/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/140808.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, August 8, 2014, Vol. 18, No. 219 Headlines ACG CREDIT: Hires ESBA as Chief Restructuring Officer ACG CREDIT: Hires DuffyAmedeo as Co-counsel ACOSTA INC: S&P Lowers CCR to 'B' on Pending Leveraged Buyout AECOM TECHNOLOGY: Moody's Assigns First Time '(P)Ba2' CFR ALLIED INDUSTRIES: Tiger Group to Auction Assets on Aug. 26 ALLISON TRANSMISSION: Moody's Hikes Corp. Family Rating to 'Ba3' AMERICAN BANCORP: Lindquist & Vennum Approved as Counsel AMR CORP: Shareholder's Substantial Contribution Claim Tossed ARMORWORKS ENTERPRISES: Gets Approval to Sell Unused Equipment AUGUSTA APARTMENTS: Kohout Must Disgorge $24,000 Retainer AUXILIUM PHARMACEUTICALS: HSR Act Waiting Period Terminated BANCO ESPIRITO SANTO: Ex-Chief Arrested As 3rd Co. Hits Bankruptcy BAY AREA FINANCIAL: Seeks Exclusivity Extension to Oct. 10 BERNARD L. MADOFF: Judge Upholds Aides' Convictions But Slams Feds BERNARD L. MADOFF: Dimon, JPMorgan Board Get Suit Thrown Out BEVERLY HILLS: Seeks Extension of Plan Filing Date to Oct. 14 BROADWAY FINANCIAL: Appoints New Board Member BROOKSTONE HOLDINGS: Trustee Wants Subsidiary Cases Closed BUCCANEER RESOURCES: Global Hunter Approved as Sale Advisor BUCCANEER RESOURCES: Conway MacKenzie's John Young Approved as CRO BUCCANEER RESOURCES: Greenberg Traurig Okayed as Panel's Counsel BUCCANEER RESOURCES: Panel Hires Alvarez & Marsal as Advisor CAESARS ENTERTAINMENT: John Payne Quits as Division President CENTAUR LLC: Merit Fails to Dismiss, Transfer $16MM Clawback Suit CENTURY INSURANCE: A.M. Best Lowers FSR to 'B(fair)' CLEAREDGE POWER: Court Approves McNutt Law as Special Counsel COSO GEOTHERMAL: Moody's Lowers Pass Through Certs to 'Ca' CYCLONE POWER: Unit Obtains $350,000 in Seed Funds DATAPIPE INC: Moody's Alters Outlook to Neg. on Incremental Loan DATAPIPE INC: S&P Revises Outlook to Stable & Affirms 'B' CCR DETROIT, MI: To Resume Water Shut-Offs After Aug. 25 EASTMAN KODAK: Posts Net Loss of $62 Million in 2nd Quarter ELBIT IMAGING: Plans to Effect a 1-for-20 Reverse Stock Split ENDEAVOUR INTERNATIONAL: Incurs $37.1 Million Net Loss in Q2 FAP INVESTORS: Case Summary & 13 Largest Unsecured Creditors FIAT CHRYSLER: TRW Sues Trust to Ditch Steering-Defect Liability FIRST SECURITY: Earns $613,000 in Second Quarter FREE LANCE-STAR: Court Approves Deal With DSP, Committee and PBGC FREE LANCE-STAR: Bid to Disband Creditor's Committee Stayed FREE LANCE-STAR: Debtor, Committee File Joint Liquidation Plan GANNETT CO: Moody's Affirms 'Ba1' Corporate Family Rating GARLOCK SEALING: Estimation Trial Shouldn't Be Sealed, Judge Rules GBG RANCH: Hires Carl Barto as Bankruptcy Counsel GENUTEC BUSINESS: Plan Due Oct. 1; Bar Date Set for Sept. 9 GENUTEC BUSINESS: Hires Totaro & Shanahan as Insolvency Counsel GEORGE ROBERTS: Heating Specialist Liable for 60% of CERCLA Claim GREG'S LANDSCAPING: Case Summary & 20 Largest Unsecured Creditors GRIDWAY ENERGY: Needs Until Oct. 7 to File Plan GROEB FARMS: Committee Wants More Time to Review Claims HAAS ENVIRONMENTAL: Deal With Cleveland Brothers Approved HAAS ENVIRONMENTAL: Deal With Longshoremen 2038 Union Okayed HAAS ENVIRONMENTAL: Vehicle Sale OK'd, Proceeds to Go to Chase HAAS ENVIRONMENTAL: Deal With Cleveland Brothers Approved HAAS ENVIRONMENTAL: Deal With Longshoremen 2038 Union Okayed HARRY VINER: Court Reduces Pittman S.C.'s Fees HI-TECH CONSTRUCTION: Case Summary & 20 Top Unsecured Creditors HIGH MAINTENANCE: Court to Hold Plan Confirmation Hearing Aug. 11 HOUSTON REGIONAL: Vote on Sale to Proceed as Scheduled HUNTER DEFENSE: S&P Raises CCR to 'B-', Off Watch Positive IDENTIPHI INC: DLA Piper Gets $1.1M Negligence Judgment Axed IOWA GAMING: Belle's Severance, Retention, Bonus Payments OK'd IOWA GAMING: Corrects Motion to Employ Quinn Emanuel as Counsel IOWA GAMING: Files Schedules of Assets and Liabilities IOWA GAMING: Argosy Sioux City Closed; Case Up for Dismissal ISR GROUP: Has Final OK to Obtain Financing & Use Cash Collateral ISR GROUP: Files Schedules of Assets and Liabilities ISTAR FINANCIAL: Incurs $16 Million Net Loss in Second Quarter JVMW PROPERTIES: Court Confirms Plan of Reorganization LIGHTSQUARED INC: Overhauls Reorganization Ch. 11 Plan LIGHTSQUARED INC: Has Access to Cash Collateral Until Aug. 31 LIGHTSQUARED INC: Has Until Sept. 30 to Decide on Parkridge Lease LITHIUM TECHNOLOGY: Closed Suit with Certain 2008 Noteholders M STREET REAL ESTATE: Case Summary & 6 Unsecured Creditors MARINA BIOTECH: Incurs $1.5 Million Net Loss in 2013 MEGA RV: Gets More Time to File Schedules, Statements MGM RESORTS: Posts $105.5-Million Net Income in Second Quarter MIG LLC: May Use Up to $102,000 in Operating Support Account MONARCH COMMUNITY: Reports $46,000 Net Income in Second Quarter MT. GOX: Parent Blocked From Auctioning Bitcoins.com Domain MUSCLEPHARM CORP: Reports $408,000 Net Income in 2nd Quarter NATCHEZ REGIONAL: Judge Sets Deadlines for Filing Claims NATCHEZ REGIONAL: Credit With UMB Extended Through Dec. 31 NATIVE ENERGY: Wins Approval of Amended Reorganization Plan NATIVE ENERGY: Amends Schedule of Real Property NAUTILUS HOLDINGS: May Borrow Up to $650,000 From Synergy Mgmt. NAUTILUS HOLDINGS: May Use Cash Collateral Thru Sept. 2 NAUTILUS HOLDINGS: Gets Court's Nod to Tap J. Mesterham as CRO NAUTILUS HOLDINGS: Gets Final OK to Pay Prepetition Vendor Claims PALM BEACH COMMUNITY: Seeks Exclusivity Extension to Complete Sale PREFERRED CONTRACTORS: A.M. Best Lowers FSR to 'B(fair)' PRISM GRAPHICS: $240,000 in Payments to CEO Declared Fraudulent PULSE ELECTRONICS: Incurs $7.8 Million Net Loss in 2nd Quarter QUALITY DISTRIBUTION: Posts $11.4-Mil. Net Income in 2nd Quarter QUICKSILVER RESOURCES: Incurs $36-Mil. Net Loss in 2nd Quarter RAAM GLOBAL: Obtains Forbearance Until Sept. 30 REVEL AC: Adjourns Auction to Aug. 14 RIVER CITY RENAISSANCE: Has Interim OK to Use Cash Collateral RIVER TERRACE: Files Plan to Restructure Debt SANUWAVE HEALTH: Director Joseph Chiarelli Quits SCOOTER STORE: Personal Injury Claim to Be Paid From Insurance SENTINEL MANAGEMENT: Ex-CEO Denied Acquittal, New Trial Request SHREEJI ENTERPRISE: Case Summary & 8 Largest Unsecured Creditors SKYLINE MANOR: Section 341(a) Meeting of Creditors Moved to Aug. 4 SOUND SHORE: Has Deal With Buyers, DOH et al Over Medicaid Issues SOUTHERN STATES COOPERATIVE: Moody's Lowers CFR to 'B2' SPENDSMART NETWORKS: Isaac Blech Holds 15.5% Equity Stake STG-FAIRWAY ACQUISITIONS: S&P Retains 'B' CCR on Watch Negative TACTICAL INTERMEDIATE: Has Approval to Sell Boot Business TELEXFREE LLC: Grand Jury Charges Heads With Pyramid Scheme TEMPLAR ENERGY: S&P Revises Outlook to Pos. & Affirms 'B' CCR THOMPSON CREEK: Reports $61.6 Million Net Income in Second Qtr. TRULAND GROUP: Petitions Filed to Force Affiliates into Bankruptcy UNIVERSITY GENERAL: Cost Reductions of $13-Mil. Anticipated UNITED AMERICAN: Now a Nevada Corporation US SHALE SOLUTIONS: Moody's Assigns 'B3' Corporate Family Rating WEST CORP: Reports $47.7 Million Net Income in Second Quarter YONKERS RACING: Moody's Alters Outlook to Neg & Affirms B1 CFR YONKERS RACING: S&P Lowers CCR to 'B' on Weak Performance ZOGENIX INC: Posts $62.9 Million Net Income in Second Quarter * CalPERS Pulls Back from Hedge Funds * After Split Vote, SEC Approves Rules on Money Market Funds * Money Funds Embrace SEC's Rules to Escape FSOC * SEC Tells S&P It Could Face Enforcement Action * Why More Companies Want Pensions Off Their Books * Argentina Sues U.S. in International Court of Justice * Carl Marks' Partners Recognized by Turnarounds & Workouts * Gavin/Solmonese's Weitz Joins People's Emergency Center's Board * BOOK REVIEW: The Money Wars: The Rise and Fall of the Great Buyout Boom of the 1980s ********* ACG CREDIT: Hires ESBA as Chief Restructuring Officer ----------------------------------------------------- ACG Credit Company II, LLC seeks authorization from the U.S. Bankruptcy Court for the District of Delaware to employ Executive Sounding Board Associates LLC ("ESBA") as chief restructuring officer for the Debtor, nunc pro tunc to June 25, 2014. The Debtor requires ESBA to: (a) assume overall management and control of day-to-day operations, including cash management, of the Company; (b) gain an understanding of the legal and operational structure of the Company, its affiliates and related entities, if any; (c) manage the Chapter 11 bankruptcy process and fulfill all of the reporting requirements associated with operating in Chapter 11; (d) provide leadership and direction of the reorganization process including, without limitation, negotiations with relevant parties-in-interest in the development and implementation of an appropriate restructuring plan for the Company; (e) negotiate litigation matters as Chief Restructuring Officer on behalf of the Company; (f) negotiate on behalf of the Company with various parties, including but not limited to secured lenders, creditors, equity holders, governmental units, and any other parties- in-interest; (g) plan and provide overall management of any required wind down efforts, including liquidation of residual assets; and (h) other services as deemed appropriate. The principal terms of ESBA's engagement are as follows: -- ESBA will be paid its standard hourly rates for the services its personnel provide to the Company. ESBA agrees that its fees will not exceed $60,000 on a monthly basis; -- ESBA will be reimbursed for any out-of-pocket expenses reasonably incurred in connection with the services rendered hereunder. Such expenses include, but are not limited to, travel, meals, lodging, parking, telephone and fax, general office services, photocopying and delivery services. Travel time is charged 50% of the consultant's standard hourly rate. The reasonable fees and expenses of attorneys consulted or engaged by ESBA to assist it in connection with this Agreement shall be a reimbursable expense incurred by ESBA; -- ESBA shall receive a retainer of $20,000 due and payable at signing of this Engagement Agreement. The retainer will be returned at the conclusion of the engagement, less any outstanding invoices due at that time, without interest. Michael DuFrayne, managing director of ESBA, 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. ESBA can be reached at: Michael DuFrayne EXECUTIVE SOUNDING BOARD ASSOCIATES LLC 1500 John F Kennedy Blvd. Suite 1730 Philadelphia, PA 19102-1748 Tel: (215) 568-5788 Fax: (215) 568-5769 E-mail: mdufrayne@esba.com About ACG Credit Company II 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. ACG CREDIT: Hires DuffyAmedeo as Co-counsel ------------------------------------------- ACG Credit Company II, LLC seeks authorization from the U.S. Bankruptcy Court for the District of Delaware to employ DuffyAmedeo LLP as co-counsel, nunc pro tunc to July 16, 2014. Subject to the allocation of responsibilities with the Debtor's current counsel, Gellert Scali Busenkell & Brown, LLC, DuffyAmedeo may be requested to render the following services to the Debtor: (a) providing the Debtor with advice and preparing all necessary documents regarding debt restructuring, bankruptcy and asset dispositions; (b) taking 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) preparing on behalf of the Debtor, as Debtor in possession, all necessary motions, applications, answers, orders, reports and papers in connection with the administration of these chapter 11 cases; (d) counseling the Debtor with regard to its rights and obligations as Debtor in possession; (e) appearing in Court and to protect the interests of the Debtor before the Court; and (f) performing all other legal services for the Debtor which may be necessary and proper in this proceeding. DuffyAmedeo will also be reimbursed for reasonable out-of-pocket expenses incurred. Todd E. Duffy, partner of DuffyAmedeo, 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. DuffyAmedeo can be reached at: Todd E. Duffy, Esq. DUFFYAMEDEO LLP 275 7th Avenue, 7th floor New York, NY 10001 Tel: (212) 729-5832 E-mail: tduffy@duffyamedeo.com About ACG Credit Company II 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. ACOSTA INC: S&P Lowers CCR to 'B' on Pending Leveraged Buyout ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Jacksonville, Fla.-based Acosta Inc. by one notch to 'B' from 'B+'. In addition, S&P removed this rating from CreditWatch, where it had placed it with negative implications on July 29, 2014, following the company's announcement that it was being acquired by The Carlyle Group. S&P assigned the same 'B' corporate credit rating to Acosta Holdco Inc., the issuer of the new senior secured credit facilities. The outlook is stable. At the same time, S&P assigned 'B' issue-level ratings to Acosta Holdco's proposed $225 million revolving credit facility and $2.1 billion term loan B. The recovery rating is '3', indicating S&P's expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default. Upon completion of the proposed transaction on the terms currently proposed, S&P will withdraw all of its existing issue-level ratings on the company's currently outstanding credit facilities, which S&P expects to be repaid. "The downgrade reflects Acosta's increased debt levels and more aggressive financial policy following the acquisition transaction," said Standard & Poor's credit analyst Jeffrey Burian. "We assess Acosta's business risk profile as "satisfactory" reflecting favorable industry dynamics and good market position. We expect Acosta to continue benefitting from consumer product companies outsourcing sales and marketing functions. We believe Acosta's and other industry participants' services are more cost- effective than retaining sales and marketing functions entirely in-house. These positive industry fundamentals should continue to support its sales and profit growth. We expect Acosta will maintain "adequate" liquidity and that sources of cash will likely be greater than its uses over the next 24 months," S&P added. The stable outlook reflects S&P's expectation that Acosta will modestly grow profits and generate predictable free cash flow, enabling it to improve credit ratios and maintain adequate liquidity. S&P forecasts leverage to reach the mid-7x area over the next 12 to 18 months. S&P believes the company will continue to benefit from favorable industry dynamics as consumer product companies continue to outsource sales and marketing functions. S&P could raise the ratings if it believes financial policy will become less aggressive, including leverage sustained in the 6x area. Based on pro forma leverage, this could occur if EBITDA grows about 40% or debt is reduced by about $1 billion. EBITDA improvement could result if Acosta's customers accelerate outsourcing. Although a remote possibility over the next year, S&P could lower the ratings if operating performance significantly weakens because of a loss of a significant number of customers resulting from the failure of multiple marketing campaigns and a damaged reputation in its industry. Under this scenario, S&P's view of Acosta's business risk could weaken to "fair" from "satisfactory." S&P could also lower the rating if financial policy becomes more aggressive with significant debt-financed acquisitions or dividends resulting in weakened liquidity and EBITDA coverage of interest declining to the mid-1x area. EBITDA would have to decline by over 30% for this to occur. AECOM TECHNOLOGY: Moody's Assigns First Time '(P)Ba2' CFR --------------------------------------------------------- Moody's Investors Service assigned a first-time provisional (P)Ba2 corporate family rating to AECOM Technology Corporation (AECOM). Concurrently, Moody's assigned provisional (P)Ba1 ratings to the company's proposed $1.05 billion senior secured credit facility, $500 million performance letter of credit facility, $1.3 billion Term Loan A and $1.8 billion Term loan B, and a P(Ba3) rating to the proposed $1.6 billion senior unsecured notes. The rating outlook is stable. Moody's has assigned provisional ratings to AECOM's proposed financing since it has not been provided legal documentation for these borrowings and because the funding of the proposed facilities is contingent upon the closing of the acquisition of URS Corporation. Upon closing of the financing and a conclusive review of the final documentation, Moody's will assign definitive ratings. The definitive ratings may differ from the provisional ratings. Assignments: Issuer: AECOM Technology Corporation Corporate Family Rating, Assigned (P)Ba2; $1.05 Billion Senior Secured Credit Facility, Assigned (P)Ba1 (LGD3); $500 Million Senior Secured Performance Letter of Credit Facility, Assigned (P)Ba1 (LGD3); $1.3 Billion Senior Secured First Lien Term Loan A, Assigned (P)Ba1 (LGD3); $1.8 Billion Senior Secured First Lien Term Loan B, Assigned (P)Ba1 (LGD3); $1.6 Billion Senior Unsecured Notes, Assigned (P)Ba3 (LGD5) Outlook Actions: Outlook, Assigned Stable Outlook This is a newly initiated rating and this is Moody's first press release on this issuer. Ratings Rationale AECOM's (P)Ba2 corporate family rating reflects its large scale, diverse end market exposure, solid market position, modest fixed price construction risk and strong and consistent operating cash flow. AECOM will become one of the largest and most diversified engineering & construction companies in North America once it completes the acquisition of URS (Baa3 RUR). The rating also reflects the company's acquisitive history, elevated pro forma leverage, the transformative nature of the URS acquisition and the risks associated with integrating the largest acquisition in the company's history, and the increased exposure to construction risk that comes with the acquisitions of URS and the Hunt Construction Group. AECOM reached a definitive agreement to acquire URS Corporation in mid-July 2014 and plans to close this transaction in October 2014. The total enterprise value of the transaction is estimated to be about $6 billion and will be funded with a combination of cash, AECOM common stock and assumed debt. The purchase price appears full at about 8.5x trailing twelve month EBITDA excluding potential synergies. AECOM estimates the purchase price at about 7.0x projected 2015 pro forma EBITDA including the full $250 million of projected synergies, which the company expects to realize by the end of 2016. AECOM will be raising about $4 billion of new debt to fund this acquisition. As a result, AECOM's pro forma adjusted leverage ratio (Debt/EBITDA) will increase to about 5.0x from 3.3x and will be elevated for its rating. The acquisition of URS will entail integration and operational risks that have never been faced by AECOM since URS is much larger in size and exposed to end markets that are unfamiliar to AECOM. URS also provides services such as industrial construction, which entail greater risks and exposure to higher priced projects than the typical engineering and design services provided by AECOM. The recent acquisition of the Hunt Construction Group will also increase the company's exposure to construction services in the commercial and infrastructure sectors. AECOM does have exposure to construction, but it mostly constructs office and high rise residential buildings and typically subcontracts most of that work to reduce its construction risk. The combination of AECOM and URS along with the recently acquired Hunt Construction Group will produce one of the largest and most diversified engineering & construction companies in the US with about $20 billion in annual revenues. This will enable the company to provide a broader array of services to a wider range of end markets and enhance its ability to meet the increasing demand for integrated services as customers shift towards awarding design and build contracts at the same time to decrease the time to completion of projects. AECOM will also have significant free cash flow generation, which should enable it to reduce its leverage to a level that is commensurate with its rating within about two years after the completion of the URS acquisition. Moody's expects AECOM to generate adjusted EBITDA of about $1.6 billion in the fiscal year ended September 2015 and to generate free cash flow of about $800 million. This should enable the company to reduce its leverage ratio to about 4.5x and to raise its interest coverage ratio to about 3.0x. The leverage ratio will still be weak for the rating, but should continue to gradually decline to the 3.5x level that is more commensurate with its Ba2 rating. AECOM is expected to have good pro forma liquidity of about $1.4 billion consisting of approximately $700 million of cash and about $700 million of availability on its revolving credit facility. However, about $300 million of the cash is not readily available since it is tied up in joint ventures, specific projects or is restricted. Therefore, the company's available liquidity is expected to be closer to about $1.1 billion. AECOM's liquidity is expected to increase modestly in the near term as it uses its free cash to pay off its revolver borrowings, which are estimated at about $300 million at the close of the URS acquisition. The stable outlook presumes the company's operating results will modestly improve over the next 12 to 18 months and result in substantial free cash flow and significantly reduced leverage. It also assumes the company will carefully balance its leverage with its growth strategy. The ratings are not likely to experience upward pressure in the short term considering the company's elevated pro forma leverage. However, an upgrade is possible if the company successfully integrates URS and reduces its leverage ratio to below 3.5x. Negative rating pressure could develop if deteriorating operating results, weaker than expected cash flow or debt financed acquisitions result in the leverage ratio remaining above 5.0x or funds from operations (CF from operations before working capital changes) remaining below 15% of outstanding debt. A significant reduction in borrowing availability or liquidity could also result in a downgrade. The principal methodology used in this rating was the Global Construction Methodology published in November 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Los Angeles, CA, AECOM Technology Corporation is a fully integrated infrastructure and support services firm providing engineering & design, planning and construction services to the transportation, facilities, environmental, energy, water and government sectors. AECOM recently acquired Hunt Construction Group, which provides construction services, construction management and general contracting services for the commercial and infrastructure construction sectors. AECOM expects to complete the acquisition of URS Corporation in October 2014. URS is a provider of engineering, construction and technical services and a contractor for the US Federal government. URS reports its revenue in four market segments: Infrastructure & Environment, Energy & Construction, Federal Services and Oil & Gas. AECOM along with URS and Hunt generated pro forma revenues of about $20 billion for the trailing 12-month period ended March 31, 2014. ALLIED INDUSTRIES: Tiger Group to Auction Assets on Aug. 26 ----------------------------------------------------------- By order of the U.S. Bankruptcy Court, Tiger Group's Remarketing Services Division and PPL Group are auctioning excavators, loaders, tractors, service and pickup trucks, and other warehousing and office assets from the commercial contractor and environmental remediation company Allied Industries, Inc., which operated under the Allied Environmental Services name. Bidding in the online-only sale of the company's equipment, which also includes towable generators, general contractors' tools, computers, and furnishings, will open August 19 at www.SoldTiger.com and will close in rapid succession, live auction style, on August 26 at 10:30 a.m. (PT). The assets will be available for inspection at the company's corporate office and construction yard located at 11333 Vanowen St. in North Hollywood on August 25, from 9:00 a.m. to 4:00 p.m. (PT). "Allied was not only an environmental remediation company, but a general contractor as well. The equipment they use spans many construction applications and should be of interest to a wide range of contractors and do-it-yourselfers," said Jeff Tanenbaum, president of Tiger Remarketing Services. For a full description of all assets being auctioned and details on how to bid, visit: www.SoldTiger.com Allied voluntarily filed for Chapter 11 Bankruptcy Protection in March 2013 in California Central Bankruptcy Court (case number 1:13-bk-11948). It was converted to a Chapter 7 filing in May 2014. About Allied Industries Allied Industries, Inc., filed a Chapter 11 petition (Bankr. C.D. Cal. Case. No. 13-11948) on March 21, 2013. The petition was signed by Ernesto Gutierrez as president and chief executive officer. The Debtor scheduled assets of $13,086,216 and scheduled liabilities of $7,457,365. The Debtor has tapped Dheeraj K. Singhal, Esq., and Dixon L. Gardner, Esq. at DCDM Law Group, P.C., as counsel, the Capital Turnaround Group, Inc., as turnaround consultant, and Glenn M. Gelman & Associates as accountants. Desmond, Marcello & Amster is business valuation appraiser to the Debtor and RLS, Inc., dba Hjelmstrom & Associates, is its assets appraiser. The Official Committee of Unsecured Creditors has retained Pachulski Stang Ziehl & Jones LLP as counsel and CohnReznick LLP as financial advisor. California United Bank is the Debtor's secured creditor. It is represented by Russell H. Rapoport, Esq. and Alan M. Mirman, Esq., of Mirman, Bubman & Nahmias, LLP, of Woodland Hills, California. ALLISON TRANSMISSION: Moody's Hikes Corp. Family Rating to 'Ba3' ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of Allison Transmission, Inc. Ratings that were upgraded include the Corporate Family Rating (CFR) to Ba3 from B1 and Speculative Grade Liquidity rating to SGL-1 from SGL-2. The rating outlook is stable. Ratings Rationale The upgrade reflects Moody's expectation that Allison will manage the pace of future distributions to shareholders in a prudent manner. This prudence, combined with the company's highly competitive business position, should enable Allison to generate credit metrics that are solidly supportive of the Ba3 rating, and to preserve sufficient flexibility and liquidity to contend with cyclical downturns. Moody's expects that Allison will continue to benefit from considerable operating strengths. It holds a commanding lead in the North American market for fully automatic transmissions used in commercial vehicles and other industrial applications, with the company estimating that it has a 61% global market share. This strong business position, combined with modest reinvestment requirements, should enable Allison to maintain EBITA margins exceeding 20% and to generate annual free cash flow of about $300 million. Allison's target leverage range for net debt to EBITDA is 3.0x to 3.5x. This target range is down from leverage of approximately 7.7x that resulted from the company's 2007 LBO (not reflecting Moody's adjustments). At June 2014, Allison's leverage was 3.9x and Moody's expect that this measure will fall to approximately 3.5x by fiscal year end -- the high end of its target range. As Allison has reduced debt and approached its targeted leverage range, the company's financial strategy has begun to prioritize the return of capital to shareholders. Moody's believe that the company will pursue this capital distribution strategy in a manner that prudently balances business and financial risk, and that preserves credit metrics consistent with the Ba3 rating. Allison's key credit metrics (reflecting Moody's adjustments) at June 2014 include: debt to EBITDA of 4.1x; EBITA to interest of 3.4x; free cash flow to debt of 13%, and EBITA margin of 28%. Notwithstanding the company's shareholder distribution plans, Moody's expect that there will be further moderate improvement in leverage and coverage measures. The principal business risk facing Allison is the considerable cyclicality of the medium and heavy truck markets. A critical consideration in the Ba3 CFR was Allison's ability to preserve strong EBITA margins (approximately 20%) and positive free cash flow (approximately $80 million) during the 2008/2009 downturn. Importantly, Moody's believe that Allison will maintain considerable operating flexibility to contend with future downturns, and that the pace of distributions to shareholders will be adjusted to accommodate any downturn-related reduction in free cash flow generation. Important to the rating upgrade is Allison's maintenance of a strong liquidity position. At June 2014 the company's liquidity resources included: cash of $127 million, $453 million in availability under a revolving credit facility that matures in 2019, and free cash flow generation that exceeded $350 million for the twelve months through June 2014. The company has current debt maturities of only $18 million. Allison's rating could improve further if the company maintains a strong business position and high margins, and if the company's financial strategy reflects adequate prudence in balancing business risk, the level of debt protection afforded to creditors, and the need to return capital to shareholders. Credit metrics that could support a higher rating include debt/EBITDA below 4x and EBITA/interest above 4.5x. The rating would most likely face pressure from an overly aggressive shareholder distribution strategy. Metrics that could pressure the rating include debt/EBITDA above 4.5x and EBIT/interest below 3.0x Upgrades: Issuer: Allison Transmission, Inc. Probability of Default Rating, Upgraded to Ba3-PD from B1-PD Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Corporate Family Rating, Upgraded to Ba3 from B1 Senior Secured Bank Credit Facility Aug 7, 2017, Upgraded to Ba2 from Ba3 Senior Secured Bank Credit Facility Jan 27, 2019, Upgraded to Ba2 from Ba3 Senior Secured Bank Credit Facility Aug 23, 2019, Upgraded to Ba2 from Ba3 Senior Secured Bank Credit Facility Aug 7, 2017, Upgraded to a range of LGD3, 40 % from a range of LGD3, 41 % Senior Secured Bank Credit Facility Jan 27, 2019, Upgraded to a range of LGD3, 40 % from a range of LGD3, 41 % Senior Secured Bank Credit Facility Aug 23, 2019, Upgraded to a range of LGD3, 40 % from a range of LGD3, 41 % Senior Unsecured Regular Bond/Debenture May 15, 2019, Upgraded to B2 from B3 Senior Unsecured Regular Bond/Debenture May 15, 2019, Upgraded to a range of LGD6, 91 % from a range of LGD6, 92 % Outlook Actions: Issuer: Allison Transmission, Inc. Outlook, Remains Stable The principal methodology used in this rating was Global Automotive Supplier Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. AMERICAN BANCORP: Lindquist & Vennum Approved as Counsel -------------------------------------------------------- American Bancorporation sought and obtained permission from the Hon. Katherine A. Constantine of the U.S. Bankruptcy Court for the District of Minnesota to employ Lindquist & Vennum LLP as Chapter 11 counsel. The Debtor requires Lindquist & Vennum to: (a) analyze the Debtor's financial situation and render assistance in connection with the preparation of documents necessary to complete the Chapter 11 filing; (b) perform work and render assistance in connection with the selection and retention of professionals that the Debtor may seek to employ in connection with the bankruptcy case from time to time; (c) assist the Debtor with preparing and filing of the schedules, statements, exhibits, attachments, lists, reports and other documents required by the Bankruptcy Code, the Bankruptcy Rules, the Local Rules or the Court in the course of this bankruptcy case; (d) attend meetings and negotiate with and respond to creditors, regulatory authorities and other parties in interest; (e) review and advise the Debtor with respect to various claims by or against the bankruptcy estate; (f) provide legal advice on bankruptcy, M&A, corporate, regulatory and litigation matters; (g) make and respond to motions, applications and other requests for relief on behalf of the Debtor and other parties in interest; (h) advise the Debtor regarding any potential sale of assets and any plan of reorganization or liquidation in this Chapter 11 case; (i) assist in plan and disclosure statement preparation; (j) advise the Debtor with regard to regulatory matters; (k) communicate with the Office of the U.S. Trustee, creditors and others as the Debtor may consider necessary or desirable; (l) appear in this Court with respect to services within the approved scope; and (m) perform other services requested by the Debtor or services reasonably necessary to represent the Debtor in this case. Lindquist & Vennum will be paid at these hourly rates: George Singer $495 Jeffrey Smith $350 Kevin Costley $530 Scott Coleman $475 Partner $250-$700 Associates $175-$310 Paralegals $80-$280 Lindquist & Vennum will also be reimbursed for reasonable out-of- pocket expenses incurred. During the 90 days preceding the Petition Date, Lindquist & Vennum received a payment of $8,221.88 on March 14, 2014, $2,816.25 on April 25, 2014 and $237.50 on April 28, 2014, that were regular monthly payments of current invoices. On or about April 24, 2014, Lindquist & Vennum also received a cash retainer from the Debtor in the amount of $50,000 and, on or about April 25, 2014, also received as a retainer an assignment and delivery of a promissory note dated May 15, 2010 (renewing and replacing a promissory note originally dated June 15, 2007) in the principal amount of $125,000 made by Barry J. O'Meara to the order of the Debtor (the "Note"). Lindquist & Vennum has applied $38,243.50 of the Cash Retainer to the payment of outstanding legal fees and related expenses owed by the Debtor to the firm and incurred in the ordinary course of business prior to the entry of the Order of Relief and is holding the balance of the Cash Retainer of approximately $11,756.50 in trust to secure compensation and reimbursement of expenses for services to be rendered during the Chapter 11 case. After the entry of the Order for Relief but prior to filing the Application with the court, Lindquist & Vennum returned the promissory note delivered to the firm as a retainer, the balance of which is approximately $85,002.25, to the Debtor. George H. Singer, partner of Lindquist & Vennum, 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. Lindquist & Vennum can be reached at: George H. Singer, Esq. LINDQUIST & VENNUM LLP 4200 IDS Center 80 South, 8th Street Minneapolis, MN 55402 Tel: (612) 371-2493 Fax: (612) 371-3207 About American Bancorporation Alesco Preferred Funding XV, Ltd., and two related entities filed an involuntary Chapter 11 bankruptcy petition for St. Paul, Minnesota-based American Bancorporation (Bankr. D. Minn. Case No. 14-31882) on May 1, 2014. The involuntary petition filed in St. Paul Minnesota indicates that the three alleged creditors are owed in excess of $48 million: Creditor Amount of Claim -------- --------------- Alesco Preferred Funding XV, Ltd. $27,374,356 Alesco Preferred Funding XVI, Ltd. $13,728,562 Alesco Preferred Funding II, Ltd. $7,000,000 plus interest The alleged creditors are represented by Jeffrey Klobucar, Esq., at Bassford Remele, PA. Judge Katherine A. Constantine handles the case. She has entered an order for relief, officially placing American Bancorporation in Chapter 11. Judge Kathleen H. Sanberg was originally assigned to the case but she disqualified herself in the case, according to her May 1, 2014 order of recusal. AMR CORP: Shareholder's Substantial Contribution Claim Tossed ------------------------------------------------------------- Bankruptcy Judge Sean H. Lane denied the application filed by Simon Mark Tabashnick, a shareholder of AMR Corporation, requesting compensation for services rendered and reimbursement of expenses incurred in connection with his alleged provision of a substantial contribution in these bankruptcy cases. Tabashnick said he is entitled to $10,800 as an administrative expense under Section 503(b)(3)(D) of the Bankruptcy Code. The Debtors opposed the request. According to Judge Lane, Mr. Tabashnick has failed to satisfy any of the requirements for payment based upon a substantial contribution under Section 503(b)(3)(D). A copy of Judge Lane's August 5, 2014 MEMORANDUM OF DECISION AND ORDER is available at http://is.gd/kxipPSfrom Leagle.com. About American Airlines AMR Corp. and its subsidiaries including American Airlines filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost- cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so- called U.S. legacy airlines to seek court protection from creditors. It was the third largest airline in the United States at the time of the bankruptcy filing. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan to exit bankruptcy through a merger with US Airways. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. Judge Sean Lane confirmed the Plan despite the lawsuit filed by the U.S. Department of Justice and several states' attorney general complaining that the merger violates antitrust laws. In November 2013, AMR and the U.S. Justice Department a settlement of the anti-trust suit. The settlements require the airlines to shed 104 slots at Reagan National Airport in Washington and 34 at LaGuardia Airport in New York. AMR stepped out of Chapter 11 protection after its $17 billion merger with US Airways was formally completed on Dec. 9, 2013. ARMORWORKS ENTERPRISES: Gets Approval to Sell Unused Equipment -------------------------------------------------------------- ArmorWorks Enterprises, LLC received court approval to sell its equipment to Envirosystems, LLC and Tony Ramirez. The equipment includes a tradeshow booth and certain miscellaneous handling equipment to be sold to Mr. Ramirez. Meanwhile, six Envirosystems Airwalls will be purchased by Envirosystems. The equipment will be sold "free and clear of any and all liens, claims, security interests, encumbrances and interests of any kind," according to a court order signed by U.S. Bankruptcy Judge Brenda Moody Whinery. About ArmorWorks Enterprises Military armor systems provider ArmorWorks Enterprises, LLC, and affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17, 2013, along with a plan that resolves a dispute with a minority shareholder and $3.5 million of financing that would save the company from running out of cash. ArmorWorks develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. The Debtors have tapped Todd A. Burgess, Esq., John R. Clemency, Esq., Lindsi M. Weber, Esq., and Janel M. Glynn, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. The U.S. Trustee for Region 14 appointed creditors to serve on an Official Committee of Unsecured Creditors. Forrester & Worth, P.L.L.C. represents the Committee as its general counsel. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. ArmorWorks and TechFiber sought and obtained an order (i) transferring the In re TechFiber, LLC chapter 11 case to the Honorable Brenda Moody Whinery, the judge assigned to the ArmorWorks Chapter 11 case, and (ii) authorizing the joint administration of the Debtors' cases. AUGUSTA APARTMENTS: Kohout Must Disgorge $24,000 Retainer --------------------------------------------------------- Edward R. Kohout appeals from an order of the U.S. Bankruptcy Court for the Northern District of West Virginia, denying his fee application and motion for nunc pro tunc employment, and ordering the disgorgement of his $24,000 retainer fee from Augusta Apartments, LLC. Augusta Apartments retained the Lampl Law Firm to serve as bankruptcy counsel for the estate and Kohout to serve as local counsel. Kohout, however, did not file an application to be employed as counsel for the Debtor at that time. On February 18, 2010, the day before filing for bankruptcy, the Debtor paid the Lampl Law Firm a $100,000 retainer fee. Of the $100,000, the firm retained $76,000 and paid the remainder to Kohout. The Debtor and Kohout discussed the terms of his retention, but did not memorialize their fee arrangement in writing. The parties agreed that Kohout would serve as local counsel for the Debtor and be responsible for litigating at least one adversary proceeding. Upon filing for bankruptcy under Chapter 11, the Debtor, as a debtor in possession, filed an application to employ the Lampl Law Firm as its counsel. The application listed a variety of bankruptcy services to be rendered, the hourly rates of the attorneys, and connections with the Debtor. The Debtor also filed a motion for the Lampl Law Firm to appear pro hac vice with Kohout acting as local counsel. The bankruptcy court approved the Debtor's application and granted its motion. On July 21, 2010, the bankruptcy court granted the appointment of a Chapter 11 trustee, and on the same day, the U.S. Trustee appointed Robert L. Johns as trustee. On July 17, 2012, the Debtor's Chapter 11 bankruptcy case was converted to a Chapter 7 bankruptcy case, with Johns still acting as trustee. Johns never sought to employee Kohout on behalf of the bankruptcy estate. On November 16, 2012, the UST filed a motion to examine attorney employment and compensation of Kohout pursuant to 11 U.S.C. Sec. 329(b), seeking a determination of whether Kohout was properly employed under Sec. 327(a) or (e), and an order requiring Kohout to disgorge the $24,000 retainer fee he received from the Debtor. On February 15, 2013, Kohout filed a fee application and moved for nunc pro tunc employment -- nearly three years after the Debtor had filed for bankruptcy relief. The UST objected to Kohout's application, arguing that he: (1) was never employed under Sec. 327 to represent the bankruptcy estate, (2) had failed to disclose his receipt of the money from the Debtor as required by Sec. 329 and Bankruptcy Rule 2016(b), and (3) did not present a justifiable reason for his failure to file a timely employment application. On March 21, 2013, the bankruptcy court held an evidentiary hearing to consider Kohout's application and the UST's objections. During that hearing, Kohout acknowledged that he had never filed an employment application or compensation disclosure statement. He argued that his failure to do so was excused by the fact that he is unfamiliar with Chapter 11 practice and the Bankruptcy Code. Kohout also testified that the $24,000 retainer he received was a payment from the Lampl Law Firm, not the Debtor. The UST, however, later filed an addendum to its objections, verifying that the Debtor was the source of the funds. On July 3, 2013, the bankruptcy court entered a Memorandum Opinion and Order denying Kohout's fee application and motion for nunc pro tunc employment, and ordering him to return the $24,000 retainer fee he had received from the Debtor. The bankruptcy court explained that Kohout's ignorance of the Chapter 11 bankruptcy rules and practices did not excuse him from filing a timely employment application. It also explained that Kohout had not demonstrated extraordinary circumstances justifying his delay. The court went on to find that Kohout had violated section 11 U.S.C. Sec. 329 and Bankruptcy Rule 2016(b) by not disclosing the retainer fee he had received from the Debtor, which constituted grounds to deny his fee application and require him to disgorge the $24,000 retainer fee. Kohout appealed the order of the bankruptcy court on August 14, 2013. According to District Judge Irene M. Keeley, Kohout violated Sec. 329 and Fed. R. Bankr. P. 2016(b) by failing to file a disclosure statement indicating that the Debtor had paid him a $24,000 retainer fee. Kohout received the fee the day before the Debtor filed for bankruptcy, on February 18, 2010, but has yet to file a disclosure statement. Kohout asks the Court to excuse his noncompliance with Sec. 329 because he was unaware of his statutory obligation to file a disclosure statement with the bankruptcy court. However, his ignorance does not excuse his noncompliance, Judge Keeley said, citing Neben & Starrett, 63 F.3d at 882; Jensen v. US Trustee, 210 B.R. 844, 849 (B.A.P. 10th Cir. 1997). According to the judge, Kohout's violations are grounds for requiring disgorgement of the retainer fee he received from the Debtor, citing Lamie v. United States Trustee, 540 U.S. 526, 529 (2004). Although disgorgement is a severe remedy, it is warranted in this instance, the judge said, because of the nature and extent of Kohout's noncompliance with the Bankruptcy Code. Kohout not only ignored his duty to disclose under Sec. 329, but also his duty to seek approval for employment under Sec. 327. The bankruptcy court's order is affirmed, Judge Keeley said in an August 4, 2014 Memorandum Opinion and Order available at http://is.gd/PpUpaRfrom Leagle.com. The case is EDWARD R. KOHOUT, Appellant, v. UNITED STATES TRUSTEE, Civil Action No. 1:13CV183 (N.D. W.Va.). Edward Kohout represented himself. The United States Trustee is represented by Debra A. Wertman and Noah M. Schottenstein of the US Department of Justice. Morgantown, West Virginia-based Augusta Apartments, LLC, filed for Chapter 11 bankruptcy protection on Feb. 19, 2010 (Bankr. N.D. W.Va. Case No. 10-00303). Kristian E. Warner, the Company's managing member, signed the petition. The Company estimated its assets and debts at $10 million to $50 million as of the Petition Date. After filing its Chapter 11 bankruptcy petition, the Debtor filed an application to employ the Lampl Law Firm. On July 17, 2012, Augusta Apartments' case joined those of McCoy 6 and Grand Central Building LLC in Chapter 7, after equity holders Andrew M. Warner, Monroe P. Warner, and Kristian E. Warner filed a motion in May 2012 to convert the case to Chapter 7. According to the Augusta Apartments Monthly Operating Report dated May 14, 2012, the the business is no longer operating. The business has no assets, the Augusta apartment building having been sold to West Virginia University. Robert L. Johns was named the Chapter 11 trustee and now serves as the Chapter 7 trustee. AUXILIUM PHARMACEUTICALS: HSR Act Waiting Period Terminated ----------------------------------------------------------- QLT Inc., a company organized under the laws of British Columbia, Canada, filed with the Securities and Exchange Commission a registration statement on Form S-4, which included a preliminary joint proxy statement of QLT and Auxilium Pharmaceuticals, Inc., a Delaware corporation, and also constitutes a management proxy circular and preliminary prospectus of QLT, in connection with the business combination between QLT and Auxilium, as contemplated by the Agreement and Plan of Merger, dated as of June 25, 2014, among QLT, Auxilium, QLT Holding Corp. and QLT Acquisition Corp. Under the Merger Agreement, on the terms and subject to the conditions contained therein, QLT Acquisition Corp., an indirect wholly owned subsidiary of QLT, will be merged with and into Auxilium and Auxilium will be the surviving corporation, and, through the Merger, Auxilium will become an indirect wholly owned subsidiary of QLT. The Form S-4 has not yet been declared effective by the SEC. On July 30, 2014, the Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to the Merger. The grant of early termination is effective immediately, and has the effect of ending the waiting period under the HSR Act relating to the Merger. The transaction remains subject to other closing conditions. Additional information can be obtained at no charge at: http://is.gd/WG7c9G About Auxilium Auxilium Pharmaceuticals, Inc., is a fully integrated specialty biopharmaceutical company with a focus on developing and commercializing innovative products for specialist audiences. With a broad range of first- and second-line products across multiple indications, Auxilium is an emerging leader in the men's healthcare area and has strategically expanded its product portfolio and pipeline in orthopedics, dermatology and other therapeutic areas. Auxilium now has a broad portfolio of 12 approved products. Among other products in the U.S., Auxilium markets edex(R) (alprostadil for injection), an injectable treatment for erectile dysfunction, Osbon ErecAid(R), the leading device for aiding erectile dysfunction, STENDRATM (avanafil), an oral erectile dysfunction therapy, Testim(R) (testosterone gel) for the topical treatment of hypogonadism, TESTOPEL(R) (testosterone pellets) a long-acting implantable testosterone replacement therapy, XIAFLEX(R) (collagenase clostridium histolyticum or CCH) for the treatment of Peyronie's disease and XIAFLEX for the treatment of Dupuytren's contracture. The Company also has programs in Phase 2 clinical development for the treatment of Frozen Shoulder syndrome and cellulite. To learn more, please visit www.Auxilium.com. As of March 31, 2014, the Company had $1.19 billion in total assets, $985.73 million in total liabilities and $210.14 million in total stockholders' equity. * * * As reported by the TCR on May 7, 2014, Moody's Investors Service downgraded the ratings of Auxilium Pharmaceuticals, Inc., including the Corporate Family Rating to B3 from B2. "The downgrade reflects Moody's expectations that declines in Testim, Auxilium's testosterone gel, will materially reduce EBITDA in 2014, resulting in negative free cash flow, a weakening liquidity profile, and extremely high debt/EBITDA," said Moody's Senior Vice President Michael Levesque. In the May 6, 2014, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Auxilium Pharmaceuticals Inc. to 'CCC' from 'B-'. "Our rating action on Auxilium is predicated on our assessment of its liquidity profile as "weak" and our expectation that the company is likely to deplete its liquidity sources over the next 12 months," said credit analyst Maryna Kandrukhin. BANCO ESPIRITO SANTO: Ex-Chief Arrested As 3rd Co. Hits Bankruptcy ------------------------------------------------------------------ Law360 reported that troubles worsened within Portugal's Espirito Santo banking empire when prosecutors arrested the former chief executive of Banco Espirito Santo in a money-laundering and tax- evasion probe just as a third company in the Espirito group sought court protection from creditors. According to the report, two months after stepping down as chief executive of BES, Portugal's second-largest lender, Ricardo Salgado was detained for questioning by an investigating judge, in connection with a long- running probe code-named 'Monte Branco' surrounding certain Swiss wealth managers' dealings in Portugal. BAY AREA FINANCIAL: Seeks Exclusivity Extension to Oct. 10 ---------------------------------------------------------- Bay Area Financial Corp. has requested a second extension of its exclusive period for obtaining acceptances to its Plan of Reorganization in its Chapter 11 case. The case is pending in the Bankruptcy Court for the Central District of California, Los Angeles Division. If granted, the extension would set a deadline of October 10, 2014, for the Debtor to obtain acceptances to its Plan. The Debtor's current exclusive solicitation period is set to expire on August 11th. Section 1121(d) of the Bankruptcy Code authorizes extensions to a debtor's exclusive period for soliciting acceptances to a Plan of Reorganization for "cause". The key question to consider is whether an extension will move a case "towards a fair and equitable resolution," the Debtor tells the Court, citing In re Henry Mayo Newhall Memorial Hospital, 282 B.R. 444, 453 (B.A.P. 9th Cir. 2002). The Debtor submits that there is cause for an extension in this case because the case is a large one with many creditors. Additionally, the Debtor has made progress in moving the case forward. The Debtor has filed a Plan, worked out objections to its Disclosure Statement, and mailed solicitation packages to creditors. The Debtor contends that a competing plan at this stage of the case would only confuse creditors and stall progress made to date. About Bay Area Financial Bay Area Financial Corp., a consumer finance company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 13-38974) on Dec. 9, 2013. The case is assigned to Judge Thomas B. Donovan. The Debtor is represented by Sandford L. Frey, Esq., and Stuart I. Koenig, Esq., at Creim Macias Koenig & Frey LLP. The Debtor disclosed $15,248,851 in assets and $21,239,663 in liabilities as of the Chapter 11 filing. There is no secured debt, although $141,000 is owing on a priority tax claim. Peter C. Anderson, the U.S. Trustee for Region 16, appointed five members to the Official Committee of Unsecured Creditors. The Committee is represented by James C. Bastian, Jr., Esq., and Melissa Davis Lowe, Esq., at Shulman Hodges & Bastian LLP. BERNARD L. MADOFF: Judge Upholds Aides' Convictions But Slams Feds ------------------------------------------------------------------ Law360 reported that a New York federal judge upheld the convictions of five former Bernard L. Madoff Investment Securities LLC employees accused of aiding the Ponzi scheme but sharply criticized prosecutors for making "derogatory generalizations" in closing arguments to the jury. According to the report, U.S. District Judge Laura Taylor Swain denied the defendants' motions for acquittal or a new trial, saying prosecutors had proven they had played a role in the scheme. The case is USA v. O'Hara et al., Case No. 1:10-cr-00228 (S.D.N.Y.). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. The most recent distribution was in March 2013. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Picard is holding almost $4.4 billion he can't distribute on account of outstanding appeals and disputes. The largest holdback, almost $2.8 billion, results from disputed claims. BERNARD L. MADOFF: Dimon, JPMorgan Board Get Suit Thrown Out ------------------------------------------------------------ Bob Van Voris, writing for Bloomberg News, reported that JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon and board members won dismissal of an investor lawsuit over $2.6 billion in penalties and settlements paid by the bank because of its relationship with convicted Ponzi scheme operator Bernard Madoff. According to the report, U.S. District Judge Paul Crotty in Manhattan on July 24 threw out the suit, which sought damages on behalf of the bank based on claims that JPMorgan executives and directors turned a blind eye to Madoff's fraud. The investors claimed the defendants harmed the bank through breaches of fiduciary duty, securities law violations and waste of corporate assets, the report related. The case is Central Laborers' Pension Fund v. Dimon, 14-cv-01041, U.S. District Court, Southern District of New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). From recoveries in lawsuits coupled with money advanced by SIPC, Mr. Picard has paid about 58 percent of customer claims totaling $17.3 billion. The most recent distribution was in March 2013. Mr. Picard has collected about $9.35 billion, not including an additional $2.2 billion that was forfeit to the government and likewise will go to customers. Picard is holding almost $4.4 billion he can't distribute on account of outstanding appeals and disputes. The largest holdback, almost $2.8 billion, results from disputed claims. BEVERLY HILLS: Seeks Extension of Plan Filing Date to Oct. 14 ------------------------------------------------------------- Beverly Hills Bancorp Inc. asks the U.S. Bankruptcy Court for the District of Delaware to extend its exclusive period to file a Chapter 11 plan to Oct. 14, 2014, and its exclusive period to solicit acceptances of that plan to Dec. 9. The Debtor said in court papers that it is seeking extension of its exclusive periods out of abundance of caution as it has already filed a plan and disclosure statement. The Debtor's exclusive filing period will expire on Aug. 13. The Debtor that currently, a potential bidder is evaluating the possibility of pursuing a transaction involving certain of the Debtor's non- liquid assets, and should the bidder decide to enter a firm bid accompanied by an earnest money deposit, the Plan and Disclosure Statement would require potentially significant amendment to accommodate a reorganized, rather than a liquidating, Debtor with a revised capital structure. If those amendments become necessary, the Debtor wants an opportunity to do so without the distraction of competing plans. A hearing on the extension request is scheduled for Aug. 27, 2014, at 10:00 a.m. (ET). Objections are due Aug. 20. About Beverly Hills Bancorp Beverly Hills Bancorp Inc., former owner of First Bank of Beverly Hills, filed a petition for Chapter 11 protection (Bankr. D. Del. Case No. 14-bk-10897) on April 15, 2014, as a forbearance agreement was expiring in connection with $25.8 million in trust- preferred securities. The bank subsidiary was taken over by regulators in April 2009. All other subsidiaries are inactive. The Debtor's counsel is Young, Conaway, Stargatt & Taylor, LLP, while its restructuring advisor is Development Specialists, Inc. BROADWAY FINANCIAL: Appoints New Board Member --------------------------------------------- Broadway Financial Corporation appointed Ms. Renata Simril to the Board of Directors of the Company and its wholly owned subsidiary, Broadway Federal Bank, f.s.b., effective July 30, 2014. This appointment increases the membership of the Board of Directors from eight to nine. Ms. Simril has not been named to any committees at this time. About Broadway Financial Los Angeles, Calif.-based Broadway Financial Corporation was incorporated under Delaware law in 1995 for the purpose of acquiring and holding all of the outstanding capital stock of Broadway Federal Savings and Loan Association as part of the Bank's conversion from a federally chartered mutual savings association to a federally chartered stock savings bank. In connection with the conversion, the Bank's name was changed to Broadway Federal Bank, f.s.b. The conversion was completed, and the Bank became a wholly owned subsidiary of the Company, in January 1996. The Company is regulated by the Board of Governors of the Federal Reserve System. The Bank is regulated by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. Broadway Financial reported a loss allocable to common stockholders of $1.08 million in 2013, a loss allocable to common stockholders of $693,000 in 2012 and a net loss available to common shareholders of $15.36 million in 2011. The Company's balance sheet at March 31, 2014, the Company had $335.07 million in total assets, $308.51 million in total liabilities and $26.56 million in total stockholders' equity. BROOKSTONE HOLDINGS: Trustee Wants Subsidiary Cases Closed ---------------------------------------------------------- Craig R. Jalbert, the Distribution Trustee in Brookstone Holdings Corp.'s chapter 11 case in the District of Delaware, has requested that Hon. Brendan L. Shannon close all subsidiary cases in the matter. The Debtor's subsidiaries are Brookstone, Inc.; Brookstone Company, Inc.; Brookstone Retail Puerto Rico, Inc.; Brookstone International Holdings, Inc.; Brookstone Purchasing, Inc.; Brookstone Stores, Inc.; Gardener's Eden, Inc.; Brookstone Military Sales, Inc.; Big Blue Audio LLC; Brookstone Holdings, Inc.; and Brookstone Properties, Inc. On June 24, 2014, the Court confirmed the Debtor's Second Modified Joint Chapter 11 Plan of Reorganization. The Confirmation Order provided that any unsatisfied claims as of the effective date of July 7th shall be treated as claims against Brookstone Holdings, Corp., and shall be administered by the Distribution Trustee. Section 350(a) of the Bankruptcy Code provides that cases shall be closed after an estate has been fully administered and the Trustee has been discharged. Section 105(a) of the Bankruptcy Code authorizes a court to enter any order that is necessary or appropriate. Bankruptcy Rule 3022 mandates the closing of a case that has been fully administered. A court is allowed flexibility in determining when an estate has been fully administered. The Distribution Trustee contends that the subsidiary estates have been fully administered since the Plan's primary transactions have been completed. Therefore, maintenance of the subsidiary cases will only create additional administrative and financial burdens. Counsel for the Distribution Trustee are Adam G. Landis, Esq., Kerri K. Mimford, Esq., and Kimberly A. Brown, Esq. at Landis, Rath & Cobb LLP of Wilmington, DE and Charles A. Dale, III, Esq. and Mackenzie L. Shea, Esq. at K & L Gates LLP of Boston, MA. About Brookstone Holdings Brookstone Holdings Corp. and its affiliated debtors on April 3, 2013, filed for relief under Chapter 11 (Bankr. D. Del. Lead Case No. 14-10752) with a plan to sell its business to another retailer. Specialty retailer Brookstone operated 242 retail stores across 40 states and Puerto Rico as of Feb. 1, 2014. Of those stores, 195 are generally located near "center court" in America's top retail centers and 47 are located in airports. Brookstone also operates an e-commerce business that includes the Brookstone catalog and http://www.Brookstone.com/ An affiliate of Spencer Spirit Holdings Inc., the parent of gift- shop chain Spencer's, has signed a deal to pay $147 million in exchange for 100% of the reorganized debtor's equity, absent higher and better offers from other parties. As of Dec. 31, 2013, Spencer operated 644 stores in 49 states and Canada. As of the bankruptcy filing, the Debtors owe more than $50 million on a senior secured prepetition credit facility ($34.1 million on a revolver, $12.3 million on a term loan and $4.7 million on account of letters of credit), and $137.3 million to holders of junior notes. The Debtors estimate that their unsecured debt is between $75 million and $85 million. The agreement with Spencer contemplates that Brookstone, headquartered in New Hampshire, will continue to operate its mall and airport stores, catalog, website, and wholesale channels, under the Brookstone brand with current employees remaining at their respective locations. The Debtors have tapped K&L Gates LLP and Landis Rath & Cobb LLP as attorneys, Deloitte Financial Advisory Services LLP as their financial advisors, Jefferies LLC as their investment banker, and Kurtzman Carson Consultants as claims agent. The DIP lenders are represented by Stroock & Stroock & Lavan LLP and Young Conaway Stargatt & Taylor LLP. BUCCANEER RESOURCES: Global Hunter Approved as Sale Advisor ----------------------------------------------------------- Buccaneer Resources, LLC and its debtor-affiliates sought and obtained permission from the Hon. David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas to employ Global Hunter Securities, LLC as sale advisor to the Debtors. The Debtors require Global Hunter to: (a) review and analyze the Debtors' business and financial projections; (b) assist the Debtors in evaluating, structuring, negotiating and implementing a potential Transaction; (c) assist the Debtors in preparing descriptive material to be provided to potential parties that might participate in a potential Transaction; (d) develop, update and review with the Debtors on an ongoing basis a list of parties that might participate in a potential Transaction; (e) contact potential parties to a potential Transaction; (f) assist the Debtors with evaluating potential term sheets, indications of interest, letters of intent and other Transaction agreements; (g) assist the Debtors in negotiating agreements and definitive contracts; (h) assist the Debtors in obtaining approval from the Bankruptcy Court for the Transaction, including, without limitation, providing testimony and other evidence of any or all of the services provided by Global Hunter to the Debtors, including, but not limited to, the steps taken by Global Hunter in contacting potential interested parties and evaluating, structuring, negotiating and implementing potential Transactions; and (i) perform other such services as Global Hunter and the Debtors shall mutually agree. Pursuant to the Engagement Letter, the Debtors contemplate that Global Hunter will be compensated as follows: -- Initial Fee. In addition to the other fees provided for herein, upon the execution of this Agreement, the Debtors shall pay Global Hunter a nonrefundable cash fee of $175,000, which shall be earned upon Global Hunter's receipt thereof in consideration of Global Hunter accepting this engagement and rendering the Services to the Debtors ("Initial Fee"). The Initial Fee shall be paid promptly following entry of the Order of the Bankruptcy Court having jurisdiction over the Debtors' chapter 11 cases authorizing the employment of Global Hunter pursuant to the terms of this Agreement; and -- M&A Fee. The Debtors will pay Global Hunter 2.5% of the purchase price, payable upon Court-approval of the asset purchase agreement and the entry of a sale order (the "M&A Fee"). Global Hunter will also seek reimbursement for reasonable out-of- pocket expenses and information resource services incurred in connection with its engagement, and will maintain receipts for all expenses. Upon Bankruptcy Court approval of the Application, the Debtors would advance a refundable cash deposit of $25,000 against such expenses. Gary Meringer, general counsel of Global Hunter, 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. Global Hunter can be reached at: Gary Meringer, Esq. GLOBAL HUNTER SECURITIES, LLC 400 Poydras Street, Suite 3100 New Orleans, LA 70130 Tel: (504) 410-8017 E-mail: gmeringer@ghsecurities.com About Buccaneer Energy Buccaneer Resources, LLC, and eight affiliates, including Buccaneer Energy Ltd. sought Chapter 11 bankruptcy protection in Victoria, Texas (Bankr. S.D. Tex. Lead Case No. 14-60041) on May 31, 2014. Founded in 2006, Buccaneer Energy, Ltd. is a publicly traded independent oil and gas company listed on the Australian Securities Exchange under the symbol "BCC". Although BCC is an Australian listed entity, the company operates exclusively through its eight U.S. subsidiary debtors, each of which are headquartered in the U.S. and which maintain offices in Houston and Dallas, Texas, and Kenai and Anchorage, Alaska. The Debtors' primary business is the exploration for and production of oil and natural gas in North America. Operations have historically focused on both onshore and offshore opportunities in the Cook Inlet of Alaska as well as the development of offshore projects in the Gulf of Mexico and onshore oil opportunities in Texas and Louisiana. CEO Curtis Burton was terminated in May 2014. Manning the Debtors' operations is Conway MacKenzie senior managing director John T. Young, who was appointed chief restructuring officer in March 2014. The bankruptcy cases are assigned to Judge David R Jones. The Debtors have sought and obtained an order authorizing joint administration of their Chapter 11 cases. The Debtors have tapped Robert Andrew Black, Esq., Jason Lee Boland, Esq., Robert Bernard Bruner, and William R Greendyke, Esq., at Fulbright Jaworski LLP as counsel. Norton Rose Fulbright Australia will render legal services related to cross-border insolvency and general corporate and litigation matters to Buccaneer Energy Ltd. Epiq Systems is the claims and notice agent. BUCCANEER RESOURCES: Conway MacKenzie's John Young Approved as CRO ------------------------------------------------------------------ Buccaneer Resources, LLC and its debtor-affiliates sought and obtained permission from the Hon. David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas to designate John T. Young, Jr. as chief restructuring officer and employ Conway MacKenzie Management Services, LLC, nunc pro tunc to the May 31, 2014 petition date. Pursuant to the Engagement Letter, in his capacity as CRO, Mr. Young will render interim management services to the Debtors and will report directly to the Debtors' Board of Directors. In addition, pursuant to the Engagement Letter, the CRO will provide oversight and support to the Debtors' other professionals in connection with execution of the Debtors' business plan, sales process and overall administration of activities in the Debtors' chapter 11 cases. The Debtors seek to retain Conway MacKenzie to provide the following services, among others: -- oversee and control the preparation of the Debtors' cash forecasts, and evaluate short-term liquidity requirements of the Debtors; -- manage and prepare budget to actual comparisons against forecast and report on variances; -- maintain compliance with any court orders governing use of cash collateral or DIP financing; -- provide oversight and assistance with the preparation of financial related disclosures required by the bankruptcy court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports, if necessary, and disclosures by the Debtors in any required regulatory or other filings and related disclosures; -- provide oversight and assistance with the preparation of financial information for distribution to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursements analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; -- provide oversight and assistance with the preparation of financial information for distribution to any official committees appointed in the case and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursements analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; -- participate in meetings and provide assistance to potential buyers of the Debtors' assets, any official committees appointed in the case, the U.S. Trustee, other parties in interest, including contractual counterparties, and professionals hired by the same, as requested; -- support sale advisors and make recommendations in connection with marketing efforts to sell substantially all of the Debtors' assets; -- provide oversight and assistance with the preparation of analysis of creditor claims by type, entity, and individual claim, including assistance with the development of databases, as necessary, to track such claims; -- provide oversight and assistance with the evaluation and analysis of avoidance actions, including, fraudulent conveyances and preferential transfers, if necessary; -- provide testimony in litigation/bankruptcy matters as required; -- identify cash generation or savings opportunities for the Debtors in order to maximize estate value; -- lead and provide oversight and assistance in connection with communications and negotiations with constituents including secured and unsecured creditors, capital providers and other key constituents critical to the successful execution of the Debtors' plan of reorganization; Conway MacKenzie will be paid at these hourly rates: John T. Young, Jr., CRO $635 Jeffrey N. Huddleston, restructuring manager $535 Bryan M. Gatson, restructuring manager $535 Jamie L. Chronister, restructuring manager $475 Seth M. Barron, restructuring manager $425 Steven A. Geuther, restructuring manager $400 Joseph C. Akouri, restructuring manager $395 Mallory Bolus, restructuring assistant $185 Conway MacKenzie will also be reimbursed for reasonable out-of- pocket expenses incurred. Prior to the Petition Date, the Debtors advanced Conway MacKenzie $400,000 to provide a retainer for services rendered or to be rendered, and for reimbursement of expenses incurred, in advising the Debtors in connection with these Chapter 11 Cases. For the one year period preceding the commencement of these chapter 11 cases, in addition to the amount advanced in the retainer, Conway MacKenzie received payments in the aggregate amount of approximately $1,163,880 from the Debtors for professional fees and expenses. John T. Young, Jr., senior managing director of Conway MacKenzie, 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. Conway MacKenzie can be reached at: John T. Young, Jr. CONWAY MACKENZIE MANAGEMENT SERVICES, LLC 1301 McKinney, Suite 2025 Houston, TX 77010 Tel: (713) 650-0500 E-mail: JYoung@ConwayMacKenzie.com About Buccaneer Energy Buccaneer Resources, LLC, and eight affiliates, including Buccaneer Energy Ltd. sought Chapter 11 bankruptcy protection in Victoria, Texas (Bankr. S.D. Tex. Lead Case No. 14-60041) on May 31, 2014. Founded in 2006, Buccaneer Energy, Ltd. is a publicly traded independent oil and gas company listed on the Australian Securities Exchange under the symbol "BCC". Although BCC is an Australian listed entity, the company operates exclusively through its eight U.S. subsidiary debtors, each of which are headquartered in the U.S. and which maintain offices in Houston and Dallas, Texas, and Kenai and Anchorage, Alaska. The Debtors' primary business is the exploration for and production of oil and natural gas in North America. Operations have historically focused on both onshore and offshore opportunities in the Cook Inlet of Alaska as well as the development of offshore projects in the Gulf of Mexico and onshore oil opportunities in Texas and Louisiana. CEO Curtis Burton was terminated in May 2014. Manning the Debtors' operations is Conway MacKenzie senior managing director John T. Young, who was appointed chief restructuring officer in March 2014. The bankruptcy cases are assigned to Judge David R Jones. The Debtors have sought and obtained an order authorizing joint administration of their Chapter 11 cases. The Debtors have tapped Robert Andrew Black, Esq., Jason Lee Boland, Esq., Robert Bernard Bruner, and William R Greendyke, Esq., at Fulbright Jaworski LLP as counsel. Norton Rose Fulbright Australia will render legal services related to cross-border insolvency and general corporate and litigation matters to Buccaneer Energy Ltd. Epiq Systems is the claims and notice agent. BUCCANEER RESOURCES: Greenberg Traurig Okayed as Panel's Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Buccaneer Resources, LLC and its debtor-affiliates sought and obtained permission from the Hon. David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas to retain Greenberg Traurig, LLP as legal counsel to the Committee, nunc pro tunc to June 11, 2014. The professional services that the Committee expects that Greenberg Traurig will perform in connection with these cases include, without limitation: (a) consulting with the Debtors' professionals and representatives concerning the administration of these cases; (b) preparing and reviewing pleadings, motions and correspondence; (c) appearing at and participating in proceedings before this Court; (d) providing legal counsel to the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses, and any other matters relevant to these cases; (e) analyzing the Debtors' proposed use of cash collateral and any debtor-in-possession financing requested; (f) advising the Committee with respect to its rights, duties and powers; (g) assisting the Committee in analyzing the claims of the Debtors' creditors and in negotiating with such creditors; (h) assisting the Committee in its analysis of and negotiations with the Debtors or any third party concerning matters related to, among other things, the terms of a sale, plan of reorganization or other conclusion of the cases; (i) assisting and advising the Committee as to its communications to the general creditor body regarding significant matters; (j) assisting the Committee in determining a course of action that best serves the interests of the unsecured creditors; and (k) performing such other legal services as may be required under the circumstances in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code. Greenberg Traurig will be paid at these hourly rates: Partners $450-$950 Senior Associates $280-$665 Associates $225-$550 Of Counsel $450-$650 Legal Assistants $195-$300 Greenberg Traurig will also be reimbursed for reasonable out-of- pocket expenses incurred. Shari L. Heyen, shareholder of Greenberg Traurig, 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. Greenberg Traurig can be reached at: Shari L. Heyen, Esq. GREENBERG TRAURIG, LLP 1000 Louisiana Street, Suite 1700 Houston, TX 77002 Tel: +1 (713) 374-3564 Fax: +1 (713) 374-3505 E-mail: heyen@gtlaw.com About Buccaneer Energy Buccaneer Resources, LLC, and eight affiliates, including Buccaneer Energy Ltd. sought Chapter 11 bankruptcy protection in Victoria, Texas (Bankr. S.D. Tex. Lead Case No. 14-60041) on May 31, 2014. Founded in 2006, Buccaneer Energy, Ltd. is a publicly traded independent oil and gas company listed on the Australian Securities Exchange under the symbol "BCC". Although BCC is an Australian listed entity, the company operates exclusively through its eight U.S. subsidiary debtors, each of which are headquartered in the U.S. and which maintain offices in Houston and Dallas, Texas, and Kenai and Anchorage, Alaska. The Debtors' primary business is the exploration for and production of oil and natural gas in North America. Operations have historically focused on both onshore and offshore opportunities in the Cook Inlet of Alaska as well as the development of offshore projects in the Gulf of Mexico and onshore oil opportunities in Texas and Louisiana. CEO Curtis Burton was terminated in May 2014. Manning the Debtors' operations is Conway MacKenzie senior managing director John T. Young, who was appointed chief restructuring officer in March 2014. The bankruptcy cases are assigned to Judge David R Jones. The Debtors have sought and obtained an order authorizing joint administration of their Chapter 11 cases. The Debtors have tapped Robert Andrew Black, Esq., Jason Lee Boland, Esq., Robert Bernard Bruner, and William R Greendyke, Esq., at Fulbright Jaworski LLP as counsel. Norton Rose Fulbright Australia will render legal services related to cross-border insolvency and general corporate and litigation matters to Buccaneer Energy Ltd. Epiq Systems is the claims and notice agent. BUCCANEER RESOURCES: Panel Hires Alvarez & Marsal as Advisor ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Buccaneer Resources, LLC and its debtor-affiliates seeks authorization from the U.S. Bankruptcy Court for the Southern District of Texas to retain Alvarez & Marsal North America, LLC as financial advisors to the Committee, effective June 11, 2014. Alvarez & Marsal will provide such consulting and advisory services to the Committee and its legal advisors as Alvarez & Marsal and the Committee deem appropriate and feasible in order to advise the Committee in the course of these Chapter 11 cases, including but not limited to the following: (a) advise the Committee on matters related to its interests in the sale of the Debtor's assets; (b) assist with a review of the Debtors' cost/benefit evaluations with respect to the assumption or rejection of executory contracts and unexpired leases; (c) assist with a review of the business model, operations, liquidity situation, properties, assets and liabilities, financial condition and prospects of the Debtor; (d) assist in the review of financial information distributed by the Debtor to the Committee, its advisors and creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis and analysis of various asset and liability accounts; (e) attend meetings with the Debtor, the Debtors' lenders and creditors, the Committee and any other official committees organized in these Chapter 11 cases, the U.S. Trustee, other parties in interest and professionals hired by the same, as requested; (f) assist in the review and preparation of information and analysis necessary for the confirmation of a plan in these Chapter 11 cases; and (g) render such other general business consulting or such other assistance as the Committee or its counsel may deem necessary, consistent with the role of a financial advisor and not duplicative of services provided by other professionals in these Chapter 11 cases. Alvarez & Marsal will be paid at these hourly rates: Managing Directors $625-$850 Directors $475-$625 Associates $350-$475 Analysts $225-$350 Alvarez & Marsal will also be reimbursed for reasonable out-of- pocket expenses incurred. The aggregate cumulative fees payable to Alvarez & Marsal shall not exceed the cumulative cap. The Cumulative Fee Cap is equal to $75,000 per month for the first three months and $50,000 per month thereafter. Kelly B. Stapleton, managing member of Alvarez & Marsal, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Alvarez & Marsal can be reached at: Kelly Stapleton, Esq. ALVAREZ & MARSAL NORTH AMERICA, LLC 600 Madison Avenue, 8th Floor New York, NY 10022 Tel: +1 (212) 763-9750 Fax: +1 (212) 759-5532 E-mail: kstapleton@alvarezandmarsal.com About Buccaneer Energy Buccaneer Resources, LLC, and eight affiliates, including Buccaneer Energy Ltd. sought Chapter 11 bankruptcy protection in Victoria, Texas (Bankr. S.D. Tex. Lead Case No. 14-60041) on May 31, 2014. Founded in 2006, Buccaneer Energy, Ltd. is a publicly traded independent oil and gas company listed on the Australian Securities Exchange under the symbol "BCC". Although BCC is an Australian listed entity, the company operates exclusively through its eight U.S. subsidiary debtors, each of which are headquartered in the U.S. and which maintain offices in Houston and Dallas, Texas, and Kenai and Anchorage, Alaska. The Debtors' primary business is the exploration for and production of oil and natural gas in North America. Operations have historically focused on both onshore and offshore opportunities in the Cook Inlet of Alaska as well as the development of offshore projects in the Gulf of Mexico and onshore oil opportunities in Texas and Louisiana. CEO Curtis Burton was terminated in May 2014. Manning the Debtors' operations is Conway MacKenzie senior managing director John T. Young, who was appointed chief restructuring officer in March 2014. The bankruptcy cases are assigned to Judge David R Jones. The Debtors have sought and obtained an order authorizing joint administration of their Chapter 11 cases. The Debtors have tapped Robert Andrew Black, Esq., Jason Lee Boland, Esq., Robert Bernard Bruner, and William R Greendyke, Esq., at Fulbright Jaworski LLP as counsel. Norton Rose Fulbright Australia will render legal services related to cross-border insolvency and general corporate and litigation matters to Buccaneer Energy Ltd. Epiq Systems is the claims and notice agent. CAESARS ENTERTAINMENT: John Payne Quits as Division President ------------------------------------------------------------- John Payne resigned from his position as president of Central Markets and Partnership Development of Caesars Entertainment Corporation effective on July 30, 2014. There are no disagreements between Mr. Payne and the Company that caused or contributed to his decision, according to the Company's statement. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's in mid-November 2010. Caesars Entertainment reported a net loss of $2.93 billion in 2013, as compared with a net loss of $1.50 billion in 2012. The Company's balance sheet at March 31, 2014, showed $24.37 billion in total assets, $26.65 billion in total liabilities and a $2.27 billion total deficit. * * * Caesars Entertainment carries a 'CCC' long-term issuer default rating, with negative outlook, from Fitch. As reported by the TCR on April 9, 2013, Moody's Investors Service downgraded Caesars Entertainment Corporation's Corporate Family Rating to Caa2. "The downgrade of Caesars' ratings considers that its same store EBITDA growth in 2012-2013 has failed to materialize to any significant degree, and so Caesars' credit metrics have deteriorated and its free cash flow deficit will be higher than Moody's previous expectations," stated Moody's analyst Peggy Holloway. In the April 10, 2014, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit ratings on Las Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned subsidiaries, Caesars Entertainment Operating Co. (CEOC) and Caesars Entertainment Resort Properties (CERP), as well as the indirectly majority-owned Chester Downs and Marina, to 'CCC-' from 'CCC+'. The downgrade reflects S&P's expectation that Caesars' capital structure is unsustainable, and the amount of cash the company will burn in 2014 and 2015 creates conditions under which S&P believes a restructuring of some form is increasingly likely over the near term absent an unanticipated significantly favorable change in operating performance. As reported by the TCR on May 1, 2014, Fitch Ratings has downgraded the Issuer Default Ratings (IDRs) of Caesars Entertainment Corp (CEC) and Caesars Entertainment Operating Company (CEOC) to 'CC' from 'CCC'. CENTAUR LLC: Merit Fails to Dismiss, Transfer $16MM Clawback Suit ----------------------------------------------------------------- FTI Consulting, Inc., as trustee of the Centaur, LLC Litigation Trust, sued Merit Management, LP, in an attempt to avoid an allegedly fraudulent transfer of $16,503,850 to Merit. Merit has filed a motion to dismiss and a motion to transfer venue to the Bankruptcy Court for the District of Delaware. Both motions are denied, according to District Judge Joan B. Gottschall in her August 5, 2014 Memorandum Opinion and Order available at http://is.gd/sVhLhmfrom Leagle.com. The case is, FTI CONSULTING, INC., as Trustee of the Centaur, LLC Litigation Trust, Plaintiff, v. MERIT MANAGEMENT GROUP, LP, Defendant, Case No. 11 CV 7670 (N.D. Ill.). FTI Consulting, Inc., as Trustee of the Centaur, LLC Litigation Trust, is represented by: Gregory Scott Schwegmann, Esq. Joshua J. Bruckerhoff, Esq. REID COLLINS & TSAI LLP 1301 S. Capital of Texas Hwy Building C, Suite 300 Austin, TX 78746 Tel: (512) 647-6108 (512) 647-6100 E-mail: gschwegmann@rctlegal.com jbruckerhoff@rctlegal.com - and - Marcus D Fruchter, Esq. Jason M. Rosenthal, Esq. SCHOPF & WEISS LLP One South Wacker Drive, 28th Floor Chicago, IL 60606-4617 Tel: 312-701-9354 Fax: 312-701-9335 E-mail: fruchter@sw.com rosenthal@sw.com Merit Management Group, LP, is represented by: Jason Jon DeJonker, Esq. Jeffrey Phillip Swatzell, Esq. SEYFARTH SHAW LLP 131 South Dearborn Street, Suite 2400 Chicago, IL 60603-5577 Tel: (312) 460-5220 Fax: (312) 460-7220 E-mail: jdejonker@seyfarth.com About Centaur LLC Indianapolis, Indiana-based, Centaur, LLC, aka Centaur Indiana, LLC -- http://www.centaurgaming.net/-- was involved in the development and operation of entertainment venues focused on horse racing and gaming. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 6, 2010 (Bankr. D. Del. Case No. 10-10799). Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, assists the Company in its restructuring effort. The Company disclosed assets of $584 million and debt of $681 million as of the Petition Date. Affiliates Centaur PA Land LP and Valley View Downs LP filed for bankruptcy reorganization in October 2009 to keep alive a project to develop a racetrack in Pennsylvania. The filings were made following the failure to make payments due in October on a $382.5 million first-lien debt and a $192 million second-lien credit. All the companies are subsidiaries of closely held Centaur Inc., which isn't in bankruptcy. Centaur LLC was authorized in August 2010 to sell the Fortune Valley Hotel & Casino 40 miles west of Denver to Luna Gaming Central City LLC for $7.5 million cash, plus a $2.5 million note. The Debtor obtained approval of its reorganization plan at a Feb. 18, 2011 confirmation hearing. The Plan would slash the casino operator's debt by two-thirds to $260 million. The Plan, as revised, is based on a settlement reached by the Debtors with the Official Committee of Unsecured Creditors, the settlement was entered among the Debtors, the Official Committee of Unsecured Creditors, and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent for lenders that provided first lien revolving credit and term loans prepetition. Under the Plan, second-lien lenders are to split $3.4 million in notes that pay in kind. Unsecured creditors of Valley View Downs now will receive the lesser of 50% paid in cash or a share of $1.5 million cash. Other general unsecured creditors also will have the lesser of half payment or sharing $650,000 in cash. FTI Consulting, Inc., serves as Trustee to the Centaur LLC Litigation Trust. CENTURY INSURANCE: A.M. Best Lowers FSR to 'B(fair)' ---------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating (FSR) to B (Fair) from B+ (Good) and issuer credit rating (ICR) to "bb+" from "bbb-" of Century Insurance Company, Ltd. (CIC Saipan) (Common Wealth of the Northern Marianna Islands) (CNMI). The outlook for the ICR has been revised to negative from stable, while the FSR remains stable. Concurrently, A.M. Best has withdrawn the ratings due to management's request to no longer participate in A.M. Best's interactive process. A.M. has also affirmed the FSR of B++ (Good) and the ICR of "bbb+" of Century Insurance Company (Guam) Limited (CIC Guam) (Guam). The outlook of CIC Guam's ratings is stable. The rating actions reflect CIC Saipan's unfavorable underwriting performance since 2012 that resulted in operating losses and overall declines in its risk-adjusted capitalization. In 2013, the company's net loss was primarily due to major losses incurred in the motor, general liability and workers' compensation lines. Although CIC Saipan has implemented multiple measures to restore its profitability, the ongoing challenges are expected to weigh on the underwriting results in the near term, given the economic decline in the territory. The ratings take into consideration CIC Saipan's supportive risk- adjusted capitalization, its leading position in the non-life insurance market in CNMI and improved claim management revision. The ratings also acknowledge the support the company receives from its parent, Tan Holdings Corporation (THC). The ratings of CIC Guam reflect its solid risk-based capitalization, continuous favorable operating results and improved claim management revision. The ratings also acknowledge the support the company receives from THC, its parent company. CIC Guam's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), is supportive of its current ratings. CIC Guam's capitalization level has consistently improved as a result of CIC Guam's favorable underwriting and investment performance in recent years. The company's consistent positive retained earnings are a reflection of its emphasis on prudent underwriting and efforts to improve its claims management, along with its diversified investment strategy. Partially offsetting these positive rating factors are the competitive landscape in Guam, CIC Guam's relatively high expense ratio and its volatile loss reserve development history. CIC Guam's loss ratio deteriorated in 2013, mainly due to a claims audit during the year that revealed reserve deficiencies in the workers' compensation and motor lines. As a result, a substantial amount of loss-reserve adjustment was made to maintain reserve adequacy. Guam's general insurance industry continues to be very competitive. CIC Guam's premium declined in 2013 due to stricter underwriting and price competition, which caused a number of non- renewals. In addition, the company in July 2013 stopped writing marine insurance, construction bonds and other high risk policies, which further contributed to the company's premium decline. Future positive rating actions could occur if CIC Guam shows continuous improvement in its operating results and expense management while regaining its market share and enhancing loss- reserve adequacy. Conversely, negative rating actions could occur if CIC Guam's operating performance deteriorates, resulting in a substantial decline in its risk-based capitalization level. CLEAREDGE POWER: Court Approves McNutt Law as Special Counsel ------------------------------------------------------------- ClearEdge Power, Inc. and its debtor-affiliates sought and obtained permission from the Hon. Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the Northern District of California to employ McNutt Law Group LLP as special counsel, effective May 1, 2014. The Debtors and McNutt Law have agreed that McNutt Law's services to the Debtors will include managing all issues and performing all services which relate to Wells Fargo. These services may include: -- advising and representing the Debtors as to any issues relating to the standby letters of credit and the collateral account; -- filing any motions that might be necessary to recover property of the estate with regard to Wells Fargo; and -- performing any other related services, as requested by the Debtors. McNutt Law will be paid at these hourly rates: Attorneys $300-$550 Paralegals & Law Clerks $100-$160 McNutt Law will also be reimbursed for reasonable out-of-pocket expenses incurred. Scott H. McNutt, partner of McNutt Law, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. McNutt Law can be reached at: Scott H. McNutt, Esq. MCNUTT LAW GROUP LLP 188 The Embarcadero, Suite 800 San Francisco, CA 94105 Tel: (415) 995-8475 Fax: (415) 995-8487 E-mail: smcnutt@ml-sf.com About ClearEdge Power Sunnyvale, California-based ClearEdge Power Inc. and two other affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Cal. Lead Case No. 14-51955) on May 1, 2014, in San Jose. Affiliates ClearEdge Power, LLC, and ClearEdge Power International Service, LLC, are based in South Windsor, Connecticut, where the manufacturing operations are located. Privately held ClearEdge designs, manufactures, sells and services distributed generation fuel cell systems for commercial, industrial, utility and residential applications. ClearEdge bought United Technologies Corp.'s UTC Power division in late 2012. ClearEdge sought bankruptcy protection just a week after shutting operations. John Walshe Murray, Esq., at Dorsey and Whitney LLP, serves as counsel to the Debtors. Insolvency Services Group, Inc., serves as noticing and claims agent. Gerbsman Partners was hired to assist in the asset sale. ClearEdge Power disclosed $31,271,670 in assets and $67,414,779 in liabilities as of the Chapter 11 filing. Power Inc. estimated $100 million to $500 million in both assets and debts. The petitions were signed by David B. Wright, chief executive officer. On May 22, 2014, the U.S. Trustee for Region 17 appointed five creditors to serve in the Committee. The Committee has hired Brown Rudnick as Counsel and Teneo Securities as financial advisors. COSO GEOTHERMAL: Moody's Lowers Pass Through Certs to 'Ca' ---------------------------------------------------------- Moody's Investors Service downgraded Coso Geothermal Power Holding's (Coso or Project) pass through trust certificates to Ca from Caa2. Concurrent with this rating action, the rating outlook is revised to stable from negative. Ratings Rationale The rating action incorporates our belief that Coso will likely have a payment default in the next several years when its debt service reserve (DSR) is fully depleted and factors in our expectation that the likely recovery for senior debt following such default will be no greater than 65%. Coso's chronic inability to address its continuing energy production declines is the main driver of the project's likely default and related recovery prospects since the Project benefits from long term contracts with an investment grade off-taker, operates as base load units and primarily serves a state that places a premium on renewable generation. While we calculate that the DSR will likely be depleted by 2016 or 2017, the rating also recognizes the possibility that the Project could default sooner if Coso's $55 million letter of credit (LC) facility that expires in November 2014 is not extended. As of March 2014, energy production was over 40% below original forecast and the Project generates insufficient cash flow to fully pay annual debt service. In January 2014, Coso drew $5.7 million from its $40 million DSR LC, bringing the total amount of DSR LC draws to $12.4 million. While Coso was able to internally fund the entire June 2013 debt service payment and repay $2.9 million from a previous draw, the 2013 performance benefitted from one-time occurrences including the deferral of capital expenditures and a property tax settlement. Further draws on the DSR are expected over time and Moody's expect Coso to fully deplete the DSR during 2016 or 2017. In a default scenario, the Ca rating reflects Moody's view that bondholder recovery will not likely exceed 65% under most reasonable scenarios examined and assuming the recent historical decline rate continues. While recovery prospects are sensitive to future energy production, Moody's view a bondholder recovery that is greater than 65% in a default as only possible if the energy production decline rate lessens to 1% or less over the life of the transaction. Moody's consider such an improvement as unlikely given the project's historical performance and the 2014 budget, which incorporates a much larger than 1% decline relative to 2013. The current drought in California adds further downside uncertainty to future energy production given the restrictions on Coso's water use permit. As part of the our recovery analysis, Moody's have not attributed much value to possible production improvements that might occur with an alternative operator or the residual value that might remain given Coso's status as a baseload renewable energy source in California, which has growing renewable energy requirements. While these factors could enhance recovery prospects, Moody's believe that Coso's very high leverage and chronic underperformance from an operating perspective more than offsets the potential positive rating and recovery considerations that these factors may provide. As mentioned, it is certainly possible that that the Project could default later this year if Coso's $55 million LC facility expiring in November 2014 is not extended. An inability to extend the LC facility could ultimately lead to a default on Coso's pass through certificates since a default on the project LC cross defaults to Coso's rated debt. Also, Moody's understands that Coso has defaulted on a DSR LC loan and that the LC provider has accelerated all outstanding DSR LC debt . However, this default and subsequent acceleration does not cross default to Coso's senior debt. That said, Coso acknowledges it does not have the funds to reimburse a full drawdown on its project LC. The change in Coso's rating outlook to stable from negative reflects the likely prospects of a payment default along with our view that recovery following such default will approximate 35% to 65%, commensurate with the 'Ca' rating category. The Coso's rating could improve if expected recovery rates exceed 65% owing primarily to substantially lower decline rates in production. In light of the rating action, the Project rating is not likely to be downgraded further, unless our expectation for recovery drops below 35%. Coso Geothermal Power Holdings LLC is a special purpose company formed to effectuate a sale-leaseback transaction of the Project. The Project comprises of three linked geothermal plants with a gross nameplate capacity of 302 MW located in California. The California geothermal plants sell all their power to Southern California Edison Company (A2 stable. Coso also benefits from the excess cash flow produced by a 17.7 MW geothermal plant in Nevada that sells its power to Sierra Pacific Power Company (Baa1 stable). Coso is owned indirectly by Terra-Gen Power LLC. The last rating action on Coso occurred on July 25, 2013, when the rating on Project's pass through trust certificates was downgraded to Caa2 from Caa1. CYCLONE POWER: Unit Obtains $350,000 in Seed Funds -------------------------------------------------- WHE Generation Corp., a 74% owned subsidiary of Cyclone Power Technologies Inc., closed its Seed Round of funding in the amount of $350,000 on July 30, 2014. The financing was led by Laird Q. Cagan, co-founder and managing director of Cagan McAffee Capital Partners LLC in Cupertino, CA, and joined by 14 other individual and strategic accredited investors. As a closing condition to the transaction and use of a material portion of the proceeds of the Seed Round funding, the Company paid the remaining balance of its senior secured debenture with TCA Global Credit Master Fund L.P. The payment fully retired that long-term liability and will release all of the Company's assets from a security interest and lien held by TCA. The Seed Round funding was structured as several promissory notes issued by WHE GEN, bearing 6% interest and maturing in 12 months. The notes automatically convert to common stock of WHE GEN at a price of $.12 per share upon the closing of the first $1 million in the subsidiary's planned $2 million "A Round" common stock funding. The Seed Round and A Round financings were described in the Company's Separation Agreement with WHE GEN, as approved by Cyclone's Board of Directors, and filed with the Company's Current Report on Form 8-K on July 23, 2014. Assuming the full conversion of the Seed Round notes to WHE GEN common stock, Cyclone would continue to own approximately 43% of its subsidiary. About Cyclone Power Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink Sheets: CYPW) is a clean-tech engineering company, whose business is to develop, commercialize and license its patented Rankine cycle engine technology for applications ranging from renewable power generation to transportation. The Company is the successor entity to the business of Cyclone Technologies LLLP, a limited liability limited partnership formed in Florida in June 2004. Cyclone Technologies LLLP was the original developer and intellectual property holder of the Cyclone engine technology. Cyclone Power reported a net loss of $3.79 million on $715,382 of revenues for the year ended Dec. 31, 2013, as compared with a net loss of $3 million on $1.13 million of revenues for the year ended Dec. 31, 2012. The Company's balance sheet at March 31, 2014, showed $1.37 million in total assets, $3.62 million in total liabilities and a $2.25 million total stockholders' deficit. Mallah Furman, in Fort Lauderdale, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company's dependence on outside financing, lack of sufficient working capital, and recurring losses raises substantial doubt about its ability to continue as a going concern. DATAPIPE INC: Moody's Alters Outlook to Neg. on Incremental Loan ---------------------------------------------------------------- Moody's Investors Service has changed the outlook of Datapipe, Inc. to negative from stable following the company's announcement to raise an incremental $60 million of term loan debt for general corporate purposes. The increased financial risk from the incremental debt will compound the company's business risk associated with its high growth rate and any use of proceeds that is not EBITDA accretive will negatively impact the company's ratings. As part of this action, Moody's also affirms Datapipe's B3 Corporate Family Rating (CFR) and B3-PD Probability of Default Rating (PDR) along with the B2 rating on its senior secured 1st lien credit facilities and Caa2 rating on its 2nd lien term loan. Outlook Actions: Issuer: DataPipe, Inc. Outlook, Changed To Negative From Stable Affirmations: Issuer: DataPipe, Inc. Probability of Default Rating, Affirmed B3-PD Corporate Family Rating, Affirmed B3 Senior Secured Bank Credit Facility Mar 15, 2019, Affirmed B2 (LGD3) Senior Secured Bank Credit Facility Mar 15, 2018, Affirmed B2 (LGD3) Senior Secured Bank Credit Facility Sep 15, 2019, Affirmed Caa2 (LGD5) Ratings Rationale Datapipe's B3 rating reflects its small scale, high leverage and persistent negative free cash flow as a result of the company's high capital intensity. These limiting factors are offset by Datapipe's stable base of contracted recurring revenues and established position within the high-growth, niche market segment of complex, auditable managed services offerings. Datapipe's market position, technical expertise and reputation and its early success attracting large enterprise customers is a key factor in Moody's affirmation of the B3 rating. Moody's believes that Datapipe is entering a new phase of growth that requires it to increase operating expense, which has pressured its margins and EBITDA. The negative outlook reflects Moody's concerns about adding more financial risk to the already high execution risk associated with the company's growth plan. Moody's expects Datapipe to have adequate liquidity over the next twelve months supported by $5 million of cash on the balance sheet at the end of Q1 2014 and an undrawn $52.5 million revolver following the recent re-pricing transaction. Moody's expects free cash flow to remain negative over the next year driven by high capital intensity. The existing credit facilities have two covenant tests: maximum total leverage and minimum interest coverage. There are no debt maturities over the next year except for the mandatory annual 1% amortization of the 1st lien term loan each year. Given the company's very high leverage and negative free cash flow, a rating upgrade is not contemplated at this time. Moody's could lower Datapipe's ratings if liquidity becomes strained or Moody's adjusted leverage stays above 7x for an extended period of time. The principal methodology used in this rating was the Global Communications Infrastructure Rating Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Jersey City, NJ, Datapipe, Inc. ("Datapipe" or "the company") is a provider of data center, managed hosting and cloud services. The company currently operates 12 data centers in the US and internationally. DATAPIPE INC: S&P Revises Outlook to Stable & Affirms 'B' CCR ------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Jersey City, N.J.-based Datapipe Inc., a managed services provider and data center operator, to stable from negative. At the same time, S&P affirmed the 'B' corporate credit rating. S&P's 'B' issue-level rating and '3' recovery rating on Datapipe's first-lien term loan due March 2019 remain unchanged following the $30 million add-on. The increase brings total first-lien credit facilities to about $255 million from $225 million. The '3' recovery rating indicates S&P's expectation for meaningful (50%- 70%) recovery for lenders in the event of a payment default. At the same time, S&P's 'CCC+' issue-level rating and '6' recovery rating on the company's second-lien term loan due Sept. 2019 remain unchanged. The increase brings the total second-lien facility to $115 million from $85 million. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%) recovery for lenders in the event of a payment default. S&P expects the company will use proceeds from the $60 million term loan add-ons to fund potential acquisitions. The outlook revision and rating affirmation reflect S&P's expectation that adjusted leverage will decline to below 7x in 2015, benefiting from organic EBITDA growth and potential acquisitions. More specifically, S&P expects leverage (adjusted for operating leases) to decline to the mid-6x area in 2015, from about 8.3x in 2014, with the potential for further improvement thereafter. S&P's assessment of Datapipe's business risk profile incorporates the company's relatively small scale, and the highly fragmented and competitive nature of its industry. S&P believes these factors leave the company greater exposed to the impact of potential customer losses. Positive factors that do not fully offset these risks include the company's focus on hybrid cloud solutions that S&P believes are attractive to customers that are more frequently adopting a hybrid of public and private cloud strategies; its good near-term revenue visibility provided by a revenue backlog from two- to three-year contracts; solid profitability; and favorable industry demand characteristics. Datapipe is a managed services provider and data center operator, with 12 data centers in eight global markets. The company mainly leases its facilities, and has moderate capacity to accommodate growth based on its current utilization levels. As a result, S&P believes there is lower risk of overexpansion compared with certain data center peers. The company generates about 80% of revenue from managed services (e.g., administration, monitoring, security, cloud computing, storage), which S&P views as having good growth prospects and higher price points compared with colocation, although subject to higher churn. In addition, Datapipe offers various services integrated with Amazon Web Services (AWS), including data analytics and direct connect solutions. S&P believes these capabilities provide Datapipe with opportunities to service customers that are increasingly looking for hybrid solutions between public and private clouds. DETROIT, MI: To Resume Water Shut-Offs After Aug. 25 ---------------------------------------------------- Matthew Dolan, writing for The Wall Street Journal, reported that the city of Detroit will resume shutting off water service to some delinquent residential customers after Aug. 25 following a weekslong moratorium imposed by the mayor. According to the Journal, the utility cutoffs in Detroit amid its municipal bankruptcy have drawn international criticism from those including a United Nations group who alleged the city was violating basic human rights for water. The Journal added that Detroit, through its water and sewerage department, plans to offer to exchange about $2.7 billion worth of debt and replace it with lower interest-rate, but better secured debt as part of a cost savings move, said a person familiar with the matter. The proposed debt tender offer comes as the city of Detroit works to exit from municipal bankruptcy filed in July 2013 with an estimated $18 billion in long-term liabilities, the Journal related. About City of Detroit, Michigan The City of Detroit, Michigan, weighed down by more than $18 billion in accrued obligations, sought municipal bankruptcy protection on July 18, 2013, by filing a voluntary Chapter 9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed more than $1 billion in both assets and debts. Kevyn Orr, who was appointed in March 2013 as Detroit's emergency manager, signed the petition. Detroit is represented by lawyers at Jones Day and Miller Canfield Paddock and Stone PLC. Michigan Governor Rick Snyder authorized the bankruptcy filing. The filing makes Detroit the largest American city to seek bankruptcy, in terms of population and the size of the debts and liabilities involved. The City's $18 billion in debt includes $5.85 billion in special revenue obligations, $6.4 billion in post-employment benefits, $3.5 billion for underfunded pensions, $1.13 billion on secured and unsecured general obligations, and $1.43 billion on pension- related debt, according to a court filing. Debt service consumes 42.5 percent of revenue. The city has 100,000 creditors and 20,000 retirees. The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is represented by David G. Heiman, Esq., and Heather Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day, in Los Angeles, California; and Jonathan S. Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone PLC, in Detroit, Michigan. Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing the American Federation of State, County and Municipal Employees and the International Union. Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is representing the United Automobile, Aerospace and Agricultural Implement Workers of America. A nine-member official committee of retired workers was appointed in the case. The Retirees' Committee is represented by Dentons US LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's financial advisor. EASTMAN KODAK: Posts Net Loss of $62 Million in 2nd Quarter ----------------------------------------------------------- Eastman Kodak Company on Aug. 5 reported a net loss of $62 million for the second quarter of 2014, a $162 million improvement from the $224 million net loss in the previous-year quarter. Revenue in the quarter was $525 million, a decline of 10% from the $583 million of the previous-year quarter, with more than two-thirds of the decline attributable to declines in the Consumer Inkjet and Entertainment and Commercial Films mature businesses. "Our progress continues. Kodak's overarching imperative is to achieve the growth potential of our strategic technology businesses," said Jeff Clarke, Chief Executive Officer. "Our products in packaging, digital printing, digital plates and workflow software form the foundation of the new Kodak, and are meeting our expectations for sales and margin growth. We have taken significant steps to simplify processes and reduce costs, which also will contribute to Kodak's long-term success. "In cooperation with our partners UniPixel and Kingsbury, we have made significant progress toward bringing our functional printing products into commercial production. We have also worked with our motion picture film customers to better position that business going forward. While we are currently behind our expectations in these businesses, these actions will position us well for 2015 and beyond. "Based on a detailed review of first-half results, product and service pipelines, brand licensing and intellectual property opportunities, and anticipated cost savings, we believe we will be within the range of our projections of between $2.1 and $2.3 billion in revenue and Operational EBITDA of $145 to $165 million for the year." "For the second half, we expect Kodak to return to year-over-year revenue growth on the strength of anticipated double-digit growth in our strategic technology businesses." John McMullen, Chief Financial Officer, noted that liquidity remains strong with cash of $768 million. Net cash used in operating activities was $88 million for the second quarter, an improvement of $55 million from the previous-year quarter. Year-to-date, net cash used in operating activities is $270 million less than in 2013. Operational cash flow is expected to be positive for the second half of the year. Table 1: Kodak Earnings Summary Millions of 6 Months 6 Months dollars 2Q 2014 2Q 2013 2014 2013 -------- --------- ---------- ---------- Sales $525 $ 583 $1,009 $1,177 --- ---- ----- ----- Gross Profit $102 $ 133 $ 191 $ 282 --- ---- ----- ----- Percent of Revenue 19% 23% 19% 24% --- ---- ----- ----- Net (Loss) Income $(62) $(224) $ (98) $ 59 --- ---- ----- ----- Operational EBITDA(1) $ 24 $ 25 $ 30 $ 74 --- ---- ----- ----- (1) Operational EBITDA is defined as Total Segment Earnings (Loss) plus depreciation and amortization expense, and excluding the reallocation of costs previously allocated to discontinued businesses, the impact of fresh start accounting, stock-based compensation expense and certain consulting costs. Total Segment Earnings (Loss) represents the company's measure of segment earnings which excludes Restructuring costs, Reorganization items, net, the Corporate components of pension and OPEB expenses / income (as defined in the company's public filings with regard to segment earnings information), other operating income (expense), net, and other income and expenses. Graphics, Entertainment & Commercial Films (GECF): The GECF segment consists of the Graphics and Entertainment & Commercial Films groups, as well as Kodak's intellectual property and brand licensing activities. Table 2: GECF Segment Financial Overview Millions of 6 Months 6 Months dollars 2Q 2014 2Q 2013 2014 2013 -------- -------- --------- --------- Revenue $357 $371 $675 $757 --- --- --- --- --- --- Gross Profit $ 50 $ 61 $ 81 $147 --- --- --- --- --- --- Percent of Revenue 14% 16% 12% 19% --- --- --- --- Selling, General and Administrative ("SG&A") $ 53 $ 63 $106 $127 --- --- --- --- --- --- Research and Development ("R&D") $ 5 $ 4 $ 10 $ 10 --- --- --- --- --- --- Segment (Loss) Earnings $ (8) $ (6) $(35) $ 10 --- --- --- --- --- Operational EBITDA(1) $ 33 $ 21 $ 45 $ 72 --- --- --- --- --- --- The GECF segment had sales of $357 million, down 4% from the previous year. Steep declines in sales of film more than offset gains in key areas of the digital plates and workflow software businesses. Unit volume in the digital plates business was up for the first time in a quarter since 2011, led by KODAK SONORA Process Free Plates. Kodak expects to quadruple the number of customers and volume for SONORA Plates in 2014, as customers continue to switch to this breakthrough technology platform. SONORA Plates remove the processing step -- providing environmental and economic benefits of saving water, waste and electricity -- without sacrificing quality, productivity or print capability of traditional processed plates. The Workflow Solutions business, which includes KODAK PRINERGY Workflow, the industry-leading workflow software, continued to enjoy strong performance with revenues up 9% in the quarter. Placements of CTP devices also increased for the first time since 2011. Sales of motion picture film continued an accelerated and sharp decline in the quarter, challenging profitability of the business. Kodak has worked with leaders of the motion picture industry to form a plan which is designed to sustain the business while optimizing cash flow. Operational EBITDA for GECF improved from $21 million to $33 million in the quarter, an increase of 57% due to a gain in intellectual property licensing, as well as volume increases in the Graphics business, cost reductions and improved manufacturing productivity. Digital Printing and Enterprise (DP&E): The DP&E Segment consists of Digital Printing, Packaging and Functional Printing, Enterprise Services & Solutions, and Consumer Inkjet Systems businesses. Table 3: Digital Printing & Enterprise Segment Financial Overview Millions of 6 Months 6 Months dollars 2Q 2014 2Q 2013 2014 2013 -------- -------- --------- --------- Revenue $168 $198 $334 $395 --- --- --- --- --- --- Gross Profit $ 39 $ 58 $ 81 $111 --- --- --- --- --- --- Percent of Revenue 23% 29% 24% 28% --- --- --- --- Selling, General and Administrative ("SG&A") $ 42 $ 49 $ 84 $ 99 --- --- --- --- --- --- Research and Development ("R&D") $ 24 $ 20 $ 49 $ 41 --- --- --- --- --- --- Segment (Loss) Earnings $(27) $(11) $(52) $(29) --- --- --- --- Operational EBITDA(1) $ (9) $ 4 $(15) $ 2 --- --- --- --- --- DP&E had sales of $168 million in the second quarter of 2014, a decline of 15% from the $198 million of the previous-year quarter. A majority of the decline was related to lower sales in the Consumer Inkjet business. Revenues from legacy digital print systems also declined. Placements of KODAK FLEXCEL NX Systems for package printing continued to enjoy robust growth, on track with guidance for a 25% increase in the installed base during 2014. Volume for FLEXCEL NX Plates in the quarter was up by 26%. During the quarter, Kodak announced an extension of the availability of the FLEXCEL NX System to the corrugated packaging category, which makes up nearly 40% of the printed packaging market. Revenue from the KODAK PROSPER Portfolio increased 10% in the quarter, with equipment placements on track to meet the projection of more than 40 press systems in place by end of year. The market has shown strong interest in the recently announced KODAK PROSPER 6000 Presses, which provide high levels of reliability, application flexibility and print speeds up to 1,000 feet per minute, the fastest of any full-color commercial inkjet press. Operational EBITDA for the DP&E Segment declined from earnings of $4 million to a loss of $9 million in the quarter, largely as a result of the decrease in consumer inkjet ink sales, as well as declines in the legacy digital printing businesses that offset gains in the PROSPER and FLEXCEL Systems portfolios. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak had been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. U.S. Bankruptcy Judge Allan Gropper confirmed the plan on August 20, 2013. Kodak and its affiliated debtors officially emerged from bankruptcy protection on Sept. 3, 2013. Mark S. Burgess, Matt Doheny, John A. Janitz, George Karfunkel, Jason New and Derek Smith became members of Kodak's new board of directors as of Sept. 3, 2013. Existing directors James V. Continenza, William G. Parrett and Antonio M. Perez will continue their service as members of the new board. ELBIT IMAGING: Plans to Effect a 1-for-20 Reverse Stock Split ------------------------------------------------------------- Elbit Imaging Ltd. provided updates regarding two proposals on the agenda of its annual general meeting of shareholders scheduled to be held on Aug. 14, 2014. Proposal No. 2 - Reverse Share Split With respect to the proposed reverse split of its ordinary shares, the Company has determined that if this proposal is approved at the Meeting, the ratio will be one-for-twenty and the reverse share split will become effective after the close of all trading on Thursday, Aug. 21, 2014, such that the shares will start trading on a reverse split-adjusted basis upon the open of trading on the NASDAQ Global Select Market on Friday, Aug. 22, 2014, and upon the open of trading on the Tel Aviv Stock Exchange on Sunday, Aug. 24, 2014. To avoid issuing fractional shares in connection with the reverse share split, any fractional share that would result from the reverse share split will be rounded to the nearest whole share and, as opposed to the Company's original plan, a half-share will be rounded up. Proposal No. 4 - Compensation Policy for Officers and Directors With respect to the Company's proposed Compensation Policy for Directors and Officers, the Company has undertaken to Entropy Financial Research Ltd., an Israeli shareholder advisory firm, as follows: Performance-based Bonus: Should a performance-based bonus be awarded to one of the Company's officer holders, the Company will disclose in its subsequent annual report the degree to which such office holder satisfied the applicable performance targets. Equity-based Compensation: The exercise price of equity-based compensation in the form of stock options will be set at a premium above the closing stock market price per share on the date of the grant and the average closing stock market price per share over the 30 trading days prior to the date of the grant. About Elbit Imaging Ltd. Tel-Aviv, Israel-based Elbit Imaging Ltd. (TASE, NASDAQ: EMITF) hold investments in real estate and medical companies. The Company, through its subsidiaries, also develops shopping and entertainment centers in Central Europe and invests in and manages hotels. Since February 2013, Elbit has intensively endeavored to come to an arrangement with its creditors. Elbit has said it has been hanging by a thread for more than five months. It has encountered cash flow difficulties and this burdens its day to day activities, and it certainly cannot make the necessary investments to improve its assets. In light of the arrangement proceedings, and according to the demands of most of the bondholders, as well as an agreement that was signed on March 19, 2013, between Elbit and the Trustees of six out of eight series of bonds, Elbit is prohibited, inter alia, from paying off its debts to the financial creditors - - and as a result a petition to liquidate Elbit was filed, and Bank Hapoalim has declared its debts immediately payable, threatening to realize pledges that were given to the Bank on material assets of the Company -- and Elbit undertook not to sell material assets of the Company and not to perform any transaction that is not during its ordinary course of business without giving an advance notice to the trustees. Accountant Rony Elroy has been appointed as expert for examining the debt arrangement in the Company. In July 2013, Elbit Imaging's controlling shareholders, Europe- Israel MMS Ltd. and Mr. Mordechay Zisser, notified the Company that the Tel Aviv District Court has appointed Adv. Giroa Erdinast as a receiver with regards to the ordinary shares of the Company held by Europe Israel securing Europe Israel's obligations under its loan agreement with Bank Hapoalim B.M. The judgment stated that the Receiver is not authorized to sell the Company's shares at this stage. Following a request of Europe-Israel, the Court also delayed any action to be taken with regards to the sale of those shares for a period of 60 days. Europe Israel and Mr. Zisser have also notified the Company that they utterly reject the Bank's claims and intend to appeal the Court's ruling. Elbit Imaging reported a loss of NIS1.56 billion on NIS360.59 million of total revenues for the year ended Dec. 31, 2013, as compared with a loss of NIS483.98 million on NIS418.48 million of total revenues in 2012. The Company's balance sheet at Dec. 31, 2013, showed NIS4.56 billion in total assets, NIS4.97 billion in total liabilities and a NIS408.63 million shareholders' deficit. Brightman Almagor Zohar & Co., a member firm of Deloitte Touche Tohmatsu, in Tel-Aviv, Israel, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. ENDEAVOUR INTERNATIONAL: Incurs $37.1 Million Net Loss in Q2 ------------------------------------------------------------ Endeavour International Corporation reported a net loss common stockholders of $37.12 million on $44.85 million of revenues for the three months ended June 30, 2014, as compared with a net loss to common stockholders of $14.34 million on $126.16 million of revenues for the same period last year. For the six months ended June 30, 2014, the Company reported a net loss available to common stockholders of $82.45 million on $139.02 million of revenues as compared with a net loss to common stockholders of $28.84 million on $183.83 million of revenues for the same period during the prior year. As of June 30, 2014, the Company had $1.55 billion in total assets, $1.55 billion in total liabilities, $43.70 million in series c convertible preferred stock and a $41.48 million in stockholders' deficit. "During the quarter we were able to establish production from both wells at the Rochelle field. We experienced periods during the quarter where production rates exceeded 100 million cubic feet of gas per day ("mmcfd") and 4,000 boepd. This confirms our confidence in the Rochelle field's potential," said William L. Transier, chairman, chief executive officer and president. "However, we continue to be challenged by unexpected downtime and lower production efficiency rates which are directly attributable to the production facilities we do not control. We are working with the operators at Alba and Rochelle to improve ongoing performance." A full-text copy of the Company's press release is available for free at http://is.gd/tnMOpB About Endeavour International Houston-based Endeavour International Corporation (NYSE: END) (LSE: ENDV) is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the United States. Endeavour International reported net loss of $95.47 million in 2013, a net loss of $126.22 million in 2012 and a net loss of $130.99 million in 2011. * * * As reported by the TCR on April 2, 2014, Moody's Investors Service upgraded Endeavour International Corporation's Corporate Family Rating (CFR) to Caa2 from Caa3. "The rating upgrade to Caa2 reflects the recent equity issuance and other first quarter financing transactions that have improved Endeavour International's liquidity" commented Pete Speer, Moody's Vice President. In the Feb. 22, 2013, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Houston, Texas-based Endeavour International Corp. (Endeavour) to 'CCC+' from 'B-'. The rating action reflects S&P's expectation that Endeavour could have insufficient liquidity to meet its needs due to the delay in production from its Rochelle development. FAP INVESTORS: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: FAP Investors, LLC fka Frozen Assets Properties, LLC 15700 W. 103rd Street Lemont, IL 60439 Case No.: 14-28918 Chapter 11 Petition Date: August 6, 2014 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Hon. Janet S. Baer Debtor's Counsel: Douglas S Draper, Esq. HELLER DRAPER PATRICK HORN & DABNEY, LLC 650 Poydras St Ste 2500 New Orleans, LA 70130 Tel: (504) 299-3300 Fax: (504) 299-3399 E-mail: ddraper@hellerdraper.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Bismarck Brackett, manager. A list of the Debtor's 13 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb14-28918.pdf FIAT CHRYSLER: TRW Sues Trust to Ditch Steering-Defect Liability ---------------------------------------------------------------- Law360 reported that global auto parts maker TRW Automotive Holdings Corp. filed an adversary suit against the old Chrysler company's liquidation trust in New York bankruptcy court, seeking a declaration that it has no duty to indemnify Chrysler over allegedly defective steering systems. According to the report, TRW is currently being sued by a plaintiff in an Oklahoma class action who is trying to pursue any claims Chrysler had against TRW, which she obtained under a bankruptcy court settlement assigning her Chrysler's indemnification rights. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). The U.S. and Canadian governments provided Chrysler LLC with $4.5 billion to finance its bankruptcy case. In connection with the bankruptcy filing, Chrysler reached an agreement to sell all assets to an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC in June 2009, formally sold substantially all of its assets to the new company, named Chrysler Group LLC. In January 2014, the American car manufacturer officially became 100% Italian when Fiat Spa completed its deal to purchase the 40% it did not already own of Chrysler. Fiat has shared ownership of Chrysler with the health care fund of the United Automobile Workers unions since Chrysler emerged from bankruptcy in 209. * * * Standard & Poor's Ratings Services raised its ratings on U.S.- based auto manufacturer Chrysler Group LLC, including the corporate credit rating to 'BB-' from 'B+' in mid-January 2014. The outlook is stable. FIRST SECURITY: Earns $613,000 in Second Quarter ------------------------------------------------ First Security Group, Inc., reported net income for the second quarter of 2014 of $613,000, or $0.01 per basic and diluted share, as compared to a loss of $45,000 in the first quarter of 2014, or $0.00 per basic and diluted share. Loans increased by $54.7 million, or 9.0% (36.2% annualized), since March 31, 2014 and $117.5 million, or 21.7%, since June 30, 2013. "We are pleased to have achieved core profitability in the second quarter. We believe that we have reached an inflection point in our recovery and that barring any unforeseen events, First Security is on a path to healthy profitability built on a strong, and improving, balance sheet," said Michael Kramer, First Security's president and chief executive officer. "Our loan growth, combined with improvements in our deposit mix and enhancements to our non-interest income, are all on positive trajectories to produce both sustainable and increasing profitability." For the second quarter of 2014, net interest income improved by $620,000, or 9.0%, to $7.5 million compared to $6.9 million for the first quarter of 2014. Stockholders' equity as of June 30, 2014, totalled $86.6 million, a $1.9 million increase from March 31, 2014. "The recent announcement of the $600 million Volkswagen expansion in Chattanooga that includes an estimated 2,000 direct and 3,600 indirect jobs as well as the South's first automotive research and development center speaks volumes to the economic activity and growth potential within our east Tennessee markets," said CEO Kramer. "We believe that we are uniquely positioned to build a successful community bank that provides solid returns to its shareholders while serving the banking needs of its communities." A full-text copy of the Company's press release is available for free at http://is.gd/mgRmDN About First Security Group First Security Group, Inc. is a bank holding company headquartered in Chattanooga, Tennessee, with $1.0 billion in assets. Founded in 1999, First Security's community bank subsidiary, FSGBank, N.A. has 26 full-service banking offices along the interstate corridors of eastern and middle Tennessee and northern Georgia. FSGBank -- http://www.FSGBank.com/-- provides retail and commercial banking services, trust and investment management, mortgage banking, financial planning, internet banking. First Security incurred a net loss of $13.44 million in 2013, a net loss of $37.57 million in 2012 and a net loss of $23.06 million in 2011. The Company's balance sheet at March 31, 2014, showed $980.50 million in total assets, $895.85 million in total liabilities and $84.65 million in total shareholders' equity. FREE LANCE-STAR: Court Approves Deal With DSP, Committee and PBGC ----------------------------------------------------------------- VA Newspaper Debtor Co., formerly known as Free Lance-Star Publishing Co. of Fredericksburg, VA; and VA Real Estate Debtor LLC, formerly known as William Douglas Properties, LLC, sought and obtained approval from the Bankruptcy Court to enter into a Settlement Agreement and Mutual Release dated as of July 24, 2014, with: -- the Official Committee of Unsecured Creditors appointed in the Debtors' cases; -- DSP Acquisition, LLC; and -- the Pension Benefit Guaranty Corporation DSP is the Debtors' pre-bankruptcy secured creditor, having acquired interest in claims asserted by Branch Banking & Trust Co. DSP also is the buyer of substantially all of the Debtors' assets. Prior to the sale, DSP commenced litigation against the Debtors seeking determination of, among other things, its secured claim and the extent and priority of its Liens on the Debtors' assets. The PBGC is a member of the Committee along with White Birch Paper Co. and Flint Group North America. On July 1, 2014, DSP filed a motion seeking to disband the Committee. On July 23, the Committee filed a motion for an order directing the U.S. Trustee to change the committee membership. Pursuant to the Settlement, the parties agree that: (a) DSP will have an Allowed Claim against the Debtors in the amount of $37,905,195.83, provided, however, for the purposes of clarity, the DSP Allowed Claim shall not include postpetition interest, charges or fees (including, without limitation, ttorneys' fees). No part of the DSP Allowed Claim shall be entitled to treatment as an Allowed Administrative Claim or an Allowed Priority Claim. (b) PBGC will have an Allowed Nonpriority, General Unsecured Claim against the Debtors in the amount of $21,007,208 and an Allowed Priority Claim in the amount of $9,453 under Section 507(a)(5) of the Bankruptcy Code. (c) The parties agree on the allocation of Sale proceeds. With respect to DSP's Allowed Claim: -- DSP's credit bid of $13,900,000 is deemed applied against its Allowed Claim; -- the Debtors will remit to DSP $7,793,000 of so-called Undisputed Proceeds from the Sale Proceeds, which will be applied to the prepetition claim set forth in DSP's Proof of Claim, and which will be deemed applied against the DSP Allowed Claim; -- the Debtors will remit to DSP $13,800,000, plus Interest thereon (less the amount of Undisputed Proceeds, or any portion thereof, if already paid to DSP at such time) from the Sale Proceeds, which will be applied to the DSP Allowed Claim; -- the Debtors will remit to DSP the proceeds from the sale of real property located on William Street in the City of Fredericksburg, which amount will be in no event less than $2,550,000. The Debtors have filed a motion seeking approval of the sale; -- All Adequate Protection Payments will be applied to the DSP Allowed Claim as of the dates they were received by DSP; and -- the Debtors will remit to DSP $335,000 of so-called Life Insurance Proceeds (less $180,500), which shall be applied to the DSP Allowed Claim. -- the Debtors will convey the Remaining Assets to DSP, including, without limitation, certain assets identified in the Debtors' Wind-Down Budget and all obligations of Mario Alfaro to the Debtors and the related Lien in favor of the Debtors on certain real property located at 2708 Lafayette Boulevard, Fredericksburg, VA 22408. (d) The remaining Sale Proceeds, totaling $2,500,000 plus Interest, plus the amount of $180,500, which amount shall be payable solely from the Life Insurance Proceeds -- referred to as the "Non-DSP Distribution Funds" -- will become property of the VA Newspaper estate to be distributed to Creditors of VA Newspaper holding Allowed Claims under the Debtors' Chapter 11 Plan. The bankruptcy estate also will acquire the Excluded Assets as indicated in the Settlement, which shall be distributed under the Debtors' Chapter 11 Plan as follows: (i) first to Allowed Administrative Claims; (ii) after Allowed Administrative Claims are paid in full, to Allowed Priority Claims (including the PBGC Priority Claim); and (iii) after Allowed Priority Claims are paid in full: (A) 50% of the remaining distributable value shall be distributed on a pro rata basis to PBGC, on account of the PBGC GUC, and to the Other Unsecured Creditors, on account of their Allowed general unsecured Claims; and (B) 50% of the remaining distributable value shall be distributed to DSP on account of the DSP Deficiency Claim, such that distributions in equal dollar amounts shall be made to (x) in the aggregate and not individually, PBGC on account of the PBGC GUC and the Other Unsecured Creditors on account of their Allowed Claims, and (y) DSP on account of the DSP Deficiency Claim. (e) The parties will schedule a status conference in regard to the Adversary Proceeding. Ultimately, if the Debtors are not in violation of their obligations under the Settlement, dismissal of the Adversary will be sought. (f) DSP and the Committee will withdraw their respective Committee Motions with prejudice. (g) Neither the Debtors nor the Committee will seek substantive consolidation of the Debtors or their estates. (h) On or before August 6, 2014, the Debtors would file a Chapter 11 Plan and the related disclosure statement, consistent with the parties' Settlement. (i) The parties will execute mutual releases. DSP may be reached at: DSP Acquisition, LLC 25 West 45th Street, Suite 1205 New York, NY 10036 Attention: Thomas Wood and Robert Orr Fax: (917) 599-0446 E-mail: twood@sandtoncapital.com rorr@sandtoncapital.com DSP is represented by: LOWENSTEIN SANDLER LLP 1251 Avenue of the Americas, 17th Floor New York, NY 10020 Attention: Sharon L. Levine, Esq. Richard Bernstein, Esq. Fax: (973) 422-6715 E-mail: slevine@lowenstein.com rbernstein@lowenstein.com - and - MCGUIREWOODS LLP One James Center 901 East Cary Street Richmond, VA 23219 Attention: Dion W. Hayes, Esq. Fax: (804) 698-2078 E-mail: dhayes@mcguirewoods.com The PBGC may be reached at: Pension Benefit Guaranty Corporation 1200 K Street, NW Washington, DC 20005 Attention: Kimberly E. Neureiter, Esq. Office of Chief Counsel Fax: (202) 326-4112 E-mail: neureiter.kimberly@pbgc.gov The Debtors are represented by: TAVENNER & BERAN, PLC 20 North Eighth Street, Second Floor Richmond, VA 23219 Attention: Lynn L. Tavenner, Esq. Paula S. Beran, Esq. Fax: (804) 783-0178 E-mail: ltavenner@tb-lawfirm.com pberan@tb-lawfirm.com The Committee is represented by: HUNTON & WILLIAMS LLP Riverfront Plaza, East Tower 951 East Byrd Street Richmond, VA 23219 Attention: Tyler P. Brown, Esq. Fax: (804) 788-8218 E-mail: tpbrown@hunton.com About The Free Lance-Star Publishing The Free Lance-Star Publishing Co. of Fredericksburg, Va., is a publishing, newspaper, radio and communications company based in Fredericksburg, Virginia and owned by the family of Josiah P. Rowe III. FLS's single, seven-day a week newspaper, The Free Lance- Star was first published in 1885 when a group of local Fredericksburg merchants and businessmen created the paper to serve the news and advertising needs of the community. FLS also owns radio stations WFLS-AM, FLS-FM, and WVBX. FLS owns the community and news portal http://www.fredericksburg.com/ FLS filed a Chapter 11 bankruptcy petition (Bankr. E.D. Va. Case No. 14-30315) in Richmond, Virginia, on Jan. 23, 2014. William Douglas Properties, L.L.C., a related entity that owns a portion of the land pursuant to which FLS operates certain aspects of its business, also sought bankruptcy protection. Judge Keith L. Phillips was initially assigned to the cases, but the cases were reassigned to Judge Kevin R. Huennekens on the Petition Date. The Debtors have tapped Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran, PLC, as counsel; and Protiviti, Inc., as financial advisor. The U.S. Trustee for Region 4 appointed three members to the official committee of unsecured creditors. FREE LANCE-STAR: Bid to Disband Creditor's Committee Stayed ----------------------------------------------------------- VA Newspaper Debtor Co., f/k/a The Free Lance-Star Publishing Co. of Fredericksburg, VA, and VA Real Estate Debtor, LLC, f/k/a William Douglas Properties, LLC; the Official Committee of Unsecured Creditors; and DSP Acquisition, LLC, agreed to stay DSP's motion to disband the committee and the Committee's motion for an order directing the U.S. Trustee to change the membership of the committee. The stay will continue until the motions are withdrawn with prejudice in accordance with the settlement agreement and mutual release by and among the Debtors, the Committee, DSP, and the Pension Benefit Guaranty Corporation. The U.S. Bankruptcy Court for the Eastern District of Virginia issued an order directing the Debtor to transfer to DSP the undisputed encumbered proceeds from the sale of a certain real property in the City of Fredericksburg, Virginia, in the amount of $7,793,000, plus any attributable interest that accrued since June 19, 2014, to DSP for application to the amount of its prepetition claim. DSP, which holds a properly perfected first-priority lien in the property and the rents generated from it, asserted that it must receive the net sale proceeds from the sale of the property. The Committee and the Debtors objected to DSP's request. About The Free Lance-Star Publishing The Free Lance-Star Publishing Co. of Fredericksburg, Va., is a publishing, newspaper, radio and communications company based in Fredericksburg, Virginia and owned by the family of Josiah P. Rowe III. FLS's single, seven-day a week newspaper, The Free Lance- Star was first published in 1885 when a group of local Fredericksburg merchants and businessmen created the paper to serve the news and advertising needs of the community. FLS also owns radio stations WFLS-AM, FLS-FM, and WVBX. FLS owns the community and news portal http://www.fredericksburg.com/ FLS filed a Chapter 11 bankruptcy petition (Bankr. E.D. Va. Case No. 14-30315) in Richmond, Virginia, on Jan. 23, 2014. William Douglas Properties, L.L.C., a related entity that owns a portion of the land pursuant to which FLS operates certain aspects of its business, also sought bankruptcy protection. Judge Keith L. Phillips was initially assigned to the cases, but the cases were reassigned to Judge Kevin R. Huennekens on the Petition Date. The Debtors have tapped Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran, PLC, as counsel; and Protiviti, Inc., as financial advisor. The U.S. Trustee for Region 4 appointed three members to the official committee of unsecured creditors. FREE LANCE-STAR: Debtor, Committee File Joint Liquidation Plan -------------------------------------------------------------- VA Newspaper Debtor Co., formerly known as Free Lance-Star Publishing Co. of Fredericksburg, VA; and VA Real Estate Debtor LLC, formerly known as William Douglas Properties, LLC, delivered to the Bankruptcy Court on August 6, 2014, a Joint Plan of Liquidation. The Official Committee of Unsecured Creditors co- proposed the Plan. The Debtors and the Committee will argue at the hearing to confirm the Plan that distributions to be made under the Plan is preferable to the distribution creditors would receive if the Debtors' Estates were liquidated under Chapter 7. A hearing on the Plan has not been scheduled yet. The purpose of the Plan is to implement a settlement and release agreement that the Co-Proponents reached in July with DSP Acquisition, LLC, the buyer of substantially all of the Debtors' assets, and the Pension Benefit Guaranty Corporation. The Settlement resolves various claims and disputes among the parties, and provides for the disposition of sale proceeds and the remaining assets. The Plan provides for the appoint of Florence C. Barnick as Administrator, who will effectuate a wind-down of the Debtors' affairs. The remaining assets include: * Non-DSP Distribution Funds in the approximate amount of $2,680,500; * All shares of capital stock or other equity interests of the Debtors or securities convertible into or exchangeable or exercisable for any such shares of capital stock or other equity interests of the Debtors; * various engagement letters; * deposits with utility providers and trade vendors estimated at approximately $21,000; * professional fee retainer balances; * all funds received by the Debtors under a Station Operating Agreement and under the true-up agreement relating to the Asset Purchase Agreements; and * office equipment. The Plan does not provide for the substantive consolidation of the Debtors and, after the Effective Date, the parties will be barred from seeking to substantively consolidate the Debtors. The Plan provides for six classes of Claims and/or Interests: (1) Class 1 consists of all Priority Claims, including, but not limited to, the Allowed PBGC Priority Claim. (2) Class 2 consists of DSP's Secured Claim. Pursuant to the terms of the Settlement Agreement, (i) DSP's credit bid under the Asset Purchase Agreements of $13,900,000 will be deemed applied against the DSP Allowed Claim as of the effective date of the Settlement Agreement; (ii) DSP received the Undisputed Proceeds (as such term is defined in the Settlement Agreement) from the Sale Proceeds, which will be deemed applied against the DSP Allowed Claim as of the effective date of the Settlement Agreement, (iii) DSP received, or will receive, the sum of $13,800,000 plus certain interest thereon (less the amount of the Undisputed Proceeds) from the Sale Proceeds, which was or will be deemed applied against the DSP Allowed Claim; (iv) all Adequate Protection Payments (as such term is defined in the Settlement Agreement) were deemed applied to the DSP Allowed Claim as of the dates they were received by DSP; (v) DSP received, or will receive, the Life Insurance Proceeds (as such term is defined in the Settlement Agreement) (less $180,500), which was or will be deemed applied against the DSP Allowed Claim; and (vi) DSP received, or will receive, the Remaining Assets (including any and all books and records and other documents relating to the Remaining Assets). DSP also will retain its lien on the William Street Property until the property is disposed of. DSP shall receive the William Street Sale Proceeds or title to the William Street Property for application to the DSP Allowed Claim. (3) Class 3 consists of all Unsecured Claims against VA Newspaper not otherwise classified that are not cured, paid, released or waived pursuant to the Sale Order or the Plan, or classified in any other Class, including, but not limited to, the Allowed PBGC GUC. Each Holder of an Allowed Class 3 Unsecured Claim shall receive (a) (i) a Ratable Share of Distributions from the Non-DSP Distribution Funds as and when the Plan Administrator determines, after consultation with PBGC and DSP, that there are sufficient funds in the Non-DSP Distribution Funds to justify a Distribution to Holders of Class 3 Claims and (ii) a Ratable Share of 50% of Distributions from the Unsecured Distribution Fund as and when the Plan Administrator determines, after consultation with PBGC and DSP, that there are sufficient funds in the Unsecured Distribution Fund to justify a Distribution to Holders of Class 3 Claims; or (b) such other, less favorable treatment as shall be agreed upon by the Holder of such Claim and the Debtor. Distributions to Holders of Allowed Class 3 Unsecured Claims shall be made only from the Non-DSP Distribution Funds and the Unsecured Distribution Fund. (4) Class 4 consists of DSP's Deficiency Claim against VA Newspaper. On account of DSP's Deficiency Claim against VA Newspaper, DSP will receive 50% of Distributions from the Unsecured Distribution Fund as and when the Plan Administrator, after consultation with PBGC and DSP, determines that there are sufficient funds in the Unsecured Distribution Fund to justify a Distribution. (5) Class 5 consists of all Unsecured Claims against VA Real Estate not otherwise classified that are not cured, paid, released or waived pursuant to the Sale Order or the Plan, or classified in any other Class, including, but not limited to, the Allowed PBGC GUC and DSP's Deficiency Claim against VA Real Estate. It is not anticipated that there will be unencumbered assets of VA Real Estate to allow any Distribution to Holders of Allowed Class 5 Unsecured Claims. Accordingly, Holders of Class 5 Claims will not receive any Distribution under the Plan. (6) Class 6 consists of all Interests in the Debtors as of the Effective Date. No Holder of an Interest shall be entitled to any Distribution under the Plan. About The Free Lance-Star Publishing The Free Lance-Star Publishing Co. of Fredericksburg, Va., is a publishing, newspaper, radio and communications company based in Fredericksburg, Virginia and owned by the family of Josiah P. Rowe III. FLS's single, seven-day a week newspaper, The Free Lance- Star was first published in 1885 when a group of local Fredericksburg merchants and businessmen created the paper to serve the news and advertising needs of the community. FLS also owns radio stations WFLS-AM, FLS-FM, and WVBX. FLS owns the community and news portal http://www.fredericksburg.com/ FLS filed a Chapter 11 bankruptcy petition (Bankr. E.D. Va. Case No. 14-30315) in Richmond, Virginia, on Jan. 23, 2014. William Douglas Properties, L.L.C., a related entity that owns a portion of the land pursuant to which FLS operates certain aspects of its business, also sought bankruptcy protection. Judge Keith L. Phillips was initially assigned to the cases, but the cases were reassigned to Judge Kevin R. Huennekens on the Petition Date. The Debtors have tapped Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran, PLC, as counsel; and Protiviti, Inc., as financial advisor. The U.S. Trustee for Region 4 appointed three members to the official committee of unsecured creditors. The Committee is represented by Hunton & Williams LLP's Tyler P. Brown, Esq., Jason W. Harbour, Esq., and Justin F. Paget, Esq. DSP Acquisition LLC, an affiliate of Sandton Capital Partners, paid $30.2 million, to acquire substantially all of Free Lance- Star's assets. DSP acquired interest in claims asserted by Branch Banking & Trust Co. prior to the bankruptcy. Prior to the sale, DSP commenced litigation against the Debtors seeking determination of, among other things, its secured claim and the extent and priority of its Liens on the Debtors' assets. DSP is represented by Lowenstein Sandler LLP's Sharon L. Levine, Esq., and Richard Bernstein, Esq.; and McGUIREWOODS LLP's Dion W. Hayes, Esq. GANNETT CO: Moody's Affirms 'Ba1' Corporate Family Rating --------------------------------------------------------- Moody's Investors Service affirmed Gannett, Co., Inc.'s Ba1 Corporate Family Rating (CFR) and Ba1-PD Probability of Default Rating (PDR) following the company's announcement of its agreement to acquire the remaining 73% interest in Cars.com that it does not already own for $1.8 billion in cash and its plan to spin-off the publishing business. Despite the initial increase in leverage and weakened coverage ratios upon closing of each transaction, Moody's expects Gannett's favorable shift in revenue to higher growth broadcast and digital businesses and away from lower margin publishing operations will support consistent free cash flow generation and the ability to repay debt. Moody's also affirmed all other ratings including the NP commercial paper rating and the Ba1 rating on each of the unsecured revolver, term loan, and notes. The SGL -- 1 Speculative Grade Liquidity (SGL) Rating was affirmed and the rating outlook remains negative. Affirmed Issuer: Gannett, Co. Inc. Corporate Family Rating: Affirmed Ba1 Probability of Default Rating: Affirmed Ba1-PD Commercial Paper: Affirmed NP $1.3 billion guaranteed senior unsecured revolver due 2018: Affirmed Ba1, LGD3 $139 million guaranteed senior unsecured term loan due 2018: Affirmed Ba1, LGD3 Guaranteed senior unsecured regular bonds/debentures: Affirmed Ba1, LGD3 Speculative Grade Liquidity Rating: Affirmed SGL -- 1 Outlook Actions: Issuer: Gannett Co., Inc. Outlook is Negative Ratings Rationale On August 5, 2014, Gannett announced that it entered into an agreement to purchase 73% of Cars.com that it does not already own for $1.8 billion in cash. The company expects to use balance sheet cash plus up to $1.3 billion of additional debt (combination of revolver advances and new senior notes) to fund the acquisition which is expected to be completed in 2014. Gannett also announced plans to spin off its publishing business on a tax free basis expected to be completed in mid-2015. Each transaction is subject to customary regulatory approvals. Moody's affirmed Gannett's credit ratings and the negative outlook despite each of the transactions being credit negative due to the initial increase in leverage and weakening of coverage ratios upon closing. Moody's believes Gannett's favorable shift in revenue to higher growth broadcast and digital businesses and away from lower margin publishing operations will support consistent free cash flow generation and the ability to repay meaningful amounts of debt leading up to the separation of publishing operations. Meaningful debt reduction, including lower levels of unfunded pension liabilities or allocation of operating lease obligations to the spin-off, allows the company to bring pro forma leverage and other financial credit metrics to be better positioned in the Ba1 Corporate Family Rating within an acceptable time frame post closing. "Even after the spin-off and the loss of $3.5 billion of newspaper revenue, Gannett will still generate $3 billion in higher margin revenue and be a leading pure-play television broadcaster with digital operations generating over $1.0 billion in revenue and 25% of consolidated EBITDA (subtracting minority interest in CareerBuilder)," stated Carl Salas, Moody's VP and Senior Credit Officer. Since the debt financed acquisition of Belo Corp. at the end of 2013, Gannett has tracked Moody's expectations and improved debt-to-EBITDA to 3.4x as of June 30, 2014 (2-year average, including Moody's standard adjustments, excluding the minority interest share of CareerBuilder's EBITDA). The addition of Belo Corp.'s television stations to Gannett's portfolio of broadcast assets positioned the company as the #1 CBS, #1 NBC and #4 ABC network affiliate based on household reach. Looking forward, leverage will increase as management intends to use up to $600 million of balance sheet cash, $600 million - $625 million of borrowings under the existing revolver commitment, plus $650 million - $675 million of new senior notes to fund the acquisition of 73% of Cars.com it does not already own. Completion of the proposed separation of publishing assets will also weaken credit metrics in the second half of 2015 due to the loss of publishing segment EBITDA (more than $400 million). "Despite the increase in leverage, ratings are supported by the consolidation of Cars.com which improves the company's credit profile due to the favorable shift in revenue and cash flow to growing and higher margin broadcast/digital assets as well as the elimination of lower margin publishing businesses. Persistent revenue pressure in publishing is a rating overhang that would be eliminated," added Salas. The rating outlook remains negative reflecting the planned increase in funded debt by up to $1.3 billion resulting in debt- to-EBITDA increasing initially to more than 3.6x by the end of 2014 (2-year average, including Moody's standard adjustments, excluding the minority interest share of CareerBuilder's EBITDA) and uncertainties related to achieving targeted lower debt levels including reduced unfunded pension liabilities. Gannett's ratings could be lowered if revenue does not track Moody's base case forecast, liquidity weakens below expected levels, or Moody's believe the company is not making progress in reducing debt balances and leverage. An increase in leverage due to another debt financed acquisition or use of excess cash to fund share repurchases could also result in a downgrade. Despite initially higher leverage with the acquisition of Cars.com and upon spin-off of publishing operations, the negative outlook could be stabilized if free cash flow is used primarily to reduce debt balances and Moody's expect Gannett to sustain 2-year average debt-to-EBITDA comfortably below 3.75x with a minimum high single digit percentage 2-year average free cash flow to debt ratio. The company would also need to maintain good liquidity including proactive management of debt maturities and would need to demonstrate revenue and EBITDA growth for broadcast and digital segments in line with Moody's base case forecast. 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. Gannett, headquartered in McLean, VA, is a diversified local newspaper/publisher and broadcast operator that also has ownership interests in a number of digital ventures including a 52.9% stake in CareerBuilder, which is fully consolidated in Gannett's financial statements. Gannett closed the Belo television acquisition in December 2013 for $1.47 billion in cash and the assumption of $715 million of outstanding Belo debt. Gannett is publicly traded with a single class share structure. The Vanguard Group, Inc., owns 7.0%, AllianceBernstein L.P. owns 5.7% of the economic and voting interest with remaining shares being widely held. Revenue for LTM June 30, 2014 pro forma for the Belo acquisition and pending divestitures of broadcast stations was approximately $6 billion. Post completion of the announced spin- off of publishing businesses, Gannett will own broadcasting and digital businesses, including 100% of Cars.com, with revenue totaling roughly $3 billion. GARLOCK SEALING: Estimation Trial Shouldn't Be Sealed, Judge Rules ------------------------------------------------------------------ Law360 reported that a North Carolina federal judge reversed a bankruptcy court's decision to close proceedings last year to estimate the mesothelioma liability of bankrupt Garlock Sealing Technologies LLC, citing the public's fundamental right to view documents filed in public courts. According to the report, U.S. District Judge Max Cogburn sided with arguments by the legal journal Legal Newsline, saying that U.S. Bankruptcy Judge George Hodges should put the onus on Garlock to explain why estimation trial transcripts should be kept under seal. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in their Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. Judge George Hodges of the United States Bankruptcy Court for the Western District of North Carolina on Jan. 10, 2014, entered an order estimating the liability for present and future mesothelioma claims against EnPro Industries' Garlock Sealing Technologies LLC subsidiary at $125 million, consistent with the positions GST put forth at trial. GBG RANCH: Hires Carl Barto as Bankruptcy Counsel ------------------------------------------------- GBG Ranch, LTD asks for authorization from the U.S. Bankruptcy Court for the Southern District of Texas to employ Carl M. Barto as bankruptcy counsel. The Debtor requires Mr. Barto to: (a) advise the Debtor with respect to its rights, duties and powers in this case; (b) assist and advise the Debtor in its consultations relative to the administration of this case; (c) assist the Debtor in analyzing the claims of the creditors and in negotiating with such creditors; (d) assist the Debtor in the analysis of and negotiations with any third party concerning matters relating to, among other things, the terms of the plan of reorganization; (e) prepare and file proofs of claim, analyze claims, and when appropriate object to claims filed on behalf of creditors; (f) represent the Debtor at all hearings and other proceedings; (g) review and analyze all applications, orders, statements of operations, and schedules filed with the Court and advise the Debtor as to their propriety; (h) assist the Debtor in preparing pleadings and applications as may be necessary in furtherance of the Debtor's interests and objectives including motions to sell and a motion to reject executory contracts; (i) drafting, filing and serving the Debtor's Disclosure Statement and Plan of Reorganization; (j) soliciting ballots and proving up the elements for confirmation of the Debtor's plan; and (k) performing such other legal services as may be required and are deemed to be in the interests of the Debtor in accordance with the Debtor's powers and duties as set forth in the Bankruptcy Code. Mr. Barto and his associates will be paid at these hourly rates: Carl M. Barto, attorney $350 Maria Lilia C. Barto, attorney $350 Monica Gerardo, paralegal $90 Mr. Barto will also be reimbursed for reasonable out-of-pocket expenses incurred. Mr. Barto 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. Mr. Barto can be reached at: Carl M. Barto, Esq. LAW OFFICE OF CARL M. BARTO 817 Guadalupe Laredo, TX 78040 Tel: (956) 725-7500 Fax: (956) 722-6739 About GBG Ranch, LTD GBG Ranch, LTD, a Texas Limited Partnership, sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 14-50155) in Laredo, Texas on July 8, 2014, without stating a reason. The company estimated assets of $50 million to $100 million and debt of less than $10 million. The company is represented by the Law Office of Carl M. Barto. GENUTEC BUSINESS: Plan Due Oct. 1; Bar Date Set for Sept. 9 ----------------------------------------------------------- A status conference was held in the Bankruptcy Court for the Central District of California, Santa Ana Division on July 10, 2014, in the Chapter 11 case of Genutec Business Solutions, Inc. At the hearing, a claims bar date of September 9th was set. October 1st is the Debtor's deadline for filing a Plan of Reorganization and Disclosure Statement. The next status conference is scheduled for November 1st in Santa Ana. About Genutec Businesss Solutions Genutec Businesss Solutions, Inc., filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 14-13115) in Santa Ana, Georgia, on May 16, 2014. David Montoya signed the petition as director. The Debtor disclosed assets of $12,851,544 and liabilities of $11,529,199. Michael R Totaro, Esq., at Totaro & Shanahan, in Pacific Palisades, California, acts as bankruptcy counsel. Judge Erithe A. Smith presides over the case. GENUTEC BUSINESS: Hires Totaro & Shanahan as Insolvency Counsel --------------------------------------------------------------- Genutec Business Solutions, Inc. sought and obtained permission from the U.S. Bankruptcy Court for the Central District of California to employ Michael R. Totaro and the Law Office of Totaro & Shanahan as general insolvency counsel, effective May 9, 2014. The Debtor requires Totaro & Shanahan to: (a) consult with Debtor's representative concerning documents needed and reports to be prepared and consultation with real estate counsel re title and other issues; (b) assist the Debtor's representative in preparation of documents for compliance with the requirements of the Office of the U.S. Trustee; (c) negotiate with secured and unsecured creditors regarding the amount and payment of their claims; (d) discuss with the Debtor's representative concerning the Disclosure Statement and plan of reorganization; (e) prepare the Disclosure Statement and Chapter 11 Plan of Reorganization and any amendments/changes to the same; (f) submit ballots to creditors, tally ballots and submission to the Court; (g) respond to any objections to disclosure statement and plan; (h) negotiations with creditors as to values, etc and the plan of reorganization; (i) respond to any motions for relief from stay, motion to dismiss or any other motions or contested matters; (j) prepare, submit and prosecute any adversary proceedings that may be necessary to the case including but not limited to determining the value of real property as collateral and extinguishing unsecured liens on real property; (k) review proofs of claims and if necessary, prepare formal objections with respect to claims asserted; (l) opposition to any motions sought by trustee, court and creditors; and (m) any other matter that arises during the administration of this chapter 11 case, except for defense of adversary proceedings against Debtor based on fraud. Totaro & Shanahan rendered pre-petition services at the expedited rate of $675 per hour then dropped the rate to $450 per hour post- petition. The parties have signed a fee agreement for billing which reflects the above and for paralegal services billed at $150 per hour. At the time the fee agreement was signed, Totaro & Shanahanm received a pre-petition retainer of $30,000 from non-estate property. The retainer was paid by a subsidiary of the Debtor, Rapid Notify, Inc. Prior to the filing Totaro & Shanahan spent a total of 20.7 hours of attorney time at $675 per hour and incurred costs, including the filing fee in the amount of $1,213. The pre- petition fees were deducted from the retainer. Because of the expedited filing, two attorneys handled the initial work, each working on a different aspect of the filing. In addition since the filing of the petition there has been an additional 21.2 hours of attorney time at $450 per hour. Totaro & Shanahan will also be reimbursed for reasonable out-of- pocket expenses incurred. Michael R. Totaro, partner of Totaro & Shanahan, 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. Totaro & Shanahan can be reached at: Michael R. Totaro, Esq. TOTARO & SHANAHAN P.O. Box 789 Pacific Palisade, CA 90272 Tel: (310) 573-0276 Fax: (310) 496-1260 About Genutec Businesss Solutions Genutec Businesss Solutions, Inc., filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 14-13115) in Santa Ana, Georgia, on May 16, 2014. David Montoya signed the petition as director. The Debtor disclosed assets of $12,851,544 and liabilities of $11,529,199. Michael R Totaro, Esq., at Totaro & Shanahan, in Pacific Palisades, California, acts as bankruptcy counsel. Judge Erithe A. Smith presides over the case. GEORGE ROBERTS: Heating Specialist Liable for 60% of CERCLA Claim ----------------------------------------------------------------- Chapter 11 debtors Nancy Roberts and George Roberts sued The Heating Specialist Inc. to seek contribution under Section 113 of the federal Comprehensive Environmental Response, Compensation and Liability Act. THS denies that it is liable under CERCLA and further argues that the service contract between the parties limits THS' liability. In an August 5 Findings of Fact and Conclusions of Law available at http://is.gd/sKZM0hfrom Leagle.com, District Judge Michael H. Simon finds that the Roberts have met their burden in proving that THS is liable under Section 113 of CERCLA. Further, the Court finds that THS is responsible for 60% of past and future response costs incurred at the Roberts' residential rental property located at 909 S.W. Washington Street, Oregon City, Oregon; and the Roberts are responsible for 40% of such costs. The U.S. Environmental Protection Agency asserted a claim against the Roberts, seeking recovery of $124,441 for environmental investigation and cleanup costs that the EPA incurred responding to the suspected release of mercury at the Property. THS is an Oregon corporation engaged in the business of boiler system sales, installation, and repairs. In February 2011, THS replaced a boiler located in the basement of the Property pursuant to a written contract between THS and the Roberts. THS removed the old boiler from the Property with the intent to dispose of the old boiler. The case is, NANCY ROBERTS and GEORGE ROBERTS, as trustee of the George Tudor Strong Roberts and Nancy Jane Roberts Chapter 11 Estate, Plaintiffs, v. THE HEATING SPECIALIST INC., ROBERT GORDON, and IRS ENVIRONMENTAL OF PORTLAND, INC., Defendants, Case No. 3:12-cv-01820-SI (D. Ore.). Counsel to the Roberts: Kenneth P. Dobson, Esq. CHENOWETH LAW GROUP, PC 510 S.W. Fifth Avenue, 5th Floor, Suite 500 Portland, OR 97204 Counsel to THS: Gregory W. Byrne, Esq. BUCKLEY LAW PC 5300 Meadows Road, Suite 200 Lake Oswego, OR 97035 Tel: 503-620-8900 Fax: 503-620-4878 E-mail: gwb@buckley-law.com George Roberts filed a Chapter 11 petition (Bankr. D. N.M. Case No. 11-10058) on January 7, 2011. GREG'S LANDSCAPING: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Greg's Landscaping, Inc 1598 Reed Road Pennington, NJ 08534 Case No.: 14-26245 Chapter 11 Petition Date: August 6, 2014 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Hon. Kathryn C. Ferguson Debtor's Counsel: Allen I Gorski, Esq. GORSKI & KNOWLTON PC 311 Whitehorse Avenue; Suite A Hamilton, NJ 08610 Fax: 609-585-2553 E-mail: agorski@gorskiknowlton.com Debtor's FRANK RIPP, CPA Accountant: Debtor's SCHENKMAN JENNINGS, LLC Special Counsel: Total Assets: $638,000 Total Liabilities: $1.71 million The petition was signed by Greg Garnich, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb14-26245.pdf GRIDWAY ENERGY: Needs Until Oct. 7 to File Plan ----------------------------------------------- Gridway Energy Holdings, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive period to file a Chapter 11 plan to Oct. 7, 2014, and their exclusive period to solicit acceptances of that plan until Dec. 8. The Debtors said they need the additional time to market their remaining assets and determine the best manner in which to wrap up their bankruptcy cases. A hearing on the extension request is scheduled for Sept. 15, 2014, at 1:00 p.m. (ET). Objections are due Aug. 20. About Gridway Energy Gridway Energy Holdings, Inc., and its affiliates, including Glacial Energy Holdings -- providers of electricity and natural gas in markets that have been restructured to permit retail competition -- sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10833) on April 10, 2014. The Debtors have 200,000 electric residential customers and 55,000 gash residential customers across the U.S. A large portion of the customers' energy consumption and revenue is generated in the northeast U.S., Ohio, Illinois and Texas (collectively accounting for 80% of revenue), with the remaining portion coming from California and other states. The Debtors blamed the bankruptcy due to lower revenue brought by increased market competition, which caused the Debtors to default on certain of their obligations. Gridway defaulted on $60 million of debt. Prepetition, the Debtors negotiated a stock purchase transaction with an interested buyer. But in March 2014, the purchaser withdrew from the transaction because of the large amount of debt that the purchaser would become liable through a stock transaction. The Debtors are represented by Michael R. Nestor, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP; and Alan M. Noskow, Esq., and Mark A. Salzberg, Esq., at Patton Boggs LLP. They employed Omni Management Group, LLC, as claims and notice agent. Gridway Energy estimated assets of $500 million to $1 billion and debt of more than $1 billion. The Creditors' Committee is represented by Sharon Levine, Esq., and Philip J. Gross, Esq., at Lowenstein Sandler LLP; and Frederick B. Rosner, Esq., and Julia B. Klein, Esq., at The Rosner Law Group LLC. Vantage is represented in the case by Ingrid Bagby, Esq., David E. Kronenberg, Esq., Kenneth Irvin, Esq., and Karen Dewis, Esq., at Cadwalader, Wickersham & Taft LLP, and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A. GROEB FARMS: Committee Wants More Time to Review Claims ------------------------------------------------------- The General Unsecured Claims Litigation Trustee in Groeb Farms, Inc.'s Chapter 11 case has objected to the closing date for the case. The case is pending in the Bankruptcy Court for the Eastern District of Michigan, Southern Division. A Notice of Confirmation was entered on December 20, 2013. The Debtor proposed a closing date of February 18, 2014; however, an objection by the Official Committee of Unsecured Creditors caused the hearing on case closure to be continued to July 24. On April 11, the Court ordered that the Trustee be allowed through December 31 to object to the allowance of claims. The Trustee is currently reviewing claims, negotiating possible resolutions, and evaluating possible avoidance actions. As a result, the Trustee is requesting that the case remain open through January 30, 2015. The request was filed by co-counsel for the Official Committee of Unsecured Creditors', Sheryl L. Toby, Esq. at Dykema Gossett PLLC of Broomfield Hills, MI and Bradford J. Sandler, Esq. at Pachulski, Stang, Ziehl & Jones LLP of Wilmington, DE. About Groeb Farms Headquartered in Onsted, Mich., Groeb Farms is one of the largest honey packers in the nation. For more than 30 years, the company has provided the finest, top quality, wholesome and safe honey and related food products to industrial and retail customers as well as the American consumer. The Company sought protection under Chapter 11 of the Bankruptcy Code on Oct. 1, 2013 (Case No. 13-58200, Bankr. E.D. Mich.). Judge Walter Shapero is overseeing the case. The Debtor is represented by Judy A. O'Neill, Esq., and John A. Simon, Esq., at Foley & Lardner LLP, in Detroit, Michigan. Conway MacKenzie, Inc., serves as financial advisor, while Houlihan Lokey Capital, Inc., investment banker and also as financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims, noticing, and balloting agent. Daniel M. McDermott, United States Trustee for Region 9, has appointed five creditors to serve on the Official Committee of Unsecured Creditors. The Creditors' Committee members are: Bees Brothers, LLC, Little Bee Impex, Delta Food International Inc., Buoye Honey, and Citrofrut SA de CV. HC Capital Holdings 0909A, LLC, an affiliate of Honey Financing Company, LLC, extended $27 million senior secured super-priority revolving credit facility to the Debtors. The DIP Lender is represented by Leonard Klingbaum, Esq., at Kirkland & Ellis LLP, in New York. HAAS ENVIRONMENTAL: Deal With Cleveland Brothers Approved --------------------------------------------------------- Haas Environmental, Inc. sought and obtained approval of a settlement with Cleveland Brothers Equipment Company. Prior to the Petition Date, Cleveland Brothers filed a complaint against Debtor in the United States District Court, Western District of Pennsylvania. On December 3, 2012, partial default judgment was entered against the Debtor in favor of Cleveland Brothers in the sum of $114,213.34 plus $44.65 in per diem interest from October 3, 2012. Cleveland Brothers asserts that, as of the Petition Date, the balance owed on account of the Judgment was $61,837.15. On January 17, 2013, the Debtor purportedly transferred a Caterpillar 315CL (serial no. CFT 1167) -- an excavator -- to Cleveland Brothers in partial satisfaction of the Judgment. On April 23, Cleveland Brothers served a writ of execution upon the Debtor. The Debtor asserts that the Levy was not effective, which Cleveland Brothers disputes. On June 13, 2013, Cleveland Brothers served on EQT Production Company a garnishment of amounts owed by EQT to the Debtor. On May 23, the Debtor sent Cleveland Brothers two wire transfers totaling $20,000. The Debtor asserts that the Garnishment and the Wire Transfers were preferential transfers under 11 U.S.C. Sec. 547, which Cleveland Brothers disputes. EQT presently holds $61,837.15 in escrow on account of the Garnishment, representing the Petition Date balance of the Judgment pending a settlement or Court order. To avoid the potential costs, risks, and delay of litigation, the Debtor and Cleveland Brothers agree that the Escrow will be paid to the Debtor, and that upon receipt of the Escrow funds, the Debtor will pay Cleveland Brothers $12,500; and retain $49,337.15. Cleveland Brothers will make the Excavator available for retrieval by the Debtor at its facility located at 18512 Route 6, Mansfield, PA 16933. The Official Committee of Unsecured Creditors tried to block the Settlement. According to the Committee, it appears that Cleveland improperly effected a Levy and Garnishment against the Debtor and obtained at least $20,000 in preferential payments from the Debtor as a result of the Levy and Garnishment. While the Debtor's Motion states that Cleveland disputes that the Wire Transfers were preferential payments, the fact is that the Debtor paid Cleveland $20,000 on account of an antecedent debt within 90 days of the Petition Date. According to the Committee, no evidence or proof has been presented in the Motion or otherwise to support Cleveland?s position that its Garnishment and Levy were valid or that the $20,000 paid to it during the preference period was not a preference. The Motion is devoid of any analysis or explanation for the estate to abandon the preference claim against Cleveland, much less why the Debtor is paying Cleveland an additional $12,500 under the Settlement. Given these open issues, the Settlement should not be approved. The Debtor defended the Settlement. It pointed out that the cost of preparing a complaint, conducting discovery, participating in motion practice, and ultimately a trial would likely cost more than the $32,500 that Cleveland will retain under the Settlement (retaining the $20,000 wire, and receiving $12,500 from the EQT garnishment). The Debtor also repossess the Excavator, which the Debtor can put into immediate use and can generate $4,000 per week of net income. The Settlement Approval Order provides that: "EQT has acknowledged that the funds it holds in Escrow are owed to the Debtor on account of goods and/or services provided by the Debtor to EQT. EQT has agreed to turn over the Escrow to the Debtor within ten business days of the presentation of an order approving the Settlement and upon execution of releases by the parties related to the Escrow and the Garnishment. Upon receipt of the Escrow funds, the Debtor shall pay Cleveland the sum of $12,500 (the ?Cleveland Settlement Amount?) and the Debtor may retain the sum of $49,337.15." About Haas Environmental, Inc. Haas Environmental, Inc., filed a Chapter 11 petition (Bankr. D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the petition as president. Judge Kathryn C. Ferguson presides over the case. The Debtor disclosed $10,127,069 in assets and $11,595,611 in liabilities as of the Chapter 11 filing. The Debtor is represented by: SHERMAN, SILVERSTEIN, KOHL, ROSE & PODOLSKY, P.A. Arthur J. Abramowitz, Esq. Jerrold N. Poslusny, Jr., Esq. 308 Harper Drive, Suite 200 Moorestown, NJ 08057 Tel: (856) 662-0700 Mary E. Seymour, Esq., at Lowenstein Sandler LLP, serves as counsel for the Official Committee of Unsecured Creditors. EisnerAmper LLP serves as its financial advisor. HAAS ENVIRONMENTAL: Deal With Longshoremen 2038 Union Okayed ------------------------------------------------------------ The U.S. Bankruptcy Court in New Jersey gave its stamp of approval on Haas Environmental, Inc.'s settlement with International Longshoremen's Association, Local 2038. That deal also has been approved by the National Labor Relations Board. Prior to the Petition Date, Longshoremen 2038 filed charges against Debtor with the NLRB related to Longshoremen 2038 and certain of its union members that are employees of the Debtor. Longshoremen 2038 alleged that in December 2012 the Debtor violated the terms of a collective bargaining agreement between the parties related to services provided by the Employees at steel plants located in Indian Harbor, Indiana, and Burns Harbor, Indiana. On November 7, 2013, the Debtor and the Regional Director of the NLRB reached the Settlement, over the objection of Longshoremen 2038. Longshoremen 2038 appealed the Settlement, which appeal was denied by the NLRB. As such, Longshoremen 2038 has no further right of appeal and no further impediment to seeking approval of the Settlement from the Bankruptcy Court. The Settlement avoids the potential costs, risks, and delay of litigation. The salient terms of the deal are: a. Each Employee and Longshoremen 2038 is entitled to an administrative claim equal to 50% of the amount listed in the Settlement under "Administrative claim." The Debtor will pay the administrative claims on the effective date of a plan, totaling $394; b. Each Employee and Longshoremen 2038 is entitled to a priority wage claim equal to 50% of the amount listed in the Settlement under ?Wage claim.? The Debtor will pay the priority wage claims on the effective date of a plan, totaling $6,090. c. Each Employee and Longshoremen 2038 is entitled to an unsecured nonpriority claim equal to 50% of the amount listed in the Settlement under ?Unsecured non-priority claim,? totaling $515.50, which claims will be treated as general unsecured in accordance with a plan. The Regional Director of the NLRB has reached a separate settlement agreement with Laborers International Union North America, Local 81 whereby Laborers Local 81 has already paid the remaining 50% owed to the Employees and Longshoremen 2038. The Official Committee of Unsecured Creditors tried to block approval of the Settlement. In its objection, the Committee said the Debtor's Motion fails to provide sufficient facts to support the Settlement or the justification for Court approval outside of confirmation of a plan. The Motion is also unclear as to the total amount to be paid by the Debtor to each of the Employees and to ILA 2038. Further, the Motion and Settlement Agreement do not provide for releases of the Debtor and its estate in exchange for the proposed settlement amounts to be paid by the Debtor. In fact, the Committee said, the Motion and Settlement Agreement appear to provide for the opposite -- despite the payments to be made by the Debtor under the Settlement Agreement, it appears that parties to the Settlement reserve all other claims against the Debtor, including claims arising out of or related to other cases that are still pending against the Debtor. A copy of the Court's order approving the Settlement and the schedule of employee claims is available at no extra charge at: http://bankrupt.com/misc/HaasEnvironmentalNLRB.pdf About Haas Environmental, Inc. Haas Environmental, Inc., filed a Chapter 11 petition (Bankr. D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the petition as president. Judge Kathryn C. Ferguson presides over the case. The Debtor disclosed $10,127,069 in assets and $11,595,611 in liabilities as of the Chapter 11 filing. The Debtor is represented by Sherman, Silverstein, Kohl, Rose & Podolsky, P.A.'s Arthur J. Abramowitz, Esq., and Jerrold N. Poslusny, Jr., Esq. Mary E. Seymour, Esq., at Lowenstein Sandler LLP, serves as counsel for the Official Committee of Unsecured Creditors. EisnerAmper LLP serves as its financial advisor. HAAS ENVIRONMENTAL: Vehicle Sale OK'd, Proceeds to Go to Chase -------------------------------------------------------------- The Hon. Kathryn C. Ferguson of the U.S. Bankruptcy Court for the District of New Jersey has granted Haas Environmental, Inc., authority to sell the Debtor's 2011 Mercedes Benz S550 limousine to Catherine Haas, free and clear of liens and claims and encumbrances. Ms. Haas offered to pay the Debtor the appraised value of $85,000 for the Vehicle. The proceeds of the Sale will first go to JPMorgan Chase Bank, N.A., the holder of a first purchase money security interest in the Vehicle, to satisfy the entire balance on its loan, together with accumulated interest, counsel fees and costs, which total approximately $59,335. The remaining balance will be placed in the trust account maintained by the Debtor's counsel. The Debtor said in its March 17 court filing that it anticipates that it will recover approximately $25,665 from the sale of the Vehicle after payment to Chase. About Haas Environmental, Inc. Haas Environmental, Inc., filed a Chapter 11 petition (Bankr. D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the petition as president. Judge Kathryn C. Ferguson presides over the case. The Debtor disclosed $10,127,069 in assets and $11,595,611 in liabilities as of the Chapter 11 filing. Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor, in Cherry Hill, New Jersey, serves as the Debtor's counsel. Mary E. Seymour, Esq., at Lowenstein Sandler LLP, serves as counsel for the Official Committee of Unsecured Creditors. EisnerAmper LLP serves as its financial advisor. HAAS ENVIRONMENTAL: Deal With Cleveland Brothers Approved --------------------------------------------------------- Haas Environmental, Inc. sought and obtained approval of a settlement with Cleveland Brothers Equipment Company. Prior to the Petition Date, Cleveland Brothers filed a complaint against Debtor in the United States District Court, Western District of Pennsylvania. On December 3, 2012, partial default judgment was entered against the Debtor in favor of Cleveland Brothers in the sum of $114,213.34 plus $44.65 in per diem interest from October 3, 2012. Cleveland Brothers asserts that, as of the Petition Date, the balance owed on account of the Judgment was $61,837.15. On January 17, 2013, the Debtor purportedly transferred a Caterpillar 315CL (serial no. CFT 1167) -- an excavator -- to Cleveland Brothers in partial satisfaction of the Judgment. On April 23, Cleveland Brothers served a writ of execution upon the Debtor. The Debtor asserts that the Levy was not effective, which Cleveland Brothers disputes. On June 13, 2013, Cleveland Brothers served on EQT Production Company a garnishment of amounts owed by EQT to the Debtor. On May 23, the Debtor sent Cleveland Brothers two wire transfers totaling $20,000. The Debtor asserts that the Garnishment and the Wire Transfers were preferential transfers under 11 U.S.C. Sec. 547, which Cleveland Brothers disputes. EQT presently holds $61,837.15 in escrow on account of the Garnishment, representing the Petition Date balance of the Judgment pending a settlement or Court order. To avoid the potential costs, risks, and delay of litigation, the Debtor and Cleveland Brothers agree that the Escrow will be paid to the Debtor, and that upon receipt of the Escrow funds, the Debtor will pay Cleveland Brothers $12,500; and retain $49,337.15. Cleveland Brothers will make the Excavator available for retrieval by the Debtor at its facility located at 18512 Route 6, Mansfield, PA 16933. The Official Committee of Unsecured Creditors tried to block the Settlement. According to the Committee, it appears that Cleveland improperly effected a Levy and Garnishment against the Debtor and obtained at least $20,000 in preferential payments from the Debtor as a result of the Levy and Garnishment. While the Debtor's Motion states that Cleveland disputes that the Wire Transfers were preferential payments, the fact is that the Debtor paid Cleveland $20,000 on account of an antecedent debt within 90 days of the Petition Date. According to the Committee, no evidence or proof has been presented in the Motion or otherwise to support Cleveland?s position that its Garnishment and Levy were valid or that the $20,000 paid to it during the preference period was not a preference. The Motion is devoid of any analysis or explanation for the estate to abandon the preference claim against Cleveland, much less why the Debtor is paying Cleveland an additional $12,500 under the Settlement. Given these open issues, the Settlement should not be approved. The Debtor defended the Settlement. It pointed out that the cost of preparing a complaint, conducting discovery, participating in motion practice, and ultimately a trial would likely cost more than the $32,500 that Cleveland will retain under the Settlement (retaining the $20,000 wire, and receiving $12,500 from the EQT garnishment). The Debtor also repossess the Excavator, which the Debtor can put into immediate use and can generate $4,000 per week of net income. The Settlement Approval Order provides that: "EQT has acknowledged that the funds it holds in Escrow are owed to the Debtor on account of goods and/or services provided by the Debtor to EQT. EQT has agreed to turn over the Escrow to the Debtor within ten business days of the presentation of an order approving the Settlement and upon execution of releases by the parties related to the Escrow and the Garnishment. Upon receipt of the Escrow funds, the Debtor shall pay Cleveland the sum of $12,500 (the ?Cleveland Settlement Amount?) and the Debtor may retain the sum of $49,337.15." About Haas Environmental, Inc. Haas Environmental, Inc., filed a Chapter 11 petition (Bankr. D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the petition as president. Judge Kathryn C. Ferguson presides over the case. The Debtor disclosed $10,127,069 in assets and $11,595,611 in liabilities as of the Chapter 11 filing. The Debtor is represented by: SHERMAN, SILVERSTEIN, KOHL, ROSE & PODOLSKY, P.A. Arthur J. Abramowitz, Esq. Jerrold N. Poslusny, Jr., Esq. 308 Harper Drive, Suite 200 Moorestown, NJ 08057 Tel: (856) 662-0700 Mary E. Seymour, Esq., at Lowenstein Sandler LLP, serves as counsel for the Official Committee of Unsecured Creditors. EisnerAmper LLP serves as its financial advisor. HAAS ENVIRONMENTAL: Deal With Longshoremen 2038 Union Okayed ------------------------------------------------------------ The U.S. Bankruptcy Court in New Jersey gave its stamp of approval on Haas Environmental, Inc.'s settlement with International Longshoremen's Association, Local 2038. That deal also has been approved by the National Labor Relations Board. Prior to the Petition Date, Longshoremen 2038 filed charges against Debtor with the NLRB related to Longshoremen 2038 and certain of its union members that are employees of the Debtor. Longshoremen 2038 alleged that in December 2012 the Debtor violated the terms of a collective bargaining agreement between the parties related to services provided by the Employees at steel plants located in Indian Harbor, Indiana, and Burns Harbor, Indiana. On November 7, 2013, the Debtor and the Regional Director of the NLRB reached the Settlement, over the objection of Longshoremen 2038. Longshoremen 2038 appealed the Settlement, which appeal was denied by the NLRB. As such, Longshoremen 2038 has no further right of appeal and no further impediment to seeking approval of the Settlement from the Bankruptcy Court. The Settlement avoids the potential costs, risks, and delay of litigation. The salient terms of the deal are: a. Each Employee and Longshoremen 2038 is entitled to an administrative claim equal to 50% of the amount listed in the Settlement under "Administrative claim." The Debtor will pay the administrative claims on the effective date of a plan, totaling $394; b. Each Employee and Longshoremen 2038 is entitled to a priority wage claim equal to 50% of the amount listed in the Settlement under ?Wage claim.? The Debtor will pay the priority wage claims on the effective date of a plan, totaling $6,090. c. Each Employee and Longshoremen 2038 is entitled to an unsecured nonpriority claim equal to 50% of the amount listed in the Settlement under ?Unsecured non-priority claim,? totaling $515.50, which claims will be treated as general unsecured in accordance with a plan. The Regional Director of the NLRB has reached a separate settlement agreement with Laborers International Union North America, Local 81 whereby Laborers Local 81 has already paid the remaining 50% owed to the Employees and Longshoremen 2038. The Official Committee of Unsecured Creditors tried to block approval of the Settlement. In its objection, the Committee said the Debtor's Motion fails to provide sufficient facts to support the Settlement or the justification for Court approval outside of confirmation of a plan. The Motion is also unclear as to the total amount to be paid by the Debtor to each of the Employees and to ILA 2038. Further, the Motion and Settlement Agreement do not provide for releases of the Debtor and its estate in exchange for the proposed settlement amounts to be paid by the Debtor. In fact, the Committee said, the Motion and Settlement Agreement appear to provide for the opposite -- despite the payments to be made by the Debtor under the Settlement Agreement, it appears that parties to the Settlement reserve all other claims against the Debtor, including claims arising out of or related to other cases that are still pending against the Debtor. A copy of the Court's order approving the Settlement and the schedule of employee claims is available at no extra charge at: http://bankrupt.com/misc/HaasEnvironmentalNLRB.pdf About Haas Environmental, Inc. Haas Environmental, Inc., filed a Chapter 11 petition (Bankr. D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the petition as president. Judge Kathryn C. Ferguson presides over the case. The Debtor disclosed $10,127,069 in assets and $11,595,611 in liabilities as of the Chapter 11 filing. The Debtor is represented by Sherman, Silverstein, Kohl, Rose & Podolsky, P.A.'s Arthur J. Abramowitz, Esq., and Jerrold N. Poslusny, Jr., Esq. Mary E. Seymour, Esq., at Lowenstein Sandler LLP, serves as counsel for the Official Committee of Unsecured Creditors. EisnerAmper LLP serves as its financial advisor. HARRY VINER: Court Reduces Pittman S.C.'s Fees ---------------------------------------------- Bankruptcy Judge Catherine J. Furay approved, in part, and denied, in part, the final application of Galen W. Pittman, S.C., counsel to Harry Viner, Inc., for compensation and disbursements. Harry Viner, Inc., filed a voluntary Chapter 11 petition (Bankr. W.D. Wis. Case No. 11-16408) on October 21, 2011. On December 1, 2011, the Debtor filed an application to employ Galen W. Pittman, S.C. as attorney on a general retainer. The application contemplated "any representation relating to actions by creditors, the preparation of the liquidation analysis and preparation and representation and [sic] the Plan and any and all residual matters relating to the Chapter 11 Proceedings until the confirmation of the Chapter 11 Plan and related matters." On December 8, 2011, the Court approved the application. On March 1, 2013, Pittman S.C. filed an Amended Application for Interim Allowance of Compensation and Disbursements. The Interim Application sought compensation of $58,773.75 and reimbursement of $1,486.13 in expenses for the period from October 28, 2011, through February 26, 2013. After an evidentiary hearing at which the Court concluded that a portion of the work for which Pittman S.C. sought compensation was not performed on behalf of the Debtor, but rather on behalf of the Debtor's sole principal in her individual capacity in a state court proceeding, the Court denied compensation in the amount of $1,300, but approved the remainder of the application. The Order concerning the Interim Application was entered on June 27, 2013. On June 25, 2013, the Debtor's amended plan was confirmed following an evidentiary hearing. The confirmation order was entered on July 18, 2013. The confirmed plan provided that the Debtor would make periodic payments to its creditors. After the Debtor failed to make several payments called for in the plan, including quarterly tax payments, priority plan payments, and payments to general unsecured creditors, the United States Trustee and an unsecured creditor filed motions to convert or dismiss the case. The Debtor filed a proposed modified plan on January 15, 2014, and objected to the motions to convert or dismiss. At an evidentiary hearing on the motions, the Debtor conceded that the confirmed plan had been substantially consummated. At the close of the evidentiary hearing, on January 28, 2014, the Debtor's case was converted to a case under Chapter 7. On January 22, 2014, Pittman S.C. filed a final fee application. The Final Application included itemizations for time and expenses for the period June 26, 2012, through January 22, 2014. The UST objected to the Final Application, as did the Chapter 7 Trustee. The UST's objection recites numerous failures of the Debtor to comply with or fulfill the terms of the confirmed plan. The UST asserts those failures evidence counsel's failure to "adequately advise the Debtor regarding obligations with respect to the Debtor's Plan." Examples of the Debtor's failures include filing operating reports that wrongly state that all post-petition taxes (other than sales tax) were current, making payments to former shareholders before payments to other classes of creditors, and failing to sell certain collateral as provided in the plan to make payments to secured creditors. Counsel was acting as a disbursing agent at the time of each of these failures. Although they were not raised as an objection by the UST, the Court has identified other deficiencies and errors that must also be addressed. Those deficiencies include: the inclusion in the Final Application of sums previously disallowed by the Court, duplicate time entries, vague descriptions of services, lumping of entries, and failure to clearly state the total and actual amount of compensation sought on a final basis. Although the Final Application fails to clearly describe the amounts sought as final compensation, the history and applications before the Court for final approval can be summarized as: The firm seeks payment of $118,863.61 in fees and $2,548.73 in costs. According to Judge Furay, the amounts of $96,879.37 in fees and $2,112.79 in expenses are allowed. The remainder sought by the application is disallowed. A copy of Judge Furay's Aug. 5 decision is available at http://is.gd/WPbW8Gfrom Leagle.com. HI-TECH CONSTRUCTION: Case Summary & 20 Top Unsecured Creditors --------------------------------------------------------------- Debtor: Hi-Tech Construction Company, Inc. PO Box 8601 South Charleston, WV 25309 Case No.: 14-20424 Nature of Business: Construction Chapter 11 Petition Date: August 6, 2014 Court: United States Bankruptcy Court Southern District of West Virginia (Charleston) Judge: Hon. Ronald G. Pearson Debtor's Counsel: Joe M. Supple, Esq. SUPPLE LAW OFFICE, PLLC 801 Viand Street Point Pleasant, WV 25550 Tel: (304) 675-6249 Fax: (304) 675-4372 E-mail: info@supplelaw.net Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Kimberly S. Jones, secretary. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/wvsb14-20424.pdf HIGH MAINTENANCE: Court to Hold Plan Confirmation Hearing Aug. 11 ----------------------------------------------------------------- A court hearing to consider the confirmation of High Maintenance Broadcasting LLC's Chapter 11 plan has been rescheduled for August 11. The hearing was supposed to take place on July 30 but the company proposed to delay the hearing to give the court overseeing its bankruptcy case enough time to rule on the objection of a group of noteholders to Fred Hoffmann's claim. The noteholders, HMB's largest creditors, have reportedly indicated that they would drop their objection to the proposed plan if their objection to the claim of Mr. Hoffman, insider and creditor of the company, is resolved in their favor. The noteholders in February filed an objection to the restructuring plan in which they criticized the proposed substantive consolidation of the company and GH Broadcasting Inc. HMB "cannot confirm the plan without the noteholders' supporting votes and it is unlikely that the noteholders will change their vote unless and until the court has ruled on the claim objection," said the company's lawyer, Patrick Neligan Jr., Esq., at Neligan Foley LLP, in Dallas, Texas. The company's exclusive period to confirm its restructuring plan has also been extended to September 15 as a result of the delay of the confirmation hearing. HMB and GH Broadcasting on January 6 filed a proposed plan of reorganization and explanatory disclosure statement. Among other things, the plan provides for the substantive consolidation of the companies' estates for purposes of distributions under the plan. About High Maintenance Broadcasting and GH Broadcasting High Maintenance Broadcasting LLC owns and operates full power television station KUQI-TV (Channel 38), which is licensed in Corpus Christi, Texas, and is primarily affiliated with the Fox TV network. It also owns the FCC license to operate the station as well as domain name kuquitv.com. GH Broadcasting Inc. owns and operates two lower-power TV broadcast stations KXPX (Channel 14) and KTOV (Channel 21), which are licensed in Corpus Christi, as well as related equipment and FCC licenses for those stations. On June 17, 2013, an involuntary petition for relief (Bankr. S.D. Tex. Case No. 13-20270) was filed against High Maintenance by Robert Behar, Estrella Behar, Leibowitz Family, Pedro Dupouy, Latin Capital, Pan Atlantic Bank & Trust, Ltd., Sumit Enterprises, LLC, Jose Rodriguez, Leon Perez, Jays Four, LLC, Benjamin J. Jesselson, Jesselson Grandchildren, Joseph Kavana, Sawicki Family, Shpilberg Mgmt, Saby Behar Rev, Morris Bailey pursuant to section 303 of the Bankruptcy Code. An involuntary petition under Chapter 11 of the U.S. Bankruptcy Code was also filed against GH Broadcasting, Inc., on July 2, 2013. GH Broadcasting owns and operates television broadcast stations KXPX CA and KTOV LP, which are licensed in Corpus Christi, Texas. On July 24, 2013, the Debtors filed responses to the involuntary petition, in which they assented to the entry of an order for relief. The Court entered on July 25, 2013, consensual orders for relief in each of the Debtors' cases. On Aug. 1, 2013, the Court entered an order for the joint administration of the cases. The Debtors' counsel are Patrick J. Neligan Jr., Esq., and John D. Gaither, Esq., at Neligan Foley LLP. The noteholders include Robert Behar, Estrella Behar, Leibowitz Family Broadcasting, LLC, Lermont Trading, Ltd., and Jays Four, LLC. The noteholders are represented by Ronald A. Simank, Esq., at Schauer & Simank, P.C. HOUSTON REGIONAL: Vote on Sale to Proceed as Scheduled ------------------------------------------------------ Secured creditor, Comcast, filed an emergency motion in Houston Regional Sports Network, L.P.'s chapter 11 case in the Bankruptcy Court for the Southern District of Texas, Houston Division. According to Comcast, potential purchasers of the Debtor have insisted that their identities and the terms of the proposed sale not be revealed to Comcast "until everything is resolved completely." The Board of Directors of the Debtor's general partner consists of directors appointed by Comcast and others. Comcast contends that the directors it appointed are put in the position of learning information to which Comcast is not privy. There is concern that the Comcast-appointed directors may be accused of inappropriately divulging information to Comcast. At the July 2nd status conference, the Court ordered that Comcast was entitled to receive information regarding the identities of the purchasers and the terms of the proposed sale by July 31st, a week before the expiration of the Debtor's exclusive period to file a Plan. However, the potential purchasers now insist that the Board vote on the sale prior to the July 31st disclosures to Comcast. Comcast argues that the vote should be delayed until after the disclosures or the disclosures should be made prior to the vote. The potential purchasers have rejected both of the options. Comcast is aware of no legitimate business reason for the potential purchasers' position. Comcast argues that such a position undermines the transparency associated with the bankruptcy process, and places the Comcast-appointed directors at a disadvantage since the directors appointed by the Houston Astros and Houston Rockets would not be subject to the proposed purchasers' confidentially demands. Accordingly, Comcast seeks an order from the Court directing that the information regarding the potential purchasers' identities as well as the terms of the proposed sale be disclosed to Comcast prior to a vote by the Board. Hon. Marvin Isgur denied Comcast's request reasoning that the potential purchasers' request to conceal their identities and the terms of the proposed sale are not uncommon and that the Board of Directors has the ability to exercise its business judgment in determining whether to accept or reject the confidentiality requirement. Comcast is represented by Vincent P. Slusher, Esq. and Andrew Zollenger, Esq. at DLA Piper of Dallas, TX; Arthur J. Burke, Esq., Timothy Graulich, Esq., and Dana M. Seshuns, Esq. at Davis Polk & Wardwell LLP of New York, NY; Howard M. Shapiro, Esq. and Craig Goldblatt, Esq. at Wilmer Cutler Pickering Hale & Dorr LLP of Washington, DC; and George W. Shuster, Esq. and Sanket J. Bulsara, Esq. at the New York, NY office of Wilmer, Cutler. About Houston Regional Sports Network An involuntary Chapter 11 bankruptcy petition was filed against Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013. The involuntary filing was launched by three units of Comcast/NBC Universal and a television-related company. The petitioners are: Houston SportsNet Finance LLC, Comcast Sports Management Services LLC, National Digital Television Center LLC, and Comcast SportsNet California, LLC. The petitioning creditors have filed papers asking the Bankruptcy Judge to appoint an independent Chapter 11 trustee "to conduct a fair and open auction process for the Network's business assets on a going concern basis." Houston Regional Sports Network is a joint enterprise among affiliates of the Houston Astros baseball team, the Houston Rockets basketball team, and Houston SportsNet Holdings, LLC -- "Comcast Owner" -- an affiliate of Comcast Corporation. The Network has three limited partners -- Comcast Owner, Rockets Partner, L.P., and Astros HRSN LP Holdings LLC. The primary purpose of Houston Regional Sports Network is to create and operate a regional sports programming service that produces, exhibits, and distributes sports programming on a full-time basis, including live Astros and Rockets games within the league- permitted local territories. Counsel for the petitioning creditors are Howard M. Shapiro, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster, Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at Davis Polk & Wardwell LLP. Judge Marvin Isgur presides over the case. The Network was officially placed into Chapter 11 bankruptcy pursuant to a Feb. 7 Order for Relief. It has won approval to hire Haynes and Boone, Charles A. Beckham, Jr., Esq., Henry Flores, Esq., Abigail Ottmers, Esq., and Christopher L. Castillo, Esq., as counsel. It also hired Conway MacKenzie, Inc., as financial advisor. Harry Perrin, Esq., represents Astros owner Jim Crane. Alan Gover, Esq., represents the Rockets. The Astros are represented by Richard B. Drubel, Esq., Colleen A. Harrison, Esq., and Jonathan R. Voegele, Esq., at Boies, Schiller & Flexner LLP, in Hanover, NH; and Scott E. Gant, Esq., at Boies, Schiller & Flexner in Washington, DC. Comcast Corporation and NBCUniversal Media, LLC, are represented by Vincent P. Slusher, Esq., Eli Burriss, Esq., Andrew Mayo, Esq., and Andrew Zollinger, Esq., at DLA Piper; Arthur J. Burke, Esq., Timothy Graulich, Esq., and Dana M. Seshens, Esq., at Davis Polk & Wardwell LLP; and Howard M. Shapiro, Esq., and Craig Goldblatt, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP. Attorney for McLane Champions, LLC and R. Drayton McLane, Jr., are Wayne Fisher, Esq., at Fisher Boyd & Huguenard, LLP. HUNTER DEFENSE: S&P Raises CCR to 'B-', Off Watch Positive ---------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Hunter Defense Technologies Inc. to 'B-' from 'CCC' and removed the rating from CreditWatch, where S&P placed it with positive implications on July 9, 2014. The outlook is stable. Following the upgrade, S&P will be withdrawing the ratings on Hunter at the company's request. In addition to the corporate credit rating, S&P is withdrawing the issue-level ratings on Hunter's debt because the company repaid it as part of a refinancing. "The upgrade reflects an improvement in Hunter's liquidity profile because the company was able to extend its maturity profile and loosens its financial covenants by entering into a new credit facility (unrated)," said Standard & Poor's credit analyst Chris Mooney. The company used the proceeds from the new facility, along with an equity contribution from private-equity sponsor Metalmark Capital, to repay all of its previously existing debt, most of which was set to mature in August 2014. Hunter faces challenging market conditions, as it derives its revenue from an area of the U.S. defense budget that will receive a disproportionate share of future funding reductions. As a provider of tactical shelters, military heaters, and environmental control units, Hunter has a large exposure to (but not direct correlation with) troop levels, with the majority of sales to the U.S. Army. The U.S. Department of Defense (DoD) plans to prioritize spending on weapons systems by reducing the size of the Army by 12% or more by 2019. Furthermore, the DoD has proposed closing certain bases that it deems unnecessary, though Congress has not yet adopted these recommendations. However, S&P believes the pace of revenue declines will slow in the coming years because most of the impact from troop withdrawals in Afghanistan has been felt already. President Obama's plan to shift toward a more agile military could partially mitigate the impact of a smaller military because Hunter's products support an expeditionary force and demand is tied to the number and types of deployments. The new credit facility has a maximum leverage covenant of 5.25x (as defined in the credit agreement) that steps down over time and a minimum fixed-charge covenant of 1.2x. S&P believes that the company will be able to maintain covenant compliance over the next tear. IDENTIPHI INC: DLA Piper Gets $1.1M Negligence Judgment Axed ------------------------------------------------------------ Law360 reported that a Texas appeals court reversed a $1.1 million judgment against DLA Piper, finding that the former majority shareholder of defunct security technology company IdentiPHI Inc. lacked standing to pursue his claims against the firm. According to the memorandum opinion by Judge Jim R. Wright of Texas' Eleventh Court of Appeals, Australian financier and investor Chris Linegar lacked standing to pursue his claims that DLA Piper's negligent advice on a bridge loan to IdentiPHI left him with an unsecured claim, the report related. Austin, Tex.-based IdentiPHI, Inc., a technology company, offers a range of enterprise security solutions and consulting services. IdentiPHI, Inc., filed a Chapter 11 petition (Bankr. W.D. Texas Case No. 09-10349) on Feb. 11, 2009. Judge Craig A. Gargotta presides over the case. Joseph D. Martinec, Esq., at Martinec, Winn, Vickers & McElroy, P.C., represents the Debtor. The Debtor estimated assets and debts between $1 million and $10 million. IOWA GAMING: Belle's Severance, Retention, Bonus Payments OK'd -------------------------------------------------------------- The Hon. Richard E. Fehling of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania entered an order authorizing Belle of Sioux City, L.P., to make severance, retention and close bonus payments. A hearing to consider the motion for authorization to make the payments was set for July 22, 2014. Belle will pay an estimated $2,165,323, which amount is comprised of $1,699,888 in severance payments, $178,800 in retention bonuses and $286,635 in close bonus payments. With respect to hourly employees, 178 hourly employees will receive severance payments totaling $759,291; 201 hourly employees will receive retention bonuses totaling $144,200. With respect to salaried employees, 38 salaried employees will receive severance payments totaling $940,597 and 31 salaried employees will receive retention bonuses totaling $34,600. Ten Salaried Employees will receive Close Bonuses. As of July 16, 2014, Belle employed approximately 242 employees, of whom approximately 212 were full-time employees and approximately 30 were part-time. The employees perform a variety of critical functions including, but not limited to, customer relations, administration, accounting, finance, human resources, management information systems, marketing, facilities maintenance, security, and other tasks. Iowa Gaming Company, LLC, et al., stated in a court filing dated July 17, 2014, that after the Debtors filed for bankruptcy protection, the employees continued to work diligently on behalf of Belle despite the possibility that the Argosy Casino would be forced to close its doors on July 1, 2014. The employees did so, in part, based upon the assurances made by the Debtors that they would receive severance, retention bonuses and close bonuses if the casino closed. The continued service of the employees is necessary in order to conduct an orderly shut-down of the Argosy Casino, the Debtors said. On July 21, 2014, the U.S. Trustee for Region 3, objected to the motion, claiming that the Debtors fail to provide sufficient information in the payment motion to enable the Court, the U.S. Trustee, creditors, or other parties in interest to determine whether the proposed payments to non-insiders are justified by the facts and circumstances of their cases. The U.S. Trustee stated that despite the significant delays in compliance with many of the initial requirements applicable to Debtors seeking relief under Chapter 11 of the Bankruptcy Code, the absence of basic information regarding the Debtors' assets and liabilities, and the lack of any information regarding the Debtors' current financial situation and the identities of the proposed recipients, the Debtors sought court approval to immediately pay over $2.1 million in severance pay and retention and Close Bonuses under section 363(b) of the Code, including payments to certain unidentified key employees. Section 503(c)(1) strictly limits the payment of retention bonuses to insiders, and to obtain approval of a retention plan, a debtor must show that the insider has a bona fide job offer with higher compensation, the insider's services are essential to the debtor's survival, and the amount of the bonus is proportionate to bonuses received by non-insiders or equal to 25 percent of the insider's prior bonus. To the extent the Debtors propose to make the compensation payments to any insiders, they fail to satisfy these requirements, the U.S. Trustee said in the court filing dated July 21, 2014. About Iowa Gaming Iowa Gaming Company, LLC, and Belle of Sioux City, L.P., sought Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 14-13904) in Reading, Pennsylvania, on May 14, 2014 following a decision by the Iowa Racing and Gaming Commission to close down Belle's casino by July 2014. Belle of Sioux City has owned and operated the Argosy riverboat casino in Sioux City, Iowa since 1994. Iowa Gaming is Belle's general partner, and it is an indirect subsidiary of Penn National Gaming, Inc. Iowa Gaming and Penn manage Belle, and they operate out of Penn's corporate offices located in Wyomissing, Pennsylvania. The Debtors have tapped Stevens & Lee, P.C. as counsel; Quinn Emanuel Urquhart & Sullivan, LLP, as co-counsel; and Province, Inc. as financial advisor. In their schedules, Iowa Gaming disclosed $57,866,300 in total assets and $4,710,258 in total liabilities, while Belle disclosed $58,450,809 in total assets and $4,710,258 in total liabilities. According to Belle's financial records, Belle has an intercompany receivable of $47 million from Penn National. IOWA GAMING: Corrects Motion to Employ Quinn Emanuel as Counsel --------------------------------------------------------------- Iowa Gaming Company, LLC, et. al., filed with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania a notice of corrected application for an order authorizing the employment of Quinn Emanuel Urquhart & Sullivan, LLP, as the Debtors' bankruptcy counsel nunc pro tunc to the Petition Date. In preparing its first monthly fee statement, Quinn Emanuel determined that its application and declaration overstated the amount it had been paid by the Debtors prepetition. The amount of fees and expenses paid by the Debtors prepetition (for the period April 15, 2014, through the Petition Date) was $303,207.45. The amount remaining in the prepetition retainer, after payment of fees and expenses, was $183,617.31, not $200,000 as stated in the application and declaration. As reported by the Troubled Company Reporter on May 20, 2014, Quinn Emanuel attorneys K. John Shaffer ($995 per hour), Eric D. Winston ($935 per hour), and Rachel Appleton ($520 per hour), will have primary responsibility for providing bankruptcy-related services to the Debtors. The firm's attorneys Christopher Tayback ($1,075 per hour) and Daniel Posner ($840 per hour) will have primary responsibility for providing litigation-related services to the Debtors. In addition, other Quinn Emanuel professionals and paraprofessionals will provide services to the Debtors as is necessary. About Iowa Gaming Iowa Gaming Company, LLC, and Belle of Sioux City, L.P., sought Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 14-13904) in Reading, Pennsylvania, on May 14, 2014 following a decision by the Iowa Racing and Gaming Commission to close down Belle's casino by July 2014. Belle of Sioux City has owned and operated the Argosy riverboat casino in Sioux City, Iowa since 1994. Iowa Gaming is Belle's general partner, and it is an indirect subsidiary of Penn National Gaming, Inc. Iowa Gaming and Penn manage Belle, and they operate out of Penn's corporate offices located in Wyomissing, Pennsylvania. The Debtors have tapped Stevens & Lee, P.C. as counsel; Quinn Emanuel Urquhart & Sullivan, LLP, as co-counsel; and Province, Inc. as financial advisor. In their schedules, Iowa Gaming disclosed $57,866,300 in total assets and $4,710,258 in total liabilities, while Belle disclosed $58,450,809 in total assets and $4,710,258 in total liabilities. According to Belle's financial records, Belle has an intercompany receivable of $47 million from Penn National. IOWA GAMING: Files Schedules of Assets and Liabilities ------------------------------------------------------ Iowa Gaming Company, LLC, and Belle of Sioux City, L.P., each filed with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania its schedules of assets and liabilities. Iowa Gaming disclosed: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property B. Personal Property $57,866,300 C. Property Claimed as Exempt D. Creditors Holding Secured Claims E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority Claims $4,710,258 ----------- ----------- TOTAL $57,866,300 $4,710,258 Belle disclosed: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property B. Personal Property $58,450,809 C. Property Claimed as Exempt D. Creditors Holding Secured Claims E. Creditors Holding Unsecured Priority Claims $2,600,927 F. Creditors Holding Unsecured Non-priority Claims $2,109,331 ----------- ----------- TOTAL $58,450,809 $4,710,258 Copies of the Schedules are available for free at: http://bankrupt.com/misc/IOWAGAMING_234_sal.pdf http://bankrupt.com/misc/IOWAGAMING_belle_232_sal.pdf On June 30, 2014, the Court extended, at the behest of the Debtors, the time to file their Schedules and Statement of Financial Affairs to July 28, 2014. The Debtors sought the extension on June 23, 2014. About Iowa Gaming Iowa Gaming Company, LLC, and Belle of Sioux City, L.P., sought Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 14-13904) in Reading, Pennsylvania, on May 14, 2014 following a decision by the Iowa Racing and Gaming Commission to close down Belle's casino by July 2014. Belle of Sioux City has owned and operated the Argosy riverboat casino in Sioux City, Iowa since 1994. Iowa Gaming is Belle's general partner, and it is an indirect subsidiary of Penn National Gaming, Inc. Iowa Gaming and Penn manage Belle, and they operate out of Penn's corporate offices located in Wyomissing, Pennsylvania. The Debtors have tapped Stevens & Lee, P.C. as counsel; Quinn Emanuel Urquhart & Sullivan, LLP, as co-counsel; and Province, Inc. as financial advisor. According to Belle's financial records, Belle has an intercompany receivable of $47 million from Penn National. IOWA GAMING: Argosy Sioux City Closed; Case Up for Dismissal ------------------------------------------------------------ Peg Brickley, writing for Daily Bankruptcy Review, reported that Penn National Gaming may have shuttered the Argosy Casino in Sioux City, but it is pressing ahead with an appeal challenging the state of Iowa's right to deny it permission to operate. About Iowa Gaming Iowa Gaming Company, LLC, and Belle of Sioux City, L.P., sought Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 14-13904) in Reading, Pennsylvania, on May 14, 2014 following a decision by the Iowa Racing and Gaming Commission to close down Belle's casino by July 2014. Belle of Sioux City has owned and operated the Argosy riverboat casino in Sioux City, Iowa since 1994. Iowa Gaming is Belle's general partner, and it is an indirect subsidiary of Penn National Gaming, Inc. Iowa Gaming and Penn manage Belle, and they operate out of Penn's corporate offices located in Wyomissing, Pennsylvania. The Debtors have tapped Stevens & Lee, P.C. as counsel; Quinn Emanuel Urquhart & Sullivan, LLP, as co-counsel; and Province, Inc. as financial advisor. Belle and Iowa Gaming each estimated at least $50 million in assets and less than $10 million in liabilities. According to Belle's financial records, Belle has an intercompany receivable of $47 million from Penn National. ISR GROUP: Has Final OK to Obtain Financing & Use Cash Collateral ----------------------------------------------------------------- ISR Group, Incorporated, sought and obtained final authorization from the Hon. Jimmy L. Croom of the U.S. Bankruptcy Court for the Western District of Tennessee to obtain DIP financing and use cash collateral. As adequate protection for the diminution in value of their interests in the pre-petition collateral on account of the Debtor's use of that collateral, the imposition of the automatic stay and the subordination to the carve out-expenses, TCFI IG LLC, the lender, is granted: (i) valid, binding, enforceable and perfected replacement liens upon and security interests in all collateral; and (ii) allowed superpriority administrative expense claim. The Debtor is also authorized to provide adequate protection to Lender, in its capacity as post-petition lender, in the form of: (a) payment of fees and other amounts due under the existing credit documents, at the times specified therein, to the Lender, (b) ongoing accrual of interest on the DIP facility, and (c) payment of fees, costs and expenses, including, without limitation, reasonable legal and other professionals' fees and expenses, of the Lender as required under the existing credit documents. A copy of the order is available for free at: http://bankrupt.com/misc/ISRGROUP_162_cashcollord.pdf On May 5, 2014, the Debtor filed a motion for interim and final orders approving postpetition financing and authorizing cash collateral use. The Debtor is restarting its business operations and as a result, needs financing to pay its postpetition obligations, including employee wages, vendors providing postpetition goods and services, as well as the administrative expenses of the Debtor's Chapter 11 proceeding, including U.S. Trustee fees and professional fees and expenses, as well as any postpetition taxes or government fees. In addition, the Debtor's prior business operations require on-going compliance with certain Department of Defense regulations which mandate high-level, sophisticated security systems to protect top secret information and technology in the Debtor's as a result of its work for various branches of the armed services. The prepetition obligations are secured by prepetition liens on substantially all of the Debtor's and its parent corporation, ISR Group Holdings, Inc.'s assets and, absent additional financing the Debtor does not have sufficient liquidity to restart its business operations or comply with applicable government regulations, the Debtor said. The Debtor and ISR Group entered into that certain March 28, 2012 loan agreement by the Debtor, ISR Holdings, and PNC Bank, National Association. The existing credit agreement provided for a $22.5 million term loan and $5 million line of credit. The obligations of the Debtor and ISR Holdings under the existing credit agreement are secured by substantially all of their assets, and mature on March 31, 2017. As of the Petition Date, the aggregate amount of all obligations owing by the Debtor and ISR Holdings to Lender under and in connection with the existing credit documents was not less than not less than $17.44 million, plus interest accrued and accruing thereon, together with all costs, fees, expenses, and other charges accrued, accruing or chargeable with respect thereto. In its May 5 motion, the Debtor sought to obtain financing in an interim maximum amount of $500,000, and final maximum amount of $1 million (which may be increased to $2 million at the discretion of the Lender), with an interest rate of LIBOR plus 12% or LIBOR plus 16% after a postpetition default. The Debtor will pay these fees to the Lender: (i) a $30,000 debtor-in-possession financing facility fee, which will be refunded to the Debtor upon the entry of the final court order; and (ii) a commitment fee of 2.5% on the average daily amount of the unused amount of the postpetition commitment during the period from and including the Petition Date to but excluding the postpetition termination date. A copy of the motion is available for free at: http://bankrupt.com/misc/ISRGROUP_24_cashcoll.pdf The Court first set for May 8, 2014, the hearing on the Debtor's financing and cash collateral motion. Objections On May 7, 2014, Samuel K. Crocker, the U.S. Trustee for Region 8, filed an objection, claiming that the Debtor's motion is filed in a context in which virtually nothing is known about the Debtor's assets or liabilities. The U.S. Trustee stated that schedules and statements had not been filed, and it was difficult to assess the business judgment that the Debtor wished to exercise without knowing the value of the Debtor's assets or the extent and nature of the Debtors liabilities. The motion, the U.S. Trustee added, made reference to the Lender which acquired the indebtedness owed to PNC Bank; but the motion did not identify the name of the Lender. The U.S. Trustee said that from the exhibit(s) filed with the motion, it is assumed that TCFI IG LLC is the Lender. The U.S. Trustee wanted the Debtor to clarify the record on this point. A copy of the objection is available for free at: http://bankrupt.com/misc/ISRGROUP_42_financingobj.pdf On May 8, 2014, the Court set for May 29, 2014, the final hearing on the motion. The Court entered on May 15, 2014, an interim order authorizing the post-petition financing and cash collateral use. On May 28, 2014, the Official Committee of Unsecured Creditors filed an objection to financing and cash collateral motion, as it believed that the financing was an unwise decision that unfairly prejudiced unsecured creditors and prematurely forces the Debtor down the Lender/stalking horse bidder's preferred path -- an expedited sale process, for no cash consideration, without any meaningful opportunity to market the assets. A copy of the objection is available for free at: http://bankrupt.com/misc/ISRGROUP_115_cashcollobj.pdf On May 28, the Debtor responded to the Committee's objection. The Debtor currently has no revenue, no unencumbered assets, and no ability to service any post-petition executory contracts. Through the DIP and sale motions, the Debtor sought to establish a process in which the Debtor's assets can be preserved while being sold through a competitive bidding process in order to maximize the value of the Debtor's estate for the benefit of all creditors. At a minimum, the proposed DIP financing and sale would result in the payment of all priority tax claims, the satisfaction of all or substantially all priority wage claims, and an opportunity for unsecured creditors to be paid in full. According to the Debtor, the proposed DIP financing would enable the Debtor to: (i) preserve and maintain its assets by, among other things, securing insurance coverage and protecting the Debtor's from deterioration and theft; (ii) pursue valuable economic opportunities that may add value to the Debtor's estate and increase the price at which the Debtor's assets can be sold; and (iii) run a competitive sale process and to propose and confirm a plan of reorganization that will result in meaningful distributions to all creditors. The U.S. Trustee renewed his objection on May 29, 2014, saying that the Debtor's motion made insufficient reference to, and the Debtor should be obliged to make a record of, the transition from old management to new management that occurred in the days leading up to the bankruptcy filing. Any agreements made by any creditor, equity holder, or interested party in connection therewith should be disclosed. "The motion relies upon the Declaration of John Stuecheli in support of certain first day pleadings as grounds for granting the motion. The adequacy of Mr. Stuecheli's personal knowledge and capacity to lay a factual predicate for granting the motion has not been demonstrated sufficiently, however. To the extent that the declarant does not have personal knowledge of events occurring prior to his taking up his office, the Court should not accept testimony based upon mere information and belief," the U.S. Trustee said. On June 6, 2014, the Debtor filed a cash budget for six weeks ended June 13, 2014. About ISR Group ISR Group, Incorporated, filed a Chapter 11 bankruptcy petition (Bankr. W.D. Tenn. Case No. 14-11077) on April 29, 2014. John Stuecheli signed the petition as chief restructuring officer. In its schedules, the Debtor disclosed $13,339,836 in total assets and $19,465,911 in total liabilities. Franklin Childress, Jr., Esq., at Baker Donelson Bearman, serves as the Debtor's counsel. Judge Jimmy L Croom presides over the case. ISR Group Inc., a provider of services for military and civilian users of drones, obtained Court permission to sell the business to an affiliate of lender Trive Capital, mostly in exchange for $18.4 million in secured debt. Under a global settlement among the company, the creditors' committee and the buyer, Trive is providing $375,000 in cash exclusively for payment to creditors with unsecured claims. The bankruptcy judge approved the settlement on June 17, together with an agreement among constituents supporting a Chapter 11 plan. ISR GROUP: Files Schedules of Assets and Liabilities ---------------------------------------------------- ISR Group, Incorporated, filed with the U.S. Bankruptcy Court for the Western District of Tennessee its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $6,326,200 B. Personal Property $7,013,636 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $17,444,444 E. Creditors Holding Unsecured Priority Claims $582,335 F. Creditors Holding Unsecured Non-priority Claims $1,439,132 ----------- ----------- TOTAL $13,339,836 $19,465,911 A copy of the Schedules is available for free at: http://bankrupt.com/misc/ISRGROUP_71_sal.pdf About ISR Group ISR Group, Incorporated, filed a Chapter 11 bankruptcy petition (Bankr. W.D. Tenn. Case No. 14-11077) on April 29, 2014. John Stuecheli signed the petition as chief restructuring officer. Franklin Childress, Jr., Esq., at Baker Donelson Bearman, serves as the Debtor's counsel. Judge Jimmy L Croom presides over the case. ISR Group Inc., a provider of services for military and civilian users of drones, obtained Court permission to sell the business to an affiliate of lender Trive Capital, mostly in exchange for $18.4 million in secured debt. Under a global settlement among the company, the creditors' committee and the buyer, Trive is providing $375,000 in cash exclusively for payment to creditors with unsecured claims. The bankruptcy judge approved the settlement on June 17, together with an agreement among constituents supporting a Chapter 11 plan. ISTAR FINANCIAL: Incurs $16 Million Net Loss in Second Quarter -------------------------------------------------------------- iStar Financial Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss allocable to common shareholders of $16.20 million on $129.84 million of total revenues for the three months ended June 30, 2014, as compared with a net loss allocable to common shareholders of $26 million on $99.91 million of total revenues for the same period during the prior year. For the six months ended June 30, 2014, the Company reported a net loss allocable to common shareholders of $42.77 million on $238.59 million of total revenues as compared with a net loss allocable to common shareholders of $67.26 million on $194.02 million of total revenues for the same period last year. The Company's balance sheet at June 30, 2014, showed $5.47 billion in total assets, $4.21 billion in total liabilities, $11.43 million in redeemable noncontrolling interests and $1.24 billion in total equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/WaRhU0 About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. * * * As reported by the TCR on June 26, 2014, Fitch Ratings had affirmed the Issuer Default Rating (IDR) of iStar Financial Inc. at 'B'. The 'B' IDR is driven by improvements in the company's leverage, continued demonstrated access to the capital markets and new sources of growth capital and material reductions in non- performing loans (NPLs). As reported by the TCR on Oct. 5, 2012, Standard & Poor's Ratings Services affirmed its 'B+' long-term issuer credit rating on iStar Financial. In October 2012, Moody's Investors Service upgraded the corporate family rating to B2 from B3. The current rating reflects the REIT's success in extending near term debt maturities and improving fundamentals in commercial real estate. The ratings on the October 2012 senior secured credit facility takes into account the asset coverage, the size and quality of the collateral pool, and the term of facility. JVMW PROPERTIES: Court Confirms Plan of Reorganization ------------------------------------------------------ The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for the District of Puerto Rico entered an order confirming JVMW Properties Management Corp.'s plan of reorganization. The Court approved the Disclosure Statement describing the Plan on May 9, 2014, and a hearing for the consideration of confirmation of the Plan was set for July 1, 2014. As reported by the Troubled Company Reporter on April 30, 2014, the Plan filed on Jan. 30, 2014, provides for the sale of all of the Debtor's real property assets to a third party purchaser, Access Group, LLC, for $10,650,000. The net proceeds to be received by Debtor will be used exclusively for the payments to be made under the Plan. The sale of the properties will be free and clear of all pre-effective date claims, interest, liens, leases and encumbrances. Mont Blanc's Condominium Council of Owners said in court filings dated June 5, 2014, and June 9, 2014, that the creditor has no objection to the Disclosure Statement, Plan and Confirmation. About JVMW Properties JVMW Properties Management Corp filed a Chapter 11 petition (Bankr. D.P.R. Case No. 13-02532) on April 1, 2013. The petition was signed by Julio Blanco D'Arcy, as president. The Debtor scheduled assets of $15,694,947 and liabilities of $25,782,161. Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC represents the Debtor in its restructuring effort. The Debtor's business entails the development, construction and management of residential and commercial properties and projects. LIGHTSQUARED INC: Overhauls Reorganization Ch. 11 Plan ------------------------------------------------------ Lightsquared Inc., et al., filed with the U.S. Bankruptcy Court for the Southern District of New York a revised joint Chapter 11 plan, with the authority, and at the direction, of the Special Committee, together with the Ad Hoc LP Secured Group. Among other things, the Plan provides for the potential satisfaction in full of senior secured claims against the Debtors and offers a compromised treatment for Prepetition LP Facility SPSO Claims that would avoid costly litigation with respect to subordination of those claims. The Plan also provides for potential recoveries to junior stakeholders through an auction of the New LightSquared Common Equity that is otherwise distributable to Holders of Allowed Prepetition LP Facility Non-SPSO Claims, Allowed Prepetition LP Facility SPSO Claims, and Allowed Prepetition Inc. Facility Non-Subordinated Claims, if those claims are first satisfied in full, in Cash, from the proceeds of the Auction. The Plan Proponents believe that the Plan is currently the highest and best restructuring offer available to the Debtors that will maximize the value of the Estates for the benefit of the Debtors? creditors and equityholders. Moreover, it is the only restructuring proposal that avoids a value-minimizing liquidation, and is the only path currently available for the Debtors to successfully exit the Chapter 11 Cases. A full-text copy of the Plan dated Aug. 7, 2014, is available at http://bankrupt.com/misc/LIGHTSQUAREDplan0807.pdf About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LIGHTSQUARED INC: Has Access to Cash Collateral Until Aug. 31 ------------------------------------------------------------- LightSquared Inc. seeks approval from U.S. Bankruptcy Judge Shelley Chapman to continue to use the cash collateral of lenders under a 2010 credit agreement until August 31. Milbank Tweed Hadley & McCloy LLP will present a proposed order to Judge Chapman for signature on August 1, at 12:00 p.m. (prevailing Eastern time). About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LIGHTSQUARED INC: Has Until Sept. 30 to Decide on Parkridge Lease ----------------------------------------------------------------- U.S. Bankruptcy Judge Shelley Chapman has given LightSquared Inc. until Sept. 30 to either assume or reject its lease contract with BDC Parkridge LLC. The company signed the contract to lease from BDC Parkridge office space in Reston, Virginia. 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. LITHIUM TECHNOLOGY: Closed Suit with Certain 2008 Noteholders ------------------------------------------------------------- Lithium Technology Corporation and certain holders of approximately EUR1,350,000 in principal amount of the Company's debt concluded a legal action commenced in April 2013 in the U.S. District Court for the District of Delaware captioned Virium et al. v. Lithium Technology Corporation (Case No. 1:13-cv-00500- LPS). The debt at issue constitutes part of the total of approximately EUR7,125,100 in principal amount of indebtedness held by holders of the Company's Convertible Promissory Notes first issued in 2008. All of the Notes are secured by a security interest in all of the Company's assets, but the Notes are not governed by a single indenture or similar agreement. Certain of the Notes held by the plaintiff holders matured in 2011, and the holders of the balance of the Notes entered into discussions with the Company. Since 2011, the prior and the current management of Company has been in discussion with the majority holders and seeking to negotiate with the minority holders regarding a consensual restructuring of the Company's indebtedness. In the action, the minority holders (representing approximately 19% of the principal amount of all Notes) sought confirmation of the debt evidenced by the Notes (which was not contested by the Company and is currently $3,329,137 in total (including attorneys' fees) with respect to the minority holders) and confirmation of certain security interests in assets of the Company or its subsidiaries, part of which was contested by the Company. The action was resolved by confirming the uncontested indebtedness, ordering the Company to re-grant a limited security interest, covering a subset of the assets the minority holders had alleged were covered by the original security interest grant, and confirming a commitment of the Company contained in the Notes not to grant any new security interests in the same collateral without the Note holders' consent. The Company promptly complied with the order to re-grant a limited security interest and has complied and intends to continue to comply with its covenant not to grant additional security interests in the same collateral. Following clarification of the scope of the security interest securing the Notes, the Company is continuing its active discussions for a consensual restructuring with the holders of approximately 81% of the Notes, and has repeated its standing offer to the minority holders to join in the negotiations. The minority holders have declined to enter into the negotiations, pending the Company's acquiescence to demands the Company understands relate primarily to the minority holders' attempt to perfect their security interest in the principal security securing all of the Notes, the Company's equity interest in its sole subsidiary, GAIA Holdings B.V. the Company is currently reviewing such demands. The Company has also been notified by the majority holders regarding the majority holders' security interest in the same collateral. The Company understands that any priority issues as between the various Note holders will be resolved between the holders. If the Company is not able to reach a consensual restructuring with its Note holders, the Company reserves all rights to protect the interests of all creditors, shareholders and other appropriate stakeholders. About Lithium Technology Plymouth Meeting, Pa.-based Lithium Technology Corporation is a mid-volume production stage company that develops large format lithium-ion rechargeable batteries to be used as a new power source for emerging applications in the automotive, stationary power, and national security markets. The Company was not able to file its annual report for the period ended Dec. 31, 2011, and its quarterly reports for the succeeding periods. For the nine months ended Sept. 30, 2011, the Company reported a net loss of $12.26 million on $6.06 million of total revenue. The Company reported a net loss of $7.25 million on $6.35 million of products and services sales for the year ended Dec. 31, 2010, compared with a net loss of $10.51 million on $7.37 million of product and services sales during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $8.83 million in total assets, $35.09 million in total liabilities and a $26.26 million total stockholders' deficit. Going Concern As reported by the TCR on April 8, 2011, Amper, Politziner & Mattia, LLP, Edison, New Jersey, after auditing the Company's financial statements for the year ended Dec. 31, 2010, noted that the Company has recurring losses from operations since inception and has a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Form 10-Q for the quarter ended Sept. 30, 2011, noted that the Company's operating plan seeks to minimize its capital requirements, but the expansion of its production capacity to meet increasing sales and refinement of its manufacturing process and equipment will require additional capital. The Company raised capital through the sale of securities closing in the second quarter of 2011 and realized proceeds from the licensing of its technology pursuant to the terms of a licensing agreement and the sale of inventory used in manufacturing its batteries as part of the establishment of a joint venture in the fourth quarter of 2011, but is continuing to seek other financing initiatives and needs to raise additional capital to meet its working capital needs, for the repayment of debt and for capital expenditures. Such capital is expected to come from the sale of securities. The Company believes that if it raises approximately $4 million in additional debt and equity financings it would have sufficient funds to meet its needs for working capital, capital expenditures and expansion plans through the year ending Dec. 31, 2012. No assurance can be given that the Company will be successful in completing any financings at the minimum level necessary to fund its capital equipment, debt repayment or working capital requirements, or at all. If the Company is unsuccessful in completing these financings, it will not be able to meet its working capital, debt repayment or capital equipment needs or execute its business plan. In that case the Company will assess all available alternatives including a sale of its assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures. These conditions raise substantial doubt about the Company's ability to continue as a going concern. M STREET REAL ESTATE: Case Summary & 6 Unsecured Creditors ---------------------------------------------------------- Debtor: M Street Real Estate Holdings, LLC A California Limited LIability Company 659 W Woodbury Road Altadena, CA 91001 Case No.: 14-06299 Chapter 11 Petition Date: August 6, 2014 Court: United States Bankruptcy Court Southern District of California (San Diego) Debtor's Counsel: Leonard Pena, Esq. PENA & SOMA, APC 402 South Marengo Ave., Suite B Pasadena, CA 91101 Tel: (626) 396-4000 Fax: (213) 291-9102 E-mail: lpena@penalaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Robert Farias, managing member. A list of the Debtor's six largest unsecured creditors is available for free at http://bankrupt.com/misc/casb14-06299.pdf MARINA BIOTECH: Incurs $1.5 Million Net Loss in 2013 ---------------------------------------------------- Marina Biotech, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K for the year ended Dec. 31, 2013. In 2013, the Company incurred a net loss of $1.57 million on $2.11 million of license and other revenue, compared to a net loss of $9.54 million on $4.21 million of license and other revenue for in 2012. The Company's balance sheet at Dec. 31, 2013, showed $7.74 million in total assets, $14.80 million in total liabilities and a $7.06 million total stockholders' deficit. "We have experienced and continue to experience operating losses and negative cash flows from operations, as well as an ongoing requirement for substantial additional capital investments. In February 2014, certain debt holders exchanged secured promissory notes in the aggregate principal and interest amount of approximately $1.5 million for approximately 2.0 million shares of our common stock. Additionally, in March 2014, we sold 1,200 shares of our Series C Convertible Preferred Stock and 6.0 million warrants to purchase one share of common stock for $0.75 per share, resulting in proceeds of $6.0 million. We believe that our current cash resources, which include the proceeds of the March 2014 offering, will enable us to fund our intended operations through May 2015," the Company stated in the Report. A full-text copy of the Form 10-K is available for free at: http://is.gd/KvEnKJ About Marina Biotech Marina Biotech, Inc., headquartered in Bothell, Washington, is a biotechnology company focused on the discovery, development and commercialization of nucleic acid-based therapies utilizing gene silencing approaches such as RNA interference ("RNAi") and blocking messenger RNA ("mRNA") translation. The Company's goal is to improve human health through the development, either through its own efforts or those of its collaboration partners and licensees, of these nucleic acid-based therapeutics as well as the delivery technologies that together provide superior treatment options for patients. The Company has multiple proprietary technologies integrated into a broad nucleic acid-based drug discovery platform, with the capability to deliver novel nucleic acid-based therapeutics via systemic, local and oral administration to target a wide range of human diseases, based on the unique characteristics of the cells and organs involved in each disease. On June 1, 2012, the Company announced that, due to its financial condition, it had implemented a furlough of approximately 90% of its employees and ceased substantially all day-to-day operations. Since that time substantially all of the furloughed employees have been terminated. As of Sept. 30, 2012, the Company had approximately 11 remaining employees, including all of its executive officers, all of whom are either furloughed or working on reduced salary. As a result, since June 1, 2012, its internal research and development efforts have been minimal, pending receipt of adequate funding. As reported by the TCR on May 21, 2014, KPMG LLP was dismissed as the principal accountants for Marina Biotech, Inc., and Wolf & Company, P.C., had been engaged as replacement. MEGA RV: Gets More Time to File Schedules, Statements ----------------------------------------------------- Mega RV Corp. requested an emergency extension for filing its Schedules of Assets and Liabilities, Statement of Financial Affairs, and all other required documents in its chapter 11 case in the Central Division of California, Santa Ana Division. The Debtor requested an extension through July 21, 2014. The Debtor filed its voluntary chapter 11 petition on June 5th. Brent McMahon, President of the Debtor, stated that the Debtor was forced to cease operations when its flooring lender, GE Commercial Capital Distribution Finance, swept all of the Debtor's cash. The Debtor has been unable to gather the documentation necessary to complete its Schedules, Statements and other required documents within fourteen (14) days of filing its petition, but anticipates gathering the information necessary to fully complete those items if granted the requested extension. Hon. Mark S. Wallace granted the Debtor's requested extension. About Mega RV Corp. Mega RV Corp. filed a Chapter 11 bankruptcy petition (Bankr. C.D. Calif. Case No. 14-13770) on June 15, 2014. Brent McMahon signed the petition as president. The Debtor estimated assets and liabilities of at least $10 million. Judge Mark S Wallace presides over the case. Proposed counsel for the Debtor are Robert P. Goe, Esq. and Elizabeth A. LaRocque, Esq. at Goe & Forsythe, LLP of Irvine, CA. The U.S. Trustee for Region 16 on July 3 appointed three creditors of Mega RV Corp. to serve on the official committee of unsecured creditors. MGM RESORTS: Posts $105.5-Million Net Income in Second Quarter -------------------------------------------------------------- MGM Resorts International reported net income attributable to the Company of $105.54 million on $2.58 billion of revenues for the three months ended June 30, 2014, as compared with a net loss attributable to the Company of $92.95 million on $2.48 billion of revenues for the same period in 2013. For the six months ended June 30, 2014, the Company reported net income attributable to the Company of $213.70 million on $5.21 billion of revenues as compared with a net loss attributable to the Company of $86.41 million on $4.83 billion of revenues for the same period last year. As of June 30, 2014, the Company had $25.57 billion in total assets, $17.63 billion in total liabilities and $7.94 billion in total stockholders' equity. "I am pleased to report another solid quarter of growth at MGM Resorts," said Jim Murren, Chairman and CEO. "Our domestic business was very strong with 12% EBITDA growth in Las Vegas driven by strong performance in both our room and casino segments. CityCenter resort operations continue to improve while in Macau we grew cash flow and margins due to a higher contribution of revenues from our main floor business. These results clearly reflect the success of our investments and strategies in our existing properties, while we are building MGM Cotai and beginning construction on MGM National Harbor." A full-text copy of the Company's press release is available for free at http://is.gd/RoAo2I About MGM Resorts MGM Resorts International (NYSE: MGM) a global hospitality company, operating a portfolio of destination resort brands including Bellagio, MGM Grand, Mandalay Bay and The Mirage. The Company also owns 51% of MGM China Holdings Limited, which owns the MGM Macau resort and casino and is in the process of developing a gaming resort in Cotai, and 50% of CityCenter in Las Vegas, which features ARIA resort and casino. For more information about MGM Resorts International, visit the Company's Web site at www.mgmresorts.com. MGM Resorts reported a net loss attributable to the Company of $156.60 million in 2013 following a net loss attributable to the Company of $1.76 billion in 2012. Bankruptcy Warning The Company stated in its 2013 Annual Report, "The agreements governing our senior secured credit facility and other senior indebtedness contain restrictions and limitations that could significantly affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations. Covenants governing our senior secured credit facility and certain of our debt securities restrict, among other things, our ability to: * pay dividends or distributions, repurchase or issue equity, prepay certain debt or make certain investments; * incur additional debt; * incur liens on assets; * sell assets or consolidate with another company or sell all or substantially all assets; * enter into transactions with affiliates; * allow certain subsidiaries to transfer assets; and * enter into sale and lease-back transactions. Our ability to comply with these provisions may be affected by events beyond our control. The breach of any such covenants or obligations not otherwise waived or cured could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross defaults under other agreements governing our long-term indebtedness. Any default under our senior secured credit facility or the indentures governing our other debt could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our debt, and could force us to seek protection under the bankruptcy laws." * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. In March 2012, S&P revised the outlook to positive from stable. "The revision of our rating outlook to positive reflects strong performance in 2011 and our expectation that MGM will continue to benefit from the improving performance trends on the Las Vegas Strip," S&P said. In March 2012, Moody's Investors Service affirmed its B2 corporate family rating and probability of default rating. The affirmation of MGM's B2 Corporate Family Rating reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 which will help improve MGM's leverage and coverage metrics, albeit modestly. Additionally, the company's declaration of a $400 million dividend ($204 million to MGM) from its 51% owned Macau joint venture due to be paid shortly will also improve the company's liquidity profile. The ratings also consider MGM's recent bank amendment that resulted in about 50% of its $3.5 billion senior credit facility being extended one year from 2014 to 2015. As reported by the TCR on Oct. 15, 2012, Fitch Ratings has affirmed MGM Resorts International's (MGM) Issuer Default Rating (IDR) at 'B-' and MGM Grand Paradise, S.A.'s (MGM Grand Paradise) IDR at 'B+'. MIG LLC: May Use Up to $102,000 in Operating Support Account ------------------------------------------------------------ MIG LLC and affiliate ITC Cellular, LLC, won permission from the Bankruptcy Court to use cash, withdraw, or transfer funds from their Operating Support Account solely to make disbursements of up to $102,000, in accordance with a prepared August 2014 budget. The Debtors negotiated with the Indenture Trustee for their Senior Secured Cash/PIK Notes Due 2016 and the Ad Hoc Committee of Noteholders regarding consensual use of cash not to exceed $102,000. The U.S. Trustee didn't pose any objection to the agreement. Judge Kevin Gross issued the funds ruling on July 23, 2014, in relation to the Debtors' motion to maintain their existing bank accounts and to continue using their existing business forms and checks (the Bank Accounts Motion). Wells Fargo is authorized to continue to service and administer the Operating Support Account in the ordinary course of business. The Court is set to convene another hearing on Aug. 18, 2014, at 3:00 p.m., to consider all other relief sought in the Bank Accounts Motion. About MIG LLC Formerly operating under the name "Metromedia International Group, Inc.," MIG LLC -- http://www.migllc-group.com/-- owned and operated and sold dozens of companies in diverse industries, including entertainment, photo finishing, garden equipment and sporting goods, until the late 1990s. In 1997 and 1998, MIG consummated the sale of substantially all of its U.S.-based entertainment assets and began focusing on expanding into emerging communications and media businesses. By 2005, all of MIG's operating businesses were located in the Republic of Georgia and operated through its subsidiaries. MIG LLC and affiliate ITC Cellular, LLC, filed for Chapter 11 bankruptcy protection on June 30, 2014. The cases are currently jointly administered under Bankr. D. Del. Lead Case No. 14-11605. As of the bankruptcy filing, MIG's sole valuable asset, beyond its existing cash, is its indirect interest in Magticom Ltd. The cases are assigned to Judge Kevin Gross. Headquartered in Tbilisi, Georgia, Magticom is the leading mobile telephony operator in Georgia and is also the largest telephone operator in Georgia. Magticom serves 2.4 million subscribers with a network that covers 97% of the populated regions in Georgia. Magticom is owned by International Telcell Cellular, LLC, which is 46% owned by MIG unit ITC Cellular, 51% owned by Dr. George Jokhtaberidze, and 3% owned by Gemstone Management Ltd. Formerly known as MIG, Inc., MIG was a debtor in a previous case (Bankr. D. Del. Case NO. 09-12118). It obtained approval of its reorganization plan in November 2010. The Debtors have tapped Greenberg Traurig LLP as counsel, Fox Rothschild Inc. as financial advisor; Cousins Chipman and Brown, LLP as conflicts counsel; and Prime Clerk LLC as claims and notice agent and administrative advisor. The Debtors has obtained interim Court approval to retain Natalia Alexeeva as chief restructuring officer. A three-member panel has been appointed in these cases to serve as the official committee of unsecured creditors, consisting of Walter M. Grant, Paul N. Kiel, and Lawrence P. Klamon. * * * The U.S. Trustee for Region 3 is currently set to hold a meeting of the Debtors' creditors on August 11, at 1:00 p.m., in Wilmington, Delaware. The companies' representative is required to appear at the meeting for the purpose of being examined under oath. MONARCH COMMUNITY: Reports $46,000 Net Income in Second Quarter --------------------------------------------------------------- Monarch Community Bancorp, Inc., reported net earnings available to common shareholders of $46,000 for the quarter ended June 30, 2014, compared to a net loss available to common shareholders of $929,000 for the same period in 2013. The Company also reported net income available to common shareholders of $64,000 on $3.74 million of interest income for the six months ended June 30, 2014, compared to a net loss available to common shareholders of $1.4 million on $3.78 million of interest income for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $188.80 million in total assets, $168.85 million in total liabilities and $19.95 million in stockholders' equity. Commenting on the bank's second quarter performance and 2014 thus far, Richard J. DeVries, president & CEO of Monarch Community Bancorp, Inc. and Monarch Community Bank, said, "we are pleased with the continued progress of the bank, particularly in the areas of loan growth and improving credit quality. Total loans have grown 8.7% since December 31, 2013, while our non-performing assets, which reached a peak of almost $27.3 million in 2010, totaled only $1.8 million as of June 30, 2014." A full-text copy of the press release is available at: http://is.gd/KfLVsJ About Monarch Community Coldwater, Michigan-based Monarch Community Bancorp, Inc., was incorporated in March 2002 under Maryland law to hold all of the common stock of Monarch Community Bank, formerly known as Branch County Federal Savings and Loan Association. The Bank converted to a stock savings institution effective Aug. 29, 2002. In connection with the conversion, the Company sold 2,314,375 shares of its common stock in a subscription offering. Monarch Community reported a net loss available to common stockholders of $2.55 million in 2013, a net loss available to common stockholders of $741,000 in 2012 and a net loss of $353,000 in 2011. MT. GOX: Parent Blocked From Auctioning Bitcoins.com Domain ----------------------------------------------------------- Law360 reported that a federal judge in Seattle has temporarily stopped the parent of bankrupt bitcoin exchange Mt. Gox from auctioning off the domain name bitcoins.com, finding that letting the sale proceed would hinder her ability to award potential damages in a $75 million contract suit against the company over licensing its intellectual property. According to the report, responding to a motion from bitcoin company CoinLab Inc., the suit's plaintiff, U.S. District Judge Marsha J. Pechman issued a temporary injunction blocking Mt. Gox parent Tibanne KK from selling any assets. About Mt. Gox Bitcoin exchange MtGox Co., Ltd., filed a petition under Chapter 15 of the U.S. Bankruptcy Code on March 9, 2014, days after the company sought bankruptcy protection in Japan. The bankruptcy in Japan came after the bitcoin exchange lost 850,000 bitcoins valued at about $475 million "disappeared." The Japanese bitcoin exchange that halted trading in February 2014. It filed for bankruptcy protection in the U.S. to prevent customers from targeting the cash it holds in U.S. bank accounts. The Chapter 15 case is In re MtGox Co., Ltd., Case No. 14-31229 (Bankr. N.D. Tex.). The Chapter 15 Petitioner is Robert Marie Mark Karpeles, the company's chief executive officer. Mr. Karpeles is represented by John E. Mitchell, Esq., and David William Parham, Esq., at Baker & Mcckenzie LLP, in Dallas, Texas. The company said it has estimated assets of $10 million to $50 million and debts of $50 million to $100 million. MUSCLEPHARM CORP: Reports $408,000 Net Income in 2nd Quarter ------------------------------------------------------------ MusclePharm Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $408,328 on $46.73 million of net sales for the three months ended June 30, 2014, compared to a net loss of $2.42 million on $25.48 million of net sales for the same period in 2013. For the six months ended June 30, 2014, the Company reported net income of $3.14 million on $96.94 million of net sales, compared to a net loss of $9.78 million on $48.04 million of net sales for the same period last year. As of June 30, 2014, the Company had $66.93 million in total assets, $28.83 million in total liabilities and $38.09 million in total stockholders' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/98Pjy1 About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life- style company that develops and manufactures a full line of National Science Foundation approved nutritional supplements that are 100 percent free of banned substances. MusclePharm is sold in over 120 countries and available in over 5,000 U.S. retail outlets, including GNC and Vitamin Shoppe. MusclePharm products are also sold in over 100 online stores, including bodybuilding.com, Amazon.com and Vitacost.com. MusclePharm reported a net loss after taxes of $17.71 million in 2013, as compared with a net loss after taxes of $18.95 million in 2012. NATCHEZ REGIONAL: Judge Sets Deadlines for Filing Claims -------------------------------------------------------- U.S. Bankruptcy Judge Neil Olack approved the deadlines proposed by Natchez Regional Medical Center for filing proofs of claim. Pursuant to the judge's order, creditors of Natchez, except governmental units, must file their pre-bankruptcy claims against the hospital on or before October 10 (General Bar Date). Meanwhile, governmental units are required to file their claims on or before November 28 (Governmental Unit Bar Date). Any creditor whose claim stemmed from the rejection of an executory contract or unexpired lease must file a proof of claim so that it is received by the Clerk of Court on or before the later of: (i) the first business day that is 30 days after court approval of the rejection; and (ii) either the General Bar Date, or if the claimant is a governmental unit, the Governmental Unit Bar Date. Any creditor whose claim is affected by the amendment of the hospital's schedules of assets and liabilities have until the later of (i) either the General Bar Date, or if the claimant is a governmental unit, the Governmental Unit Bar Date; or (ii) 30 days after service of notice of the amendment, to file a proof of claim. About Natchez Regional Based in Natchez, Mississippi, Natchez Regional Medical Center is a full-service hospital offering comprehensive diagnostic and treatment services for acute, subacute and ambulatory care. Natchez Regional serves as a referral center for the five Mississippi counties and two Louisiana parishes it serves, known locally as the Miss-Lou. The hospital is owned by Adams County. Natchez Regional Medical Center filed for Chapter 9 bankruptcy protection (Bankr. S.D. Miss. Case No. 14-01048) on March 26, 2014. Eileen N. Shaffer, Esq., Attorney At Law, serves as bankruptcy counsel. In its petition, the Center listed total assets of $27.8 million and total debts of $20.80 million. The petition was signed by Donny Rentfro, hospital CEO. At the onset of the case, the 179-bed facility said intends to have a term sheet outlining a sale of the facility to a "qualified buyer." The hospital blamed financial problems on "ill-timed and poorly integrated acquisition of physicians' practices and new clinical technologies," the report related. This is the Center's second bankruptcy filing in six years. It filed a Chapter 9 petition on Feb. 12, 2009 (Bankr. S.D. Miss. Case No. 09-00477). Eileen N. Shaffer, Esq., also represented the Debtor as counsel in the 2009 case. The Debtor listed total assets of between $10 million and $50 million, and total debts of between $10 million and $50 million in the 2009 petition. Nathcez Regional exited bankruptcy in December 2009 after a court approved its plan of adjustment, in which all unsecured creditors owed $5,000 were to be paid in full. In the 2014 case, Bankruptcy Judge Neil P. Olack, who presides over the case, has held that appointment of a patient care ombudsman is unnecessary. NATCHEZ REGIONAL: Credit With UMB Extended Through Dec. 31 ---------------------------------------------------------- U.S. Bankruptcy Judge Neil Olack granted the request of Natchez Regional Medical Center for extension of the final order for obtaining credit, modifying automatic stay, and granting post- petition liens through Dec. 31, 2014. A copy of Judge Olack's order is available without charge at http://is.gd/eG2GzM About Natchez Regional Based in Natchez, Mississippi, Natchez Regional Medical Center is a full-service hospital offering comprehensive diagnostic and treatment services for acute, subacute and ambulatory care. Natchez Regional serves as a referral center for the five Mississippi counties and two Louisiana parishes it serves, known locally as the Miss-Lou. The hospital is owned by Adams County. Natchez Regional Medical Center filed for Chapter 9 bankruptcy protection (Bankr. S.D. Miss. Case No. 14-01048) on March 26, 2014. Eileen N. Shaffer, Esq., Attorney At Law, serves as bankruptcy counsel. In its petition, the Center listed total assets of $27.8 million and total debts of $20.80 million. The petition was signed by Donny Rentfro, hospital CEO. At the onset of the case, the 179-bed facility said intends to have a term sheet outlining a sale of the facility to a "qualified buyer." The hospital blamed financial problems on "ill-timed and poorly integrated acquisition of physicians' practices and new clinical technologies," the report related. This is the Center's second bankruptcy filing in six years. It filed a Chapter 9 petition on Feb. 12, 2009 (Bankr. S.D. Miss. Case No. 09-00477). Eileen N. Shaffer, Esq., also represented the Debtor as counsel in the 2009 case. The Debtor listed total assets of between $10 million and $50 million, and total debts of between $10 million and $50 million in the 2009 petition. Nathcez Regional exited bankruptcy in December 2009 after a court approved its plan of adjustment, in which all unsecured creditors owed $5,000 were to be paid in full. In the 2014 case, Bankruptcy Judge Neil P. Olack, who presides over the case, has held that appointment of a patient care ombudsman is unnecessary. NATIVE ENERGY: Wins Approval of Amended Reorganization Plan ----------------------------------------------------------- Native Energy Farms LLC won conditional approval of its amended plan of reorganization from Nevada Judge August B. Landis. A hearing on the Plan was held July 11 in Las Vegas. No party appeared at the hearing or filed an objection to the motion. The Court was scheduled to hold another plan hearing for July 23. The Debtor owns certain real property totaling 76.88 acres located in Goleta, California along the Pacific Coast Highway. The Property is free and clear of liens and encumbrances and has a current market value of $8 million to $11 million, when developed. The Debtor filed for Chapter 11 to resolve these issues: -- The maturity of $1.1 million principal amount to SMI/ISC Corp.; -- The need for additional funding for the Debtor's small development project to build two houses and split the property. Prior to the bankruptcy, the Debtor and SMI/ISC agreed that the Debtor would file a pre-packaged plan and SMI/ISC would take a subordinate position to a DIP lender and be repaid in full and receive 20% of the profit when the parcel of land and/or lots sold. Pursuant to the Debtor's exit plan, the Debtor will seek to obtain $1,500,000 in New DIP Loans from Golden Bear Capital to finance the development of its property, consisting of a portion of the Rancho Nuestra Senora Del Refugio in the County of Santa Barbara, California. Thereafter, the Debtor will sell that developed property and use the proceeds to fund Plan payments. DISTRIBUTIONS UNDER THE PLAN NEW DIP LOAN: $1,500,000.00 Estimated Points and Fees ($125,000.00) Admin Claims: ($26,213.00) Global Guidance ($22,500.00) ------------- Total Amount of DIP Loan Available to Debtor for Project $1,326,287.00 DISTRIBUTIONS AFTER DEVELOPMENT AND SALE OF PROPERTY SALE PRICE: $8,000,000.00 DIP Loan ($1,500,000.00) SMI/ISC Loan ($1,298,000.00) GGG, LLC ($9,982.50) Interest on DIP Loan: ($539,550.00) Interest Due to SMI/ISC ($116,820.00) Profit: $4,535,647.50 20% Profit to SMI/ISC ($907,129.50) Distribution to Equity Interest $3,628,518.00 When it filed for bankruptcy, Native Energy Farms delivered to the Court a pre-packaged plan of reorganization and other related documents. The original plan provided for these classes: (i) Class 1 - SMI/ISC Unsecured Claim to Secured Claim; (ii) Class 2 - General Unsecured Claims; (iii) Class 3 - Equity Interest; and (iv) Class 4 - Post Confirmation DIP Lender Claim. On May 16, 2014, the Debtor's Voting Agent reported that 100% in amount and 100% in number of Impaired Claims and Interests that were entitled to vote to accept or reject the Plan, voted to accept the Plan. That same day, the Debtor sought bankruptcy protection. At a combined Plan and Disclosure Statement hearing on June 13, 2014, the Court required the Debtor to make modifications to the Plan documents, and the hearing was continued to June 26. The Debtor made minor modifications to the Plan, which required a new solicitation. The Disclosure Statement was approved at the June 26 hearing. On June 28, 2014, the Debtor mailed out a new solicitation package for voting on the modified Plan. On July 10, Steven L. Yarmy, Esq., the Debtor's counsel, also serving as voting and tabulation agent, reported that 100% in amount and 100% in number of Impaired Claims and Interests that were entitled to vote to accept or reject the Plan, voted to accept the Plan. The Amended Plan provides for this treatment of claims of Creditors and holders of equity interests, including holders of Old Membership Units: Class Claim Claim Amount Status Voting Rights ----- ----- ------------ ------ ------------- 1 SMI/ISC $1,298,000 Impaired Entitled to Vote 2 General Unsecured Claims $30,000 Impaired Entitled to Vote 3 Equity Interest $7,000,000 Unimpaired Deemed to Accept 4 Golden Bear Capital or a Substitute Sec. 364(d)(1) DIP Lender $1,500,000 Unimpaired Deemed to Accept SMI/ISC Corp.'s Class 1 Claim The Class 1 claim will consist of a Secured Claim in favor of SMI/ISC Corp. against the Debtor's vacant land located in Goleta, California more commonly known as APN: 081-140-023, which will be secured by a Second Deed of Trust subordinate to the DIP Lender's Super Priority First Deed of Trust. On the Effective Date, the holder of the unsecured Note dated April 13, 2013 in favor of SMI/ISC, Corp., and in complete satisfaction of such claim shall be fully released and converted to a secured claim and subordinated second deed of trust to the Claim of the DIP Lender Golden Bear Capital: (b) Principal Balance. The principal balance of the Class 1 claim shall be the Allowed Secured Lender Claim in the amount of $1,298,000. (c) Lien. From and after the Confirmation Date, the Holder of the Class 1 Claim shall be allowed to record a subordinated second deed of trust in the Collateral consistent with the applicable Loan Documents until the Class 1 claim is repaid in full. (d) Post-Effective Date Interest Rate. Interest shall accrue on the Class 1 Holders Claim at an interest only rate of 3.00% per annum. (e) Monthly Payments. There shall be no monthly payments, payments shall accrue interest until paid. (f) Maturity Date. The unpaid balance of the Class 1 claim shall be due and payable 36 months after the Effective Date. (g) Prepayment. There shall be no penalty for prepayment for all or part of the Class 1 claim prior to the Maturity Date. (h) Property Taxes & Insurance. The Debtor shall be responsible for all property taxes and general liability insurance. (i) Refinancing and Sale Options. Prior to the Maturity Date, Reorganized Debtor shall have the absolute right to act as follows: (1) Refinance; provided, however, that the proceeds of such refinancing loan are sufficient to pay, and are utilized to pay, all sums due and owing under the Class 1 claim at the time of closing of such refinancing, unless Secured Lender otherwise agrees; or (2) Sell the Real Property free and clear of Secured Lender's Liens; provided, however, that the proceeds of such sale are sufficient at the time of closing of such sale to pay, and are utilized to pay, all sums due and owing under the Class 1 claim, unless Secured Lender otherwise agrees. (j) Equity Share in Sales Profits. SMI/ISC shall be entitled to 20% of the sales profits from the sale of the property after all liens and expenses are deducted. (k) Default. On the Effective Date, the Loan Documents shall remain in full force and effect as related to Default terms under the Note and Deed of Trust. Should the Debtor not be able to satisfy the obligation to SMI/ISC the Debtor shall provide a Deed in Lieu of Foreclosure or Quiet Claim/Grant Deed in full satisfaction of its obligations to SMI/ISC. General Unsecured Claims Class 2 Claims consist of the General Unsecured Claims of Global Guidance Group, LLC. Holders of Class 2 General Unsecured Claims on the Effective Date shall, in full satisfaction, settlement, release and exchange for such Allowed General Unsecured Claims, shall receive two payments: -- The first payment shall come from the DIP Loan Proceeds equal to $22,500 -- The remaining $7,500.00 shall be paid when the property sells, with interest to accrue at a rate of 10% per annum compounding. DIP Lender Claim Golden Bear Capital and/or its assigns or a substitute lender Class 3 will consist of Golden Bear Capital's and/or its assigns or a substitute lender 11 U.S.C. Sec. 364(d)(1) super priority first deed of trust. Golden Bear Capital will be authorized to lend the Debtor any amount of capital necessary to complete the Project on any reasonable commercial terms that are in the Debtor's business judgment. Golden Bear Capital will have a super- priority first deed of trust senior to any claims, interest or any other liens of any kind against the vacant land, except for taxes owed to a governmental unit, which shall be paid out of the proceeds of any loan. The Confirmation Order shall operate as the Court's Order authorizing that financing. Equity Interest of the Debtor Class 4 Equity Interests of the Debtor are unimpaired by the Plan and conclusively deemed to have accepted the Plan. On the Effective Date, the Membership Interest or Units shall not be cancelled and the Debtors Member(s) may sell, transfer, or assign membership units or interest as necessary. About Native Energy Native Energy Farms, LLC, is the owner of certain real property totaling 76.88 acres located in Goleta, California along the Pacific Coast Highway. The property is free and clear of liens and encumbrances and has a current market value of $8 million to $11 million. Native Energy filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 14-13482) in Las Vegas, Nevada, with a prepackaged Chapter 11 plan on May 16, 2014. The case is assigned to Judge August B. Landis. The deadline for filing claims is on Sept. 17, 2014. Steven L. Yarmy, Esq., in Las Vegas, serves as counsel to the Debtor. NATIVE ENERGY: Amends Schedule of Real Property ----------------------------------------------- Native Energy Farms LLC filed amended the first section of its schedules of assets and liabilities. The Debtor amended its schedule of real property to disclose that the property is worth $1.5 million. A full-text copy of the amended schedule is available for free at http://is.gd/ukfwFs About Native Energy Native Energy Farms, LLC, is the owner of certain real property totaling 76.88 acres located in Goleta, California along the Pacific Coast Highway. The property is free and clear of liens and encumbrances and has a current market value of $8 million to $11 million. Native Energy filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 14-13482) in Las Vegas, Nevada, with a prepackaged Chapter 11 plan on May 16, 2014. The case is assigned to Judge August B. Landis. The deadline for filing claims is on Sept. 17, 2014. Steven L. Yarmy, Esq., in Las Vegas, serves as counsel to the Debtor. NAUTILUS HOLDINGS: May Borrow Up to $650,000 From Synergy Mgmt. --------------------------------------------------------------- Judge Robert Drain has, to date, entered an amended second interim order permitting Nautilus Holdings Limited, et al., to borrow up to an aggregate principal amount of $650,000 from non-bankrupt affiliate Synergy Management Services Limited as lender. As reported on the July 3, 2014 edition of The Troubled Company Reporter, Synergy has committed to provide $5 million upon final approval of the Debtors' request to tap postpetition financing. The DIP Loan will accrue at an annual interest rate of 3.25% per annum. Synergy will be granted a first priority security interest in and lien upon all tangible and intangible prepetition and postpetition property and assets of the Debtors and their estates and a junior security interest in and lien upon all assets of the Debtors that is subject to valid, perfected and unavoidable liens in existence immediately prior to the Petition Date. The Amended Second Interim Order was issued in mid-July 2014. The final hearing on the matter, previously scheduled for Aug. 4, has been adjourned to Aug. 25, at 10:00 a.m., in White Plains, New York. About Nautilus Holdings Nautilus Holdings Limited and 20 affiliated companies, including Nautilus Holdings No. 2 Limited, filed bare-bones Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 14-22885) in White Plains, New York, on June 23, 2014. The affiliates are Nautilus Holdings No. 2 Limited; Nautilus Shipholdings No. 1 Limited; Nautilus Shipholdings No. 2 Limited; Nautilus Shipholdings No. 3 Limited; Able Challenger Limited; Charming Energetic Limited; Dynamic Continental Limited; Earlstown Limited; Findhorn Osprey Limited; Floral Peninsula Limited; Golden Knighthead Limited; Magic Peninsula Limited; Metropolitan Harbour Limited; Metropolitan Vitality Limited; Miltons' Way Limited; Perpetual Joy Limited; Regal Stone Limited; Resplendent Spirit Limited; Superior Integrity Limited; and Vivid Mind Limited. The Debtors' cases have been assigned to Judge Robert D. Drain, and are being jointly administered for procedural purposes. Hamilton, Bermuda-based Nautilus estimated $100 million to $500 million in assets and debt. Monrovia, Liberia-based Reminiscent Ventures S.A. owns 100% of the stock. Nautilus has tapped Jay Goffman, Esq., Mark A. McDermott, Esq., Shana A. Elberg, Esq., and Suzanne D.T. Lovett, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, as counsel; and AP Services, LLC, as financial advisor. Epiq Bankruptcy Solutions LLC serves as the claims and noticing agent. NAUTILUS HOLDINGS: May Use Cash Collateral Thru Sept. 2 ------------------------------------------------------- Judge Robert Drain has, to date, entered a third interim order authorizing Nautilus Holdings Limited, et al., to use cash collateral through and including the week ending Sept. 2, 2014. The Debtors are to provide the administrative agents of their Prepetition Loan Facilities an updated 4-week cash flow forecast and budget in accordance with the Interim Cash Collateral Order. As a condition for the Cash Collateral Use, the Debtors' Prepetition Lenders are entitled to certain adequate protection to the extent of any diminution of their interests in the Cash Collateral. Among other things, the Lenders are granted (i) allowed senior administrative expense claims in the amount of the Diminution with superpriority status over all other claims, subject only to a carve-out, and (ii) adequate protection liens in the amount of the Diminution subject to a carve-out. During the term of the Third Interim Cash Collateral Order, only 60% of the management fees owed to Synergy Management Services Limited will be paid out in the ordinary course of business. The remaining 40% will be pooled and won't be paid out to Synergy until further Court order. The Third Interim Cash Collateral Order was issued on Aug. 6, 2014. The Bankruptcy Court will hold a final hearing on the Cash Collateral Motion on Aug. 25. About Nautilus Holdings Nautilus Holdings Limited and 20 affiliated companies, including Nautilus Holdings No. 2 Limited, filed bare-bones Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 14-22885) in White Plains, New York, on June 23, 2014. The affiliates are Nautilus Holdings No. 2 Limited; Nautilus Shipholdings No. 1 Limited; Nautilus Shipholdings No. 2 Limited; Nautilus Shipholdings No. 3 Limited; Able Challenger Limited; Charming Energetic Limited; Dynamic Continental Limited; Earlstown Limited; Findhorn Osprey Limited; Floral Peninsula Limited; Golden Knighthead Limited; Magic Peninsula Limited; Metropolitan Harbour Limited; Metropolitan Vitality Limited; Miltons' Way Limited; Perpetual Joy Limited; Regal Stone Limited; Resplendent Spirit Limited; Superior Integrity Limited; and Vivid Mind Limited. The Debtors' cases have been assigned to Judge Robert D. Drain, and are being jointly administered for procedural purposes. Hamilton, Bermuda-based Nautilus estimated $100 million to $500 million in assets and debt. Monrovia, Liberia-based Reminiscent Ventures S.A. owns 100% of the stock. Nautilus has tapped Jay Goffman, Esq., Mark A. McDermott, Esq., Shana A. Elberg, Esq., and Suzanne D.T. Lovett, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, as counsel; and AP Services, LLC, as financial advisor. Epiq Bankruptcy Solutions LLC serves as the claims and noticing agent. NAUTILUS HOLDINGS: Gets Court's Nod to Tap J. Mesterham as CRO -------------------------------------------------------------- Judge Robert Drain has authorized Nautilus Holdings Limited, et al., to employ AP Services LLC to provide them interim management and restructuring services and designate James A. Mesterham as chief restructuring officer nunc pro tunc to the Petition Date. As previously reported by The Troubled Company Reporter on July 8, 2014, Mr. Mesterham will assist the Debtors in evaluating and implementing strategic and tactical options through the restructuring process. Mr. Mesterham's standard hourly rate is $990. His temporary staff's hourly rates range from $435 to $875. They will be compensated for their services accordingly. To the extent APS uses the services of independent contractors, (i) it will pass-through the cost of those Contractors to the Debtors at the same rate that it pays the Contractors; (ii) seek reimbursement for actual costs only; (iii) ensure that the Contractors are subject to the same conflict checks required for APS; and (iv) file with the Court those disclosures required by Bankruptcy Rule 2014. About Nautilus Holdings Nautilus Holdings Limited and 20 affiliated companies, including Nautilus Holdings No. 2 Limited, filed bare-bones Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 14-22885) in White Plains, New York, on June 23, 2014. The affiliates are Nautilus Holdings No. 2 Limited; Nautilus Shipholdings No. 1 Limited; Nautilus Shipholdings No. 2 Limited; Nautilus Shipholdings No. 3 Limited; Able Challenger Limited; Charming Energetic Limited; Dynamic Continental Limited; Earlstown Limited; Findhorn Osprey Limited; Floral Peninsula Limited; Golden Knighthead Limited; Magic Peninsula Limited; Metropolitan Harbour Limited; Metropolitan Vitality Limited; Miltons' Way Limited; Perpetual Joy Limited; Regal Stone Limited; Resplendent Spirit Limited; Superior Integrity Limited; and Vivid Mind Limited. The Debtors' cases have been assigned to Judge Robert D. Drain, and are being jointly administered for procedural purposes. Hamilton, Bermuda-based Nautilus estimated $100 million to $500 million in assets and debt. Monrovia, Liberia-based Reminiscent Ventures S.A. owns 100% of the stock. Nautilus has tapped Jay Goffman, Esq., Mark A. McDermott, Esq., Shana A. Elberg, Esq., and Suzanne D.T. Lovett, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, as counsel; and AP Services, LLC, as financial advisor. Epiq Bankruptcy Solutions LLC serves as the claims and noticing agent. NAUTILUS HOLDINGS: Gets Final OK to Pay Prepetition Vendor Claims ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York entered a final order authorizing Nautilus Holdings Limited, et al., to pay in the ordinary course of business pre-bankruptcy Vendor Claims as they become due and payable. Aggregate prepetition payments under the Order should not exceed $5.3 million. The Vendors supply the goods, materials, and services, for each of the Debtors' vessels. The Vendors include, for the most part, vendors and suppliers outside the United States, and those who may be able to assert maritime liens on the Vessels for work and other services they have provided for the Vessels' benefit. The Debtors, with the input and oversight of the Chief Restructuring Officer, will determine which Vendor Claims, if any, will be paid. Unless the parties otherwise agree to different terms, if a Vendor accepts payment under the Order, that Vendor is deemed to have agreed to continue to provide goods and services to the Debtors during the pendency of the Chapter 11 cases. About Nautilus Holdings Nautilus Holdings Limited and 20 affiliated companies, including Nautilus Holdings No. 2 Limited, filed bare-bones Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 14-22885) in White Plains, New York, on June 23, 2014. The affiliates are Nautilus Holdings No. 2 Limited; Nautilus Shipholdings No. 1 Limited; Nautilus Shipholdings No. 2 Limited; Nautilus Shipholdings No. 3 Limited; Able Challenger Limited; Charming Energetic Limited; Dynamic Continental Limited; Earlstown Limited; Findhorn Osprey Limited; Floral Peninsula Limited; Golden Knighthead Limited; Magic Peninsula Limited; Metropolitan Harbour Limited; Metropolitan Vitality Limited; Miltons' Way Limited; Perpetual Joy Limited; Regal Stone Limited; Resplendent Spirit Limited; Superior Integrity Limited; and Vivid Mind Limited. The Debtors' cases have been assigned to Judge Robert D. Drain, and are being jointly administered for procedural purposes. Hamilton, Bermuda-based Nautilus estimated $100 million to $500 million in assets and debt. Monrovia, Liberia-based Reminiscent Ventures S.A. owns 100% of the stock. Nautilus has tapped Jay Goffman, Esq., Mark A. McDermott, Esq., Shana A. Elberg, Esq., and Suzanne D.T. Lovett, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, as counsel; and AP Services, LLC, as financial advisor. Epiq Bankruptcy Solutions LLC serves as the claims and noticing agent. PALM BEACH COMMUNITY: Seeks Exclusivity Extension to Complete Sale ------------------------------------------------------------------ Palm Beach Community Church has requested an extension to its exclusive period for soliciting acceptances to its Plan of Reorganization in its Chapter 11 case in the Southern District of Florida, West Palm Beach Division. The current exclusive solicitation period was slated to expire July 17, 2014, absent an extension, and the Debtor is seeking an extension through September 15. The Debtor is seeking the extension in order to complete an auction sale which will provide a cash payment to its secured lender, PNC Bank. Additionally, the Debtor is considering offers for the purchase of PNC Bank's claim. This is the Debtor's third request for an extension. About Palm Beach Community Church Palm Beach Community Church, Inc., filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-35141) on Oct. 20, 2013. The petition was signed by Raymond Underwood as president. The Debtor scheduled total assets of $14.6 million and total liabilities of $11.43 million. Palm Beach Community Church is represented by Robert C. Furr, Esq., and Aaron A. Wernick, Esq., at Furr & Cohen, PA of Boca Raton, FL, as attorney; and Roy Wiley and Covenant Financial, Inc. dba SmartPlan Financial Services as accountants. In December, the U.S. Trustee informed the Bankruptcy Court that it was unable to appoint a committee of creditors in the case. PREFERRED CONTRACTORS: A.M. Best Lowers FSR to 'B(fair)' -------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B (Fair) from B+ (Good) and the issuer credit rating to "bb" from "bbb-" for Preferred Contractors Insurance Company Risk Retention Group, LLC (PCIC) (Billings, MT). The outlook for both ratings has been revised to negative from stable. The ratings reflects PCIC's deteriorating risk-adjusted capitalization and uncertainty surrounding its volatile operating performance given the multiple and significant changes in reinsurance arrangements in recent years. These concerns are amplified by the sizable adverse loss-reserve development recorded during 2013 on prior accident years, sizable growth since 2011 and relatively weak management controls. The negative outlook on the ratings reflects A.M. Best's concerns regarding the adequacy of the company's loss reserves, relatively weak capitalization and uncertainty over future underwriting and operating results. Partially offsetting these negative factors are PCIC's positive underwriting results recorded since 2011. Furthermore, an adverse development cover was put into place with London market reinsurers on Dec. 31, 2013, to protect against additional loss development. A quota share reinsurance treaty, effective Jan. 1, 2014, was also placed with London market reinsurers to reduce PCIC's net underwriting leverage. A.M. Best will closely monitor quarterly performance of PCIC. Any material negative deviation from the business plan in terms of management, operating profitability and risk profile, or a decline in its risk-adjusted capitalization could result in negative rating pressure. Factors that could lead to positive rating movement are evidence of sustained favorable operating performance and credit metrics that improve risk-adjusted capitalization over the long term. PRISM GRAPHICS: $240,000 in Payments to CEO Declared Fraudulent --------------------------------------------------------------- In the avoidance action, DANIEL J. SHERMAN AS CHAPTER 7 TRUSTEE FOR PRISM GRAPHICS, INC. Plaintiff, v. BRYAN NETSCH, et al., Defendants, Adv. Proc. No. 10-3092 (Bankr. N.D. Tex.), Bankruptcy Judge Harlin DeWayne Hale ruled that: -- fraudulent transfers of $160,000 and $80,000 to Bryan A. Netsch, Chief Executive Officer and majority shareholder of Prism, are avoided and must be brought back into the estate. -- transfers of $11,703.95 and $15,000 to Netsch are deemed preferences under 11 U.S.C. Sec. 547 and are avoided as well. -- Intense Printing Inc. is liable for a $200,000 loan repayment. -- the Defendants are liable for post-judgment interest and attorneys' fees. Judge Hale said the Chapter 7 Trustee's complaint against the Netsch sons fails. The payment arrangement to them was consistent, though high, until the verdict was rendered. After that, they went off the payroll. As their payments ended with the verdict, there are insufficient badges of fraud regarding their payments to hold them liable under a fraudulent transfer theory and their payments were not proved to be preferences. The payments to them are not avoided. A copy of Judge Hale's August 4, 2014 FINDINGS OF FACT AND CONCLUSIONS OF LAW is available at http://is.gd/86FEQWfrom Leagle.com. Prism Graphics, Inc. was a "print broker," providing print management services to various customers. Prism filed for chapter 11 bankruptcy (Bankr. N.D. Case No. 08-31914) in the Northern District of Texas on April 25, 2008. Judge Harlin DeWayne Hale oversees the case. John Mark Chevallier, Esq., at McGuire, Craddock & Strother, served as Chapter 11 counsel. Subsequently, the case was converted to chapter 7 and Daniel J. Sherman was appointed as Trustee. In its petition, Prism estimated assets of $100,000 to $1 million, and debts of $1 million to $10 million. PULSE ELECTRONICS: Incurs $7.8 Million Net Loss in 2nd Quarter -------------------------------------------------------------- Pulse Electronics Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $7.83 million on $93.56 million of net sales for the three months ended June 27, 2014, as compared with a net loss of $5.22 million on $88.25 million of net sales for the three months ended June 28, 2013. For the six months ended June 27, 2014, the Company reported a net loss of $16.87 million on $175.21 million of net sales, compared to a net loss of $12.35 million on $173.06 million of net sales for the six months ended June 28, 2013. The Company's balance sheet at June 27, 2014, showed $180.44 million in total assets, $247.24 million in total liabilities and a $66.79 million total shareholders' deficit. The company had $24.8 million of cash and cash equivalents at June 27, 2014. compared with $26.9 million at December 27, 2013. "Our operating results in the second quarter for revenue and non- GAAP operating profit were higher both sequentially and year-over- year, as we expected based on the strength in industry demand we experienced in the first quarter," said interim Chief Executive Officer Alan Benjamin. "Shipments in key network and power product lines were strong following higher order rates coming into the quarter, and higher demand in our smartphone programs bolstered revenue in the wireless segment." A full-text copy of the Form 10-Q is available for free at: http://is.gd/dAeNnE About Pulse Electronics San Diego, California-based Pulse Electronics Corporation -- http://www.pulseelectronics.com/-- is a global producer of precision-engineered electronic components and modules, operating in three business segments: Network product group; Power product group; and Wireless product group. As of Dec. 28, 2012, Pulse had $188 million in total assets. As reported by the TCR on Juy 8, 2013, the Company dismissed KPMG LLP as its independent registered public accounting firm. Grant Thornton LLP was hired as replacement. Pulse Electronics reported a net loss of $27.02 million on $355.67 million of net sales for the year ended Dec. 27, 2013, as compared with a net loss of $32.09 million on $373.16 million of net sales for the year ended Dec. 28, 2012. QUALITY DISTRIBUTION: Posts $11.4-Mil. Net Income in 2nd Quarter ---------------------------------------------------------------- Quality Distribution, Inc., reported net income of $11.36 million of net income on $255.59 million of total operating revenues for the three months ended June 30, 2014, as compared with a net loss of $31.14 million on $239.29 million of total operating revenues for the same period during the prior year. For the six months ended June 30, 2014, the Company reported net income of $14.44 million on $490.08 million of total operating revenues as compared with a net loss of $22 million on $468.71 million of total operating revenues for the same period last year. As of June 30, 2014, the Company had $445.64 million in total assets, $481.19 million in total liabilities and a $35.55 million total shareholders' deficit. "We are pleased with our second quarter performance as we delivered strong top line growth, advanced our balance sheet improvement strategy and met the high end of our earnings expectation range," stated Gary Enzor, chairman and chief executive officer. "Our Chemical and Intermodal segments posted very solid results and all three of our operating segments generated increases in driver counts. On a company-wide basis, our driver count has risen 6.0% since the end of last year. Our Energy Logistics segment achieved sequential margin improvement this quarter, despite headwinds in certain shale regions. Overall, the first half of 2014 met our expectations and we look forward to carrying this momentum into the second half of the year." A full-text copy of the Company's press release is available for free at http://is.gd/smGdWH About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30 percent of the common stock of Quality Distribution, Inc. Quality Distribution reported a net loss of $42.03 million on $929.81 million of total operating revenues for the year ended Dec. 31, 2013, as compared with net income of $50.07 million on $842.11 million of total operating revenues in 2012. Bankruptcy Warning The Company had consolidated indebtedness and capital lease obligations, including current maturities, of $383.3 million as of Dec. 31, 2013. The Company must make regular payments under the ABL Facility, including the $17.5 million senior secured term loan facility that was fully funded on July 15, 2013, and the Company's capital leases and semi-annual interest payments under its 2018 Notes. "The ABL Facility matures August 2016. Obligations under the Term Loan mature on June 14, 2016 or the earlier date on which the ABL Facility terminates. The maturity date of the ABL Facility, including the Term Loan, may be accelerated if we default on our obligations. If the maturity of the ABL Facility and/or such other debt is accelerated, we may not have sufficient cash on hand to repay the ABL Facility and/or such other debt or be able to refinance the ABL Facility and/or such other debt on acceptable terms, or at all. The failure to repay or refinance the ABL Facility and/or such other debt at maturity would have a material adverse effect on our business and financial condition, would cause substantial liquidity problems and may result in the bankruptcy of us and/or our subsidiaries. Any actual or potential bankruptcy or liquidity crisis may materially harm our relationships with our customers, suppliers and independent affiliates," the Company said in the Annual Report for the year ended Dec. 31, 2013. * * * As reported in the TCR on June 28, 2013, Moody's Investors Service upgraded Quality Distribution, LLC's Corporate Family Rating to B2 from B3 and Probability of Default Rating to B2-PD from B3-PD. The upgrade of Quality's CFR to B2 was largely driven by the expectation that credit metrics will improve over the next twelve to eighteen months, through a combination of EBITDA growth and debt paydowns, to levels consistent with the B2 rating level. The company is in the process of integrating the bolt-on acquisitions made in its Energy Logistics business sector since 2011. QUICKSILVER RESOURCES: Incurs $36-Mil. Net Loss in 2nd Quarter -------------------------------------------------------------- Quicksilver Resources Inc. reported a net loss of $36.09 million on $118.03 million of total revenue for the three months ended June 30, 2014, as compared with net income of $242.52 million on $175.49 million of total revenue for the same period last year. For the six months ended June 30, 2014, the Company reported a net loss of $94.92 million on $209.81 million of total revenue as compared with net income of $182.81 million on $294.20 million of total revenue for the same period during the prior year. The Company's balance sheet at June 30, 2014, showed $1.05 billion in total assets, $2.16 billion in total liabilities and a $1.10 billion total stockholders' deficit. "Quicksilver's top goals for the remainder of 2014 remain unchanged and management is extremely focused on unlocking the value in the Horn River, building cash flow in core areas, and addressing the subordinated notes due in 2016," said Glenn Darden, CEO of Quicksilver Resources. "In addition, we will push hard to advance our West Texas project and reduce overall company debt." A full-text copy of the Company's press release is available for free at http://is.gd/YdDTmH About Quicksilver Quicksilver Resources Inc. is an exploration and production company engaged in the development and production of long-lived natural gas and oil properties onshore North America. Based in Fort Worth, Texas, the company is widely recognized as a leader in the development and production from unconventional reservoirs including shale gas, and coal bed methane. Following more than 30 years of operating as a private company, Quicksilver became public in 1999 and is listed on the New York Stock Exchange under the ticker symbol KWK. The company has U.S. offices in Fort Worth, Texas; Glen Rose, Texas; Steamboat Springs, Colorado; Craig, Colorado and Cut Bank, Montana. The Company's Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta. Quicksilver Resources posted net income of $161.61 million in 2013 following a net loss of $2.35 billion in 2012. * * * As reported by the TCR on June 17, 2013, Moody's Investors Service downgraded Quicksilver Resources Inc.'s Corporate Family Rating to Caa1 from B3. "This rating action is reflective of Quicksilver's revised recapitalization plan," stated Michael Somogyi, Moody's Vice President and Senior Analyst. "Quicksilver's inability to complete its recapitalization plan as proposed elevates near-term refinancing risk given its weak operating profile and raises concerns over the sustainability of the company's capital structure." In the June 27, 2013, edition of the TCR, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Fort Worth, Texas-based Quicksilver Resources Inc. to 'CCC+' from 'B-'. "We lowered our corporate credit rating on Quicksilver Resources because we do not believe the company will be able to remedy its unsustainable leverage," said Standard & Poor's credit analyst Carin Dehne-Kiley. RAAM GLOBAL: Obtains Forbearance Until Sept. 30 ----------------------------------------------- RAAM Global Energy Company entered into a forbearance agreement with its senior secured lenders under the Fourth Amended and Restated Credit Agreement dated as of Nov. 29, 2011, by and among Century Exploration New Orleans, LLC, Century Exploration Houston, LLC, Century Exploration Resources, LLC, MUFG Union Bank, N.A. f/k/a Union Bank, N.A. (the "Agent") and the Lenders, as a result of the Company not being in compliance with the interest coverage ratio covenant in the Credit Agreement, which specifies that the Company must maintain at least a 2.5 to 1.0 interest coverage ratio for the four immediately preceding consecutive fiscal quarters. Pursuant to the Forbearance Agreement, the Agent and Lenders, as well as the counterparties to certain outstanding hedging agreements with Century New Orleans, have agreed to forbear from exercising any rights or remedies that any of the Agent, the Lenders or the Hedging Lenders may have, or from initiating or instituting legal proceedings, against any of Century New Orleans, the Company or any of the other subsidiary guarantors under the Credit Agreement, or from realizing on their security granted in connection with the Credit Agreement, until the earlier of Sept. 30, 2014, or the occurrence of an event of default within the meaning of the Forbearance Agreement. Pursuant to the terms of the Forbearance Agreement, among other provisions, (i) the borrowing base was permanently reduced to $0.00, thereby preventing additional borrowings under the credit facility, (ii) the Borrowers have agreed to maintain at least $4 million in cash collateral in one or more deposit accounts with the Agent and (iii) the Lenders have agreed to waive commitment fees owed to the Lenders under the Credit Agreement from and after April 24, 2014. A full-text copy of the Forbearance Agreement is available at: http://is.gd/fYHNBy About RAAM Global RAAM Global Energy Company is a privately held company engaged primarily in the exploration and development of oil and gas properties and in the resulting production and sale of natural gas, condensate and crude oil. The Company's production facilities are located in the Gulf of Mexico, offshore Louisiana and onshore Louisiana, Texas, Oklahoma, and California. * * * As reported by the TCR on Aug. 4, 2014, Standard & Poor's Ratings Services lowered its corporate credit and senior secured ratings on exploration and production company RAAM Global Energy Co. to 'CCC+' from 'B-'. The outlook is negative. "The downgrade reflects our assessment that Lexington, Ky.-based RAAM Global Energy Co. could have difficulty refinancing its $250 million senior secured notes due October 2015 due to weak operating performance, largely due to unexpected production declines on its Yegua wells that have resulted in weakening liquidity and limited near-term growth potential," S&P said. RAAM Global Energy carries a Caa1 Corporate Family Rating from Moody's Investors Service. REVEL AC: Adjourns Auction to Aug. 14 ------------------------------------- Revel AC, Inc., et al., notified the U.S. Bankruptcy Court for the District of New Jersey the auction of their assets is adjourned to Aug. 14, 2014, to give them additional time to fully analyze and evaluate the bids received on Aug. 4. Atlantic City Mayor Don Guardian told Bloomberg News has said he thinks Revel could fetch from $100 million to $200 million. The sale could be a barometer of things to come for the seaside resort town, which has already seen the Atlantic Club close during its recent bankruptcy and is slated to see two more shutter by the end of September, Bloomberg said. 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 CITY RENAISSANCE: Has Interim OK to Use Cash Collateral ------------------------------------------------------------- Judge Kevin R. Huennekens of the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, gave River City Renaissance, LC, and River City Renaissance III, LC, interim authority to use the cash collateral of U.S. Bank National Association, as trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass- Through Certificates, Series 2005-C22, and U.S. Bank National Association, as trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2006-C23. U.S. Bank asserts that the original principal indebtedness due under the RCR Note, as of October 2005, was approximately $30,350,000, and, as of April 2014, RCR owed to U.S. Bank approximately $29,622,593. U.S. Bank also asserts that the original principal indebtedness due under the RCR III Note, as of January 2006, was $6,300,000, and, as of April 2014, RCR III owed to U.S. Bank approximately $6,354,245. The Debtors said they have a vital need to use the cash collateral because without access or use of the cash collateral, they may not be able to provide the regular services to the tenants and occupants of their properties and pay utilities, vendors, and insurers. The Debtors said their inability to do any of these would cause immediate and irreparable harm to the estate. A final hearing on the motion is scheduled for Sept. 3, 2014, at 9:00 a.m. Objections are due Aug. 27. River City Renaissance, LC, and River City Renaissance III, LC, sought Chapter 11 protection (Bankr. E.D. Va. Case Nos. 14-34080 and 14-34081) in Richmond, Virginia, on July 30, 2014. The cases are assigned to Judge Keith L. Phillips. Richmond, Virginia-based River City Renaissance estimated $10 million to $50 million in assets and debts. Renaissance III estimated less than $10 million in assets and debts. The Debtors have tapped Spotts Fain PC as counsel. RIVER TERRACE: Files Plan to Restructure Debt --------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that River Terrace Estates Inc., a nonprofit senior living community in Bluffton, Indiana, filed a Chapter 11 petition on July 22 in Fort Wayne to carry out a proposed restructuring of its municipal bond debt. According to the report, River Terrace said that under its proposed reorganization plan, filed with explanatory disclosure materials, bondholders will get "the best of either a repayment plan over time or a sale at a controlled price that protects the residents." Under the proposed plan, bondholders would exchange their existing bonds, under which they are owed about $14 million, for $7.5 million in new ones, the report related. River Terrace is seeking an Aug. 26 hearing to approve the disclosure statement, the report said. River Terrace Estates, Inc., a continuing-care and retirement community, sought protection under Chapter 11 of the Bankruptcy Code (Case No. 14-11829, Bankr. N.D. Ind.) on July 22, 2014. The case is before Judge Robert E. Grant. The Debtor's counsel is Jeffrey A. Hokanson, Esq., at Frost Brown Todd LLC, in Indianapolis, Indiana. SANUWAVE HEALTH: Director Joseph Chiarelli Quits ------------------------------------------------ Joseph Chiarelli resigned as a director of SANUWAVE Health, Inc., on July 31, 2014. About SANUWAVE Health Alpharetta, Ga.-based SANUWAVE Health, Inc., is an emerging global regenerative medicine company focused on the development and commercialization of noninvasive, biological response activating devices for the repair and regeneration of tissue, musculoskeletal and vascular structures. SANUWAVE reported a net loss of $11.29 million in 2013, a net loss of $6.40 million in 2012 and a net loss of $10.23 million in 2011. The Company's balance sheet at March 31, 2014, showed $8.56 million in total assets, $6.85 million in total liabilities and $1.71 million total stockholders' equity. SCOOTER STORE: Personal Injury Claim to Be Paid From Insurance -------------------------------------------------------------- The SCOOTER Store Holdings Inc. asks the Bankruptcy Court to approve a settlement agreement between Lonnie Martin and National Fire Insurance Company of Hartford. Mr. Martin sued the Debtor prior to the petition date over injuries sustained while at one of the Debtor's premises. National has reached a deal with Mr. Martin that will resolve the lawsuit by permitting National to remit $4,500 as settlement payment to Mr. Martin out of the proceeds of the Debtor's insurance policy with National. Mr. Martin agrees to limit his recovery exclusively to that which may be had under the policy. About The Scooter Store The Scooter Store is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the Company's customers. It has 57 distribution centers in 41 states. Scooter Store Holdings Inc., and 71 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in Wilmington. The closely held company listed assets of less than $10 million and debt of more than $50 million. Affiliates of private equity firm Sun Capital Partners, based in Boca Raton, Florida, purchased a majority voting interest in the debtors in 2011. Scooter Store is 66.8 percent owned by Sun Capital Partners Inc., owed $40 million on a third lien. In addition to Sun's debt and $25 million on a second lien owing to Crystal Financial LLC, there is a $25 million first-lien revolving credit owing to CIT Healthcare LLC as agent. Crystal is providing $10 million in financing for bankruptcy. SENTINEL MANAGEMENT: Ex-CEO Denied Acquittal, New Trial Request --------------------------------------------------------------- Law360 reported that former CEO Eric Bloom of the bankrupt Sentinel Management Group Inc. has lost a bid to overturn a March guilty verdict that found he operated a $500 million securities fraud scheme, reached by a jury Bloom said made its decision out of laziness and a desire to be finished quicker. According to the report, U.S. District Judge Ronald A. Guzman refused to grant Bloom a new trial or acquit him of the charges, ruling that the government had presented a credible case against Bloom. The case is USA v. Bloom et al., Case No. 1:12-cr-00409 (N.D. Ill.). About Sentinel Management Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- was a full service firm offering a variety of security solutions. The Company filed a voluntary Chapter 11 petition (Bankr. N.D. Ill. Case No. 07-14987) on Aug. 17, 2007. Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd., represented the Debtor. Lawyers at Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represented the Official Committee of Unsecured Creditors. When the Debtor sought bankruptcy protection, it estimated assets and debts of more than $100 million. On Aug. 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper US LLP, and Vincent E. Lazar, Esq., at Jenner & Block LLP, represent the Chapter 11 Trustee. The Court confirmed the Fourth Amended Chapter 11 Plan of Liquidation for Sentinel on Dec. 15, 2008, which created a Liquidation Trust. The Plan became effective Dec. 17, 2008, and Mr. Grede was appointed Liquidation Trustee. SHREEJI ENTERPRISE: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Shreeji Enterprise LLC dba Super Stay Inn fdba Rodeway Inn 709 Mallory Dr. Belton, MO 64012 Case No.: 14-42693 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: August 6, 2014 Court: United States Bankruptcy Court Western District of Missouri (Kansas City) Judge: Hon. Cynthia A. Norton Debtor's Counsel: Bradley D. McCormack, Esq. THE SADER LAW FIRM, LLC 2345 Grand Boulevard, Suite 1925 Kansas City, MO 64108-2663 Tel: 816-561-1818 Fax: 816-561-0818 E-mail: bmccormack@saderlawfirm.com - and - Neil S. Sader, Esq. THE SADER LAW FIRM, LLC 2345 Grand Boulevard, Suite 1925 Kansas City, MO 64108-2663 Tel: 816-561-1818 Fax: 816-561-0818 E-mail: nsader@saderlawfirm.com Total Assets: $2.63 million Total Liabilities: $2.94 million The petition was signed by Rameshbhai B. Patel, managing member. A list of the Debtor's eight largest unsecured creditors is available for free at http://bankrupt.com/misc/mowb14-42693.pdf SKYLINE MANOR: Section 341(a) Meeting of Creditors Moved to Aug. 4 ------------------------------------------------------------------ The U.S. Trustee for Region 13 has adjourned the meeting of creditors of Skyline Manor Inc. to August 4, at 1:30 p.m. Central time. The meeting will be held at Roman L. Hruska U.S. Courthouse, 111 South 18th Plaza, United States Trustee Meeting Room, 1st Floor, in Omaha, Nebraska. Skyline Chief Restructuring Officer John Bartle is required to appear at the meeting for the purpose of examination under oath. All creditors are invited but not required to attend. The meeting of creditors offers creditors the opportunity to question a responsible office of the company under oath about its financial affairs and operations that would be of interest to the general body of creditors. 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. SOUND SHORE: Has Deal With Buyers, DOH et al Over Medicaid Issues ----------------------------------------------------------------- Sound Shore Medical Center of Westchester; The Mount Vernon Hospital; and the Howe Avenue Nursing Home d/b/a Helen and Michael Schaffer Extended Care Center participate in the Medicaid program and render services to Medicaid beneficiaries. The program provides medical assistance to low-income individuals and individuals with disabilities. The federal and state governments jointly fund and administer the Medicaid program. The Medical Centers' participation in the Medicaid program is governed by so-called Provider Agreements with the New York State Department of Health. The Medical Centers were assigned several provider numbers for billing purposes. The Amended and Restated Asset Purchase Agreement that governed the sale of the Debtors' assets to Montefiore New Rochelle Hospital, Schaffer Extended Care Center, and Montefiore Mount Vernon Hospital provides that, as a condition to close the Sale, the Montefiore Buyers must have received reasonably acceptable assurances, in the Buyers' sole discretion, from counsel and/or appropriate regulatory agencies that the Buyers will have no successor liability resulting from the transactions contemplated under the Purchase Agreement, including with respect to the assignment of the Provider Agreements and Provider Numbers. To receive an uninterrupted stream of Medicaid reimbursements for services provided to Medicaid beneficiaries at the Medical Centers after the Sale, the Buyers and the Medical Centers seek to have the Medical Centers' Provider Agreements and Provider Numbers assigned to the Montefiore Buyers in conjunction with the APA. The DOH desires to facilitate the Sale so as to ensure the continuing availability of medical services for the communities that traditionally have relied on the Medical Centers. In New York State, the DOH administers the Medicaid program, and the New York State Office of the Medicaid Inspector General, an independent office within DOH, conducts audits and reviews of various providers of Medicaid reimbursable services, equipment and supplies. The audits and reviews are conducted to determine if the provider complied with applicable laws, regulations, rules and policies of the Medicaid program. Medicaid fees for service providers are reimbursed by Medicaid on the basis of the information they submit in support of their claims. The information provided in relation to any claim must be true, accurate and complete. Providers must maintain records demonstrating the right to receive payment for six years, and all claims for payment are subject to audit for six years. If a DOH or OMIG audit reveals an overpayment, DOH or OMIG may require repayment of the amount determined to have been overpaid. An overpayment includes any amount not authorized to be paid under the Medicaid program, whether paid as the result of inaccurate or improper cost reporting, improper claiming, unacceptable practices, fraud or mistake. Pursuant to a Settlement Agreement, dated April 12, 2012, between MFCU and SSMC, SSMC agreed to repay an overpayment for cancer drugs billed at excess rates in an original aggregate amount of $2,241,760.35 at the rate of $67,600.40 until due on April 1, 2015. Monthly payments have been made by SSMC, both before and since the filing of the bankruptcy petitions, and there remains due and owing under the Settlement Agreement the sum of $1,134,279 -- MFCU Settlement Balance. The Debtors also owe the DOH an aggregate of $87,792 for New York Health Care Reform Act Pool Payments. The Debtors also owe DOH $76,222 for reconciliation of initially paid to actual inpatient psychiatric transition pool payments. The Debtors and DOH also estimate that no indigent care pool liabilities are due related to Medicaid Disproportionate Share Hospital (DSH) cap audits for 2011, 2012, and 2013 through November 5, 2013. Additionally, the Debtors owe OMIG an aggregate of $128,015 for overpayments identified though four audits conducted by OMIG. In sum, the Debtors believe they currently owe DOH and OMIG, as of July 22, 2014, an aggregate of $1,426,308 for all liabilities relating to the Provider Agreements, inclusive of the MFCU Settlement Balance. The Debtors and DOH estimate that the DOH currently owes the Debtors an aggregate of $1,523,298 relating to Medicaid Receivables. The DOH has not completed its reconciliation for actual capital rates for SSMC and MVH for the years 2012 and 2013. Moreover, the reconciliation of estimated to actual SSMC and MVH indigent care pool payments for the period January 1, 2013 through November 5, 2013 remain outstanding. Additionally, certain amounts that are undetermined at this time may be due from the DOH to SECC relating to a potential universal settlement in connection with the Wage Equalization Factor (WEF) appeal for New York State skilled care-nursing home facilities. The Buyers have filed applications for certificate of need approvals pursuant to Article 28 of the Public Health Law. As a condition precedent to receiving CON approval, the Buyers' representative executed an affidavit sworn to as of November 1, 2013 in support of its Medicaid audit (successor) liability cap request. The parties now wish to resolve certain issues relating to the assumption and assignment of the Provider Agreements and related Provider Numbers, including the resolution and payment of the Medicaid Claims, inclusive of the MFCU Settlement Balance and the Medicaid Receivables. On July 29, the parties executed a Settlement and Agreement to govern the Debtors' assumption and assignment of the Provider Agreements and related Provider Numbers to the Buyers. The parties agree that: -- In full satisfaction and release of the parties' respective claims and rights arising from, or related to, the Medicaid Claims (including the MFCU Settlement Balance) and Medicaid Receivables, the same will be paid through the eMedNY system by way of Medicaid rate adjustments once all OMIG and MFCU claims are entered on the eMedNY system. The DOH will apply positive retroactive adjustments against not just those liabilities associated with a specific provider identification number, but in addition, against any of the liabilities set forth. -- The DOH will attempt to process all of the Medicaid Claims during one Medicaid cycle after the full execution and delivery of this Stipulation and Agreement. -- The Debtors shall timely prepare and submit the Medical Centers' DSH cap surveys for 2011, 2012, and 2013 through the Closing Date in conformance with the timelines established by DOH and will maintain all of the supporting documentation necessary to comply with the DOH's DSH cap audit protocols. The Debtors shall also timely prepare and submit the Medical Centers' Residential Health Care Facility (RHCF-4) and Medicaid Institutional Cost Reports (ICRs) for 2012 and 2013 through the Closing Date. In the event the Debtors fail to submit the surveys and reports, the Buyers shall be responsible for filing these surveys and reports; provided that if the Buyers are responsible for filing these surveys and reports, the Debtors shall be obligated to reimburse Buyers for the cost of preparing and filing such surveys and reports, including the imputed salary of the Buyers' employees working on the matter and the fees and costs of the Buyers' agents, advisors and professionals. The Buyers' claims for reimbursement against the Debtors shall be an allowed administrative expense claim under section 503(b)(1)(A) of the Bankruptcy Code and shall be payable 10 days after invoicing by Buyers unless the Debtors or the Creditors Committee contest the amount thereof (including, but not limited to, the reasonableness of the fees and the costs), in which case the amount shall be paid to the Buyers promptly after the parties agree on the amount or the Court enters an Order fixing the amount. -- The Buyers, DOH, and OMIG further agree that on the Closing Date the Buyers will each be severally liable to DOH and OMIG for repayment of amounts, exclusive of certain estimates, finally determined to have been overpaid by the Medicaid program to SSMC, MVH and SSEC, respectively, on a dollar for dollar basis, for the provision of services at the relevant predecessor location to Medicaid recipients provided during the period prior to the Closing Date in an amount not to exceed $3,000,000 -- Liabilities Cap. -- For the avoidance of doubt, neither the Buyers, nor any affiliates, shall be responsible for any interest, penalties, surcharges, assessments, fees or liabilities arising out of the Medicaid program alleged to be owed by SSMC, MVH or SECC to DOH in excess of the Liabilities Cap. The Liabilities Cap is in addition to the Medicaid Claims amount and the Excluded Claim Estimates, to the extent such Excluded Claim Estimates become liabilities due and owing to DOH by SSMC, MVH or SECC. -- The parties agree that the Excluded Claim Estimates shall not be deemed to be resolved as part, or pursuant to the terms, of this Stipulation and Agreement. -- The DOH and OMIG agree, in consideration of the Buyers' payment of the Medicaid Claims and the Liabilities Cap, that they will not file or assert in the Bankruptcy Court or in any other forum any claims of any kind or nature against the Debtors, or the Buyers or their affiliates that arise from pre-Closing Date conduct of the Debtors with respect to the Medicaid Claims. The Buyers are represented by: Frank A. Oswald, Esq. Scott A. Griffin, Esq. TOGUT, SEGAL & SEGAL, LLP One Penn Plaza New York, NY 10019 Telephone: (212) 594-5000 Facsimile: (212) 967-4258 About Sound Shore Medical Center Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home and related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on May 29, 2013, in White Plains, New York. The Debtors were the largest "safety net" providers for Southern Westchester County in New York. Affiliated with New York Medical College, Sound Shore is a not-for-profit 242-bed, community based- teaching hospital located in New Rochelle, New York. Mountain Vernon Hospital is a voluntary, not-for-profit 176-bed hospital located in Mount Vernon, New York. Howe Avenue Nursing Home is a 150-bed, comprehensive facility. The Debtors tapped Burton S. Weston, Esq., at Garfunkel Wild, P.C. as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors; and GCG Inc., as claims agent. Alston & Bird LLP represents the Official Committee of Unsecured Creditors. Deloitte Financial Advisory Services LLP serves as the Committee's as financial advisor. Sound Shore disclosed assets of $159.6 million and liabilities totaling $200 million. Liabilities include a $16.2 million revolving credit and a $5.8 million term loan with Midcap Financial LLC. There is $9 million in mortgages with Sun Life Assurance Co. of Canada (US) and $11.5 million owing to the New York State Dormitory Authority. Neubert, Pepe & Monteith, P.C., represents Daniel T. McMurray, the patient care ombudsman for Sound Shore. The Debtors filed for bankruptcy to sell their assets, including their hospital and nursing home operations, to the Montefiore health system. On Aug. 8, 2013, the Bankruptcy Court entered an order, as affirmed and ratified by a Supplemental Sale Order entered on Oct. 15, 2013, approving the sale to Montefiore New Rochelle Hospital, Inc., Schaffer Extended Care Center, Inc., Montefiore Mount Vernon Hospital, Inc. and certain related affiliates. In June 2013, Montefiore added $4.75 million to its purchase offer to speed up the sale. Montefiore raised its bid to $58.75 million plus furniture and equipment as part of a request for a private sale of the hospitals. On Nov. 6, 2013 at 12:01 a.m., the closing of the Sale occurred and the sale became effective. Montefiore is represented by Togut, Segal & Segal LLP. SOUTHERN STATES COOPERATIVE: Moody's Lowers CFR to 'B2' ------------------------------------------------------- Moody's Investors Service downgraded Southern States Cooperative Inc.'s ratings, including the Corporate Family Rating to B2 from B1, Probability of Default Rating to B2-PD from B1-PD, as well as the second lien note rating to B3 from B2. The ratings outlook is stable. The downgrade reflects the increased volatility in operating performance and credit metrics that has occurred over the past three years, largely due to adverse weather conditions in Southern States' markets. While volatility is factored into the company's ratings, credit metrics have once again deteriorated to levels that are well outside expectations. Wet and snowy weather caused delays in key planting and fertilizer application periods in fiscal 2014, more than offsetting increased heating fuel and feed sales. The company's revenue declined 8% in the first nine months ended March 31, 2014, and both EBITDA and free cash flow were negative. Credit metrics again showed significant year-over-year deterioration, similar to those reported in fiscal 2012. Moody's estimates that the company will likely end the fiscal year with leverage (lease-adjusted debt/EBITDAR) well in excess of 7 times and interest coverage (EBITA/Interest) below 1.0 time. Ratings downgraded: Corporate Family Rating to B2 from B1 Probability of Default Rating to B2-PD from B1-PD $130 million second lien notes due 2021 to B3 (LGD5) from B2 (LGD4) The SGL-3 Speculative Grade Liquidity rating was affirmed, reflecting the expectation for adequate liquidity. Ratings Rationale Southern States' B2 Corporate Family Rating reflects the company's high degree of earnings and cash flow volatility driven by factors such as weather and commodity price levels which tend to fluctuate based on supply and demand. This volatility can lead to significant fluctuations in sales, profitability and credit metrics. The rating also reflects Southern States' low absolute profit margins and limited pricing advantage stemming from the commoditized nature of its products. The rating is supported by the company's strong competitive position as an agricultural supplier in the Mid Atlantic and Southeastern U.S., its highly diversified customer base, and the favorable long-term fundamentals of commercial agriculture that underpin stable future demand for products, including population growth and proliferation of industrial applications such as production of bio-fuels. Southern States' liquidity remains adequate, as reflected in the SGL-3 Speculative Grade Liquidity Rating. While revolver usage has been moderately higher than expected due to free cash flow deficits, excess revolver availability has remained ample. The company typically generates positive free cash flow in its fiscal fourth quarter, its seasonal peak, repaying revolver balances and replenishing balance sheet cash. The stable ratings outlook reflects Moody's expectation that Southern States will be able to manage the inherent business and industry risks while maintaining adequate liquidity. Ratings could be downgraded if liquidity were to erode, specifically if cash or cash flow generation declines to a point where excess revolver availability falls below $100 million at any time. A downgrade could also occur if it appears that operating performance and credit metrics will not recover from the current weak levels; particularly if EBITA/Interest were sustained near or below 1.0 time. In view of Southern States' high level of business volatility, a ratings upgrade is unlikely over the near-to-intermediate term. Over time, the ability to stabilize revenue and earnings fluctuations while sustainably improving margins and credit metrics would be viewed positively. Headquartered in Richmond, Virginia, Southern States Cooperative, Inc. is a retailer and wholesale supplier of a diversified array of agricultural products and services, such as fertilizer, seed, crop protectants, animal feed, petroleum, and farm and home supplies. Annual revenue is estimated to exceed $2.1 billion. Southern States Cooperative Inc.'s ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Southern States Cooperative Inc.'s core industry and believes Southern States Cooperative Inc.'s ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. SPENDSMART NETWORKS: Isaac Blech Holds 15.5% Equity Stake --------------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Isaac Blech and his affiliates disclosed that as of Aug. 1, 2014, they beneficially owned 2,605,370 shares of common stock of SpendSmart Networks, Inc., representing 15.5 percent of the shares outstanding. On Aug. 1, 2014, the Company entered into a stock option agreement, pursuant to which it issued a stock option to Isaac Blech to purchase up to an aggregate of 225,000 shares of Common Stock at a purchase price of $1.14 per share. The option was fully-exercisable upon issuance. A full-text copy of the regulatory filing is available at: http://is.gd/EbgAFW About SpendSmart Networks SpendSmart Networks Inc, formerly The SpendSmart Payments Company, is a financial solutions company focused on helping teens and young adults between the ages of 13 and 18 to manage spending. The Company offers a prepaid reloadable MasterCard with parental features ranging from giving parents complete control to make purchase on behalf of their teens to simply monitoring their teen's purchase transactions. The Company provides solutions that facilitate communication between parents and teens while helping to teach financial responsibility. In March 2014, the Company acquired SMS Masterminds. Effective as of June 20, 2014, SpendSmart Networks, Inc. f/k/a The SpendSmart Payments Company filed an amendment to its newly adopted Delaware Certificate of Incorporation to change its name to "SpendSmart Networks, Inc.". The Spendsmart Payments incurred a net loss and comprehensive loss of $12.58 million on $1.02 million of revenues for the year ended Sept. 30, 2013, as compared with a net loss and comprehensive loss of $21.09 million on $1 million of revenues during the prior year. The Company's balance sheet at March 31, 2014, showed $14.68 million in total assets, $2.44 million in total liabilities and $12.24 million in total stockholders' equity. EisnerAmper LLP, in Iselin, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2013. The independent auditors noted that the Company has incurred net losses since inception and has an accumulated deficit at Sept. 30, 2013. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern. STG-FAIRWAY ACQUISITIONS: S&P Retains 'B' CCR on Watch Negative --------------------------------------------------------------- Standard & Poor's Ratings Services retained its ratings on Atlanta-based STG-Fairway Acquisitions Inc., including its 'B' corporate credit rating, will remain on CreditWatch with negative implications. "We placed the ratings on CreditWatch with negative implications on May 6, 2014, after the company announced its request to amend its credit agreement to extend the date it is required to provide its audited financial statements by an additional 120 days, which would be Aug. 28, 2014," said Standard & Poor's credit analyst Rodney Olivero. "This means we could either lower or affirm the ratings after we complete our review," said Mr. Olivero. "Our ratings remain on CreditWatch as the company has not filed its 2013 audited financial statements. The CreditWatch listing reflects the heightened risks associated with STG-Fairway's discovery of accounting errors that we understand only relate to its 2012 financial statements. It is our understanding that the company is delaying the issuance of its 2013 audited financial statements in order to complete the re-audit of its 2012 financial statements," S&P noted. Resolution of the CreditWatch depends on the company's ability to provide audited financial statements within the requested amended timeframe which reflect, in S&P's opinion, its financial condition substantially close to levels it had previously anticipated. S&P could lower the ratings if the company cannot provide financial statements within the requested time period, or if its financial condition, including credit measures and liquidity, are materially weaker than S&P had previously anticipated. S&P believes this will occur if the company sustains leverage above 5x. Conversely, S&P could affirm the ratings if the company provides audited financial statements within the requested timeframe that reflect credit measures and liquidity at levels that are reasonably close to S&P's previous expectations. Currently, S&P expects the company's leverage to be in the low- to mid-4x area at year-end 2014 with funds from operations to total debt in the mid- to high- teens and that liquidity will remain adequate. TACTICAL INTERMEDIATE: Has Approval to Sell Boot Business --------------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware authorized Tactical Intermediate Holdings, Inc., et al., to sell all of their footwear assets to Original Footwear Holdings, Inc., for $6.9 million, plus the assumption of certain debts. An auction for the Wellco and Altama combat boot lines was canceled after no competing bid was timely received. The Debtors will come back to Court on Aug. 22 to seek approval of the sale of their Massif clothing business to Massif Apparel Enterprises, LLC, for $13 million comprised of an $8 million cash purchase price, plus a $5 million contingency payment. An auction will be conducted on Aug. 20 if more than one competing bids for the assets are timely received. 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. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed three members to serve in the official committee of unsecured creditors in the Chapter 11 cases of Tactical Intermediate Holdings, Inc., et al. TELEXFREE LLC: Grand Jury Charges Heads With Pyramid Scheme ----------------------------------------------------------- Law360 reported that a federal grand jury in Massachusetts charged the owners of bankrupt TelexFree Inc. with fraud and conspiracy in connection with the purported Internet telephone service company that authorities and investors contend was little more than a $1.1 billion pyramid scheme. According to the indictment, TelexFree founders James M. Merrill, 53, of Ashland, Massachusetts, and Carlos N. Wanzeler, 45, of Northborough, Massachusetts, operated the company as an elaborate Ponzi-type scheme, in which it derived the bulk of its revenue not through sales of its "voice-over- internet-protocol." About TelexFREE TelexFREE -- http://www.TelexFREE.com-- is a telecommunications business that uses multi-level marketing to assist in the distribution of voice over internet protocol telephone services. TelexFREE's retail VoIP product, 99TelexFREE, allows for unlimited international calling to seventy countries for a flat monthly rate of $49.90. TelexFREE has over 700,000 associates or promoters worldwide. The company believes the sales of the 99TelexFREE product, the TelexFREE "app," and other new products will ultimately prove successful and profitable. The company is struggling, however, with several factors that required it to seek chapter 11 protection. First, the Company experienced exponential growth in revenue between 2012 and 2013 (from de minimus amounts to over $1 billion), which put tremendous pressure on the Company's financial, operational and management systems. Second, although the company revised its original compensation plan to promoters in order to address certain questions that were raised regarding such plan, the company believes that the plans need to be further revised. Finally, the trailing liabilities arising from the original compensation plan are difficult to quantify and have resulted in substantial asserted liabilities against the company, a number of which may not be valid. TelexFREE LLC and two affiliates sought bankruptcy protection (Bankr. D. Nev. Lead Case No. 14-12525) on April 13, 2014. Alvarez & Marsal North America, LLC is serving as restructuring advisor and Greenberg Traurig, LLP and Gordon Silver are serving as legal advisors to TelexFREE. Kurtzman Carson Consultants LLC serves as claims and noticing agent. TelexFREE, LLC, estimated $50 million to $100 million in assets and $100 million to $500 million in liabilities. TelexFREE is facing accusations of operating a $1 billion-plus pyramid scheme. In May, the Court approved the motion by the U.S. Securities & Exchange Commission to transfer the venue of the Debtors' cases to the U.S. Bankruptcy Court, District of Massachusetts (Bankr. D. Mass. Case Nos. 14-40987, 14-40988 and 14-40989). The Court entered an order in relation to the venue transfer stating that the cases remain jointly administered, and KCC will continue to serve as claims processing agent. The Debtors had opposed to the motion, stating that while the SEC contends that the Massachusetts Bankruptcy Court is more convenient for the SEC, the SEC has failed entirely to meet its burden to show that the Massachusetts Bankruptcy Court is better than the Nevada Bankruptcy Court for administration of the Chapter 11 Cases. The Debtors chose the Nevada Bankruptcy Court because, inter alia, TelexFREE Nevada, a Nevada entity, is a counter-party to more than 700,000 contracts governed by Nevada law. TEMPLAR ENERGY: S&P Revises Outlook to Pos. & Affirms 'B' CCR ------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Oklahoma City-based Templar Energy LLC to positive from stable and affirmed its 'B' corporate credit rating on the company. The rating action follows the announcement of Templar's proposed acquisition of Granite Wash assets from Newfield Exploration Co. S&P's issue rating on the company's second-lien term loan remains 'B-' (one notch lower than the corporate credit rating) with a recovery rating of '5', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. The recovery ratings incorporate an increase in the company's proven reserves, using a company-provided midyear 2014 (pro forma for the transaction) PV10 report, which is computed using S&P's recovery price deck assumptions, as well as an increase in the senior secured credit facility size and additional second-lien secured debt. The positive outlook on Templar reflects increased size and scale of oil and gas reserves and production following the acquisition. Templar is acquiring 41,000 net acres for $588 million (which S&P expects will be reduced for purchase price adjustments from the effective date of July 1), which is contiguous with its existing core acreage in the Granite Wash formation. S&P expects the acquisition to be financed entirely with debt, which will increase leverage in the near term. Templar has operations primarily in the Anadarko Basin across the Texas panhandle and Oklahoma. "The positive outlook on Templar reflects our expectation that the company will close the transaction with the proposed financing and amendments to its RBL facility and will continue to expand its reserves and production," said Standard & Poor's credit analyst Michael Tsai. "We could raise the rating if the company decreases leverage to below 4x and increase FFO to debt to above 20% on a sustained basis while also maintaining adequate liquidity." S&P could revise the outlook to stable if the company were unable to improve its credit measures. Such a scenario would likely result from lower-than-projected hydrocarbon price realizations, lower production than anticipated from the Newfield assets, a more aggressive financial policy that increases leverage, or if the company's capital spending does not result in a commensurate increase in production. THOMPSON CREEK: Reports $61.6 Million Net Income in Second Qtr. --------------------------------------------------------------- Thompson Creek Metals Company Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $61.6 million on $248.4 million of total revenues for the three months ended June 30, 2014, compared to a net loss of $19.2 million on $117.8 million of total revenues for the three months ended June 30, 2013. For the six months ended June 30, 2014, the Company reported net income of $22.5 million on $409.4 million of total revenues, compared to a net loss of $18.3 million on $226.5 million of total revenues for the same period last year. The Company's balance sheet at June 30, 2014, showed $3.05 billion in total assets, $1.92 billion in total liabilities, and $1.13 billion in shareholders' equity. Total cash and cash equivalents at June 30, 2014, were $216.1 million compared to $202.7 million at March 31, 2014 and $233.9 million at Dec. 31, 2013. "We are pleased with our improving safety performance, operational results and ending cash position," said Jacques Perron, chief executive officer of Thompson Creek. "We ended the quarter with an increase in cash from the first quarter of this year, which is another significant milestone for our Company following the completion of Mt. Milligan Mine. During the second quarter of 2014, we continued to focus on execution at Mt. Milligan and achieved an average mill throughput of 48,065 tonnes per day for the month of June 2014 and experienced improvements in both copper and gold recoveries. Looking ahead, management will remain focused on the Mt. Milligan ramp-up. We continue to expect fluctuations in mill throughput until we consistently achieve approximately 80% of design capacity, which we expect by year-end 2014, and 100% by year-end 2015." A full-text copy of the Form 10-Q is available for free at: http://is.gd/xa8Vlu About Thompson Creek Metals Thompson Creek Metals Company Inc. -- http://www.thompsoncreekmetals.com/-- is a diversified North American mining company. The Company's principal operating properties are its 100%-owned Mt. Milligan Mine, an open-pit copper and gold mine and concentrator in British Columbia, its 100%-owned TC Mine, an open-pit molybdenum mine and concentrator in Idaho, its 75% joint venture interest in the Endako Mine, an open-pit molybdenum mine, concentrator and roaster in British Columbia, and the Langeloth Metallurgical Facility in Pennsylvania. The Company's development projects include the Berg property, a copper, molybdenum, and silver exploration property located in British Columbia and the Maze Lake property, a gold exploration project located in the Kivalliq District of Nunavut, Canada. The Company's principal executive office is located in Denver, Colorado. * * * As reported by the TCR on July 1, 2014, Standard & Poor's Ratings Services said it raised its long-term corporate credit rating on mining company Thompson Creek Metals Co. to 'B-' from 'CCC+'. "The upgrade primarily reflects the decline in liquidity risk Thompson Creek faces following commercial production from its Mt. Milligan mine and reduced capital requirements associated with the project," said Standard & Poor's credit analyst Jarrett Bilous. In the May 9, 2012, edition of the TCR, Moody's Investors Service downgraded Thompson Creek Metals Company Inc.'s Corporate Family Rating (CFR) and probability of default rating to Caa1 from B3. Thompson Creek's Caa1 CFR reflects its concentration in molybdenum, relatively small size, heavy reliance currently on two mines, and the need for favorable volume and price trends in order to meet its increasingly aggressive capital expenditure requirements over the next several years. TRULAND GROUP: Petitions Filed to Force Affiliates into Bankruptcy ------------------------------------------------------------------ Sarah Halzack and Thomas Heath, writing for The Washington Post, reported that a group of pension and trust funds for local electrical workers has filed petitions to force companies affiliated with Truland Group into bankruptcy amid reports that the Reston-based electrical contractor is winding down operations. According to the report, the petitions were filed in a federal courthouse in Baltimore asking a judge to begin Chapter 7 proceedings against various Truland affiliates. UNIVERSITY GENERAL: Cost Reductions of $13-Mil. Anticipated ----------------------------------------------------------- University General Health System, Inc., announced the implementation of cost containment measures that are expected to result in permanent cost reductions and savings in excess of $13 million annually. The cost saving measures included salary and work force reductions, along with cutbacks in, or the elimination of, certain marketing and other initiatives that previously did not produce the desired outcomes. UGH - Houston implemented an additional $2.7 million in permanent annualized cost reductions, in addition to previously reported expense reductions, some of which were seasonal in nature. Hospital Outpatient Departments accounted for $0.7 million in projected annual cost savings, UGHS Management Services expects to benefit from $3.1 million in annual expense reductions, Support Services lowered its costs by $2.2 million annually, and UGH - Dallas reduced expenses on an annual basis by $4.7 million. Some of these cost savings resulted from the elimination of nearly 100 jobs within the Company's operating network. "Given the dynamic nature of the health care industry and our disappointing financial performance in 2013, we determined that drastic measures were required to remain competitive and restore profitability," stated Hassan Chahadeh, MD, Chairman and chief executive officer of University General Health System, Inc. "While the implementation of these permanent cost-saving measures were often difficult, they were necessary and we are hopeful they will result in a positive impact upon our financial results during the balance of 2014 and in future years. We will also continue to focus on strategic relationships, the divestiture of non-core assets and the elimination of non-performing assets." About University General University General Health System, Inc., located in Houston, Texas, is a diversified, integrated multi-specialty health care provider that delivers concierge physician- and patient-oriented services. UGHS currently operates one hospital and two ambulatory surgical centers in the Houston area. It also owns a revenue management company, a hospitality service provider and facility management company, three senior living facilities and manages six senior living facilities. University General reported a net loss attributable to common shareholders of $35.70 million on $163.98 million of total revenues for the year ended Dec. 31, 2013, as compared with a net loss attributable to common shareholders of $3.97 million on $113.22 million of total revenues for the year ended Dec. 31, 2012. As of Dec. 31, 2013, the Company had $183.26 million in total assets, $186.91 million in total liabilities, $2.97 million in series C convertible preferred stock, and a $6.61 million total deficit. Moss, Krusick & Associates, LLC, in Winter Park, Florida, 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 negative working capital and relative low levels of cash and cash equivalents. These conditions raise substantial doubt about its ability to continue as a going concern, the auditors said. UNITED AMERICAN: Now a Nevada Corporation ----------------------------------------- United American Healthcare Corporation converted from a Michigan corporation into a Nevada corporation. The Conversion was effected by the filing of a Certificate of Conversion with the Michigan Department of Licensing and Regulatory Affairs on July 28, 2014, and Articles of Conversion with the Nevada Secretary of State on July 30, 2014, in each case with an effectiveness date of Aug. 1, 2014. The Conversion was approved by the shareholders of the Company at a meeting of the shareholders held on Dec. 13, 2013. In connection with the Conversion, the Company also filed with the Nevada Secretary of State on July 30, 2014, a Plan of Conversion and Articles of Incorporation that are substantially identical to the proposed Plan of Conversion and Articles of Incorporation which were furnished as exhibits to the Company's Definitive Proxy Statement on Schedule 14A filed on Nov. 1, 2013. In addition, the Bylaws of United American Healthcare Corporation, a Nevada corporation, are substantially identical to the proposed Bylaws which were furnished as exhibits to the Company's Definitive Proxy Statement on Schedule 14A filed on Nov. 1, 2013. The Company's Bylaws are available for free at http://is.gd/cHe9TH About United American Chicago-based United American Healthcare, through its wholly owned subsidiary Pulse Systems, LLC, provides contract manufacturing services to the medical device industry, with a focus on precision laser-cutting capabilities and the processing of thin-wall tubular metal components, sub-assemblies and implants, primarily in the cardiovascular market. The Company disclosed a net loss of $769,000 on $3.23 million of contract manufacturing revenue for the six months ended Dec. 31, 2013, as compared with net income of $82,000 on $3.83 million of contract manufacturing revenue for the same period in 2012. Bravos & Associates, CPA's, in Bloomingdale, Illinois, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company's liabilities and working capital raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at March 31, 2014, showed $14.95 million in total assets, $13.11 million in total liabilities and $1.84 million in total shareholders' equity. US SHALE SOLUTIONS: Moody's Assigns 'B3' Corporate Family Rating ---------------------------------------------------------------- Moody's assigned a B3 Corporate Family Rating (CFR) to US Shale Solutions, Inc. and a B3 rating to the company's proposed $210 million senior secured notes due 2017. Moody's also assigned a stable rating outlook. These are first time ratings for US Shale. The proceeds from the notes will be used to finance the acquisition of four oilfield services companies: Ritter Construction Company (Ritter), W. Pidhirney Welding Ltd (WPW), Culberson Construction, Inc. (CCI) and J4 Fluid Services, Inc. (J4). All four will be combined and operate as US Shale. "US Shale's B3 rating reflects its modest size, the volatile earnings inherent in the oilfield services sector, and relatively high debt level at the close of the notes financing," commented Arvinder Saluja, Moody's Analyst. "While we recognize the scale benefits of combining four entities into one, there are operational challenges in executing this type of integration, which is also incorporated in our B3 rating." Assignments: Issuer: US Shale Solutions, Inc. Corporate Family Rating: B3 Probability of Default Rating: B3-PD Senior Secured Notes Rating: B3 Speculative Grade Liquidity Rating: SGL-3 Rating Outlook: Stable Ratings Rationale In July 2014, US Shale entered into separate but coordinated transactions to acquire Ritter, WPW, CCI and J4 for an aggregate purchase price of $261 million. Each entity will become a wholly owned subsidiary of US Shale and Ritter, CCI and J4 will serve as guarantors of the proposed notes. WPW is a Canadian company that will not guarantee the notes. The combined company is a full service provider of infrastructure, fluids and completions services with a focus on unconventional resource plays. US Shale's primary offerings are well site construction, wellhead hookups, surface equipment, pipeline and facility construction and maintenance. US Shale's B3 CFR reflects the company's modest scale with limited tangible assets, product lines with low barriers to entry, exposure to the cyclical exploration and development activity in the oil and gas industry, customer concentration with top three accounting for roughly half of the consolidated revenues, execution risks entailed in the integration of acquired companies, and high debt level pro forma for the transaction. US Shale is expected to derive over 85% of its revenues from infrastructure services geared towards E&P companies. As is typical for most of its peers, the majority of its services will not be not provided under long term contracts. Nonetheless, US Shale's CFR is supported by the four predecessor companies' operational history and customer relationships, the continued favorable industry fundamentals, its focus on unconventional plays and basins with attractive production returns, and modest geographical diversification. The ongoing strength in oil prices is underpinning the development of shale plays in North America, and US Shale is expected to be a beneficiary of that trend. Although, pro-forma for the notes offering, leverage will be about 4 times, Moody's expect it to reduce by year-end 2014. While Moody's anticipate leverage to gradually decline as earnings grow organically and through bolt-on acquisitions, Moody's also recognize the inherent cyclicality of the oilfield services sub sector. The B3 rating on the proposed senior secured notes, at the same level at the B3 CFR, reflects the predominance of the notes in the capital structure. The notes are secured by a first priority lien on substantially all of the company's existing and future property and assets. However, Moody's believe that in case of distress, the collateral would not be sufficient to provide full coverage to the notes. In addition, if US Shale enters into a senior secured credit facility, the notes will also be contractually subordinated to the credit facility which is likely to be periodically utilized for working capital needs. US Shale has adequate liquidity as reflected by its SGL-3 Speculative Grade Liquidity Rating. Pro forma for the financing transaction, the company will have a modest cash balance around $15 million. US Shale has expressed its intent to enter into a $30 million senior secured credit facility, though there is no facility in place at this time. There are two financial covenants governing the notes, one limiting net leverage to below 4.25x and a second limiting capital expenditures to 40% of the previous year's consolidated EBITDA for 2015. The second covenant is expected to step down to 35% thereafter. Moody's expect US Shale to maintain compliance with these covenants through 2015. The stable rating outlook incorporates the expectation that viable integration plans will be put in place shortly after the close of the financing and the acquisition transactions. The ratings are unlikely to be upgraded in the near term. However, if the company's revenue base approaches $500 million with commensurate increase in EBITDA, and leverage remains sustainably under 2.5x, a positive rating action could be considered. On the other hand, ratings could be lowered if the exploration and development activity in North America slows meaningfully, key customers are lost, internal control issues persist beyond 2014, liquidity deteriorates, or leverage remains above 4.0x for more than two quarters. 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. US Shale Solutions, Inc. is an oilfield services provider headquartered in Houston, Texas. WEST CORP: Reports $47.7 Million Net Income in Second Quarter ------------------------------------------------------------- West Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $47.75 million on $691.06 million of revenue for the three months ended June 30, 2014, as compared with net income of $43.66 million on $672.69 million of revenue for the same period last year. For the six months ended June 30, 2014, the Company reported net income of $94.03 million on $1.36 billion of revenue as compared with net income of $46.72 million on $1.33 billion of revenue for the six months ended June 30, 2013. As of June 30, 2014, the Company had $3.87 billion in total assets, $4.54 billion in total liabilities and a $672.74 million total stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/L8bzDV About West Corporation Founded in 1986 and headquartered in Omaha, Nebraska, West Corporation -- http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West Corporation has a team of 41,000 employees based in North America, Europe and Asia. West Corp posted net income of $143.20 million in 2013, as compared with net income of $125.54 million in 2012. The Company's balance sheet at March 31, 2014, showed $3.54 billion in total assets, $4.25 billion in total liabilities and a $709.40 million total stockholders' deficit. Bankruptcy Warning The Company said in its quarterly report for the period ended March 31, 2014, "If we cannot make scheduled payments on our debt, we will be in default, and as a result: * our debt holders could declare all outstanding principal and interest to be due and payable; * the lenders under our Senior Secured Credit Facilities could terminate their commitments to lend us money and foreclose against the assets securing our borrowings; and * we could be forced into bankruptcy or liquidation." * * * As reported by the TCR on June 20, 2014, Standard & Poor's Ratings Services affirmed all existing ratings, including the 'BB-' corporate credit rating, on Omaha, Neb.-based business process outsourcer West Corp. The rating outlook is stable. "In our view, the rating on West Corp. reflects our expectation that leverage will remain relatively high, in the 4x to 5x area over the intermediate term, as the company will continue its acquisition-oriented growth strategy, albeit under a less aggressive financial policy," the rating agency said. In the April 4, 2013, edition of the TCR, Moody's Investor Service upgraded West Corporation's Corporate Family Rating to B1 from B2. "The CFR upgrade to B1 reflects West's shift to a more conservative capital structure and financial policies as a publicly owned company," stated Moody's analyst Suzanne Wingo. YONKERS RACING: Moody's Alters Outlook to Neg & Affirms B1 CFR -------------------------------------------------------------- Moody's Investors Service revised the rating outlook of Yonkers Racing Corporation to negative from stable. The company's B1 Corporate Family Rating and B1-PD Probability of Default Rating were affirmed. The Ba3 rating on Yonkers' first lien term loan and B3 rating on its second lien term loan were also affirmed. The rating outlook revision to negative is in response to the drop in earnings that occurred in the company's second quarter ended June 30, 2014, and Moody's expectation that despite a positive free cash flow profile, good liquidity and strong market characteristics, uncertain gaming demand trends could make it difficult for Yonkers to reduce its leverage back down to a level Moody's consider more appropriate for its current rating. Yonkers ratings could be lowered if it appears that company will not be able to reduce debt/EBITDA to near 6.0 times by the end of fiscal 2015. An outlook revision back to stable is possible if Moody's believes that Yonkers can meet this leverage target and time frame. Yonkers owns and operates a gaming and entertainment facility comprised of Empire City Casino -- a 140,000 square-foot casino featuring 5,297 gaming positions (including slot machines and electronic table games), and Yonkers Raceway -- a harness race track featuring pari-mutuel wagering on live and simulcast horse races. The facility, which is located in Yonkers, New York, is owned and operated by the Rooney family of Pittsburgh. Yonkers is a private company and does not disclose detailed financial information to the public. The company reported net revenue of $206 million for the latest 12-month period ended June 30, 2014. Ratings Rationale Yonkers' B1 Corporate Family Rating reflects its small size, single property concentration risk, and high leverage. Debt/EBITDA for the latest 12-month period ended June 30, 2014 was significant, at over 7.0 times. The ratings also take into account our view that U.S. consumers, under continued pressure from weak growth in disposable personal income and increasing living expenses, will continue to limit their spending to items more essential than gaming, leaving less funds available for this highly discretionary form of entertainment. Positive rating consideration is given to our expectation that despite high leverage and an extremely challenging operating environment, Yonkers will generate positive free cash flow in the range of about $20 million in each of the next two years, a portion of which will go towards the repayment of debt above and beyond the scheduled amounts. The ratings are further supported by the favorable demographics and limited direct competition allowed in the company's primary market, the New York City metropolitan area. Empire City is one of only two properties in the New York City market that are authorized to operate a casino under New York State law. The principal methodology used in this rating was the Global Gaming Industry published in June 2014. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. YONKERS RACING: S&P Lowers CCR to 'B' on Weak Performance --------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on New York-based gaming operator Yonkers Racing Corp. to 'B' from 'B+'. The rating outlook is stable. At the same time, S&P lowered its issue-level ratings on Yonkers' first-out revolving credit facility to 'BB-' from 'BB', on the first-lien term loan to 'B+' from 'BB-', and on the second-lien term loan to 'CCC+' from 'B-'. The recovery ratings on all these issues are unchanged. The downgrade reflects S&P's reduced forecast for run-rate EBITDA to the low- to mid-$40-million range through 2015 and S&P's expectation that debt to EBITDA will increase to about 7x for the full year 2014 and be in the low- to mid-6x range in 2015. EBITDA fell in the mid-20% area in the first half of 2014 from the comparable period in 2013, and we expect EBITDA to drop about 20% for the full year. "Although operating performance in the first half was hurt in part by inclement weather, we believe discretionary spending will remain pressured for many of Yonkers' customers and result in continued declines in slot machine revenue for at least the next few quarters," said Standard & Poor's credit analyst Ariel Silverberg. "Furthermore, we believe expenses will remain high year-over-year in 2014 because of new amenities that opened in early and mid-2013. We believe, however, that expenses will begin to stabilize in 2015," she continued. The downgrade also reflects S&P's reassessment of Yonkers' business risk profile to "vulnerable" from "weak," as defined in S&P's criteria, reflecting its belief that EBITDA will likely be more volatile than S&P expected, primarily because of increased competition in Yonkers' regional market and the need to increase spending from time to time to offset this effect. The assessment also reflects the stringent revenue allocation structure with New York State that results in a lower EBITDA margin relative to that of other commercial gaming operators; and the company's reliance on a single property for cash flow generation, which heightens exposure to event risk, regional economic weakness, and adverse changes to the competitive environment. The stable outlook reflects S&P's expectation for EBITDA to stabilize in the low- to mid-$40-million range through 2015, which should create sufficient discretionary cash flow generation for debt reduction during the next few years. S&P could lower the ratings if EBITDA generation is weaker than it currently forecasts, resulting in EBITDA coverage of interest falling below 2x, or if S&P lowers its assessment of Yonkers' currently "strong" liquidity profile. S&P could consider raising the ratings if it believed Yonkers' EBITDA generation would stabilize over the long run at a level that would support debt reduction and debt to EBITDA below 5x. In addition, S&P would need greater clarity about the location and timing of any new regional competition. ZOGENIX INC: Posts $62.9 Million Net Income in Second Quarter ------------------------------------------------------------- Zogenix, Inc., reported net income of $62.86 million on $9.16 million of total revenue for the three months ended June 30, 2014, as compared with a net loss of $13.33 million on $8.94 million of total revenue for the same period last year. For the six months ended June 30, 2014, the Company reported net income of $41.93 million on $16.83 million of total revenue as compared with a net loss of $34.38 million on $15.92 million of total revenue for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $133.29 million in total assets, $64.98 million in total liabilities and $68.31 million in total stockholders' equity. Cash and cash equivalents as of June 30, 2014, were $81.2 million. Cash and cash equivalents as of June 30, 2014, were $81.2 million. Additionally, restricted cash was $8.5 million as of June 30, 2014, consisting of the portion of proceeds from the sale of the SUMAVEL DosePro business to Endo required to be held in escrow until May 2015. Roger Hawley, chief executive officer of Zogenix, stated, "In the first full quarter of the launch of Zohydro ER there continues to be steady growth in prescriptions and positive feedback from prescribers and patients on Zohydro ER and our safe use offerings. With only 5 months of product availability, we have approximately 2,800 prescribers and 15,000 prescriptions. We also announced an updated development timeline for our abuse deterrent formulations of Zohydro ER, and remain on track to file the supplemental New Drug Application by October 2014 for the first formulation, with potential approval in early 2015." A full-text copy of the press release is available for free at: http://is.gd/tb37x3 About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Zogenix reported a net loss of $80.85 million in 2013, as compared with a net loss of $47.38 million in 2012. Ernst & Young LLP, in San Diego, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company's recurring losses from operations and lack of sufficient working capital raise substantial doubt about its ability to continue as a going concern. * CalPERS Pulls Back from Hedge Funds ------------------------------------- Dan Fitzpatrick, writing for The Wall Street Journal, reported that public pensions from California to Ohio are backing away from hedge funds because of concerns about high fees and lackluster returns. According to the report, those having second thoughts include officials at the largest public pension fund in the U.S., the California Public Employees' Retirement System, or Calpers. Its hedge-fund investment is expected to drop this year by 40%, to $3 billion, amid a review of that part of the portfolio, the Journal said, citing a person familiar with the changes. The retreat comes after many pension funds poured money into hedge funds in recent years in hopes of making up huge shortfalls, the report related. * After Split Vote, SEC Approves Rules on Money Market Funds ------------------------------------------------------------ William Alden, writing for The New York Times' DealBook, reported that regulators imposed new restrictions on a vast market that played a significant role in the 2008 financial crisis. According to the report, the Securities and Exchange Commission voted 3 to 2 to adopt a set of new rules for money market funds, a $2.6 trillion industry where ordinary individuals and sophisticated institutions alike park their money. The rules come after years of debate among regulators and lobbying from Wall Street, the report noted. * Money Funds Embrace SEC's Rules to Escape FSOC ------------------------------------------------ Dave Michaels, writing for Bloomberg News, reported that given a choice between a regulator whose mission is to promote growth through investment, or an unfamiliar committee dominated by the Federal Reserve, the mutual-fund industry opted for the devil it knew. According to the report, the threat of regulation by the Financial Stability Oversight Council, an umbrella group charged with monitoring regulators' blind spots, encouraged fund companies to negotiate with the Securities and Exchange Commission on new rules for money-market mutual funds that were approved on July 23. * SEC Tells S&P It Could Face Enforcement Action ------------------------------------------------ Timothy W. Martin, writing for The Wall Street Journal, reported that the Securities and Exchange Commission told Standard & Poor's Ratings Services that it could face an enforcement action for alleged securities fraud regarding six commercial real-estate deals in 2011, according to a filing by S&P parent McGraw Hill Financial Inc. According to the report, the so-called Wells Notice sent to McGraw Hill on July 22 states that the SEC has made a preliminary determination that an enforcement action should be taken. The notice is neither a formal allegation nor a finding of wrongdoing, McGraw Hill said, the report related. * Why More Companies Want Pensions Off Their Books -------------------------------------------------- Michael A. Fletcher, writing for The Washington Post, reported that Verizon, General Motors, Ford and, recently, ketchup kingpin Heinz, have all moved part of their pension obligations off their books and into annuities run by insurance companies. According to the report, the move, called de-risking, requires companies to pay a lump sum to purchase a group annuity from an insurance company. The insurer then takes over the retirement payments, wiping troubling and erratic pension obligations off the books of the purchaser, the report related. The Post said the change offers an opportunity to shed volatile risk. * Argentina Sues U.S. in International Court of Justice ------------------------------------------------------- Ken Parks, writing for The Wall Street Journal, reported that Argentina has asked the International Court of Justice to hear a lawsuit it wants to bring against the U.S. in a high-stakes legal battle between the South American nation and some of its creditors over unpaid debts. According to the Journal, citing the tribunal, Argentina's petition says that decisions by U.S. courts in the dispute have violated its sovereignty. However, the U.S. would have to accept the International Court of Justice's jurisdiction for a lawsuit to move forward, something that has happened in only 22 cases since the tribunal began working in 1946, the Journal related. * Carl Marks' Partners Recognized by Turnarounds & Workouts ----------------------------------------------------------- Carl Marks Advisors, a consulting and investment banking advisor to middle-market companies, on Aug. 7 disclosed that partners, Mark Claster, Warren Feder, Duff Meyercord, Evan Tomaskovic, and Christopher Wu have been recognized in the latest Special Report on Outstanding Investment Banking Firms by Turnarounds & Workouts, a leading bankruptcy, restructuring, and distressed investing publication that reports on industry news and analysis. The recognition honors firms that are routinely retained in the most complex and sophisticated restructuring transactions. Honorees are selected by the publication's editorial staff based upon recent representations, as well as nominations received from leading restructuring professionals nationwide. Carl Marks was honored for its achievements pertaining to the following engagements: * Representing debtors in Green Field Energy Services, Landauer-Metropolitan Inc., and American Bancorporation * Representing secured lenders in the sale of Biofuel Energy's ethanol assets to Green Plains Renewable Energy * Representing secured lenders in Corinthian Colleges * Representing unsecured creditors committees in Rogers Bancshares, North Texas Bancshares, First Mariner, and Natrol "It's an honor to be recognized for our team's accomplishments over the past year," said, Christopher Wu, partner at Carl Marks Advisors. "To be distinguished alongside industry front-runners is a testament to the fact that we're consistently helping companies resolve challenges by designing and executing plans that enable successful transactions from start to close." Carl Marks Advisors was among only 12 firms recognized in 2014. Turnarounds & Workouts tracks distressed businesses in the U.S. and Canada, and releases annual lists of the outstanding firms and professionals working in the bankruptcy, corporate renewal, investment, turnaround, and restructuring industries. About Carl Marks Advisors Carl Marks Advisory Group LLC -- http://www.carlmarks.com-- is a New York-based consulting and investment banking advisory firm serving middle-market companies, provides an array of financial and operational services, including mergers and acquisitions advice, sourcing of capital, financial restructuring plans, strategic business assessments, improvement plans and interim management. The award-winning firm was included in the Global M&A Network 2014 annual listing of the Top 100 Restructuring and Turnaround Professionals; received the 2013 & 2014 Turnaround Atlas Awards' Middle Market Restructuring Investment Banker of the Year; 2013 M&A Advisor's Sector Financing Deal of the Year (Real Estate); the 2013 Turnaround Atlas Awards' Healthcare Services Turnaround of the Year and Mid Markets Restructuring Investment Bank of the Year. * Gavin/Solmonese's Weitz Joins People's Emergency Center's Board ----------------------------------------------------------------- Gavin/Solmonese Managing Director Wayne P. Weitz was recently elected to the board of directors of The People's Emergency Center (PEC), a West Philadelphia agency dedicated to nurturing families, strengthening neighborhoods and driving change in West Philadelphia. Mr. Weitz was one of four new directors added to the board, and he will serve a three-year term. He is a senior financial professional with more than 25 years of experience advising clients and executing transactions as a principal in corporate finance and capital structure optimization, restructuring, mergers and acquisitions, financial management, and bankruptcy. Mr. Weitz was recently named one of the top business professionals making their mark in turnaround, bankruptcy and restructuring by Turnarounds & Workouts (T&W) in its "People To Watch" list for 2014. He began his career as an investment banker and has completed nearly 100 acquisitions, dispositions, and capital formation transactions. Mr. Weitz earned a Bachelor of Arts degree in economics and politics from Brandeis University and a Master's in Business Administration (MBA) in finance and accounting from the University of Chicago Booth School of Business. About People's Emergency Center People's Emergency Center -- http://www.pec-cares.org-- nurtures families, strengthens neighborhoods, and drives change. It is committed to increasing equity and opportunity throughout our entire community. It provides comprehensive support services to families experiencing homelessness, revitalizes its West Philadelphia neighborhood, and advocate for social justice. Its community development arm, PEC Community Development Corporation, revitalizes the West Philadelphia neighborhood where PEC provides services. Together, PEC and PECCDC build strong families and strong communities. About Gavin/Solmonese Whether it's protecting a company or its creditors from failure, deploying new leadership, or reversing antiquated thinking, Gavin/Solmonese -- http://www.gavinsolmonese.com-- leads companies to measurable bottom line improvement. Named one of the country's Outstanding Turnaround Firms by Turnarounds & Workouts, the Gavin/Solmonese Corporate Restructuring Group provides leadership for underperforming and troubled companies and their stakeholders, helping businesses maximize value for owners, investors, creditors and employees. The Gavin/Solmonese Corporate Engagement & Public Affairs Group leads organizations through critical strategic thinking and tactical planning, creating better connections with consumers, decision makers and the media, resulting in market share growth and higher profitability. * BOOK REVIEW: The Money Wars: The Rise and Fall of the Great Buyout Boom of the 1980s ------------------------------------------------------------- Author: Roy C. Smith Publisher: Beard Books Softcover: 370 pages List Price: $34.95 Review by David Henderson Get your own personal today at http://is.gd/kxvqjA Business is war by civilized means. It won't get you a tailhook landing on an n aircraft carrier docked in San Diego, but the spoils of war can be glorious to behold. Most executives do not approach business this way. They are content to nudge along their behemoths, cash their options, and pillage their workers. This author calls those managers "inertia ridden." He quotes Carl Icahn describing their companies as run by "gross and widespread incompetent management." In cycles though, the U.S. economy generates a few business warriors with the drive, or hubris, to treat the market as a battlefield. The 1980s saw the last great spectacle of business titans clashing. (The '90s, by contrast, was an era of the investment banks waging war on the gullible.) The Money Wars is the story of the last great buyout boom. Between 1982 and 1988, more than ten thousand transactions were completed within the U.S. alone, aggregating more than $1 trillion of capitalization. Roy Smith has written a breezy read, traversing the reader through an important piece of U.S. history, not just business history. Two thirds of the way through the book, after covering early twentieth century business history, the growth of financial engineering after WWII, the conglomerate era, the RJR-Nabisco story, and the financial machinations of KKR, we finally meet the star of the show, Michael Milken. The picture painted by the author leads the reader to observe that, every now and then, an individual comes along at the right time and place in history who knows exactly where he or she is in that history, and leaves a world-historical footprint as a result. Whatever one may think of Milken's ethics or his priorities, the reader will conclude that he is the greatest financial genius this country has produced since J.P. Morgan. No high-flying financial era has ever happened in this country without the frothy market attracting common criminals, or in some cases making criminals out of weak, but previously honest men (and it always seems to be men). Something there is about testosterone and money. With so many deals being done, insider trading was inevitable. Was Michael Milken guilty of insider trading? Probably, but in all likelihood, everybody who attended his lavish parties, called "Predators' Balls," shared the same information. Why did the Justice Department go after Milken and his firm, Drexel Burnham Lambert with such raw enthusiasm? That history has not yet been written, but Drexel had created a lot of envy and enemies on the Street. When a better history of the period is written, it will be a study in the confluence of forces that made Michael Milken's genius possible: the sclerotic management of irrational conglomerates, a ready market for the junk bonds Milken was selling, and a few malcontent capitalist like Carl Icahn and Ted Turner, who were ready and able to wage their own financial warfare. This book is a must read for any student of business who did not live through any of these fascination financial eras. Roy C. Smith is a professor of entrepreneurship, finance and international business at NYU, and teaches on the faculty there of the Stern School of Business. Prior to 1987, he was a partner at Goldman Sachs. He received a B.S. from the Naval Academy in 1960 and an M.B.A. from Harvard in 1966. ********* 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 ***