all of our rated E&P peers. Our B3 CFR reflects the initially weak cash flow and high leverage metrics, offset by the quality of the management team and the prospectivity of the undeveloped acreage." Assignments: American Energy-Permian Basin, LLC Corporate Family Rating (CFR), Assigned B3 Probability of Default Rating (PD), Assigned B3-PD Speculative Grade Liquidity Rating (SGL), Assigned SGL-3 Senior unsecured notes, Assigned Caa1, LGD4-65% Outlook is stable Ratings Rationale The B3 CFR reflects AEPB's small scale and largely undeveloped asset base. There is significant execution risk associated with moving the resources to a producing status especially when considering the company's very heavily leveraged balance sheet. At closing, AEPB will have production of roughly 15,000 Boe per day and proved developed reserves of 26 million Boe. With $1.5 billion of debt, debt to average daily production was approximately $100,000 per Boe and debt to proved developed reserves was $58 per Boe -- higher than almost every other E&P company we rate. Moody's expects both ratios to improve over the next few years as the company drills proved undeveloped and possible locations, but leverage will remain very elevated even for a B3 rated company. The assigned rating is supported by the quality of the management team, many of whom gained resource development experience using the latest drilling and completion technologies while employed at Chesapeake. AEPB also benefits from strong equity support. The equity Sponsors have committed $1.1 billion into the company to finance the asset acquisition from Enduring and would be expected to further support their investment if necessary. The SGL-3 rating reflects adequate liquidity. The company is expected to out-spend cashflow over the next 18 months by nearly $900 million. However, most of this spending is discretionary in nature and could be managed down if necessary. AEPB plans to establish a $1 billion senior secured revolving credit facility with an initial borrowing base of $500 million at the time of closing. A condition to closing the credit facility is that at least $350 million is unused and available for liquidity purposes going forward. AEPB will be highly reliant on borrowing base increases or new debt offerings to meets its spending plans and maintain liquidity. The leverage and fixed charge covenants are expected to be set with a normal cushion of approximately 30%. Alternative liquidity is modest as all assets are pledged as collateral to the revolving credit facility. The outlook is stable. To be considered for an upgrade, AEPB would need to drastically reduce its leverage ratios. When debt to average daily production approaches $60,000 per Boe and debt to proved developed reserves fall below $30 per Boe, an upgrade will be considered. Alternatively, a downgrade could occur if production growth stalls and liquidity weakens. Should the company fail to materially meet its production growth targets or if liquidity falls to less than $100 million, a downgrade will be considered. The principal methodology used in this rating was Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. American Energy-Permian Basin, LLC, is an independent E&P company with principal producing properties located in the Southern Midland Basin of the Permian Basin. American Energy-Permian Basin, LLC is headquartered in Oklahoma City, Oklahoma. AMERICAN ENERGY-PERMIAN: S&P Assigns 'B' CCR; Outlook Stable ------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to Oklahoma City-based American Energy- Permian Basin LLC. The rating outlook is stable. S&P also assigned its 'BB-' issue-level rating ('1' recovery rating) to the company's planned $1 billion RBL facility (with an initial borrowing base of $500 million); the '1' recovery rating indicates our expectation of a very high (90% to 100%) recovery in the event of a payment default. In addition, S&P assigned its 'CCC+ issue- level rating, with a '6' recovery rating, to the company's proposed $1.4 billion senior unsecured notes maturing between 2019 and 2021; the '6' recovery rating indicates S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. "The stable rating outlook reflects our expectation that AEPB's operating cash flow and availability under its RBL facility will be sufficient to fund planned capital spending over the next year and that the company will be successful in significantly expanding its production and reserves from initial levels," said Standard & Poor's credit analyst Scott Sprinzen. S&P could reassess its view of AEPB's business risk profile if the company were able to increase its proved reserve base, proved developed percentage, and daily production rate to levels more in line with the 'B+' rated peers. Even so, AEPB's financial risk profile could be a constraint, to the extent S&P expected free cash flow to remain substantially negative, with the deficit being debt financed. The ratings would be jeopardized if the company did not maintain adequate liquidity, with credit availability and operating cash flow more than sufficient to support development-related capital spending at least at maintenance levels. AMERICAN ENERGY: Reports $3.54-Mil. Net Loss in March 31 Quarter ---------------------------------------------------------------- The American Energy Group, Ltd., filed its quarterly report on Form 10-Q disclosing a net loss of $3.54 million on $318,855 of oil and gas royalties revenue for the three months ended March 31, 2014, compared with net income of $42,614 on $298,290 of oil and gas royalties revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.64 million in total assets, $798,801 in total liabilities, and stockholders' equity of $840,975. At March 31, 2014, the Company's current liabilities exceeded its current assets and it has recorded negative cash flows from operations. In addition, the collection of the Company's oil and gas sales receivables have been delayed and are subject to the final outcome of the litigation. The preceding circumstances combine to raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/8ebor4 Westport, Connecticut-based The American Energy Group, Ltd., operates as an energy resource royalty company. It owns an interest in two oil and gas leases located in Southeast Texas; and holds 18% overriding royalty interest in the Yasin Concession located in Pakistan. The Company also holds a 2.5% working interest on oil and gas production acreage in Sanjawi Block located in Baluchistan Province and in Zamzama North Block located in Sindh Province, Pakistan. The Company was formerly known as Belize-American Corp. Internationale and changed its name to The American Energy Group, Ltd. in November 1994. AMERICAN MEDIA: Acquisition Deal no Impact on Moody's 'Caa1' CFR ---------------------------------------------------------------- Moody's Investors Service said American Media, Inc.'s ("American Media," "AMI" or the "company") Caa1 Corporate Family Rating (CFR) and negative outlook are not immediately impacted by the announcement that the company has entered into a non-binding Letter of Intent with certain investors to obtain a controlling interest in AMI and provide a liquidity infusion. 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. American Media reported sales of approximately $342 million for the twelve months ended December 31, 2013. AMERICAN MEDIA: Chatham, Cooperman Offer To Buy Publisher --------------------------------------------------------- Lisa Allen, writing for The Deal, reported that one of American Media Inc.'s largest second-lien noteholders and hedge fund investor Leon Cooperman have entered into a non-binding letter of intent to take over the magazine and tabloid publisher, according to a source familiar with the situation. The Deal related that the source said the buying group includes hedge fund Chatham Asset Management, which owns American Media second-lien debt; Cooperman, the CEO of Omega Advisors Inc.; and Cooperman's Omega Charitable Partnership. The beleaguered publisher of titles such as the National Enquirer, Star, Shape, and Men's Fitness revealed on July 9 that it had entered into a non-binding LOI for a takeover that would provide much-needed liquidity, the Deal further related. Under the deal, the Chatham-Cooperman group would get 100% of American Media's equity for $2 million in cash and the assumption of $513 million in debt, in addition to a pledge to make sure the company has at least $10 million in liquidity for the next 12 months, according to the Deal. The closely held publisher would exercise a "drag-along" provision in its stockholders agreement to execute the exchange, Stephanie Gleason, writing for Daily Bankruptcy Review, reported. About American Media Based in New York, American Media, Inc., publishes celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI manages 14 different Web sites. The company also owns Distribution Services, Inc., the country's #1 in-store magazine merchandising company. American Media, Inc., and 15 units, including American Media Operations, Inc., filed for Chapter 11 protection in Manhattan (Bankr. S.D.N.Y. Case No. 10-16140) on Nov. 17, 2010, with a prepackaged plan. The Debtors emerged from Chapter 11 reorganization in December 2010, handing ownership to former bondholders. The new owners include hedge funds Avenue Capital Group and Angelo Gordon & Co. American Media incurred a net loss of $55.54 million on $348.52 million of total operating revenues for the fiscal year ended March 31, 2013, as compared with net income of $22.29 million on $386.61 million of total operating revenues for the fiscal year ended March 31, 2012. As of Dec. 31, 2013, the Company had $565.84 million in total assets, $692.81 million in total liabilities, $3 million in redeemable noncontrolling interest, and a $129.97 million total stockholders' deficit. * * * As reported by the TCR on Nov. 20, 2013, Standard & Poor's Ratings Services raised its corporate credit rating on Boca Raton, Fla.- based American Media Inc. to 'CCC+' from 'SD'. "The upgrade follows the company's exchange of $94.3 million of its $104.9 million 13.5% second-lien cash-pay notes due 2018 for privately held $94.3 million 10% second-lien notes due 2018," said Standard & Poor's credit analyst Hal Diamond. ANPULO FOOD: Incurs $100K Net Loss in Q1 Ended March 31 ------------------------------------------------------- Anpulo Food, Inc., filed its quarterly report on Form 10-Q disclosing a net loss of $100,827 on $4.38 million of revenue for the three months ended March 31, 2014, compared with a net loss of $152,741 on $4.53 million of revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $23.93 million in total assets, $19.64 million in total liabilities, and stockholders' equity of $4.29 million. The Company has accumulated deficit of $2.17 million, a working capital deficit and cash outflow from operating activities of $9.9 million and $1.92 million at March 31, 2014. This raises substantial doubt about its ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/0DtT7h Anpulo Food, Inc., processes and supplies pork and cured pork products to wholesale customers, including fast food companies, processing factories and school cafeterias. The Company has a processing plant in Hubei, China where it also maintains its headquarters. AMERICAN NATURAL: Has $972K Net Loss in Q1 Ended March 31 --------------------------------------------------------- American Natural Energy Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $972,133 on $575,109 of revenues for the three months ended March 31, 2014, compared with a net loss of $496,275 on $1.01 million of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $19.12 million in total assets, $16.95 million in total liabilities, and stockholders' equity of $2.17 million. The Company currently has a severe shortage of working capital and funds to pay its liabilities. The Company has no current borrowing capacity with any lender. The Company has a working capital deficit of $14.47 million and an accumulated deficit of $27.66 million at March 31, 2014 which leads to substantial doubt concerning the ability of the Company to meet its obligations as they come due. The Company also has a need for substantial funds to develop its oil and gas properties and repay borrowings as well as to meet its other current liabilities. A copy of the Form 10-Q is available at: http://is.gd/SWA6T3 About American Natural American Natural Energy Corporation is a Tulsa, Oklahoma based independent exploration and production company with operations in St. Charles Parish, Louisiana. AMPLIPHI BIOSCIENCES: Incurs $10.14-Mil. Net Loss in First Quarter ------------------------------------------------------------------ AmpliPhi Biosciences Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $10.14 million on $nil of revenue for the three months ended March 31, 2014, compared with a net loss of $1.61 million on $22,000 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $34.35 million in total assets, $58.46 million in total liabilities, and a stockholders' deficit of $24.11 million. The Company has incurred net losses since its inception, has negative operating cash flows and has an accumulated deficit of $394.8 million and $384.7 million as of March 31, 2014 and Dec. 31, 2013, respectively. These circumstances raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/1cH5N9 AmpliPhi Biosciences Corp. is a biopharmaceutical company, which focuses on the development and commercialization of novel bacteriophage-based therapeutics. It also develops an internally generated pipeline of naturally occurring viruses called bacteriophage (Phage) for the treatment of bacterial infection, such as drug-resistant strains of bacteria that are commonly found in the hospital setting. The company's Phage discovery also focuses on acute & chronic lung, sinus and gastrointestinal infections. AmpliPhi Biosciences was founded in March 1989 and is headquartered in Glen Allen, VA. AT EMERALD: Is "Small Business Debtor", Says U.S. Trustee --------------------------------------------------------- The U.S. Trustee has requested that AT Emerald's Chapter 11 case in the District of Nevada be designated as a small business case. Section 101(51)D of the Bankruptcy Code defines a "small business debtor" as a business debtor not engaged in owning or operating real property whose debts do not exceed $2,490,925 in a case where an Official Committee of Unsecured Creditors has not been appointed. The U.S. Trustee asserts that the Debtor meets these qualifications. Nicholas Strozza, Esq., and William B. Cossitt, Esq., filed the motion on behalf of U.S. Trustee Tracy Hope Davis. About AT Emerald AT Emerald LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 14-50331) on March 4, 2014, in Reno, Nevada. The Washoe, Nevada-based company disclosed $200 million in assets and less than $541,000 in liabilities. The company has no real property. Its lone major asset is one emerald valued at $200 million, which is categorized under furs and jewelry. Bankruptcy Judge Bruce T. Beesley is assigned to the case. The Debtor is represented by the law offices of Alan R. Smith in Reno. Anthony Thomas, the managing member, owns 100% of the company's stock. AT EMERALD: Court Approves Joint Administration Request ------------------------------------------------------- Honorable Bruce T. Beesley of the Bankruptcy Court for the District of Nevada has approved AT Emerald's request to jointly administer its Chapter 11 case with that of Anthony Thomas and Wendi Thomas. Holly E. Estes, Esq., appeared on behalf of the Debtor. No other parties appeared or filed objections. The lead case shall be Anthony Thomas and Wendi Thomas, case No. 14-50333. About AT Emerald AT Emerald LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 14-50331) on March 4, 2014, in Reno, Nevada. The Washoe, Nevada-based company disclosed $200 million in assets and less than $541,000 in liabilities. The company has no real property. Its lone major asset is one emerald valued at $200 million, which is categorized under furs and jewelry. Bankruptcy Judge Bruce T. Beesley is assigned to the case. Holly E. Estes, Esq., at the Law Offices of Alan R. Smith of Reno, NV represents the Debtor. Anthony Thomas, the managing member, owns 100% of the company's stock. ATP OIL: Case Converted to Chapter 7 Liquidation ------------------------------------------------ Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, issued an order on June 26 converting ATP Oil & Gas Corporation's Chapter 11 case to one under Chapter 7 of the Bankruptcy Code. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, ATP's liquidating Chapter 11 plan was unusual because it didn't promise full payment to creditors with priority claims who are entitled to payment in full. Instead, the plan depended on consent from priority creditors to accept less than what they're owed, Mr. Rochelle noted. At least one priority creditor refused to go along, prompting the company to make an oral request for the Chapter 7 conversion, Mr. Rochelle related. ATP's $1.5 billion in 11.875 percent second-lien notes traded at 2:10 p.m. on June 27 for 1.5 cents on the dollar, the Bloomberg report said, citing Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About ATP Oil Houston, Texas-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A seven-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. BEAMZ INTERACTIVE: Has $1.16-Mil. Net Loss in First Quarter ----------------------------------------------------------- Beamz Interactive, Inc., filed its quarterly report on Form 10-Q disclosing a net loss of $1.16 million on $68,098 of net sales for the three months ended March 31, 2014, compared with a net loss of $818,746 on $50,272 of net sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.14 million in total assets, $5.26 million in total liabilities, and a stockholders' deficit of $4.12 million. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs, which raises doubts about the ability of the Company to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/0lEejP Beamz Interactive, Inc., is a recreational musical instrument and music entertainment product that enables people of all ages and skill levels to have fun creating and playing music. CARDINAL RESOURCES: Incurs $188K Net Loss in First Quarter ---------------------------------------------------------- Cardinal Resources Inc. filed its quarterly report on Form 10-Q disclosing a net loss of $188,029 on $295,420 of sales for the three months ended March 31, 2014, compared with a net loss of $134,711 on $140,842 of sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.25 million in total assets, $2.68 million in total liabilities, and a stockholders' deficit of $1.43 million. As of March 31, 2014, the Company had an accumulated deficit and a working capital deficit. In addition, the Company currently has limited liquidity and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These factors raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/T3LPZ0 Cardinal Resources Inc. is engaged in environmental and engineering services business. The Company?s services range from design of custom systems to water distribution systems, from regulatory considerations, to finding and assessing appropriate water supplies. The Company has provided remediation services in active and inactive industrial, mining, and waste disposal sites throughout the United States and around the world. The Company incorporates green infrastructure techniques that use natural systems or engineered systems to mimic natural landscapes to capture, clean, and reduce storm water runoff. The Company provides water supply service from concept through implementation. CAROLINA CREATIONS: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Carolina Creations, Inc. dba J.T. Carolina Creations (by certificate of authority in NC) 239 Koolabrew Dr Calabash, NC 28467 Case No.: 14-03937 Chapter 11 Petition Date: July 9, 2014 Court: United States Bankruptcy Court Eastern District of North Carolina Judge: Hon. Randy D. Doub Debtor's Counsel: Stephen G Inman, Esq. MURRAY, CRAVEN & INMAN, L.L.P. P. O. Drawer 53007 Fayetteville, NC 28305-3007 Tel: 910 483-4990 Fax: 910 483-6822 Email: sgi@mcilaw.com Total Assets: $342,302 Total Liabilities: $4.60 million The petition was signed by John R. Soucek, president. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/nceb14-03937.pdf CASH STORE: Gordon Reykdal & Ed McLelland Step Down as Directors ---------------------------------------------------------------- The Cash Store Financial Services Inc. on July 7 disclosed that Gordon Reykdal and Ed McClelland have resigned from their positions as Directors of the Company and associated entities. About Cash Store Financial Headquartered in Edmonton, Alberta, Cash Store Financial Services Inc. (TSX: CSF) is a lender and broker of short-term advances and provider of other financial services in Canada. Cash Store Financial operates 510 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 27 branches in the United Kingdom. Cash Store Financial is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States. Cash Store Financial reported a net loss and comprehensive loss of C$35.53 million for the year ended Sept. 30, 2013, as compared with a net loss and comprehensive loss of C$43.52 million for the year ended Sept. 30, 2012. As of Sept. 30, 2013, the Company had C$164.58 million in total assets, C$165.90 million in total liabilities and a C$1.32 million shareholders' deficit. CASPIAN SERVICES: Reports $10.96-Mil. Net Loss for First Quarter ---------------------------------------------------------------- Caspian Services, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $10.96 million on $4.56 million of total revenues for the three months ended March 31, 2014, compared with a net loss of $2.72 million on $8.98 million of total revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $64.67 million in total assets, $90.61 million in total liabilities, and a stockholders' deficit of $25.94 million. Its ability to continue as a going concern is dependent upon, among other things, its ability to (i) successfully restructure the Company's financial obligations to EBRD and Investor, (ii) increase its revenues and improve the Company's operating results to a level that will allow it to service its financial obligations, and/or (iii) attract other significant sources of funding. Uncertainty as to the outcome of each of these events raises substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/w0X3Xz About Caspian Services Headquartered in Salt Lake City, Caspian Services, Inc., was incorporated under the laws of the state of Nevada on July 14, 1998. Since February 2002 the Company has concentrated its business efforts to provide diversified oilfield services to the oil and gas industry in western Kazakhstan and the Caspian Sea, including providing a fleet of vessels, onshore, transition zone and marine seismic data acquisition and processing services and a marine supply and support base in the port of Bautino, in Bautino Bay, Kazakhstan. Caspian Services incurred a net loss of $11.82 million on $33.08 million of total revenues for the year ended Sept. 30, 2013, as compared with a net loss of $15.95 million on $24.74 million of total revenues during the prior fiscal year. Haynie & Company, P.C., in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2013. The independent auditors noted that a Company creditor has indicated that it believes the Company may be in violation of certain covenants of certain substantial financing agreements. The financing agreements have acceleration right features that, in the event of default, allow for the loan and accrued interest to become immediately due and payable. As a result of this uncertainty, the Company has included the note payable and all accrued interest as current liabilities at Sept. 30, 2013. At Sept. 30, 2013, the Company had negative working capital of approximately $66,631,000. Uncertainty as to the outcome of these factors raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning To help the Company meet its additional funding obligations to construct the marine base, in 2008 the Company entered into two facility agreements pursuant to which the Company received debt funding of $30,000. In June and July 2011, Mr. Bakhytbek Baiseitov (the "Investor") acquired the two facility agreements. In September 2011 the Company issued the Investor two secured promissory notes, a Secured Non-Negotiable Promissory Note in the principal amount of $10,800 and a Secured Convertible Consolidated Promissory Note in the principal amount of $24,446 in connection with restructuring the facility agreements. During December 2012 the Company, the European Bank for Reconstruction and Development and the Investor outlined the terms of a potential restructuring of the Company's financial obligations to EBRD and the Investor in a non-binding term sheet. Throughout the fiscal year the parties have worked to negotiate definitive agreements pursuant to the terms set out in the Term Sheet. Subsequent to the fiscal year end, negotiations between EBRD, the Investor and the Company to restructure the Company's financial obligations pursuant to the terms of the Term Sheet stalled and have been discontinued. However, the Company has engaged in new discussions with EBRD regarding a possible restructuring of its financial obligations to EBRD. "Should EBRD or the Investor determine to accelerate the Company's repayment obligations to them, the Company currently has insufficient funds to repay its obligations to EBRD or the Investor, individually or collectively, and would be forced to seek other sources of funds to satisfy these obligations. Given the Company's current and near-term anticipated operating results, the difficult credit and equity markets and the Company's current financial condition, the Company believes it would be very difficult to obtain new funding to satisfy these obligations. If the Company is unable to obtain funding to meet these obligations EBRD or the Investor could seek any legal remedies available to them to obtain repayment, including forcing the Company into bankruptcy, or in the case of the EBRD loan, which is collateralized by the assets, including the marine base, and bank accounts of Balykshi and CRE, foreclosure by EBRD on such assets and bank accounts. The Company has also agreed to collateralize the Investor's Notes with non-marine base related assets," according to the Company's 2013 Annual Report. CCS INTERMEDIATE: S&P Assigns 'B' Rating to $335MM 1st-Lien Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to CCS Intermediate Holdings LLC. The outlook is stable. At the same time, S&P's assigned its 'B' issue-level rating and '3' recovery rating to CCS' proposed first-lien credit facility, which consists of a $335 million first lien term loan and $50 million revolver. S&P also assigned its 'CCC+' rating and '6' recovery rating to its proposed $170 million second lien term loan. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%) recovery in the event of default payment, while the '6' recovery rating reflects S&P's expectation for negligible (0% to 10%) recovery in the same scenario. CCS and CHC have agreed to merge in a transaction financed with a $555 million senior secured credit facility. The company intends to use the proceeds to repay each company's respective existing debt, pay a one-time dividend to shareholders, fund transaction fees and expenses, and add cash to the balance sheet. The combined entity generated pro forma trailing-12-month revenues of $753 million at quarter ended March 31, 2014. "Our ratings on CCS reflect our assessment of the company's narrow market, slow growth potential for outsourced correctional facility health care, and the company's high leverage," said credit analyst Lucy Patricola. "Additional risks include contract pricing and thin operating margins. We assess CCS's business risk profile as "vulnerable" and its financial risk profile as "highly leveraged." As a result of S&P's expectations of modest free cash flow generation in 2014 and continued improvement in subsequent years, S&P has assigned a one-notch upward adjustment for the comparable rating analysis, as CCS' cash flow prospects are more consistent with other issuers in the 'B' category." S&P's stable rating outlook reflects its expectation that low- single-digit organic revenue growth and relatively stable EBITDA margins will support the generation of moderate free operating cash flow over the next two years. Downside Scenario S&P could lower the rating if CCS is unable to successfully integrate CHS, resulting in EBITDA that is lower than S&P's expectation. In this scenario, S&P thinks free cash flow would be negligible. S&P estimates this could occur if EBITDA margins contract by 120 bps below its 2014 expectation. Upside Scenario A higher rating is possible if S&P's assessment of the company's business risk profile improves. However, S&P do not see this as likely within one year given the limited growth prospects in the industry, thin operating margins, and the high risk imbedded in contract negotiations. Conversely, S&P could consider a higher rating if CCS demonstrated a commitment to sustaining adjusted leverage below 5x. In this scenario, S&P would need to see EBITDA generation nearly double from our 2014 expectations. CCS INTERMEDIATE: Moody's Assigns 'B2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and B3-PD Probability of Default Rating to CCS Intermediate Holdings, LLC, an entity formed by the merger of Correct Care Solutions, LLC. and the parent company of Correctional Healthcare Companies ("CHC"), Jessamine Healthcare, Inc. Moody's also assigned B1 (LGD 3) ratings to the company's proposed senior secured first lien credit facilities, including a $335 million senior secured first lien term loan and a $50 million senior secured first lien revolver. At the same time, Moody's assigned a Caa2 (LGD 5) rating to the company's proposed $170 million senior secured second lien term loan. This is the first time Moody's has publicly rated CCS Intermediate Holdings, LLC. The outlook for the ratings is stable. The proceeds from the senior secured credit facilities will be used in connection with the merger to refinance existing debt at both companies, fund a one-time $170 million special dividend to existing shareholders, and pay transaction fees and expenses. All ratings are subject to review of final documentation. Moody's assigned the following ratings: CCS Intermediate Holdings, LLC: Corporate Family Rating at B3 Probability of Default Rating at B3-PD $50 million senior secured first lien revolving credit facility at B1 (LGD 3) $335 million senior secured first lien term loan at B1 (LGD 3) $170 million senior secured second lien term loan at Caa2 (LGD 5) Ratings Rationale CCS' B3 Corporate Family Rating reflects the company's high financial leverage, modest interest coverage, and business risks associated with the correctional healthcare segment. The rating also reflects event risk associated with the company's aggressive financial policy and acquisition strategy, and the substantial integration and execution risks inherent in the consummation of the CHC transaction, the largest acquisition in the company's history. However, the ratings are supported by the sound strategic rationale for the merger, given the combined company's enhanced scale and good diversity across customers, geographies, and business segments, as well as the company's strong market position in the more attractive public jails segment. Moody's expects the combination to generate significant cost savings over the next 12 to 18 months, while generating positive free cash flow, as the business is characterized by minimal bad debt expense and modest capital investment needs. Pro forma for the transaction, adjusted debt to EBITDA was approximately 8 times on a Moody's adjusted basis for the twelve months ended March 31, 2014, including 75% of management's targeted acquisition cost synergies. The stable outlook reflects Moody's expectation that financial leverage will improve over the next 12 to 18 months following recent contract wins, good growth opportunities within the public jails segment, and realized cost savings resulting from the merger with CHC. However, the outlook reflects substantial integration and execution risks inherent in consummating the largest merger in the company's history. The ratings could be downgraded if top-line pressure accelerates, if leverage increases, or if operating margins, cash flow, or sources of liquidity deteriorate. In addition, the ratings could be lowered if the company engages in material debt-financed acquisitions or shareholder initiatives. The ratings could be upgraded upon successful completion of the merger, and realization of synergies such that top-line growth improves and credit metrics, including free cash flow to debt and debt to EBITDA, are sustained above the 5% and below 5.5 times , respectively. The principal methodology used in this rating was the Global Business & Consumer Service Industry 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. Based in Nashville, Tennessee, CCS Intermediate Holdings, LLC ("CCS") is a leading provider of contract healthcare services (including medical, dental, and behavioral health services) to patients in correctional facilities owned or operated by state and local government, as well as private institutions. The company is owned by private equity firms, Audax Private Equity, Frazier Healthcare, and GTCR, as well as management and other co- investors. For the twelve months ended March 31, 2014, the combined company generated net revenues of approximately $646 million. CHINA BAK: Posts $9.26-Mil. Net Loss in Q1 Ended March 31 --------------------------------------------------------- China BAK Battery, Inc., filed its quarterly reported a net loss of $9.26 million on $34.28 million of net revenues for the three months ended March 31, 2014, compared with a net loss of $19.69 million on $44.07 million of net revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $329.22 million in total assets, $385.68 million in total liabilities, and a stockholders' deficit of $56.46 million. The Company has net liabilities, a working capital deficiency, accumulated deficit from recurring net losses incurred for the current and prior years and significant short-term debt obligations maturing in less than one year as of March 31, 2014. The Company has been suffering severe cash flow deficiencies. Because the Company defaulted on repayment of loans from Bank of China in August 2013, the Company experiencing and, the Company believes, will continue to experience significant difficulties to renew the Company's credit facilities or refinance loans from banks. These factors raise substantial doubts about its ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q filed with the U.S. Securities and Exchange Commission is available at: http://is.gd/I0p92n China BAK Battery, Inc. is a lithium-based battery cells manufacturer based in Shenzhen, China. The Company produces battery cells that are the principal component of rechargeable batteries used to power smart phones, netbook computers, portable consumer electronics, and electric vehicles. CHINA GINSENG: Files Amendment to Q4 2013 Report ------------------------------------------------ China Ginseng Holdings Inc. filed an amendment to its quarterly report on Form 10-Q. A copy of the Form 10-Q/A1 is available at http://is.gd/1wxrkB The Company disclosed a net loss of $514,440 on $2.48 million of revenues for the three months ended Dec. 31, 2013, compared to a net loss of $256,860 on $1.69 million of revenues for the same period in 2012. The Company's balance sheet at Dec. 31, 2013, showed $11.86 million in total assets, $13.78 million in total liabilities, and stockholders' deficit of $1.92 million. The Company had net losses of $770,322 (restated) and $1.65 million for the six months ended Dec. 31, 2013 and 2012, respectively, and an accumulated deficit of $10.18 million (restated) as of Dec. 31, 2013 and there are existing uncertain conditions the Company foresees relating to its ability to obtain working capital and operate successfully. These matters raise substantial doubt about the Company's ability to continue as a going concern, according to a regulatory filing. About China Ginseng Changchun City, China-based China Ginseng Holdings, Inc., conducts business through its four wholly-owned subsidiaries located in China. The Company has been granted 20-year land use rights to 3,705 acres of lands by the Chinese government for ginseng planting and it controls, through lease, approximately 750 acres of grape vineyards. However, recent harvests of grapes showed poor quality for wine production which indicates that the vineyards are no longer suitable for planting grapes for wine production. Therefore, the Company has decided not to renew its lease for the vineyards with the Chinese government upon expiration in 2013 and, going forward, it intends to purchase grapes from the open market in order to produce grape juice and wine. CHINA GINSENG: Has $674K Net Loss in March 31 Quarter ----------------------------------------------------- China Ginseng Holdings Inc. disclosed in a regulatory filing in the U.S. that it had a net loss of $674,564 on $nil of revenues for the three months ended March 31, 2014, compared with a net loss of $1.42 million on $497,943 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $11.6 million in total assets, $14.31 million in total liabilities, and a stockholders' deficit of $2.7 million. The Company had an accumulated deficit of $11.11 million as of March 31, 2014 and there are existing uncertain conditions the Company foresees relating to its ability to obtain working capital and operate successfully. These matters raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q filed with the U.S. Securities and Exchange Commission is available at http://is.gd/g18lXi About China Ginseng Changchun City, China-based China Ginseng Holdings, Inc., conducts business through its four wholly-owned subsidiaries located in China. The Company has been granted 20-year land use rights to 3,705 acres of lands by the Chinese government for ginseng planting and it controls, through lease, approximately 750 acres of grape vineyards. However, recent harvests of grapes showed poor quality for wine production which indicates that the vineyards are no longer suitable for planting grapes for wine production. Therefore, the Company has decided not to renew its lease for the vineyards with the Chinese government upon expiration in 2013 and, going forward, it intends to purchase grapes from the open market in order to produce grape juice and wine. CHINA NATURAL: Bankruptcy Converted To Ch. 7 -------------------------------------------- Law360 reported that a New York bankruptcy judge pushed China Natural Gas Inc.?s Chapter 11 case into a liquidation, saying a trustee might have more luck than creditors at monetizing the unresponsive Chinese natural gas pipeline operator?s assets. According to the report, U.S. Bankruptcy Judge Sean H. Lane?s decision converting the case to a Chapter 7 proceeding aligned with the wishes of the U.S. trustee?s office and the hedge funds that forced CNG into involuntary bankruptcy in February 2013. Ruling from the bench, the judge said the relief was appropriate in light of the debtor?s scant progress toward an asset sale and its apparent unwillingness to pursue a reorganization under Chapter 11, the report related. About China Natural Headquartered in Xi'an, Shaanxi Province, P.R.C., China Natural Gas, Inc., was incorporated in the State of Delaware on March 31, 1999. The Company through its wholly owned subsidiaries and variable interest entity, Xi'an Xilan Natural Gas Co., Ltd., and subsidiaries of its VIE, which are located in Hong Kong, Shaanxi Province, Henan Province and Hubei Province in the People's Republic of China ("PRC"), engages in sales and distribution of natural gas and gasoline to commercial, industrial and residential customers through fueling stations and pipelines, construction of pipeline networks, installation of natural gas fittings and parts for end-users, and conversions of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles at 0ptmobile conversion sites. On Feb. 8, 2013, an involuntary petition for bankruptcy was filed against the Company by three of the Company's creditors, Abax Lotus Ltd., Abax Nai Xin A Ltd., and Lake Street Fund LP (Bankr. S.D.N.Y. Case No. 13-10419). The Petitioners claimed that they have debts totaling $42,218,956.88 as a result of the Company's failure to make payments on the 5% Guaranteed Senior Notes issued in 2008. Adam P. Strochak, Esq., at Weil, Gotshal & Manges, LLP, in Washington, D.C., represents the Petitioners as counsel. China Natural Gas, Inc., sought dismissal of the involuntary petition but in July 2013, it consented to the entry of an order for relief under Chapter 11 of the U.S. Code. China Natural Gas employed Warren Street Global Inc. and designated J. Gregg Pritchard as chief restructuring officer. It employed as bankruptcy counsel Schiff Hardin LLP's Louis T. DeLucia, Esq., and Alyson M. Fiedler, Esq. As of Sept. 30, 2013, the Company had consolidated assets of $307,496,948 and liabilities of $87,714,323. CHINA PEDIATRIC: Posts $1.53-Mil. Net Loss in Q1 Ended March 31 --------------------------------------------------------------- China Pediatric Pharmaceuticals, Inc., filed its quarterly report on Form 10-Q disclosing a net loss of $1.53 million on $1.79 million of sales for the three months ended March 31, 2014, compared to a net loss of $4.74 million on $1 million of sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $10.16 million in total assets, $542,201 in total liabilities, and stockholders' equity of $9.62 million. The Company had accumulated deficit of $8.82 million and $7.29 as at March 31, 2014 and Dec. 31, 2013. These create an uncertainty about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/3YKUxn Located in Xi'an, Shaanxi Province, People's Republic of China, China Pediatric Pharmaceuticals, Inc., is engaged in the business of manufacturing and marketing of over-the-counter and prescription pharmaceutical products for the Chinese marketplace as treatment for a variety of disease and conditions. CICERO INC: Has $723K Net Loss for Q1 Ended March 31 ---------------------------------------------------- Cicero Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $723,000 on $539,000 of total operating revenue for the three months ended March 31, 2014, compared with a net loss of $1.01 million on $503,000 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $3.24 million in total assets, $12.58 million in total liabilities, and a stockholders' deficit of $9.33 million. The Company has incurred an operating loss of approximately $3.21 million for the year ended Dec. 31, 2013, and has a history of operating losses. For the three months ended March 31, 2014, the Company had a working capital deficiency of $6.62 million as of March 31, 2014. These factors raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/2rNjhv About Cicero Inc. Cary, N.C.-based Cicero, Inc., provides business integration software solutions and also provides technical support, training and consulting services as part of its commitment to providing customers with industry-leading solutions. The Company focuses on the customer experience management market with emphasis on desktop integration and business process automation with its Cicero XM(TM) products. Cicero XM enables the flow of data between different applications, regardless of the type and source of the application, eliminating redundant entry and costly mistakes. The Company has extended the maturity dates of several debt obligations that were due in 2011 to 2012, to assist with liquidity and may attempt to extend these maturities again if necessary. Despite the recent additions of several new clients, the Company continues to struggle to gain additional sources of liquidity on terms that are acceptable to the Company. Cicero reported a net loss applicable to common stockholders of $3.33 million on $2.19 million of total operating revenue for the year ended Dec. 31, 2013, as compared with a net loss applicable to common stockholders of $315,000 on $5.99 million of total operating revenue in 2012. The Company's balance sheet at Dec. 31, 2013, showed $4.19 million in total assets, $12.80 million in total liabilities and a $8.60 million total stockholders' deficit. Cherry Bekaert LLP, in Raleigh, North Carolina, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficiency as of Dec. 31, 2013. CITGO PETROLEUM: Moody's Assigns 'B1' Rating on $650MM Term Loan ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating (LGD 3, 34%) to CITGO Petroleum Corporation's proposed $650 million Term Loan B facility due 2021 and $650 million of senior secured notes due 2021/2022. The new Term Loan B and senior secured notes are part of $1.3 billion in new financing that CITGO expects to close in July 2014. The refinancing includes a new $1 billion revolving credit facility due 2019 which is rated B1 (LGD 3, 34%). Proceeds from the financing were used to repay $667 million of maturing credit facilities and roughly $300 million of secured notes. The company will also pay a $300 million dividend to its parent company Petroleos de Venezuela (PDVSA). The new $1 billion revolver will remain undrawn as a source of liquidity for CITGO except for $11 million in letters of credit. The outlook for the ratings is negative. Ratings Rationale CITGO's ratings reflect its significant size and refinery complexity, strategic access to diversified crude supplies, strong logistics and marketing flexibility, good safety record, and a strong collateral package to creditors. Moody's notes that underlying the CITGO's B1 CFR is a baseline credit assessment of baa2. CITGO is wholly-owned subsidiary of PDVSA (Caa1 negative) and, as a government-related issuer, PDVSA's ratings reflect a high level of imputed government support and default correlation between the two entities. Any future negative ratings action affecting the government's ratings or outlook would be likely to result in a downgrade of PDVSA's ratings and in turn could affect CITGO's rating and outlook. CITGO's liquidity has improved as a result of the new financings, with the upsized revolver extended to 2019. Creditors also will benefit from a collateral package that includes all three of CITGO's large-scale refineries, its inventories, and its accounts receivable. Collateral coverage, assuming a fully drawn revolving credit facility, is estimated at 5.1x total debt. All of the creditors rank pari passu. CITGO Petroleum Corporation is headquartered in Houston, Texas and operates three large complex refineries in Texas, Louisiana, and Illinois. The company has total crude oil refining capacity of 749 MBPD and a weighted average Nelson complexity of 13. For the twelve months ended March 31, 2014 the company generated $41 billion of revenues and had total assets of $8 billion. The principal methodology used in this rating was the Global Refining and Marketing 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 and Government-Related Issuers: Methodology Update published in July 2010. CLEARWATER SEAFOODS: Moody's Affirms 'B2' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service revised Clearwater Seafoods Limited Partnership's ratings outlook to positive and affirmed the company's B2 corporate family rating ("CFR"), B3-PD probability of default rating, B1 senior secured debt rating, and SGL-3 speculative grade liquidity rating. "The outlook change to positive recognizes Clearwater's strengthening operating performance and increased potential for a ratings upgrade within 18 months given expectations for improved credit metrics," said Peter Adu, Moody's lead analyst for Clearwater. Ratings Affirmed: Corporate Family Rating, B2 Probability of Default Rating, B3-PD C$75M Revolving Credit Facility due 2018, B1 (LGD2, 29%) from (LGD2, 28%) C$30M first lien term loan A due 2018, B1 (LGD2, 29%) from (LGD2, 28%) C$45M delayed draw first lien term loan A due 2018, B1 (LGD2, 29%) from (LGD2, 28%) US$200M first lien term loan B due 2019, B1 (LGD2, 29%) from (LGD2, 28%) Speculative Grade Liquidity Rating, SGL-3 Outlook: Changed to Positive from Stable Ratings Rationale Clearwater's B2 CFR primarily reflects its small scale relative to peers in the protein and agriculture industry, exposure to exogenous factors such as foreign currency fluctuations, weather patterns, foreign trade disputes and regulation, and expectations that its growth aspirations could increase leverage (adjusted Debt/EBITDA was 4.1x at LTM Q1/14). The rating considers the company's vertically integrated structure, its ownership of solid quotas that create barriers to entry, attractive long term growth prospects in the premium shellfish seafood industry, supported by growing demand from emerging markets and good geographic and customer diversity. Moody's considers Clearwater's liquidity as adequate, reflected by the SGL-3 rating. This is supported by cash of $43 million at Q1/14 and about $65 million of availability under its $75 million revolving credit facility that matures in 2018. These sources are sufficient to cover annual term loan amortizations of about $5 million. Moody's expects Clearwater's free cash flow for fiscal 2014 to be negative $35 million due to higher capital expenditures for a clam vessel. Clearwater is subject to a total leverage covenant which Moody's expects will provide cushion over 20% through the next 4 to 6 quarters. Clearwater has limited ability to generate liquidity from asset sales as its credit facilities are secured by liens on all assets of the company and its material subsidiaries. The outlook is positive because Moody's expects the company to be able to manage its earnings volatility and improve its credit metrics further through the next 12 to 18 months. A ratings upgrade will require Clearwater to maintain ample liquidity with consistently positive annual free cash flow generation, and sustain Debt/EBITDA below 4x. Clearwater's ratings could be downgraded if operating results soften such that adjusted Debt/EBITDA rises above 5x, or free cash flow remains negative. Significant deterioration in liquidity, possibly caused by debt- funded acquisitions could also lead to a downgrade. The principal methodology used in this rating was the Global Protein and Agriculture Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Clearwater Seafoods Limited Partnership is a vertically-integrated harvester, processor, and distributor of premium shellfish. Revenue for the last twelve months ended March 31, 2014 was C$398 million. The company is headquartered in Bedford, Nova Scotia, Canada. COLOR STAR: Barrier Blocks Approval of Settlement With Regions -------------------------------------------------------------- NexBank Securities, Inc., dba NexBank Capital Advisors, fka Barrier Advisors asks the Hon. Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas to deny Color Star Growers of Colorado, Inc.'s motion for approval of compromise and settlement of the Debtors' claims against their pre-petition lenders, Regions Bank, Comerica Bank, and MCG Capital Corporation. As reported by the Troubled Company Reporter on June 25, 2014, the Debtor, the Lenders, and the Committee of Unsecured Creditors announced a proposed global settlement. Under the terms of the proposed settlement, the Lenders will, among other things, allow $750,000 of the Debtor's cash collateral to be used solely for allowed administrative expenses. In exchange, the Debtor will provide full releases to the Lenders. Barrier claims that the Debtors fail to articulate what claims the Debtors have against the Lenders, the likelihood of success on the merits of the claims, or the potential value to the estates of the claims if they were to be pursued. Barrier believes that the reason this information is not disclosed in the Settlement Motion is because throughout the Chapter 11 cases, the discovery sought by the Debtors and the Committee has been delayed, frustrated and stalled by the Lenders, in particular, Regions. The Debtors, according to Barrier, have not valued the claims that they have against each of the Lenders, and cannot do so because, upon information and belief, every effort by the Debtors and the Committee to obtain reasonable discovery into the claims being settled has been sidestepped by the Lenders. The motions seeking issuance of subpoenas for the Rule 2004 Examinations, and the requests for court orders granting the examinations have been continuously delayed and adjourned. Barrier has served upon each of the Debtors, the Committee, Regions and MCG Barrier's first request for production of documents to compel the production and disclosure of the relevant information necessary to assess the facts supporting the Settlement. In addition, Barrier intends to issue subpoenas, including to the Debtors and the Committee, seeking the testimony of their respective representatives and counsel at the hearing on the Settlement Motion. By July 8, 2014, the Debtors must: (i) file and serve an affidavit or an unsworn declaration under penalty of perjury recommending settlement approval under the case law guidelines and conforming to Local Bankruptcy Rule 9019(d); (ii) file and serve a witness and exhibit list with respect to the compromise motion, and provide to counsel for Barrier copies of all items listed on the exhibit list; (iii) provide a copy of the settlement agreement to counsel for Barrier; and (iv) provide to counsel for Barrier a list of the Debtors' known potential claims that they may have against the Lenders and the potential defenses the Lenders could assert in response to those claims. On July 10, 2014, any party, other than the Debtors, that intends to present evidence and witnesses at the July 18 hearing must: (a) file and serve a witness and exhibit list with respect to the compromise motion; and (b) provide to counsel for the Debtors, the Committee, the Lenders and Barrier, copies of all items listed on the exhibit list. On July 16, 2014, Barrier, the Debtors, the Lenders, and the Committee, may take the deposition, in connection with the compromise motion, of any person listed on a witness and exhibit list. An evidentiary hearing on the Debtors' Settlement Motion will be held on July 18, 2014, at 10:00 a.m. (Central). The hearing on Barrier's motion requesting that the Court continue the hearing on the Debtors' motion was previously set for July 3, 2014 at 9:30 a.m. On July 2, 2014, Barrier asked the Court to continue the July 14, 2014 hearing until such time as the discovery requested by Barrier is completed or at a minimum 60 days from the hearing on the Settlement Motion. To the extent the Court would deny that request, Barrier asked the Court to conduct the July 14 hearing as an evidentiary hearing so that the Court can consider evidence in support of and in opposition to the Settlement Motion. Barrier is represented by: Michael D. Warner, Esq. Cole, Schotz, Meisel, Forman & Leonard, P.A. 301 Commerce Street, Suite 1700 Fort Worth, TX 76102 Tel: (817) 810-5250 Fax: (817) 810-5255 E-mail: mwarner@coleschotz.com About Color Star Color Star, a grower and wholesaler of flowers and nursery stock with greenhouses and distribution centers in Colorado, Missouri and Texas, filed for Chapter 11 bankruptcy protection in December 2013. Color Star Growers of Colorado, Inc., and two affiliates filed Chapter 11 bankruptcy petitions (Bankr. E.D. Tex. Case Nos. 13- 42959 to 13-42961) on Dec. 15, 2013, in Sherman, Texas. The petitions were signed by Brad Walker, chief restructuring officer. The Debtors estimated assets of at least $10 million and liabilities of at least $50 million. Marcus A. Helt, Esq., and Evan R. Baker, Esq., at Gardere Wynne Sewell LLP, serve as the Debtors' counsel. Simon, Ray & Winikka LLP serves as special conflicts counsel. SSG Advisors, LLC provides investment banking services, and UpShot Services LLC serves as claims, noticing and balloting agent. The Official Committee of Unsecured Creditors appointed in the Debtors' cases retained Gavin/Solmonese, LLC as financial advisors; and Raymond J. Urbanik, Esq., Deborah M. Perry, Esq., Thomas Berghman, Esq., and Isaac J. Brown, Esq., at Munsch Hardt Kopf & Harr, PC as attorneys. COOPER-BOOTH WHOLESALE: SSG Advises on Exit Financing Package ------------------------------------------------------------- SSG Capital Advisors, LLC acted as the investment banker to Cooper-Booth Wholesale Company, L.P., Cooper-Booth Transportation Company, L.P. and Cooper-Booth Management Company, Inc. in the placement of an exit financing package which enabled the Company to refinance existing indebtedness and successfully exit Chapter 11 through a Plan of Reorganization. The transaction closed in June 2014. CBW is one of the top 20 convenience store wholesale distributors in the United States and serves retailers in the Mid-Atlantic region. The family-owned Company was founded in 1865 and is based in Mountville, PA. Historically, CBW was a profitable operation. In May 2013, the Company learned that a customer located in Virginia was smuggling Virginia stamped cigarettes into New York. As part of an investigation by the federal government, a seizure warrant was issued against the Company's primary operating bank account, putting a freeze on the account and leaving CBW unable to access funds for day-to-day operations. In reaction to the seizure warrant, the Company's existing lender declared a default and immediately terminated the Company's line of credit. After evaluating a number of strategic options to address the seizure warrant, CBW determined that the best alternative was to file for Chapter 11 to protect its assets and provide time to reorganize and find a buyer for the business or secure financing. SSG was retained as CBW's investment banker to find a solution for the Company to exit bankruptcy, including a sale of substantially all of the Company's assets or exit financing resulting in a plan of reorganization. SSG conducted a comprehensive marketing process which resulted in a wide range of potential buyers, including multiple strategic and financial parties interested in operating CBW as a going concern business. However, in November 2013, the Company settled the seizure warrant investigation with the federal government providing CBW the possibility to refinance existing debt and retain ownership of the business. SSG immediately commenced a financing process, resulting in multiple competitive term sheets. The exit financing of $35 million enabled CBW to confirm a Plan of Reorganization that paid all creditors in full plus interest. SSG's knowledge of the industry and flexibility in running concurrent sales and financing processes enabled the Company to continue as a going concern and maintain ownership for the family. Other professionals who worked on the transaction include: * Aris J. Karalis, Camille Spinale, and Dustin G. Kreider of Maschmeyer Karalis P.C., counsel to Cooper-Booth Wholesale Company, L.P.; * Michael DuFrayne, Robert Agarwal and Geoffrey M. DuFrayne of Executive Sounding Board Associates, LLC, financial advisor to Cooper-Booth Wholesale Company, L.P.; * Morton R. Branzburg and Richard M. Beck of Klehr Harrison Harvey Branzburg, LLP, counsel to the Unsecured Creditors Committee; * Claudia Z. Springer, Derek J. Baker and Brian M. Schenker of Reed Smith, LLP, counsel to the Senior Lender; * Karen Lee "Kitt" Turner and Alan I. Moldoff of Eckert Seamans Cherin & Mellott, LLC, counsel to the Bonding Insurer; * Christopher D. Molen, W. Austin Jowers and Maria Danielle Merritt of King & Spalding, counsel to the Exit Lender; and, * Andrew F. Lucarelli of Brubaker Connaughton Goss & Lucarelli, LLC, counsel to the Exit Lender. About SSG Capital Advisors, LLC SSG Capital Advisors is an independent boutique investment bank that assists middle-market companies and their stakeholders in completing special situation transactions. The company provides its clients with comprehensive advisory services in the areas of mergers and acquisitions, private placements, financial advisory, financial restructurings and valuations. SSG has a proven track record of closing over 250 transactions in North America and Europe and is one of the leaders in the industry. About Cooper-Booth Wholesale Cooper-Booth Wholesale Company, L.P. and two affiliates sought Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 13-14519) in Philadelphia on May 21, 2013, after the U.S. government seized the Company's bank accounts to recover payments made by a large customer caught smuggling Virginia-stamped cigarettes into New York. Serving the mid-Atlantic region, Cooper is one of the top 20 convenience store wholesalers in the country. Cooper supplies cigarettes, snacks, beverages and other food items from Hershey's, Lellogg's, Bic, and Mars to convenience stores. Cooper has been in the wholesale distribution business since 1865 when the Booth Tobacco Company was incorporated in Lancaster, Pennsylvania. The Company has been family owned and operated for three generations. Aris J. Karalis, Esq., and Robert W. Seitzer, Esq., at Maschmeyer Karalis, P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Executive Sounding Board Associates, Inc., is the financial advisor. SSG Advisors, LLC, serves as investment bankers. Blank Rome LLP represents the Debtor in negotiations with federal agencies concerning the seizure warrant. Cooper-Booth Wholesale Company, L.P., and its affiliates filed a joint disclosure statement in respect of its plan of reorganization dated Feb. 28, 2014. The Plan provides for the reorganization of the Debtors and their continued existence after the Effective Date as Reorganized Debtors. The Plan provides for the payment of 100% of the Allowed Claims in each Class. The funds to make the Distributions required under the Plan will be comprised of cash on hand and the loan proceeds from an exit financing facility, which is a senior credit facility in an aggregate amount of $35 million to be provided by an Exit Financing Lender. This concludes the Troubled Company Reporter's coverage of Cooper- Booth Wholesale Company, L.P., until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. CORINTHIAN COLLEGES: Thousands To Be Affected by Schools Closure ---------------------------------------------------------------- Stephanie Gleason, writing for The Wall Street Journal, reported that Corinthian College Inc.'s decision to shutter a dozen of its Everest schools will affect more than 3,400 students, the for- profit-school operator confirmed on July 7. According to the report, the students will be allowed to complete their education at the schools before they close, or they can transfer to another similar institution. The Journal said $30 million has been set aside to pay students at these campuses that wish to withdraw and request a refund. The schools will continue to operate until there are no more students enrolled. COVENANT SURGICAL: Moody's Assigns B3 CFR & Rates $120MM Notes B3 ----------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and B3-PD Probability of Default Rating to Covenant Surgical Partners, Inc. At the same time, Moody's assigned a B3 rating to Covenant's $120 million senior secured notes due 2019. The outlook is stable. The proceeds will be used to refinance existing debt of about $98 million, for planned future acquisitions, general corporate purposes, and to pay transaction expenses. The following ratings have been assigned: Covenant Surgical Partners, Inc.: Corporate Family Rating at B3 Probability of Default Rating at B3-PD $120 million senior secured notes due 2019 at B3 (LGD 4) The outlook is stable Rating Rationale The B3 Corporate Family Rating reflects Covenant Surgical Partners' small size on both an absolute basis and relative to larger competitors, as well as the company's high pro forma leverage at 7 times, for the LTM period ending March 31, 2014. Furthermore, the rating reflects the risks associated with the company's significant concentration in gastroenterology and ophthalmology at about 68% and its aggressive acquisition strategy. However, Moody's also considers the industry's long-term favorable growth prospects, as many patients and payors prefer the outpatient environment (primarily due to lower cost and better outcomes) for certain specialty procedures. The stable rating outlook reflects Moody's expectation that the company will remain acquisitive and fund acquisitions using a combination of free cash flow and debt, yet delever to around 6 times over the next four quarters. Moody's also anticipates that the company will maintain an adequate liquidity profile. Given the small absolute size and high financial leverage, Moody's does not anticipate an upgrade in the near-term. If over time the company can effectively manage its growth, increase its size and scale, and sustain debt/EBITDA below 6 times, the rating could be upgraded. An upgrade would also have to be supported by a very strong liquidity profile. The rating could be downgraded if revenues and profitability weaken or if the company increases financial leverage as it pursues acquisitions. Additionally, the rating could be lowered if liquidity deteriorates or the company's free cash flow turns negative. The principal methodology used in this rating was the Global Healthcare Service Providers Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Covenant Surgical Partners, Inc. is an owner and operator of freestanding ambulatory surgery centers. Covenant operates 23 single or limited-specialty ambulatory surgery centers across 14 states focused on high volume, lower-risk procedures. CRUMBS BAKE SHOP: Investor Group Eyes Rescue of Cupcake Chain ------------------------------------------------------------- Sara Randazzo, writing for The Wall Street Journal, reported that a group of investors could be ready to save Crumbs Bake Shop, the New York-based cupcake chain that abruptly shut its doors on July 7 and said it was considering filing for bankruptcy. According to the report, Marcus Lemonis, a CNBC reality-show host and chief executive of retailer Camping World, confirmed that he lent Crumbs a "not that substantial" amount of money with plans to further invest and reinvigorate the company. The Journal related that Fischer Enterprises, which lent Crumbs money earlier this year, is also involved in the discussions, Mr. Lemonis said. Shares of Crumbs were up more than 1,000 percent to more than 50 cents, from 3 cents, on July 10 in over-the-counter trading, according to Sydney Ember, writing for The New York Times' DealBook. DAVE & BUSTER'S: S&P Affirms 'B' CCR & Rates $580MM Debt 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Dallas-based restaurant and out-of-home entertainment company Dave & Buster's Inc. The outlook is stable. At the same time, S&P assigned its 'B' issue-level rating and '3' recovery rating to the company's proposed $580 million secured credit facilities. The '3' recovery rating indicates S&P's expectation for meaningful (50% to 70%) recovery in the event of a payment default. S&P based the ratings on proposed terms, which are subject review upon receipt of final documentation. "Dave & Buster's participates in the restaurant and out-of-home entertainment industries, which we believe remains intensely competitive," said credit analyst Andy Sookram. "It is a small- sized company that operates 68 stores. We think the company has pursued a prudent approach to store development, by slowing new store growth during the last U.S. recession and accelerating store openings in the currently improving economy. It has thus far been able to secure attractive geographic locations, which has contributed to its good average unit volumes and profit margins." The stable rating outlook on Dave & Buster's incorporates S&P's expectation that credit metrics will improve in the next year on EBTIDA growth that arises from store growth initiatives. Specifically, S&P expects about a 20- to 30-basis-point improvement in EBITDA margins, leverage of slightly under 5x, and FFO to debt of about 10%. Downside scenario S&P could consider a negative rating action if EBITDA falls by about 15% from negative same-store sales as a result of heightened competitive pressures or poor execution of its store growth initiatives. Under these scenarios, leverage stays above 6x, FFO to debt declines to under 9%, and EBITDA coverage of interest declines to under 2x. Additional downside rating pressures would result from debt-funded dividends. Upside scenario An upgrade is unlikely given the company's elevated debt burden and the ownership structure of the company that could lead to additional debt-funded dividends. Still, an upgrade could occur if S&P revises its assessment of the business risk profile to "fair" if EBITDA grows about 15% and if S&P believes the financial sponsor will not extract another debt-financed dividend from the company. For S&P to believe that another debt-funded dividend will not occur, S&P needs to see a decline in financial sponsor ownership. This, combined with leverage sustained below 5x and FFO to debt above 12%, would likely lead to a reassessment of the company's financial risk profile as "aggressive" and could lead to a one-notch upgrade. DENTAL CARE: A.M. Best Upgrades Finc'l. Strength Rating to 'B+' --------------------------------------------------------------- A.M. Best Co. has upgraded the financial strength rating to B+ (Good) from B (Fair) and the issuer credit rating to "bbb-" from "bb+" of Dental Care Plus, Inc. (DCP) (Cincinnati, OH). The outlook for both ratings has been revised to stable from positive. The rating upgrades reflect DCP's consistent earnings, niche market expansion and the improvement in its capital. DCP delivered favorable earnings in 2013, continuing the trend it developed over the previous two years. The company's underwriting results were favorably impacted by profitability in the self- insured segment, giving DCP the opportunity to expand the development of risk premiums, while adapting to significant changes in its operating environment. Strategically, DCP's management formed alliances with two third-party administrator plans in order to expand the scale of its business and to cross- sell dental and vision products and services to their medical only insurance members. Additionally, the company has greatly expanded its provider network options leading to much broader service geographies. In 2013, DCP initialized its geographic expansion into Indiana, adding to operations already established in Ohio and Kentucky. However the majority of its business development efforts are still being conducted in Ohio and Kentucky and over two-thirds of revenue development is concentrated in Ohio. To accommodate individuals and small groups looking to purchase dental benefits on the exchange, DCP launched DentaTrust (an individual dental product) and DentaSpan (a small group dental product) on the Ohio state-based exchange. Through the addition of accreted earnings and timely capital infusions from the privately held parent, DCP Holding Company, DCP's level of risk-adjusted capital improved sequentially over the past three years. Furthermore, the company has exhibited improved working capital measures, higher risk-based capital balances and substantial improvement in net premium leverage over the past three years. Offsetting factors include DCP's significant competition and its operating in a limited geographic market. DCP operates in a highly competitive business environment, where local and national multiline insurers vie for the profitable dental business. Additionally, DCP's underwriting leverage is considered high when compared to the industry composite. However, this measure of operating capacity has improved steadily over the last four years. Although DCP's capital and surplus has grown significantly over the last several years, it is still considered modest and limits the organization's capacity for stronger business development. A.M. Best believes that positive rating actions are unlikely in the near term. Factors that could lead to negative rating actions include operating losses and weakened risk-adjusted capitalization. DETROIT, MI: Bid To Undo $1.5B Pension Finance Deals Survives ------------------------------------------------------------- Law360 reported that the city of Detroit cleared a hurdle in its attempt to void the sale of $1.45 billion in pension-related debt that hastened its insolvency when a federal judge allowed its lawsuit to proceed claiming the complex bond transactions violated Michigan municipal borrowing law. According to the report, U.S. Bankruptcy Judge Steven Rhodes refused to dismiss claims against two service corporations set up to grease controversial transactions in 2005 and 2006 that were designed to raise money to meet the city?s obligations to its two principal retirement systems. The disputed transactions, the judge said, were ?a significant factor? in Detroit?s slide into Chapter 9, the Law360 reported. Judge Rhodes did let Financial Guaranty Insurance Co., which guaranteed the challenged debt, and individual holders of debt, to intervene in the suit, Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported. 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. DIGITAL REALTY: S&P Affirms 'BB+' Preferred Stock Rating -------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Digital Realty Trust Inc. to stable from negative. At the same time, S&P affirmed its 'BBB' corporate credit rating on the company, its 'BBB' rating on the senior unsecured debt, and its 'BB+' rating on the preferred stock. "Digital has demonstrated improved operating performance in recent quarters," said Standard & Poor's credit analyst Scott Sprinzen. Importantly, while a widening of the gap between lease signings and tenant move-ins had been an issue last year, the gap has narrowed from 18 months in the first quarter of 2013, to five to six months subsequently, which is in line with what occurred in 2012: S&P anticipates that Digital will maintain this level going forward, excluding the impact of build-to-suit developments. Also, while occupancy had declined in recent years, leasing activity has been robust year-to-date, and the company has given guidance -- which S&P views as credible -- that portfolio occupancy will be in the 92% to 93% range at year-end 2014, compared with 92.6% at year-end 2013. Contributing to the trend of lower occupancy had been Digital's speculative property development activity (as well as lease expirations at legacy non- data center assets), but the company is now taking a more conservative approach: the extent to which the development pipeline was preleased increased to 79% as of Dec. 31, 2013, from 48% as of Sept. 30, 2013, and it stood at 90% at March 31, 2014. Moreover, while industry-wide supply has constrained rental rate increases, Digital has benefited from modest sequential improvement to date this year. Digital has not repurchased shares under the $500 million authorization approved by its board last year: S&P do not expect substantial share repurchases within the next two years, except perhaps in conjunction with asset sales (where S&P would anticipate that some debt would also be retired). Nonetheless, debt to EBITDA has increased to date this year to a level S&P views as somewhat aggressive for the rating. Also, the company continues to search for a new permanent CEO, following the resignation of the prior CEO earlier this year: S&P believes this poses some uncertainty regarding Digital's long-range business strategy and financial policies. San Francisco-based Digital is the largest data center REIT, with investment in real estate (before depreciation) of $10.1 billion as of March 31, 2014. The company's "satisfactory" business risk profile is supported by a 131-property portfolio (188 buildings throughout North America, Europe, Asia, and Australia). Apart from its geographic diversity, Digital also has a high degree of tenant diversity, with its top five tenants accounting for about 24% of annualized rent. In addition, its lease expiration schedule is well-staggered, with only 3.8% of net rentable square feet set to expire during the remaining nine months of this year (as of March 31, 2014), 9.1% next year, and 8.0% in 2016. While Digital's first-quarter financial performance is typically seasonally weak, same-store net operating income (NOI) (GAAP basis) grew by a robust 9.5% year-over-year in the first quarter of 2014, albeit this was down from 10.8% growth in the fourth quarter of last year. The outlook on Digital Realty Trust Inc. is stable, based on S&P's expectation of improved occupancy, stable-to-modestly-improving rental rates, a more conservative stance with respect to development, and debt to EBITDA trending lower as operating earnings improve. If the time to reverse higher vacancy levels became protracted, or the company departed from its stated financial policies, heightened financial leverage could result, jeopardizing the rating (with S&P's financial risk profile assessment being revised from "intermediate" to "significant"). In this regard, a key benchmark prompting a downgrade could be debt to EBITDA of greater than 7.5x, or fixed-charge coverage of less than 2.1x. S&P currently views an upgrade as unlikely within the next few years, given its assessment of competitive conditions in the data center property sector, Digital's continuing -- albeit reduced -- appetite for development risk, and the potential for changes in business strategy or financial policies under a new CEO. ECOTALITY INC: 8% Recovery Seen for Unsecured Creditors Under Plan ------------------------------------------------------------------ Electric Transporation Engineering Corporation (dba Ecotality North America), et al., filed with the Bankruptcy Court a Joint Plan of Liquidation and Disclosure Statement on July 1, 2014. The Plan seeks to substantively consolidate the entities into a single entity, and the remaining assets of all of the Debtors will be liquidated in a single pool. The proceeds will then be paid ratably within classes to all of the Debtors' creditors. This objective will be accomplished through the creation of a liquidating trust. The Plan designates and provides for six classes of claims and interests in the Debtors. Class 3 General Unsecured Claims are expected to make a recovery of up to 8% under the Plan. Class 1 Secured Claims and Class 2 Priority Non-Tax Claims have an estimated 100% recovery while Class 4 Intercompany Claims, Class 5 Sec. 510(b) Claims, and Class 6 Equity Interests will have no expected recovery under the Plan. Chief Financial Officer for the Debtors, Susie Herrmann signed the Plan documents. Simultaneous with the Plan filing, the Debtors seek the Bankruptcy Court's conditional approval of the adequacy of the Disclosure Statement to permit them to commence solicitation of votes on the Plan. Furthermore, the Debtors propose the following Plan Confirmation Schedule: Voting Record Date July 15, 2014 Deadline for Plan Filing Supplement Aug. 18, 2014 Voting Deadline Aug. 25, 2014, 5 p.m. Arizona time Final Disclosure Statement and Plan Objection Deadline Aug. 25, 2014 Submission of Voting Report Sept. 3, 2014 Debtors' Reply Deadline Sept. 5, 2014 Disclosure Statement and Confirmation Hearing Sept. 9, 2014 Full-text copies of the Plan documents are available for free at: http://bankrupt.com/misc/ECOtality_DS0701.PDF About Ecotality Inc. Headquartered in San Francisco, California, Ecotality, Inc. (Nasdaq: ECTY) -- http://www.ecotality.com-- is a provider of electric transportation and storage technologies. Ecotality Inc. along with affiliates including lead debtor Electric Transportation Engineering Corp. sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 13-16126) on Sept. 16, 2013, with plans to sell the business at an auction. The cases are assigned to Chief Judge Randolph J. Haines. The Debtors' lead counsel are Charles R. Gibbs, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas; and David P. Simonds, Esq., and Arun Kurichety, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Los Angeles, California. The Debtors' local counsel is Jared G. Parker, Esq., at Parker Schwartz, PLLC, in Phoenix, Arizona. FTI Consulting, Inc. serves as the Debtors' crisis manager and financial advisor. The Debtors' claims and noticing agent is Kurtzman Carson Consultants LLC. Electric Transportation estimated assets of $10 million to $50 million and debt of $100 million to $500 million. Unlike most companies in bankruptcy, Ecotality has no secured debt. It simply ran out of money. There's $5 million owing on convertible notes, plus liability on leases. Part of pre-bankruptcy financing took the form of a $100 million cost-sharing grant from the U.S. Energy Department. In view of the San Francisco-based company's financial problems, the government cut off the grant when $84.8 million had been drawn. On Sept. 24, 2013, the Office of the United States Trustee for Region 14 appointed a committee of unsecured creditors. In October 2013, the bankruptcy judge cleared Ecotality to sell most of the business to Car Charging Group Inc. for $3.3 million. Two other buyers purchased other assets for $1 million in total. ECOTALITY INC: Blink UYA Seeks Dual Track Solicitation for Plans ---------------------------------------------------------------- Blink UYA, LLC, wants to have its own alternative plan put on a dual track solicitation process along with Electric Transportation Engineering Corporation (dba Ecotality North America), et al.'s Liquidating Plan. Blink relates that before the Debtors filed a Liquidating Plan on July 1, 2014, it entered into extensive discussions regaring an alternative plan (the Reorganizing Plan) with the Debtors and the Official Committee of Unsecured Creditors. The Debtors and the Committee however ultimately rejected the Reorganizing Plan. After a review of the Liquidating Plan, Blink asserts that its Reorganizing Plan could be substantially more beneficial to creditors than the Liquidating Plan. Under its Dual Track Motion, Blink argues that the Liquidating Plan fails to address the potential benefits associated with the reorganization of the Debtors' business. Thus, concurrent with the Dual Track Motion, Blink filed a Motion to terminate the exclusive period by which the Debtors may solicit acceptances for their Plan so that it may file its own Reorganizing Plan. The Debtors sought and were granted five extensions of the Exclusive and Solicitation Periods in their cases, the last extension granted on June 26, 2014. The Debtors' current exclusive plan solicitation period terminates on Oct. 12, 2014. The Reorganizing Plan While the Debtors sold substantially all of their assets at the beginning of their cases, the corporate entity continues to have potential value as a regional electric vehicle service equipment (EVSE) player, according to Blink. Blink maintains that the Reorganizing Plan takes advantage of this potential value, with Blink contributing significant assets to effectuate a developed business plan that will be incorporated and adopted by the plan. Under the Reorganizing Plan, 50% of the Reorganized Debtors' stock will be distributed to Blink as the Plan Sponsor, and 50% of the Reorganized Debtors' stock will be distributed to qualifying unsecured creditors. The Reorganizing Plan, much like the Liquidating Plan, will also establish a creditors' trust to be administered by, and for the benefit of, all unsecured creditors. The creditors' trust would consist of all remaining proceeds of the sale of assets of the Estates and all Assets that were not sold by the Debtor (the Excluded Assets). Blink UYA LLC is represented by: ANDANTE LAW GROUP OF DANIEL E. GARRISON, PLLC Daniel E. Garrison, Esq. Jessica R. Kenney, Esq. Scottsdale Financial Center I 4110 North Scottsdale Road, Suite 330 Scottsdale, AZ 85251 Tel No: (480) 421-9449 Fax No: (480) 522-1515 Email: dan@andantelaw.com jessica@andantelaw.com -- and -- SCHAFER AND WEINER, PLLC Brendan G. Best, Esq. Michael E. Baum, Esq. 40950 Woodward Ave., Ste 100 Bloomfield Hills, MI 48304 Tel No: (248)540-3340 Fax No: (248)282-2100 Email: mbaum@schaferandweiner.com About Ecotality Inc. Headquartered in San Francisco, California, Ecotality, Inc. (Nasdaq: ECTY) -- http://www.ecotality.com-- is a provider of electric transportation and storage technologies. Ecotality Inc. along with affiliates including lead debtor Electric Transportation Engineering Corp. sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 13-16126) on Sept. 16, 2013, with plans to sell the business at an auction. The cases are assigned to Chief Judge Randolph J. Haines. The Debtors' lead counsel are Charles R. Gibbs, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas; and David P. Simonds, Esq., and Arun Kurichety, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Los Angeles, California. The Debtors' local counsel is Jared G. Parker, Esq., at Parker Schwartz, PLLC, in Phoenix, Arizona. FTI Consulting, Inc. serves as the Debtors' crisis manager and financial advisor. The Debtors' claims and noticing agent is Kurtzman Carson Consultants LLC. Electric Transportation estimated assets of $10 million to $50 million and debt of $100 million to $500 million. Unlike most companies in bankruptcy, Ecotality has no secured debt. It simply ran out of money. There's $5 million owing on convertible notes, plus liability on leases. Part of pre-bankruptcy financing took the form of a $100 million cost-sharing grant from the U.S. Energy Department. In view of the San Francisco-based company's financial problems, the government cut off the grant when $84.8 million had been drawn. On Sept. 24, 2013, the Office of the United States Trustee for Region 14 appointed a committee of unsecured creditors. In October 2013, the bankruptcy judge cleared Ecotality to sell most of the business to Car Charging Group Inc. for $3.3 million. Two other buyers purchased other assets for $1 million in total. EASTCOAL INC: Seeks Shareholder OK for AIM Admission Cancellation ----------------------------------------------------------------- EastCoal Inc. on July 7 disclosed that on June 23, 2014 that the Company intended to seek shareholder approval for the cancellation of the Company's Admission to AIM. The Company is due to hold a combined Annual General Meeting and Special Meeting on July 30, 2014, at which, inter alia, shareholders will be asked to consider a special resolution to approve the Cancellation. Reasons for the Cancellation of Admission to AIM The board of directors of the Company have identified the following reasons for the Cancellation, which they consider to be in the long-term best interests of the Company and EastCoal shareholders: The high costs of maintaining the Company's Admission to AIM. The Company considers the costs associated with maintaining the Company's Admission to AIM are excessive when considered alongside the costs of maintaining the Company's listing on TSX Venture Exchange's trading board NEX in Canada. At this time, the Board has concluded that maintaining a second listing on AIM is inappropriate. The need to maintain appropriate liquidity of EastCoal stock. With the Company's listing on NEX, the Board is concerned that there may not be enough liquidity for EastCoal shares to support trading on both NEX and AIM. The Board believes it is in the best interests of the Company and its shareholders to focus the trading of EastCoal shares on NEX. The operational and legal difficulties of being subject to two different regulatory regimes in two different countries, in order to maintain listings on both AIM and NEX. The Company currently has to comply with the regulatory, reporting and corporate governance requirements of two exchanges in two different countries, whose requirements are sometimes different and/or inconsistent. The Board believes that it is best to remove the requirement of compliance with two different exchanges, as it believes that compliance with one exchange would still supply EastCoal shareholders with proper governance and protection. The management time taken up with the Company's Admission to AIM. The ongoing regulatory requirements associated with the Company's securities being admitted to trading on both NEX and AIM are diverting a substantial portion of management time and attention which the EastCoal Board believes could more usefully be deployed developing the business. Circular to EastCoal shareholders and recommendation Rule 41 of the AIM Rules for Companies requires an AIM company that wishes to cancel admission of its securities to trading on AIM to notify such intended cancellation to the public and separately to inform the London Stock Exchange of its preferred cancellation date at least 20 business days prior to such date. Rule 41 also requires that, unless the London Stock Exchange otherwise agrees, the Cancellation must be conditional upon the consent of not less than 75% of shares represented by shareholders voting in a general meeting. The Company is sending a circular to EastCoal shareholders which will explain the reasons for the proposed Cancellation and will also convene a combined Annual General Meeting and Special Meeting of the Company, at which EastCoal shareholders will be asked, inter alia, to consider a special resolution to approve the Cancellation. The combined Annual General Meeting and Special Meeting will be held on July 30, 2014, thereby allowing Cancellation to become effective on September 24, 2014. The Board members, who, in aggregate, have an interest in 40,256,178 common shares of EastCoal, representing approximately 25.8 per cent of the Company's issued share capital, unanimously recommend that all EastCoal shareholders vote in favor of such resolution, as they intend to do in respect of their aggregate holding in the common shares of EastCoal. Strategy following the Cancellation from AIM Should the Cancellation from AIM be approved by EastCoal shareholders, the Company will maintain its NEX listing and will therefore continue to be subject to the Canadian Securities and Exchange Commission's reporting obligations. The Company will continue to keep EastCoal shareholders informed of the Company's financial and operational performance through ongoing updates in regulatory filings with the NEX, as well as updates in press releases, on the Company's website -- http://www.eastcoal.com-- and in investor meetings. Subject to EastCoal shareholder approval of the Cancellation at the General Meeting by the required 75% of shares represented by shareholders voting in a general meeting, it is expected that the admission of the Ordinary Shares to trading on AIM will be cancelled with effect from 7.00 a.m. (London time) on September 24, 2014. Accordingly, the latest date for trading in Ordinary Shares through the market on normal market timings to settle prior to the Cancellation will be September 19, 2014. Following the Cancellation, there will be no market facility in the UK for dealing in EastCoal shares and EastCoal shareholders wishing to publicly trade their EastCoal shares will need to do so through NEX. All shares of Common Stock that were previously admitted to trading on AIM and entered on the register maintained by Computershare will be placed on the Company's Canadian registrar list. The Company's Canadian transfer agent and registrar will send out physical share certificates to all EastCoal shareholders whose shares were previously entered on the share register maintained by Computershare UK. In addition, the CREST depository interest facility will be terminated following Cancellation of our admission to AIM, the shares held in such facility shall be withdrawn placed on the Company's Canadian registrar list and the ISIN for the securities previously held in CREST system will be disabled and expired. Any EastCoal shareholder holding a physical certificate should hold on to the certificate until such time as they wish to trade the shares. Any questions regarding the handing in of share certificates or how to electronically deposit shares can be directed to EastCoal's Canadian transfer agent and registrar, Computershare, 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1 http://www.computershare.com/ Computershare, or a brokerage firm of your choosing, will be able to further provide you with instructions regarding the process of trading your shares in Canada. Expected Timetable Publication of circular and Notice of combined Annual General Meeting and Special Meeting - July 4, 2014, Latest time and date for receipt of Last time and date for receipt of Forms of Instructions for the combined Annual General Meeting and Special Meeting - July 25, 2014, Combined Annual General Meeting and Special Meeting - July 30, 2014, Result of combined Annual General Meeting and Special Meeting announced - July 31, 2014, Latest date for trading in Shares in the Company's Common Stock through the AIM market on normal market timings to settle prior to the Delisting - September 19, 2014 Cancellation of admission of the Company's Shares to trading on AIM - September 24, 2014 Notes: 1. Each of the times and dates referred to in this announcement is based on the Company's current expectation and is subject to change. All times are London times. 2. Any changes to the expected timetable will be announced via a Regulatory Information Service. EastCoal Inc. -- http://www.eastcoal.ca/-- is focused on coal in Ukraine. The Company is engaged in the acquisition and development of mineral properties. The Company is focused on the Verticalnaya Mine, which is an advanced coal project in the construction phase located in the Donbass Region of Ukraine. The Company's mineral properties include the Verticalnaya Coal Mine, Ukraine. The surface mine site in the Verticalnaya Coal Mine covers approximately 10.4 hectares, including three hectares of approach roads. The Company's operations also include the dewatering of the Main Mine at Verticalnaya. EastCoal Inc. previously announced on April 23, 2014, that at a meeting of its creditors held on April 22, 2014, it had received creditor approval for the Company's proposal to its creditors pursuant to the Bankruptcy and Insolvency Act (Canada). The Company also previously announced that on May 20, 2014, the Proposal trustee, Deloitte Restructuring Inc. and the Company were granted an order from the Supreme Court of British Columbia approving the Proposal and the associated transactions identified below. The Company announced that the Company's obligations under the Proposal have been completed were effected as of June 23 2014. EKDN PROPERTY: Files for Chapter 11 in Florida ---------------------------------------------- EKDN Property Inc. filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 14-05258) on May 6. Based in Maitland, Florida, the Debtor disclosed $432,123 assets and $86,388 in liabilities. The company is represented by Jeffrey Ainsworth, Esq., at BransonLaw PLLC -- jeff@bransonlaw.com ?- in Orlando. ELITE DATA: Incurs $37K Net Loss in Q1 Ended March 31 ----------------------------------------------------- Elite Data Services Inc. filed its quarterly report on Form 10-Q disclosing a net loss of $37,578 on $7,215 of revenues for the three months ended March 31, 2014, compared with a net loss of $208,290 on $nil of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $3 million in total assets, $4.44 million in total liabilities, and a stockholders' deficit of $1.44 million. Since inception, the Company has a cumulative net loss of $6.5 million. The Company currently has only limited working capital with which to continue its operating activities. The amount of capital required to sustain operations is subject to future events and uncertainties. These conditions raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/mrpL6Y Elite Data Services, Inc., operates in the marketing and advertising sector in the United States. The company develops, markets, administers, and sells various consumer products and services, including membership club products. Its products primarily include ClassifiedRide, a classified listing platform that enables where users can list their vehicle to the company?s Website by free or paid listing options; Autoglance, a search engine of used cars that prioritizes and compares inventory in individualized markets; the VIP Salesmen Directory, which allows users to view salesmen?s profile from dealerships and interact with them online before having to commit or walk onto a dealership lot; and the Carline Negotiator, which that enables the end users to find the vehicle they are looking for. It serves private sellers, dealerships, affiliate lead providers, and third party advertisers. The company was formerly known as Dynamic Energy Alliance Corporation and changed its name to Elite Data Services, Inc. in November 2013. The company was incorporated in 1981 and is headquartered in Dallas, Texas. ELITE DIGITAL: Files for Chapter 11 in Florida ---------------------------------------------- Elite Digital Photo Inc. filed a Chapter 7 petition (Bankr. M.D. Fla. Case No. 14-05248) on May 6. Located in 174 Wilshire Blvd., Casselberry, Florida, the company disclosed $625 assets and $34,626 in liabilities. Major creditors are: -- Jostens Inc. with $19,000; -- Wilshire Plaza LLC, Casselberry with $10,090; -- Encore Broadcast Solutions, Winter Springs with $3,553. The company is represented by: Randy E Hillman, Esq. RANDY HILLMAN, PA 1073 Willa Springs Drive, #2029 Winter Springs, FL 32708 Tel: (407) 695-0874 Fax: (407) 803-6104 E-mail: hillmanlaw@earthlink.net EMMAUS LIFE: Incurs $6.74-Mil. Net Loss for March 31 Quarter ------------------------------------------------------------ Emmaus Life Sciences, Inc., filed its quarterly report on Form 10- Q disclosing a net loss of $6.74 million on $84,689 of net revenues for the three months ended March 31, 2014, compared with a net loss of $3 million on $89,560 of revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $3.62 million in total assets, $22.86 million in total liabilities, and a stockholders' deficit of $19.25 million. The Company has a significant amount of notes payable and other obligations due within this year and is projecting that its operating losses and expected capital needs will exceed its existing cash balances and cash expected to be generated from operations for the foreseeable future, including the expected costs relating to the commercialization of the Company's L- glutamine treatment for SCD. In order to meet the Company's expected obligations, management intends to raise additional funds through equity and debt financings and partnership agreements. However, there can be no assurance that the Company will be able to complete any additional equity or debt financings or enter into partnership agreements. Therefore, due to the uncertainty of the Company's ability to meet its current operating and capital expenses, there is substantial doubt about the Company's ability to continue as a going concern, as the continuation and expansion of its business is dependent upon obtaining further financing, successful and sufficient market acceptance of its products, and finally, achieving a profitable level of operations. A copy of the Form 10-Q is available at: http://is.gd/F5ihas Emmaus Life Sciences, Inc., is engaged in the discovery, development, and commercialization of treatments and therapies for rare and orphan diseases. The company?s lead product candidate includes pharmaceutical-grade L-glutamine, which has completed Phase III clinical trials for the treatment of sickle cell disease. It also markets and sells NutreStore, an L-glutamine powder for oral solution as a treatment for short bowel syndrome in patients receiving specialized nutritional support; and sells L-glutamine as a nutritional supplement under the AminoPure brand name through retail stores in various states, as well as through importers and distributors in Japan, Taiwan, and South Korea. The company was formerly known as Emmaus Holdings, Inc. and changed its name to Emmaus Life Sciences, Inc. in September 2011. Emmaus Life Sciences, Inc. was founded in 2000 and is headquartered in Torrance, California. ENERGY FUTURE: Lenders Seeking Direct Appeal -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that CSC Trust Co., representing holders of 10 percent first-lien notes issued by an Energy Future Holdings Corp. subsidiary wants the U.S. Court of Appeals to review a June 10 ruling by the bankruptcy court approving a settlement with first- lien noteholders. According to the report, CSC called the bankruptcy judge's action unprecedented, saying he approved a tender offer that hadn't been sanctioned by any court or reviewed by the U.S. Securities and Exchange Commission. The indenture trustee likewise faulted the process because it entailed paying off pre-bankruptcy debt long before adoption of a Chapter 11 plan, the report related. U.S. Bankruptcy Judge Christopher Sontchi will decide at a July 18 hearing in Delaware whether to recommend a direct appeal to the circuit court, bypassing the federal district court in Wilmington, the report further related. 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: Second Lien Expiration Date Extended to July 11 -------------------------------------------------------------- Energy Future Intermediate Holding Company LLC, a wholly-owned subsidiary of Energy Future Holdings Corp., and EFIH Finance Inc. on July 7 disclosed that the expiration date of its previously announced offer to purchase EFIH Second Lien Notes for cash as a voluntary settlement with respect to the Issuer's obligations under the EFIH Second Lien Notes has been extended to 5:00 p.m., New York City time, on July 11, 2014. Other than the extension of the Expiration Date, the terms of the Offer are unchanged. The EFIH Second Lien Settlement is open to all holders of the Issuer's 11% Senior Secured Second Lien Notes due 2021 and 11.750% Senior Secured Second Lien Notes due 2022. As of 5:00 p.m., New York City time, on July 3, 2014, approximately $162 million of EFIH Second Lien Notes (approximately 8% of the outstanding EFIH Second Lien Notes) had been tendered in the Offer. In addition, pursuant to the Restructuring Support and Lock-Up Agreement, dated April 28, 2014 (as amended), to which the Issuer is a party, certain holders holding, in the aggregate, approximately $760 million of EFIH Second Lien Notes (approximately 35% of the outstanding EFIH Second Lien Notes) have agreed to the EFIH Second Lien Settlement on the terms provided in such agreement. Epiq Systems is serving as the Offer Agent and Depositary Agent, and may be contacted by telephone at (646) 282-2500 or toll free at (866) 734-9393 or by email at tabulation@epiqsystems.com (please reference ?EFIH Second Lien Offer? in the subject line). 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. ENERPULSE TECHNOLOGIES: Has $702K Net Loss in Q1 Ended March 31 --------------------------------------------------------------- Enerpulse Technologies, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $702,266 on $97,164 of sales for the three months ended March 31, 2014, compared with a net loss of $692,294 on $162,904 of sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.43 million in total assets, $1.6 million in total liabilities, puttable common stock of $393,780, and a stockholders' deficit of $567,016. The Company anticipates a net loss for the remainder of 2014. The Company used net cash in operations of approximately $348,000 for the three months ended March 31, 2014 and has a working capital deficit of approximately $891,000 at March 31, 2014. As a result of the Company's losses from operations, negative cash flows and limited liquidity, the Company's independent registered public accounting firm's report on the Company's consolidated financial statements as of and for the year ended Dec. 31, 2013 includes an explanatory paragraph stating that these conditions raise substantial doubt about the Company's ability to continue as a going concern, according to a regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/lTAWFl Enerpulse Technologies, Inc., through its wholly-owned subsidiary, Enerpulse, Inc., designs, develops, manufactures, and markets an energy and efficiency enhancing product in the automotive industry under the Pulstar brand name. The company provides capacitor-based precise combustion ignition (PCI) technology, which enhances spark-ignited internal combustion (IC) engines in the areas of horsepower, torque, fuel economy, acceleration, combustion stability, and emissions. It offers PCI pulse plugs for the natural gas IC engine, automotive OEM, and automotive and power sports aftermarkets. The company is headquartered in Albuquerque, New Mexico. EXIDE TECHNOLOGIES: Exclusive Plan Filing Pd Extended Thru July 31 ------------------------------------------------------------------ Judge Kevin J. Spacey entered a second order extending the Exclusive Periods for Exide Technologies. Under the order, the Debtor is granted exclusivity to file a Chapter 11 plan through July 31, 2014, and exclusive right to solicit acceptances of that plan through Sept. 30, 2014. About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002 and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. Exide disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick and Company Inc. as public relations consultant and GCG as claims agent. Schnader Harrison Segal & Lewis LLP was tapped as special counsel. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co-counsel. Zolfo Cooper, LLC serves as its bankruptcy consultants and financial advisors. Geosyntec Consultants was tapped as environmental consultants to the Committee. Robert J. Keach of the law firm Bernstein Shur as fee examiner has been appointed as fee examiner. He has hired his own firm as counsel. FANNIE MAE: Hearing on Continental Western's Motion to Compel ------------------------------------------------------------- Three lawyers appeared before Magistrate Judge Ross A. Walters in Des Moines, Iowa, on Thurs., July 10, 2014, to debate the Continental Western Insurance Company's motion to compel production of the administrative record and to suspend briefing on the motions to dismiss its lawsuit against the Federal Housing Finance Agency and the United States Department of the Treasury: -- David H. Thompson, Esq., at Cooper & Kirk, PLLC, representing Continental Western Insurance Company; -- Howard N. Cayne, Esq., at Arnold & Porter LLP, representing FHFA; and -- Joel McElvain, Esq., from the Department of Justice, representing the Department of the Treasury; Mr. Thompson told Magistrate Walters that the 43-page administrative record FHFA produced in the litigation before Judge Lamberth is incomplete and can't possibly be everything on which FHFA based its decision to enter into the Third Amendment to solve what FHFA and Treasury say in their papers was the solution to "a very real problem." Mr. Thompson indicated that, unlike the other plaintiffs in their lawsuits, Continental Western challenges Treasury's continued purchases of preferred stock in Fannie and Freddie after Congressional authority had expired. Mr. Cayne told Magistrate Walters that for purposes of deciding the motions to dismiss, FHFA accepts all of the factual allegations contained in Continental Western's complaint as true, and all those facts lead to the correct decision that Continental Western's complaint should be dismissed. Decisions by FHFA in its role as Fannie and Freddie's conservator, Mr. Cayne says, are not subject to review under the Administrative Procedures Act, and no court has authority to review a conservator's action or inaction. Mr. Cayne says that Continental Western has everything it needs to reply to the pending motions to dismiss and Judge Pratt can decide those motions based on what's in front of him today. FHFA says it is entited to dismissal of Continental Western's complain as a matter or law because the Congress says that FHFA had the power to enter into the Third Amendment (even if it was a bad or dumb deal), the FHFA exercised that power, and no court has authority to second-guess the conservator. So, Mr. Cayne says, further discovery is pointless. Mr. Cayne told Magistrate Walters that he didn't want to debate the underlying merits, but took the opportunity to do it anyway. Mr. Cayne told Magistrate Walters that in 2008, Fannie and Freddie had no net worth. The only reason the GSEs are in business today is because of the deal the Conservator cut with Treasury. FHFA says that the plaintiff has no standing to file its lawsuit because immediately upon appointment of the conservator, all shareholder rights were vested in and with the conservator for the duration of the conservatorship. All of the case law cited by the Plaintiff, Mr. Cayne says, relates to receiverships and not conservatorships, and the two, the Congress says, are very different. Mr. Cayne said that Fannie and Freddie's conservatorship proceedings are temporary but indefinite, and during that time, FHFA holds all of the rights of Fannie and Freddie's shareholders. Mr. McElvain echoed many of Mr. Cayne's comments, saying that Judge Pratt can decide the motions to dismiss using the four corners of Continental Western's complaint. The motions to dismiss present purely legal arguments and no more evidence is necessary. HERA, at 12 U.S.C. Sec. 4617(f), prohibits the Plaintiff from obtaining any equitable or declaratory relief that would restrain or affect the powers exercised by FHFA as the GSEs' conservator. That's what the Congress said when it enacted HERA, and that's what Judge Pratt must follow. Further, HERA, at 12 U.S.C. Sec. 4617(b), provides that FHFA has succeeded to all rights of the GSEs' shareholders for the duration of the conservatorship, including the right to bring a lawsuit like the one Continental Western has filed. There are no factual disputes, Mr. McElvain, and Judge Pratt can and should dismiss Continental Western's lawsuit. Magistrate Walters thanked the lawyers for their time and said he will do his best to issue a ruling as quickly as possible. About Fannie Mae Federal National Mortgage Association, aka Fannie Mae, is a government-sponsored enterprise that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. The U.S. Department of the Treasury owns Fannie Mae's senior preferred stock and a warrant to purchase 79.9 percent of its common stock, and Treasury has made a commitment under a senior preferred stock purchase agreement to provide Fannie with funds under specified conditions to maintain a positive net worth. Fannie Mae reported net income of $83.98 billion on $117.54 billion of total interest income for the year ended Dec. 31, 2013, as compared with net income of $17.22 billion on $129.19 billion of total interest income for the year ended Dec. 31, 2012. As of March 31, 2014, the Company had $3.22 trillion in total assets, $3.21 trillion in total liabilities and $8.09 billion in total equity. Conservatorship Fannie Mae has operated under the conservatorship of the Federal Housing Finance Agency ("FHFA") since Sept. 6, 2008. Fannie Mae has not received funds from Treasury since the first quarter of 2012. The funding the company has received under its senior preferred stock purchase agreement with Treasury has provided the company with the capital and liquidity needed to fulfill its mission of providing liquidity and support to the nation's housing finance markets and to avoid a trigger of mandatory receivership under the Federal Housing Finance Regulatory Reform Act of 2008. For periods through March 31, 2014, Fannie Mae has requested cumulative draws totaling $116.1 billion and paid $121.1 billion in dividends to Treasury. Under the senior preferred stock purchase agreement, the payment of dividends cannot be used to offset prior draws. As a result, Treasury maintains a liquidation preference of $117.1 billion on the Company's senior preferred stock. FL 6801 SPIRITS: Auction of Canyon Ranch Hotel Set for Aug. 19 -------------------------------------------------------------- Bankruptcy Judge Shelley C. Chapman authorized FL 6801 Spirits LLC et al. to sell The Canyon Ranch Hotel & Spa to 360 Miami Hotel & Spa LLC or to any competing bidder that submits a higher or better offer for the assets at an auction next month. The Court also approved the Debtors' proposed bidding procedures. The deadline for submitting bids for the Assets is August 14, 2014, at 4:00 p.m. If the Debtors extend the Bid Deadline, the Debtors must promptly notify all Potential Bidders of the extension. If Qualified Bids are timely received, the Auction will commence at 11:00 a.m. New York Time on August 19, 2014, at a location to be determined in New York, New York. In the event that no Qualified Bids (other than that submitted by the Purchaser) are received by the Bid Deadline, the Debtors shall not be required to conduct an Auction, and in such event the Debtors shall proceed with the approval of the Purchase Agreement. Each Qualified Bidder participating at the Auction will be required to confirm on the record at the Auction that it has not engaged in any collusion with respect to the bidding or the Sale. The Sale Hearing will be held August 27, 2014 at 10:00 a.m. at the United States Bankruptcy Court, Courtroom 623, One Bowling Green, New York, New York 10004. Sale Objections, if any, are due no later than 4:00 p.m. prevailing Eastern Time on August 14, 2014. Supplemental objections relating to the conduct of the Auction, the selection of the Successful Bidder (other than the Purchaser) or the terms of the Successful Bid (other than the Purchase Agreement), are due no later than 4:00 p.m. prevailing Eastern Time on August 22, 2014. The Stalking Horse bidder, 360 Miami Hotel, is represented by: Jane Snoddy Smith, Esq. FULBRIGHT & JAWORSKI LLP 98 San Jacinto Blvd., Suite 1100 Austin, TX 78701-4255 - and - Kristian W. Gluck, Esq. FULBRIGHT & JAWORSKI LLP 2200 Ross Avenue, Suite 2800 Dallas, TX 75201 The North Carillon Beach Condominium Association, Inc., Central Carillon Beach Condominium Association, Inc. and South Carillon Beach Condominium Association, Inc., objected to the bidding procedures motion. Among other things, they noted that the Debtors have precluded the Associations from formulating an offer to purchase the Property. The Debtors, however, called the Associations' objections "disingenuous," saying they welcome an offer by the Associations, but that none has been made. The Debtors told the Court that, after a thorough ten-month marketing process and losing a purchaser due to actions taken by the Associations, the Debtors found the Stalking Horse whose bid is the best offer for the Debtors' Assets. That bid is subject to higher or better offers under a non-expedited process with market- based bidding protections that are routinely approved by the Bankruptcy Courts in this District and others, as they are reasonable and designed to maximize value. The Associations would like to bid for the Assets. There is nothing in the Bidding Procedures that precludes them from making a higher or better offer for the Assets other than their own inability to organize themselves and be able to close a higher or better transaction with the Debtors within the non-expedited proposed time frame. The Debtors accused the Associations of playing for more time but the Debtors said they cannot risk losing the Stalking Horse's offer and then being left with no sale. Such a result is not in the best interests of the Debtors or any of their stakeholders, including the Associations unless the Associations true goal is no sale at all. The Court agreed with the Debtors, and said those objections are overruled. The Associations are represented by: BROWN RUDNICK LLP 7 Times Square New York, NY 10036 Edward S. Weisfelner, Esq. Howard S. Steel, Esq. As reported by the Troubled Company Reporter, 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. The Debtors had signed a sale agreement with Shamrock for a higher purchase price -- $15 million -- before the Associations commenced litigations in Florida State Court that effectively chilled the sale to Shamrock and any other party. Hannah Sampson, writing for The Miami Herald, reported that portions of the resort at 6801 Collins Ave. in Miami Beach are being marketed for sale by CBRE Hotels, including retail space; 13 condo units, townhomes or condo-hotel units; a spa; four pools; restaurants and lounges and other common spaces. 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 6801 SPIRITS: Associations Drop Bid to Transfer Cases to Fla. ---------------------------------------------------------------- The North Carillon Beach Condominium Association, Inc., Central Carillon Beach Condominium Association, Inc., and South Carillon Beach Condominium Association, Inc. have withdrawn, without prejudice, their motion to transfer the Chapter 11 cases of FL 6801 Spirits LLC et al. to the U.S. District Court for the Southern District of Florida. The Associations represent owners of approximately 570 condominium units on the Debtors' property. They argued that the property, the Debtors, the Associations, the Unit Owners, and almost all key creditors and parties-in-interest in these Chapter 11 Cases are Florida based. The Debtors' only connection to New York is that the Debtors are indirect subsidiaries of Lehman Brothers Holdings, Inc. and purportedly maintain an office -- or perhaps, more simply, a desk within an office -- in New York. Although the Debtors are indirect subsidiaries of LBHI, their assets and business operations are discrete and bear no meaningful relation to the financial operations of LBHI and its other subsidiaries. They also pointed out that the Debtors' Sale Motion suggests that the net proceeds from the proposed sale of the assets will likely be exhausted by creditor claims or, at best, may result in a de minimis distribution to the Debtors' parent company that would prove insignificant in the context of the LBHI bankruptcy cases. The Associations also said their litigation fees and costs (including travel) associated with the Chapter 11 Cases will be lower if venue is transferred to the Southern District of Florida than if the cases remain in New York Court. A hearing on the motion was originally set for June 25. The Associations said, "Prior to filing for bankruptcy, the Debtors entered into a standstill agreement with the Associations to negotiate a deal for the purchase of Canyon Ranch Miami by an entity controlled by the Unit Owners. However, instead of negotiating in good faith, the Debtors left the Unit Owners at the altar and now seek to sell their property interest in Canyon Ranch Miami in a Bankruptcy Code Section 363 sale that would terminate the Canyon Ranch management and materially devalue the Unit Owners? interest in their condominium units. The Unit Owners are interested in submitting a higher or better bid and plan to contest the Debtors' unfair proposed sale procedures." The Debtors are defendants in pending lawsuits commenced by the Associations in the Circuit Court in and for Miami-Dade County, Florida. The Associations seek, inter alia, declaratory relief under Florida state law as to the condominium Unit Owners' rights under various condominium declarations, restrictions and easements. They seek a determination that the Debtors have historically levied millions of dollars of improper assessments against the Unit Owners and now seek to prospectively lock in these exponential over-charges and other restrictions on their Canyon Ranch lifestyle. The Associations are represented by: Edward S. Weisfelner, Esq. Howard S. Steel, Esq. BROWN RUDNICK LLP 7 Times Square New York, NY 10036 Telephone: (212) 209-4800 Facsimile: (212) 209-4801 - and - Scott L. Baena, Esq. Mindy A. Mora, Esq. BILZIN SUMBERG BAENA PRICE & AXELROD LLP 1450 Brickell Avenue, Suite 2300 Miami, FL 33131 Telephone: (305) 374-7580 Facsimile: (305) 351-2242 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. FREDDIE MAC: Hearing on Continental Western's Motion to Compel -------------------------------------------------------------- Three lawyers appeared before Magistrate Judge Ross A. Walters in Des Moines, Iowa, on Thurs., July 10, 2014, to debate the Continental Western Insurance Company's motion to compel production of the administrative record and to suspend briefing on the motions to dismiss its lawsuit against the Federal Housing Finance Agency and the United States Department of the Treasury: -- David H. Thompson, Esq., at Cooper & Kirk, PLLC, representing Continental Western Insurance Company; -- Howard N. Cayne, Esq., at Arnold & Porter LLP, representing FHFA; and -- Joel McElvain, Esq., from the Department of Justice, representing the Department of the Treasury; Mr. Thompson told Magistrate Walters that the 43-page administrative record FHFA produced in the litigation before Judge Lamberth is incomplete and can't possibly be everything on which FHFA based its decision to enter into the Third Amendment to solve what FHFA and Treasury say in their papers was the solution to "a very real problem." Mr. Thompson indicated that, unlike the other plaintiffs in their lawsuits, Continental Western challenges Treasury's continued purchases of preferred stock in Fannie and Freddie after Congressional authority had expired. Mr. Cayne told Magistrate Walters that for purposes of deciding the motions to dismiss, FHFA accepts all of the factual allegations contained in Continental Western's complaint as true, and all those facts lead to the correct decision that Continental Western's complaint should be dismissed. Decisions by FHFA in its role as Fannie and Freddie's conservator, Mr. Cayne says, are not subject to review under the Administrative Procedures Act, and no court has authority to review a conservator's action or inaction. Mr. Cayne says that Continental Western has everything it needs to reply to the pending motions to dismiss and Judge Pratt can decide those motions based on what's in front of him today. FHFA says it is entited to dismissal of Continental Western's complain as a matter or law because the Congress says that FHFA had the power to enter into the Third Amendment (even if it was a bad or dumb deal), the FHFA exercised that power, and no court has authority to second-guess the conservator. So, Mr. Cayne says, further discovery is pointless. Mr. Cayne told Magistrate Walters that he didn't want to debate the underlying merits, but took the opportunity to do it anyway. Mr. Cayne told Magistrate Walters that in 2008, Fannie and Freddie had no net worth. The only reason the GSEs are in business today is because of the deal the Conservator cut with Treasury. FHFA says that the plaintiff has no standing to file its lawsuit because immediately upon appointment of the conservator, all shareholder rights were vested in and with the conservator for the duration of the conservatorship. All of the case law cited by the Plaintiff, Mr. Cayne says, relates to receiverships and not conservatorships, and the two, the Congress says, are very different. Mr. Cayne said that Fannie and Freddie's conservatorship proceedings are temporary but indefinite, and during that time, FHFA holds all of the rights of Fannie and Freddie's shareholders. Mr. McElvain echoed many of Mr. Cayne's comments, saying that Judge Pratt can decide the motions to dismiss using the four corners of Continental Western's complaint. The motions to dismiss present purely legal arguments and no more evidence is necessary. HERA, at 12 U.S.C. Sec. 4617(f), prohibits the Plaintiff from obtaining any equitable or declaratory relief that would restrain or affect the powers exercised by FHFA as the GSEs' conservator. That's what the Congress said when it enacted HERA, and that's what Judge Pratt must follow. Further, HERA, at 12 U.S.C. Sec. 4617(b), provides that FHFA has succeeded to all rights of the GSEs' shareholders for the duration of the conservatorship, including the right to bring a lawsuit like the one Continental Western has filed. There are no factual disputes, Mr. McElvain, and Judge Pratt can and should dismiss Continental Western's lawsuit. Magistrate Walters thanked the lawyers for their time and said he will do his best to issue a ruling as quickly as possible. About Freddie Mac Based in McLean, Virginia, the Federal Home Loan Mortgage Corporation, known as Freddie Mac (OTCBB: FMCC) -- http://www.FreddieMac.com/-- was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. Freddie Mac is under conservatorship and is dependent upon the continued support of Treasury and the Federal Housing Finance Agency acting as conservator to continue operating its business. FREEDOM INDUSTRIES: Told to Keep Public Better Informed ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Freedom Industries Inc., whose leaking chemical tank made much of West Virginia's water undrinkable early this year, must keep the public better informed about the bankruptcy and site cleanup if it wants more time to propose a liquidating plan. According to the report, Freedom didn't prepare adequately for predicted heavy rainstorms in mid-June, U.S. Bankruptcy Judge Ronald G. Pearson in Charleston, West Virginia said in an order he signed. As result, there were "unfortunate containment breaches," the judge said, the report related. Judge Pearson said in his order that Freedom can retain the exclusive right to propose a Chapter 11 plan only if there is better disclosure to the public going forward, and, to assure the public that environmental issues are being dealt with responsibly, required the restructuring officer to attend all hearings unless excused beforehand and to hold press conferences or issue bulletins to the public, the report further related. About Freedom Industries Freedom Industries Inc., is engaged principally in the business of producing specialty chemicals for the mining, steel and cement industries. The Debtor operates two production facilities located in (a) Nitro, West Virginia; and (b) Charleston, West Virginia. The company, connected to a chemical spill that tainted the water supply in West Virginia, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan. 17, 2014. The case is assigned to Judge Ronald G. Pearson. The petition was signed by Gary Southern, president. The Debtor is represented by Mark E Freedlander, Esq., at McGuire Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson, Esq., at Barth & Thompson, in Charleston, West Virginia. On Dec. 31, 2013, four companies merged under the umbrella of Freedom Industries: Freedom Industries Inc., Etowah River Terminal LLC, Poca Blending LLC and Crete Technologies LLC. As reported in the Troubled Company Reporter on Feb. 20, 2014, Kate White, writing for The Charleston Gazette, reported that the Debtor disclosed $16 million in assets and $6 million in liabilities when it filed for bankruptcy. On Feb. 5, 2014, the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Frost Brown Todd LLC as counsel. On March 18, the Bankruptcy Court approved the hiring of Mark Welch at MorrisAnderson in Chicago as Freedom's chief restructuring officer. FRESH & EASY: Employee Wage Settlement Approved ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Fresh & Easy Neighborhood Market Inc., the former supermarket operator, obtained approval from the U.S. Bankruptcy Court in Delaware of a settlement with a class representing workers who alleged violation of California labor law. According to the report, the company is paying $2 million for a release of all claims up until the time the business was sold last year. Lawyers representing the employee class get $660,000, plus $61,500 for their expenses, while giving notice to the class members is costing another $65,000, the report related. About Fresh & Easy Fresh & Easy Neighborhood Market Inc., and its affiliate filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-12569 and 13-12570) on Sept. 30, 2013. The petitions were signed by James Dibbo, chief financial officer. Judge Kevin J. Carey presides over the case. Fresh & Easy owes $738 million to Cheshunt, England-based Tesco, the U.K.'s biggest retailer. Fresh & Easy never made a profit and lost an average of $22 million a month in the 12 months ended in February, according to court papers. Jones Day serves as lead bankruptcy counsel. Richards, Layton & Finger, P.A., serves as local Delaware counsel. Alvarez & Marsal North America, LLC, serves as financial advisors, and Alvarez & Marsal Securities, LLC, serves as investment banker. Prime Clerk LLC acts as the Debtors' claims and noticing agent. Gordon Brothers Group, LLC, and Tiger Capital Group, LLC, serves as the Debtors' consultant. The Debtors estimated assets of at least $100 million and liabilities of at least $500 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five creditors to serve in the Official Committee of Unsecured Creditors in the Chapter 11 cases of Fresh & Easy Neighborhood Market Inc., et al. Pachulski Stang Ziehl & Jones LLP serves as counsel to the Committee. FTI Consulting, Inc. serves as its financial advisor. The Debtors closed, on or about Nov. 26, 2013, the sale of about 150 supermarkets plus a production facility in Riverside, California, to Ron Buckle's Yucaipa Cos. Pursuant to the sale terms, the bankruptcy company changed its name, and the name of the case, to Old FENM Inc. Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware on July 2, 2014, issued an order confirming Old FENM, Inc., et al.'s second amended joint Chapter 11 plan of reorganization. FUEL PERFORMANCE: Incurs $1.34-Mil. Net Income in First Quarter --------------------------------------------------------------- Fuel Performance Solutions, Inc., filed its quarterly report on Form 10-Q, disclosing a net income of $1.34 million on $374,426 of net revenues for the three months ended March 31, 2014, compared with a net loss of $408,522 on $213,294 of net revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $2.92 million in total assets, $2.54 million in total liabilities, and stockholders' equity of $382,392. The Company has incurred significant losses since inception and currently has, and previously from time to time, had limited funds with which to operate. These conditions raise substantial doubt as to the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/Wd1w5B About Fuel Performance Fuel Performance Solutions, Inc., was incorporated in Nevada on April 9, 1996, by a team of individuals who sought to address the challenges of reducing harmful emissions while at the same time improving the operating performance of internal combustion engines, especially with respect to fuel economy and engine cleanliness. After the Company's incorporation, its initial focus was product research and development, but over the past few years, the Company's efforts have been directed to commercializing its product slate, primarily DiesoLiFTTM and the PerfoLiFTTM BD- Series, for use with diesel fuel and bio-diesel fuel blends, by focusing on marketing, sales and distribution efforts in conjunction with our distribution partners. On Feb. 5, 2014, the Company changed its name from International Fuel Technology, Inc., to Fuel Performance Solutions, Inc. FURNITURE BRANDS: Files Second Amended Liquidation Plan ------------------------------------------------------- FBI Wind Down, Inc., f/k/a Furniture Brands International, Inc., and its debtor affiliates, on July 9, filed with the U.S. Bankruptcy Court for the District of Delaware a second amended joint plan of liquidation to, among other things, clarify certain provisions relating to the liquidation trustee and the creation of a liquidating trust. A blacklined version of the Second Amended Plan is available at http://bankrupt.com/misc/FBIplan0709.pdf The Hon. Christopher S. Sontchi, who is overseeing the Debtors' Chapter 11 cases, will convene a hearing on July 14, 2014, to consider confirmation of the Plan. The Internal Revenue Service objected to the Debtors' Plan, complaining that it violates the law by allowing the company to escape its tax debts, Law360 reported. The tax collection agency argued that various provisions in the liquidation stemming from the $280 million sale of Furniture Brands' assets to private equity firm KPS Capital Partners LP violate the Anti-Injunction Act by enjoining the collection of taxes against non-debtor third parties, which is not within the scope of a bankruptcy court's authority, the Law360 report related. About Furniture Brands Furniture Brands International (NYSE:FBN) -- http://www.furniturebrands.com-- engaged in the designing, manufacturing, sourcing and retailing home furnishings. Furniture Brands markets products through a wide range of channels, including company owned Thomasville retail stores and through interior designers, multi-line/ independent retailers and mass merchant stores. Its brands include Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith and LaBarge. The balance sheet at June 29, 2013, showed $546.73 million in total assets against $550.13 million in total liabilities. On Sept. 9, 2013, Furniture Brands International, Inc. and 18 affiliated companies sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12329). Attorneys at Paul Hastings LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. Alvarez and Marsal North America, LLC, is the restructuring advisors. Miller Buckfire & Co., LLC is the investment Banker. Epiq Systems Inc. dba Epiq Bankruptcy Solutions is the claims and notice agent. The official creditor's committee is comprised of the Pension Benefit Guaranty Corp., Milberg Factors Inc. and five suppliers. The Committee tapped Blank Rome LLP as co-counsel, Hahn & Hessen LLP as lead counsel, BDO Consulting as financial advisor, and Houlihan Lokey Capital, Inc., as investment banker. In November 2013, Furniture Brands won bankruptcy court approval to sell the business to KPS Capital Partners LP for $280 million. Private-equity investor KPS formed a new company named Heritage Home Group LLC to operate the business. Furniture Brands changed its name to FBI Wind Down, Inc., following the sale. * * * The Debtors obtained an extension until Aug. 24, 2014 of the exclusive period within which they may file a Chapter 11 plan. The exclusive period within which the Debtors may solicit acceptances to that plan is extended until Oct. 21, 2014. GEMINI HDPE: S&P Assigns Prelim. 'B+' Rating on $420MM Loan ----------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its preliminary 'B+' senior secured rating and '3' recovery rating to Gemini HDPE LLC's proposed first-lien senior secured $420 million term loan B due 2021. The '3' recovery rating indicates meaningful (50% to 70%) recovery of principal in a default scenario. The outlook is stable. Gemini is a 50/50 joint venture between INEOS AG (INEOS) and Sasol Ltd. via wholly owned indirect subsidiaries INEOS Gemini HDPE Holding Co. LLC (INEOS HoldCo) and Sasol Chemicals North America LLC (Sasol CNA). It intends to raise $524 million of capital to fund the construction of a 1 billion pound bimodal high-density polyethylene (HDPE) plant in La Porte, Texas. The proposed funding sources include a $420 million term loan B and $104 million of equity. S&P is assigning its 'B+' rating to the term loan B using our project finance methodology. The rating on the term loan B is weak-linked to the rating on INEOS Group Holdings S.A. (B+/Stable), which guarantees 50% of the project's debt and all other payment obligations during the construction and operational phases. Sasol Financing (Pty.) Ltd., a subsidiary of Sasol Ltd.(BBB/Stable), guarantees the remaining 50% of Gemini's debt and counterparty payment obligations. The completion and tolling guarantees are several, not joint, which ultimately links the project's rating to the weakest rated counterparty. Relative to other rated projects, Gemini is unique in that its parent companies fully guarantee the project's debt service, making it immune to construction and operating risks. S&P analyzed whether the project's stand-alone merits (i.e., assuming the project operated on a merchant basis, without benefiting from any parent contracts) could warrant a higher rating during the operations phase, but concluded that it would be no better than the assigned 'B+' rating. Gemini is a special-purpose, bankruptcy-remote operating entity, set up to build the HDPE plant at the INEOS Battleground Manufacturing Complex in La Porte. S&P expects the facility to start operations in the latter half of 2016. Gemini will repay its debt obligations from a 15-year tolling agreement with INEOS HoldCo and Sasol CNA (guaranteed by INEOS Group Holdings and Sasol Financing (Pty.) Ltd., respectively). Each sponsor is responsible to supply one-half of the raw material (ethylene and 1-hexene) and, in return, will receive one-half of the plant's output. The tolling fee received by the project covers all of its operating costs and debt service obligations. The sponsors are obligated to pay the toll fee under all circumstances, including closure of the plant or if a bankruptcy occurs. The plant's construction is supported by a several, and not joint, completion guarantee between INEOS Group Holdings and Sasol Financing (Pty.) Ltd. This agreement, which meets the guidelines set forth in S&P's guarantee criteria, effectively assures the full and timely payment of the project's debt regardless of whether or not the plant becomes operational. The stable outlook on Gemini mirrors that on INEOS Group Holdings. If S&P revised its outlook on INEOS Group Holdings, S&P would likely do the same to Gemini's outlook. Similarly, if S&P was to raise or lower the rating on INEOS Group Holdings, it would likely do the same to the rating on Gemini. GENCO SHIPPING: Exits Chapter 11 Bankruptcy Protection ------------------------------------------------------ The Associated Press reported that drybulk shipper Genco Shipping emerged from Chapter 11 bankruptcy reorganization, a week after the the U.S. Bankruptcy Court for the Southern District of New York confirmed its Prepackaged Plan of Reorganization. The Troubled Company Reporter has previously reported that upon completion of the restructuring process, the Plan will reduce the Company's total debt by approximately $1.2 billion and enhance its financial flexibility. About Genco Shipping & Trading New York-based Genco Shipping & Trading Limited (NYSE: GNK) transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. Excluding Baltic Trading Limited's fleet, Genco Shipping owns a fleet of 53 drybulk vessels, consisting of nine Capesize, eight Panamax, 17 Supramax, six Handymax and 13 Handysize vessels, with an aggregate carrying capacity of approximately 3,810,000 dwt. In addition, Genco Shipping's subsidiary Baltic Trading Limited currently owns a fleet of 13 drybulk vessels, consisting of four Capesize, four Supramax, and five Handysize vessels. Genco Shipping & Trading sought bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-11108) on April 21, 2014, to implement a prepackaged financial restructuring that is expected to reduce the Company's total debt by $1.2 billion and enhance its financial flexibility. The company's subsidiaries other than Baltic Trading Limited (and related entities) also sought bankruptcy protection. Genco, owned and controlled by Peter Georgiopoulos, disclosed assets of $2.448 billion and debt of $1.475 billion as of Feb. 28, 2014. Adam C. Rogoff, Esq., and Anupama Yerramalli, Esq., at Kramer Levin Naftalis & Frankel LLP serve as the Debtors' bankruptcy counsel. Blackstone Advisory Partners, L.P., is the financial advisor. GCG Inc. is the claims and notice agent. Wilmington Trust, N.A., in its capacity as successor administrative and collateral agent under a 2007 credit agreement, is represented by Dennis Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP. Credit Agricole Corporate & Investment Bank, as agent and security trustee under an August 2010 Loan Agreement; Deutsche Bank Luxembourg S.A., as agent, and Deutsche Bank AG Fillale Deutschlandgeschaft, as security agent and bookrunner under the August 2010 Loan Agreement, are represented by Alan Kornberg, Esq., Sarah Harnett, Esq., and Elizabeth McColm, Esq., at Paul Weiss Rifkind Wharton & Garrison LLP. Paul Weiss also represents the Pre-Petition $100 Million and $253 Million Credit Facilities. The Bank of New York Mellon, the indenture trustee for Genco's 5.00% Convertible Senior Notes due Aug. 15, 2014, and the informal group of 5.00% Convertible Senior Notes due August 15, 2014, are represented by Michael Stamer, Esq., and Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP. Akin Gump also represents the Informal Convertible Noteholder Group. Kirkland & Ellis LLP's Christopher J. Marcus, Esq., Paul M. Basta, Esq., Eric F. Leon, Esq., represent for Och-Ziff Management LP. Brown Rudnick LLP's William R. Baldiga, Esq., represents an Ad Hoc Consortium of Equity Holders. Orrick, Herrington & Sutcliffe LLP's Douglas S. Mintz, Esq., Washington, DC, represents Deutsche Bank as Pre-Petition Lender, and Credit Agricole, Corporate Investment Bank, as Post-Petition Bankruptcy Lender. Dechert LLP's Allan S. Brilliant, Esq., represents the Entities Managed by Aurelius Capital Management, LP. The U.S. Trustee has appointed an Official Committee of Equity Security Holders. The Equity Committee members are (1) Aurelius Capital Partners, LP; (2) Mohawk Capital LLC; and OZ Domestic Partners, LP. It is represented by Steven M. Bierman, Esq., Benjamin R. Nagin, Esq., Michael G. Burke, Esq., James F. Conlan, Esq., and Larry J. Nyhan, Esq., at Sidley Austin LLP. Genco has filed a motion to disband the Equity Committee, complaining that it is unnecessary and wasteful of the estates' resources. GENCO SHIPPING: Rothschild Approved as Equityholders' Advisor ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized the Official Committee of Equity Security Holders to retain Rothschild Inc. as financial advisor and investment banker. The firm will be entitled to a $1.35 million completion fee payable upon either (i) confirmation and effectiveness of the Prepackaged Plan of Reorganization, or (ii) consummation of any transaction or confirmation and effectiveness of a plan of liquidation. The firm will also be entitled to $2.25 million payable upon confirmation and effectiveness of a Plan or consummation of a transaction, provided that the Plan or Transaction materially improves the recoveries of the class of holders of existing equity interests in the Company from those proposed for the class in the Prepack Plan. About Genco Shipping & Trading New York-based Genco Shipping & Trading Limited (NYSE: GNK) transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. Excluding Baltic Trading Limited's fleet, Genco Shipping owns a fleet of 53 drybulk vessels, consisting of nine Capesize, eight Panamax, 17 Supramax, six Handymax and 13 Handysize vessels, with an aggregate carrying capacity of approximately 3,810,000 dwt. In addition, Genco Shipping's subsidiary Baltic Trading Limited currently owns a fleet of 13 drybulk vessels, consisting of four Capesize, four Supramax, and five Handysize vessels. Genco Shipping & Trading sought bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 14-11108) on April 21, 2014, to implement a prepackaged financial restructuring that is expected to reduce the Company's total debt by $1.2 billion and enhance its financial flexibility. The company's subsidiaries other than Baltic Trading Limited (and related entities) also sought bankruptcy protection. Genco, owned and controlled by Peter Georgiopoulos, disclosed assets of $2.448 billion and debt of $1.475 billion as of Feb. 28, 2014. Adam C. Rogoff, Esq., and Anupama Yerramalli, Esq., at Kramer Levin Naftalis & Frankel LLP serve as the Debtors' bankruptcy counsel. Blackstone Advisory Partners, L.P., is the financial advisor. GCG Inc. is the claims and notice agent. Wilmington Trust, N.A., in its capacity as successor administrative and collateral agent under a 2007 credit agreement, is represented by Dennis Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP. Credit Agricole Corporate & Investment Bank, as agent and security trustee under an August 2010 Loan Agreement; Deutsche Bank Luxembourg S.A., as agent, and Deutsche Bank AG Fillale Deutschlandgeschaft, as security agent and bookrunner under the August 2010 Loan Agreement, are represented by Alan Kornberg, Esq., Sarah Harnett, Esq., and Elizabeth McColm, Esq., at Paul Weiss Rifkind Wharton & Garrison LLP. Paul Weiss also represents the Pre-Petition $100 Million and $253 Million Credit Facilities. The Bank of New York Mellon, the indenture trustee for Genco's 5.00% Convertible Senior Notes due Aug. 15, 2014, and the informal group of 5.00% Convertible Senior Notes due August 15, 2014, are represented by Michael Stamer, Esq., and Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP. Akin Gump also represents the Informal Convertible Noteholder Group. Kirkland & Ellis LLP's Christopher J. Marcus, Esq., Paul M. Basta, Esq., Eric F. Leon, Esq., represent for Och-Ziff Management LP. Brown Rudnick LLP's William R. Baldiga, Esq., represents an Ad Hoc Consortium of Equity Holders. Orrick, Herrington & Sutcliffe LLP's Douglas S. Mintz, Esq., Washington, DC, represents Deutsche Bank as Pre-Petition Lender, and Credit Agricole, Corporate Investment Bank, as Post-Petition Bankruptcy Lender. Dechert LLP's Allan S. Brilliant, Esq., represents the Entities Managed by Aurelius Capital Management, LP. The U.S. Trustee has appointed an Official Committee of Equity Security Holders. The Equity Committee members are (1) Aurelius Capital Partners, LP; (2) Mohawk Capital LLC; and OZ Domestic Partners, LP. It is represented by Steven M. Bierman, Esq., Benjamin R. Nagin, Esq., Michael G. Burke, Esq., James F. Conlan, Esq., and Larry J. Nyhan, Esq., at Sidley Austin LLP. Genco has filed a motion to disband the Equity Committee, complaining that it is unnecessary and wasteful of the estates' resources. GLOBAL ARENA: Has $349K Net Loss for March 31 Quarter ----------------------------------------------------- Global Arena Holding, Inc., filed its quarterly report on Form 10- Q, disclosing a net loss of $349,643 on $7.59 million of total revenues for the three months ended March 31, 2014, compared with a net loss of $994,621 on $2.12 million of total revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.65 million in total assets, $4.78 million in total liabilities, and a stockholders' deficit of $3.13 million. The Company has generated recurring losses and cash flow deficits from operations since inception and has had to continually borrow to continue operations. In addition, the Company is in default of certain notes outstanding and is subject to the holders' continued forbearance of not demanding payment. These matters raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/xBdSZo About Global Arena New York, N.Y.-based Global Arena Holding, Inc., formerly Global Arena Holding Subsidiary Corp., was formed in February 2009, in the state of Delaware. The Company is a financial services firm that services the financial community through its subsidiaries as follows: Global Arena Investment Management LLC provides investment advisory services to its clients. GAIM is registered with the Securities and Exchange Commission as an investment advisor and clears all of its business through Fidelity Advisors, its correspondent broker. Global Arena Commodities Corp. provides commodities brokerage services and earns commissions. Global Arena Trading Advisors, LLC provides futures advisory services and earns fees. GATA is registered with the National Futures Association (NFA) as a commodities trading advisor. Lillybell Entertainment, LLC provides finance services to the entertainment industry. Global Arena disclosed a net loss attributable to common stockholders of $2.44 million in 2012, as compared with a net loss attributable to common stockholders of $2.75 million in 2011. Wei, Wei & Co., LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses since inception, experiences a deficiency of cash flow from operations and has a stockholders' deficiency. These conditions raise substantial doubt about the Company's ability to continue as a going concern. GOLDKING HOLDINGS: Plan Outline Approved, Aug. 18 Conf. Hrg Set --------------------------------------------------------------- Goldking Holdings, LLC, et al., won Bankruptcy Court approval of the revised Disclosure Statement explaining their Joint Plan of Reorganization. The Disclosure Statement Order, signed by Judge David R. Jones on June 25, 2014, found that the Plan Outline contain adequate information within the meaning of Section 1125(a) of the Bankruptcy Code. The Plan originally, filed on May 27, 2014, was amended along with the Disclosure Statement on June 25. Among other things, the Plan contemplates: -- the issuance of New Equity; -- provision of Exit Financing by Wayzata Opportunities Fund II; -- the cancellation of certain securities and agreements; -- appointment of a Plan Agent; and -- preservation of certain Avoidance Actions. The Plan designates and provides treatment for 17 classes of claims and interests against the Debtors -- one of them was added under the First Ameneded Plan, Class GOO-04. Before the Court entered its ruling, several parties filed formal written objections. They include the Official Committee of Unsecured Creditors; the Tallerine Parties -- Leonard C. Tallerine, Jr. and Goldking LT Capital Corp.; and White Oak Operating Co., LLC and White Oak Energy V, LLC. The Debtors related that they engaged in discussions with the Objecting Parties to resolve their issues. Among the issues resolved are noted in the Amended Plan and Disclosure Statement. All objections to the Disclosure Statement are overruled to the extent not withdrawn, settled or otherwise resolved, the Court ruled. A redline version of the First Amended Disclosure Statement dated June 25, 2014, is available for free at: http://bankrupt.com/misc/GOLDKING_AmdDS0625.pdf Confirmation Hearing The Court will commence a hearing on Aug. 18, 2014, at 2:00 p.m. Central Time, to consider confirmation of the Plan. Creditors eligible to vote are given until Aug. 8 to complete and send back ballots for the Plan. Ballots may be delivered by mail, messenger service, or overnight delivery to: Haynes and Boone LLP Attn: Ken Rusinko 1221 McKinney Suite 2100 Houston, Texas 77010 or may be transmitted by facsimile to his attention at (713)236- 5401. Counsel for White Oak: WINSTON & STRAWN LLP James M. Donnell, Esq. 200 Park Avenue New York NY 1016-4193 Email: jdonnell@winston.com Counsel for Leonard Tallerine Parties: Benjamin Kadden Lugenbuhl 601 Poydras Street, Suite 2775 New Orleans LA 70130 Email: bkadden@lawla.com About Goldking Holdings Goldking Holdings LLC, an oil-and-gas exploration company based in Houston, sought bankruptcy protection (Bankr. D. Del. Case No. 13-12820) in Wilmington, Delaware, on Oct. 30, 2013, from creditors with plans to sell virtually all its assets. Goldking Onshore Operating, LLC, and Goldking Resources, LLC, also sought creditor protection. The cases were initially assigned to Delaware Judge Brendan Linehan Shannon. On Nov. 20, 2013, Judge Shannon granted the request of Goldking's former CEO Leonard C. Tallerine Jr. and Goldking Capital LT Corp., to move the Chapter 11 case to Houston, Texas (Bankr. S.D. Tex. Case No. 13-37200). Mr. Tallerine owns a nearly 6% stake in the company through an entity called Goldking LT Capital Corp. The Debtors are represented by Scott W. Everett, Esq., and Christopher L. Castillo, Esq., at Haynes and Boone, LLP. Edmon L. Morton, Esq., and Robert F. Poppiti, Jr., Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. The Debtors' notice, claims, solicitation and balloting agent is Epiq Bankruptcy Solutions, LLC. Lantana Oil & Gas Partners was initially hired as the Debtors' financial advisors. In December 2013, the Debtors won Court approval to employ E-Spectrum Advisors LLC, led by its CEO Coy Gallatin, as asset sale advisor. Alvarez & Marsal Global Forensic and Dispute Services, LLC, has been engaged to provide computer forensics and related services. Goldking Holdings disclosed $16,170 in assets and $11,484,881 in liabilities as of the Chapter 11 filing. Judy A. Robbins, United States Trustee for the Southern District of Texas, appointed a three-member official committee of unsecured creditors. Matthew S. Okin, Esq. and Christopher Adams of Okin & Adams LLP serve as local counsel to the Committee. The Committee withdrew its application to employ Brinkman Portillo Ronk, APC, as general counsel amidst objections from the Debtors and the U.S. Trustee. Claro Group LLC is the panel's financial advisor. Wayzata Investment Partners, LLC and Wayzata Opportunities Fund II, L.P. are lenders to the Debtors. They are represented by John F. Higgins, Esq., of Porter Hedges LLP. GOLDKING HOLDINGS: Reaches Deal to Access DIP Loans Thru Aug. 1 --------------------------------------------------------------- Goldking Holdings, LLC, et al., negotiated a fourth amended stipulation with lender Wayzata Opportunities Fund II, L.P., for an extension of access to postpetition financing through Aug. 1, 2014. Specifically, the parties have agreed to a third supplemental budget, which operates solely to extend the term of the existing second agreed supplemental budget and the final order (1) approving postpetition financing; (2) authorizing use of cash collateral; and (3) granting liens and providing superpriority administrative expense statues to Aug. 1, 2014. The third agreed supplemental Budget does not contemplate any increase in fund availability or any other "material" amendments. Plan Milestone Extensions The Debtors and Lender have also agreed to amendments of a Ratification Agreement and of the Final DIP Loan Order to allow the Debtors (i) until Friday, July 11, 2014, to have Court approval of a disclosure statement, and (ii) until Friday, Aug. 15, 2014 to have a plan of reorganization confirmed by the Court. About Goldking Holdings Goldking Holdings LLC, an oil-and-gas exploration company based in Houston, sought bankruptcy protection (Bankr. D. Del. Case No. 13-12820) in Wilmington, Delaware, on Oct. 30, 2013, from creditors with plans to sell virtually all its assets. Goldking Onshore Operating, LLC, and Goldking Resources, LLC, also sought creditor protection. The cases were initially assigned to Delaware Judge Brendan Linehan Shannon. On Nov. 20, 2013, Judge Shannon granted the request of Goldking's former CEO Leonard C. Tallerine Jr. and Goldking Capital LT Corp., to move the Chapter 11 case to Houston, Texas (Bankr. S.D. Tex. Case No. 13-37200). Mr. Tallerine owns a nearly 6% stake in the company through an entity called Goldking LT Capital Corp. The Debtors are represented by Scott W. Everett, Esq., and Christopher L. Castillo, Esq., at Haynes and Boone, LLP. Edmon L. Morton, Esq., and Robert F. Poppiti, Jr., Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. The Debtors' notice, claims, solicitation and balloting agent is Epiq Bankruptcy Solutions, LLC. Lantana Oil & Gas Partners was initially hired as the Debtors' financial advisors. In December 2013, the Debtors won Court approval to employ E-Spectrum Advisors LLC, led by its CEO Coy Gallatin, as asset sale advisor. Alvarez & Marsal Global Forensic and Dispute Services, LLC, has been engaged to provide computer forensics and related services. Goldking Holdings disclosed $16,170 in assets and $11,484,881 in liabilities as of the Chapter 11 filing. Judy A. Robbins, United States Trustee for the Southern District of Texas, appointed a three-member official committee of unsecured creditors. Matthew S. Okin, Esq. and Christopher Adams of Okin & Adams LLP serve as local counsel to the Committee. The Committee withdrew its application to employ Brinkman Portillo Ronk, APC, as general counsel amidst objections from the Debtors and the U.S. Trustee. Claro Group LLC is the panel's financial advisor. Wayzata Investment Partners, LLC and Wayzata Opportunities Fund II, L.P. are lenders to the Debtors. They are represented by John F. Higgins, Esq., of Porter Hedges LLP. GRANDPARENTS.COM INC: Has $1.98-Mil. Net Loss in First Quarter -------------------------------------------------------------- Grandparents.com, Inc., reported a net loss of $1.98 million on $35,275 of total revenue for the three months ended March 31, 2014, compared to a net loss of $2.74 million on $122,859 of total revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $4.35 million in total assets, $5.04 million in total liabilities, and a stockholders' deficit of $687,525. The Company has used approximately $900,000 in cash for operating activities during the three-months ended March 31, 2014. Without additional capital from existing or outside investors or further financing, the Company's ability to continue to implement its business plan may be limited. These conditions raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q filed with the U.S. Securities and Exchange Commission is available at http://is.gd/WB43qz New York-based Grandparents.com, Inc., together with its consolidated subsidiaries, is a family-oriented social media company that through its Web site, http://www.grandparents.com/, serves the age 50+ demographic market. The website offers activities, discussion groups, expert advice and newsletters that enrich the lives of grandparents by providing tools to foster connections among grandparents, parents, and grandchildren. GREEN AUTOMOTIVE: Accumulated Deficit at $54MM as of March 31 ------------------------------------------------------------- Green Automotive Company filed its quarterly report on Form 10-Q disclosing net income of $56.43 million on $1.25 million of revenues for the three months ended March 31, 2014, compared with net income of $38.08 million on $218,396 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.98 million in total assets, $13.3 million in total liabilities, and a stockholders' deficit of $11.31 million. As of March 31, 2014, the Company has sustained recurring operating losses and accumulated deficit of $54.46 million. These conditions, among others, give rise to substantial doubt about our ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/WrUjLs About Green Automotive Company Green Automotive Company is a vehicle design, engineering, manufacturing and distribution company. The Company also provides after sales program. It possesses a portfolio of businesses and is active in three main market segments: Cutting edge technology development, engineering and design with a focus on zero and low emission vehicle solutions; Manufacturing and customization of vehicles for markets with the potential to be converted into low emission or electric vehicles, such as shuttle buses, taxis, commercial vehicles, and After sales services for electric or low emission vehicles, including servicing and repair. GRILLED CHEESE: Incurs $1.2-Mil. Net Loss for First Quarter ----------------------------------------------------------- The Grilled Cheese Truck, Inc., filed its quarterly report on Form 10-Q disclosing a net loss of $1.2 million on $634,063 of total revenue for the three months ended March 31, 2014, compared with a net loss of $831,037 on $382,369 of total revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.33 million in total assets, $6.47 million in total liabilities, and a stockholders' deficit of $5.14 million. The Company has cash of $89,498 and working capital deficiency of $2.7 million at March 31, 2014. The Company has historically relied on proceeds from the issuance of debt and shares of its Common Stock to finance its operations. The Company's net loss for the three-month period ended March 31, 2014 was $1.2 million and the deficit accumulated by the Company amounts to $9.1 million as of March 31, 2014. These matters raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/4AAE3U The Grilled Cheese Truck, Inc., engages in the operation of food trucks. Its food trucks sell various gourmet grilled cheese and other comfort foods in the southern California and Phoenix, Arizona areas. The company serves gourmet grilled cheese melts, as well as grilled cheese sandwiches and side dishes, and dessert- based sandwiches. It owns and operates a fleet of five food trucks. HCSB FINANCIAL: Elliott Davis LLC Raises Going Concern Doubt ------------------------------------------------------------ HCSB Financial Corporation filed with the U.S. Securities and Exchange Commission on May 20, 2014, its annual report on Form 10- K for the year ended Dec. 31, 2013. Elliot Davis, LLC, expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has suffered recurring losses that have eroded regulatory capital ratios and the Company's wholly owned subsidiary, Horry County State Bank, is under a regulatory Consent Order with the Federal Deposit Insurance Corporation (FDIC) that requires, among other provisions, capital ratios to be maintained at certain levels. As of Dec. 31, 2013, the Company's subsidiary is considered significantly undercapitalized based on its regulatory capital levels. The Company reported net income of $1.76 million on $17.07 million of total interest income in 2013, compared with a net loss of $9.53 million on $20.37 million of total interest income in 2012. The Company's balance sheet at Dec. 31, 2013, showed $434.59 million in total assets, $451.03 million in total liabilities, and a stockholders' deficit of $16.44 million. A copy of the Form 10-K is available at: http://is.gd/r6cjyr About HCSB Financial Loris, South Carolina-based HCSB Financial Corporation was incorporated on June 10, 1999, to become a holding company for Horry County State Bank. The Bank is a state chartered bank which commenced operations on Jan. 4, 1988. From its 13 branch locations, the Bank offers a full range of deposit services, including checking accounts, savings accounts, certificates of deposit, money market accounts, and IRAs, as well as a broad range of non-deposit investment services. During the third quarter of 2011, the Bank closed its Covenant Towers branch located at Myrtle Beach. All deposits were transferred to the Bank's Myrtle Beach branch and the Bank does not expect any disruption of service in that market for its customers. HCSB reported a net loss of $29.01 million in 2011, compared with a net loss of $17.27 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $512.65 million in total assets, $520.03 million in total liabilities and a $7.38 million total shareholders' deficit. HCSB FINANCIAL: Reports $317K Net Income for March 31 Quarter ------------------------------------------------------------- HCSB Financial Corporation filed its quarterly report on Form 10- Q, disclosing net income of $317,000 on $4.14 million of total interest income for the three months ended March 31, 2014, compared with net income of $664,000 on $4.17 million of total interest income for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $457.87 million in total assets, $471.43 million in total liabilities, and a stockholders' deficit of $13.56 million. At March 31, 2014, the Company was categorized as "critically undercapitalized" and the Bank was categorized as "significantly undercapitalized." Its losses over the past five years have adversely impacted its capital. As a result, the Company has been pursuing a plan to increase capital ratios in order to strengthen its balance sheet and satisfy the commitments required under the Consent Order. However, if the Company continues to fail to meet the capital requirements in the Consent Order in a timely manner, then this would result in additional regulatory actions, which could ultimately lead to the Bank being taken into receivership by the FDIC. The Company's auditors have noted that the uncertainty of its ability to obtain sufficient capital raises substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/D85GLo About HCSB Financial Loris, South Carolina-based HCSB Financial Corporation was incorporated on June 10, 1999, to become a holding company for Horry County State Bank. The Bank is a state chartered bank which commenced operations on Jan. 4, 1988. From its 13 branch locations, the Bank offers a full range of deposit services, including checking accounts, savings accounts, certificates of deposit, money market accounts, and IRAs, as well as a broad range of non-deposit investment services. During the third quarter of 2011, the Bank closed its Covenant Towers branch located at Myrtle Beach. All deposits were transferred to the Bank's Myrtle Beach branch and the Bank does not expect any disruption of service in that market for its customers. HCSB reported a net loss of $29.01 million in 2011, compared with a net loss of $17.27 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $512.65 million in total assets, $520.03 million in total liabilities and a $7.38 million total shareholders' deficit. HELLAS TELECOM: Termination of Ch.15 Recognition Order Sought ------------------------------------------------------------- The liquidators of Hellas Telecommunications (Luxembourg) II SCA's sued TPG Capital Management LP and Apax Partners LLP in U.S. Bankruptcy Court in Manhattan on March 13, 2014, claiming the private-equity firms left the wireless company insolvent. They filed a similar lawsuit in U.S. district court the same day. Presently, defendants TPS, APAX, TCW and Nikesh Arora have requested that the Bankruptcy Court for the Southern District of New York terminate its Recognition Order and dismiss the Chapter 15 case of Hellas Telecommunications (Luxembourg) II SCA and the related adversary proceedings. A hearing on the motion was scheduled before Honorable Martin Glenn for June 17, 2014. The Defendants are requesting that the Court terminate recognition of the Debtor's compulsory liquidation pending as a foreign main proceeding before the High Court of Justice of England and Wales and dismiss the Debtor's Chapter 15 case and adversary proceedings against the Defendants. The Defendants contend that the Recognition Order was in conflict with controlling case law in the 2nd Circuit and should never have been entered. The Defendants contend that the Debtor does not satisfy the foreign debtor eligibility requirements under Sec. 109(a) of the Bankruptcy Code as the Debtor has no domicile, place of business or property in the U.S. The Defendants assert that the Recognition Order should thus be terminated under Drawbridge Special Opportunities Fund LP v. Barnet, 737 F.3d 238 (2nd Cir. 2013) and Sec. 1517(d) of the Bankruptcy Code. Alternatively, the Defendants argue the Recognition Order should be terminated pursuant to Federal Rule of Civil Procedure 60(b)(5) or Bankruptcy Rule 9024. The Debtor contends that it has property in the form of claims for fraudulent conveyance and unjust enrichment against the Defendants. The Adversary Proceeding was initiated on March 13, 2014. Section 109(a) of the Bankruptcy Code provides that to be a debtor in a U.S. bankruptcy proceeding one must reside or have a domicile, place of business, or property in the U.S. The Barnet decision made Section 109(a) applicable to debtors under Chapter 15 of the Bankruptcy Code. Section 1517(d) of the Bankruptcy Code provides for termination of cases where recognition should not have been granted or the grounds for recognition cease to exist. Section 1506 of the Bankruptcy Code also allows termination of recognition because recognition is contrary to the public policy of the U.S. About Hellas Telecommunications In February 2007, Hellas Telecommunications was purchased from TPG Capital LP and Apax Partners by the Italian telecommunications giant Weather Group. The Company later suffered liquidity problems and commenced administration proceedings in the U.K. in November 2009. The administrators sold 100% of the shares of Wind Hellas to the existing owners, the Weather Group. An order placing the Company into liquidation was entered on Dec. 1, 2011. Andrew Lawrence Hosking and Carl Jackson, as Joint Liquidators petitioned for the Chapter 15 protection for the Company (Bankr. S.D. N.Y. Case No. 12-10631) on Feb. 16, 2012. Bankruptcy Judge Martin Glenn presides over the case. The Debtor estimated assets and debts of more than $100,000,000. The Debtor did not file a list of creditors together with its petition. The petitioners are represented by Howard Seife, Esq., at Chadbourne & Parke LLP. TPG is represented by Paul M. O'Connor, III, Esq., and Andrew K. Glenn, Esq., at Kasowitz, Benson, Torres, & Friedman, LLP of New York, NY. APAX is represented by Robert S. Fischler, Esq., and Stephen Moeller-Sally, Esq., at Ropes & Gray LLP of New York, NY. TCW is presented by Wayne S. Flick, Esq., and Amy C. Quartarolo, Esq., at Latham & Watkins LLP of Los Angeles, CA. Nikesh Aurora is represented by William F. Gray, Jr., Esq., and Alison D. Bauer, Esq., at Torys LLP of New York, NY and Michael A. Sherman, Esq., at Stubbs Alderton & Markiles, LLP of Sherman Oaks, CA. HUNTER DEFENSE: S&P Puts 'CCC' Rating on CreditWatch Positive ------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings on U.S.-based defense contractor Hunter Defense Technologies Inc., including the 'CCC' corporate credit rating, on CreditWatch with positive implications. "The CreditWatch placement reflects our increased confidence that Hunter will successfully complete the proposed refinancing, thus improving its liquidity profile," said Standard & Poor's credit analyst Chris Mooney. The company plans to use the proceeds from the new debt, along with cash on hand and additional equity from its private-equity sponsor, Metalmark Capital LLC, to repay existing debt that is scheduled to mature August 2014 and Feb. 2015. The corporate credit rating on Hunter is constrained by S&P's assessment of the company's liquidity profile as "weak," which reflects the company's upcoming debt maturities, which are all due in less than a year, and its very tight covenant compliance. S&P will monitor the company's progress on the planned refinancing. If Hunter is able to successfully extend its maturity profile and loosen its financial covenants, prompting S&P to revise its liquidity assessment to "less than adequate" or "adequate" from "weak," S&P will likely raise the corporate credit rating--potentially by more than one notch. S&P will then withdraw all of its ratings on the company at its request. IBAHN CORP: Seeks Extension of Plan Filing Date ----------------------------------------------- iBahn Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend through and including Oct. 1, 2014, the period by which they have exclusive right to file a plan of reorganization and through and including Nov. 30 the period by which they have exclusive right to obtain acceptances of that plan. The Debtors said that during the extended exclusive period, they can evaluate their options for moving forward in their Chapter 11 cases. The Debtors separately ask the Bankruptcy Court to extend until Oct. 1 the period set forth in Rule 9027 of the Federal Rules of Bankruptcy Procedure during which the Debtors may seek to remove actions to federal court. The Debtors also ask the Court to extend the time by which they may file notices of removal with respect to civil actions initiated after the Petition Date to the later of (i) Oct. 1, and (ii) the time period specified by Rule 9027(a)(3)(A) and (B) A hearing on the Debtors' extension requests is set for Aug. 14, at 9:30 a.m. (prevailing Eastern Time). Objections are due July 17. About iBahn Corp. Salt Lake City, Utah-based IBahn Corp., a provider of Internet services to hotels, sought bankruptcy protection (Bankr. D. Del. Case No. 13-12285), citing a loss of contracts with largest customer Marriott International Inc. and patent litigation costs. IBahn Chief Financial Officer Ryan Jonson said the company had assets of $13.6 million and it listed liabilities of as much as $50 million in the Chapter 11 filing on Sept. 6, 2013. The petitions were signed by Ryan Jonson as chief financial officer. Judge Peter J. Walsh presides over the case. Laura Davis Jones, Esq., Davis M. Bertenthal, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang, Ziehl Young & Jones, LLP, serve as the Debtors' counsel. The Debtors' claims and noticing agent is Epiq Bankruptcy Solutions. Epiq also serves as administrative agent. Houlihan Lokey Capital, Inc., serves as financial advisor and investment banker. IDENTIVE GROUP: Posts $5.17-Mil. Net Loss for March 31 Quarter -------------------------------------------------------------- Identive Group, Inc., reported a net loss of $5.17 million on $17.16 million of net revenue for the three months ended March 31, 2014, compared with a net loss of $4.96 million on $15.95 million of net revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $63.84 million in total assets, $40.44 million in total liabilities, and stockholders' equity of $23.4 million. The Company has historically incurred operating losses and negative cash flows from operating activities, and expects to continue to incur losses for the foreseeable future. As of March 31, 2014, the Company had a total accumulated deficit of $326 million. The loss for the period included a gain from discontinued operations of $0.5 million. The Company expects to use a significant amount of cash in its operations over the next twelve months for its operating activities and servicing of financial liabilities, including increased investment in marketing and sales capabilities to drive revenue growth, and continued investment in the Company's cloud-based services, physical access control solutions, smart card reader products and RFID and NFC products. These factors, among others, including the ongoing effects of the U.S. Government sequester and related budget uncertainty on certain parts of the Company's business, have raised substantial doubt about its ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available for free at: http://is.gd/sAhQ2w Santa Ana, California-based Identive Group, Inc., provides products and solutions used for identity management, cyber access control and near field communication and radio frequency identification-enabled applications by governments, enterprises, consumers, and customers in the healthcare and education sectors. INFRAX SYSTEMS: Has $513K Net Loss in March 31 Quarter ------------------------------------------------------ Infrax Systems, Inc., filed its quarterly report on Form 10-Q disclosing a net loss of $513,024 on $27,550 of revenues for the three months ended March 31, 2014, compared with a net loss of $578,613 on $41,761 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $2.32 million in total assets, $3.16 million in total liabilities, and a stockholders' deficit of $843,987. As of March 31, 2014, the Company has a working capital deficit and has incurred a loss from operations and recurring losses since its inception resulting in a significant accumulated deficit. As of March 31, 2014, the Company had negative working capital of approximately $2.3 million and $373 in cash with which to satisfy any future cash requirements. These conditions raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/9rHwgC St. Petersburg, Fla.-based Infrax Systems, Inc., engages in the design, development, systems integration, and manufacture of turnkey secure solutions for the utility industry. IPARADIGMS HOLDINGS: Moody's Rates 2nd Lien Sr. Secured Loan Caa2 ----------------------------------------------------------------- Moody's Investors Service announced new debt ratings for iParadigms Holdings, LLC. The Corporate Family rating ("CFR") is B3, the Probability of Default rating ("PDR") is B3-PD, the proposed senior secured first-lien revolving credit facility expiring in 2019 and proposed senior secured first-lien term loan due 2021 are rated B1, and the proposed senior secured second-lien term loan due 2022 is Caa2. The ratings outlook is stable. The proceeds of the rated debt will be used along with equity from Insight Venture Partners and GIC (the "sponsors") to acquire iParadigms, pay existing debt, and pay related fees and expenses. Ratings Rationale The B3 CFR primarily reflects iParadigms' very small, sub-$75 million revenue base and its narrow operating scope, as well as the high financial leverage borne by the company as a result of its acquisition, at a steep multiple, by private equity owners. Risks posed by scale and leverage are somewhat offset by strong operating margins, a highly recurring, subscription-based revenue model, and iParadigms' market-leading niche in a narrow, albeit growing sliver of the educational software market. While the accounting treatment of cash versus accrued revenues for software companies (which receive large, upfront payments from subscription sales) allows for large discrepancies in calculating sales and profits, even by favorable, "cash"-based measures iParadigms' opening debt-to-EBITDA leverage is no less than 8.6 times. However, the expected continued strong, double-digit top line growth on iParadigms' high-margin operations should allow for fairly rapid deleveraging -- barring, that is, aggressive financial policies by the sponsors, whose 57% equity contribution may impel them to extract dividends sooner rather than later. We note that the sponsors are paying a multiple of cash EBITDA of roughly 18 times to acquire iParadigms. Although small, the company's revenue is predictable due to subscription-based contracts that are paid in advance, and a customer retention rate that is greater than 95%. iParadigms is well known in North America for its plagiarism prevention and grading solution, Turnitin, which is used by more than 22 million high school and college students and nearly two million instructors, and which represents about 90% iParadigms' total revenues. Moody's views the company's liquidity as adequate, given our expectations for minimal free cash flow generated in 2014, supplemented by about $10 million balance sheet cash and an undrawn, $16 million revolver. The stable ratings outlook reflects Moody's expectation for about 15% revenue growth this year and next, steady cash EBITDA margins of about 45%, and close to $20 million of free cash flow next year. The ratings could be lowered if customer retention declines, anticipated revenue growth slows, or EBITDA margins decline -- reflective, perhaps, of the emergence of a formidable competing technology -- resulting in Moody's coming to expect diminished liquidity. The ratings could be raised if the size and scope of the business expand while profit margins and customer retention rates remain high, leading Moody's to expect debt-to-EBITDA to be sustained below 6.0 times while the company continues to generate better than $20 million in annual free cash flow. Assignments: Issuer: iParadigms Holdings LLC Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured Revolving Credit Facility due 2019, Assigned B1 (LGD3) Senior Secured 1st Lien Term Loan due 2021, Assigned B1 (LGD3) Senior Secured 2nd Lien Term Loan due 2022, Assigned Caa2 (LGD5) Outlook, Assigned Stable The principal methodology used in this rating was Global Software Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. iParadigms, LLC, controlled by Insight Venture Partners and GIC, is a market-leading developer and provider of educational software for plagiarism prevention and online grading serving secondary and higher education institutions. With Moody's-estimated 2014 revenue of $62 million, iParadigms hosts a suite of proprietary applications and provides customers access to its software over the Internet generally in return for an annual, prepaid subscription. IPARADIGMS HOLDINGS: S&P Assigns 'B-' CCR; Outlook Stable --------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B-' corporate credit rating to Oakland, Calif.-based iParadigms Holdings LLC. The outlook is stable. In addition, S&P assigned a 'B-' issue-level rating with a recovery rating of '3' to the company's proposed $16 million revolving credit facility due 2019 and $225 million first-lien term loan due 2021. The '3' recovery rating indicates S&P's expectation for meaningful (50% to 70%) recovery of principal in the event of payment default. At the same time, S&P assigned a 'CCC' issue-level rating with a '6' recovery rating to the proposed $115 million second-lien term loan due 2022. The '6' recovery rating indicates negligible (0% to 10%) recovery of principal in the event of payment default. "Our ratings on iParadigms reflect its 'highly leveraged' financial risk profile with leverage that we expect to be around 11x at fiscal 2014 year-end and its 'weak' business risk profile based on the company's small operating scale and niche focus in the highly fragmented and competitive overall educational technology industry," said Standard & Poor's credit analyst Jacob Schlanger. S&P expects the company to generate positive free operating cash flow while improving EBITDA margins due to scale benefits. The stable outlook reflects S&P's expectation that iParadigms will continue to generate high recurring revenue and achieve high customer renewal rates, while improving EBITDA margins based on incremental revenue growth from price increases and winning new clients. However, S&P still expects leverage to remain above the mid-8x area over the next 12 months. S&P views an upgrade as unlikely over the next 12 months given iParadigms' niche market focus and high debt leverage and its expectation that a material debt leverage reduction to the 6x area within that period is not likely. S&P could lower the rating on iParadigms if its operating profitability deteriorates materially due to revenue and EBITDA decline from competition or retention issues such that S&P do not expect the company to generate positive FOCF over the next 12 months and or meet its liquidity needs. JAMES RIVER: Has $224-Mil. in Assets, $886-Mil. in Debts -------------------------------------------------------- James River Coal Company filed its schedules of assets and liabilities with the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, disclosing $224,968,587 in assets and $886,184,211 in liabilities. The Debtor's assets consisted of deposits in checking, savings and other financial accounts, security deposits with public utilities, stocks and interests in incorporated businesses, accounts receivables, net income tax receivable, office furniture and fixtures, and other personal property such as prepaid insurance. The Debtors' liabilities consisted of $64,731,988 held by secured creditors and $821,452,223 held by unsecured nonpriority creditors. Pending before U.S. Bankruptcy Judge Kevin R. Huennekens is the Debtors' request for the Court to establish Sept. 22, 2014, as the deadline for persons or entitities, other than governmental units, to file a proof of claim in respect of a prepetition claim, including prepetition secured claims or priority claims against any of the Debtors. The Debtors propose that governmental units be given until Oct. 6 to file proofs of claim in respect of prepetition claims against any of the Debtors. Any person or entity whose claim is listed on the Schedules; provided that (i) the claim is not scheduled as ?disputed,? ?contingent? or ?unliquidated,? (ii) the claimant agrees with the amount, nature and priority of the claim as set forth in the Schedules and (iii) the claimant agrees that the claim is an obligation of the specific Debtor against which the claim is listed on the Schedules, is not required to file a proof of claim on or prior to the applicable Bar Date. Full-text copies of the Schedules are available for free at http://bankrupt.com/misc/JAMESRIVERsal0620.pdf A June 30 report by Bill Rochelle, the bankruptcy columnist for Bloomberg News, James River's $47.3 million in 4.5 percent senior unsecured convertible notes due 2015 last traded on June 23 for 2 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $270 million in 7.875 percent senior unsecured notes due 2019 traded at 11:14 a.m. on June 27 for 12.75 cents on the dollar, up from a low of 8.625 cents on May 15, the Bloomberg report said, citing Trace. About James River James River Coal Company is a producer and marketer of coal in the Central Appalachia ("CAPP") and the Midwest coal regions of the United States. James River's principal business is the mining, preparation and sale of metallurgical coal, thermal coal (which is also known as steam coal) and specialty coal. James River and 33 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. E.D. Va. Case Nos. 14-31848 to 14-31886) in Richmond, Virginia, on April 7, 2014. The petitions were signed by Peter T. Socha as president and chief executive officer. Judge Kevin R. Huennekens oversees the Chapter 11 cases. On the petition date, James River Coal disclosed total assets of $1.06 billion and total liabilities of $818.6 million. Davis Polk & Wardwell LLP serves as the Debtors' counsel. Hunton & Williams, LLP, acts as the Debtors' local counsel. Kilpatrick Townsend & Stockton LLP serves as the Debtors' special counsel. Perella Weinberg Partners L.P. is the Debtors' financial advisor. Deutsche Bank Securities Inc. serves as the Debtors' investment banker and M&G advisor. Epiq Bankruptcy Solutions, LLC, acts as the debtors' notice, claims and administrative agent. The U.S. Trustee for Region 4 has appointed five creditors to the Official Committee of Unsecured Creditors. Michael S. Stamer, Esq., Alexis Freeman, Esq., and Jack M. Tracy II, Esq., at Akin Gump Strauss Hauer & Feld LLP; and Jonathan L. Gold, Esq., Christopher L. Perkins, Esq., and Christian K. Vogel, Esq., at LeClairRyan. K. LAURENMARTIN: Files for Chapter 7 in Florida ----------------------------------------------- K. Laurenmartin Enterprises Inc., doing business as Planet Beach, 3152 Floral Way East, Apopka, filed a Chapter 7 petition (Bankr. M.D. Fla. Case No. 14-05016) on April 30, 2014. The Debtor disclosed no assets and $1.7 million in liabilities. Major creditors are: -- Regional Asset Servicing Corporation, The Villages with $1.1 million; -- Small Business Administration, c/o Pioneer Credit Recovery, Arcade, N.Y., with $517,041; -- Apex Development Corp., care of Michael R. LeMaire, Esq., Fort Lauderdale, with $82,215. KAISER ALUMINUM: Moody's Affirms 'Ba3' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service changed the rating outlook for Kaiser Aluminum Corporation to positive from stable. At the same time, Moody's affirmed the Ba3 corporate family rating, the Ba3-PD probability of default rating and the Ba3 senior unsecured rating. The speculative grade liquidity rating remains unchanged at SGL-1. The change in Kaiser's outlook acknowledges the company's ability to maintain solid metrics notwithstanding price pressure in some of its key business areas as a result of excess inventory in the aerospace supply chain. The change also reflects the fact that the company has completed its major strategic investments, particularly at its Trentwood facility in Washington to expand its heat treated plate capacity to serve the aerospace industry. With the ramp-up currently in process for the company's casting complex and heat treated expansion at Trentwood, Kaiser's performance over the balance of 2014 and in 2015 is expected to reflect the benefits from these strategic investments. In addition to the capacity expansion in a key market, these investments are expected to be reflected in improved productivity and operating efficiency. The outlook change also considers the company's ability to maintain a conservative capital structure and leverage profile that helps it to accommodate the volatility in the aluminum markets and economic cycles in its key end user markets: aerospace, general industry, which continues in a recovery mode, and automotive extrusions. Issuer: Kaiser Aluminum Corporation Outlook Actions: Outlook, Changed To Positive From Stable Affirmations: Issuer: Kaiser Aluminum Corporation Probability of Default Rating, Affirmed Ba3-PD Corporate Family Rating, Affirmed Ba3 Senior Unsecured Regular Bond/Debenture Jun 1, 2020, Affirmed Ba3 (LGD4) Ratings Rationale The Ba3 corporate family rating (CFR) reflects Kaiser's moderate leverage as measured by its debt/EBITDA ratio (2.3x for the twelve months ended March 31, 2014) the strong market presence of its semi-fabricated aluminum mill products in the currently favorable commercial aerospace and automotive sectors, limited exposure to base metal price volatility, long standing relationships with its biggest customers, and Moody's expectations for a continued strong liquidity profile. Approximately 70% of Kaiser's value added revenues (net sales less the hedged cost of aluminum) are derived from its aerospace and automotive market segments (approximately 60% aerospace), which continue to enjoy good fundamentals. The current solid outlook for these two industries is expected to support performance in 2014 and beyond despite continued competitive conditions in the aluminum plate market, which are expected to clear in 2014 and the ongoing slow recovery in the general engineering segment due to the slow improvement in industrial manufacturing in the US. The company's liquidity position, evidenced by $290 million in cash at March 31, 2014 and a $300 million asset based revolving credit facility ($7 million in letter of credit usage, $256 million available at March 31, 2014 based upon receivable and inventory positions) provide further support to the rating. At the same time, the Ba3 CFR also recognizes Kaiser's modest size (with roughly $1.3 billion in revenues and $732 million in value added revenues for the twelve months through March 31, 2014 -- essentially flat with 2013 performance); customer concentration; reliance on the cyclical aerospace and light automotive segments; the inherent risk associated with its acquisition focused growth strategy, and the potential for a negative financial impact from the conditional cash conversion features of its convertible notes, although this has been limited due to the company's purchase of call options and sale of net-share --settled warrants. The Ba3 rating of the senior unsecured notes, which are guaranteed on a senior unsecured basis by each guarantor of the asset based revolver, reflects the moderate level of secured debt and priority payables ahead of the notes as well as their structurally senior position to Kaiser's $175 million convertible notes, which are not guaranteed by its subsidiaries. The rating could be favorably impacted should the company be able to sustain an adjusted leverage ratio of no more than 2.5x, EBIT/interest of at least 4x and (CFO-dividends)/debt greater than 35%. Kaiser's ratings could be lowered if metrics deteriorate sustainably (specifically, if debt to EBITDA increases to greater than 3.5x and EBIT to interest falls below 3x), if aerospace or auto sector fundamentals turn negative from any shock to the global economy, if the company makes acquisitions at aggressive multiples, or if available liquidity (measured as cash plus revolver availability) drops below $150 million for more than two quarters. Kaiser Aluminum Corporation, based in Foothill Ranch, California, currently operates 12 fabricating facilities throughout North America (11 in the US, and 1 in Canada). Kaiser produces value- added-sheet, plate, extrusions, rod, bar, and tube primarily for aerospace, automotive, and general engineering market segments. For the twelve months ended March 31, 2014, the company generated revenues of $1.3 billion of which value-added-revenues were $732 million, relatively flat with fiscal 2013 performance. The principal methodology used in this rating was the Global Steel Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. KEMPER CORP: A.M. Best Affirms 'bb' on Preferred Stock Rating ------------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of the property/casualty subsidiaries and affiliated insurance companies (Kemper Property and Casualty Group) (Kemper P&C) of Kemper Corporation (Kemper Corp.) [NYSE: KMPR]. A.M. Best also has affirmed the FSRs of A- (Excellent) and ICRs of "a-" of Kemper Corp.'s life/health subsidiaries, collectively referred to as Kemper Life & Health Group (Kemper L&H) and the separately rated Reserve National Insurance Company (Reserve National) (Oklahoma City, OK). Concurrently, A.M. Best has affirmed the ICR of "bbb-" and senior debt ratings of "bbb-" on $250 million 6.0% unsecured senior notes due 2015, $360 million 6.0% unsecured senior notes due 2017 and "bb+" on $150 million 7.375% subordinated debt due 2054 of Kemper Corp. In addition, A.M. Best has affirmed the indicative ratings of "bbb-" on senior unsecured debt, "bb+" on subordinated debt and "bb" on preferred stock in the automatic shelf of Kemper Corp. The outlook for all ratings is stable, with the exception of the outlook of Reserve National's ratings, which was revised to stable from negative. All companies are headquartered in Chicago, IL, unless otherwise specified. The affirmation of the ratings for Kemper P&C, led by Trinity Universal Insurance Company (Trinity) (Dallas, TX), is reflective of its solid risk-adjusted capitalization and balance sheet liquidity, generally profitable earnings, diverse business profile and the continual actions being taken to improve earnings, reduce exposure to catastrophic loss and manage risks. These actions include increasing rates, enhancing risk selection, reducing exposure in catastrophe-prone areas, discontinuing its Direct to Consumer business segment and further developing a formal enterprise risk management program. Kemper P&C, which ranked 52nd in the United States based on 2013 direct premiums written, maintains a diverse business profile with a strong market presence, good geographic spread of risk, multi-channel distribution and long-standing agency relationships. Trinity reinsures the other members through a 100% net quota share reinsurance agreement. Partially offsetting these positive rating factors is Kemper P&C's underwriting variability and negative operating cash flows in most of the past five years. In addition, underwriting leverage remains above average when compared with the private passenger automobile and homeowner composite. Kemper P&C continues to face challenges by strong competitive market pricing in its main private passenger auto lines of business, potential catastrophic losses from increased severity of weather events and continuation of low interest rates and equity market volatility, which is putting pressure on investment returns. However, following underwriting deterioration between 2011 and 2012, Kemper P&C was able to improve capitalization from favorable operating earnings in 2013. Kemper P&C's outlook may be revised to negative or its ratings downgraded if capitalization weakens or operating performance does not show sustained improvement. The outlook on the ratings may be revised to positive and upward movement in the ratings may occur if there is a favorable earnings trend that leads to capital preservation without excessive growth. The affirmation of the ratings for Kemper L&H recognize its important role within the Kemper organization, its strong niche presence in the home service life insurance market, as well as its well-established employee agency field force and strong operating performance. The life/health subsidiaries are among the market leaders in the mature home service life insurance segment, predominantly marketing low face amount permanent and term life policies. Kemper L&H's consolidated risk-adjusted capitalization is enhanced by its strong profitability, which historically has offset large dividend payments made to Kemper Corp. Furthermore, A.M. Best notes Kemper L&H's stable liability structure relative to its life/annuity peers is facilitated by the sale of straightforward, lower risk product offerings through career agents. Partially offsetting these strengths is A.M. Best's belief that Kemper L&H may be challenged to meaningfully grow its businesses given the limited growth potential in the mature home service market. A.M. Best also notes the continued high concentration of real estate and Schedule BA assets -- limited liability investment companies and limited partnerships -- relative to total capital that remain above industry averages; however, the real estate is unlevered. Positive rating movement is unlikely in the near term. Downward rating actions may occur on Kemper L&H's ratings if there is a decline in capital, downward earnings trend, significant dividends to its parent, or a negative rating action on Kemper P&C. Additionally, downward pressure could occur if there is a change in Kemper Corp.'s willingness or ability to provide financial support. In affirming the ratings of Reserve National, A.M. Best notes its generally increasing net premium trends, favorable operating performance and adequate stand-alone risk-adjusted capitalization. A.M. Best has revised the outlook of Reserve National to stable from negative, due to the overall replacement of revenue from hospitalization products that are subject to the challenges of the Affordable Care Act (ACA), with life products and other supplemental health products that are not subject to ACA requirements. Additionally, Reserve National has demonstrated strong risk-adjusted capital and consistent profitability on a statutory and GAAP basis, despite being challenged by life new business surplus strain. KISMET: Obtains Affirmance in Post-Petition Transfer Appeals ------------------------------------------------------------ Cooley LLP on July 8 disclosed that it successfully represented Kismet Acquisition, LLC, in obtaining affirmance in several related appeals before the Ninth Circuit Court of Appeals in a case that has spanned more than ten years. The appeals concerned a judgment in Kismet's favor issued by the United States Bankruptcy Court for the Southern District of California, avoiding and recovering the debtors' post-petition transfer of an interest in coastal real estate located in Jalisco, Mexico, as well as the related contempt sanctions awarded against the defendants as a result of their failure to comply with the judgment. The Ninth Circuit's affirmance of the judgment avoiding and recovering the post-petition transfer as fraudulent establishes the broad extraterritorial reach of a bankruptcy court over an estate and upholds a bankruptcy court's exclusive jurisdiction over core proceedings. In addition, the Ninth Circuit's finding that the defendants had waived any objection they might have had under Stern v. Marshall to the bankruptcy court's judgment under Article III of the Constitution is one of the first circuit court applications of the U.S. Supreme Court's ruling in Exec. Benefits Ins. Agency v. Arkison concerning the breadth of the bankruptcy court's power to hear and decide avoidance actions. The Ninth Circuit also affirmed the District Court's order affirming in part the Bankruptcy Court's award of contempt sanctions against defendants for having created impediments in Mexico to try to evade the bankruptcy court's judgment to transfer the Mexican property to Kismet. This decision establishes the broad power of a bankruptcy court to award significant monetary sanctions where it is necessary to obtain compliance with a judgment. It also upholds the bankruptcy court's power to require that specific acts be taken even if that act must on foreign soil. The Ninth Circuit also upheld the abrogation of the defendants' attorney-client privilege under the crime-fraud exception, establishing very broad and important limitations on the availability of the attorney-client privilege to a contemnor in any contempt proceeding. The Cooley team representing Kismet was led by partner Ali M.M. Mojdehi and included associate Janet Dean Gertz. About Cooley LLP Cooley's attorneys solve legal issues for entrepreneurs, investors, financial institutions and established companies. Clients partner with Cooley on transformative deals, complex IP and regulatory matters, and bet-the-company litigation, often where innovation meets the law. Cooley has more than 750 lawyers across 11 offices in the United States and China. LABORATORY PARTNERS: Files First Amended Ch. 11 Plan ---------------------------------------------------- Laboratory Partners, Inc., et al., on July 8, filed with the U.S. Bankruptcy Court for the District of Delaware a first amended joint Chapter 11 plan to provide that the transfer of all of the reorganized Debtors' remaining assets will also include any of the reorganized Debtors' rights to receive any remaining payments from the Medicare Program. Unless a Medicare Enrollment Agreement is specifically listed on a rejection schedule, all Medicare Enrollment Agreements will be assumed on the Effective Date. A blacklined version of the First Amended Plan is available at http://is.gd/v5juyf Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that the Debtors won?t face major opposition to approval of their liquidating plan as the U.S. Trustee and the U.S. Department of Health and Human Services were the only parties who lodged formal objections by the objection deadline. Mr. Rochelle said the U.S. Trustee complained that the list of parties receiving immunity from lawsuits under the plan is ?far too broad? and should be limited to only those who served as estate fiduciaries. HHS, meanwhile, the objection primarily to ensure the company complies with Medicare law and regulations, Mr. Rochelle said. 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. LIGHT TOWER: Moody's Assigns B2 Rating on $300MM Secured Notes -------------------------------------------------------------- Moody's Investors Service assigned a first time rating of B2 to Light Tower Rentals, Inc.'s (LTR) proposed offering of $300 million senior secured notes. Moody's also assigned a B2 Corporate Family Rating (CFR), a SGL-3 Speculative Grade Liquidity Rating and a stable outlook. Notes proceeds will be used to repay amounts currently outstanding under the existing credit facility and to pay a special shareholder distribution. "The proceeds from this new issue will refinance the existing debt while also returning a significant amount of capital to shareholders," commented Michael Sabella, Moody's Analyst. "While the transaction is leveraging, pro forma leverage statistics will be comparable to other B-rated oilfield service providers and equipment rental companies and we expect that minimal additional debt will be needed to fund future organic growth." Ratings Assigned: Light Tower Rentals, Inc. Corporate Family Rating assigned at B2 Probability of Default Rating assigned at B2-PD Senior Secured Note Rating assigned at B2 (LGD4-53%) Speculative Grade Liquidity Rating assigned at SGL-3 Outlook stable Ratings Rationale The B2 CFR reflects LTR's small size and scale within the broader oilfield services industry, the highly cyclical and competitive nature of onshore services demand, and low barriers to entry due to the un-contracted nature of rental revenues combined with the relatively low-technology product offering. The rating also considers the company's private ownership by a combination of management and private equity investors as well as the increased leverage from this debt offering which dividends substantially all book equity of the company. The rating is supported by the company's market-leading position in oilfield focused specialty equipment rental market and the deep customer relationships developed by management. The rating also acknowledges that while the products represent a minimal proportion of the total well cost, they play a critical component of well-site operations. Further supporting the rating is the company's geographic diversity in the most active hydrocarbon regions in the US, product diversity, and pro forma leverage which, while increased from previous levels, remains lower than single-B levels for oilfield service providers. Pro forma for the notes offering and dividend to shareholders, LTR will have a debt/EBITDA of around 3.3x as of March 31, 2014. However, Moody's believes that EBITDA could grow to in excess of $100 million for 2014 with leverage falling to around 3x by the end of 2014. LTR is owned 50% by management and 50% by a group of investors led by private-equity sponsor Clairvest Group Inc. The company is a diversified well-site specialty surface equipment rental and services provider which generates revenue through the rental of products (power generators, light towers, fluid handling, trailers and heaters) for use at oil and natural gas well-sites. Roughly 70% of revenues are generated in the more volatile drilling and completion phase of the well life, with the remaining 30% is generated in the more stable and less cyclical production phase. Geographically, operations are well diversified across the major onshore US energy plays, with the largest exposure in the Permian Basin of West Texas and New Mexico. LTR should have adequate liquidity through mid-2015, supporting its SGL-3 Speculative Grade Liquidity Rating. The $300 million senior secured note offering will be used to repay $107 million outstanding on an existing credit facility, with this facility simultaneously terminated. In addition, proceeds will fund the payment of a special shareholder distribution of $193 million. Pro forma for the transaction, LTR will have $8 million outstanding on a new $30 million secured borrowing base ABL facility. LTR has substantial control over its capital budget, and we believe cash flow should sufficiently fund capital spending without significant additional ABL borrowings. Should ABL facility availability fall below $4 million, the facility includes a fixed charge coverage requirement of 1.1x, and we do not expect borrowing levels to test the covenant over the next year. Given that both the ABL and senior notes are secured, Moody's believes asset sales would have a limited ability to raise cash for liquidity. The outlook is stable. If EBITDA increases above $200 million while maintaining Debt/EBITDA below 3x, LTR could be considered for an upgrade. The ratings could be downgraded if cash flow suffers as a result of operational issues or additional distributions such that EBIT/Interest falls below 2x or Debt/EBITDA increases above 4x. The B2 rating on the senior secured notes reflects the first-lien interest in substantially all assets of LTR, subject to a $30 million carve-out for the ABL facility. The ABL facility carries a priority first-lien on the company's accounts receivable and deposit accounts. The relatively small size of the ABL claim in relation to LTR's senior secured notes results in the notes being rated the same as the B2 CFR under Moody's Loss Given Default Methodology. 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. Light Tower Rentals, Inc. is specialty equipment rental and services company headquartered in Odessa, Texas. LIGHTSQUARED INC: Judge Says Ergen Didn't Mediate in Good Faith --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Robert Drain, who presides over a court-ordered mediation in the Chapter 11 case of LightSquared Inc., said that Charles Ergen and his company SP Special Opportunities, LLC, a secured creditor of the communications system developer, "have not participated in the mediation in good faith and have wasted the parties' and the mediator's time." According to Bloomberg, Judge Drain said in his report that Ergen left the June 23 mediation session "without my permission," although Ergen's attorney remained. Judge Drain reported in a court filing on June 23 that the parties aside for Ergen agreed on "key business terms" of a plan which Judge Drain believes can be confirmed, or approved by the parties and Chapman, without support from Ergen, the report related. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LIVINGVENTURES INC: Reports $379K Net Loss in Q1 Ended March 31 --------------------------------------------------------------- LivingVentures Inc. filed its quarterly report on Form 10-Q disclosing a net loss of $379,814 on $262,015 of revenue for the three months ended March 31, 2014, compared with a net loss of $465,225 on $194,869 of revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.75 million in total assets, $2.01 in total liabilities, and a stockholders' deficit of $257,023. The Company sustained an accumulated net loss of $4.98 million for the period from Dec. 17, 1999 (inception) to March 31, 2014. This raises substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/R0cIFL LivingVentures is a proven leader in the Management of Senior Living Communities and is focused on providing Management and Related Services to owners of Assisted Living (AL) and Memory Care (MC) Facilities. LivingVentures is able to acquire and develop its own facilities and enter into Master Lease Agreements with Financial Partners. LTR HOLDCO: S&P Assigns 'B' CCR & Rates $300MM Sr. Notes 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to Odessa, Texas-based LTR Holdco Inc. The outlook is stable. At the same time, S&P assigned its 'B' issue rating (same as the corporate credit rating) to the company's proposed $300 million senior secured notes due 2019. The recovery rating is '3', indicating our expectation of meaningful (50% to 70%) recovery if a payment default occurs. The notes will be issued by Light Tower Rentals Inc. LTR Holdco will guarantee the proposed notes issue. S&P expects that the company will use proceeds from the proposed notes to pay a $193 million special distribution to its owners and to repay about $107 million of existing debt. The ratings on specialty equipment rental and services company LTR Holdco reflect S&P's assessment of the company's "vulnerable" business risk profile, "aggressive" financial risk profile, and "adequate" liquidity. These in turn include LTR's limited scale of operations and product diversity and the potential volatility of cash flows due to its reliance on the cyclical capital spending levels of the exploration and production (E&P) industry. "Ratings benefit from the company's good profitability and its flexibility to cut back on capital spending during a downturn," said Standard & Poor's credit analyst Stephen Scovotti. LTR is a specialty equipment rental and services company that focuses on the oil and gas sector. Equipment rentals represent about two-thirds of revenue, with services representing the balance. The company's main product lines include power generation, light towers, fluid handling, trailers, and heaters. The stable outlook reflects our expectation that the oilfield service industry will remain robust over the next 12 months. S&P expects LTR's debt leverage to remain between 2.5x and 3x over the next 12 months. S&P also expects the company to maintain FFO to debt of about 25% over the next 12 months. MEDISWIPE INC: Incurs $235K Net Loss in Q1 Ended March 31 --------------------------------------------------------- MediSwipe, Inc., reported a net loss of $235,601 on $19,520 of total revenue for the three months ended March 31, 2014, compared with a net loss of $248,688 on $49,818 of total revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.93 million in total assets, $1.85 million in total liabilities, and stockholders' equity of $74,030. As of March 31, 2014, the Company had an accumulated deficit of $9.55 million and working capital of $72,306. These conditions raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q filed with the U.S. Securities and Exchange Commission is available for free at http://is.gd/z3UgVk MediSwipe Inc. is a fully reporting company trading on the OTCQX under the Stock Symbol (MWIP). The Company is a noted leader in compassionate care and provides innovative, turnkey solutions for medicinal and canna-businesses located within regulated jurisdictions across the Unites states. MeiSwipe was a pioneer within the industry and the first public entity to offer electronically processing transactions within the medicinal marijuana sector. MERCANTILE BANCORP: Plan Effective Date Occurred on June 30 ----------------------------------------------------------- All conditions to the occurrence of the effective date set forth in Mercantile Bancorp, Inc.'s Second Amended Plan of Liquidation and the confirmation order were satisfied or waived and the effective date of the Plan occurred on June 30, 2014. As reported by the Troubled Company Reporter on June 30, 2014, the Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware on June 26, 2014, issued his findings of fact, conclusions of law and order confirming Mercantile Bancorp, Inc.'s Second Amended Plan of Liquidation, a full-text copy of which is available for free at http://is.gd/Jz2wx0 About Mercantile Bancorp Mercantile Bancorp -- http://www.mercbanx.com/-- is a Quincy, Illinois-based bank holding company with wholly owned subsidiaries consisting of one bank in Illinois and one each in Kansas and Florida, where the Company conducts full-service commercial and consumer banking business, engages in mortgage banking, trust services and asset management, and provides other financial services and products. The Company also operated Mercantile Bank branch offices in Missouri and Indiana. On Aug. 10, 2011, the Illinois Division of Banking released a Consent Order that Mercantile Bank, the Federal Deposit Insurance Corporation, and the Division entered into as of July 28, 2011. Under the Order, Mercantile Bank will cease operating with all money transmitters and currency businesses providing brokerage, sale or exchange of non-United States currency for deposit customers. Furthermore, Mercantile Bank may not enter into a new line of business without the prior written consent of the FDIC and the Division. Mercantile Bancorp filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-11634) on June 27, 2013. The petition shows assets and debt both exceeding $50 million. Liabilities include $61.9 million owing on junior subordinated debentures. Mercantile stopped paying interest on the debentures in 2009, since then running up $14 million in unpaid interest. Stuart M. Brown, Esq. at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Kimberly D. Newmarch, Esq., and Aaron M. Paushter, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are the attorneys for the Debtor. A three-member official committee of unsecured creditors was appointed by the U.S. Trustee. An official committee of trust preferred securities holders was also appointed by the U.S. Trustee. The TruPS Committee is represented by Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington, Delaware; Morton R. Branzburg, Esq., at Klehr Harrison Harvey Branzburg LLP, in Philadelphia, Pennsylvania; David R. Seligman, P.C., Esq., and Jeffrey W. Gettleman, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois; and Joseph Serino Jr., P.C., Esq., and John P. Del Monaco, Esq., at Kirkland & Ellis LLP, in New York. In October 2013, the Bankruptcy Court authorized Mercantile Bancorp, Inc.'s sale of its shares in Mercantile Bank and the related trademark for Mercantile Bank's "M" Logo. Mercantile Bancorp entered into a stalking horse purchase agreement with United Community Bancorp Inc., under which the Purchaser will pay $22,277,000, less all amounts due and owing by the Bank to the Federal Deposit Insurance Corporation and all broker's fees. MERITAS SCHOOLS: S&P Assigns 'CCC+' Rating on $80MM 2nd Lien Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned Meritas Schools Holdings LLC's proposed $80 million senior secured second-lien term loan an issue-level rating of 'CCC+', with a recovery rating of '5', indicating S&P's expectation for modest (10%-30%) recovery for lenders in the event of default. The proposed loan and simultaneous amendment of the company's existing first-lien senior secured credit agreement, which allows for the addition of the proposed second-lien term loan, will not affect S&P's existing corporate credit or issue-level rating on the company. Meritas announced that it will use funds from the proposed second-lien term loan, along with cash on hand, to repay approximately $33 million of the existing first-lien term loan, fund a distribution to shareholders, prefund capital expenditures, and fund Leman Manhattan Preparatory School (an operating subsidiary which sits outside of the credit group).Leman Manhattan is still being operated at a loss but is transitioning to being a cash flow contributor. Although the proposed term loan will increase pro forma lease- adjusted leveraged at fiscal year ended June 30, 2014, to roughly 8.4x from about 7.5x, S&P expects the company to generate modest discretionary cash flow in fiscal 2015. S&P also expects that liquidity will remain adequate and the cushion of covenant compliance will remain above 15% over the intermediate term. Recovery Analysis Key analytical factors -- Standard & Poor's Ratings Services is updating its recovery analysis on Meritas Schools Holdings LLC to assign recovery and issue-level ratings to the proposed $80 million second- lien term loan. -- $75 million in proceeds, along with cash on balance sheet, will be used to pay a dividend and fund Lehman Manhattan (an unrestricted, non-guarantor subsidiary of the borrower). In addition proceeds will be used to pay down a portion of the first-lien term loan (about $33 million) and pre-fund capital expenditures (about $24 million). -- Recovery ratings remain unchanged on the existing debt. -- S&P's simulated default scenario assumes that lower enrollment (from competition such as charter schools) and school utilization (including potential school closures), combined with business execution missteps, result in a payment default. Financial strain from debt-financed dividends/and or distributions outside the credit group would further contribute to the default scenario. -- S&P has valued the company as a going concern, using a 5x emergence multiple, reflecting its view of the company's position relative to rated peers, as well as S&P's view that recovery value could diminish in a distressed scenario, as there could be student attrition as a result of curriculum cuts, faculty reductions, and reputational impairment. Simulated default and valuation assumptions -- Simulated year of default: 2016 -- EBITDA at Emergence: $30 million -- EBITDA Multiple: 5x -- The revolver is fully drawn in our simulated year of default. -- No specific value potentially available to creditors from real property sales. S&P do not reduce the valuation for the approximate $51 million sale-lease back obligations at College du Leman in Geneva, which S&P assumes is unimpaired in its simulated bankruptcy. -- Foreign subsidiaries do not guarantee the company's secured debt. -- Therefore, any debt and other liabilities (including operating lease liabilities and trade payables) of foreign subsidiaries could be effectively senior to the claims of secured lenders with respect to foreign assets. Simplified waterfall -- Net EV (after 7% admin. costs): $140 million -- Secured first-lien debt: $216 million -- Recovery expectations: 50% to 70% -- Secured second-lien debt: $85 million -- Recovery expectations: 10% to 30% Notes: All debt amounts include six months of prepetition interest. RATINGS LIST Meritas Schools Holdings LLC Corporate Credit Rating B-/Stable/-- New Rating Meritas Schools Holdings LLC Senior Secured $80M second-lien term loan CCC+ Recovery Rating 5 MF GLOBAL: Gardiner Koch Sued Over Trading Firm Manager's Ouster ---------------------------------------------------------------- Law360 reported that the former managing member of 3Red Trading LLC sued Gardiner Koch Weisberg & Wrona in Illinois court, alleging the Chicago law firm botched a settlement with the bankruptcy trustee for MF Global Holdings Ltd. and helped his partner oust him from the trading outfit without proper compensation. According to the report, Edwin Johnson, who held a 10 percent interest in 3Red and managed its day-to-day operations, accuses Gardiner Koch -- particularly partner James B. Koch -- of professional negligence, breach of fiduciary duty and tortious interference in connection with the firm?s representation of 3Red and its principals. The case is Edwin Johnson v. Gardiner Koch Weisberg & Wrona et al., case number 14L006857, in the Circuit Court of Cook County, Illinois. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058), after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. In April 2013, the Bankruptcy Court approved MF Global Holdings' plan to liquidate its assets. Bloomberg News reported that the court-approved disclosure statement initially told creditors with $1.134 billion in unsecured claims against the parent holding company why they could expect a recovery of 13.4% to 39.1% from the plan. As a consequence of a settlement with JPMorgan, supplemental materials informed unsecured creditors their recovery was reduced to the range of 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.174 billion claim against the holding company. As a consequence of the settlement, the predicted recovery became 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. MILLENNIUM HEALTHCARE: Has $7.92-Mil. Net Loss in First Quarter --------------------------------------------------------------- Millennium Healthcare Inc. filed its quarterly report on Form 10- Q, disclosing a net loss of $7.92 million on $538,446 of revenue for the three months ended March 31, 2014, compared with a net loss of $1.51 million on $487,833 of revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $2.89 million in total assets, $12.54 million in total liabilities, and a stockholders' deficit of $9.65 million. The Company has incurred operating losses for the past several years and has a working capital deficiency of $9.47 million. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/XpM0jS New York-based Millennium Healthcare Inc. is a supplier and distributor of medical devices and equipment focused on prevention and early detection of diseases. The Company recently entered into several distribution agreements to launch its medical equipment and device business. MILLER HEIMAN: S&P Keeps 'B' Rating Over $359MM Debt Add-on ----------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Reno, Nevada-based Miller Heiman Inc. are unchanged following the company's announcement of its proposed $136 million add-on to its first-lien term loan due 2019. The company will use proceeds and $96 million of new cash equity from its private equity sponsor and management to finance the acquisition of VitalSmarts LLC, a provider of leadership training products for corporations, and to repay about $37 million of outstanding borrowings under the revolving credit facility. The transaction does not materially alter credit measures because of Miller Heiman's and VitalSmarts' good near-term growth prospects and the large proportion (roughly 50%) of equity financing. S&P expects debt to EBITDA to decline to the mid-5x area by year-end 2014 from a pro forma level of roughly 6x at March 31, 2014, based on a scenario of mid-single-digit percent revenue growth and a low-double-digit percent increase in EBITDA. S&P expects the company to maintain healthy profitability through the ongoing integration of its September 2013 acquisition of business training provider Informa Performance Improvement and potential operating synergies and costs savings resulting from the VitalSmarts purchase. The 'B' corporate credit rating on Miller Heiman reflects S&P's assessment of its business risk profile as "weak" and the financial risk profile as "highly leveraged." S&P's assessment of the business risk profile is based on its niche position in the highly fragmented and competitive corporate sales training industry that is tempered by its dependence on independent sales consultants that generate a significant percentage of its EBITDA. The independent sales consultants are responsible for account management and training. Although consultant turnover has been minimal, retaining them is critical to the company's reputation and its high EBITDA margin. S&P's financial risk profile assessment is based on its expectation that leverage will remain above 5x, notwithstanding the company's reasonably favorable operating outlook, as a result of continued acquisitions and the risks associated with integrating them. RATINGS LIST Miller Heiman, Inc. Corporate Credit Rating B/Stable/-- Ratings Unchanged Miller Heiman, Inc. Senior Secured $359M* first-lien term loan due 2019 B Recovery Rating 3 *Amount following add-on. MOMENTIVE PERFORMANCE: Plan Ruling Expected by September -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Robert D. Drain has formally approved the disclosure statement explaining Momentive Performance Inc.'s plan of reorganization and indicated that he expects to rule on the plan by mid-September. According to the report, Judge Drain said the confirmation hearing to approve the plan will run from Aug. 18 to Aug. 22, with one day off. At the same time, Judge Drain will hear evidence and argument on three lawsuits to determine the pecking order among noteholders, the report related. The $635 million in 9 percent second-lien notes due 2021 traded at 10:41 a.m. New York time on June 27 for 83 cents on the dollar, according to Trace, the Bloomberg report said, citing bond-price reporting system of the Financial Industry Regulatory Authority. The senior subordinated notes traded at 12:38 a.m. on June 27 for 28.784 cents on the dollar, according to Trace, the report related. About Momentive Performance Momentive Performance is one of the world's largest producers of silicones and silicone derivatives, and is a global leader in the development and manufacture of products derived from quartz and specialty ceramics. Momentive has a 70-year history, with its origins as the Advanced Materials business of General Electric Company. In 2006, investment funds affiliated with Apollo Global Management, LLC, acquired the company from GE. As of Dec. 31, 2013, the Company had 4,500 employees worldwide, of which 46% of the Company's employees are members of a labor union or are represented by workers' councils that have collective bargaining agreements. Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., and their affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 14-22503) on April 14, 2014, with a deal with noteholders on a balance-sheet restructuring. As of Dec. 31, 2013, the Debtors had $4.114 billion of consolidated outstanding indebtedness, including payments due within the next 12 months and short-term borrowings. The Debtors said that the restructuring will eliminate $3 billion in debt. The Debtors have tapped Willkie Farr & Gallagher LLP as bankruptcy counsel with regard to the filing and prosecution of these chapter 11 cases; Sidley Austin LLP as special litigation counsel; Moelis & Company LLC as financial advisor and investment banker; AlixPartners, LLP as restructuring advisor; PricewaterhouseCoopers as auditor; and Crowe Horwath LLP as benefit plan auditor. Kurtzman Carson Consultants LLC is the notice and claims agent. The U.S. Trustee for Region 2 appointed seven members to serve on the Official Committee of Unsecured Creditors of the Debtors' cases. Klee, Tuchin, Bogdanoff & Stern LLP serves as its counsel. FTI Consulting, Inc., serves as its financial advisor. Rust Consulting Omni Bankruptcy serves as its information agent. MT LAUREL LODGING: Plan Exclusivity Period Extended to Aug. 29 -------------------------------------------------------------- Mt. Laurel Lodging Associates, LLP requested that the Bankruptcy Court for the Southern District of Indiana, Indianapolis Division extend its exclusivity period for filing a Plan of Reorganization to August 29, 2014 and extend its period for obtaining acceptances to the Plan to October 28. The Debtor contends that this third extension is necessary so that the Debtor may negotiate the terms of its Plan and finalize its Disclosure Statements. NRB, the Debtor's secured lender, opposed to the prior two extensions, but has consented to the Debtor's current extension request. The Debtor contends that the circumstances warrant "cause" for the extension pursuant to Sec. 1121(d) of the Bankruptcy Code. Honorable Robyn L. Moberly granted the Debtor's request for an extension. The Debtor is represented by Michael P. O'Neill, Esq., at Taft Stettinius & Hollister LLP of Indianapolis, IN and David M. Neff, Esq., Brian A. Audette, Esq., and David J. Gold, Esq., at Perkins Coie LLP of Chicago, IL. NEW WESTERN: Reports $1.31-Mil. Net Loss in March 31 Quarter ------------------------------------------------------------ New Western Energy Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $1.31 million on $71,388 of revenues for the three months ended March 31, 2014, compared with a net loss of $180,653 on $19,197 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $2.68 million in total assets, $3.1 million in total liabilities, and a stockholders' deficit of $423,347. The Company has not generated significant revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. At March 31, 2014, the Company had working capital deficit of $1.08 million and used cash in operating activities of $888,978. These factors raise substantial doubt regarding the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/bp7Pc6 Irvine, Cal.-based New Western Energy Corporation is an oil and gas and mineral exploration and production company with current projects located in Oklahoma, Kansas and Texas. The Company has a limited operating history with nominal revenues. NEWLEAD HOLDINGS: Files Claims Against Ironbridge Global IV ----------------------------------------------------------- NewLead Holdings Ltd. disclosed that on June 23, 2014, in arbitration proceedings currently pending between the Company and Ironridge Global IV, Ltd., the Company filed claims against Ironridge for breach of contract, fraudulent inducement of contract and fraud, securities market manipulation and misrepresentation in violation of United States federal securities laws, unjust enrichment, and violation of 15 U.S.C. 78p(b), seeking disgorgement of short-swing profits, damages in excess of $25 million, punitive damages in excess of $100 million, and reimbursement of legal costs and the costs of the arbitration. NewLead has also requested that the arbitration tribunal declare that the agreement between NewLead and Ironridge is terminated and/or void ab initio, and that Ironridge has no entitlement to the issuance of additional common shares of NewLead. Although the Company has continually indicated it has no desire to receive or intent to accept any further funding from Ironridge, until and subject to the resolution of the arbitration, Ironridge has unilaterally waived conditions under their notes, which notes were not due without such waiver, to attempt to force the Company to receive funding under the transaction documents, which funding has been returned by the Company. As Ironridge's forced funding was not pursuant to any obligations it has under the transaction documents, the Company believes it is an attempt to be able to convert further preferred shares, while continuing to abuse the irrevocable instruction letter in order to immediately sell, as many common shares as possible. To this end, and notwithstanding the foregoing, following the forced funding, Ironridge immediately converted a portion of the preferred shares corresponding to the note it force funded and requested common shares, despite having the returned funds and the existence of the arbitration. These actions, together with Ironridge's request for substantial numbers of additional common shares on an almost daily basis, do not support Ironridge's representations to the Company at the outset of its investment that it wished to be a "long-term" investor. Ironridge continues to sell substantial numbers of common shares of the Company on a daily basis, to the detriment of the Company and all of its stockholders. In this regard, Ironridge has already requested and/or received an aggregate of approximately 62 million common shares (through July 6, 2014, adjusted to give effect to the 1-for-50 reverse stock split, effective May 15, 2014) and has received approximately $22.8 million of proceeds (based upon information received from Ironridge) on the sale, in the Company's belief, of approximately 44 million of such common shares through June 30, 2014. These amounts include approximately 4.7 million common shares of Ironridge's recent conversion of further preferred shares pursuant to the forced funding as outlined above. The balance of the share amount, approximately 57.3 million common shares requested and/or received, are the result of the conversions of the preferred shares it received at closing, which conversions are continuing under such initially received preferred shares when it advanced proceeds of $2.5 million and received preferred shares in lieu of a fee. About NewLead Holdings Ltd. Based in Athina, Greece, NewLead Holdings Ltd. -- http://www.newleadholdings.com/-- is an international, vertically integrated shipping company that owns and manages product tankers and dry bulk vessels. NewLead currently controls 22 vessels, including six double-hull product tankers and 16 dry bulk vessels of which two are newbuildings. NewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. NewLead Holdings reported a net loss of $158.22 million on $7.34 million of operating revenues for the year ended Dec. 31, 2013, as compared with a net loss of $403.92 million on $8.92 million of operating revenues in 2012. The Company's balance sheet at Dec. 31, 2013, showed $151.33 million in total assets, $292.68 million in total liabilities and a $141.34 million total shareholders' deficit. EisnerAmper LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred a net loss, negative operating cash flows, a working capital deficiency, and shareholders' deficiency and has defaulted under its credit facility agreements. Those conditions raise substantial doubt about the Company's ability to continue as a going concern. NORTHWEST HARDWOODS: Moody's Assigns 'B2' Corp. Family Rating ------------------------------------------------------------- Moody's Investors Service assigned a first-time B2 Corporate Family Rating and B2-PD Probability of Default Rating to initially, Hardwoods Acquisition, Inc., becoming Northwest Hardwoods, Inc. (collectively "NWH"), a national manufacturer and distributor of hardwood products for products ranging from high- end cabinets to floors, upon closing of the leveraged buyout of NWH by Littlejohn & Co., LLC. In a related rating action, Moody's assigned a B3 rating to the proposed $300 million senior secured notes due 2021. The rating outlook is stable. Littlejohn & Co., LLC, through its affiliates, is acquiring NWH for approximately $465 million, excluding transaction fees. NHW's new capital structure will consist of a $100 million asset-based revolving credit facility of which $30 million will be used for the buyout, and $300 million of senior secured notes. Littlejohn's contribution is in the form of common equity. The following ratings will be affected by this action: Corporate Family Rating assigned B2; Probability of Default Rating assigned B2-PD; and, Senior Secured Notes due 2021 assigned B3 (LGD4, 61%). Ratings Rationale NWH's B2 Corporate Family Rating reflects the company's leveraged capital structure following the buyout by affiliates of Littlejohn. Balance sheet debt is increasing to about $330 million from $110 million, about a 200% increase in debt from March 31, 2014, resulting in adjusted leverage of over 6.0x on a pro forma basis at closing. With the prospects of some operating improvements and reduced borrowings under the company's revolving credit facility, Moody's projects debt-to-EBITDA will approach 5.0x near year-end 2015 (all ratios incorporate Moody's standard adjustments). Additionally, NWH will have significant negative tangible net worth. A significant risk is that debt reduction from excess free cash flow will be difficult to achieve. Cash interest payments for the proposed high-yield notes will approach nearly $23 million annually. On a pro forma basis, free cash flow relative to adjusted debt over the twelve months from March 31, 2014 is weak at negative 3%. We also anticipate higher levels of working capital expenditures relative to previous years to meet growing demand. This could further limit NWH's ability to reduce revolver borrowings. Although free cash flow is initially negative on a pro forma basis, we expect free cash flow to turn positive over the next 12 to 18 months. Another key risk is NWH's size. It is a small company relative to other manufacturing companies based on revenues and absolute levels of EBITA. Offsetting the risks associated with its small scale and leveraged capital structure is NWH's leading position in the hardwood niche with multiple mills throughout the United States producing hardwood. Producers of softwood used predominately for framing in new home construction have avoided this segment. Moody's also expects NWH will benefit from the strength in the new home construction and the repair and remodeling sectors, end markets from which NWH collectively derives about 60% of its revenues. Moody's also projects a gradual improvement in EBITA margins further into high single-digit levels due to increased volumes and better pricing. Despite the large pro forma increase in balance sheet debt and related interest expense, we expect interest coverage, measured as EBITA-to-interest expense, could exceed 2.0x over the next 12 to 18 months. NWH is benefiting from the currently low interest rate environment. NWH's liquidity profile, characterized by its ability to generate free cash flow, ample revolver availability, and the absence of any debt maturities until the revolver expires in 2019, gives NWH the financial flexibility to meet potentially higher seasonal demand and to satisfy its debt service requirements. The stable rating outlook incorporates our view that NWH' operating performance will improve, resulting in debt leverage metrics that are more supportive of the current corporate family rating. Also, revolver availability provides needed liquidity to meet potential shortfalls in operating cash flows and higher working capital needs. The B3 rating assigned to the company's proposed senior secured notes due 2021, one notch below the corporate family rating, reflects their subordination to NWH's 1st lien ABL revolving credit facility (unrated), which is secured by NHW's most liquid assets. Due to the company's elevated debt leverage, positive rating actions are unlikely for NWH over the intermediate term. However, if the company meets Moody's expectations for margin expansion and reduced borrowings under the revolving credit facility from free cash flow, maintaining debt-to-EBITDA below 5.0x and EBITA-to- interest expense sustained over 2.5x (all ratios incorporate Moody's standard adjustments), could result in positive ratings momentum. A better liquidity profile and additional scale could also support positive rating actions. Negative rating actions may occur if NWH fails to meet our expectations for both operating and financial performance over the next 12 to 18 months. Debt-to-EBITDA sustained above 6.0x, EBITA- to-interest expense remaining below 2.0x (all ratios incorporate Moody's standard adjustments), or a weakening liquidity profile could create downward ratings pressure. Sustained revolving credit facility borrowings and significantly large debt-financed acquisitions could also pressure NWH's ratings. Northwest Hardwoods, Inc., headquartered in Tacoma, WA, is a national manufacturer and distributor of hardwood lumber used for diverse end products such as high-end cabinets and flooring. Littlejohn & Co., through its affiliates, will be the primary owner of Northwest Hardwoods. Revenues for the 12 months through March 31, 2014 totaled about $530 million. 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. NORTHWEST HARDWOODS: S&P Assigns 'B' CCR & Rates Secured Notes 'B' ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to Tacoma, Wash.-based hardwood lumber manufacturer and distributor, Northwest Hardwoods Inc. At the same time S&P assigned its 'B' issue-level rating to the company's proposed $300 million senior secured notes due 2021. The '3' recovery rating on the notes indicates S&P's expectation for meaningful (50%-70%) recovery in the event of a payment default. "The stable outlook reflects our view that key drivers such as the ongoing U.S. housing recovery and improved repair and remodeling spending will support a steady improvement in demand for hardwoods used in millwork, furniture, and other residential uses," said Standard & Poor's credit analyst James Fielding. "We also think slower but still healthy growth in China will support demand for wood used in pallets and other products." These favorable conditions are likely to support a healthy improvement of at least 20% in EBITDA in 2014. However, leverage will remain above 5x because of the new acquisition related debt. S&P would raise its rating if leverage falls more quickly than it currently anticipates, to below 5x, and if S&P is comfortable that the company and its financial sponsor are committed to maintaining more conservative financial policies. This upside scenario could occur if EBITDA margins were 200 basis points higher than S&P's current expectations because stronger demand allows the company to raise prices. At that time, S&P could revise its assessment of the company's financial policies to "FS-5" from "FS-6" and its financial risk assessment to "aggressive" from "highly leveraged." Given S&P's favorable view of the company's end markets, it believes a downgrade is unlikely in the next 12 months unless the company's liquidity becomes constrained. Since S&P expects EBITDA to improve in this timeframe, the most likely downside scenario would involve more aggressive financial policies, including leveraged acquisitions or distributions to the owner. S&P do not expect this to occur next year, but if this downside did occur S&P could lower its assessment of the anchor rating to 'b-' from 'b' and its corporate credit rating to 'B-' from 'B'. OPTIM ENERGY: Energy Future May Bid Up to $87.5MM for Plant ----------------------------------------------------------- Peg Brickley, writing for Daily Bankruptcy Review, reported that the bankruptcy auction for Optim Energy LLC's Twin Oaks power plant is still weeks away, but its price continues to jump, with Texas giant Energy Future Holdings Corp. signaling it could go as high as $87.5 million for the facility. According to DBR, Optim is selling the coal-fired plant to help pay off its debts in Chapter 11, with a starting price, offered by Blackstone Group, of $60 million. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that the U.S. Trustee and Carlyle Investment Management LLC, a possible competing bidder for the Twin Oaks plant, object to the proposed bidding procedures, specifically the provision where Optim would disqualify any bidder that has had prior discussions with Walnut Creek Mining Co., the plant's sole coal supplier whose contract would be terminated by Blackstone. The U.S. Trustee and Carlyle complained that the retroactive "gag order," will or might chill bidding, Mr. Rochelle said, citing court papers. Carlyle says that superior bid structures that reduce risk and produce higher bids would result if bidders can negotiate with Walnut Creek as Walnut Creek is the "most logical" and "economically viable" source of fuel for the assets being sold, Mr. Rochelle related. About Optim Energy Optim Energy, LLC, and its affiliates are power plant owners principally engaged in the production of energy in Texas's deregulated energy market. Optim owns and operates three power plants in eastern Texas: the Twin Oaks plant in Robertson County, Texas, the Altura Cogen plant in Harris County, Texas and the Cedar Bayou plant in Chambers County, Texas. The Altura and Cear Bayou plants are fueled by natural gas, and the third is coal- fired. Optim Energy and its affiliates sought Chapter 11 protection from creditors (Bankr. D. Del. Lead Case No. 14-10262) on Feb. 12, 2014. The Debtors have tapped Bracewell & Giuliani LLP and Morris, Nichols, Arsht & Tunnell LLP as attorneys; Protiviti Inc. as restructuring advisors; and Prime Clerk LLC as claims agent. Optim Energy, LLC scheduled $6,948,418 in assets and $716,561,450 in liabilities. Optim Energy Cedar Bayou 4, LLC, disclosed $183,694,097 in assets and $717,646,180 in liabilities as of the Chapter 11 filing. The Debtors have $713 million of outstanding principal indebtedness. On Feb. 27, 2014, Roberta A. DeAngelis, U.S. Trustee for Region 3, notified the Bankruptcy Court that she was unable to appoint an official committee of unsecured creditors in the Debtors' cases. The U.S. Trustee explained that there were insufficient responses to her communication/contact for service on the committee. 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. OSUM PRODUCTION: Moody's Assigns B3 Rating on $210MM Senior Notes ----------------------------------------------------------------- Moody's Investors Service, assigned a B3 rating to Osum Production Corp's (OPC) proposed US$210 million senior secured term loan and a Ba3 rating to the super-priority US$15 million senior secured revolver. Moody's also assigned OPC a B3 Corporate Family Rating, a B3-PD Probability of Default Rating and a SGL-2 Speculative Grade Liquidity rating. The rating outlook is stable. The ratings are subject to receipt and review of final documentation. This is the first time that Moody's has rated OPC. The proceeds of the term loan will be used to finance the acquisition of the Orion steam-assisted gravity drainage (SAGD) bitumen asset from Shell Canada. Assignments: Issuer: Osum Production Corp. 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 Senior Secured Bank Credit Facility, Assigned Ba3 Senior Secured Bank Credit Facility, Assigned a range of LGD4, 52 % Senior Secured Bank Credit Facility, Assigned a range of LGD1, 01 % Rating Rationale The B3 Corporate Family Rating (CFR) reflects OPC's small size and concentrated production in one SAGD project, Orion. The rating also reflects the poor performance of this project over the last number of years, evident by production being well under the 10,000 bbls/d design capacity. This performance has led to a cumulative steam oil ratio of above 5x, driving down OPC's cash margin, but has improved to below 4x on recent production improvement initiatives, increasing OPC's cash margins. The rating is supported by OPC's solid leverage metrics, long lived reserve base that requires minimal maintenance capital expenditures, and generation of positive free cash flow that will be used to reduce debt. OPC's SGL-2 speculative grade liquidity rating reflects good liquidity. We expect positive free cash flow of about C$45 million through to September 30, 2015 and for the company to have full availability under its C$15 million revolving credit facility. OPC will be well in compliance with its sole financial covenant through this period. Alternate sources of liquidity are somewhat limited as its assets are pledged as collateral to the secured credit facilities. Under Moody's Loss Given Default (LGD) Methodology, the US$15 million super-priority revolving credit facility is rated Ba3 as the US$210 million senior secured term loan provides cushion. The senior secured term loan is rated at the CFR as it makes up the majority of the capital structure. The stable outlook reflects our expectation that OPC will produce 7,000 bbls/d and generate positive free cash flow. The rating could be upgraded if OPC can significantly increase its size and scale, while maintaining retained cash flow to debt above 25%. The rating could be downgraded if OPC's liquidity weakens, if leverage as measured by debt to average daily production climbs above US$40,000 per boe for an extended period, or if retained cash flow to total debt falls below 15%. The principal methodology used in this rating was the Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. OPC is the wholly-owned subsidiary of Osum Oil Sands Corp., a Calgary, Alberta based private independent exploration and production company. OPC produces about 7,000 bbls/d of bitumen. OSUM PRODUCTION: S&P Assigns 'B-' LT Corp. Credit Rating -------------------------------------------------------- Standard & Poor's Rating Services said it assigned its 'B-' long-term corporate credit rating to Calgary, Alta.-based Osum Production Corp. (OPC). At the same time, Standard & Poor's assigned its 'B-' corporate credit rating to OPC's parent company, Osum Oil Sands Corp. (OOSC). S&P's ratings on both OOSC and OPC, which it has equalized, reflect its view of OPC as a core subsidiary of its parent company, and the integrated nature of their financial policies and strategic planning. Standard & Poor's also assigned its 'B+' issue-level rating and '1' recovery rating to OPC's proposed US$210 million senior secured term loan B. The '1' recovery rating indicates S&P's expectation of very high (90%-100%) recovery under our default scenario. The outlook is stable. "The ratings reflect our expectation that OPC will be able to operate its one producing asset, the Orion in-situ project, in a manner consistent with the project's previous owner, such that production economics remain consistent with Orion's recent performance," said Standard & Poor's credit analyst Michelle Dathorne. "Although we have limited visibility to Orion's historical finding and development cost profile, we are assuming OPC's full-cycle costs will remain in line with the average cost structure of other producers operating in the Cold Lake region," Ms. Dathorne added. The ratings on OPC reflects Standard & Poor's view of the company's narrow scale and scope of operations; lack of operating track record managing its one producing asset, the Orion in-situ oil sands project; and limited ability to expand its production base beyond the 15%-20% growth expected in 2016-2017, which is beyond S&P's forecast period. OPC's robust cash flow adequacy and leverage profile, and ability to internally fund the organic growth incorporated into S&P's base-case scenario offset these weaknesses somewhat. OPC is a 100% wholly owned subsidiary of OOSC, a privately held exploration and production (E&P) company. OPC has one in-situ bitumen producing asset in Alberta's Cold Lake region, and also owns extensive undeveloped bitumen resources, known as its Taiga project. The stable outlook reflects Standard & Poor's expectation that OPC will maintain production at its one operating asset at levels that will generate sufficient cash flow to sustain operations, as well as exploit the organic growth potential inherent in the Orion project's existing 2P in-situ reserves. The outlook also incorporates S&P's assumption that the company's full-cycle costs (total operating and F&D costs) will remain consistent with the average full-cycle cost profile of other E&P companies operating in Alberta's Cold Lake region. If either OPC's upstream cost profile, or its cash flow adequacy and leverage profile, deteriorates, such that it generates negative free operating cash flow, and the company is unable to internally fund the expected production growth incorporated in S&P's base-case scenario, it would lower the ratings. Specifically, a negative rating action would occur if OPC's spending accelerates or operating cash flow fell short of S&P's expectations such that its fully adjusted three-year weighted average debt-to-EBITDA increased above 3x and the weighted average FFO-to-debt fell below 30%. At present, OPC's business risk profile is not strong enough to support a higher rating. In S&P's opinion, the company would have to materially strengthen its competitive position to support a 'B' rating. It could achieve this by expanding the scale and scope of its upstream operations. This would occur if OPC is able to bolster its proven reserves base, as well as increase and sustain its daily average production at levels consistent with other 'B' rated E&P companies, which is about 15,000 barrels per day. Given Orion's estimated full-cycle costs and production during S&P's outlook period, it do not believe the company's competitive position will strengthen sufficiently during this period to warrant an upgrade. PAID INC: Reports $173K Net Loss for Q1 Ended March 31 ------------------------------------------------------ PAID, Inc., reported a net loss of $173,095 on $509,405 of revenues for the three months ended March 31, 2014, compared with a net loss of $201,527 on $932,375 of revenues for the same period in 2013. The balance sheet at March 31, 2014, showed $1.55 million in total assets, $806,446 in total liabilities, and stockholders' equity of $747,915 million. The Company has continued to incur losses, although it has taken significant steps to reduce them. For the year ended December 31, 2013, the Company reported a net loss of $1.13 million. The Company has an accumulated deficit of $52.26 million at March 31, 2014 and used $44,993 of cash and cash equivalents in operations for the three months ended March 31, 2014. These factors raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q filed with the U.S. Securities and Exchange Commission is available for free at: http://is.gd/jaF5TB Headquartered in Westborough, Massachusetts, PAID, Inc., provides brand-related services to businesses and celebrity clients in the entertainment industry as well as charitable organizations. PAMPA ENERGIA: Incurs ARS719.77-Mil. Net Loss in First Quarter -------------------------------------------------------------- Pampa Energia S.A. reported a net loss of ARS719.77 million on ARS1.43 billion of sales for the three months ended March 31, 2014, compared with a net loss of ARS606.02 million on ARS1.39 billion of net sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed ARS13.18 billion in total assets, ARS2.26 billion in total liabilities, and stockholders' equity of ARS10.92 billion. Given the fact that the realization of the projected measures to revert the manifested negative trend depends, among other factors, on the occurrence of certain events that are not under its subsidiary Edenor's control, such as the requested electricity rate increases, the Board of Directors has raised substantial doubt about Edenor's ability to continue as a going concern in the term of the next fiscal year, being obliged to defer certain payment obligations, as previously mentioned, or unable to meet expectations for salary increases or the increases recorded in third-party costs. A copy of the Form 6-K filed with the U.S. Securities and Exchange Commission is available at http://is.gd/FdhSx1 Pampa Energia S.A., is an Argentina-based company primarily engaged, through its subsidiaries, in the generation, transmission and distribution of electric power. Electric Generation division comprises the activities of Hidroelectrica Los Nihuiles SA (HINISA), Hidroelectrica Diamante SA (HIDISA), Central Termica Guemes SA (CTG), Central Termica Loma de la Lata SA (CTLLL) and Central Piedra Buena SA (CPB); the Electric Transmission division, includes the activities of Compania de Transporte de Energia Electrica en Alta Tension Transener SA; as well as the Electric Distribution division, which its services are rendered by Empresa Distribuidora y Comercializadora Norte SA (Edenor). PETAQUILLA MINERALS: Posts $11.62-Mil. Net Loss for First Quarter ----------------------------------------------------------------- Petaquilla Minerals Ltd. disclosed in a regulatory filing in the U.S. that it had a net loss of $11.62 million on $5.75 million of revenues for the three months ended March 31, 2014, compared with a net income of $15.77 million on $28.46 million of revenues for the three months ended Feb. 28, 2013. The Company's balance sheet at March 31, 2014, showed $226.37 million in total assets, $194.13 million in total liabilities, and stockholders' equity of $32.23 million. The Company is in default of its Forward Gold and Silver Purchase Agreements as the Company failed to meet its physical delivery requirements and has either accrued for or settled such obligations in cash. The default persists as of the date of these condensed interim consolidated financial statements for all agreements with Deutsche Bank. As a result of the default, all balances owing to Deutsche Bank have been classified as current liabilities as required under IAS 1. This factor indicates the existence of a material uncertainty that raises substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 6-K filed with the U.S. Securities and Exchange Commission is available for free at http://is.gd/V2DJ6O Petaquilla Minerals Ltd. is engaged in the mining of gold in Molejon, Panama. The British Columbia, Canada-Company also owns gold exploration and development projects in Portugal and Spain. PHILLIPS INVESTMENTS: Taps Scroggins & Williamson as Attorneys -------------------------------------------------------------- Phillips Investments, LLC seeks authorization from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Scroggins & Williamson, P.C. as attorneys. In the operation of its business during the Chapter 11 case, the Debtor requires Scroggins & Williamson to: (a) prepare pleadings and applications; (b) conduct examinations; (c) advise the Debtor of its rights, duties and obligations as a debtor-in-possession; (d) consult with the Debtor and represent the Debtor with respect to a Chapter 11 plan and a sale of the Debtor's assets; (e) perform legal services incidental and necessary to the day- to-day operation of the Debtor's affairs, including, but not limited to, institution and prosecution of necessary legal proceedings, and general business and corporate legal advice and assistance; and (f) take any and all other action incidental to the proper preservation and administration of the Debtor's estate. Scroggins & Williamson will be paid at these hourly rates: Attorneys $285-$425 Paralegals $75-$150 Scroggins & Williamson will also be reimbursed for reasonable out- of-pocket expenses incurred. Scroggins & Williamson is currently holding $41,495.72, received via wire transfer on Jun. 11, 2014, as a Chapter 11 retainer to represent the Debtor. J. Robert Williamson, member of Scroggins & Williamson, 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. Scroggins & Williamson can be reached at: J. Robert Williamson, Esq. SCROGGINS & WILLIAMSON, P.C. 1500 Candler Building 127 Peachtree Street, NE Atlanta, GA 30303 Tel: (404) 893-3880 Fax: (404) 893-3886 E-mail: rwilliamson@swlawfirm.com Phillips Investments, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 14-61444) on June 11, 2014. Ly Phillips signed the petition as managing member. The Debtor estimated assets and liabilities of between $10 million to $50 million. Scroggins & Williamson, P.C., serves as the Debtor's counsel. Judge Mary Grace Diehl presides over the case. PHILLIPS INVESTMENTS: Taps Burroughs Keene as Special Counsel ------------------------------------------------------------- Phillips Investments, LLC asks permission from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Burroughs, Keene, Paulk & Von Schuch, LLC as special counsel. The Debtor wishes to employ Burroughs Keene as special counsel to continue to assist it with real estate issues as well as to assist with general corporate and tax related matters with the scope of Burroughs Keene's retention being limited to the foregoing and reasonably related matters but not including conducting the Chapter 11 case or otherwise duplicating the work of the Debtor's general bankruptcy counsel. Burroughs Keene will be paid at these hourly rates: Attorneys $250 Legal Assistants $75 Burroughs Keene will also be reimbursed for reasonable out-of- pocket expenses incurred. Within the ninety days prior to the Debtor's filing its bankruptcy petition, Burroughs Keene received the following two payment from the Debtor: (i) $15,000 on May 16, 2014; and (ii) $10,000 on Jun. 11, 2014. Kirk W. Keene, member of Burroughs Keene, 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. Burroughs Keene can be reached at: Kirk W. Keene, Esq. BURROUGHS, KEENE, PAULK & VON SCHUCH, LLC 2900 Paces Ferry Road SE Bldg. C-2000 Atlanta, GA 30339 Tel: (770) 432-2100 Fax: (770) 432-9561 Phillips Investments, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 14-61444) on June 11, 2014. Ly Phillips signed the petition as managing member. The Debtor estimated assets and liabilities of between $10 million to $50 million. Scroggins & Williamson, P.C., serves as the Debtor's counsel. Judge Mary Grace Diehl presides over the case. PINAFORE HOLDINGS: Moody's Withdraws Ba3 Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service announced that it has withdrawn the ratings for Pinafore Holdings B.V.'s and the previously rated debt at its subsidiary, Gates Investments, LLC, following the announcement by Onex Corporation and its affiliates (the "Onex Group") and Canada Pension Plan Investment Board ("CPPIB") that they have completed the sale of Gates Corporation (the principal remaining business of Pinafore), to private equity funds affiliated with Blackstone for $5.4 billion. This action concludes the review for downgrade initiated on April 10, 2014. The following ratings are withdrawn: Pinafore Holdings BV Ba3, Corporate Family Rating; Ba3-PD, Probability of Default Rating Gates Investments, LLC Ba2 (LGD3), $300 million senior secured first lien revolving credit facility; Ba2 (LGD3), $86 million (remaining amount) amended senior secured first lien term loan A facility; Ba2 (LGD3), $1.3 billion (remaining amount) senior secured first lien term loan B facility; B1 (LGD5), $330 million (remaining amount) senior secured second lien notes Ratings Rationale As part of the sale transaction, all of the previously rated debt for Pinafore was repaid, or will be repaid by July 14, 2014. The newly rated entity Gates Global LLC (Gates) was assigned ratings on June 5, 2014 - Corporate Family and Probability of Default Ratings at B3 and B3-PD, respectively. Gates will be the intermediate parent holding company for the operations of the Gates businesses. Gates Global LLC, headquartered in Denver, Colorado, is a leading global manufacturer of power transmission belts and fluid power products that are highly engineered and critical components, used in diverse industrial and automotive applications. Gates derives a majority of its sales from replacement markets around the world. In FY 2013, ongoing operations generated sales of USD 2.9 billion. PLEASANT HILL: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Pleasant Hill Associates, L.P. 870 5th Avenue, Suite 20C New York, NY 10065-4907 Case No.: 14-12030 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: July 9, 2014 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Gerard Sylvester Catalanello DUANE MORRIS LLP 1540 Broadway New York, NY 10036 Tel: 212-692-1000 Fax: 212-692-1020 Email: gcatalanello@duanemorris.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jay Marc Schwamm, president. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/nysb14-12030.pdf PLYMOUTH OIL: Court to Defer Ruling on Stay Motion Against Prairie ------------------------------------------------------------------ The Hon. Thad J. Collins of the U.S. Bankruptcy Court for the Northern District of Iowa will defer ruling on Plymouth Oil Company, LLC's motion to enforce the automatic stay and sanctions until after the ruling is entered in Plymouth Oil Company v. Prairie Sun Foods, Adv. No. 14-9035. As reported by the Troubled Company Reporter on July 8, 2014, the Debtor asked the Court to, among other things, hold Prairie Sun Foods, LLC -- the winning bidder at the foreclosure sale of the plant with a credit bid and, therefore, now holds title to the plant -- in civil contempt for having violated the automatic stay of Section 362 of the Bankruptcy Code. Prairie Sun claimed that the lawsuit is part of its collateral acquired through the purchase of the lenders' loans. Bradley R. Kruse, Esq., at Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, PLC, in Des Moines, Iowa, argued that the language contained in the security agreements and UCC filings, which Prairie Sun has purchased, does not create a valid and perfected security interest in the lawsuit. The lawsuit is not part of Prairie Sun's collateral purchased from the lenders, he asserted. On June 23, 2014, Prairie Sun objected to the Debtor's stay motion, saying that it had no intention of conducting the UCC sale when its counsel inadvertently sent out the notices. Prairie Sun has canceled the sale and currently has no intention of moving forward with the UCC sale until the adversary proceeding is decided. According to Prairie Sun, the automatic stay was not violated because the Court had granted relief from the stay in what is now Prairie Sun's collateral. Unsecured creditor Plymouth Energy Company, L.L.C., also filed on June 24, 2014, an objection to the Debtor's stay motion. Plymouth Energy renewed its request for the Court to expedite its ruling on the pending motion to convert and remove the Debtor's case from Chapter 11. The TCR reported on July 8, 2014, the Debtor filed on May 23, 2013, an adversary action in its bankruptcy case against Plymouth Energy, which is currently pending. The lawsuit includes counts for breach of contract, fraudulent transfer avoidance and preferential transfer avoidance, among other things. No trial date has been set but significant discovery has been conducted. Settlement discussions between Plymouth Energy and Plymouth Oil are currently ongoing. Plymouth Energy stated in its June 24 court filing that a settlement in the Plymouth Energy lawsuit will not occur in the foreseeable future. Plymouth Energy said that it will "shortly be serving upon the Debtor written discovery requests and then intends to depose the Debtor's personnel at a later date. Another trial scheduling conference will need to be set up in the Plymouth Energy lawsuit to provide new case deadlines including, among others, the completion of discovery." Prairie Sun is represented by: T. Randall Wright, Esq. Brandon R. Tomjack, Esq. Baird Holm, LLP 1500 Woodmen Tower 1700 Farnam Street Omaha, NE 68102 Tel: (402) 344-0500 E-mail: rwright@bairdholm.com Plymouth Energy is represented by: Jeffrey W. Courter, Esq. Nyemaster Goode, P.C. 700 Walnut Street, Suite 1600 Des Moines, IA 50309-3899 Tel: (515) 283-3189 Fax: (515) 283-8045 E-mail: jwc@nyemaster.com About Plymouth Oil Plymouth Oil Company, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Iowa Case No. 12-01403) in Sioux City on July 23, 2012. In its amended schedules, the Debtor disclosed $21,623,349 in total assets and $12,891,586 in total liabilities. Plymouth Oil -- http://www.plymouthoil.com-- owned a $30 million extraction plant located at 22058 K-42 Merrill, Iowa, directly across from the new Plymouth Energy Ethanol Plant. Founded by local investors, Plymouth Oil Company, started operations in February 2010 purchasing raw corn germ and refining this material into de-oiled germ meal and kosher food-grade cooking oil. The plant was capable of pumping out 90 tons of corn oil each day and about 300 tons of DCGM (defatted corn germ meal) daily, which is used for hog, poultry and dairy feed. The plant was later shut down. Bankruptcy Judge Thad J. Collins presides over the case. Bradley R. Kruse, Esq., and Adam J. Freed, Esq., at Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, P.L.C., represent the Debtor as counsel. The petition was signed by David P. Hoffman, president. Secured creditors Arlon Sandbulte, Ryan Lake, Dirk Dorn, Steven Vande Brake, and Iowa Corn Opportunities, LLC, are represented by lawyers at Baird Holm LLP in Omaha, Nebraska. On Oct. 28, 2013, the Bankruptcy Court denied confirmation of the Debtor's Chapter 11 plan and allowed secured lenders owed $8.3 million on a bridge loan to foreclose. A copy of the Plan is available at http://bankrupt.com/misc/plymouthoil.doc120.pdf POSITIVEID CORP: Reports $2.31-Mil Net Loss for First Quarter ------------------------------------------------------------- PositiveID Corporation filed its quarterly report on Form 10-Q disclosing a net loss of $2.31 million on $nil of revenue for the three months ended March 31, 2014, compared with a net loss of $1.9 million on $nil of revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.17 million in total assets, $6.18 million in total liabilities, mandatorily redeemable preferred stock of $1.2 million, and a stockholders' deficit of $6.2 million. As of March 31, 2014, the Company had a working capital deficiency of approximately $6.1 million and an accumulated deficit of $127.3 million, compared to a working capital deficiency of $5.6 million and an accumulated deficit of $124.6 million as of Dec. 31, 2013. The Company has incurred operating losses since its inception, and has not generated revenue from continuing operations since 2009. The current operating losses are the result of research and development expenses and selling, general and administrative expenses. While the Company expects to begin recognizing revenue during the three months ended June 30, 2014, the Company expects its operating losses to continue through at least the next twelve months. These conditions raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/Bb8K0T About PositiveID Delray Beach, Fla.-based PositiveID Corporation has historically developed, marketed and sold RFID systems used for the identification of people in the healthcare market. Beginning in early 2011, the Company has focused its strategy on the growth of its HealthID business, including the continued development of its GlucoChip, its Easy Check breath glucose detection device, its iglucose wireless communication system, and potential strategic acquisition opportunities of businesses that are complementary to its HealthID business. PositiveID reported a net loss attributable to common stockholders of $13.33 million on $0 of revenue for the year ended Dec. 31, 2013, as compared with a net loss attributable to common stockholders of $25.30 million on $0 of revenue in 2012. The Company's balance sheet at Dec. 31, 2013, showed $1.40 million in total assets, $5.82 million in total liabilities, all current, $488,000 in mandatorily redeemable preferred stock, and a $4.91 million total stockholders' deficit. EisnerAmper LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has a working capital deficiency and an accumulated deficit. Additionally, the Company has incurred operating losses since its inception and expects operating losses to continue during 2014. These conditions raise substantial doubt about its ability to continue as a going concern. POWIN CORP: Posts $1.47-Mil. Net Loss for Q1 Ended March 31 ----------------------------------------------------------- Powin Corporation filed its quarterly report on Form 10-Q disclosing a net loss of $1.47 million on $2.53 million of net sales for the three months ended March 31, 2014, compared to a net loss of $686,713 on $6.84 million of net sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $6.37 million in total assets, $8.67 million in total liabilities, and stockholders' deficit of $2.3 million. The Company sustained operating losses during the three months ended March 31, 2014 and 2013 and for the years ended Dec. 31, 2013 and 2012 and incurred negative cash flows from operations in those same periods. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required. This condition raises substantial doubt about the Company's ability to do so. A copy of the Form 10-Q is available at: http://is.gd/vRiZAd Tualatin, Oregon-based Powin Corporation has very strong relationships with eight plants located in The People's Republic of China and one in Taiwan and, coordinate all the manufacturing of over 4,000 products plus the coordination of all product shipments and delivery to its distribution channels. However, the Company does not own the manufacturing facilities in China or Taiwan; it only facilitates the manufacturing and distribution of the products for the Company's customers. Products include gun safes, outdoor cooking and cookware products, fitness and recreational equipment, truck parts, furniture products and cabinets, plastic products, rubber products, electrical parts and components and appliances. The Company also manufactures metal products in Tualatin, Oregon through its wholly owned subsidiary, Quality Bending and Fabrication Inc. PRETTY GIRL: Meeting to Form Creditors' Panel Set for July 15 ------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on July 15, 2014, at 10:00 a.m. in the bankruptcy case of Pretty Girl, Inc. The meeting will be held at: 80 Broad Street, 4th Floor New York, NY 10004 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. 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. PRIME CHOICE: Hiring Heritage to Seek Buyer or Investor ------------------------------------------------------- David McGee, writing for Bristol Herald Courier, reported that Prime Choice Foods is seeking a buyer or investor, and has retained Heritage Equity Partner, a Maryland-based investment banking services firm, in hopes of finding a buyer, partner or investor. "We are actively pursuing options that will allow our company to not only continue operating, but also to emerge from bankruptcy properly capitalized and well positioned to continue serving customers and working with our vendors," Prime Choice President Jose Gomez said in the statement. "The support from both groups has been phenomenal and I believe is a testament to the way we conduct our business. As a family-run company, we have deep relationships with the groups we work with and we are eager to maintain those and see what options are available to us through this process." "The company is in need of working capital to support growth and we are exploring many possible scenarios to solve this problem, including new money, either debt or equity, a joint-venture partner, or a going concern buyer," according to Matt LoCascio, a managing director at Heritage, according to Bristol Herald Courier. The firm may be reached at: Matt LoCascio Managing Director HERITAGE EQUITY PARTNERS 16 N. Washington St., Suite 102 Easton, MD 21601 Tel: (866) 969-1115 Fax: (866) 604-9434 E-mail: MLoCascio@EquityPartnersHG.com About Prime Choice Foods Prime Choice Foods, Inc., filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 14-13422) on Feb. 25, 2014, in Los Angeles. Judge Robert N. Kwan presides over the case. Marc J. Winthrop, Esq., at Winthrop Couchot, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in both assets and liabilities. The petition was signed by Jose G. Gomez, CEO/president. The family-owned business produces a wide range of primarily corn- based snack products at its two facilities in Bristol, Virginia. PUERTO RICO: Electric Power Authority Given More Time to Pay Debt ----------------------------------------------------------------- Michael Corkery, writing for The New York Times' DealBook, reported that Puerto Rico's struggling electric power authority has reached a temporary deal with some of its lenders, buying the agency a little more time as it sorts out its troubled finances. According to the report, banks providing credit lines are allowing the Puerto Rico Electric Power Authority to delay certain payments for three more weeks, the agency said on July 7. * * * The Troubled Company Reporter, on July 4, 2014, reported that Moody's Investors Service has downgraded the Commonwealth of Puerto Rico to B2 from Ba2, affecting $14.4 billion of outstanding general obligation (GO) bonds. Concurrently, commonwealth agencies and public corporations have been downgraded, affecting about $46 billion of non-GO bonds, including $15.6 billion of senior- and subordinate-lien bonds issued by the Sales-Tax Financing Corporation (COFINA), which respectively were lowered to Ba3 and B1. The Puerto Rico Electric Power Authority (PREPA) was downgraded to Caa2 from Ba3, while the Puerto Rico Aqueduct and Sewer Authority (PRASA) was downgraded to Caa1 from Ba3. The Puerto Rico Highway and Transportation Authority (PRHTA) was downgraded to Caa1 (senior 1998 resolution and 1968 resolution) from Ba3, and to Caa2 from B1 (subordinate 1998 resolution). For PREPA, PRHTA and PRASA, the newly lowered ratings remain under review for possible further downgrade. The debt of the Government Development Bank (GDB) was downgraded to B3 from Ba2, and the debt of the University of Puerto Rico was downgraded to Caa1 and Caa2. The outlook for the GDB as well as for commonwealth GO and related debt remains negative. QUARTZ HILL: Hearing on Case Transfer Motion Scheduled for Today ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida will hold on July 9, 2014, at 10:30 a.m. a hearing to consider Quartz Hill Mining LLC and Superior Gold LLC's motion to transfer the venue of cases and adversary proceedings to the District of Colorado. The Debtors say in their June 11, 2014 motion that they have "one potential creditor who apparently would rather deal with the bankruptcy issues in Colorado than before the Court which issued certain orders which need clarification and before the Court in another proceeding which is entertaining the very issues which necessitated the filing of these bankruptcy cases." The Debtors state that the Court apparently believes that the connections of the Debtors are tenuous and, rather than spend time and money litigating over the appropriate venue, the Debtors are amenable to transferring the cases to Colorado. The Estate of William B. Kemper and Marjorie Robbins Daggett, secured creditors of the Debtors, filed on July 3, 2014, an objection to the Debtors' transfer motion, saying that substantial events have occurred in this case, including, among other things: (a) an adversary proceeding filed in this case by the Debtor against creditors; (b) an adversary proceeding in Meredon filed by the Debtor against creditors on the same grounds as those in the adversary of within Quartz Hill Mining, LLC; (c) motions to employ counsel and special counsel; (e) a motion to employ a realtor business specialist at an absorbent rate on an undeveloped real property. "Had the Motion been filed prior to the above-referenced events, an entirely different perspective would exist. Instead, months have passed, a first meeting of creditors has finalized, and countless hours have been expended by creditors before this forum to outline the wrongs of the Debtor. Creditors perceive the Motion as Debtor's metaphorical ejection seat," the Secured Creditors say in their July 3 filing. The Debtors filed on July 7, 2014, a memorandum of law in support of their motion to transfer the venue of cases and adversary proceedings to the District of Colorado. The Debtors say that as all of the Debtors' assets are located in Colorado, the Debtors principals and the challenging creditors exist under the laws of the State of Colorado, the convenience of the parties weighs heavily in favor the requested transfer. As no parties' due process or property rights will be affected by the requested transfer, but the Debtors' property rights are in considerable jeopardy if these cases are dismissed, the interests of justice heavily weigh in favor of the requested transfer, the Debtors state in their July 7 filing. A hearing is also set for July 9 at 10:30 a.m. to consider the Quartz Hill's June 12, 2014 motion to extend by 30 days the time by which parties are required to submit proposed orders on the Secured Creditors' motion to dismiss the Chapter II proceedings. On April 23, 2014, the Court ordered the parties to submit proposed orders on the motion to dismiss by June 12, 2014. As reported by the Troubled Company Reporter on May 14, 2014, the Debtors opposed the Secured Creditors' dismissal motion. Robert P. Charbonneau, Esq., at Ehrenstein Charbonneau Calderin, in Miami, Florida, pointed out that the Secured Creditors wrongly assumed that the cases are a "single asset real estate debtor" and were filed in bad faith. Rather, it is a small business case as defined by Section 101 of the Bankruptcy Code. According to Mr. Charbonneau, it is only because of the Secured Creditors engaged in an unlawful collateral attack of the court orders that the Debtors had to seek court protection. By filing, they prevented a levy and execution of their properties, which would have operated as forfeiture of all equity to one unsecured creditor. The Secured Creditors are represented by: E. Alan Hampson, Esq. 1420 Vance Street #200 Lakewood, Co 80214 Tel: (303) 233-8997 Fax: (303) 233-1995 E-mail: e.alan.hampson@comcast.net and Robert C. Meyer, Esq. Robert C. Meyer, P.A. 2223 Coral Way Miami, Florida 33145 Tel: (305) 285-8838 Fax: (305) 285-8919 E-mail: meyerrobertc@cs.com About Quartz Hill Quartz Hill Mining, LLC sought protection under Chapter 11 of the Bankruptcy Code (Case No. 14-15419, Bankr. S.D.Fla.) on March 7, 2014. The case was initially assigned to Judge Robert A. Mark, but later transferred to Judge A. Jay Cristol's chambers. The Debtor is represented by Robert P. Charbonneau, Esq., and Jacqueline Calderin, Esq., at Ehrenstein Charbonneau Calderin, in Miami, Florida. The Debtor's special counsel is John A. Moffa, Esq., at Moffa & Bonacquisti, P.A., in Plantation, Florida. The Debtor said it has $58 million in assets and $7.5 million in debts. Affiliate Superior Gold, LLC, also sought Chapter 11 protection. Judge ordered the joint administration of the two cases. RELIABRAND INC: Reports $198K Net Loss for First Quarter -------------------------------------------------------- Reliabrand Inc. filed its quarterly report on Form 10-Q disclosing a net loss of $198,049 on $77,401 of revenues for the three months ended March 31, 2014, compared with a net loss of $1.06 million on $19,896 of revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $2.49 million in total assets, $829,893 in total liabilities, and stockholders' equity of $1.66 million. The Company has sustained operating losses since inception, which raises substantial doubt about the Company's ability to continue as a going concern. As of March 31, 2014, the Company has a working capital surplus of $900,338, and accumulated deficit of $4,201,093. During the period ended March 31, 2014, the Company had a net loss of $823,536 and cash used in operating activities of $1.1 million. The Company's ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. A copy of the Form 10-Q is available at: http://is.gd/hdQneK Based in Kelowna, B.C., Canada, Reliabrand Inc. has developed and has begun manufacturing a newer version of the Adiri baby bottles and related components such as sippy cups. The Company intends to aggressively promote and market the bottles and hopes to secure widespread retail distribution outlets for the bottles. The Company manufactures the baby bottles and accessories in China. Presently, the Company is selling the baby bottles through its online Web site and has begun limited retail distribution as well. The Company is presently in discussion with distributors of baby bottles and related products in over 20 countries worldwide. REVEL AC: KEIP, Seal Approval Sought ------------------------------------ BankruptcyData reported that Revel AC filed with the U.S. Bankruptcy Court a motion for entry of an order authorizing and approving a key employee incentive plan to motivate and incentivize five key employees whose efforts and expertise are integral to preserving the Debtors' business, a meaningful continuation of the Debtors' marketing process and the Debtors' efforts towards a competitive auction. The Debtors filed a request to seal the motion, stating that the List of KEIP Participants is confidential commercial information, the protection of which is necessary to preserve morale within the Debtors' workforce and to prevent competitors from using the List of KEIP Participants to recruit away the Debtors' key employees who are vital to preserving and maximizing the value of the Debtors' estates. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that on completion of the sale, the participants would receive a discretionary share of a bonus pool of $175,000 to $1.53 million, based on achieving various levels of operating cash flow exceeding the budget. An additional $225,000 will be added to the bonus pool if the sale consideration, excluding assumed liabilities, is at least $150 million, the report related. The Court scheduled a July 21, 2014 hearing to consider the seal motion. 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. RIVER-BLUFF: Parties Dispute Receiver Fees ------------------------------------------ River-Bluff Enterprises, Inc. has filed an objection to the receiver and its counsel's fee requests. The Debtor contends that the Bankruptcy Court for the Eastern District of Washington should reduce the fee amounts or deny the final fees claimed by the receiver and the receiver's counsel. The Debtor argues that the receiver and its counsel have charged excessive fees to date which should more than compensate them for work performed. The Debtor urges the Court to apply its own judgment and experience with billing practices when considering the fee requests and determining whether the requests are reasonable pursuant to Sec. 330(a)(3)(A) of the Bankruptcy Code. In response, Revitalization Partners, LLC, the receiver, argues that the Debtor did not raise any objection to its prior fee requests, but now contends the fees are excessive. The receiver asserts that its fees from February to March 2014 are reasonable, and urges the Court to approve them. About River-Bluff Enterprises Ellensburg, Washington-based River-Bluff Enterprises, Inc., filed a Chapter 11 bankruptcy petition (Bankr. E.D. Wash. Case No. 14- 00843) on March 11, 2014. In its schedules, the Debtor disclosed $10,231,777 in total assets and $17,609,653 in total liabilities. This is River-Bluff's second bankruptcy filing in less than two years. The company previously sought bankruptcy protection (Bankr. E.D. Cal. Case No. 12-92017) in Modesto, California, in July 2012. The case was dismissed in 2013. Gary W. Dryer, Assistant U.S. Trustee for Region 18, informed the U.S. Bankruptcy Court for the Eastern District of Washington that due to the lack of entities eligible to serve on the unsecured creditors' committee, the U.S. Trustee is not appointing an unsecured creditors' committee in the Chapter 11 case of River- Bluff Enterprises, Inc. The Debtor is represented by: James A. Perkins, Esq. LARSON BERG AND PERKINS PLLC 105 N 3rd Street Yakima, WA 98901 Tel: (509) 457-1515 Fax: (509) 457-1027 The receiver is represented by: David W. Crowell, Esq. BALL JANIK, LLP 101 Sw Main St, #1100 Portland, OR 97204 Tel: (503) 228-2525 RIVERA & MIRO: Files for Chapter 7 in Florida --------------------------------------------- Rivera & Miro Investment Group Inc. filed a Chapter 7 petition (Bankr. M.D. Fla. Case No. 14-05268) in Central Florida in May 6. The Debtor disclosed $13,495 assets and $177,637 in liabilities. Major creditors are: -- Terrace 390 LLC, Orlando with $46,000; -- Sysco Central Florida, Ocoee with $25,000; -- World Global Financing Inc., Miami with $20,000. The Debtor is represented by: Arvind Mahendru 5703 Red Bug Lake Rd #284 Winter Springs, FL 32708 Tel: 407-504-2462 E-mail: amtrustee@gmail.com SALIX PHARMACEUTICAL: Cosmo Merger No Impact on Moody's B1 CFR -------------------------------------------------------------- Moody's Investors Service commented that the agreement by Salix Pharmaceutical, Ltd. to merge with Cosmo Technologies Limited ("Cosmo Tech"), a subsidiary of Cosmo Pharmaceuticals S.p.A. (collectively "Cosmo") is credit-positive. The deal provides financial benefits and enhances Salix's business profile. There is currently no effect on Salix's existing ratings including the B1 Corporate Family Rating, the Ba1 senior secured rating and the B2 senior unsecured rating. The rating outlook is stable. Cosmo is unrated. "Credit-positive elements of the Cosmo merger include tax benefits of the inversion and product portfolio enhancements, but Salix's ratings remain constrained by high financial leverage," stated Michael Levesque, Moody's Senior Vice President. Salix Pharmaceuticals, Ltd. is a specialty pharmaceutical company operating in the US gastroenterology area. Through the recent acquisition of Santarus Pharmaceuticals, Inc., Salix became the largest specialty company operating in this market. For the 12 months ended March 31, 2014 Salix reported net product revenue of approximately $1.1 billion including Santarus revenues from the January 2, 2014 acquisition date. The principal methodology used in this rating was the Global Pharmaceutical Industry published in December 2012. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SALON SEVEN: Files for Chapter 7 in Florida -------------------------------------------- Salon Seven LLC filed a Chapter 7 petition (Bankr. M.D. Fla. Case No. 14-05121) on May 2. The Debtor disclosed $3,501 assets and $197,308 in liabilities. The Ormond Beach, Florida-based company is represented by: Robert J Mara, Esq. MARA & MARA, P.A. 555 West Granada Blvd., Suite B5 Ormond Beach, FL 32174 Tel: (386) 672-8081 Fax: (386) 265-5995 E-mail: rjmara@mara-maralaw.com SCH-TRIDENT: Files Schedules of Assets and Liabilities ------------------------------------------------------ SCH-Trident, Ltd., filed its schedules of assets and liabilities in the U.S. Bankruptcy Court for the Northern District of Texas, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $8,557,800 B. Personal Property $1,406 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $16,858,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $12,356,310 ----------------- -------------- TOTAL $8,559,206 $29,214,310 A copy of the Schedules is available for free at: http://bankrupt.com/misc/SCH-TRIDENT_30_sal.pdf List of 14 Largest Unsecured Creditors On June 20, 2014, the Debtor filed with the Court a list of its largest unsecured creditors, disclosing: Name of Creditor Nature of Claim Amount of Claim ---------------- --------------- --------------- 7636 Harwin, LLC Business Debt $10,800,000 c/o Tim Hagan 1980 Post Oak Boulevard Suite 1380 Houston, TX 77056 PlainsCapital Bank Business Debt $13,500,000 c/o Edward M. Fishman Value: $8,557,800 Fishman Jackson 13155 Noel Road, Suite 700, LB13 Dallas, TX 75240 Target Builders, LLC Business Debt $1,600,000 P.O. Box 11367 Value: $0 Carrollton, TX 75011 A & Skipol, Inc. Business Debt $1,058,000 Value: $0 AZA Investments Business Debt $700,000 Value: $0 Rajiv Chhabra Business Debt $500,000 Rajinder Singh Business Debt $500,000 Amir Hussain Business Debt $500,000 Enterprise America Business Debt $50,000 Tim Ferguson Attorney Legal Fees $3,000 West Star Deposit refund $1,260 Hussain Zamanian CPA Accounting Fees $1,100 J Sport Tenant complaint $950 regarding repairs Dallas County Tax Assessor Business Debt $0 Cash Collateral Use On July 2, the Court entered a interim agreed order for the Debtor's use of cash collateral. The secured lenders are granted valid, binding, enforceable, and perfected liens co-extensive in validity and priority with the secured lenders' pre-petition liens in all of the Debtor's assets. As adequate protection for the diminution in value of their interests, the secured lenders are granted replacement liens and security interests, having priority over all other creditors co-extensive in validity and priority with their pre-petition liens, against the Debtor's rents originating post-petition. No hearing to consider the entry of any final order authorizing use of cash collateral will be conducted until after the Debtor has provided, and the secured lenders have had a reasonable opportunity to assess, any restructuring proposal the Debtor has undertaken to conceive. On May 31, 2014, secured creditor 7636 Harwin, LLC, filed an objected to the Debtor's motion, saying, "Not only has the Debtor failed to timely deliver a new budget to the lenders, it has asked for additional amounts to be paid for 'repairs' when the amounts sought have no bids and may not truly be repairs. In addition, the Debtor has failed to provide proof of insurance, which is increasingly troubling. The failure to comply with the prior order and deliver a new budget timely is cause to deny the Debtor's request for use of cash collateral. 7636 Harwin is represented by: Vickie L. Driver, Esq. Courtney J. Hull, Esq. State Bar No. 24061297 Coffin & Driver, PLLC 7557 Rambler Road, Suite 200 Dallas, Texas 75231 Tel: (214) 377-4848 Fax: (214) 377-4858 E-mail: vdriver@coffindriverlaw.com E-mail: chull@coffindriverlaw.com About SCH-Trident SCH-Trident, Ltd., operator of a shopping center located on Harry Hines Blvd. in Dallas, Texas, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Tex. Case No. 14-32277) in Dallas on May 6, 2014. The petition was signed by Rajinder Singh as manager of SCH-Trident, G.P. The Debtor estimated $10 million to $50 million in assets and liabilities. Joyce W. Lindauer, Esq., at Joyce W. Lindauer, attorney at law, in Dallas, serves as the Debtor's counsel. Judge Harlin DeWayne Hale presides over the case. SCRIPSAMERICA INC: Incurs $1.26-Mil. Net Loss for First Quarter --------------------------------------------------------------- ScripsAmerica, Inc., filed its quarterly report on Form 10-Q disclosing a net loss of $1.26 million on $823,859 of total net revenues for the three months ended March 31, 2014, compared with a net loss of $720,132 on $287,374 of total net revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $3.17 million in total assets, $3.8 million in total liabilities, convertible preferred stock of $1.04 million and stockholders' deficit of $1.68 million. After taking into consideration interim results and current projections, management believes that the Company's cash flow from operations, coupled with recent financings will not be sufficient to support the working capital requirements, debt service and applicable debt maturity requirements for the twelve month period ending March 31, 2015. This raises substantial doubt regarding the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/UzYGxa ScripsAmerica, Inc., primarily develops, markets, and distributes branded over the counter (OTC) pharmaceutical products in the United States and China. It primarily focuses on the marketing, sale, and distribution of RapiMed pediatric acetaminophen products. The company was founded in 2008 and is based in Tysons Corner, Virginia. SCRUB ISLAND: FirstBank's Plea to End Exclusivity Period Denied --------------------------------------------------------------- The Hon. Michael G. Williamson of the U.S. Bankruptcy Court for the Middle District of Florida denied on July 3, 2014, FirstBank Puerto Rico's motion for entry of an order terminating the period during which Scrub Island Development Group Limited and Scrub Island Construction Limited have the exclusive right to solicit acceptances of their joint plan of reorganization, or, alternatively, denying any request by the Debtors for an extension of the period. Since the filing of the exclusivity termination motion in April, two additional months have passed, during which time the Debtors, the Committee of Unsecured Creditors, and FirstBank participated in a mediation process requested by the Committee and ordered by the Court. The mediation resulted in an impasse declared by the mediator. FirstBank stated in its June 24 supplement to the motion for termination of the Exclusive Solicitation Period that in light of the failure of the mediation and the clear infirmities of the Plan, the Debtors are no closer to confirming a plan than they were on the Petition Date more than seven months ago. FirstBank proposed a solution to move the cases forward: a transparent and competitive plan process in which the actual investor market for the Debtors' assets -- not the Debtors' controlling shareholder and insider, Mr. Collier -- would determine the optimal, value-maximizing outcome for the Debtors' estates and creditors. On June 23, 2014, Scrub Island Associates, Jose Blanco, Tomas Blanco, Mavana Corporation, Felipe Perez, Fernando Ortega, Mila Investment Group Corporation, Gustavo Hermida, Gloria Colon Hermida and EJA Kachting Group, Ltd., joined in FirstBank's motion. On June 24, 2014, the Debtors responded, saying that FirstBank seeks to terminate exclusivity so as to attempt to cram down unsecured creditors and the Debtors under a potential plan so that it can pursue a contingent third party contract for the acquisition of the assets of the Debtors. The Debtors claim that there is no firm commitment by FirstBank's prospective purchaser, who can terminate the contract for any reason whatsoever. According to the Debtors, termination of exclusivity will jeopardize financing commitments obtained by the Debtors to fund the Plan, "leaving all parties to the mercy of a potential purchaser who has no skin in the game and subjecting them to the chaos of competing plans. It will jeopardize business operations at the Scrub Island Resort and will likely result in inability of the Debtors to obtain debtor in possession financing under their current pending motion." In a filing dated June 25, 2014, FirstBank claims that, among other things, the Debtors have admitted their financial condition is so dire that they must obtain on an emergency basis a $185,000 DIP loan from Mainsail to fund employee wages and other immediate expenses. The Debtors' admission as to their cash situation demonstrates further cause for termination of exclusivity, to permit the stalking horse and auction process agreed to in the plan support agreement to move ahead expeditiously, FirstBank states. Debtors' Requested Extension of Exclusivity Periods On June 25, 2014, Judge Williamson entered a pro memo extending until July 11, 2014, the exclusivity period for filing a Chapter 11 plan and disclosure statement. On June 24, the Debtors sought extension of the Exclusive Solicitation Period, saying that their cases are large and complex, involving more than $100 million in claims. The Debtors timely filed their Plan, and they have negotiated in good faith with the various constituents in an effort to achieve consensus and to avoid expensive, time-consuming, and costly litigation. FirstBank, according to the Debtors, hasn't yet completed its document production, resulting from the Debtors' December 2013 request for production of documents, although additional materials have been delivered. This delay is no fault of the Debtors. At a minimum, the Debtors will need an extension of exclusivity in order to obtain and review the documents requested almost six months ago. The Official Committee of Unsecured Creditors and Marriott International, Inc., as a party-in-interest and creditor, joined in the Debtors' motion for extension of the Exclusive Solicitation Period. Marriott International is represented by: Lori V. Vaughan, Esq. Trenam, Kemker, Scharf, Barkin, Frye, O'Neill and Mullis, P.A. 101 E. Kennedy Boulevard, Suite 2700 Tampa, FL 33602 Tel: (813) 223-7474 Fax: (813) 227-0404 E-mail: lvaughan@trenam.com and Carren B. Shulman, Esq. Sheppard, Mullin, Richter & Hampton LLP 30 Rockefeller Plaza, 39th Floor New York, New York 10112 Tel: (212) 653-8700 Fax: (212) 653-8701 E-mail: cshulman@sheppardmullin.com Scrub Island Associates is represented by: Marsha G. Rydberg, Esq. The Rydberg Law Firm, P.A. 201 N. Franklin Street, Suite 1625 Tampa, FL33602 Tel: (813) 221-2800 Fax: (813) 221-2420 E-mail: mrydberg@rydberglaw.com FirstBank is represented by: W. Keith Fendrick, Esq. Holland & Knight LLP 100 N. Tampa Street, Suite 4100 Tampa, FL 33602 Tel: (813) 227-8500 Fax: (813) 229-0134 E-mail: keith.fendrick@hklaw.com and Zachary H. Smith, Esq. Moore & Van Allen PLLC Suite 4700 100 North Tryon Street Charlotte, NC 28202-4003 Tel: (704) 331-1000 Fax: (704) 331-1159 E-mail: zacharysmith@mvalaw.com About Scrub Island Scrub Island Development Group Ltd., the owner of a British Virgin Islands luxury resort, and its affiliate, Scrub Island Construction Limited, sought bankruptcy protection (Bankr. M.D. Fla. Case Nos. 13-15285 and 13-15286) on Nov. 19, 2013, to end a receivership Scrub Island claims was secretly put in place by its lender. The bankruptcy case is assigned to Judge Michael G. Williamson. The 230-acre resort operates as a Marriott Autograph Collection property. It has 52 rooms and suites, a spa and a 55-slip marina. Scrub Island Development Group scheduled $125,569,235 in total assets and $130,695,731 in total liabilities. The Debtors are represented by Charles A. Postler, Esq., and Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida. FirstBank Puerto Rico, the prepetition secured lender, is represented by W. Keith Fendrick, Esq., at Holland & Knight LLP, in Tampa, Florida. The Debtors are represented by Charles A. Postler, Esq., and Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida. FirstBank Puerto Rico, the Debtor's prepetition secured lender, is represented by W. Keith Fendrick, Esq., at Holland & Knight LLP, in Tampa, Florida. The Official Committee of Unsecured Creditors appointed in Scrub Island's cases has retained Robert B. Glenn, Esq., Edwin G. Rice, Esq., and Victoria D. Critchlow, Esq., at Glenn Rasmussen, P.A., as general counsel. SANTA FE GOLD: Posts $2.99-Mil. Net Loss for Q1 Ended March 31 -------------------------------------------------------------- Santa Fe Gold Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $2.99 million on $205,761 of net sales for the three months ended March 31, 2014, compared with a net loss of $2.53 million on $3.31 million of net sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $22.89 million in total assets, $27.06 million in total liabilities, and a stockholders' deficit of $4.17 million. The Company has incurred a loss of $8.33 million for the nine months ended March 31, 2014, and has a total accumulated deficit of $82.67 million, and a working capital deficit at March 31, 2014 of $22.12 million. A copy of the Form 10-Q is available at: http://is.gd/33rvGC About Santa Fe Gold Santa Fe Gold -- http://www.santafegoldcorp.com-- is a U.S.- based mining and exploration enterprise focused on acquiring and developing gold, silver, copper and industrial mineral properties. Santa Fe controls: (i) the Summit mine and Lordsburg mill in southwestern New Mexico; (ii) a substantial land position near the Lordsburg mill, comprising the core of the Lordsburg Mining District; (iii) the Mogollon gold-silver project, within trucking distance of the Lordsburg mill; (iv) the Ortiz gold property in north-central New Mexico; (v) the Black Canyon mica deposit near Phoenix, Arizona; and (vi) a deposit of micaceous iron oxide (MIO) in Western Arizona. Santa Fe Gold intends to build a portfolio of high-quality, diversified mineral assets with an emphasis on precious metals. SCRUB ISLAND: Seeks Court Approval to Hire HVS as Appraiser ----------------------------------------------------------- Scrub Island Development Group Limited asks for permission from the U.S. Bankruptcy Court for the Middle District of Tampa to employ HVS Shared Ownership Services to appraise the Debtor's real property and related personal property consisting of the Scrub Island Resort, Spa & Marina, including the various villas and lots owned by the Debtor. The Debtor requires HVS to: (a) provide real property appraisal services; (b) prepare a written appraisal report; (c) provide expert testimony; and (d) perform such other services as may be agreed to by HVS and the Debtor. HVS advised the Debtor that its fee will be $20,000, with $10,000 payable in advance. HVS will also be reimbursed for reasonable out-of-pocket expenses incurred. FirstBank Puerto Rico, prepetition secured lender to the debtors, objected to the Application to the extent the Debtors propose to use any of the Emergency Funds to pay the Retainer, or any other amount to HVS without Court approval. To the extent the Retainer has already been paid to HVS, prior to approval of the Application, it is incumbent upon the Debtors to confirm the source of such payment through HVS' disinterestedness affidavit, which the Application states is forthcoming but which has not yet been filed with the Court. FirstBank requested that the Court condition approval of the Application upon (i) the Debtors' submission of HVS's disinterestedness affidavit confirming that the Retainer has not been (or will not be) paid from Emergency Funds, confirming the source of payment of the Retainer, and otherwise satisfying the requirements of section 327(a) of the Bankruptcy Code; and (ii) the clarification that no further payment will be made to HVS absent approval of a fee application. HVS can be reached at: John P. Lancet, MAI HVS SHARED OWNERSHIP SERVICES 8925 SW 148th Street, Suite 216 Miami, FL 33176 Tel: (305) 378-0404 ext. 1014 E-mail: jlancet@hvs.com Firstbank's Counsel can be reached at: W. Keith Fendrick, Esq. HOLLAND & KNIGHT LLP 100 N. Tampa St., Suite 4100 Tampa, FL 33602 Tel: (813) 227-8500 Fax: (813) 229-0134 E-mail: keith.fendrick@hklaw.com About Scrub Island Scrub Island Development Group Ltd., the owner of a British Virgin Islands luxury resort, and its affiliate, Scrub Island Construction Limited, sought bankruptcy protection (Bankr. M.D. Fla. Case Nos. 13-15285 and 13-15286) on Nov. 19, 2013, to end a receivership Scrub Island claims was secretly put in place by its lender. The bankruptcy case is assigned to Judge Michael G. Williamson. The 230-acre resort operates as a Marriott Autograph Collection property. It has 52 rooms and suites, a spa and a 55-slip marina. Scrub Island Development Group scheduled $125,569,235 in total assets and $130,695,731 in total liabilities. The Debtors are represented by Charles A. Postler, Esq., and Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida. FirstBank Puerto Rico, the prepetition secured lender, is represented by W. Keith Fendrick, Esq., at Holland & Knight LLP, in Tampa, Florida. The Debtors are represented by Charles A. Postler, Esq., and Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida. FirstBank Puerto Rico, the Debtor's prepetition secured lender, is represented by W. Keith Fendrick, Esq., at Holland & Knight LLP, in Tampa, Florida. The Official Committee of Unsecured Creditors appointed in Scrub Island's cases has retained Robert B. Glenn, Esq., Edwin G. Rice, Esq., and Victoria D. Critchlow, Esq., at Glenn Rasmussen, P.A., as general counsel. SIMPLEXITY LLC: Seeks More Time to Negotiate, File Plan ------------------------------------------------------- Simplexity, LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend until Nov. 11, 2014, the period by which they have exclusive right to file a plan, and until Jan. 12, 2015, the period by which they have exclusive right to solicit acceptances of that plan. The Debtors need the additional time to attempt to negotiate a plan of liquidation, which will have the support of all of their constituencies. The hearing date for the extension request is still to be determined, according to court papers, but objections are due July 23. About Simplexity Simplexity, LLC, sought protection under Chapter 11 of the Bankruptcy Code on March 16, 2014 (Case No. 14-10569, Bankr. D.Del.). The case is before Judge Kevin Gross. The Debtors' counsel is Kenneth J. Enos, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware. Prime Clerk LLC serves as claims and noticing agent. Simplexity hired Rutberg & Co. as investment banker. Simplexity LLC and Simplexity Services LLC both estimated $10 million to $50 million in assets, and $50 million to $100 million in liabilities. The U.S. Trustee for Region 3 appointed five members to an official committee of unsecured creditors. Peter S. Partee, Sr., Esq., and Michael P. Richman, Esq., at Hunton & Williams LLP, in New York; and Christopher A. Ward, Esq., and Shanti M. Katona, Esq., at Polsinelli PC, in Wilmington, Delaware, represent the Committee. SIMPLY WHEELZ: Wants Bar Dates for Sec. 503(b)(9) & 365 Claims -------------------------------------------------------------- Simply Wheelz, Inc. has requested that the Bankruptcy Court for the Southern District of Mississippi establish these bar dates: (i) all claims arising under section 503(b)(9) of the Bankruptcy Code must be filed with the Court on or before 30 days from the date of the entry of the order granting the Debtor's Bar Date Motion; and (ii) all claims for rejection damages arising under section 365 of the Bankruptcy Code must be filed with the Court on or before the latter of: (a) 30 days from the date the Court entered an order granting the Debtor's motion to reject the executory contract or unexpired lease giving rise, in whole or in part, to the proof of claim; or, (b) 30 days from the date of the entry of the order granting the Bar Date Motion. The Debtor also asked the Court to rule that any holder of a claim against the Debtor who is required to file a proof of claim in accordance with the Bar Dates, but fails to do so on or before the applicable Bar Dates, shall: (i) be forever barred, estopped, and enjoined from asserting such claim against the Debtor and the bankruptcy estate (or filing a proof of claim with respect thereto); and, (ii) not be permitted to vote to accept or reject any plan filed in the chapter 11 case, or participate in any distribution in this chapter 11 case on account of the claim or to receive further notices regarding the claim. About Simply Wheelz LLC Simply Wheelz LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 13-03332) on Nov. 5, 2013. The case is assigned to Judge Edward Ellingon. The Debtor disclosed $413,502,259 in assets and $322,230,695 in liabilities as of the Chapter 11 filing. The Debtor is represented by Stephen W. Rosenblatt, Esq., Christopher R. Maddux, Esq., J. Mitchell Carrington, Esq., and Thomas M. Hewitt, Esq., at Butler Snow LLP of Ridgeland, Mississippi. Simply Wheelz tapped EPIQ Bankruptcy Solutions LLC as noticing and claims agent, and Capstone Advisory Group, LLC, as financial advisor. The Troubled Company Reporter reported on Jan. 7, 2014, that the Bankruptcy Court has approved the sale of substantially all of the Debtors' assets to The Catalyst Group, Inc., in exchange for the $46 million loan that is financing the Chapter 11 reorganization. SINCLAIR TELEVISION: Moody's Assigns Ba1 Rating on $500MM Loan -------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to the proposed incremental $500 million 1st lien senior secured term loan B-1 and a B1 rating to the proposed $450 million senior notes of Sinclair Television Group, Inc. ("STG"). Proceeds from the new term loan and senior notes will be used to fund the acquisition of Allbritton Communications Company ($985 million) and corporate purposes, including pending acquisitions. Proposed amendments to the existing credit agreement include increasing the size of the senior secured revolver commitment to a minimum $465 million from $157.5 million by converting existing term loan A commitments (including the delayed draw facility), eliminating maintenance covenants on the term loan B, and relaxing or eliminating certain financial covenants on the term loan A and revolver facilities. Sinclair Broadcast Group, Inc.'s ("Sinclair") Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, and ratings on existing senior secured credit facilities and senior notes are unchanged. The SGL-2 Speculative Grade Liquidity Rating and the stable outlook also remain unchanged. Assigned: Issuer: Sinclair Television Group, Inc. INCREMENTAL $500 million 1st Lien Sr Secured Term Loan B-1: Assigned Ba1, LGD2 NEW $450 million Sr Notes: Assigned B1, LGD5 Ratings Rationale Sinclair's Ba3 Corporate Family Rating reflects moderately high leverage with 2-year average debt-to-EBITDA of 5.2x estimated for March 31, 2014 (including Moody's standard adjustments) and pro forma for announced transactions. The pending acquisition of Allbritton represents Sinclair's latest debt funded investment to expand its footprint of U.S. households while further diversifying revenue by geography, network affiliation, and market size. Ratings incorporate at least high single digit percentage revenue growth through 2014, on a same station basis, driven by significant political ad demand in the second half of 2014. Despite higher levels of SG&A and production expenses, including reverse compensation, Moody's expects EBITDA margins to remain above 32% (including Moody's standard adjustments) generated by the company's sizable and diverse television station group. "We also expect management will achieve most of its planned acquisition synergies for Allbritton soon after the transaction closes given cash flow benefits are primarily from contractual retransmission fees. We believe 2-year average leverage ratios could improve over the next 12 months as excess cash is used to reduce credit facility balances or prepay maturing notes, absent acquisitions. The FCC is considering removing the 50% discount for UHF signals in determining compliance with the 39% cap on television coverage of U.S. households. Given Sinclair's coverage of U.S. households would be just under the 39% FCC limit if the 50% UHF discount were to be eliminated (or 24% including the UHF 50% discount), Moody's expects Sinclair may consider swapping television assets with other broadcasters to optimize its station portfolio while remaining within the 39% limit. We also expect the company to look at acquiring non-broadcast operations which could result in increased debt balances. The Ba3 rating and stable outlook reflect our expectation that the company will reduce pro forma 2-year average debt-to-EBITDA ratios below initial levels allowing for financial metrics to be better positioned within the Ba3 category. Ratings incorporate moderately high financial risk, the inherent cyclicality of the broadcast television business, and increasing media fragmentation. The SGL-2 liquidity rating reflects good liquidity including enhanced availability under the proposed increased revolver facility," Moody's said. The stable outlook reflects Moody's expectation that core advertising revenue will grow in the low single digit percentage range over the next 12 months accompanied by additional growth in retransmission fees (increasingly offset by higher levels of production expense, including reverse compensation). The significant increase in demand for political advertising, particularly in the second half of this year, will drive revenue growth on a same station basis to at least the high single digit percentage range for 2014. In the absence of additional acquisitions or investments, we believe Sinclair will apply a portion of excess cash to reduce debt balances contributing to improved leverage and greater free cash flow. Ratings could be downgraded if 2-year average debt-to-EBITDA ratios exceed 5.50x (incorporating Moody's standard adjustments) or if distributions, share repurchases or deterioration in operating performance results in free cash flow-to-debt ratios falling below 4%. Ratings could also be downgraded if liquidity deteriorates due to dividends, share buybacks, debt financed acquisitions, or decreased EBITDA cushion to financial covenants. Ratings could be upgraded if Sinclair's 2-year average debt-to-EBITDA ratios are sustained comfortably below 4.25x with good liquidity including free cash flow-to-debt ratios in the high single digit percentage range. Management would also need to show a commitment to financial policies consistent with the higher rating. Sinclair Broadcast Group, Inc., headquartered in Hunt Valley, MD, and founded in 1986, is a television broadcaster, operating with 162 primary stations in 78 markets pro forma for announced transactions. The station group will reach 39% of U.S. television households with diversified network affiliations across primary and digital subchannels including 43 FOX, 32 ABC, 30 CBS, 44 CW, 27 MNT, 20 NBC, and 19 Spanish language stations. The company will also own a local cable news network in Washington D.C. and four radio stations. Members of the Smith family exercise control over most corporate matters given they represent four of the seven board seats and, through Sinclair's dual class share structure, the Smith family controls approximately 76% of voting rights. Pro forma for announced transactions, total revenue was roughly $1.8 billion in 2013. The principal methodology used in this rating was the Global Broadcast and Advertising Related Industries Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SINCLAIR BROADCAST: S&P Raises Sr. Unsecured Debt Rating to 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed the 'BB-' corporate credit rating on Hunt Valley, Md.-based U.S. TV broadcaster Sinclair Broadcast Group Inc. The outlook is stable. At the same time, S&P assigned Sinclair Television Group Inc.'s proposed senior unsecured notes due 2024 a 'B+' issue-level rating, with a recovery ratings of '5', indicating S&P's expectation of modest (10%-30%) recovery in the event of a payment default. In addition, S&P assigned the company's proposed incremental term loan B its 'BB+' issue-level rating, with a recovery rating of '1', indicating its expectation for very high (90%-100%) recovery in the event of a payment default. Finally, S&P revised its recovery rating on Sinclair's senior unsecured debt to '5' from '6', and subsequently raised its issue- level rating on the debt to 'B+' from 'B', in accordance with its notching criteria. S&P is raising its issue-level ratings on the company's senior unsecured debt because it had originally expected Sinclair to fund its acquisition of Allbritton Communication Co.'s television stations using only bank debt. The company had planned to raise $1.25 billion in incremental bank debt in October 2013, but downsized the offering when the closing of the Allbritton transaction was delayed. The company is now proposing to split that financing between bank debt and senior unsecured notes. As a result of this change, recovery prospects for the senior unsecured notes have increased. The ratings on Sinclair reflect a "satisfactory" business risk profile, as per S&P's criteria, because of its significant size, scale, and diversity as one of the largest non-broadcast-network- owned TV station groups, its good EBITDA margin, and a growing revenue stream from highly predictable retransmission fees from cable and satellite video service operators. While there are many FCC initiatives underway that could affect the current TV business model, S&P currently expects that regulatory shifts are unlikely to affect Sinclair's rating. S&P continues to monitor FCC progress in its regulatory review. The rating also reflects the long-term structural changes in the consumption of media, with viewers shifting to alternative media for news and entertainment. S&P assess Sinclair's management as "fair" under its criteria. The company is controlled by the David Smith family and has a history of actions that benefit the majority shareholders more than the minority shareholders and bondholders. S&P assess Sinclair's financial risk profile as "aggressive." Factors in S&P's assessment include its elevated debt-to-EBITDA ratio and history of debt-financed acquisitions and investments in non-TV assets. The stable rating outlook reflects S&P's expectation that, barring a significant decline in core revenue growth and profitability, Sinclair will maintain a ratio of debt to average-eight-quarter EBITDA below our threshold of 5.5x for the 'BB-' rating over the intermediate term. SKYLINE MANOR: May Use Oxford's Cash Collateral Until July 16 ------------------------------------------------------------- Ron Ross, Chapter 11 trustee of Skyline Manor, Inc., sought and obtained third interim authorization from the Hon. Thomas L. Saladino of the U.S. Bankruptcy Court for the District of Nebraska to use Oxford Finance LLC's cash collateral until July 16, 2014. Loans provided under the pre-petition credit agreements by Oxford are allegedly secured by first priority liens on and security interests in all of the Debtor's property and assets. Oxford asserts that the proceeds of Oxford's loan and the proceeds received from pre-petition collateral are cash collateral. Prior to, on and after the Petition Date, the Debtor has received and collected, and continues to receive and collect, cash proceeds from the pre-petition collateral which has not been remitted to Oxford, and which constitutes cash collateral of Oxford. The Trustee said in its June 4, 2014 motion that he requires the immediate use of cash collateral to operate the healthcare facility -- a 199 unit continuing care retirement community and a 140 unit independent living facility in Omaha. Oxford consented to the Trustee's use of cash collateral. Proceeds of the pre-petition collateral will be subject to the adequate protection liens. As adequate protection for its interest in the cash collateral, Oxford is granted a valid, enforceable, perfected and continuing security interest in and lien upon all post-petition assets of the Debtor of the same type and to the same extent and validity as secured the Debtor's indebtedness to Oxford prior to the Petition Date. As reported by the Troubled Company Reporter on May 27, 2014, the Debtor was first allowed to use cash collateral nunc pro tunc to the Petition Date, through May 30, 2014. On June 5, 2014, a second interim order was entered allowing cash collateral use from June 4, 2014, through June 27, 2014. Oxford filed a objection to the cash collateral use on June 16, 2014, saying that it reserves its right to assert an objection to the Trustee's use of cash collateral and its right to assert all other rights and remedies, in the event the parties cannot reach a consensual agreement for cash collateral use. The Trustee asked the Court on June 4, 2014, to set a hearing on its emergency motion for order authorizing cash collateral use. On June 9, 2014, a final hearing was initially set for June 25, 2014, to consider the Debtor's use of cash collateral. The final hearing is now scheduled for July 16, 2014, at 9:00 a.m. Oxford is represented by : Kenneth J. Ottaviano, Esq. Paige E. Barr, Esq. Katten Muchin Rosenman LLP 525 West Monroe Street Chicago, Illinois 60661 Tel: (312) 902-5200 Fax: (312) 902-1061 E-mail: Kenneth.Ottaviano@kattenlaw.com Paige.Barr@kattenlaw.com Chapter 11 Trustee Appointment On May 30, 2014, the Court approved the application of Nancy J. Gargula, U.S. Trustee for the District of Nebraska, to appoint Ron Ross as Chapter 11 trustee in this case. As reported by the Troubled Company Reporter on May 29, 2014, Oxford asked the Court to appoint a Chapter 11 trustee for the Debtor to ensure honest, competent and proper management of the bankrupt operator of retirement community and living facility in Omaha. The State of Nebraska and the Official Committee of Unsecured Creditors, joined in Oxford's motion. On May 29, 2014, the Court entered an order allowing the appointment of a Chapter 11 trustee. Stinson Leonard's Employment as Debtor's Attorney On June 2, 2014, the Court approved the Debtor's May 26, 2014 motion to employ Robert V. Ginn and the firm of Stinson Leonard Street LLP as attorney. The Firm will, among other things, give the Debtor legal advice with respect to its powers and duties as debtor-in-possession and in the continued operation of its business and in the management and reorganization of its affairs. The Firm's regular hourly rates for attorneys anticipated to principally represent the Debtor range from $125 to $425. On May 27, 2014, the Court gave the Firm 14 days to file with the Court an affidavit, declaration or verified statement in accordance with the Federal Rules of Bankruptcy Procedure 2014 and Neb. R. Bank. P. 9004-3. About Skyline Manor Skyline Manor, Inc., operates a retirement community in Omaha. The facility offers apartments, assisted-living units, skilled nursing beds and hospice care. Skyline Manor filed a Chapter 11 bankruptcy petition (Bankr. D. Neb. Case No. 14-80934) on May 8, 2014. The petition was signed by John W. Bartle as chief restructuring officer. Judge Thomas L. Saladino presides over the case. The Debtor estimated assets of at least $10 million and liabilities between $10 million to $50 million. STARSTREAM ENTERTAINMENT: Has $921K Net Loss in March 31 Quarter ---------------------------------------------------------------- Starstream Entertainment, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $921,099 on $nil of total net revenues for the three months ended March 31, 2014. The Company's balance sheet at March 31, 2014, showed $3.41 million in total assets, $2.03 million in total liabilities, and stockholders' equity of $1.38 million. The Company has experienced recurring losses through March 31, 2014. As of March 31, 2014, the Company had cash on hand of $76,012, and current liabilities of $1.98 million. These factors raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/nmFQyH Starstream Entertainment, Inc., an independent entertainment production company, is engaged in the development, production, marketing, and distribution of feature-length motion pictures and entertainment projects. It exploits motion pictures and entertainment projects, and their ancillary rights through various avenues, including theatrical releases, video-on-demand, digital distribution, and television outlets. The company is based in Monterey, California. SUMMIT MIDSTREAM: S&P Assigns 'B' Rating to $300MM Unsecured Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B' issue- level rating and '5' recovery rating to Summit Midstream Holdings LLC and Summit Midstream Finance Corp.'s proposed $300 million senior unsecured notes due 2022. The '5' recovery rating indicates S&P's expectation of modest (10% to 30%) recovery if a payment default occurs. The notes are guaranteed on a senior unsecured basis by Summit Midstream Partners L.P. The company will use net proceeds to repay an outstanding portion under the revolving credit facility, which it drew on to fund the Red Rock Gathering Co. LLC acquisition. Dallas, Texas-based Summit Midstream is a master limited partnership with a focus on natural gas gathering and compression. It has a footprint in the Piceance and Williston basins and the Barnett and Marcellus shales. S&P's corporate credit rating on Summit is 'B+', and the outlook is stable. RATINGS LIST Summit Midstream Partners L.P. Corp credit rating B+/Stable/-- New Ratings Summit Midstream Holdings LLC Summit Midstream Finance Corp. $300 mil sr unsecd notes due 2022 B Recovery rating 5 SUPER BUY FURNITURE: Section 341(a) Meeting Set on August 8 ----------------------------------------------------------- A meeting of creditors in the bankruptcy case of Super Buy Furniture Inc. will be held on Aug. 8, 2014, at 9:00 a.m. at 341 meeting room, Ochoa Building, 500 Tanca Street, First Floor, in San Juan. Deadline to file proofs of claim will be on Nov. 6, 2014. For governmental units, the bar date will be on Jan. 4, 2015. 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. Super Buy Furniture, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D. P.R. Case No. 14-05523) on July 3, 2014. The petition was signed by Carlos N. Berrios Casillas as president. O'Neill & Borges, LLC, serves as the Debtor's counsel. CPA Luis R. Carrasquillo & Co. P.S.C. acts as the Debtor's financial consultant. The Debtor disclosed total assets of $18.2 million and total liabilities of $26.7 million. TAAZA FRESH: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Taaza Fresh Global Food, Inc. 8903 Sovereign Row Dallas, TX 75247 Case No.: 14-33325 Chapter 11 Petition Date: July 9, 2014 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Stacey G. Jernigan Debtor's Counsel: David R. Gibson, Esq. THE GIBSON LAW GROUP 3102 Maple Ave., Ste. 400 Dallas, TX 75201 Tel: (214) 800-2213 Fax: (214) 800-2214 Email: my.lawyer@sbcglobal.net Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Faisal Moosa, president. The Debtor did not file a list of its largest unsecured creditors when it filed the petition. TACTICAL INTERMEDIATE: Asks for Approval of $3.5MM DIP Loans ------------------------------------------------------------ Tactical Intermediate Holdings, Inc., and its debtor-affiliates ask for approval from the bankruptcy court to obtain $3.5 million of senior-secured DIP financing from prepetition secured lender Wells Fargo Bank, National Association, and to use cash collateral. The salient terms of the DIP facility are: * Type and Amount of Borrowing: A senior secured facility in an aggregate principal amount that in no event will exceed $3,500,000. * Interest Rate: Advances will bear interest at 10%. Default rate will be 2.0% in excess of the cash interest rate. * Maturity Date: September 15, 2014. * Carve-Out: The DIP facility subjects security interest and administrative expense claims of the DIP lenders to a carve-out and provides for the funding of budgeted professional fees into a professional fee escrow account on a weekly basis. * Bridge Loan: The DIP credit agreement contains an affirmative covenant that requires the proceeds of the DIP facility to be used to repay a DIP bridge loan, which had a principal balance of $1,050,000 on the Petition Date. * Milestones: Footwear & Massif Bidding Procedures Order by Aug. 5, 2014; Footwear and Massif Sale Orders by Aug. 27, 2014; and Footwear and Massif Closings by Sept. 12, 2014. The DIP Facility contemplates providing the DIP Lender with priming liens on the liens granted to the prepetition secured lender and subordinated lender GGC Tactical Debt Holdings, LLC, as the payee under the 12 secured promissory note dated as of Oct. 5, 2012, in the original principal of $7 million. The Debtors intend to provide the prepetition secured lender and subordinated lender adequate protection, which include liens in all DIP collateral and cash collateral, and to the extent of any diminution in value of their prepetition security interests, superpriority administrative claims. The Debtors want a final hearing by Aug. 8 for the Court to consider entry of a final order authorizing the DIP facility. 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 LLC as claims and noticing agent. 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., and Gregory F. Fesce, Esq., at Kirkland & Ellis LLP. TACTICAL INTERMEDIATE: Proposes to Pay Critical Vendors ------------------------------------------------------- Tactical Intermediate Holdings, Inc., and its debtor-affiliates seek approval from the bankruptcy court to make payments for prepetition claims of critical vendors up to the amount of $187,000 pursuant to an interim order and $197,000 on a final basis. The Debtors say that payment of any critical vendor claims will be subject to a procurement policy designed to enable the Debtors to continue to receive goods and services from vendors on customary trade terms throughout the Chapter 11 cases. The Debtors expect that $140,000 of the total amount requested will be utilized to satisfy the critical vendor claims associated with Massif, which will ultimately be assumed in the Massif asset purchase agreement, with $137,000 of that amount being expended during the first 21 days of the Chapter 11 cases. The Debtors have filed a separate motion to pay the prepetition claims of lien claimants. To the extent the lien claimants and the critical vendor motions are granted, the Debtors will not satisfy more than $1.33 million of total prepetition obligations relating to the lien claimants and critical vendors combined. 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 LLC as claims and noticing agent. 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., and Gregory F. Fesce, Esq., at Kirkland & Ellis LLP. TACTICAL INTERMEDIATE: Proposes Prime Clerk as Claims Agent ----------------------------------------------------------- Tactical Intermediate Holdings, Inc., and its debtor-affiliates ask the bankruptcy court for permission to employ Prime Clerk LLC as claims and noticing agent. The firm's claims and noticing rates are: Professional Hourly Rates ------------ ------------ Analyst $32 Technology Consultant $85 Consultant $94 Senior Consultant $125 Director $170 The firm's solicitation, balloting and tabulation rates are: Professional Hourly Rates ------------ ------------ Solicitation Consultant $170 The firm's fax noticing services will cost $0.07 per page, although e-mail noticing will be free of charge. The firm will charge at its standard hourly rates for inputting proofs of claim and ballots. The firm will charge $10.0 per record per month for data storage, maintenance and security. Prior to the Petition Date, the Debtors provided Prime Clerk a retainer in the amount of $5,000. Michael J. Frishberg, the co-president and COO, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The claims agent can be reached at: PRIME CLERK LLC 830 3rd Avenue, 9th Floor New York, NY 10022 Attn: Shai Waisman Tel: (212) 257-5450 E-mail: swaisman@primeclerk.com 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 LLC as claims and noticing agent. 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., and Gregory F. Fesce, Esq., at Kirkland & Ellis LLP. TACTICAL INTERMEDIATE: Meeting to Form Creditors Panel on July 18 ----------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on July 18, 2014, at 10:00 a.m. in the bankruptcy case of Tactical Intermediate Holdings, Inc., et al. The meeting will be held at: J. Caleb Boggs Federal Building 844 King St., Room 5209 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. 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. 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., and Gregory F. Fesce, Esq., at Kirkland & Ellis LLP. TARGUS GROUP: S&P Cuts CCR to B- on Expected Thin Covenant Cushion ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Anaheim, Calif.-based Targus Group International Inc. to 'B-' from 'B'. The outlook is negative. S&P also lowered its issue-level rating on the $190 million senior secured term loan due 2016 to 'B-' from 'B'. The recovery rating is unchanged at '4', indicating S&P's expectation for average (30% to 50%) recovery in the event of payment default. "We believe the company could face further headwinds due to fewer laptop and tablet sales resulting in fewer case and accessory purchases," said Standard & Poor's credit analyst Stephanie Harter. "The downgrade reflects our view that continued weak operating performance could persist, resulting in the covenant cushion declining and remaining below 10% due to several covenant test ratio stepdowns occurring in the next several quarters, which would constrain liquidity." S&P's assessment of the company's "highly leveraged" financial risk profile incorporates its high debt burden. S&P's assessment of the company's "vulnerable" business risk profile includes Targus' narrow product focus, participation in the highly competitive and fragmented computer case and accessories industry, and heavy reliance on new product launches and consumer spending. However, S&P believes Targus benefits from favorable long-term growth prospects for notebook computer and other mobile electronic device sales globally. S&P could lower its ratings if business conditions, liquidity, or credit protection measures weaken such that it appears that covenants will be breached and that the company will undertake a restructuring plan absent waivers or a cure from its owners. THREE FORKS: Incurs $725K Net Loss for First Quarter ---------------------------------------------------- Three Forks, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $725,450 on $491,458 of total revenues for the three months ended March 31, 2014, compared with a net loss of $359,867 on $nil of total revenues for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $6.46 million in total assets, $2.13 million in total liabilities, and stockholders' equity of $4.32 million. The Company has reported an accumulated deficit of $3,233,942. At March 31, 2014, the Company has current assets of $458,484, including cash and cash equivalents of $74,275 and current liabilities of $1.83 million. To the extent the Company's operations are not sufficient to fund the Company's capital and current growth requirements the Company will attempt to raise capital through the sale of additional shares of stock. At the present time, the Company cannot provide assurance that it will be able to raise funds through the further issuance of equity in the Company. These conditions raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/kLHoew Three Forks, Inc., based in Broomfield, Colorado, is engaged in the acquisition, exploration, development, and production of oil and gas properties. The Company currently has oil and gas projects in Texas, Oklahoma, and Louisiana. TRIANGLE USA: Moody's Rates New $350MM Sr. Unsecured Notes 'Caa1' ----------------------------------------------------------------- Moody's Investors Service assigned first time ratings to Triangle USA Petroleum Corporation (TUSA), including a B3 Corporate Family Rating (CFR), a Caa1 rating to its proposed offering of $350 million senior unsecured notes due 2022, and a SGL-3 Speculative Grade Liquidity Rating. The proceeds will be used for debt refinancing, capital spending, to repay $40 million to its parent company, Triangle Petroleum Corporation (TPLM), which was previously contributed to TUSA in connection with the company's recently closed acquisitions, and general corporate purposes. The rating outlook is stable. "The company has largely financed its initial acreage acquisitions and production through TPLM funding and bank debt, while this notes offering will layer in an incremental source of capital to fund its growing operations in the Williston Basin," commented Amol Joshi, Moody's Vice President. Rating Assignments: $350 Million Senior Unsecured Notes due in 2022, Rated Caa1 (LGD 5) Corporate Family Rating of B3 Probability of Default Rating of B3-PD Speculative Grade Liquidity rating of SGL-3 Ratings Rationale TUSA's B3 CFR reflects the company's relatively small size in terms of production and reserves, concentration in the Bakken Shale, and its limited operating history. The rating is supported by the company's strong cash margins from the high oil content of its production, the embedded growth potential in its Bakken acreage and the relatively high operational control over its well completion through RockPile Energy Services LLC, TPLM's wholly- owned subsidiary, and oil & gas gathering activities through Caliber Midstream Partners, L.P., TPLM's 32%-owned joint venture with First Reserve. The rating also incorporates the risks of the high capital spending needed to grow production and further capitalize on the oil potential of its acreage. TUSA expects to outspend cash flow in 2014 and beyond, likely debt funding this capital spending in excess of operating cash flow as it continues to grow production. Nevertheless, we expect debt leverage metrics to remain moderate relative to similarly rated peers because of the rising production. The SGL-3 Speculative Grade Liquidity rating is based on Moody's expectation that TUSA will have adequate liquidity through the middle of 2015. The company's $403 million borrowing base is expected to be reduced by $72.5 million due to the new notes issuance. The company is expected to have approximately $310 million of availability following the notes offering and revolver borrowing repayment, under its roughly $330 million borrowing base revolver due 2018. Financial covenants under the facility are debt / EBITDAX of no more than 4.0x and a current ratio of at least 1.0x. We expect TUSA to remain in compliance with these covenants based on current capital spending plans. As the company adds more reserves, the borrowing base is expected to grow over time. There are no debt maturities until 2018 when the credit facility matures. Substantially, all of TUSA's oil and gas assets are pledged as security under the facility, which limits the extent to which asset sales could provide a source of additional liquidity if needed. The Caa1 rating on the $350 million senior unsecured notes reflects the size of the senior secured revolver's potential priority claim relative to the senior unsecured notes, which results in the notes being rated one notch beneath the B3 CFR under Moody's Loss Given Default Methodology. If the borrowing base increases significantly in the future, the notes rating could be pressured because of the increasing proportion of secured debt relative to unsecured debt in the capital structure. The stable outlook is based on Moody's expectation that TUSA achieves its production growth forecast and maintains its superior oil-weighted cash margins. "We expect debt leverage metrics to remain moderate barring any debt-funded acquisitions, as production growth outpaces the incremental debt used to finance the expected levels of negative free cash flow. In order for the ratings to be upgraded to B2, TUSA will need to show growth in production and reserves while strengthening its financial leverage metrics. The ratings could be upgraded following a proven track record of disciplined growth resulting in average daily production exceeding 20,000 boe/day, while debt/ average daily production is sustained below $45,000 per boe and retained cash flow/debt is sustained above 40%. A material increase in financial leverage could trigger a negative rating action. The company's ratings could be downgraded if debt/average daily production exceeds $55,000 per boe or retained cash flow/debt falls below 20% on a sustained basis," Moody's said. The principal methodology used in this rating was the Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Triangle Petroleum USA Corporation is a wholly-owned subsidiary of publicly-listed Triangle Petroleum Corporation, and is an exploration and production company with operations in the Bakken Shale. TUSA is headquartered in Denver, CO. TRIANGLE USA: S&P Assigns 'B' CCR & Rates Sr. Unsec. Notes 'CCC+' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Denver, Colo.-based Triangle USA Petroleum Corp. The outlook is stable. At the same time, S&P assigned its 'CCC+' issue rating to Triangle USA's proposed $350 million senior unsecured notes due 2022. The recovery rating is '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default, albeit at the high end of the range. S&P expects net proceeds from the debt offering will be used to refinance Triangle USA's existing debt and to repay acquisition capital provided by its parent, Triangle Petroleum Corp. "The stable outlook on Triangle USA Petroleum Corp. reflects our expectation that Triangle USA's operational performance will continue to expand production as it develops the reserves in the Williston basin while maintaining solid profitability and adequate liquidity," said Standard & Poor's credit analyst Mark Salierno. S&P could lower the rating if debt leverage exceeds 4x on a sustained basis or if liquidity were to erode with no near-term solution. Both of these scenarios would likely follow weak drilling results combined with a prolonged period of realized crude oil prices below $70 per barrel. In addition, S&P could also consider a lower rating if weaker-than-expected profitability causes S&P to reassess the business risk profile to "vulnerable" from "weak". S&P could also lower the ratings if Triangle USA were to pursue a more aggressive financial policy. Although unlikely in the next year, an upgrade could be considered if Triangle USA meaningfully expands its reserve base and production output while maintaining credit measures close to current levels and more closely aligning capital spending with cash flow to preserve adequate liquidity. This could occur if Triangle USA can successfully execute its growth strategy and more than double current daily production output while the price of crude oil continues to exceed $90 per barrel. UMED HOLDINGS: Incurs $465K Net Loss for Q1 Ended March 31 ---------------------------------------------------------- UMED Holdings, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $465,974 on $7,882 of sales for the three months ended March 31, 2014, compared with a net loss of $639,701 on $5,804 of sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $2.13 million in total assets, $3.45 million in total liabilities, and a stockholders' deficit of $1.33 million. The Company's recurring net losses and inability to generate sufficient cash flows to meet its obligations and sustain its operations raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/ybpUBS UMED Holdings, Inc., is a Fort Worth, Texas-based global diversified holding company that owns and operates businesses in a variety of industries including energy, oil and gas, aerospace, food and beverage, and mining. UNITED AIRLINES: Hawaii Ground Workers Vote for Concessions ----------------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reported that United Continental Holdings Inc., which on July 7 said it would outsource about 635 baggage and customer-service jobs at 12 airports to vendors to save money, has reached a different solution with 236 employees working at three airports in Hawaii: the workers there voted to accept concessions to keep their jobs. According to the report, the International Association of Machinists union, which represents United airport workers, said the employees at Kona, Lihue and Kahului airports in Hawaii "overwhelming" voted to accept the givebacks, easily reaching the required two-thirds majority called for in the labor contract. The employees agreed to reduced wage rates, suspension of company- matching contributions to their 401(k) plans and scheduling flexibility, the union said, the Journal related. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. UNITED AMERICAN: Incurs $423K Net Loss for Q1 Ended March 31 ------------------------------------------------------------ United American Petroleum Corp. filed its quarterly report on Form 10-Q, disclosing a net loss of $423,850 on $137,185 of total revenue for the three months ended March 31, 2014, compared with a net loss of $115,666 on $136,396 of total revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.21 million in total assets, $1.81 million in total liabilities, and a stockholders' deficit of $601,819. The Company has incurred a net loss and negative operating cash flows since inception through March 31, 2014. These factors raise substantial doubt about the Company?s ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/rWkVUA Austin, Tex.-based United American Petroleum Corp. is an exploration company engaged in the acquisition, exploration, development and production of oil and gas properties. Its principal business is the acquisition of leasehold interests in petroleum and natural gas rights, either directly or indirectly, and the exploitation and development of properties subject to these leases. Its primary focus is to develop its properties that have potential for near-term production. The Company also provides operational expertise for several third-party well owners out of its operation base in Austin, Texas. It currently has proved reserves in the State of Texas. * * * MaloneBailey, LLP, in Houston, Tex., expressed substantial doubt about United American Petroleum's ability to continue as a going concern, following the Company's results for the year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficit. UNIVERSAL COOPERATIVES: Lowenstein Sandler Named Panel's Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Universal Cooperatives, Inc. and its debtor-affiliates sought and obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Lowenstein Sandler LLP as counsel to the Committee, effective May 28, 2014. The Committee requires Lowenstein Sandler to: (a) provide legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under section 1102 of the Bankruptcy Code; (b) assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business, potential claims and any other matters relevant to the case, to the sale of assets and to the formulation of a plan of reorganization; (c) participate in the formulation of a Plan; (d) provide legal advice as necessary with respect to any disclosure statement and Plan filed in this Chapter 11 case and with respect to the process for approving or disapproving a disclosure statement and confirming or denying confirmation of a Plan; (e) prepare on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements and other legal papers; (f) appear in Court to present necessary motions, applications, and pleadings, and otherwise protecting the interests of those represented by the Committee; (g) assist the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and (h) perform other legal services as may be required and that are in the best interests of the Committee and creditors. Lowenstein Sandler will be paid at these hourly rates: Partners/Principals of the Firm $500-$985 Senior Counsel and Counsel $385-$685 Associates $275-$480 Paralegals and Assistants $160-$270 Lowenstein Sandler will also be reimbursed for reasonable out-of- pocket expenses incurred. Sharon L. Levine, partner of Lowenstein Sandler, 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. Lowenstein Sandler can be reached at: Sharon L. Levine, Esq. LOWENSTEIN SANDLER LLP 65 Livingston Avenue Roseland, NJ 07068 Tel: (973) 597-2500 Fax: (973) 597-6247 E-mail: slevine@lowenstein.com About Universal Cooperatives As an inter-regional farm supply cooperative, Universal Cooperatives, Inc. consolidates the purchasing power of its members to procure, and/or manufacture, and distribute high quality products at competitive prices. Universal has 14 voting members and over 50 associate members. Eagan, Minnesota-based Universal Cooperatives and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14- 11187) on May 11, 2014. The debtor-affiliates are Heritage Trading Company, LLC; Bridon Cordage LLC; Universal Crop Protection Alliance, LLC; Agrilon International, LLC; and Pavalon, Inc. UCI do Brasil, a majority-owned subsidiary located in Brazil, is not a debtor in the Chapter 11 cases The cases are assigned to Judge Mary F. Walrath. Universal estimated $1 million to $10 million in assets and $10 million to $50 million in debt. Heritage estimated less than $10 million in assets and debt. The Debtors have tapped Travis G. Buchanan, Esq., Robert S. Brady, Esq., Andrew L. Magaziner, Esq., and Travis G. Buchanan, Esq., at Young Conaway Stargatt & Taylor, LLP; and Mark L. Prager, Esq., Michael J. Small, Esq., and Emil P. Khatchatourian, Esq., at Foley & Lardner LLP, as counsel; The Keystone Group, as financial advisor and Prime Clerk as notice and claims agent. Bank of America, N.A., as agent for the DIP Lenders, is represented by Daniel J. McGuire, Edward Kosmowski, Esq., and Gregory M. Gartland, Esq., at Winston & Strawn, LLP. The United States Trustee for Region 3 has appointed seven members to the Official Committee of Unsecured Creditors, which is represented by Sharon Levine, Esq., Bruce S. Nathan, Esq., and Timothy R. Wheeler, Esq., at LOWENSTEIN SANDLER LLP, in Roseland, New Jersey; and Jamie L. Edmonson, Esq., and Daniel A. O'Brien, Esq., at VENABLE LLP, in Wilmington, Delaware. UNIVERSAL COOPERATIVES: Venable LLP Okayed as Panel's Co-Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Universal Cooperatives, Inc. and its debtor-affiliates sought and obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Venable LLP as co-counsel to the Committee, effective Jun. 3, 2014. The Committee requires Venable LLP to: (a) assist and advise the Committee in its discussions with the Debtors and other parties-in-interest regarding the overall administration of these cases, including with respect to any sale of the Debtors' assets; (b) represent the Committee at hearings to be held before the Court and communicating with the Committee regarding the matters heard and the issues raised as well as the decisions and considerations of this Court; (c) assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs; (d) review and analyze pleadings, orders, schedules, and other documents filed and to be filed with the Court by parties- in-interest in these Cases; advising the Committee as to the necessity, propriety, and impact of the foregoing upon the Debtors' Chapter 11 cases; and consenting or objecting to pleadings or orders on behalf of the Committee, as appropriate; (e) assist the Committee in preparing applications, motions, memoranda, proposed orders, and other pleadings as may be required in support of positions taken by the Committee, including all trial preparation as may be necessary; (f) confer with the professionals retained by the Debtors and other parties-in-interest, as well as with other professionals as may be selected and employed by the Committee; (g) coordinate the receipt and dissemination of information prepared by and received from the Debtors' professionals, as well as such information as may be received from professionals engaged by the Committee or other parties-in- interest in these cases; (h) participate in examinations of the Debtors and other witnesses as may be necessary in order to analyze and determine, among other things, the Debtors' assets and financial condition, whether the Debtors have made any avoidable transfers of property, or whether causes of action exist on behalf of the Debtors' estates; (i) negotiate and formulate a plan of reorganization for the Debtors or other resolution of these Chapter 11 cases; (j) assist the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and (k) assist the Committee generally in performing other legal services as may be desirable or required for the discharge of the Committee's duties pursuant to Bankruptcy Code Section 1103. Venable LLP will be paid at these hourly rates: Partners $490-$1,080 Of Counsel $450-$825 Associates $295-$595 Paralegals $170-$345 Venable LLP will also be reimbursed for reasonable out-of-pocket expenses incurred. Jamie L. Edmonson, partner of Venable LLP, 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. Venable LLP can be reached at: Jamie L. Edmonson, Esq. VENABLE LLP 1201 North Market Street, Suite 1400 Wilmington, DE 19801 Tel: (302) 298-3535 Fax: (302) 298-3550 E-mail: jledmonson@venable.com About Universal Cooperatives As an inter-regional farm supply cooperative, Universal Cooperatives, Inc. consolidates the purchasing power of its members to procure, and/or manufacture, and distribute high quality products at competitive prices. Universal has 14 voting members and over 50 associate members. Eagan, Minnesota-based Universal Cooperatives and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14- 11187) on May 11, 2014. The debtor-affiliates are Heritage Trading Company, LLC; Bridon Cordage LLC; Universal Crop Protection Alliance, LLC; Agrilon International, LLC; and Pavalon, Inc. UCI do Brasil, a majority-owned subsidiary located in Brazil, is not a debtor in the Chapter 11 cases The cases are assigned to Judge Mary F. Walrath. Universal estimated $1 million to $10 million in assets and $10 million to $50 million in debt. Heritage estimated less than $10 million in assets and debt. The Debtors have tapped Travis G. Buchanan, Esq., Robert S. Brady, Esq., Andrew L. Magaziner, Esq., and Travis G. Buchanan, Esq., at Young Conaway Stargatt & Taylor, LLP; and Mark L. Prager, Esq., Michael J. Small, Esq., and Emil P. Khatchatourian, Esq., at Foley & Lardner LLP, as counsel; The Keystone Group, as financial advisor and Prime Clerk as notice and claims agent. Bank of America, N.A., as agent for the DIP Lenders, is represented by Daniel J. McGuire, Edward Kosmowski, Esq., and Gregory M. Gartland, Esq., at Winston & Strawn, LLP. The United States Trustee for Region 3 has appointed seven members to the Official Committee of Unsecured Creditors, which is represented by Sharon Levine, Esq., Bruce S. Nathan, Esq., and Timothy R. Wheeler, Esq., at LOWENSTEIN SANDLER LLP, in Roseland, New Jersey; and Jamie L. Edmonson, Esq., and Daniel A. O'Brien, Esq., at VENABLE LLP, in Wilmington, Delaware. UNIVERSAL COOPERATIVES: EisnerAmper Okayed as Panel's Accountants ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Universal Cooperatives, Inc. and its debtor-affiliates sought and obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to retain EisnerAmper LLP as accountants and financial advisors to the Committee, effective May 30, 2014. The Committee requires EisnerAmper LLP to: (a) analyze the financial operations of the Debtors pre- and post-petition as necessary; (b) perform forensic investigating services as requested by the Committee and counsel regarding pre-petition activities of the Debtors in order to identify potential causes of action as necessary; (c) perform claims analysis for the Committee, as necessary; (d) verify the physical inventory of supplies, equipment and other material assets and liabilities, as necessary; (e) assist the Committee in its analysis and review of monthly statements of operations to be submitted by the Debtors; (f) analyze the Debtors' budgets, cash flow projections, cash disbursements, restructuring programs, selling and general administrative expense structure and other reports or analyses prepared by the Debtors or its professionals in order to advise the Committee on the status of the Debtors' operations; (g) analyze transactions with insiders, related and affiliated companies; (h) prepare and submit reports to the Committee as necessary; (i) assist the Committee in its review of the financial aspects of a plan of reorganization to be submitted by the Debtors; (j) attend meetings of Creditors and conferences with representatives of the creditor groups and their counsel; (k) prepare hypothetical orderly liquidation analyses, as necessary; (l) monitor, participate in and consult with the Committee in regard to the marketing and sale of any of the Debtors' assets as necessary; (m) analyze the tax ramifications of any proposed transactions with non-debtor, foreign subsidiaries as necessary; (n) analyze the financial ramifications of any proposed transactions for which the Debtors seek Bankruptcy Court approval including, but not limited to, post-petition financing, sale of all or a portion of the Debtors' assets, management compensation and retention and severance plans; (o) provide assistance, including expert testimony, and analysis in support of potential litigation that may be investigated and prosecuted by the Committee as necessary; and (p) any other services in which the Committee requests its Accountants and Financial Advisors to perform. EisnerAmper LLP will be paid at these hourly rates: Directors/Partners $425-$590 Managers/Senior Managers $280-$420 Associates/Seniors $160-$275 Paraprofessionals $130-$160 Allen D. Wilen, Partner $520 Edward A. Phillips, Partner $520 William J. Pederson, Director $470 Eugene Simon, Senior Manager $370 Ryan W. Farley, Manager $280 Various Associates as needed $160-$275 Stephanie Prinston, Paraprofessional $160 EisnerAmper LLP will also be reimbursed for reasonable out-of- pocket expenses incurred. Allen D. Wilen, partner of EisnerAmper LLP, 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. EisnerAmper LLP can be reached at: Allen D. Wilen EISNERAMPER LLP 111 Wood Avenue South Iselin, NJ 08830 Tel: (732) 243-7000 About Universal Cooperatives As an inter-regional farm supply cooperative, Universal Cooperatives, Inc. consolidates the purchasing power of its members to procure, and/or manufacture, and distribute high quality products at competitive prices. Universal has 14 voting members and over 50 associate members. Eagan, Minnesota-based Universal Cooperatives and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14- 11187) on May 11, 2014. The debtor-affiliates are Heritage Trading Company, LLC; Bridon Cordage LLC; Universal Crop Protection Alliance, LLC; Agrilon International, LLC; and Pavalon, Inc. UCI do Brasil, a majority-owned subsidiary located in Brazil, is not a debtor in the Chapter 11 cases The cases are assigned to Judge Mary F. Walrath. Universal estimated $1 million to $10 million in assets and $10 million to $50 million in debt. Heritage estimated less than $10 million in assets and debt. The Debtors have tapped Travis G. Buchanan, Esq., Robert S. Brady, Esq., Andrew L. Magaziner, Esq., and Travis G. Buchanan, Esq., at Young Conaway Stargatt & Taylor, LLP; and Mark L. Prager, Esq., Michael J. Small, Esq., and Emil P. Khatchatourian, Esq., at Foley & Lardner LLP, as counsel; The Keystone Group, as financial advisor and Prime Clerk as notice and claims agent. Bank of America, N.A., as agent for the DIP Lenders, is represented by Daniel J. McGuire, Edward Kosmowski, Esq., and Gregory M. Gartland, Esq., at Winston & Strawn, LLP. The United States Trustee for Region 3 has appointed seven members to the Official Committee of Unsecured Creditors, which is represented by Sharon Levine, Esq., Bruce S. Nathan, Esq., and Timothy R. Wheeler, Esq., at LOWENSTEIN SANDLER LLP, in Roseland, New Jersey; and Jamie L. Edmonson, Esq., and Daniel A. O'Brien, Esq., at VENABLE LLP, in Wilmington, Delaware. USEC INC: Plan Terms Approved, Confirmation Hearing on Sept. 5 -------------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware on July 7, 2014, approved the disclosure statement explaining USEC Inc.'s plan of reorganization after determining that the plan outline contains adequate information as required by Section 1125 of the Bankruptcy Code. The Confirmation Hearing is scheduled for Sept. 5, 2014, at 1:00 p.m. (Eastern time). The Plan Objection Deadline is Aug. 22, and the deadline for filing a reply to objections to confirmation of the Plan, if any, is Sept. 2. USEC filed the Disclosure Statement describing the Plan of Reorganization with the court on March 5, 2014, and updated it on June 19. No objections were raised prior to the July 7 hearing. The solicitation package, including the Disclosure Statement and ballot, will be sent to those entitled to vote as of the record date of July 3, 2014. The deadline for voting is August 11. The two classes of voting creditors will be asked to vote on the Plan of Reorganization during a 30-day voting period that is expected to begin July 12. USEC filed a pre-arranged case under Chapter 11 of the United States Bankruptcy Code on March 5. The Plan of Reorganization is supported by the holders of approximately 66 percent of the principal amount of the $530 million of notes outstanding. The Plan of Reorganization is also supported by the two holders of the Company's preferred equity who will also be entitled to vote on the Plan of Reorganization. The holders of USEC's common equity are assumed to have rejected the Plan and, thus, the votes of such holders will not be solicited during the upcoming period. Following the voting period, the Plan of Reorganization is expected to be reviewed by the court at a confirmation hearing scheduled for September 5. "We have made steady progress in recent months to restructure USEC and we anticipate emerging from Chapter 11 protection with an improved balance sheet," said John K. Welch, USEC president and chief executive officer. "We are taking many steps in advance of emerging as a restructured company. We are working closely with Oak Ridge National Laboratory to continue the demonstration of the American Centrifuge technology. Our Kentucky employees have done an outstanding job of preparing the Paducah Gaseous Diffusion Plant for de-lease and return to the U.S. Department of Energy in October. And we continue our record of delivering low enriched uranium to our nuclear utility customers, on time and within specifications," Mr. Welch said. As reported by the Troubled Company Reporter on March 21, 2014, the Plan proposes, and its terms embody, a prearranged restructuring of the Debtor's obligations under (a) its 3.0% convertible senior unsecured notes due 2014, and (b) its preferred stock. Specifically, the Plan provides that, among other things, each holder of an allowed noteholder claim will receive its pro rata share of (i) 79.04% of the new common stock issued under the Plan, (ii) cash equal to the amount of the interest accrued on the old notes from the date of the last interest payment made by the Debtor before the Petition Date to the Effective Date, and (iii) new notes to be issued under the Plan in the aggregate principal amount of $200 million. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported on July 2 that USEC more than doubled in July 1's trading, closing at $7.39, a day after the bankrupt producer of enriched uranium for nuclear power plants reported an operating loss of $7.2 million and negative net operating cash flow of $4.9 million in May. Mr. Rochelle noted that for a company like USEC in bankruptcy, a significant stock price implies there is sufficient value for creditors to be paid in full. The bond market on July 1 wasn't in agreement with the stock market about USEC's value, Mr. Rochelle said. On July 1, USEC's $530 million in convertible notes traded several times between 27 cents and 30 cents on the dollar, the Bloomberg report said, citing Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Prior to the Disclosure Statement hearing, USEC revised its plan outline twice -- on June 19, a full-text copy of which is available at http://is.gd/P5xNy6and on July 3, a full-text copy of which is available at http://is.gd/ORjVVK 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. VISION INDUSTRIES: Posts $1.12-Mil. Net Loss in First Quarter ------------------------------------------------------------- Vision Industries Corp. filed its quarterly report on Form 10-Q disclosing a net loss of $1.12 million on $nil of revenue for the three months ended March 31, 2014, compared with a net loss of $1.15 million on $nil of revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.25 million in total assets, $3.16 million in total liabilities, and a stockholders' deficit of $1.9 million. The Company does not generate any revenue, and has negative cash flows from operations, which raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/AJeKDE About Vision Industries Long Beach, Cal.-based Vision Industries Corp. focuses its efforts in building Class 8 fuel cell electric vehicles (FCEV) used in drayage transportation. The Company's balance sheet at Sept. 30, 2013, showed $1.06 million in total assets, $2.89 million in total liabilities, and stockholders' deficit of $1.83 million. Vision Industries reported a net loss of $5.28 million on $26,545 of total revenue for the year ended Dec. 31, 2012, as compared with a net loss of $6.44 million on $764,157 of total revenue for the year ended Dec. 31, 2011. DKM Certified Public Accountants, in Clearwater, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company's cash and available credit are not sufficient to support its operations for the next year. Accordingly, management needs to seek additional financing that raises substantial doubt about its ability to continue as a going concern. WELLNESS CENTER: Incurs $3.92-Mil. Net Loss for March 31 Quarter ---------------------------------------------------------------- Wellness Center USA, Inc., filed its quarterly report on Form 10-Q disclosing a net loss of $3.92 million on $18,919 of total revenue for the three months ended March 31, 2014, compared with a net loss of $1 million on $51,593 of total revenue for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $6.04 million in total assets, $833,715 in total liabilities, and stockholders' equity of $5.21 million. The Company had an accumulated deficit at March 31, 2014, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/QxFN8O Wellness Center USA, Inc. is in the healthcare and medical device solutions business, engaged in providing treatment of brain-based health disorders through subsidiary CNS Wellness Florida, LLC; and manufacturing devices to treat skin diseases through Psoria-Shield Inc. Wellness Center is headquartered in Schaumburg, Illinois. XTREME GREEN: Incurs $84K Net Income for Q1 Ended March 31 ---------------------------------------------------------- Xtreme Green Electric Vehicles, Inc., filed its quarterly report on Form 10-Q disclosing a net income of $84,819 on $342,731 of net sales for the three months ended March 31, 2014, compared with a net loss of $185,844 on $31,709 of net sales for the same period in 2013. The Company's balance sheet at March 31, 2014, showed $1.44 million in total assets, $417,397 in total liabilities, and stockholders' equity of $1.02 million. The Company incurred net losses from inception through March 31, 2014; aggregating $11.24 million and has working capital of $789,656 at March 31, 2014. The Company's ability to continue as a going concern is contingent upon its ability to secure additional financing, increase ownership equity and develop profitable operations. In addition, the Company's ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates. A copy of the Form 10-Q is available at: http://is.gd/qkg8oC Xtreme Green Electric Vehicles, Inc., filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Nev. Case No. 13-17266) on Aug. 22, 2013. It is expected that the Company will continue to operate its businesses as "debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. The petition was signed by Neil Roth as president. The Debtor disclosed assets of $253,585 and liabilities of $5,210,832. Lenard E. Schwartzer, Esq., at SCHWARTZER & MCPHERSON LAW FIRM -- bkfilings@s-mlaw.com -- serves as the Debtor's counsel. Judge Mike K. Nakagawa presides over the case. Las Vegas, Nev.-based Xtreme Green Electric Vehicles Inc. has developed a line of electric powered products such as personal mobility vehicles, light trucks (UTVs) and (ATVs), motor cycles and scooters. The Company's product line is based on its proprietary "green" energy management system and electric propulsion system. These products have the power and ability of gas powered engines, but without the particulate pollution or noise pollution. YARWAY CORP: Needs Until October to File Reorganization Plan ------------------------------------------------------------ Yarway Corporation asks the U.S. Bankruptcy Court for the District of Delaware to extend its exclusive period to file a Chapter 11 plan of reorganization through and including Oct. 22, 2014, and solicit acceptances of the plan through and including Dec. 22. The Debtor tells the Court that since April 2014, it has continued to efforts to conduct meaningful negotiations on the terms of a plan of reorganization among the Official Committee of Asbestos Personal Injury Claimants, the Court-appointed legal representative for future asbestos claimants, and the Debtor's corporate affiliates. The Debtor has also continued to evaluate litigation options to be explored in the absence of a near-term agreement on the terms of a consensual plan. The requested extension of the exclusive periods will allow the process to continue, either in furtherance of a consensual plan process or orderly litigation to address various issues among the parties, the Debtors further tells the Court. The hearing to consider approval of the extension request will be held on July 30, 2014, at 9:00 a.m. (ET). Objections are due July 23. About Yarway Corporation Yarway Corporation sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11025) on April 22, 2013, to deal with claims arising from asbestos containing products it allegedly sold as early as the 1920s. Yarway was founded in 1908 by Robert Yarnall and Bernard Waring as the Simplex Engineering Company and originally manufactured pipe clamps, steam traps, valves and controls. Based in Pennsylvania, Yarway was a privately-owned company until 1986 when KeyStone International, Inc. bought equity in the company. Yarway became a unit of Tyco International Ltd. when Tyco purchased KeyStone in 1997. Yarway's asbestos-related liabilities derive from Yarway's (i) purported use of asbestos-containing gaskets and packing, manufactured by others, in its production of steam valves and traps from the 1920s to 1970s, and (ii) alleged manufacture of expansion joint packing that was allegedly made up of a compound of Teflon and asbestos from the 1940s to the 1970s. Over the past five years, about 10,021 new asbestos claims have been asserted against Yarway, including 1,014 in Yarway's 2013 fiscal year ending March 31, 2013. The Debtor estimated assets and debts in excess of $100 million as of the Chapter 11 filing. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A. and Sidley Austin LLP serve as the Debtor's counsel in the Chapter 11 case. Logan and Co. is the claims and notice agent. On May 6, 2013, the U.S. Trustee for Region 3, appointed an official committee of asbestos personal injury claimants. The Committee tapped Elihu Inselbuch, Esq. at Caplin & Drysdale, Chartered, as lead bankruptcy counsel. * Moody's Says U.S. High-yield Bond Covenant Declines in June ------------------------------------------------------------- North American high-yield bond covenant quality declined marginally in June following a slight improvement in May, Moody's Investors Service says in a new report "Bond Covenant Quality Dips Slightly in June After Improving in May." In June, the average score worsened to 4.10 from the 4.07 it recorded in May, using Moody's five-point scale in which 1.0 denotes strongest investor protections and 5.0, the weakest. "Since January, scores for 2014 have not shown any definitive trend," says Moody's Alexander Dill, Vice President and Head of Covenant Research. Moody's notes that during June covenant quality worsened for Ba rated bonds and Caa/C-rated, but improved for single B issuance. Bonds rated Ba in June averaged a score of 4.26, a worsening from their score of 4.15 in May but slightly stronger than their historical average of 4.30. Issuance volume for bonds rated Ba was lower in June, accounting for 28% of issuance, down from 35% in May and the same as their historical average. The average CQ score for bonds rated Caa/Ca at issuance worsened to 4.35 in June, from 4.00 in May, but remained weaker than the historical average of 3.53. Caa bonds accounted for only 14% of June issuance, less than both the 18% share in May and their 22% historical average. In contrast, covenant quality of single B bonds improved materially to 3.96 in June from 4.04 in May and close to the 3.98 they posted in April; they remained removed from their significantly stronger 3.68 historical average. Single B bonds comprised 58% of June issuance, a meaningful decrease from 47% in May and above the historical average of 50%. The weakest full high-yield bond package in June came from Gates Global LLC with a CQ score of 4.76 for two tranches. Almost as weak were the packages for West Corp., which received a 4.74 score, and Hillman Group Inc., which received a 4.61 score. The most protective full high-yield packages came from Cenveo Corp., which scored 2.41, followed by those for Altegrity Inc., at 2.57, and Outerwall Inc., at 2.85. * Cornerstone Research Names Michael E. Burton President & CEO -------------------------------------------------------------- Cornerstone Research, a provider of economic and financial consulting and analysis in commercial litigation and regulatory proceedings, on July 10 announced the appointment of Michael E. Burton as President and CEO. Dr. Burton, formerly a Senior Vice President, succeeds Cynthia L. Zollinger, who has held Cornerstone Research's highest leadership position since January 2007. Ms. Zollinger remains an officer of the firm and will assume the post of Chair, succeeding James K. Malernee Jr. This transition in Cornerstone Research's leadership position reflects the firm's commitment to proactive succession planning. "Mike was selected as our next President and CEO after careful consideration, based on his exceptional leadership abilities and his commitment to our vision and values," said Ms. Zollinger. Dr. Burton joined Cornerstone Research in 2000 to help build the firm's Washington, DC office, which has grown rapidly under his leadership. He has nearly 30 years of experience in economic and financial consulting and analysis of liability and damages issues arising in business litigation. Dr. Burton has led Cornerstone Research's work in numerous high-profile matters involving antitrust, breach of contract, business valuation, intellectual property rights, international arbitration, market manipulation, and securities. "Cindy has been outstanding together with our senior staff in steering Cornerstone Research to the market-leading position that it occupies today," Dr. Burton said. "I am excited to build upon this work. We're committed to maintaining the high levels of expertise and excellent service that our clients have come to expect from Cornerstone Research." Ms. Zollinger expressed her appreciation for her years as the firm's leader: "It has been a privilege and a pleasure to work with the clients, experts, and staff of Cornerstone Research in the position of CEO and President, and I look forward to continuing my active role with the firm for years to come." About Cornerstone Research Cornerstone Research -- http://www.cornerstone.com-- provides high-quality economic and financial consulting and expert testimony in all phases of complex litigation and regulatory proceedings. The firm works with an extensive network of leading authorities from academia and industry to identify the best- qualified expert for each assignment. Staff consultants bring specialized knowledge and experience as well as a commitment to produce outstanding results. Currently marking its 25th anniversary, Cornerstone Research has over 450 staff and offices in Boston, Chicago, Los Angeles, Menlo Park, New York, San Francisco, and Washington. * BOOK REVIEW: Lost Prophets -- An Insider's History of the Modern Economists ----------------------------------------------------------- Author: Alfred L. Malabre, Jr. Publisher: Beard Books Softcover: 256 pages List Price: $34.95 Review by Henry Berry Order your personal copy today at http://is.gd/KNTLyr Alfred Malabre's personal perspective on the U.S. economy over the past four decades is firmly grounded in his experience and knowledge. Economics Editor of The Wall Street Journal from 1969 to 1993 and author of its weekly "Outlook" column, Malabre was in a singular position to follow the U.S. economy in recent decades, have access to the major academic and political figures responsible for economic affairs, and get behind the crucial economic stories of the day. He brings to this critical overview of the economy both a lively, often provocative, commentary on the picture of the turns of the economy. To this he adds sharp analysis and cogent explanation. In general, Malabre does not put much stock in economists. "In sum, the profession's record in the half century since Keynes and White sat down at Bretton Woods [after World War II] provokes dismay." Following this sour note, he refers to the belief of a noted fellow economist that the Nobel Prize in this field should be discontinued. In doing so, he also points out that the Nobel for economics was not one originally endowed by Alfred Nobel, but was one added at a later date funded by the central bank of Sweden apparently in an effort to give the profession of economists the prestige and notice of medicine, science, literature and other Nobel categories. Malabre's view of economists is widespread, although rarely expressed in economic circles. It derives from the plain fact that modern economists, even hugely influential ones such as John Meynard Keynes, are wrong as many times as they are right. Their economic theories have proved incomplete or shortsighted, if not basically wrong-headed. For example, Malabre thinks of the leading economist Milton Friedman and his "monetarist colleagues" as "super salespeople, successfully merchandising.an economic medicine that promised far more than it could deliver" from about the 1960s through the Reagan years of the 1980s. But the author not only cites how the economy has again and again disproved the theories and exposed the irrelevance of wrong-headedness of the policy recommendations of the most influential economists of the day. Malabre also lays out abundant economic data and describes contemporary marketplace and social activities to show how the economy performs almost independently of the best analyses and ideas of economists. Malabre does not engage in his critiques of noted economists and prevailing economic ideas of recent decades as an end in itself. What emerges in all of his consistent, clear-eyed, unideological analysis and commentary is his own broad, seasoned view of economics-namely, the predominance of the business cycle. He compares this with human nature, which is after all the substance of economics often overlooked by professional and academic economists with their focus on monetary policy, exchange rates, inflation, and such. "The business cycle, like human nature, is here to stay" is the lesson Malabre aims to impart to readers interested in understanding the fundamental, abiding nature of economics. In Lost Prophets, in language that is accessible and jargon-free, this author, who has observed, written about, and explained economics from all angles for several decades, persuasively makes this point. In addition to holding a top position at The Wall Street Journal, Malabre is also the author of the books, Understanding the New Economy and Beyond Our Means, which received the George S. Eccles Prize from the Columbia Business School as the best economics book of 1987. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com by e-mail. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to the nation's bankruptcy courts. The list includes links to freely downloadable of these small-dollar petitions in Acrobat PDF documents. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2014. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***